jit agreement - micron technology · web viewwhereas, micron is willing to furnish consigned...

Consignment Agreement

THIS AGREEMENT (the “Agreement”) is effective the _____ day of _____________, 201__ between Micron _________________, a ____________ corporation, with offices at ___________________________ (“Micron”) and __________________________, a ______________ corporation, with offices at _______________________ (“Customer”).

WHEREAS, Customer may from time to time issue Customer’s scheduling agreements to Micron for products offered for sale by Micron (“Consigned Products”); and

WHEREAS, Customer may desire to have any such Consigned Products delivered to a warehouse facility (“Warehouse”) that is owned and operated by Customer; and

WHEREAS, Micron is willing to furnish Consigned Products to the Warehouse for purchase and use by Customer in accordance with the terms of this Agreement;

NOW, THEREFORE, in consideration of the foregoing premises, the mutual promises contained herein and other good and valuable consideration, receipt and sufficiency of which are hereby acknowledged, Customer and Micron agree as follows:

1. SCOPE.

This Agreement shall apply to scheduling agreements which reference this Agreement (such scheduling agreements referred to herein as “Orders”). Customer may issue Orders for Consigned Products at any time during the Term (as defined in Section 6.1 below).

2. FORECAST; ORDERING; DELIVERY; PRICE; TERMS AND CONDITIONS.

2.1 Within ten (10) days after the commencement of the Term, Customer shall provide Micron with a six (6) month forecast of Customer’s projected requirements for Consigned Products. Customer shall provide Micron with an update of such forecast within five (5) business days of the beginning of each calendar month during the Term.

2.2 Micron will issue a response to the forecast within ____ days of receipt. Micron will use commercially reasonable efforts to maintain a one-week average level of inventory in the Warehouse based on the next twelve weeks of the response to forecast. Micron will adjust shipments so that inventory levels in the Warehouse do not exceed a four-week average level of inventory in the Warehouse based on the next twelve weeks of the response to forecast.

2.3 With the exception of the circumstances described under Section 4.3 below, Customer shall not be obligated to issue Orders for, or to otherwise purchase, and Micron shall not be obligated to deliver or sell, any Consigned Products as a result of Customer’s delivery of any such forecast or update thereto to Micron.

2.4 All Orders shall: (i) be initiated by written Order sent to Micron; (ii) reference this Agreement; and (iii) set forth the requested Consigned Product quantity, destination and a

ELECTRONIC DATA INTERCHANGE AGREEMENT FOR SALES - 1

desired shipment date during the Term. Orders may be placed by telecopy, verified facsimile transmission or Electronic Data Interchange (“EDI”) pursuant to Section 11 of this Agreement. All Orders are subject to acceptance by Micron in writing, and Micron shall have no liability to Customer with respect to Orders that are not accepted. No partial acceptance of a Order shall constitute acceptance of an entire Order. To facilitate Micron’s production scheduling, Customer shall submit Orders to Micron in accordance with Micron’s lead times then in effect, which lead times shall be communicated to Customer upon Customer’s request. Micron shall endeavor to use reasonable efforts to accept Orders submitted in accordance with Micron’s lead times and fill Orders in accordance with shipment dates specified in Micron’s acceptance of Orders. Micron shall provide an acknowledged shipment date within ten (10) business days of receipt of Customer’s Order. Should Micron change the acknowledged shipment date, Micron shall advise Customer of such change. Notwithstanding the foregoing, Customer acknowledges and agrees that the shipment dates specified in Micron’s acceptance of Orders are estimates only.

2.5 The price applicable to all Consigned Products ordered hereunder shall be determined on the date the Consigned Products are removed from the Warehouse for use by Customer in its manufacturing operations. Any other terms and conditions governing purchases of Consigned Products hereunder shall be as set forth in Micron’s confirmation statement; provided that the terms and conditions of this Agreement shall control if the terms and conditions in Micron’s confirmation statement conflict with the terms and conditions of this Agreement.

2.6 Unless otherwise provided by Micron in writing, Customer may remove any Consigned Products from the Warehouse at any time for use by Customer in its manufacturing operations.

