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Exhibit
10.6
011907 Final
CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
PURCHASE AND MANUFACTURING
SERVICES
AGREEMENT
Agreement Number
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Solectron
Corporation |
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NCR CORPORATION |
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847 Gibraltar
Drive |
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1700 S. Patterson
Blvd. |
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Milpitas, CA
95035 |
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Dayton, OH 45479 |
This Agreement is effective on
January 19, 2007 (“Effective Date”) and will
terminate on January 19, 2012, unless renewed in accordance
with the Agreement.
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Under this Agreement NCR will
have Solectron build certain automated teller machines and item
processing systems. |
TABLE OF
CONTENTS
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ARTICLE I - GENERAL TERMS AND
CONDITIONS
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3 |
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ARTICLE II - MANUFACTURING
SERV.
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9 |
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EXHIBIT A - PRODUCTS AND
SPECIFICATIONS
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30 |
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| EXHIBIT B
- PRICING, LEADTIME, FLEXIBILITY, ORDER RESCHEDULING, CANCELLATION,
AND RETURNED EVALUATION EQUIPMENT |
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31 |
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EXHIBIT C - QUALITY
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43 |
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EXHIBIT D - SUPPORT SERVICE
REQUIREMENTS
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67 |
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EXHIBIT E - SAFETY AND REGULATORY
REQUIREMENTS
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77 |
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EXHIBIT F - SERVICE LEVEL
AGR.
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81 |
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EXHIBIT G - ELECTRONIC DATA
INTERCHANGE
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97 |
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EXHIBIT H - NCR AND THIRD PARTY
SOFTWARE
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103 |
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EXHIBITS I - LOGISTICS
EXHIBITS
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112 |
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EXHIBIT J - *** BRAZIL
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121 |
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EXHIBITS K - EMPLOYEES
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124 |
NCR/Solectron Confidential
011907 Final
CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
NCR CORPORATION, a Maryland corporation,
having a place of business at 1700 S. Patterson Blvd., Dayton, OH
45479 USA (“NCR”) and , having a place of business at
847 Gibraltar Drive, Milpitas, CA 95035 (“Solectron”)
AGREE AS FOLLOWS:
This document sets forth a set of
agreements between the parties. This Agreement consists of Article
I (General Terms and Conditions) together with the terms of this
Article II and any exhibits referenced therein
(“Agreement”).and makes up a separate contract between
the parties.
AGREED by the following authorized
representatives:
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NCR CORPORATION |
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| By: |
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By: |
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| Name: |
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Doug Britt |
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Name: |
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Bruce Langos |
| Title: |
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Executive Vice President |
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Title: |
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Sr. Vice President |
| Date: |
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Date: |
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January 19, 2007 |
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| Solectron/NCR-Confidential |
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Page 2 |
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011907 Final
CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
ARTICLE I
General Terms and
Conditions
TABLE OF
CONTENTS
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| 1. CONFIDENTIAL MATERIALS |
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3 |
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| 2. NOTICES |
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4 |
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| 3. AUDIT |
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4 |
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| 4. DISPUTES |
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5 |
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| 5. GENERAL |
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6 |
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5.1 A
SSIGNMENT |
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6 |
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5.2 S
EVERABILITY |
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6 |
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5.3 E
XCUSED P ERFORMANCE |
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6 |
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5.4 C
HOICE OF L
AW |
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6 |
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5.5 C
ONSTRAINED C APACITY |
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6 |
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5.6 A
FFILIATE P ARTICIPATION |
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6 |
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5.7 W
AIVER OR D
ELAY |
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6 |
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5.8 S
OLECTRON D ISASTER P
LAN |
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6 |
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5.9 D
UTY D RAWBACK |
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7 |
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5.10 C
OUNTRY OF O
RIGIN |
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7 |
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5.11 C
OMPLIANCE WITH L
AWS |
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7 |
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5.12 P
ERSONAL W ARRANTIES |
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7 |
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5.13 R
ELATIONSHIP OF P
ARTIES |
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7 |
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5.14 P
ERIODS OF T
IME |
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7 |
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5.15 P
UBLICATION OF A
GREEMENT |
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7 |
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5.16 L
IMITATION OF L
IABILITY |
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7 |
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5.17 E
NTIRE A GREEMENT |
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7 |
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| 6. OTHER OBLIGATIONS |
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8 |
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6.1 I
NTENTIONALLY O MITTED |
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8 |
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6.2 I
NTENTIONALLY O MITTED |
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8 |
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6.3 I
NTENTIONALLY O MITTED |
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8 |
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6.4 I
NTENTIONALLY O MITTED |
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8 |
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| 7. DEFINITIONS |
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8 |
| 1. |
CONFIDENTIAL MATERIALS |
For a period of 5 years from
the date of receipt, the recipient will use the same degree of care
to prevent the disclosure of Confidential Information to any other
person as it uses to protect other information of a similar nature
which it owns or possesses, but in no event less than reasonable
care, unless disclosure is required by law. The recipient may
disclose Confidential Information only to thse of its employees
with a legitimate
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| Solectron/NCR-Confidential |
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Page 3 |
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011907 Final
CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
need to know. Unless the
discloser provides written notice to the contrary, the recipient
may disclose Confidential Information to its affiliates or
contractors with a legitimate need to know who agree in writing to
confidentiality obligations consistent with this Section. All
materials containing Confidential Information are and remain the
discloser’s property, and upon written request the recipient
will promptly return them, and all copies of them, except a single
archival copy.
Except as otherwise
specifically provided herein, notices and other communications will
be delivered by any method providing for proof of delivery, except
that a notice of default or termination may be delivered by
facsimile transmission if the original document is also promptly
delivered to the recipient. A notice will be deemed given on the
date of receipt at the following address(es): the addresses shown
on the cover page of this Agreement, with an additional copies
to:
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| General
Counsel/Notices |
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Michael
Hartung |
| NCR
Corporation |
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Vice
President Sales |
| Dayton, OH
45479 |
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Solectron
Corporation |
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847
Gibraltar Drive |
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Milpitas, CA
95035 |
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| Vice
President, Supplier Management |
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Legal
Department |
| NCR
Corporation |
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Solectron
Corporation |
| 1700 S.
Patterson Blvd |
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847
Gibraltar Drive |
| Dayton, OH
45479 |
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Milpitas, CA
95035 |
Either party may change its
address upon notice as required by this Section.
3.1 For a period of 5 years form the
date the information was created, Solectron agrees to keep all
usual and proper records and books of account and all usual and
proper entries relating to the compliance with provisions
concerning quality control, third party software licenses procured
by NCR in connection with this Agreement, NCR software, component
and Part price information required to be disclosed by Solectron to
NCR in connection with Exhibit B, Safety regulatory warranties,
Sections 5.5, 5.9, 5,10, 5.11 of Article I, Export documentation in
Exhibit I, Exhibit F, royalties reported under Exhibit B, and most
favored pricing. Solectron shall maintain such records for itself
and for each Solectron subsidiary which exercises rights under this
Agreement.
3.2 In order to verify Solectron’s
compliance with the terms of this Agreement expressly set forth in
Section 3.1 of Article I and any third party or governmental
audit requirements, NCR may cause (i) an audit to be made of
Solectron’s and/or Solectron’s subsidiaries’
books and records directly related to the audited matters and/or
(ii) an inspection to be made of Solectron’s and/or
Solectron’s subsidiaries’ facilities and procedures.
Any audit and/or inspection shall be conducted during regular
business hours at such facilities, with 5 business days notice.
Any
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| Solectron/NCR-Confidential |
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Page 4 |
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011907 Final
CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
audit may be conducted by NCR or an
independent certified public accountant selected by NCR (other than
on a contingent fee basis) reasonably acceptable to Solectron. Such
third party auditor shall enter into a nondisclosure agreement with
Solectron and shall only report to NCR on Solectron’s
compliance with respect to the audited matter.
3.3 Solectron agrees to provide
NCR’s designated audit or inspection team access to the
relevant Solectron’s and/or Solectron’s
subsidiaries’ records and facilities, except to the extent
such access may be limited or prohibited by Solectron’s
agreements with its other customers.
3.4 Prompt adjustment shall be made to
compensate for any errors or omissions disclosed by such audit
unless Solectron objects to the results of the audit in writing.
Any such audit shall be paid for by NCR unless material
discrepancies are disclosed. If material discrepancies are
disclosed, Solectron agrees to pay NCR for the reasonable costs
associated with the audit. In no event shall audits be made more
frequently than semi-annually unless the immediately preceding
audit disclosed a material discrepancy.
4.1 In the event any controversy or
claim arises between the parties to this Agreement, they will
attempt in good faith to negotiate a solution to their differences
by elevating the issue to senior management for resolution and, if
negotiation does not result in a resolution within 30 days, they
agree to participate in good faith mediation as administered by the
American Arbitration Association. In the event of threatened or
actual irreparable harm, a party may elect to bypass this Section
and proceed directly pursuant to Sections 4.2 or 4.4.
4.2 Any controversy or claim between the
parties to this Agreement, whether based on contract, tort,
statute, or other legal theory (including but not limited to any
claim of infringement, fraud or misrepresentation), which cannot be
resolved by negotiation or mediation will be resolved by
arbitration pursuant to this section and the then-current
Commercial Rules and supervision of the American Arbitration
Association. The duty to arbitrate will extend to any employee,
officer, shareholder, agent, or affiliate of a party hereto making
or defending a claim which would be subject to arbitration if
brought by a party hereto. If any part of this section is held to
be unenforceable, it will be severed and will not affect either the
duty to arbitrate hereunder or any other part of this
section.
4.3 The arbitration will be held in the
US headquarters city of the party not initiating the claim before a
sole arbitrator who is knowledgeable in business information and
electronic data processing systems. The arbitrator’s award
will be final and binding and may be entered in any court having
jurisdiction thereof. The arbitrator will not have the power to
award any damages excluded by, or in excess of, any damage
limitations expressed in this Agreement. Issues of arbitrability
will be determined in accordance solely with the federal
substantive and procedural laws relating to arbitration; in all
other respects, the arbitrator will be obligated to apply and
follow the substantive law of the state or nation specified in this
Agreement. Each party will bear its own attorney’s fees
associated with the arbitration and other costs and expenses of the
arbitration will be borne as provided by the rules of the American
Arbitration Association.
4.4 If a party breaches any provision of
this Agreement related to the other party’s or the other
party’s supplier’s intellectual property, the other
party will have no adequate remedy at law and may petition a court
of law for injunctive relief to protect the intellectual
property.
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| Solectron/NCR-Confidential |
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Page 5 |
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011907 Final
CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
No assignment of this Agreement by a
party will be valid without the prior written consent of the other
party which will not be unreasonably withheld. As used in this
Section, “assignment” shall not include mergers,
consolidations or the acquisition of the majority of the
outstanding voting shares or other controlling interest in the
party. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and
permitted assigns. NCR, if it sells an operating unit that is using
this Agreement, may replicate this Agreement to such operating
unit.
5.2 Severability. If any
provision of this Agreement shall be held to be illegal, invalid,
or unenforceable, the remaining provisions shall remain in full
force and effect provided the intent of the parties has not been
materially frustrated.
5.3 Excused Performance. Neither
party will be liable for damages because of delays in or failure of
performance when the delay or failure is due to supplier shortages
beyond Solectron’s reasonable control, acts of God, acts of
civil or military authority, fire, flood, strikes, war, epidemics,
shortage of power, or other cause beyond such party’s
reasonable control and without its fault or negligence, if the
party (a) uses best efforts to promptly notify the other in
advance of conditions which will result in a delay in or failure of
performances (b) uses commercially reasonable efforts to avoid
or remove the conditions (including transferring production to
other manufacturers who are not affiliated with Solectron), and
(c) immediately continues performance when the conditions are
removed.
5.4 Choice of Law. This Agreement
shall be governed by and construed in accordance with the laws of
the State of New York, as applied to contracts entered into and
performed entirely in that State, specifically excluding its rules
on conflicts of law.
5.5 Constrained Capacity . During
times of constrained capacity, Solectron will use all commercially
reasonable efforts to utilize capacity planned for NCR to meet NCR
requirements. In the event of such constrained capacity, Solectron
will provide NCR first priority within NCR’s forecasts, as
regards available capacity allocation and in no event will
NCR’s available allocation be lower than the proportion of
NCR’s pre-allocation Orders as a percentage of
Solectron’s business for the Products and/or Parts. Subject
to Section 5.3, acceptance by NCR of such percentage of its
Orders will not be a waiver of any rights or remedies which NCR may
have as a result of Solectron’s failure to ship all ordered
Products and Parts.
5.6 Affiliate Participation . All
rights granted to NCR in this Agreement may be exercised by any
Affiliate of NCR agreeing to be bound by the terms of this
Agreement. NCR agrees to guarantee the performance of its
Affiliates that exercise rights under this Agreement.
5.7 Waiver or Delay . Failure to
enforce any provision of this Agreement is not a waiver of future
enforcement of that or any other provision.
5.8 Solectron Disaster Plan .
Upon NCR’s request, Solectron will provide NCR an opportunity
to review Solectron’s disaster recovery plan which will be
prepared within 180 days after the Effective Date. At a minimum,
the plan shall address production interruptions and the
contingencies indicated in Section 5.3 of Article
I.
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| Solectron/NCR-Confidential |
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Page 6 |
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011907 Final
CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
5.9 Duty Drawback . NCR will be
entitled to claim duty drawback on Products and Parts exported by
or for NCR. Solectron will submit, for any Products and Parts
containing imported components, a Manufacturing Drawback Entry
and/or Certificate (Customs Form 331 or other as applicable), will
retain all records required by U.S. statutes and regulations and
identified in any drawback contract covering Products and Parts,
and will assist NCR as reasonably requested by providing relevant
information to NCR, in order to claim duty drawback for Products
and Parts.
5.10 Country of Origin .
Solectron will provide to NCR, prior to the first delivery of any
Product hereunder, a certificate of origin stating the country of
origin for the Product or Part and if applicable a NAFTA
certificate of origin. If the country of origin for any Product
should change, Solectron will provide a new certificate of origin
prior to the first delivery of any Product affected by the
change.
