UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
August 25, 1999 (August 10, 1999)
Date of Report (Date of earliest event reported)
TRIMBLE NAVIGATION LIMITED
(Exact name of registrant as specified in its charter)
California 0-18645 94-2802192
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) identification No.)
645 North Mary Avenue, Sunnyvale, California 94088
(Address of Principal Executive Offices) (Zip Code)
(408) 481-8000
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
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ITEM 2. DISPOSITION OF ASSETS
On August 10, 1999, Trimble Navigation Limited ("Trimble" or "the Company")
signed an Asset Purchase Agreement with Solectron Corporation and Solectron
Federal Systems, Inc. (collectively, "Solectron"). The closing of the
transaction occurred on August 13, 1999. At the closing of the Asset Purchase
Agreement, the Company transferred to Solectron substantially all of the
Company's tangible manufacturing assets located at the Company's Sunnyvale,
California campus, including but not limited to equipment, fixtures and work in
progress, and certain contract and other intangible assets and rights, together
with certain related obligations, including but not limited to real property
subleases covering the Company's manufacturing floor space, and outstanding
purchase order commitments. In addition, the Asset Purchase Agreement also
provides for Solectron's subsequent purchase, on August 30, 1999, of Trimble's
entire component inventory which was on hand as of August 13, 1999.
Trimble received cash at the closing of the Asset Purchase Agreement,
representing an interim estimate of the value of the assets purchased by
Solectron, excluding inventory, and expects to receive an additional cash
payment on August 30, 1999, representing an interim estimate of the component
inventory to be sold to Solectron.
The final purchase price for all of the Company's assets to be sold to
Solectron, including the component inventory, will be determined, and the cash
payment between the parties will be adjusted, based upon a subsequent
determination of all such purchased assets actually on hand at Trimble as of the
date of closing of the Asset Purchase Agreement. The Company estimates that the
final purchase price as so determined will be approximately $28 million. Such
final determination, and the final purchase price, is expected to be finalized
by the end of the Company's third fiscal quarter. Upon such final determination,
the Company will calculate its gain on the transaction, if any, and will
recognize any such gain over the exclusive life of the Supply Agreement
described below. The purchase price was arrived at through arm's length
negotiations by the parties and was determined to be fair and reasonable by the
Board of Directors of Trimble.
Concurrently with the closing of the Asset Purchase Agreement, the
Company and Solectron also entered into a Supply Agreement. The Supply Agreement
provides for the exclusive manufacture by Solectron of almost all Trimble
products for a period of three years.
Solectron will initially manufacture such Trimble products under the
Supply Agreement in the same Trimble buildings in which such products were
previously manufactured by Trimble, and Trimble has sublet such space to
Solectron as part of this transaction. Solectron has offered employment to
approximately 230 Trimble manufacturing, engineering and related support
personnel, and Trimble understands that substantially all such employees have
accepted employment with Solectron
Prior to the execution of the above agreements, there were no material
relationships between Solectron and Trimble, or any affiliates, directors, or
officers, or any associate of any such director, or officer. The descriptions in
this Report on Form 8-K of the terms and conditions of the agreements and the
transactions contemplated by the agreements are qualified in their entirety by
reference to the full text of the agreements and exhibits related thereto (filed
as Exhibit 10.68 and 10.69 to this current Report on Form 8-K).
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired: Not applicable
(b) Pro Forma Financial Information: Not applicable
The sale of assets by Trimble to Solectron does not meet the
thresholds for significance of Item 2 of Form 8-K and,
therefore, the Registrant will not be presenting separate
audited financial statements or pro forma financial
information related to the disposition of the described
assets.
(c) EXHIBITS
10.68* Asset Purchase Agreement dated August 10, 1999 by and
among Trimble Navigation Limited and Solectron
Corporation and Solectron Federal Systems, Inc.
10.69* Supply Agreement dated August 10, 1999 by and among
Trimble Navigation Limited and Solectron Corporation
and Solectron Federal Systems, Inc.
--------------------
* Confidential treatment has been requested for certain portions
of this exhibit.
Certain exhibits and schedules to the above Asset Purchase
Agreement, as indicated on page (iii) thereto, and to the
Supply Agreement, as indicated on page (ii) thereto, have not
been filed herewith. The Registrant will furnish any such
exhibits and schedules supplementally to the Securities and
Exchange Commission upon request; provided, however, the
Registrant reserves the right to request confidential
treatment for portions of any such exhibits and schedules so
requested.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
TRIMBLE NAVIGATION LIMITED
(Registrant)
By: /s/Steven W. Berglund
---------------------------------------------------------
Steven W. Berglund
(President and CEO)
Dated: August 24, 1999
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EXHIBIT INDEX
Exhibit No. Description of Exhibit
10.68* Asset Purchase Agreement dated August 10, 1999 by and
among Trimble Navigation Limited and Solectron
Corporation and Solectron Federal Systems, Inc.
10.69* Supply Agreement dated August 10, 1999 by and among
Trimble Navigation Limited and Solectron Corporation
and Solectron Federal Systems, Inc.
------------------------------
* Confidential treatment has been requested for certain portions
of this exhibit.
Certain exhibits and schedules to the above Asset Purchase Agreement,
as indicated on page (iii) thereto, and to the Supply Agreement, as
indicated on page (ii) thereto, have not been filed herewith. The
Registrant will furnish any such exhibits and schedules supplementally
to the Securities and Exchange Commission upon request; provided,
however, the Registrant reserves the right to request confidential
treatment for portions of any such exhibits and schedules so requested.
<PAGE>
Exhibit 10.68
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
SOLECTRON FEDERAL SYSTEMS, INC.,
SOLECTRON CORPORATION
AND
TRIMBLE NAVIGATION LIMITED
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Asset Purchase Table of Contents
ARTICLE 1 DEFINITIONS..................................................1
ARTICLE 2 PURCHASE AND CONSIDERATION..................................10
2.1 PURCHASE AND SALE OF ASSETS TO BE TRANSFERRED................10
2.2 ASSETS NOT TO BE TRANSFERRED.................................11
2.3 LIABILITIES AND OBLIGATIONS..................................11
2.4 CONSIDERATION................................................12
2.5 ADJUSTMENT OF PURCHASE PRICE.................................12
2.6 TRANSFER TAXES...............................................13
2.7 NONASSIGNABLE ASSETS.........................................13
2.8 ALLOCATION...................................................13
2.9 LICENSE OF ANCILLARY TECHNOLOGY..............................14
ARTICLE 3 CLOSING.....................................................14
3.1 THE CLOSING..................................................14
3.2 PAYMENT......................................................14
3.3 BUYER'S ADDITIONAL DELIVERIES................................14
3.4 SELLER'S DELIVERIES..........................................15
3.5 PASSAGE OF TITLE ............................................15
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLER....................15
4.1 ORGANIZATION OF SELLER.......................................16
4.2 AUTHORIZATION................................................16
4.3 TAXES........................................................16
4.4 CONDITION OF ASSETS..........................................17
4.5 GOVERNMENTAL PERMITS.........................................17
4.6 TITLE TO TANGIBLE PROPERTY...................................17
4.7 INTELLECTUAL PROPERTY........................................17
4.8 EMPLOYEES....................................................17
4.9 CONTRACTS....................................................18
4.10 NO VIOLATION, LITIGATION OR REGULATORY ACTION ...............18
4.11 ENVIRONMENTAL MATTERS .......................................19
4.12 NO FINDER ...................................................20
4.13 DISCLOSURE ..................................................20
4.14 YEAR 2000 COMPLIANCE ........................................20
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYER.....................20
5.1 ORGANIZATION OF BUYER........................................20
5.2 AUTHORIZATION................................................21
5.3 NO FINDER....................................................21
5.4 CASH CONSIDERATION...........................................21
5.5 DISCLOSURE...................................................22
ARTICLE 6 ACTION PRIOR TO THE CLOSING DATE............................22
6.1 INVESTIGATION OF THE OPERATIONS BY BUYER.....................22
6.2 PRESERVE ACCURACY OF REPRESENTATIONS AND WARRANTIES..........22
6.3 TRANSFERRED AGREEMENTS.......................................23
6.4 NOTICE OF CERTAIN MATTERS....................................23
6.5 OPERATIONS PRIOR TO THE CLOSING..............................23
6.6 GOVERNMENT FILINGS...........................................24
ARTICLE 7 ADDITIONAL AGREEMENTS.......................................25
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7.1 EMPLOYMENT MATTERS...........................................25
7.2 TAXES........................................................26
7.3 BULK SALE....................................................27
7.4 NON-SOLICITATION.............................................27
7.5 INSPECTION OF LEASED FACILITY................................27
7.6 TRANSITION SERVICES..........................................27
7.7 PUBLICITY....................................................27
7.8 CONFIDENTIALITY..............................................28
ARTICLE 8 CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER................28
8.1 NO MISREPRESENTATION OR BREACH OF COVENANTS AND WARRANTIES...28
8.2 NO RESTRAINT OR LITIGATION...................................28
8.3 NECESSARY APPROVALS..........................................28
8.4 EMPLOYEES....................................................28
8.5 ADDITIONAL AGREEMENTS........................................29
8.6 NO MATERIAL ADVERSE CHANGE...................................29
ARTICLE 9 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER...............29
9.1 NO MISREPRESENTATION OR BREACH OF COVENANTS AND WARRANTIES...29
9.2 NO RESTRAINT OR LITIGATION...................................29
9.3 NECESSARY APPROVALS..........................................29
9.4 ADDITIONAL AGREEMENTS........................................29
9.5 NO MATERIAL ADVERSE CHANGE...................................29
ARTICLE 10 INDEMNIFICATION............................................30
10.1 INDEMNIFICATION BY SELLER; SELLER LIABILITY...............30
10.2 INDEMNIFICATION BY BUYER..................................30
10.3 NOTICE OF CLAIMS..........................................31
10.4 THIRD PARTY CLAIMS........................................32
10.5 ENVIRONMENTAL INDEMNIFICATION BY SELLER...................32
10.6 ENVIRONMENTAL INDEMNIFICATION BY BUYER....................33
10.7 SPECIAL UNDERSTANDING REGARDING PRE-EXISTING LEAD IN THE
EXHAUST SYSTEM ...........................................34
ARTICLE 11 TERMINATION................................................34
11.1 TERMINATION...............................................34
11.2 NOTICE OF TERMINATION.....................................35
11.3 EFFECT OF TERMINATION.....................................35
ARTICLE 12 GENERAL PROVISIONS.........................................35
12.1 SURVIVAL OF OBLIGATIONS...................................35
12.2 NOTICE....................................................35
12.3 SUCCESSORS AND ASSIGNS....................................36
12.4 ACCESS TO RECORDS AFTER CLOSING DATE......................36
12.5 ENTIRE AGREEMENTS; AMENDMENTS.............................37
12.6 INTERPRETATION............................................37
12.7 WAIVERS...................................................37
12.8 EXPENSES..................................................37
12.9 PARTIAL INVALIDITY .......................................37
12.10 GOVERNING LAW.............................................38
12.11 DISPUTE RESOLUTION........................................38
12.12 COUNTERPARTS..............................................38
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List of Exhibits
Exhibit A - Sublease Agreement [not submitted in filing]
Exhibit B - Supply Agreement [filed seperately]
Exhibit C - Interim Financial Statement of Assets and Liabilities
(FSAL) [not submitted in filing]
Exhibit D - Purchase Price Allocation
Exhibit E - Description of Transition Services
Exhibit F - Employee Transition Benefits [not submitted in filing]
Exhibit G - Inventory
List of Schedules
Schedule 2.1 - Tangible Assets [not submitted in filing]
Schedule 2.1 - Intangible Assets [not submitted in filing]
Schedule 2.1 - Transferred Agreements [not submitted in filing]
Schedule 2.1 - Transferred Permits [not submitted in filing]
Schedule 2.1 - Expensed Assets [not submitted in filing]
Schedule 2.1 - Inventory [not submitted in filing]
Schedule 4 - Disclosure Letter exceptions to representations and
warranties [not submitted in filing]
Schedule 6.5 - Extraordinary course compensation commitments
[not submitted in filing]
Schedule 7.1 - Regular Employee List [not submitted in filing]
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT ("Agreement"), dated as of August 10,
1999, is made and entered into by and between Solectron Federal Systems, Inc., a
Delaware corporation, Solectron Corporation, a Delaware Corporation (jointly and
severally, "Solectron" or "Buyer") and Trimble Navigation Limited, a California
corporation ("Trimble" or "Seller"), each a "Party" and collectively, the
"Parties".
RECITALS
A. Seller desires to sell certain assets related to aspects of Seller's
Global Positioning Systems operations in buildings 6, 8 and 10 ("Operations") of
Seller's campus in Sunnyvale, California (the "Facility"), and Buyer desires to
purchase said assets related to the Operations in accordance with the terms and
conditions of this Agreement.
B. In connection with the sale of such assets by Seller to Buyer, Seller
will release certain individuals associated with the Operations from their
employment with Seller, and Buyer will employ such individuals as its own
employees, all in accordance with the terms and conditions of this Agreement.
C.The Board of Directors of each of the parties believes it is in the best
interests of such party and its respective stockholders/shareholders that this
transaction is undertaken and in furtherance thereof, the parties hereby enter
into the following Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants, representations, warranties, conditions and agreements herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as
follows:
ARTICLE 1
DEFINITIONS
In this Agreement (including exhibits and schedules), the following terms
have the meanings specified or referred to in this Article 1 and shall be
equally applicable to both the singular and plural forms. Any agreement referred
to below shall mean such agreement as amended, supplemented and modified from
time to time to the extent permitted by the applicable provisions thereof and by
this Agreement.
"Additional Agreements" means all agreements (including exhibits and
schedules), instruments and documents being or to be executed and delivered
under this Agreement or in connection herewith, including, but not limited to
the following: the Real Estate Sublease Agreement and the Supply Agreement.
"Affiliate" means any entity which controls, is controlled by, or is under
common control with, Seller or Buyer, as the case may be. An entity shall be
deemed to be in control
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of another entity only if, and for so long as, it owns or controls more
than fifty percent (50%) of the shares of the subject entity entitled to vote in
the election of directors (or, in the case of an entity that is not a
corporation, for the election of the corresponding managing authority).
"Ancillary Technology" means specific Intellectual Property rights owned by
Seller or licensed by Seller and which can be sublicensed, which rights are used
in connection with the Operations, as listed and described in the Supply
Agreement.
"Assumed Liabilities" has the meaning specified in Section 2.3
("Liabilities and Obligations") hereof.
"Benefit Arrangement" has the meaning specified in Section 4.8
("Employees") hereof.
"Bonus" has the meaning specified in Section 7.1 ("Employment Matters")
hereof.
"Buyer" has the meaning specified in the first paragraph of this Agreement.
"Claim Notice" has the meaning specified in Section 10.3 ("Notice of
Claims") hereof.
"Closing" has the meaning specified in Section 3.1 ("The Closing") hereof.
"Closing Date" has the meaning specified in Section 3.1 ("The Closing")
hereof.
"Code" means the United States Internal Revenue Code of 1986, as amended.
"Components" means component parts, raw materials, supplies and other
materials which are of a type generally quantified in bills of materials and
which are required for the Operations.
"Contamination" means the presence of any Hazardous Material in the soil,
groundwater, surface water, ambient air, or building or other materials
constituting the referenced property in a concentration that (a) exceeds the
concentration allowed by applicable Federal and/or State Environmental Laws and
Governmental Orders or, (b) requires investigation, remediation, removal, or
monitoring under applicable Federal and/or State Environmental Laws and
Government Orders.
"Disclosure Letter" has the meaning specified in the introductory paragraph
to Article 4 ("Representations and Warranties of Seller") hereof.
"Disposal Facility" means all transporters, locations, landfills, disposal
sites, storage sites, treatment facilities, recycles and incinerators to which
Hazardous Materials generated at an Operations Property in connection with a
Remediation Activity have been transferred or transported for storage, treatment
or disposal.
"DOJ" has the meaning specified in Section 6.6 ("Government Filings")
hereof.
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"Encumbrance" means any lien, claim, charge, security interest, mortgage,
pledge, easement, conditional sale or other title retention agreement, defect in
title, covenant or other restrictions of any kind.
"Environmental Laws" mean all Requirements of Laws which relate to the use,
handling, transportation, production, spill, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, release, threatened release, leaching,
migration, emission, sale, or storage of, or the exposure of any Person to, a
Hazardous Material.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Excess" means those Components related to the Operations which are in
excess of that which is necessary to satisfy Seller's forecast for the period
beginning on the Closing Date and ending on the one year anniversary.
"Excluded Assets" has the meaning specified in Section 2.2 ("Assets Not to
be Transferred") hereof.
"Expensed Assets" has the meaning specified in Section 2.1 ("Purchase and
Sale of Assets to be Transferred") hereof.
"Expenses" means any and all costs and expenses incurred, including,
without limitation, court filing fees, court costs, arbitration fees or costs,
witness fees, and reasonable fees and expenses of legal counsel, investigators,
expert witnesses, consultants, accountants and other professionals.
"FTC" has the meaning specified in Section 6.6 hereof.
"Final FSAL" has the meaning specified in Section 2.5 ("Adjustment of
Purchase Price") hereof.
"GAAP" means the generally accepted accounting principles in the United
States, applied consistently with prior periods.
"Governmental Body" means any foreign, federal, state, county, local,
district, public authority, public agency, or any other political subdivision,
public corporation, or governmental or regulatory authority whether foreign or
domestic.
"Governmental Order" means any legally enforceable judgment, order, award
or decree of any foreign, federal, state, local or other court or tribunal, or
any Governmental Body and any final binding award in any arbitration proceeding.
"Governmental Permits" has the meaning specified in Section 4.5
("Governmental Permits") hereof.
"HSR Act" has the meaning specified in Section 6.6 ("Governmental Filings")
hereof.
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"Hazardous Material" means any material or substance that is prohibited or
regulated by any Requirements of Law to be radioactive, toxic, hazardous or
otherwise a danger to human health, or the environment, excluding office and
janitorial supplies, and other similar substances.
"Hazardous Material Activity" means the transportation, transfer,
recycling, storage, use, treatment, manufacture, investigation, removal,
remediation, release, exposure of any Person to, or sale or distribution of, any
Hazardous Material or any equipment or product containing a Hazardous Material.
"Indemnified Party" means a Person indemnified pursuant to Section 10.3
("Notice of Claims") hereof.
"Indemnitor" means a Person providing indemnification pursuant to Section
10.3 ("Notice of Claims") hereof.
"Instrument of Assignment" means an instrument of assignment executed by
Seller conveying the Purchased Assets to Buyer.
"Instrument of Assumption" means an instrument of assumption executed by
Buyer assuming the Assumed Liabilities.
"Intangible Assets" has the meaning specified in Section 2.1 ("Purchase and
Sale of Assets to be Transferred") hereof.
"Intellectual Property" means
(a) inventions, whether or not patentable, whether or not
reduced to practice, and whether or not yet made the
subject of a pending patent application or applications;
(b) ideas and conceptions of potentially patentable subject
matter, including without limitation, any patent
disclosures, whether or not reduced to practice and
whether or not yet made the subject of a pending patent
application or applications;
(c) all worldwide statutory invention registrations, patents,
patent registrations and patent applications (including
all reissues, divisions, continuations,
continuations-in-part, extensions and reexaminations) and
all rights therein provided by law, multinational treaties
or conventions and all improvements to the inventions
disclosed in each such registration, patent or application
(collectively "Patents");
(d) trademarks, service marks, trade dress, logos, trade names
and corporate names, including all of the goodwill
associated therewith, whether or not registered, including
all common law rights, and registrations and applications
for registration thereof, including, but not limited to,
all marks
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registered in the United States Patent and Trademark Office,
the Trademark Offices of the States and Territories of the
United States of America, and the trademark offices of
other nations throughout the world, and all rights therein
provided by multinational treaties or conventions
(collectively "Trademarks");
(e) copyrights, whether or not registered, and registrations
and applications for registration thereof, and all rights
therein provided by law, multinational treaties or
conventions (collectively "Copyrights");
(f) mask works or registrations of mask works;
(g) trade secrets and confidential, technical information
(including ideas, formulas, compositions, inventions, and
conceptions of inventions whether patentable or
unpatentable and whether or not reduced to practice)
(collectively "Trade Secrets");
(h) technology (including know-how and show-how),
manufacturing and production processes and techniques,
research and development information, drawings,
specifications, designs, plans, proposals, technical data
and copyrightable works, whether secret or confidential or
not;
(i) copies and all tangible embodiments of all of the foregoing,
in whatever form or medium;
(j) all rights to obtain and rights to apply for patents, and to
register trademarks and copyrights; and
(k) all rights to sue for and recover and retain damages, costs or
attorneys' fees for present and past infringement of any of the
intellectual property rights hereinabove set out.
"Interim FSAL" has the meaning specified in Section 3.2 ("Adjustment of
Purchase Price") hereof.
"Inventory" means all non-Excess, non-Obsolete raw materials, supplies,
Components, work-in-process related to the Operations.
"IRS" means the Internal Revenue Service of the United States of America.
"Knowledge" or "knowledge" means a party's actual knowledge after
reasonable inquiry of its directors, officers, and other management level
employees reasonably believed to have knowledge in such matters.
"Leased Facility" means that portion of Seller's facility that will be
subleased by Seller to Buyer as of the Closing Date, pursuant to the Real estate
Sublease Agreement.
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"Losses" means any and all losses, costs, obligations, liabilities,
settlement payments, awards, judgments, fines, penalties, damages, Expenses,
deficiencies or other charges.
"New Regular Personnel" means Regular Personnel who become Buyer's
personnel as of the Closing Date.
"Nonassignable Asset" has the meaning specified in Section 2.7
("Nonassignable Assets") hereof.
"Nonexclusive Asset" has the meaning specified in Section 2.7
("Nonassignable Assets") hereof.
"Obsolete" means parts, spares, products or Components which either have no
useful life or cannot be incorporated or used in the manufacturer of Seller's
products within the foreseeable future.
"Operations" has the meaning specified in the Recitals to this Agreement.
"Operations Property" means any real or personal property, plant, building,
facility, structure, underground storage tank, equipment or unit, or other asset
which is now or has at any time been owned, leased or operated by Seller in the
conduct of the Operations or used by or for the benefit of Seller and the
Operations, including, without limitation, the Leased Facility and only those
applicable Purchased Assets.
"OSHA" means the Occupational Safety and Health Act, 29 U.S.C. ss.ss. 651
et seq., any amendment thereto, any successor statute, and any regulations
promulgated thereunder.
"Permitted Encumbrances" means
(a) liens for taxes and other governmental charges and assessments
which are not yet due and payable;
(b) liens of landlords and liens of carriers, warehousemen, mechanics
and materialmen and other like liens arising in the ordinary
course of business for sums not yet due and payable;
(c) liens being contested in good faith by appropriate legal
proceedings; and
(d) other liens or imperfections on property which are not material
in amount or do not materially detract from the value of
or materially impair the existing use of the property
affected by such lien or imperfection.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, Governmental Body or any other entity.
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"Pre-Existing Environmental Liabilities" means all Losses arising out of
any of the following:
A. the presence of Contamination
(i) originating at or in any of the Operations Property
included in the Purchased Assets on or before the Closing Date,
(ii) at or in any of the Operations Property or any other
property at any time as a consequence of, and caused by, Seller's
Release or generation of Hazardous Material on or before the Closing
Date originating at the Leased Facility in the course of the conduct of
the Operations on or before the Closing Date or
(iii) the presence on the Leased Facility on or before the
Closing Date of a condition, to the extent that such condition causes a
Release of Hazardous Material to the environment or which violates
applicable Environmental Laws.
B. any Hazardous Material Activity or Remediation Activity
conducted in the course of the Operations
(i) on the Leased Facility on or before the Closing Date,
(ii) at any time on any Operations Property including the
Purchased Assets other than the Leased Facility on or before the
Closing Date or
(iii) at any time on or before the Closing Date by any Seller
Group Member or its agents, employees or contractors.
