DEVELOPMENT AND SUPPLY AGREEMENT
________________________________
This agreement ("Agreement") is made and entered into this 13 day of April
1993 ("Agreement Date"), by and between Parlex Corporation, a Massachusetts
corporation having a principal place of business at 145 Milk Street, Methuen,
MA 01844 ("Parlex"), and Motorola, Inc., a Delaware corporation, by and
through its Automotive and Industrial Electronics Group ("AIEG"), having a
place of business at 4000 Commercial Avenue, Northbrook, IL 60062 U.S.A.
("Motorola").
WHEREAS, Parlex manufactures and sells flexible substrate assemblies to the
AIEG division of Motorola for use in automotive applications; and
WHEREAS, Parlex has the capability of modifying the construction of flexible
circuits to lower its cost, the capability of manufacturing and selling
assemblies of such modified flexible circuits to AIEG on a long term basis,
and the desire to do so; and
WHEREAS, AIEG desires to continue purchasing flexible substrate assemblies
from Parlex while Parlex is developing such modified flexible circuits, and
desires to replace such purchases with purchases of assemblies constructed of
such modified flexible circuits if such assemblies meet AIEG's functional
requirements and cost constraints; and
WHEREAS, AIEG desires to purchase flexible substrate assemblies on a long term
basis from a supplier that will share productivity and materials savings in
the form of price reductions to Motorola.
NOW, THEREFORE, in consideration of the mutual obligations and promises set
forth herein, Motorola and Parlex agree as follows:
1.0 Definitions
1.1 Flexible Substrate Assembly: finished assembly consisting of
Acrylic Adhesive-Based Flexible Circuit Construction or New
Flexible Circuit Construction, Rigidizer, and Motorola's circuit
interconnect design.
1.2 Acrylic Adhesive-Based Flexible Circuit Construction: type of
flexible circuit incorporating acrylic adhesive as the bonding
material for attaching copper to dielectric layers, and conforming
to the functional specifications, production prices, and quality
and cycle time initiatives attached hereto as Appendices 1, 5 and
6 respectively.
1.3 New Flexible Circuit Construction: type of flexible circuit
conforming to the functional specifications, production prices,
and quality and cycle time initiatives attached hereto as
Appendices 2, 3 and 6 respectively.
1.4 Rigidizer: Base plate used as stiffener for flexible circuit.
2.0 Development Program
2.1 Development of New Flexible Circuit Construction
2.1.1 Parlex shall develop New Flexible Circuit
Construction, qualify it for Motorola's use in production,
and prepare to manufacture it at its facilities for supply
to Motorola in accordance with the terms of this Agreement.
The Product Qualification Procedure to be followed by Parlex
is attached as Appendix 4. Such development, product
qualification and manufacturing preparation shall be
completed for product launch on or before January 1, 1994.
2.1.2 All development costs shall be borne by Parlex,
with the exception that Motorola will assist in the funding
of equipment necessary to perform processes unique to
Motorola (i.e., equipment that is not usable for any other
customer of Parlex). Parlex shall notify Motorola in advance
of any equipment purchase for which it will request Motorola
assistance in funding. Parlex shall not use any such
equipment to service other Parlex customers.
2.1.3 For a period of one year commencing with the in-
service date of equipment funded by Motorola pursuant to
paragraph 2.1.2, Parlex shall not duplicate such equipment
to service any other Parlex customer. Thereafter, Parlex may
duplicate such equipment to service other Parlex customers
on equitable terms mutually acceptable to Parlex and
Motorola.
2.2 Prototype and Pre-Pilot Assemblies
2.1.1 Parlex shall build prototype and pre-pilot Flexible
Substrate Assemblies incorporating New Flexible Circuit
Construction, as needed by Motorola. Such Flexible Substrate
Assemblies shall be delivered to Motorola for delivery to
customers as samples and for evaluation and testing by
Motorola. The purpose of the prototype evaluation and tests
is to demonstrate the capabilities of the New Flexible
Circuit Construction, and the parties thereby anticipate
that desirable changes to the applicable specifications may
be identified. Any proposed changes to the applicable
specifications shall be made in accordance with paragraph
2.3.
2.2.2 Motorola shall purchase prototype and pre-pilot
Flexible Substrate Assemblies incorporating new Flexible
Circuit Construction at a price equal to four (4) times the
production price stated in Appendix 3 or at a lot charge of
twenty five hundred ($2,500) dollars, whichever is greater.
Such price includes all prototype engineering and tooling
costs, with the exception of electrical test tooling costs
which shall be agreed by the parties. Further, such price is
based on the standard delivery lead-time of four (4) weeks.
The following price premiums shall apply to three week, two
week and one week deliveries: twenty five percent, fifty
percent and one hundred percent, respectively.
2.3 Changes to Specifications or Qualification Procedure
Changes to the applicable specifications or Product
Qualification Procedure may be requested in writing by either
party. Changes requested by Parlex shall be submitted by use of a
Supplier Request for Engineering Change Notice (SREA). Any such
request shall set forth the nature of the proposed change(s) and
the effects thereof, including function, performance, reliability,
availability, development and tooling costs, production prices,
cycle time and quality. Any changes must be mutually agreed to in
writing by the parties to implementation.
2.4 Development Review Meetings
Three months after the Agreement Date, and at quarterly
intervals thereafter until completion of development,
knowledgeable representatives of Motorola and Parlex shall meet to
review Parlex's progress in its development of New Flexible
Circuit Construction under this Article 2.0.
