Exhibit 10.26

`MANUFACTURING SERVICES AGREEMENT

THIS AGREEMENT (the “Agreement”) is effective as of March 22, 2010 (the
“Effective Date”), by and between SYMMETRICOM, INC., a Delaware corporation
having a principal place of business at 2300 Orchard Parkway, San Jose, CA
95131, on behalf of itself and its affiliates or subsidiaries (collectively
“CUSTOMER”) and SANMINA-SCI CORPORATION, a Delaware corporation having its
principal place of business at 2700 North First Street, San Jose, California
95134, on behalf of itself and its affiliates or subsidiaries (“SANMINA-SCI”).
CUSTOMER and SANMINA-SCI are sometimes referred to herein as a “Party” and the
“Parties.”

WHEREAS, Customer is a leading developer and supplier of products and services
for the generation and synchronization of precise timing for the communications,
government and other markets;

WHEREAS, SANMINA-SCI provides contract manufacturing services from its
facilities located worldwide;

WHEREAS, Customer may, among other things desire to have Sanmina-SCI procure
components, parts, and raw material and assemble and manufacture for and ship
products to Customer.

NOW, THEREFORE, in consideration of the mutual promises and conditions set forth
herein, and intending to be legally bound, the Parties agree as follows:

 

1. SCOPE AND TERM

1.1 This Agreement sets forth the terms under which Customer may, among other
things, have SANMINA-SCI procure components, parts, and raw material
(collectively “Components”) and manufacture, assemble, test, inspect, and
configure these parts and Components into finished goods (“Products”) in
accordance with Customer’s specifications (“Specifications”).

1.2 The initial term of this Agreement shall commence on the Effective Date and
shall continue through the first anniversary of the Effective Date unless sooner
terminated by mutual agreement or in accordance with this Agreement. Upon the
expiry of the initial term, this Agreement shall continue from year to year
until one Party terminates the Agreement in accordance with section 10 of this
agreement.

 

2. PRICING

2.1 Pricing. During the term, SANMINA-SCI shall manufacture and sell to CUSTOMER
the Products specified by the Customer, as amended from time to time (at the
prices set forth in Exhibit A (the “Prices”). Prices (a) are in U.S. Dollars,
(b) include SANMINA-SCI standard packaging, (c) exclude the items set forth in
Section 2.2, and (d) are based on (i) the configuration set forth in the
Specifications provided to SANMINA-SCI on which SANMINA-SCI’s quotation was
based and (ii) the projected volumes, minimum run rates and other assumptions
mutually agreed upon by the parties. The Prices shall remain fixed and reviewed
annually subject to SANMINA-SCI’s right to propose price changes (x) to account
for any material variations on the market prices of components, parts and raw
material (collectively “Components”), including any such variations resulting
from allocations or shortages as ; (y) to account for any changes in the
exchange rate between the currency in which the pricing is calculated and the
currency in which SANMINA-SCI pays for its labor, overhead and Components or
(z) the price adjustments as set forth in Section 2.3. Any pricing SANMINA-SCI
gives to Customer shall specify line item pricing, time and rate and any price
adjustments shall be mutually agreed to between the Parties.

 

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2.2 Exclusions from Price. Prices specifically exclude (a) export licensing of
the Product and payment of broker’s fees, duties, tariffs and other similar
charges; (b) taxes or charges (other than those based on net income of
SANMINA-SCI) imposed by any taxing authority upon the manufacture, sale,
Shipment storage, “value add” or use of the Product; and (c) setup, tooling, or
non-recurring engineering activities (collectively “NRE Charges”).

2.3 Other Price Adjustments:

(a) CUSTOMER acknowledges that the Prices set forth in Exhibit A are based on
the forecasted volumes provided by CUSTOMER to SANMINA-SCI. In the event
CUSTOMER does not purchase Product in sufficient volumes consistent with the
quoted prices, the Parties will review the prices and volumes quarterly and any
price adjustments shall be mutually agreed to between the Parties during the
quarterly pricing review.

(b) CUSTOMER acknowledges that the Prices are based on the Specifications and
the assumptions set forth in SANMINA-SCI’s quotation and in Exhibit A. In the
event SANMINA-SCI experiences an increase or decrease in cost as a result of
changes in the pricing assumptions or the Specifications, SANMINA-SCI shall
propose such cost changes during the quarterly cost review cycle and any changes
in pricing must be mutually agreed upon by both parties.

 

3. PAYMENT TERMS/SETOFFS/CREDIT LIMIT

3.1 Payment Terms. Payment terms for shipments originating from [***] are [***].
Payment terms for shipments originating from [***] shall be (a) [***], and
(b) [***]. Any pricing or quantity discrepancies must be brought to
SANMINA-SCI’s attention within [***] after receiving an invoice. Invoice to be
issued only when title transfers. Unless otherwise stated, payment shall be made
in U.S. Dollars.

3.2 Setoffs. Each Party shall be entitled at all times to set-off any amount
owing from the other Party to such Party against any amount payable to the other
Party under this Agreement from such Party, arising out of this or any other
transaction under this Agreement. For purposes hereof, (i) the term “Party”
shall include the Parties to this transaction and each Party’s Affiliates and
(ii) a Party’s “Affiliate” shall mean any entity that, directly or through one
or more intermediaries, controls, is controlled by or is under common control by
such Party, including but not limited to a Party’s subsidiaries.

3.3 Credit Limit. SANMINA-SCI’s Credit Department shall provide CUSTOMER with an
initial credit limit, which shall be reviewed (and, if necessary, adjusted) from
time to time. In the event CUSTOMER’s payments are in arrears, SANMINA-SCI shall
have the right to reduce the credit limit upon thirty (30) days’ prior written
notice to CUSTOMER. In the event CUSTOMER has any outstanding invoice, which are
not subject to good faith dispute by Customer and which are more than thirty
(30) days past due, SANMINA-SCI shall have the right to stop shipments of
Product to CUSTOMER until CUSTOMER makes a sufficient payment to bring its
account within the credit limit provided.

 

4. PURCHASE ORDERS/FORECAST/RESCHEDULE

The following process under this Section 4 shall apply until or unless a VMI
agreement has been executed by the Parties, in which event the VMI agreement
will be made part of this Agreement and attached to this Agreement as Exhibit D
and will control with respect to this Section.

 

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4.1 Purchase Orders.

(a) CUSTOMER will issue to SANMINA-SCI specific Orders for Product covered by
this Agreement. Each Order shall be in the form of a written or electronic
communication and shall contain the following information: (i) the part number
of the Product; (ii) the quantity of the Product; (iii) the delivery date or
shipping schedule; (iv) the location to which the Product is to be shipped; and
(v) transportation instructions. Each Order shall contain a number for billing
purposes, and may include other instructions and terms (provided that such terms
do not conflict with this Agreement) as may be appropriate under the
circumstances.

(b) All Orders shall be confirmed by SANMINA-SCI within five (5) business days
of receipt If SANMINA-SCI does not accept or reject the Order within the five
day period, the Order shall be deemed rejected by SANMINA-SCI. In the event
SANMINA-SCI is unable to meet the delivery schedule set forth in a proposed
Order, or finds the schedule or if the Order does not conform to this Agreement,
the Parties shall negotiate in good faith to resolve the disputed matter(s).

4.2 Forecast; Minimum Buys; Excess and Obsolete Inventory.

(a) Initial Forecast. [***]

(b) Subsequent Forecasts. On the first business day of each calendar month after
the initial Order and Forecast, the first Forecast month shall automatically
become part of the Order, a new Forecast month shall be added, and a new firm
Order issued, so that a rolling Order of [***] is always maintained.

(c) MRP Process.

(1) SANMINA-SCI shall take the Order and Forecast and generate a Master
Production Schedule (“MPS”) for a [***] in accordance with the process described
in this Section. The MPS shall define the master plan on which SANMINA-SCI shall
base its procurement, internal capacity projections and commitments. SANMINA-SCI
shall use CUSTOMER’s Order to generate the first [***] of the MPS and shall use
CUSTOMER’s Forecast to generate the subsequent [***] of the MPS.

(2) SANMINA-SCI shall process the MPS through industry-standard software (the
“MRP Software”) that will break down CUSTOMER’s Product requirements into
Component requirements. When no Product testing (in-circuit or functional
testing) is required by CUSTOMER, SANMINA-SCI will use commercially reasonable
efforts to schedule delivery of all Components to SANMINA-SCI eleven working
days before the Products are scheduled to ship to CUSTOMER; in the event Product
testing is required, SANMINA-SCI will use commercially reasonable efforts to
schedule delivery of all Components to SANMINA-SCI [***] before the Products are
scheduled to ship to CUSTOMER.