C. the exposure of any employee of any Seller Group Member, or
any other Person in violation of Environmental Laws
(i) to any Contamination described in sub-part (a) above,
at any time,
(ii) to any Hazardous Material located at the Leased Facility,
to the extent that such exposure occurred on or before the Closing
Date, or
(iii) to any Hazardous Material in the course of or as a
consequence of any Hazardous Material Activity or Remediation Activity
conducted (A) on or before the Closing Date with respect to the
Operations or (B) by any Seller Group Member or their respective
agents, employees or contractors at any time on or before the Closing
Date; or
D. the presence at any Disposal Facility of any Hazardous
Material that is generated in the course of the Operations and
(i) shipped from the Leased Facility at any time on or before
the Closing Date,
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(ii) shipped from any other Operations Property at any time,
or
(iii) shipped by any Seller Group Member or their respective
agents, employees or contractors at any time on or before the Closing
Date.
"Purchase Price" has the meaning specified in Section 3.2 ("Consideration")
hereof.
"Purchased Assets" has the meaning specified in Section 2.1 ("Purchase and
Sale of Assets to be Transferred") hereof.
"Real Estate Sublease Agreement" means the agreement whereby Seller will
sublease the Facility to Buyer commencing as of the Closing Date in the form
attached as Exhibit A ("Sublease Agreement").
"Records and Manuals" has the meaning specified in Section 2.1 ("Purchase
and Sale of Assets to be Transferred") hereof.
"Regular Personnel" means all employees of the Seller engaged in the
Operations as of immediately prior to the Closing Date.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or dispersing into
the environment.
"Remediation Activity" means any reporting, investigation,
characterization, feasibility study, health assessment, risk assessment,
remediation, treatment, recycling, removal, transport, monitoring, maintenance
or any other activity incident to a Release, threatened Release, or the
investigation, remediation or removal, of a Hazardous Material existing on any
Operations Property or the air, soil, ground water, surface water, or
improvements thereof.
"Representatives" means officers, directors, employees and agents of the
respective parties.
"Requirements of Laws" means any applicable and legally enforceable
foreign, federal, state and local laws, statutes, regulations, rules, codes,
ordinances, judgments, injunctions, decrees, orders, permits, approvals,
treaties, enacted, adopted, issued or promulgated by any Governmental Body
(including, without limitation, those pertaining to electrical, building,
zoning, environmental and occupational safety and health requirements) or common
law.
"Retained Liabilities" has the meaning specified in Section 2.3
("Liabilities and Obligations") hereof.
"Seller" has the meaning specified in the first paragraph of this
Agreement.
"Solectron" has the meaning specified in the first paragraph of this
Agreement.
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"Successor" means any
(a) direct or indirect successor (by purchase of any asset(s),
purchase of any stock, purchase of a partnership interest, merger,
acquisition, reorganization, or other similar transaction) of a
principal,
(b) any assignee or transferee, of any right, title or interest in the
assets of the principal, or any portion thereof, as permitted
under this Agreement, and
(c) any direct successor to any of the foregoing.
"Supply Agreement" means the agreement whereby Buyer will supply certain of
Seller's worldwide market requirements for global positioning systems products,
which agreement will be in the form attached as Exhibit B ("Supply Agreement")
hereof.
"Tangible Assets" has the meaning specified in Section 2.1 ("Purchase and
Sale of Assets to be Transferred") hereof.
"Tax" means any federal, state, local or foreign net income, alternative or
add-on minimum, gross income, gross receipts, property, sales, use, transfer,
gains, license, excise, employment, value-added, registration, stamp, payroll,
withholding or minimum tax, or any other tax custom, duty, governmental fee or
other like assessment or charge of any kind whatsoever, together with any
interest or any penalty, addition to tax or additional amount imposed by any
Governmental Body.
"Tax Return" means any return, report or similar statement required to be
filed with respect to any Taxes including, without limitation, any information
return, claim for refund, amended return and declaration of estimated Tax.
"Third Party Licenses" means the licenses and other agreements included in
the Transferred Agreements that relate to this Agreement.
"Third Party Technology" means all software, technology, know-how or
processes of third parties under license to Seller by third party vendors and
suppliers.
"Transfer Taxes" means all sales taxes, use taxes, conveyance taxes,
transfer taxes, filing fees, recording fees, reporting fees and other similar
duties, taxes and fees, if any, imposed upon, or resulting from, the transfer of
the Purchased Assets hereunder, except federal, state, or local income or
similar taxes based upon or measure by revenue, income, profit or gain from
transfer of the Purchased Assets or the conduct of the Operations or by any
increase in the value of any of the Purchased Assets through the Closing Date.
"Transferred Agreements" has the meaning specified in Section 2.1
("Purchase and Sale of Assets to be Transferred") hereof.
"Transferred Permits" has the meaning specified in Section 2.1 ("Purchase
and Sale of Assets to be Transferred") hereof.
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"Y2K Compliant" means, with respect to any software or hardware, that
neither performance nor any function shall be adversely affected by dates prior
to, during or after the year 2000. In particular and without limiting the
generality of the foregoing, (i) no value for current date will cause directly
or indirectly any material interruption in operation, (ii) each material
date-based function shall behave consistently for dates prior to, during and
after the year 2000, (iii) in all interfaces and data storage, the century in
any date must be specified either explicitly or by unambiguous algorithms or
interferencing rules, and (iv) the year 2000 must be recognized as a leap year.
ARTICLE 2
PURCHASE AND CONSIDERATION
2.1 Purchase and Sale of Assets to be Transferred.
(a) On the terms and subject to the conditions of this Agreement, as of
the Closing Date, Seller agrees to sell, transfer, convey, assign and deliver to
Buyer, and Buyer agrees to buy and acquire from Seller, free and clear of all
Encumbrances other than Permitted Encumbrances, all right, title and interest of
Seller in and to the following assets and goodwill related to the Operations as
of the Closing Date (collectively, the "Purchased Assets"):
(i) all tangible assets listed on Schedule 2.1(a)(i)("Tangible Assets")
hereto;
(ii) all intangible assets related to the Operations listed on Schedule
2.1(a)(ii) ("Intangible Assets") hereto;
(iii) the agreements listed on Schedule 2.1(a)(iii) hereto
("Transferred Agreements");
(iv) the permits listed on Schedule 2.1(a)(iv) hereto
("Transferred Permits");
(v) All repair and maintenance records and operation manuals in
Trimble's possession at the Closing Date that relate to the Purchased Assets
("Records and Manuals") provided, however that Seller shall be entitled to
retain and use as Seller deems fit such copies of each of such Records and
Manuals as Seller may determine; and
(vi) those expensed assets of Seller used solely to support the
Operations and tangible personal property of Seller used solely in connection
with the Operations as listed on Schedule 2.1(a)(vi) ("Expensed Assets") hereto.
(b) Seller agrees to sell, transfer, convey, assign and deliver to
Buyer, and Buyer agrees to buy and acquire from Seller, free and clear of all
Encumbrances other than Permitted Encumbrances, all right, title and interest of
Seller in and to the Inventory on the terms and subject to the conditions of
Exhibit G ("Inventory") hereto. Prior to such sale, Seller shall consign the
Inventory to Buyer on the terms and subject to the conditions of Exhibit G
("Inventory") hereto.
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(c) With respect to the unscheduled, expensed assets otherwise
designated by Seller in writing to Buyer, Seller shall permit Buyer no more than
seven (7) days prior to the Closing Date to identify with a label any
unscheduled assets to indicate that they shall be transferred to Buyer as part
of the transactions contemplated hereunder.
2.2 Assets Not to be Transferred.
Seller shall retain and Buyer shall not acquire any right, title or
interest of Seller in or to any of Seller's assets, other than the Purchased
Assets including, without limitation, the following (collectively, the "Excluded
Assets"):
(a) all cash, bank accounts and cash equivalents;
(b) all accounts and notes receivable;
(c) all telephone, telex and facsimile numbers;
(d) Seller's financial, tax and accounting records;
(e) Facility leases; and
(f) assets, rights or properties used by Seller in connection with any
of its businesses other than the Operations.
2.3 Liabilities and Obligations.
(a) As of the Closing Date, Buyer agrees to only assume and pay,
perform or otherwise discharge the obligations associated with the following
(collectively, the "Assumed Liabilities"):
(i) Purchased Assets, Transferred Agreements and Transferred Permits,
arising from and after the Closing Date, and
(ii) liabilities and obligations with respect to New Regular Personnel.
(b) Except as set forth in Section 2.3(a) hereof and notwithstanding
anything else in this Agreement to the contrary, Buyer shall not assume or have
any responsibility for any liability, obligation or commitment of any nature of
Seller, or associated with the Operations prior to the Closing, whether now or
hereafter existing, known or unknown, accrued or unaccrued or due to come due,
including, without limitation, the Pre-Existing Environmental Liabilities, those
liabilities, if any, listed on the Disclosure Letter and those other liabilities
and obligations specifically identified as "Retained Liabilities" in this
Agreement (collectively, the "Retained Liabilities"). Seller acknowledges and
agrees that it shall be fully responsible for all such Retained Liabilities in
accordance with the terms of Article 10 hereof.
(c) Nothing herein shall be deemed to deprive Buyer of any defenses,
set-offs or counterclaims which Seller may have had or which Buyer shall have
with respect to any of
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the Assumed Liabilities (collectively, the "Defenses and Claims"). Effective
at the Closing, Seller agrees to assign, transfer and convey to Buyer all
Defenses and Claims and agrees to cooperate with Buyer (at Buyers expense) to
maintain, secure, perfect and enforce such Defenses and Claims including the
execution of any documents, the giving of testimony or the taking of any such
other action as is reasonably requested by Buyer in connection with such
Defenses and Claims.
2.4 Consideration.
The consideration for the transfer of the Purchased Assets (the
"Purchase Price") shall be the Determined Value of the Purchased Assets, all as
determined pursuant to Section 2.5 ("Adjustment of Purchase Price") below.
2.5 Adjustment of Purchase Price.
(a) Within forty-five (45) days after the Closing, Seller will
prepare and deliver to Buyer a Final Financial Statement of Assets and
Liabilities ("Final FSAL") reflecting the purchase price of the Purchased Assets
and any Assumed Liabilities as of the Closing Date. The Final FSAL shall be
true, accurate and prepared (to the extent applicable) in a manner consistent
with the Interim Financial Statement of Assets and Liabilities attached hereto
as Exhibit C ("Interim FASL") and (to the extent applicable) in accordance with
the Seller's accounting policies and practices which are in compliance with
GAAP, and will fairly present, as of the Closing Date, [*] (the sum of all of
the foregoing collectively referred to as the "Determined Value"). In the event
of any dispute regarding the final FSAL (other than net book value amounts),
such dispute shall be resolved in accordance with the provisions of Section
12.14 ("Dispute Resolution") hereof. Buyer may not dispute any net book value
amounts contained in the Final FSAL and no dispute may be asserted by either
Party unless the aggregate of all disputed amounts related to the Final FSAL are
in excess of Twenty Five Thousand Dollars ($25,000.00). Any notice of dispute by
either Party must be in writing and must contain a reasonably detailed
description of the nature of the dispute.
(b) In the event the Purchase Price exceeds the Closing Date
Payment (as hereinafter defined) Buyer shall, within thirty (30) days following
delivery to Buyer of the Final FSAL (the "Dispute Period"), (i) identify any
portions of the Final FSAL which may be subject to dispute, and (ii) deliver to
Seller cash in an amount equal to the difference between the Purchase Price and
the Closing Date Payment, reduced only by the amount identified as provided in
subsection (i) above, by wire transfer of immediately available funds to the
bank account designated by Seller. In the event the Closing Date Payment exceeds
the Purchase Price and Buyer does not dispute the Final FSAL, the Seller shall,
not later than thirty (30) days following delivery to Buyer of the Final FSAL,
deliver to Buyer cash in an amount equal to such difference by wire transfer of
immediately available funds to the bank account
[*]-CERTAIN INFORMATION AS INDICATED ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMMISSION. CONFIDENTAL TREATEMENT HAS BEEN REQUESTED
WITH RESPCECT TO THE OMITTED PORTIONS.
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designated by Buyer. Buyer's failure to deliver a written notice of dispute
to seller within the applicable Dispute Period shall be deemed acceptance of
the Final FSAL.
2.6 Transfer Taxes.
Transfer Taxes shall be paid by Buyer. Seller shall cooperate with
Buyer to the extent reasonably requested and legally permitted to minimize any
Transfer Taxes.
2.7 Nonassignable Assets.
To the extent that any Purchased Asset is not capable of being assigned
to Buyer without the consent, approval or waiver of a third Person, or if such
assignment or attempted assignment would constitute a breach thereof or default
thereunder (each a "Nonassignable Asset"), or to the extent that the assignment
of any such contract is not practicable because it also relates to an area of
Seller's business other than the Operations (each a "Nonexclusive Asset"),
nothing in this Agreement will constitute an assignment or require the
assignment thereof except to the extent provided in this Section 2.7.
Notwithstanding anything contained in this Agreement to the contrary,
Seller will not be obligated to assign to Buyer any of its rights and
obligations in and to any of the Nonassignable Assets without first having
obtained all consents, approvals and waivers necessary for such assignment;
provided, however, that Seller shall use its reasonable efforts (which will not
under any circumstances include the payment of money or litigation of claims) to
obtain all such consents, approvals and waivers prior to the Closing and, if the
Closing occurs, will use reasonable efforts after the Closing Date to obtain all
such consents, approvals and waivers. Buyer will cooperate with Seller in
Seller's efforts to obtain all required consents, approvals and waivers. If any
such consent shall not be obtained, Seller and Buyer shall cooperate to enter
into a reasonable and mutually agreeable resolution (including, but not limited
to equitably adjusting the Purchase Price). As to the Nonexclusive Assets,
Seller shall use reasonable efforts (which will not under any circumstances
include the payment of money or litigation of claims) to effect an assignment of
rights with respect to the parts of such Nonexclusive Asset that relate
exclusively to the Operations (if practicable) or, alternatively, to enter into
new agreements with respect to the parts of each Nonexclusive Asset that relate
exclusively to the Operations.
2.8 Allocation.
Each of the parties agrees to report this transaction for foreign and
domestic state and federal tax purposes in accordance with the allocations set
forth in Exhibit D ("Purchase Price Allocation"). Buyer and Seller agree to
use such allocation in filing any applicable report, form or filing made with
applicable taxing authorities. If any taxing authority makes or proposes an
allocation different from that set forth in Exhibit D ("Purchase Price
Allocation"), Buyer and Seller shall cooperate with each other in good faith
to contest such taxing authority's allocation (or proposed allocation);
provided however, that, after consultation with all parties adversely affected
by such allocation (or proposed allocation), any other party hereto may file
such protective claims or returns as may be reasonably required to protect its
interests. Each party requesting cooperation shall reimburse the
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cooperating party for its reasonable out-of-pocket expenses (including
reasonable legal fees and expenses) incurred in rendering such cooperation.
2.9 License of Ancillary Technology.
Subject to and upon the terms and conditions of this Agreement, at the
Closing, Seller agrees to grant Buyer the right to use Ancillary Technology in
connection with the conduct of the Operations as provided in the Supply
Agreement.
ARTICLE 3
CLOSING
3.1 The Closing.
The transactions contemplated by this Agreement shall be consummated
(the "Closing") at the Administration Building (building 5) of Solectron
Corporation at 10:00 a.m., local time, on August 13, 1999, or such other place,
time and date as the parties shall agree provided, however, that the Seller
shall have the right to extend such date for up to fourteen (14) days on written
notice to Buyer given on or before August 11, 1999. The time and date on which
the Closing is actually held is referred to herein as the "Closing Date."
3.2 Payment.
Subject to fulfillment or waiver of the conditions set forth in Article
8 ("Conditions Precedent to Obligations of Buyer") below, at the Closing, Buyer
shall pay Seller a cash amount equal to the Determined Value as reflected on the
Interim FSAL (the "Closing Date Payment") by wire transfer of immediately
available funds to the bank account designated by Seller.
3.3 Buyer's Additional Deliveries.
Subject to fulfillment or waiver of the conditions set forth in Article
8 ("Conditions Precedent to Obligations of Buyer"), at the Closing Buyer shall
deliver to Seller, in addition to the Closing Date Payment, all of the
following:
(a) Certificate of the secretary or an assistant secretary of
Buyer, dated the Closing Date, in form and substance reasonably satisfactory to
Seller, as to the resolutions of the Board of Directors of Buyer authorizing the
execution and performance of this Agreement by Buyer and the contemplated
transactions;
(b) The certificate contemplated by Section 9.1 ("No
Misrepresentation or Breach of Covenants and Warranties") below, duly executed
by any Vice President or the President of Buyer;
(c) The Instrument of Assumption duly executed by Buyer;
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(d) The Real Estate Sublease Agreement duly executed by Buyer;
and
(e) The Supply Agreement duly executed by Buyer.
3.4 Seller's Deliveries.
Subject to fulfillment or waiver of the conditions set forth in Article
9 ("Conditions Precedent to Obligations of Seller"), at the Closing Seller shall
deliver to Buyer all of the following:
(a) Certificate of the secretary or an assistant secretary of
Seller, dated the Closing Date, in form and substance reasonably satisfactory
to Buyer, as to the resolutions of the Board of Directors of Seller
authorizing the execution and performance of this Agreement and the
contemplated transactions;
(b) The certificates contemplated by Section 8.1 ("No
Misrepresentations or Breach of Covenants and Warranties") below, duly
executed by Seller;
(c) The Instrument of Assignment duly executed by Seller;
(d) Certificates of title or origin (or like documents) with
respect to any Tangible Assets for which a certificate of title or origin is
required in order to transfer title;
(e) All consents, waivers or approvals required to be obtained
by Seller with respect to the Purchased Assets or the consummation of the
transactions contemplated by this Agreement;
(f) Such other bills of sale, assignments and other
instruments of transfer or conveyance as Buyer may reasonably request or as
may be otherwise necessary to evidence and effect the sale, assignment,
transfer, conveyance and delivery of the Purchased Assets to Buyer;
(g) The Real Estate Sublease Agreement duly executed by
Seller; and
(h) The Supply Agreement duly executed by Seller.
3.5 Passage of Title.
Legal and equitable title and risk of loss with respect to all of the
Purchased Assets shall pass to Buyer on the transfer of the Purchased Assets
at the Closing.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER
Except as set forth in Schedule 4 hereto (the "Disclosure Letter")
Seller represents and warrants to Buyer as follows as of the Effective Date:
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4.1 Organization of Seller.
Seller is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction. Seller is duly qualified to carry
on the Operations as now conducted and is in good standing in each of the
jurisdictions in which the ownership or leasing of the Purchased Assets or the
conduct of the Operations requires such qualification, unless the absence of
qualification would not have a material adverse effect on the Purchased Assets
or the Operations. Seller has the requisite corporate power and authority to own
or lease and to operate and use the Purchased Assets and to carry on the
Operations as now conducted.
4.2 Authorization.
(a) Seller has all necessary power and authority to execute,
deliver and perform this Agreement and all of the Additional Agreements
and to consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance of this Agreement and the Additional
Agreements by Seller have been duly and validly authorized and approved by all
required corporate proceedings on the part of Seller, and do not require any
further authorization or consent of Seller. This Agreement has been, and
the Additional Agreements, upon execution and delivery by Seller will be, duly
authorized, executed and delivered by Seller.
(b) Neither the execution and delivery of this Agreement or any of the
Additional Agreements or the consummation of any of the transactions
contemplated hereby or thereby nor compliance with or fulfillment of the terms,
conditions and provisions hereof or thereof will: (i) violate, conflict with,
result in a breach of the terms, conditions or provisions of, or constitute a
default, an event of default or an event creating rights of acceleration,
termination or cancellation or a loss of rights under, or result in the creation
or imposition of any Encumbrance upon any of the Purchased Assets under (A) the
organizational documents of Seller, (B) any other note, instrument, agreement,
mortgage, lease, license, franchise, permit or authorization, right, restriction
or obligation to which Seller is a party or any of its properties is subject or
by which Seller or any of its properties is bound, (C) any Governmental Order to
which Seller is a party or any of its properties is subject or by which Seller
or any of its properties is bound, or (D) any Requirements of Laws affecting
Seller or its property; or (ii) except for any filings required to be made under
the HSR Act, require the approval, consent, authorization or act of, or the
making by Seller of any declaration, filing or registration with, any Person.
4.3 Taxes.
There are (and as of immediately following the Closing there will
be) no Encumbrances on the Purchased Assets relating to or attributable to
Taxes other than Permitted Encumbrances. Seller has no knowledge of any basis
for the assertion of any such claims which, if adversely determined, would
materially and adversely effect Buyer or Buyer's use of the Purchased
Assets or result in an Encumbrance on the Purchased Assets, other than
Permitted Encumbrances. None of the Purchased Assets are treated as
"tax-exempt use property" within the meaning of Section 168(h) of the Code.
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4.4 Condition of Assets.
The Tangible Assets are in good and serviceable condition, subject to
reasonable wear and tear. Except as expressly set forth in this Agreement, the
Purchased Assets are provided as is and without any express, implied or
statutory warranties of any kind, including, but not limited to the implied
warranties of merchantability, fitness for a particular purpose and
non-infringement of third party rights.
4.5 Governmental Permits.
Seller owns, holds or possesses all material licenses, franchises,
permits, privileges, immunities, approvals and other authorizations from a
Governmental Body which are necessary to entitle it to own or lease, operate and
use the Purchased Assets and to carry on and conduct the Operations
substantially as currently conducted (collectively, the "Governmental Permits").
4.6 Title to Tangible Property.
Seller has good and indefeasible title to all of the Tangible Assets,
free and clear of all Encumbrances other than Permitted Encumbrances. Except as
set forth in Schedule 4, the Purchased Assets constitute all of the assets which
Seller has used in the conduct of the Operations as now conducted by Seller and
the Purchased Assets are all located at the Leased Facility. Upon delivery to
Buyer on the Closing Date of the instruments of transfer contemplated by Section
3.4 (Seller's Deliveries") above, Seller will thereby transfer to Buyer good and
indefeasible title to the Tangible Assets, free and clear of Encumbrances other
than Permitted Encumbrances.
4.7 Intellectual Property.
There are no pending actions of which Seller has received notice,
and no Person has made or, to Seller's knowledge, threatened to make, a claim
that the operation of the Operations infringes or otherwise violates the
Intellectual Property right of such Person. Except as set forth in Schedule
4, to Seller's knowledge, the current operation of the Operations does not
infringe or otherwise violate any Intellectual Property right of any
Person.
4.8 Employees
(a) Buyer will not have, as a consequence of the transactions
contemplated hereby, any liability or obligation with respect to or under any
employee benefit plan (as such term is defined in Section 3(3) of ERISA),
and each other plan, program or arrangement, whether written or oral, providing
for compensation or benefits in connection with the performance of services to
Seller and maintained by Seller with respect to Regular Personnel
(collectively, "Benefit Arrangements") or any other Seller employees and
all such matters shall constitute "Retained Liabilities" hereunder.
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(b) Insofar as it pertains to the Operations, Seller is not a party
to or bound by any union contract and has not experienced any strike, grievance
or any arbitration proceeding, claim of unfair labor practices filed or, to
Seller's knowledge, threatened to be filed or any other material labor
difficulty. To Seller's knowledge, no organizational effort is being or has
been made or threatened by or on behalf of any labor union with respect to
any employees of Seller pertaining to the Operations. To Seller's
knowledge, except as described on Schedule 7.1, none of the Regular
Personnel listed on Schedule 7.1 is involved in or is otherwise threatening
a potential labor dispute.
4.9 Contracts.
Each Transferred Agreement constitutes a valid, legal and binding
obligation of the respective parties thereto (assuming that such Transferred
Agreements are binding on all parties thereto other than Seller; Seller has no
knowledge to the contrary); and no defenses, offsets, or counterclaims thereto
have been asserted by any party thereto. Seller has not received notice of any
default under any of such Transferred Agreements. To Seller's knowledge, there
are no existing defaults or events of default, real or claimed, or events which
with notice or lapse of time or both would constitute a material default under
any Transferred Agreement. To Seller's knowledge, there exists no actual or
threatened termination, cancellation, or limitation of, or any amendment,
modification, or change to any Transferred Agreement.
