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Adept Technology / Ramix Agreement
1. REPRESENTATIONS
This is an Agreement between Adept Technology, Inc. located at 150 Rose
Orchard Way, San Jose, California 95134, ("Buyer") and Ramix
Incorporated, located at 9421 Winnetka Avenue, Bldg. K, Chatsworth, CA
91311 ("Seller").
2. PURPOSE
This Agreement is written and executed in good faith on 10/27/98 (the
"Effective Date") by both parties, with the mutual interest of
developing a long lasting business relationship that will be mutually
profitable and successful. In executing this Agreement the parties
hereto declare they are each independent contractors and the
transactions described in this Agreement constitute the extent and
total relationship of the parties.
3. TERM OF AGREEMENT
The Term of this Agreement shall be three (3) years from the Effective
Date, unless either party initiates formal notification of termination.
Thereafter, this Agreement may be extended by mutually signed, written
amendment.
4. PRODUCTS AND SERVICES
Buyer agrees to purchase the "Products" as specified by written
purchase orders, and Seller agrees to deliver such Products in
compliance with Buyer's purchase order documents, and mutually agreed
specifications and Seller's order acknowledgments. Buyer and Seller
agree to consider other products, assemblies and/or services that are
compatible with each other's business purpose and end products and
services as a means of enhancing and further developing the success of
this business relationship.
5. APPLICABLE DOCUMENTS
All deliverables under this Agreement shall be manufactured, assembled
or otherwise modified or value added, in accordance with the Buyer
approved specifications and/or drawings and other process documentation
as mutually agreed between Buyer and Seller.
6. QUALITY
Seller shall produce the Product in accordance with the standards set
forth in IPC-610- Class 2. Buyer and Seller agree to cooperate and
provide reasonable quality and defect cause data collection to improve
Buyer's documentation of requirements, Seller's delivered end product
and Buyer's resulting application of Seller's end product.
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7. ENGINEERING CHANGE ORDERS, PROCESS CHANGE NOTICES AND DEVIATION NOTICES
It is recognized that Seller will be asked to implement Buyer's
Engineering Change Orders (ECO's), Process Change Notices and Deviation
Notices in a timely manner. Seller shall issue, within 5 (five)
business days, a quotation in response to the foregoing showing all
charges associated with documentation, labor, material and
administrative costs. Implementation will be mutually agreed by the
issuance of Buyer's purchase order or change order and by Seller's
order acknowledgment. Buyer agrees to pay Seller for all costs incurred
by Seller relative to orders released and confirmed by Seller prior to
the implementation of the mutually agreed ECO, deviation or process
change.
8. PRODUCT AND BUSINESS CONFIDENTIALITY
A. The partnership, product assembly and working relationship between
Buyer and Seller are mutually considered a special relationship.
Information or disclosed knowledge may be considered by either party
to be Company Confidential, especially related to potential new
products, new or changing product markets and related business
actions and conditions. It is expected, as an integral part of the
contractual and partnership relationship, that such discussions or
transmitted or otherwise disclosed information should be treated as
strictly Company Confidential between both parties, their employees
and applicable suppliers.
B. Neither party shall intentionally or unintentionally discuss,
disclose or otherwise transmit any product, product market or other
technical or business information with any third party, whether
company or individual, including marketing or advertising of its
relationship and/or photographs of processes or products, without
the specific advance knowledge and written consent of the other
party to this Contract.
9. PROPRIETARY DATA
All specifications, drawings or other documents provided by the Buyer
to Seller pursuant to this Agreement are property of Buyer and as such,
shall be considered Company Confidential by Buyer. Seller shall not
copy, duplicate or transfer any such information for purposes other
than may be required to perform to the requirements of this Agreement.
This Agreement and amendments thereto and all documentation, written
procedures, purchase orders, order acknowledgments and/or written
correspondence shall be considered Company Confidential between the
parties regardless of whether or not the written documentation is so
marked. All business and technical discussions between Buyer's and
Seller's employees shall be considered Company Confidential and all
information related to such discussions shall not be discussed with any
other parties.
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10. BUSINESS FAILURE OR INABILITY TO PERFORM
A. In the event Seller's business activities begin to decline to the
extent that the financial condition affects its ability to deliver
fully compliant Products, or Seller desires not to manufacture and
deliver Products, Seller shall so notify Buyer a minimum of at least
180 calendar days in advance. Seller's inability to maintain
shipments of Product consistent, over a four (4) week period, shall
also constitute Seller's failure to perform. In such event, Buyer
shall retain the right to take whatever action it deems necessary to
protect its ability to deliver Product to meet the demand
requirements of its customer base or other potential customers,
including the right to take over manufacture of Product under this
agreement. In such event, Buyer has the right to assume full
ownership of Seller's design and any copyright/patents, including
manufacturing. Seller will cooperate fully in providing all tooling,
fixtures, and test equipment, either paid for by Buyer or used
exclusively in the manufacture and test of Products, in a timely
manner.
