Standing Advisory Committee Agenda

Circuit Board Alliance Agreement

CIRCUIT BOARD ALLIANCE AGREEMENT (this "Agreement"), effective as of , 20____, by and between , a corporation having an office at ("Low-Cost Manufacturer") and , a corporation having an office at ("High-Cost Manufacturer").

1. Recitals.

1.1. High-Cost Manufacturer is a technology leading U.S. manufacturer of printed circuit boards ("PCBs");

1.2. Low-Cost Manufacturer is a quality non-U.S. manufacturer of PCBs;

1.3. High-Cost Manufacturer desires to establish a lower-cost manufacturing capability for lower-technology PCBs; and

1.4. Low-Cost Manufacturer desires to establish itself in U.S. markets as a quality manufacturer of PCBs.

NOW THEREFORE, in exchange for the promises contained herein and other good and sufficient consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows.

2. Definitions. As used herein, the term:

2.1. "Agreement" means this Agreement, together with Exhibits A-C, Appendix A, Exhibits 1 and 2 thereto, and Appendix B.

2.2. "Alliance" means the alliance relationship between Low-Cost Manufacturer and High-Cost Manufacturer as set forth in this Agreement.

2.3. "Alliance Customers" means those customers listed in Exhibit A in the territories listed in Exhibit A.

2.4. "Alliance Factory Direct Customer" has the meaning set forth in Section 4.2.2 of Appendix A.

2.5. "Alliance Price" has the meaning set forth in Section 3 of Appendix A.

2.6. "BUYER" has the meaning set forth in the preamble to Appendix A.

2.7. "Disclosing Party" has the meaning set forth in Section 9.4.

2.8. "Effective Date" means the date first written hereinabove.

2.9. "Factory" means Low-Cost Manufacturer-owned factory(ies), provided that any Low-Cost Manufacturer-owned factory other than the factory located at will be approved in writing by High-Cost Manufacturer before being added to the defined term Factory.

2.10. "Factory Direct Order" has the meaning set forth in Section 4.2.2 of Appendix A.

2.11. "Incoterms 2000" means the International Commercial Terms published in November 1999 by the International Chamber of Commerce and effective as of January 1, 2000.

2.12. "Indemnified Party" has the meaning set forth in Section 6.

2.13. "Indemnifying Party" has the meaning set forth in Section 6.

2.14. "Late Product" has the meaning set forth in Section 11 of Appendix A.

2.15. "MFC Period" has the meaning set forth in Section 3 of Appendix A.

2.16. "Non-Alliance Customers" means those customers listed in Exhibit B in the territories listed in Exhibit B, and, at all relevant times, all other customers not listed in Exhibit A in the territories listed in Exhibit A.

2.17. "Offer" has the meaning set forth in Section 8.2.

2.18. "Part Number" means a specific Product manufactured for a specific Alliance Customer, as described in Exhibit 1 to Appendix A, as may be changed from time to time during the term of this Agreement by written agreement between the Parties.

2.19. "Party" means Low-Cost Manufacturer or High-Cost Manufacturer, as applicable, and "Parties" means Low-Cost Manufacturer and High-Cost Manufacturer.

2.20. "PCBs" has the meaning set forth in Section 1.1.

2.21. "Preexisting Relationship" means, with respect to Low-Cost Manufacturer, a contractual relationship in place as of the Effective Date pursuant to which Low-Cost Manufacturer grants some form of marketing exclusivity to a third party, and, with respect to High-Cost Manufacturer, a contractual relationship in place as of the Effective Date pursuant to which High-Cost Manufacturer performs exclusive marketing services for a third party. All Preexisting Relationships are listed in Exhibit C.

2.22. "Product" means those types of PCBs described in Exhibit 1 to Appendix A, as may be changed from time to time during the term of this Agreement by written agreement between the Parties.

2.23. "Proprietary Information" has the meaning set forth in Section 9.4.

2.24. "Pullback" has the meaning set forth in Section 3.8.

2.25. "QTA" has the meaning set forth in Section 7 of Appendix A.

2.26. "Quality System" has the meaning set forth in Section 16 of Appendix A.

2.27. "Receiving Party" has the meaning set forth in Section 9.4.

2.28. "Registration Date" has the meaning set forth in Section 3.2.

2.29. "Rejectable Product" has the meaning set forth in Section 11 of Appendix A.

2.30. "SELLER" has the meaning set forth in the preamble to Appendix A.

2.31. "Specifications" has the meaning set forth in Section 1 of Appendix A.

3. Marketing.

3.1. Alliance Customers. High-Cost Manufacturer will have the exclusive right to market Low-Cost Manufacturer's PCB manufacturing capability and the Products to Alliance Customers.

