EXHIBIT 10.75
Agreement
among
Schlumberger Technologies, Inc.
ATE Division,
Microelectronic Packaging, Inc.,
and
CTM Electronics, Inc.
1. RECITALS
This Agreement amends, restates and replaces the
Schlumberger/Microelectronic Packaging Agreement (Agreement Number 092796-1)
signed on behalf of Schlumberger Technologies, Inc., a Delaware Corporation,
acting through its ATE Division, with offices at 1601 Technology Drive, San
Jose, CA 95110, hereinafter referred to as "Buyer" and Microelectronic
Packaging, Inc., a California Corporation, with offices at 9577 Chesapeake
Drive, San Diego, CA 92123, hereinafter referred to as "MPI".
This Agreement does not address arrangements for repayment of amounts owed
to Buyer for materials purchased from Buyer for orders under Agreement Number
092796-1 which is the subject of other communications between the parties.
2. TERM OF AGREEMENT
(a) This agreement is entered into by and among Buyer, MPI and CTM
Electronics, Inc., a California corporation with offices at 9577 Chesapeake
Drive, San Diego, CA 92123, hereinafter referred to as "Seller", and is
effective upon execution by all three parties.
(b) The term of this Agreement shall expire on October 31, 2000. Buyer,
MPI and Seller may elect to extend or amend this Agreement at any time by mutual
written agreement.
3. GENERAL
This Agreement and its Exhibits constitute the sole understanding between
Buyer and Seller with respect to the subject of this Agreement (other than the
repayment arrangements referred to in the second recital above). All prior and
contemporaneous communications between the parties on this subject are
superseded by this Agreement. Additional or different terms as contained in
Seller's quotations, acknowledgment and invoices are superseded by this
Agreement.
4. PURCHASE ORDER/ORDER OF PRECEDENCE
(a) This Agreement is not a commitment to purchase any services or
products nor does this Agreement grant to Seller any right to exclusivity of
purchases by or supplies to Buyer. Buyer will issue purchase orders or releases
against blanket purchase orders.
(b) Subject to the foregoing, [*] when determining purchases of
its custom multi-chip module requirements for which Seller is an approved
source.
(i) Qualification as an approved source shall include, without
limitation, [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*].
(ii) [*] [*]
[*] [*]
[*] [*]
[*] [*]. Where Seller's multi-chip module
related services and products meet the above-mentioned conditions, [*] [*]
[*] [*]
[*] for services and products meeting those conditions from Seller
based on capacity commitments from Seller corresponding to Buyer's forecasted
procurements. Seller shall have [*] [*] of any particular
module related service or product, [*] [*]
[*] [*]
[*] [*].
(iii) Following periods of [*] [*]
[*] , and, as regards specific multi-
chip module related services and products, following periods where multi-chip
modules or services [*] [*]
[*] [*]
[*] [*] shall not be under any obligation to do so within a
particular period of time, and the actual timing will be determined in good
faith by Buyer's needs [*]
[*] [*].
[*] Indicates that material has been omitted and confidential treatment has
been requested therefor. All such omitted material has been filed
separately with the Commission pursuant to Rule 24b-2.
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(iv) To the extent Seller is generally qualified as an approved
source and has the appropriate engineering resources, Buyer will involve
Seller sufficiently early in new design projects to permit Seller to carry
out module design concurrent with Buyer system design (subject to the non-
disclosure agreement executed and delivered by Buyer and Seller in connection
herewith in substantially the form attached hereto as Exhibit A (the
"Confidentiality Agreement")).
(c) [*] [*], Buyer hereby commits to allocate at least the
following percentages of its purchase orders for the following products for
delivery in the first quarter of calendar year 1998 subject to product and
service qualification under subsection (b)(ii) above:
Device Percentage
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
5. COMPONENTS SUPPLIED BY BUYER
(a) Components or other items to be supplied to Seller by Buyer pursuant
to purchase orders or releases against blank purchase orders for multi-chip
module related services and/or products ("Consigned Items") shall be held by
Seller in trust on behalf of Buyer as Buyer's property. In the event of
uncertainty regarding the status of any components or other items received from
Buyer, all such items received from Buyer during any period during which Seller
or MPI is in arrears on payment obligations to Buyer for materials purchased
under Agreement Number 092796-1 shall be considered Consigned Items subject to
this Section of this Agreement. Seller shall receive Consigned Items and shall
store them carefully and properly, without any charge to Buyer, in such manner
as shall keep their ownership by Buyer at all times clear and shall perform all
acts required by law to protect the rights of Buyer to such items. Seller
accepts responsibility for management and care of Consigned Items while they are
in Seller's possession to the same extent as though they were Seller's own,
including, but not limited to, maintenance of records of quantity, removal,
return, and location.
[*] Indicates that material has been omitted and confidential treatment has
been requested therefor. All such omitted material has been filed
separately with the Commission pursuant to Rule 24b-2.
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(b) All Consigned Items shall remain Buyer's property while in Seller's
possession, and shall not cease to be Buyer's property through any action
of Seller, including assembly into a multi-chip module.
(c) Consigned Items shall at all times be subject to Buyer's direction
and control, and upon demand by Buyer for return of any Consigned Items not
incorporated into multi-chip module related services or products, Seller shall
promptly return, at Buyer's expense, such Consigned Items under this Agreement
if requested by Buyer. Where practical, Consigned Items shall be segregated from
other similar property.
(d) Seller shall be responsible to and shall reimburse Buyer for all loss
and expense to Buyer resulting from (i) damage to, loss of or destruction of the
Consigned Items except loss or damage by fire or other normally insurable perils
or earthquakes, other natural disasters or Acts of God regardless of
insurability, (ii) improper workmanship (subject to the five percent allowance
described in the following sentence) or (iii) levy or attachment of any court
process or lien thereon while in Seller's possession. Seller shall not be liable
for (i) electronically defective die, (ii) die that does not pass incoming
inspection upon arrival at Seller's premises, or (iii) up to a five percent
defective rate for die of a particular specification (e.g. ELIC2 or DIC2),
regardless of the number of die in a given product, that pass incoming
inspection and are defective for reasons other than electronic defects. Buyer
shall assume the risk of loss or damage to Consigned Items by fire or other
normally insurable perils or earthquakes, other natural disasters or Acts of God
regardless of insurability, while in possession of Seller. If Seller requires
consigned components from Buyer to replace or repair product under this
Agreement, Buyer shall supply such consigned components to Seller at Buyer's
cost for supplying such consigned components.
(e) Seller and MPI shall severally indemnify Buyer against any material
loss or damage to Consigned Items caused by acts of Seller or MPI not authorized
by this Agreement.
6. SCOPE
(a) Buyer and Seller have resolved to enter into this Agreement for
Seller to provide services and supply product as defined in Exhibit B for use in
Buyer's systems.
