Exhibit 10.16
IOMEGA CORPORATION
GLOBAL REQUIREMENTS AGREEMENT
NO. MSL183G
THIS SUPPLY AGREEMENT (hereinafter referred to as "the Agreement"), dated and
effective this 30th day of July 1997, ("Effective Date"), between
Manufacturers' Services Limited, a company organized and existing under the laws
of Delaware and having its principal place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇., #▇▇▇,
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇ ("Seller") and
Iomega Corporation, a Delaware corporation of the United States of America,
having its principal place of business at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ("Buyer")
Seller and Buyer hereinafter also collectively referred to as "Parties" and
individually as "Party".
WHEREAS, Seller agrees to manufacture and sell to Buyer Product (as hereinafter
defined) and Buyer agrees to purchase from Seller such Product, subject to the
terms and conditions of this Agreement.
0. DEFINITIONS
A. "Affiliate"
"Affiliate" shall mean any entity in which Seller and or Buyer, as the
case may be, directly or indirectly owns a majority equity interest or
otherwise owns a controlling interest. Buyer's Affiliates are identified
in Exhibit E, which may be changed by notice from Buyer to Seller from
time to time.
B. Buyer's "Authorized Agent"
Buyer's "Authorized Agent" shall mean Iomega Suppliers, Subcontractors, or
Contract Manufacturers who produce Iomega products and whose credit
worthiness is acceptable to the Seller. Buyer does not guarantee the
Purchase Orders of Buyer's Authorized Agents but Buyer does hereby
guarantee payment and performance by its Affiliates of all indebtedness
and obligations owing, from time to time, to Seller. Buyer's Authorized
Agents are identified in Exhibit E, which may be changed from time to time
by agreement between Buyer and Seller. Prior to any performance of any
obligations under this Agreement, such Authorized Agent shall execute and
deliver to Buyer and Seller an Accession Agreement satisfactory to both
Parties whereby such Authorized Agent agrees to be bound by the terms
hereof.
C. "Products"
"Products" shall mean the products, the specifications of which are
attached as Exhibit B, hereinafter referred to as "Specifications" sold by
Seller to Buyer, Buyer's Affiliates or Buyer's Authorized Agents subject
to the terms and conditions of this Agreement which are defined in Exhibit
B of this Agreement (and those products added to Exhibits A and B by
written amendment and in mutual agreement between the Parties at any time
hereafter).
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[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with the
Commission.
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D. "Specifications"
"Specifications" shall mean the specifications attached as Exhibit B,
and shall also include as modified from time to time [*] workmanship
standards and the then currently accepted commercial manufacturing
practices.
E. Precedence of Documents
The precedence of agreements between the Buyer, its Affiliates, and its
Authorized Agents on the one hand and Seller on the other hand shall be:
1. This Agreement
2. Any Buyer, Buyer's Affiliate, or Buyer's Authorized Agent Purchase
Order
3. Any subsequent agreement between Buyer and Seller that is not
expressly stated to be an amendment to this Agreement.
4. Non-Binding Forecast (PSI) provided pursuant to Section 2.D.
1. INTENT
A. Both parties intend to enter into a strategic supplier relationship. In
consideration thereof, both parties agree to cooperate to achieve mutual
long term program goals by sharing Product road-map information,
technology migration, engineering and other resources when applicable.
Goals include: shortening Product lead-times, increasing volume
flexibility, achieving Just-in-Time delivery, achieving ongoing cost
reductions, specific quality goals, and continuous quality improvement.
B. Seller agrees to provide design recommendations to Buyer, and to
manufacture, sell, and deliver Products to Issuing Parties. Buyer
agrees to purchase, and to cause those of its Affiliates and Authorized
Agents who purchase, to purchase from Seller such Products,
subject to and in accordance with the terms and conditions of
this Agreement.
C. Buyer and its Affiliates intend to purchase, and Seller intends to
supply, between [*] of Buyer's and buyer's Affiliates' requirements
during the term of this Agreement for the Products listed in Exhibit
"A".
2. PRODUCT ORDERS
A. Purchase Orders
Purchase Orders ("Purchase Orders") for Product shall be submitted by
Buyer, Buyer's Affiliates, or Buyer's Authorized Agents to Seller on
separate, Purchase Order forms, in the [*] (other than the [*]) during
the term of this Agreement for the [*], except when component lead-time
exceeds [*], in which case Purchase Orders will be given to lead time
or other arrangements will be made which are mutually agreed by Buyer
and Seller. Each Purchase Order shall at least include the following:
a) Ordering entity and location;
b) Purchase Order number and issue date;
c) Reference to this Agreement;
d) Product quantity;
e) Product requested delivery dates;
f) Product requested delivery location(s);
g) Product revision level, and
h) Price
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B. Acceptance of Purchase Orders
Purchase Orders shall not be considered as accepted until accepted in
writing (confirmation) by an authorized representative of Seller. Seller
shall make commercially reasonable efforts to send confirmation (except by
written mutual arrangement) of Purchase Orders within five (5) working
days after receipt. If Seller fails to return the acknowledgment
(confirmation) within five (5) working days, Seller will be deemed to have
accepted that Purchase Order. No additional or different provisions
proposed by either Party shall apply unless expressly agreed to in writing
by both parties. Seller will accept Purchase Orders for Product which are
in compliance with the terms and conditions of this Agreement.
C. Delivery Dates
Delivery dates shall be identified by the Buyer, Buyer's Affiliate, or
Buyer's Authorized Agent. Seller will acknowledge its commitment to the
dates or offer alternative dates that reflect the Seller's commercially
reasonable efforts to meet the identified delivery dates. The delivery
date will be the confirmed date that is mutually agreed to in writing by
Seller and the person who issued the relevant Purchase Order (the "Issuing
Party") but in any event shall, unless otherwise agreed by the Seller and
Issuing Party, be a date which is consistent with Seller's commitment to
supply Product under this Agreement.
D. Rolling Forecast
Buyer agrees to use its commercially reasonable efforts to provide to
Seller during the last full week of each month (hereinafter "N") during
the term of this Agreement a written rolling Product purchase forecast
(the "Rolling Forecast"), indicating the total quantity of Product to be
shipped and/or anticipated to be shipped, in each of the next twelve (12)
months, including the period already covered by outstanding Purchase
Orders.
The Rolling Forecast structure shall be as follows:
a)[*]
b)[*]
The Purchase Orders shall be the only documentation for ordering
quantities. Forecasts are for information and capacity planning only.