2.7 Customer may not change the location of the Warehouse or remove any Consigned Products from the Warehouse for purposes other than those set forth in Section 2.6 hereof without obtaining Micron’s prior written consent. Any such change of location or removal shall be at Customer’s sole risk, cost and expense, and Micron may immediately invoice Customer for all Consigned Products in, or in transit to, the Warehouse at the time of such change of location or removal. Payment for such Consigned Products shall be due immediately upon invoice.

2.8 Within twenty-four (24) hours of Customer’s removal of any Consigned Products from the Warehouse pursuant to Section 2.6, Customer shall provide Micron with a written removal notice. Such removal notice shall set forth: (i) the date of such removal; (ii) an identification of the Consigned Products removed; (iii) a reference to the date and number of the Order pursuant to which such Consigned Products were originally shipped to the Warehouse; and (iv) the date on which such removed Consigned Products were shipped by Micron. Customer shall remove any Consigned Products within thirty-five (35) days after shipment of such Consigned Products by Micron (the “Removal Period”). If any Consigned Products are not removed during the Removal Period applicable to such Products, Micron may immediately invoice Customer for such Products and Customer shall pay such invoice pursuant to the applicable terms and conditions.


2.9 [reference TAPA certification if applicable][if no TAPA certification, then consider whether we attach the minimum security requirements as an exhibit]

2.10 Customer shall use Micron’s web-based tracking system and shall also separately maintain or cause to be maintained accurate and complete inventory records with respect to Products furnished by Micron hereunder. Such inventory records shall include, without limitation: (i) an identification of all Products in, or in transit to, the Warehouse; (ii) the date of shipment of all such Products; (iii) the date and number of the Order pursuant to which such Products were shipped to the Warehouse; (iv) prices applicable to all such Products; and (v) the date of removal of any Product from the Warehouse. Within five (5) business days after the beginning of each calendar month during the Term, Customer shall provide an inventory reconciliation to Micron with respect to such Products for the preceding calendar month in a form acceptable to and containing information required by Micron. As often as once a month, and no less than once a quarter, a physical count of the Products stored in the Warehouse will be performed by a Micron representative. Customer shall have an authorized representative review such physical inventory and shall initial the physical inventory listing of Products and quantities. If Customer does not make authorized personnel available for such purposes, Customer hereby agrees that Micron count will be deemed by Customer to be complete and accurate.

If the physical count does not agree with the quantity indicated in Customer’s records (after assuring that all recent shipments to Customer have been put into stock), the discrepancies must be resolved with Micron. Customer is responsible for the security and control of Micron inventory at the Warehouse, and will be billed for any unexplained shortages at the time of the audit.

3. SHIPMENT; INSURANCE; TITLE; RISK OF LOSS.

3.1 Products delivered pursuant to the terms of this Agreement shall be packed for shipment in Micron’s standard shipping cartons, marked for shipment to the Warehouse, and delivered to the carrier agent F.C.A. Micron’s shipping location, at which time risk of loss shall pass to Customer. Unless otherwise instructed in writing by Customer in Customer’s Order, Micron shall select the carrier. All freight, insurance, and other shipping expenses, as well as expenses for any special packing requested by Customer and provided by Micron, shall be paid by Customer.

3.2 Prior to shipment of any Products hereunder, Customer shall deliver to Micron a certificate of insurance evidencing coverage, in form and amount satisfactory to Micron, of any risk of loss or damage to the Products from the time of delivery to the carrier by Micron until the time of removal of such Products from the Warehouse for Customer’s use pursuant to Section 2.6. Such certificate shall name Micron as loss payee and shall provide for at least thirty (30) days prior written notice to Micron before any cancellation of such insurance coverage. Notwithstanding the foregoing, if any Products are damaged, lost, stolen or destroyed, Micron may immediately invoice Customer for such Products and Customer shall pay Micron for all such Products pursuant to the applicable terms and conditions. Micron will invoice the Customer based on the average selling price of the Products for the fiscal quarter in which such Products are damaged, lost,


stolen or destroyed. Upon payment in full from Customer for such damaged, lost, stolen or destroyed Products, Micron shall relinquish any claim against the insurance carrier for such loss and Customer shall be solely responsible to settle any claims against its insurance carrier for such loss.