(b) Product and service must meet the specifications (acceptance
criteria) set forth in Exhibit B (the "Specifications"). Any changes in the
Specifications must be agreed in advance in writing by Buyer and Seller.
(c) Payment will be made only in respect of products meeting the
Specifications and being accepted by Buyer.
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7. DELIVERABLES
(a) On execution of this Agreement, Seller will deliver to Buyer (or
place in escrow) all documents, data and information sufficient to allow
performance of manufacturing services and manufacture of the products if Seller
fails to deliver products including, without limitation, copies of product
drawings, schematics, diskettes, and contracts with vendors relied upon by
Seller for essential components of the products. For the avoidance of doubt, by
delivery of the foregoing, Seller does not relinquish any rights of ownership of
process or design it otherwise has. Subject to Buyer's right to use such
documents, data and information to obtain manufacturing services and products
pursuant hereto, Buyer shall make reasonable efforts to protect the
confidentiality of said documents, data and information, in accordance with the
Confidentiality Agreement, to the extent confidential or proprietary or
otherwise meriting such protection.
(b) On execution of this Agreement, Seller will provide to Buyer written
details setting out Seller's manufacturing plan to ensure consistent supply of
products covered by this Agreement, indicating where the products will be
manufactured and including a list of all vendors supplying parts, components or
raw materials for multi-chip modules. Subject to Buyer's compliance with its
major customers' operational oversight programs, Buyer shall make reasonable
efforts to protect the confidentiality of said information, in accordance with
the Confidentiality Agreement, to the extent confidential or proprietary or
otherwise meriting such protection.
(c) Buyer may, from time to time, request upgrades to the products and
the Specifications requiring modification or redesign of some or all of the
products in accordance with this Agreement. Seller shall be given first refusal
to undertake such modification or redesign. In the event that Seller refuses,
such modification may be offered to a third party and Seller agrees to provide
any necessary information to allow such party to proceed with the desired
upgrade under a royalty-free license subject to such conditions of
confidentiality and other terms and conditions upon which Seller, Buyer and the
third party may reasonably agree.
8. PRICING
(a) Temporary prices for products supplied under this Agreement are set
forth in Exhibit C. As a condition to the continuance of this agreement, Buyer
and Seller will have to agree on a new Price list no later than January 31,
1998. Thereafter, Buyer and Seller will meet periodically to review forward
pricing with the goal of arriving at prices that will give Buyer a cost
competitive multi-chip module and Seller an acceptable profit margin. Either
Buyer or Seller can request a meeting.
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(b) Where appropriate, Buyer and Seller shall enter into further
agreements dealing with non-recurring engineering, payments for modifications or
upgrades being paid at the time of design approval, and meeting new
specifications agreed between the parties.
(c) Seller warrants that the prices to be charged for products or
services identified herein do not exceed prices charged to other customers for
similar quantities and delivery requirements of the same products or services.
Any lower price charged to such other customers and all price decreases
applicable to products or services which are similar under all relevant
circumstances to the products or services ordered under this Agreement shall
automatically reduce the unit price of unshipped products and services not yet
rendered by a comparable percentage.
(d) In connection with the discount, if any, offered by Seller for prompt
payment, time will be computed from the latest of:
(i) the scheduled delivery date; and
(ii) the actual delivery date.
9. GENERAL TERMS OF DELIVERY
Seller commits to delivery of new orders based on the terms outlined in
Sections 13 and 14 and Exhibit C for individual purchase orders based on this
Agreement.
10. INVOICES
Invoices shall be submitted in duplicate and shall include the following
information: purchase order number, product number, description of products,
sizes, quantities, unit prices, and extended totals in addition to any other
information specified elsewhere therein. Bills of lading or express receipts
shall accompany each invoice. Payment of invoice shall not constitute
acceptance of products and shall be subject to adjustment for errors, shortages,
defects in the products, and other failure of Seller to meet the specific and
unambiguous requirements of the applicable order.
11. TAXES AND EXPENSES
The prices set forth in Exhibit C do not include applicable Federal, State
or local taxes, but they do include all miscellaneous charges including, but not
limited to, duties, customs, tariffs, and surcharges. All such charges shall be
stated separately on Seller's invoice. Seller warrants that all applicable
duties, tariffs, customs, and miscellaneous charges incurred by Seller due to
component purchases which are Sellers' responsibility have been satisfied and
that no resulting liabilities pass through to Buyer.
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12. OVERSHIPMENTS
Buyer reserves the option to return at Seller's expense any shipment of
products either significantly in excess of the amount ordered pursuant to this
Agreement, or significantly in advance of the agreed upon schedule. Such
shipments will be held at Seller's risk and expense including reasonable storage
charges while awaiting shipping instructions.
13. PACKING AND SHIPMENT
(a) Unless otherwise specified, all products shall be packed, marked and
otherwise prepared for shipment in a manner which is:
(i) in accordance with good commercial practice,
(ii) acceptable to common carriers for shipment at the lowest rate
for the particular product and in accordance with I.C.C. and similar
regulations; and
(iii) adequate to insure safe arrival of the product at the named
destination and for storage and protection against foreseeable weather.
(b) Seller shall mark all containers with necessary lifting, handling,
and shipping information, and purchase order numbers, date of shipment, and the
names of Seller and Buyer. An itemized packaging sheet must accompany each
shipment unless otherwise specified.
(c) No partial or complete delivery shall be made prior to the dates
shown on the applicable order or separately scheduled unless Buyer has given
prior written permission.
14. F.O.B. POINT
Unless otherwise specifically provided herein, the products shall be
delivered on an F.O.B. Origin basis to Buyer's designated location. Freight will
be paid by Buyer on a prepay and bill basis, or as indicated on Buyer's purchase
order as to which Seller agrees in writing. Buyer shall be responsible for all
duties, customs, tariffs, and surcharges which may be incurred due to any Buyer
requested export shipments. Seller will provide, with Buyer's reasonable
cooperation, all necessary documentation required in the process of exporting
Products covered under this Agreement. Failure to provide such documentation in
a timely manner would constitute a breech of this Agreement. Buyer and Seller
agree to comply with all applicable U.S. export laws.
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15. WARRANTY
(a) Subject to the warranty period specified in Exhibit C, Seller
warrants that all products and services delivered (including all incorporated
components and raw materials that have not been directly or indirectly supplied
by or through Buyer) shall be free from defects in workmanship, materials, and
manufacture, shall comply with the specifications of this Contract (including
compliance with any drawings or the Specifications and to any samples furnished
by Seller), shall be new unless otherwise agreed, and, where design is Seller's
responsibility, shall be free from defects in design. Seller further warrants
all products shall be fit and suitable for the purposes reasonably understood by
Seller to be intended by Buyer except where Buyer's design or specifications, or
Buyer-supplied components, cause the products to be otherwise. The foregoing
warranties are in addition to all other express warranties in this Agreement or
in writing from Seller and shall survive any delivery, inspection, acceptance
and payment by Buyer.