(3) SANMINA-SCI will release (launch) purchase orders to Vendors (including
other SANMINA-SCI facilities) prior to the anticipated date that the Components
are needed at SANMINA-SCI. The date on which these orders are launched will
depend on the lead time determined between the Vendor and SANMINA-SCI and
SANMINA-SCI’s manufacturing or materials planning systems.

(4) A list of all Components with lead times greater than [***] (or the Order
period, if the Order period is less [***]) (“Long Lead-time Components”) shall
be provided to Customer and identified in Exhibit B to this Agreement.
SANMINA-SCI shall update the list of Long Lead-time Components [***] and present
an updated list of Long Lead-time Components to

 

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CUSTOMER at the time SANMINA-SCI presents the CUSTOMER with the E&O List
described in Section 4.2(e). Each revised Long Lead-time Item list shall be
deemed an amendment to Exhibit B, whether or not it has been formally designated
as such. In the event SANMINA-SCI fails to present an updated list of Long
Lead-time Components, (i) the Parties shall continue to rely on the preceding
list (as updated in writing by the Parties) and (ii) CUSTOMER will accept
responsibility for Long Lead-time Components ordered outside the lead-times set
forth in the list provided that SANMINA-SCI can demonstrate to CUSTOMER’s
reasonable satisfaction that such Components were ordered in accordance with the
then-current Vendor lead-times and CUSTOMER Forecast. (CUSTOMER acknowledges
that lead-times constantly change and that SANMINA-SCI might not always be able
to present CUSTOMER with a current Long Leadtime Component List).

(5) CUSTOMER acknowledges that SANMINA-SCI will order Components in quantities
sufficient to support CUSTOMER’s Forecast. [In determining the quantity of
Components to order, SANMINA-SCI divides the Components into three classes,
“Class A,” “Class B” and “Class C.” Class A Components are comprised of [***].
Class C Components are comprised of [***]. Class B Components are comprised of
[***]. [***]. A summary of SANMINA-SCI’s purchase commitments is set forth in
the table below.

 

Part Class

   [***]   [***]   [***]

A

   [***]   [***]   [***]

B

   [***]   [***]   [***]

C

   [***]   [***]   [***]

(6) CUSTOMER acknowledges that SANMINA-SCI will be required to order Components
in accordance with the various minimum buy quantities, tape and reel quantities,
and multiples of packaging quantities required by the Vendor.

(d) Reschedule. CUSTOMER may, at any time, reschedule all or part of a scheduled
delivery of an Order prior to shipment upon written notice to Sanmina-SCI, with
reschedule not to exceed [***] in accordance with the table below.

At the end of this [***] period, CUSTOMER shall either accept delivery of
rescheduled finished units and/or pay SANMINA-SCI’s Component Cost associated
with rescheduled units not yet built.

 

Days Before P.O. Delivery Date

  

Percentage Reschedule Allowance

[***]    [***] [***]    [***] [***]    [***]

SANMINA-SCI shall use reasonable commercial efforts to accommodate any upside
schedule changes beyond the firm Order periods.

 

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(e) Excess and Obsolete Inventory.

For the purpose of this Agreement,

a. “Delivered Cost” shall mean SANMINA-SCI’s quoted cost of Components as stated
on the bill of materials, plus a materials margin equal to [***] percent [***].

b. “Excess Inventory” means the Inventory that SANMINA-SCI has on hand, which
has been ordered, manufactured, or acquired (in accordance with the requirements
of this Section 4), based on CUSTOMER’s then-current Forecast or Orders, greater
than the Customer’s next [***] demand, which is subject to the reconciliation
process defined in Section 4.2 (g) and the ABC Stratification process as defined
Section 4.2 (c) (5).

c. “Obsolete Inventory” means: the quantity of Inventory that SANMINA-SCI has on
hand, which has been ordered, manufactured, or acquired (in accordance with the
requirements of this Section 4) based on CUSTOMER’s then-current Forecast or
Orders, but which SANMINA-SCI no longer requires as a result of (i) CUSTOMER’s
announcement or notification that the Product into which such Inventory is
incorporated has reached its end of life (“EOL”), (ii) a change in the
specification the Product into which the Inventory is incorporated as a result
of an Engineering Change Notice or otherwise; or (iii) Section 4.2(e)(vii)
below.

d. Disposition Process: Within [***] after the end of the second month of
calendar quarter, SANMINA-SCI shall advise CUSTOMER in writing of any Excess or
Obsolete Inventory in its inventory and their Delivered Cost (the “E&O List”).
Sanmina’s E&O list will contain only inventory items that make up [***] of
excess and Obsolescence. Within [***] of receiving SANMINA-SCI’s E&O List,
CUSTOMER shall advise SANMINA-SCI of any Component on the E&O List that it
believes is not excess or obsolete. Within [***] after receiving SANMINA-SCI’s
E&O List, SANMINA-SCI and CUSTOMER shall finalize the E&O List, and (1) CUSTOMER
shall issue to SANMINA-SCI an Order for all mutually agreed upon Excess
Inventory on the E&O List, or (2) [***]. If option 1:CUSTOMER shall pay
SANMINA-SCI its Delivered Cost for Components on the E&O List within [***] of
the date of invoice. In the event the Parties cannot agree as to the Components
on the E&O List, [***]. For the purpose of this Section, the phrase “obsolete
Component” shall mean any Component which is not currently used to manufacture
CUSTOMER’s Product (whether as a result of an ECO or otherwise), and the term
“excess Component” shall mean any Component which is not required to meet
CUSTOMER’s Order or CUSTOMER’s Forecast to which such Component was initially
ordered. CUSTOMER shall not have the right to delay payment for excess
Components by increasing or pushing out its Forecast.

(f) Customer Component Liability. Customer’s Component liability for any
termination without Cause shall be as set forth in Section 10 below. CUSTOMER
acknowledges that it shall be financially liable for all Components ordered in
accordance with this Section. Specifically, CUSTOMER’s Component Liability shall
be equal to SANMINA-SCI’s Delivered Cost of all Components ordered in support of
any Order or Forecast, including any excess Components resulting from any
minimum buy quantities, tape and reel quantities, and multiples of packaging
quantities required by the Vendor less the actual cost (per the bill of
materials) of those Components which are returnable to Vendor (less any
cancellation or restocking charges). At CUSTOMER’s request, SANMINA-SCI shall
use commercially reasonable efforts to minimize CUSTOMER’s Component Liability
by attempting to return Components to the Vendor

(g) Supplier Managed Inventory Program. CUSTOMER acknowledges that the concept
of “purchase commitments to a Vendor” (as used in Section 4.2(a) and elsewhere
in this Agreement) includes not only SANMINA-SCI purchase orders issued to
Vendors, but also forecasts (which are based on CUSTOMER’s Forecasts) provided
to Vendors in accordance with SANMINA-SCI’s Supplier Managed Inventory Program
(“SMI Program”). Under the SMI

 

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Program, SANMINA-SCI provides Vendors with forecasts of anticipated Component
requirements, and the Vendor is obligated to supply SANMINA-SCI with all
forecasted Components, but SANMINA-SCI does not issue Vendor a purchase order
until the Component is actually required by SANMINA-SCI for production. However,
under the SMI Program, SANMINA-SCI is obligated to either consume a sufficient
level of the forecasted Components or pay the Vendor for a certain level of
unused Components. For the purpose of this Agreement, CUSTOMER’s Component
Liability (pursuant to 4.2(f) above) shall include the cost of any Components
actually ordered from the Vendors based on CUSTOMER’s Forecast and in accordance
with the terms of this Agreement.

 

5. DELIVERY ACCEPTANCE; DELAYS

5.1 Delivery. , all product shipments originating from [***] (including
shipments made in accordance with Section 7 “Warranty”) shall be [***]. All
product shipments originating from [***] will be (a) [***], and (b) [***]..
[***]. . SANMINA-SCI shall mark, pack, package, crate, transport, ship and store
Product to ensure (a) delivery of the Product to its ultimate destination in
safe condition, (b) compliance with all requirements of the carrier and
destination authorities, and (c) compliance with any special instructions of
CUSTOMER. SANMINA-SCI shall notify CUSTOMER of any anticipated delays.