Seller is neither renegotiating any of the Transferred Agreements nor
is it paying liquidated damages in lieu of performance thereunder. Any such
Transferred Agreements may be transferred to Buyer pursuant to this Agreement
and will continue in full force and effect thereafter, in each case without
breaching the terms thereof or resulting in the forfeiture or impairment of any
rights thereunder and without the consent, approval or act of, or the making of
any filing with, any Person. Complete and correct copies of each of the written
Transferred Agreements have heretofore been delivered or otherwise made
available to Buyer by Seller.
4.10 No Violation, Litigation or Regulatory Action
a) The Purchased Assets and their current use by Seller comply in
all material respects with all applicable Requirements of Laws and Governmental
Orders,
b) Seller has complied in all material respects with all Requirements
of Laws and Governmental Orders which are applicable to the Purchased Assets or
the Operations,
c) There are no lawsuits, claims, suits, proceedings or
investigations pending of which Seller has received notice or, to the knowledge
of Seller, threatened against or affecting Seller in respect of the Purchased
Assets or the Operations, and there are no lawsuits, suits or proceedings
pending in which Seller is the plaintiff or claimant and which relate to
the Purchased Assets or the Operations; nor to Seller's knowledge, is there any
basis for the same, and
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d) There is no action, suit or proceeding pending of which the
Seller has received notice or, to the knowledge of Seller threatened which
questions the legality of the transactions contemplated by this Agreement.
4.11 Environmental Matters
(a) To Seller's knowledge, neither Seller, with respect to the
Purchased Assets, the Operations or any of the Operations Property, nor any of
the past or present Operations, is subject to any pending or ongoing judicial
proceeding of which Seller has received written notice, Governmental Order,
investigation, written notice of claim or demand, or settlement with or before
any Governmental Body or other Person (including without limitation any present
or prior owner or operator of Operations Property) respecting
(i) any material violation of Environmental Laws,
(ii) any Remediation Activities,
(iii) the conduct of Hazardous Material Activities associated with the
Operations, or
(iv) any claim of Losses arising from Contamination or the Release
or threatened Release of Hazardous Material.
Seller has not, with respect to the Operations or the Purchased Assets,
filed nor does Seller intend to file any written notice or report under any
Environmental Laws reporting a violation by Seller of any Environmental Laws or
any Release of Hazardous Material to the environment. In the five (5) year
period prior to the Closing Date, to Seller's knowledge, Seller has not received
any written notice or claim to the effect that it is or may be liable to any
Person as a result of the Release or threatened Release of Hazardous Material
into the environment
(i) arising out of or relating in any way to past or present
Operations, or
(ii) from the Leased Facility or any other Operations Property.
(b) To Seller's knowledge, no Contamination is present on, in or
under the Leased Facility, and no material Release has occurred on the
Leased Facility or any other Operations Property in connection with the conduct
of the Operations by the Seller which would be required to be reported to a
Governmental Body under Environmental Laws. Other than Hazardous Material
reasonably necessary for the conduct of the Operations as presently
conducted and properly stored in accordance with applicable Environmental
Laws, no Hazardous Material will be stored at the Leased Facility as of the
Closing Date.
(c) To Seller's knowledge, any asbestos-containing material which is
on or part of the Leased Facility (excluding any raw materials used in the
manufacture of products or products themselves) is in good repair according to
the current standards and practices governing such material, and its presence or
condition does not violate any applicable Environmental Laws. To the Seller's
knowledge, none of the products Seller has
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manufactured, distributed or sold in connection with the Operations
contains asbestos-containing material.
(d) To Seller's knowledge, all Hazardous Material Activities
conducted at the Leased Facility or the Operations Property or in connection
with past or present Operations (i) have been conducted in material compliance
with applicable Environmental Laws and (ii) have not resulted in Seller's
receipt of a written notice claiming that Seller's exposure of any Person to
Hazardous Material in a manner which has or will cause an adverse health effect
to said Person.
4.12 No Finder.
Neither Seller nor any Person acting on its behalf has paid or become
obligated to pay any fee or commission to any broker, finder or intermediary for
or on account of the transactions contemplated by this Agreement.
4.13 Disclosure.
None of the representations or warranties of Seller contained herein,
none of the information contained in the exhibits and schedules attached hereto
or in the Additional Agreements (including exhibits and schedules attached
thereto) contains or will contain any untrue statement of a material fact
or omits or will omit to state a material fact necessary to make the
statements herein or therein, in light of the circumstances in which they
were made, not misleading.
4.14 Year 2000 Compliance.
Seller represents that to the extent applicable, the Purchased Assets
transferred to Buyer are Year 2000 compliant as defined herein. With respect to
non-Y2K Compliant assets identified on Schedule 4.14, Trimble and Solectron will
cooperate over the 45 day period following the Closing to bring such assets into
mutually acceptable compliance, or to develop a mutually acceptable plan for
compliance, or to make the risk level mutually acceptable, consistent with the
degree of importance of such assets to the activities to be performed by
Solectron for Trimble under the Supply Agreement. Trimble will bear any required
hardware and software replacement purchase costs.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller and agrees as of the
effective date:
5.1 Organization of Buyer
Buyer is an entity duly organized, validly existing and in good
standing under the laws of its jurisdiction. If Buyer conducts the operations
upon the Closing, it will be duly qualified to carry on the Operations and will
be in good standing in
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the State of California. Buyer has full corporate power and authority to own or
lease and to operate and use its properties and assets and to carry on its
business as now conducted.
5.2 Authorization.
(a) Buyer has full power and authority to execute, deliver and perform
this Agreement and all of the Additional Agreements and to consummate the
transactions contemplated hereby and thereby. The execution, delivery and
performance of this Agreement and the Additional Agreements by Buyer have
been duly authorized and approved by the board of directors of Buyer, and
do not require any further authorization or consent of Buyer. This
Agreement has been, and the Additional Agreements, upon execution and
delivery by Buyer will be, duly authorized, executed and delivered by
Buyer.
(b) Neither the execution and delivery of this Agreement or any
of the Additional Agreements or the consummation of any of the transactions
contemplated hereby or thereby nor compliance with or fulfillment of the
terms, conditions and provisions hereof or thereof will:
(i) violate, conflict with, result in a breach of the terms,
conditions or provisions of, or constitute a default, an event or default or
an event creating rights of acceleration, termination or cancellation or a
loss of rights under
(ii) the organizational documents of Buyer,
(iii) any other note, instrument, agreement, mortgage, lease, license,
franchise, permit or authorization, right, restriction or obligation to which
Buyer is a party or any of its properties is subject or by which Buyer or any of
its properties is bound,
(iv) any Governmental Order to which Buyer is a party or any of its
properties is subject or by which Buyer or any of its properties is bound, or
(v) any Requirements of Laws affecting Buyer or its property; or
(vi) except for any filings required to be made under the HSR Act,
require the approval, consent, authorization or act of, or the making
by Buyer of any declaration, filing or registration with, any person.
5.3 No Finder.
Neither Buyer nor any Person acting on its behalf has paid or become
obligated to pay any fee or commission to any broker, finder or intermediary for
or on account of the transactions contemplated by this Agreement.
5.4 Cash Consideration.
Buyer will, at the Closing, have available sufficient cash to enable
it to perform its obligations under this Agreement.
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5.5 Disclosure.
None of the representations or warranties of Buyer contained herein,
none of the information contained in the exhibits and schedules attached hereto
or in the Additional Agreements (including exhibits and schedules attached
hereto) contains or will contain any untrue statement off a material fact or
omits or will omit to state a material fact necessary to make the statements
herein or therein, in light of the circumstances in which they were made, not
misleading.
ARTICLE 6
ACTION PRIOR TO THE CLOSING DATE
The respective parties hereto covenant and agree to take the
following actions prior to the Closing.
6.1 Investigation of the Operations by Buyer.
Prior to the Closing, upon reasonable advance notice by Buyer to
Seller, Seller shall afford to the officers, employees and authorized
representatives of Buyer (including, without limitation, independent public
accountants and attorneys) reasonable access during normal business hours to the
offices, properties, employees and business records (excluding financial
records) but including computer files, retrieval programs and similar
documentation) of Seller with respect to the Operations and shall furnish to
Buyer or its authorized representatives such additional information concerning
the Purchased Assets and the Operations as shall be reasonably requested,
including all such information as shall be reasonably necessary to enable Buyer
or its representatives to verify the accuracy of the representations and
warranties contained in this Agreement, to verify that the covenants of Seller
contained in this Agreement have been complied with and to determine whether the
conditions set forth in Article 8 ("Conditions Precedent to Obligations of
Buyer") have been satisfied. Such investigation shall be conducted in such a
manner as not to interfere with the Operations, and Seller shall have no duty
hereunder to provide access to Buyer to any information as to which Seller owes
any Person a duty of confidentiality without such Person's prior written
consent. No investigation made by Buyer or its representatives hereunder shall
affect the express representations and warranties of Seller.
6.2 Preserve Accuracy of Representations and Warranties.
Each of the parties hereto shall refrain from taking any action which
would render any representation or warranty contained in Article 4 or 5 of this
Agreement not to be true and correct in all material respects as of the Closing
Date. Each party shall promptly notify the other of any action, suit or
proceeding that shall be instituted or threatened against such party to
restrain, prohibit or otherwise challenge the legality of any transaction
contemplated by
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this Agreement. Seller shall promptly notify Buyer of any lawsuit, claim,
proceeding or investigation that is threatened, brought, asserted or commenced
against Seller which would have been set forth in Schedule 4 if such lawsuit,
claim, proceeding or investigation had arisen prior to the date hereof.
6.3 Transferred Agreements.
Subject to Section 2.7 ("Nonassignable Assets") hereof, Seller will
use commercially reasonable efforts to secure, before the Closing Date, the
consent, approval or waiver, in form and substance reasonably satisfactory
to Buyer, from any Person to any Transferred Agreement required to be
obtained to assign or transfer any such agreements to Buyer or to otherwise
satisfy the conditions set forth in Section 8.3 ("Necessary Approvals")
hereof; provided that neither Seller nor Buyer shall have any obligation to
offer or pay any consideration in order to obtain any such consents or
approvals; and provided, further, that Seller shall not make any agreement
or understanding affecting the Purchased Assets or the Operations as a
condition for obtaining any such consents or waivers except with the prior
written consent of Buyer not to be unreasonably withheld. During the period
prior to the Closing, Buyer shall use commercially reasonable efforts to
cooperate and assist Seller in obtaining the consents, approvals and
waivers contemplated by this Section 6.3.
6.4 Notice of Certain Matters.
Without limiting either party's right to rely on the representations
and warranties as set forth herein, each of Buyer and Seller shall provide the
other party with prompt written notice with respect to any material facts which
arise between the date of this Agreement and the Closing Date which, if they had
occurred and been known prior to the date of this Agreement, would have been
required to have been disclosed in order to make the representations and
warranties contained in Articles 4 and 5 true and correct as of the date of this
Agreement. In addition, Seller shall provide Buyer with prompt written notice
if, between the date hereof and the Closing Date, there is a change in the
Purchased Assets or the Operations which has or may be reasonably expected to
materially and adversely affect the Operations. Subject to the applicable
confidentiality provisions of this Agreement, during the period prior to the
Closing, Seller will as promptly as reasonably possible under the circumstances
advise Buyer in writing of
(a) any notice or other communication from any third Person alleging
that the consent of such third Person is or may be required in connection with
the transactions contemplated by this Agreement, and
(b) any material default under any Transferred Agreement or
Governmental Permit or event which, with notice or lapse of time or both, would
become such a default on or prior to the Closing Date and of which Seller has
knowledge.
6.5 Operations Prior to the Closing.
Except as expressly contemplated by this Agreement or as described in
Schedule 6.5,
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(i) Seller shall operate and carry on the Operations only in the
ordinary course and substantially as presently operated, and in compliance with
all Requirements of Laws, Governmental Orders, and the binding agreements,
covenants and restrictions applicable thereto;
(ii) Seller shall keep and maintain the Purchased Assets in reasonably
good operating condition and repair (reasonable wear and tear excepted) and,
except to the extent specifically agreed to in writing by Buyer, shall use
commercially reasonable efforts to maintain the business organization of the
Operations intact and to preserve the goodwill of the suppliers, contractors,
employees, customers and other Persons having business relations with the
Operations to the extent necessary to continue to conduct the Operations and
In furtherance of the foregoing subsection, and without limitation
thereof, except as expressly contemplated by this Agreement or except with
the express written approval of Buyer, Seller shall
(i) use the Purchased Assets in the usual, regular and ordinary course
and in substantially the same manner as heretofore used,
(ii) continue to make payments when due and not slow down those
payments as compared to its normal payment procedures and to perform its
obligations under the leases, contracts, commitments and other agreements
included in the Purchased Assets,
(iii) maintain insurance against loss or damage to the Purchased Assets
and such other insurance with respect to the Purchased Assets as has heretofore
been maintained,
(iv) not sell, dispose of, encumber or enter into any agreement for
the sale, disposition or encumbrance of, all or any part of the Purchased
Assets, except in the ordinary course of business consistent with past
practice,
(v) with respect to any employee who is or would thereby become
Regular Personnel listed on Schedule 7.1, not enter into any employment
contract or, except in the ordinary course of business, increase any such
employee's compensation or benefits, and
(vi) not enter into any contracts or commitments with respect to
the Operations not in the ordinary course of business that involve receipt or
payment of more than $50,000 in the aggregate.
6.6 Government Filings.
Seller and Buyer shall each have filed a pre-merger notification and
report form and all documentary attachments thereto to be filed with the United
States Federal Trade Commission ("FTC") and the Antitrust Division of the United
States Department of Justice ("DOJ") pursuant to the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations promulgated
thereunder ("HSR Act"). Seller and Buyer shall each pay their respective filing
fees required by the HSR Act or otherwise in connection with
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the transactions contemplated by this Section. Seller and Buyer shall file any
additional information requested by the FTC, the DOJ or any other Governmental
Body in connection with this Agreement or the transactions contemplated hereby
as soon as practicable after receipt of any legally valid request for such
information. Neither Seller nor Buyer shall unreasonably take or fail to take
any action which reasonably could be expected to have the effect of delaying,
impairing or impeding the receipt of approval under the HSR Act as contemplated
by this Section 6.6, provided, however, that this sentence shall not be
construed to require either party to transfer or assign rights or other assets
to a third Person.
ARTICLE 7
ADDITIONAL AGREEMENTS
7.1 Employment Matters.
(a) Schedule 7.1 contains: (i) a list of all Regular Personnel who
shall be offered employment as New Regular Personnel and (ii) the base
salary provided by Seller to any such employees as of the Effective Date. At
or prior to Closing, Buyer will offer in writing employment to all individuals
who are Regular Personnel and are listed on Schedule 7.1 with salaries,
bonus payments, vacation time and other employee benefits and terms and
conditions substantially similar to (or in the discretion of Buyer, more
favorable than) those that exist for the employment of each Regular
Personnel by Seller immediately prior to the Closing. Such employment, if
accepted by Regular Personnel, shall become effective immediately on the
Closing Date.
(b) Seller shall terminate each of the Regular Personnel who has
accepted (and not withdrawn) an offer of employment extended pursuant to Section
7.1(a) above on and as of the Closing Date. Nothing contained in this Section
7.1 is intended or shall be deemed to;
(i) require Buyer to employ New Regular Personnel for any fixed or
predetermined time after the Closing as all such employment shall be "at will,"
or
(ii) confer upon any employee of Seller, past, present, or future, any
rights of employment of any nature, it being understood and agreed that the
provisions of this Section 7.1 are intended to set forth an agreement among
Buyer and Seller, and are not intended to benefit any Persons not party to this
Agreement, including such employees.
(c) From the date hereof to the Closing Date, Seller agrees to
cooperate with Buyer in recruiting and hiring Regular Personnel who shall be
offered employment as New Regular Personnel as contemplated in Section 7.1(a)
above.
(d) Buyer and Seller shall offer the New Regular Employees benefits
under a employee retention program ("Employee Transition Benefits")
identified and described in Exhibit F which is referenced hereto and
made part of this Agreement.
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(e) New Regular Personnel shall be employed subject to Buyer's
customary compensation and benefit policies, including, but not limited
to, bonus policies, overtime, shift premium, paid time off, other similar
policies and vacation policies. Subject to Section 7.1(a) above, Buyer reserves
the right, in its sole discretion, to change elements of the employment
compensation and benefits provided its employees, including and New Regular
Personnel hired pursuant to this Section 7.1.
(f) Notwithstanding anything to the contrary herein, Regular Personnel
listed on Schedule 7.1 who, on the Closing Date, are employed in the United
States pursuant to a work or training visa shall be offered employment as New
Regular Personnel of Buyer at such times, and under such terms and conditions,
as Seller and Buyer shall agree. Prospective new employees of the Operations to
whom Seller has made offers prior to the Closing, shall be offered employment as
New Regular Personnel of Buyer only if Seller and Buyer so agree.
(g) Upon each offer of employment Buyer shall request from New Regular
Personnel and provide to Seller a signed release and consent to the transfer by
Seller to Buyer of the personnel records of such employee maintained by Seller.
Copies of all personnel records of each employee who signs such release and
consent shall be transferred by Seller to Buyer as soon as practicable after
such release and consent is provided to Seller. With respect to New Regular
Personnel who do not sign such release and consent, only the name, Seller
employee number, social security number, W-4 income tax withholding form
information, current job assignment, current rate of wages or salary, and the
amount of service completed with Seller and its subsidiaries shall be
transferred. In the event any applicable laws or regulations prohibit or
restrict the transfer of personnel information pursuant to this paragraph, the
obligations of Seller shall be to transfer only such information as shall be
permitted by such laws or regulations.
(h) Seller has undertaken reasonable efforts to complete and retain
legally prescribed I-9 employment forms on all New Regular Personnel hired by
Seller since the effective date of the requirements to complete such forms.
Seller will transfer all such forms to Buyer together with the personnel records
transferred pursuant to this paragraph (i).
7.2 Taxes.
Notwithstanding anything to the contrary in Article 10
("Indemnification") below, and subject to the provisions of Section 2.6
("Transfer Taxes"), Seller shall be responsible for and pay all Taxes of Seller,
the Operations or the Purchased Assets arising at any time with respect to
periods ending on or prior to the Closing Date, including the portion of real,
personal or other property Taxes attributable to such periods and all such Taxes
shall constitute Retained Liabilities.
To the extent relevant to the Purchased Assets and the Operations,
Seller shall:
provide Buyer, at Buyer's expense, with such assistance as may reasonably be
required in connection with the preparation of any Buyer's Tax Return and the
conduct of any audit or other examination by any taxing authority relating or
pertaining to any and all Taxes
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attributable to or levied upon the Operations and/or the Purchased Assets after
the Closing or in connection with judicial or administrative proceedings
relating to any liability for Taxes attributable to or levied upon the Operation
and/or the Purchased Assets after the Closing.
7.3 Bulk Sale.
Buyer and Seller hereby waive compliance with any applicable bulk sale
laws in connection with the transactions contemplated by this Agreement.
7.4 Non-Solicitation.
Seller and Buyer each agree, for a period of thirty (30) months after
the Closing Date, that it shall not solicit, any employees of the other party
or other party's Affiliates to work for Seller or Buyer, as the case may
be, or its Affiliates, in any capacity, without the prior written consent
of the other party.
7.5 Inspection of Leased Facility.
Seller shall permit, on reasonable notice from Buyer at reasonable
times, Buyer and its agents, contractors and consultants to enter the real
property of Seller where the Leased Facility is located for the purpose of
conducting such inspections, testing, and evaluation of any matter concerning
the physical condition of the Leased Facility (including, without limitation,
the structural, operating and roof systems thereof, and the determination of the
presence or absence of termites, dry rot, fungi, wood destroying organisms or
Hazardous Material at or on the Leased Facility, or the soil, groundwater,
surface water, air or building materials thereof) as Buyer may reasonably elect
to investigate; provided, however, that any such investigation shall be subject
to Buyer's compliance with the confidentiality provisions of this Agreement and
any procedures regarding safety and security designated by Seller. Buyer shall
pay the cost of such inspections and indemnify and hold harmless the Seller from
any property damage or bodily injury arising out of the negligent conduct of
such inspections; provided, however, that in no event shall Buyer be liable for
any condition present on the Leased Facility prior to entry by Buyer or its
agents, contractors or consultants thereon.
7.6 Transition Services.
For a period of not more than Eight (8) months after the Closing date,
Seller will provide Buyer the services described in Exhibit E ("Description of
Transition Services").
7.7 Publicity.
Seller and Buyer agree that they will collaborate on a mutually
beneficial press release concerning the transactions contemplated by this
Agreement. The parties shall advise and confer with each other prior to the
issuance of any reports, statements or releases pertaining to the
matters contemplated by this Agreement. Each party agrees not to issue any
press release or public statement with respect to the matters contemplated
by this Agreement without the consent of the other Party except as required by
law and after reasonable
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consultation with the other party. Either party may disclose,
under confidentiality and use restrictions, such terms of this Agreement as only
reasonably necessary to disclose for purposes of seeking financing, bank
credit or the like. Both parties shall remain free to disclose the
existence of this Agreement. To the extent reasonably required, Buyer and
Seller may disclose limited information concerning this Agreement to third
parties whose consent is necessary in order to terminate or assign the
Transferred Agreements.
7.8 Confidentiality
Buyer and Seller previously entered into a Nondisclosure Agreement
dated December 3, 1998 (the "NDA"). The NDA is hereby incorporated by reference
into and made a part of this Agreement, and will remain in full force and
effect following execution of this Agreement.
ARTICLE 8
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
The obligations of Buyer under this Agreement shall be subject,
at the option of Buyer, to the satisfaction, on or prior to the Closing Date,
of the following conditions.
8.1 No Misrepresentation or Breach of Covenants and Warranties.
Each of the representations and warranties of Seller contained or
referred to herein and in the Additional Agreements shall be true and correct in
all material respects on the Closing Date as though made on the Closing Date;
Seller shall have complied with and not otherwise breached the covenants
set forth herein; and there shall have been delivered to Buyer a
certificate to such effect, dated the Closing Date, signed on behalf of
Seller.
8.2 No Restraint or Litigation.
No action, suit, investigation or proceeding shall have been instituted
or overtly threatened to restrain or prohibit or otherwise challenge the
legality or validity of the transactions contemplated hereby.
8.3 Necessary Approvals.
The parties shall have received the consent of all Persons necessary to
consummate the transactions contemplated hereby, which are either specified in
Schedule 4 or contemplated by Section 6.6 ("Government Filings") hereof.
8.4 Employees.
The key employees on Schedule 7.1 mutually identified by Buyer and
Seller shall have accepted (and not withdrawn) offers of employment by Buyer
extended as contemplated by Section 7.1 ("Employment Matters") hereof.
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8.5 Additional Agreements.
Each of the Additional Agreements shall have been duly executed by
Seller or its Affiliates and shall be in full force and effect.
8.6 No Material Adverse Change.
There shall have been no material adverse change with respect to
the Purchased Assets or the Operations.
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligations of Seller under this Agreement shall be subject, at the
option of Seller, to the satisfaction, on or prior to the Closing, of the
following conditions:
9.1 No Misrepresentation or Breach of Covenants and Warranties.
Each of the representations and warranties of Buyer contained or
referred to in this Agreement and the Additional Agreements shall be true and
correct in all material respects on the Closing Date as though made on the
Closing Date; Buyer shall have complied with and not otherwise breached the
covenants set forth herein; and there shall have been delivered to Seller a
certificate or certificates to such effect, dated the Closing Date and signed on
behalf of Buyer by the President or any Vice President of Buyer.
9.2 No Restraint or Litigation.
No action, suit, investigation or proceeding shall have been instituted
or overtly threatened to restrain, prohibit or otherwise challenge the legality
or validity of the transactions contemplated hereby.
9.3 Necessary Approvals.
The parties shall have received the consent of all Persons necessary to
consummate the transactions contemplated hereby, which are either specified in
Schedule 4 or contemplated by Section 6.6 ("Government Filings") hereof.
9.4 Additional Agreements.
Each of the Additional Agreements shall have been duly executed by
Buyer or its Affiliates and shall be in full force and effect.
9.5 No Material Adverse Change.
There shall have been no material adverse change with respect to
Buyer's business, operating results or financial condition.
