Manufacturing Agreement - Solectron California Corp. and Brocade Communications Systems Inc.
MANUFACTURING AGREEMENT
Solectron California Corporation ("Solectron") whose principle place of business
is located at 847 Gibraltar Drive, Milpitas, California 95035 and Brocade
Communications Systems, Inc. ("Brocade") whose principle place of business is
located at 1901 Guadalupe Parkway, San Jose, California 95131 in their desire to
formulate a strategic business relationship and to define their expectations
regarding this relationship, hereby agree as follows:
1.0 PRECEDENCE:
1.1 This Standard Manufacturing Agreement (the "Agreement") is intended by
Solectron and Brocade to operate as a basic set of operating conditions
regarding their respective business relationship whereby Solectron would
manufacture certain models of Brocade's products as described in more
particularity in the addenda to this Agreement (the "Products").
Product-specific requirements along with specific business terms and
conditions with respect to each Product will be mutually agreed to and
documented by an executed addendum to this Agreement.
1.2 It is the intent of the parties that this Agreement and its addenda
shall prevail over the terms and conditions of any purchase order,
acknowledgment form or other instrument. In the event of a conflict
between the terms of this Agreement and the terms contained in any
addenda to this Agreement, the terms of the addenda shall be
controlling. Addenda shall not be binding until executed by authorized
representatives of each party.
1.3 This Agreement may be executed in one or more counterparts, each of
which will be deemed the original, but all of which will constitute but
one and the same document. The parties agree this Agreement and its
addenda may not be modified except in writing signed by both parties.
1.4 Nothing in this Agreement shall be construed or deemed to prevent or
otherwise inhibit Brocade's ability or right to manufacture, at
Brocade's facility or at a third party facility of Brocade's choice, the
Products. Further, nothing in this Agreement shall be construed or
deemed to (i) require Brocade to order any units of the Products to be
manufactured by Solectron, or (ii) prevent or otherwise inhibit
Brocade's ability or right to design, develop, manufacture, have
manufactured, market, use, sell, and or distribute any follow-on
products or derivatives of the Products.
2.0 TERM
2.1 The effective date of this Agreement shall be 7/30/, 1999 ("Effective
Date"). This Agreement shall commence on the Effective Date, and shall
continue for an initial term of three (3) years. Thereafter, this
Agreement shall automatically be renewed for successive one (1) year
renewal terms unless either party requests in writing, at least one
hundred twenty (120) days prior to the anniversary date of the
then-current term, that this Agreement not be so renewed.
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3.0 PRODUCT FORECAST
3.1 It is agreed that Brocade will provide Solectron, on a monthly basis, a
non-binding rolling twelve (12) month Product forecast. This section, as
appropriate, may be modified in an addendum to reflect specific Product
requirements. Solectron shall view all such forecasts as Confidential
Information as provided in Section 11.
4.0 MATERIAL PROCUREMENT
4.1 Solectron is authorized to purchase materials using standard purchasing
practices including, but not limited to, acquisition of material
recognizing Economic Order Quantities, ABC buy policy and long lead time
component management in order to meet the PO and long lead time
requirements of Brocade, solely in accordance with the authorization
procedures set forth in Section 4.2. Brocade recognizes its financial
responsibility for the material purchased by Solectron on behalf of
Brocade.
4.2 Solectron will purchase specified quantities of long lead time material
and Brocade unique material as authorized by Brocade in advance and in
writing. Solectron will compile and maintain (and provide an updated
version to Brocade on a monthly basis that reflects Brocade's current
requirements) a report concerning this long lead time material which
will contain:
* Brocade part number
* Solectron part number
* Manufacturer name
* Manufacturer part number
* Manufacturer description
* Lead time
* Where used
* Quantity per unit of Product
* Purchase quantity authorized by Brocade
* Purchase price authorized by Brocade
* Extended price
It is understood and agreed that if Brocade orders Solectron to stop
production of Products for Brocade's convenience, prior to the
consumption of all material authorized for purchase by Brocade pursuant
to this Section 4.2, Brocade will purchase all material as provided in
Section 4.3. It is the intention of both parties that Solectron
effectively manages the long lead time and Brocade unique material
inventory such that the inventory will be completely consumed by the
end-of-support of the Products, and Brocade will consequently not have
any such material inventory liability.
4.3. In the event of a termination or a cancellation of a purchase order or a
material release, Solectron shall provide to Brocade within ten (10)
business days the cost of material inventory and value-add, whether in
raw form, work in process, or finished goods, and not returnable to the
vendor or usable for other customers, the cost of material on order
which cannot be canceled, and any vendor cancellation charges incurred
with respect to material canceled or returned to the vendor.
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4.4. Solectron shall undertake reasonable efforts to cancel all applicable
component purchase orders and reduce component inventory through return
for credit programs or allocate components for alternate programs if
applicable. Charges will be finalized within thirty (30) business days.
4.5. Solectron shall define manufacturing capacity for each major step in the
manufacturing process and total manufacturing capacity for each Product
and/or family of Products. Solectron will also provide component
supplier supply capacity information with the exception of Brocade
Managed Components, as defined below in Section 7.3 (collectively
"Capacity Information"). Capacity Information along with up-to-date
information on Solectron's manufacturing capacity model and cycle time
plan will be provided to Brocade on the first day of each month in a
monthly report or as requested by Brocade. Component supplier capacity
information will be provided on an as-needed basis.
4.6. During the term of this Agreement, Solectron agrees to aggressively
monitor lead times and cycle times for the various Products as broken
down into the following major categories:
* Order processing cycle time
* Material lead time
* Manufacturing cycle time
* Pack out and shipping cycle time
This information will be reported to Brocade on a monthly basis, or as
otherwise requested by Brocade ("Lead time Reports"). Solectron agrees
to aggressively work with Brocade to develop strategies which will lead
to ongoing reductions in lead times and cycle times for the various
categories. The Lead time Reports will include the details and results
of the implementation of such strategies.
4.7. Solectron will perform a preferred supplier comparison on an ongoing
basis to ensure optimal use of Solectron's preferred supply base.
4.8. Upon written request by Brocade, Solectron agrees to increase or
decrease the quantity of Products scheduled to be delivered to Brocade
as follows:
[*]
Solectron agrees to use commercially reasonable efforts to meet the [*]
in the table above. The above flexibility percentages are the limit for
the sum of requested changes during any rolling [*] day planning cycle.
[*]. The maximum cumulative reschedule delay is sixty (60) days.
5.0 PURCHASE ORDERS AND PRICE REVIEWS
5.1 Brocade agrees to provide Solectron Purchase Orders or Material Releases
[*] calendar days in advance of the scheduled delivery date (or
as otherwise provided by an
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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addendum) and shall become effective upon acceptance of the order by
Solectron. Solectron shall accept or reject all Purchase Orders within
two (2) business days of receipt or such Purchase Orders shall be deemed
accepted by Solectron. Such confirmation must include acceptance of
requested delivery dates. If Solectron is unable to accept Brocade's
requested delivery dates, Solectron must immediately advise Brocade of
the reason such delivery dates cannot be met. Change orders shall be
provided by written or electronically dispatched notice from Brocade.
