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CONFIDENTIAL TREATMENT REQUESTED MANUFACTURING SERVICES AND SUPPLY AGREEMENT

Requirements Supplier Agreement

CONFIDENTIAL TREATMENT REQUESTED MANUFACTURING SERVICES AND SUPPLY AGREEMENT | Document Parties: ADAPTEC INC | ADAPTEC, INC | SANMINA-SCI CORPORATION You are currently viewing:
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ADAPTEC INC | ADAPTEC, INC | SANMINA-SCI CORPORATION

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Title: CONFIDENTIAL TREATMENT REQUESTED MANUFACTURING SERVICES AND SUPPLY AGREEMENT
Governing Law: California     Date: 6/4/2009
Industry: Computer Storage Devices     Sector: Technology

CONFIDENTIAL TREATMENT REQUESTED MANUFACTURING SERVICES AND SUPPLY AGREEMENT, Parties: adaptec inc , adaptec  inc , sanmina-sci corporation
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Exhibit 10.45

CONFIDENTIAL TREATMENT REQUESTED

MANUFACTURING SERVICES AND SUPPLY AGREEMENT

THIS MANUFACTURING SERVICES AND SUPPLY AGREEMENT (the "Agreement"), effective this 19th day of February, 2009 ("Effective Date") is made and entered into by and between ADAPTEC, INC., a Delaware corporation having a place of business at 691 S. Milpitas Blvd., Milpitas, California 95035, on behalf of itself and its Affiliates (collectively, "ADAPTEC"), and SANMINA-SCI CORPORATION, a Delaware corporation having its principal place of business at 2700 North First Street, San Jose, California 95134, on behalf of itself and its Affiliates (collectively "SANMINA-SCI). ADAPTEC and SANMINA-SCI are sometimes individually referred to herein as a "Party" and collectively referred to herein as the "Parties".

RECITALS

The Parties previously entered into an Amendment to the Manufacturing Services and Supply Agreement, Effective Date: May 23, 2007 (the "Amendment"), and intend, by this Agreement to terminate the earlier Manufacturing Services and Supply Agreement dated December 23, 2005 and the Amendment and replace those with this Agreement.

The Parties are entering into this Agreement to set forth the terms and conditions pursuant to which ADAPTEC will purchase from SANMINA-SCI and SANMINA-SCI will manufacture, supply and sell to ADAPTEC, on a non-exclusive basis, products listed on the attached Exhibit A which may be updated from time to time by the Parties as they agree in writing.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

1.         DEFINITIONS

1.1 " ADAPTEC Controlled Components " means those Components for which ADAPTEC negotiates the prices and confirms lead times with vendors which shall be handled by a consistently updated, mutually agreed list to be reviewed quarterly by the Parties. All other Components are SANMINA-SCI Controlled Components.

1.2" Affiliate " means, with respect to any Party, any entity that directly or indirectly controls, is controlled by, or is under common control with a Party. For purposes of this definition, "control" means having: (i) ownership of more than fifty percent (50%) of the outstanding voting securities entitled to vote for the election of directors (or, in the case of an entity that is not a corporation, for the election of the corresponding managing authority); or (ii) the right to vote for or appoint a majority of the board of directors or other governing body of such entity. An entity will be deemed to be an Affiliate only so long as such control exists.

1.3 "BOM" means bill of materials.

1.4 " Current Product " means any Product that is in production as of December 31, 2008 which is listed on the attached Exhibit A, as revised by the Parties, from time to time, as the Parties agree in writing.

1.5 "Delivered Cost" means SANMINA-SCI's quoted cost of Components as stated on the BOM.

1.6 " E&O List" means the written list provided by SANMINA-SCI to ADAPTEC notifying ADAPTEC of the Excess Components or Obsolete Components in its inventory and their Delivered Cost as described more fully in Section 5.7 plus [******]% mark-up as described in Section 1.8.

1.7 " Epidemic Failure " has the meaning set forth in Section 8.7, below.