3.3 Title to Products shall be retained by Micron until Customer removes such Products from the Warehouse pursuant to Section 2.6 of this Agreement, at which time title shall pass to Customer; provided that Customer hereby grants to Micron a security interest in such Products after delivery until payment has been made therefor. At any time, and from time to time, during the term of this Agreement, Micron may file financing statements (or similar instruments under the law of the jurisdiction in which the Warehouse is located) with appropriate authorities as evidence of its title in the Product maintained in the Warehouse and its security interest in the delivered Products. Customer hereby authorizes Micron to execute and irrevocably appoints Micron its attorney in fact for the execution of such documents. Customer agrees that it will not permit any lien or encumbrance of any sort to be created or executed against the Product. Customer warrants and represents that no part of this Agreement constitutes a violation of the terms of, or default under, any other agreement it may have with suppliers, creditors or otherwise.

4. INVENTORY LIABILITY.[insert freshness and forecast liability language]

4.1 Customer shall provide Micron every week with an updated Product forecast to facilitate Micron’s capacity planning. Product forecast shall be provided by EDI. Such Product forecasts are merely estimates and firm Orders shall be communicated in accordance with the process described in Section 2.4 above.

4.2 Micron shall use forecasts to maintain a consignment stock equal to ________ weeks, as a minimum, to _______ weeks as a maximum, of inventory, calculated on the average of __________ weeks of forecast, available for consumption during the first week of the forecast.

4.3 If the Product has not been consumed by Customer after ______________ days in the Warehouse, Micron may invoice Customer at the currently applicable Consigned Product price.

5. INVOICES.

Except as otherwise provided in Sections 2.7, 2.8, 3.2 and 6.5 hereof, Micron shall invoice Customer for any Consigned Products furnished hereunder only upon Customer’s removal of the Consigned Products from the Warehouse pursuant to Section 2.6 of this Agreement.

6. TERM AND TERMINATION.

6.1 The term of this Agreement shall commence on the Effective Date and shall remain in effect thereafter, unless it is earlier terminated as provided herein.


6.2 Either party may terminate this Agreement at any time, without cause upon thirty (30) days prior written notice to the other party. Such termination shall be effective on the date stated in such notice.

6.3 Either party may terminate this Agreement for cause effective upon written notice of termination to the other party if the other party:

6.3.1 ceases to function as a going concern or to conduct operations in the normal course of business; or

6.3.2 has a petition filed by or against it under any bankruptcy or insolvency law which petition has not been dismissed or set aside within sixty (60) days of its filing; or

6.3.3 fails to perform any of its obligations under this Agreement so as to be in breach hereunder and fails to cure such breach within thirty (30) days after written notice of such breach.

6.4 [If we terminate for convenience or customer terminates for cause , then Micron should pay for freight and bear risk for returned products; flipside, Customer needs to consume the inventory in the warehouse within __ days of the effective date of termination or Micron can elect to have the customer return the inventory at customer’s risk and expense.]If Micron terminates this Agreement pursuant to Section 6.2 or if Customer terminates this Agreement pursuant to Section 6.3, Micron shall, within thirty (30) days of Customer’s written request and at Micron’s own cost, remove all remaining Consigned Products from the Warehouse which: (i) are in good and working condition and in their original packaging; (ii) have a designated, published distribution price in the then-current version of Micron's Distributor Price Book; (iii) were ordered by Customer directly from Micron; and (iv) are not custom or other non-standard Consigned Products. If any Consigned Products remain in the Warehouse that are custom or non-standard Consigned Products, Micron may: (i) immediately invoice Customer for these Consigned Products; or (ii) may require that Customer return these Consigned Products to Micron.

6.5 If Customer terminates this Agreement pursuant to Section 6.2 or if Micron terminates this Agreement pursuant to Section 6.3, Micron may: (i) immediately invoice Customer for those Consigned Products remaining in the Warehouse on the effective termination date; or (ii) may require that Customer return those Consigned Products remaining in the Warehouse on the effective termination date to Micron at Customer’s own cost and expense. Payment for such remaining Consigned Products shall be due immediately upon invoice.