5.2 Acceptance. Customer shall have) [***] from date of receipt of the Product
to inspect and to accept the Products (“Acceptance Period”) In the event
Customer rejects the Product as defective, Customer shall have the option of
returning the Product [***] to its manufacturing facility for repair, or request
an advance replacement of the Product. In the event Customer requests an advance
replacement of the Product(s), Sanmina-SCI shall quickly provide replacement
Product to Customer within [***] of Customer’s request, excluding transit time
contingent upon Sanmina-SCI having replacement Product in finished Product
inventory. [***]. Notwithstanding anything to the contrary, Product shall be
deemed accepted if not rejected within the Acceptance Period. Once a Product is
accepted, all Product returns shall be handled in accordance with Section 7
Warranty. Prior to returning any rejected Product, CUSTOMER shall obtain an
Authorized Return Material (“RMA”) number from SANMINA-SCI, and shall return
such Product in accordance with SANMINA-SCI’s instructions; CUSTOMER shall
specify the reason for such rejection in all RMA’s. In the event a Product is
rejected, SANMINA-SCI shall have a reasonable opportunity to cure any defect
which led to such rejection.

 

6. CHANGES

6.1 General. CUSTOMER may upon sufficient notice make changes within the general
scope of this Agreement. Such changes may include, but are not limited to
changes in (1) drawings, plans, designs, procedures, Specifications, test
specifications or bill of material (“BOM”), (2) methods of packaging and
shipment, (3) quantities of Product to be furnished, (4) delivery schedule, or
(5) Customer-Furnished Items. All changes other than changes in quantity of
Products to be furnished shall be requested pursuant to an Engineering Change
Notice (“ECN”) and finalized in an Engineering Change Order (“ECO”). If any such
change causes either an increase or decrease in SANMINA-SCI’s cost or the time
required for performance of any part of the work under this Agreement (whether
changed or not changed by any ECO) the Prices and/or delivery schedules shall be
mutually agreed upon and adjusted in a manner which would adequately compensate
the Parties for such change.

6.2 ECN’s. SANMINA-SCI will respond to two (2) ECN request per month per product
family type without a non-recurring administrative fee; responses to additional
ECN’s will incur an administrative fee mutually agreed to between both Parties.
Within five (5) business days after an ECN is received, SANMINA-SCI shall advise
CUSTOMER in writing (a) of any

 

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change in Prices or delivery schedules resulting from the ECN and (b) the
Delivered Cost of any Finished Product, Work-in-Process or Component rendered
excess or obsolete as a result of the ECN (collectively the “ECN Charge”).
Unless otherwise stated, ECN Charges are valid from thirty (30) days from the
date of the ECN Charge.

6.3 ECO’s. In the event CUSTOMER desires to proceed with the change after
receiving the ECN Charge pursuant to Section 6.2, CUSTOMER shall advise
SANMINA-SCI in writing and shall pay the portion of the ECN Charge set forth in
Section 6.2(b) thirty (30) days from date of receipt of invoice. In the event
CUSTOMER does not desire to proceed with the Change after receiving the ECN
Charge, it shall so notify SANMINA-SCI. In the event SANMINA-SCI does not
receive written confirmation of CUSTOMER’s desire to proceed with the change
within thirty (30) days after SANMINA-SCI provides CUSTOMER with the ECN Charge,
the ECN shall be deemed cancelled.

 

7. WARRANTY

7.1 SANMINA-SCI Warranty. SANMINA-SCI warrants that, for a period of [***], the
Product will be free from defects in workmanship and shall strictly conform to
the manufacturing requirements contained in Customer’s Specifications, including
but not limited to industry standard IPC-A-600 or IPC-A-610, Class II.
SANMINA-SCI shall, at its option and at its expense (and as CUSTOMER’s sole and
exclusive remedy for breach of any warranty), [***]. In addition, SANMINA-SCI
will pass on to CUSTOMER all Vendors’ (and manufacturers’) Component warranties
to the extent that they are transferable, as well as manage such warranties, but
will not independently warrant any Components. All warranty obligations will
cease upon the earlier of the expiration of the warranty period set forth above
or the return (at CUSTOMER’s request) of any test equipment or test fixtures.
ALL CLAIMS FOR BREACH OF WARRANTY MUST BE RECEIVED BY SANMINA-SCI NO LATER THAN
[***] AFTER THE EXPIRATION OF THE WARRANTY PERIOD.

7.2 RMA Process. SANMINA-SCI shall concur in advance on all Products to be
returned for repair or rework. CUSTOMER shall obtain a RMA number from
SANMINA-SCI prior to return shipment. All returns shall state the specific
reason for such return, and will be processed in accordance with SANMINA-SCI’s
RMA process. [***]. Any repaired or replaced Product shall be warranted as set
forth in this Section for a period [***].

7.3 Exclusions from Warranty. This warranty does not include Products that have
defects or failures resulting from (a) CUSTOMER’s design of Products including,
design functionality failures, , failures relating to the functioning of
Products in the manner for the intended purpose or in the specific CUSTOMER’s
environment; (b) accident, disaster, neglect, abuse, or Customer’s negligent
actions such as misuse, improper handling, testing, storage or installation
including improper handling in accordance with static sensitive electronic
device handling requirements; (c) alterations, modifications or repairs by
CUSTOMER or third parties without SANMINA-SCI’s prior written approval or
(d) defective CUSTOMER-provided test equipment or test software.

7.4 Remedy. THE SOLE REMEDY UNDER THIS WARRANTY SHALL BE THE REPAIR, REPLACEMENT
OR CREDIT FOR DEFECTS AS STATED ABOVE. THIS WARRANTY IS THE SOLE WARRANTY GIVEN
BY SANMINA-SCI AND IS IN LIEU OF ANY OTHER WARRANTIES EITHER EXPRESS OR IMPLIED.
SANMINA-SCI DOES NOT MAKE ANY WARRANTIES REGARDING MERCHANTIBILITY,
NONINFRINGEMENT, (OR SIMILAR LEGISLATION), OR FITNESS FOR A PARTICULAR PURPOSE,
AND SPECIFICALLY DISCLAIMS ANY SUCH WARRANTY, EXPRESS OR IMPLIED.

 

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8. CUSTOMER FURNISHED EQUIPMENT AND COMPONENTS

8.1 Customer-Furnished Items. CUSTOMER shall provide SANMINA-SCI with the
Product design and related specifications, applicable regulatory requirements,
equipment, tooling, Components or documentation set forth in Exhibit C
(collectively the “Customer-Furnished Items”). CUSTOMER shall deliver the
Customer-Furnished Items to SANMINA-SCI in a timely manner. Documentation
(including BOM’s, drawings and artwork) shall be current and complete and maybe
updated by Customer from time to time.

8.2 Care of Customer-Furnished Items. All Customer-Furnished Items shall remain
the property of CUSTOMER. However, while in SANMINA_SCI’s custody and control,
any and all such Customer Furnished Items will be covered under a broad form
property insurance policy, a warehouseman’s liability policy and marine cargo
policy in amounts to cover full replacement cost. SANMINA-SCI shall clearly
identify all Customer-Furnished Items by an appropriate tag and shall utilize
such Customer-Furnished Items solely in connection with the manufacture of
CUSTOMER’s Product. SANMINA-SCI agrees that it will not pledge, encumber, use
the Customer-Furnished Items as collateral, or permit any liens to be attached
to the Customer-Furnished Items or use the Customer-Furnished Items for any such
purposes without the written consent of Customer. SANMINA-SCI shall not make or
allow modifications to be made to Customer-Furnished Items without CUSTOMER’s
prior written consent. SANMINA-SCI shall be responsible for reasonable diligence
and care in the use and protection of any Customer-Furnished Items and routine
maintenance of any Customer-Furnished equipment, but shall not be responsible
for repairs or replacements (including servicing and calibration to the
equipment) unless such failure was caused by SANMINA-SCI’s negligence or willful
misconduct. All Customer-Furnished Items shall be returned to CUSTOMER at
CUSTOMER’s expense upon request. SANMINA-SCI’s production and warranty
obligations which require the utilization of the returned Customer-Furnished
Items will cease upon SANMINA-SCI’s fulfillment of CUSTOMER’s request.

8.3 Customer-Furnished Components. Customer-furnished Components shall be
handled in accordance with the applicable SANMINA-SCI manufacturing facility’s
procedures regarding Customer-Furnished Material.