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ARTICLE 10
INDEMNIFICATION
10.1 Indemnification by Seller; Seller Liability.
Seller agrees to indemnify and hold harmless Buyer from and against any
and all Losses incurred by Buyer in connection with or arising from:
(a) any breach by Seller of any of its covenants in this Agreement;
(b) any breach of any warranty or the inaccuracy of any representation
of Seller contained or referred to in this Agreement or any certificate
delivered by or on behalf of Seller pursuant hereto; and
(c) the Retained Liabilities.
The indemnification provided for in Section 10.1(a) and 10.1(c)
shall not terminate. The indemnification provided for in Section 10.1(b)
shall terminate one (1) year after the Closing Date and no claims shall be
made by Buyer under this Section 10.1(b) thereafter, except that the
indemnification by Seller shall continue as to any Loss of which Buyer has
notified Seller, including the general circumstances giving rise thereto, in
accordance with the requirements of Section 10.3 ("Notice of Claims") on or
prior to the date such indemnification would otherwise terminate in accordance
with this Section 10.1, as to which the obligation of Seller shall continue
until the liability of Seller shall have been determined pursuant to this
Article 10, and Seller shall, if required to do so under a final judgement of a
court or final decision of an arbitrator have reimbursed Buyer for the full
amount of such Loss in accordance with this Article 10, provided however, that
Seller shall only have liability under this Section 10.1 once the aggregate of
all Losses exceeds [*] and thereafter, only if the amount of Loss arising from
the same or single set of circumstances is in excess of [*].
In addition to the foregoing, Buyer and Seller agree that Seller shall
only have liability under this Agreement once the aggregate of all Losses for
which Seller is liable to Buyer exceeds [*] and thereafter, only if the amount
of Loss arising from the same or single set of circumstances for which Seller is
liable to Buyer is in excess of [*] provided, however, that this sentence shall
not apply to a claim by Buyer against Seller that arises from any adjustment of
the purchase price as described in Section 2.5(a).
10.2 Indemnification by Buyer.
Buyer agrees to indemnify and hold harmless Seller from and against any
and all Losses incurred by Seller in connection with or arising from:
[*]-CERTAIN INFORMATION AS INDICATED ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMMISSION. CONFIDENTAL TREATEMENT HAS BEEN REQUESTED
WITH RESPCECT TO THE OMITTED PORTIONS.
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(a) any breach by Buyer of any of its covenants in this Agreement;
(b) any breach of any warranty or the inaccuracy of any representation
of Buyer contained or referred to in this Agreement or any certificate
delivered by or on behalf of Buyer pursuant hereto; and
(c) the Assumed Liabilities;
(d) claims for which Buyer is required to indemnify Seller under Section
7.1(f) hereof; and
(e) the use of the Purchased Assets, the conduct of the Operations or the
use of the Leased Facility from and after the Closing Date.
The indemnification provided for in Section 10.2(a), 10.2(c), 10.2(d),
and 10.2(e) shall not terminate. The indemnification provided for in Section
10.2(b) shall terminate one (1) year after the Closing Date, and no claims shall
be made by Seller under Section 10.2(b) thereafter, except that the
indemnification by Buyer shall continue as to any Loss or Expense of which
Seller has notified Buyer in accordance with the requirements of Section 10.3 on
or prior to the date such indemnification would otherwise terminate in
accordance with this Section 10.2, as to which the obligation of Buyer shall
continue until the liability of Buyer shall have been determined pursuant to
this Article 10, and Buyer shall have reimbursed Seller for the full amount of
such Loss in accordance with this Article 10.
10.3 Notice of Claims.
Buyer or Seller (the "Indemnified Party") seeking indemnification
hereunder shall give to the party obligated to provide indemnification to such
Indemnified Party (the "Indemnitor") a notice (a "Claim Notice") describing in
reasonable detail the facts then known with respect to such claim for
indemnification hereunder and shall include in such Claim Notice the amount of
such claim (to the extent then known), and a reference to the provision of this
Agreement or any other Additional Agreement, executed hereunder or in connection
herewith upon which such claim is based; provided, however, that a Claim Notice
in respect of any action at law or suit in equity by or against a third Person
as to which indemnification will be sought shall be given promptly after the
action or suit is commenced; and provided, further, that failure to give such
notice shall not relieve the Indemnitor of its obligations hereunder except to
the extent it shall have been materially prejudiced by such failure.
After delivery of any Claim Notice pursuant hereto, the amount of
indemnification to which an Indemnified Party shall be entitled under this
Article 10 shall be determined in accordance with the dispute resolution
mechanism set forth in Section 12.12 hereto.
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10.4 Third Party Claims.
The Indemnitor shall have the right to conduct and control, through
counsel of its choosing, the defense, compromise or settlement of any third
Person claim, action or suit against any Indemnified Party as to which
indemnification will be sought by such Indemnified Party from any
Indemnitor hereunder, and in any such case the Indemnified Party shall
cooperate in connection therewith and shall furnish such records,
information and testimony and attend such conferences, discovery
proceedings, hearings, trials and appeals as may be reasonably requested by
the Indemnitor in connection therewith; provided, that the Indemnified
Party may participate, through counsel chosen by it and at its own expense,
in the defense of any such claim, action or suit as to which the Indemnitor
has so elected to conduct and control the defense thereof. So long as the
Indemnitor is defending in good faith any third Person claim as to which
indemnification has been sought hereunder, the Indemnified Party shall not
settle or compromise such third Person claim without Indemnitor's prior
written consent.
10.5 Environmental Indemnification by Seller.
(a) Indemnification. Notwithstanding anything to the contrary in this
Agreement, Seller agrees to indemnify and hold harmless Buyer from and against
any and all Pre-Existing Environmental Liabilities.
(b) Adequate Protection From Loss. Seller acknowledges that its
obligations under the foregoing Section 10.5 (a) shall arise upon the service or
filing of an action or proceeding regarding any Losses for which Seller is
liable under this indemnity, and not merely upon the realization by an
Indemnified Party of an actual loss; and, therefore, Seller agrees, within
fifteen (15) days following receipt of a written notice regarding the service or
filing of such action or proceeding to indemnify and hold harmless the
Indemnified Party from such Losses. If it is determined that the subject Losses,
or some portion of them, pertain to circumstances first occurring after the
Closing Date that are subject to Section 10.6 hereof, Buyer shall promptly
refund to Seller on a equitable prorata basis the Losses Seller incurred in
providing indemnity and hold harmless protection.
(c) Waiver by Seller. To the extent permitted by applicable Law,
Seller, on behalf of itself and its Successors (other than Buyer), after
consultation with counsel, hereby waives (i) any and all rights to join Buyer
and its Successors in any litigation or proceeding to the extent, but only to
the extent arising out of or in connection with any Pre-Existing Environmental
Liabilities; and (ii) any and all Losses which any of them may have in respect
to any Pre-Existing Environmental Liabilities.
(d) Survival. It is expressly acknowledged by Seller that the acts,
omissions, breach of any covenant in this Agreement or in any Additional
Agreement, or violation of environmental Laws by Buyer and/or Successors
(whether active, passive, negligent, wrongful or in violation of any agreement)
shall not impair the right of any of such Persons (including the Person acting
or omitting the act) to enforce Seller's indemnification
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obligations pursuant to this Section 10.5. The obligations and rights of the
parties under this Section 10.5 are in addition to, independent from, and
severable from the rights and obligations of the parties under this Agreement or
any other agreement between them and shall survive, notwithstanding the
termination, expiration or breach of such agreements or any other agreement
between any of the parties hereto and notwithstanding any other act or omissions
of the parties, whether or not such acts are in violation of the express
provisions of this Agreement or applicable Requirements of Laws.
10.6 Environmental Indemnification by Buyer.
(a) Indemnification. Buyer agrees to indemnify and hold harmless Seller
from and against any and all Losses incurred to the extent caused by or arising
out of any of the following liabilities which are not otherwise Pre-Existing
Environmental Liabilities ("Buyer Environmental Liabilities"):
(i) the presence of Contamination as a consequence of the Release after
the Closing Date of Hazardous Material by Buyer or any of Buyer's agents,
employees or contractors on or about the Leased Facility or the Operations on or
about the Leased Facility after the Closing Date.
(ii) any Hazardous Material Activity or Remediation Activity on the
Leased Facility after the Closing Date.
(iii) the exposure after the Closing Date of any employee of any
Seller or any other Person to any Contamination described in sub-part (i)
above, at any time, to any Hazardous Material in the course of or a
consequence of any Hazardous Material Activity conducted on or about the
Leased facility after the Closing Date.
(b) Adequate Protection From Loss. Buyer acknowledges that its
obligations under the foregoing Section 10.6 (a) shall arise upon the service or
filing of any action or proceeding for which Buyer is liable under this
indemnity, and not merely upon the realization by the Indemnified Party of an
actual loss; and, therefore, Buyer agrees, within fifteen (15) days following
receipt of a written notice regarding the service or filing of such action or
proceeding indemnify and hold harmless the Indemnified Party. If it is
determined that the subject Losses, or some portion of them, pertain to
circumstances first occurring prior to the Closing Date, that are subject to the
provisions of Section 10.5 hereof, Seller shall promptly refund to Buyer on an
equitable prorata basis, the Losses Buyer incurred in providing indemnity and
hold harmless protection.
(c) Waiver by Buyer. To the extent permitted by applicable law, Buyer,
on behalf of itself and its Successors, after consultation with counsel,
hereby waives any and all rights to join Seller and their Successors in any
litigation or proceeding to the extent, but only to the extent, arising out of
or in connection with any Buyer Environmental Liabilities; and any and all
Losses which any of them may have with respect to any Buyer Environmental
Liability to which Seller did not exacerbate or contribute.
33
<PAGE>
(d) Survival. It is expressly acknowledged by Buyer that the acts,
omissions, breach of any covenant in this Agreement or in any Additional
Agreement, or violation of Environmental Laws by Seller and/or its respective
Successors (whether active, passive, negligent, wrongful or in violation of any
agreement) shall not impair the right of any such Persons (including the Person
acting or omitting to act) to enforce Buyer's indemnification obligations
pursuant to this Section 10.6. The obligations and rights of the parties under
this Section 10.6 are in addition to, independent from, and severable from the
rights and obligations of the parties under this Agreement or in any Additional
Agreement between them and shall survive, notwithstanding the termination,
expiration or breach of such agreements between any of the parties hereto and
notwithstanding any other act or omission of the parties, whether or not such
acts are in violation of the express provisions of this Agreement, any
Additional Agreement or Requirements of Laws.
10.7 Special Understanding Regarding Pre-Existing Lead in the Exhaust
System.
Seller acknowledges the presence of a Hazardous Material within the
Leased Facility as more particularly described in Subsection 4.11 of
Schedule 4 ("Pre-Existing Lead in the Exhaust System"). With respect and
only with respect to such Pre-Existing Lead in the Exhaust System, Trimble
and Solectron agree that:
(a) Pre-Existing Lead in the Exhaust System existing at the Closing
Date shall be deemed a Pre-Existing Environmental Liability; and
(b) Any further accretion or deposit of lead in the affected exhaust
system occurring after the Closing Date shall be deemed a Pre-Existing
Environmental Liability to the extent that such further accretion or deposit
occurs both (i) in the regular course of Buyer's manufacture of Seller's
products after the Closing Date under the Supply Agreement, AND (ii) in the
substantially the same manner and at the substantially the same rate (or a lower
rate) as occurred before the Closing Date.
ARTICLE 11
TERMINATION
11.1 Termination.
Notwithstanding anything in this Agreement to the contrary, this
Agreement may be terminated at any time prior to the Closing:
(a) by the mutual written consent of Buyer and Seller;
34
<PAGE>
(b) by either party if the other party fails to satisfy the conditions
to Closing required under this Agreement through no fault of such other party;
(c) by Buyer in the event of any material breach by Seller of any of
the representations, warranties, covenants or agreements of Seller contained
herein and the failure of Seller to cure such breach within fifteen (15) days
after receipt of notice from Buyer requesting such breach to be cured; or
(d) by Seller in the event of any material breach by Buyer of any of
Buyer's representations, warranties, covenants or agreements contained herein
and the failure of Buyer to cure such breach within fifteen (15) days after
receipt of notice from Seller requesting such breach to be cured.
11.2 Notice of Termination.
Any party desiring to terminate this Agreement pursuant to Section 11.1
("Termination") above shall give notice of such termination to the other parties
to this Agreement.
11.3 Effect of Termination.
In the event that this Agreement shall be terminated pursuant to this
Article 11, all further obligations of the parties under this Agreement (other
than Sections 12.2 ("Notice"), 12.8 ("Expenses"), 12.11 ("Governing Law") and
12.12 ("Dispute Resolution") shall be terminated, provided that nothing herein
shall relieve any party from liability for its breach of this Agreement.
ARTICLE 12
GENERAL PROVISIONS
12.1 Survival of Obligations.
All representations, warranties, covenants and obligations contained
in this Agreement shall survive the consummation of the transactions
contemplated by this Agreement. The respective representations and
warranties of each party hereto contained herein shall not be deemed waived
or otherwise affected by any investigation made by the other party hereto
and shall survive the Closing Date.
12.2 Notice
All notices, requests and other communications permitted or required
to be given pursuant to this Agreement shall be in writing and shall be sent by
either recognized delivery service or certified or registered mail, return
receipt requested and with all postage prepaid, to the recipient party at
its address set forth below:
35
<PAGE>
If to Solectron:
Solectron Corporation
847 Gibraltar Drive, Building 5
Milpitas, CA 95035
Attention: Chief Financial Officer and Legal Department
Facsimile: (408) 956-6059
If to Trimble:
Trimble Navigation Limited
645 North Mary Avenue
Sunnyvale, CA 94088-3642
Attention: Chief Financial Officer and Legal Department
Each such notice shall be effective upon delivery or when delivery is refused.
Either party may, by notice given in accordance herewith, designate another
address for receipt of notice.
12.3 Successors and Assigns.
Neither party shall directly or indirectly assign, sell, subcontract or
otherwise transfer this Agreement or any of its rights or obligations under this
Agreement without the prior written consent of the other party, except as
permitted in this Section. Either party may, without the prior notice to or
written consent of the other party, assign or transfer this Agreement as part of
a corporate reorganization, consolidation, merger, sale of substantially all of
its assets or any other similar corporate transaction in which fifty percent
(50%) or more of a party's equity securities or fifty percent (50%) or more of a
party's shareholders' voting power, are transferred, sold or exchanged, provided
that the Successor assumes all of the assigning party's obligations under this
Agreement.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their successors and permitted assigns. Nothing in this Agreement,
expressed or implied, is intended or shall be construed to confer upon any
Person other than the parties and successors and assigns permitted by this
Section 12.3 any right, remedy or claim under or by reason of this Agreement.
12.4 Access to Records After Closing Date.
In the event that buyer reasonably requires records of Seller after
the Closing Date, the parties agree to meet and discuss same.
36
<PAGE>
12.5 Entire Agreements; Amendments.
This Agreement and the exhibits and schedules referred to herein and
the documents delivered pursuant hereto contain the entire understanding of the
parties hereto with regard to the subject matter contained herein or
therein, and supersede all prior agreements or understanding between or
among any of the parties hereto including without limitation the Letter of
Intent between the Parties dated April 9, 1999 and the Letter of Intent
between the Parties dated July 23, 1999. This Agreement shall not be
amended, modified or supplemented except by a written instrument signed by
an authorized representative of each of the parties hereto.
12.6 Interpretation.
Article titles and headings to sections herein are inserted for
convenience of reference only and are not intended to be a part of or to
affect the meaning or interpretation of this Agreement. The schedules
referred to herein shall be construed with and as an integral part of this
Agreement to the same extent as if they were set forth verbatim herein.
12.7 Waivers.
Any term or provision of this Agreement may be waived, or the time for
its performance may be extended, by the party or parties entitled to the
benefit thereof. Any such waiver shall be validly and sufficiently
authorized for the purposes of this Agreement if, as to any party, it is
authorized in writing by an authorized representative of such party. The
failure of any party hereto to enforce at any time any provision of this
Agreement shall not be construed to be a waiver of such provision, nor in
any way to affect the validity of this Agreement or any part hereof or the
right of any party thereafter to enforce each and every such provision. No
waiver of any breach of this Agreement shall be held to constitute a waiver
of any other or subsequent breach.
12.8 Expenses.
Except as otherwise expressly agreed to in writing by the parties
and subject to Section 6.6 hereof, each party hereto will pay all Expenses
incident to its negotiation and preparation of this Agreement and to its
performance and compliance with all agreements and conditions contained
herein on its part to be performed or complied with.
12.9 Partial Invalidity.
Wherever possible, each provision hereof shall be interpreted in
such manner as to be effective and valid under applicable law, but in case any
one or more of the provisions contained herein shall be held to be invalid,
illegal or unenforceable in any respect, such provision shall be
ineffective to the extent, but only to the extent, of such invalidity,
illegality or unenforceability without invalidating the remainder of such
invalid, illegal or
37
<PAGE>
unenforceable provision or provisions or any other provisions hereof,
unless such a construction would be unreasonable.
12.10 Governing Law.
This Agreement shall be governed by and the legal relations between
the parties shall be determined in accordance with the substantive laws of the
State of California, without regard to the conflicts of law principles of
the State of California.
12.11 Dispute Resolution.
Except for the right of either Party to apply to a court of competent
jurisdiction for a temporary restraining order, a preliminary injunction, or
other equitable relief pending further action by the arbitrators, all claims or
disputes related to or arising from this Agreement or the commercial
relationship of the parties that are not resolved by negotiation and mutual
agreement shall be submitted to final and binding arbitration before
JAMS/ENDISPUTE, or its successor, for arbitration in Santa Clara County,
California pursuant to the United States Arbitration Act, 9 U.S.C. ss.1 et seq.,
unless the parties mutually agree otherwise. Either Party may commence the
arbitration process by filing a written demand for arbitration with
JAMS/ENDISPUTE, with a copy to the other Party. The arbitration will be
conducted in accordance with the provisions of JAMS/ENDISPUTE's Streamlined
Arbitration Rules and Procedures in effect at the time of filing of the demand
for arbitration. Each Party will select an arbitrator from JAMS/ENDISPUTE's
panel of neutrals and together the selected arbitrators shall mutually agree on
a third arbitrator. The parties covenant that they shall participate in the
arbitration in good faith, and that they shall share equally in its costs,
except for attorneys' fees and expenses of witnesses which shall be borne by the
Party incurring the fees or producing the witness. The arbitration award shall
be in writing and shall specify the factual and legal bases of such award. The
arbitration award shall be final and binding, and judgment thereon may be
entered by any court of competent jurisdiction. The parties agree that the
arbitration award shall be treated confidentially, and the parties shall not,
except as otherwise required by law or court order or to enable its entry or
enforcement as a judgment, disclose the arbitration award to any third Party,
excluding personnel in their Affiliates and their attorneys and accountants with
a need to know, provided that such recipients agree to be bound by the same
restrictions as are contained in this Agreement. The arbitrator shall not have
the power to render an award of punitive, exemplary or treble damages. To the
extent of any conflict, this provisions of this Agreement shall supersede and
control any JAMS/ENDISPUTE rules. The provisions of this Section 12.11 may be
enforced by any court of competent jurisdiction, and the prevailing Party in
such enforcement action shall recover from the other Party its costs, reasonable
attorney fees and expenses, from the other Party.
12.12 Counterparts.
This Agreement may be executed in two (2) or more counterparts, each of
which will be deemed an original and when taken together shall constitute a
single fully-signed original, regardless whether the parties' signatures appear
together on the same document or separately on one or more counterparts.
38
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Asset Purchase
Agreement to be executed on the date first above written.
SOLECTRON CORPORATION
By:
Name:
Title:
SOLECTRON FEDERAL SYSTEMS, INC.
By:
Name:
Title:
TRIMBLE NAVIGATION LIMITED
By:
Name:
Title:
39
<PAGE>
EXHIBIT D
Purchase Price Allocation
1. Tangible Assets
[*] [*]
[*] [*]
[*] [*]
[*] [*]
2. Intangible Assets
[*] [*]
[*] [*]
[*] [*]
Total Purchase Price $27,924,321.78
[*]-CERTAIN INFORMATION AS INDICATED ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMMISSION. CONFIDENTAL TREATEMENT HAS BEEN REQUESTED
WITH RESPCECT TO THE OMITTED PORTIONS.
<PAGE>
EXHIBIT E
Transitional Services Agreement
1. TRANSITIONAL SUPPORT SERVICES
The Parties agree that during the period of time that Solectron
produces products at Trimble's Sunnyvale, California facility
("Transition Period"), and in connection with the sublease agreements
attached to the Asset Purchase Agreement as Exhibit A (the "Sublease
Agreements"), Trimble shall perform the transitional support services
as described below.
2. SUBLEASE, AND FACILITIES SERVICES
2.1. Sublease
Trimble will sublease to Solectron and Solectron will sublease
from Trimble a total of 55,121 square feet, more or less of the
manufacturing-related areas in Buildings 6, 6X, 8 and 10, in
accordance with the terms and conditions of the Sublease
Agreements. In the event of any conflict between the terms of
the Sublease Agreements executed by the Parties and this Section
2, the terms of the Subleases shall be controlling.
2.2. Facilities Services
Trimble shall provide the following services ("Facilities
Services") (i) during the Transition Period; (ii) in
substantially the same manner as Trimble provides the same or
like services to itself of its employees; and (iii) at no
additional charge to Solectron:
2.2.1 Use of the existing restroom, break- or lunch-room,
and conference room facilities;
2.2.2 Facilities maintenance, including janitorial, general
building and grounds maintenance, and heating,
ventilation and air conditioning (HVAC) maintenance
in accordance with Sublease Agreements terms;
2.2.3 Utilities and depreciation, in accordance with
Sublease Agreements terms;
2.2.4 Personal property taxes;
2.2.5 Coffee and bottled water support and supplies in
the break- and lunch-rooms;
2.2.6 Paper and battery recycling;
2.2.7 Ergonomic evaluation of work space and furniture
as requested by Solectron; except that any special
furniture or equipment purchased, will be purchased
at Solectron's sole cost and will become the property
of Solectron;
2.2.8 Use of installed telephone lines and network cabling
infrastructure,
<PAGE>
in accordance with Sublease Agreements terms;
2.2.9 Security guard services;
2.2.10 use of copiers with Solectron's prorated usage of
photocopiers solely used by Solectron allocated to
the Solectron Department(s);
2.2.11 Paper shredding services; and
2.2.12 Use of common area parking facilities shared with
Trimble employees on a "first come first serve"
basis.
2.3. Excluded Services
The Facilities Services shall not include the following
services ("Excluded Services"), for which Solectron shall be
solely responsible.
2.3.1 Modifications to existing facilities;
2.3.2 Replacements of, or modifications to HVAC or other
fixtures or facilities equipment required by
Solectron to meet its expanded needs;
2.3.3 Long distance telephone calls, and costs of
Solectron's pro-rata share of voicemail lines/800
lines/and other "common" telecom services in
accordance with Sublease Agreements;
2.3.4 Adding, moving, and changes to telephone phone
and network cabling system infrastructure done by
Trimble employees or contractors;
2.3.5 Additional furniture and/or equipment requested by
Solectron employees;
2.3.6 Office supplies;
2.3.7 Moving or changing Solectron employees either
onsite (Sunnyvale) or offsite;
2.3.8 Special ergonomic furniture or equipment purchased
for Solectron employees; and
2.3.9 Any other services not expressly included in
paragraph 2.2.
3. IS SUPPORT SERVICES
In addition to the Facilities Services described above, Solectron and
Trimble shall each provide its information services support ("IS
Support Services") as described below.
3.1 Network
Solectron will, at its cost, provide a T1 network line from
its Milpitas campus to Trimble's facility at 930 Benicia
Avenue in Sunnyvale, California, and such routers as are
reasonably necessary to set up their own network
infrastructure and email during the Transition Period. Trimble
will provide reasonable access to Solectron for its
performance of its obligations under this paragraph 3.1.
Solectron will permit Trimble to install such security devices
as Trimble deems necessary, in Trimble's
<PAGE>
business judgment, to maintain the confidentiality of its
Proprietary Information.
