EXHIBIT 10.9
Memorandum of Understanding
between
International Manufacturing Services, Inc.
and
Alteon Networks, Inc.
IMS shall perform turnkey manufacturing for Alteon in accordance with purchase
order requirements and releases to be issued by Alteon. This turnkey
manufacturing shall involve the following activities to the extent required in
order to accomplish the desired result.
Program Managagement: IMS shall establish a Program Manager to manage and
coordinate the IMS activities required in support of the Alteon program. The IMS
Program Manager shall be responsible to assure that all IMS resources required
to satisfy the Alteon program requirements are applied in a timely and efficient
manner.
Engineering: IMS shall utilize its Engineering staff in support of this project
to assure that the Alteon product is produced in a cost effective manner. These
IMS engineering resources shall be applied to, but not limited to product and
testing tool design, as well as manufacturability and testability review and
recommendations to Alteon. The IMS engineering staff shall assist the Alteon
engineers during the introductory phase of the new products brought to IMS
during the period of this MOU to assure a smooth transition from design to
production.
Materials Management: In accordance with the requirements of this MOU, IMS shall
be responsible for, but not limited to, the following material management
activities: purchasing, expediting, inventory control, kitting and periodic
cycle counting. When necessary, Alteon will identify preferred or sole sources
for components required for Alteon products.
Alteon shall be financially responsible for all Excess and Obsolete material
accumulated as a result of engineering changes in the product order,
cancellations, reschedules and/or product cancellations. IMS will use its best
efforts to return for credit, or use elsewhere, any excess or obsolete material.
Assembly: IMS shall be responsible for all assembly activities related to Alteon
products covered by this MOU. IMS shall determine the most efficient and cost
effective method for accomplishing this activity depending upon the product to
be assembled in accordance with Alteon design and manufacturing documentation.
All assembly workmanship will be done according to IPC 610B, Class II standards.
Testing: Alteon and IMS will jointly determine the methods for testing Alteon
products built by IMS. IMS shall test all Alteon products built under this
agreement to the extent specified in the purchase orders released by Alteon.
This testing will include in-circuit testing, functional testing and system
testing where appropriate. The results of all testing performed by IMS shall be
recorded and provided to Alteon as required.
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Warranty: All products assembled by IMS shall be covered by a 1 year warranty on
workmanship and 90 day warranty on material. The warranty period will commence
on the date of first shipping to Alteon. Defective product will be returned by
Alteon to the IMS point of manufacturer at Alteon's expense using the IMS RMA
procedures.
Quality Assurance: IMS shall maintain and apply accepted Quality Assurance
practices throughout the entire manufacturing process from incoming inspection
to final inspection, packing and shipping. ISO 9002 Quality Systems and BABT
requirements shall apply. This QA process shall include a corrective action
process to identify root cause of any non-conformance which may occur during the
manufacture of Alteon products. Alteon reserves the right to participate in the
review and disposition of non-conforming Alteon product at any state of IMS
production. IMS quality assurance records relating to the production of Alteon
products shall be available to Alteon for review upon request.
Packing and Shipping: IMS shall prepare the finished Alteon products for
shipment in order to assure arrival at the designated destination in an
undamaged condition. Shipping destination will be designated by Alteon in the
purchase order. Alteon products shall be shipped FOB, the IMS facility in
Thailand.
Payment Terms: All Alteon payments for products shall be in United States
dollars and free of any offset or claims. Alteon is responsible for all taxes,
duties and freight. Payment terms are Net Thirty (30) days from date of invoice.
Agreed to: Agreed to:
IMS
International Manufacturing Services, Inc. Alteon Networks, Inc.
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Senior Vice President Vice President, Operations
Date: 6-30-98 Date: 6-30-98
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