1.8 "Excess Component" means any Component that is not required to meet ADAPTEC's Order or Forecast (always within Component leadtimes), to which such Component was initially ordered and includes Excess Components resulting from any minimum buy quantities, tape and reel quantities, and multiples of packaging quantities required by the Vendor less the actual cost (per the BOM) plus a

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The symbol [******] is used to indicate that a portion of the exhibit has been omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to the omitted portion.

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Components margin of [******]% on those Components that are returnable to Vendor (less any cancellation or restocking charges).

1.9 " Excess Component Liability " means ADAPTEC's liability for Excess Components.

1.10 "Forecast" means ADAPTEC's nonbinding forecast (excepting in cases of Component purchases within lead times which are outside of any [******] week Purchase Agreement Release) for Products for the ensuing nine-month period. This will be a rolling document issued once per month with significant updates highlighted weekly.

1.11 "Intellectual Property Rights" means all rights in patents, copyrights, trade secrets, trademarks and other similar rights.

1.12 "Components" means any raw material, component, part or other item used in the manufacture of the Products.

1.13 " New Product " means Products in production after December 31, 2008 and which are released with a new model number and for which the BOM includes 80% new Components.

1.14 " Manufacturing Specifications" means the written specifications that describe the manner in which a Product is manufactured and tested, and excludes all other Specifications.

1.15 "Obsolete Component" mean any Component that is not currently used to manufacture a Product (whether as a result of an ECO or otherwise) and for which there is no demand and the cost of which is the actual cost (per the BOM) of those Components less the amounts for those Components that are returnable to Vendor (less any cancellation or restocking charges).

1.16 "Order" is a document provided by ADAPTEC that stipulates Product, Pricing, Delivery Point, Validity Period and Target Quantity and includes a Purchase Agreement Release. Purchase Agreements require Purchase Agreement Releases to determine delivery quantity and date.

1.17 "Purchase Agreement" means the nonbinding agreement issued by ADAPTEC to SANMINA-SCI listing Product, Pricing, Delivery Point, Validity Period and Target Quantity.

1.18 " Purchase Agreement Release" means the binding document provided by ADAPTEC that determines delivery quantity and date.

1.19 "Products" means Current Products and New Products as described below and listed on the attached Exhibit A which may be updated from time to time by the Parties as they agree in writing which are manufactured by SANMINA- SCI.

1.20 "Scheduled Release" means the date on which SANMINA-SCI and ADAPTEC agree Products are available for delivery and release to ADAPTEC and which will be released only in accordance with the Purchase Agreement Release.

1.21 "Specifications" means the written specifications that describe the design, functionality, configuration and/or performance requirements of a Product except for Manufacturing Specifications.

1.22 "Vendor(s)" mean seller(s) of Components.

1.23 " Warranty Period" means the period of [******] from the date of manufacture of the Product as more fully described in Section 8.1.

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The symbol [******] is used to indicate that a portion of the exhibit has been omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to the omitted portion.

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TERM

The term of this Agreement commences on the Effective Date and continues for three (3) years thereafter (" Initial Term ") and renews thereafter in 1 year increments (" Renewal Term ," collectively, " Term ") unless sooner terminated in accordance with the terms of this Agreement.

3 . APPOINTMENT

ADAPTEC and SANMINA-SCI agree that the Manufacturing Services and Supply Agreement between the Parties, signed December 23, 2005 ("2005 Agreement") is terminated concurrent with the Effective Date. Notwithstanding Section 11.6 of the 2005 Agreement, Sections 8, 10.1, 10.2 and 14 of the 2005 Agreement survive termination and remain in full force and effect. Termination of the 2005 Agreement does not affect the prices of Products listed in Purchase Agreement Releases issued to SANMINA- SCI by ADAPTEC prior to the Effective Date. The Parties further agree that SANMINA-SCI will manufacture, supply and sell to ADAPTEC and ADAPTEC will buy from SANMINA-SCI the Products on a non-exclusive basis during the Term in accordance with this Agreement. Products will only be manufactured in SANMINA-SCI's Singapore or Batam Plant unless the ADAPTEC otherwise first agrees in writing which may require adjustment of the financial terms resulting from manufacturing relocation. ADAPTEC may buy the Products from sources other than SANMINA-SCI.