E. Seller agrees that all of the Buyer's Authorized Agents and Affiliates,
wherever located, shall be entitled to make purchases under this
Agreement, subject to their credit worthiness being acceptable to Seller,
unless guaranteed by Buyer. Any payment timing and credit limitations
placed on Buyer's Affiliates, other than those presented in this
Agreement, will be agreed upon in writing by both parties. Seller agrees
to notify Buyer of any credit limitations applicable to Buyer's Authorized
Agents.
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3. TERM OF AGREEMENT
A. Term of Agreement
This Agreement shall become effective upon execution by authorized
representatives of both Parties. This Agreement shall expire
twenty-four (24) months after the date of execution by both parties,
unless this Agreement is terminated earlier pursuant to article 13,
14, or 16 and shall be automatically extended for two additional twelve
(12) month periods, unless one Party notifies the other Party in writing
at least three (3) months prior to the beginning of such additional
period that it desires not to extend.
B. Multiple and Fully Qualified Manufacturing Facilities:
Seller shall provide adequate, qualified manufacturing facilities where
the Buyer's Products can be manufactured/produced. Detailing of additional
quality requirements shall be defined in Quality Supplements to be
mutually agreed from time to time, and to be attached as Exhibit C (a
"Quality Agreement"). Seller shall build Buyer's Products only in
facilities that have been approved and certified by Buyer unless prior
written consent has been obtained.
C. Production Capacity
Seller shall make available the necessary capacity to meet Issuing
Parties' production requirements, as provided by Issuing Parties in
Sections 2.A and 3. D. Buyer agrees to not unreasonably withhold approval
of additional production facilities in the event of extraordinary demand.
D. Flexibility Capability
Issuing Party may issue change requests for Product quantities and
schedule dates, and Seller shall maintain the necessary capacity to
accommodate such changes, in accordance with the Flexibility Agreement
attached as Exhibit D (the "Flexibility Agreement"). Changes made in
accordance with the Flexibility Agreement will not incur cost or liability
for Issuing Party, unless said changes cause Seller to violate or exceed
Component suppliers' Flexibility Agreements, as negotiated by Buyer from
time to time. If such a situation occurs, then Issuing Party will be
liable only for that portion of the change which exceeds the Component
suppliers' Flexibility Agreements. Seller warrants that it will use its
commercially reasonable efforts, and will cooperate with Buyer as needed,
in order to minimize Buyer's liability exposure under this Flexibility
Agreement. Buyer warrants that it will use its commercially reasonable
efforts to enforce the Component suppliers' Flexibility Agreements in
cooperation, as needed, with Seller.
E. Inventory Transfer
Seller agrees to buy, from time to time, Buyer's on-hand inventory that is
in excess of Buyer's own production requirements and is needed for
Seller's production. Seller also agrees to make inventory in excess of
Seller's production requirements available for sale to the Buyer, to any
of Buyer's Affiliates or Authorized Agents or anyone else designated by
Buyer. Seller's obligation to sell such inventory to any Buyer's
Authorized Agent or to anyone else designated by Buyer, is subject to
Seller's determining such entities' credit worthiness is acceptable to
Seller. Transfer quantities and payment terms will be mutually agreed on a
case-by-case basis. Prices shall be [*].
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F. Obsoleted Material
Any unique, non-returnable or non-cancelable material ordered by the
Seller in order to fulfill Purchase Orders placed by the Buyer, Buyer's
Affiliates, and Buyer's Authorized Agents, which is made obsolete, or is
made excess through Purchase Order changes outside of the Flexibility
Agreement, will be the liability of the Issuing Party. Seller and Issuing
Party will determine future demand at the end of each month based on
Issuing Party's PO's and forecasts. Issuing Party will purchase such
inventory from the Seller within thirty days after the Seller's notice to
the Issuing Party of the obsolete status.
4. PRICING
A. Price for Product
The prices for Product sold pursuant to this Agreement are set out in
Exhibit A to this Agreement (hereinafter referred to as "Prices") and
shall be reviewed and negotiated at least [*] prior to each [*] during the
term of this Agreement and any extension thereof. Any change to the Prices
set forth in Exhibit A shall be identified by an amendment to Exhibit A
which shall be approved by authorized representatives of both Parties. All
prices shall be in US Dollars, unless otherwise negotiated and documented
in Exhibit A.
B. Charges
Seller shall pay all applicable export costs, including any pre-shipment
inspection charges if mandated by the authorities of the country of
exportation, as well as all export brokerage, documentation, processing,
customs and any other export fees and taxes. Seller also agrees to pay all
sales and use taxes to Issuing Party's delivery point. All Products shall
be shipped Delivered Duty Paid (DDP) as defined in Incoterms (1990), but
freight collect, and DDP costs invoiced with Product.
Both Parties agree that prices shall include all charges such as
packaging, palletizing, packing, crating, and storage as needed.
C. Components
Buyer shall negotiate and deliver all Component pricing to Seller. All
components shall be purchased from suppliers on Buyer's Approved Vendor
List (the "AVL") as revised from time to time.
As used herein the term "Component" shall mean any Class A Component, any
Class B Component and any Class C Component, as designated in the
Specifications.
D. Opportunity Cost Savings
During Production, Seller shall maintain a vigorous cost reduction program
to ensure that Product pricing, subject to the price of Components, is
competitive at all times. After the execution of this Agreement, the
actual all-in net benefit of cost reduction opportunities identified by
Seller (i) of which Buyer and Buyer's Affiliates were not aware at the
▇▇▇▇ ▇▇▇▇▇▇ notified Buyer of them, (ii) which do not result from a price
reduction by a supplier on the AVL and (iii) which are accepted by Buyer,
on Class A Components, Class B Components and Class C Components [*]. The
benefits shared with Seller shall be in the form of increased margin on
Products sold by
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Seller which incorporate the cost reduction for a period of [*] after
implementation or until the termination of this Agreement, if earlier.
During New Product Introduction (NPI), in exchange for providing pricing
during the pilot, preproduction and manufacturing ramp-up stage equivalent
to that provided during the volume manufacturing period for any new
Product Buyer identifies to Seller and which is added to this Agreement,
Seller will retain [*] of any purchase price variance (as defined in the
second sentence of the preceding paragraph) identified by Seller during
the NPI phase, for a period of [*] after implementation or until the
termination of the Agreement, if earlier, and [*] thereof during the [*]
period starting on the last day of such [*] period or until termination
of this Agreement, if earlier.
