Manufacturing Services Agreement
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both not material and would likely cause competitive harm to the Company if publicly disclosed.
This Manufacturing Services Agreement ("Agreement") is entered into on October 1, 2019 (“Effective Date”), by and between:
A. Enphase Energy, Inc. having its place of business at ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, on behalf of itself and its Subsidiaries ("Enphase"), and
B. Salcomp Manufacturing India Private Ltd., having its place of business at Noka Telecom SEZ, SIPCOT Industrial Park, Phas III, Chennai – Bangalore Highway, Sriperumbudur, Tamil Nadu – India, 602105 on behalf of itself and its Subsidiaries ("Supplier").
Enphase and Supplier shall each be a “Party” and collectively, the “Parties”.
Enphase desires to engage the Supplier, and the Supplier agrees to perform manufacturing services, for good and valuable consideration as further set forth in this Agreement. The Parties agree as follows:
I. DEFINITIONS
Supplier and Enphase agree that capitalized terms shall have the meanings set forth in this Agreement and Exhibit A attached hereto and incorporated herein by reference.
2. MANUFACTURING SERVICES
2.1. Work. Enphase hereby engages Supplier to perform the work (hereinafter "Work"). "Work" shall mean to procure Materials (as applicable) and to manufacture, assemble, and test products, which shall include, but not be limited to: (i) the Combiner Box 3.0; (ii) the Envoy S; and (iii) the IQ7 Microinverter) and any other products as required by Enphase (collectively, hereinafter "Product(s)") pursuant to detailed written Specifications for each category of Products. The "Specifications" for each category of Products (or revision thereof), shall include, but are not limited to ▇▇▇▇ of materials (“BOM”), designs, schematics, assembly drawings, process documentation, test specifications, packing specifications, current revision number, and Approved Vendor Lists, and shall be further detailed in Exhibit B. For the avoidance of doubt, the Work also includes the Supplier’s responsibility to procure (and/or install, as applicable) the Supplier Controlled Equipment as listed in Exhibit E. For the avoidance of doubt, the Supplier shall not deviate from the Specifications, the terms of this Agreement or any Exhibit hereto, unless required by an ECO (as defined herein) issued by Enphase. Enphase may, at its discretion, add new products to the scope of the Products and the Work under this Agreement (“NPI”). Should Enphase
choose to exercise this right, the Parties will discuss and mutually agree on the fees and other relevant terms applicable to such NPI. For the avoidance of doubt, the Supplier shall be responsible for translating any of the documents referred to in this Agreement (including the terms of this Agreement itself), to the extent required to perform the Work to the satisfaction of Enphase.
2.2. Engineering Changes. Enphase may from time to time, request that Supplier incorporate engineering changes into the Product by providing Supplier with a description of the proposed engineering change as the Enphase deems necessary, for Supplier to evaluate its feasibility and cost (an “Engineering Change Order” or “ECO”). An ECO is required when the form, fit, or function of the design of the Product and/or Specifications are affected. Supplier shall provide a written response in the form of an "Engineering Change Analysis" form to Enphase, within three (3) business days of receipt of an ECO, if such changes affect the per-unit price and/or delivery of a Product. Enphase shall respond with a written acceptance in the
form of a purchase order or rejection of the Supplier "Engineering Change Analysis" form within three (3) business days of receipt thereof. Upon receiving Enphase written acceptance, Supplier will proceed with engineering changes as given in the ECO. For the avoidance of doubt, and notwithstanding anything to the contrary in this Agreement, the Supplier shall not make any changes to the processes or designs as stated in the Specifications, without Enphase’s express prior written consent.
2.3. Tooling; Non-Recurring Expenses; Software. Enphase shall pay for or obtain and consign to Supplier any Enphase Controlled Equipment, as outlined in Exhibit D, Product-specific tooling, equipment or software and other reasonably necessary non-recurring expenses, to be set forth in Supplier's quotation. All software that Enphase provides to Supplier, or any test software that Enphase engages Supplier to develop is and shall remain the property of Enphase at all times. The Supplier shall promptly notify Enphase in case of any non-consignment of Enphase Controlled Equipment required to perform the Work.
2.4. Enphase Controlled Equipment. All Enphase Controlled Equipment will remain the property of Enphase; however, Supplier shall be responsible for managing and maintaining all such equipment. This Agreement shall be updated to include any additional Enphase Controlled Equipment made available by Enphase for Supplier’s use in performing the Work. Notwithstanding the location of any Enphase Controlled Equipment at a Supplier or other non-Enphase facility, or the failure to list any item of Enphase Controlled Equipment in the Agreement or a purchase order, all right, title and interest in and to any Enphase Controlled Equipment will be and remain with Enphase, and Supplier will have no title or ownership interest in such Enphase Controlled Equipment. Supplier will provide Enphase with reasonable access to all Enphase Controlled Equipment located at a Supplier or other non-Enphase facility, and, notwithstanding any contrary terms that may be contained herein, will be responsible for all costs and expenses associated with repair or replacement of any Enphase Controlled Equipment or any part thereof damaged (reasonable
wear and tear excepted) by Supplier, its employees, permitted subcontractors, agents or invitees (excluding Enphase). Neither Supplier nor its assignees will file a mechanic’s lien or similar lien, security interest or other encumbrance, on Enphase Controlled Equipment or otherwise use Enphase Controlled Equipment as collateral for any financing. Without limiting the foregoing, in the event any such lien or security interest is filed, Supplier or its assignee, as the case may be, will be responsible for the immediate satisfaction, payment or bonding of any such lien or security interest. Unless a later return date is requested by Enphase, within ten (10) business days following the earlier of completion of the applicable purchase order or any expiration or termination of this Agreement, Supplier will return each item of Enphase Controlled Equipment to Enphase in substantially the same condition it was in when initially provided to Supplier, reasonable wear and tear excepted.
2.5. Cost Reduction Projects. Supplier agrees to continuously, during the term of this Agreement, to use its commercially reasonable efforts to seek ways to reduce the cost of manufacturing Products by methods such as elimination of Materials, redefinition of Specifications, and re-design of assembly or test methods. Upon implementation of such ways that have been initiated by Enphase, Enphase will receive 100% of the demonstrated cost reduction for the balance of the quarter in which it is found. Costs shall be formally evaluated at the end of each quarter and standards shall be adjusted based upon that evaluation. Justification for all costs (including a costed BOM) shall be provided to Enphase no later than 10 business days before the end of the quarter. New standards will be effective for all shipments starting on the first day of each quarter. The Parties shall mutually agree upon non-binding cost reduction targets during their QBRs.
2.6. Factory Access. Supplier agrees to grant access as needed to Enphase or its representatives for factory audits at no charge to Enphase. Enphase may at its option, seat its employees or representatives
onsite within the Supplier’s factory premises (“Onsite Team”), towards establishing an Enphase ‘office desk’ within the Supplier’s factory premises. The Supplier shall provide all facilities, equipment and support reasonably necessary for the Enphase employees (or representatives, as applicable) to carry out their day to day business activities. The Onsite Team may access the Supplier’s factory at any time during the term of this Agreement, without prior written notice to the Supplier, and the Supplier expressly consents to the same. Upon providing a written notice at least two (2) weeks in advance, Enphase may bring any of its customers, with the intention of carrying out an Audit (as defined herein), and the Supplier agrees to co-operate with Enphase (or such Enphase customers, as applicable) for conducting such an Audit. Notwithstanding anything else contained in this Agreement, and in addition to any of Enphase’s rights of Audit and access, Enphase may, upon providing 24 hours’ notice to the Supplier, access and/or Audit the Supplier’s factory along with a technical support team.
