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Published: 2008-03-26

Standard Manufacturing Agreement - Solectron California Corp., Fine Pitch Technology Inc. and Juniper Networks Inc.




Standard Manufacturing Agreement
Solectron Confidential

                        STANDARD MANUFACTURING AGREEMENT


Solectron California Corporation ('Solectron') whose principal place of business
is located at 847 Gibraltar Drive, Milpitas, California 95035 and Fine Pitch
Technology Inc. whose principal place of business is located at 2450 Autumnvale
Drive, San Jose, California 95131 (Solectron California Corporation and Fine
Pitch Technology Inc. collectively referred to as 'Solectron') and Juniper
Networks Inc. ('Customer') whose principal place of business is located at 385
Ravendale Drive, Mountain View, California 94043 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 Agreement is intended by Solectron and Customer to operate as a basic
     set of operating conditions regarding their respective business
     relationship. Product specific requirements along with specific business
     terms and conditions will be mutually agreed to and documented by an
     addendum to this Agreement.

1.2  It is the intent of the parties that this Agreement and its addenda shall
     prevail over the Standard Manufacturing Agreement previously entered into
     by the party's with the effective date of February 10, 1998. It is the
     intent of the parties that this Agreement and its addenda shall also
     prevail over the terms and conditions of any purchase order, acknowledgment
     form or other instrument.

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.

2.0  TERM

2.1  This Agreement shall commence on the effective date, June 10, 1998, and
     shall continue for an initial term of one (1) year. This Agreement shall
     automatically be renewed for successive one(1) year increments unless
     either party requests in writing, at least ninety (90) days prior to the
     anniversary date, that this Agreement not be so renewed.

3.0  PRODUCT FORECAST


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3.1   Customer will provide an annual twelve (12) month forecast and a monthly
      six (6) month rolling Product forecast to Solectron.

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 forecasted requirements of 
      Customer. [***]

      Customer recognizes its financial responsibility for the material 
      purchased by Solectron on behalf of Customer. Customer is responsible for 
      material to the extent that (i) material was purchased by Solectron to 
      support the Product forecast and agreed upon safety stock; (ii) Solectron 
      exercised reasonable business judgment in managing suppliers and lead 
      times; (iii) Solectron complied with Customer cancellation instructions 
      in a timely manner (canceled all open orders within one (1) week of 
      receiving instructions).

4.2   Customer may revise or cancel a purchase order for Product and may also 
      eliminate a component from a Product. If Customer revises or cancels a 
      purchase order ('Order'), or eliminates a component, or through revised 
      forecast (downside) causes excess inventory, Solectron shall identify all 
      potential liability of Customer for material on order, material on hand, 
      work in process, and finished goods. Solectron shall undertake 
      commercially reasonable efforts to cancel all applicable component 
      purchase orders and reduce component inventory through return for credit 
      programs or allocate components for alternate programs to minimize 
      charges to Customer. Customer agrees to compensate Solectron for costs 
      incurred for finished goods (including profit); work in process 
      (including labor performed); material on hand which could not be returned 
      or used for other customers and at other sites of Solectron; material on 
      order which could not be canceled; applicable material supplier's 
      restocking or cancellation fees; and agreed

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      Solectron handling charges. Customer agrees to pay carrying costs to 
      Solectron of [***].

4.3   Solectron will report its inventory position to Customer on a monthly 
      basis, including the following data: quantity of raw material, work in 
      process and any open orders that cannot be canceled due to supplier lead 
      time. Report will specifically identify any material on hand or on order 
      where the quantity exceeds the agreed three (3) month forward looking 
      forecast plus safety stock.

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.

5.0   PURCHASE ORDERS AND PRICE REVIEWS

5.1   Initial order placement will be an Order from Customer to Solectron issued
      electronically with facsimile copy as backup. Shipment of Product to
      Customer from date of acceptance shall be [***] for forecasted Product
      [***]. Solectron will provide notice to Customer of Order acceptance and
      scheduled shipment date [***].

5.2   Customer may issue specific Orders to Solectron which will be identified
      as 'high priority' at time of Order placement. Scheduled shipment of
      designated 'high priority' Product will be [***]. Solectron will ship
      these Products [***]. Solectron's on-time delivery performance of 'high
      priority' Products will be taken into consideration by the parties during
      quarterly price reviews.

5.3   In the event Customer issues Orders in excess of forecasts and agreed to 
      safety stock, Solectron will use commercially reasonable efforts to 
      recover and replenish inventory levels. Expediting costs for such Orders 
      will be agreed upon prior to Order placement. Solectron will provide 
      Customer with 'what-if' shortages results [***].