(b) If any product does not meet the warranties specified herein for
reason other than Buyer's design or specification or components supplied by or
on behalf of Buyer, Buyer may at its election:
(i) require Seller promptly to correct, at no cost to Buyer, any
defective or non-conforming products by repair or replacement, at Seller's
location; or
(ii) return such defective or non-conforming products at Seller's
expense to Seller, and receive from Seller the order price thereof. The
foregoing remedies are in addition to all other remedies at law or in
equity or under this Agreement, for damages or otherwise, and shall not be
deemed to be exclusive. All warranties shall run to Buyer only.
(c) Buyer's approval of Seller's product or design shall not relieve
Seller of the above warranties, nor shall waiver by Buyer of any drawing or
specification requirement for one or more of the products constitute a waiver of
such requirements for the remaining products unless so stated by Buyer in
writing. The provisions of this section shall not limit or affect the rights of
Buyer under the section entitled "Inspection".
(d) Claims by Buyer under this warranty shall be made after final
acceptance by Buyer and prior to the end of the warranty period, as defined in
Exhibit D, unless specifically agreed otherwise in writing.
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16. INSPECTION
(a) All products purchased pursuant hereto shall be subject to inspection
and test by Buyer to the extent practicable at all times and places during and
after the period of manufacture and, in any event, prior to final acceptance. If
inspection or test is made by Buyer on Seller's premises, Seller without
additional charge shall provide all reasonable facilities and assistance for the
safety and convenience of Buyer's inspectors. No inspection or test made prior
to final acceptance shall relieve Seller from responsibility for defects or
other failure to meet the requirements of this Agreement.
(b) In case any product is materially defective in materials or
workmanship, that have not been directly or indirectly supplied by or through
Buyer, or otherwise not in conformance with the requirements of this Agreement
through no fault of Buyer, Buyer shall, in addition to its rights under
subsection 15(b), have the right to conditionally accept it. Buyer reserves the
right to return such conditionally accepted products for credit within a
reasonable period of time in the event Buyer determines that such products are
unsuitable for its purposes expressed in writing by Buyer to Seller at or prior
to the time of the applicable order. With respect to any product which has been
rejected or required to be corrected, Seller shall incur all cost associated
with replacement of rejected or returned items (so as to include shipping costs
and freight costs). If, after request by Buyer, Seller fails promptly to replace
or correct any defective product within the delivery schedule (unless such
failure is the result of Buyer's failure to provide the necessary Consigned
Items on a timely basis or other delay caused Buyer), Buyer may:
(i) without further notice, terminate this Agreement for default in
accordance with the section entitled "Termination for Default"; or
(ii) utilize the deficient product and require an appropriate
reduction in price.
(c) Notwithstanding any prior inspection or payments, all products shall
be subject to final inspection and acceptance by Buyer's location within a
reasonable time after delivery, as defined in Exhibit B.
(d) Seller shall provide and maintain its own inspection system which is
acceptable to Buyer as agreed between Buyer and Seller. Records of all
inspection work shall be available to Buyer during the performance of this
Agreement and for such further period as Buyer reasonably may require.
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(e) Buyer may accept or reject shipments in accordance with its
established lot inspection procedures. Where rejection of shipment is
appropriately based on Buyer's normal inspection level, then after consultation
with Seller regarding Buyer's lot inspection procedures and proposed test
procedures, Buyer may elect, at Seller's sole cost, to conduct 100% testing of
such shipment (provided that Seller will not be charged if it becomes clear that
the problem is not with Seller's products or services).
(f) Where such rejection endangers Buyer's production schedule by reason
of the fact that at least some of the products are necessary to meet such
production schedules, then Buyer at its option may charge Seller for the
reasonable costs of an above normal level of inspection up to and including 100%
inspection of such shipment and shall consult with Seller regarding test
procedures (provided that Seller will not be charged if it becomes clear that
the problem is not with Seller's products or services).
17. CHANGES
(a) Buyer may at any time, by a written change order, and without notice
to sureties or assignees, suspend performance under an order, increase or
decrease the order quantities, or make changes in any one or more of the
following:
(i) applicable drawings, designs, and specifications;
(ii) method of shipment or packing; and
(iii) place of delivery.
(b) If any such change causes an increase or decrease in the cost of or
the time required for performance of this Agreement or the applicable order, an
equitable adjustment shall be made in the price or delivery schedule, or both,
and this Agreement or the applicable order, or both, shall be modified in
writing accordingly. No claim by Seller for adjustment hereunder shall be valid
unless (i) accepted in writing by Buyer, which acceptance shall not be
unreasonably withheld, and (ii) accompanied by an estimate of costs within
thirty (30) days from the date of receipt by Seller of the written change order
and, in any event, Seller must submit its final claim in writing with supporting
documentation within thirty (30) days following Buyer's payment of Seller's
final invoice. Failure of Seller to timely assert such a claim shall constitute
an unconditional and absolute waiver by Seller of any right to make a claim for
adjustment. Changes required to comply with new or amended safety regulations
shall be made at Seller's cost in accordance with a timetable to be agreed upon
by Buyer and Seller so as to ensure substantially uninterrupted supply of the
product. If new or amended safety regulations impose a significant cost increase
on Seller, Buyer agrees to re-negotiate the applicable pricing structure due to
changed regulations.
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(c) Any changes required to address recurring design or reliability
problems due to Seller's design or workmanship and noted by Buyer in a written
notice to Seller shall be undertaken at Seller's cost. Seller will also be
responsible to present a plan to retroactively repair, under the terms of the
"Warranty" section, all products previously delivered to Buyer to prevent
failures due to Seller's design or workmanship defects, at Seller's cost.
(d) To the extent that failure of Buyer to deliver or arrange delivery of
die results in [*] [*] if (i)
Seller notifies Buyer of its intention to [*] [*]
[*] [*]
[*] [*]
[*] [*], then Buyer
agrees to [*] [*]
[*] [*]
[*] [*].
(e) Buyer may verify claims hereunder and Seller shall make available to
Buyer upon its reasonable request all relevant books, records, inventories, and
facilities for its inspection. Subject to Buyer's right to use such documents,
data and information to verify Seller's claims and defend its interests pursuant
hereto, Buyer shall make reasonable efforts to protect the confidentiality of
said documents, data and information, in accordance with the Confidentiality
Agreement, to the extent confidential or proprietary or otherwise meriting such
protection.
18. REPAIR
Seller undertakes to maintain the ability to repair product or part of a
product supplied by Seller (excluding components purchased from Buyer) under
this Agreement such that any product so repaired shall meet the Specifications.