6.6 NEITHER MICRON NOR CUSTOMER SHALL, BY REASON OF THE EXPIRATION OR TERMINATION OF THIS AGREEMENT, BE LIABLE TO THE OTHER FOR COMPENSATION, INDEMNIFICATION, REIMBURSEMENT OR DAMAGES ON ACCOUNT OF ANY LOSS OF PROSPECTIVE PROFITS OR ANTICIPATED SALES OR ON ACCOUNT OF EXPENDITURES, INVESTMENTS, LEASES OR COMMITMENTS MADE IN CONNECTION WITH THIS AGREEMENT OR THE ANTICIPATED PERFORMANCE OF THIS AGREEMENT.


7. LIMITATION OF LIABILITY.

IN NO EVENT SHALL MICRON BE LIABLE TO CUSTOMER FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES RESULTING FROM MICRON'S PERFORMANCE OR FAILURE TO PERFORM UNDER THIS AGREEMENT, OR THE FURNISHING, PERFORMANCE OR USE OF ANY GOODS OR SERVICES SOLD PURSUANT HERETO, WHETHER DUE TO A BREACH OF CONTRACT, BREACH OF WARRANTY, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE.

8. INDEMNIFICATION.

To the fullest extent permitted by applicable law, Customer shall indemnify, defend and hold harmless Micron, its directors, officers and employees, from and against any and all claims, causes of action, liabilities, losses, payments, obligations and expenses (including reasonable attorneys’ fees): (i) arising out of or in any way connected with Customer’s breach of this Agreement; (ii) proximately caused by Customer’s negligence, fault or willful misconduct; or (iii) arising out of or in any way connected with the storage, transportation or use of the Consigned Products.

9. CONFIDENTIALITY.[check to see if NDA in place. If so, use NDA default language]

9.1 Except as required by law, each party agrees that it will keep this Agreement confidential, and that it will prevent the acquisition, disclosure, use or misappropriation, by any person or persons, of this Agreement and any other proprietary or confidential information that is marked "confidential" at the time it is disclosed to the other party. If either party transmits confidential information, verbally or visually, to the other party, such information shall be identified as confidential at the time of disclosure, and, within thirty (30) days, the disclosing party shall remit to the other party written confirmation setting forth the date and the confidential nature of the information disclosed. Each party agrees that if it breaches this confidentiality provision, the owner of the confidential or proprietary information shall suffer irreparable injury and shall be entitled immediately to a temporary and permanent injunction, in addition to other remedies which may be available for breach of this Agreement.

9.2 This confidentiality provision shall survive for a period of three (3) years following the termination or expiration of this Agreement. The prevailing party shall be entitled to recover from the other party the reasonable attorneys' fees incurred in an action to enforce this provision.

9.3 Each party: (i) agrees not to disclose confidential information received from the other party to any person, real or legal, except as necessary for the party to perform its obligations under this Agreement; (ii) shall require its employees who may have access to confidential information, and any third party to whom disclosure of confidential information is necessary, to sign a confidentiality agreement containing provisions similar to this Agreement; (iii) shall exercise the same degree of care it would use to safeguard the confidentiality of similar information of its own (but in no event less care


than the industry standard); and (iv) agrees to use its best efforts to prevent inadvertent or unauthorized disclosure, publication or dissemination of any confidential information.

9.4 The foregoing confidentiality obligation shall not apply to information which: (i) is shown to have been known, available, or developed by the receiving party independent of any disclosure by the other party; (ii) is or becomes available to the public through no breach of this Agreement; (iii) is furnished to a third party by the original disclosing party without a similar restriction on disclosure; or (iv) is lawfully obtained from a third party without restriction and without breach of this or any other agreement.

10. SURVIVAL.

The provisions of Sections 2.7, 2.9, 3.2, 3.3, 6, 7, 8, 9, 10 and 12 shall survive termination or expiration of this Agreement for any or no reason. All other rights and obligations of the parties shall cease upon the effective termination date of this Agreement.