Solectron shall notify Brocade of acceptance of a change order within
two (2) business days after receipt of Brocade's change order.
5.2 In the event of termination or cancellation of a purchase order, the
terms of Section 4.3 shall apply.
5.3 Solectron and Brocade will meet every [*] months, or more frequently
upon the request of either party, during the term of this Agreement to
review pricing and determine whether any price increase or decrease is
required. Any price change shall apply only to purchase orders or
material releases issued after the effective date of such price change,
unless otherwise agreed to by Solectron and Brocade.
6.0 DELIVERY
6.1 Solectron acknowledges and agrees that Solectron shall make commercially
reasonable efforts to meet the target goal of 100% on-time delivery to
Brocade's customer, defined as the shipment of Product by Solectron
within a maximum window of 0 days early and 0 days late based on the
acknowledged delivery due date. This section, as appropriate, may be
modified by an addendum to reflect specific Product requirements.
6.2 All shipments shall be F.O.B. origin (Solectron's dock). Title and risk
of loss shall pass to Brocade upon Solectron's tendered delivery to the
common carrier or Brocade's designee.
6.3 Upon learning of any potential delivery delays, Solectron will notify
Brocade within one (1) business hour as to the cause and extent of such
delay.
6.4 If Solectron fails to make deliveries at the specified time and such
failure is caused by Solectron, Solectron will, at no additional cost to
Brocade, employ accelerated measures such as material expediting fees,
premium transportation costs, or labor overtime required to meet the
specified delivery schedule or minimize the lateness of deliveries;
however, [*].
6.5 Should Brocade require Solectron to undertake export activity on behalf
of Brocade, Brocade agrees to submit requested export information to
Solectron pursuant to Solectron Guidelines for Brocade-Driven Export
Shipments as provided in the addenda.
6.6 All Products shall be packaged and prepared for shipment in a manner
which (i) follows the requirements set forth in Brocade's Purchase
Order, (ii) follows good commercial practice, (iii) is acceptable to
common carriers for shipment, and (iv) is adequate to ensure safe
arrival. Each shipment shall be accompanied by a packing slip that
includes Brocade's part numbers, purchase order number and the quantity
shipped.
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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7.0 PAYMENT TERMS
7.1 Solectron and Brocade agree to payment terms of [*] after the date of
shipment of Product or Solectron's invoice, whichever is later.
7.2 Currency will be in U.S. Dollars unless specifically negotiated and
reflected in the addenda.
7.3 Solectron and Brocade agree that the prices for each unit of Product
manufactured by Solectron for Brocade pursuant to the Agreement shall be
set forth in the applicable addenda, and further agree that such prices
shall be generally based upon a formula of different percentage mark-ups
or margins contained in such applicable addenda for the different
components, depending upon whether the various components are either (i)
components for which Solectron is responsible for all aspects of the
management of the relationship with the supplier ("Solectron Managed
Components"), or (ii) components for which Brocade is responsible for
all aspects of the management of the relationship with the supplier
("Brocade Managed Components"). The applicable addenda for the products
manufactured by Brocade as of the Effective Date shall be Exhibit 1
attached hereto.
8.0 QUALITY
8.1 Solectron shall manufacture the Products in accordance with the process
quality requirements, standards, specifications and expectations as set
forth in Exhibit 2 ("Quality System and Product Quality Requirements").
8.2 Solectron will use best industry standards in manufacturing, assembly
and test, consistent with meeting Brocade's product specifications. As
far as practical, Solectron will use documented industry standards
(ASME, IPC, SPI, etc.).
8.3 Workmanship standards for the PCBA are IPC 610b Class II and IPC-R-700C
Class II. Workmanship standards for the system level are Cosmetic
Specifications of Molded Parts: SPI 1994 edition. As needed, Solectron
and Brocade can mutually agree to add industry or product-specific
standards.
9.0 ENGINEERING CHANGES
9.1 Brocade may, upon advance written notice to Solectron, submit
engineering changes (ECOs) for incorporation into the Product. It is
important that this notification include documentation of the change to
effectively support an investigation of the impact of the engineering
change. Solectron will use all reasonable efforts to review the
engineering change and report to Brocade within two (2) business days).
If any such change affects the price, delivery, or quality performance
of said Product, an equitable adjustment will be negotiated between
Solectron and Brocade prior to implementation of the change.
9.2 The parties agree that five (5) business days is a reasonable time
period to permit Solectron to evaluate ECO impact regarding potential
excess material liability, price, and delivery.
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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9.3 Solectron agrees not to undertake significant process changes, design
changes, or process step discontinuance affecting electrical performance
and/or mechanical form and fit without prior written notification and
concurrence of Brocade.
9.4 Brocade shall pay Solectron for their costs of implementing ECOs at the
rate of [*] each. [*] per sustaining product per month will not be
charged to Brocade. ECOs that are just for AVL changes will not be
charged to Brocade. ECOs before a product reaches General Availability
(GA) maturity will not be charged to Brocade.
10.0 INVENTORY MANAGEMENT
10.1 Solectron agrees to purchase components according to Brocade approved
vendor list (AVL)
10.2 All tools, tooling equipment, test equipment and other related items
furnished to Solectron by Brocade (See Attachment 1 for list effective
at contract signing date) or paid for by Brocade ("Brocade Property") in
connection with this Agreement will be clearly identified by Solectron
and will remain the property of Brocade and shall:
* Be clearly marked and remain the personal property of
Brocade.
* Be kept free of liens and encumbrances.
* Be certified by Brocade to be in compliance with the
GAO's Y2K guidelines.
10.3. Unless otherwise agreed, Brocade is responsible for the general
maintenance of Brocade tooling/equipment. Solectron will maintain
burn-in ovens, hi-pot tester and test fixtures at no labor cost to
Brocade, but will charge Brocade for parts and supplies.
10.4. Brocade hereby appoints Solectron its bailee and assigns to Solectron
the Brocade Property, and Solectron accepts such appointment and agrees
that it will not issue any negotiable bills or receipts on the Brocade
Property and shall neither file nor permit any lien or other claim to be
filed against any of the Brocade Property. In the event that such a lien
or claim is filed, Solectron shall promptly notify Brocade and shall
take all action necessary to cause such lien or claim against the
Brocade Property to be released or otherwise removed within forty-five
(45) days. If such lien or claim is not released within such forty-five
(45) days, then Solectron shall be deemed to have purchased the Brocade
Property at the then current replacement costs for such Brocade Property
and such amount shall be immediately payable to Brocade.