Responsibility for returning the product or part to be repaired shall be with
Buyer. Seller undertakes to dispatch repaired products or parts within the
period as defined in Exhibit C, after receipt of the product or part to be
repaired. Seller may, at its choice, replace a product or part returned for
repair with an equivalent new product or part which meets specification.
[*] Indicates that material has been omitted and confidential treatment has
been requested therefor. All such omitted material has been filed
separately with the Commission pursuant to Rule 24b-2.
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19. PROTECTION IN CONNECTION WITH WORK DONE AT OTHER PARTY'S PLANT
Seller shall take such steps as may be reasonably necessary to prevent
personal injury or property damage during any work hereunder that may be
performed by any employees, agents or subcontractors of Seller at Buyer's
location(s) and Seller shall defend, indemnify and hold harmless Buyer from and
against all loss, liability, and damages arising from, or caused directly or
indirectly by an act or omission of such employees, agents or subcontractors of
Seller. Seller shall maintain such insurance against public liability and
property damage, and such Employees' Liability and Compensation Insurance as
will protect Buyer against the aforementioned risks and against any claims under
any Workman's Compensation and occupational disease and injury Acts. Buyer will
take similar steps to protect Buyer's employees, agents or subcontractors at
Seller's location.
20. TERMINATION FOR DEFAULT
(a) It is understood and agreed that TIME IS OF THE ESSENCE under this
Agreement and any extension affected by any change order. Buyer may, by written
notice stating the reasons for termination, terminate this Agreement or any
order hereunder in whole or in part if Seller:
(i) repeatedly fails to make delivery of the products or to
perform the services within the time specified or any extension thereof by
written change order or amendment (unless such failure is the result of
Buyer's failure to provide the necessary consigned items on a timely basis
or other delay caused by Buyer);
(ii) fails to replace or correct defective products in accordance
with the provisions of the "Warranty" and "Inspection" sections (unless
such failure is the result of Buyer's failure to provide the necessary
consigned items on a timely basis or other delay caused by Buyer); or
overall quality is determined to be below standard as demonstrated by
repeated failures of the products to pass inspection, and failures during
the Warranty period;
(iii) fails to perform any of the other material provisions of this
Agreement or so fails to make progress as to endanger performance in
accordance with the terms hereof, including delivery schedules (unless
such failure is the result of Buyer's failure to provide the necessary
consigned items on a timely basis or other delay caused by Buyer or is
otherwise caused by Buyer); or
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(iv) files for receivership under applicable Federal or State law,
files or has filed against it a petition for bankruptcy which is not
dismissed or stayed within thirty (30) days, or makes an assignment for
the benefit of creditors.
(b) Buyer may, by written notice, terminate this Agreement in whole or in
part if MPI files for receivership under applicable Federal or State law, files
or has filed against it a petition for bankruptcy which is not dismissed or
stayed within thirty (30) days, or makes an assignment for the benefit of
creditors.
(c) If this Agreement is terminated pursuant to subsection 20(a), Buyer,
in addition to any other rights provided herein, may upon payment by Buyer of
any amount due to Seller hereunder require Seller to transfer title (under
subsections (i) or (ii)) and deliver to Buyer, in the manner, time, and to the
extent reasonably directed by Buyer in accordance with this Agreement:
(i) any completed products and Consigned Items; or
(ii) any partially completed products and materials, parts, tools,
designs, fixtures, plans, drawings, information, and contract rights as
Seller has produced or acquired for the performance of the terminated part
of the applicable order; and
(iii) Seller shall grant Buyer an assignable, non-exclusive license
to use and license others to use, Seller's designs, processes, drawings,
and technical data to permit Buyer's completion of the terminated part of
an order under this Agreement. The aforementioned license shall be
royalty-free where and to the extent it pertains to Seller's designs,
processes, drawings, and technical data developed under contract with
Buyer, unless the total cost to Buyer of completing terminated parts of
the applicable order is less than Buyer's total cost would have been if
Seller had completed the order. Seller shall, upon direction of Buyer,
protect and preserve Consigned Items encompassed in this section in the
possession of Seller. Subject to Buyer's rights to use and assign the
foregoing to obtain manufacturing services and products pursuant hereto,
Buyer shall make reasonable efforts to protect the confidentiality of said
documents, data and information, in accordance with the Confidentiality
Agreement, to the extent confidential or proprietary or otherwise meriting
such protection.
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(iv) Payment for completed products delivered to and accepted by
Buyer shall be in an amount reasonably and promptly agreed upon by Seller
and Buyer; provided, however, such amount shall not exceed the order price
per unit, and Seller's obligation hereunder to carry out Buyer's direction
as to delivery, protection, and preservation shall not be contingent upon
prior agreement as to such amount.
(d) If Buyer issues a notice of termination for default and it is
subsequently determined that Buyer's termination under this section is
inappropriate, the termination shall, unless Buyer otherwise specifically
indicates in writing, be deemed by Buyer and Seller to have been originally
issued under the section entitled "Termination for Convenience", and the rights
and liabilities of the parties shall be governed by such section.
(e) Failure of Buyer, MPI or Seller to enforce any right under this
section shall not be deemed a waiver of any other right hereunder. The rights
and remedies of Buyer under this section shall not be exclusive and are in
addition to any other right and remedies provided by law or equity or under this
Agreement. In the event Buyer reasonably anticipates any default under
subsection 20(a), Buyer may, in its sole discretion, require adequate assurance
of future performance in such form as Buyer may reasonably specify, and if such
assurance is not given to Buyer promptly, Buyer shall have the right to
terminate this agreement in whole or in part forthwith.
21. TERMINATION FOR CONVENIENCE
(a) Buyer may terminate this Agreement upon one hundred twenty (120) days
written notice to Seller or MPI without cause and without any legally binding
commitments other than those specific obligations created through the use of
formal purchase orders or other agreements with their respective terms and
conditions.
(b) Buyer may terminate work under a purchase order for production units
in whole, or from time to time in part, by giving written notice to Seller
specifying the extent to which performance of work is terminated and the time at
which such termination becomes effective.
(c) In the event Buyer elects to terminate only a portion of such order,
Seller shall continue the performance of that order to the extent not
terminated.
(d) Within thirty (30) days after receipt of the notice of termination,
Seller shall submit to Buyer its written termination claim. Failure of Seller to
timely submit its termination claim shall constitute an unconditional and
absolute waiver by Seller of any claim arising from Buyer's notice of
termination.
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(e) Seller shall reasonably assess costs of raw materials, work in
process and subassemblies as may be included within its termination claim to
determine whether or not such items may be used by Seller for the manufacture of
associated products or diverted for any other purpose, and to correspondingly
reduce its termination claim by the value of such items. When settlement has
been made, title to any such items determined not usable by Seller and charged
to Buyer in the termination claim shall vest in Buyer upon payment of the claim
and shall forthwith be delivered to Buyer.