11. ELECTRONIC DATA INTERCHANGE

11.1 Each party may electronically transmit to or receive from the other party any of the documents set forth in Exhibit “A” attached hereto (the “Documents”) in order to facilitate sales transactions hereunder (“Transactions”). Any transmission of data which is not a Document shall have no force or effect between the parties. All Documents shall be transmitted in accordance with American National Standards Institute (“ANSI”) Electronic Data Interchange Standards ANSI X12 or U.N./EDIFACT. Revision or modification to such Standards must mutually be agreed upon in writing by the parties. Documents will be transmitted electronically to each party through a third-party service provider (the “Provider”), directly, or as otherwise agreed by the parties. Should either party elect to change its method of electronic transmission under this Section 11, such party shall provide thirty (30) days advance written notice of its intention to do so to the other party. Each party, at its own expense, shall provide and maintain the equipment, software, services and testing necessary to transmit and receive Documents effectively and reliably and shall properly use security procedures which are reasonably sufficient to ensure that all Document transmissions are authorized and protected from improper access. Subject to the limitations of liability set forth in this Agreement, each party shall indemnify, defend and hold the other party harmless from any and all claims, losses, damages and liabilities arising out of the indemnifying party’s breach of the requirement to implement reasonable security procedures. Each party shall adopt as its signature an electronic identification consisting of a symbol(s) or code(s) (“Signature”), which is to be affixed to or contained in each Document transmitted by such party. Each party agrees that any Signature of such party affixed to or contained in any transmitted Document shall be sufficient to verify that such party originated such Document. Neither party shall disclose the Signature of the other party to any unauthorized person.

11.2 A Document shall not be properly received, and no Document shall give rise to any obligation, until such Document is accessible at the receipt computer of the receiving party. If functional acknowledgment of a Document is required by any purchase order or by this Agreement, the receiving party shall, upon proper receipt of any Document, promptly and properly transmit a functional acknowledgment in return. A functional


acknowledgment shall constitute conclusive evidence that the acknowledged Document was properly received. If any transmitted Document is received in an unintelligible or garbled form, the receiving party shall promptly notify the originating party (if identifiable from the received Document) in a reasonable manner. In no event shall such unintelligible or garbled transmission have any legal or binding effect.

11.3 All information contained in any Document received by either party as the result of an exchange of information under this Section 11, or otherwise received by either party pursuant to this Agreement, as well as the electronic identification of the parties, shall be kept in strict confidence pursuant to the provisions of Section 9. This Section 11 evidences the parties’ mutual intent to create binding purchase and sale obligations pursuant to the electronic transmission and receipt of Documents. Any Document properly transmitted pursuant to this Section 11 shall be considered a “writing” or “in writing”; and any such Document when containing, or to which there is affixed, a Signature (“Signed Documents”) shall be deemed for all purposes: (i) to have been “signed;” and (ii) to constitute an “original” when printed from electronic files or records established and maintained in the normal course of business. The parties agree not to contest the validity or enforceability of Signed Documents under the provisions of any applicable law relating to whether certain agreements are to be in writing or signed by the party to be bound thereby. Signed Documents, if introduced as evidence on paper in any judicial, arbitration, mediation, or administrative proceedings, will be admissible as between the parties to the same extent and under the same conditions as other business records originated and maintained in documentary form. Neither party shall contest the admissibility of copies of Signed Documents under either the business records exception to the hearsay rule or the best evidence rule on the basis that the Signed Documents did not originate or were not maintained in documentary form. The conduct of the parties pursuant to this Section 11 shall, for all legal purposes, evidence a course of dealing and a course of performance accepted by the parties in furtherance of this Agreement and any Transaction.

12. MISCELLANEOUS.

12.1 This Agreement shall be governed by and construed in accordance with the laws of the State of Idaho, U.S.A., without reference to conflicts of laws principles.

12.2 Any notice, communication or statement relating to this Agreement shall be in writing and deemed effective: (i) when delivered in person; (ii) when delivered by verified facsimile transmission; or (iii) when delivered by registered or certified mail, postage prepaid, return receipt requested, to the address of the respective party below:


To Micron at: To Customer at:

Attention: Attention: Facsimile: Facsimile:

With a copy to:Micron Technology Inc.8000 S. Federal Way MS 507Boise, ID 83716-9632Attention: General CounselFax: (208) 368-4540

12.3 Nonperformance of Micron shall be excused to the extent that Micron’s performance is rendered impossible by strike, fire, flood, delay in component supply, equipment failure, governmental acts, orders or restrictions, or any other reason where failure to perform is beyond the reasonable control and not caused by the negligence of Micron.