5.11 Compliance with Laws . Both
parties will, in the manufacture/sale of the Products and parts,
and in all other performance under this Agreement, fully comply
with all applicable federal, state, local and other governmental
laws and regulations.
5.12 Personal Warranties . Each
party represents and warrants that it has the right and power to
enter into this Agreement.
5.13 Relationship of Parties .
The relationship of Solectron and NCR as established under this
Agreement will be and remain one of independent contractors, and
neither party will at any time or in any way represent itself as
being a dealer, agent or other representative of the other party or
as having authority to assume or create obligations or act in any
manner on behalf of the other party. Nothing in this Agreement
creates a partnership, joint venture, agency, or franchise
relationship.
5.14 Periods of Time . Saturdays,
Sundays, and holidays will be included when computing the number of
days required or permitted for notice, response, or other action on
the part of either party.
5.15 Publication of Agreement .
Except as may be required by law or by the order of a court of
competent jurisdiction, neither Solectron nor NCR will publicize or
otherwise advertise the existence of this Agreement or its terms
without the prior written consent of the other party. In the event
this Agreement must be disclosed, the party disclosing the
Agreement shall inform the other party of the requirement and
shall, as requested by such other party, provide all reasonable
assistance in seeking a protective order or confidential treatment
of this Agreement.
5.16 Limitation of Liability .
EXCEPT AS EXPRESSLY INDICATED IN THIS AGREEMENT OR OTHERWISE
EXPRESSLY AGREED IN WRITING, IN NO EVENT WILL EITHER PARTY BE
LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES UNDER THIS AGREEMENT, EVEN IF IT HAS BEEN
NOTIFIED OF THE POSSIBILITY OF ANY SUCH DAMAGES.
5.17 Entire Agreement. This
document and any referenced documents sets out the entire agreement
of the parties, and supersedes all prior communications regarding
its subject matter. A waiver or amendment of any provision may only
be made in writing signed by the authorized representatives of both
parties.
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| Solectron/NCR-Confidential |
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Page 7 |
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011907 Final
CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
5.18 Further, this Agreement shall take
precedence over any conflicting terms in any Exhibit hereto or any
Purchase Orders hereunder.
| 6.1 |
Intentionally Omitted |
| 6.2 |
Intentionally Omitted |
| 6.3 |
Intentionally Omitted |
| 6.4 |
Intentionally Omitted |
7.1 “Affiliate” shall mean
any corporation that has outstanding voting securities, at least
fifty percent (50%) of which are directly held by
NCR.
7.2 “Confidential
Information” is information reasonably related to this
Agreement that complies with this paragraph. Confidential
Information disclosed in documents or other tangible form must be
clearly marked as confidential at the time of disclosure.
Confidential Information in oral or other intangible form must be
identified as confidential at the time of disclosure, and
summarized in tangible form clearly marked as confidential and
delivered to the recipient within 10 calendar days thereafter.
Confidential Information will also include any information which
the recipient knows or should know to be confidential even if not
marked. Confidential Information does not include information which
is or becomes available without restriction to the recipient or any
other person through no wrongful act.
| 7.3 |
“Effective Date” means the first day of the initial
term of this Agreement. |
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| Solectron/NCR-Confidential |
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Page 8 |
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011907 Final
CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
ARTICLE II
Manufacturing
Services
TABLE OF
CONTENTS
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1.
BACKGROUND/TRANSITION
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10 |
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1.1 S COPE
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10 |
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1.2 L EADING T
ECHNOLOGY
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10 |
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1.3 O UTSOURCED M
ANUFACTURING S ERVICES
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10 |
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1.4 T
RANSITION
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11 |
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1.5 B RAZIL O
BLIGATIONS
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12 |
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1.6 ***
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14 |
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1.7 K NOW -H
OW
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14 |
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1.8 P ERSONNEL
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15 |
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2. DEFINITIONS
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16 |
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3. SERVICES/FORECAST/ORDER
PLACEMENT/FLEXIBILITY
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17 |
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4. PRICES
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18 |
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5. LEAD TIME, DELIVERY, AND
PAYMENT
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18 |
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6. LICENSE OF SOFTWARE AND
DOCUMENTATION
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19 |
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7. SERVICE SUPPORT REQUIREMENTS;
EMERGENCY SPARE PARTS
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20 |
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8. TAXES
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20 |
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9. QUALITY
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20 |
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10. WARRANTY
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21 |
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10.1 G ENERAL W
ARRANTY
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21 |
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10.2 DOA
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21 |
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10.3 S ERVICES
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22 |
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10.4 S AFETY
AND R EGULATORY A
GENCY R EQUIREMENTS
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22 |
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10.5 I NTENTIONALLY O
MITTED
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23 |
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10.6 E PIDEMIC F
AILURES
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23 |
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11. SPECIFICATION, ENGINEERING AND
OTHER CHANGES
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23 |
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12. INDEMNIFICATION
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24 |
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12.1 IP I NDEMNIFICATION
BY S OLECTRON
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24 |
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12.2 P ARTS I
NDEMNIFICATION
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24 |
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12.3 IP I NDEMNIFICATION
BY NCR
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25 |
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12.4 L ITIGATION
BY O THERS
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25 |
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12.5 I
NSURANCE
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26 |
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| Solectron/NCR-Confidential |
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Page 9 |
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011907 Final
CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
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13. OTHER OBLIGATIONS
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13.1 S ERVICE L
EVEL A GREEMENT
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13.2 L EADING E
DGE P ROCUREMENT
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13.3 E XECUTIVE R
EVIEWS
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13.4 A CCESS
TO P RODUCTION
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13.5 P ERFORMANCE C
LAUSE
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13.6 C ONFIDENTIALITY T
ERM
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13.7 H IRING E
MPLOYEES
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13.8 N EW P
RODUCT I NTRODUCTION
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13.9 D IVERSITY P
LAN
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14. TERM AND
TERMINATION
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15. INTELLECTUAL
PROPERTY
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29 |
1.1 Scope . NCR is in the
business of producing, marketing, and integrating financial self
service systems and related equipment, software, supplies and
services. Solectron provides manufacturing and other services
related to the business of NCR and, subject to the terms and
conditions set forth herein, agrees to sell or license its Products
and Parts it has manufactured on behalf of NCR to NCR for either
NCR’s internal use or NCR’s resale or license to
NCR’s customers. NCR will at its option procure Product from
Solectron which may or may not be resold under NCR’s logo.
From time to time, the parties may agree to additional products or
features that will be defined by their specifications and
acknowledged and added to this Agreement through the new
product/feature process set out in Exhibit F. The parties may agree
from time to time to additional services that Solectron will
perform for NCR. Such additional services may be added by an
amendment to this Agreement or by execution of a separate
agreement. Solectron shall have no right to sell any Products or
NCR designed Parts covered by this Article II to anyone other than
at NCR explicit direction.
1.2 Leading Technology . The
parties intend that NCR shall be a leading edge supplier of
financial self service system products. To this end Solectron will
both inform and provide a commercially reasonable opportunity for
acquisition of new and emerging Solectron and industry technology
and manufacturing capabilities. At a minimum NCR will be informed
by Solectron at least on a concurrent basis with Solectron’s
other OEM customers in the same or similar markets of such emerging
Solectron or industry technology or manufacturing
capabilities.
1.3 . Outsourced Manufacturing
Services . Provided that Solectron is not in material breach of
this Article II, for a period of 5 years from the Effective Date,
NCR will purchase and Solectron will supply a) all NCR’s
requirements for manufacturing automated teller machines and
payment solutions products in and b) all of NCR’s
requirements for outsourced services for manufacturing automated
teller machines and payment solutions products for sale by NCR in
North, Central and South America from Solectron. The following
situations will be exempt from the obligation in this Section: i)
NCR fulfilling emergency orders that Solectron is unable to fulfill
in the required time frame; ii) NCR manufacturing or having
manufactured products that are expected to sell in low volumes in
the Americas unless Solectron is also manufacturing that Product in
the Americas; iii) one time rollouts of products not manufactured
at the time by Solectron in the relevant country in the Americas.
Further, provided that Solectron is not in material breach of this
Article II, for a period of 5 years from the Effective Date, if
NCR
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011907 Final
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APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
outsources manufacturing services for
automated teller machines outside of North, Central or South
America as the incumbent supplier, NCR will provide Solectron a 60
day period to bid and negotiate for such outsourced manufacturing
services before NCR opens the bidding for such services to any
other vendor, The foregoing obligations are contingent upon
Solectron’s compliance with the terms of this Agreement and
Solectron providing to NCR, manufacturing services that are similar
in, cost, and quality as generally available from others in the
manufacturing services industry. NCR may acquire outsourced
manufacturing services from other person if Solectron invokes
Section 5.3 of Article I for a period in excess of *** , and
may continue to acquire such services for the rest of that
product’s life cycle.
| |
a) |
Transition Plan . Solectron will provide a transition
team for each Product line who will prepare a details transition
plan for transferring the manufacture from NCR’s site to
Solectron’s site. The transition plan will consist of the
following documents |
| |
1) |
Transition Plan – Solectron will prepare a detailed plan
necessary to transition from NCR’s manufacturing site to
Solectron’s manufacturing site for each of the Product
families, such list to assign responsibility for each task to a
named team member, as well as a timeline for completing each task
and identifying all deliverables and milestones needed to complete
the transition. |
| |
2) |
Staffing Plan – As part of the transition plan Solectron
will prepare a staffing plan for each team, identifying each
position on the team, the qualifications required for each
position, and whether Solectron or NCR will fill such
position. |
| |
3) |
Team Structure – As part of the transition plan Solectron
will prepare a structure for the transition project teams,
including a list of functional teams by skill set; and Solectron
will document an escalation process, including points of contact
that will be available to NCR and Solectron. |
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b) |
Plan Execution . Solectron will document the transition
plan and place it under a formal change control process. NCR shall
approve the transition plan prior to implementation. The parties
will complete Transition Plan approval within 5 days after the
Effective Date. Each party will appoint a transition project lead.
The plan and all changes must be approved in writing by both
transition project leads. Solectron shall be lead responsible for
executing the transition plan while NCR will fully cooperate in
executing the plan, in accordance with its terms and modifications.
The transition project leads shall meet regularly to review
progress under the transition plan. Both parties acknowledge that
the successful execution of the Transition Plan is dependent to the
joint commitment to and joint ownership of the Plan. |
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c) |
NCR Plan Execution . NCR understands that the execution
of the Transition Plan and meeting the *** date for the completion
of the transition is dependent upon: |
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1. |
Fully staffed, cross functional NCR transition team for each
Product Line; |
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2. |
Complete and fully accurate BOMs for each Product line and
Configuration; |
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3. |
Complete and fully accurate Manufacturing Documents to support
assembly and test processes/procedures for each Product line and
Configuration; and |
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011907 Final
CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
| |
4. |
Information provided by NCR during the transition is reasonably
accurate. |
| |
d) |
Expenses . Solectron shall develop the transition plan
so that it can be achieved within a budget of US$*** of incremental
expense for the transition. Solectron shall document the budget and
review spending against the budget in comparison with progress
under the transition plan. *** shall *** and not *** for any
transition costs or charges within the US$*** transition budget. If
it appears likely that the costs born by Solectron will exceed
US$***, the parties shall meet to consider ways to reduce costs
without affecting the quality of the transition. To the extent a
party is the cause of an expense overrun, it will bear the
additional cost. To the extent that there is a change in scope of
the transfer project by NCR, NCR shall be responsible for any
additional costs associated with the transfer. |
| |
e) |
Redundant Manufacturing Lines . Solectron and NCR will
work together to ensure that there are overlapping manufacturing
lines so that NCR will not stop production at NCR’s site
until Solectron has reasonably demonstrated that it is able to
assume all of the required production for the relevant Product
model. Provided, however, if the parties agree that a different
method of assurance, such as a buffer stock, is preferred redundant
manufacturing lines shall not be required. |
| |
f) |
Timeline . The parties will use commercially reasonable
best efforts to complete the transition of all automated teller
machine Product lines by *** and all payments solution product
lines by ***. If Solectron misses either of these dates, Solectron
will cover *** and *** costs for the late product lines. Solectron
will not be responsible for those costs if NCR causes the delay or
if the parties otherwise agree. |
| |
g) |
Unless mutually agreed, Solectron will not make any changes to
the AVL for a Product within the first *** the Effective Date of
this Article II. |
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h) |
During the transition plan, Solectron shall prepare the
disaster recovery plan required by Art. I Section 5.8 and
review it with NCR. |
1.5 Brazil Obligations .
Solectron will meet the following additional obligations with
respect to the transition in Brazil and Products produced in
Brazil:
| |
a) |
Solectron will use reasonable commercial efforts to operate so
that all Products produced for NCR will benefit from *** as more
fully set out in Exhibit J. |
(1) Solectron shall, or shall
cause the appropriate Solectron Brazilian subsidiary to, offer
employment to approximately *** NCR Brazilian employees identified
by NCR and *** hereto (the “Brazil Employees”);
provided, that, with respect to any Brazil Employee who accepts
employment with Solectron, any commencement of employment shall
only occur following NCR’s termination of the employment
relationship between NCR and such Brazil Employee in accordance
with applicable Brazilian law (including payment of all accrued and
outstanding labor rights) and NCR’s policies; and, provided
further, that, Solectron shall only extend such offers of
employment if Solectron is awarded the transfer of all
manufacturing operations
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011907 Final
CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
(including all products,
sub-assemblies, service parts and kits) at NCR’s Sao Paolo,
Brazil facility. Solectron’s employment offers will
(i) provide for wages that are the same as currently paid by
NCR to those employees and (ii) benefits comparable to
similarly situated Solectron employees in Brazil. Solectron will
also provide for *** for *** of the Brazil Employees (*** of
$US***) with the remainder of the Brazil Employees being offered
*** to ***, at ***, at *** discretion as it wants them ***.
Notwithstanding any of the foregoing, Solectron shall not *** to
*** Brazil Employee who *** NCR by ***.
(2) NCR shall defend and
indemnify Solectron and its subsidiaries and affiliates and their
respective directors, officers, employees and agents (the
“Solectron Indemnified Parties”) against, and agrees to
hold each of them harmless from, any claims, causes of action,
suits appeals, administrative proceedings, investigations, or
audits (“Proceeding”) for Liabilities incurred or
suffered by the Solectron Indemnified Parties to the extent related
to any Brazil Employee’s employment or relationship with NCR
or the termination of such Brazil Employee’s employment or
relationship with NCR. As used in this Section 1.5 and
Section 1.8, “Liability” mean any liability,
indebtedness, claim, loss, damage, assessment (including of
governmental authorities), obligation, charge, judgment, penalty,
fine, costs, interest charges or expenses (including reasonable
attorneys’ fees and disbursements and the costs of
investigation and litigation) paid or owing to any Brazil employee
(or, in the case of Section 1.8, Key Employee) or third
person, whether due or to become due, determined or determinable or
whether under contract, statute common law or otherwise. The
foregoing NCR indemnity shall not apply to the extent any Liability
for which a Solectron Indemnified Party is seeking indemnification
was caused by the negligence or willful misconduct of a Solectron
Indemnified Party. Solectron shall give NCR (1) prompt written
notice of the Proceeding; (2) reasonably requested information
that Solectron possesses about the Proceeding; (3) reasonable
cooperation and assistance; and (4) sole authority to defend
or settle the Proceeding.