(f) Seller's termination claim shall consist solely of the following: (1)
completed products accepted by Buyer and not theretofore paid for, the sum
determined by multiplying the number of such products by the unit price as
specified in Exhibit C or in the applicable order, (2) the total of (i) the cost
of work in process not to exceed the average unit cost multiplied by the number
of units in process (provided, however, that such number of units in process
shall not exceed that amount which has been previously placed on firm release by
Buyer (such amounts shall not exceed any costs attributable to Seller's products
paid or to be paid under subsection (f)(1) above)) and (ii) a sum as profit on
subsection (f)(2)(i) at a rate not to exceed the rate used in establishing the
original purchase price (provided, however, if Seller would have sustained a
loss on the purchase order had it been completed, no profit shall be included or
allowed, and an appropriate adjustment shall be made reducing the amount of
settlement to reflect fifty percent (50%) of the indicated rate of loss), (3)
the cost (book value on a first-in-first-out basis) of safety stock as
determined in Exhibit C hereto, and (4) in the case of partial termination,
economies of scale reflected in direct manufacturing costs (no overhead
absorption to be taken into consideration).
(g) The total sum to be paid to Seller under subsections (f)(1) and
(f)(2) above, shall not exceed the total order price reduced by the amount of
payments otherwise made and as further reduced by the price of work not
terminated under the order.
(h) Upon payment by Buyer to Seller of any such claims, all material,
whether completed or not, shall become property of Buyer and be shipped to Buyer
as Buyer shall indicate within thirty (30) days of payment, or if Seller is not
notified by Buyer, be disposed of at Seller's discretion.
(i) In no event shall Seller be entitled to incidental or consequential
damages, anticipated or projected profits (except as provided in subsection
(f)(2)) costs or prepaid claims, attorneys' fees, costs of tooling or equipment
(except as required specifically by Buyer) or sales or agents' commissions on
the terminated quantity.
15
(j) Buyer reserves the right to verify claims hereunder, and Seller shall
make available to Buyer upon its request all relevant books, records,
inventories and facilities for its inspection. Subject to Buyer's right to use
such information to verify and defend its claims hereunder, Buyer shall protect
the confidentiality of Seller's proprietary data and information acquired
pursuant to this section, in accordance with the Confidentiality Agreement, to
the extent confidential or proprietary or otherwise meriting such protection. In
the event Seller fails reasonably to afford Buyer its rights under this
subsection, Seller shall be deemed to have relinquished its claim asserted under
the provisions of this section.
22. AVAILABILITY ASSURANCE
(a) The products described herein shall be available for purchase from
Seller for a minimum of seven (7) years from the date of this Agreement or such
shorter term as Buyer's customer for the associated product shall impose on
Buyer, as notified in writing by Buyer to Seller, unless this Agreement is
terminated earlier by Buyer. Seller agrees to maintain availability of the
number of fully functional products, spares and parts (commonly referred to
herein as safety stock) specified in Exhibit C for the term of this Agreement.
In the event that Seller is notified by its vendor(s) of the discontinuance of
any subcomponent(s), Seller agrees to immediately notify Buyer of this change
and propose, as quickly as practicable, possible substitute subcomponents and
appropriate changes in process or method of manufacturing in accordance with the
provisions of section 37 below as regards notification and approval (provided
however that the one month notice period referred to therein may be accelerated
as appropriate under the circumstances). In the event Seller is unable or
unwilling to continue production of the products described herein, Seller agrees
to give Buyer six months notice prior to ceasing production. At the time Seller
notifies Buyer of any such cessation, Buyer shall be permitted to place
additional orders for such product in order to satisfy Buyer's anticipated post-
cessation requirements. At this time, Seller will also make available to
Buyer -- subject to the Confidentiality Agreement, reasonable confidentiality
undertakings (substantially in the form of the confidentiality agreement
attached hereto as Exhibit A) by any third party and appropriate licenses and
permissions for the manufacture of the products -- complete and updated
manufacturing details of the products, including the documents, data and
information mentioned in sections 7(a) and 20(c)(iii), for the purpose of
appointing another manufacturer to proceed on Buyer's behalf.
(b) Buyer will have the first right of refusal in the event Seller wishes
to or must dispose of its manufacturing facilities for multi-chip modules.
Seller shall notify Buyer in advance of any serious discussions with any third
party regarding the possible transfer of said facilities, and shall notify any
such third party of Buyer's first right of refusal hereunder before receiving
any offer from such party regarding such a transfer. Buyer's first right of
refusal shall be subject to Buyer's willingness, after a reasonable notice and
reasonable time for analysis and due diligence, to match the price quoted in any
irrevocable cash offer from a third party with the financial wherewithal to
carry out such a transaction.
16
(c) Buyer will have the right to operate the multi-chip module
manufacturing facilities, under the license specified below and subject to the
Confidentiality Agreement, in the event Seller is financially unable to do so or
is prevented from doing so by MPI under circumstances associated with financial
difficulties of MPI. Should Buyer wish to exercise that right, MPI will provide
a royalty free license allowing Buyer to use the documents, data and information
mentioned in subsections 7(a) and 20(c)(iii) in the conduct of the factory
operations. The right to operate the factory will revert to Seller when it is
able to reassume that responsibility.
23. EXCLUSIVITY
(a) Seller covenants that the specific services and products ordered by
Buyer under this Agreement and based upon unique proprietary specifications or
drawings, or other data or know-how furnished by Buyer, will be supplied to
Buyer on an exclusive basis for the term of this Agreement.
(b) Seller shall not act as a selling agent of specific products based
upon unique proprietary specifications or drawings, or other data or know-how
furnished by Buyer or otherwise produced for Buyer pursuant to this Agreement,
to any existing or impending customers or competitors of Buyer. Seller shall
notify Buyer if Seller is requested to provide such product directly to any end
user, and shall obtain written authorization from Buyer to begin acting as a
selling agent of the product, as contained in this Agreement.
24. WAIVER
The failure of any party hereto at any time to enforce any of the
provisions of this Agreement, or to exercise any election or option provided
herein, or to waive or require performance by any other party hereto of any of
the provisions hereof, shall in no way be construed to be a waiver of such
provisions or such party's rights, nor in any way to affect the validity of this
Agreement or any part hereof, or the right of such party thereafter to enforce
each and every such provision.
25. PATENTS, ROYALTIES AND ENCUMBRANCES
All products and Consigned Items supplied shall be free from claims of
others with respect to royalties, liens, patent rights and other encumbrances
and charges. Buyer and Seller/MPI agree to defend, indemnify, and hold harmless
the other party from and against all claims, demands, expenses, costs, and
actions for actual or alleged infringements of patent rights in the use, sale or
resale of its product or Consigned Item, as applicable.
17
26. COMPLIANCE WITH LAWS
Seller warrants that no law, rule or ordinance of the United States, any
State or any other governmental agency has been violated in the manufacture or
sale of the products or in the performance of services covered by this Agreement
and will defend, indemnify and hold Buyer harmless from and against any loss,
expense, cost or damage as a result of any such actual or alleged violation.