E. Price Auditing
Buyer reserves the right to review all Component pricing, contracts,
Purchase Orders, and payment schedules applicable to Seller's activities
in providing Product in connection with this Agreement. Audits are
intended to ensure Supplier compliance with Buyer's contractual pricing
and delivery requirements. Seller shall provide such access to its books,
records, facilities, and officers and employees as may reasonably be
requested by Buyer in connection with any such audit, which shall take
place during Seller's business hours and shall not unreasonably interfere
with Seller's operations.
5. DELIVERY
A. Lead Time
Lead time represents the period of time required by Seller to procure
Components, manufacture and deliver a finished Product beginning with the
receipt of a Purchase Order for the Product and ending with the shipment
of the finished Product. Seller shall provide Issuing Party a lead time
which, at a maximum, represents the longest Component lead time plus one
week.
B. Timely delivery is an important requirement of Buyer. Delivery performance
shall be measured by on-dock date against the agreed delivery date. The
delivery target is either the specified delivery date or the immediately
preceeding day.
C. To achieve Buyer's Just-In-Time goals, Seller agrees to perform frequent
on-time deliveries, maintain regional warehouses, or establish "in-house
stores" maintained at the Buyer's production sites.
D. Unless otherwise set forth in the Purchase Order, and mutually agreed in
writing by both Parties, title and risk of loss shall pass to Issuing
Party at the named place of destination as indicated by the Issuing Party.
Seller shall consult the Issuing Party on the freight method and carrier
and, when Issuing Party is paying for freight, use Issuing Party's
prescribed freight method and carrier.
E. If Seller delivers Product before the specified delivery date, Issuing
Party may, at its option, return such Product at Seller's risk and expense
for subsequent delivery on the specified delivery date or retain such
material and make payment to terms as if the shipment had been delivered
on the specified delivery date.
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F. Changes to delivery dates may only be approved by the authorized
purchasing representatives for the Issuing Party. The Issuing Party may,
without cost or liability, issue change requests for Product quantities
and schedule dates in accordance with the Flexibility Agreement. Written
confirmation or rejection of any change request will be sent by Seller to
the Issuing Party within three (3) business days of receiving a change
request, and the Issuing Party shall provide a confirming Purchase Order
change within three (3) business days of receiving Seller's confirmation.
Seller must accept any change requests within the terms of the Flexibility
Agreement Requests that fall outside the scope of the Flexibility
Agreement will be mutually agreed to as to quantity, timing, and cost, and
will become effective only after Parties reach a mutual agreement.
G. Seller shall notify Issuing Party in writing immediately if Seller has
knowledge of any event which could result in any change to the agreed
delivery plan.
H. In the event that Product scheduled for delivery is more than [*]
business days late, Seller agrees to use Issuing Party's preferred carrier
(or other transportation mode) if requested by Issuing Party. Seller
agrees to absorb any incremental premium transportation cost on such late
shipment. In the event that Product scheduled for delivery is more than
[*] business days late the Issuing Party may purchase substitute Product
elsewhere with no liability to Seller whatsoever, except to the extent
that failure to deliver is caused by Issuing Party, Seller will not be
liable for late delivery.
6. PACKING, MARKING, WORKMANSHIP, AND SHIPPING INSTRUCTIONS
A. All Product shall be prepared and packed in a commercially reasonable
manner so as to secure the lowest transportation rates and meet carrier's
requirements and those set forth in Buyer's Packaging Specifications
(Iomega Document: 00201400: "Spec, Iomega Packaging").
B. Each shipping container shall be marked to show Issuing Party's Purchase
Order number, part number, revision level, lot number, quantity contained
therein, and destination. A packing list showing the Purchase Order number
shall be included in each container. Marking on all parts should be per
the Buyer's shipping specification. Symbolization should include date of
manufacture, place of manufacture, Seller's part number and revision
number.
C. Seller agrees to standardize the count multiples used in shipments of
Product.
7. QUALITY
A. Buyer and Seller shall establish one or more Quality Agreements acceptable
to both Parties, if needed.
B. At Buyer's or Seller's request, each Party will facilitate reasonable
on-site visits and inspections by the other Party during normal business
hours. Inspections shall in no way relieve either Party of obligations to
deliver or correctly use conforming Product.
C. Seller agrees to provide relevant outgoing inspection, quality, and
reliability data upon Buyer's request.
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D. Seller agrees that all Products will conform to the Specifications for the
part number and revision level stated on Issuing Party's Purchase Order,
to the workmanship specifications of IPC-610B Class 2 as modified from
time to time, and to the then currently accepted commercial manufacturing
practices.
E. Seller agrees to advise Buyer in writing of any changes to process,
materials, or sources of supply no less than the Components' lead time
plus [*] and to ensure that such changes do not compromise specifications,
quality, or reliability of Products ordered pursuant to this Agreement. In
the event a Seller-proposed change fails the Buyers qualification, the
Seller is obligated to provide the existing qualified product until the
proposed changed can be qualified.
8. INSPECTION AND ACCEPTANCE
A. Products purchased pursuant to this Agreement shall be subject to
inspection and testing by Issuing Party, which shall occur within [*]
business days of receipt, with a goal to reduce same to [*]. Unless
otherwise specified in the Purchase Order, final inspection and acceptance
of Product by Buyer shall be at Buyer's, Buyer's Affiliates, or Buyer's
Authorized Agent's facilities. Buyer reserves the right to reject Product
which does not conform to the Specifications and the Quality Agreement, if
any. Buyer may either return non-conforming Product for full credit of the
purchase price plus any transportation charges paid by Buyer to prevent
line-down situations, or require prompt repair or replacement, at Seller's
option, of non-conforming Product, which rights shall be in addition to
such other rights as Buyer may have in law or equity. Repaired or replaced
Product-shall be subject to the same inspection and warranty provisions of
this Agreement as Product originally delivered under any Purchase Order.
In the event non-conforming Product is received by Issuing Party, the
Seller will be notified and a satisfactory remedy will be negotiated.
