AGREEMENT
Altron purchased by Sanmina
1. REPRESENTATIONS
This is an Agreement between Adept Technology, Inc. located at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ("Buyer") and Altron Systems
Corporation, located at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("Seller").
2. PURPOSE
This Agreement is written and executed in good faith on the date of final
execution (the "Effective Date") by both parties, with the mutual interest
of developing a long lasting business relationship that will be mutually
profitable and successful. In executing this Agreement the parties hereto
declare they are each independent contractors and the transactions
described in this Agreement constitute the extent and total relationship of
the parties.
3. TERM OF AGREEMENT
The Term of this Agreement shall be three (3) years from the Effective
Date, unless either party initiates formal notification of termination.
Thereafter, this Agreement may be extended by mutually signed, written
amendment.
4. PRODUCTS AND SERVICES
Buyer agrees to purchase printed circuit assemblies (the "Products") as
specified by written purchase orders, and Seller agrees to deliver such
Products in compliance with Buyer's purchase order documents, and mutually
agreed specifications and Seller's order acknowledgments. Buyer and Seller
agree to consider other products, assemblies and/or services that are
compatible with each other's business purpose and end products and services
as a means of enhancing and further developing the success of this business
relationship.
5. APPLICABLE DOCUMENTS
All deliverables under this Agreement shall be manufactured, assembled or
otherwise modified or value added, in accordance with the Buyer's
specifications and/or drawings and other process documentation as mutually
agreed between Buyer and Seller.
**** - Indicates confidential information that has been omitted pursuant to a
request for confidential treatment and filed separately with the Securities and
Exchange Commission.
6. QUALITY
Seller shall produce the Product in accordance with the standards set forth
in IPC-610-Class 2. Buyer and Seller agree to cooperate and provide
reasonable quality and defect cause data collection to improve Buyer's
documentation of requirements, Seller's delivered end product and Buyer's
resulting application of Seller's end product.
7. ENGINEERING CHANGE ORDERS, PROCESS CHANGE NOTICES AND DEVIATION NOTICES
It is recognized that Seller will be asked to implement Buyer's Engineering
Change Orders (ECO's), Process Change Notices and Deviation Notices in a
timely manner. Seller shall issue, within 5 (five) business days, a
quotation in response to the foregoing showing all charges associated with
documentation, labor, material and administrative costs. Implementation
will be mutually agreed by the issuance of Buyer's purchase order or change
order and by Seller's order acknowledgment. Buyer agrees to pay Seller for
all costs incurred by Seller relative to orders released and confirmed by
Seller prior to the implementation of the mutually agreed ECO, deviation or
process change.
8. PRODUCT AND BUSINESS CONFIDENTIALITY
The partnership, product assembly and working relationship between Buyer
and Seller are mutually considered a special relationship. Information or
disclosed knowledge may be considered by either party to be Company
Confidential, especially related to potential new products, new or changing
product markets and related business actions and conditions. lt is
expected, as an integral part of the contractual and partnership
relationship, that such discussions or transmitted or otherwise disclosed
information should be treated as strictly Company Confidential between both
parties, their employees and applicable suppliers. Neither party shall
intentionally or unintentionally discuss, disclose or otherwise transmit
any product, product market or other technical or business information with
any third party, whether company or individual, including marketing or
advertising of its relationship and/or photographs of processes or
products, without the specific advance knowledge and written consent of the
other party to this Contract.
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9. PROPRIETARY DATA
All specifications, drawings or other documents provided by the Buyer to
Seller pursuant to this Agreement are property of Buyer and as such, shall
be considered Company Confidential by Buyer. Seller shall not copy,
duplicate or transfer any such information for purposes other than may be
required to perform to the requirements of this Agreement. This Agreement
and amendments thereto and all documentation, written procedures, purchase
orders, order acknowledgments and/or written correspondence shall be
considered Company Confidential between the parties regardless of whether
or not the written documentation is so marked. All business and technical
discussions between Buyer's and Seller's employees shall be considered
Company Confidential and all information related to such discussions shall
not be discussed with any other parties.