2.7. IT Support. Enphase requires a client-to-site connection to the Supplier facility be available at all times to monitor production test equipment and to troubleshoot any potential problems. Supplier shall provide a static internet connection, through which Enphase can tunnel via a secure protocol such as VPN. Enphase shall, at its discretion and to the extent required in Enphase’s sole opinion, provide pre-configured equipment for installation at the Supplier facilities.
2.8. Quality
(a) Prior to the commencement of the Work, Enphase will have the right (but not the obligation) to conduct a quality Audit on the factory or other premises used by the Supplier to perform the Work, in order to confirm whether such factory complies with the Specifications (as applicable). The Supplier will resolve to Enphase’s satisfaction, any critical or major issues identified by Enphase during such Audit, prior to beginning production of the Products.
(b) Enphase is contracting to buy conforming Products, assemblies or components, and expects Defect- free yields from Supplier. Enphase seeks a relationship with Supplier that maximizes the probability of 100% Defect-free Product. To ensure quality, the Supplier shall dedicate a team of adequate number of Supplier Personnel with appropriate qualifications, along with a team leader who shall be fluent in English. The Supplier shall ensure that adequately qualified Supplier Personnel are available at all times to Enphase. Supplier will set up an incoming quality control (“IQC") system to inspect all Materials used in the Product based on the component Specifications on a sampling basis. Supplier will ensure only IQC “passed” Material is utilized in the Products, and will maintain records for lot traceability into the production serial range. Supplier will ensure incoming Materials have no substitution for country of origin, and will require a COC per lot. Enphase shall subject the Products delivered by the Supplier to an accelerated lifetime testing regimen as well as ongoing reliablility testing. Any failures in such testing that arise from differences in Materials, Specifications or processes specified by Enphase in this Agreement or any subsequent ECOs shall be considered a Defect
(c) Quality includes, but is not limited to, all properties of the Product that contribute to customer satisfaction, including function, workmanship, appearance, performance, reliability, timely delivery, invoicing, packing, packaging, meeting hazardous substance restrictions and support. Supplier will follow a PPAP process as outlined in Exhibit B to launch each new production TAN. Supplier will develop an operator certification program and online station validation/record keeping to ensure only “trained/certified” operators are on the production line.
(d) The primary goal of Supplier’s quality planning will be prevention and early detection of Defects, as opposed to reacting to Defects as they are discovered. Upon request, Supplier will demonstrate to Enphase that its quality control plans are inherently capable of meeting Defect-free standards. The Supplier will endeavor
to obtain and maintain the ISO 9001:2015 certification during the term of this Agreement.
(e) Supplier will deliver Products conforming to applicable specifications and which are 100% Defect- free. The date code limitation for all inbound components will be the greater of: (i) the designated expiration date of the Materials; or twenty four (24) months from the date of manufacture. Supplier will develop a quality program for its production process that ensures Products are Defect-free. At Enphase’s request, Supplier will supply Enphase with process control data to help Enphase ascertain the probability of receiving Defect-free Product. During any production period, the Supplier will follow the DPPM shutdown rules as detailed in Exhibit B.
(f) At its option, Enphase may inspect and test any or all Products received by Enphase, and such inspection may be by lot sampling or by testing individual units. When lot sampling is used, the applicable standard will be the industry-recognized zero defects (C = 0) plan at the appropriate confidence level. Such testing and/or inspection may take place at Enphase’s facility or at Supplier’s facility. If at Supplier’s facility, Supplier agrees to provide reasonable support and services to and for Enphase’s representative. Supplier agrees that the representations and warranties made in this Agreement with respect to Products will continue to apply regardless of whether Enphase accepts, tests or inspects any Product Unit or lot.
(g) The Supplier acknowledges that the obligations on quality provided in Sections 2.8 (a) to (f) are essential so that Enphase may achieve its goals under this Agreement. To the extent that any Materials, or portions of the Work are performed for the Supplier by any third-party supplier, the Supplier shall ensure that such third- party Suppliers are bound by obligations at least as onerous as those in this Agreement, with relation to quality and compliance to the applicable Specifications. Supplier shall notify Enphase in writing of any such third-party supplier, and Enphase reserves the right to reasonably reject Supplier’s use of any third party supplier.
(h) If Defects, including Enphase’s rejection and/or return of Product as permitted under this Agreement, cause a Line Down, Supplier, within 24 hours of receipt of notice thereof from Enphase will provide qualified repair personnel at Enphase’s or Enphase’s customer’s facility to repair or sort, at Enphase ’s option, such defective Product at no cost to Enphase or Enphase’s customer. “Line down,” as used in the preceding sentence, means the cessation or delay of manufacturing, assembly or shipment operations experienced by Enphase and/or a Enphase customer as a result of a Defect or action or inaction by Supplier.
(i) If any Product does not comply to the Specifications, in accordance with Section 2.8 (e) and is therefore rejected by Enphase, Supplier will supply Enphase with a return material authorization or replacement Product within three (3) business days of Enphase’s request. Supplier further agrees to supply Enphase with an initial failure analysis within 24 hours and a containment plan within 48 hours and to provide due diligence in obtaining a full failure analysis within seven days of receipt of samples of rejected Product. Supplier agrees to provide the full failure analysis to Enphase in the format prescribed by Enphase.
(j) If any replacement Products delivered pursuant to Section 2.8 (e) have Defects or otherwise fail to conform to the requirements of this Agreement, Enphase may, at its option, cancel the related purchase order in whole or in part, without penalty or liability whatsoever to Enphase and/or Enphase may avail itself of any remedy set forth herein or pursuant to applicable Law.
(k) Upon request, Supplier will make available to Enphase all Product test data relating to qualification as well as production yield to evidence conformance to specifications and quality control. Supplier will facilitate product sampling for ongoing reliability testing (“ORT”) for Enphase. Sampling program is detailed in Exhibit
B. Supplier will provide resources at their facility to perform 1st level failure analysis for any failures that occur in ORT. Supplier will provide a weekly ORT report which tracks the status of the units submitted to the ▇▇▇▇▇▇▇▇, and the failure status by week.
(l) The Parties will meet on a weekly basis, to conduct an ongoing review of the steps required to ensure Product quality as envisaged by this Agreement. Supplier will track yield at each process step/test station, and perform pareto analysis, root cause analysis and corrective action per week to address the top items causing first pass yield loss (including NTF) per week. Data will be presented in a format as prescribed by Enphase to demonstrate the yield results, paretos, and action taken to address issues. This data will be reviewed in a joint weekly meeting between the Parties.
(m) For the purpose of ensuring quality and effective compliance to each Party’s obligations under this Agreement, a quarterly business review (“QBR”) shall be held every three (3) months, face-to-face in a mutually agreed location, generally at one of Supplier’s locations (i.e. a factory currently performing Work for Enphase). It may on occasion be held at an Enphase office. Conference call participation should be limited. To maintain focus and ensure direct and open communication, only key participants shall be present and shall include senior management representation from both Parties. The purpose of the QBR includes, but is not limited to reviewing Supplier performance, business trends, quality performance, improvement initiatives and strategic direction. The items to be reviewed shall, at either Party’s request, include items such as cost savings initiatives, Product pricing, Special Inventory and Lead Times. In general, these meetings shall assess the future outlook and review the previous period.