B. Recognizing Seller owns the design of Product, if either of the
above financial or operational failure conditions does occur, Buyer
may invoke its right to take over direct production and supply of
Product. In the event Buyer elects to take over production and
supply of Product, Buyer shall provide a royalty, based on two
percent (2%) of the last Buyer purchase order unit price paid to
Seller for the Product, for each Product sold to Buyer's customers.
Recognizing that Buyer shall suffer some potential loss of business
and have to expend labor and cost to take over full production of
Product for Seller's failure to perform, the royalty payable to
Seller shall not apply on any production and supply of Product by
Buyer to its customers for the initial twelve (12) months of taking
over production responsibility. Seller's right to royalty for its
design shall be limited to Product produced and sold by Buyer after
the first year to no more than 3 years, i.e., the end of the fourth
year after taking over production and delivery responsibility by
Buyer from Seller. At the end of the three (3) year royalty period,
Seller's rights to any and all ownership and rights of the design of
Product shall cease to exist. At such time, full ownership and
rights to the design shall immediately transfer from Seller to Buyer
for a total not-to-exceed cost of one dollar ($1.00).
11. TECHNICAL COMMUNICATION
Technical discussions related to this Agreement between the Buyer's and
Seller's engineering, manufacturing and/or quality personnel, are
hereby authorized to preclude misunderstandings or misinterpretations.
However, all changes in the contractual scope of work, pricing or
delivery schedule, materials or data related to this Agreement shall be
effective only if mutually agreed by a Buyer change order and Seller
order acknowledgment.
12. PURCHASE ORDERS/FORECASTS
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A. Buyer shall provide Seller with a minimum of six (6) month forecast,
of which the first three (3) months will be covered by signed
purchase orders. Seller will procure parts and materials per Buyer's
purchase order and forecast quantities based on lead-time and lot
size agreements in place.
B. Seller shall promptly respond within five (5) working days to
Buyer's forecasted changes, indicating acceptance and/or any cost
premiums that may be required in materials or labor to satisfy such
changes. Buyer shall acknowledge acceptance and any cost changes, or
negotiated changes thereof, via a written purchase order or change
order.
C. Seller shall provide a list of Long Lead items and a Lot Size Parts
Exposure Listing to Buyer that supports deliveries beyond 90 days.
Said lists shall be updated and reviewed by Buyer and Seller every
three months.
D. Buyer authorizes Seller to purchase such Long Lead Items and Lot
Size Parts to support Buyer's forecast. Buyer shall assume liability
for such material until such material is used on a released order.
13. NO PURCHASE COMMITMENT
Buyer shall not be committed to purchase any annual quantity or dollar
volume, nor any estimated or anticipated usage quantities or dollar
volume, regardless of any expressed or implied verbal or written
statements that may be communicated to Seller either before issuance of
this agreement or during the term of this agreement.
14. ORDER CANCELLATION
Buyer may cancel any order scheduled for delivery more than thirty (30)
days from the date such cancellation notice is given to seller. Upon
cancellation, buyer is liable to seller for all material within the
greater of the ninety (90) day period or the long lead time and lot
size parts exposure list for the material. In addition, Seller will
make every effort to cancel its orders or return materials for credit
without penalty and pass on any recovered cost to buyer. Buyer will
only be responsible for any restocking fees that Seller fully justifies
its failure to negotiate out of returned materials to its suppliers,
with no mark-up in costs to Seller.
15. FOB POINT
Products will be shipped Free-On-Board (FOB) Seller's Dock.
16. EXCESS MATERIALS RESULTING FROM NO DEMAND
In the event of the end of a program and/or Buyer has had no demand for
a minimum of six (6) months, that portion of excess materials that were
purchased by Seller consistent with Buyer's prior demand volume will be
purchased by Buyer. Seller will exercise diligent commercial efforts to
utilize the materials in other customer businesses prior to requesting
Buyer excess buyout.
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17. RESCHEDULING
Seller may invoice Buyer, and Buyer shall remit payment for any
Seller's end product (finished goods assembly), produced in good faith
by Seller to support Buyer's purchase order requirements, that is still
on hand at Seller 90 days after original delivery date, unless Seller
agrees to a subsequent reschedule date. Seller may invoice Buyer and
Buyer shall remit payment for piece part or material, purchased in good
faith by Seller to support Buyer's purchase order requirements, that is
still on hand at Seller 180 days after original delivery date. Seller
shall be responsible for costs incurred relative to purchase and
inventorying of any piece parts or materials in quantities that are
excess to Buyer's purchase order demand.