Remedial action will include Corrective Action Reports (CARs), Return
Material Authorizations (RMAs), and a plan to proceed. If non-conforming
Product is received, Issuing Party will provide Seller with the
opportunity to remedy. Issuing Party has the right to immediately "screen"
such Product to prevent a line-down situation. However, the Issuing Party
will supply the Seller an estimation of the amount of Product to be
screened, along with the costs involved. The-actual labor costs will be
applied for each direct labor man-hour expended by Buyer, Buyer's
Affiliates, or Buyer's Authorized Agents, and the actual costs of
supplies. In the event a subcontractor is needed for additional inspection
and/or screening, the actual cost incurred by Buyer, Buyer's Affiliates,
or Buyer's Authorized Agents will be charged to the Seller.
B. Return of Rejected Product
In the event Buyer, Buyer's Affiliates, or Buyer's Authorized Agent
detects non-conforming Product, a Non-Conforming Material Report (NCMR)
and/or a Corrective Action Request (CAR) shall be provided to Seller.
Seller has [*] from the return receipt of non-conforming Product to
confirm the reason for rejection. Seller must provide a Return Material
Authorization (RMA) within [*] after receipt of samples of suspected
Product.
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If Seller accepts the CAR, the following procedures (the "RMA Procedures")
shall apply with respect to the relevant Product:
1. Buyer shall return the discrepant Products to Seller accompanied by
the RMA number and send a debit note (invoice) to Seller
representing the Prices and quantity of the returned Product; and
2. Buyer may send a Purchase Order to Seller to replace parts at
Buyer's discretion; and
3. Seller shall expedite such Purchase Order at Buyer's request by
premium transport. Incremental transportation cost shall be absorbed
by Seller. Seller shall also conform to the Buyer's closed loop
corrective action process.
4. Seller shall credit Buyer's account for the amount of the debit
note.
If Seller does not accept the CAR the following procedures (the "Seller
Analysis Procedures") shall apply with respect to the relevant Product:
1. Seller shall request Buyer to send samples of rejected Product to
Seller for detailed analyses;
2. Seller shall analyze samples within [*] business days after receipt
of such samples. After analyses of those samples, Seller shall issue
an RMA or give a written explanation of denial.
3. In the case that an RMA is issued, the RMA Procedures shall apply
and the CAR shall be accepted.
4. In the case of Product with No Defect Found, a mutually agreed
charge will apply.
If pending the analysis of samples by Seller pursuant to the Seller
Analysis Procedures, Buyer is in urgent need of Product, Buyer may issue a
Purchase Order to replace the Products to which the CAR pertains. Seller
will expedite such Purchase Order at Buyer's request and, if requested by
Buyer, will ship the order by premium transport as specified by Buyer.
Unless an RMA is issued, all costs of expedited handling of such Purchase
Order and any premium transport specified by Buyer shall be borne by
Buyer.
C. Support
Buyer may request reasonable on-site support from Seller, which Seller
shall provide, to solve problems with rejected shipment batches of Product
as well as validating inspection methodology further specified in the
Quality Agreement. All costs will be borne by the entity incurring them.
D. Other
For purposes of this Section 8 the term Buyer shall mean Buyer, or, if
different, the Issuing Party except that the provisions of Section 8.A
concerning Screening and additional inspection shall, once invoked, apply
equally to Buyer, Buyer's Affiliates, and Buyer's Authorized Agents and in
the event of dispute among Issuing Parties, Buyer shall make the final
determination. To the extent any of Buyer's Affiliates is obligated to
Seller under this Section 8, Buyer will cause it to perform its
obligations.
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9. WARRANTY
A. Seller warrants that title to all Products delivered to Buyer under
this Agreement shall be free and clear of all liens, encumbrances,
security interests or other claims.
B. Seller warrants that Products delivered hereunder shall be free from
defects in workmanship under normal use and service for a period of [*]
from date of acceptance of Products by Issuing Party. Seller further
warrants that all Products shall conform to the Specifications. Seller
makes no warranty on Components except to the extent that a Component
is covered by the Component manufacturers' or another persons' warranty
that is enforceable and collectable. If a failed Component is not
covered by its manufacturer's or another person's warranty which is
enforceable and collectable, Buyer shall [*] unless the non-coverage is
Seller's fault. Seller shall, upon request, assign Components
warranties to Buyer in which event Seller shall have no responsibility
for the components covered thereby.
The warranty for replaced or repaired Product will be the same as for
the original Product. Products which are "samples" and/or "prototypes"
are sold "as is", with all faults and with no warranty whatsoever.
C. Non-conforming Product discovered during Buyer's manufacturing or
assembly processes are not considered to be a warranty repair and shall
be corrected in accordance with paragraph 8.
D. Seller agrees that in case of epidemic failure (greater than [*]
combined failure rate of delivered Product, after [*] units have been
produced, for the same or multiple causes in any [*] period). Seller
will provide corrective action in accordance with Paragraph 8 and
Seller will provide a written corrective Action Report addressing the
steps that will be taken to eliminate the cause of the problem in
accordance with Buyer's Corrective Action process. Failures due to
Component issues will be cooperatively resolved between Buyer, Buyer's
Affiliate, or Buyer's Authorized Agent, Seller and Component supplier.
E. Seller agrees to work with Buyer during the development phase in order
to make sure that the products are fit for the intended use, but Seller
does not warrant such fitness. Especialy in the development phase, both
Buyer and Seller have the responsibility to give each other immediate
feedback on fit-for-use issues and potential defect mechanisms. Buyer
has the sole responsibility to make sure that the Specifications
reflect the fit-for-use criteria.
F. If during the applicable warranty period, (i) Seller is notified
promptly in writing upon discovery of any non-conformity in the
Products, including a detailed description of such defect; (ii) such
Products are returned to Seller's Failure Analyses and Corrective
Action facility accompanied by Seller's Return Material Authorization;
and (iii) such Products are defective and such defects are not caused
by accident, abuse, neglect, alteration, improper installation, repair
or alteration by someone other than Seller, improper testing, or use
contrary to any instructions issues by Seller within a reasonable time
and not in opposition to Product's Specifications, Seller shall [*].
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G. Prior to any return of Products by Issuing Party pursuant to this
Paragraph, Issuing Party shall afford Seller the opportunity to inspect
such Products at issuing Party's location, and any such Products so
inspected shall not be returned to Seller prior to receipt of an RMA.
H. Seller shall return Products repaired or replaced under this warranty to
Issuing Party transportation prepaid. Seller shall also reimburse Issuing
Party for the transportation charges paid by Issuing Party, if any, for
repaired, replaced, or returned-for-credit Products. Performance of this
warranty does not extend the warranty period for any unreturned Products
beyond that period applicable to the Products when originally delivered.