10. TECHNICAL COMMUNICATlON
Technical discussions related to this Agreement between the Buyer's and
Seller's engineering, manufacturing and/or quality personnel, are hereby
authorized to preclude misunderstandings or misinterpretations. However,
all changes in the contractual scope of work, pricing or delivery schedule,
materials or data related to this Agreement shall be effective only if
mutually agreed by a Buyer change order and Seller order acknowledgment.
11. PURCHASE ORDERS/FORECASTS
A. Buyer shall provide Seller with a minimum of six (6) month forecast, of
which the first three (3) months will be covered by signed purchase orders.
Seller will procure parts and materials per Buyer's purchase order and
forecast quantities based on lead-time and lot size agreements in place.
B. Seller shall promptly respond within five (5) working days to Buyer's
forecasted changes, indicating acceptance and/or any cost premiums that may
be required in materials or labor to satisfy such changes. Buyer shall
acknowledge acceptance and any cost changes, or negotiated changes thereof,
via a written purchase order or change order.
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C. Seller shall provide a list of Long Lead items and a Lot Size Parts
Exposure Listing to Buyer that supports deliveries beyond 90 days. Said
lists shall be updated and reviewed by Buyer and Seller every three months.
D. Buyer authorizes Seller to purchase such Long Lead Items and Lot Size Parts
to support Buyer's forecast. Buyer shall assume liability for such material
until such material is used on a released order.
12. NO PURCHASE COMMITMENT
Buyer shall not be committed to purchase any annual quantity or dollar
volume, nor any estimated or anticipated usage quantities or dollar volume,
regardless of any expressed or implied verbal or written statements that
may be communicated to Seller either before issuance of this agreement or
during the term of this agreement.
13. ORDER CANCELATION
Buyer may cancel any order scheduled for delivery more than thirty (30)
days from the date such cancellation notice is given to seller. Upon
cancellation, buyer is liable to seller for all material within the greater
of the ninety (90) day period or the long lead time and lot size parts
exposure list for the material. In addition, Seller will make every effort
to cancel its orders or return materials for credit without penalty and
pass on any recovered cost to buyer. Buyer will only be responsible for any
restocking fees that Seller fully justifies its failure to negotiate out of
returned materials to its suppliers, with no ▇▇▇▇-up in costs to Seller.
14. FOB POINT
Products will be shipped by Seller's own truck and be shipped FOB
Destination.
15. EXCESS MATERIALS RESULTING FROM NO DEMAND
In the event of the end of a program and/or Buyer has had no demand for a
minimum of six (6) months, that portion of excess materials that were
purchased by Seller consistent with Buyer's prior demand volume will be
purchased by Buyer. Seller will exercise diligent commercial efforts to
utilize the materials in other customer businesses prior to requesting
Buyer excess buyout.
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16. RESCHEDULING
Seller may invoice Buyer, and Buyer shall remit payment for any Seller's
end product (finished goods assembly), produced in good faith by Seller to
support Buyer's purchase order requirements, that is still on hand at
Seller 90 days after original delivery date, unless Seller agrees to a
subsequent reschedule date. Seller may invoice Buyer and Buyer shall remit
payment for piece part or material, purchased in good faith by Seller to
support Buyer's purchase order requirements, that is still on hand at
Seller 180 days after original delivery date. Seller shall be responsible
for costs incurred relative to purchase and inventorying of any piece parts
or materials in quantities that are excess to Buyer's purchase order
demand.
17. EARLY/LATE DELIVERIES
Unless mutually agreed in writing Seller shall schedule all shipments of
Product to ensure receipt at Buyer's dock no more than five working days
prior to the mutually agreed upon purchase order due date, with no
allowance for any delivery beyond the purchase order due date. Deliveries
outside the allowed delivery window may be returned by Buyer at the
Seller's expense and any invoiced charges will be debited against Buyer's
purchase order.