18. EARLY/LATE DELIVERIES
Unless mutually agreed in writing Seller shall schedule all shipments
of Product to ensure receipt at Buyer's dock no more than five working
days prior to the mutually agreed upon purchase order due date, with no
allowance for any delivery beyond the purchase order due date.
Deliveries outside the allowed delivery window may be returned by Buyer
at the Seller's expense and any invoiced charges will be debited
against Buyer's purchase order.
19. OVERSHIPMENTS
Unless otherwise mutually agreed in writing, all overshipments of
Product shall be considered unauthorized and may be returned at no cost
to Buyer.
20. PACKAGING
Seller shall be responsible for providing all necessary packaging and
shall pack merchandise so as to ensure proper ESD protection and safe
delivery in an undamaged condition for receipt at Buyer's dock. Safe
and undamaged condition shall be defined as no external or internal
damage nor ESD damage or degradation of performance of the Seller's end
product, or any or all of its piece parts, components or materials
therein. Any cost for repair or replacement of merchandise damaged in
transit due to insufficient/improper packaging shall be the sole
responsibility of the Seller.
21. MARKING & IDENTIFICATION
Seller shall ensure the manufacturer's part number and Buyer part
number, as appearing on the applicable purchase order and/or purchase
order technical specifications or drawings, and related bar coded
documents (if available), shall be permanently applied to the actual
part, or internal part bag or package if the part is too small for
marking. This same part number requirement, along with the Buyer
purchase order number, shall appear on all external shipping
containers, shipping documents and Seller's packing slip.
22. PRICE LIST
The parties will agree to an Approved Price List which will pertain to
the Products sold
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under this Agreement, which Price List shall be reviewed on a
semi-annual basis and be subject to changes to reflect price changes
required under the section titled "Engineering Change Order, Process
Change Notice and Deviation Changes" above or changes in any statement
of work agreed to by the parties or price changes necessitated due to
significant cost increases of Seller's suppliers or changes in
Supplier's commodity markets.
23. PREMIUM DELIVERY PERFORMANCE AND CHARGES
Seller agrees to provide premium delivery on selected end product
requirements specifically requested by Buyer, pending availability of
parts and materials needed to meet the expedited delivery date(s).
Based on Seller's supported justification, Buyer agrees to reimburse
Seller for reasonable premium delivery charges for the specific
quantities of purchased parts and materials required to meet the
expedited delivery date requested.
24. PAYMENT TERMS
Buyer agrees to pay for all Products within thirty (30) days from
receipt of invoice, unless quality of the product is in question, as
defined and provided for herein.
25. ANNUAL MEETINGS
Buyer and Seller agree to meet annually to review performance under
this Agreement and to discuss any significant issues which may arise
during the Term hereof. Seller shall provide disclosure of material
prices and labor hours for the Products covered under this Agreement.
In addition, Buyer and Seller shall discuss topics relative to the
development of Continuous Process Improvement (e.g. quality issues,
delivery improvements, cost reduction, etc.).
26. COST REDUCTION DISCUSSIONS
During the Term here of the parties will explore measures to reduce
costs. The target goal for such reductions is five per cent (5%) per
year. Cost benefits which result from the efforts of both Buyer and
Seller or Seller only will be shared equally. All of the cost benefits
resulting from the sole efforts of Buyer will be passed on to Buyer.
27. NEW PRODUCT DEVELOPMENT PRICING
Seller agrees to provide, materials, facilities, test and related
equipment, and prototyping engineering and test manpower in support of
Buyer's requirements for new product development. In all aspects of
design development, parts and materials procurement and assembly and
test, Seller agrees to provide accelerated fast-turn support to Buyer
in new product development. This activity will provide an opportunity
for additional business and/or or ensure continuation of business to
Seller as new product replacements and/or upgrade design changes
obsolete Buyer's existing products
28. EXPEDITE FEES
Seller agrees not to charge Buyer for any accelerated delivery
performance, except for any
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pass-through costs incurred and charged by the PCB fabrication supplier
to Seller, without mark-up, to drive any prototypes down to one (1)
week delivery to Buyer.
29. JIT KANBAN DELIVERY PROGRAM
Buyer and Seller agree to develop a completed method of JIT KANBAN
Deliveries by Seller to meet Buyer's production demand, with individual
part and assembled product inventory configured within Seller's
operation and both Buyer's and Seller's employees trained, to ensure
implementation of the program within twelve (12) calendar months from
the Effective Date of this Agreement.