Repaired or replaced Products shall have full warranty coverage from date
of final delivery to Issuing Party.
I. The foregoing warranty constitutes Seller's exclusive liability, and the
exclusive remedy of the Issuing Party, for any breach of warranty or other
nonconformity of accepted Products covered by this Agreement.
10. END OF LIFE
A. In the event Seller determines that the manufacture of any Product covered
by this agreement should be discontinued, Seller shall notify Buyer in
writing of Products' End of Life [*] in advance. Seller shall allow Buyer
the opportunity to purchase sufficient quantities of Product necessary to
maintain and support Buyer's requirements for a minimum of [*] after
Buyer's receipt of Seller's notification. The parties agree to negotiate
the timing of such discontinuance and the purchase of final life-time buy
quantities (including price and delivery).
B. In the event Buyer determines that the manufacture of any Product covered
by this agreement should be discontinued, Buyer shall notify Seller in
writing of Products' End of Life. Buyer and Seller shall negotiate the
timing of such discontinuance and the dispostion of finished goods, work
in progress, and Buyer unique materials that have been purchased within
lead time by Seller to fulfill Issuing Party's Purchase Order(s). In no
case shall Issuing Party's liability exceed the purchase of all finished
goods, work in progress, and Buyer unique materials that have been
purchased within lead time by Seller to fulfill Issuing Party's Purchase
Order(s), and reimbursement to Seller for cancellation and/or return
charges for standard products that have been purchased within lead time,
and cannot be used on any other Product, by Seller to fulfill Issuing
Party's Purchase Order(s). Components which are purchased pursuant to
minimum order quantities to fulfill Issuing Party's Purchase Order(s)
shall be included under this paragraph.
11. PAYMENT AND SET-OFF
A. Payment shall be made by Issuing Party net [*] days from the date of
receipt of product. Payment of invoices shall not constitute final
acceptance of the Product.
B. Issuing Party retains the right to set-off rejections of Product (per
Paragraph 8) against future invoices.
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C. Except as provided in Section 11.B all payments shall be made without any
discount whatsoever. Seller shall submit the invoices to the address
indicated by Buyer.
D. Unless otherwise specified in Exhibit A or agreed to in writing by the
Seller and the Issuing Party, payment shall be in U.S. Dollars. Both
Parties agree to wire transfer as the method of payment, Seller and each
Issuing Party shall specify accounts to which funds should be transferred.
12. CHANGES
A. Product Modification
The Parties recognize that from time to ▇▇▇▇ ▇▇▇▇▇▇ will request or will
be requested by Buyer to implement Engineering Change Orders (hereinafter
referred to as "ECOs"). The following outlines the proper procedure:
1. Seller Requested Changes
Seller is to notify Buyer in writing of proposed ECOs no less than lead
time of the Components plus [*] and will, if so requested, provide Buyer
with samples. The notification shall include the proposed product changes,
anticipated price changes and implementation date. Notification shall also
include the appropriate documentation to support Buyer's investigation of
the impact of this proposal. Buyer will review the feasibility of the
implementation of the proposed ECO. If lead time or new costs are required
for the ECO, lead time and new prices will be reviewed. Buyer is to advise
Seller of its decision with respect to the proposed ECO within [*] after
receipt of Seller's written notification.
2. Buyer Requested Changes
Buyer agrees to notify Seller in writing of all proposed ECOs. This
notification will include the appropriate documentation to support
Seller's investigation of the impact of this proposal. Seller is to report
to Buyer within [*] of Buyer's request the feasibility of the
implementation of the ECO and if possible, the estimated charges that
would be incurred for obsolete work-in-process material, raw material, and
on-order material. Buyer will review the labor and material costs and
impact for the implementation of the ECO. If new material is required for
the ECO, lead time and new Product price will be reviewed and mutually
agreed upon.
Buyer is to notify Seller in writing within [*] after receipt of Seller's
cost report of its decision as to the proposed ECO, associated costs, and
the implementation dates. Seller will execute an agreed ECO per a
mutually-agreed upon phase-in plan that will not, under any circumstances,
exceed the maximum of lead-time for new or different Components plus two
weeks.
B. No changes shall be made by Seller as defined in Section 7.E nor in the
form, fit, or function of Products purchased hereunder without Buyer's
prior written approval.
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13. TERMINATION FOR CAUSE
A. Seller may terminate this Agreement and/or any Purchase Order issued
hereunder at any time by written notice in the event Buyer, Buyer's
Affiliate, or Buyer's Authorized Agent:
1. Fails to comply with any material provision of this Agreement and,
in the case of a breach which is capable of remedy, fails to remedy
same within [*] of notification of said breach, or
2. Becomes insolvent or makes an assignment for the benefit of
creditors, or a receiver or similar officer is appointed to take
charge of all or a part of the Buyer's, Buyer's Affiliate's, or
Buyer's Authorized Agent's assets or is the subject of any
bankruptcy or insolvency proceedings and such condition is not cured
within [*].
3. Assigns, or attempts to assign, or subcontracts or attempts to
subcontract, any or all of its rights or obligations under this
Agreement or any Purchase Orders issued hereunder to a third party,
other than Buyer's Affiliates, without the Seller's prior written
approval. Approval of assignment to Buyer's Affiliates will not be
unreasonably withheld under this paragraph, but Buyer shall remain
liable for Buyer's Affiliate's obligations.
In addition, if Buyer, Buyer's Affiliate, or Buyer's Authorized
Agent fails to make payment when due or within any applicable grace
or notice period, unless such obligation to pay is in a bona fide
dispute, or any of the events in paragraph 13.A above occur (not
counting any grace or notice period) Seller may suspend its
performance hereunder.
B. Buyer may terminate this Agreement and/or any Purchase Order issued
hereunder at any time by written notice in the event Seller:
1. Fails to comply with any material provision of this Agreement and in
the case of a breach which is capable of remedy, fails to remedy
same within [*] of notification of said breach, or
2. Becomes insolvent or makes an assignment for the benefit of
creditors, or a receiver or similar officer is appointed to take
charge of all or a part of Seller's assets or is the subject any
bankruptcy or insolvency proceedings and such condition is not cured
within [*].