5.4   Solectron and Customer will meet every three (3) months during the term 
      of this Agreement to review safety stock levels, pricing and to determine 
      whether any price adjustment is required. [***]

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 5.5  Solectron will provide pricing for average monthly volumes of [***]. If
      volumes fall below [***] production rate of [***], Solectron and
      Customer agree to review the causes. If the volumes have dropped due to
      the end of Product life, Solectron and Customer agree to develop their
      end-of-life support strategy. If the low volumes are only temporary,
      Solectron and Customer will discuss what if any fixed program costs are
      required to maintain the Solectron team. Solectron will attempt to
      minimize the fixed program costs by re-assigning personnel whenever
      possible. Solectron will consider production volumes of comparable (within
      the same Product family) follow-on products when calculating total monthly
      volumes realized.

 6.0  DELIVERY

 6.1  Solectron will target [***] on time delivery, defined as shipment of
      Product by Solectron within a window of [***] except as provided above.
      Each configuration order received from Customer will include the date on
      which the Product is to be delivered to either Customer or their
      designated customer location.

 6.2  The FOB point is ex factory.

 6.3  Solectron and Customer shall agree to delivery schedule flexibility
      requirements specific to the Product as documented in the addenda.

 6.4  Upon learning of any potential delivery delays, Solectron will notify
      Customer as to the cause and extent of such delay.

 6.5  If Solectron fails to make deliveries at the specified time and such
      failure is caused by Solectron, Solectron will, at no additional cost to
      Customer, 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.

 6.6  Should Customer require Solectron to undertake export activity on behalf
      of Customer, Customer agrees to submit requested export information to
      Solectron pursuant to Solectron Guidelines for Customer-Driven Export
      Shipments as provided in the addenda.

 7.0  PAYMENT TERMS

 7.1  Solectron and Customer agree to payment terms of Net 30 days from the date
      of invoice.

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 7.2  Currency will be in U.S. Dollars unless specifically negotiated and
      reflected in the addenda.

 7.3  Until the purchase price and all other charges payable to Solectron have
      been received in full, Solectron retains and Customer grants to Solectron
      a security interest in the products delivered to Customer and any proceeds
      therefrom.

 8.0  QUALITY

 8.1  The Customer program quality requirements shall be in accordance with IAW
      ISO 9002. Printed Circuit Board Assemblies ('PCBA') shall be fabricated
      IAW with IPC-A-610 Rev.B, Class 2. Low volumes will prohibit the use of
      statistical based methods for quality management. Rather, all entities
      agree to evaluate quality performance using a yield or Defects Per Million
      (DPM) process, with a Pareto of failures. Improvements will be prioritized
      and assigned appropriate resources by all parties.

 9.0  ENGINEERING CHANGES

 9.1  Customer may, upon advance written notice to Solectron, submit engineering
      changes 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 make
      a reasonable effort to review the engineering change and report to
      Customer [***]. If any such change affects the price, delivery, or quality
      performance of said Product, an equitable adjustment will be negotiated
      between Solectron and Customer prior to implementation of the change.

 9.2  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 the Customer.

10.0  INVENTORY MANAGEMENT

10.1  Solectron agrees to purchase components according to the Customer approved
      vendor list (AVL) including any sourcing plans as provided by the addenda.

10.2  All customer tooling/equipment furnished to Solectron or paid for by
      Customer in connection with this Agreement shall:

      a)   Be clearly marked and remain the personal property of Customer.

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     b)   Be kept free of liens and encumbrances
     c)   Unless otherwise agreed, Customer is responsible for the general
          maintenance of Customer tooling/equipment.

     Solectron shall hold Customer property at its own risk and shall not 
     modify the property without the written permission of Customer. Upon 
     Customer's request, Solectron shall redeliver the property to Customer 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

11.1 Solectron and Customer agree to execute, as part of this Agreement, a 
     Nondisclosure Agreement for the reciprocal protection of confidential 
     information.

11.2 Subject to the terms of the Nondisclosure Agreement and the proprietary 
     rights of the parties, Solectron and Customer 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 Customer.

12.0 WARRANTY

12.1 Solectron warrants for a period of [***] from the date of 
     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 Customer and accepted by Solectron; (ii)
     such Product will be of good material (supplied by Solectron) 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. In the event that any Product manufactured shall not be in  
     conformity with the foregoing warranties, Solectron shall, at Solectron's 
     option, either credit Customer for any such nonconformity (not to exceed  
     the purchase price paid by Customer for such Product), or, at Solectron's
     expense, replace, repair or correct such Product. The foregoing           
     constitutes Customer's sole remedies against Solectron for breach of      
     warranty claims.                                                          
                                                                               
12.2 Solectron shall have no responsibility or obligation to Customer under    
     warranty claims with respect to Products that have been subjected to      
     abuse, misuse, accident, alteration, neglect or unauthorized repair.      
                                                                               
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      THE WARRANTIES CONTAINED IN THIS SECTION ARE IN LIEU OF, AND SOLECTRON
      EXPRESSLY DISCLAIMS AND CUSTOMER 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.

12.3  An Epidemic Condition exists when Failure reports or statistical samplings
      show that [***] of the same Product installed or shipped during any one
      month contain an identical, repetitive defect in Solectron supplied
      material and/or workmanship.