12.4 No modification of, or amendment to, this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing signed by the party to be charged, and the waiver of any breach or default shall not constitute a waiver of any other right hereunder or any subsequent breach or default.

12.5 If it is determined by a court of competent jurisdiction as part of a final nonappealable ruling, government action or binding arbitration, that any provision of this Agreement (or part thereof) is invalid, illegal, or otherwise unenforceable, such provision shall be enforced as nearly as possible in accordance with the stated intention of the parties, while the remainder of this Agreement shall remain in full force and effect and bind the parties according to its terms. To the extent any provision (or part thereof) cannot be enforced in accordance with the stated intentions of the parties, such provision (or part thereof) shall be deemed not to be a part of this Agreement; provided that in such event the parties shall use their best efforts to negotiate, in good faith, a substitute, valid and enforceable provision which most nearly effects the parties’ intent in entering into this Agreement.

12.6 This Agreement may be executed in two or more counterparts, each of which shall be deemed an original.

12.7 This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter hereof and merges all prior discussions and writings between them with respect to the contents of this Agreement. The parties agree that the terms and conditions of this Agreement shall prevail, notwithstanding contrary or additional terms in any purchase order.

12.8 Nothing in this Agreement shall be construed as creating any partnership, joint venture, or agency between Micron and Customer. Micron and Customer are acting in the capacity of independent contractors hereunder, and neither is authorized to act as the


agent of the other, and neither party may in any way bind the other party to any contractual commitment.

IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed by their duly authorized representatives to be effective on the date first set forth above.

MICRON

By: By:

Name: Name: Title: Title:


EXHIBIT A

DOCUMENTS


ELECTRONIC DATA INTERCHANGE AGREEMENT (SALES)

THIS ELECTRONIC DATA INTERCHANGE (“EDI”) AGREEMENT (the “Agreement”) is effective __________, _______, by and among Micron Semiconductor Products, Inc. (“Micron”), an Idaho corporation, with offices at 8000 South Federal Way, Boise, Idaho, 83706-9632 and its affiliates, including but not limited to, Micron Europe Limited, Micron Semiconductor Asia Pte. Ltd., and Micron Semiconductor (Xiamen) Co. Ltd., and ______________________________________, a ____________ corporation, with offices at __________________________________ (“Customer”).

Micron and Customer desire: (1) to facilitate sales transactions (“Transactions”) by electronically transmitting and receiving data in agreed formats in lieu of conventional paper-based documents,:and (2) to ensure that such Transactions are legally valid and enforceable.

NOW THEREFORE, the parties, intending to be legally bound, agree as follows:

1. PREREQUISITES. Each party may electronically transmit to or receive from the other party any of the documents set forth in Exhibit “A” and incorporated herein by reference (the “Documents”). Any transmission of data which is not a Document shall have no force or effect between the parties. All Documents shall be transmitted in accordance with American National Standards Institute (“ANSI”) Electronic Data Interchange Standards ANSI X12 or U.N./EDIFACT. Revision or modification to such Standards must mutually be agreed upon in writing by the parties. The “Terms and Conditions of Sale” applicable to this transaction are attached hereto as Exhibit “B” and are incorporated herein by this reference. Any conflict between or among the terms and conditions of the various documents applicable to any EDI transaction shall be construed in accordance with the following order of priority: (1) the terms and conditions on the face of any Micron confirmation; and (2) the terms and conditions of this Agreement.

Documents will be transmitted electronically to each party through a third-party service provider (the “Provider”), directly, or as otherwise agreed by the parties. Should either party elect to change its method of electronic transmission under this Agreement, such party shall provide 30 days advance written notice of its intention to do so to the other party.

Each party, at its own expense, shall provide and maintain the equipment, software, services and testing necessary to transmit and receive Documents effectively and reliably and shall properly use security procedures which are reasonably sufficient to ensure that all Document transmissions are authorized and protected from improper access.

Subject to the limitation of liability set forth in Section 4 below, each party shall indemnify, defend and hold the other party harmless from any and all claims, losses, damages and liabilities arising out of the indemnifying party’s breach of the requirement to implement reasonable security procedures or a breach of the confidentiality requirements by itself or its employees, officers, directors or agents.