3.2. Term of Exclusivity. Low-Cost Manufacturer recognizes that High-Cost Manufacturer must expend considerable time and effort to proceed from a first sales call to booking an order...

3.3. Transfers to Subcontract Assemblers. If procurement or production for a specific program or Part Number is transferred from an Alliance Customer to a subcontract assembler not defined at such time as an Alliance Customer, then:

3.3.1. Orders submitted by the subcontract assembler for such program or Part Number will be deemed to have been made by the original Alliance Customer for purposes of exclusivity under this Agreement.

3.3.2. In the event that the Alliance Customer or the subcontract assembler, for any reason, prefers to sign purchase orders directly with Low-Cost Manufacturer, Low-Cost Manufacturer will accept factory direct orders...

3.3.3. In the event that the Alliance Customer or the subcontract assembler, for any reason, chooses to sign purchase orders directly with Low-Cost Manufacturer, and to be serviced by a representative of Low-Cost Manufacturer other than High-Cost Manufacturer, then Low-Cost Manufacturer will pay High-Cost Manufacturer a fee equal to 2.5% of Low-Cost Manufacturer's invoice price...

3.4. Non-Alliance Customers. High-Cost Manufacturer may not sell Low-Cost Manufacturer's capability to Non-Alliance Customers unless otherwise agreed to by Low-Cost Manufacturer in advance.

3.5. Account Reviews and Information. High-Cost Manufacturer sales management will review the status of and marketing activity at each Alliance Customer no less than once per calendar quarter...

3.6. Capacity Allocation. Low-Cost Manufacturer will allocate up to 25% of its total actual production capacity to High-Cost Manufacturer in support of High-Cost Manufacturer's marketing efforts...

3.7. Factory Exclusivity. With the exception of factories under its sole ownership or control, High-Cost Manufacturer will place orders for Product from Alliance Customers, directly or indirectly, with Low-Cost Manufacturer exclusively.

3.8. Pullbacks. A Pullback is defined as the transfer of production of a Part Number from Low-Cost Manufacturer to a High-Cost Manufacturer factory.

3.8.1. High-Cost Manufacturer will not Pullback any orders which have already been placed with Low-Cost Manufacturer.

3.8.2. High-Cost Manufacturer will not Pullback any Part Number consisting of standard multilayer PCBs already in production at Low-Cost Manufacturer without Low-Cost Manufacturer's written consent.

3.8.3. High-Cost Manufacturer will not Pullback any Part Number except for situations where, in High-Cost Manufacturer's reasonable determination, (1) Low-Cost Manufacturer cannot or has failed to meet quality, delivery or cost requirements; (2) the Pullback is necessary to support product transition plans; or (3) the Pullback is necessary to maintain the operations of High-Cost Manufacturer's plants and commitments to employees.

3.8.4. In the event that High-Cost Manufacturer executes a Pullback in accordance with clause (3) of Section 3.8.3, High-Cost Manufacturer will not subsequently place an order for any affected Part Number with a third party without Low-Cost Manufacturer's prior written consent.

3.9. New Relationships. Each Party agrees to provide the other Party with the name and location of similar third party manufacturing or marketing relationships that the Party establishes during the term of this Agreement.

4. Commercial and Operating Terms. All Products sold to High-Cost Manufacturer by Low-Cost Manufacturer for resale to Alliance Customers will be deemed to be sold pursuant to this Agreement, including Appendix A.

5. Representations and Warranties.

5.1. By Low-Cost Manufacturer.

5.1.1. Low-Cost Manufacturer is a corporation duly organized, validly existing, and in good standing under the laws of , and has all requisite power and authority to conduct its business as now conducted.

5.1.2. The execution, delivery and performance by Low-Cost Manufacturer of this Agreement do not and will not violate any charter documents, by-laws, or any other agreement including any Preexisting Relationship.

5.1.3. Exhibit C contains a complete and accurate list of Low-Cost Manufacturer's Preexisting Relationships.

5.2. By High-Cost Manufacturer.

5.2.1. High-Cost Manufacturer is a corporation duly organized, validly existing and in good standing under the laws of , and has all requisite power and authority to conduct its business as now conducted.

5.2.2. The execution, delivery and performance by High-Cost Manufacturer of this Agreement do not and will not violate any articles of incorporation, by-laws, or any other agreement including any Preexisting Relationship.

5.2.3. Exhibit C contains a complete and accurate list of High-Cost Manufacturer's Preexisting Relationships.

6. Indemnification. Each Party will indemnify and hold harmless the other Party and its affiliates, directors, officers, employees and subcontractors from and against any and all claims, losses, expenses, damages or liabilities arising out of any inaccuracy in representation, warranty, covenant, obligation or undertaking.

7. Term and Termination.

7.1. This Agreement is effective as of the Effective Date and will continue in force until terminated pursuant to this Section 7.

