AMENDED AND RESTATED AGREEMENT FOR MANUFACTURE BETWEEN IRIDIUM SATELLITE LLC AND CELESTICA CORPORATION

Exhibit 10.9

 

[*] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of

The Securities Exchange Act of 1934, as amended.

 

 

 

 

 

 

AMENDED AND RESTATED

AGREEMENT FOR MANUFACTURE

BETWEEN

IRIDIUM SATELLITE LLC

AND

CELESTICA CORPORATION

 

 

Final 01-10-2007

 

 

 

 

 

[*] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of

The Securities Exchange Act of 1934, as amended.

 

 

CONTENTS

1.

DEFINITIONS………………………………………………………………………………………………..

1

2.

SCOPE OF AGREEMENT…………………………………………………………………………………..

2

3.

FORECAST AND ORDER PROCEDURE………………………………………………………………….

3

4.

MATERIALS…………………………………………………………………………………………………

3

5.

DELIVERY AND RISK……………………………………………………………………………………...

4

6.

ACCEPTANCE OF PRODUCTS……………………………………………………………………………

5

7.

ORDER AND FORECAST, UPSIDE FLEXIBILITY, AND RESCHEDULING…………………………..

5

8.

CANCELLATION……………………………………………………………………………………………

6

9.

PRICES……………………………………………………………………………………………………….

6

10.

PAYMENT……………………………………………………………………………………………………

7

11.

CUSTOMER LETTER OF CREDIT…………………………………………………………………………

7

12.

TITLE…………………………………………………………………………………………………………

7

13.

INTELLECTUAL PROPERTY………………………………………………………………………………

7

14.

QUALITY ASSURANCE……………………………………………………………………………………

8

15.

CHANGE CONTROL………………………………………………………………………………………..

8

16.

COST SAVING SHARING………………………………………………………………………………….

9

17.

EXCESS AND/OR OBSOLETE MATERIAL………………………………………………………………

9

18.

CELESTICA WARRANTY…………………………………………………………………………………

10

19.

CUSTOMER WARRANTY………………………………………………………………………………....

11

20.

INDEMNIFICATION……………………………………………………………………………………….

11

21.

CUSTOMER PROPERTY…………………………………………………………………………………..

11

22.

CONFIDENTIALITY……………………………………………………………………………………….

12

23.

FREEDOM OF ACTION……………………………………………………………………………………

12

24.

EXCLUSIONS AND LIMITATION OF LIABILITY………………………………………………………

12

25.

TERM AND TERMINATION………………………………………………………………………………

13

26.

GENERAL…………………………………………………………………………………………………..

14

SCHEDULE 1:

PRODUCTS AND SPECIFICATION

SCHEDULE 2:

PRICING

 

 

 

 

 

 

i

 

[*] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of

The Securities Exchange Act of 1934, as amended.

 

 

THIS AMENDED AND RESTATED AGREEMENT is made effective the first day of January, 2007 (the “Effective Date”)

 

BETWEEN

CELESTICA CORPORATION, a Delaware corporation with an office located at 4300 West Round Lake Road, Arden Hills MN 55112 (“Celestica”).

AND

IRIDIUM SATELLITE LLC, a Delaware limited liability company with an office located at 8440 South River Parkway, Tempe AZ 85284 (the “Customer”).

WHEREAS

This Agreement sets out the terms and conditions upon which Celestica will manufacture and supply to the Customer certain Products and supply certain Services as herein defined.

IT IS AGREED

1.

DEFINITIONS

The following words and expressions shall have the following meanings:

1.1

“Affiliate” means, a) with respect to the Customer, any company, firm, joint venture, partnership, or other entity of which the Customer directly or indirectly owns or controls the power to vote a majority of the voting rights or over which the Customer directly or indirectly has the power to exercise a controlling influence; b) with respect to Celestica, any company, firm, joint venture, partnership, or other entity of which Celestica Inc., an Ontario, Canada corporation, directly or indirectly owns or controls the power to vote a majority of the voting rights or over which Celestica Inc., directly or indirectly has the power to exercise a controlling influence.

1.2

“Customer Information” shall mean the specification for the relevant Product and all drawings, documentation, data, software, information and know-how, and any tooling provided by the Customer to Celestica.