3.2 CA/MANMAN Setup and Support
3.2.1 Trimble will set up a separate database on a Computer
Associates' MANMAN platform ("DB8"). Trimble has or
will procure for Solectron a six (6) month license,
beginning upon Closing, for Solectron to use DB8 on
site in Sunnyvale for all their materials requirements
planning, production floor transactions and inventory
receipt, subject to the terms of an end user license
agreement that Trimble will provide to Solectron upon
request. Upon the conclusion of the 6-month period,
Solectron must obtain its own license to use the
Computer Associates MANMAN software. Except as
expressly provided in this paragraph 3.2.1, DB8 will
not support any financial transaction or other
capabilities.
3.2.2 Such server system administration support shall
include (i) monitoring back-ups, (ii) administering
user accounts and privileges, (iii) maintaining
databases, and (iv) such other services as the Parties
may agree.
3.2.3 Trimble will provide between twenty (20) and forty
(40) hours per week of ongoing MANMAN application
support at the rate of [*] during the Transition
Period. Such applications support shall only include,
and Trimble shall only be responsible for supporting,
Solectron's critical business processes in the MANMAN
environment. Solectron will be responsible for any
additional services including, but not limited to
customer report requests. From time to time, changes
may be required to the MANMAN system. Trimble will
make reasonable efforts to communicate and coordinate
required changes to SLR, which may include scheduled
system downtime. Any modifications to MANMAN code can
and will be initiated by Trimble only. It is expected
that Solectron will adapt to any changes or upgrades
that Trimble makes to the MANMAN environment. In
addition, the Solectron MANMAN database/application
will not have access to a development/test
environment.
3.2.4 Trimble will provide ongoing support for other
production floor related applications residing in the
UNIX server MFGDBM1 at the rate of [*] during the
Transition Period.
3.2.5 Solectron shall be responsible for maintaining and
supporting all personal computers, NT servers,
printers, desktop applications and any other network
devices used by Solectron employees on site in
Sunnyvale.
3.2.6 Trimble and Solectron may, at a later time and in each
Party's discretion, identify additional services,
which Trimble will provide under commercially
reasonable terms and conditions.
3.2.7 Solectron shall be responsible for ensuring Y2K
compliance of any acquisition-specific reports or
applications.
[*]-CERTAIN INFORMATION AS INDICATED ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMMISSION. CONFIDENTAL TREATEMENT HAS BEEN REQUESTED
WITH RESPCECT TO THE OMITTED PORTIONS.
<PAGE>
3.3 Other Applications
3.3.1 Cognos/Impromptu.
Trimble has or will procure for Solectron a license,
beginning upon Closing, for Solectron to use the
following three (3) Cognos catalogues during the
Transition Period: QDC, PQM and SMT (file names
QDC1.cat, SMT1.cat and PQM1.cat)
3.3.2 Manugistics/ Supply/C.
Trimble has or will procure for Solectron a license
for four (4) seats of Manugistics software (2
management seats, 2 power user seats) for Solectron's
use for six (6) months following Closing. Trimble
will extract data from a MANMAN format and import the
data to the Manugistics platform. At the end of the
6-month period, Solectron will be responsible for
procuring its own license agreement with Manugistics.
3.3.3 Microsoft/Office and other Microsoft Applications.
Trimble will retain all Microsoft licenses from the
transitioning employees. Solectron will obtain
licenses for its employees on site in Sunnyvale.
4. SHARED PERSONNEL RESOURCES
The Parties acknowledge that there are a number of open requisitions
for employee positions designated to be transferred to Solectron. Some
of the positions are currently filled by Trimble employees while the
recruiting process is taking place. In the event that the positions are
not filled by the Effective Date, and those unfilled positions are
critical to the operations contemplated under the terms of the Parties'
Agreement, Trimble will continue to provide such employee resources
(ii) without additional charge for a period of thirty (30) days after
the Effective Date of the Supply Agreement; (ii) at a rate of [*] after
the Effective Dated of the Supply Agreement; and (iii) thereafter
Trimble will charge Solectron at a rate of [ *].
5. SHARED PRODUCTION EQUIPMENT
Trimble currently owns and shall continue to be own certain equipment
described on Attachment E-1 to this Exhibit E ("Production Equipment").
During the Transition Period, Trimble will permit Solectron to use the
Production Equipment in Solectron's performance of its obligations
under the Supply Agreement. Solectron's use of the Production Equipment
shall be at the times and in the manner reasonably agreed to by Trimble
in its sole and absolute discretion consistent with the intentions of
the Parties expressed above.
[*]-CERTAIN INFORMATION AS INDICATED ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMMISSION. CONFIDENTAL TREATEMENT HAS BEEN REQUESTED
WITH RESPCECT TO THE OMITTED PORTIONS.
<PAGE>
EXHIBIT G
Inventory
1.0 General
Seller shall deliver and consign to Buyer at Closing all Inventory listed on
Schedule 2.1(b) hereto. Buyer shall purchase such Inventory as provided below.
Buyer will bear all risk of loss to the Inventory while it is in Buyer's
possession and will use appropriate storage methods to maintain the Inventory in
good condition.
2.0 Inventory Consumption
Beginning on the Closing Date, Buyer shall use the items in the Inventory
to the extent required to perform its services under the Supply Agreement (the
"Services"). Title to such Inventory items so used ("Consumed Inventory") will
pass from Seller to Buyer, and Consumed Inventory will be deemed Purchased
Assets, immediately upon Buyer's use of Consumed Inventory. On or before August
30, 1999, Buyer shall (i) furnish to Trimble an accounting of the Consumed
Inventory, and (ii) remit to Trimble payment in cash for the Consumed Inventory
at the prices provided in Schedule 2.1(b).
3.0 Inventory Purchase
On August 30, 1999, Buyer shall (i) purchase from Seller any Inventory not
previously used in Buyer's performance of Services as described below
("Remaining Inventory"); and (ii) remit to Trimble payment in cash for the
Consumed Inventory at the prices provided in Schedule 2.1(b), by wire transfer
of immediately available funds to the bank account designated by Seller. Title
to the Remaining Inventory shall pass to Buyer, and the Remaining Inventory
shall be deemed Purchased Assets, immediately upon such payment.
4.0 Security
Buyer shall, at Closing, furnish to Seller an irrevocable letter of credit,
in a form and drawn from a bank reasonably satisfactory to Seller, in the amount
of [*], to secure timely payment of Buyer's obligations under this Exhibit G.
5.0 Miscellaneous
Although Buyer may, for administrative convenience, issue purchase orders to
Seller for the Inventory, any terms, conditions or information appearing on or
accompanying any purchase order shall be of no effect unless Seller expressly
agrees otherwise in a separate, signed writing.
[*]-CERTAIN INFORMATION AS INDICATED ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMMISSION. CONFIDENTAL TREATEMENT HAS BEEN REQUESTED
WITH RESPCECT TO THE OMITTED PORTIONS.
<PAGE>
Exhibit 10.69
TRIMBLE SOLECTRON
NAVIGATION FEDERAL SYSTEMS, INC.
LIMITED and
SOLECTRON CORPORATION
Supply Agreement
Dated Effective
August 13, 1999
<PAGE>
TRIMBLE NAVIGATION SOLECTRON FEDERAL SYSTEM, INC.
LIMITED and
SOLECTRON CORPORATION
Supply Agreement
TABLE OF CONTENTS
AGREEMENT ..................................................................1
1. DEFINITIONS ..........................................................1
2. PURCHASE AND SALE OF PRODUCTS ........................................5
3. EXCLUSIVITY ..........................................................5
4. PRODUCTION FILES .....................................................6
5. PRODUCTION CAPABILITY ................................................7
6. PRODUCTION SUPPORT TEAMS ............................................11
7. FORECASTS ...........................................................12
8. PURCHASE ORDERS .....................................................12
9. DELIVERY. ...........................................................14
10. LABELING AND PACKAGING ...........................................15
11. ACCEPTANCE OR REJECTION ..........................................16
12. PRICING, PAYMENT, AND COST REDUCTION .............................17
13. RECORDS, AUDITS AND REPORTS ......................................18
14. PROTOTYPE SERVICES ...............................................20
15. QUALITY ASSURANCE ................................................20
16. REGULATORY COMPLIANCE ............................................20
17. PRODUCT WARRANTY; EPIDEMIC FAILURE ...............................21
18. WARRANTY CLAIMS AND REPAIR .......................................22
19. PARTS SUPPLY .....................................................23
20. PROPERTY FURNISHED TO SOLECTRON BY TRIMBLE .......................24
21. INTELLECTUAL PROPERTY OWNERSHIP ..................................25
22. CONFIDENTIALITY ..................................................28
23. INTELLECTUAL PROPERTY INDEMNIFICATION ............................29
24. LIMITATION OF LIABILITY ..........................................31
25. INSURANCE ........................................................31
26. TERM OF THEAGREEMENT .............................................31
27. TERMINATION ......................................................31
28. REPRESENTATIONS ..................................................34
29. GENERAL ..........................................................34
Exhibits ............................................................Appended
i
<PAGE>
LIST OF EXHIBITS
Exhibit 1.2 - Ancillary Technology [not submitted in filing]
Exhibit 1.20 - Products [not submitted in filing]
Exhibit 1.33 - Weighted Average Actual Price Description
[not submitted in filing]
Exhibit 5.6 - Manufacturing Support Services
Exhibit 5.8 - Protected Employees [not submitted in filing]
Exhibit 8.2 - Order Flexibility, Forecast and Lead Time
[not submitted in filing]
Exhibit 12.1 - Pricing Model [not submitted in filing]
Exhibit 13.3 - Monthly Operational Reporting [not submitted in
filing]
Exhibits 14 - Prototypes [not submitted in filing]
Exhibit 15.1 - Quality Improvement and Corrective Action Plans
[not submitted in filing]
ii
<PAGE>
SUPPLY AGREEMENT
THIS SUPPLY AGREEMENT is made and entered into effective August 13,
1999 ("Effective Date"), by and between Solectron Federal System, Inc., a
Delaware corporation, Solectron Corporation, a Delaware corporation (jointly and
severally "Solectron"), and Trimble Navigation Limited, a California corporation
("Trimble") (each a "Party" and collectively the "Parties").
RECITALS
A. Trimble is and has been engaged in the business, among others, of the
development, manufacture, marketing and sale of various global positioning
system products for various markets worldwide.
B. Solectron is and has been engaged in the business, among others, of
manufacturing its customers' products on a contract basis.
C. The Parties intend by this Agreement to provide for Solectron to
manufacture certain of Trimble's products.
NOW, THEREFORE, the Parties, intending to be legally bound, agree as follows:
Agreement
1. DEFINITIONS
In addition to the definitions appearing elsewhere in this Agreement, the
following words and phrases shall have the meanings indicated:
1.1. "Affiliates" shall mean those corporations or other entities which
directly or indirectly own or control either Party to this Agreement
and their respective Subsidiaries.
1.2. "Ancillary Technology" shall mean all test programs, tooling,
fixtures, and other items provided to Solectron by Trimble as
described on Exhibit 1.2.
1.3. "Create" when used with reference to Proprietary Information means to
conceive, make, develop, reduce to practice, author, or
otherwise materially and substantially contribute to the existence
of such Proprietary Information, such that the Proprietary
Information that results can be fairly and reasonably attributed
in whole or in material part to such contribution. Other forms of the
word "Create" (e.g., Created, Creation, etc.) shall have
substantially the same meaning as required by the context.
Proprietary Information that is "Created Jointly" shall apply to
all Proprietary Information that (i) qualifies for patent
protection in any jurisdiction under which jurisdiction's laws
the signature or cooperation or identification of more than one
Party or their respective employee(s), agent(s) or contractor(s),
as an inventor, is appropriate or required, or must or should be
sought or made in connection with any related application, to obtain
such protection, or (ii) was Created in whole or in material part by
Page 1 of 39
<PAGE>
employee(s), agent(s) or contractor(s) of both Parties acting in
concert or cooperation.
1.4. "Delivery Leadtime" shall mean the number of days between the date
a purchase order is delivered by Trimble to Solectron and the date the
relevant Product is delivered to the appropriate delivery location.
1.5. "Derivative" shall mean (i) for copyrightable or copyrighted
material, any translation, abridgment, revision or other form in
which an existing work may be recast, transformed or adapted;
(ii) for patentable or patented material, any improvement thereon;
and (iii) for material which is protected by or is a Trade Secret or
is otherwise Proprietary Information, any new material derived from
such existing Trade Secret material or Proprietary Information,
including but not limited to new material which may be protected by
copyright, patent or Trade Secret. 2.2.
1.6. "Design Specification" shall mean all or any part of a description
of a Product's physical, functional or technical elements, attributes,
requirements or performance, related to or used in its design,
manufacture, testing, operation and repair, whether in human,
machine-readable or other form. Without limiting the foregoing, a
"Design Specification" may include, without limitation, bills of
materials; schematic diagrams, approved vendor lists, parts,
general and special fabrication and assembly drawings and
procedures; computer aided design and manufacturing files;
unique material specification control drawings; manufacturing
materials and chemistry; test procedures, software and equipment;
component and other source control drawings; quality plans including
source inspection procedures, yield targets and process audit
plans; mechanical models; standard assemblies; estimated
process flows and times; assembly fixtures and special tools
and drawings.
1.7. "Disclose" shall mean to use, deliver, communicate or provide, or
to use or benefit in any way or form including, by way of example and
without limitation, in writing; electronically; in machine readable
form; by demonstration; in tangible form; by access to plans,
diagrams or equipment; or orally. Other forms of the word "Disclose"
(e.g., Disclosure, Discloses, etc.) shall have substantially
the same meaning as required by the context.
1.8. "Disclosing Party" shall mean a Party hereto that discloses its
Proprietary Information to the other Party.
1.9. "Dispose" shall mean to practice, make, have made, use, license, grant
rights to sublicense, lease, sell, Disclose, assign, encumber,
dispose or otherwise exercise an incident of ownership. Other
forms of the word "Dispose" (e.g., Disposition, Disposal, etc.)
shall have substantially the same meaning as required by the
context.
1.10. "Effective Date" shall mean the date of execution of this
Agreement as first above written.
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1.11. "Exclusivity Termination Trigger" shall mean the occurrence of
an event described in paragraph 3.2.
1.12. "Flexibility Parameters" shall have the meaning described in
Exhibit 8.2.
1.13. "Incorporate" shall mean shall mean include as a constituent part.
Other forms of the word "Incorporate" (e.g., Incorporated, etc.)
shall have substantially the same meaning as required by the context.
1.14. "Invention" shall mean any invention, discovery, process, art, method
(including mathematical algorithms), machine, manufacture,
composition of matter, or improvement thereof, whether or not
patented or patentable, to the extent that it is or is qualified to
be the subject of an intellectual property right or intellectual
property protection under the laws of any applicable jurisdiction
under any applicable legal theory, including but not limited
to rights or protections under patent, trade secret, or copyright
laws or principles.
1.15. "Made Known" shall mean made known, received, developed,
possessed or communicated, at any time before or after the
Effective Date. "Rightfully Made Known" shall mean Made Known
without, and "Wrongfully Made Known" shall mean Made Known with,
any violation of any legally protectable and/or enforceable
express or implied right, title, duty or obligation of the
owner of such Proprietary Information or third Parties from, by or
through whom such knowledge passed.
1.16. "Manufacturing Specifications" shall mean Trimble's written
specifications regarding the processes for the manufacture of
the Products provided to Solectron, including, without
limitation, the [*] and [*]. In cases where the specific processes
are not covered by these specifications, industry standard
specifications shall apply (e.g., IPC, ANSI/IPC).
1.17. "Manufacturing Standards" shall mean information that describes the
processes, procedures and requirements specifically related to
the manufacture of any Product. Without limiting the foregoing, a
"Manufacturing Standard" may include assembly machine programs;
reflow profiles; assembly aids; process flows; standard assembly
instructions; process control plan; overall process
definition; work instructions; process and machine capabilities;
design review report; first article inspection reports; and Quality
Improvement Plan.
1.18. "Owning Party" shall mean a Party to the extent that such Party has
an ownership interest in any Proprietary Information.
1.19. "Part" shall mean any materials, parts or components used in the
Products.
1.20. "Product" shall mean any of those products identified in Exhibit
1.20 attached to this Agreement.
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1.21. "Production File" shall mean the definitive manufacturing
specifications for each Product and shall include the most recently
effective Design Specification and Manufacturing Standards.
1.22. "Proprietary Information" shall mean information or material
relating to the existing or prospective business of Solectron,
Trimble or third parties or to this Agreement, any information
contained therein or Created therefrom, and any Derivatives thereof,
including, by way of example and without limitation, technical,
and/or business information such as processes, methods, techniques,
systems, subroutines, source code, object code, documentation,
diagrams and flow charts, analyses (including computer
simulations), results, reports and information of all kinds
Disclosed in writing by the Disclosing Party to the Receiving
Party to permit the Parties to perform their obligations under this
Agreement. "Proprietary Information" shall also include Inventions,
Works and Trade Secrets. Proprietary Information shall not
include any information or material to the extent that the Receiving
Party proves by a preponderance of the evidence that such information
or material has been or becomes:
1.22.1. Rightfully Made Known to the Receiving Party without
obligation of confidence; or
1.22.2. Rightfully Made Known to third Parties who are neither
under obligation of confidence nor who treat such
Proprietary Information confidentially
1.23. "Proprietary Rights" shall mean, in any country, (i) the right to
file patent applications and any rights under patent applications;
(ii) rights under a grant of letters patent or any similar form of
statutory protection for inventions, such as utility model
protection and industrial design protection; (iii) rights under
copyright, trade secret, mask work or trademark law; and (iv) any
other protectable intellectual property rights.
1.24. "Prototype" shall mean a pre-production or pilot prototype,
engineering or design sample, or production verification prototype.
1.25. "Purchase Order" shall mean a Trimble purchase order issued to
Solectron pursuant to the provisions of this Agreement.
1.26. "Receiving Party" shall mean a Party hereto that receives
Proprietary Information of the other Party hereto.
1.27. "Term" shall mean the period of time that begins on the Effective
Date and ends upon Termination.
1.28. "Termination" means the time at which this Agreement terminates as
provided or referenced in paragraph 26.
1.29. "Trade Secret" shall mean information Made Known to either
Party, that is maintained by a Party in reasonable confidence
such that it is not generally known and used in the Party's industry,
and which gives or may give the Party a competitive, technical or
other business advantage over the other Party, or third parties,
who do not possess, know or use it.
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1.30. "Trimble Proprietary Component" shall mean any component which
Solectron cannot purchase without Trimble's express authorization.
1.31. "Trimble Designated Distributor" shall mean a person or entity
identified by Trimble to Solectron as an authorized Trimble
distributor.
1.32. "Trimble Vendor" shall mean any producer or supplier of all or any
portion of a Product that has been identified by Trimble on Trimble's
approved vendor list (or "AVL") for such Product as the source of
certain Parts to be used by Solectron in the manufacture of such
Product.
1.33. "WAAP" shall mean Weighted Average Actual Price determined as
specified in Exhibit 1.33.
1.34. "Work" shall mean a work of authorship protectable under the
copyright laws of an applicable jurisdiction, or a mask work
protectable under the semiconductor chip protection laws of any
applicable jurisdiction.
2. PURCHASE AND SALE OF PRODUCTS
During the Term and subject to the provisions of this Agreement, Solectron
shall manufacture and deliver or provide to Trimble, and Trimble shall
purchase from Solectron, Products, and such other goods and services as
this Agreement requires or as the Parties may otherwise mutually
agree in writing.
3. EXCLUSIVITY
3.1. Products
During the Initial Term, Trimble shall purchase from Solectron
all Trimble's requirements for Products except as otherwise
expressly provided in this Agreement. After the Initial Term,
or after an Exclusivity Termination Notice, Trimble shall only
be obligated to purchase from Solectron such of the Products
and in such quantities as Trimble may determine in its sole
discretion. Nothing in this Agreement shall be construed or
deemed to require Trimble to order any particular quantity of
any Product, nor constitute any warranty or representation by
Trimble in that regard.
Nothing in this Agreement shall require Trimble to purchase
any Product from Solectron to the extent such requirement
would violate, prevent or frustrate the purpose or benefit of
any extraordinary Trimble contract or business relationship
that may arise after the Effective Date, including those
requiring local manufacturing, or those which arise in
connection with any business acquisition or change of control.
3.2. Exclusivity Termination Triggers
In addition to any other rights or remedies available to
Trimble, the following events shall constitute Exclusivity
Termination Triggers:
3.2.1. [*]
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3.2.2. [*]
3.2.3. [*]
3.2.4. [*]
3.3 Exclusivity Termination Process
In the event of an Exclusivity Termination Trigger, Trimble
shall provide written notice thereof to Solectron, and within
three (3) business days thereafter the Parties' most senior
business executives then available who have decisional
authority over this Agreement shall meet and confer regarding
such Exclusivity Termination Trigger and the consequences
thereof. If within five (5) business days after such notice
the Parties have not mutually agreed upon a resolution of the
circumstances that constitute or relate to the Exclusivity
Termination Trigger, Trimble may deliver to Solectron an
Exclusivity Termination Notice. Such Exclusivity Termination
Notice shall have the effect described elsewhere in this
Agreement.
4. PRODUCTION FILES
4.1. Design Specifications
Within a reasonable time following the Effective Date, Trimble
shall furnish to Solectron any Design Specifications,
Manufacturing Specification and any Manufacturing Standard, in
the form historically used by Trimble to produce each Product.
Solectron acknowledges that, although Trimble will furnish the
Design Specifications, Manufacturing Specification and any
Manufacturing Standard in the form historically used by
Trimble to produce each Product, Trimble makes and has made no
representations or warranties with respect to Solectron's
ability to produce Products or achieve any particular results
from its use of such Design Specifications, Manufacturing
Specifications and any Manufacturing Standards furnished by
Trimble.
4.2. Manufacturing Standards
Solectron at its expense shall review each Design
Specification and Manufacturing Standard submitted by Trimble
promptly upon receipt and, consult with Trimble and visit the
facilities of Trimble and its subcontractors as necessary or
advisable for the purposes of this paragraph 4. Promptly
thereafter, and from time to time during the Term, Solectron
shall advise and make recommendations to Trimble regarding all
relevant matters that may affect each Design Specification and
Manufacturing Standard as such matters may relate to
Solectron's
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preparation of preliminary or final Manufacturing Standards,
or changes thereto, including but not limited to sourcing and
qualifying components, cost analysis, and Product
modifications for unit cost reduction. Trimble may, at its
option, participate in all such Solectron activities.
For each Product, Solectron shall submit to Trimble
preliminary Manufacturing Standards that comply with the
relevant Design Specification and Manufacturing Specifications
within a reasonable time after Trimble delivers its Design
Specification to Solectron.
As soon as practicable after Solectron delivers the
preliminary manufacturing procedures to Trimble, Trimble and
Solectron shall review them jointly. Solectron shall deliver
proposed final Manufacturing Standards to Trimble within one
(1) week after Trimble's approval of the preliminary
Manufacturing Standards and, upon Trimble's approval of the
proposed final Manufacturing Standards, such Manufacturing
Standards shall be deemed established as to the relevant
Product.
4.3. Production File
Solectron shall maintain, for each Product, a Production File
that (i) includes the Design Specifications and final
Manufacturing Standards; and (ii) complies with all relevant
provisions of this Agreement, including the Manufacturing
Specifications. Solectron shall promptly identify to Trimble
any Production File information that Solectron considers
Solectron's Proprietary Information.
4.4. Production Prior to Acceptance of Production Files
Prior to Trimble's written approval of Solectron's proposed
Manufacturing Standards, Solectron shall continue to produce
the Products in accordance with Trimble's historic processes
prior the Effective Date, provided that to the extent that
Trimble has not furnished information regarding its historic
processes for producing any such Products, Solectron shall
employ methods of production that conform to generally
recognized best practices.
5. PRODUCTION CAPABILITY
5.1. Capacity
During the Term and as otherwise provided in this Agreement,
Solectron shall maintain the labor, materials and facilities
necessary to produce and deliver to Trimble all Products,
services, activities and other things required of Solectron
under this Agreement. The Parties will amend Exhibit 1.20
("Products") to appropriately manage end-of-life, inactive or
discontinued Products.