(3) Solectron shall defend
and indemnify NCR and its subsidiaries and affiliates and their
respective directors, officers, employees and agents (the
“NCR Indemnified Parties”) against, and agrees to hold
each of them harmless from, any Proceeding (as defined in
Section 1.5(b)(2)) for Liabilities incurred or suffered by the
NCR Indemnified Parties to the extent related to: (i) any
Brazil Employees’ employment relationship with Solectron
following the commencement of employment of any such Brazil
Employee with Solectron; or (ii) the employment relationship
of any other Solectron employee with Solectron. The foregoing
Solectron indemnity shall not apply to the extent any Liability for
which an NCR Indemnified Party is seeking indemnification was
caused by the negligence or willful misconduct of an NCR
Indemnified Party. NCR shall give Solectron (1) prompt written
notice of the Proceeding; (2) reasonably requested information
that Solectron possesses about the Proceeding; (3) reasonable
cooperation and assistance; and (4) sole authority to defend
or settle the Proceeding.
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011907 Final
CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
(4) The parties agree that no
provision in this Agreement or any related agreement or document
shall limit or cap a party’s indemnification obligation set
forth in Section 1.5(b) above.
| |
c) |
Upon written notice, NCR may pull Brazil manufacturing from
this Agreement if NCR determines that the cost or impact of
transfer is unacceptable. The parties and their respective
Brazilian affiliates will enter into an asset purchase agreement
for the purchase of the equipment and inventory used by NCR’s
Sao Paolo, Brazil facility in producing the Products under terms
substantially similar to those set out in the Asset Purchase
Agreement between the parties dated January 19,
2007. |
1.6 *** . *** will pay *** US$***
for:
a) the *** product ***
described in Exhibit *** Section ***; and
b) the manufacturing ***
described in Section ***
Such payment will be due *** and payable
by wire transfer.
1.7 Know-How .
a) License . Subject
to ***, NCR grants Solectron a fully paid up, *** license to ***
any Manufacturing Know-How, including, without limiting, the right
to use such Manufacturing Know-How to ***, and *** automated teller
machines and payment solution devices ***.
b) Delivery . NCR
obligation to deliver Manufacturing Know-How shall consist of
allowing Solectron personnel and Key Employees to transition the
manufacture of the automated teller machines and payment solution
products to Solectron, allowing Solectron *** under the terms of
Section 1.9, the opportunity to work on the transition, and
*** covered by Section 1.8. In addition, NCR will use
reasonable efforts to deliver copies of any documentation of its
Manufacturing Know-How that exists in NCR’s facilities in
Waterloo, Dallas, and Sao Paolo as of the Effective Date. NCR shall
have no further obligation to deliver Know-How after
***.
c) Under no circumstances
will the license grant set forth in Section 1.7(a) be
construed as granting, by implication, estoppel or otherwise, a
license to any technology owned by NCR to Solectron (other than the
license to Manufacturing Know-How expressly granted in that
Section). All rights not expressly granted in Section 1.7 are
expressly reserved. Solectron shall have no right under the
licenses in this Agreement to use NCR’s intellectual property
rights to create or assist others in creating *** for *** for the
Products, or ***.
d) For the purpose of this Agreement,
“Manufacturing Know-How” shall consist of any
information , including , without limiting, ***,
disclosed
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011907 Final
CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
to Solectron in the course of the
transition, or *** by Solectron under Sections ***, regarding ***
of automated teller machines and payment solutions products,
including, without limiting, *** and *** and techniques for ***;
and *** and *** testing of ***. Manufacturing Know-How shall not
include any information or intellectual property right related to
*** information having to do with anything other than *** of
***
1.8 Personnel Transfer
.
(a) Solectron shall, or shall cause
the appropriate subsidiary to, offer employment to each of the ***
key NCR employees *** hereto (the “Key Employees”);
provided, that, with respect to any Key Employee who accepts
employment with Solectron, any commencement of employment shall
only occur following NCR’s termination of the employment
relationship between NCR and such Key Employee in accordance with
applicable Canadian law (including the payment of all accrued
severance) and NCR’s policies. Solectron’s
employment offers will provide for (i) *** to the wages *** to
the *** by NCR, (ii) Solectron’s *** for *** employees,
(iii) employment in *** at a Solectron site and
(iv) eligibility to receive *** from a *** of US$ *** (actual
*** will depend on *** of the *** Key Employees *** with
Solectron). Notwithstanding any of the foregoing, Solectron
*** to *** who is *** by NCR by ***.
(b) NCR shall defend and
indemnify Solectron and its subsidiaries and affiliates and their
respective directors, officers, employees and agents (the
“Solectron Indemnified Parties”) against, and agrees to
hold each of them harmless from, any Proceeding (as defined in
Section 1.5(b)(2)) for Liabilities incurred or suffered by the
Solectron Indemnified Parties to the extent related to any Key
Employee’s employment with NCR or the termination of such Key
Employee’s employment relationship with NCR. . The
foregoing NCR indemnity shall not apply to the extent any Liability
for which a Solectron Indemnified Party is seeking indemnification
was caused by the negligence or willful misconduct of a Solectron
Indemnified Party. Solectron shall give NCR (1) prompt written
notice of the Proceeding; (2) reasonably requested information
that Solectron possesses about the Proceeding; (3) reasonable
cooperation and assistance; and (4) sole authority to defend
or settle the Proceeding.
(c) Solectron shall defend
and indemnify NCR and its subsidiaries and affiliates and their
respective directors, officers, employees and agents (the
“NCR Indemnified Parties”) against, and agrees to hold
each of them harmless from, any Proceeding (as defined in
Section 1.5(b)(2)) for Liabilities incurred or suffered by the
NCR Indemnified Parties to the extent related to: (i) any Key
Employees’ employment relationship with Solectron following
the commencement of employment of any such Key Employee with
Solectron; or (ii) the employment relationship of any other
Solectron employee with Solectron. The foregoing Solectron
indemnity shall not apply to the extent any Liability for which an
NCR Indemnified Party is seeking indemnification was caused by the
negligence or willful misconduct of an NCR
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011907 Final
CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
Indemnified Party. NCR shall give
Solectron (1) prompt written notice of the Proceeding;
(2) reasonably requested information that Solectron possesses
about the Proceeding; (3) reasonable cooperation and
assistance; and (4) sole authority to defend or settle the
Proceeding.
(d) *** will *** up to
$*** for *** in connection with NCR’s ***, provided, that,
*** written documentation reasonably satisfactory to Solectron
evidencing such *** to the *** Key Employees.
(e) The parties agree
that no provision in this Agreement or any related agreement or
document shall limit or cap a party’s indemnification
obligation set forth above in Section 1.8(b) or
(c).
2.1 “Committed Ship Date”
(“CSD”)—The date Solectron agrees to deliver to a
factory an order release or replenishment signal.
2.2 Intentionally
Omitted
2.3 “Desired Receipt Date”
(“DRD”)—The date NCR requests in an Order or
Release Order that Products or parts be delivered to
NCR.
2.4 “Forecast”—A
planning tool which expresses NCR’s estimated Product demand,
typically in weekly and/or monthly buckets, spanning a minimum of
***. It is understood that the Forecast is for planning and
administrative purposes only, and that NCR will have no obligation
to purchase any or all of the Products or parts identified in an
NCR Forecast, except as otherwise provided herein.
2.5 “Lead Time”—The
number of calendar days measured from the time Solectron receives
an Order and/or sends a replenishment signal until Solectron ships
the Product.
2.6 “Manufacturing Know-How”
shall have the definition set out in Section 1.7.
2.7 “Master Purchase Order”
or “MPO” – NCR’s purchase authorization to
Solectron for Products, Parts or services under this Agreement in
preparation of the receipt of Purchase Orders. It is understood
that MPO’s are for planning and administrative purposes and
are not Purchase Orders.
2.8 “Part”—Any
component, subassembly, field replaceable unit, or other module of
the Product sold under this Agreement.
2.9 “Product”—Any
finished assembly, subassembly or module built by Solectron under
this Agreement according to NCR Specifications.
2.10 “Purchase Order”,
“Sales Order” or “Order”—A document
issued by NCR for the purpose of ordering Product or Parts pursuant
to this Agreement. Purchase Orders, Sales Orders or Orders may
include an NCR Purchase Order Form, an NCR Release Order Form
written against an MPO, or a defined Electronic Data Interface
(EDI) Order transmissions as defined by Solectron and NCR in an EDI
Agreement attached as Exhibit G.
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011907 Final
CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
2.11 “Release Order”—A
firm Order written against and referencing an existing MPO. A
Release Order may also take the form of an Electronic Data
Interface (EDI) Order transmissions as defined by Solectron and NCR
in an EDI Agreement attached as Exhibit G.
2.12
“Specifications”—NCR provided prototypes,
engineering drawings, diagrams and other documentation specific to
a particular Product as amended from time to time.
| 2.13 |
“Software”—Versions of computer programs
including software or firmware. |
| 3. |
SERVICES/FORECAST/ORDER
PLACEMENT/FLEXIBILITY |
3.1 Solectron will provide manufacturing
services under the terms of the agreement for any automated teller
machines or payment solutions products models, kits or spare parts
requested by NCR.
3.2 Design/Value Engineering .
Solectron will provide design support services with world class
expertise in DFX, and other design/value engineering services. At
NCR’s option,, Solectron *** for the *** of such services
either *** engineering ***, Solectron *** (as set out in
Section 2.5 of Exhibit B) or *** over an *** and
***.
3.3 Certification . Solectron
will provide all certifications services required for each Product
release including, safety, EMC, and other regulatory requirements.
The parties shall *** on the responsible party for any*** any
certification requested by *** including the *** for any
***.
3.4 Setup . Solectron will
perform all manufacturing setup at ***. Industry standard tooling
and other ***. *** non-standard tooling will be handled in
accordance with Section 2.5 of Exhibit B. NCR may purchase any
*** at ***, including any ***, made by ***. or *** related to the
tooling in accordance with the ***.
3.5 Encryption . Certain Products
contain high level encryption capability which requires unique
information tracking, reporting, production processes, certified
facilities and shipping requirements. To the extent that these
Products have been identified by NCR and Solectron’s quote
based upon the provision of the additional services, Solectron will
meet all these requirements ***.
3.6 NAFTA Eligibility . In
performing services under this Agreement, Solectron will use
reasonable efforts to ensure that Products are eligible for duty
free treatment under NAFTA and any other mutually agreed to free
trade unions,
3.7 Staging . Solectron will
provide staging services with respect to the Products for
installing end user required software of components. Solectron will
provide NCR with a mutually agreed charge sheet for standard
staging operations, however, NCR may request that Solectron provide
a quote for a specific staging requirement.
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011907 Final
CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
3.8 Provisions related to Forecasts,
Order placement and flexibility are set forth in Exhibit
B.
4.1 *** . Solectron offers
services to *** that are *** any of the services provided under
this Agreement, and such *** are *** than those ***, then *** will
*** the *** as such ***, provided that the terms under which the
entity is *** those ***, the *** being *** and the *** are
***.
4.2 Pricing . Pricing will be
determined as indicated in Exhibit B of this Agreement. Except as
explicitly set out in this Article or Exhibit B, there shall be no
additional charges for any services performed by Solectron within
the scope of this Article.
4.3 Cost Reductions . Solectron
will continue throughout the term of this Agreement to reduce costs
for all Products and Parts. All cost reductions will be shared in
accordance with Exhibit B.
| 5. |
LEAD TIME, DELIVERY, AND PAYMENT |
5.1 Lead-time . Purchase Orders
will be received by Solectron in advance of the required delivery
date, allowing for the lead time specified in Exhibit C, unless a
shorter lead time is mutually agreed to in a specific
Order.
5.2 Packaging/Logistics Exhibits
. Solectron will meet the packaging standards set out in Exhibit
I-1. For each production location, the parties will agree to a
logistics exhibit that will cover delivery terms, and other
logistics information. Exhibits I-2 and I-3 cover Solectron’s
Columbia, SC, and Guadalajara, Mexico facilities
respectively.
5.3 Delivery Timing . NCR and
Solectron will work together to ensure *** order delivery
flexibility. A maximum of *** late shall be allowed for all
deliveries, unless NCR specifically requests other delivery terms.
Provided that Solectron is the sole cause of any delay, Solectron
will *** any late Products or Parts at *** charge to NCR. Provided
NCR is not the sole cause of any delay, if Solectron is unable, for
any reason, to supply any portion of NCR’s requirements of
the Products or Parts as established by Purchase Orders, such
portion will be *** from Solectron for purposes of determining ***
when *** by NCR. This will not, however, limit any other remedy to
which NCR may be entitled on account of Solectron’s inability
to supply NCR’s requirements.