3.0 Supply Program
3.1 Production Commitment
Parlex shall manufacture Flexible Substrate Assemblies in
accordance with Motorola's circuit interconnect design and
Rigidizer and assembly requirements. Parlex shall be capable of
manufacturing Flexible Substrate Assemblies incorporating New
Flexible Circuit Construction for sale to Motorola in compliance
with paragraph 3.2 on and after January 1, 1994. Testing for
continuity of the circuit interconnect design shall be performed
by Parlex in accordance with current Interconnecting and Packaging
Electronic Circuits (IPC) specifications.
3.2 Purchase and Sale Commitments
3.2.1 During the term of this Agreement, Parlex shall
sell to Motorola, and Motorola shall purchase from Parlex, *
percent of AIEG's requirements for Flexible Substrate
Assemblies.Motorola's purchase obligation in this paragraph
3.2 shall be limited to the extent that any purchaser of
flexible substrate assemblies, or products incorporating
flexible substrate assemblies, from AIEG has approved
another supplier of flexible substrate assemblies as of the
Agreement Date or requires another supplier or multiple
suppliers of flexible substrate assemblies in the future.
3.2.2 Motorola may request Parlex to sell Flexible
Substrate Assemblies to one or more Motorola customers. If
so, Parlex shall sell to any such Motorola customer its
requirements for Flexible Substrate Assemblies on terms
acceptable to Parlex, except that warranty and price shall
be identical to that herein provided. The volume of Flexible
Substrate Assemblies purchased from Parlex by any such
Motorola customer shall be considered, for the purpose of
volume pricing only, to be purchases by Motorola and the
price to Motorola (and any such customer(s)) shall
correspond to the price for the total volume purchased.
* Confidential information has been omitted and filed separately with the
Commission.
3.3 Price
The price of the Flexible Substrate Assemblies shall
conform to the production volume price schedules, attached as
Appendices 3 and 5. Unit prices invoiced to Motorola shall be
based on Motorola's estimate of its anticipated purchase volume
for that calendar year of production. If Motorola purchases for
the year a quantity corresponding to a unit price different than
the unit price at which it was invoiced, Motorola's contract unit
price shall be retroactively adjusted accordingly and Motorola or
Parlex, as the case may be, shall pay to the other party the
difference between the amount invoiced and the amount due for the
number of units actually shipped.
3.4 Purchase Terms and Conditions
Motorola shall issue purchase orders and/or releases for
all prototype and production Flexible Substrate Assemblies
purchased hereunder. Each Motorola purchase order shall specify
the circuit interconnect design ordered. Only the terms and
conditions contained in this document and in Motorola's standard
purchase order and release forms current at the time of purchase
shall apply to such purchases pursuant to this Agreement. To the
extent of any inconsistency or conflict between this Agreement and
the terms and conditions of such purchase order or release, this
Agreement shall control. Any terms and conditions contained in
Parlex's acknowledgment forms or elsewhere shall not change, alter
or add to these terms and conditions in any way and shall be of no
effect.
3.5 Exclusivity and Licenses
3.5.1 Parlex agrees not to sell to customers selling
products in the automobile industry the New Flexible Circuit
Construction developed hereunder for Motorola, or
substantially identical derivative flexible circuit, for one
year following the initial sale to Motorola of production
Flexible Substrate Assemblies incorporating the New Flexible
Circuit Construction, without first obtaining Motorola's
written permission.
3.5.2 Parlex grants Motorola a paid up, royalty free,
perpetual, non-exclusive, sublicensable license to make,
have made, use and sell under any patents or other
intellectual property rights for any new inventions
conceived or reduced to practice by Parlex jointly with
Motorola during and pursuant to new development work
performed under this Agreement for the New Flexible Circuit
Construction to be developed and delivered to Motorola under
this Agreement, and Parlex also grants to Motorola an
equivalent license under any new Parlex copyright rights for
new works of authorship which arise during and pursuant to
the development work performed, by Parlex, jointly with
Motorola, for the New Flexible Circuit Construction to be
developed and delivered to Motorola under this agreement.
With respect to any new inventions conceived or reduced to
practice solely by Parlex during and pursuant to new
development work performed under this agreement for the New
Flexible Circuit Construction to be developed and delivered
to Motorola under this agreement, Parlex agrees to grant to
Motorola a royalty-bearing, non-exclusive license on terms
and conditions to be reasonably negotiated by the parties.
The above licenses do not include rights for inventions or
works of authorship developed prior to or separately with
respect to development work performed under this Agreement
for the New Flexible Circuit Construction to be developed
and delivered to Motorola under this Agreement.
3.6 Service and Replacement
3.6.1 At Motorola's request, Parlex shall sell to
Motorola Flexible Substrate Assemblies necessary to satisfy
Motorola's current service and replacement requirements for
such Flexible Substrate Assemblies at the current applicable
production prices plus any actual cost differential for
packaging and manufacturing.
3.6.2 For a period of ten (10) years after Motorola
completes its purchases of Flexible Substrate Assemblies,
Parlex shall sell to Motorola Flexible Substrate Assemblies
necessary to satisfy Motorola's past model service and
replacement requirements at the last applicable production
prices plus actual cost differentials for packaging and
manufacturing. Motorola and Parlex will negotiate in good
faith with regard to Parlex's continued manufacture and sale
to Motorola of service and replacement Flexible Substrate
Assemblies beyond the tenth year.