3. Assigns, or attempts to assign, or subcontracts or attempts to
subcontract, any or all of its rights or obligations under this
Agreement or any Purchase Orders issued hereunder to a third party,
other than Seller's Affiliates whose facilities are approved per
paragraph 3.B, without the Buyer's prior written approval. Approval
of assignment to Seller's other Affiliates will not be unreasonably
withheld under this paragraph.
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C. Upon termination by Seller of the Agreement and/or any Purchase Order
issued under Section 13.A above:
1. Seller shall immediately cease to incur expenses pursuant to this
Agreement and/or any Purchase Order that has been terminated unless
otherwise directed in the termination notice. Seller shall also take
all reasonable steps to mitigate impact of terminating this
Agreement and/or any Purchase Order.
2. Subject to Section 27.A, Issuing Party's entire liability shall be
to pay any balance due for non-conforming Products received from
Seller before notice of termination, purchase all finished goods,
work in progress, and Buyer unique Components that have been
purchased within lead time by Seller to fulfill Issuing Party's
Purchase Order(s), and to reimburse Seller for cancellation and/or
return charges for non-unique Components that have been purchased
within lead time by Seller to fulfill Issuing Party's Purchase
Order(s).
D. Upon termination by Buyer of the Agreement and/or any Purchase Order
issued under section 13.B above:
1. Seller shall immediately cease to incur expenses pursuant to this
Agreement and/or any Purchase Order that has been terminated unless
otherwise directed in the termination notice. Seller and Buyer shall
also take all reasonable steps to mitigate impact of terminating
this Agreement and/or any Purchase Order.
2. Buyer shall have the option to purchase any Components, work in
progress, or finished goods which Seller may have purchased or
processed for the fulfillment of any Purchase Order [*].
3. Subject to Section 27.A, Buyer shall have no liability beyond
payment for any balance due for conforming Products received from
Seller before notice of termination.
14. TERMINATION FOR CONVENIENCE
A. Buyer may terminate this Agreement at any time for any reason or for its
convenience upon giving [*] written notice of termination to the Seller
("Termination Period"). Buyer warrants that all provisions of this
Agreement will be upheld throughout the Termination Period. Upon receipt
of such notice, Seller shall immediately cease to incur expenses, except
those necessary for execution of remaining Purchase Orders, pursuant to
this Agreement. Buyer may terminate on shorter notice but if it does,
Buyer shall pay Seller a negotiated amount. Seller and Buyer shall also
take all reasonable steps to mitigate the cost to both Parties for
terminating this Agreement. Seller shall immediately notify Buyer of costs
incurred through the last day of the Termination Period, and Buyer shall
be liable for such costs. In no event shall such cost exceed the unpaid
balance due:
1. for conforming Product delivered per Issuing Party's Purchase Orders
prior to the actual termination date and an amount for Product that
would have been delivered through the Termination Period, which
shall be negotiated between the Parties.
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2. for all finished goods, work in progress, and Buyer unique
Components that have been purchased within lead time by Seller to
fulfill Issuing Party's Purchase Order(s), and to reimburse
Seller for cancellation and/or return charges for non-unique
Components that have been purchased within lead time by Seller to
fulfill issuing Party's Purchase Order(s).
B. Seller may terminate this Agreement at any time for any reason or for
its convenience upon giving [*] written notice of termination to the
Buyer ("Termination Period"). Seller warrants that all provisions of
this Agreement will be upheld throughout the Termination Period. Seller
agrees to assist Buyer, upon Buyer's request, to locate and secure
sufficient capacity for Product to meet Buyer's demand before the end
of the Termination Period. Seller and Buyer shall use best efforts to
mitigate the cost to Buyer for terminating this Agreement including,
but not limited to, minimizing the inventory of Buyer-unique,
non-cancelable and/or non-returnable material at the end of the
Termination Period and Buyer may elect to purchase Components, work in
process and finished goods at [*].
15. LIMITATION OF LIABILITY
A. IN NO EVENT SHALL EITHER PARTY'S LIABILITY FOR ANY BREACH OR ALLEGED
BREACH OF THIS AGREEMENT EXCEED THE TOTAL PURCHASE PRICE FOR THE
PRODUCTS IN QUESTION SUPPLIED UNDER THIS AGREEMENT WITHOUT CREDIT FOR
ANY PAYMENTS PREVIOUSLY MADE THEREFOR, NOR SHALL EITHER PARTY BE LIABLE
FOR ANY LOSS OF PROFITS (LOSS OF PROFITS SHALL NOT BE CONSTRUED TO LIMIT
THE OBLIGATION TO PAY THE PRICE FOR COMPLYING PRODUCTS OR THE
NEGOTIATED AMOUNT REFERRED TO IN 14.A), LOSS OF USE, SPECIAL,
INCIDENTAL, PUNITIVE, INDIRECT, EXEMPLARY OR CONSEQUENTIAL DAMAGES
RESULTING FROM SUCH BREACH OR ALLEGED BREACH, AND IRRESPECTIVE OF
WHETHER SELLER HAS ADVANCE NOTICE OR ADVANCE KNOWLEDGE OF THE
POSSIBILITY OF SUCH DAMAGES.
16. FORCE MAJEURE
A. Neither Party shall be liable for its failure to perform any of its
obligations hereunder during any period in which performance is delayed
by fire, flood or other severe weather, war, embargo, riot,
intervention of any government authority, labor unrest or any other
cause beyond Party's control ("Force Majeure"), provided that the Party
suffering such delay immediately notifies the other Party of the delay
and proceeds immediately upon occurance to eliminate such Force Majeure
or limit its effects. If, however, Seller's performance is delayed for
reasons set forth above for a consecutive period of [*] or more, Seller
will make its best effort to transition its production for the duration
of the Force Majeure to an alternate source (including a competitor).
In the event Seller is not able to establish an alternative source, the
Buyer, notwithstanding any other provision of this Agreement to the
contrary, may terminate this Agreement and/or any Purchase Order(s)
issued hereunder by notice to Seller. In the event of such termination,
Buyer's and/or Issuing Party's sole liability hereunder will be for the
payment to Seller of any balance due and owing for conforming Product
delivered by
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Seller prior to Seller's notification of delay to Buyer. Buyer shall have
the option to purchase any Components, work in progress, or finished goods
which Seller may have purchased or processed for the fulfillment of any
Purchase Order at Seller's cost plus a negotiated amount for any value
already added by Seller. In the event the Parties do not terminate this
Agreement and/or Purchase Order due to a Force Majeure, the time for
performance or cure will be extended for a period equal to the duration of
the Force Majeure.