Each party shall adopt as its signature an electronic identification consisting of a symbol(s) or code(s) (“Signature”), which is to be affixed to or contained in each Document transmitted by such party. Each party agrees that any Signature of such party affixed to or contained in any transmitted Document shall be sufficient to verify that such party originated such Document. Neither party shall disclose the Signature of the other party to any unauthorized person.

2. TRANSMISSIONS. A Document shall not be properly received, and no Document shall give rise to any obligation, until such Document is accessible at the receipt computer of the receiving party. If functional acknowledgment of a Document is required by any purchase order or by agreement of the parties, the receiving party shall, upon proper receipt of any Document, promptly and properly transmit a functional acknowledgment in return. A functional acknowledgment shall constitute conclusive evidence that the acknowledged Document was properly received.

If any transmitted Document is received in an unintelligible or garbled form, the receiving party shall promptly notify the originating party (if identifiable from the received Document) in a reasonable manner. In no event shall such unintelligible or garbled transmission have any legal or binding effect.

Each party shall select and designate, on the attached Exhibit “C,” a financial officer or management individual and a separate administrative contact individual, by name, address, telephone number or other identification and means of communication mutually agreed upon, who will serve as coordinators under this Agreement and the primary interface in connection with the permitted use of the Provider hereunder. The parties may change such designated individuals at any time, upon written notice to the other.


3. TRANSACTION TERMS. All information contained in any Document received by either party as the result of an exchange of information under this Agreement, or otherwise received by either party pursuant to this Agreement, as well as the electronic identification of the parties, shall be kept in strict confidence and not disclosed by the recipient of the confidential information to any unauthorized third party without the express written consent of the disclosing party (unless disclosure of such information is required by law).

This Agreement is executed by the parties to evidence their mutual intent to create binding purchase and sale obligations pursuant to the electronic transmission and receipt of Documents. Any Document properly transmitted pursuant to this Agreement shall be considered a “writing” or “in writing”; and any such Document when containing, or to which there is affixed, a Signature (“Signed Documents”) shall be deemed for all purposes: (1) to have been “signed;” and (2) to constitute an “original” when printed from electronic files or records established and maintained in the normal course of business. The parties agree not to contest the validity or enforceability of Signed Documents under the provisions of any applicable law relating to whether certain agreements are to be in writing or signed by the party to be bound thereby. Signed Documents, if introduced as evidence on paper in any judicial, arbitration, mediation, or administrative proceedings, will be admissible as between the parties to the same extent and under the same conditions as other business records originated and maintained in documentary form. Neither party shall contest the admissibility of copies of Signed Documents under either the business records exception to the hearsay rule or the best evidence rule on the basis that the Signed Documents did not originate or were not maintained in documentary form.

The conduct of the parties pursuant to this Agreement shall, for all legal purposes, evidence a course of dealing and a course of performance accepted by the parties in furtherance of this Agreement and any Transaction.

4. MISCELLANEOUS. This Agreement shall remain in effect until terminated, with not less than 30 days prior written notice, by either party. Such notice shall specify the effective termination date. No termination shall affect the respective obligations or rights of the parties arising under any Documents or this Agreement prior to the effective termination date .

If any paragraph of this Agreement is adjudged by a court of competent jurisdiction to be void or unenforceable in whole or in part, such adjudication shall not affect the validity of the remainder of this Agreement. Each paragraph of this Agreement is severable from every other paragraph and constitutes a separate, distinct and binding covenant.

This Agreement: (1) sets forth the entire agreement and understanding between the parties as to the subject matter thereof and merges all prior discussions and writings between them with respect to the contents of this Agreement; (2) shall not be modified in any manner except in writing signed by duly authorized representatives of both parties; and (3) shall be governed by, and construed in accordance with, the laws of the State of Idaho, without resort to conflict of law principles. The courts of Idaho shall have jurisdiction over any action arising out of this Agreement and shall have personal jurisdiction over both parties. Idaho shall be the place of venue for any action arising under this Agreement.

No party shall be liable for any failure to perform its obligations in connection with any Document where such failure results from any act of God or other cause beyond such party’s reasonable control (including, without limitation, any mechanical, electronic or communications failure), which prevents such party from transmitting or receiving any such Document.