3.7 Emergency Manufacturing Rights
In the event that Parlex is unable or may be unable to
deliver to Motorola production quantities of the Flexible
Substrate Assemblies to be supplied hereunder for any reason,
including a force majeure, and such inability continues or may
continue for more than a commercially reasonable period of time,
or if Parlex discontinues its manufacture of such Flexible
Substrate Assemblies for any reason, Parlex will grant Motorola
emergency manufacturing rights and transfer sufficient information
and tooling to Motorola to allow Motorola, at no cost for use of
Parlex's intellectual property rights, to have the Flexible
Substrate assemblies to be provided hereunder made by Motorola or
made for Motorola by a third party manufacturer. Motorola shall
request such rights and information from Parlex by notice to
Parlex as provided herein for notices. These emergency
manufacturing situation shall be under reasonable terms and
conditions mutually agreed to by Parlex and Motorola, and such
rights shall cease when Parlex can demonstrate that it is capable
of delivering production quantities of flexible substrate
Assemblies to the provided hereunder to Motorola at competitive
prices. Further, these emergency manufacturing rights and the
transfer of information acquired by Parlex from Polyonics and
which Parlex may not disclose to third parties.
3.8 Supplier Objectives
During term of this Agreement, Parlex shall comply with
the quality and cycle time initiatives stated in Appendix 6.
4.0 Post-Development Improvement of New Flexible Circuit Construction
Three months after product launch of the New Flexible Circuit
Construction, and at quarterly intervals thereafter, knowledgeable
representatives of Motorola and Parlex shall meet to review Parlex's
progress in making further technological improvements to the New
Flexible Circuit Construction.
5.0 Engineering Support
During the term of this Agreement, Parlex shall provide Motorola
with reasonable engineering support for the design and manufacturing of
Flexible Substrate Assemblies as needed by Motorola. Such support shall
be at Parlex's expense and shall be provided to AIEG engineering and
manufacturing facilities worldwide.
6.0 Confidential Information
All exchanges of information between the parties pursuant to the
present agreement shall be made in accordance with the terms and
conditions of the Mutual Non-Disclosure Agreement, attached hereto as
Appendix 7. The parties further agree that the term of said agreement
shall be coextensive with the term of this Agreement.
7.0 Release of News, Information and Advertisement
Neither party shall, without the prior written consent of the
other, release any information to which the Agreement applies nor make
any news releases or public announcements relating to the terms of this
Agreement. However, the foregoing sentence shall not be construed as
prohibiting either party from acknowledging that Motorola and Parlex
have entered into this Agreement nor shall it be construed as
prohibiting communication among employees of Parlex and Motorola
necessary to fulfill the parties' respective obligations under this
Agreement.
8.0 Limitation of Liability
Neither party shall be liable to the other for any incidental,
indirect, special or consequential damages whatsoever arising out of,
caused by or related in any way to the development, purchase of the
possibility of such damages. The parties expressly agree that the
limitations on incidental, consequential, special or indirect damages
set forth herein are agreed allocations of risk constituting in part the
consideration for this Agreement, and that such limitations shall
survive the determination of any court of competent jurisdiction that
any remedy provided herein or available at law fails of its essential
purpose.
9.0 Term
This Agreement shall commence on the Agreement Date and shall
extend for a term of three (3) years, unless sooner terminated as
provided herein. No less than sixty (60) days prior to the end of each
year of this Agreement, the parties shall declare their intentions to
add an additional one year to the term. If the Parties agree to such
extension, the term of this Agreement shall be so extended by amendment
as provided herein. Nothing contained in this Agreement shall be deemed
to create any express or implied obligation on either party to renew or
extend this Agreement or to create any right to continue this Agreement
on the same terms and conditions contained herein.
10.0 Termination
10.1 Any termination pursuant to this article 10.0 shall not
relieve either party of obligations previously incurred pursuant
to this Agreement, including but not limited to payment for
Flexible Substrate Assemblies shipped hereunder, warranty,
confidentiality, and patent, maskwork and copyright licenses,
rights and indemnity.
10.2 Termination of each purchase order or release for Flexible
Substrate Assemblies shall be in accordance with the terms stated
on the purchase order or release.
10.3 Development of the New Flexible Circuit Construction may be
terminated by either party if and when it occurs that, for any
reason, (I) the production prices (Appendix 3) cannot be achieved
based on the applicable specifications or other specifications
required to satisfy Motorola's needs, or (ii) flexible circuits of
significantly advanced design or processing become available to
Motorola, which are capable of being used as a replacement of or
in substitution for the New Flexible Circuit Construction being
developed hereunder. In any such event, either party may initiate
termination of this Agreement as it pertains to the development of
New Flexible Circuit Construction and Motorola may initiate
termination of this Agreement in its entirety. A party may
initiate termination by sending written notice to the other party
of its intent to terminate. The parties shall explore remedies
during a period not to exceed ninety (90) days from the date of
the notice. Failing agreement on a remedy, the development of New
Flexible Circuit Construction or this Agreement in its entirety,
as the case may be, shall terminate at the expiration of that
period. Motorola shall not be liable for any development costs
incurred or termination charges of any kind.