5.4 CT-PAT . Should
Solectron’s services hereunder require Solectron to perform,
support, or handle any importation of any item into the U.S., the
parties shall cooperate with each other to address the
recommendations of U.S. Customs relative to its Customs-Trade
Partnership Against Terrorism (C-TPAT) program and comply with said
requirements of C-TPAT . To the extent permitted by
local law, in compliance with the provisions of all applicable
federal, state, and/or local laws, regulations, rules and orders,
Solectron perform pre-hiring screening for its employees consistent
with standard industry practices.
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APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
5.5 Payment . Payment for all
Orders will be net 30 days from the date of NCR’s receipt of
a proper EDI invoice. Solectron will not invoice NCR prior to the
shipping of the relevant Product or Parts. All prices and payments
will be in US Dollars. Solectron’s invoices shall contain the
following information: a) NCR’s Purchase Order numbers; b)
NCR’s Product I.D., part number or other relevant number; c)
a description of the items shipped; d) the quantity of items
shipped; e) the unit and extended price applicable thereto; and f)
Solectron’s serial number if applicable. Payment to Solectron
will be made by wire transfer including remittance information or
other electronic means selected by NCR to the following account an
account as Solectron notifies NCR from time to time. NCR may
withhold payment of any of your charges that (i) NCR disputes
in good faith; (ii) are not submitted in accordance with
NCR’s instructions; or (iii) fail to contain sufficient
information to permit processing. With respect to any amounts to be
reimbursed, or otherwise owed, to NCR by you, NCR may set off that
amount as a credit against charges payable to you. NCR will not
make an set off until it has received approval from Solectron which
will not be unreasonably withheld.
5.6 Shipping . NCR may provide
shipping information electronically. Solectron will meet the
following shipping requirements unless NCR requests
otherwise:
| |
a) |
Ship the material complete unless otherwise
instructed. |
| |
b) |
Ship all Products, Parts, and other items in accordance with
the relevant terms set out in the relevant Exhibit I
terms. |
| |
c) |
Initiate shipments in accordance with routing instructions
given by NCR. |
| |
d) |
Enclose a packaging memorandum with each shipment and, when
more than one package is shipped, identify the package containing
the memorandum. |
| |
e) |
Mark the Purchase Order number on all packages and shipping
papers. |
| |
f) |
Mark with the NCR part number. |
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g) |
In the event that there are multiple pallet orders, copies of
the packaging list should be attached to all pallets. |
5.7 Failure to Comply . If
Solectron fails to comply with the terms of the agreed to shipping
instructions, Solectron authorizes NCR to charge back any increased
shipping costs incurred by NCR as a result of Solectron’s
noncompliance *** for each shipment which is not in compliance. NCR
will provide Solectron with detailed shipping charges incurred by
NCR as a result of Solectron’s noncompliance.
5.8 Classification . Each company
agrees to determine Harmonized Tariff and Export Control
Classification Number data for each Product or Part that it
designs, designs and manufactures, or procures from another vendor,
and subsequently delivers to the other company. Upon request, each
company will provide the other with all available information and
assistance to permit an independent classification of the Product
or Part.
| 6. |
LICENSE OF SOFTWARE AND DOCUMENTATION |
6.1 Software . As to Software
authored by Solectron (the “Solectron Software”) which
may be provided separately or with the Product(s), Solectron hereby
grants to NCR and its software reproducer a perpetual, worldwide,
non-exclusive, non-transferable, royalty-free license to
resell
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APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
and reproduce copies of the Solectron
Software for distribution for use with the Products and Parts. NCR
will license the Software to its customers pursuant to NCR’s
standard terms and conditions. Solectron grants to NCR a perpetual,
worldwide, non-exclusive, royalty-free license to use
Solectron’s trademarks and trade names on or in connection
with the Solectron Software copies made under this Agreement. NCR
agrees to take such reasonable steps as may be necessary to
preserve copyrights to the Software and Software documentation.
Solectron also agrees to use its commercially reasonable efforts to
procure for NCR and its software reproducer, a similar license to
Software supplied to NCR by Solectron in connection with the
Products which Software is not authored by Solectron and will
notify NCR if Solectron is unable to procure such a
license.
6.2 Documentation . Solectron
will provide documentation and marketing materials set out in
Exhibit A (“Documentation”). Solectron will deliver the
Documentation in electronic format. NCR may order copies of
Documentation which Solectron specifies as orderable under the same
terms as Products. Solectron hereby grants to NCR and its
designated Documentation reproducer a perpetual, worldwide,
non-exclusive, non-transferable, royalty-free license to reproduce,
distribute, perform and display copies and create derivative works
of the Documentation for use with the Products and Parts. The
foregoing includes any medium such as Internet access (FTP, WWW)
and CD-ROM.
6.3 NCR or Third Party Software .
Solectron will comply with the provisions of Exhibit H with respect
to any software provided to Solectron by NCR or a third
party.
| 7. |
SERVICE SUPPORT REQUIREMENTS; EMERGENCY SPARE
PARTS |
Solectron will provide Product support
in accordance with Exhibit D.
Product prices do not include
applicable federal, state or local sales, use, property, excise, or
similar taxes that may be levied upon Solectron as a result of sale
or delivery of any Product under this Agreement. All such taxes
will be assumed and paid by NCR except any taxes refundable or
creditable to Solectron. If a resale certificate or other document
is required in order to exempt the sale of Products from taxes, NCR
will furnish Solectron, at Solectron’s request, with
appropriate documentation prior to shipment by Solectron. If
Solectron pays any such taxes at NCR’s request, NCR will
reimburse Solectron upon being appropriately invoiced for the exact
amount of such taxes and being provided with documentation which
will allow NCR to claim a credit for such taxes. Solectron shall be
responsible for all taxes based upon its personal property
ownership and gross or net income.
Solectron will use data
driven processes based on continuous improvement and defect
prevention with a goal of delivering defect free Products, Parts
and services to NCR and its customers. Solectron will implement all
quality processes that will contribute to meeting the quality and
reliability requirements defined in Exhibits C.
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APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
10.1 General Warranty . Solectron
warrants that all Products manufactured or supplied herein will
conform to the Specifications, Product prototypes accepted by NCR,
the quality provisions of this Agreement and, will be of ***.
Claims for Products not complying with this warranty will be
submitted by NCR, at its option, to ***, within *** from the date
of delivery of the non-complying Product or part to NCR. For Parts
and Software, Solectron will *** the *** in accordance with Exhibit
D. For Parts and Software controlled by Solectron, Solectron will
use *** to obtain *** a *** warranty (or such *** warranty that
***) and a warranty that Software does not *** or other ***. *** a
warranty that ***, *** will obtain ***. *** shall be responsible
for *** in warranty to the extent that *** has not provided ***
notice of the ***. Furthermore, Solectron warrants that it has the
right to grant the licenses set forth in Sections 9 of this Article
and that the Product and Parts are free and clear of all liens,
encumbrances and conflicting rights. Solectron will promptly ***
(including any ***) for non-complying Products or alternately,
Solectron will pay *** the *** at the ***. Any shipment of
non-complying Products or Parts by *** to ***, and the shipping
charges for return of repaired or replacement Products or Parts by
*** to *** under this Section 10.1, will be at *** expense
unless the *** with ***, in which case *** shall be at *** expense.
Solectron will have the warranty obligations provided in this
Section 10.1 as to all ***, notwithstanding their ***. The
foregoing are *** from *** for *** of this Section 10.1. The
warranty set forth above is made to and for the benefit of ***
only, but this shall not prevent *** from *** of any ***
person’s ***. This warranty shall not apply to any ***
components provided by *** to *** or to the extent that defects
caused by *** compliance with ***, abuse, misuse, accident or
neglect, or other fault directly attributable to *** or ***, or
other ***, and provided that *** is notified by *** of all such
claims within *** days of the end of the applicable warranty
period. EXCEPT AS SET FORTH IN THIS AGREEMENT, SOLECTRON MAKES NO
WARRANTIES, WHETHER EXPRESS OR IMPLIED, OR STATUTORY REGARDING OR
RELATING TO THE PRODUCTS, PARTS, SOFTWARE OR DOCUMENTATION, OR ANY
MATERIALS OR SERVICES PROVIDED TO NCR UNDER THIS AGREEMENT.
SOLECTRON SPECIFICALLY DISCLAIMS ALL IMPLIED WARRANTIES OF FITNESS
FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT WITH RESPECT TO THE
PRODUCTS, PARTS, SOFTWARE, DOCUMENTATION, AND SAID OTHER MATERIALS
AND SERVICES, AND WITH RESPECT TO THE USE OF ANY OF THE
FOREGOING.
10.2 DOA . If a Product or Part
fails (meaning the Product or Part does not function materially in
accordance with its specifications and/or the Product has been
misconfigured) within the *** of (a) *** and (b) *** from
Solectron, *** will, as soon as reasonably possible but no more
than *** to ship a replacement Product or *** to ship a Part to NCR
for delivery to *** by the *** of shipping *** the *** being
subject to *** pursuant to the ***. *** will *** for the *** and
*** cost to the extent the DOA is *** by any *** provided by *** to
*** or *** controlled Parts, failure of Product or Part components
which were *** or *** by ***,
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APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
or to the extent that defects with the
Products or Parts are *** by ***, ***, or other *** directly
attributable to *** or ***, or ***. *** will *** for the *** and
*** in all other cases. The charge for repairs will be *** standard
rates or such other rate as the parties may agree to from time to
time.
10.3 Services . Solectron will
perform services by properly trained personnel with care
appropriate to ensure world class execution. Solectron will
efficiently use the resources necessary to perform
Solectron’s obligations set forth in this Agreement and will
use commercially reasonable efforts to provide services under this
Agreement in the most cost-effective manner consistent with the
levels of quality and performance set forth herein.
10.4 Safety and Regulatory Agency
Requirements . Solectron warrants that all Products, Parts and
packaging material will comply with all applicable country (as
indicated by NCR in writing or in Exhibit E), federal, state and
other governmental regulations in effect at the time of manufacture
(including without limitation and similar regulations concerning
safety, EMI and equipment labeling). Products and Parts will be
listed or certified by a nationally recognized testing laboratory
with NCR’s name, NCR’s tradename, NCR’s trademark
and file number. Additional Product specific safety and regulatory
requirements may be indicated in the Product Specifications.
Solectron will promptly repair or replace, at its option and
expense, non-complying Products or Parts, at the end user site, or
alternately, will pay NCR its costs of remedying the non-compliance
at the end user site. Any shipment of non-complying Products or
Parts by NCR to Solectron, and the return shipment of repaired or
replacement Products or Parts by Solectron to NCR under this
Section, will be at Solectron’s expense. NCR will take title
to replacement Products and Parts at the Solectron facility that
are intended for export and arrange for their shipment to the
end-user site. In addition Solectron will use manufacturing and
material handling processes and procedures, including process
materials and chemicals used in Solectron controlled manufacturing
processes, are compliant with the European Union Directive
2002/95/EC on the Restriction of the use of certain Hazardous
Substances (“RoHS Directive”) for Products that are
designated by NCR to be RoHS compliant. Further, Solectron
will purchase Parts, materials and components designated in the BOM
by NCR. Solectron shall take the following steps to meet
Solectron’s RoHS responsibilities:
a) Upon receipt of
signed CoC’s from supplier’s on the current NCR AVL,
Solectron shall determine if the Parts are compliant with the RoHS
directive.
b) If the design or AVL
is changed by NCR for Products and /or assemblies, Solectron will
reassess the compliance of Solectron internal processes and NCR or
Solectron will obtain signed CoCs for the supplier as
required.
c) For Solectron
controlled Parts, Solectron shall have the responsibility
for obtaining the CoC from each supplier evidencing that the
Part is in compliance with the RoHS Directive. In addition,
Solectron shall promptly obtain updated CoCs from such Solectron
controlled Parts suppliers in the event that the identity or part
numbers of any materials, parts, mechanical assemblies or
electromechanical assemblies are changed. All such CoCs shall
be retained by Solectron consistent with Solectron’s document
retention policy and be available to NCR upon request. NCR
will be responsible for obtaining the CoC from the suppliers for
NCR controlled Parts. Solectron shall inform NCR of any issues with
RoHS compliance that it becomes aware of.
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APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
d) In the event that
environmental laws are enacted in any other jurisdiction in which
NCR desires to sell Products, NCR and Solectron shall work together
in good faith and with due diligence to determine the requirements
necessary for Solectron to be able to manufacture in conformance
with the new environmental law or proposed environmental
specifications, as applicable.
10.5 Intentionally Omitted
.
10.6 Epidemic Failures . An
Epidemic Failure is defined as the occurrence of multiple failures
of the same component, subassembly, feature, software (for example;
processor, memory device, power supply, hard drive, mechanical
assembly, processor board, software, etc.) supplied by a ***
supplier, and/or *** (if applicable), and/or ***, and are due to
the same cause, occur in the same model of a Product, and impair
the use of the Product to the extent that such failures occur in
*** than *** of the installed base of the component, subassembly,
feature or software of the affected Product over a *** period,
unless the particular component, sub-assembly, feature, or software
has been shipped for less than that amount of time, in which case
the measurement window is the *** of *** or *** that the component,
sub-assembly, feature, or software has been shipped. *** that the
failures have been properly diagnosed and that the failure count
for that cause is accurate. Solectron provides *** months coverage
for Epidemic Failures which are a result of *** products and/or
workmanship. *** will use *** to maintain, expand, and provide a
***, or *** previously *** between *** and the ***, coverage for
Epidemic Failure cause from base component, sub-assembly, feature,
or software suppliers. In the event of Epidemic Failure caused by
failures of components supplied by these suppliers, *** will *** to
*** the *** as provided in the ***, if any, with *** of the ***.
*** will obtain *** approval prior to ***, *** into *** which do
not provide *** of Epidemic Failure coverage. In the event of a
claim of epidemic failure, *** will perform a root cause analysis
of the failure and will meet with *** to mutually determine
(i) the precise details of the problem including whether or
not *** is responsible for the problem and (ii) the most
efficient way to resolve the failure considering customer
satisfaction, logistics and cost. *** will *** its *** of ***,
which will be ***. The parties agree that in the event of an
Epidemic Failure regarding software, *** obligation hereunder with
respect to such software will be limited to *** a *** to ***. ***
shall have no liability or responsibility for reimbursement to ***
to the extent that any such Epidemic Failure claims are the result
of (a) modification or alteration of the Product or Part by a
party other than ***, (b) improper installation or
incorporation of the Product or Part, (c) misuse, accident,
abuse or neglect by anyone other than *** to the Product or Part,
(d) defects in any component not supplied by ***, or
(e) defects caused by *** design.
| 11. |
SPECIFICATION, ENGINEERING AND OTHER CHANGES |
11.1 NCR Changes . The
Specifications may only be amended by the NCR design release
process. Prior to any change becoming effective, all Products
shipped by Solectron to NCR will conform to the existing
Specifications, unless NCR otherwise requests. If any such change
affects the price, delivery, quality or performance of said
Product, an equitable adjustment will
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APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
be negotiated between the parties prior
to the implementation of the change. After an agreed upon effective
date between NCR and the Solectron site for implementing changes,
all Products shipped by Solectron will conform to the changed
Specifications. Drawing corrections and minor changes which have no
effect on form, fit, function or interchangeability will not be
considered a change in the Specifications.