Upon reasonable written request by Buyer, Seller agrees to execute and furnish a
certification of compliance, which may be on Buyer's form and which shall
certify Seller's compliance with all applicable Federal, State or local laws or
regulations, including but not limited to FLSA, EEO, OSHA, and any economic
control statutes or regulations.
27. FEDERAL EMPLOYMENT OPPORTUNITY
Seller agrees not to discriminate against any employee or applicant for
employment because of race, color, religion, sex or national origin. Applicable
provisions of Executive Order 11246 issued September 24, 1965, as amended and
the rules and regulations of the Secretary of Labor thereunder, including
exceptions therein, govern this Agreement and are incorporated herein by
reference.
28. AFFIRMATIVE ACTION FOR HANDICAPPED WORKER
The Affirmative Action clause in 41 CFR 60, subsection 741.4 and the
implementation rules and regulations of the Department of Labor associated
therewith are incorporated herein by reference, unless an applicable order is
under $2,500. As used in said clause, "Contractor" means Seller.
29. AFFIRMATIVE ACTION FOR SPECIAL DISABLED VETERANS AND VETERANS OF THE
VIETNAM-ERA
The Affirmative Action clause of 41 CFR 60 subsection 250.4 and the
implementing rules and regulations of the Department of Labor associated
therewith are incorporated herein by reference, unless an applicable order is
under $10,000. As used in said clause, "Contractors" means Seller, and
"Contract" means an order.
30. GRATUITIES
Seller warrants that it has not offered or given and will not offer or give
to any employee, agent or representative of Buyer any gratuity with a view
toward securing any business from Buyer or influencing such person with respect
to the terms, conditions or performance of any contract with or order from
Buyer. Any breach of this warranty shall be a material breach of each and every
contract between Buyer and Seller.
18
31. NONDISCLOSURE OF CONFIDENTIAL MATTER AND PUBLICITY
Buyer's unique proprietary specifications or drawings, or other data
furnished by Buyer in connection with products or services contemplated by this
Agreement shall be treated as confidential information by Seller, shall remain
Buyer's property and shall be promptly returned to Buyer upon request. Seller
will take all reasonable measures necessary to protect such confidential
information as is done protecting their own confidential information; provided,
however, that such information will not be considered confidential if (i)
legitimately possessed or known to Seller on a non-confidential basis prior to
its disclosure to Seller by Buyer, or (ii) generally available to the trade or
public through any reasons except disclosure by Seller, or (iii) received by
Seller from a third party in good faith without breach of a confidential
relationship between the third party and Buyer. Any publicity regarding this
Agreement (pictures, descriptions or samples thereof) is prohibited except with
Buyer's written approval. Seller may disclose the terms of this Agreement if
such disclosure is required, in Seller's opinion, by its reporting obligations
under the Securities Exchange Act of 1934, as amended; provided that Seller
shall take reasonable actions to seek confidential treatment for those terms and
provisions for which Buyer reasonably requests confidential treatment.
32. ASSIGNMENTS AND SUBCONTRACTS
No right or obligation under this Agreement (including the right to receive
money due hereunder) shall be assigned by Seller, and Seller shall not enter
into any subcontracts with respect to this Agreement without the prior written
consent of Buyer. Any purported assignment, without such consent, shall be null
and void and Buyer shall not be obligated to recognize any claim from Seller
resulting from a subcontract except as previously consented to by Buyer. Buyer
may assign its rights hereunder to any affiliate.
33. BUYER-FURNISHED TOOLS
All tools and other materials furnished by Buyer for use in the performance
of this Agreement and not covered by section 5 of this Agreement shall remain
the property of Buyer, shall be used by Seller in the performance of this
Agreement only in accordance with the requirements of the applicable order
relating to such use, and shall be returned to Buyer upon the completion or
termination of the order. Seller agrees to exercise reasonable care in
safeguarding and preserving all Buyer-furnished property and assumes all
responsibility for loss, damage or destruction while such property is within
Seller's possession or control.
19
34. SPECIAL TOOLING
If special tooling used in the performance of an order has been charged to
the applicable order, or to other orders placed by Buyer, title to such special
tooling shall vest in Buyer at the option of Buyer. Such tooling is to be used
only in the performance of such orders unless otherwise approved by Buyer.
Seller agrees that it will follow normal industrial practice in the
identification and maintenance of the property control records on all such
tooling, and will make such records available for inspection by Buyer or any
local, state or federal governmental body or instrumentality lawfully demanding
said records, at all reasonable times. After the termination or completion of
such order(s) and upon the request of Buyer, Seller shall furnish a list of such
tooling in the form reasonably requested and shall make such tooling available
for disposition to Buyer.
35. GOVERNMENT CONTRACTS
If Buyer informs Seller that an order is issued for any purpose which is
either directly or indirectly connected with the performance of a prime contact
with a government or a subcontract thereunder, each of the clauses set forth in
the federal acquisition regulations (or similar procurement regulations)
applicable to the prime or subcontract is incorporated herein by reference and
applies to Seller as though Seller were a prime contractor and in such manner as
will enable Buyer to meet its obligations arising out of the government prime or
subcontract. Buyer shall use reasonable efforts to assist Seller in obtaining
copies of applicable rules and regulations not otherwise applicable to Seller's
operations, provided, however, that Seller shall at all times be solely
responsible for obtaining appropriate legal guidance as to its obligations and
agrees that Buyer shall bear no responsibility whatsoever in that regard.
36. FORCE MAJEURE
In the event of an actual or potential delay or failure of performance
because of acts of God, or other causes beyond Seller's reasonable control,
Seller shall immediately give notice thereof to Buyer. In the event of the
foregoing, Buyer has the option of (i) extending the time of performance or (ii)
terminating the uncompleted portion of the order as described under termination
for convenience.
20
37. CHANGES IN PROCESS OR METHOD OF MANUFACTURING
Seller agrees that it will not invoke any changes in process or method of
manufacturing or use of vendors specified in any agreed manufacturing plan
applicable to the products or services being supplied pursuant to this Agreement
or during the term of this Agreement without Buyer's written consent. Seller
further agrees that any contemplated changes to this plan shall not be made
unless Buyer has been informed in writing at least one month in advance of such
change and has indicated approval of the change in writing. Buyer agrees not to
withhold approval unless there are concerns about the ability of Seller to
maintain consistency and reliability of supply of products meeting specification
and an ability to support installed systems at Buyer's customers under the new
plan.