10.5. Solectron shall hold Brocade Property at its own risk and shall not
modify the property without the written permission of Brocade. Brocade
property will be used by Solectron only for purposes of this Agreement.
Upon Brocade's request, Solectron shall redeliver the property to
Brocade in the same condition as originally received by Solectron with
the exception of reasonable wear and tear. In the event the property is
lost, damaged or destroyed, Solectron's liability for the property is
limited to the book value of the property.
11.0 CONFIDENTIAL INFORMATION AND PROPRIETARY RIGHTS
11.1 Solectron and Brocade have executed as of April 21, 1998, as part of
this Agreement, a Nondisclosure Agreement for the reciprocal protection
of confidential information (the
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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"NDA Agreement"), as attached hereto as Attachment 2 and incorporated
herein by reference.
11.2 Subject to the terms of the NDA Agreement and the proprietary rights of
the parties, Solectron and Brocade agree to exchange, at least
semi-annually, relevant process development information and business
plans to include market trends, process technologies, product
requirements, new product developments, available capacity and other
information to support technology advancements by both Solectron and
Brocade.
11.3 Solectron acknowledges and agrees that all right, title and interest in
and to the Products manufactured by Solectron for Brocade pursuant to
this Agreement shall remain with Brocade (and/or its suppliers, as
applicable).
12.0 WARRANTY
12.1. Solectron warrants for a period of [*] from the date of completion of
the manufacture of the Product, that (i) the Product will conform to the
specifications applicable to such Product at the time of its
manufacture, which are furnished in writing by Brocade and accepted by
Solectron; (ii) such product will be of good material (except for
material supplied by Brocade) and workmanship and free from defects for
which Solectron is responsible in the manufacture; (iii) such Product
will be free and clear of all liens and encumbrances and that Solectron
will convey good and marketable title to such Product.
12.2. All Products are subject to Brocade's inspection and acceptance at
Brocade's facility or facility of the purchasers of the Products before
final acceptance. If any Product delivered hereunder fails to conform to
the specifications provided by Brocade and accepted by Solectron, then
Brocade shall notify Solectron of such failure and Solectron will have
up to five (5) business days after receipt of defective Product, to
either repair or replace the Product at Solectron's option and cost for
Solectron-caused problems. If Solectron fails to repair or replace such
Product within such five (5) business day period, then Brocade shall
have the right, without liability, to require expedited shipping of the
conforming Product at Solectron's sole cost.
12.3. In the event that any Product manufactured shall not be in conformity
with the foregoing warranties, Solectron shall, at Solectron's sole
expense, replace, repair or correct such Product within [*] of receipt
of such defective Product. Solectron shall waive any charges to Brocade
in order to effect the replacement of such defective Products to
Brocade. Solectron agrees to maintain a repair capability for products
under warranty. If Solectron is unable to repair, replace or correct
such product, then Solectron shall credit Brocade for the purchase price
paid by Brocade for such Product.
12.4. The foregoing constitutes Brocade's sole remedies against Solectron for
breach of warranty claims.
12.5. Solectron shall have no responsibility or obligation to Brocade under
warranty claims with respect to Products that have been subjected to
abuse, misuse, accident, alteration, neglect or unauthorized repair.
12.6. Solectron shall have no liability or responsibility for any losses,
damages, or failures to the extent that any such claims are a result of
(i) Solectron's compliance with Brocade's supplied specifications, (ii)
the negligence of Brocade in supplying the goods, services, or
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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information in connection with the design, development, distribution,
and configuration of the product, (iii) modification or alteration of
product by a party other than Solectron, (iv) incorrect installation or
incorporation of product by either Brocade or Brocade's authorized field
representative, (v) inherent design flaws the product which may induce
intermittent failures, (vi) and transportation damage from approved
freight carriers.
12.7 THE WARRANTIES CONTAINED IN THIS SECTION ARE IN LIEU OF, AND SOLECTRON
EXPRESSLY DISCLAIMS AND BROCADE 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.
13.0 TERMINATION
13.1. If either party fails to meet any one or more of the terms and
conditions as stated in either this Agreement or the addenda, Solectron
and Brocade agree to negotiate in good faith to resolve such default.
Notwithstanding the foregoing, if the defaulting party fails to cure
such default or submit an acceptable written plan (as determined by the
non-defaulting party in its sole discretion) to resolve such default
within thirty (30) days following the date of written notice of default,
the nondefaulting party shall have the right to terminate this Agreement
by furnishing the defaulting party with thirty (30) days written notice
of termination.
13.2. Each party shall have the right to terminate this Agreement by giving
termination notice, which termination shall become effective ten (10)
days after mailing, if the other party:
13.2.a. files an application for or consents to or directs the
appointment of, or takes of possession by, a receiver, a
custodian, trustee or liquidator of all or substantially all of
such other party's property, whether tangible or intangible,
wherever located;
13.2.b. makes a general assignment for the benefit of creditors;
13.2.c. commences or has the intention of commencing a voluntary case
under the federal bankruptcy laws (as now or hereinafter may be
in effect);
13.2.d. is part of an adjudication that such other party is bankrupt or
insolvent;
13.2.e. files or has the intent to file a petition seeking to take
advantage of any other law providing for the relief of debtors;
13.2.f. acquiesces to or fails to have dismissed within ninety (90)
days, any petition filed against such other party in any
involuntary case under such bankruptcy law; or
13.2.g. terminates, dissolves, or ceases to continue all or
substantially all of its business affairs or distributes a
substantial portion of its assets.
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13.3 Either Solectron or Brocade may terminate this Agreement without cause
by giving one hundred twenty (120) days advance written notice to the
other party.
13.4 The following Sections shall survive the expiration or earlier
termination of this Agreement: sections 4.2, 4.3, 8, 11, 12, 13, 14, 15,
16, and 17.
14.0 DISPUTE RESOLUTION
14.1 In the spirit of continued cooperation, the parties intend to and hereby
establish the following dispute resolution procedure to be utilized in
the unlikely event any controversy should arise out of or concerning the
performance of this Agreement.
14.2. In the event of a dispute or claim arising between the parties on any
matter relating to this Agreement, either party may initiate negotiation
proceedings by written notice to the other party setting forth the
particulars of the dispute. Upon receipt of such notice, the parties
agree to meet in good faith within two (2) weeks of the date of such
notice, to jointly define the scope of and a method to remedy the
dispute. If such meeting does not resolve the dispute, then senior
management of Solectron and Brocade are authorized to and will meet
personally within ten (10) days to confer in a bona fide attempt to
resolve the matter. The parties will use diligent efforts to arrange
meetings or telephone conferences as needed to facilitate these
negotiations.
14.3. Should any disputes remain existent between the parties at the
conclusion of the time periods set forth above, then the parties shall
promptly submit any dispute to mediation with an independent mediator.