5.2. Materials
Solectron shall provide or acquire all Parts necessary to
perform Solectron's obligations under this Agreement from the
applicable Trimble Vendor(s). Trimble may instruct Solectron
to change specific Parts or procedures for the manufacture or
assembly of any Product(s) by
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following the change procedure described in Paragraph 5.4,
subject to reasonable adjustment of price and delivery
schedule equitably attributable to such change.
Trimble's liability for such Parts shall be limited to the
provisions of Exhibit 8.2.
5.3. Product Manufacture
Solectron shall manufacture, assemble and test each Product in
accordance with its Production File at a Solectron facility
that has been approved by Trimble in writing. Solectron will
not change the location of manufacture, including without
limitation different facilities or different production lines
within the same facility, without Trimble's prior written
approval.
Solectron shall not subcontract or delegate any portion of the
manufacture, assembly or testing of the Products to third
parties without Trimble's express written approval, which may
be granted or withheld by Trimble in its sole discretion.
Solectron shall not, without Trimble's prior written approval,
include electronic components in the Products which have a
date code which is older than [*] from the date such component
is first delivered to Solectron, provided however, that for
any such Parts with a date code older than [*] from the date
such component is first delivered to Solectron, Solectron
shall perform such solderability and other tests as may be
required by the Manufacturing Specifications or best
commercial practice. Solectron shall keep documentation
sufficient to verify its compliance with this Paragraph 5.3
and shall promptly provide such documentation to Trimble upon
request.
5.4. Production File Changes
5.4.1. Initiated by Trimble
From time to time during the Term, Trimble may issue a
preliminary change notice ("Preliminary Change Notice") to
Solectron that states one or more changes to a Production File
or the Manufacturing Specifications.
Trimble's Preliminary Change Notice shall specify whether
Trimble's requested change is a Class 1 ECN or Class 2 ECN. A
"Class 1 ECN" is an engineering change that must be
implemented within Twenty Four (24) hours after receipt of
notice and before additional Products are delivered to
Trimble. A "Class 2 ECN" is an engineering change that may be
implemented at a mutually agreeable time.
Solectron shall, [*] within the time specified in the
Preliminary Change Notice but generally not more than two (2)
business days from Trimble's issuance of the Preliminary
Change Notice, provide information regarding factors that may
affect implementation, and costs associated with
implementation (one-time and on-going), of the changes
described in the Preliminary Change Notice.
If, after receiving Solectron's response, Trimble wishes to
implement the changes described in the Preliminary Change
Notice, Trimble shall issue
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a final engineering change notice ("ECN") or final
manufacturing change Notice ("MCN") to Solectron.
5.4.2. Initiated by Solectron
If Solectron wishes to initiate a change to a Production File
or the Manufacturing Specifications, Solectron shall furnish
to Trimble a proposed change notice ("Proposed Change Notice")
together with information regarding factors that may affect
implementation, and cost associated with implementation
(one-time and on-going). Solectron shall supplement the
Proposed Change Notice with such additional information as
Trimble may reasonably request at any time ("Supplemental
Information"). Trimble shall not be deemed to have completed
its assessment, and shall be under no obligation to respond to
a Proposed Change Notice, until Trimble has received and
analyzed the Proposed Change Notice, the Supplemental
Information, and such other information regarding the
business, financial and technical particulars as Trimble may
in its sole discretion deem necessary or advisable. Trimble
may decline any Proposed Change Notice in Trimble's absolute
discretion. If Trimble wishes to implement an engineering
change as described in Solectron's Proposed Change Notice,
Trimble shall issue a Final ECN or Final MCN to Solectron.
For change requests initiated by Solectron, Solectron will be
responsible for [*] to such materials, locations or processes
that are requested by Solectron, except as the Parties may
otherwise expressly agree in writing.
5.4.3. Final ECN/MCN
A Final ECN or final MCN shall be incorporated into the
Production File for the applicable Product(s) on the specified
implementation date. Solectron shall not change or modify the
processes for the Products as provided in the Production File
without a Final ECN or final MCN from Trimble.
5.4.4. Charges
For purposes of this paragraph 5.4, any cost identified by
Solectron as a "cost associated with implementation" shall not
include, and Trimble shall not be liable for, [*]
5.5.5. Allocations
Solectron warrants and agrees that with respect to any
allocations of components, materials, labor or production
capacity made in connection with orders placed by Trimble
under this Agreement due to any shortage or unavailability,
Trimble will receive from Solectron allocations thereof that
are at least as favorable as any allocation provided to any
other Solectron customer.
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5.6. Manufacturing Support
Each Party shall perform its manufacturing support services as
described in Exhibit 5.6.
5.7. Solectron Relationship with Trimble Vendors
Solectron shall manage Solectron's relationships with Trimble
Vendors in a manner that will enhance long-term relationships
with such vendors and produce benefits for both Solectron and
Trimble. [*]
Without limiting the foregoing, Solectron shall, at a minimum,
comply with the following obligations to ensure good component
material management for the Products:
5.7.1. Ensure component level failure analysis is performed by the
Trimble Vendors,
5.7.2. Expedite component returns, failure analysis and corrective
actions regarding defective components with Trimble
Vendors and promptly communicate this information to
Trimble,
5.7.3. Work with Trimble Vendors to reduce leadtimes and WAAPs,
5.7.4. Address poor component yields with Trimble Vendors and promptly
provide analysis and corrective plans regarding same to
Trimble,
5.7.5. Provide regular performance feedback to Trimble Vendors, with a
copy to Trimble,
5.7.6. Provide Trimble with copies of all Trimble Vendors newsletters
via e-mail,
5.7.7. Permit Trimble to participate in discussions with Trimble
Vendors regarding issues related to Parts WAAP and
availability, and to Solectron's performance of this Agreement,
5.7.8. Initiate and maintain vendor qualification, performance and
corrective action programs with the Trimble Vendors,
5.7.9. Assist Trimble as Trimble may reasonably request with Trimble's
vendor conference, and
5.7.10.Provide to Trimble any information relating to Part quality,
technology trends, and such other information that Solectron
may have and Trimble may reasonably require to maintain a
competitive position in its markets.
Solectron shall provide each of the Trimble Vendors with
non-binding, forward looking, rolling forecasts for each of
the Parts and shall update such forecasts on a monthly basis,
or more frequently as necessary to support Trimble's business
needs. Such forecasts shall [*]
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[*]
5.8. Production Personnel
Solectron acknowledges that certain Solectron personnel whose
names appear on the attached Exhibit 5.8 were Trimble
employees before the Effective Date, possess certain [*] or
other technical or engineering skills and experience that have
been and will continue to be required in the production of the
Products. Solectron agrees that it shall [*]
5.9. Production Floor Scrap
Solectron shall bear all costs for Scrap within a [*]. Above
the [*], (i) Trimble shall reimburse Solectron the [*] for all
Parts or Products Scrap that the Parties reasonably determine
is caused by Trimble's Product design; and (ii) Solectron
shall bear all cost for all Parts or Products Scrap caused by
Solectron's manufacture of the Products.
"Scrap" means Parts or Products that are or may become
unusable in the manufacturing process. "Scrap Rate" is
calculated by dividing the materials WAAP of all Scrap created
in each quarter by the total materials WAAP in that quarter
and expressing the result as a percentage.
5.10. Discrepant Materials
As provided in the Asset Purchase Agreement, Solectron will
purchase Discrepant Materials from Trimble at [*]. Trimble
will sell only those Discrepant Materials produced in the one
(1) year prior to the Effective Date. Solectron may repair or
rework the Discrepant Materials to meet the applicable
Product's Production File and supply the repaired or reworked
Discrepant Materials to Trimble as Products under this
Agreement. Solectron shall bear the cost of all Scrap in the
Discrepant Materials. If (i) the price paid by Solectron for
the Discrepant Material totals more than [*]; or (ii) despite
its best efforts, Solectron is unable to repair or rework more
than [*] of the Discrepant Materials to meet the applicable
Product's Production File; the Parties will meet and discuss
an equitable resolution. "Discrepant Materials" means work in
progress that fails to meet the applicable Product's
Production File.
6. PRODUCTION SUPPORT TEAMS
On or before the Effective Date Solectron shall establish a team of
skilled and experienced employees ("Production Support Team") which
shall be the primary Product and technical interface with the other
Party and serve as the focal point for the identification and
resolution of any problems that may surface during the
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course of this Agreement. Solectron shall consult with Trimble and
comply with Trimble's reasonable requests regarding the Solectron
personnel that Solectron designates or intends to designate as
Solectron's Production Support Team, including the opportunity to
interview and reject proposed Production Support Team candidates prior
to Solectron assigning them to the Production Support Team. Production
Support Teams shall not have the authority to amend or modify the terms
of this Agreement. The Production Support Teams shall meet
periodically, electronically, telephonically or otherwise as reasonably
agreed by the Parties, and at least quarterly for a general review of
the Parties' performance under the relationship and to establish any
corrective action plans necessary to meet performance criteria set
forth in this Agreement.
Solectron's Production Support Team shall include two (2) Customer
Focus Teams, aligned on a product- or business unit basis as Trimble
may reasonably request, which shall be responsible for providing
support in the following areas: (i) Trimble Vendor management; (ii)
inventory control; (iii) engineering services; (iv) master scheduling;
(v) document control; (vi) quality assurance; and (vii) customized
reporting.
In addition to the obligations described above, Solectron's Production
Support Team shall be able to (i) respond to normal inquiries within [*],
(ii) provide an initial response for urgent requests within [*],
and (iii) comply with the order acknowledgment and RMA procedures set
forth elsewhere in this Agreement.
7. FORECASTS
Within three (3) business days after the Effective Date, Trimble shall
deliver to Solectron a non-binding, forward looking, [*] rolling
forecast ("Forecast") for orders of the Products, and update such
Forecast from time to time during the Term, but no less frequently than
[*]. Each Forecast shall state Trimble's anticipated orders for each
Product during the Forecast period: [*]
8. PURCHASE ORDERS
8.1. Submission; Content
From time to time during the Term, Trimble may deliver
Purchase Orders to Solectron in writing, via telefax or
electronically, via procedures to be mutually agreed or in the
same manner as specified in this Agreement for the delivery of
notices. Such Purchase Orders shall include the following
information ("Basic Information"), as and if applicable, and
such other information as may be relevant to such Purchase
Orders:
8.1.1. Deliverables (which shall include Trimble part number(s));
8.1.2. Quantities of each deliverable;
8.1.3. Unit and total prices then in effect;
8.1.4. Delivery date(s) within the applicable Product Delivery
Leadtime;
8.1.5. Delivery location(s);
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8.1.6. Product notes (including, but not limited to, radio frequency
or other configuration information); and
8.1.7. Any special packaging or shipping requirements.
Any terms, conditions or information appearing on or
accompanying any of Trimble's or Solectron's purchase orders
or acknowledgments or related correspondence, other than the
Basic Information, shall be of no effect unless (i) expressly
permitted under this Agreement, or (ii) Trimble and Solectron
expressly agree otherwise in a separate, signed writing.
8.2. Delivery Leadtimes
Delivery Leadtimes for each Product shall be determined by the
Product's applicable delivery category specified on, and
subject to change as provided in, the attached Exhibit 8.2.
8.3. Confirmation
8.3.1. [*]
8.3.2. [*]
8.3.3. [*]
8.4. Order Acceptance.
A Purchase Order in the form described in Paragraph 8 above,
which complies with the terms of this Agreement, (a "Complying
Order") shall be deemed accepted by Solectron upon receipt
regardless of whether or not confirmed or acknowledged by
Solectron as provided in paragraph 8.3. Solectron shall not be
obligated to accept a purchase order that is not a Complying
Order, nor shall Solectron be obligated to accept a purchase
order which states quantities in excess of those Forecast and
Flexibility
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Parameters (any of the foregoing a "Non-Complying Order"), and
such a Non-Complying Order shall not be deemed accepted by
Solectron unless Solectron expressly accepts it in writing. If
Solectron determines that any purchase order is a
Non-Complying Order, Solectron shall notify Trimble as
described in Paragraph 8.3 above, and the Parties shall use
their mutual reasonably diligent efforts to cause the Purchase
Order to be a Complying Order, at which time it shall be
deemed accepted by Solectron and Solectron shall so confirm to
Trimble in writing.
8.5. Purchase Order Changes
8.5.1. Trimble shall be entitled to cancel any Purchase Order in
whole or in part, or change all or any part of the Basic
Information applicable to any Purchase Order, by
delivering notice thereof to Solectron in the same manner
as a Purchase Order may be delivered, and Solectron shall
comply with any such change or cancellation. Any such change
or cancellation shall be without liability to Trimble if it is
within the Flexibility Parameters and, if it is not, such
change or cancellation shall be subject to any relevant
liability as described in Exhibit 8.2.
8.5.2. For increases or decreases in quantities ordered which
fall outside of the parameters set forth in Exhibit 8.2,
Solectron agrees to use best efforts to accommodate Trimble's
requested changes.
8.6. First Month Orders
For the thirty (30) days following the Effective Date, the
forecasting and ordering procedures specified in Paragraphs 7
and 8 shall not apply to the ordering, production or delivery
of the Products. Instead, during that thirty (30) day period,
Solectron shall complete the production of Products in process
as of the Effective Date in accordance with a schedule to be
provided by Trimble to Solectron at the Effective Date,
provided that such schedule generally provides for
manufacturing times for the Products substantially in
accordance with the Delivery Leadtimes specified on Exhibit
8.2. During such thirty (30) day period, Trimble will supply
forecasts on a daily basis.
8.7. Solectron and Trimble agree to discuss at a mutually agreeable date
the terms and conditions, if any, under which the Parties may agree
to implement a kanban or demand-pull form of delivery system for the
Products.
9. DELIVERY.
9.1. Beginning at the Effective Date and until such time as required by
a Delivery Plan ("Delivery Interim Period"), Solectron shall deliver
Products to Trimble on time to the same extent that Trimble's
manufacturing function has internally delivered Products within
Trimble on time, or earlier, during the six (6) month period
preceding the Effective Date. During the Delivery Interim
Period, Solectron shall use its best efforts to deliver Products on
time as required to meet Trimble's business needs, consistent
with the condition of the Trimble manufacturing function
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transferred to Solectron under that certain Asset Purchase Agreement
between Trimble and Solectron dated [date].
Within Forty Five (45) days following the Effective Date,
Solectron shall furnish to Trimble, for Trimble's review and
approval, a proposed plan to achieve on time delivery of all
Products ("Delivery Plan"). Beginning at the time specified in
the Delivery Plan, but in no event later than March 31, 2000,
Solectron will deliver all Products to Trimble on time.
For purposes of this Agreement, a Product shall be deemed
delivered "on time" if it conforms to the relevant warranty
and acceptance criteria, was produced in conformity with the
applicable Production File, and is delivered to the required
delivery location or common carrier, as applicable, on or not
more than three (3) days before the delivery date specified in
the applicable Purchase Order.
9.2. If a delivery is not on time, or if Solectron reasonably expects
to make a delivery that is not on time, Solectron shall promptly
notify Trimble, and unless the delay is caused by Trimble, shall at
no additional cost to Trimble employ accelerated measures such
as material expediting fees, premium transportation costs, or
labor diversion or overtime required to meet the specified
delivery date or minimize the lateness of deliveries.
9.3. For deliveries to Trimble within [*] of Solectron's Milpitas,
California facility, Solectron shall deliver Products to
Trimble's delivery location specified in an Order, [*] choosing.
9.4. For all other deliveries, Solectron shall deliver Products [*]
choosing addressed to the delivery location specified in the
relevant order, and shall insure against normal transportation
risks. The cost of shipment and insurance shall be added to the amount
payable by Trimble.
9.5. Title and risk of loss to all Products shall pass to Trimble upon
delivery to the common carrier at Solectron's shipping dock.
10. LABELING AND PACKAGING
10.1. Trimble shall provide to Solectron all necessary specifications,
identification and artwork for the labeling of the Products and
packaging under the applicable label.
10.2. Solectron shall package and label all Products as specified by
Trimble in the Design Specification, without additional cost to
Trimble. Where Trimble does not specify packaging and shipping
requirements in the Design specification, Solectron shall package
and ship Products to Trimble in a manner which (i) follows Trimble's
written instructions, (ii) follows good commercial practice, (iii)
is acceptable to common carriers for shipment, and (iv) is
adequate to ensure safe arrival. Solectron shall mark the
outside of each shipment container with the applicable Trimble
part numbers and necessary handling and lifting information. Each
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shipment shall be accompanied by a packing slip and source inspection
acceptance report which will include Trimble's part numbers,
purchase order and the quantity shipped. Solectron further agrees
to label the Products consistent for United States custom
requirements for country of manufacture as well as to provide
revision code and manufacturing date code labeling for the Products
in the location and format specified by Trimble.
10.3. If Trimble requests additional marking or labeling information on,
or packaging for, the Products which is not specified in the Design
Specifications and which results in a change in the cost of
materials or production, Trimble and Solectron shall negotiate an
equitable price adjustment in good faith.
10.4. Solectron shall not pack different Products or different
configurations of the same Products in the same shipment container.
11. ACCEPTANCE OR REJECTION
11.1. Source Inspections.
Upon prior notice to Solectron, Trimble or its authorized
representative(s) may conduct source inspections of the
Products at Solectron's facility at which Products are being
manufactured, during Solectron's normal business hours. Such
inspections shall be based upon [*] and such other standards
as Trimble may reasonably elect. The Parties shall mutually
agree upon the timing of such inspections, which shall be
conducted in a manner that does not interfere with Solectron's
operations. Solectron shall provide sufficient facilities for
persons conducting such source inspections. If any Product
fails the test procedure set forth in the Manufacturing
Standards, Trimble may reject the entire lot of any such
Products, and Solectron shall promptly take all steps
necessary to correct such failures.
Immediately upon any rejection resulting from a source
inspection, Solectron shall identify the cause of the failure
and shall promptly take all reasonable steps to correct any
such failure as described in the Manufacturing Specifications.
11.2. Incoming Inspections.
Trimble may inspect all Products within [*] after its
receipt of such Product ("Rejection Period") and may reject
any Product that fails to meet the Design Specifications or
Manufacturing Standards.
Trimble may also reject any quantity of goods shipped by
Solectron in excess of those ordered, or which are delivered
more than [*] before the scheduled delivery date. However,
such overshipments or early shipments, to the extent accepted,
shall be subject to all of the terms and provisions contained
in this Agreement.
If Trimble rejects any Products, Trimble shall notify
Solectron in writing or follow the RMA procedure described in
Paragraph 18.3 within the
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Rejection Period. Solectron shall promptly credit Trimble's
account for all Products rejected by Trimble and returned to
Solectron.
11.3. General.
Solectron shall (i) provide Corrective Action Reports as
specified in Exhibit 15.1 unless otherwise specified by
Trimble in the Design Specifications or Quality Plan for the
applicable Products, and (ii) record date codes, serial
numbers, electronic serial numbers ("ESN numbers") and
corrective action for all Products rejected by Trimble.
Notwithstanding anything to the contrary contained in this
Agreement, inspection or failure to inspect the Products upon
Delivery shall not affect Trimble's rights under the warranty
provisions of this Agreement.
12. PRICING, PAYMENT, AND COST REDUCTION
12.1. Prices
12.1.1. The initial unit prices to be paid by Trimble for Product(s)
are set forth in Exhibit 1.20 attached to this Agreement.
12.1.2. During the term of this Agreement, adjustments to the
unit prices for the Products will be made on an ongoing
basis in accordance with the provisions of Exhibit 12.1.
12.1.3. Except as otherwise provided in this Agreement, unit price
includes all charges for the Product(s), any related
deliverable items and services, and packaging.
12.1.4. The WAAP stated by Solectron to Trimble during the Term
for any Part supplied or to be supplied by Solectron to
Trimble (i) fairly and accurately represents the price
paid by Solectron for such Part, and (ii) is determined under
the Method stated in Exhibit 1.33.
12.1.5. Solectron's Method of calculating the WAAP of any Part
(i) is the method regularly and consistently employed
by Solectron for internal financial reporting
purposes, and (ii) includes all elements, and does not
omit elements, necessary to make any statement of WAAP
accurate and not misleading.
12.1.6. Prices are partially based on the Parties' estimate
that Solectron's annual revenue from Trimble, [*]. If,
upon the first anniversary of the Effective Date, [*],
the parties will in good faith discuss an equitable
resolution. Solectron will use its best efforts to
reduce or otherwise control its costs and re-deploy
its manufacturing assets prior to any such
negotiations.
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12.2. Payment
Trimble shall pay for all Products received by Trimble [*]
Except as provided above:
12.2.1. Trimble shall use commercially reasonable efforts to pay for
all other Products received by Trimble between [*] and
12.2.2. Trimble shall use commercially reasonable efforts to pay for
all Products received by Trimble [*]
When reasonably practicable, payment will be made by
electronic transmittal Electronic Data Interchange ("EDI") or
equivalent. Solectron agrees to support Trimble in
implementing the required EDI process. Payment shall not
constitute acceptance of the Products by Trimble.
12.3. Taxes
Where the law permits, Solectron shall treat Trimble as exempt
from applicable state and/or local sales tax for Product(s)
purchased pursuant to this Agreement. Where required by state
or local law, Trimble shall provide Solectron with a valid
reseller's exemption certificate for each taxing jurisdiction
to which Solectron ships Product(s). When Trimble purchases
Products for internal use pursuant to this Agreement, Trimble
shall notify Solectron and shall pay any applicable sales tax
to Solectron.
13. RECORDS, AUDITS AND REPORTS
13.1. Solectron shall keep complete, correct and accurate books of
account containing all records that are required according to
Solectron's business processes and policies. In order to allow
Trimble to determine the accuracy of the prices charged to
Trimble under this Agreement and to verify the efforts of
Solectron to reduce such prices.
Solectron shall within three (3) business days after Trimble's
request made at any time and from time to time provide to Trimble:
13.1.1. A report that identifies, by part number, quantity and such
other attributes as are relevant, all finished goods, work
in progress, Parts and other items held or ordered by
Solectron (i) for which Trimble is or may become liable
to pay Solectron under any provision of this Agreement,
and (ii) in addition to the foregoing, those that Solectron
intends to use in producing Products.
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13.1.2. Access to the following types of information with
respect to Solectron's performance of its obligations under
this Agreement: component WAAPs; component business awards
where such awards are specified by Trimble; labor time
standards; yield data at board test and final test; rework
and scrap rates; supplier performance ratings; lot
tracking/status information; factory cycle-time; component
lead times; freight costs; inventory visibility; ECN
tracking and effectiveness; and summaries of shipments and
billings.
13.1.3. For the verification of component pricing, Solectron shall
provide Trimble Weighted Average Actual Price (WAAP) data for
components, at the Trimble part number level. Trimble,
at its request, may verify Solectron's process for
calculating the WAAP by reviewing data relating to
receipt and disbursement of a reasonably
representative sample of Parts whose pricing does not
fall under a Solectron non-disclosure agreement with
any supplier, or when the supplier waives any related
non-disclosure obligation. If a supplier waives a
non-disclosure obligation, Solectron shall take no
action to discourage or prevent Part price disclosure
to Trimble. For new assemblies containing new
components with no WAAP in Solectron's MRP system,
Solectron shall provide Trimble a burdened component
price in order to comply with existing non-disclosure
provisions that prohibit Solectron from sharing actual
purchase price. Such burdened price will be for
reference only, and contain a Solectron-proprietary
adjustment which shall not be included in any Part
pricing for costed bills of materials for new
products, assemblies or Parts.
13.1.4. All WAAP information disclosed between the Parties shall be
deemed Confidential Information. Trimble shall not reveal
WAAP data to component suppliers, distributors, other
contract manufacturers, or any other third parties, either
directly or indirectly. The Parties acknowledge that improper
disclosure of WAAP data to suppliers could result in
irreparable damage to procurement leverage; therefore, each
Party agrees to take prompt corrective action for any
improper disclosure and to take disciplinary action where
appropriate.
13.1.5. The most current Production File for the Product(s).
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13.2. Solectron shall, on or before the fifth (5th) day of each
calendar month during the Term, deliver to Trimble a Monthly
Report as described in the attached Exhibit 13.3.
13.3. Solectron shall permit Trimble's customers reasonable inspection
and access to data regarding quality, yield data at board test
and final test, rework and scrap rates, lot tracking/status
information, summaries of shipments, and such other non-financial
manufacturing information as Trimble's customers may reasonably
require to confirm Trimble's compliance with such customers'
reasonable manufacturing requirements.