4. PRICES AND PAYMENT

4.1. Prices. During the Term and subject to Section 3, above, the prices for all Products will be determined solely in accordance with the terms and conditions set forth in the New Product MVA Matrix and Current Product MVA Matrix included in the attached Exhibit A.

4.2 Payment Terms . ADAPTEC agrees to pay all undisputed amounts included in SANMINA-SCI's invoice within [******] days after date of the invoice. Late payments for undisputed amounts accrue interest at the lesser rate of 1.5% per month or maximum amount permitted by law. Unless otherwise stated, all prices are stated in and all payments shall be made in U.S. Dollars.

4.3 Setoffs . Except as expressly agreed to in writing by the Parties, neither Party shall be entitled to set-off any amount owing from the other Party to such Party against any amount payable to the other Party from such Party, under this Agreement or arising out of any other Agreement or transaction between the Parties. For purposes of this Section 4.6, a Party shall be deemed to include the Parties to this transaction and each of the Party's Affiliates.

4.4 Credit Limit . SANMINA-SCI's Credit Department shall provide ADAPTEC with an initial credit limit, which shall be reviewed (and, if necessary, adjusted) from time to time. SANMINA-SCI shall have the right to reduce the credit limit upon 10 business days' prior written notice to ADAPTEC if ADAPTEC has not provided SANMINA-SCI with reasonable assurances in response to its written request. In the event ADAPTEC exceeds this credit limit or has any outstanding invoice for undisputed amounts more than fifteen (15) business days after written notice to ADAPTEC has expired and ADAPTEC fails to make any payment, SANMINA-SCI may stop shipments of Product to ADAPTEC until ADAPTEC makes a sufficient payment to bring its account within the credit limit provided.

4.5        Pricing for Small Builds . For purposes hereof, "Small Build" means any Product that ADAPTEC requests SANMINA-SCI to manufacture in quantities of 300 or less of the same board assembly. For clarification, all Products in any Small Build must be from the same Product family (i.e., the same PCB) with no builds within the previous two months or no subsequent Orders looking forward to the next three months. The pricing set forth in Exhibit A will apply to Small Builds; provided, however, that SANMINA-SCI will be entitled to charge an additional amount for each Small Build to cover its costs in producing small volume Products of no more than [******] ("Setup Fee"). SANMINA-SCI will advise ADAPTEC of the amount of the Setup Fee within five (5) business days after a request from ADAPTEC ("Request").

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The symbol [******] is used to indicate that a portion of the exhibit has been omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to the omitted portion.

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5 . FORECAST, PURCHASE ORDERS AND RESCHEDULE

5.1 Forecast. (a) ADAPTEC shall provide SANMINA-SCI with a Forecast on a monthly basis for a rolling nine month period. This Forecast will include an estimated breakdown of Forecasted Product requirements on a weekly basis for the first three months of the Forecast period. Any quantities listed in any Forecast or other correspondence between the Parties are only estimates made as an accommodation for planning purposes and do not constitute a commitment on ADAPTEC'S part to purchase such quantity. ADAPTEC may revise any Forecasts in its sole discretion. Any expenditures or commitments by SANMINA-SCI in anticipation of ADAPTEC'S requirements are at SANMINA-SCI'S sole risk and expense except as the Parties otherwise expressly agree in this Agreement. Within 10 business days of ADAPTEC providing the monthly Forecast (or as agreed to by the Parties), SANMINA-SCI will take all actions to procure, reschedule and cancel SANMINA-SCI's orders for Components. Any action not taken within this time frame results in SANMINA-SCI's sole liability and responsibility unless the Parties otherwise agree to extend the time.