11.2 Solectron Changes .
Solectron must not make design, supplier, or component part changes
to Product(s) manufactured for NCR nor change to the production
facility (including moving to another site) without submitting a
written Request for Change (“RFC”) notice and NCR
approving the changes and NCR will not unreasonable reject such
changes. NCR will review Solectron’s RFC and shall consider
the feasibility of all proposed changes. Within the time frame set
out in Exhibit F, NCR will furnish to Solectron a written
response regarding the proposed changes, including its willingness
to implement the change, and the time schedule required for
implementation if appropriate.
11.3 Product Obsolescence and Phase
Out . Solectron will accept all service part Orders for new
builds *** after the production phase out by NCR and the service
repair costs shall be mutually agreed upon. Solectron will provide
NCR at least *** written notice prior to the termination within the
*** period. If during the *** period, Solectron has difficulty with
production or repair of parts because of components becoming
obsolete and Solectron has knowledge of component obsolescence,
then Solectron will notify NCR at least *** prior to production
termination. Prior to this production termination, NCR may develop
a Forecast and make a final buy of the component parts so ongoing
production or repairs may continue.
12.1 IP Indemnification by
Solectron . Solectron will defend at its expense any actual or
threatened claim or suit brought against NCR, its affiliates,
distributors and end users alleging that any manufacturing process
for a Product or Part infringes a patent, copyright, trade secret
or other intellectual property right and will pay all costs and
damages finally awarded, if NCR gives Solectron (1) prompt
written notice of the claim; (2) reasonably requested
information that NCR possesses about the claim; (3) reasonable
cooperation and assistance; and (4) sole authority to defend
or settle the claim. In the defense or settlement of the claim,
Solectron may obtain for NCR the right to continue using the
Product or Part or replace or modify the Product or Part so that
the manufacturing process for such Product or Part becomes
non-infringing. Solectron is not obligated to indemnify NCR under
this Section if the claim results only from
i) Solectron’s compliance with NCR’s engineering
designs and/or NCR specifications if the alleged infringement is
inherent in compliance with such designs and/or specifications,
ii) the use of the Product or Part with other products not
furnished, specified, or approved by Solectron provided there is a
substantial non-infringing use for the Product or Part, or
iii) modifications to the Product or Part not made by
Solectron or in accordance with Solectron’s instructions.
This Section states Solectron’s entire liability for
infringement of patents, copyrights, trade secrets, and other
intellectual property rights.
12.2 Parts Indemnification .
Solectron also agrees to use its commercially reasonable efforts to
procure for NCR, its Affiliates, distributors and end users an
indemnification for intellectual property claims for Products or
Parts not designed by Solectron providing substantially equivalent
protection as Section 12.1. If Solectron is unable to obtain
such protection, Solectron will seek NCR’s approval for using
that vendor. Solectron will notify NCR of the variance from the
protection in Section 12.1 in writing sent to: Vice President,
Procurement, NCR Corporation, 1700 S. Patterson Blvd. Dayton, OH
45479
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WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
12.3 IP Indemnification by NCR .
If an actual or threatened claim of infringement of intellectual
property rights is asserted against Solectron due to actions taken
by Solectron which are the direct and necessary result of
compliance with NCR engineering design or specifications, NCR will
defend at its expense any actual or threatened claim or suit
brought against Solectron, or its affiliates, and NCR will pay all
costs and damages finally awarded, if Solectron gives NCR
(1) prompt written notice of the claim; (2) reasonably
requested information that Solectron possesses about the claim;
(3) reasonable cooperation and assistance; and (4) sole
authority to defend or settle the claim. This Section states
NCR’s entire liability for infringement of patents,
copyrights, trade secrets, and other intellectual property
rights.
12.4 Litigation by Others
.
| |
12.4.1 |
Except for claims regarding intellectual property infringement
covered in Sections 12.1 and 12.2 of this Agreement, in the event
of litigation or arbitration filed by any other person not a party
to this Agreement against either Solectron or NCR (including their
subsidiaries, affiliated companies, agents and employees) relating
to the subject matter of this Agreement, without regard to the
legal theory claimed and without regard to the type of relief
sought (money damages, injunctive, equitable or other relief) or
the loss, damage, injury (including death) alleged, the parties
shall proceed as follows. Neither shall implead the other, file
cross-claims against the other, or otherwise cause the other to be
brought into the proceeding as an additional or third-party
defendant. Any such claims between the parties shall be resolved
pursuant to Section 4 of Article I; for purposes of this
paragraph and any agreement of limitations for commencing
arbitration, no arbitrable claim shall be construed to arise until
the final conclusion of the proceedings initiated by the non-party
to this Agreement, although nothing shall prohibit such an
arbitration from being commenced sooner. |
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12.4.2 |
If both NCR and Solectron are parties defendant in a proceeding
brought by another person, each shall conduct its own defense at
its own expense. If either believes that the other is solely
responsible for the loss, damage or injury (including death)
alleged, it shall have the right, within a reasonable period of
time following its initial notice of the claim, to tender defense
of the claim to the other, which tender shall be accepted or
rejected within sixty days of receipt of the tender; if no response
is received within that time, the tender will be deemed rejected.
In the event tender is rejected, the tendering party shall continue
its defense of the proceeding, and shall have the right to seek
sharing of any final award as set out in Section 12.4.4 below.
If either party so desires, it shall request tender of the entire
defense be made to it, in which case the tender shall be complied
with, and from the time of the tender the requesting party shall,
as between NCR and Solectron, bear all responsibility and all
costs, including judgments, awards, settlements, attorney fees, and
expenses, associated with the claim. |
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12.4.3 |
In the event
only one party is sued, that party will defend the claim. In such
instance, the party sued will keep the other informed of
developments in the
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SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
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claim and will reasonably
consult with the other on settlement negotiations. If that party
believes that the other is solely responsible for the loss, damage
or injury (including death) alleged, it shall have the right,
within a reasonable period of time following its initial notice of
the claim, to tender defense of the claim to the other, which
tender shall be accepted or rejected within sixty days of receipt
of the tender; if no response is received within that time, the
tender will be deemed rejected. In the event tender is rejected,
the tendering party shall continue its defense of the proceeding,
and shall have the right to seek sharing of any final award as set
out in Section 12.4.4 below. If either party so desires, it
shall request tender of the entire defense be made to it, in which
case the tender shall be complied with, and from the time of the
tender the requesting party shall, as between NCR and Solectron,
bear all responsibility and all costs, including judgments, awards,
settlements, attorney fees, and expenses, associated with the
claim.
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12.4.4 |
For purposes of any arbitration conducted between NCR and
Solectron with respect to claims arising out of or ancillary to
litigation or arbitration initiated by another person, NCR and
Solectron agree to allocate any loss, damage, injury (including
death), costs, fees and expenses finally awarded by a competent
tribunal to such other person bringing a claim. Such allocation
shall be determined by the arbitrator in accordance with the extent
to which each party’s supplied components, design, act or
omission, product or manufacturing defect, or other matter caused
the loss, damage, injury (including death), costs, fees, or
expense. All other losses, costs, fees and expenses (including
settlements and each party’s own attorneys fees) will not be
shared unless agreed to in a written agreement separate from this
Agreement. |
12.5 Insurance . Solectron will
maintain, at its expense, General Liability insurance including but
not limited to Premises Operations, Products/Completed Operations,
Contractual Liability, Independent Contractors, Broad Form Property
Damage and Personal/Advertising Injury with minimum limits of US***
combined single limit per occurrence, Excess/Umbrella Liability
insurance with minimum limits of US*** per occurrence. The
insurance will a) name NCR as an additional insured; b) carry an
endorsement that the insurance will be primary; c) if coverage is
on a “Claims Made” form, then a policy must be
maintained during the term of this Agreement and for a period of
five (5) years thereafter. Solectron will also, maintain, at
its expense, Workers’ Compensation/Employer’s Liability
insurance with statutory limits. Each insurance policy required by
this agreement shall be issued by an insurance carrier with an A.M.
Best rating of “A-” or better and shall be kept in
force throughout performance of the services required by this
Agreement. Certificates of insurance showing compliance with these
requirements will be furnished by Solectron prior to the signing of
this Agreement and sent to: NCR, Corp., Risk Management Department,
1700 S. Patterson Blvd. WHQ-3E, Dayton, OH 45479. Certificates will
state that the policy or policies have been issued and are in
force, will not expire or lapse, and will not be canceled or
changed so as to affect the insurance described in he certificate.
Compliance or non-compliance with the requirements of this Section
shall not relieve Solectron from any responsibility to indemnify
NCR or its liability to NCR as specified in any other provision of
this Agreement. Indemnity obligations specified elsewhere in this
Agreement shall not be negated or reduced by virtue of any
insurance carrier’s denial of insurance coverage for the
occurrence or event which is the subject matter of the claim; or
refusal to defend any named insured.
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011907 Final
CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
13.1 Service Level Agreement .
The parties will adhere to the service level agreement set out in
Exhibit F which describes requirements, measurements, and
activities needed to release and support the Products.
13.2 Leading Edge Procurement .
NCR and Solectron will proactively seek opportunities to implement
leading edge procurement processes such as demand pull,
consignment, electronic data interchange, etc. Prior to
implementation, the specific details of such processes shall be
documented and added as an exhibit to this Agreement. Solectron is
to proactively pursue similar activities with its
suppliers.
13.3 Executive Reviews In
addition to other meetings called for in this Agreement, senior
management from NCR and Solectron will meet quarterly for executive
reviews to discuss the status of the relationship as well as
strategic and other important issues. Solectron will also provide
and review reasonable information related to its financial status
to the extent the same has been disclosed to the market.
13.4 Access to Production .
Solectron will not allow access by competitors of NCR to the
dedicated line that produce Products or to any other production
line or area that has Products in it.
13.5 Performance Clause .
NCR’s failure to perform any of its responsibilities set
forth in this Agreement or a transition plan, other than
NCR’s obligation to pay undisputed amounts will not
constitute a material breach of this Agreement or be deemed to be
grounds for termination of this Agreement by Solectron. However,
Solectron’s nonperformance of its obligations under this
Agreement or a transition plan will be excused if and to the extent
(i) such nonperformance results from NCR’s failure to
perform its responsibilities set forth in this Agreement or
transition plan, and (ii) Solectron provides NCR with
reasonable notice of such nonperformance and use commercially
reasonable efforts to perform notwithstanding NCR’s failure
to perform and NCR fails to cure such nonperformance within thirty
(30) days of such notice.
13.6 Confidentiality Term . The
period for protection of Confidential Information related to this
Article II shall be 6 years from date of receipt.
13.7 Hiring Employees . Except
for those employees identified to Solectron under the transition
pursuant to Section 1.8, Neither NCR or Solectron will not
solicit or hire any employee of the other who became known to the
other party as part of this transaction for a period *** with the
other party. Nothing in this Section will prevent a party from
offer to hire or hiring an employee of the other who answers a
general solicitation of employment including, without limitation,
media advertisement, and position postings on websites.
13.8 New Product Introduction .
For Products to be built in Brazil only and for Tidel Products,
Solectron may have new product introduction take place in Brazil or
Guadalajara respectively. For replacement Products for Products
then currently being manufactured in Guadalajara and meeting the
requirements of this Agreement, Solectron may have new product
introduction take place in Guadalajara. Except as otherwise
mutually agreed by the parties, for all other Products, Solectron
shall have new product introduction take place in Columbia,
SC.
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011907 Final
CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
13.9 Diversity Plan . It is
NCR’s policy to ensure that maximum opportunity is afforded
to certified minority and women-owned businesses to participate as
suppliers, contractors, and subcontractors of goods and services to
NCR. Supplier agrees to reasonably cooperate with
NCR to develop a mutually agreeable diversity plan.
14.1 Unless earlier terminated under any
other provision of this Agreement, this Agreement will continue for
an initial term as set out on the first page of this Agreement and,
after that, will be automatically continue in force until NCR or
Solectron gives 180 days notice of termination, or unless earlier
terminated under any other provision of this Agreement. In the
event that NCR should terminate this agreement other than pursuant
to 14.2 for any reason prior to the fifth anniversary of the
Effective Date, NCR shall refund a pro-rated portion of the
licensing fee set forth in Section 1.7. The pro-ration shall
be done a 60 month straight line basis from the Effective
Date.