 

9. INDEMNIFICATION AND LIMITATION OF LIABILITY

9.1 SANMINA-SCI’s Indemnification. SANMINA-SCI shall indemnify, defend, and hold
CUSTOMER and CUSTOMER’s affiliates, shareholders, directors, officers,
employees, contractors, agents and other representatives (the
“Customer-Indemnified Parties”) harmless from all third party demands, claims,
actions, causes of action, proceedings, suits, assessments, losses, damages,
liabilities, settlements, judgments, fines, penalties, interest, costs and
expenses (including reasonable fees and disbursements of counsel) of every kind
(each a “Claim,” and, collectively “Claims”) (i) based upon personal injury or
death or injury to property (other than damage to the Product itself, which is
handled in accordance with Section 7 “Warranty”) to the extent any of the
foregoing is caused by the negligent or willful acts or omissions of SANMINA-SCI
or its officers, employees, subcontractors or agents, and/or (ii) arising from
or relating to any actual or alleged infringement or misappropriation of any
patent, trademark, mask work, copyright, trade secret, or any actual or alleged
violation of any other intellectual property rights arising from or in
connection with SANMINA-SCI’s manufacturing processes.

9.2 CUSTOMER’s Indemnification. CUSTOMER shall indemnify, defend, and hold
SANMINA-SCI and SANMINA-SCI’s affiliates, shareholders, directors, officers,
employees, contractors, agents and other representatives (the
“SANMINA-SCI-Indemnified Parties”) harmless from all third party Claims
(i) based upon personal injury or death or injury to property to the extent any
of the foregoing is caused by a defective Product, by the negligent or willful
acts or omissions of CUSTOMER or its officers, employees, subcontractors or
agents (except as otherwise result from SANMINA-SCI’s manufacturing processes),
and/or (ii) arising from or relating to any actual or alleged infringement or
misappropriation of any patent, trademark, mask

 

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work, copyright, trade secret or any actual or alleged violation of any other
intellectual property rights arising from or in connection with the Customer’s
designs or Specifications of the Products, except to the extent that
infringement occurs as a result of SANMINA-SCI’s manufacturing processes.

9.3 Procedure. A Party entitled to indemnification pursuant to this Section (the
“Indemnitee”) shall promptly notify the other Party (the “Indemnitor”) in
writing of any Claims covered by this indemnity. Promptly after receipt of such
notice, the Indemnitor shall assume the defense of such Claim with counsel
reasonably satisfactory to the Indemnitee. If the Indemnitor fails, within a
reasonable time after receipt of such notice, to assume the defense with counsel
or, if a direct or indirect conflict of interest exists between the Parties with
respect to the Claim, the Indemnitee shall have the right to undertake the
defense of such Claims, provided however that the Indemnitee shall have no right
to compromise and settlement such Claim for the account and at the expense of
the Indemnitor. If the Claim is one of multiple claims in a lawsuit against
Indemnitee, some of which claims may not be subject to the indemnity obligation
of the Indemnitor, Indemnitee may, at its sole discretion, elect to solely
control the defense, settlement, adjustment or compromise of those claims for
which is not subject to the Indemnitor’s indemnity obligations under this
Section 9, in which event the Indemnitor agrees to cooperate with Indemnitee’s
sole control and provide any assistance as may be reasonably necessary for the
defense, settlement, adjustment or compromise of any such controversy or
proceedings. Notwithstanding the foregoing, if the Indemnitee in its sole
judgment so elects, the Indemnitee may also participate in the defense of such
action by employing counsel at its expense, without waiving the Indemnitor’s
obligation to indemnify and defend. The Indemnitor shall not compromise any
Claim (or portions thereof) or consent to the entry of any judgment without an
unconditional release of all liability of the Indemnitee as to each claimant or
plaintiff.

9.4 Limitation of Liability. EXCEPT FOR BREACHES OF CONFIDENTIALITY OBLIGATIONS
AND EXCEPT FOR AMOUNTS PAYABLE PURSUANT TO THE PARTY’S INDEMNIFICATION
OBLIGATIONS HEREOF, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR
ANY INDIRECT, CONSEQUENTIAL, INCIDENTAL, PUNITIVE OR SPECIAL DAMAGES, OR ANY
DAMAGES WHATSOEVER RESULTING FROM LOSS OF USE, DATA OR PROFITS, EVEN IF SUCH
OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. FOR THE PURPOSE
OF THIS SECTION, BOTH LOST PROFITS AND DAMAGES RESULTING FROM VALUE ADDED TO THE
PRODUCT BY CUSTOMER SHALL BE CONSIDERED CONSEQUENTIAL DAMAGES. EXCEPT FOR
BREACHES OF CONFIDENTIALITY OBLIGATIONS AND EXCEPT FOR AMOUNTS PAYABLE PURSUANT
TO THE PARTY’S INDEMNIFICATION OBLIGATIONS HEREOF, IN NO EVENT SHALL EITHER
PARTY’S LIABILITY FOR ALL CLAIMS ARISING OUT OF OR RELATING TO THIS AGREEMENT
EXCEED THE GREATER OF EITHER $[***] or [***]. THESE LIMITATIONS SHALL APPLY
NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY.
Notwithstanding the foregoing, the provisions of this Section shall not apply to
limit (i) Customer’s obligation for termination payments in accordance with
section 10 (ii). THE LIMITATIONS SET FORTH IN THIS SECTION SHALL APPLY WHERE THE
DAMAGES ARISE OUT OF OR RELATE TO THIS AGREEMENT.

 

10. TERMINATION

10.1 Termination for Cause. Either Party may terminate this Agreement or an
Order hereunder for default if the other Party materially breaches this
Agreement; provided, however, no termination right shall accrue until thirty
(30) days after the defaulting Party is notified in writing of the material
breach and has failed to cure or give adequate assurances of performance within
the thirty (30) day period after notice of material breach.

10.2 Termination for Convenience. Subject to Section 10.4, CUSTOMER may
terminate this Agreement or an order hereunder for any reason upon thirty
(30) days’ prior

 

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written notice. Subject to Section 10.4, SANMINA-SCI may terminate this
Agreement for any reason upon sixty (60) days’ notice, provided, however, that
after such termination of the Agreement, SANMINA-SCI shall continue to provide
product to the Customer for a period mutually agreed to by both parties as may
be needed to meet Customer’s contractual commitments with its customers.

10.3 Termination by Operation of Law. This Agreement shall terminate should
either Party (a) become insolvent; (b) enter into or file a petition,
arraignment or proceeding seeking an order for relief under the bankruptcy laws
of its respective jurisdiction and such actions are not dismissed with thirty
(30) days; (c) enter into a receivership of any of its assets and such actions
are not dismissed within thirty (30) days or (d) enter into a dissolution or
liquidation of its assets or an assignment for the benefit of its creditors and
such actions are not dismissed within thirty (30) days.

10.4 Consequences of Termination.

a. Termination for Reasons other than SANMINA-SCI’s Breach. In the event this
Agreement or an Order hereunder is terminated for any reason other than a breach
by SANMINA-SCI (including but not limited to a force majeure or termination for
convenience), CUSTOMER shall pay SANMINA-SCI, termination charges equal to
(1) [***]; (2) [***]; and (3) [***]. The foregoing statement of states the
entire Liability of Customer and SANMINA-SCI’s sole remedy for termination for
convenience by Customer or SANMINA-SCI. In no event shall Customer’s liability
or any cancellation or termination of an Order(s) or the Agreement exceed the
price of the Order(s) cancelled hereof.

b. Termination Resulting from SANMINA-SCI’s Breach. In the event CUSTOMER
terminates this Agreement or any Order hereunder as a result of a breach by
SANMINA-SCI, CUSTOMER shall pay SANMINA-SCI, termination charges equal to
(1) [***]; (2) [***]; and (3) [***]. In no event shall Customer’s payment to
SANMINA-SCI’s under this section 10.4(b) constitute a waver by Customer of any
kind to enforce any of the provisions of this Agreement or pursue any rights,
remedies or options available at law, equity or otherwise.