In the event mediation is not successful in resolving the dispute within
sixty (60) days of the beginning of the two-step resolution process set
forth above, the parties agree to submit the dispute to binding
arbitration in accordance with the rules of the Judicial Arbitration and
Mediation Services/Endispute in San Jose, California (hereinafter
"JAMS"), and judgment upon the award may be entered in any court having
jurisdiction. A single arbitrator shall be selected according to JAMS
rules within thirty (30) days of submission of the dispute to the JAMS.
The arbitrator shall conduct the arbitration in accordance with the
California Evidence Code. Except as expressly provided above, no
discovery of any kind shall be taken by either party without the written
consent of the other party, provided, however, that either party may
seek the arbitrator's permission to take any deposition which is
necessary to preserve the testimony of a witness who either is, or may
become, outside the subpoena power of the arbitrator or otherwise
unavailable to testify at the arbitration. The arbitrator shall have the
power to enter any award that could be entered by a Judge of the
Superior Court of the State of California sitting without a jury, and
only such power, except that the arbitrator shall not have the power to
award punitive damages, treble damages, or any other damages which are
not compensatory, even if permitted under the laws of the State of
California or any other applicable law. The arbitration award may be
enforced in any court having jurisdiction over the parties and the
subject matter of the arbitration. Notwithstanding the forgoing, the
parties irrevocably submit to the non-exclusive jurisdiction of the
Superior Court of the State of California, Santa Clara County, and the
United States District Court for the Northern District of California,
San Jose Branch, in any action to enforce an arbitration award.
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15.0 LIMITATION OF LIABILITY
IN NO EVENT, WHETHER AS A RESULT OF BREACH OF CONTRACT, WARRANTY, OR
TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, PRODUCT LIABILITY, OR
OTHERWISE, SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL,
INCIDENTAL, CONSEQUENTIAL, EXEMPLARY DAMAGES OF ANY KIND WHETHER OR NOT
EITHER PARTY WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
16.0 PATENT, COPYRIGHT AND TRADEMARK INDEMNITY
Each party (the "Indemnifying Party") shall defend, indemnify, and hold
harmless the other party from any claims by a third party of
infringement of intellectual properties resulting from the acts of the
Indemnifying Party pursuant to this Agreement, provided that the other
party (i) gives the Indemnifying Party prompt notice of any such claims,
(ii) renders reasonable assistance to the Indemnifying Party thereon,
and (iii) permits the Indemnifying Party to direct the defense of the
settlement of such claims.
17.0 GENERAL
17.1. Each of the parties shall at all times during the term of this Agreement
act as, and shall represent itself to be, an independent contractor, and
not an agent or employee of the other.
17.2. Each party to this Agreement will maintain insurance to protect itself
from claims (i) by the party's employees, agents and subcontractors
under Worker's Compensation and Disability Acts, (ii) for damages
because of injury to or destruction of tangible property resulting out
of any negligent act, omission or willful misconduct of the party or the
party's employees or subcontractors, (iii) for damages because of bodily
injury, sickness, disease or death of its employees or any other person
arising out of any negligent act, omission, or willful misconduct of the
party or the party's employees, agents or subcontractors.
17.3. Neither party shall delegate, assign or transfer its rights or
obligations under this Agreement, whether in whole or part, without the
written consent of the other party, except that Brocade may assign this
Agreement to a successor in interest in the event of a merger,
acquisition or purchase of all or substantially all of the stock or
assets of Brocade. A waiver of any default hereunder or of any of the
terms and conditions of this Agreement shall not be deemed to be a
continuing waiver or a waiver of any other default or of any other term
or condition, but shall apply solely to the instance to which such
waiver is directed. The exercise of any right or remedy provided in this
Agreement shall be without prejudice to the right to exercise any other
right or remedy provided by law or equity, except as expressly limited
by this Agreement.
17.4. In the event any provision of this Agreement is found to be invalid,
illegal or unenforceable, the validity, legality and enforceability of
any of the remaining provisions shall not in any way be affected or
impaired.
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17.5. Except for purchase orders which may be sent by normal carrier, all
notices and communications hereunder are required to be sent to the
address or telecopier number stated below (or such other address or
telecopier number as subsequently notified in writing to the other
party): (i) By facsimile with confirmation of transmission, (ii)
personal same or next day delivery or (iii) sent by commercial overnight
courier with written verification of delivery. All notices so given
shall be deemed given upon the earlier of receipt or one (1) day after
dispatch.
Any notices sent to Brocade hereunder should be sent to:
Brocade Communications Systems, Inc.
1901 Guadalupe Parkway
San Jose, CA 95131
Attn: Jean Zorzy
Fax No. (408) 487-8091
with a copy to:
Maureen S. Dorney, Esq.
Gary Cary Ware & Freidenrich
400 Hamilton Avenue
Palo Alto, CA 94301
Fax No. (650) 327-3699
Any notices sent to Solectron hereunder should be sent to:
Solectron Corporation
847 Gibraltar Drive, Bldg. #5
Milpitas, CA 95035
Attn: Jayne Carthy
Fax No. 408-956-6056
with a copy to:
Solectron Corporation
847 Gibraltar Drive, Bldg. #5
Milpitas, CA 95035
Attn: Legal Department
Fax No. 408-957-2717
17.6. Neither party shall be liable for any failure or delay in its
performance under this Agreement due to acts of God, acts of civil or
military authority, fires, floods, earthquakes, riots, wars or any other
cause beyond the reasonable control of the delayed party provided that
the delayed party: (i) gives the other party written notice of such
cause within fifteen (15) days of the discovery of the event; and (ii)
uses its reasonable efforts to remedy such delay in its performance. If
Solectron is unable to deliver in accordance with agreed delivery
Schedule, the terms of section 6.4 shall apply.
17.7. This Agreement shall be governed by, and construed in accordance with
the laws of the State of California, excluding its conflict of laws
provisions. In any action to enforce this Agreement, the prevailing
party shall be awarded all court costs and reasonable attorney fees
incurred.
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17.8. Neither party shall object to the use of a photocopy of the original of
this Agreement for the purpose of making any required or allowed public
filings.
17.9. This Agreement, the NDA Agreement and the Exhibits hereto are intended
as the complete, final and exclusive statement of the terms of the
agreement between the parties regarding the subject matter hereof and
supersedes any and all other prior or contemporaneous agreements or
understandings, whether written or oral, between them relating to the
subject matter thereof. This Agreement may not be modified except in
writing executed by both parties.
Agreed:
Solectron California Corporation Brocade Communications Systems, Inc.