14. PROTOTYPE SERVICES
From time to time during the Term, Trimble may desire Solectron's help
in building Prototypes. In these instances, Trimble shall notify
Solectron of its desire, shall furnish to Solectron preliminary design
information and the Parties shall cooperate as described in Exhibit 14.
15. QUALITY ASSURANCE
15.1. Quality Improvement Plan
In addition to the Quality Plans that are part of each
Production File, Solectron shall establish, maintain and
manage a Quality Improvement Plan for each Product that is
consistent with (i) the provisions of Exhibit 15.1, and (ii)
standard industry practices, to ensure that the overall
reliability, quality and performance objectives stated in the
relevant Production File is achieved.
15.2. ISO9000 Certification
Solectron shall manufacture the Product(s) at a facility that
maintains ISO 9000 certification.
15.3. QS9000 Compliance
Solectron shall obtain as soon as reasonably practicable (but
in no case longer than twelve (12) months following the
Effective Date) and maintain throughout the Term QS9000
compliance at its Product production facility. Solectron will
investigate QS9000 certification and advise Trimble if and
when Solectron can achieve QS9000 certification.
15.4. Other Requirements
From time to time during the Term, Trimble may request that
Solectron obtain such other certifications and meet such other
manufacturing, security, facility and other requirements as
Trimble may specify.
16. REGULATORY COMPLIANCE
Solectron represents and warrants that its manufacturing facilities
will comply, its manufacturing processes will be conducted in
accordance, and its performance under this Agreement shall comply, with
all applicable federal, state and local statutes, laws and regulations.
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17. PRODUCT WARRANTY; EPIDEMIC FAILURE
17.1. Performance Warranty.
Solectron warrants to Trimble that Product(s) furnished by
Solectron to Trimble under this Agreement, and their
production, (a) shall conform to the Production File, (b)
shall conform to the Manufacturing Specifications, and (c)
shall be free from defects in material and workmanship
furnished by or through Solectron under normal use and
operation for either (i) the period specified on Exhibit 1.20,
or (ii) if no period is specified on Exhibit 1.20, the lesser
of (A) [*] from the date of delivery by Solectron to
Trimble, or (B) [*] from the date of delivery of the
Product to the end user, or (iii) such other period as the
Parties may expressly agree in writing.
17.2. Epidemic Failure
Except as may otherwise be provided in a Production File, in
the event that, at any time within [*] after Delivery, more
than [*] of any given Product sold and delivered to Trimble
within any [*] period fails to operate properly as the result
of improper Solectron workmanship, then an Epidemic Failure
shall be deemed to have occurred. Upon notice by Trimble to
Solectron of any Epidemic Failure, Solectron shall promptly
develop a plan to eliminate the problem in all continuing
production and to correct the problem in all affected units of
Product previously sold and delivered to Trimble during said
[*] time period. Solectron shall submit such plan to Trimble
for Trimble's acceptance. Upon receiving Trimble's approval of
such plan, Solectron shall implement the corrective action at
its expense. If such plan is not acceptable to Trimble, then
Trimble can require Solectron to repair or replace, at
Trimble's option, the affected Product at Solectron's cost.
The parties agree to use reasonable efforts to complete the
repair or replacement of the affected Product within [*] after
written notice of such Epidemic Failure is provided to
Solectron. For epidemic failures that are affecting current
production, Solectron shall identify the problem and develop a
plan to solve it within [*] of Trimble's notice.
In the event of an epidemic failure due to a common cause
which is neither (A) otherwise covered by the previous
paragraph; nor (B) due to (i) a Trimble Product design, (ii)
Trimble-supplied test design, or (iii) a Trimble Proprietary
Component; the Parties will use reasonable efforts to
determine, address and resolve such failure and its
consequences.
In the event any failure described in this paragraph 17.2
arises from defects in materials supplied to Solectron by any
third party, Solectron shall share, assign or pass through to
Trimble any related concession from or claim against the
relevant supplier.
17.3. Warranty Exclusions
The warranties set forth in this article shall not apply to
any claims, problems or defects which are the result of
designs specified in the Design Specifications, normal wear
and tear, mishandling, misuse,
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neglect or improper testing or repair by other than Solectron
or its authorized representative. These warranties shall
survive inspection, acceptance and payment.
THE WARRANTIES CONTAINED IN THIS ARTICLE ARE IN LIEU OF, AND
SOLECTRON EXPRESSLY DISCLAIMS AND TRIMBLE WAIVES ALL OTHER
REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR
ARISING BY COURSE OF DEALING OR PERFORMANCE, CUSTOM, USAGE IN
THE TRADE OR OTHERWISE, INCLUDING WITHOUT LIMITATION THE
IMPLIED WARRANTIES OF MERCHANTABILITY, TITLE AND FITNESS FOR A
PARTICULAR USE.
18. WARRANTY CLAIMS AND REPAIR
18.1. Trimble shall promptly notify Solectron of any breach or
alleged breach of the warranties contained in Paragraph 17.
Solectron and Trimble or Trimble's customers shall follow the
RMA procedure described in Paragraph 18.3 below to return to
Solectron Product(s) that are defective or that need repair
or replacement. Solectron, at Solectron's expense and at
Trimble's option, shall either replace or repair Products
which are or become defective during the warranty period and
Deliver the Products to the location designated by Trimble
within [*] after Solectron's receipt of the rejected
Product(s).
18.2. In connection with warranty repair or replacement, Solectron
shall:
18.2.1. Use repair/rework processes that are part of the
Production File or otherwise approved by Trimble in
writing;
18.2.2. Record and report to Trimble, in writing, date codes,
serial numbers, and corrective action for all
Product(s) returned for repair or replacement;
18.2.3. Furnish Corrective Action Reports as required by Exhibit
15.1;
18.2.4. Update Product(s) to the latest engineering change level;
18.2.5. Pay all shipping costs associated with Products returned
for repairs during the warranty period;
18.2.6. Repair or rework any given Product not more than [*]
times;
18.2.7. Retest Products as specified in the Manufacturing
Standards prior to a redelivery;
18.2.8. Return repaired, reworked or replacement Products in
separate shipments from Trimble's scheduled Product
orders; and
18.2.9. Provide statistics to Trimble on no problem found
(or "NPF") returns on a quarterly basis.
18.3. RMA Procedure
To return a Product to Solectron as provided by Paragraphs 11
and 18, Trimble shall, request a Return Material Authorization
("RMA") number from Solectron. Solectron shall provide the RMA
number in writing to Trimble within [*] after receipt of any
request.
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After receipt of the written RMA number, Trimble shall return
to Solectron the rejected or defective Product, freight
collect and properly insured, in its original shipping carton
(if available) with the RMA number displayed on the outside of
the carton.
Solectron shall, at Trimble's request, provide Trimble with
pre-issued RMA numbers.
18.4. In-Field Warranty Repair
Trimble in the exercise of its sound business judgment may
from time to time determine that warranty repair of certain
Products or for certain customers should be undertaken at or
near the customer's place of business. In such event, Trimble
shall notify Solectron of such determination and the Parties
shall thereupon immediately cooperate with each other to (i)
determine whether the affected Product's condition constitutes
a breach of any Solectron warranty and (ii) undertake such
repair. If the affected Product's condition constitutes a
breach of any Solectron warranty, Solectron shall either
undertake such repair, or reimburse Trimble for its reasonable
cost of such repair.
19. PARTS SUPPLY
19.1. By Solectron
Solectron shall, upon Trimble's request made at any time and
from time to time, sell to Trimble:
19.1.1. During the Term of this Agreement, all finished goods,
work in progress, Parts and other items held or ordered
by Solectron (i) for which Trimble is or may become
liable to pay Solectron under any provision of this
Agreement; and (ii) in addition to the foregoing, those
that Solectron intends to use in producing Products.
The prices for any items shall not exceed what Trimble's
liability would have been for the items as described
in Exhibit 8.2 if Trimble had canceled its orders for
Products.
19.1.2. During the Term of this Agreement, Parts Trimble may
reasonably require for all Products purchased by Trimble
from Solectron. Prices for the Products shall not
exceed Solectron's WAAP for procuring the Parts
plus the material markup specified in Exhibit 1.20.
Trimble acknowledges that prices for Parts shall be
subject to adjustment for increased costs in
procurement of materials and manufacturing after
cessation of production of the Product for which such
Parts are supplied.
19.2. Discontinued Parts.
In addition to its obligations under paragraph 19.1 above,
Solectron shall: (i) provide notice to Trimble at least twelve
(12) months prior to discontinuing the availability of any
Parts; (ii) inform Trimble of all last-time buy notifications
for Parts promptly upon Solectron's receipt of such
notifications; (iii) advise Trimble if a last-time buy is the
most economical procurement strategy for such Parts as to
which such a notification is
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received (especially custom Parts which may require tool
maintenance and set-up charges that far outweigh piece part
WAAPs); and (iv) assist Trimble as reasonably requested to
negotiate supply of any Parts subject to a last-time buy.
Trimble may then buy, and Solectron will supply, such
quantities as Trimble deems necessary to fulfill the remainder
of its Product support requirements (i.e., "last-time buy.")
If Trimble determines that a final buy is not financially
favorable due to the length of the remaining support period
for the Part(s), Solectron will assist Trimble in finding a
third party supplier that can continue to support the Part(s)
through manufacturing.
19.3. Restricted Materials and Last Time Buys.
Any Parts ordered or obtained by Solectron from or for Trimble
that are subject to restricted, limited or otherwise
problematic availability, including those that are subject to
last-time buy or limited allocation, shall be held and used by
Solectron exclusively to perform its obligations under this
Agreement.
19.4. By Trimble
Solectron shall purchase, and assist Trimble Dispose of, Parts
from Trimble's inventory existing at the Effective Date before
purchasing such Parts from other sources. Any such sales shall
be on commercially reasonable prices, terms and conditions.
20. PROPERTY FURNISHED TO SOLECTRON BY TRIMBLE
20.1. Trimble Property
Unless otherwise agreed in writing by Trimble, and
notwithstanding the provisions of paragraph 21, all designs,
specifications, drawings, special dies, molds, patterns, jigs,
fixtures and any other property furnished to Solectron by
Trimble, or specifically paid for by Trimble, for use in the
performance of this Agreement shall be and remain the sole
property of Trimble, shall be marked as Trimble directs to
evidence its ownership thereof, shall be subject to return to
Trimble or other disposition at any time upon Trimble's
instruction, shall be used exclusively in the furnishing for
Trimble of goods and/or providing of services for Trimble and
shall, in the case of tangible property, be insured by
Solectron, at Solectron's expense, while in its custody or
control in an amount equal to the replacement cost thereof,
with loss payable to Trimble. Solectron shall furnish to
Trimble a copy of the policy or certificate of such insurance
upon demand. Solectron shall execute and deliver to Trimble
such other or further agreements relative to property
furnished by Trimble to Solectron as may be requested by
Trimble. With respect to such property, Solectron at its
expense shall (i) obtain any consumable material required for
its operation, (ii) perform all routine maintenance, and (iii)
perform all repairs necessitated by accident, misuse, abuse or
neglect. Trimble shall be responsible to perform or pay for
repairs due to reasonable wear and tear, provided that
Solectron first notifies Trimble of the need for such repairs
and cooperates with Trimble regarding the nature and source of
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such repairs. Solectron shall, upon Trimble's request, furnish
to Trimble a written report listing the Trimble property in
Solectron's possession.
As of the Effective Date, the property Trimble is furnishing
to Solectron under this Section 20.1 is listed on Exhibit 20.1
attached hereto.
20.2. Technology License
Trimble grants to Solectron revocable, non-exclusive,
non-transferable, royalty-free licenses to (i) possess, use
and have used the Ancillary Technology exclusively for
Trimble's benefit; and (ii) purchase or license from Trimble
such of the Trimble Proprietary Components as is reasonably
necessary for Solectron to produce Products exclusively for
purchase by Trimble under this Agreement.
20.3. Trimble Trademark License
Subject to the terms and conditions of this Agreement, Trimble
hereby grants to Solectron a personal, non-exclusive,
non-sublicensable, non-transferable, royalty-free, license to
use during the Term such Trimble trademarks as may reasonably
relate to the Products ("Trimble Marks"), to the extent
reasonably required to perform Solectron's obligations under
this Agreement.
Solectron hereby acknowledges and recognizes Trimble's
exclusive worldwide ownership of the Trimble Marks and agrees
not to take any action inconsistent with such ownership.
Solectron acknowledges that its use of the Trimble Marks
pursuant to this Agreement and any goodwill established
thereby shall inure to the sole benefit of Trimble.
Solectron shall support Trimble in policing the use of the
Trimble Marks and shall cooperate with Trimble in protecting
the Trimble Marks, including cooperating in becoming a
registered user of such Trimble Marks. Such cooperation by
Solectron shall be at the sole expense of Trimble. Solectron
shall promptly notify Trimble of any infringement of the
Trimble Marks that comes to Solectron's attention.
Solectron shall not attempt to register with any trademark
office, anywhere in the world, any trademark or other mark
that is confusingly similar to any of the Trimble Marks or
that otherwise infringes or dilutes any of the Trimble Marks.
Solectron shall not modify any Product bearing a Trimble Mark
in such a manner as to detract from the favorable reputation
enjoyed by the Trimble Marks. Solectron shall not take or
permit to be taken any actions which would detract from the
goodwill or favorable reputation associated with the Trimble
Marks.
21. INTELLECTUAL PROPERTY OWNERSHIP
Except as expressly agreed by the Parties in this Agreement, or in a
formal written amendment to this Agreement signed by duly authorized
officers of each Party:
21.1. Ownership of Proprietary Information that is Created solely by
one Party.
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The "Owning Party" for purposes of this Agreement of all
Proprietary Information owned by a Party or Created solely by
a Party, whether before or after the Effective Date, shall be
determined as follows:
21.1.1. All Proprietary Information which is not a Derivative
of any Proprietary Information of the other Party shall
be the sole and exclusive property of, and be deemed the
Proprietary Information of, the Party who owned or
Created the Proprietary Information.
21.1.2. All Proprietary Information which is a Derivative of any
Proprietary Information of the other Party but which is
not a Derivative of any Proprietary Information of the
Party who so Creates, shall be Disclosed in writing to
the other Party by the Party who so Created, and shall be
deemed the Proprietary Information of the other Party.
21.1.3. All Proprietary Information which is a Derivative of any
Proprietary Information of the other Party, and which
is also a Derivative of any Proprietary Information
of the Party who so Creates, shall be Disclosed in
writing to the other Party by the Party who so
Created, and shall be the Parties' joint property.
21.2. Ownership of Proprietary Information that is Created Jointly by
the Parties.
The "Owning Party" for purposes of this Agreement of all
Proprietary Information Created Jointly by the Parties,
whether before or after the Effective Date, shall be
determined as follows:
21.2.1. All Proprietary Information Created Jointly by the
Parties which is a Derivative of any Proprietary
Information of one Party who so Creates, and which is
not a Derivative of any Proprietary Information of
the other Party who so Creates, shall be Disclosed in
writing to the Party from whose Proprietary Information
it is a Derivative or whose Proprietary Information it
incorporates, and shall be deemed the Proprietary
Information of such Party.
21.2.2. All Proprietary Information Created Jointly by the
Parties which is a Derivative of any Proprietary
Information of one Party who so Creates, and which is
also a Derivative of any Proprietary Information of
the other Party who so Creates, shall be Disclosed in
writing by each Party to the other, and shall be the
Parties' joint property.
21.2.3. All Proprietary Information Created Jointly by the
Parties which is not a Derivative of Proprietary
Information of either such Party, shall be Disclosed
in writing by each Party to the other, and shall be the
Parties' joint property.
21.3. Ownership of any other Proprietary Information.
Ownership, whether solely by any Party or jointly by the
Parties, and all related rights in, to and of, all Proprietary
Information that is Created under circumstances not specified
in Paragraph 21.1 or 21.2 above shall be agreed upon by the
Parties in good faith and, failing such agreement,
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shall be submitted to arbitration in accordance with the
provisions of Paragraph 28.4, provided, however, that the
arbitrators' determination shall not result in, nor require or
permit, the Disclosure or Disposition of a Party's Proprietary
Information. Subject to the foregoing, in reaching its
determination the arbitrator(s) shall take into account the
following factors in addition to any other factors the
arbitrator(s) deem relevant:
21.3.1. The extent to which the Proprietary Information is based
on or incorporates the Proprietary Information of a
Party; and
21.3.2. The extent of each Party's material contribution to the
Proprietary Information.
21.4. Effect of Joint Ownership on Disposition of Proprietary
Information.
Except as provided herein, either Party shall be free to
Dispose of any Proprietary Information that is such Party's
joint property, as determined under this Agreement,
independently of and without accounting to any other Party
therefor, subject always to the other Party's equal and
concurrent right to likewise so Dispose of such joint
property, provided always, that neither Party may Dispose of
such joint property to the extent that such Disposition would
result in or require Disclosure of the other Party's
Proprietary Information of which the joint property was a
Derivative or which is Incorporated in the joint property, if
any.
21.5. Effect of Joint Ownership on Patent and Copyright Prosecution and
Enforcement.
21.5.1. Either Party who jointly owns any Proprietary
Information, as determined under this Agreement, shall
cooperate with any other Party who jointly owns such
Proprietary Information (i) in filing and prosecuting
applications for patent and copyright protection of any
jointly owned Proprietary Information that is
reasonably subject to such protection in any
jurisdiction any such Party deems appropriate, and (ii)
in enforcing patent rights and copyrights in such
Proprietary Information against others in any
jurisdiction the requesting Party deems appropriate.
21.5.2. Notwithstanding Paragraph above, neither Party may file
or prosecute nor require any other Party to cooperate in
the filing or prosecution of an application for patent
protection or copyright, and neither Party may enforce
or require any other Party to cooperate in enforcing
patent rights and copyrights for patent protection or
copyright, to the extent that such filing,
prosecution, cooperation or enforcement would result
in or require public or otherwise damaging Disclosure
of any the other Party's Proprietary Information of
which the joint property is a Derivative or which is
Incorporated in the joint property, if any.
21.5.3. Any Party requesting cooperation under Paragraph
21.5.1 or Paragraph 21.5.2 above shall bear all expenses
associated therewith, except that the Parties who
jointly own any Proprietary Information, as determined
under this Agreement, shall equally bear the expense of
filing and prosecuting applications for patent
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protection in the United States of America of such jointly
owned Proprietary Information.
21.6. Limitation on Transfer of Proprietary Information. Except as
expressly provided herein, nothing in this Agreement shall
operate to create or transfer an ownership, license or other
proprietary interest in any Proprietary Information, nor require
the Disclosure by an Owning Party of any of its Proprietary
Information, nor restrict, inhibit or encumber any Owning
Party's right or ability to dispose of, use, distribute,
Disclose or disseminate in any way its own Proprietary
Information or to release or modify by further agreement the
obligations of the other Party or Others with respect to such
Owning Party's Proprietary Information.
22. CONFIDENTIALITY
22.1. A Receiving Party shall, with respect to an Owning
Party's Proprietary Information:
22.1.1. Restrict access thereto to such of its employees and
consultants who need to know it in order for the
Receiving Party to perform its obligations under this
Agreement and who agree to be bound by an obligation
of confidence no less protective of the Disclosing
Party's Proprietary Information than the provisions
of this Agreement;
22.1.2. Not use Proprietary Information disclosed to it
pursuant to this Agreement for any purposes other than
those expressly permitted by this Agreement; and
22.1.3. Not disclose Proprietary Information disclosed to it
pursuant to this Agreement to any third Party.
22.2. Each Receiving Party shall protect the Disclosing Party's
Proprietary Information using at least the same degree of
care it employs to avoid disclosure of its own Proprietary
Information of a similar nature, provided such degree of care
is not less than reasonable under the circumstances. The
obligations and restrictions provided in this Paragraph 22
shall survive expiration or termination of this Agreement.
22.3. A Disclosing Party's Proprietary Information and any tangible
or electronic medium on or by which it is or has been Disclosed
to, possessed, or reproduced by the Receiving Party, shall at
all times be the Disclosing Party's sole and exclusive property.
The Disclosing Party may at any time, by written notice,
revoke in whole or in part any permission given to the
Receiving Party under this Paragraph 22 to use, possess or
Disclose its Proprietary Information. Upon such revocation, or
upon any written request, the Receiving Party shall
immediately and unconditionally deliver to the Disclosing
Party all of the Disclosing Party's Proprietary Information and
any tangible or electronic medium on or by which it is or has
been Disclosed to, possessed, or reproduced by the Receiving
Party.
22.4. Except as otherwise provided in this Agreement, the Disclosure
of Proprietary Information shall not be construed as granting the
Receiving
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Party any rights with respect to the other Party's Proprietary
Information or any license under any patents, patent
applications, copyrights and/or other intellectual property
rights to which the Disclosing Party may then or
thereafter own or hold licensing rights.
22.5. Disclosure of any Proprietary Information by a Receiving Party
hereunder shall not be precluded if such Disclosure is (a)
in response to a valid and legally-enforceable order of a
court or other government body or any political subdivision
thereof; or (b) otherwise required by law, provided, however,
that the Receiving Party before making such Disclosure must
first (i) immediately upon receipt of such order notify the
Disclosing Party of such order; and (ii) make and cooperate
with the Disclosing Party in making, if available under
applicable law, a good faith effort to obtain a protective
order or other appropriate determination against or limiting
disclosure or use of the Proprietary Information.
22.6. Each Disclosing Party shall endeavor to affix or incorporate
in any tangible Proprietary Information it Discloses to the
Receiving Party an appropriate statement identifying the
information as the Disclosing Party's Proprietary Information,
such as "[Disclosing Party] Proprietary Information", or
"[Disclosing Party] Confidential Information", or words of like
meaning, clearly expressed. The Disclosing Party shall, after
Disclosing Proprietary Information other than in tangible form,
endeavor to: (i) promptly confirm the Disclosure, (ii) reduce
the Proprietary Information to writing and (iii) identify the
information as the Disclosing Party's Proprietary Information
in the manner described above. However, the Disclosing
Party's failure to so affix or incorporate or confirm
shall not affect such information's or material's character
as the Disclosing Party's Proprietary Information under
this Agreement.
23. INTELLECTUAL PROPERTY INDEMNIFICATION
23.1. By Solectron
Solectron shall defend, indemnify and hold harmless Trimble,
its Affiliates and its and their customers from and against
any costs, expenses, damages, judgments and liabilities of any
kind, including reasonable attorneys' fees and costs, arising
from or related to any claim, suit or other action against
Trimble, any of its Affiliates or its or their customers to
the extent such claim, suit or action is based upon an
assertion that (i) the Manufacturing Standards, Solectron's
Proprietary Information or any portion thereof, or (ii) the
Product(s) where such claim, suit or action relates to the
Manufacturing Standards or Solectron's Proprietary
Information; infringe any third party's copyright, trade
secrets, patent, trademark and/or trade name, and Solectron
shall pay the amount of the settlement or the costs, damages
and attorneys' fees and costs finally awarded by a court in
any such suit or action, provided that Trimble:
23.1.1. promptly gives Solectron notice of any such claim or
threatened or actual suit or action;
23.1.2. gives Solectron sole control of the defense and
settlement of such claim, suit or action and related
settlement negotiations; and
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23.1.3. cooperates in the defense of such claim, suit or action.
In the event that in any such suit or action an injunction is
entered prohibiting the purchase or sales of any Product(s) by
Trimble, any of its Affiliates or its or their customers,
Solectron, at its expense, shall (i) procure for Trimble, its
Affiliates and its and their customers the right to continue
to purchase, sell, market, use and have others sell, market
and use the Manufacturing Standards, Solectron's Proprietary
Information and/or the Product(s); or (ii) replace or modify
the Manufacturing Standards or Solectron's Proprietary
Information such that Solectron or Trimble may manufacture or
have manufactured Product(s) that are non-infringing while
still conforming to the applicable Production File(s).