Neither party shall be liable to the other party for any special, incidental, exemplary or consequential damages arising from or as a result of any delay, omission or error in the electronic transmission or receipt of any Documents pursuant to this Agreement, even if either party has been advised of the possibility of such damages.

No obligation to enter into any Transaction is to be implied from the execution or delivery of this Agreement. Neither party may assign this Agreement without the written consent of the other. This Agreement is for the benefit of, and shall be binding upon, the parties and their respective successors and permitted assigns.

Each party has caused this Agreement to be executed by duly authorized representatives as of the date first written above.

MICRON SEMICONDUCTOR PRODUCTS, INC.

By: By:

Title: Title:

CONSIGNMENT AGREEMENT - 13

EXHIBIT B

Minimum Security Requirements

1. Warehouse Manager shall, at its sole cost and expense unless otherwise provided herein, provide and operate at the Warehouse a secure and efficient system reasonably acceptable to Micron for the management and storage of Products delivered by Micron. Warehouse Manager shall implement such security procedures as may be reasonable, given the value and size of the Products. Security procedures shall include the following and such other procedures as Micron may reasonably request:

Perimeter Security:

a) Access to warehouse cargo handling, shipping and receiving yard is adequately controlled to prevent unauthorized access.

b) All dock doors are constructed of material which is of sufficient strength so the doors will deter and/or delay forced entry by use of small portable hand tools.

c) Warehouse pedestrian doors and frames cannot be easily penetrated; if hinges on outside they must be pinned or spot welded.

d) Facility exterior walls and roof designed and maintained to resist penetration (Example: brick, block, tilt up concrete slab, sandwich panel walls).

e) All external warehouse doors always closed and secured when not in active use.

CCTV System:

a) Digital recording of all cameras is in place at a minimum of 3 frames per second (per camera) and a 30 day video retention policy is in place (where allowed by law).

b) Digital Recording and CCTV systems are routinely checked (per documented procedure) to ensure proper operation.

c) Cameras mounted to be able to view all operations and movement around external dock area unless temporary obstruction due to operational needs (i.e. truck unloading).

d) Vehicles and individuals visible in most shipping operations areas.

e) Access to CCTV systems, images, and recordings is restricted to only authorized personnel.

f) All internal dock doors and dock areas covered by CCTV. (Color or “day/night” cameras).

g) Views of freight being loaded/unloaded clear at all times unless temporary obstruction due to operational needs (i.e. truck unloading).


Micron, 07/24/15,

This Exhibit will be added for hub contracts w/o TAPA certification.

Lighting:

a) Lighting adequate in loading and unloading areas to support visual identification and to support quality CCTV images. (Constant light or activated by alarm or motion detection providing immediate illumination).

b) All Dock doors fully illuminated, indoor and exterior.

Access Control System:

a) Access to facility is enforced 24/7.

b) Facility keys are controlled and audited (per documented policy).

c) Access at visitor entry point(s) controlled by an employee/guard/receptionist that has been trained on badge issuance, controls, logging visitors, escort requirement, etc (process for out of hours visits in place).

d) Access to dock/warehouse is limited to designated/authorized personnel (per documented process).

e) Access to Access Control Systems is restricted to only authorized personnel.

Intrusion Detection System:

a) All facility external warehouse doors alarmed to detect unauthorized opening and linked to main alarm system.

b) Monitoring of alarm events 24x7x366 via an internal or 3rd party external monitoring post, secured from attack.

c) All security system alarms are responded to in real-time 24/7.

d) Monitoring post acknowledges alarm-activation and escalates in less than 3 minutes.

e) Alarm monitoring reports available.

f) Documented response procedures.

g) Access to Intrusion Detection system is restricted to only authorized personnel.


High Value Parts Cage:

a) Perimeter caged or hard-walled on all sides, including top/roof.

b) Locking device on door/gate.

c) CCTV (Color or “day/night” cameras) coverage on cage or vault entrance.

d) Access logged and access list in place to limit/verify that access is only granted to designated/authorized personnel.

e) Approved access list to HV cage reviewed monthly and updated in real time when employee leaves employment or no longer requires access.