3. FORECASTS; ORDERS; FEES; PAYMENT
3.1. Forecast. Enphase shall provide Supplier, on a monthly basis, a rolling twelve (12) month forecast indicating Enphase's monthly Product requirements. The first ninety (90) days of the forecast shall be in weekly time buckets and will constitute Enphase's written purchase order for all Work to be completed within the first ninety (90) day period. Such purchase orders will be issued in accordance with Section 3.2 below. The remainder of the forecast is non-binding.
3.2. Purchase Orders; Precedence. Enphase may use its standard purchase order form for any notice provided for hereunder; provided that all purchase orders must reference this Agreement and the Specifications (if applicable). The Parties agree that the terms and conditions contained in this Agreement shall prevail over any terms and conditions of any such purchase order, acknowledgment form or other instrument, unless specifically agreed in writing by both Parties.
3.3. Purchase Order Acceptance. Purchase orders shall normally be deemed accepted by Supplier unless the Supplier notifies Enphase of Supplier’s objections to any purchase order within three
(3) days of receipt of such purchase order.
3.4. Fees; Changes; Taxes.
(a) The fees will be agreed by the Parties and will be indicated on the purchase orders issued by Enphase and accepted by Supplier. The initial fees shall be as set forth on the Fee List attached hereto and incorporated herein as Exhibit C (the "Fee List"). If a Fee
List is not attached or completed, then the initial fees shall be as set forth in purchase orders issued by Enphase and accepted by Supplier in accordance with the terms of this Agreement.
(b) All costs and fees will be evaluated quarterly during the ]QBR. The Parties shall agree to such costs, including but not limited to any BOM costs for a subsequent quarter during the aforementioned review. Any changes and timing of changes shall be agreed by the Parties, such agreement not to be unreasonably withheld or delayed. By way of example only, the fees may be increased if the market price of fuels, Materials, equipment, labor and other production costs, increase beyond normal variations in pricing or currency exchange rates as demonstrated by Supplier, to the satisfaction of Enphase.
(c) All fees are exclusive of federal, state and local excise, sales, use, VAT, and similar transfer taxes, and any duties, and the Supplier shall be responsible for all such items.
(d) Undisputed invoices will be paid by the Customer within [*] days from the date of receipt by Enphase of the shipment made by the Supplier of Products under a relevant purchase order.
4. MATERIALS PROCUREMENT; ENPHASE’S RESPONSIBILITY FOR MATERIALS
4.1. Authorization to Procure Materials, Inventory and Special Inventory. Enphase's purchase orders and forecast will constitute authorization for Supplier to procure: (a) Inventory to manufacture the Products covered by such purchase orders based on the Lead Time and (b) certain Special Inventory based on Enphase's purchase orders and forecast as follows: Long Lead-Time Materials as required based on the Lead Time when such purchase orders are placed and Minimum Order Inventory as required by the third party supplier. Supplier will only purchase Economic Order Inventory with the prior approval of Enphase. Supplier will provide to Enphase each quarter a list of all Long Lead Time Materials (greater than 8 weeks) and the total quantity on order for each long lead time part.
4.2. Preferred Supplier. Enphase shall provide to Supplier and maintain an Approved Vendor List (or AVL). Supplier shall purchase from vendors on a current AVL the Materials required to manufacture the Product. Enphase shall give Supplier an opportunity to be included on AVL's for Materials that Supplier can supply, and if Supplier is competitive with other approved vendors as determined by Enphase, Supplier shall be included on such AVL's. If Enphase determines that the Supplier is on an AVL and its prices and quality are competitive with other vendors, Enphase will raise no objection to Supplier sourcing Materials from itself. Notwithstanding anything else contained in the Agreement, unless otherwise agreed by Enphase in writing, the Supplier shall be bound to: (i) follow any Enphase approved splits to an AVL; and (ii) to the extent applicable and instructed by Enphase, purchase Materials only from those vendors listed in a current AVL. For the purposes of this Section 4.2 only, the term "Supplier" includes any companies affiliated with Supplier including the Supplier’s subsidiaries. For Supplier sourced material, Supplier must either: (i) provide a reasonable annual cost reduction based upon comparison to similar commodities; or (ii) provide proof of competitive bidding on the Supplier sourced parts on an annual basis.
4.3. Enphase Responsibility for Inventory and Special Inventory. Enphase is responsible under the conditions provided in this Agreement for all Materials, Inventory and Special Inventory purchased by Supplier under this Section 4, to the extent that such Materials, Inventory and Special Inventory have been purchased: (i) at Enphase’s request; or (ii) solely for performing the Work. Notwithstanding the foregoing, the Supplier shall implement industry standard practices, for the storage and safety of such Materials, Inventory or Special Inventory. The Supplier shall maintain the minimum quantities of Materials, Inventory and Special Inventory as outlined in Exhibit F to this Agreement, in order to ensure timely fulfillment of purchase orders issued by Enphase.
4.4. Materials Warranties. Supplier shall use its best efforts to obtain and pass through to Enphase the following warranties with regard to the Materials (other than the Enphase Controlled Materials) for a period of at least [*] years: i) conformance of the Materials with the vendor's specifications and with the Specifications; (ii) that the Materials will be free from defects in workmanship; (iii) that the Materials will comply with Environmental Regulations and all applicable Laws; and (iv) that the Materials will not infringe the intellectual property rights of third-parties. Supplier shall promptly inform Enphase if it is not able to obtain and pass through the foregoing warranties with regard to any Materials.
5. SHIPMENTS, SCHEDULE CHANGE, CANCELLATION, STORAGE
5.1. Shipments. All Products delivered pursuant to the terms of this Agreement shall be suitably packed for shipment in accordance with the Specifications and marked for shipment to Enphase's destination specified in the applicable purchase order. Shipments will be made DDP (lncoterms 2000) by the Supplier and will be received by Enphase at locations specified by Enphase in the purchase order, at which time risk of loss and title will pass to Enphase. The Supplier and Enphase shall mutually agree on the cost of such shipments during the QBR. The costs for shipments as a result of any new Products or additional Work requested by Enphase, shall be mutually agreed to between the Parties, as and when applicable.
5.2. Quantity Increases and Shipment Schedule Changes.
(a) Supplier will use reasonable commercial efforts to meet any quantity increases as requested by Enphase at no additional cost to Enphase apart from the applicable fees, provided that such quantity increases are subject to availability of Materials.
(b) For purposes of calculating the amount of Inventory and Special Inventory subject to subsection (b), the "Lead Time" shall be calculated as the Lead Time at the time of procurement of the Inventory and Special Inventory.