10.4 If Parlex fails to maintain its position as a satisfactory
supplier by not remaining competitive in quality and delivery as
defined in this Agreement with other responsible suppliers or
potential suppliers of flexible circuits of substantially similar
prices, Motorola may terminate this Agreement without further
liability to Parlex by furnishing written notice of a termination
date no less than ninety (90) days after the date of the notice.
If, however, prior to such termination date, Parlex becomes
competitive, or demonstrates to Motorola's satisfaction its
capability of becoming competitive within an additional time
period selected by Motorola, the notice of termination shall be
withdrawn and this Agreement shall continue.
10.5 If flexible circuits of significantly advanced design or
processing become available to Motorola, which are capable of
being used as a replacement of or in substitution for the
production of Flexible Substrate Assemblies being purchased
hereunder, Motorola may terminate this Agreement without further
liability to Parlex by furnishing written notice of a termination
date no less than one hundred eighty (180) days after the date of
the notice. If, however, prior to such termination date, Parlex
demonstrates to Motorola's satisfaction its capability of
producing and delivering Flexible Substrate Assemblies of the same
or comparable design or processing, at competitive prices in the
quantities required, the notice of termination shall be withdrawn
and this Agreement shall continue with respect to the Flexible
Substrate Assemblies of significantly advanced design or
processing.
10.6 In the event of a material breach of this agreement,
Motorola or Parlex, as the case may be, shall give written notice
to the defaulting party of the breach and of the non-defaulting
party's intention to terminate this Agreement if the non-
defaulting party is not, within thirty (30) days from and after
receipt of the written notice of default, provided with a plan of
corrective action and if substantial efforts to cure the default
in accordance with the plan are not made. If such breach is not
substantial corrected as provided above, the nondefaulting party
may terminate this Agreement by sending written notice to the
other party of such termination, whereupon this Agreement shall
terminate and the non-defaulting party, subject to the terms of
this Agreement, shall be entitled to pursue remedies provided by
law. In the event the nondefaulting party elects to terminate this
Agreement, the notice of termination must be sent to the
defaulting party within five (5) days after the expiration of the
thirty (30) day period mentioned above.
10.7 Either party may terminate this Agreement on thirty (30)
days written notice without liability to the other party in the
event of the happening of any of the following with regard to that
other party: (a) ceases to function as a going concern, (b) makes
as assignment of the benefit of creditors, (c) becomes the subject
of any proceeding under any applicable bankruptcy, receivership,
insolvency or similar laws instituted by or against such party,
which proceeding is not dismissed as to such party within forty-
five (45) days after it has been instituted, or (d) liquidates,
dissolves, sells substantially all of its assets, mergers or
consolidates.
11.0 Notices
All notices or permits hereunder shall be in writing and shall be
deemed duly given when personally delivered or sent by registered mail,
return receipt requested, postage prepaid, or by telex, cable or telex
confirmed by letter as aforesaid, addressed as follows:
If to Motorola:
Motorola, Inc.
Automotive and Industrial Electronics Group
4000 Commercial Avenue
Northbrook, IL 60062 - USA
Attn: Group Sourcing Manager
If to Parlex:
Attn: President
or to such other address as either party may hereafter designate
in writing by like notice.
12.0 General
12.1 Neither party shall be liable for any failure to perform or
for any delay in performance of its obligations hereunder which is
caused by circumstances beyond its reasonable control, including
but not limited to acts of God or a public enemy, fires, storms,
floods, epidemics, quarantine restrictions, riots, insurrections,
explosions, accidents, war, labor disputes, transportation
embargoes, acts or failures to act of or by any government or
agency thereof, judicial action, or any act, neglect or default of
the other party. Each party shall promptly notify the other of the
existence of any excusable nonperformance or any delays and the
anticipated duration thereof.
12.2 No delay on the part of either party in exercising any of
its respective rights hereunder or the failure to exercise the
same nor the acquiescence in or waiver of a breach of any term,
provision or condition of this Agreement shall be construed to
operate as a waiver of any such rights or acquiescence thereto,
except for the specific instance of delay, waiver or acquiescence.
12.3 This Agreement and the rights and obligations hereunder may
not be assigned by either party without the prior written consent
of the other party.
12.4 This Agreement is deemed to have been entered into in
Illinois, and its interpretation, construction and remedies for
its enforcement or breach are to be applied in accordance with the
laws of the State of Illlinois without reference to principles of
choice and conflicts of laws.
12.5 Section and paragraph headings used in this Agreement are
for convenience only and are not to be deemed or construed to be
part of this Agreement.
12.6 This Agreement does not create an agency, joint venture or
partnership between Motorola and Parlex. Neither party shall
impose or create any obligation or responsibility, express or
implied, or make any promises, representations or warranties on
behalf of the other party, other than as expressly provided
herein.
13.0 Dispute Resolution
13.1 Motorola and Parlex will attempt to settle any claim or
controversy arising out of this Agreement through consultation and
negotiation in good faith and a spirit of mutual cooperation. If
those attempts fail, then the dispute will be mediated by a
mutually acceptable mediator to be chosen by Motorola and Parlex
within 45 days after written notice by either to the other
demanding mediation. Neither party may unreasonably withhold
consent to the selection of a mediator, and Motorola and Parlex
will share the costs of the mediation equally. By mutual
agreement, however, Motorola and Parlex may postpone mediation
until some specified but limited discovery about the dispute has
been completed. The parties may also agree to replace mediation
with some other form of alternative dispute resolution (ADR), such
as neutral fact-finding or a minitrial.