30. UNAUTHORIZED CHANGES
Any intended changes by the Seller to the delivery, specifications,
price, quantity or other contractual terms and conditions on an open
purchase order / subcontract shall be communicated in writing by the
Seller in advance of such actions. Seller shall not implement any
changes until confirmation or acknowledgment is received from the Buyer
31. NO COMPONENT SUBSTITUTION
Seller shall not deviate from the contractually specified materials,
parts or components designated by the Buyer's purchase order or
Approved Supplier Listing (ASL) or any related specification, drawing
or other contractual document required in the performance of
manufacturing and delivering the product requirements on the face of
any of the Buyer's purchase order / subcontract, without written fax,
letter or change order approval specifically issued by the Buyer. Only
the Buyer of record or other duly authorized purchasing personnel,
shall be authorized to approve any substitute materials, piece parts,
or components.
32. COMPONENT END OF LIFE (EOL)
If any component or material manufacturer specified in the PMC card
design announces that a given part/material is going End of Life (EOL),
whether or not the manufacturer stipulates a form, fit, function
replacement, Seller shall immediately notify the Buyer of record or
other duly authorized purchasing personnel in writing. Seller shall
ensure Buyer receives minimum of twelve (12) months advance notice of
any component or material going EOL, to the extent provided by
manufacturer.
33. WARRANTY
A. Seller warrants that the Products will conform in all performance
and material respects to mutually agreed specifications for a period
of five (5) years from receipt by Buyer (the "Warranty Period"). If
Buyer, during the Warranty Period, notifies Seller in writing of a
warranty claim, then upon receipt of such notice, Seller may examine
the Products at Buyer's facility or require Buyer, at Seller's
expense, to ship the Products to Seller per Seller's Return
Materials Authorization (RMA) Procedures.
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B. If a Product is found to be non-conforming per the terms herein,
Buyer will notify Seller. Seller shall provide an RMA number within
two (2) working days of written request by Buyer. Seller shall use
due diligence to perform any analysis or examination of the Products
in question in a timely manner. Seller shall not withhold or
otherwise delay providing to Buyer an RMA number for return of the
Product for repair or replacement. Seller shall have no obligation
under this section, if Seller determines reasonably that the
Products were not defective or missing at the time of shipment by
Seller or, if the Products were damaged of misused by Buyer or
modified, repaired, or altered, except as authorized by Seller or
subject to accident or improper installation by Buyer.
C. The liability of Seller under this warranty is limited to repairing
or replacing non- conforming products at no charge to Buyer or
issuing a credit at Seller's option, not to exceed the purchase
price of the non-conforming products. Seller shall deliver repaired
or replaced Product within fifteen (15) working days of receipt of
the Product returned by Buyer.
D. If the Seller fails to provide retum delivery of repaired or
replaced Product within the above fifteen (15) working day period,
Buyer will debit Seller for the full purchase order unit price
extended value of the Products.
E. Except for express warranties set forth herein, Seller makes no
other express Warranties of any kind and hereby disclaims all
implied warranties including the implied warranties of
merchantability and fitness for a particular purpose.
34. REPAIR OF PRODUCT AFTER WARRANTY PERIOD
If a non-conformity arises after the expiration of the Warranty Period,
and Buyer notifies Seller in writing of such non-conformity, Seller and
Buyer will cooperate with each other to diagnose the non-conformity.
Seller shall provide a Return Material Authorization (RMA) number
within two (2) working days of written request by Buyer. Once such
diagnosis is complete, Seller will provide Buyer with a written
quotation for repair of the Product and Buyer, at its option may then
issue its purchase order to Seller to effect such repair. Seller shall
deliver out of warranty repaired Product within thirty (30) working
days of receipt of the Product and purchase order from Buyer.
35. NO TROUBLE FOUND
If during the Warranty Period, Buyer identifies a non-conformity in a
Product but the cause cannot be reasonably determined, Buyer and Seller
will cooperate with each other to diagnose the cause within a
reasonable time and cost ceiling, mutually agreed prior to incurring
any respective labor and material costs. If the final cause is
determined to be covered by the Section titled "Warranty", Seller shall
repair or replace such non-conforming product per the provisions of the
"Warranty" Section and also bear the costs of the
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diagnosis. Alternatively, if the final cost is determined to be outside
of the provisions of Warranty section, Buyer shall bear the costs of
repair or replacement and the costs of the diagnosis.