5.3. Mitigation of Inventory and Special Inventory. Prior to invoicing Enphase for the amounts due pursuant to Sections 5.1 or 5.2, Supplier will use its best efforts for a period of thirty (30) days, to return unused Inventory and Special Inventory and to cancel pending orders for such items, and to otherwise mitigate the amounts payable by Enphase. Enphase shall pay amounts due under this Section 5 within sixty
(60) of receipt of an invoice. Supplier will ship the Inventory and Special Inventory paid for by Enphase under this Section 5.3 to Enphase promptly upon said payment by Enphase. In the event Enphase does not pay within sixty (60) days from the date of expiry of the
aforementioned payment term, Supplier will be entitled to dispose of such Inventory and Special Inventory in a commercially reasonable manner and credit to Enphase any monies received from third-parties. The Supplier will make available to Enphase on a quarterly basis, a report containing details of any excess or obsolete Inventory held by the Supplier. The Parties will mutually agree on a course of action to deal with such Inventory.
5.4. Delivery performance. Time is of the essence in Supplier’s performance under this Agreement. On time delivery shall be measured and reported to Enphase on a monthly basis. Orders shall be considered on time if they are shipped from one week earlier than the scheduled shipment date up to one day after the scheduled shipment date. If Supplier cannot meet the on-time delivery requirement for any order due to Supplier's failure to make a timely shipment, then Supplier will ship that Order at Supplier’s' own expense via air transportation or other expedient means acceptable to Enphase, at the earliest, to minimize the delay in delivery. Notwithstanding anything else contained in this Agreement, if a shipment of Products is delayed by more than thirty (30) days Enphase shall have the right to terminate this Agreement with no further liability to the Supplier except for payments to be made for shipments already delivered.
6. PRODUCT ACCEPTANCE AND EXPRESS LIMITED WARRANTY
6.1. Product Acceptance. The Products delivered by Supplier will be accepted upon delivery provided that they meet the criteria, in accordance with section 5.1 of this Agreement. If Products do not comply with the terms of the PO or the express limited warranty set forth in Section 6.2 below, Enphase has the right to reject such Products during said period. Products not rejected during said period will be deemed accepted. Enphase may return defective Products, freight collect, after obtaining a return material
authorization number from Supplier to be displayed on the shipping container and completing a failure report. Rejected Products will be promptly repaired or replaced, at Enphase's option, and returned freight pre-paid, at the Supplier’s expense. In the event Enphase chooses not to accept a repaired or replacement Product, then Supplier will refund the price paid by Enphase for such Product, net fifteen (15) days from Enphase’s written request for refund.
6.2. Express Warranty. This Section 6.2 sets forth the Supplier's Product warranty and Enphase's remedies with respect to a breach by Supplier of such Product warranty.
(a) Supplier warrants that the Products will have been manufactured in accordance with the applicable Specifications and will be free from defects in materials and workmanship for a period of [*] from the date of delivery of the Product. In addition, Supplier warrants that (A) Production Materials shall be used in compliance with Environmental Regulations, (B) Supplier will not manufacture Products using Materials from vendors that are not on the Approved Vendor List, unless otherwise agreed in writing by Enphase.
(b) Upon any failure of a Product to comply with this express limited warranty, Supplier will, at Enphase’s option, either refund the amount paid for such Products by Enphase, or promptly repair or replace such unit and return it to Enphase freight prepaid.
6.3. General Warranties. As on the Effective Date of this Agreement, each Party represents and warrants that: (a) it is a corporation duly incorporated, validly existing and in good standing under the laws of the state or country in which it was incorporated; (b) it has all necessary corporate power and authority to enter into this Agreement and that the execution, delivery and the consummation of the transactions contemplated thereby have each been authorized by all necessary corporate action and do not violate any judgment, order, or decree; (c) the execution, delivery, performance and consummation of the transactions contemplated by this Agreement do not and will not constitute a material default under any contract by which it or any of its material assets are bound. The Supplier further represents and warrants that: (i) it will comply with its obligations under Section 10.9 of this Agreement; (ii) all information provided by the Supplier in any proposal, offer or other document prior to execution of this Agreement in relation to the subject matter of this Agreement, to the best of Supplier’s knowledge, is true, accurate and complete; (iii) no claim, litigation, proceeding, arbitration, investigation, or material controversy is pending, has been threatened, or is contemplated which would have a material adverse effect on the Supplier’s ability to enter into the Agreement or perform the Work and/or manufacture, test or assemble the Products or fulfil any or all its obligations under this Agreement; (iv) it shall perform the Work with promptness, diligence and in a workmanlike and professional manner, in accordance with the terms of the Agreement and with the practices and professional standards used in well-managed operations performing services similar to the Work; (iv) it has the required personnel who are duly qualified, and are suitably trained, educated, experienced, and skilled to perform the Work and shall only deploy such trained, experienced and skilled personnel to provide the Work; (v) that it has obtained and will maintain for the term of this Agreement: (a) ISO 9001:2015 certifaction, (b) ISO 14001:2015 certification, and (c) ISO 45001:2018 certification, or the latest industry standard equivalent of these certifications, as applicable; and (vi) it is in compliance with, and will continue to be in compliance with all applicable Laws.
7. INTELLECTUAL PROPERTY LICENSES
7.1. Licenses. Enphase hereby grants Supplier a non-exclusive, limited, revocable, non- transferable, non-sublicensable right and license (unless permitted by Enphase) during the term of this
Agreement to use Enphase's patents, trade secrets and other intellectual property solely as necessary to perform Supplier's obligations under this Agreement. For the avoidance of doubt, any such intellectual property will be considered the Confidential Information of Enphase. If and to the extent the Products contains Supplier’s intellectual property, the Supplier grants to Enphase an unrestricted, perpetual, irrevocable, worldwide, sub-licensable, royalty-free license to such Supplier intellectual property to use, copy, modify, revise, distribute, publicly display, publicly perform, import, manufacture, have made, sell, offer to sell (whether directly or through channels of distribution), to the extent they are needed for Enphase to exercise its rights in the Products. Any such license shall include
Enphase's right to grant an unrestricted, royalty-free license to its Subsidiaries or other affiliates for the purposes stated herein.
7.2. No Other Licenses. Except as otherwise specifically provided in this Agreement, each Party acknowledges and agrees that no licenses or rights under any of the intellectual property rights of the other Party are given or intended to be given to such other Party.
8. TERM AND TERMINATION
8.1. Term. The term of this Agreement shall commence on the Effective Date and shall continue until two (2) years from the Effective Date unless terminated earlier as provided in Section 8.2 (Termination) or 10.8 (Force Majeure). After the expiration of the initial term hereunder (unless this Agreement has been terminated), this Agreement shall be automatically renewed for separate but successive one-year terms unless either Party provides written notice to the other Party that it does not intend to renew this Agreement ninety (90) days or more prior to the end of any term.
8.2. 
Termination. This Agreement may be terminated: (a) by Enphase for convenience upon thirty (30) days written notice to the Supplier; (b) by either Party if the other Party defaults in any payment to the terminating Party and such default continues without a cure for a period of sixty (60) days after the delivery of written notice thereof by the terminating Party to the other Party; (c) by a Party if the other Party defaults in the performance of any other material term or condition of this Agreement and such default continues unremedied for a period of thirty (30) days after the delivery of written notice thereof by the terminating Party to the other Party (d) pursuant to Section 10.8 (Force Majeure); or (e) by a Party if the other Party becomes insolvent, unable to pay debts when due, or the subject of bankruptcy proceedings not terminated within thirty (30) days of any filing; or makes a general assignment for the benefit of creditors; or if a receiver is appointed for substantially all of its property.