14.2 Termination for Breach
a) NCR may terminate this Agreement upon
30 days prior written notice to Solectron for failure of Solectron
to fulfill any of its material obligations, including failure due
to causes specified in Section 5.3 of Article I; unless during
such 30 day period Solectron remedies the failure, in which case
this Agreement will continue in effect as if the failure had not
occurred. During the initial term of this Agreement, the following
shall be deemed material breaches by Solectron: moving production
of a Product to a different manufacturing location from
Solectron’s Columbia, SC or Guadalajara, MX locations
respectively, other than in accordance with
Section 11,
b) NCR may terminate this Agreement if
Solectron becomes bankrupt, insolvent, or makes a general
assignment for the benefit of creditors. If NCR becomes insolvent,
Solectron may alter the payment terms set out in Section 5.5
and or credit terms related to inventory purchasing.
c) Solectron may terminate this
Agreement upon 30 days prior written notice to NCR for failure of
NCR to pay any undisputed amounts due Solectron in accordance with
the terms of this Agreement unless during such 30 day period NCR
remedies the failure, in which case this Agreement will continue in
effect as if the failure had not occurred.
d) Termination of this Agreement by
either Solectron or NCR under this Section will not prejudice or
otherwise affect any manufacturing license to which NCR may be
entitled. Termination of this Agreement by either party will not
prejudice it or the other party to recover any money amounts or
require performance of any obligations due at the time of the
termination.
14.3 The following Sections will survive
termination of this Agreement: Sections 1, 3, 4, 5.4, 5.9, 5.10,
5.11, 5.16 of Article I; Sections 1.1, 1.5(b)(2) – (4), 1.7,
1.8(b) – (d), 6, 7, 8, 10, 12, 13.7, 14.4, 15 of Article II;
Ex B—6(D) and the continuation engineering portions of
Exhibit F.
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CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
14.4 In the event of termination or
expiration of this Agreement, or in the event NCR decides, to
transfer manufacturing of a Product or Part to another person,
Solectron will use reasonable efforts to efficiently transition the
manufacture of Products or Parts to the other person. Solectron
will bear its own costs of such transition except in the event of
expiration of this Agreement or termination of this Agreement by
Solectron for NCR’s breach in which case NCR will pay for
Solectron’s reasonable out of pocket costs for transitioning
the manufacture of Products or Parts to such other person.
Solectron will deliver to NCR and grant NCR, and any NCR sublicense
the worldwide, perpetual, royalty free right to copy, use, and
create derivative works from the tooling and manufacturing test
software used in production of the Products or Parts solely for the
purpose of manufacturing and supporting products and parts that NCR
will sell; provided that Solectron will have no obligation to
provide any manufacturing test software which was developed by
Solectron for use with the manufacture of products other than the
Products and Parts. Solectron will grant NCR license to copy, use,
and create derivative works from such non NCR specific
manufacturing test software solely for the purpose of manufacturing
and supporting products and parts that NCR will sell for a
reasonable royalty taking into account any value that NCR has
previously provided. NCR may exercise the foregoing licenses
directly or have another person exercise them on its behalf. In
addition, if NCR requests Solectron to consult with it or its
manufacturer on questions related to the manufacturing of Products
or Parts, Solectron will provide such consultation on a reasonable
time and materials basis.
| 15. |
INTELLECTUAL PROPERTY |
15.1 Each party will retain ownership of
any IPR it had prior to the Effective Date of this Article or
developed independently and without NCR funding or
reimbursement.
15.2 NCR will own any IPR that relates
to a Product, including its design; use; features; functions;
production (including bills of materials, authorized vendor lists,
Product specific build/test documentation, Product specific
assembly instructions, Product specific build times, etc); NCR
unique tooling and equipment; quality, serviceability, support,
diagnostic and test data, tools and programs usable for maintenance
or support of the Products. Solectron hereby transfers to NCR any
such IPR that it creates as part of the services provided under
this Article and will provide such IPR in any form reasonably
requested by NCR. Solectron will do any acts necessary to complete
the transfer of IPR described herein. Solectron shall retain any
IPR it creates that relates to Solectron’s manufacturing
processes and procedures.
15.3 For the purpose of this
Section 15, “IPR” shall mean all patents,
copyrights, trade secrets, confidential information, design rights,
trade dress, trade marks, service marks, know-how, inventions,
ideas, works of authorship, and other intellectual property rights
in any jurisdiction in the world and any applications or
registrations for the foregoing.
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NCR Agreement #
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EXHIBIT
A
PRODUCTS AND
SPECIFICATIONS
| |
1.0 |
PRODUCT SPECIFICATIONS |
NCR will provide Solectron a
New Product Specification for each NCR product or feature to be
developed by Solectron. The Product Specification will be comprised
of one or more NCR produced documents contained in NCR’s
Merlin system that, in their entirety, provide the required Product
Information.
|
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|
Class Number
|
|
Description
|
|
|
| 3050 |
|
Tidel Lobby
ATM |
|
|
| 3100 |
|
Tidel Lobby
ATM |
|
|
| 3300 |
|
Tidel Lobby
ATM |
|
|
| 3400 |
|
Tidel Lobby
ATM |
|
|
| 3600 |
|
Tidel Lobby
ATM |
|
|
| 3800 |
|
Tidel Lobby
ATM (pc based product with sidecar) |
|
|
| 3700 |
|
Tidel
through the wall ATM |
|
|
| 5867 |
|
NCR ATM
(Brazil) |
|
|
| 5868 |
|
NCR ATM
(Brazil) |
|
|
| 5865 |
|
NCR ATM
(Brazil) |
|
|
| 5886 |
|
NCR ATM
(Waterloo) |
|
|
| 5877 |
|
NCR ATM
(Brazil & Waterloo) |
|
|
| 5890 |
|
NCR ATM
(Waterloo) |
|
|
| 6676 |
|
NCR ATM
(Waterloo) |
|
|
| 9820 |
|
Payments |
|
|
| 9810 |
|
Payments |
|
|
| 7781 |
|
Payments |
|
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| 9814 |
|
Payments |
|
|
| 9824 |
|
Payments |
|
|
| Xxx |
|
Branch
Assist Solution |
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|
Kits for the above products
Spares for the above products and all
discontinued products
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NCR Agreement #
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EXHIBIT
B
PRICING, LEADTIME,
FLEXIBILITY, ORDER RESCHEDULING, CANCELLATION, AND
RETURNED EVALUATION
EQUIPMENT SCHEDULE
1.1 Pricing Matrix . As part of
the transition, the parties will develop a matrix of features for
each Product class and associated major module kits (including CPM,
BNA, deposit automation HLAs, cores, fascias, depositories,
shutters). The matrix will set out the feature, the material cost,
the material burden, freight, direct labor, and profit for that
feature. Solectron will use the matrix to price specific orders for
Products. However, Solectron will use its then current material
cost for material and freight subject to the cost saving sharing
set out in Section 2.5 of Exhibit B below. The matrix pricing
will not exceed the quote attached in Attachment 1 except for
material changes in the market price of fuel, raw materials, Brazil
labor costs, and/or the scope of services. In the event any of the
exceptions apply, the parties agree to negotiate in good faith a
corresponding change to the matrix pricing along with any
opportunities to mitigate the change. The companies will work
together in good faith to resolve issues that arise due to the
complexity of the transfer of the business.
1.2 Volume Discussion . If
Solectron believes that the unit volume of business has materially
declined, the parties will meet and discuss the issue in good
faith.
1.3 Parts and Kits . Pricing for
spare Parts and Kits will be calculated on a material cost plus
***% for labor, inbound freight overhead and profit, plus outbound
freight if any.
1.4 Turns . The Product pricing
provided to NCR has been based on the achievement of *** inventory
turns. This measure of turns shall include any finished goods
inventory that NCR asks Solectron to hold. Solectron will use
reasonable efforts to work with NCR and endeavor to exceed ***
inventory turns by the end of one full calendar quarter after
transition of a Product line. In the event that *** inventory turns
are not consistently achieved measured at the end of each calendar
quarter and such failure is not caused by Solectron or a anomalous,
one off event, NCR and Solectron will meet to determine an
appropriate action plan to achieve at least *** inventory
turns.
2.1 Calendar 2007 . *** will pay
*** US$*** as set out in Section 1.6(a) as an *** for cost
reductions that *** will *** through calendar year 2007. During
calendar year 2007, Solectron shall retain all actual cost
reductions it implements.
2.2 Calendar 2008 and 2009 . At
the beginning of calendar 2008, *** will *** the pricing to give
*** the *** for 2007. In 2008 and 2009, *** a *** of ***% cost
reduction on *** controlled materials so long as *** has control of
sourcing at least ***% of the value of the bill of materials.
“Control of sourcing” for a component shall mean that
*** controls the authorized vendors for the component, the terms
and conditions of doing business with those vendors (subject to the
terms of this Agreement) and pricing negotiations. In 2008 and
2009, *** a *** of ***%
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CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
additional cost reduction of materials
so long as *** is engaged in *** services to provide alternative
technical and/or engineering solutions to a Product that meets
relevant *** Product specifications and reduces Product cost for
(“*** Cost Reductions” or “***”). To
achieve the *** targets, there will have to be a collaborative
effort between NCR and Solectron *** and *** teams pursuant to
Section 2.7 below and the approval of the *** for alternative
technical and/or engineering solutions to a Product that provides
equivalent functionality at a lower cost. NCR shall not be
obligated to approve any ***, however, *** acknowledges that the
failure to approve *** or any delay in approval may impact ***
ability to *** the *** ***% cost reduction.
2.3 *** . For calendar years 2008
and 2009, within 10 days after the conclusion of November of each
calendar year, Solectron shall prepare and submit to NCR a
statement setting forth the year to date cost reductions realized
by NCR as well as an estimate of the cost reductions that NCR will
realize in the month of December (“*** Statement”). If
NCR disagrees with an item contained in a *** Statement, NCR may,
within ten (10) days after delivery of such *** Statement to
NCR, deliver a notice to Solectron disagreeing with such
calculations and setting forth NCR’s reasons for the
disagreement. Any such disputes shall be resolved in accordance
with the dispute resolution procedures contained in the
Section 4 of Article 1. In the event that NCR does not deliver
a notice to Solectron disagreeing with such amount within said 10
days, NCR will be deemed to have accepted such calculation. In the
event that the relevant conditions to deliver the cost savings in
Section 2.2 above have been met and Solectron has not
delivered the cost savings as evidenced by the *** Statement, ***
will *** to *** for the *** the *** amount and the *** amount prior
to the end of NCR’s fiscal year. Prior to the end of January
of the following year, the parties will *** any *** versus
***.
2.4 After 2009 Cost Targets
.
a) Prior to the beginning of each
calendar year, NCR will propose reasonable cost reduction targets
taking into consideration past performance and the then current
market environment for the Product models NCR wants Solectron to
produce.
b) In the event that Solectron and NCR
cannot achieve agreement on targeted price reductions, NCR shall
provide sufficient information and documentation to demonstrate
that Solectron is not competitive and the areas in which Solectron
is not competitive and that the cost reduction targets requested by
NCR are reasonable. Based upon the information provided, Solectron
shall either agree to the requested cost reduction targets or
provide NCR with sufficient information and documentation to
validate that Solectron’s position on cost reductions are
reasonable. In the event that the parties still cannot reach
agreement on the cost reduction target, Solectron and NCR agree to
resolve the dispute pursuant to Section 4 of Article
I.
c) NCR acknowledges that
Solectron’s ability to achieve cost reductions is dependent
upon NCR’s cooperation in approving engineering and BOM
change proposals.
2.5 Cost Sharing . Solectron
shall immediately pass through all NCR initiated cost savings.
After 2007, for Solectron initiated cost savings, with NCR’s
prior agreement, Solectron shall retain such saving until the
agreed to non-recurring engineering or tooling costs are offset.
After that, for 90 days Solectron shall pass through to NCR ***% of
such cost savings. After the first 90 day period, Solectron shall
pass through to NCR ***% of such cost savings. After the
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CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
second 90 day period, Solectron shall
pass through to NCR ***% of the cost savings. On January 1,
2008, Solectron will begin sharing in accordance with the above any
cost savings Solectron has initiated in 2007.
2.6 NRE, Tooling and Other One Time
Expenses . Solectron will identify to NCR in writing any one
time charges for a Product change that Solectron wants NCR to
reimburse for. As mutually agreed by the parties, i) Solectron
***that amount ***, ii) Solectron may ***that amount through ***,
or iii) NCR may*** for ***.
2.7 Design Cost Reduction
(“DCR”) To achieve the DCR, the parties will use
reasonable efforts to perform the following roles and
responsibilities:
| |
a) |
NCR Roles and Responsibilities: |
1) Provide relevant technical
information reasonably requested by Solectron.
2) Provide reasonable access
to relevant technical contacts and relevant technical support
within NCR which may include engineering, industrial design,
software development, regulatory compliance testing.
3) Review and approve the DCR
proposals as prepared and submitted by Solectron.
4) Actively participate in
design reviews and project status reviews with
Solectron.
5) Provide timely feedback on
all proposed concepts and designs.
6) Sign off on project phase
gates once all Solectron deliverables are met.
7) Sign off on project
financials by phase once all Solectron deliverables are met for
each project phase; and
8) Review and sign off on
Engineering Release Notices to allow manufacturing cut-in of the
new design features.
| |
b) |
Solectron Roles and Responsibilities: |
1) Solectron will prepare and
present DCR proposal to NCR for review and approval. The proposal
will include a statement of work, estimated NRE, project schedule,
key project milestones, technical risks, any additional
dependencies on NCR above and beyond those mentioned above, and
Solectron deliverables.
2) Once approved, SLR will
manage each DCR effort like a funded engineering
project.
3) SLR will request weekly or
bi-weekly status review calls with NCR as required.
4) SLR will execute to the
agreed upon Statement of Work and work towards the design cost
reduction target.
3. NEW PRODUCT/REPLACEMENT PRODUCT
COST: Solectron will quote for new Products ***with the cost
structure for the ***.
4. PRICING FOR THIRD PARTY PRODUCTS,
STAGED ITEMS, AND PASS-THROUGH ITEMS:
Definition of Staging - Refer to Exhibit
F.
NCR will determine whether a Product
requires staging. NCR will communicate its staging requirements via
a Customer/Purchase Order.
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CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
Schedule of Services - NCR anticipates
three levels of third party product activities:
A. Consigned Products
Staged/Integrated by Solectron
If NCR purchases products
(including software) to be integrated into a staged system, NCR
will consign the products to Solectron and will pay Solectron ***%
of the value of the third party product for the handling, plus the
the time and material expended for the integration of the product.
The hourly rate for such integration will be based on the agreed to
labor rates in each manufacturing facility. NCR agrees that it will
use its reasonable efforts to consign products only as necessitated
by specific NCR customer requirements.