By: /s/ MICHAEL T. LING By: /s/ VICTOR RINKLE
-------------------------------- -------------------------------------
Name: Michael T. Ling Name: Victor Rinkle
Title: VP Ops Title: VP Ops
Date: 7-30-99 Date: 7-30-99
12 of 12
<PAGE> 13
Amendment No. 1 To The Manufacturing Agreement
This Amendment No. 1 ("Amendment") to the Standard Manufacturing
Agreement (the "Agreement") which was entered into effective 7/30, 1999, is by
and between Brocade Communication Systems, Inc., with a place of business at
1901 Guadalupe Parkway, San Jose, California 95131 ("Brocade") and Solectron
California Corporation, with its place of business at 847 Gibraltar Drive,
Milpitas, California 95035 ("Solectron").
RECITALS
WHEREAS, the parties have entered into an agreement whereby Solectron
acts as a contract manufacturer for Brocade; and
WHEREAS, under limited circumstances, Brocade desires to grant [*] with
a place of business at [*] with a limited right to purchase products direct from
Solectron.
NOW THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement, the parties hereby agree as follows:
AGREEMENT
1. All capitalized terms not defined herein shall have the meaning
set forth in the Agreement.
2. A new Section 18 is hereby added to this Agreement, as follows:
18.1 In the event Brocade provides written notice to
Solectron, [*] shall be entitled to purchase products
directly from Solectron pursuant to the terms and
conditions of this Agreement and at the same prices at
which [*] could otherwise purchase such products from
Brocade.
18.2 Brocade shall provide Solectron with a list of products
which Solectron may offer to [*] and the associated
prices at which said products shall be offered. Such
list shall be deemed confidential and subject to the
non-disclosure agreement executed between Solectron and
Brocade.
18.3 Solectron shall remit to Brocade, in accordance with
procedures to be mutually agreed upon, the difference in
the price paid by [*] and the price which Brocade is
charged under this Agreement for each product.
18.4 Solectron acknowledges that in the event Brocade fails
to notify Solectron that [*] right to buy products
directly from Solectron has arisen, [*] may provide a
copy of the agreement between [*] and Brocade as
evidence to exercise such right. Prior to allowing [*]
to buy directly,
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
1
<PAGE> 14
Solectron shall notify Brocade of the request from [*]
to exercise this provision.
3. Except as amended by the terms of this Amendment, all other
terms and conditions of the Agreement, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties, through their duly authorized officers,
have executed this Amendment.
Brocade: Solectron:
Brocade Communication Systems, Inc. Solectron California Corporation
By: /s/ VICTOR RINKLE By: /s/ MICHAEL T. LING
----------------------------------- --------------------------------
Print Name: VICTOR RINKLE Print Name: Michael T. Ling
Title: VP Ops Title: VP Ops
Date: 7-30-99 Date: 7-30-99
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
2
<PAGE> 15
EXHIBIT 1
PRICING
BROCADE COMMUNICATIONS MANUFACTURING AGREEMENT -- 7/20/98
ASSUMPTIONS:
1.) [*]
2.) [*]
3.) [*]
4.) [*]
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE> 16
BROCADE COMMUNICATION SOLECTRON(R) SLR QUOTE # R05036-98
UNIT PRICING
ASSEMBLY # 40-0000220-02 REV. E SILKWORM II CPU
RECURRING EXPENSE (NRE)
VOLUME/Quarter [*] [*] [*]
Material Cost [*] [*] [*]
Material Margin [*] [*] [*]
Material Price [*] [*] [*]
Assembly Labor [*] [*] [*]
ICT Labor [*] [*] [*]
TOTAL UNIT PRICE [*] [*] [*]
MATERIAL LEAD TIME [*]
NONRECURRING EXPENSE (NRE)
Manufacturing Tooling (taxable)
Stencil [*]
Wave Fixture [*]
TOTAL Taxable Mfg
Mfg. Engineering (nontaxable)
Programming/Engineering [*]
TOTAL Non-Taxable Mfg [*]
Test Tooling (taxable)
ICT Fixture [*]
TOTAL Taxable Test [*]
Test Engineering (nontaxable)
ICT Program [*]
TOTAL Non-Taxable Test [*]
TOTAL Assembly NRE [*]
ICT ATE: HP307X UNIQUE TO 40-0000220-02
A. Basic test program to cover:
- this device will use TestJet only: U16, U31, U19, U22,
U17, U20
- this device will use TestJet + Library Test: U4, U5, U9,
U10
B. This test is based on the following assumptions:
- based on (estimated) node count: 625
LEAD TIME 3-4 weeks (upon receipt of all necessary documentation and P.O. #)
Solectron Confidential SLS-10-021924 Rev: - Page 2 of 8 June 16, 1998
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE> 17
BROCADE COMMUNICATION SOLECTRON(R) SLR QUOTE # R05036-98
UNIT PRICING
ASSEMBLY # 40-0000273-01 REV.K G PORT
RECURRING EXPENSE (NRE)
VOLUME/Quarter [*] [*] [*]
Material Cost $[*] $[*] $[*]
Material Margin [*] [*] [*]
Material Price $[*] $[*] $[*]
Assembly Labor [*] [*] [*]
ICT Labor [*] [*] [*]
TOTAL UNIT PRICE $[*] $[*] $[*]
MATERIAL LEAD TIME [*]
NONRECURRING EXPENSE (NRE)
MANUFACTURING TOOLING (TAXABLE)
Stencil $[*]
Pick & Place Fixture $[*]
Wave Fixture $[*]
TOTAL Taxable Mfg. $[*]
Mfg. Engineering (nontaxable)
Programming/Engineering $[*]
TOTAL Non-Taxable Mfg. $[*]
Test Tooling (taxable)
ICT Fixture $[*]
TOTAL Taxable Test $[*]
Test Engineering (nontaxable)
ICT Program $[*]
TOTAL Non-Taxable Test $[*]
TOTAL ASSEMBLY NRE $[*]
ICT ATE: HP307X UNIQUE TO 40-0000273-01
A. Basic test program to cover:
- this device will use TestJet only: U1, U2, U3
B. This test is based on the following assumptions:
- based on (estimated) node count: 200
LEAD TIME 3 weeks (upon receipt of all necessary documentation and P.O. #)
Solectron Confidential SLS-10-021924 Rev: Page 3 of 8 June 16, 1998
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE> 18
BROCADE COMMUNICATION SOLECTRON(R) SLR QUOTE# R05036*98
UNIT PRICING
ASSEMBLY# 40-0000623-01 REV. 15 FLANNEL PORT BOARD
RECURRING EXPENSE (NRE)
VOLUME/Quarter [*] [*] [*]
Material Cost $[*] $[*] $[*]
Material Margin [*] [*] [*]
Material Price $[*] $[*] $[*]
Assembly Labor [*] [*] [*]
ICT Labor [*] [*] [*]
TOTAL UNIT PRICE $[*] $[*] $[*]