13.2 Any dispute which cannot be resolved between the parties
through negotiation, mediation or other form of ADR within six
months of the date of the initial demand for it by one of the
parties may then be submitted to the courts for resolution. The
use of any ADR procedures will not be construed under the
doctrines of laches, waiver or estoppel to affect adversely the
rights of either party. And nothing in this section will prevent
either party from resorting to judicial proceedings if (a) good
faith efforts to resolve the dispute under these procedures have
been unsuccessful or (b) interim relief from a court is necessary
to prevent serious and irreparable injury to one party or to
others.
14.0 Entire Agreement
This Agreement, together with the Appendices referred to herein
and the terms and conditions of Motorola's current standard purchase
order form, constitutes the entire Agreement and understanding of the
parties with regard to the matters covered and herein have merged all
prior and collateral representations, promises or conditions, whether
oral or written. No amendment or modification of any of the provisions
contained herein shall be binding upon either party unless made in
writing and signed by a duly authorized representative of each party.
IN WITNESS WHEREOF, each of the Parties hereto have caused this Agreement to
be signed by its respective duly authorized representative.
Motorola, Inc. Parlex Corporation
Automotive and Industrial
Electronics Group
By: /s/ LEE H. CRAFT By: /s/ HERBERT W. POLLACK
------------------------------- -------------------------------
Title: Director, Group Operations Title: President
and Services
-------------------------- ---------------------------
Appendices included:
1. Specification: Acrylic Adhesive-Based Flexible Circuit Construction
2. Specification: New Flexible Circuit Construction
3. Production Prices: New Flexible Circuit Construction
4. Product Qualification Procedure
5. Production Prices: Acrylic Adhesive-Based Flexible Circuit
Construction
6. Quality and Cycle Time Initiatives
7. Mutual Non-Disclosure Agreement
April 8, 1993
APPENDIX 1
Specification: Acrylic Adhesive-Based Flexible Circuit
______________________________________________________
Construction
____________
The Flexible Substrate Assembly using Acrylic Adhesive-Based Flexible Circuit
Construction is:
Typical
Solder Protection (HASL)
Solder Mask
Copper (1 oz. plated to 2 oz.) 0.0028"
Acrylic Adhesive 0.001"
Polyimide Dielectric 0.001"
Acrylic Adhesive 0.001"
Copper (1 oz. plated to 2 oz.) 0.0028"
Acrylic Adhesive 0.002"
Polyimide Dielectric 0.001"
Pressure Sensitive Adhesive 0.002"
Aluminum Rigidizer
Performance Specifications:
___________________________
- - The flexible circuit must meet or exceed the current established
Institute for Interconnecting & Packaging Electronic Circuits
requirements (IPC-FC-250A) and Motorola specifications.
- - In addition to the IPC specifications, the flexible circuits must
meet the Automotive Environmental requirements as followed:
Temperature Extremes: -50 degree C to +150 degree C
- Both Storage and Cycle testing
Humidity: +85 degree C and 85% Relative Humidity Fluid Compatibility
with typical Automotive Fluids
- - All prototype and production flexible substrate assemblies must be
electrically tested to IPC specification IPC-250A.
The design and panel utilization requirement:
_____________________________________________
The pricing in the Appendix 3 is based on the following producibility
requirements:
Part Requirement Panel Requirement (18" x 24")
________________ ____________________________
Min line .006" .750 border, usable area 16.5"x22.5"
Min space .005" 2 datums per part
Min hole .018" Min datum edge to datum edge .350"
Min edge to edge .090"/.300"*
<F*> Min edge to edge distance for single up/multi up blanking dies
respectively.
April 8, 1995
APPENDIX 2
Specification: New Flexible Circuit Construction
________________________________________________
The Flexible Substrate Assembly using New Flexible Circuit Construction is:
Typical
Solder Protection To Be Developed
Solder Mask To Be Developed
Copper To Be Developed
Dielectric To Be Developed
Copper To Be Developed
Adhesive and/or Dielectric To Be Developed
Aluminum Rigidized
Performance Specifications:
___________________________
- - The flexible circuit must meet or exceed the current established Institute
for Interconnection & Packaging Electronic Circuits requirements
(IPC-FC-250A) and Motorola specifications.
- - In addition to the IPC specifications, the flexible circuits must meet the
Automotive Environmental requirements as followed:
Temperature Extremes: -50 degree C to +150 degree C
- Both Storage and Cyclic testing
Humidity: +85 degree C and 85% Relative Humidity
Fluid Compatibility with typical Automotive Fluids
- - All prototype and production flexible substrate assemblies must be
electrically tested to IPC specification IPC-250A.
The design and panel utilization requirement:
_____________________________________________
The pricing in the Appendix 5 is based on the following producibility
requirements:
Part Requirement Panel Requirement (18"x24")
________________ __________________________
Min line .006" .750 border, usable area 16.5"x22.5"
Min space .005" 2 datums per part
Min hole .018" Min datum edge to datum edge .350"
Min edge to edge .090"/.300"*
Min datum edge to border .240"
<F*> Min edge to edge distance for single up/multi up blanking dies
respectively.