 

11. QUALITY

11.1 Specifications. Product shall be manufactured by SANMINA-SCI in accordance
with the Specifications and industry standard IPC-A-600 or IPC-A-610, as
modified via written ECO’s in accordance with this Agreement. Neither Party
shall make any change to the Specifications, to any Inventory described therein,
or to the Products (including, without limitation, changes in form, fit,
function, design, appearance or place of manufacture of the Products or changes
which would affect the reliability of any of the Products) unless such change is
made in accordance with Section 6.1. Notwithstanding the foregoing, SANMINA-SCI
shall be permitted to make changes in its manufacturing process at any time, so
long as such changes do not affect the form, fit, or function of the Products.

11.2 Content of Specifications. The Specifications shall include, but shall not
be limited to (i) detailed electrical, mechanical, performance and appearance
specifications for each model of Product, (ii) the BOM; (iii) tooling
specifications, along with a detailed description of the operation thereof,
(iv) art work drawings, (v) Component specifications, (vi) Vendor cross
references.

11.3 Components. SANMINA-SCI shall use in its production of Products such
Components of a type, quality, and grade specified by CUSTOMER to the extent
CUSTOMER chooses to so specify, and shall purchase Components only from Vendors
appearing on CUSTOMER’s approved vendor list (“AVL”); provided, however, that in
the event SANMINA-SCI cannot purchase a Component from a Vendor on CUSTOMER’s
AVL for any reason, SANMINA-SCI shall be able to purchase such Component from an
alternate Vendor, subject to CUSTOMER’s prior written approval, which approval
shall not be unreasonably withheld or

 

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delayed. SANMINA-SCI shall use commercially reasonable efforts to manage all
Vendors, but shall not be responsible for any Component (including the failure
of any Component to comply with the Specifications). SANMINA-SCI shall pass
through Component warranties to the extent that they are transferable, as well
as manage such warranties, as further specified in Section 7 above.

11.4 Quality Specifications. SANMINA-SCI shall comply with the quality
specifications set forth in its Quality Manual, incorporated by reference
herein, a copy of which is available from SANMINA-SCI upon request.

11.5 SANMINA-SCI agrees (i) to properly inspect and test all Components and
Product(s) to ensure that they meet the Specifications and any other mutually
agreed quality requirements prior to delivery to Customer; (ii) to maintain
inspection and test records of the Components and Product, including without
limitation, out-going quality level of the Product(s), and (iii) to provide to
Customer for review all inspection and testing data and records upon Customer’s
request.

11.6 Inspection of Facility. Upon reasonable advance written notice and, upon
SANMINA-SCI’s request the execution of an appropriate nondisclosure agreement,
CUSTOMER and its representatives, including Customer’s insurance carrier, may
inspect any SANMINA-SCI facility and the Products and Components held by
SANMINA-SCI for CUSTOMER at SANMINA-SCI’s facilities during SANMINA-SCI’s
regular business hours, provided that such inspection does not unduly affect
SANMINA-SCI’s operations. CUSTOMER and its representatives shall observe all
security and handling measures of SANMINA-SCI while on SANMINA-SCI’s premises.
CUSTOMER and its representatives acknowledge that their presence on
SANMINA-SCI’s property is at their sole risk. Customer’s inspection of the
Products and Components at SANMINA-SCI’s facility shall in no way be considered
Customer’s acceptance of such Products or Components nor a waiver of Customer’s
right to do later perform incoming inspection of the Products or Components.

 

12. FORCE MAJEURE

12.1 Force Majeure Event. For purposes of this Agreement, a “Force Majeure
Event” shall mean the occurrence of unforeseen circumstances beyond a Party’s
control and without such Party’s negligence or intentional misconduct,
including, but not limited to, any act by any governmental authority, act of
war, natural disaster, strike, boycott, embargo, shortage, riot, lockout, labor
dispute, civil commotion.

12.2 Notice of Force Majeure Event. Neither Party shall be responsible for any
failure to perform due to a Force Majeure Event provided that such Party gives
notice to the other Party of the Force Majeure Event as soon as reasonably
practicable, but not later than five (5) days after the date on which such Party
knew or should reasonably have known of the commencement of the Force Majeure
Event, specifying the nature and particulars thereof and the expected duration
thereof; provided, however, that the failure of a Party to give notice of a
Force Majeure Event shall not prevent such Party from relying on this Section
except to the extent that the other Party has been prejudiced thereby.

12.3 Termination of Force Majeure Event. The Party claiming a Force Majeure
Event shall use reasonable efforts to mitigate the effect of any such Force
Majeure Event and to cooperate to develop and implement a plan of remedial and
reasonable alternative measure to remove the Force Majeure Event; provided,
however, that neither Party shall be required under this provision to settle any
strike or other labor dispute on terms it considers to be unfavorable to it.
Upon the cessation of the Force Majeure Event, the Party affected thereby shall
immediately notify the other Party of such fact, and use its best efforts to
resume normal performance of its obligations under the Agreement as soon as
possible.

 

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12.4 Limitations. Notwithstanding that a Force Majeure Event otherwise exists,
the provisions of this Section shall not excuse (i) any obligation of either
Party, including the obligation to pay money in a timely manner for Product
actually delivered or other liabilities actually incurred, that arose before the
occurrence of the Force Majeure Event causing the suspension of performance; or
(ii) any late delivery of Product, equipment, materials, supplies, tools, or
other items caused solely by negligent acts or omissions on the part of such
Party.

 

13. CONFIDENTIALITY AND NON-SOLICITATION OF EMPLOYEES

13.1 Definitions. For the purpose of this Agreement,

(a) “Confidential Information” may include but is not limited to information (in
any form or media) regarding a Party’s customers, prospective customers
(including lists of customers and prospective customers), methods of operation,
engineering methods and processes (include, but not limited to manufacturing
processes or any information which may be obtained by a Party by reverse
engineering, decompiling or examining any software or hardware provided by the
other Party under this Agreement), programs and databases, patents and designs,
billing rates, billing procedures, vendors and suppliers, business methods,
finances, management, or any other business information relating to such Party
(whether constituting a trade secret or proprietary or otherwise) which has
value to such Party and is treated by such Party as being confidential;
provided, however, that Confidential Information does not include information
that (i) is known to the other Party without any restriction on use or
disclosure or without any obligation of confidentiality prior to receipt from
the Disclosing Party hereunder, which knowledge shall be evidenced by written
records, (ii) is independently developed without use or reference to any
Confidential Information, as evidenced by written records, (iii) is or becomes
in the public domain through no breach of this Agreement, or (iv) is received
from a third party without breach of any obligation of confidentiality as
evidenced by written records. Confidential Information shall also include
information obtained or ascertained by Receiving Party as a result of any visit
to any facility occupied by Disclosing Party or by third party which the
Disclosing Party has a contractual, legal or fiduciary obligation of
confidentiality to said party, whether or not protectible by patent, copyright
or other laws

(b) “Person” shall mean and include any individual, partnership, association,
corporation, trust, unincorporated organization, limited liability company or
any other business entity or enterprise.

(c) “Representative” shall mean a Party’s employees, agents, or representatives,
including, without limitation, financial advisors, lawyers, accountants,
experts, and consultants.

13.2 Nondisclosure Covenants.

(a) In connection with this Agreement, each Party (the “Disclosing Party”) may
furnish to the other Party (the “Receiving Party”) or its Representatives
certain Confidential Information. For the term of this Agreement and for a
period of five (5) years from the date of the termination of this Agreement, the
Receiving Party (a) shall maintain as confidential all Confidential Information
disclosed to it by the Disclosing Party, (b) shall not, directly or indirectly,
disclose any such Confidential Information to any Person other than (i) those
Representatives of the Receiving Party whose duties justify the need to know
such Confidential Information and then only after each Representative has agreed
to be bound by this Confidentiality Agreement and clearly understands his or her
obligation to protect the confidentiality of such Confidential Information and
to restrict the use of such Confidential Information or (ii) if SANMINA-SCI is
the Receiving Party, a third party Vendor for the purpose of obtaining price
quotations, provided that SANMINA-SCI shall cause the Vendor to agree to this
Confidentiality Agreement and protect the confidentiality of such Confidential
Information and to restrict the use of such Confidential Information, and
(c) shall treat such Confidential Information with the same degree of care as it
treats its own Confidential Information (but in no case with less than a
reasonable degree of care).

 

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(b) The disclosure of any Confidential Information is solely for the purpose of
enabling each Party to perform under this Agreement, and the Receiving Party
shall not use any Confidential Information disclosed by the Disclosing Party for
any other purpose.