      If during the warranty period of one year, the same Product shows evidence
      of an Epidemic Condition Juniper shall promptly notify Solectron of such
      condition. Upon notification, Juniper shall have the right, pending
      correction of the Epidemic Condition, to postpone further shipments of
      such Product by giving written notice of such postponement to Solectron.
      Such postponement shall temporarily relieve Solectron of its shipment
      liability and Juniper of any shipment liability for such postponed
      shipments. Both parties shall work together to prepare and propose a
      corrective action plan addressing implementation and procedure milestones
      for remedying such Epidemic Condition(s). Both parties shall use best
      efforts to implement the remedy in accordance with the agreed upon
      schedule.

      In the event of Epidemic Failure Solectron will:
      (a)  Incorporate the remedy in the affected Product in accordance with 
      Juniper engineering change order procedures.
      (b)  Ship all subsequent Products incorporating the required modification.
      (c)  [***]
12.4  Solectron shall have no liability or responsibility under Sections above
      for any losses or damages to the extent that any such Epidemic Failure
      claims are the result of:

      12.4.a  Solectron's compliance with Customer specifications;
      12.4.b  the negligence of Customer or any other person providing goods or
              services in connection with the design, development, production,
              and distribution of the Product (with the exception of Solectron
              manufacture of the Product);
      12.4.c  modification or alteration of the Product by a party other than
              Solectron;
      12.4.d  defects in Customer's products or components thereof (with the
              exception of the Products and Solectron supplied components
              thereof).

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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 Customer agree to negotiate in good faith to resolve
          such default. If the defaulting party fails to cure such default or
          submit an acceptable written plan to resolve such default within
          thirty (30) days following 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      This Agreement shall immediately terminate should either party; (i)
          become insolvent; (ii) enter into or file a petition, arraignment or
          proceeding seeking an order for relief under the bankruptcy laws of
          its respective jurisdiction; (iii) enter into a receivership of any of
          its assets or; (iv) enter into a dissolution of liquidation of its
          assets or an assignment for the benefit of its creditors.

13.3      Either Solectron or Customer may terminate this Agreement without
          cause by giving ninety (90) days advance written notice to the other
          party.

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      It is the intent of the parties that any dispute be resolved
          informally and promptly through good faith negotiation between
          Solectron and Customer. Either party may initiate negotiation
          proceedings by written notice to the other party setting forth the
          particulars of the dispute. The parties agree to meet in good faith to
          jointly define the scope and a method to remedy the dispute. If these
          proceedings are not productive of a resolution, then senior management
          of Solectron and Customer are authorized to and will meet personally
          to confer in a bona fide attempt to resolve the matter.

14.3      Should any disputes remain existent between the parties after
          completion of the two-step resolution process 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, the parties agree to submit the dispute to
          binding arbitration as provided by their respective jurisdiction.

15.0      LIMITATION OF LIABILITY


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       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 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.

17.2   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 provided, however, upon prior written
       notice to Solectron Customer may assign or transfer its rights to those
       parties as provided in Exhibit A.

17.3   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.

17.4   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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Agreed:

Solectron California Corporation                    Customer Juniper Networks

By: /s/ JIM WILLIAMS                                By: /s/ GARY HEIDENREICH
    ----------------------------                        ------------------------

Name: Jim Williams                                  Name: Gary Heidenreich
      --------------------------                          ----------------------

Title: Vice President                               Title: VP, Operations
    ----------------------------                        ------------------------

Date: 8/8/98                                        Date: 6/10/98
      --------------------------                          ----------------------


Fine Pitch Technology Inc.

By: /s/ YEN-HAO PAN 
    ----------------------------

Name: Yen-Hao Pan 
      --------------------------

Title: Operation Mgr 
    ----------------------------

Date: 6/3/98
      --------------------------



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    JUNIPER NETWORKS SOLECTRON ADDENDUM TO STANDARD MANUFACTURING AGREEMENT

This Addendum and the Standard Manufacturing Agreement (SMA) set forth the terms
and conditions under which Solectron agrees to manufacture and support the
Juniper Networks Martini product based on the specifications provided by Juniper
Networks. SOLECTRON agrees to perform such manufacturing, and to ship to Juniper
or it's customers in return for payment. This Addendum is hereby incorporated by
reference into the SMA. Except as set forth herein, the Addendum is subject to
each and every provision of the SMA. Capitalized terms not otherwise defined
here shall have the meanings ascribed to such terms in the SMA.

This addendum describes changes and additions to the SMA. It follows the
numbering scheme of the SMA. If a specific item was NOT changed or modified,
that item number will NOT be seen in the Addendum. For example, there were no
changes to Item 1.1. Thus, there is no 1.1 under section 1.0 although 1.1.1. has
been added under section 1.1 and thus are elements of this Addendum.




Signatures

/s/  JIM DAILY                          /s/ GARY HEIDENREICH
-------------------------              ----- ----------------------- 
Jim Daly                                Gary Heidenreich
Division Manager                        Vice President of Operations
Complex Systems Division                Juniper Networks
Solectron



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