17. NOTICES
A. All notices, reports, requests, acceptances, and other communications
required or permitted under this agreement shall be in writing and shall
reference this agreement. They will be deemed delivered:
1. When delivered in person, or
2. When sent by confirmed telex or acknowledged facsimile or acknowledged
e-mail except that the communications referred to in Sections 13, 14, and
16 may not be sent by e-mail, or
3. One day after having been sent by commercial overnight courier with
written verification of receipt or,
4. Five days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or upon actual receipt thereof,
whichever occurs first.
An acknowledged e-mail communication shall be deemed to be a communication
in writing. All communication will be sent to the receiving Party as
follows or to such address that the receiving party may designate pursuant
to this Section.
--------------------------------------------------------------------------------
If to Seller: If to Buyer
Manufacturers' Services Limited IOMEGA CORPORATION
▇▇▇ ▇▇▇▇▇ ▇▇▇. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇
ATTN.: General Counsel ATTN.: Procurement Director
--------------------------------------------------------------------------------
with a copy to: with a copy to:
Manufacturers' Services Limited IOMEGA CORPORATION
607 North ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇
ATTN.: General Counsel
ATTN: Rod Michael, VP Business Dev.
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18. COMPLIANCE WITH LAWS
A. All Product supplied and work performed under this Agreement shall comply
with all applicable laws and regulations in effect. In particular, Seller
agrees that its performance under this Agreement shall comply with all
laws governing its relationship with its employees, agents or
subcontractors and with the chlorofluorocarbon labeling requirements of
the U.S. Clean Air Act of 1990. Upon request, Seller agrees to certify
compliance with such applicable laws and regulations.
19. PATENT, COPYRIGHT AND TRADEMARK INDEMNITY
A. Buyer shall, at its own expense, indemnify and hold Seller harmless from
and against any claim, expense, damage or loss resulting from, and shall
defend at its own expense (including reasonable attorneys fees and
expenses) any claim or suit that may be made against Seller for any
alleged infringement of any patent, trade ▇▇▇▇, copyright, or other
proprietary right related to the Products covered by this Agreement to the
extent that the alleged infringement arises from Seller's compliance with
Specifications and instructions issued by Buyer and/or an Issuing Party.
Seller shall give Buyer prompt notice in writing of any such suit or claim
and its documentation and permit Buyer, through counsel of Buyer's choice,
to answer the charge of infringement and defend such suit and control the
settlement thereof. Seller shall cooperate with Buyer at Buyer's expense,
in the defense and/or settlement of such suit or claim. Buyer shall not be
responsible or liable for any settlement made without its prior written
consent. In addition, in the event that an infringement suit results in a
judgment against Buyer's designs, Buyer's liability shall also be to
purchase at Seller's cost all materials obsoleted by the judgment,
including finished goods, work in progress, and Buyer unique materials
that have been purchased within lead time by Seller to fulfill Buyer's
Purchase Order(s), and to reimburse Seller for cancellation and/or return
charges for obsoleted standard products that have been purchased within
lead time by Seller to fulfill Buyer's Purchase Orders.
B. Seller shall, at its own expense, indemnify and hold Buyer and each
Issuing Party harmless from and against any claim, expense, damage, or
loss resulting from, and shall defend at its own expense (including
reasonable attorneys fees and expenses), any claim or suit that may be
made against any of them for any alleged infringement of any patent, trade
▇▇▇▇, copyright, or other proprietary right related to the Products
covered by this Agreement except to the extent that the alleged
infringement arises from Seller's compliance with Specifications and
instructions issued by Buyer and the Issuing Party. Buyer and the Issuing
Party shall give Seller prompt notice in writing of any such suit or claim
and its documentation and permit Seller, through counsel of Seller's
choice, to answer the charge of infringement and defend such suit and
control the settlement thereof. Buyer and the Issuing Party shall
cooperate with Seller at Seller's expense, in the defense and/or
settlement of such suit or claim. Seller shall not be responsible or
liable for any settlement made without its prior written consent.
C. This Section 19, as limited by Section 15, allocates the total
responsibility and liability for, and the sole remedy for, any actual or
alleged infringement of any patent, trademark or copyright by any Products
or services delivered hereunder, or any part thereof. This Section 19 is
in lieu of and replaces any other expressed, implied, or statutory
warranty against infringement. If a supplier of Components is or may be
required to indemnify,
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defend or hold Seller, Buyer or an Issuing Party harmless with respect to
any alleged infringement, Seller agrees to coordinate its activities with
respect to such supplier with Buyer and to assign its rights with respect
to such supplier to Buyer upon request.
D. Seller is authorized to use Buyers logo and trademarks only to the extent
necessary to meet the required specification for the Product(s) and only
after Buyer's prior review and approval of each use. No other rights with
respect to Buyer's trademarks, trade names or brand names are conferred,
either expressly or by implication, upon Seller.
20. CAPACITY PLANNING
A. Seller agrees to review forecasts provided by Buyer and advise Buyer if
Seller anticipates that it will be unable to achieve the requested
volumes. Buyer's volume forecasts will be provided to Seller according to
Section 2.D. Seller may from time to time request Buyer to review Buyer's
forecast and advise of any changes and Buyer will do so.
B. If Buyer's Rolling Forecast exceeds Seller's available maximum capacity
for Buyer, Seller shall advise Buyer of the limitations in the capacity
and provide a response in writing as described in the Purchase Order and
Rolling Forecast articles.
21. GRATUITIES
Each Party represents and warrants that it has not offered or given and
will not offer or give any employee, agent, or representative of the other
Party any gratuity with a view toward securing any business from the other
Party or influencing such person with respect to the business between the
parties.
22. INSURANCE AND STATUTORY OBLIGATIONS
If either Party's work under this Agreement requires access to any of the
other Party's premises or the premises of the other Party's customers,
suppliers, or locations where the other Party conducts business, or with
material or equipment furnished by the other Party, both Parties shall
take all necessary precautions to prevent the occurrence of any injury to
persons or property during the progress of such work and, except to the
extent that such injury is due to the other Party's negligence or willful
misconduct, each Party shall indemnify the other Party against all loss
which may result in any way from any negligence or willful misconduct of
the Party, its employees, servants, agents, or subcontractors, and each
Party shall maintain such insurance as shall protect the other Party from
such risks and from any statutory liabilities arising therefrom and shall
provide evidence of such insurance to the other Party upon request.