(c) Except as otherwise set forth in this Agreement, all Confidential
Information supplied by the Disclosing Party shall remain the property of the
Disclosing Party, and will be promptly returned by the Receiving Party upon
receipt of written request therefore.

(d) If the Receiving Party or its Representative is requested or becomes legally
compelled to disclose any of the Confidential Information, it will provide the
Disclosing Party with prompt written notice. If a protective order or other
remedy is not obtained, then only that part of the Confidential Information that
is legally required to be furnished will be furnished, and reasonable efforts
will be made to obtain reliable assurances of confidentiality.

13.3 Non-Solicitation of Employees. During the term of this Agreement and for a
period of two (2) years thereafter, neither Party shall directly or indirectly
solicit, recruit or hire (or attempt to solicit, recruit or hire) any of the
other Party’s employees; provided, however, that this shall not prohibit a Party
from (a) advertising for open positions provided that such advertisements are
not targeted solely at the employees of the other Party; (b) or employing any
individual who initiates contact with such Party on his or her own initiative,
whether in response to an advertisement or otherwise.

13.4 Injunctive Relief Authorized. Any material breach of this Section by a
Party or its Representatives may cause irreparable injury and the non-breaching
Party may be entitled to equitable relief, including injunctive relief and
specific performance, in the event of a breach. The above will not be construed
to limit the remedies available to a Party. In addition, the prevailing Party
will be entitled to be reimbursed for all of its reasonable attorneys’ fees and
expenses at all levels of proceedings and for investigations, from the
non-prevailing Party.

13.5 No Publicity. Each Party agrees not to publicize or disclose the existence
or terms of this Agreement to any third party without the prior consent of the
other Party except as required by law (in which case, the Party seeking to
disclose the information shall give reasonable notice to the other Party of its
intent to make such a disclosure). Neither Party shall make any press release or
similar public statement without the prior consent of the other Party.

 

14. INSURANCE

Without in anyway limiting SANMINA-SCI’s indemnification obligations,
SANMINA-SCI agrees to maintain during the term of this Agreement (a) workers’
compensation insurance as prescribed by the law of the nation, state, territory
or providence in which SANMINA-SCI’s services are performed; (b) employer’s
liability insurance with limits of at least $500,000 per occurrence;
(c) commercial automobile liability insurance if the use of motor vehicles is
required in the performance of this contract, with limits of at least $1,000,000
for bodily injury and property damage for each occurrence; (d) commercial
general liability insurance, including blanket contractual liability and broad
form property damage, with limits of not less than $1,000,000 combined single
limit for personal injury and property damage for each occurrence; and
(e) commercial general liability insurance endorsed to include products
liability and completed operations coverage with limits not less than $1,000,000
for each occurrence; (f) errors and omissions insurance covering its acts,
errors and omissions in connection with the services provided under this
Agreement, with limits of not less than $500,000 per occurrence or per claim and
$1,000,000 in the annual aggregate; (g) warehouseman’s liability policy to cover
the full value of products held on behalf of CUSTOMER; and (h) Cargo-Marine
insurance policy to cover the full value and risk `of all

 

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shipments to CUSTOMER SANMINA-SCI shall furnish to CUSTOMER upon request
certificates or evidence of the foregoing insurance indicating the amount and
nature of such coverage and the expiration date of each policy. CUSTOMER’S
receipt or review of such certificates or evidence of insurance shall not
relieve SANMINA-SCI of its obligations to maintain insurance policies as
outlined herein. Each Party agrees that it, its insurer(s) and anyone claiming
by, through, under or in its behalf shall have no claim, right of action or
right of subrogation against the other Party and the other Party’s affiliates,
directors, officers, employees and customers based on any loss or liability
insured against under the insurance required by this Agreement.

 

15. BUSINESS CONTINUITY PLAN

SANMINA-SCI shall have in place a business continuity plan, as regularly updated
as required, that will ensure that SANMINA-SCI is able to perform under the
Agreement and to continue to provide Products and services to Customer when the
manufacture or delivery of Products is interrupted for any reason outside of
SANMINA-SCI’s reasonable control (“BCP”). Upon Customer’s request, SANMINA-SCI
will provide and a copy of the BCP plan to Customer for review.

 

16. MISCELLANEOUS

16.1 Integration Clause. This Agreement (including the Exhibits and Schedules to
this Agreement) constitutes the entire agreement of the Parties, superseding all
previous Agreements covering the subject matter. This Agreement shall not be
changed or modified except by written agreement, specifically amending,
modifying and changing this Agreement, signed by SANMINA-SCI and an authorized
representative of the CUSTOMER.

16.2 Order of Precedence. All quotations, Orders, acknowledgments and invoices
issued pursuant to this Agreement are issued for convenience of the Parties only
and shall be subject to the provisions of this Agreement and the Exhibits
hereto. When interpreting this Agreement, precedence shall be given to the
respective parts in the following descending order: (a) this Agreement;
(b) Schedules and Exhibits to this Agreement; and (c) if Orders are used to
release product, those portions of the Order that are not pre-printed and which
are accepted by SANMINA-SCI. The Parties acknowledge that (y) the preprinted
provisions on the reverse side of any such quotation, Order, acknowledgment or
invoice and (z) all terms other than the specific terms set forth in
Section 4.1(a)(i)-(iv) shall be deemed deleted and of no effect whatsoever. No
modification to this Agreement, the Exhibits or any Order shall be valid without
the prior written consent of the Purchase Agreement Coordinators of SANMINA-SCI
and CUSTOMER.

16.3 Assignment. Neither this Agreement nor any rights or obligations hereunder
shall be transferred or assigned by either Party without the written consent of
the other Party, which consent shall not be unreasonably withheld or delayed.
This Agreement (a) may be assigned in whole or in part by either Party to any
Affiliate of such Party provided that such Party remains secondarily liable
under this Agreement and (b) may be assigned by Customer to a successor in
interest upon any reorganization, change of control, merger, acquisition, or
sale of all or substantially all of the assets of the assigning party.
Notwithstanding the foregoing, either Party may assign its right to payment to a
third party without the need for consent from the other Party.

 

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16.4 Notices. Wherever one Party is required or permitted or required to give
written notice to the other under this Agreement, such notice will be given by
hand, by certified U.S. mail, return receipt requested, by overnight courier, or
by fax and addressed as follows:

 

If to CUSTOMER:    with a copy to: Symmetricom, Inc.    Symmetricom, Inc. 2300
Orchard Parkway,    2300 Orchard Parkway San Jose, CA 95131    San Jose, CA
95131 Attn: VP – Supply Chain    Attn: Legal Fax: 408-428-    If to SANMINA-SCI:
   with a copy to: SANMINA-SCI Corporation    SANMINA-SCI Corporation 2700 N.
First Street    2700 N. First Street San Jose, California 95134    San Jose,
California 95134 Att’n: EVP, Sales    Att’n: Vice President & Corporate Counsel
Phone: (408) 964-3600    Phone: (408) 964-3600 Fax: (408) 964-3636    Fax: (408)
964-3636

All such notices shall be effective upon receipt. Either Party may designate a
different notice address from time to time upon giving ten (10) days’ prior
written notice thereof to the other Party.

16.5 Disputes/Choice of Law/Attorneys Fees. The Parties shall attempt to resolve
any disputes between them arising out of this Agreement through good faith
negotiations. In the event the Parties cannot resolve a dispute, the Parties
acknowledge and agree that the state courts of Santa Clara County, California
and the federal courts located in the Northern District of the State of
California shall have exclusive jurisdiction and venue to adjudicate any and all
disputes arising out of or in connection with this Agreement. The Parties
consent to the exercise by such courts of personal jurisdiction over them and
each Party waives any objection it might otherwise have to venue, personal
jurisdiction, inconvenience of forum, and any similar or related doctrine. This
Agreement shall be construed in accordance with the substantive laws of the
State of California (excluding its conflicts of laws principles). The provisions
of the United Nations Conventions on Contracts for the International Sale of
Goods shall not apply to this Agreement. The prevailing Party shall be entitled
to recover its costs and reasonable attorney’s fees from the non-prevailing
Party in any action brought to enforce this Agreement.

 

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the Effective Date, by their officers, duly authorized.