April 8, 1993
APPENDIX 3
PRODUCTION PRICE: New Flexible Circuit Construction
___________________________________________________
*
1. Price of New Flexible Circuit Construction on a Panel Basis
_______________________________________________________________
Yearly Business Volume 1993 1994 1995 1996
______________________ ____ ____ ____ ____
* * * * *
2. Price of finishing and testing a circuit
____________________________________________
*
3. Price of Rigidizer
______________________
*
4. Tooling - *
_______________
Price to Motorola and Payment term:
___________________________________
*
* Confidential information has been omitted and filed separately with the
Commission.
April 8, 1993
APPENDIX 4
Product Qualification Procedure
_______________________________
The following Product Qualification Procedure must be followed when the
circuit construction's material or manufacturing process is modified. For all
Purchase Orders placed by Motorola, Parlex must document in writing the
circuit construction, materials and manufacturing process used to produce the
order. This information will be treated as Parlex Confidential and will be
distributed within Motorola on a need to know basis only. Once Parlex has
produced pre-pilot samples any circuit construction changes, material changes
or manufacturing process changes must be approved by Motorola prior to
shipment of the changed flexible substrate assembly.
The procedure which will be used to evaluate and qualify new materials,
manufacturing process or circuit constructions will be as follows:
Activity Responsible Time Duration
________ ___________ _____________
1. New Material, Process or Parlex or Motorola Time 0
Construction Idea
2. Initial Evaluation Test Parlex and Motorola Time 0 + 2 weeks
3. Schedule developed and Parlex and Motorola Time 0 + 4 weeks
mutually agreed to
4. Material, Process or Parlex Time 0 + 14 weeks
construction level
qualification
5. If required, product level Motorola Time 0 + 26 to 30 weeks
design validation test
6. If required, product level Motorola Time 0 + 44 to 48 weeks
process validation test
The Production Flexible Substrate Assembly is considered preliminary qualified
after successful completion of Product Level Design Validation Testing and
final qualification after successful completion of Product Level Process
Validation testing.
For each proposed material, process or construction change, this schedule will
be reviewed to determine the appropriate qualification tests required. Once a
Flexible Substrate Assembly is in production the qualification schedule will
become dependent on Motorola's customer approval and may require additional
time than detailed above.
Under no circumstances can a production approved Flexible Substrate Assembly
be changed without Parlex obtaining prior approval from Motorola. Notification
of changes to a production approved Flexible Substrate Assembly must be done
in using the Supplier Request for Engineering Change Notice (SREA). The
development schedule and qualification testing requirements may apply to any
changes.
April 8, 1993
APPENDIX 5
PRODUCTION PRICE: Acrylic Adhesive-Based Flexible Circuit Construction
______________________________________________________________________
*
1. Price of Acrylic Based Flexible Circuit Construction on a Panel Basis
_________________________________________________________________________
Yearly Business Volume 1993 1994 1995 1996
______________________ ____ ____ ____ ____
* * * * *
2. Price of finishing and testing a circuit
____________________________________________
*
3. Price of Rigidizer
______________________
*
4. Tooling - *
___________
Price to Motorola and Payment term:
___________________________________
*
* Confidential information has been omitted and filed separately with the
Commission.
April 8, 1993
APPEXNDIX 6
Quality and Cycle Time Initiatives
__________________________________
- - Manufacturing Quality: The manufacturing quality level will be established
as soon as practicable after the Agreement Date as the baseline Flexible
Substrate Assemblies. Then 10X improvement goals every 2 years will be
established and progress reported quarterly.
- - Design Cycle Time: The Design Cycle Time, stated in working days, will be
established as soon as practicable after the Agreement Date as the
baseline as the base for Flexible Substrate Assemblies. The 10X
improvement goals every 5 years will be established and progress
reported semi-annually.
- - Prototype Manufacturing Cycle Time: The manufacturing cycle time for
prototypes, stated in working days, will be established as soon as
practicable after the Agreement Date as the baseline for Flexible
Substrate Assemblies. Then 10X improvement goals every 5 years will be
established and progress reported semi-annually.
- - Production Manufacturing Cycle Time: The manufacturing cycle time for
production, stated in working days, will be as the baseline for Flexible
Substrate Assemblies. Then 10X improvement goals every 5 years will be
established and progress reported semi-annually.
- - Tooling Cycle Time: The tooling cycle time for production, stated in
working days, will be established and progress reported semi-annually.
- - Tooling Cycle Time: The tooling cycle time for production, stated in
working days, will be established as soon as practicable after the
Agreement Date as the baseline for Flexible Substrate Assemblies. Then
10X improvement goals every 5 years will be established and progress
reported semi-annually.
APPENDIX 7
- B -
NON-DISCLOSURE AGREEMENT
________________________
MUTUAL
______
This Agreement is effective the 4th day of March, 1992 between MOTOROLA,
INC., a Corporation of the State of Delaware, U.S. A., (hereinafter
"Motorola",) by the through its Automotive and Industrial Electronics Group,
having a principal place of business at 4000 Commercial Avenue, Northbrook,
Illinois 60062, and Parlex Corporation, a corporation having a principal place
of business at 145 Milk Street, Methuen, MA 01844 (hereinafter "Parlex").