B. Products Acquired
and Staged/Integrated by Solectron
If NCR requests Solectron to
purchase third party products (including software) on NCR’s
behalf, NCR will pay Solectron ***% of the value of the third party
product for the cost of acquisition and handling, plus the time and
material expended, for the integration of the product. As requested
by NCR, Solectron will manage purchased products, however, NCR
retains the right to source, manage, and integrate such products
either by NCR, or by other suppliers depending on NCR’s
business needs, including customer requested and/or deal specific
products, such as non-NCR brand and non-Solectron provided computer
products.
C. Pass-Through
Items
If NCR requests Solectron to
purchase pass-through items that require no manufacturing assembly
services (e.g. ATM stands, software, documentation, kits, spare
parts, etc.) on its behalf, NCR will pay Solectron ***% of the
value of the pass-through items for the cost of acquisition and
handling, including the consolidation of the pass-through item and
manufactured Products at point of shipment plus inbound freight
costs.
5. PRICING FOR MANUFACTURING
SERVICES:
A. Special Customer
Engineering Requests (SCER’s)
Solectron will receive a one
time fee for determining the manufacturing capability, actual setup
cost, and NCR price for each NCR SCER. This fee will not exceed the
actual costs associated with the assessment. If NCR approves and
releases the SCER through a DR, Solectron will execute all
manufacturing activities to support the SCER and will invoice NCR
for the setup cost on an actual time and material basis.
B.
Prototypes
For all preproduction
Products, Solectron will provide a written quote for each *** model
requested by NCR based on the agreed pricing methodology for
production Products.
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011907 Final
CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
6. FORECAST/ORDER
PLACEMENT:
A. NCR Forecast
.
1) Forecasts are for planning
purposes only, and are not binding, NCR will update Forecasts at
least monthly and provide a rolling *** (***) month forecast.
Solectron will plan resources required to meet the *** (***) month
rolling Forecast. Solectron will also utilize the Forecast to
identify long lead-time material issues and capacity constraints.
NCR will update spare Parts forecasts monthly.
The *** (***) month rolling
forecast will represent the major top line products and quantity by
month.
2) NCR will prepare detailed
feature mix forecast to support the “top line product
family” Forecasts. NCR will provide input to Solectron during
the monthly Forecast/Supply Plan review. NCR expects that Solectron
will continue to focus on initiatives that are demand-pull type
processes (Kanban, Micro-Schedule, VMI, etc.).
B. Placement/Acceptance
Purchase Orders . NCR will place either an advanced
purchase requisition, or an order (together referred to as
“POs”). Solectron will build the Products covered by a
PO so as to meet the committed ship date in accordance with the
terms of this Article. Any Sales Order Solectron is unable to
fulfill shall be communicated by Solectron electronically, or in
writing, to NCR with an objective of one business day after
receipt, including identification of the issue(s) and/or
constraint(s) affecting fulfillment of the order. Otherwise, all
Sales Orders will be deemed accepted by Solectron.
C.
Flexibility
1) Forecast
Flexibility,
a) Baseline
Flexibility . Solectron shall use its reasonable best efforts
to meet the following stated flexibility requirements
(“Baseline Flexibility Requirements”). NCR agrees to
cooperate with Solectron by taking reasonable actions to facilitate
the achievement of the flexibility requirements. The percentages
outlined below are representations as total aggregate for all
products and are not meant to be limitations for individual
products:
1)
Products:
Flexibility for
Systems
|
|
|
|
|
|
|
|
+***%
|
|
***
days |
|
|
|
|
|
|
|
|
|
+***%
|
|
***
days |
|
|
|
|
|
|
|
|
|
+***%
|
|
***
days |
|
|
|
|
|
|
|
|
|
+/-***%
|
|
***+
days |
|
|
|
|
|
|
|
|
|
| Solectron/NCR-Confidential |
|
Page 35 |
|
|
011907 Final
CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
2) Spare Parts
Flexibility (as forecasted on a part number basis)
+***% of ***
b) NCR’s current
process has shown that flexibility within the percentages listed is
available via existing systems, capabilities, overhead/labor models
currently in use, Flexibility and changes within the percentage
parameters are not subject to additional fees and charges by
Solectron. Solectron will exercise all reasonable commercial
efforts to adjust its labor and supply base and to reallocate any
material that may be impacted by the flexibility schedule indicated
above.
c) Stretch Flexibility
. On occasion, NCR will require flexibility as set out below
(“Stretch Flexibility Requirements”). NCR and Solectron
will take reasonable actions to facilitate the achievement of the
Stretch Flexibility Requirements. In the event that NCR’s
aggregate POs are outside of the Baseline Flexibility Requirements,
Solectron will use reasonable best efforts to meet the requested
additional demand, subject to material availability and NCR will
work in good faith with Solectron in the event that Solectron
incurs extraordinary costs in meeting the additional demand. Prior
to incurring an additional fee or charge associated with a
requested flexibility action on a PO, Solectron will inform NCR of
such a possibility in writing within one (1) business day of
ascertaining such a possible charge. NCR will then give written
direction regarding the requested flexibility action, which may
include the authorization and acceptance of any premiums or special
charges resulting from its flexibility direction, if applicable to
the directed flexibility action.
1)
Products:
Flexibility for
Systems
|
|
|
|
|
|
|
|
+***%
|
|
***
days |
|
|
|
|
|
|
|
|
|
+***%
|
|
***
days |
|
|
|
|
|
|
|
|
|
+***%
|
|
***
days |
|
|
|
|
2) Order
Flexibility
a) Configuration Changes. If
NCR requests a change to a configuration *** days prior to the
committed ship date, Solectron will make such change at no
additional charge with best efforts to maintain the committed ship
date. Configuration changes NCR requests within *** days of the
committed ship date will be subject to a mutually agreed
charge.
b) Administrative Changes.
NCR may request administrative changes (such as information on the
order) to an order at any time prior to shipment at no
charge.
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| Solectron/NCR-Confidential |
|
Page 36 |
|
|
011907 Final
CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
D. EXCESS AND OBSOLETE
INVENTORY
1) Definition .
E&O is defined as Inventory on-hand and/or on-order in excess
of the *** month Forecast. Any management adjustments to the
computed excess position must be mutually agreed to by both
parties.
2) Solectron Report
. Solectron shall, on a monthly basis, report to NCR on the
Forecasted Materials including listing of materials which, based on
a *** month Forecast, Solectron believes are excess and obsolete
(“E&O”). Material will not be designated as E&O
until such time as it is declared E&O by NCR. The report will
list (a) the reason Solectron believes an item has E&O
status; (b) whether item is an NCR E&O Item, or Solectron
E&O Item (all as defined below); and (c) the E&O
materials which had E&O status for more than 90
days.
3) E&O
Management . Solectron agrees to undertake commercially
reasonable efforts to cancel all applicable components purchase
orders and reduce component inventory through return for credit
programs or allocate components for alternate programs if
applicable to minimize E&O. Solectron will undertake these
activities in a manner consistent with the prior activities of ***
NCR ***. NCR will take like action to mitigate E&O through
available channels through product or parts sale or other
disposition. Solectron shall reasonably demonstrate to NCR that
Solectron has done so, and that Solectron has purchased the subject
materials using recognized Economic Order Quantities, ABC buy
policy, long lead time component management, VMI, and leading edge
procurement and demand pull principles. Solectron and NCR will meet
***to review the status of the E&O inventory, reserves, and any
disposition activities.
4) E&O Management
and Vendors . Solectron will use reasonable efforts to
incorporate flexibility provisions and other provisions in
Solectron’s vendor agreements to minimize E&O. Solectron
will pursue commercially reasonable efforts to maintain and improve
upon these supply terms. Where such provisions would result in
higher prices, the parties will meet and discuss an appropriate
solution. NCR will retain responsibility for any charges incurred
within the supply base for cancellation related charges outside of
the flexibility parameters.
5) E&O Status
Caused by NCR . The parties agree that an item’s
E&O status shall be deemed to be caused by NCR if it results
from: (a) program cancellation or unique configuration
changes; (b) product design changes; (c) a substantial
deterioration in NCR’s business; and (d) a Master
Purchase Order variance which is specifically requested by NCR that
is outside of the flexibility ranges set forth on Exhibit B. Such
items are “NCR E&O Items.”
6) E&O Status
Caused by Solectron . The parties agree that an
item’s E&O status shall be deemed to be caused by
Solectron if it results from: 1) a mistake in ordering the item, 2)
a Solectron initiated change of suppliers for the item, 3)
negligence in the ordering process such as insufficient staffing or
untimely rescheduling/cancellation activities which are
inconsistent with current NCR practices, and 4) ordering outside
the forecast. Such items are “Solectron E&O
items”.
|
|
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| Solectron/NCR-Confidential |
|
Page 37 |
|
|
011907 Final
CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
7) E&O Inventory
Consignment . At the time of each asset transfer for a
Product line, NCR will consign to Solectron any E&O inventory
NCR has for the Product line as of the transfer date. NCR shall not
charge Solectron for such E&O consigned inventory and Solectron
will not charge NCR a carrying charge for holding consigned
inventory.
8) On-going Quarterly
E&O Payment . Each quarter, Solectron will review with
NCR the current E&O exposure and performance to plan. If the
current E&O exposure is greater than Solectron’s E&O
reserve, then NCR will remit to Solectron ***% of the variance
caused by NCR E&O items and ***% of the variance caused by
Solectron E&O items. NCR may, at its option, elect to purchase
some E&O items and consign such E&O items to Solectron
instead of remitting the relevant variance.
9) Disposition and
Recovery of E&O Items . Solectron will utilize
reasonable commercial efforts to attain maximum financial recovery
of the identified E&O inventory and will recommend the
appropriate disposition timing and method to NCR for concurrence.
The proceeds from material disposed by Solectron will be included
in the current E&O exposure. On NCR E&O items, NCR will
receive ***% of the proceeds and Solectron will receive ***% once
NCR has paid for the E&O item through the above process.
Solectron will receive ***% of the proceeds on Solectron E&O
items. NCR will utilize reasonable commercial efforts to assist in
the mitigation of the E&O exposure.
F. Inventory Carrying
Cost.
NCR plans to purchase all
E&O items which have had E&O status of greater than ***
months requirements forecast visibility for more than 90 days.
However, NCR, at its option may pay Solectron an inventory carrying
cost of ***% per month for such E&O Items which have had
E&O status for more than 90 days. At the end of the 90 days,
such items that NCR does not purchase would be subject to the ***%
inventory carrying cost per full month until dispositioned from
Solectron. Inventory Carrying Costs apply only to declared E&O.
In the event that Solectron desires to warehouse such Products and
Parts subject to inventory carrying costs, it will obtain
NCR’s written consent for doing so. Otherwise no additional
charge for warehousing shall apply to NCR. Inventory carrying costs
shall not apply to NCR if inventory aging is attributable to
Solectron or its suppliers.
7. PURCHASE ACTIVITY
REPORTING
To the extent the *** do so
prior to the Effective Date, Solectron shall do the
following:
1) Solectron will provide, on
a weekly basis, reports indicating the level of order and shipment
activity. Solectron will provide NCR electronic access to these
reports via the Web or through a direct dial-up
connection.
2) Solectron will provide, on
a weekly basis, reports indicating order delivery status. The
report should include the following: status by customer order
indicating due date, projected ship date, listing of any delinquent
orders with projected recovery date, and root cause analysis of
delinquencies, etc.
8. LEADTIMES
The lead times for the
Products are as follows:
|
|
|
|
Product
|
|
Lead Time in Calendar
Days
|
|
5867, 5868, 5865
|
|
*** |
|
5877
|
|
*** |
|
5886
|
|
*** |
|
5890
|
|
*** |
|
9820, 9810, 7781, 9814, 9824
|
|
*** |
|
Branch Assist Solution
|
|
*** |
|
|
|
|
|
| Solectron/NCR-Confidential |
|
Page 38 |
|
|
011907 Final
CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
Solectron will use best
efforts to fulfill orders NCR designates within *** days for
Products and same day for Parts.
For Product with
“Tidel” as part of the description in Exhibit A, ***%
of the monthly forecast must be available for a one day lead time,
***% of forecast available for a *** day lead time, and ***% of
forecast for a lead time of more than *** days.
9. REWORK PRICING:
A. Rework of Solectron
finished goods inventory for Non Warranty Rework
If NCR wishes rework done on
a unit that Solectron has in its finished goods inventory (outside
of a warranty claim), NCR will issue a PO for the rework on the
unit. Solectron will refurbish and reconfigure the unit to meet the
PO and to bring a Product to the then current production level
components and quality level. The refurbishment will include the
following:
1. Reconfigure per the terms
of the new PO and production testing
2. Scrap incidental obsolete
material from the reconfiguration
NCR will pay for the
materials cost of the Product unit as reconfigured, plus the
conversion cost of the original unit plus the $US***
reconfiguration charge.
Solectron will track the
costs associated with this activity and a quarterly true up of
actual material and labor costs against the total refurb fees
charged in that quarter.
If a party believes that the
$*** refurb charge is too low or too high in light of the actual
refurb costs, the parties will negotiate in good faith an
adjustment to such refurb charge.
B. Rework of NCR finished
good inventory
If NCR wishes rework done on
a unit (outside of a warranty claim), NCR will consign the unit to
Solectron and NCR will place a purchase order for rework services.
Solectron will refurbish and reconfigure the unit to meet the PO
and bring a Product to the then current production level components
and quality level. The refurbishment will include the
following:
1. Reconfigure per the terms
of the new PO and production testing
|
|
|
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|
| Solectron/NCR-Confidential |
|
Page 39 |
|
|
011907 Final
CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
2. Scrap incidental obsolete
material from the reconfiguration
The charge for refurbishment
and rework shall be $US*** plus the net cost of Parts added and
removed.
Solectron will track the
costs associated with this activity and a quarterly true up of
actual material and labor costs against the total refurb fees
charged in that quarter.
If a party believes that the
$*** refurb charge is too low or too high in light of the actual
refurb costs, the parties will negotiate in good faith an
adjustment to such refurb charge.