18. OVERSHIPMENTS
Unless otherwise mutually agreed in writing all overshipments of Product
shall be considered unauthorized and may be returned at no cost to Buyer.
19. PACKAGING
Seller shall be responsible for providing all necessary packaging and shall
pack merchandise so as to ensure proper ESD protection and safe delivery in
an undamaged condition for receipt at Buyer's dock. Safe and undamaged
condition shall be defined as no external or internal damage nor ESD damage
or degradation of performance of the Seller's end product, or any or all of
its piece parts, components or materials therein. Any cost for repair or
replacement of merchandise damaged in transit shall be the sole
responsibility of the Seller.
20. MARKING & IDENTIFICATION
Seller shall ensure the manufacturer's part number and Buyer part number,
as appearing on
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the applicable purchase order and/or purchase order technical
specifications or drawings, and related bar coded documents (if available),
shall be permanently applied to the actual part, or internal part bag or
package if the part is too small for marking. This same part number
requirement, along with the Buyer purchase order number, shall appear on
all external shipping containers, shipping documents and Seller's packing
slip.
21. PRICE LIST
The parties will agree to an Approved Price List which will pertain to the
Products sold under this Agreement, which Price List shall be reviewed on a
semi-annual basis and be subject to changes to reflect price changes
required under the section titled "Engineering Change Order, Process Change
Notice and Deviation Changes" above or changes in any statement of work
agreed to by the parties or price changes necessitated due to significant
cost increases of Seller's suppliers or changes in Supplier's commodity
markets.
22. PRICING MODEL
Pricing will be reset each year based on the following model. Any
modifications to this model, for current or future assembly quotations,
must be jointly agreed, except as follows. Seller agrees to provide a price
reduction from the above standard model based on pre-set annual revenue
hurdles. The reduction in prices is as follows:
****
23. PREMIUM DELIVERY PERFORMANCE AND CHARGES
Seller agrees to provide premium delivery on selected end product
requirements specifically requested by Buyer, pending availability of parts
and materials needed to meet the expedited delivery date(s). Based on
Seller's supported justification, Buyer agrees to reimburse Seller for
reasonable premium delivery charges for the specific quantities of
purchased parts and materials required to meet the expedited delivery date
requested.)
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24. PAYMENT TERMS
Customer agrees to pay for all Products within thirty (30) days from
receipt of invoice.
25. QUARTERLY MEETINGS
Buyer and Seller agree to meet quarterly to review performance under this
Agreement and to discuss any significant issues which may arise during the
Term hereof. Seller shall provide disclosure of material prices and labor
hours for the Products covered under this Agreement. In addition, Buyer and
Seller shall discuss topics relative to the development of Continuous
Process Improvement (e.g. quality issues, delivery improvements, cost
reduction, etc.).
26. COST REDUCTION DISCUSSIONS
During the Term hereof the parties will explore measures to reduce costs.
The target goal for such reductions is five per cent (5%) per year. Cost
benefits which result from the efforts of both Buyer and Seller or Seller
only will be shared equally. All of the cost benefits resulting from the
sole efforts of Buyer will be passed on to Buyer.
27. NEW PRODUCT DEVELOPMENT PRICING.
Seller agrees to provide facilities, test and related equipment, and
prototyping engineering and test manpower in support of Buyer's
requirements for new product development. Initial piece part and materials
requirements may be secured from Seller's inventory or through Seller's
buying capability, or at the option of the Buyer, as consigned kits of
parts and materials for prototype assembly and later for initial production
runs. In all aspects of design development, parts and materials procurement
and assembly and test, Seller agrees to provide accelerated fast-turn
support to Buyer in new product development. This activity will provide an
opportunity for additional business and/or or ensure continuation of
business to Seller as new product replacements and/or upgrade design
changes obsolete Buyer's existing products
28. JIT KANBAN DELIVERY PROGRAM
Buyer and Seller agree to develop a completed method of JIT KANBAN
Deliveries by Seller to meet Buyer's production demand, with individual
part and assembled product inventory configured within Seller's operation
and both Buyer's and Seller's employees trained, to
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ensure implementation of the program within twelve (12) calendar months
from the Effective Date of this Agreement.