MATERIAL LEAD TIME [*]
NONRECURRING EXPENSE (NRE)
Manufacturing Tooling (taxable)
Stencil $[*]
Pick & Place Fixture $[*]
Wave Fixture $[*]
TOTAL Taxable Mfg. $[*]
Mfg. Engineering (nontaxable)
Programming/Engineering $[*]
TOTAL Non-Taxable Mfg. $[*]
Test Tooling (taxable)
ICT Fixture $[*]
TOTAL Taxable Test $[*]
Test Engineering (nontaxable)
ICT Program $[*]
TOTAL Non-Taxable Test $[*]
TOTAL ASSEMBLY NRE $[*]
ICT ATE: HP307X UNIQUE TO 40-0000623-01
A. Basic test program to cover:
- this device will use TestJet only: U8, U9, U10, U11
B. This test is based on the following assumptions:
- based on (estimated) node count: 235
LEAD TIME 3 weeks (upon receipt of all necessary documentation and P.O. #)
Solectron Confidential SLS-10-021924 Rev: - Page 4 of 8 June 16, 1998
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE> 19
BROCADE COMMUNICATION SOLECTRON (R) SLR QUOTE # R05036*98
UNIT PRICING
ASSEMBLY # 40-0000749-01 REV. A SILKWORM II MOTHER BOARD
RECURRING EXPENSE (NRE)
VOLUME/Quarter [*] [*] [*]
Material Cost $[*] $[*] $[*]
Material Margin [*] [*] [*]
Material Price $[*] $[*] $[*]
Assembly Labor [*] [*] [*]
ICT Labor [*] [*] [*]
TOTAL UNIT PRICE $[*] $[*] $[*]
MATERIAL LEAD TIME [*]
NONRECURRING EXPENSE (NRE)
Manufacturing Tooling (taxable)
Stencil $[*]
Pick & Place Fixture $[*]
Wave Fixture $[*]
TOTAL Taxable Mfg. $[*]
Mfg. Engineering (nontaxable)
Programming/Engineering $[*]
TOTAL Non-Taxable Mfg. $[*]
Test Tooling (taxable)
ICT Fixture $[*]
TOTAL Taxable Test $[*]
Test Engineering (nontaxable)
ICT Program $[*]
TOTAL Non-Taxable Test $[*]
TOTAL ASSEMBLY NRE $[*]
ICT ATE: HP307X UNIQUE TO 40-0000749-01
A. Basic test program to cover:
- this device will use TestJet only: U1, U2, U3, U27, U28,
U29, U30, U31, U32, U33, U34, U35
- this device will use TestJet + Library Test: U8-25
B. This test is based on the following assumptions:
- based on (estimated) node count: 1275
LEAD TIME 4-5 weeks (upon receipt of all necessary documentation and P.O. #)
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE> 20
Solectron Confidential SLS-10-021924 Rev: - Page 5 of 8 June 16, 1998
<PAGE> 21
BROCADE COMMUNICATION SOLECTRON(R) SLR QUOTE #R05036-98
UNIT PRICING
ASSEMBLY# 70-0000370-03 REV. 1 SILKWORM II
RECURRING EXPENSE (NRE)
VOLUME/Quarter [*] [*] [*]
Material Cost $[*] $[*] $[*]
Material Margin [*] [*] [*]
Material Price $[*] $[*] $[*]
Assembly Labor [*] [*] [*]
System Test [*] [*] [*]
Haas Test [*] [*] [*]
TOTAL UNIT PRICE $[*] $[*] $[*]
Solectron Confidential SLS-10-021924 Rev: Page 6 of 8 June 16, 1998
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE> 22
EXHIBIT 2
QUALITY SYSTEM & PRODUCT QUALITY REQUIREMENTS
1 PURPOSE
1.1 This document outlines the Quality System and Product Quality
Requirements to Solectron. While this document defines quality
requirements that are the responsibility of Solectron, it is important
to note that it is Brocade's intention to establish an open quality
management relationship with Solectron.
2 SCOPE
2.1 The Quality System and Product Quality Requirements called out in this
document are for the Fibre Channel Switches and associated printed
circuit boards manufactured by Solectron.
2.2 Where the requirements called out in this document conflict with
requirements called out elsewhere, the order of precedence is as
follows:
2.2.1 Contractual agreements
2.2.2 Brocade Communications Purchase Order, Brocade Communications
Engineering drawing or specification noted in the Purchase Order
2.2.3 This document
3 DEFINITIONS
3.1 Unless otherwise specified the terms used in this document are defined
in:
3.1.1 ISO 8402-1986, Quality Vocabulary
3.1.2 ANSI/ASQC A3-1987, Quality Systems Terminology
3.2 Unit: In this document a unit is considered to be an assembled printed
circuit board (e.g. a CPU board), a subassembly (e.g., power supply), a
chassis, or a fully assembled switch made up of printed circuit boards,
subassemblies, displays, and chassis.
4 RESPONSIBILITY
4.1 The Supply Base Engineer reporting to the Manager, Product and Process
Quality in the Brocade Communications-Operations function is responsible
for implementing the requirements of this document.
5 REFERENCE DOCUMENTS
5.1 ISO STANDARD 840 Quality Vocabulary
5.2 ISO 9000:1994 Quality management and quality assurance
standards -Guide lines for selection and use
5.3 ISO 9002:1994 Quality Systems- Model for quality assurance in
design/development, production, installation and
servicing.
5.4 ANSI/ASQC A3- 1987 Quality Systems Terminology
5.5 ANSI/ASQC Q1 1986 Guide Lines for Quality System Audits
5.6 MIL STD 105E Sampling procedures and Tables for inspection
by Attributes
6 EQUIPMENT REQUIRED (HARDWARE AND SOFTWARE) (NONE REQUIRED)
7 QUALITY SYSTEM REQUIREMENTS
7.1 Quality System Requirements:
Brocade Communications' Quality System requirements are defined in the
document ISO 9002:1994. Solectron's conformance to these requirements
will be determined by a Quality Assessment organized by the Supply Base
Engineer and carried out with the
<PAGE> 23
assistance of other Brocade Communication groups.
<PAGE> 24
7.1.1 Brocade Communications reserves the right to conduct, with
proper notification, periodic reviews of Solectron's Process and
Quality Control system. These reviews can include all aspects of
materials management, manufacturing, test, and quality records
associated with products and services sold or provided to
Brocade Communications by Solectron.
7.2 If the Quality Assessment shows that Solectron is does not meet the ISO
9002 requirements, the deficiencies will be noted and corrective action
may be required. (See the ANSI/ASQC Q1 1986: Guide Lines for Quality
System Audits).
7.3 Process Definition:
Prior to the start of production, Brocade Communications' Supply Base
Engineer (SBE) and Solectron's representative will determine the key
steps of the process flow. The key steps of the process flow will be
documented using either Brocade's or Solectron's documentation.