23.2. By Trimble.
Trimble shall defend, indemnify and hold harmless Solectron
and its Affiliates from and against any costs, expenses,
damages, judgments and liabilities of any kind, including
reasonable attorneys' fees and costs, arising from or related
to any claim, suit or other action against Solectron or any of
its Affiliates to the extent such suit or claim is based upon
an assertion that the Product(s), Trimble's Proprietary
Information or any portion thereof infringe any third party's
copyright, trade secrets, patent, trademark and/or trade name,
and Trimble shall pay the amount of settlement or the costs,
damages and attorneys' fees and costs finally awarded by a
court in any such suit or action, provided that Solectron:
23.2.1. gives Trimble notice of any such claim or threatened or
actual suit or action;
23.2.2. gives Trimble sole control of the defense and settlement
of such suit, claim or action and related settlement
negotiations; and
23.2.3. cooperates in the defense and settlement negotiation of
such suit, claim or action.
Notwithstanding the preceding sentence, Trimble shall have no
obligation to Solectron regarding any such claim, suit or
action to the extent that such claim, suit or action is caused
by, arises from or is attributable to (i) any unauthorized
modification of the Trimble Proprietary Information by
Solectron; (ii) or Solectron's unauthorized modifications to
the Product(s).
23.3. General.
In performing its obligations under this Agreement, each Party
agrees that it will not knowingly infringe any patent,
copyright, mask work right or trade secret of any third party.
This Paragraph 23 shall survive the expiration or termination
of this Agreement in any manner whatsoever. This Paragraph 23
specifies the exclusive remedies of the parties for any
alleged infringement or misappropriation of any intellectual
property rights of any third party by the Manufacturing
Standards or Solectron Proprietary Information provided by
Solectron to pursuant to this Agreement and by the Design
Specification, Products, Trimble Proprietary Information or
Trimble Components provided by Trimble pursuant to this
Agreement.
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24. LIMITATION OF LIABILITY
EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, NEITHER PARTY SHALL BE
LIABLE TO THE OTHER, WHETHER IN CONTRACT OR IN TORT, FOR SPECIAL,
INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING,
WITHOUT LIMITATION, CLAIMS FOR LOST PROFITS OR LOSS OF GOODWILL, EVEN
IF THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, BY
REASON OF ANY BREACH OR DEFAULT UNDER THIS AGREEMENT. Regardless of the
foregoing, this paragraph shall not apply to either Party's breach of
the following paragraphs [*].
25. INSURANCE
Each Party shall, at its own expense, maintain comprehensive general
liability insurance (including product liability and broad form
contractual liability) for not less than [*] per occurrence, during
the term of this Agreement and for [*] thereafter. Such insurance
shall (i) be in a form and with a carrier or carriers reasonably
acceptable to Solectron and Trimble, (ii) list the other Party as an
additional named insured, and (iii) provide that such insurance may not
be canceled or altered so as to affect the interest of any of the
foregoing without at least thirty (30) days' prior written notice to
the other Party. Promptly following execution of this Agreement, each
Party shall deliver to the other Party satisfactory evidence of such
insurance coverage, or an equivalent self-insurance program.
26. TERM OF THE AGREEMENT
26.1. Initial Term. The Initial Term of this Agreement shall be three
(3) years, beginning on the Effective Date ("Initial Term").
26.2. Renewal Term. Trimble shall have two (2) options to extend the
Term for periods of one (1) year each ("Renewal Term") upon
written notice to Solectron given not less than ninety (90) days
before expiration of the then-current Term.
26.3. Extended Term. Provided that Trimble does not timely renew the
Term as provided in paragraph 25.2, the Term shall continue
after any scheduled expiration of the Initial Term or any
Renewal Term and until terminated by either Party on not less
than ninety (90) days advance written notice to the other
effective at or after such scheduled expiration.
27. TERMINATION
27.1. This Agreement shall terminate:
27.1.1. On expiration of the Term; or
27.1.2. As the parties may mutually and expressly agree in
writing at any time; or
27.1.3. As provided elsewhere in this Agreement; or
27.1.4. As may be decreed by final judgment or order of a court
of competent jurisdiction; or
[*]-CERTAIN INFORMATION AS INDICATED ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMMISSION. CONFIDENTAL TREATEMENT HAS BEEN REQUESTED
WITH RESPCECT TO THE OMITTED PORTIONS.
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27.1.5. As otherwise provided by law.
27.2. This Agreement may be terminated:
27.2.1. For Cause.
27.2.1.1. By Trimble, in the event of Solectron's
material breach of this Agreement, which
within thirty (30) days of Trimble's written
notice thereof is neither (i) cured, nor (ii)
the subject of a mutually agreed plan to
cure, provided, however, that if a material
breach is not capable of being cured, Trimble may
terminate with immediate effect.
27.2.1.2. By Solectron, in the event of Trimble's
material breach of this Agreement, which
within thirty (30) days of Solectron's written
notice thereof is neither (i) cured, nor (ii)
the subject of a mutually agreed plan to cure,
provided, however, that if a material breach is not
capable of being cured, Solectron may terminate
with immediate effect.
27.2.2. For Trimble's Convenience, without cause, upon not less
than ninety (90) days advance written notice to Solectron
effective at or after the end of the Initial Term,
regardless whether Trimble has renewed the Term as
provided in Paragraph 25.2.
27.3. Contents of Notice of Termination
When a Party is permitted or required to give written notice
of termination under Paragraph 26.2.1 above, such notice shall
state with reasonable particularity the nature of the breach,
the steps required to cure if such breach is by its nature
curable, and either (i) the Party's intent to terminate this
Agreement if a curable breach is not cured, or (ii) the
Party's election to immediately terminate the Agreement if the
breach is not curable.
27.4. Effect of Termination and Notice of Termination
27.4.1. Neither the expiration nor Termination of this
Agreement shall relieve either Party of any obligation
previously accrued, nor any obligation accruing or
arising thereafter under the following paragraphs of
this Agreement and any other paragraphs that by their
terms so provide: 1 ("Definitions"), 13
("Records, Audits and Reports"), 17 ("Product Warranty;
Epidemic Failure"), 18 ("Warranty Claims and Repair"), 19
("Parts Supply"), 21 ("Intellectual Property
Ownership"), 22 ("Confidentiality"), 23 ("Intellectual
Property Indemnity"), 26 ("Termination"), and 28
("General").
27.4.2. Upon any notice of termination given by either Party
for any reason, the exclusivity provided in Paragraph
3 of this Agreement with respect to the
manufacture of Products by Solectron for Trimble shall
immediately terminate.
27.4.3. Upon Solectron's termination of this Agreement as
provided in Paragraph 26.2.1.2, Solectron at Trimble's
request shall continue
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to supply the Products to Trimble, subject to
commercially reasonable terms and conditions of sale,
for a period of twelve (12) months following such
termination.
27.4.4. Upon or after any notice of termination, any
Termination, or any Exclusivity Termination Notice, (i)
Solectron will identify to Trimble any Products, Parts,
finished goods, work in progress, components or other
material for which Trimble is or may become liable under
the terms of this Agreement to pay Solectron, and
(ii) Solectron at Trimble's request will sell and deliver
to Trimble those Parts and assemblies as required under
Exhibit 8.2 and such other items as Trimble may elect to
purchase, at the price determined under this Agreement.
27.4.5. Upon any Termination, Solectron shall complete the
production of any Products for which Solectron has
accepted a purchase order as of the effective date of
such Termination and deliver such completed Products
to Trimble within twenty (20) days of the effective date
of such Termination provided, however, that if
this Agreement was terminated by Trimble for Solectron's
default under Paragraph 26.2.1.1, Trimble may direct
Solectron to refrain from completing such production
and in such event Trimble shall be under no obligation,
under this Paragraph 26.4.5 or otherwise under this
Agreement, to pay Solectron for any such items or any
portions or components thereof. With respect to
purchase orders for components that will not be utilized
to manufacture Products as set forth above in this
Paragraph 26.4.5, Solectron shall not cancel any
purchase order accepted by its suppliers for the
purchase of Parts, without Trimble's prior written
authorization.
27.4.6. Upon any Termination or Exclusivity Termination Notice,
Trimble shall have a perpetual, non-exclusive,
royalty-free license to use and have used the
Production Files for Product-related purposes to the
extent such use is not otherwise permitted under the
terms of this Agreement. Regardless of the foregoing,
in no event will Trimble have a license to use or
disclose any Solectron Inventions or Trade Secrets.
27.4.7. Within fifteen (15) days after a notice of termination
is given by either Party to the other, or at least
thirty (30) days before any expiration of this
Agreement, Solectron shall provide Trimble with all
relevant information concerning its outstanding purchase
orders for Parts. Trimble may, on or before the effective
date of such termination or expiration, elect, at
Trimble's sole discretion and in addition to any other
rights Trimble may have under this Agreement, none, any
one, or a combination of the following options:
27.4.7.1 To purchase from Solectron some or all Parts.
27.4.7.2. Direct Solectron to cancel, to the extent
possible, some or all of the outstanding purchase
orders for Parts; or
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27.4.7.3. Obtain from Solectron an assignment of
Solectron's rights and obligations under
the outstanding purchase orders Parts.
If Trimble instructs Solectron to cancel any
Solectron purchase order for Parts under Paragraph
26.4.7.2, (i) Solectron agrees to use reasonable
efforts to cancel such purchase order; (ii) Solectron
shall use reasonable efforts to negotiate an
equitable settlement with its suppliers concerning
Solectron's financial liability due to the
cancellation of such purchase order for Parts; and
(iii) if Solectron is unable to cancel any
outstanding purchase order for Parts, Trimble shall
be liable for Solectron's direct financial liability
for such purchase orders and/or their cancellation as
provided in Exhibit 8.2.
28. REPRESENTATIONS
28.1. Each Party represents to the other that: (i) it has all
requisite power and authority to enter into this Agreement
and to carry out the transactions contemplated hereby; (ii)
it has the rights, licenses, permits and power to perform all
obligations incurred by it under this Agreement; (iii) the
execution, delivery and performance of this Agreement are duly
authorized; (iv) this Agreement has been duly executed and
delivered by it and is a valid and binding obligation of it; and
(v) the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby do
not conflict with or violate its charter and by-laws, any
other contract or agreement to which it is a party, any
applicable law or any order or judgment of any court or
governmental authority. Solectron represents that all Product(s)
purchased and sold pursuant to this Agreement shall be (i) free
from any liens or encumbrances and (ii) manufactured, labeled,
packaged, sold and Delivered in accordance with all applicable
United States federal, state and local laws, orders,
regulations, codes and standards (whether or not specifically
referenced elsewhere in this Agreement).
28.2. Trimble represents and warrants to Solectron that Trimble and
its Affiliates have the right to manufacture and have
manufactured the Products.
29. GENERAL
29.1. Force Majeure.
Neither Party shall be liable to the other Party if the
performance of any of its obligations under this Agreement is
prevented or delayed because of causes beyond its reasonable
control including, without limitation, fire, strike, war,
insurrection, act of God, law, regulation and embargo of
government agency, riot, severe weather, restriction on the
use of power or any other cause beyond its reasonable control
and not due to such Party's own fault or negligence (an
"Excusable Delay"). A Party shall be excused from its
performance to the extent caused by such Excusable Delay;
provided that such Party (i) gives notice of the Excusable
Delay to
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the other Party promptly after its occurrence, (ii) uses its
reasonable efforts (including executing any disaster plan) to
overcome, mitigate and remove the cause of the event
preventing or delaying performance, (iii) continues the
performance of all its obligations under this Agreement that
are not prevented or delayed and (iv) upon cessation of the
Excusable Delay, promptly performs or completes performance of
the obligations which were prevented or delayed.
Notwithstanding the foregoing, if Solectron's performance is
delayed for more than five (5) days due to Excusable Delay,
Trimble shall have the right to temporarily and reasonably
procure from any other supplier Product(s) which Solectron is
unable to supply.
29.2. Assignment; Binding Effect.
Neither Party shall assign or transfer this Agreement or any
rights and obligations hereunder without the other Party's
prior written consent, which consent may be refused in such
Party's absolute discretion. This Agreement and the
transactions and other instruments provided for herein shall
be binding upon and inure to the benefit of the parties, their
legal representatives, successors, and permitted assignees.
29.3. Governing Law.
This Agreement shall be governed by and the legal relations
between the parties shall be determined in accordance with the
substantive laws of the State of California, without regard to
the conflicts of law principles of California.
29.4. Dispute Resolution.
Except for the right of either Party to apply to a court of
competent jurisdiction for a temporary restraining order, a
preliminary injunction, or other equitable relief pending
further action by the arbitrators, all claims or disputes
related to or arising from this Agreement or the commercial
relationship of the parties that are not resolved by
negotiation and mutual agreement shall be submitted to final
and binding arbitration before JAMS/ENDISPUTE, or its
successor, for arbitration in Santa Clara County, California
pursuant to the United States Arbitration Act, 9 U.S.C. ss.1
et seq., unless the parties mutually agree otherwise. Either
Party may commence the arbitration process by filing a written
demand for arbitration with JAMS/ENDISPUTE, with a copy to the
other Party. The arbitration will be conducted in accordance
with the provisions of JAMS/ENDISPUTE's Streamlined
Arbitration Rules and Procedures in effect at the time of
filing of the demand for arbitration. Each Party will select
an arbitrator from JAMS/ENDISPUTE's panel of neutrals and
together the selected arbitrators shall mutually agree on a
third arbitrator. The parties covenant that they shall
participate in the arbitration in good faith, and that they
shall share equally in its costs, except for attorneys' fees
and expenses of witnesses which shall be borne by the Party
incurring the fees or producing the witness. The arbitration
award shall be in writing and shall specify the factual and
legal bases of such award. The arbitration award shall be
final and binding, and judgment thereon may be entered by any
court of competent jurisdiction. The parties agree that the
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arbitration award shall be treated confidentially, and the
parties shall not, except as otherwise required by law or
court order or to enable its entry or enforcement as a
judgment, disclose the arbitration award to any third Party,
excluding personnel in their Affiliates and their attorneys
and accountants with a need to know, provided that such
recipients agree to be bound by the same restrictions as are
contained in this Agreement. The arbitrator shall not have the
power to render an award of punitive, exemplary or treble
damages. To the extent of any conflict, the provisions of this
Agreement shall supersede and control any JAMS/ENDISPUTE
rules. The provisions of this Paragraph 28.4 may be enforced
by any court of competent jurisdiction, and the prevailing
Party in such enforcement action shall recover from the other
Party its costs, reasonable attorney fees and expenses, from
the other Party.
29.5. No Waiver.
Either Party's (i) waiver of any performance by the other,
(ii) waiver of any condition of this Agreement, or (iii)
consent to any breach of this Agreement by the other, shall
(a) be effective only if expressly set forth in a writing
signed by the Party alleged to have waived or consented, and
(b) not constitute or require an ongoing waiver of such
performance or condition, or consent to any previous,
different or subsequent breach, regardless of whether such
performance, condition or breach is similar, identical or
related, and regardless of the course of dealing which
develops or has developed between the Parties.
29.6. Compliance with U.S. Government Export Controls.
If either Party exports any Product or any Proprietary
Information, such Party shall comply with the United States
Export Administration Act as amended from time to time, with
the Export Administration Regulations promulgated from time to
time thereunder, all other export laws and regulations of the
United States and all amendments, modifications or additions
thereto, including all laws and regulations relating to
re-export.
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29.7. Notices.
All notices, requests and other communications permitted or
required to be given pursuant to this Agreement shall be in
writing and shall be personally delivered, or sent by
recognized delivery service or certified or registered mail
with return receipt requested and with all postage prepaid, to
the recipient Party at its address set forth below:
Trimble: Solectron:
Trimble Navigation Limited Solectron Federal
Attention: Chief Manufacturing Officer Systems, Inc.
645 North Mary Avenue 847 Gibraltar Drive
Sunnyvale, CA 94088-3642 Milpitas, CA 95035
With Copy To: With Copy To:
Solectron Corporation
Trimble Navigation Limited Attention: Corporate
Attention: General Counsel Urgent Notice Legal Department
645 North Mary Avenue 847 Gibraltar Drive
Sunnyvale, CA 94088-3642 Milpitas, CA 95035
Each such notice shall be effective upon delivery or when
delivery is refused. Either Party may, by notice given in
compliance with the provisions of this Paragraph 28.7,
designate another address for receipt of notice.
29.8. Entire Agreement.
This Agreement, together with its exhibits, constitutes the
entire agreement of the Parties respecting its subject matter.
It supersedes all prior and contemporaneous communications and
understandings and agreements, written or oral, between the
parties relative to its subject matter and merges all
discussions between them, including, without limitation, the
Letter of Intent dated April 19, 1999 between the Parties.
Regardless of the above, the Parties acknowledge that they
have entered into (i) an Asset Purchase Agreement dated August
10,1999, for the sale of certain Trimble assets (the "Asset
Purchase Agreement") and (ii) a sublease dated August 10,
1999, for Solectron's rental of certain Trimble Sunnyvale
facilities (the "Sublease"). The parties agree that (a) this
Agreement will not supersede the Asset Purchase Agreement and
that the provisions of the Asset Purchase Agreement shall
exclusively govern the sales of the applicable assets; and (b)
this Agreement will not supersede the Sublease and that the
provisions of the Sublease shall exclusively govern the rental
of the applicable Trimble facilities. This Agreement may only
be amended by subsequent written agreement which is duly
executed by the parties.
29.9. Severability
If any provision of this Agreement is determined by any court
of competent jurisdiction or arbitrator to be invalid,
illegal, or unenforceable to any extent, that provision shall,
if possible, be construed as though more narrowly drawn, if a
narrower construction would avoid such
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invalidity, illegality, or unenforceability or, if that is not
possible, such provision shall, to the extent of such
invalidity, illegality, or unenforceability, be severed, and
the remaining provisions of this Agreement shall remain in
effect provided, however, that the court shall have authority
and jurisdiction to add to this Agreement a provision as
similar in terms and intended effect to such severed provision
as may be possible and be legal, valid, and enforceable. If,
as a result of the foregoing, a party's material benefits
under this Agreement that would have existed but for the
operation of the preceding sentence are materially impaired,
such party may at such party's election thereafter terminate
this Agreement on not less than three (3) months advance
written notice to the other party.
29.10. Effect of Title and Headings.
The title of this Agreement and the headings of its articles
are included solely for convenience and shall not govern,
limit or aid in the interpretation of any terms or provision
of this Agreement.
29.11. Construction
The Parties acknowledge and agree that both Parties have
participated in the drafting and negotiation of all provisions
of this Agreement, and each Party hereby waives and agrees not
to assert that any ambiguity should be construed for or
against either Party. Except as otherwise specified,
references in this Agreement to Paragraphs and Exhibits are to
Paragraphs of, and Exhibits attached to, this Agreement.
Except where the context clearly requires to the contrary,
"including" shall mean "including, without limitation".
29.12. Nature of Relationship
For the purposes of this Agreement, the Parties are deemed to
be independent contractors. It is expressly agreed that this
Agreement and the relationship between the parties hereby
established do not constitute a partnership, joint venture,
agency or contract of employment. Neither Party shall have the
authority to make any statements, representations or
commitments of any kind, or to take any action, which shall be
binding on the other, except as authorized in writing by the
Party to be bound. Neither Party shall bind nor attempt to
bind the other to any contract or to the performance of any
obligation, nor represent to third parties that it has any
right to enter into any obligation on the other's behalf.
29.13. Publicity.
Neither Party shall make or issue any publicity, news release,
public announcement or communication of any sort with the
media, direct or indirect, written or oral, concerning this
Agreement or the transactions contemplated by this Agreement
without the prior written consent of the other Party, not to
be unreasonably withheld.
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WITH INTENT TO BE BOUND, Trimble and Solectron have executed this Agreement on
the dates indicated below.
Trimble: Solectron:
TRIMBLE NAVIGATION LIMITED SOLECTRON FEDERAL SYSTEMS, INC.
By: By:
Printed Name Printed Name
and Title: and Title:
Dated: Dated:
SOLECTRON CORPORATION
By:
Printed Name
and Title:
Dated:
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EXHIBIT 5.6
Manufacturing Support Services
1. MANUFACTURING SUPPORT SERVICES
During the Term, each Party at its sole expense shall perform its services
as described below.
2. TRIMBLE'S SERVICES
Except as expressly stated below, or elsewhere in this Agreement,
Trimble shall be responsible for product introduction and development
services, including without limitation:
2.1. Printed Circuit Board ("PCB") Assembly
In the PCB Assembly area, Trimble shall perform the following
manufacturing support services:
2.1.1. Creating fixtures and processes for product
introduction into manufacturing ("Product
Introduction");
2.1.2. Creating in-circuit testing ("ICT") programs, fixtures
and acceptance or approval standards;
2.1.3. Approving an X-ray program for testing Products;
2.1.4. Qualifying and validating the processes developed by
Solectron as described in paragraph 3.1 of this
Exhibit; and
2.1.5. Cooperating with Solectron to identify any improvements
to the above or other manufacturing processes.
2.2. PCB Testing and Box Build
In the PCB Testing and Box Build area, Trimble shall perform
the following manufacturing support services:
2.2.1. Creating Product Introduction hardware and software to
perform functional, strife and board tests;
2.2.2. Creating and validating repeatability and
reproducibility of Product Introduction tests;
2.2.3. Upgrading test station hardware equipment and software
as required;
2.2.4. Creating Product Introduction acceptance testing and
approval standards;
2.2.5. Creating Product Introduction fixtures and processes;
2.2.6. Performing reasonable operator training for the Product
Introduction materials created by Trimble in this
paragraph 2.2;
2.2.7. Scheduling shared equipment during the Transition
Period (as defined below);
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2.2.8. Qualifying and validating the processes developed by
Solectron as described in paragraph 3.2 of this
Exhibit; and
2.2.9. Cooperating with Solectron to identify any improvements
to the above or other manufacturing processes.
3. SOLECTRON'S SERVICES
3.1. Printed Circuit Board ("PCB") Assembly
In the PCB Assembly area, Solectron shall perform the
following manufacturing support services:
3.1.1. Building additional or replacement assembly fixtures;
3.1.2. Developing different processes for securing Parts to
the PCB Assemblies;
3.1.3. Procuring, building and maintaining ICT test equipment;
3.1.4. Procuring, building and maintaining ICT software and
fixtures;
3.1.5. Procuring, building and maintaining flying probe test
equipment, software, and fixtures;
3.1.6. Procuring or developing X-ray software for Trimble's
approval;
3.1.7. Maintaining approved X-ray software;
3.1.8. Procuring and maintaining stencils, other placement
equipment, and reflow software;
3.1.9. Tracking and reporting yield measurements as required
by this Agreement;
3.1.10. Maintaining and operating all equipment as
necessary to ensure that Products produced on the
equipment consistently meet or exceed the quality
and other requirements of this Agreement and good
commercial practices;
3.1.11. Coordinating Corrective Action Reports as required by
this Agreement; and
3.1.12. Cooperating with Trimble to identify and, upon
Trimble's approval, implement any improvements to the
above or other manufacturing processes.
3.2. PCB Testing and Box Build
In the PCB Testing and Box Build area, Solectron shall perform
the following manufacturing support services:
3.2.1. Maintaining, including troubleshooting, calibrating,
and performing mechanical maintenance for assembly
fixtures and test stations;
3.2.2. Tracking and reporting yield measurements as required
by this Agreement;
3.2.3. Procuring such commercially-available equipment
(including MAPS Packages and assembly aids) as is
necessary to perform its obligations under this
Agreement;
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3.2.4. Coordinating Corrective Action Reports as are required
by this Agreement;
3.2.5. Training new Solectron personnel in the use of the
equipment furnished by Trimble;
3.2.6. Creating design analysis reports as required by this
Agreement;
3.2.7. Maintaining and operating all equipment as necessary
to ensure that Products produced on the equipment
consistently meet or exceed the quality and other
requirements of this Agreement and good commercial
practices;
3.2.8. Procuring, installing and maintaining Strife testing
and ESS equipment as specified by Trimble in the
Manufacturing Standards; and
3.2.9. Cooperating with Trimble to identify and, upon
Trimble's approval, implement any improvements to the
above or other manufacturing processes.
4. TRIMBLE ASSISTANCE DURING TRANSITION
During the first twelve (12) months following the Effective
Date ("Transition Period") Trimble shall provide to Solectron
such assistance as Trimble, in its business judgment,
determines is reasonable to assist Solectron in performing its
obligations described in paragraph 3 above.
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