29. UNAUTHORIZED CHANGES
Any intended changes by the Seller to the delivery, specifications, price,
quantity or other contractual terms and conditions on an open purchase
order / subcontract shall be communicated in writing by the Seller in
advance to such actions. Seller shall not implement any such changes until
confirmation or acknowledgment is received from the Buyer
30. NO COMPONENT SUBSITIUTION
Seller shall not deviate from the contractually specified materials, parts
or components designated by the Buyer's purchase order or Approved Supplier
Listing (ASIQ or any related specification, drawing or other contractual
document required in the performance of manufacturing and delivering the
product requirements on the face of any of the Buyer's purchase order /
subcontract, without written fax, letter or change order approval
specifically issued by the Buyer. Only the Buyer of record or other duly
authorized purchasing personnel, shall be authorized to approve any
substitute materials, piece parts, or components.
31. WARRANTY
Seller warrants that the Products will conform in all material respects to
mutually agreed specifications for a period of eighteen (18) months from
receipt by Buyer (the "Warranty Period"). If Buyer, during the Warranty
Period, notifies Seller in writing of a warranty claim, then upon receipt
of such notice, Seller may examine the Products at Buyer's facility or
require Buyer, at Seller's expense, to ship the Products to Seller per
Seller's Return Materials Authorization (RMA) Procedures. If a Product is
found to be non-conforming per the terms herein, Buyer will notify Seller.
Seller shall provide an RMA number within two (2) working days of written
request by Buyer. Seller shall use due diligence to perform any analysis or
examination of the Products in question in a timely manner. Seller shall
not withhold or otherwise delay providing to Buyer an RMA number for return
of the Product for repair or replacement. Seller shall have no obligation
under this section, if Seller determines
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reasonably that the Products were not defective or missing at the time of
shipment by Seller or, if the Products were damaged of misused by Buyer or
modified, repaired, or altered, except as authorized by Seller or subject
to accident or improper installation by Buyer. The liability of Seller
under this warranty is limited to repairing or replacing non-conforming
products at no charge to Buyer or issuing a credit at Seller is option, not
to exceed the purchase price of the non-conforming products. Seller shall
deliver repaired or replaced Product within fifteen (15) working days of
receipt of the Product returned by Buyer. If the Seller fails to provide
return delivery of repaired or replaced Product within the above fifteen
(15) working day period, Buyer will debit Seller for the full purchase
order unit price extended value of the Products.
EXCEPT FOR EXPRESS WARRANTIES SET FORTH HEREIN, SELLER MAKES NO OTHER
EXPRESS WARRANTIES OF ANY KIND AND HEREBY DISCLAIMS ALL IMPLIED WARRANTIES
INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
32. REPAIR OF PRODUCT AFTER WARRANTY PERIOD
If a non-conformity arises after the expiration of the Warranty Period, and
Buyer notifies Seller in writing of such non-conformity, Seller and Buyer
will cooperate with each other to diagnose the non-conformity. Seller shall
provide an RMA number within two (2) working days of written request by
Buyer. Once such diagnosis is complete, Seller will provide Buyer with a
written quotation for repair of the Product and Buyer, at its option may
then issue its purchase order to Seller to effect such repair. Seller shall
deliver out of warranty repaired Product within thirty (30) working days of
receipt of the Product and purchase order from Buyer.