 

SANMINA-SCI CORPORATION     CUSTOMER By:  

/s/    George Korson        

    By:  

/s/    Gregory P. Ruebusch        

  Signature       Signature  

George Korson

     

Gregory P. Ruebusch

  Typed Name       Typed Name  

Vice President

     

EVP Operations

  Title       Title  

March 30, 2010

     

March 22, 2010

  Date       Date

 

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INDEX

1. TERM

2. PRICING

3. PAYMENT TERMS

4. PURCHASE ORDERS/ FORECAST/ RESCHEDULE

5. DELIVERY AND ACCEPTANCE

6. CHANGES

7. WARRANTY

8. CUSTOMER FURNISHED EQUIPMENT AND COMPONENTS

9. INDEMNIFICATION AND LIMITATION OF LIABILITY

10. TERMINATION

11. QUALITY

12. FORCE MAJEURE

13. CONFIDENTIALITY AND NON-SOLICITATION OF EMPLOYEES

14. INSURANCE

15. MISCELLANEOUS

EXHIBITS

A. PRICES

B. LONG LEAD-TIME COMPONENTS

C. CUSTOMER FURNISHED EQUIPMENT, COMPONENTS AND DOCUMENTATION

 

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EXHIBIT A

PRICING

 

Product    Quantity    Price    [***]   

 

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Securities and Exchange Commission.

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EXHIBIT B

LONG LEAD-TIME COMPONENTS

[***]

 

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separately with the Securities and Exchange Commission.

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EXHIBIT C

CUSTOMER FURNISHED EQUIPMENT, COMPONENTS, AND DOCUMENTATION

[***]

 

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and Documentation have been omitted and filed separately with the Securities and
Exchange Commission.

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Prepaid Program

Addendum 1 to the Manufacturing Service Agreement

Between

Sanmina-SCI and Symmetricom, Inc.

This Addendum 1 (“Addendum”) is made and entered into on September 19, 2009,
between Sanmina-SCI Corporation, on behalf of itself and its affiliates and
subsidiaries (“Company”) and Symmetricom, Inc., on behalf of itself and its
affiliates and subsidiaries (“Customer”). This Addendum is subject to the terms
and conditions of the “Letter of Agreement” dated June 30, 2008, as superseded
by the “Manufacturing Services Agreement”, between Company and Customer, dated
September     , 2009 (collectively, the “MSA”), except in the event of a
conflict between the terms and conditions of this Addendum and the terms of the
MSA, the terms of this Addendum shall control.

 

I. Definition of Terms:

Excess Inventory: Inventory that Company has on hand which has been ordered,
manufactured or acquired in support of Customer requirements, and is deemed to
be excess in accordance with the terms set forth in the MSA.

Obsolete Inventory: Inventory that Company has on hand, which has been ordered,
manufactured, or acquired in support of Customer requirements, and is deemed to
be obsolete in accordance with the terms set forth in the MSA.

Prepaid Inventory: Inventory that is held by Company for Customer under this
prepaid program.

Company Inventory: Inventory bought and owned by Company in support of Customer
Requirements as set forth in the MSA.

Customer Inventory: Inventory that has been bought and is owned by Customer, and
resides in Customer’s facility/control.

 

II. Purpose:

This Amendment sets forth the terms for the Customer Prepaid Program, which
enables two types of pre-paid inventory processes as follows:

 

  a. Prepaid Inventory process for Company Inventory, as further set forth in
Section III below.

 

  b. Prepaid Inventory process for Customer Inventory, as further set forth in
Section IV below.

 

CONFIDENTIAL – May not be disclosed outside of Sanmina-SCI and Symmetricom,
Inc., except with the prior written consent of the contracting parties

[***] Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission

Page 1 of 4

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III. Prepaid Inventory Process for Company Inventory:

Within [***] upon completion of the Excess and Obsolete Inventory review process
as defined in the terms of the MSA, and the parties have determined that the
Excess and Obsolete Inventory is to be moved into Prepaid Inventory (hereafter
“Mutually Agreed Excess”), the parties will:

 

  1. Compare the prior quarter’s Prepaid Inventory reserve account with the new
Mutually Agreed Excess amount.

 

  2. If the new Mutually Agreed Excess amount is greater than the Prepaid
Inventory reserve account, then Customer shall, within [***], pay the difference
between the Mutually Agreed Excess amount and the Prepaid Inventory amount to
Company, who shall credit the Prepaid Price (Defined in Section IV, below) to
the Prepaid Inventory reserve account.

 

  3. If the new Mutually Agreed Excess amount is less than the Prepaid Inventory
reserve account, then Company shall, within [***], refund the amount in
difference between these two to Customer.

 

IV. Prepaid Inventory Process for Customer Inventory:

When Customer Inventory has been identified by Customer as inventory that is to
be moved into the prepaid program, the following process is to be followed:

 

  1. Customer shall create a list of inventory to be transferred, from any
Customer facility to Company’s facility under the prepaid program.

 

  2. Customer and Company shall perform a joint audit of the Prepaid Inventory
to determine:

 

  a. Technical or commercial viability of the inventory

 

  b. Quantity

 

  c. Approved Manufacturers in accordance with Customer’s AML

 

  3. [***]

 

  4. Company shall then purchase the Prepaid Inventory by issuing a purchase
order (“PO”) to Customer for said inventory at [***] and hold the inventory in a
prepaid account for Customer’s benefits.

 

  5. Customer will at the same time issue a PO to Company for the agreed upon
amount of Prepaid Inventory.

 

  6. Upon receipt of the POs by Company and Customer, respectively, each party
shall send a corresponding invoice to the other party.

 

  7. Payment shall be made by each party concurrently to the other party’s
account no later than thirty (30) days from date of invoice.

 

  8. Title of the Prepaid Inventory shall remain with Company after payment is
received from the Customer, except that at all time the Prepaid Inventory shall
be held by Company for the benefit of Customer until used or consumed by
Customer or disposed of in accordance with the terms of this program.

 

CONFIDENTIAL – May not be disclosed outside of Sanmina-SCI and Symmetricom,
Inc., except with the prior written consent of the contracting parties

[***] Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission

Page 2 of 4

--------------------------------------------------------------------------------

V. Business Process:

 

  1. Company assumes risk of loss for all Prepaid Inventory held at a Company
facility.

 

  2. If Customer desires to purchase Excess Inventory from Company that is in
the prepaid program, Customer will issue a PO to Company for said inventory.

 

  3. Company shall maintain Prepaid Inventory in a “Net-able Inventory location
on Oracle and to use commercially reasonable effort to first use and consume the
inventory under this prepaid program to fulfill Customer’s orders and
requirements as set forth in the MSA prior to purchasing inventory from outside
suppliers. When any inventory is transferred from the prepaid program into
normal inventory for Customer’s requirements under the MSA, it will be
transacted at the Prepaid Price without any Company mark-up.

 

  4. The parties agree that Company may transfer the Prepaid Inventory, in whole
or in part, to other Company sites in order to produce Customer product without
Customer’s prior consent, except for Prepaid Inventory that is identified as
strategic inventory pursuant to paragraph 5 below.

 

  5. Prepaid Inventory that is identified as strategic inventory (end of life,
last time buy, proprietary to Customer, ITAR regulated) may not be transferred
to or used for any third party or for non-Customer usage without Customer’s
prior written consent.

 

  6. If Customer directs Company to dispose of any of the inventory in the
prepaid program, the Company will systematically scrap and physically scrap
identified inventory within the same accounting period per Customer’s direction.
Customer will issue a PO to Company for said inventory.

 

  7. Customer reserves the right, upon 30 days notice to perform a process audit
of Prepaid Inventory at Company’s facility.

 

  8. [***]

 

VI. Liens; Bankruptcy Proceeding:

 

  1. Company hereby acknowledges that the Prepaid Inventory identified under
this Addendum has been prepaid by Customer. Company agrees that it will not
pledge, encumber, use the Prepaid Inventory as collateral, or permit any liens
to be attached to the Prepaid Inventory or use the Prepaid Inventory for any
such purposes without the written consent of Customer. Company further agrees to
execute any other necessary document to further protect Customer’s interest in
the Inventory, including UCC-1 filing regarding the Prepaid Inventory

 

CONFIDENTIAL – May not be disclosed outside of Sanmina-SCI and Symmetricom,
Inc., except with the prior written consent of the contracting parties

[***] Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission

Page 3 of 4

--------------------------------------------------------------------------------

  2. In the event Company files a petition under the U.S. Bankruptcy Code or is
the subject of involuntary bankruptcy proceeding under such Code, the parties
hereby stipulate to the lifting of the automatic stay in effect and relief from
such stay.