5.2 Orders . ADAPTEC will issue written Orders and/or Purchase Agreement Releases specifying the number of Products to be manufactured and shipped during the period covered and other terms as mutually agreed. Orders will cover a [******] week period and will include, as applicable: (i) the delivery date or shipping schedule; (ii) the location to which the Products are to be shipped; and (iii) transportation instructions. Each Order and/or Purchase Agreement Release will reference this Agreement. SANMINA-SCI will notify ADAPTEC of rejection of any Order within three business days after receipt of the date of the Order or the Order is deemed rejected. If SANMINA-SCI does not accept or reject the Order within the three business day period, the Order shall be deemed rejected by SANMINA-SCI. Notwithstanding the foregoing, SANMINA-SCI shall not reject an Order for Forecasted Products (including Upside Demand). Once accepted by SANMINA-SCI, Orders may not be changed except as otherwise stated herein. The Parties agree that the terms and conditions contained in this Agreement shall prevail over any terms and conditions of any Purchase Order, acknowledgment form or other instrument except as such writing is signed by each Party's authorized representative.

5.3 Component Liability . ADAPTEC will be financially responsible for all Components ordered by SANMINA-SCI per ADAPTEC's Purchase Agreement Release and all Components ordered by SANMINA-SCI per Adaptec's forecast within the then- current agreed lead-times.

5.4 Reschedule. ADAPTEC may reschedule all or part of a scheduled delivery at any time which will be communicated through the Parties' respective designated personnel for up to 60 days from the initial agreed-upon Delivery Date. SANMINA-SCI shall use reasonable commercial efforts to accommodate any upside schedule changes beyond the firm Order periods.

5.5 Meeting Demand for Un-Forecasted Products . Subject to the terms set forth herein and in Exhibit A SANMINA-SCI will manufacture Products to meet any un-Forecasted demand.

5.6 Upside Demand . , SANMINA-SCI will commit to manufacture Products having consistent demand on at least three consecutive Forecasts to meet any un-Forecasted demand up to the percentages specified below (the "Upside Demand Percentage") beyond the quantities set forth in the applicable Forecast, subject to the limitations contained in this Section:

0-7 Days

[******]% (of a specified one-Month Demand)

8-30 Days

[******]% (of a specified one-Month Demand)

31-60 Days

[******]% (of a specified one-Month Demand)

61-90

[******]% (of a specified one-Month Demand)

Any Purchase Price Variance ("PPV") will be settled quarterly when PPV is a result of un-Forecasted upside requests, "pull-ins" of then-current Forecasts . All PPVs are subject to audit verification by ADAPTEC.

5.7        Excess and Obsolete Inventory. On a monthly basis utilizing ADAPTEC's current monthly Forecast and Scheduled Release, SANMINA-SCI shall provide ADAPTEC with the E&O List. The E&O

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The symbol [******] is used to indicate that a portion of the exhibit has been omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to the omitted portion.

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List will contain a comprehensive where-used analysis and rationale for the excess (e.g. MOO, cancelled Order or Forecast, ECO) and list all Obsolete Components and Excess Components. Within ten (10) business days of receiving SANMINA-SCI's E&O List, ADAPTEC shall advise SANMINA-SCI of any Component on the E&O List that it believes is not Excess or Obsolete. Within fifteen (15) business days after receiving SANMINA-SCI's E&O List, SANMINA-SCI and ADAPTEC shall finalize the E&O List, and ADAPTEC shall issue to SANMINA-SCI an Order for all Components agreed upon in the finalized E&O List or an Order for Product that will consume the Excess Components. ADAPTEC shall pay SANMINA-SCI its Delivered Cost plus [******]% Component handling mark-up for Components on the E&O List along with any undisputed liability for Excess Components within forty-five (45) days of the date of invoice. In the event the Parties cannot agree as to the Components on the E&O List, ADAPTEC shall pay SANMINA-SCI for all non-disputed Components in accordance with this Section. SANMINA-SCI shall use commercially reasonable efforts to minimize ADAPTEC's Component Liability by attempting to return Components to the Vendor or using the Components on other Products or on products that SANMINA-SCI manufactures for third parties in the same manufacturing facility. ADAPTEC shall be responsible for any Vendor return charges for Excess or Obsolete Components.