1.3

“Days” means calendar days unless otherwise identified herein

1.4

“Excess” Material shall have the meaning set forth in Article 17.

1.5

“Forecast” shall have the meaning set forth in Article 3.1(b).

1.6

“Intellectual Property” shall mean all patents, applications for patents, copyrights, mask works, trade secrets, know-how, discoveries, improvements, inventions, technical data, writings, software in whatever form and Information (as that term is defined in the Confidentiality Agreement between Iridium Satellite LLC and Celestica Corporation dated February 8, 2002), Subscriber Equipment Technical Information (as that term is defined in the Non-Disclosure Agreement among SE Licensing LLC, Iridium Satellite LLC and Celestica Corporation dated April 2, 2003), and any other intellectual property rights recognised by any jurisdiction.

1.7

“Material” shall mean any components and other materials comprising or comprised in Products.

1.8

“Minimum Order Quantity” shall mean the minimum monthly quantity of Products which Customer agrees to buy and which Celestica agrees to sell pursuant to the terms of Article 3.

1.9

“Obsolete” Material shall have the meaning set forth in Article 17.4.

 

1

 

[*] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of

The Securities Exchange Act of 1934, as amended.

 

 

1.10

“Order” shall mean purchase order for Products and/or Services placed by the Customer subject to the terms and conditions of this Agreement.

1.11

“Prices” shall mean the prices for Products and/or Services and/or non-recurring expenditure (“NRE”) (including, without limitation, tooling and fixtures and other agreed items) agreed between the parties from time to time.

1.12

“Products” shall mean the products listed in Schedule 1 and described in the Specifications.

1.13

“RMA” shall mean a return material authorisation to be provided by Celestica to the Customer.

1.14

“Services” shall have the meaning set forth in Article 2.2.

1.15

“Specifications” shall mean the requirements for the development, manufacture, test, and packaging of the Products, all as further specified in the documents listed in Schedule 1.

2.

SCOPE OF AGREEMENT

2.1

This Agreement will apply to all Orders for Products and Services placed by the Customer and accepted by Celestica under this Agreement.

2.2

From time to time, Customer or its Affiliates may wish to purchase services from Celestica. Such “Services” may include, but shall not be limited to: development, design, engineering, out-of-warranty repair, prototyping, distribution or other services as Customer may request and Celestica may provide from time to time and which may be described in more detail in various statements of work or Orders. Unless otherwise agreed to in writing between the parties, Celestica shall perform all Services in accordance with the terms and conditions set forth in this Agreement and in accordance with Celestica’s then-current fee schedule for such service, or if no fee exists for such service, at a mutually agreed upon price.

2.3

Celestica will manufacture and deliver Products and supply Services pursuant to the terms of this Agreement, subject to the Customer first having provided Celestica with the specification for the Product, together with any Customer Information and all other necessary drawings, documentation, data, software, and other information of the Customer and any consigned materials necessary for the manufacture of Products and the provision of Services. Celestica is responsible for maintaining necessary drawings, documentation, data, software, and other information provided by the Customer.

2.4

As required for the manufacture of the Products, Celestica will procure components, materials, equipment and other supplies, and manufacture, assemble, test and deliver Products pursuant to detailed written specifications, workmanship standards and quality requirements for each such Product as specified in the Schedule 1 Specifications, including applicable bills of materials, schematics, assembly drawings, process documentation, test specifications, current revision number, quality standards and approved vendor list.

2.5

The Customer will accept Products and Services delivered, at agreed upon Prices, pursuant to the terms of this Agreement.

2.6

Celestica shall provide reasonable information and technical support to Customer as required to assist Customer in obtaining regulatory certifications as well as country-by-country type approvals necessary for the distribution and sale of the Product in the jurisdictions specified by Customer.

2.7

All previous agreements between the parties concerning the subject matter hereof are superseded and merged into this amended and restated Agreement for Manufacture including without limitation:

(a)

the Agreement for Manufacture which became effective 02 April 2003;

 

2

 

[*] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of

The Securities Exchange Act of 1934, as amended.

 

 

(b)

Amendment No. 1 to the Agreement for Manufacture which became effective 03 December 2004; and

(c)

Exhibit A, Fulfillment and Miscellaneous Services, to the Agreement for Manufacture which became effective 30 May 2003.