Termination. This Agreement may be terminated: (a) by Enphase for convenience upon thirty (30) days written notice to the Supplier; (b) by either Party if the other Party defaults in any payment to the terminating Party and such default continues without a cure for a period of sixty (60) days after the delivery of written notice thereof by the terminating Party to the other Party; (c) by a Party if the other Party defaults in the performance of any other material term or condition of this Agreement and such default continues unremedied for a period of thirty (30) days after the delivery of written notice thereof by the terminating Party to the other Party (d) pursuant to Section 10.8 (Force Majeure); or (e) by a Party if the other Party becomes insolvent, unable to pay debts when due, or the subject of bankruptcy proceedings not terminated within thirty (30) days of any filing; or makes a general assignment for the benefit of creditors; or if a receiver is appointed for substantially all of its property.8.3. Effect of Expiration or Termination. Expiration or termination of this Agreement under any of the foregoing provisions: (a) shall not affect the undisputed amounts due under this Agreement by either Party that exist as of the date of expiration or termination, and (b) as of such date the provisions of Sections 5.3, and 5.4 shall apply with respect to payment and shipment to Enphase of finished Products, Inventory, and Special Inventory in existence as of such date, and (c) shall not affect Supplier's express limited warranty in Section 6.2 above. Upon termination of this Agreement in its entirety, for any reason, Supplier agrees to: (i) return to Enphase all copies of any Confidential Information received from Enphase; and (ii) return to Enphase, or Enphase’s designee, all Enphase Controlled Equipment used to perform the Work; Termination of this Agreement, settling of accounts in the manner set forth in the foregoing sentence shall be the exclusive remedy of the Parties for breach of this Agreement, except for breaches of Section 6, 9.1, 10.1 or a Party’s indemnification obligations under this Agreement. Sections 1, 5.4, 6.2, 6.3, ▇, ▇, ▇, ▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇ the only terms that shall survive any termination or expiration of this Agreement.
9. INDEMNIFICATION; LIABILITY LIMITATION
9.1. Indemnification by Supplier. Supplier agrees to defend, indemnify and hold harmless, Enphase and all directors, officers, employees, and agents (each, an "Enphase lndemnitee") from and against all claims, actions, losses, expenses, damages or other liabilities, including reasonable attorneys' fees (collectively, "Damages") incurred by or assessed against any of the foregoing:
(a) any actual or threatened injury or damage to any person or property caused, or alleged to be caused, by a Product sold by Supplier to Enphase hereunder, but solely to the extent such injury or damage has been caused by the breach by Supplier of its express limited warranties related to Supplier's workmanship and manufacture in accordance with the Specifications only as further set forth in Section 6.2;
(b) any infringement of the intellectual property rights of any third-party but solely to the extent that such infringement is caused by a process that Supplier uses to manufacture, assemble and/or test the Products; provided that, Supplier shall not have any obligation to indemnify Enphase if such claim would not have arisen but for Supplier's manufacture, assembly or test of the Product in accordance with the Specifications; or
(c) noncompliance with any Environmental Regulations but solely to the extent that such non- compliance is caused by a process or Production Materials that Supplier uses to manufacture the Products.
9.2. Sale of Products Enjoined. Should the use of any Products be enjoined for a cause stated in Section 9.l (b) or 9.1 (c) above, or in the event the Supplier desires to minimize its liabilities under this Section 9, in addition to its indemnification obligations set forth in this Section 9, the Supplier shall either:
(a) substitute a fully equivalent Product or process (as applicable) not subject to such injunction, modify such Product or process (as applicable) so that it no longer is subject to such injunction; or (b) obtain the right to continue using the enjoined process or Product (as applicable). In the event that any of the foregoing remedies cannot be effected on commercially reasonable terms, then, all accepted purchase orders and the current forecast will be considered cancelled and Enphase shall have no obligation to purchase all Products, Inventory and Special Inventory as provided in Sections 5.3 hereof. Any changes to any Products or process must be made in accordance with Section 2.2 above.
9.3. No Other Liability. EXCEPT WITH REGARD TO THE SUPPLIER’S INDEMNIFICATION OBLIGATIONS UNDER THIS AGREEMENT, OR BREACH OF SECTION
10.1 BELOW, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY OR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES OF ANY KIND OR NATURE ARISING OUT OF THIS AGREEMENT OR THE SALE OF PRODUCTS, WHETHER SUCH LIABILITY IS ASSERTED ON THE BASIS OF CONTRACT, TORT (INCLUDING THE POSSIBILITY OF NEGLIGENCE OR STRICT LIABILITY), OR OTHERWISE, EVEN IF THE PARTY HAS BEEN WARNED OF THE POSSIBILITY OF ANY SUCH LOSS OR DAMAGE, AND EVEN IF ANY OF THE LIMITED REMEDIES IN THIS AGREEMENT FAIL OF THEIR ESSENTIAL PURPOSE.
10. MISCELLANEOUS
10.1. Confidentiality.
(a) Each Party shall not use any and all Confidential Information of the disclosing Party for any purposes or activities other than those specifically authorized in this Agreement. Except as otherwise specifically permitted herein or pursuant to written permission of the Party to this Agreement owning the Confidential Information, no Party shall disclose or facilitate disclosure of Confidential Information of the
disclosing Party to anyone without the prior written consent of the disclosing Party, except to its employees, consultants, parent company, and subsidiaries of its parent company who need to know such information for carrying out the activities contemplated by this Agreement and who have agreed in writing to confidentiality terms that are no less restrictive than the requirements of this Section. Notwithstanding the foregoing, the receiving Party may disclose Confidential Information of the disclosing Party pursuant to a subpoena or other court process only (i) after having given the disclosing Party prompt notice of the receiving Party's receipt of such subpoena or other process and (ii) after the receiving Party has given the disclosing Party a reasonable opportunity to oppose such subpoena or other process or to obtain a protective order. Confidential Information of the disclosing Party in the custody or control of the receiving Party shall be promptly returned or destroyed upon the earlier of(i) the disclosing Party's written request or (ii) termination of this Agreement. Confidential Information disclosed pursuant to this Agreement shall be maintained confidential for a period of [*] years after the termination of this Agreement. The existence and terms of this Agreement shall be confidential in perpetuity.
(b) Notwithstanding anything contained in this Section 10.1, a receiving Party may disclose the existence and terms of this Agreement if such information is required by Law to be disclosed under applicable Law, including without limitation pursuant to the rules and regulations promulgated by the United States Securities and Exchange Commission, provided that the disclosing party shall request the reduction of confidential terms in any such disclosure.
10.2. Use of Name is Prohibited. The existence and terms of this Agreement are Confidential Information and protected pursuant to Section 10.1 above. Supplier may not use Enphase's name or identity or any other Confidential Information in any advertising, promotion or other public announcement without the express prior written consent of Enphase.
10.3. Entire Agreement; Severability. This Agreement constitutes the entire agreement between the Parties with respect to the transactions contemplated hereby and supersedes all prior agreements and understandings between the Parties relating to such transactions. If the scope of any of the provisions of this Agreement is too broad in any respect whatsoever to permit enforcement to its full extent, then such provisions shall be enforced to the maximum extent permitted by Law, and the Parties hereto consent and agree that such scope may be judicially modified accordingly and that the whole of such provisions of this Agreement shall not thereby fail, but that the scope of such provisions shall be curtailed only to the extent necessary to conform to Law.