WHEREAS, Motorola and Parlex each have or may acquire certain
confidential information relating to the subject area of flexible printed
circuit board for electronic control modules for engine, brake etc. which they
desire to disclose to each other and each party is willing to accept the
other's information confidentially and as limited herein;
NOW, THEREFORE, the parties agree as follows:
1. "Confidential Information" is defined as any device, graphics,
written information or information in other tangible forms that is disclosed,
for evaluation and/or development purposes, to the receiving party by the
disclosing party relating to the above-identified subject areas and that is
marked at the time of disclosure as being "Confidential" or "Proprietary".
Information disclosed orally or visually and identified at that time as
Confidential shall be considered as "Confidential Information" if it is
reduced to tangible form, marked Confidential, and transmitted to the
receiving party within thirty (30) days after the oral or visual disclosure.
2. During the "Confidential Period" defined below, each party will use
its best efforts to prevent its disclosure of the other party's "Confidential
Information" for any purpose other than the aforesaid evaluation and
development purposes, and to limit dissemination of the other party's
"Confidential Information" to such of its employees who have a need to know
for the aforesaid evaluation and/or development purposes. "Best efforts" with
respect to any "Confidential Information" means at least that degree of care
normally used by the receiving party to prevent disclosure to others of its
own confidential information of similar importance, but in no case less than a
reasonable degree of care.
The "Confidential Period" shall mean five (5) years from the date of
receipt of the "Confidential Information" or until such time as the
information no longer qualifies as "Confidential Information" pursuant to
Paragraph 4.
3. Except as may be provided in another written agreement between
parties, neither party shall be obligated: to do business with the other
party; to refrain from dealing with others in the above-identified subject
area; or to begin, continue, or terminate any business venture.
4. Notwithstanding any other provisions of this Agreement, each party
acknowledges that "Confidential Information" shall not include any information
which: (a) is or becomes publicly known through no wrongful act on the
receiving party's part; or (b) is, at the time of disclosure under this
Agreement, already known to the receiving party without restriction on
disclosure; or (c) is, or subsequently becomes, rightfully and without breach
of this Agreement, in the receiving party's possession without any obligation
restricting disclosure; or (d) is independently developed by the receiving
party without breach of this Agreement; or (e) is furnished to a third party
by the disclosing party without a similar restriction on the third party's
rights; or (f) is explicitly approved for release by written authorization of
the disclosing party.
5. Each party agrees to return to the disclosing party upon request,
the devices, graphics, writings, and information in other tangible forms
containing any of the "Confidential Information" referred to in Paragraph 1,
and any copies of "Confidential Information".
6. No license, express or implied, in the "Confidential Information",
is granted to either party other than to use the information in the manner and
to the extent authorized by this Agreement.
7. This Agreement shall terminate on 3rd of March 1997 (the Termination
Date). The obligations recited herein relating to information disclosed prior
to the Termination Date shall survive such termination.
8. Each party acknowledges that it is not prohibited by the Office of
Export Administration for the U.S. Department of Commerce from receiving
technical information, know-how, data or other information, and it agrees not
to export such information, or products incorporating it, to any prohibited
country.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives.
MOTOROLA, INC.
By /s/ JOHN PELLAND
------------------------------------
Corporate Vice President and General
Manager, Automotive Powertrain and
Chassis Electronics Division
Dated: March 12, 1992 Title ---------------------------------
PARLEX CORPORATION
By /s/ JILL POLLACK KUTCHIN
------------------------------------
Dated: March 12, 1992 Title Vice President
--------------------------------
AMENDMENT TO
DEVELOPMENT AND SUPPLY AGREEMENT
This amending agreement is made and entered into this 19th day of
August, 1994 by and between Parlex Corporation, a Massachusetts corporation
having a principal place of business at 145 Milk Street, Methuen, MA 01844
("Parlex"), and Motorola, Inc., a Delaware corporation, by and through its
Automotive and Industrial Electronics Group ("AIEG"), having a place of
business at 4000 Commercial Avenue, Northbrook, IL 60062 U.S. A. ("Motorola").
WHEREAS, the parties hereto made and entered into a written Development
and Supply Agreement ("Agreement") dated April 13, 1993; and
WHEREAS, the parties desire to amend the Agreement in certain respects.
THEREFORE, Motorola and Parlex agree as follows:
1. Article 1. of the Agreement (Definitions) is amended by:
(i) modifying Paragraph 1.1 to read:
1.1 Flexible Substrate Assembly: finished assembly panel
consisting of circuits made of either the Acrylic Adhesive-
Based Flexible Circuit Construction or New Flexible Circuit
Construction, Rigidizer, and Motorola's circuit interconnect
design.
(ii) adding the following as Paragraph 1.5:
1.5 Prototype: prototype, pre-pilot or other pre-
production Flexible Substrate Assembly panel.
2. Paragraph 2.1.1 of the Agreement is amended by deleting
"January 1, 1994" and replacing it with "July 1, 1994".
3. Paragraph 2.2 of the Agreement is deleted in its entirety and
replaced with the following:
2.2 Prototype and Pre-Pilot Assemblies
2.2.1 Parlex shall build prototypes incorporating
New Flexible Circuit Construction as needed by
Motorola. Prototypes shall be delivered to Motorola
for delivery to customers as samples and for
evaluation and testing by Motorola. The purpose of the
prototype evaluation and tests is to demonstrate the
capabilities of the New Flexible Circuit Construction,
and the parties thereby anticipate that desirable
changes to the applicable specifications may be
identified. Any proposed changes to the applicable
specifications shall be made in accordance with
paragraph 2.3.