3.

FORECAST AND ORDER PROCEDURE

3.1

During the term of this Agreement, Customer agrees to purchase and Celestica agrees to provide a Minimum Order Quantity of two thousand (2000) Products per month (the “Delivery Month”). On a monthly basis, Customer will provide Celestica with an updated forecast (the “Forecast”) covering the upcoming ten (10) month period that specifies any Delivery Month where Customer’s monthly order requirements are projected to exceed the Minimum Order Quantity. Customer will use its reasonable commercial efforts to ensure that the Forecast is accurate, but the Forecast will not constitute an Order. No less than two (2) months in advance of each Delivery Month, Customer will provide Order(s) to Celestica confirming the Minimum Order Quantity for that Delivery Month plus any quantity in excess of the Minimum Order Quantity as ordered by Customer.

3.2

Celestica will acknowledge receipt of Orders as soon as reasonably practicable and notify the Customer of acceptance or non-acceptance of Orders within five working (5) days of receipt. Celestica shall not unreasonably refuse to accept an Order, provided that the Order is issued consistent with the Minimum Order Quantity for the Delivery Month, plus any excess quantity as Forecast by Customer for such Delivery Month.

3.3

Following Customer’s issuance of an Order, Customer may increase the quantity ordered for the specified Delivery Month as follows:

(a)

from 31 to 60 days in advance of the monthly period, an increase of up to [*]% can be incurred with no premium charges;

(b)

from 1 to 30 days in advance of the monthly period, an increase of up to [*]% can be incurred with no premium charges;

Changes outside the limits specified in 33 (a) and (b) are subject to Celestica’s advance notice to Customer of a proposed premium and Customer’s agreement to pay the proposed premium rates per Product.

3.4

Orders will incorporate by reference, the terms and conditions of this Agreement. This Agreement shall supersede the terms and conditions of such Orders and exclude any pre-printed terms and conditions found on the Customer’s Orders, which shall be deemed deleted. Orders will describe in more detail the required Product and/or Service to be rendered by Celestica and will include: the description and Price per unit of Product; the quantities ordered; Product revision details and such other information as the parties may agree is required. Orders may be issued in writing, by mail or facsimile, or by electronic means as agreed to by the parties.

4.

MATERIALS

4.1

The Customer hereby authorises Celestica, and Celestica shall be entitled, to order Materials in accordance with Material leadtimes (for which Customer will be responsible in accordance with Article 17 herein), as necessary to support Orders and Forecasts. Such authorisation shall include without limitation, additional Materials as are, in Celestica’s opinion, reasonably required, taking into account any supplier minimum order requirements, packaging sizes and economic order quantities.

4.2

Without limiting Article 4.1 above, where lead times for Materials are at any time longer than the period covered by Orders set out in Article 3.1(a) above, Celestica shall be authorized to order such Materials on the basis of the Forecast in order to meet the Customer’s delivery requirements requested therein.

4.3

Where the Customer so directs, Celestica will procure Materials in accordance with the Customer’s approved vendor list. To use other vendors of Materials, Celestica must obtain the Customer’s prior written consent, which consent shall normally be provided within fourteen (14) Days and, in any event, shall not be

 

3

 

[*] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of

The Securities Exchange Act of 1934, as amended.

 

 

unreasonably withheld or delayed. Where the Customer has not directed the use of an approved vendor list, Celestica shall be responsible for all actions necessary to assure the timely and compliant procurement of Materials as necessary to meet Customer Order and Forecast requirements.

4.4

In the event of any inconsistency between the terms and conditions of this Agreement and Customer negotiated terms and conditions with suppliers for Customer controlled components, then to the extent of any such inconsistencies, Celestica shall be relieved of any liability to Customer with respect to Customer controlled components.

4.5

When requested by the Customer or as identified by Celestica, and upon receipt of a Customer Order, Celestica will purchase lifetime buys of Materials that exceed the Forecast.

4.6

Where the Customer directs Celestica to buy Materials from contracts that are negotiated by the Customer, the Customer will have primary responsibility for directing its suppliers to perform in accordance with these contracts, including resolving any quality issues and compensating Celestica for its reasonable costs related to Material quality issues.

