Exhibit 10.26
Document of Understanding Between
Advanced Energy Industries and
Advanced Power
Technologies
Contract Number:
1010
1.
PREAMBLE
This agreement is made on this 15th
day of Jan 2001 by and between Advanced Energy Industries, Inc.
& Affiliates (hereinafter referred to as “Buyer”)
and Advanced Power Technologies, (hereinafter referred to as
“Seller”), under which services shall be performed.
This contract is in effect through the 15th day of Jan
2002.
2.
TERMS AND CONDITIONS
No terms and conditions other than
the terms and conditions set forth in this document and such terms
and conditions as are set forth in any document attached to or
incorporated by reference in this contract shall be binding unless
specifically accepted by both the Buyer’s authorized
Purchasing Agent or Commodity Manager and the Seller’s
authorized agent. This contract will be reviewed on an annual basis
and unless terminated by either party, as provided for in Section
19, shall continue to be in force. This contract is intended as the
complete and final agreement of both parties and exclusive
statement of its terms and may not be changed, altered or modified,
except in writing by agreement of both parties.
3.
WARRANTY
[ * ]. The Seller shall comply with
all applicable Colorado State, Federal and local laws, rules and
regulations. The exclusive venue for any litigation concerning this
matter shall be in the Larimer County District Court in Fort
Collins, Colorado.
4.
LIABILITY
The Seller agrees that the
relationship established by this order constitutes him as an
independent contractor and that, no tax assessment or legal
liability of the Seller or of his agents or employees becomes, by
reason of this order, an obligation of the Buyer.
5.
REMEDY
Seller will not be responsible for
incidental or consequential damages. Seller’s entire remedy
will be the value of the product sold to Buyer.
6.
BUYER CHANGES
Buyer shall have the right to make
changes to existing orders. Purchase order changes will be allowed
only if authorized by Buyer. If such change affects delivery,
quality or amount to be paid by Buyer, Seller shall notify Buyer of
such changes in writing.
[ * ] = CONFIDENTIAL TREATMENT
REQUESTED
1
7.
ENGINEERING CHANGE ORDERS AND BUYER CHANGES
All engineering change orders will
be communicated to Seller via an Engineering Change Order (ECO). If
such change affects delivery, quality or the amount to be paid by
Buyer, Seller shall notify Buyer immediately. The charges for scrap
and/or rework resulting from any change submitted via Buyer’s
ECO process, shall be limited to the materials in process at the
time of the change and within Seller’s manufacturing cycle,
as defined in the related addendum. These charges will be
communicated in their entirety in writing, to Buyer, within fifteen
(15) working days of receipt of ECO. Buyer will not be responsible
for any costs associated with the change order which are not
identified within the fifteen (15) working day window.
8.
DELIVERY
The goods described herein shall be
delivered FOB point of origin. Buyer’s Purchasing Agent or
Commodity Manager shall authorize means of shipment. Preferred
means of shipment is UPS Ground. If seller chooses alternative
method of shipment without Buyer’s authorization, Seller is
responsible for any incremental shipping charges.
[ * ].
Identification of the goods shall
occur when they are placed in the hands of the Carrier. Title shall
pass to Buyer upon delivery to Carrier. The goods shall be placed
in suitably protected containers, the nature of which may be
determined by the Buyer.
9.
KANBAN PULL PROCESS
Seller will participate in a Kanban
pull process for specifically agreed upon part numbers, as listed
in addendum. This list will be updated as parts are added on to or
deleted off of the Kanban program, with agreement between Buyer and
Seller.
Buyer’s authorized Purchasing
Agent or Commodity Manager and Seller shall agree on the Kanban
quantity and replenishment strategy for each part number. Kanban
quantities for all part numbers will be reviewed by Buyer on an as
required basis and adjusted accordingly. Buyer’s quantity of
Finished Goods Bins is subject to change dependent upon
Seller’s ability to reduce manufacturing lead-time. Changing
the
[ * ] = CONFIDENTIAL TREATMENT
REQUESTED
2
quantity of Finished Goods Bins at
the buyer’s facility does not necessitate
re-negotiation of this contact. Seller agrees that no
shipments will be made to Buyer unless authorized by
Buyer.
10.
PURCHASE ORDER
Buyer will also be entitled to issue
purchase orders for individual items separate from the Kanban Pull
process and the Schedule Agreement Process, as quoted by Seller and
agreed to in writing by Buyer.
11.
SCHEDULE AGREEMENT
Schedule Agreements will be issued
with agreement by Buyer and Seller for a specific time frame, by
part number, negotiated price and estimate annual usage. Buyer
shall provide Seller with demand information as part of the
planning and forecasting process, to be updated periodically as
agreed upon by Buyer and Seller. This report is for use as a
planning tool only. Seller is responsible for any and all material
purchased beyond the agreed upon liabilities, as stated in
addendum.
12.
LIMITATION OF MATERIAL LIABILITY
The extent and limitation of
Buyer’s liability for materials purchased by Seller are as
defined in the addendum.
13.
PRICING
Buyer and Seller agree to the
price(s) set forth in the appropriate addendum. Any change in the
contracted price must have written approval by Buyer’s
Commodity Manager or Purchasing Agent, prior to
implementation.