6.         DELIVERY AND ACCEPTANCE

6.1 Delivery. All Product shipments (including shipments made in accordance with Section 8 (Warranty)) shall be Ex Works (Incoterms 2000), SANMINA-SCI's facility of manufacture (or repair). Title to and risk of loss or damage to the Product shall pass to ADAPTEC upon SANMINA-SCI's tender of the Product to the common carrier. ADAPTEC shall be the exporter and importer of record for all shipments of Products, including any repaired or replacement Products. SANMINA-SCI is not the importer or exporter of the Products. SANMINA-SCI shall mark, pack, package, crate, transport, ship and store Products to ensure (a) delivery of the Product to its ultimate destination in safe condition, (b) compliance with all requirements of the carrier and destination authorities, and (c) compliance with any special instructions of ADAPTEC. SANMINA-SCI shall use reasonable efforts to deliver the Products on the agreed-upon delivery dates and shall use commercially reasonable efforts to notify ADAPTEC of any anticipated delays. SANMINA-SCI will pay for expedited shipment for delayed Products if requested by ADAPTEC.

6.2 Acceptance. Acceptance of the Product shall occur no later than fifteen (15) days after shipment of Product and shall be based solely on whether the Product passes a mutually agreeable acceptance test procedure or inspection designed to demonstrate compliance with the Manufacturing Specifications. In the event of conflict between any of the foregoing, the following order of precedence shall apply: (i) Order as agreed to between ADAPTEC and SANMINA-SCI; (ii) 100% compliance with all Assembly/Test plan criteria or component drawing (as applicable); (iii) industry-recognized workmanship standard; and (iv) other applicable referenced documents. Products cannot be rejected based on criteria that were unknown to SANMINA-SCI or based on test procedures that SANMINA-SCI has not approved or does not conduct. Notwithstanding anything to the contrary, Products shall be deemed accepted if not rejected within this fifteen-day period. Once a Product is accepted, all Product returns shall be handled in accordance with Article 8 (Warranty). Prior to returning any rejected Product, ADAPTEC shall obtain an Return Material Authorization("RMA") number from SANMINA-SCI, and shall return such Product in accordance with SANMINA-SCI's instructions; ADAPTEC shall specify the reason for such rejection in all RMA's. In the event a Product is rejected, SANMINA-SCI shall have a reasonable opportunity to cure any defect which led to such rejection.

7. CHANGES

7.1 General. ADAPTEC may upon sufficient notice make changes within the general scope of this Agreement. Such changes may include, but are not limited to changes in (i) drawings, plans, designs, procedures, Specifications, test specifications or BOM, (ii) methods of packaging and shipment, (iii) quantities of Product to be furnished, (iv) delivery schedule, or (v) ADAPTEC- Furnished Items (defined in Section 9.1). All changes other than changes in quantity of Products to be furnished shall be requested and finalized in an Engineering Change Order ("ECO"). If any such change causes either an increase or decrease in SANMINA-SCI's cost or the time required for performance of any part of the work under this Agreement (whether changed or not changed by any ECO) the Prices and/or delivery schedules shall be adjusted in accordance with the Parties' written agreement.

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The symbol [******] is used to indicate that a portion of the exhibit has been omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to the omitted portion.

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7.2 ECO's.

(i) SANMINA-SCI will respond to [******] ECO requests per quarter for production ECO's and [******] ECO requests per month for pre-production ECOs without a non-recurring administrative fee. Responses to additional ECO's will incur an administrative fee of [******] each. Within five (5) business days after an ECO is received, SANMINA-SCI shall advise ADAPTEC in writing (a) of any change in Prices or delivery schedules resulting from the ECO and (b) the Delivered Cost plus mark-up as indicated in Exhibit A of any finished Product, Work-in-Process or Components rendered Excess or Obsolete as a result of the ECO (collectively the "ECO Charge"). Unless otherwise stated, ECO Charges are valid from thirty (30) days from the date of the ECO Charge.