10.4. Amendments; Waiver. This Agreement may be amended only by written consent of both Parties. The failure by either Party to enforce any provision of this Agreement will not constitute a waiver of future enforcement of that or any other provision. Neither Party will be deemed to have waived any rights or remedies hereunder unless such waiver is in writing and signed by a duly authorized representative of the Party against which such waiver is asserted.
10.5. Independent Contractor. Neither Party shall, for any purpose, be deemed to be an agent of the other Party and the relationship between the Parties shall only be that of independent contractors. Neither Party shall have any right or authority to assume or create any obligations or to make any representations or warranties on behalf of any other Party, whether express or implied, or to bind the other Party in any respect whatsoever. For the avoidance of doubt, any personnel deployed by the Supplier for performing the Work (“Supplier Personnel”) shall continue to be employees of the Supplier at all times, and shall not, for any purpose, be considered employees of the and shall not be entitled to any employee benefits from the Supplier including, but not limited to, holiday, vacation, or sick pay, social security, unemployment or disability insurance,
employees' compensation insurance, health and welfare benefits, profit sharing, or any employee stock option or stock purchase plans. Enphase shall not be liable to pay any amounts of any nature whatsoever to such resources of the Supplier. The Supplier shall indemnify Enphase in the event any Supplier Personnel make claims against Enphase in relation to any of the foregoing Enphase employee benefits or if any Supplier Personnel are later reclassified by any court of competent jurisdiction to be common law employees of Enphase.
10.6. Expenses. Each Party shall pay their own expenses in connection with the negotiation of this Agreement. All fees and expenses incurred in connection with the resolution of Disputes shall be allocated as further provided in Section 10.17 below.
10.7. Insurance. Supplier shall procure and/or maintain at its own expense the following insurance and willusecommercially reasonable effortstodosowithin sixty (60) days of the Effective Date: (i) commercial general liability insurance (including coverage for bodily injury, personal injury, property damage, contractual liability, products and completed operations) in an amount not less than [*] per occurrence; (ii) umbrella excess liability insurance in an amount not less than [*]; and (iii) an errors and omissions insurance policy which covers Supplier's obligations hereunder in an amount not less than [*]. Such insurance shall be written by an insurance company with a Best's rating of at least A-VIII who is licensed to do business in all states of the United States. Supplier shall furnish certificates of insurance and such other appropriate documentation (including evidence of renewal of insurance) evidencing all insurance coverage's set forth in this Section 10.6. Such certificates of insurance and other documentation shall name Enphase and its officers, directors and employees as additional insured. Such certificates of insurance and other documentation shall contain a broad form naming Enphase and its officers, directors and employees as an additional insured. Supplier will provide Enphase with at least thirty (30) days prior written notice of any cancellation or material alteration of the insurance coverage set forth in this Section 10.6. Failure by Enphase to receive or request the aforementioned
certificates of insurance and other documentation shall not represent a waiver of the requirements for insurance coverage setforth in this Section 10.7
10.8. Force Majeure. In the event that either Party is prevented from performing or is unable to perform any of its obligations under this Agreement (other than a payment obligation) due to any act of God, acts or decrees of governmental or military bodies, fire, casualty, flood, earthquake, war, strike, lockout, epidemic, destruction of production facilities, riot, insurrection, Materials unavailability, or any other cause beyond the reasonable control of the Party invoking this section (collectively, a "Force Majeure"), and if such Party shall have used its commercially reasonable efforts to mitigate its effects, such Party shall give prompt written notice to the other Party, its performance shall be excused , and the time for the performance shall be extended for the period of delay or inability to perform due to such occurrences. Regardless of the excuse of Force Majeure, if such Party is not able to perform within ninety (90) days after such event, the other Party may terminate the Agreement.
10.9. Disaster Recovery and Business Continuity.
The Supplier agrees that it will throughout the duration of this Agreement implement, maintain and keep under regular review a business continuity plan for the Work it performs for Enphase, so far as is reasonably practicable, adherence to which will enable it to continue to operate in accordance with the Supplier’s obligations under this Agreement and in accordance with any regulatory requirements. The aforementioned business continuity plan shall be presented by the Supplier to Enphase, for Enphase’s approval at the beginning of each year during the term of this Agreement, starting with the Effective Date. The Supplier shall amend the business continuity plan as reasonably requested by Enphase, so as to secure Enphase’s approval on such plan. For the avoidance of doubt, the Supplier will not have satisfied its obligations under this Section 10.9, if it has
not secured Enphase’s written approval on a business continuity plan.
10.10. Anti-Corruption and Anti Bribery.
(a) Vendor and each of its shareholders, beneficial owners, affiliates, officers, directors, employees and agents involved in providing services under this Agreement, will comply with the U.S. Foreign Corrupt Practices Act, the UK Bribery Act and the anti-corruption laws of any other applicable jurisdiction. In carrying out its responsibilities under this Agreement, neither Vendor nor any of its shareholders, beneficial owners, affiliates, officers, directors, employees or agents will offer, promise or give anything of value, directly or indirectly, to (i) any Government Official in order to influence official action or otherwise obtain an improper advantage, (ii) any other person with the knowledge that all or any portion of the money or thing of value will be offered or given to a Government Official in order to influence official action or otherwise obtain an improper advantage, or (iii) any other person in order to induce them to perform their work duties disloyally or otherwise improperly. For the purposes of this Section 10.10, a person shall be deemed to have “knowledge” with respect to conduct, circumstances or results if such person is aware of
(1) the existence of or (2) a high probability of the existence of such conduct, circumstances or results.
(i) For the purposes of this Agreement:
a. “Government Official” means any public or elected official or officer, employee (regardless of rank), or person acting on behalf of a national, provincial, or local government, including a department, agency, instrumentality, state-owned or state–controlled company, public international organization (such as the United Nations or World Bank), or any other Government Entity, or any political party, party official or any candidate for political office. Officers, employees (regardless of rank), or persons acting on behalf of an entity that is financed in large measure through public appropriations, is widely perceived to be performing government functions, or has its key officers and directors appointed by a government should also be considered Government Officials.
b. "Government Entity" means a national government, political subdivision thereof, or local jurisdiction therein; an instrumentality, board, commission, court or agency, whether civilian or military, or any of the above, however constituted; a government-owned or government-controlled association, organization, business or enterprise, including any state-owned enterprise, such as any state-owned broadcaster, state-owned airlines, tourism boards, state-owned (or part-owned) banks or an entity that provides a service to its citizens (e.g., a postal office); public international organizations (including organizations whose members are countries, or territories, governments of countries or territories); and any a political party.
10.11. Successors, Assignment. This Agreement shall be binding upon and inure to the benefit of the Party hereto and their respective successors, assigns and legal representatives. Neither Party shall have the right to assign or otherwise transfer its rights or obligations under this Agreement except with the prior written consent of the other Party, not to be unreasonably withheld.