36. ASSIGNMENT
A. Seller shall not assign this Agreement to any other party or entity,
including any successor of substantially all of Seller's business
and assets, without first obtaining the prior written consent of the
Buyer. Seller shall not subcontract or assign any or all of the
required design effort nor product manufacturing responsibility
without specific written advance approval of Buyer.
B. Since the Seller's core competency is design and development, Seller
shall subcontract the Buyer-approved final design to a contract
manufacturer. Selection of the contract manufacturer must have
advance written Buyer approval prior to Seller award of any order
commitment for Product manufacturing. Seller shall be responsible
for any and all testing of completed Product.
C. Initially, Seller shall contract to its contract manufacturer, based
on consigned kitted materials purchased and provided by Seller, for
manufacture and delivery of Product to Seller. It is mutually agreed
by Buyer and Seller that the goal as part of this contract is the
Seller will make every effort to convert the said consigned
inventory contract manufacturing of Product to a full turnkey
contract with its contract manufacturer, within one (1) year from
Buyer's approval and introduction of production and delivery of
Product under this contract. "Full turnkey" shall be defined as
Seller contractually requiring its contract manufacturer to be fully
responsible for cost and availability of required materials in
support of manufacture and delivery of Product to Seller within the
Seller's purchase order delivery requirements.
D. Seller shall have full responsibility for program management of the
subcontractor's performance, whether contracted as consigned or
turnkey, ensuring on-time delivery of quality product to Buyer's
scheduled demand.
37. FORCE MAJEURE
Except for Buyer's payment obligations neither party hereto shall be
liable for delays in performance hereunder if such delay is the result
of causes beyond its reasonable control.
38. INDEMNIFICATION AND LIMITATION OF LIABILITY
In no event, whether as a result of breach of contract, warranty, or
tort (including negligence), strict liability, product liability, or
otherwise, shall either party be liable to the other for any special,
indirect, incidental, consequential or exemplary damages of any kind
whether or not such party was advised of the possibility of such
damage. These limitations shall apply notwithstanding any failure of
essential purpose of any limited remedy. Buyer
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assumes responsibility for the use and resale of the Products, and
agrees to indemnify and hold Seller harmless from loss of any kind,
resulting from such use or resale. Each party hereto agrees to
indemnify and hold the other party harmless from claims made against it
by its own shareholders, employees, suppliers, customers or the U. S.
Government. The provisions of this Section shall survive the
termination of this Agreement.
39. TERMINATION
This Agreement may be terminated for convenience or for cause by either
party in accordance with the following:
A. Either party may terminate this Agreement for cause if the other
party breaches a material provision hereof and the defaulting party
fails to cure such breach within thirty (30 days after receiving
written notice thereof.
B. Either party may terminate this Agreement if the other party enters
into or files a petition, arrangement or proceeding seeking an order
for relief under the bankruptcy laws of the United States, or has a
receiver appointed for it or the other party enters into an
arrangement for the benefit of its creditors; or becomes insolvent.
C. Either party may terminate this Agreement for convenience, without
reason given, upon one-hundred-eighty (180) days notice to the other
party. During the one-hundred-eighty (180) day period, all terms and
conditions of this Agreement shall remain in full force and effect.
Such termination for convenience will not affect obligations which
arose prior to such termination.
40. GOVERNING LAW AND ARBITRATION
This Agreement shall be governed by and construed in accordance with
the laws of the State of California. Any general disputes or disputed
termination-for-cause actions will be adjudicated under the laws of the
State of California. Buyer and Seller agree to resolve any disputes
arising out of this Agreement by means of arbitration. Buyer and Seller
shall mutually agree on a specific independent arbitrator, with the
final decision of the independent arbitrator binding of both parties in
cost and action. The cost of any arbitration shall be shared equally by
the parties, except each party shall bear the cost of preparing and
presenting its own case.
41. GENERAL
The provisions of this Agreement shall take precedence over any
different or conflicting terms of any purchase order or acknowledgment
issued hereunder. This Agreement represents the complete understanding
between the parties hereof. No waiver by either party of the breach of
any provision hereof shall be deemed to be a waiver of any different or
subsequent breach. All notices shall be given in writing and addressed
to the individuals named below.
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Signed and Executed on the dates set forth below:
Adept Technology, Inc. (Buyer) RamiX Incorporated (Seller)
/s/ Gary L. Gerlinger /s/ Carol Perham
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Authorize Representative Authorized Representative
Gary L. Gerlinger Carol Perham
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Printed Name Printed Name
Dir. of Materials Contracts Admin.
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Title Title
October 20, 1998 10/27/98
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Date Date