4.7

Customer will furnish the Materials specified in Schedule 2 to Celestica for use in the manufacture of the Products. In the event that such Customer-supplied Material is received by or provided to Celestica in a condition that is not suitable for its intended use, Celestica shall immediately notify Customer, and Customer shall, in its discretion, be responsible for the correction of such Material. Upon Celestica’s acceptance of Customer-supplied Material, Celestica shall be responsible for loss of or damage to the Material where such loss or damage is the result of negligence of Celestica. Celestica shall not be responsible for reasonable attrition of Customer-supplied Material. The use by Celestica of Customer-supplied Material, which is provided in a suitable condition for its intended use, shall not relieve Celestica from its responsibility to manufacture and deliver Products in conformance with the requirements of this Agreement. All Customer-supplied Material shall remain the property of Customer, shall be maintained by Celestica only for Customer’s work and shall be returned to Customer as provided in Article 17 below.

5.

DELIVERY AND RISK

5.1

Except as agreed otherwise, all Products sold to the Customer are delivered FCA (1NCOTERMS 2000) Celestica’s premises of manufacture.

5.2

The Customer will arrange transportation and specify carrier and transportation instructions. If the Customer has not done so, Celestica shall arrange for transportation on the Customer’s behalf and at the Customer’s cost, utilizing to the extent possible any Customer negotiated discount arrangements made available by Customer to Celestica.

5.3

Celestica will meet agreed delivery dates, will advise the Customer promptly of any delivery delays, and will bear the cost of any reasonable premium freight charges, material expediting fees, and overtime labour necessarily incurred to mitigate the impact on Customer of actual or impending late deliveries, to the extent such lateness is attributable to Celestica.

5.4

Risk of loss and damage will pass from Celestica to the Customer upon delivery by Celestica pursuant to Article 5.1 above.

5.5

All Products will be packed by Celestica in accordance with the Schedule 1 Specification packaging requirements or otherwise as may be agreed to by the parties.

5.6

The Customer is responsible for obtaining:

(a)

any necessary export and import licenses relating to Products; and

 

4

 

[*] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of

The Securities Exchange Act of 1934, as amended.

 

 

(b)

any government or regulatory approvals relating to the marketing, sale or use of Products and maintaining compliance with all applicable laws and regulations in any jurisdiction to or from which Products are shipped or in or from which the Products are marketed, distributed or sold.

6.

ACCEPTANCE OF PRODUCTS

6.1

The Customer may reject Products which, a) have been materially damaged by Celestica prior to delivery or b) have not met, in all material respects, the Specifications (“Rejected Products”).

6.2

The Customer will notify Celestica in writing of Rejected Products within thirty (30) Days of original delivery and will return Rejected Products at its risk to Celestica within a further fifteen (15) Days. The Customer requires an RMA from Celestica prior to returning any Product. Celestica’s issuance of an RMA will not be unreasonably withheld.

6.3

Upon return of the Rejected Products, Celestica will, as soon as reasonably practical at its election either repair, replace or credit the Customer for Rejected Products. The cost associated with any such repair, replacement, or credit will be the responsibility of Celestica. In the case of replacement or credit, title to the Rejected Product shall pass to Celestica on delivery to Celestica. Where the Customer has a preference for one of repair, replacement or credit, it shall communicate its preference to Celestica, which shall use its reasonable commercial efforts to accommodate the request.

6.4

In the absence of earlier notification of rejection, the Customer will be deemed to have accepted Products thirty (30) Days after Customer’s receipt of Products at Customer’s facility.

7.

ORDER AND FORECAST, UPSIDE FLEXIBILITY, AND RESCHEDULING

7.1

Upon Customer’s request, Celestica shall use its commercially reasonable efforts to:

(a)

accept unplanned Orders, or

(b)

accelerate delivery dates of existing Orders, or

(c)

accept increases in quantities on existing Orders; subject to the mutual agreement of the parties on any increased costs or premium charges incurred as a result of such activity.

7.2

The Customer may delay or reschedule deliveries in advance of agreed delivery dates, subject to the limitations set forth in the table below:

 

Celestica shall use its commercially reasonable efforts to mitigate the costs of Excess material caused by any such delay or rescheduling. Any Excess or Obsolete Material created as a