7.2. Either Party may terminate this Agreement forthwith by written notice in the event of bankruptcy, insolvency, assignment for the benefit of creditors, voluntary dissolution, discontinuation of PCB business, nationalization, or state of war between the United States and .

7.3. At any time more than six months after the Effective Date, either Party may terminate this Agreement by giving the other Party prior written notice.

7.4. If either Party defaults in any material respect, the other Party will have the right to terminate this Agreement by giving written notice no less than 60 days prior to the effective date.

8. Equity Provisions.

8.1. Ownership. In the event that High-Cost Manufacturer has a bona fide interest in acquiring an ownership interest in Low-Cost Manufacturer, Low-Cost Manufacturer will use its best efforts to assist.

8.2. Right of First Refusal. If Low-Cost Manufacturer receives a bona fide offer to sell substantially all of its PCB business, High-Cost Manufacturer will have a right of first refusal.

8.3. High-Cost Manufacturer Purchase of Asian Factory. High-Cost Manufacturer will keep Low-Cost Manufacturer informed of its intentions with respect to the construction, lease or purchase of a manufacturing facility in Asia.

9. Miscellaneous.

9.1. Notices. All notices required or permitted to be given under this Agreement must be in writing in the English language, and may be delivered by mail, hand, courier, facsimile, telex, telecopy or telegram.

If to Low-Cost Manufacturer:

with a copy to:

If to High-Cost Manufacturer:

with a copy to:

9.2. General Waiver of Liability...

9.3. Further Assurances. Each Party will promptly execute and deliver all such other agreements, instruments or documents and do and perform all such further acts and things as may be reasonably requested.

9.4. Confidentiality. Each Party acknowledges that the other Party has Proprietary Information not in the public domain...

9.5. Assignability.

9.6. Legal and Ethical Business Practices.

9.7. English Language.

9.8. Law. This Agreement will be governed by the laws of .

9.9. Dispute Resolution. The place of arbitration will be , and the arbitration will be conducted by the in English.

9.10. No Implied Licenses.

9.11. Survival of Obligations.

9.12. Superscedence; No Amendment.

9.13. Rescission of Unenforceable Terms.

9.14. Waiver by Delay or Non-Enforcement.

9.15. Force majeure.

9.16. Brokers; Expenses.

9.17. No Agency.

9.18. Section Headings.

9.19. Counterparts.

9.20. Incorporation; Order of Priority.

IN WITNESS WHEREOF, the Parties have caused this instrument to be executed in duplicate by their duly authorized and empowered officers and representatives as of the Effective Date.

EXHIBIT A

ALLIANCE CUSTOMERS

Alliance Customers Territories Headquarters Location

EXHIBIT B

NON-ALLIANCE CUSTOMERS

Non-Alliance Customers Territories Headquarters Location

EXHIBIT C

PREEXISTING RELATIONSHIPS

I. High-Cost Manufacturer Relationships:

Relationship Exclusive Accounts and Territories

II. Low-Cost Manufacturer Relationships:

Relationship Exclusive Accounts and Territories

APPENDIX A

COMMERCIAL AND OPERATIONAL TERMS

1. Product Specifications.

Products purchased and sold in accordance with this Agreement are described in Exhibit 1. SELLER guarantees the availability of the volumes listed in Exhibit 1 of the Products during the time when the Products are included in Exhibit 1.

The specifications of the Products will be at any given time the specifications associated from time to time with each Part Number (the "Specifications").

2. Rights to the Products.

3. Price Quotation Procedure.

All prices quoted by SELLER to BUYER, except for QTA Product, will be discounted by 5% from the lowest price that SELLER charges any of its other customers for PCBs of similar composition and complexity...

4. Ordering Procedure.

5. Delivery and Lead-Time.

6. Rescheduling and Cancellation.

7. QTA Capability.

8. Passing of Title.

9. Payment Terms.

10. Packing.

11. Acceptance and Rejection of Product.

12. Warranty.

13. Personal Injury Liability.

14. Infringement of Intellectual Property.

15. Environmental.

16. Quality.

17. Productivity.

18. ISO Certification and Compliance.

19. Use of Subcontractors.

20. Inspections.

21. Process Change Notification.

22. Export Control.

23. Customer Specific Terms.

ACKNOWLEDGED AND AGREED:

EXHIBIT 1 TO APPENDIX A

PRODUCTS, VOLUMES, PRICES, QTA CAPABILITIES AND SPECIFICATIONS

[OMITTED]

EXHIBIT 2 TO APPENDIX A

CUSTOMER SUPPORT SERVICES

Customer Support Services for Alliance Factory Direct Orders and Direct Orders.

APPENDIX B

BUYER'S HEALTH, SAFETY AND ENVIRONMENTAL POLICY

[OMITTED]