(ii) In the event ADAPTEC desires to proceed with the change after receiving the ECO Charge pursuant to Section 7.2, ADAPTEC shall advise SANMINA-SCI in writing and shall immediately pay the portion of the ECO Charge set forth in Section 7.2(i). In the event ADAPTEC does not desire to proceed with the Change after receiving the ECO Charge, it shall so notify SANMINA-SCI. In the event SANMINA-SCI does not receive written confirmation of ADAPTEC's desire to proceed with the change within thirty (30) days after SANMINA-SCI provides ADAPTEC with the ECO Charge, the ECO shall be deemed cancelled.

8.         WARRANTY

8.1 SANMINA-SCI Warranty. SANMINA-SCI warrants that, for the Warranty Period, the Products will comply with the applicable Manufacturing Specifications and shall be free from defects in workmanship. SANMINA-SCI shall, at its option and at its expense, repair, replace or issue a credit for Products found defective during the Warranty Period per the remedies described in Section 8.2. In addition, SANMINA-SCI will pass on to ADAPTEC all Vendors' (and manufacturers') Component warranties to the extent that they are transferable which does not relieve SANMINA-SCI from its obligations under this Warranty. In addition, SANMINA-SCI will be responsible for all reasonable efforts to resolve warranty issues with such Component Vendors including acting as the point of contact for all warranty related issues and providing RMA support. All warranty obligations will cease upon the expiration of the Warranty Period except any repaired or replaced Product shall be warranted as set forth in this Section for a period equal to the greater of (i) the balance of the applicable warranty period relating to such Product or (ii) sixty (60) days after it is received by ADAPTEC. ALL CLAIMS FOR BREACH OF WARRANTY (EXCLUDING CLAIMS FOR EPIDEMIC FAILURE) MUST BE RECEIVED BY SANMINA-SCI NO LATER THAN THIRTY (30) DAYS AFTER THE EXPIRATION OF THE WARRANTY PERIOD.

8.2 Warranty Remedies . For any Products under Warranty that is deemed "un-repairable," SANMINA-SCI will credit ADAPTEC at the Price paid for the Product. All returns shall be processed within 15 days of Products received by SANMINA- SCI.

8.3 RMA Procedure-In-Warranty Repairs. SANMINA-SCI will concur in advance on all Products to be returned for repair or rework which such concurrence shall be reasonable and timely but in no event later than [******] days from ADAPTEC's request. ADAPTEC shall obtain a RMA number from SANMINA-SCI prior to return shipment. All returns shall be processed in accordance with SANMINA-SCI's RMA Procedure in effect as of the Effective Date and which SANMINA-SCI has provided to ADAPTEC prior to the Effective Date. Any changes to SANMINA-SCI'S RMA Procedure requires agreement of the Parties. ADAPTEC shall pay all transportation costs for returns of the Products to SANMINA-SCI and SANMINA-SCI shall pay for the shipment of the repaired or replacement Products to ADAPTEC, and each shall bear risk of loss or damage to such Products for the leg in transit for which it pays shipping. ADAPTEC shall pay all shipping charges, plus a handling charge, for Products returned without an RMA number or "no defect found" returns.

8.4 Exclusions From Warranty. The warranties set forth in Section 8.1 do not apply to the extent a failure of a Product to conform to such warranties results from: (a) ADAPTEC's design including, but not limited to, design functionality failures, specification inadequacies; (b) accident, disaster, neglect, abuse, misuse, improper handling, storage or installation including improper handling in accordance with static sensitive electronic device handling requirements by ADAPTEC; (c) alterations, modifications or repairs by ADAPTEC or third parties not authorized by SANMINA-SCI; or (d) defective ADAPTEC-provided test

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The symbol [******] is used to indicate that a portion of the exhibit has been omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to the omitted portion.

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equipment or test software. In the event SANMINA-SCI believes that a Product is not covered by the warranty, it shall advise ADAPTEC of the specific reasons therefore and, where possible, supply ADAPTEC with any failure analysis and/or root cause evaluation which supports its position.