38. NOTICE
All notices to be given or served hereunder shall be given or served in
writing either in person, by U.S. Mail, postage prepaid, by telegram or by
Federal Express or another reputable overnight carrier. All such notices shall
be effective upon receipt and addressed as follows:
To Buyer at SCHLUMBERGER TECHNOLOGIES
1601 TECHNOLOGY DRIVE
SAN JOSE, CALIFORNIA 95110
UNITED STATES
ATTN: BRUCE TARBOX
To Seller and MPI at MICROELECTRONIC PACKAGING, INC.
9577 CHESAPEAKE DRIVE
SAN DIEGO, CALIFORNIA 92123
UNITED STATES
ATTN: ANDREW WROBEL
or such other address that Buyer, MPI or Seller may designate by notice to the
other from time to time in accordance with this section.
39. SEVERABILITY
The invalidity in whole or in part of any provision shall not affect the
validity of any other provision.
21
40. INTERPRETATION
This Agreement shall be governed by, subject to, and construed in
accordance with the laws of the State of California. The United Nations
Convention for the international Sale of Goods does not apply to this Agreement.
This Agreement shall not be modified, supplemented, qualified or interpreted by
any trade usage or prior course of dealing not made a part of this Agreement by
its express terms.
SCHLUMBERGER TECHNOLOGIES, INC.
By /s/ Dieter Kraemer
-------------------------
Name Dieter Kraemer
-------------------------
Title Director Global Materials
-------------------------
Date 1/15/98
-------------------------
CTM ELECTRONICS, INC.
By /s/ Denis J. Trafecanty
-----------------------
Name Denis J. Trafecanty
-------------------
Title Chief Financial Officer
-----------------------
Date January 14, 1998
----------------
MICROELECTRONIC PACKAGING, INC.
By /s/ A. Wrobel
------------------
Name Andrew K. Wrobel
------------------
Title President & C.E.O.
------------------
Date 1/14/98
------------------
22
EXHIBIT A
CONFIDENTIALITY AGREEMENT
This Confidentiality Agreement (this "Agreement") is entered into as
of this __ day of January, 1998, by and between Schlumberger Technologies, Inc.,
a Delaware corporation (including its successors, transferees and permitted
assigns, "Schlumberger"), Microelectronic Packaging, Inc., a California
corporation (including its successors, transferees and permitted assigns,
"MPI"), and CTM Electronics, Inc., a California corporation (including its
successors, transferees and permitted assigns, "CTM"). In connection with an
Agreement, of even date herewith, among Schlumberger, MPI and CTM regarding the
production of custom multi-chip modules and services in connection therewith
(the "Stated Purpose"), each of the parties to this Agreement may disclose
certain of its proprietary and confidential information concerning its business,
affairs and technology to another party. In consideration of the mutual
agreements, undertakings and covenants set forth in this Agreement, for other
good and valuable consideration, the receipt, sufficiency and adequacy of which
are hereby acknowledged, and as a condition to the furnishing by one party (in
such capacity, the "Disclosing Party") of such information as the Disclosing
Party, in its sole and absolute discretion, may determine to furnish to another
party (in such capacity, the "Recipient"), the parties hereto, intending to be
legally bound, agree to comply with the terms and conditions set forth below:
1. Confidential Information. All "Confidential Information" (defined
------------------------
below) that the Disclosing Party or any of its "Representatives" (defined below)
furnishes to the Recipient or any of its Representatives (including without
limitation any such information furnished prior to the date of this Agreement)
shall be used by the Recipient and its Representatives solely in connection with
the Stated Purpose and not for any other purpose without the prior written
permission of the Disclosing Party. The Recipient shall take reasonable steps to
ensure that all Confidential Information of the Disclosing Party is kept
confidential; provided, however, that such information may be disclosed to those
representatives, counsel, directors, officers, employees and agents (each, a
"Representative," and collectively, the "Representatives'') of the Recipient who
have a need to know such information in connection with the Stated Purpose only
if each such Representative is informed by the Recipient of the confidential
nature of such information and of the confidentiality undertakings of the
Recipient contained herein. The Recipient shall be responsible for any breach of
this Agreement by its Representatives and will, at its sole expense, take all
reasonable steps (including but not limited to court proceedings) to restrain
its Representatives from prohibited or unauthorized disclosure of the
Confidential Information.
As used herein, "reasonable steps" means the steps that the Recipient
takes to protect its own, similar confidential and proprietary information,
which shall not be less than a reasonable standard of care.
As used herein, "Confidential Information" means any of the Disclosing
Party's proprietary or confidential information, technical data, trade secrets
or know-how, including, but not limited to, research, product plans, products,
service plans, services, customer lists and
customers, markets, software, developments inventions, processes, formulas,
technology, designs, drawings, engineering, marketing, distribution and sales
methods and systems, sales and profit figures, finances and other business
information, and any notes, analyses, compilations, studies, or other documents
that contain or reflect in whole or in part any such information, disclosed to
the Recipient or its Representatives by or on behalf of the Disclosing Party or
its Representatives, either directly or indirectly, in writing, orally, by
drawings or inspection of documents or other tangible property or by any other
form of communication, regardless of whether such information is conspicuously
marked as being confidential. However, "Confidential Information" does not
include any of the foregoing items which the Recipient can prove:
(i) prior to disclosure, is known to the public;
(ii) after disclosure, becomes known to the public or
otherwise ceases to be a trade secret, through no act
or omission of the Recipient or its Representatives in
violation of this Agreement;
(iii) is required to be disclosed pursuant to applicable
laws, rules or regulations or government requirement or
court order (provided, however, that the Recipient
shall promptly advise the Disclosing Party of its
notice of any such requirement or order);
(iv) is already rightfully in the Recipient's possession at
the time of disclosure (provided, however, that the
source of such information was not known by the
Recipient to be bound by a confidentiality agreement
with or other contractual, legal or fiduciary
obligation of confidentiality to the Disclosing Party
or any other party with respect to such information);
(iv) is independently developed by or for the Recipient; or
(vi) is received by the Recipient from a source other than
the Disclosing Party whom the Recipient reasonably
believes is not obligated to the Disclosing Party to
keep the same confidential.
2. Ownership and Return of Confidential Information. All
-------------------------------------------------
Confidential Information shall remain the property of the Disclosing Party. Any
Disclosing Party may request at any time in writing the return of any
Confidential Information, and the Recipient of such Confidential Information
shall promptly deliver to the Disclosing Party all Confidential Information of
the Disclosing Party, in whatever medium, including any and all copies thereof,
and shall cause all summaries or synopses thereof and notes, analyses,
compilations, studies and other such documents which constitute Confidential
Information to be either delivered to the Disclosing Party or destroyed. Such
destruction shall be confirmed in writing by the Recipient to the
2.
Disclosing Party. Nothing in this Agreement shall be construed as granting any
rights, by license or otherwise, to any Confidential Information disclosed.
