Exhibit 10.1
Document of Understanding
Between Advanced Energy Industries and Affiliates
MicroPac Industries Inc.
Contract Number: 1009
1. PREAMBLE
This agreement is made as of this 01st day of February 2003 by and between
Advanced Energy Industries, Inc. & Affiliates (hereinafter referred to as
"Buyer") and MicroPac
Industries
Inc. (hereinafter referred to as
"Seller"),
under which services shall be
performed. Affiliates
shall mean any person,
or
entity directly or indirectly
controlled by, controlling or under common control
with Advanced Energy Industries, Inc. This contract will be reviewed on
an
annual basis and unless
terminated by either
party, as provided for
in Section
19, shall continue to be in
force.
2. TERMS AND
CONDITIONS
No terms and conditions other than the terms and
conditions set forth
in this
document in conjunction with the general terms and conditions placed on
http:\\www.advanced-energy.com/terms
&
conditions
shall be binding unless
specifically accepted by both the Buyer's authorized Purchasing Agent or
Commodity Manager and the Seller's
authorized
agent. Any terms and
conditions
set forth in any document attached to or incorporated by reference in this
contract shall be binding unless specifically accepted by both the Buyer's
authorized Purchasing Agent or Commodity Manager and the Seller's
Authorized
agent. This contract is intended as the
complete and final
agreement of
both
parties and exclusive
statement of its terms and may not be changed, altered or
modified, except in writing
by agreement of both parties.
3. WARRANTY
The Seller warrants the goods and materials
furnished under this Contract for
workmanship, material and compliance with all
specifications,
for a period
of
twelve (12) months. The
Seller shall comply with all applicable Colorado State,
Federal and local
laws, rules and regulations. The exclusive venue for any
litigation concerning this matter shall be in
the Larimer County District Court
in Fort Collins,
Colorado.
4. LIABILITY
The Seller agrees that the
relationship
established by this
order
constitutes
the Seller as an independent contractor and that, no tax assessment or legal
liability of the Seller or of
his agents or employees becomes, by reason of this
order, an obligation of the
Buyer.
5. REMEDY
Seller will not be
responsible for incidental or consequential damages.
Seller's
entire remedy will be the
value of the product sold to Buyer.
6. BUYER CHANGES
Buyer shall have the right to
make changes to existing orders. Purchase order
changes will be allowed only if
authorized
by Buyer. If such change affects
delivery, quality or amount to be paid by
Buyer, Seller
shall notify Buyer
of
such changes in
writing.
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<PAGE>
Document of
Understanding Between Advanced Energy Industries and
Affiliates
MicroPac Industries Inc.
Contract Number: 1009
7. ENGINEERING CHANGE ORDERS
AND BUYER CHANGES
All engineering change orders will be communicated
to Seller via an Engineering
Change Order (ECO). If such
change affects delivery, quality or the amount to be
paid by Buyer, Seller shall notify Buyer immediately. The charges for scrap
and/or rework resulting from
any change submitted via Buyer's ECO process, shall
be limited to the materials in process at the time of the change
and within
Seller's manufacturing cycle,
as defined in the related addendum. These charges
will be communicated in their
entirety in writing, to Buyer, within fifteen (15)
working days of receipt of ECO.
Buyer will not be responsible for any costs
associated with the change order which are not identified within the fifteen
(15) working day
window.
8. DELIVERY
Seller is to schedule
non-Kanban
part shipments, as defined in the
addendum,
such that deliveries are received no more
than 3 days earlier than the due date
and zero (0) days late. The
date specified in a purchase order, or required in
an addendum, is the date due in house. A Kanban part, as defined in the
addendum, may be delivered only after the supplier is
signaled in the business
system software. Kanban parts
may be delivered anytime prior to the due date and
zero (0) days late,
where the due date is
defined in the
addendum. Seller is
responsible for all costs
associated
with expedited
delivery when the need
to
expedite is due to the
Seller's inability to meet Buyer's demand. The only
exception is when Buyer pulls
in demand within Seller's lead-time window.
9. PACKAGING
Identification of the goods
shall occur when they are placed in the hands of the
Carrier. Title shall pass to Buyer upon
delivery to Carrier.
Seller agrees
to
insure that shipments are properly
packaged and
described in
accordance
with
specifications and/or
applicable carrier regulations. Seller is responsible
for
packing any shipment
correctly based on the
carrier/mode
utilized. Seller is
responsible for all shipments that are damaged in transit due to improper
packaging, improper judgment, or any other act of omission of the seller.
Charges for packing and
crating shall be deemed part of the purchase price, and
no additional charges will be made unless
specifically
requested by
Advanced
Energy. Seller agrees to ship via the
carrier specified by
Advanced Energy. If
no carrier is specified by
Advanced Energy, then
the seller will ship best way.
Shipments will be made at the
lowest freight charges. All Kanban or PC shipments
received shall have either a copy of the AE
Kanban signal or PC
enclosed
with
the packing slip or the
following information listed on the outside of the box:
.
AE
Part Number
o
# of
parts in shipment
o
box
# of total boxes (i.e. 3 of 5)
o
Indicate type KB for Kanbans of PC for Purchase Orders
o
Kanban Bin Size
o
Container #
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<PAGE>
Document of Understanding
Between Advanced Energy Industries and Afiliates
MicroPac Industries Inc.
Contract Number: 1009
10. SHIPPING
The goods described herein
shall be delivered FOB Garland TX. Buyer's Purchasing
Agent or Commodity Manager
shall authorize means of shipment. If seller chooses
alternative method of shipment without Buyer's authorization, Seller is
responsible for any
incremental shipping charges.
11. KANBAN PULL
PROCESS
Seller will participate in a Kanban pull
process for
specifically agreed
upon
part numbers, as listed in addendum. This list will be updated as parts are
added to or deleted from the
Kanban program,
with agreement
between Buyer
and
Seller.
Buyer's authorized
Purchasing Agent or
Commodity Manager and Seller shall agree
on the Kanban quantity and
replenishment strategy
for each part number.
Kanban
quantities for all part numbers will be reviewed by Buyer on an as requ