C. The refurb rate for kits
will be as mutually agreed on a case by case basis.
10. CONTINUOUS
IMPROVEMENTS
All items listed in this
Exhibit will be managed via a continuous improvement process. The
process to be used is the Supplier Value Add (SVA) process.
Solectron agrees to commit appropriate resources to facilitate this
process.
|
|
|
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|
| Solectron/NCR-Confidential |
|
Page 40 |
|
|
011907 Final
CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
Exhibit B Attachment 1
Matrix Pricing Not To
Exceed
|
|
|
|
|
|
|
|
Pricing Quote by
(Solectron)
|
|
|
|
High Mat’l |
|
Low Mat’l |
|
ATM 5877 - Waterloo
|
|
Total
Cost |
|
$*** |
|
$*** |
|
Volume ***
|
|
Material |
|
$*** |
|
$*** |
|
|
Freight |
|
$*** |
|
$*** |
|
|
Material
Burden |
|
$*** |
|
$*** |
|
|
Labor |
|
$*** |
|
$*** |
|
|
Profit |
|
$*** |
|
$*** |
|
|
Test |
|
$*** |
|
$*** |
|
|
Pack |
|
$*** |
|
$*** |
|
|
|
|
|
ATM 5886 - Waterloo
|
|
Total
Cost |
|
$*** |
|
$*** |
|
Volume ***
|
|
Material |
|
$*** |
|
$*** |
|
|
Freight |
|
$*** |
|
$*** |
|
|
Material
Burden |
|
$*** |
|
$*** |
|
|
Labor |
|
$*** |
|
$*** |
|
|
Profit |
|
$*** |
|
$*** |
|
|
Test |
|
$*** |
|
$*** |
|
|
Pack |
|
$*** |
|
$*** |
|
|
|
|
|
ATM 5890 Waterloo
|
|
Total
cost |
|
$*** |
|
$*** |
|
Volume ***
|
|
Material |
|
$*** |
|
$*** |
|
|
Freight |
|
$*** |
|
$*** |
|
|
Material
Burden |
|
$*** |
|
$*** |
|
|
Labor |
|
$*** |
|
$*** |
|
|
Profit |
|
$*** |
|
$*** |
|
|
Test |
|
$*** |
|
$*** |
|
|
Pack |
|
$*** |
|
$*** |
|
|
|
|
|
ATM 5867 (Brazil Only)
|
|
Total
cost |
|
$*** |
|
$*** |
|
Volume ***
|
|
Material |
|
$*** |
|
$*** |
|
|
Freight |
|
$*** |
|
$*** |
|
|
Material
Burden |
|
$*** |
|
$*** |
|
|
Labor |
|
$*** |
|
$*** |
|
|
Profit |
|
$*** |
|
$*** |
|
|
Test |
|
$*** |
|
$*** |
|
|
Pack |
|
$*** |
|
$*** |
|
|
|
|
|
| Solectron/NCR-Confidential |
|
Page 41 |
|
|
011907 Final
CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
|
|
|
|
|
|
|
|
Payment 9810
|
|
Total
cost |
|
$*** |
|
$*** |
|
Volume ***
|
|
Material |
|
$*** |
|
$*** |
|
Columbia
|
|
Freight |
|
$*** |
|
$*** |
|
|
Material
Burden |
|
$*** |
|
$*** |
|
|
Labor |
|
$*** |
|
$*** |
|
|
Profit |
|
$*** |
|
$*** |
|
|
Test |
|
$*** |
|
$*** |
|
|
Pack |
|
$*** |
|
$*** |
|
|
|
|
|
Payment 9820
|
|
Total
Cost |
|
$*** |
|
$*** |
|
Volume ***
|
|
Material |
|
$*** |
|
$*** |
|
Columbia
|
|
Freight |
|
$*** |
|
$*** |
|
|
Material
Burden |
|
$*** |
|
$*** |
|
|
Labor |
|
$*** |
|
$*** |
|
|
Profit |
|
$*** |
|
$*** |
|
|
Test |
|
$*** |
|
$*** |
|
|
Pack |
|
$*** |
|
$*** |
|
|
|
|
|
Tidel 3300
|
|
Total
Cost |
|
$*** |
|
$*** |
|
Volume ***
|
|
Material |
|
$*** |
|
$*** |
|
|
Freight |
|
$*** |
|
$*** |
|
|
Material
Burden |
|
$*** |
|
$*** |
|
|
Labor |
|
$*** |
|
$*** |
|
|
Profit |
|
$*** |
|
$*** |
|
|
Test |
|
$*** |
|
$*** |
|
|
Pack |
|
$*** |
|
$*** |
|
|
|
|
|
Tidel 3600
|
|
Total
Cost |
|
$*** |
|
$*** |
|
Volume ***
|
|
Material |
|
$*** |
|
$*** |
|
|
Freight |
|
$*** |
|
$*** |
|
|
Material
Burden |
|
$*** |
|
$*** |
|
|
Labor |
|
$*** |
|
$*** |
|
|
Profit |
|
$*** |
|
$*** |
|
|
Test |
|
$*** |
|
$*** |
|
|
Pack |
|
$*** |
|
$*** |
|
|
|
|
|
| Solectron/NCR-Confidential |
|
Page 42 |
|
|
011907 Final
CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
EXHIBIT
C
QUALITY
Quality Exhibit
C
Table of Contents
|
|
|
|
|
|
Exhibit Cl - Quality
|
|
44 |
|
1.0
|
|
Purpose |
|
44 |
|
2.0
|
|
Scope |
|
44 |
|
3.0
|
|
Terms and
Definition |
|
44 |
|
4.0
|
|
Quality
Performance Requirements |
|
46 |
|
5.0
|
|
Notification
of Change |
|
51 |
|
6.0
|
|
RMA
Requirements |
|
53 |
|
7.0
|
|
Formal
Reviews and Audits |
|
53 |
|
8.0
|
|
Reliability
Programs |
|
53 |
|
9.0
|
|
NCR Supplier
Management Process |
|
55 |
|
10.0
|
|
Weights and
Measures |
|
56 |
|
11.0
|
|
Laser
Safety |
|
56 |
|
12.0
|
|
Supplier
Responsibilities |
|
|
|
|
|
Exhibit C2- Performance Requirements and
Metrics
|
|
57 |
|
1.0
|
|
Purpose |
|
57 |
|
2.0
|
|
Metrics |
|
57 |
|
3.0
|
|
NCR 1998
Balanced Scorecard Objectives |
|
59 |
|
|
|
Exhibit C3 - Software Quality Assurance
- Replication and Development Installation Services
|
|
61 |
|
1.0
|
|
Definitions |
|
61 |
|
2.0
|
|
Gold Drive
Loads |
|
61 |
|
3.0
|
|
Records
Keeping |
|
61 |
|
4.0
|
|
General |
|
62 |
|
5.0
|
|
Additional
Support Requirements |
|
62 |
|
|
|
*** or *** of Existing ***
|
|
62 |
|
1.0
|
|
Statements
of Work |
|
62 |
|
2.0
|
|
Acceptance
Testing |
|
63 |
|
3.0
|
|
Closed Loop
Corrective Action |
|
64 |
|
4.0
|
|
Additional
Support Requirements |
|
64 |
|
|
|
|
|
| Solectron/NCR-Confidential |
|
Page 43 |
|
|
011907 Final
CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
Exhibit Cl –
Quality
1.0 PURPOSE
The purpose of Exhibit Cl (Quality) is
to provide an overview of the quality requirements which are
directly linked to the metrics defined in Exhibit C2 (Performance
Requirements and Metrics). Additional requirements may be indicated
in each Product Specification as well as NCR’s Business Level
Agreement. The content of Exhibit Cl also establishes a mutual
understanding of NCR’s qualitative objectives.
1.1 RESPONSIBILITY
Solectron must provide quality related
data to NCR weekly/monthly as required for review maintaining the
same content and form that is currently in place. In the event that
Solectron does not meet the requirements defined in Exhibit C2,
immediate action must be taken to contain and correct all
non-conformances. Solectron must submit a corrective action plan to
NCR identifying all root causes and planned actions. NCR agrees to
work with Solectron in a proactive manner to meet the stated goals.
Solectron and NCR will work together to manually agree on ownership
of expenses related to any non-conformances.
2.0 SCOPE
The parties commit to data driven
processes based on continuous improvement and defect prevention
with a goal of delivering defect free Products, Parts and Services
to NCR and it’s customers. This exhibit also establishes
NCR’s quality reporting requirements which will be used to
measure Supplier performance against the requirements established
in Exhibit C2. The intent is to establish Solectron’s
responsibilities for meeting NCR’s quality / reliability
goals and business objectives,
3.0 TERMS AND
DEFINITIONS
3.1 Defective Product or Part . A
defective Product or Part is one that does not meet applicable
warranty, functionality or other specified requirements indicated
in this Agreement, the Exhibits or the Specifications.
3.2 Metrics . Specific measures
that will be used to assess Supplier performance with the primary
focus on driving continuous improvement. Examples include but are
not limited to, Out-Of-Box Failure Rate, Defective Parts Per
Million (DPPM), Mean Time Between Failure (MTBF), Service Calls Per
Machine Per Year (SCMY).
3.3 Defective Parts Per Million
(DPPM) . DPPM shall be calculated by dividing the number of
defective Products by the total volume shipped/installed as
appropriate within a specified period of time, multiplied by
1,000,000. All functional and non-functional defects as defined by
NCR and Solectron shall be counted in the DPPM measure.
3.4 Calculated Mean Transactions
Between Failure (MTrBF) . MTrBF shall be calculated by using
specified reliability failure rates of the Products or Parts.
Operating temperature assumptions and electrical stress levels will
be documented and agreed to by NCR and Solectron.
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CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
3.4.1 Demonstrated MTrBF . In
house Demonstrated reliability for Products or Parts predicted or
measured by operating a sample of the Products or Part for a
specified period under normal or stated operating conditions, to
prove the Product or Part meets the specified reliability
requirements. MTrBF will be calculated at a 80 percent confidence
level using a modified Chi Square.
3.5 Out of Box Failure . An Out
of Box failure is defined as a non-conformance of a Product or Part
against the product specification at the time of installation. For
all Products except where identified by NCR, the measurement window
may include the ***days of operation.
3.6 DOA . A DOA is a Product or
Part that fails (meaning the Product or Part does not function
materially in accordance with its specifications) *** days after
installation.
3.7 Quality improvement Plan
(QIP) . A formal method to be used by Solectron to address and
improve processes or products.
3.8 Return Material Authorization
(RMA) . Returned Material Authorization is a process agreed to
between Solectron and NCR for return of non-conforming Products or
Parts, or incomplete / incorrect orders. Specific requirements are
defined in section 6.0.
3.9 First Article Inspection .
First-article inspection is a pre-acceptance review of a new or
newly-changed product against a predetermined set of requirements
or specifications. A first-article inspection may also be required
for an unchanged product produced under a new process or at a new
facility. Any agreed upon inspection may be carried out by NCR or
Solectron, either at an NCR or Solectron facility.
3.11 Ongoing Reliability Tests .
Ongoing Reliability Tests are a series of tests run on a
continuous, statistically-based sample of production-level Products
or Parts to validate reliability.
3.12 Field Retrofit Order (FRO) .
Proactive replacement / repair of field sites for the purpose of
avoiding potential failures.
3.13 Service Calls Per Machine Per
Year (SCMY) . SCMY is a measure of the Product reliability once
installed, and is based on the volume of service calls for Products
installed in the field.
3.14 Early Life Failure . An
early-life failure is any failure that occurs in the first *** days
after a product is installed at an end-customer site.
3.15 *** . When used in this
exhibit, “products ***” or similar statements will
refer to products for which Solectron has *** that are covered by
the Agreement as defined in exhibit A.
3.16 New Product Introduction Plan
(NPI) . A NPI plan defines product specific quality objectives,
strategies and methodologies and will be developed concurrent with
product development (refer to section 4.6 for further
details).
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Page 45 |
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011907 Final
CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.
OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS
4.0 QUALITY PERFORMANCE
REQUIREMENTS
Specific quality performance
requirements will be stipulated in Exhibit C2 Performance
Requirements and Metrics. If performance levels are not
consistently maintained, NCR requires Solectron to undertake
aggressive action to bring performance levels within the desired
range as defined in Exhibit C2. The parties understand that
Solectron has *** in connection with this transaction. It is also
understood that the quality performance requirements set forth
below may not be at consistent levels if maturity is not achieved
at each of the three locations contemplated in this transaction. It
is Solectron’s intent to leverage best practices across all
sites in order to meet and exceed the stated quality performance
requirements. Where provided throughout this Exhibit C, performance
by Solectron in accordance with “NCR’s ***
Practices” will mean that Solectron will perform its
responsibilities in a manner consistent with and to the extent done
by NCR immediately prior to Solectron’s*** and immediately
following the Closing.
4.1 Quality Improvement Plan
(QIP) . The Quality Improvement Plan must define the
improvements and action needed to achieve the goals defined in
Exhibit C2. Requirement must be manually agreed upon between NCR
and Solectron. The plan must specify the quality metrics to be used
to quantify improvement. NCR and Solectron will work together to
jointly develop the quality plan. NCR will be responsible for
providing quality data when applicable. This does not relieve
Solectron of the responsibility to complete the plan and submit it
to NCR for review and approval. Covered topics for Products and
Parts manufactured for NCR will include, but are not limited to,
product quality, delivery, reliability, and failure analysis.
Products and Parts *** must include all of the above plus specific
plan for product development. Owners and target dates will be
included for each defined initiative. This document will be
reviewed and updated quarterly or more often as needed, and will be
managed by NCR and Solectron.
4.2 Closed Loop Corrective Action
(CLCA) Requirements . Solectron must establish and maintain a
Closed Loop Corrective Action Process capable of addressing any
quality issues in accordance with NCR’s *** Practices. Root
Cause Analysis and Corrective Action Identification may be
triggered by the discovery of a problem from any source (e.g.,
engineering test failures, manufacturing staging failures, field
failures, in accordance with NCR’s *** Practices
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