IN WITNESS WHEREOF, the Parties hereto have caused this Addendum to be executed
as of the Effective Date, by their officers, duly authorized.

 

SANMINA-SCI CORPORATION     SYMMETRICOM, INC. By:  

/s/    Michael Sparacino        

    By:  

/s/    Justin Spencer        

  Signature       Signature  

Michael Sparacino

     

Justin Spencer

  Typed Name       Typed Name  

Vice-President

     

CFO

  Title       Title  

9/18/09

     

9/18/09

  Date       Date

 

CONFIDENTIAL – May not be disclosed outside of Sanmina-SCI and Symmetricom,
Inc., except with the prior written consent of the contracting parties

[***] Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission

Page 4 of 4

--------------------------------------------------------------------------------

Addendum 2 to the Letter of Agreement

Between

Sanmina-SCI and Symmetricom, Inc.

This Addendum 2 (“Addendum”) is made and entered into on April 2, 2010, between
Sanmina-SCI Corporation, on behalf of itself and its affiliates and subsidiaries
(“Company”) and Symmetricom, Inc., on behalf of itself and its affiliates and
subsidiaries (“Customer”). This Addendum is subject to the terms and conditions
of the Manufacturing Service Agreement (MSA) between Company and Customer, dated
March 12, 2010, except in the event of a conflict between the terms and
conditions of this Addendum and the terms of MSA, the terms of the Addendum
shall control.

 

I. Definition of terms:

Company: Refers to Sanmina-SCI Corporation

Customer: Refers to Symmetricom, Inc.

Company’s New Hampshire facility: refers to both Manchester and Derry locations
in New Hampshire.

Customer’s Puerto Rico facility: refers to Aguadilla manufacturing facility in
Puerto Rico.

Product and Services: [***]

Closing of Facility: This is accomplished when all manufacturing process and
products have been transferred and are actively being produced in New Hampshire.

 

II. Purpose:

This Addendum sets forth the terms and conditions for the transfer management
project which will result in the closing of the Customer’s Puerto Rico facility.
The products and services of the Customer’s manufacturing facility will be
transferred to the Company’s facility in New Hampshire. In consideration for the
management of this project, the Company shall be paid a transfer management fee
(the “Fee”) of [***] All costs claimed by Company are to be submitted to
Customer for review.

 

III Program Overview:

 

  1. On April 6, 2010 Customer will announce the closing of its manufacturing
facility in Puerto Rico to the public.

 

  2. On April 12, 2010 Company shall bring a transfer team to the Customer’s
manufacturing facility in Puerto Rico.

 

  3. The Company’s transfer team which will consist of manpower resources that
will reside in Puerto Rico and travel as needed to enable the transfer of
production from Puerto Rico to New Hampshire. This transfer team will consist of
employees of Company to cover the functional areas of responsibility matched
with functional responsibilities in Customer’s site in Puerto Rico.

 

  4. Functional areas are to include:

 

  a. [***]

 

  b. [***]

 

  i. [***]

 

  ii. [***]

 

[***] Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

--------------------------------------------------------------------------------

  iii. [***]

 

  iv. [***]

 

  v. [***]

 

  vi. [***]

 

  vii. [***]

 

  c. [***]

 

  d. [***]

 

  5. The transfer team is intended to learn the processes performed in Puerto
Rico and then transfer said product and processes to New Hampshire.

 

  6. Prior to transfer, Company will re-quote all assemblies using the
pre-agreed manufacturing rates for the New Hampshire site.

 

  7. The Company will be responsible for managing the transfer of Symmetricom
products currently manufactured at the Puerto Rico facility to Company’s New
Hampshire site. Customer will provide at least one Management representative on
site at all times to assist Company with decisions and oversight questions that
may arise. Any critical decisions would be mutually agreed to by both Company
and Customer, with final responsibility for decisions and oversight residing
with Customer.

 

  8. With the aid of and under the authority of Symmetricom employees and
outside resources the Company transfer team will use it best efforts to support
a consistent revenue flow during the transfer period while transferring product
from Puerto Rico to New Hampshire to meet Symmetricom customer product delivery
requests.

 

  9. As the transfer project progresses the Company will work with Customer
management and representatives to reduce the headcount at Customer’s plant and
use best efforts to identify areas where expenses can be reduced.

 

  10. All products and services are to be transferred to the Company’s facility
in New Hampshire no later than [***].

 

  11. At the conclusion of the [***] period all operations being performed in
Customer’s Puerto Rico facility will be actively performed to Customer’s quality
standards in Company’s facility in New Hampshire.

 

IV. Terms of Agreement:

 

  1. The Company’s Fee, will be paid by Symmetricom on a [***] basis.

 

  2. The Fee shall be paid in equal installments at [***] The first [***]
installment is to be paid on [***].

 

  3. [***], shall be withheld by Customer until project completion. Any Fee
amounts below or in excess of [***] will be settled upon completion of the
project.

 

  4. The transfer of manufacturing equipment, inventory, and other items to be
used in the manufacture of Symmetricom product by Company at Company’s New
Hampshire site shall be paid by [***].

 

  5. [***] shall be administered and paid by Symmetricom.

 

V. Dispute Resolution

Prior to initiating any legal proceeding, the parties shall attempt in good
faith to resolve any dispute arising out of or relating to this Program promptly
by negotiation between executives who have authority to settle the controversy
and who are at a higher level of management than the persons with direct
responsibility for administration of this Program within thirty (30) days from
date of receipt notice to enter into negotiation or a longer time as mutually
agreed to by the parties. All communications and negotiations pursuant to this
clause are confidential and shall be treated as compromise and settlement
negotiations and shall be protected by the applicable rules of evidence.

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the Effective Date, by their officers, duly authorized.

 

[***] Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

--------------------------------------------------------------------------------

SANMINA-SCI CORPORATION     SYMMETRICOM, INC. By:  

/s/    Frank Morrone        

    By:  

/s/    Justin Spencer        

  Signature       Signature  

Frank Morrone

     

Justin Spencer

  Typed Name       Typed Name  

Exec. Vice Pres.

     

Chief Financial Officer

  Title       Title  

April 2, 2010

     

April 2, 2010

  Date       Date

 

[***] Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

--------------------------------------------------------------------------------

Amendment 1 to Addendum 2 to the Agreement

Between

Sanmina-SCI and Symmetricom, Inc.

This Amendment 1 (“Amendment”) is made by and between Sanmina-SCI Corporation,
on behalf of itself and its affiliates and subsidiaries (“Company”) and
Symmetricom, Inc., on behalf of itself and its affiliates and subsidiaries
(“Customer”).

Whereas, Company and Customer entered into a Manufacturing Service Agreement
(MSA) dated March 12, 2010;

Whereas, Company and Customer entered into Addendum 1, dated September 19, 2009,
to add Prepaid Inventory Program ordering process and inventory management to
the MSA;

Whereas, Company and Customer entered into Addendum 2, dated April 2, 2010, to
add transition project management services to be provided by Company in
connection with the closure of Customer’s Puerto Rico facility;

Whereas, Company and Customer desire to amendment the payment terms in Addendum
2

Now therefore, in consideration of the mutual covenants and obligations herein,
the Parties agree as follows:

 

1. The Fee payable by Customer pursuant to Section IV (2) of Addendum 2 is
hereby amended and replaced as follows:

 

     [*** ]      [*** ]      [*** ]      [*** ] 

Fee

   $ [*** ]    $ [*** ]    $ [*** ]    $ [*** ] 

Holdback

   $ [*** ]    $ [*** ]    $ [*** ]    $ [*** ] 

Net Payment Due

   $ [*** ]    $ [*** ]    $ [*** ]    $ [*** ] 

 

2. The MSA together with Addendum 1 through Addendum 2 and this Amendment 1
constitute the entire agreement between the Parties hereto with respect to the
subject matter hereof. In the event of a conflict between the terms and
conditions of this Amendment and the terms of the Addendums and the MSA with
respect to the subject matter hereof, the terms of this Amendment shall control

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the Effective Date, by their officers, duly authorized.

 

SANMINA-SCI CORPORATION     SYMMETRICOM, INC. By:  

/s/ Jose A. Carrasquillo

    By:  

/s/ Justin Spencer

Name:   Jose A. Carrasquillo     Name:   Justin Spencer Title:   SVP     Title:
  Chief Financial Officer Date:   5/25/10     Date:   5/20/10

 

[***] Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.