8.5 Out-Of-Warranty Repairs. SANMINA-SCI will confirm the Product is no longer covered by the SANMINA-SCI warranty and, prior to undertaking any repair activities, SANMINA-SCI will provide a cost estimate for repairs which will be provided on a time and materials basis, using the labor rate as the Parties agree quarterly. ADAPTEC will provide authorization to proceed if it so elects. All returns shall be processed within 20 days of Products received by SANMINA-SCI.

8.6 Remedy. THIS WARRANTY IS THE SOLE WARRANTY GIVEN BY THE PARTIES TO EACH OTHER AND IS IN LIEU OF ANY OTHER WARRANTIES EITHER EXPRESS OR IMPLIED. BOTH PARTIES DO NOT MAKE ANY WARRANTIES REGARDING MERCHANTIBILITY, NONINFRINGEMENT, AND SPECIFICALLY DISCLAIMS ANY SUCH WARRANTY, EXPRESS OR IMPLIED.

8.7 Epidemic Failure.

(a) For the purposes of this Agreement, Epidemic Failure will be deemed to have occurred if more than [******] of any Products manufactured by SANMINA-SCI hereunder fail during the Warranty Period or sixty days thereafter in a manner attributable to the same "root cause" within any time period of ninety (90) days or if more than [******] % of any Products manufactured by SANMINA-SCI hereunder fail in a manner attributable to the same "root cause" within any time period of thirty (30) days. In such event,. In such event, without limiting SANMINA-SCl's obligations and ADAPTEC's remedies under Sections 8.1 and 8.4, SANMINA-SCI shall (i) promptly deliver to ADAPTEC a reasonable plan to correct the problem, (ii) SANMINA-SCI shall exert its best reasonable efforts to diagnose the problem; and (iii) SANMINA-SCI shall reimburse ADAPTEC for any costs or expenses reasonably incurred by ADAPTEC to repair, replace or retrofit the defective Products including but not limited to the cost of recovery and replacement (or transportation) of such defective Products already sold to and used by customers, up to an amount not exceeding $[******]. Upon the acceptance of any such plan by ADAPTEC, SANMINA-SCI shall implement the plan and deliver to ADAPTEC progress reports relating thereto.

(b) Upon ADAPTEC's notification to SANMINA-SCI of an Epidemic Condition:

(i) ADAPTEC shall have the right to postpone all or part of the shipments of unshipped Product that are affected by the Epidemic Condition without liability, by giving written notice of such postponement to SANMINA-SCI, pending correction of the Epidemic Condition.

             (ii) SANMINA-SCI will provide ADAPTEC no later than five (5) business days following the Epidemic Condition a root cause analysis and corrective action plan. If, after review of the root cause analysis and corrective action plan, ADAPTEC determines that the Epidemic Condition necessitates a field stocking recall or customer based recall or retrofit, ADAPTEC, without waiving any other rights or remedies, may then elect to have SANMINA-SCI undertake all action and pay all reasonable costs and expenses associated with repairing or replacing the affected Product in the field or by return to SANMINA-SCI's expense within ten (10) business days from the determination of an Epidemic Condition by ADAPTEC. Alternatively, if SANMINA-SCI agrees to allow ADAPTEC to elect to perform repairs or make replacements, SANMINA-SCI will reimburse ADAPTEC for all reasonable costs and expenses ADAPTEC incurs for repair or replacement. Such Products, parts or upgrades will have the highest shipping priority.

(iii) The remedy for the affected Product will be incorporated in all subsequent Products (unless ADAPTEC otherwise directs) at no additional charge to ADAPTEC.

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The symbol [******] is used to indicate that a portion of the exhibit has been omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to the omitted portion.