33. NO TROUBLE FOUND
If during the Warranty Period, Buyer identifies a non-conformity in a
Product but the cause cannot be reasonably determined, Buyer and Seller
will cooperate with each other to diagnose the cause within a reasonable
time and cost ceiling, mutually agreed prior to incurring any respective
labor and material costs. If the final cause is determined to be
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covered by the Section titled "Warranty", Seller shall repair or replace
such non-conforming product per the provisions of the "Warranty" Section
and also bear the costs of the diagnosis. Alternatively, if the final cost
is determined to be outside of the provisions of Warranty section, Buyer
shall bear the costs of repair or replacement and the costs of the
diagnosis.
34. ASSIGNMENT
Neither party hereto shall assign this Agreement except to a successor of
substantially all of such party's business and assets, without first
obtaining the prior written consent of the other party. A party assigning
this Agreement to a successor shall provide prior written notice of such
assignment to the other party.
35. FORCE MAJEURE
Except for Buyer's payment obligations neither party hereto shall be liable
for delays in performance hereunder if such delay is the result of causes
beyond its reasonable control.
36. INDEMNIFICATION AND LIMITATION OF LIABILITY
In no event, whether as a result of breach of contract, warranty, or tort
(including negligence), strict liability, product liability, or otherwise,
shall either party be liable to the other for any special, indirect,
incidental, consequential or exemplary damages of any kind whether or not
such party was advised of the possibility of such damage. These limitations
shall apply notwithstanding any failure of essential purpose of any limited
remedy. Buyer assumes responsibility for the use and resale of the
Products, and agrees to indemnify and hold Seller harmless from loss of any
kind, resulting from such use or resale. Each party hereto agrees to
indemnify and hold the other party harmless from claims made against it by
its own shareholders, employees, suppliers, customers or the U.S.
Government. The provisions of this Section shall survive the termination of
this Agreement.
37. TERMINATION
This Agreement may be terminated for convenience or for cause by either
party in accordance with the following:
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A. Either party may terminate this Agreement for cause if the other party
breaches a material provision hereof and the defaulting party fails to cure
such breach within thirty (30) days after receiving written notice thereof.
B. Either party may terminate this Agreement if the other party enters into or
files a petition, arrangement or proceeding seeking an order for relief
under the bankruptcy laws of the United States, or has a receiver appointed
for it or the other party enters into an arrangement for the benefit of its
creditors; or becomes insolvent.
C. Either party may terminate this Agreement for convenience, without reason
given, upon one-hundred-eighty (180) days notice to the other party. During
the one-hundred-eighty (180) day period, all terms and conditions of this
Agreement shall remain in full force and effect. Such termination for
convenience will not affect obligations which arose prior to such
termination.
38. INFRINGEMENT
As all Products are based on Buyer's specifications, Seller shall have no
liability for any infringement claim which arises from Buyer's
specifications. Buyer shall indemnify and hold Seller harmless from all
costs, fees and expenses incurred by Seller with respect to any such claim.
39. GOVERNING LAW AND ARBITRATION
This Agreement shall be governed by and construed in accordance with the
laws of the State of California. Any general disputes or disputed
termination-for-cause actions will be adjudicated under the laws of the
State of California. Buyer and Seller agree to resolve any disputes arising
out of this Agreement by means of arbitration. Buyer and Seller shall
mutually agree on a specific independent arbitrator, with the final
decision of the independent arbitrator binding of both parties in cost and
action. The cost of any arbitration shall be shared equally by the parties,
except each party shall bear the cost of preparing and presenting its own
case.
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40. GENERAL
The provisions of this Agreement shall take precedence over any different
or conflicting terms of any purchase order or acknowledgment issued
hereunder. This Agreement represents the complete understanding between the
parties hereof. No waiver by either party of the breach of any provision
hereof shall be deemed to be a waiver of any different or subsequent
breach. All notices shall be given in writing and addressed to the
individuals named below.
Signed and Executed on the dates set forth below:
Adept Technology, Inc.(Buyer) Altron Systems Corporation (Seller)
/s/ ▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Authorized Representative Authorized Representative
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Typed Name Typed Name
VP Operations VP Western Region
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Title Title
1/28/98 1/30/98
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Date Date
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