Party for the purposes of Section 22 includes Buyer, Buyer's Affiliates,
and Buyer's Authorized Agents.
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23. PRODUCT LIABILITY INSURANCE
Buyer will provide evidence of product liabiity insurance in the amounts
of [*] per occurrence and [*] aggregrate per year, and will maintain in
effect such insurance which will name Seller as an additional insured.
24. CONFIDENTIAL INFORMATION
A. Confidentiality
Confidential information shall be treated in accordance with Confidential
Disclosure Agreement signed July 21, 1997 by Seller and July 21, 1997 by
Buyer. If additional confidential information not covered by such
Agreement needs to be exchanged by the Parties, the Parties will first
enter additional confidential disclosure agreements as appropriate.
25. COUNTRY OF ORIGIN
A For each Product purchased under this Agreement, Seller shall furnish
Buyer with country of origin (manufacture), by quantity and part number
(Buyer's and Seller's) if requested by Buyer.
26. PROPERTY FURNISHED BY BUYER
A. Any tools, drawings, specifications, or other materials furnished by Buyer
for use by Seller in its performance under this Agreement or any Purchase
Order issued hereunder shall be identified and shall remain the property
of Buyer and shall be used by Seller only in its performance hereunder and
Seller shall, at Buyer's expense, take such action as Buyer may reasonably
request to give full legal effect to Buyer's rights therein. Such property
shall be returned to Buyer at Buyer's cost, upon request, to destination
specified by Buyer in good condition, except for normal wear and tear.
B. Buyer shall maintain, or pay to maintain, any Buyer-owned property in use
by Seller.
27. GENERAL
A. Any obligations and duties which, by their nature, extend beyond the
expiration or earlier termination of this Agreement, including Sections 0,
4.E, 8, 9, 11, 13.C, 14, 15, 16, 19, 24 and 26 shall survive any such
expiration or termination and remain in effect. Termination shall not
relieve any Party from its liability for breach.
B. If any provision or provisions of this Agreement shall be held to be
invalid, illegal or unenforceable, such provision shall be enforced to the
fullest extent permitted by applicable law and the validity, legality and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
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C. No action, except those regarding claims by third parties, or claims with
respect to patents, copyrights, trademarks or trade names or the
unauthorized disclosure of Confidential Information, regardless of form,
arising out of this Agreement may be brought by either party more than [*]
after the cause of action has arisen, or, in the case of non-payment, more
than [*] from the date the payment was due.
D. Any waiver of any kind by a party of a breach of this Agreement must be in
writing, shall be effective only to the extent set forth in such writing
and shall not operate or be construed as a waiver of any subsequent
breach. Any delay or omission in exercising any right, power or remedy
pursuant to a breach or default by a party shall not impair any right,
power or remedy which either party may have with respect to a future
breach or default.
E. To the extent the laws of the United States are applicable, Seller hereby
gives assurance to Buyer that it shall not export, re-export or otherwise
disclose, directly or indirectly, technical data received from Buyer or
the direct product of such technical data to any person or destination
when such export, re-export or disclosure is prohibited by the laws of the
United States or regulations of a Department of the United States.
F. This Agreement is considered to be Buyer and Seller Confidential
Information.
G. The entire Agreement between the parties is incorporated in this Agreement
and Exhibits, and it supersedes all prior discussions and agreements
between the parties relating to the subject matter hereof. This Agreement
can be modified only by a written amendment duly signed by persons
authorized to sign agreements on behalf of both parties, and shall not be
supplemented or modified by any course of dealing or trade usage. Variance
from or addition to the terms and conditions of this Agreement in any
Purchase Order, or other written notification from Seller will be of no
effect.
H. Exhibits specified in this Agreement shall be attached hereto and by this
reference are made a part hereof.
I. The construction, validity, and performance of this agreement and any
Purchase Order issued under it shall be governed by the laws of the State
of Utah. The United Nations Convention on Contracts for the International
Sale of Goods is hereby expressly excluded from application to this
Agreement.
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IN WITNESS, THE AUTHORIZED REPRESENTATIVES OF THE PARTIES HAVE EXECUTED THIS
AGREEMENT.
For the Buyer: For the Seller:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ 7/31/97 /s/ Rod Michael 7/30/97
-------------------------------- --------------------------------
Signature (date) Signature (date)
▇▇▇▇▇ ▇▇▇▇▇▇▇ ROD MICHAEL
-------------------------------- --------------------------------
Name Name
Chief Operating Officer VP Business Development
-------------------------------- --------------------------------
Title Title
Iomega Corporation Manufacturers' Services Limited
-------------------------------- --------------------------------
Company Company
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EXHIBIT A
Products & Pricing
Seller agrees that the price is firm for the current [*] and that the price will
be renegotiated prior to the end of the firm pricing period. Seller agrees to
furnish a non-binding price forecast for the following [*]. No less than [*]
prior to the end of the then current pricing period, Seller shall provide Buyer
with [*] pricing. Seller agrees that any Value Added and Material Acquisition
pricing adjustments made shall include both existing Purchase Orders (backlog)
and new Purchase Orders respective to the [*] in which they are scheduled for
delivery by Buyer.
Seller further agrees to provide price in US$. Buyer agrees to pay in US$ for
any given quarter.
Qtrly Run Rate Machine Hand Hand Solder Material
(Annualized) Placement Cost Placement Cost Cost/Comp Acquisition
------------ -------------- -------------- --------- -----------
[*]
Component Pricing is delivered by Buyer to the Seller for each pricing period.
The total price of the Product is calculated by the following formula, using the
values in the table above:
[*]
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EXHIBIT B
SPECIFICATION
Buyer's specifications are identified by Buyer part number(s) in Exhibit B
herein. For each part number all reference specifications shall apply as
provided to Seller.
Description Part Number
----------- -----------
[*]
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EXHIBIT C
QUALITY AGREEMENT
Intentionally Left Blank.
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EXHIBIT D
FLEXIBILITY AGREEMENT
The following changes to volumes on existing Purchase Orders may be made without
cost or liability to Buyer for Products, except as allowed by Paragraph 3.D of
this Agreement.
Number of weeks prior % Increase % Decrease
to scheduled delivery dates
[*]
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EXHIBIT E
AFFILIATES AND AUTHORIZED AGENTS
Affiliates
Iomega (Malaysia) SDN BHD
Authorized Agents
None
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