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            (c) If SANMINA-SCI is unable to develop a corrective action plan acceptable to ADAPTEC, or does not adequately take into account the business interest of ADAPTEC, or SANMINA-SCI refuses to carry out the agreed upon plan, ADAPTEC shall have the option to: (i) develop and implement such remedy or engage a third party to do so and, in such case, all such implementation costs, risk of in-transit loss and damages incurred by ADAPTEC shall be borne by SANMINA-SCI; (ii) cancel orders of Products affected by the Epidemic Condition without liability and return to SANMINA-SCI all Product affected by such Epidemic Condition for full refund, payable by SANMINA-SCI within thirty (30) days after receipt of returned Product (with risk of loss or in-transit damage borne by SANMINA-SCI) and/or (iii) terminate this Agreement without further liability.

9. ADAPTEC FURNISHED EQUIPMENT AND COMPONENTS WARRANTY, LICENSE AND OWNERSHIP

9.1 ADAPTEC-Furnished Items. ADAPTEC shall provide SANMINA-SCI with the Product design and related specifications, applicable regulatory requirements or documentation which are made available to SANMINA-SCI by accessing ADAPTEC's Agile PDM system. (collectively the "ADAPTEC-Furnished Items").

9.2 Licenses .

            (a) From ADAPTEC.

             (i) ADAPTEC grants SANMINA-SCI a limited, non-assignable, non-transferable, non-exclusive license during the Term to use ADAPTEC's Intellectual Property delivered to SANMINA-SCI by ADAPTEC solely in connection with and to the extent required to manufacture the Products exclusively for ADAPTEC and to otherwise perform its obligations hereunder. SANMINA-SCI agrees to use all Intellectual Property licensed hereunder in accordance with the applicable license agreement or usage guidelines. All Intellectual Property remains the property of ADAPTEC. All Intellectual Property licensed to SANMINA-SCI will be listed in the Statement of Work or other memorandum signed by the Parties. All Intellectual Property will be maintained as Confidential Information.

(ii) ADAPTEC Trademarks . For the term of this Agreement and accordance with the terms and conditions herein, ADAPTEC grants SANMINA-SCI a personal, non-exclusive, non-transferable, royalty-free, worldwide license to use those ADAPTEC's trademarks in connection with SANMINA-SCI's manufacturing of the Product (" ADAPTEC Trademarks ") in accordance with ADAPTEC's guidelines as such guidelines may be amended from time to time in ADAPTEC's sole discretion and of which it has advised SANMINA-SCI in writing. SANMINA-SCI (A) agrees to implement modifications to ADAPTEC Trademark guidelines into any materials created and distributed after receipt of such written notice; (B) acknowledges ADAPTEC's rights in the ADAPTEC Trademarks and agrees that any use thereof by SANMINA-SCI inures to the sole benefit of ADAPTEC; and, (C) agrees to not challenge ADAPTEC's ownership or use of any ADAPTEC Trademarks, or apply to register any ADAPTEC Trademark or mark confusingly similar thereto. Nothing in this Agreement should be construed to grant SANMINA-SCI any other license or rights in the Trademarks of the other Party.

            (b) From SANMINA-SCI. In all Products manufactured by SANMINA-SCI pursuant to ADAPTEC Orders, SANMINA-SCI grants ADAPTEC a nonexclusive, worldwide, royalty-free, perpetual license with the right to sublicense to use, develop, modify, reproduce, distribute and sublicense SANMINA-SCI's Pre-Existing Intellectual Property only as incorporated in Products and such other intellectual property as required for ADAPTEC's rights hereunder.

9.3 Ownership .

            (a) Pre-Existing Intellectual Property Rights. All Intellectual Property Rights existing prior to the Effective Date will belong to the Party that owned such rights immediately prior to such date (" Pre-Existing Intellectual Property Rights "). Neither Party will gain by virtue of this Agreement any rights of

_______________________________________________________________________________________________________________________________________________________________________________________________

The symbol [******] is used to indicate that a portion of the exhibit has been omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to the omitted portion.

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ownership of copyrights, patents, trade secrets, trademarks or any other intellectual property rights owned by the other.

(b) Ownership . ADAPTEC shall own all right, title, and interest in the copyrights, patents, tra


 
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