7.4 Process Changes:
Once the key process steps are defined, they can not be changed without
written notification and approval from the Brocade Communications'
Quality Engineer prior to the implementation of the changes. Examples of
process changes are: using parts not called out on the Approved Vendor
List (AVL), alterations to the agreed on process flow, changing
pass/fail parameters, increasing or decreasing test times, changes in
test equipment, relocation of the process to a different location, etc.
7.5 Process Reporting:
Prior to the start of volume production Brocade Communications' Quality
Engineer and Solectron's representative will agree on the content,
format, and frequency of the Process Reports.
7.5.1 The Process Reports will include, at a minimum, yields at each
operation, defect paretos at each operation, and corrective
actions to address the significant defects. The reports will
include data from the On-Going Reliability Test and the Out-Of
the Box Audit (OOBA).
7.5.2 Brocade will, as far as practical, use Solectron's data
collection process and reports, provided they meet Brocade's
requirements. The data will be sent electronically.
7.6 Process Qualification and Improvement
7.7 Prior to the start of volume shipments the Brocade and Solectron will
conduct a Product Verification Test (PVT). The PVT is a controlled build
of a predetermined number of units with the purpose of demonstrating the
capability of the process to produce defect free product in a cost
efficient way.
7.7.1 The Brocade Quality Engineer and Solectron's representative will
determine prior to the start of the volume production the target
yield for the PVT build.
7.7.1.1 If the target yield is reached, the process is considered
capable and ready for volume production.
7.7.1.2 If the target yield is not met, the Brocade Supply Base Engineer
and Solectron's representative will jointly develop a corrective
action plan to improve the process yield. When the corrective
actions have been implemented, a second PVT build will be done.
If this build meets the predetermined goals, the volume
production can begin. If the yield is not met, the corrective
action process will be duplicated until the predetermined yield
criterion is reached.
7.7.2 Once volume production starts, the Brocade Supply Base Engineer
and Solectron's representative will agree on a yield improvement
plan. The Yield Improvement Plan (YIP) will set targets for
quarterly yield or process improvements. If the quarterly goals
are not reached, the Brocade and Solectron will determine what
corrective actions are necessary to reach the quarterly goals.
7.8 On-Going Reliability Test
Brocade Communications uses an On-going Reliability Test (ORT) as a
measure of the production process performance. Prior to the start of
volume production Brocade's Supply Base Engineer and Solectron's
representative will agree on the how the
<PAGE> 25
On-going Reliability test will be implemented. The implementation will
follow the guidelines called out in the Brocade Communications' Process
number 99-0000401-01
June 18, 1999 Page 3 of 4 Quality System
and
Product Quality Requirements
<PAGE> 26
7.8.1 If there is a failure in the ORT, Solectron will immediately
notify Brocade's Supply Base Engineer. Solectron's
representative and Brocade's SBE will immediately start the
failure analysis process and take any corrective action
necessary. When the failure analysis is completed, the Brocade
SBE will inform Brocade's Manager of Process and Product Quality
of the findings and the status of the corrective action.
7.9 Failure Analysis:
Solectron is required to do failure analysis on all in-warranty units
returned from Brocade's customers. At Brocade's request Solectron is
required to perform the first level failure analysis (determine the
failed component) within one working day after receiving the failed
unit. The root-cause analysis (analysis of the defective component) must
be done within ten working days after the receipt of the failed unit.
7.10 Epidemic Failure:
Epidemic failures are unit failures that are the result of defects in
material, workmanship, and/or other deficiencies attributable to or
within the control of Solectron, including but not limited to, incorrect
use of components with inherent or latent defects, or consistent
maladjustments during manufacture. The Epidemic Failure rate is defined
as three times the Normal Annualized Failure rate specified in the
Product Specification.
7.10.1 If the unit manufactured by Solectron for Brocade Communications
is found to fail at an Epidemic rate, Solectron and Brocade
Communications will mutually agree on a corrective action plan
to be carried out by Solectron, at Solectron's expense to repair
and replace the defective units.
7.11 Field Failure Rates as a Measure of Solectron Performance:
Solectron's performance in delivering a quality product is determined by
the Field Failure Rate and is measured as the Annualized Field Failure
Rate. This is rate is calculated as the average number of returns over
the last three months divided by the installed base, then multiplied by
twelve to give an annualized rate.
7.11.1 If the Field Failure Rate of the unit manufactured by Solectron
for Brocade Communications exceeds the Normal Annualized Failure
Rate called out in the Product specification, Solectron and
Brocade Communications will mutually implement a program to
determine the root causes of the Field Failure Rate and
implement corrective actions.
June 18, 1999 Page 4 of 4 Quality System
and
Product Quality Requirements
<PAGE> 27
ATTACHMENT 1 BRC CONSIGNED EQUIPMENT LIST
Item Equip. Description Serial Number BRC Asset No. SLR ID # Comments
1 Dell Monitor 17" 7117360 100018
2 Dell Monitor 17" 04036a606p 100007
3 PC CPU DELL Dimension 88jpx 100013
xps 166
4 Dell Monitor 17", lab 04036a7fiv 102079
5 PC CPU HP Vectra XA us74152334 107074
6 HP Vectra- PC us75150685 107159
7 Sony Monitor 200ES 4036166 100302
8 Sony Monitor 200ES 4034244 100306
9 HP Vectra- CPU 75150693 100307
10 HP- CPU us75150707 100345
11 Ascend P50 - SLR -GW 7196010 106349
12 Dell Laptop Latitude 7147346byk8642 106365
13 Dell XPS CPU 88jq8 102064
14 LinkSys 16 port 10bT Hub N/A 107401
15 LinkSys 16 port 10bT Hub N/A 107402
16 Bur-In Oven #1 N/A N/A BRCOVEN1
17 Bur-In Oven #2 N/A N/A BRCOVEN2
18 Bur-In Oven #3 N/A N/A BRCOVEN3
19 Bur-In Oven #4 N/A N/A BRCOVEN4
20 Bur-In Oven #5 N/A N/A BRCOVEN5
21 Bur-In Oven #6 N/A N/A BRCOVEN6
22 Bur-In Oven #7 N/A N/A BRCOVEN7
23 Run-In Oven #1 N/A N/A BRCOVEN8
24 Run-In Oven #2 N/A N/A BRCOVEN9
25 Run-In Oven #3 N/A N/A BRCOVEN10
26 ICT Fixture 40-0000749-01 N/A N/A Located on C4 shelf
27 ICT Fixture 40-0000623-01 N/A N/A Located on C1 shelf
28 ICT Fixture 40-0000220-01 N/A N/A Located on C1 shelf
29 ICT Fixture 40-0000004-01 N/A N/A Located on C1 shelf
30 ICT Fixture 40-0000273-01 N/A N/A Located on C1 shelf
31 ICT Fixture 40-0000003-01 N/A N/A Located on C1 shelf
32 SMT Stencil 40-0000623-04 Top N/A N/A Located on F01
Shelf SMT
33 SMT Stencil 40-0000623-04 Bot N/A N/A Located on F02
Shelf SMT