3. Remedies. Each party agrees that it would be impossible or
---------
inadequate to measure and calculate the another party's damages from any breach
of the covenants set forth in this Agreement. Accordingly, the parties agree
that if either party breaches any of such covenants, the non-breaching party
will have available, in addition to any other right or remedy available, the
right to obtain an injunction from a court of competent jurisdiction restraining
such breach or threatened breach and to specific performance of any such
provision of this Agreement. The parties further agree that no bond or other
security shall be required in obtaining such equitable relief and each party
hereby consents to the issuance of such injunction and to the ordering of
specific performance. Such remedies will not be deemed to be the exclusive
remedies for a breach of this Agreement but will be in addition to all other
remedies available at law or in equity. In the event of litigation relating to
this Agreement, if a court of competent jurisdiction determines that either
party or any of its Representatives has willfully breached this Agreement, then
that party will be liable for, and will pay to the non-breaching party, the
reasonable attorneys' fees incurred by the non-breaching party in connection
with such litigation, including any appeal therefrom.
4. Severability. If any court determines that any provision of this
------------
Agreement is invalid, such determination will not affect the validity of any
other provision of this Agreement, which will remain in full force and effect,
and will be construed so as to be valid under applicable law.
5. Compelled Disclosure. In the event that the Recipient or any of
--------------------
its Representatives becomes legally compelled to disclose any of the
Confidential Information, it will (a) provide the Disclosing Party with prompt
written notice so that the Disclosing Party may seek a protective order or other
appropriate remedy and/or waive compliance with the provisions of this
Agreement; (b) disclose only that portion of the Confidential Information which
its legal counsel advises that it is legally required to disclose; and (c)
endeavor to obtain assurances that confidential treatment will be accorded the
Confidential Information so disclosed.
3.
6. Miscellaneous. It is understood and agreed that no failure or
-------------
delay by the Disclosing Party in exercising any right, power, or privilege under
this Agreement will operate as a waiver thereof, nor will any single or partial
exercise thereof preclude any other or future exercise thereof or the exercise
of any other right, power or privilege hereunder. It is further understood and
agreed that this Agreement may not be amended except by an instrument signed by
the party against whom enforcement is sought. This Agreement shall be governed
by and interpreted in accordance with the laws of the State of California,
without giving effect to any conflict of laws provisions. Neither party may
assign this Agreement without the prior written consent of the other, and any
purported assignment in violation of this Agreement will be void. This Agreement
shall become binding when any one or more counterparts hereof, individually or
taken together, shall bear the signatures of Schlumberger, MPI and CTM. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed to be an original as against any party whose signature appears thereon,
but all of which together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Confidentiality
Agreement to be duly executed and delivered as of the day and year first written
above.
SCHLUMBERGER TECHNOLOGIES, INC.
By: /s/ Dieter Kraemer
---------------------------------
Name: Dieter Kraemer
Title: Director Global Materials
MICROELECTRONIC PACKAGING, INC.
By: /s/ Andrew K. Wrobel
---------------------------------
Name: Andrew K. Wrobel
Title: President and CEO
CTM ELECTRONICS, INC.
By: /s/ Denis J. Trafecanty
---------------------------------
Name: Denis J. Trafecanty
Title: Chief Financial Officer
4.
EXHIBIT B
GOODS AND SERV[CES TO BE PROVIDED BY SELLER
- -------------------------------------------
Assembly of [*]
Assembly of [*]
Assembly of [*]
Assembly of [*]
Assembly of [*]
Assembly of [*]
Assembly of [*]
Assembly of [*]
Assembly of [*]
Repair of any module assembled by Seller
TECHNICAL SPECIFICATIONS FOR PRODUCTS AND SERVICES
- --------------------------------------------------
Assembly MPA# Rev SLB# Rev
- ----------- ---- --- ---- ---
[*] [*] [*] [*] [*]
[*] [*] [*] [*] [*]
[*] [*] [*] [*] [*]
[*] [*] [*] [*] [*]
[*] [*] [*] [*] [*]
[*] [*] [*] [*] [*]
[*] [*] [*] [*] [*]
[*] [*] [*] [*] [*]
[*] [*] [*] [*] [*]
Note: These are top level drawings and it is understood that all sub-drawings
are a part of the technical specifications for products and services.
INSPECTION PERIOD BY BUYER
- --------------------------
Thirty days from receipt of goods.
[*] Indicates that material has been omitted and confidential treatment has
been requested therefor. All such omitted material has been filed
separately with the Commission pursuant to Rule 24b-2.
EXHIBIT C
PRICING
- -------
Product Name Selling Price
- ------------ -------------
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*]
Unreparable after evaluation [*]
Minor repair (replace component,
smashed wire) [*]
[*]
Unreparable after evaluation [*]
Minor repair (replace up to 10 edge
pins, replace components, smashed
wires) [*]
Replace all edge pins [*]
Replace memory chips [*]
Replace Ric2, Dic2 die [*]
Replace Elic2, Essmic, Lcmic die [*]
[*]
Unreparable after evaluation [*]
Minor repair (replace up to 10 edge
pins, replace components, smashed
wires) [*]
Replace all edge pins [*]
Replace memory chips [*]
Replace Ric2, Dic2 die [*]
Replace Elic2, Essmic, Lcmic die [*]
[*]
Unreparable after evaluation [*]
Minor repair (replace up to 10 edge
pins, replace components, smashed
wires) [*]
Replace all edge pins [*]
Replace one Ldl die [*]
Each additional Ldl on same unit [*]
Replace Tgic die [*]
[*] Indicates that material has been omitted and confidential treatment has
been requested therefor. All such omitted material has been filed
separately with the Commission pursuant to Rule 24b-2.
[*]
Unreparable after evaluation [*]
Minor repair (replace relay, replace
components, smashed wires) [*]
Replace Edge die [*]
[*]
Unreparable after evaluation [*]
Minor repair (replace up to 10 edge
pins, replace components, smashed
wires) [*]
Replace all edge pins [*]
Replace Essmic die [*]
[*]
Unreparable after evaluation [*]
Minor repair (replace up to 10 edge
pins, replace components, smashed
wires) [*]
Replace all edge pins [*]
Replace Essmic die [*]
[*]
Unreparable after evaluation [*]
Minor repair (replace up to 10 edge
pins, replace components, smashed
wires) [*]
Replace all edge pins [*]
Replace Dic, Ric, Elic die [*]
DELIVERY TERMS
- --------------
Four weeks from receipt of material
WARRANTY PERIOD
- ---------------
[*] [*].
REPAIR DISPATCH TIME BY SELLER
- ------------------------------
Thirty days
SAFETY STOCK DEFINITION
- -----------------------
Safety stock is the sum of (1) a lead time worth of material for a particular
part, and (2) two additional weeks of time for shipping, receiving and
inspection. The lead time will vary depending upon the particular part.
[*] Indicates that material has been omitted and confidential treatment has
been requested therefor. All such omitted material has been filed
separately with the Commission pursuant to Rule 24b-2.