10.12. Audits and Inventory count reports. Supplier will keep complete and accurate records of all matters relating to its performance under this Agreement, including Inventory count. In particular, the Supplier shall conduct an internal audit on a quarterly basis, on the Inventory maintained by the Supplier. The Supplier shall, at Enphase’s request, provide a report detailing the findings of the aforementioned internal audit to Enphase. All financial records relating to this Agreement will be maintained according to local regulation. Supplier will retain all such records for at least five years from the date of creation or longer if required by applicable Law or by a specific term of this Agreement. Supplier agrees that Enphase may,
upon reasonable advance notice and at Enphase’s expense, audit and inspect such items in order to verify Supplier’s compliance with this Agreement, including Supplier’s documents, records, facilities and Enphase Owned Equipment (each, an “Audit”). If an Audit reveals any overcharges, Supplier will pay to Enphase, within 30 days of Supplier’s receipt of notice thereof from Enphase, (1) the amount of such overcharges, including interest thereon as provided in this section; and (2) Enphase’s reasonable cost of conducting such Audit. Interest will accrue on any overcharges at the lesser of (1) the prime rate of interest published in the Wall Street Journal, as same will be published on the day on which the Audit is completed (or, if the prime rate of interest is not published on such date, the next business Day thereafter on which the prime rate of interest is so published), plus two percent; or (2)
the highest amount allowed by Law. Such interest will accrue from the time such overcharge was paid by Enphase until Supplier repays such overcharge.
10.13. Notices. All notices required or permitted under this Agreement will be in writing and will be deemed received (a) when delivered personally; (b) when sent by confirmed facsimile; (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (d) one
(1) day after deposit with a commercial overnight carrier. All communications will be sent to the addresses set forth above or to such other address as may be designated by a Party by giving written notice to the other Party pursuant to this section.
10.14. Even-Handed Construction. The terms and conditions as set forth in this Agreement have been arrived at after mutual negotiation, and it is the intention of the Party that its terms and conditions not be construed against any Party merely because it was prepared by one of the Party.
10.15. Compliance with Laws. Supplier represents and warrants that the Products are and will be produced and delivered in accordance with all applicable Laws. Further, Supplier has implemented and maintains a comprehensive program for assuring environmental compliance in its operations according to recognized practices, such as ISO 14000 or comparable criteria. Both Parties will adhere to all applicable Laws and regulations governing such Party’s conduct in connection with this Agreement, including, any laws or regulations of the U.S. Department of Commerce Bureau of Industry and Security, and will not export or re-export any technical data or products received from a Party, or the direct product of such technical data, to any proscribed country listed in the U.S. Export Administration regulations unless properly authorized by the U.S. government.
10.16. Controlling Language. This Agreement is in English only, which language shall be controlling in all respects. All documents exchanged under this Agreement shall be in English.
10.17. Controlling Law. This Agreement shall be governed and construed in all respects in accordance with the domestic Laws and regulations of the State of California, without regard to its conflicts of laws provisions. The courts in Santa ▇▇▇▇▇ County, California will have jurisdiction over any disputes between the Parties, arising from this Agreement (“Disputes”). The Party specifically agree that the 1980 United Nations Convention on Contracts for the International Sale of Goods, as may be amended from time to time, shall not apply to this Agreement. The Party further acknowledge and confirm that the selection of the governing law is a material term of this Agreement.
10.18. No Waiver. No failure or delay on the part of any Party in exercising any right hereunder, irrespective of the length of time for which such failure or delay shall continue, will operate as a waiver of, or impair, any such right. No single or partial exercise of any right hereunder shall preclude any other or further exercise thereof or the exercise of any other right. No waiver of any right hereunder will be effective unless given in a signed writing.
10.19. Counterparts. This Agreement may be executed in counterparts.
IN WITNESS WHEREOF, the Party have caused this Agreement to be duly executed by their duly authorized representatives as of the Effective Date.
ENPHASE ENERGY INC. SALCOMP MANUFACTURING INDIA
PRIVATE LTD.
By:/S/ ▇▇▇▇ ▇▇▇▇▇▇ By:/S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇ Name:/S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Operating Officer Title: Chief Executive Officer
Date: October 1, 2019 Date:/S/ October 1, 2019
EXHIBIT A
Definitions
Approved Vendor List or AVL shall mean the list of suppliers currently approved to provide the Materials specified in the BOM or a Product.
Confidential Information shall mean (a) the existence and terms of this Agreement and all information concerning the unit number and fees for Products and Inventory/Special Inventory, as well as the Specifications and (b) any other information that is marked "Confidential" or the like or, if delivered verbally, confirmed in writing to be "Confidential" within 30 days of the initial disclosure. Confidential Information does not include information that (i) the receiving Party can prove it already knew at the time of receipt from the disclosing Party; or (ii) has come into the public domain without breach of confidence by the receiving Party; (iii) was received from a third-party without restrictions on its use; (iv) the receiving Party can prove it independently developed without use of or reliance on the disclosing Party's data or information; or (v) the disclosing Party agrees in writing is free of such restrictions
Cost shall mean the cost represented on the ▇▇▇▇ of materials supporting the most current fees for Products at the time of cancellation, expiration or termination, as applicable.
California RoHS Shall mean the California Electronic Waste Recycling Act of 2003, as amended from time to time, and related interpretive guidance and enforcement policies
China RoHS means the People's Republic of China (PRC)'s Measures for the Administration of the Control of Pollution by Electronic Information Products (电子 信息产品污染控制管理办法 ) promulgated on
February 28, 2006 (including any pre-market certification ("CCC ▇▇▇▇") requirements thereunder), the PRC Ministry of Information Industry's Frequently Asked Questions regarding China RoHS, official standards including Marking for Control of Pollution Caused by Electronic
Information Products (SJ/T 11364-2006), Requirements for Concentration Limits for Certain Hazardous Substances in Electronic Information Products (SJ/T 11363-2006) and Testing Methods for Hazardous Substances in Electronic Information Products (SJ/T 11365-2006) and the PRC General Administration of Quality Supervision, Inspection and Quarantine's Circular 441 (2006), each as amended from time to time, and related interpretative guidance and enforcement policies.
Defect Shall mean the failure of a Product to comply with the warranty given in Section 6 and Includes defects of any sub-component or assembly that does not meet the Specifications for that portion.
Enphase Controlled Equipment shall mean those Equipment provided by Enphase or by third party suppliers with whom Enphase has a commercial contractual relationship or non- contractual relationship, as further detailed in Exhibit D.
Enphase Indemnitee shall have the meaning set forth in Section 9.1
Equipment shall mean those equipment and fixtures required by the Supplier to carry out the Work, in order to manufacture, assemble, and test the Products.
Damages shall have the meaning set forth in Section 9.1
Economic Order Inventory shall mean Materials purchased in quantities above the required amount for purchase orders, in order to achieve price targets for such Materials.
"Engineering Change Order" (ECO) shall mean the document that details a change in the Specifications and/or design of a Product.
Government Official shall have the meaning given to it in 10.10 (a).
Government Entity shall have the meaning given to it in 10.10 (b).
Disputes shall have the meaning set forth in Section 10.l7.
Environmental Regulations shall mean any hazardous substance content laws and regulations including, without limitation, those related to the EU Directive 2002/95/EC about the Restriction of Use of Hazardous
Substances (RoHS), the Directive 2012/19/EU of the European Parliament and of the Council of 27 January 2003 on Waste Electrical and Electronic Equipment (WEEE), 2003 O.J. (L37) 24 as amended from time to time, and includes the WEEE Requirements.
Fee List shall have the meaning set forth in Section 3.4 (a).