34 SMT Stencil 40-0000749-01 Top N/A N/A Located on F03
Shelf SMT
35 SMT Stencil 40-0000749-01 Bot N/A N/A Located on F04
Shelf SMT
36 SMT Stencil 40-0000220-03 T & B N/A N/A Located on F05
Shelf SMT
37 SMT Stencil 40-0000273-03 Top N/A N/A Located on F06
Shelf SMT
38 SMT Stencil 40-0000273-03 Bot N/A N/A Located on F07
Shelf SMT
39 SMT Stencil 40-0200003-03 Top N/A N/A Located on F09
Shelf SMT
40 SMT Stencil 40-0200003-03 Bot N/A N/A Located on F08
Shelf SMT
41 SMT Stencil 40-0000001-01 T & B N/A N/A Located on F10
Shelf used on
proto run SMT
42 SMT Stencil 40-0000727-05 Top N/A N/A Located on F11
Shelf SMT
<PAGE> 28
Item Equip. Description Serial Number BRC Asset No. SLR ID # Comments
43 SMT Stencil 40-0000727-05 Bot N/A N/A Located on F12
Shelf SMT
44 SMT Stencil 40-0000004-03 Top N/A N/A Located on F13
Shelf SMT
45 SMT Stencil 40-0000004-03 Bot N/A N/A Located on F14
Shelf SMT
46 SMT Stencil 40-0000003-01 Top N/A N/A Located on F15
Shelf SMT
47 SMT Stencil 40-0000003-01 Bot N/A N/A Located on F16
Shelf SMT
48 Functional Test Fixture 2400 BRC2400 F/T 1
49 Functional Test Fixture 2400 BRC2400 F/T 2
50 Functional Test Fixture 2800 BRC2800 F/T 1
51 Functional Test Fixture 2400 BRC2800 F/T 2
52 Functional Test Debug Fixt. 2400 BRC2400 F/T DBG 1
53 Functional Test Debug Fixt. 2800 BRC2800 F/T DBG 1
54 Dell Optiplex PC UN6JL Used On ESS Chamber
55 Dell Monitor 84779-DVYN-29 Used On ESS Chamber
56 6681A Power Supply US36400338 Used On ESS Chamber
57 6681A Power Supply US36400327 Used On ESS Chamber
58 6680A Power Supply US36480139 Used On ESS Chamber
59 6680A Power Supply US36480130 Used On ESS Chamber
60
61
62
63
<PAGE> 29
ATTACHMENT 2 MUTUAL NONDISCLOSURE AGREEMENT
All parties below acknowledge that, by reason of their relationship, they may
have access to certain information and materials concerning the other's
business, plans, products and technical data which are confidential and of
substantial value which would be impaired if such information were disclosed to
third parties. Accordingly, for the purposes of protecting and preserving the
confidential and/or proprietary nature of information to be disclosed or made
available by each party to the others under this Mutual Nondisclosure Agreement
("Agreement"), the parties hereto agree as follows:
1. Confidential Information. For the purposes of this Agreement,
Confidential Information means any technical, business, financial, contractual
terms and conditions or other information or data furnished by one party to the
other: (i) in written or other tangible form marked with a proprietary legend,
or (ii) in oral or visual form, identified as being confidential at the time of
the disclosure and thereafter summarized in a writing which identifies the
Confidential Information and is transmitted to the receiving party within thirty
(30) days after such oral or visual disclosure.
2. Period of Protection. The period of protection during which Confidential
Information received pursuant to this Agreement shall be subject to an
obligation of confidentiality and protection is five (5) years from the date of
first receipt of the Confidential Information.
3. Standard of Care. The standard of care which each party shall be
required to employ in protecting and handling a Confidential Information
received pursuant to this Agreement is the same degree of care which the
receiving party uses to protect and safeguard its own Confidential Information
of the kind, but not less than a reasonable degree of care.
4. Restrictions on Use. Confidential Information shall be used solely for
internal evaluation and use pertaining to the purpose of this Agreement and
shall not otherwise be used for the benefit of the receiving party or others.
Confidential Information shall be disclosed only to the employees of the
receiving party who have a "need to know" and executed an internal nondisclosure
agreement.
5. Information Not Subject to Confidentiality. The Confidential Information
of a party shall not include and the foregoing obligations shall not apply to
information or data which: (i) was generally available to the public at the time
of receipt from the disclosing party, or thereafter to have become generally
available to the public; (ii) is known to the receiving party on a
non-confidential basis prior to its receipt from the disclosing party; (iii)
disclosed with the prior written consent of the disclosing party; (iv) becomes
known to the receiving party from a source other than the disclosing party
without breach of this Agreement by the receiving party; (v) was required to be
disclosed pursuant to law; (vi) developed independently by personnel of the
receiving party who had no substantive knowledge of the disclosing party's
Confidential Information at the time of such independent development.
6. No License. The disclosure of Confidential Information shall not be
construed as granting either a license under any patent, patent application or
any right of ownership in said Confidential Information.
7. Equitable Relief. The receiving party acknowledges and agrees that in
the event of a breach or threatened breach of any provision of this Agreement,
the disclosing party shall have no adequate remedy at law and shall therefore be
entitled to enforce any such provision by temporary or permanent injunctive or
mandatory relief obtained in any court without the necessity of proving damages,
posting any bond or other security, and without prejudice or diminution of any
other rights or remedies which may be available at law or in equity. This
Agreement shall be construed in accordance with the laws of the State of
California.
8. Termination. This Agreement may be terminated by either party giving the
other parties a thirty (30) day termination notice in writing. Upon expiration
or termination of this Agreement, each party shall cease all use of the other
party's Confidential Information and return to the other party all tangible
copies of the other party's Confidential Information.
<PAGE> 30
AGREED:
SOLECTRON Brocade Communications Systems, Inc.
------------------------------------- ------------------------------------- -------------------------------------
Name of Other Party Name of Other Party
/s/ Kelly Priest /s/ Jean Zorzy
-------------------------------------
Authorized Representative's Signature Authorized Representative's Signature Authorized Representative's Signature
KELLY PRIEST Jean Zorzy
--------------------------------------- ---------------------------------------
Name Name -------------------------------------
Name
DIRECTOR OF SALES DIRECTOR, SUPPLIER MGMT
------------------------------------- ------------------------------------- -------------------------------------
Title Title Title
4-15-98 4/21/98
--------------------------------------- ---------------------------------------
Date Date -------------------------------------
Date
1901 Guadalupe Pkwy -------------------------------------
MILPITAS, CA San Jose, CA 95131
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Address Address Address
SLRNDA3P doc (Date 11/22/95) Confidential