2.2.2 A standard prototype delivery shall be five
(5) panels with a delivery lead time of four (4)
weeks. The balance of any prototype order exceeding
the standard delivery quantity of 5 panels, up to a
maximum of two hundred fifty (250) circuits, shall
have a delivery lead time of five (5) weeks. Delivery
of that portion of prototype orders exceeding 250
circuits will be scheduled as agreed by the parties.
Parlex shall provide one standard delivery per week,
as requested by Motorola.
2.2.3 Motorola shall purchase prototypes
incorporating new Flexible Circuit construction at a
price equal to four (4) times the production price
stated in Appendix 3 or at a lot charge of *
dollars, whichever is greater. Such price includes all
prototype engineering and tooling costs, with the
exception of electrical test tooling costs which shall
be agreed by the parties. Further, such price is based
on the standard delivery lead-time as described in
paragraph 2.2.2 for prototype orders up to two hundred
fifty (250) circuits. The following price premiums
shall apply to three week, two week and one week
deliveries: twenty five percent, fifty percent and one
hundred percent, respectively.
4. Paragraph 3.1 of the Agreement is amended by deleting "January
1, 1994" and replacing it with "July 1, 1994".
5. Paragraph 3.2.1 of the Agreement is deleted and replaced with
the following:
During the term of this Agreement, Parlex shall sell to
Motorola, and Motorola shall purchase from Parlex, Flexible
Substrate Assemblies in an amount * of AIEG's requirements as
measured in square footage. Motorola's purchase obligation in this
Paragraph 3.2 shall be limited to the extent that purchasers from
AIEG of Flexible Substrate Assemblies, or products incorporating
Flexible Substrate Assemblies, have approved other suppliers of
Flexible Substrate Assemblies as of the Agreement Date or require
other suppliers of Flexible Substrate Assemblies in the future.
6. The second sentence of Paragraph 3.2.2 of the Agreement is
deleted and replaced with the following:
If so, Parlex shall sell to any such Motorola customer its
requirements for Flexible Substrate Assemblies on terms acceptable
to Parlex, except that warranty shall be identical to that herein
provided.
* Confidential information has been omitted and filed separately with the
Commission.
7. Article 3.0 of the Agreement is amended by adding the
following as Paragraph 3.9:
3.9 FORECAST
On or about December 15 of each year during the term of
this Agreement, Motorola will provide Parlex with a forecast of
AIEG's anticipated purchase volume for the following calendar year
of production for the purpose of establishing invoiced unit prices
as described in Paragraph 3.3. Performance to each forecast will
be reviewed by the parties on or about June 15 and on or about
December 15 of each year to determine if an adjustment of the
invoiced unit price is required to reflect unit volumes actually
purchased for that year.
8. Paragraph 3.5.1 of the Agreement is deleted and replaced with
the following:
Parlex agrees not to sell to customers selling products in
the automobile industry the New Flexible Circuit Construction
developed hereunder for Motorola, or substantially identical
derivative flexible circuit, for one year following the initial
delivery to Motorola of satisfactory product level process
validation units of Flexible Substrate Assemblies incorporating
the New Flexible Circuit Construction, without first obtaining
Motorola's written permission. For the purpose of this Paragraph,
multi-layer circuits incorporating New Flexible Circuit
Construction shall not be considered to be "substantially
identical".
9. The first sentence of Paragraph 10.4 is deleted and replaced
with the following:
If Parlex fails to maintain its position as a satisfactory
supplier by not remaining competitive in quality, price and
delivery as defined in this Agreement with other responsible
suppliers or potential suppliers of flexible circuits of
substantially similar prices, Motorola may terminate this
Agreement without further liability to Parlex by furnishing
written notice of a termination date no less than ninety (90) days
after the date of the notice.
10. In all other respects, the Agreement shall continue in full
force and effect.
11. This Amendment shall become effective on the date hereof.
IN WITNESS WHEREOF, each of the parties hereto has caused this amendment
to be signed by its respective duly authorized representative.
MOTOROLA, INC. PARLEX CORPORATION
AUTOMOTIVE & INDUSTRIAL ELECTRONICS GROUP
By: /s/ CARNEY YAKMALIAN By: /s/ PETER J. MURPHY
------------------------------------- --------------------------
Title: Group Materials Manager Title: Executive Vice President
--------------------------------- ------------------------
March 23, 1995
JTEC Price Structure
PRODUCTION PRICE: PALFlex Circuit Construction for JTEC 1
_________________________________________________________
*
1. Price of PALFlex Circuit Construction on a Panel Basis
_________________________________________________________
Yearly Business Volume 1995 1996 1997
______________________ ____ ____ ____
(Annualized Rate)
_________________
* * * *
2. Price of finishing and testing a circuit
___________________________________________
*
3. Price of Rigidizer/PSA
_________________________
*
4. Tooling - *
__________
5. PIC - *
______
6. Price Reduction Commitment - *
_____________________________
* Confidential information has been omitted and filed separately with the
Commission.
JTEC First and Second Year Pricing
Model Year 1996 *
Model Year 1997 *
Agreement on JTEC Pricing:
/s/ PETER J. MURPHY 3/23/95 /s/ REX T. ELLINGTON 3/23/95
- ----------------------- --------- ------------------------ ---------
Parlex Authorization Date Motorola Authorization Date
* Confidential information has been omitted and filed separately with the
Commission.