Force Majeure shall have the meaning set forth in Section 10.8.
Inventory shall mean any Materials that are used to manufacture Products that are ordered pursuant to a purchase order from Enphase.
Lead Time(s) shall mean the Materials Procurement Lead Time plus the manufacturing cycle time required from the delivery of the Materials at the Supplier's facility to the completion of the manufacture, assembly and test processes.
Long Lead Time Materials shall mean Materials with Lead Times exceeding the period covered by the accepted purchase orders for the Products.
Laws means any U.S. or non-U.S. federal, national, supranational, state, provincial, local or similar statute, law (including common law), Environmental Regulations, regulation, treaty, constitutional provision, ordinance, code, directive, including the (RoHS Directive and the WEEE Requirements and the RoHS Requirements) notice, binding agreement, policy or rule of law, legal requirement, other government restriction or regulation promulgated or entered into by any regulatory authority of competent jurisdiction, tribunal, judicial or arbitral body, administrative agency or commission or other government authority or instrumentality.
Materials shall mean components, parts and subassemblies that comprise the
Product and that appear on the BOM for the Product.
Materials Procurement Lead time shall mean with respect to any particular item of Materials, Lead time to obtain such Materials as recorded in the purchase order.
Minimum Order Inventory shall mean Materials purchased in excess of requirements for purchase orders because of minimum lot sizes available from the third-party supplier.
Product(s) shall have the meaning set forth in Section 2.1.
Production Materials shall mean Materials that are consumed in the production processes to manufacture Products including without limitation, solder, epoxy, cleaner solvent, labels, flux, and glue.
RoHS Requirements means the RoHS Directive, China RoHS, California RoHS and/or other similar or related environmental, product composition or materials declaration Laws.
Subsidiary shall mean the corporations, partnerships, limited liability companies, joint ventures, associations and any other legal entities of which any Party (either alone or through or together with any other Subsidiary), owns, directly or indirectly, or has rights to acquire, directly or indirectly more than 50 percent of the stock or other equity interests, the holders of which are generally entitled to vote for the election of the board of directors or other governing body of such corporation or other legal entity.
Supplier Controlled Equipment shall mean those Equipment provided by the Supplier.
Special Inventory shall mean any Long Lead Time Materials and/or Minimum Order Inventory and/or Economic Order Inventory.
Specifications shall have the meaning set forth in Section 2.1.
Work shall have the meaning set forth in Section 2.1.
WEEE Requirements means any requirements, obligations, standards, duties or responsibilities pursuant to any environmental, product or packaging recycling, reuse or waste Laws and any regulations, interpretive guidance or enforcement policies relating to any of the foregoing, including the WEEE directive, California RoHS or other similar or related Laws.
EXHIBIT B
SPECIFICATIONS
The Supplier shall perform the Work to the satisfaction of Enphase, according to the Specifications listed in the relevant document, as outlined in the table below. Enphase reserves the right to update this table from time to time and shall notify the Supplier thirty (30) days in advance of such updates, and upon such notification, these Specifications will be deemed to be updated.
Products (as applicable) | Document | Document Number | Revision Number | ||||||||
[ *] | [*] | [*] | [*] | ||||||||
| [*] | [*] | [*] | |||||||||
| [*] | [*] | [*] | |||||||||
| [*] | [*] | [*] | |||||||||
[*]
EXHIBIT C
FEES LIST
QUOTATION -- MVA Cost Elements & Material Costs;
Package Deal -- All programs to be awarded | |||||||||||||||||||||||||||||
MVA Cost Elements/Manufacturing Locations/Volume Scenario | Microinverter | Envoy | Combiner Box | Enpower (#11) | Remark | ||||||||||||||||||||||||
| Chennai | Chennai | Chennai | Chennai | ||||||||||||||||||||||||||
| [*]pcs/Quarter | [*]pcs/Quarter | [*]pcs/Quarter | [*]Kpcs/Quarter | ||||||||||||||||||||||||||
Raw Material Inbound Freight | $ | [*] | $ | [*] | $ | [*] | $ | [*] | [*] | ||||||||||||||||||||
Finished-Good Outbound Freight | $ | [*] | $ | [*] | $ | [*] | $ | [*] | [*] | ||||||||||||||||||||
Process Consumables | $ | [*] | $ | [*] | $ | [*] | $ | [*] | [*] | ||||||||||||||||||||
Direct Labors | $ | [*] | $ | [*] | $ | [*] | $ | [*] | [*] | ||||||||||||||||||||
Indirect Labors | $ | [*] | $ | [*] | $ | [*] | $ | [*] | [*] | ||||||||||||||||||||
| Depreciation | $ | [*] | $ | [*] | $ | [*] | $ | [*] | [*] | ||||||||||||||||||||
Factory OverHead | $ | [*] | $ | [*] | $ | [*] | $ | [*] | |||||||||||||||||||||
SGA & Profit | $ | [*] | $ | [*] | $ | [*] | $ | [*] | |||||||||||||||||||||
| Costed-BOM $ [*] $ [*] $ [*] $ [*] CBOM info release by Enphase; Overall Production Yield Loss [*] [*] [*] TBD Yeild Loss & % to be agreed; | Costed-BOM $ [*] $ [*] $ [*] $ [*] CBOM info release by Enphase; Overall Production Yield Loss [*] [*] [*] TBD Yeild Loss & % to be agreed; | Costed-BOM | $ [* | $ [* | $ [* | $ [* | CBOM info release by Enph | Overall Production Yield L | [*] | [*] | [*] | TBD | Yeild Loss & % to be ag | ||||||||||||||||||||||||||||
| Costed-BOM $ [*] $ [*] $ [*] $ [*] CBOM info release by Enphase; Overall Production Yield Loss [*] [*] [*] TBD Yeild Loss & % to be agreed; | Costed-BOM | $ [* | $ [* | $ [* | $ [* | CBOM info release by Enph | Overall Production Yield L | [*] | [*] | [*] | TBD | Yeild Loss & % to be ag | |||||||||||||||||||||||||||||
Costed-BOM | $ [* | $ [* | $ [* | $ [* | CBOM info release by Enph | ||||||||||||||||||||||||||||||||||||
Overall Production Yield L | [*] | [*] | [*] | TBD | Yeild Loss & % to be ag | ||||||||||||||||||||||||||||||||||||
TotalTotal
Total
MVA per Unit (US$) $MVA per Unit (US$) $
MVA per Unit (US$) $
Total MVA per Unit (US$) $
[*]$
[*]$
[*]$
[*]
Total Material Costs per Unit | ||||||||||||||
| (US$) | $ [*] | $ [*] | $ [*] | $ [*] | ||||||||||
Unit Pricing (MVA + Materials) | $ [*] | $ [*] | $ [*] | $ [*] | ||||||||||
The extra cost of embedded FG Outbound Freight Cost (Line#18) to ship FG to different locations | |||||||||||||||||
US, Oakland California | $ [*] | $ [*] | $ [*] | $ [*] | [*] | ||||||||||||
Netherlands, Rotterdam | $ [*] | $ [*] | $ [*] | $ [*] | [*] | ||||||||||||
NOTES
[*]
EXHIBIT D
ENPHASE CONTROLLED EQUIPMENT
[*]
'
EXHIBIT E
SUPPLIER CONTROLLED EQUIPMENT
[*]