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EXHIBIT 10.33
AGREEMENT
THIS AGREEMENT (this "Agreement") is entered into as of May 5,
1998, by and between Xxxxx Instruments Corp., a Delaware corporation ("Xxxxx"),
and Weidy Optical Co., Ltd., a Republic of China corporation ("Weidy").
WHEREAS, Xxxxx purchases from Weidy certain astronomical
telescopes, astronomical telescope components and accessories, and other related
optical products which are more specifically described on Exhibit A attached
hereto, as such Exhibit A may be amended from time to time by Xxxxx (the
"Products"); and
WHEREAS, Xxxxx desires to maintain a smooth, uninterrupted flow
of the Products during the term of this Agreement; and
WHEREAS, Weidy desires to ensure a predictable stream of orders
from Xxxxx during the term of this Agreement.
NOW THEREFORE, in consideration of the mutual promises contained
herein, and for other good and valuable consideration hereby acknowledged, the
parties hereto agree as follows:
1. Exclusivity by Weidy.
A. Exclusivity as to Products. Weidy agrees that all products
produced or sold by Weidy during the term of this Agreement, including all
astronomical telescopes, astronomical telescope components and accessories, and
all other related optical products, including, without limitation, the Products,
shall be sold exclusively to Xxxxx. Xxxxx and Weidy agree that binoculars and
riflescopes shall not be subject to this exclusivity provision.
B. Exclusivity as to Tooling. Weidy also agrees that during the
term hereof, it may not use in any way, or allow others to use in any way, for
any purpose other than the manufacture of the Products sold exclusively to
Xxxxx, any of the tooling, dies, molds or other equipment necessary for
production of the Products (collectively, "Tooling," and to the extent such
Tooling was or is paid for by Xxxxx, and is set forth on Exhibit B attached
hereto, as such Exhibit B may be amended from time to time by Xxxxx, such
Tooling shall be referred to as the "Xxxxx Owned Tooling").
2. Exceptions to Weidy's Exclusivity.
A. Sales in Taiwan. Notwithstanding Section 1A above, Weidy may
offer any of the Products for sale to any purchaser within the boundaries of
Taiwan, R.O.C., provided each such Product offered is not manufactured in any
way with any of the Xxxxx Owned Tooling (or any duplicate thereof). (For
example, Weidy may sell within Taiwan, R.O.C. any of the following Products:
Saturn 60 AZ-style telescopes, Model 230 telescopes or Model 395 telescopes, as
well any other Products that are not manufactured in any way with any of the
Xxxxx Owned Tooling.) Weidy agrees to take all reasonable steps to assure none
of the Products sold to any purchaser within the boundaries of Taiwan, R.O.C.
are exported outside the boundaries of Taiwan, R.O.C.
B. Sales in Australia and New Zealand. Notwithstanding Xxxxxxx 0X
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xxxxx, Xxxxx may offer any of the Products listed below in this Section 2B for
sale to those certain entities known as (i) "Innovations Mail Order Limited" for
sale solely within the boundaries of New Zealand and (ii) "Innovations Direct
PTY Ltd. for sale solely within the boundaries of Australia. Weidy agrees that
except for such sales to Innovations Mail Order Limited and Innovations Direct
PTY Ltd., Weidy will not permit any of the Products to be exported outside the
boundaries of Taiwan, R.O.C. by or for any other person or entity. In addition,
Weidy agrees to take all reasonable steps to assure Innovations Mail Order
Limited and Innovations Direct PTY Ltd., and any of their affiliates or
customers, do not export any of the Products outside the boundaries of New
Zealand or Australia, respectively. The only Products that Weidy may offer to
any person or entity other than Xxxxx for sale in New Zealand or Australia are
the following: (i) Saturn 60 AZ-style telescopes, (ii) Saturn 60 EQ-style
telescopes, (iii) Saturn 114 EQ-style telescopes, and (iv) 90mm optical tube
assembly with 114EQ mount-style telescopes, provided, however, that each of (i),
(ii), (iii) and (iv) above shall only be available with J-size (24.5mm barrel
diameter) eyepieces.
3. Exclusivity by Xxxxx. Xxxxx may purchase any products from any
other person or entity throughout the world, provided, however, that without the
express written consent of Weidy (i) Xxxxx'x total annual purchase of any of the
Products from any person or entity other than Weidy may not exceed 20% of the
preceding calendar year's total Products purchased from Weidy and (ii) Xxxxx may
not purchase any of the Products from any person or entity other than Weidy
within the boundaries of Taiwan, R.O.C.
4. Annual Minimum Purchase.
A. Annual Minimum Purchase Amounts. During the term of this
Agreement, Xxxxx agrees to purchase the following total number of Products in
each of the following calendar years: 1999 calendar year: 250,000 units; 2000
calendar year: 300,000 units; and 2001 calendar year and later years: 350,000
units (collectively, in each year, the "Annual Minimum Purchase Amount").
B. In Event of Termination without Cause. During the first 12
months after a Termination without Cause (as defined below) of this Agreement,
Xxxxx agrees to purchase no less than 75% of the Product quantities purchased
during the last full calendar year in which this Agreement was in effect. During
the second 12 months after a Termination without Cause of this Agreement, Xxxxx
agrees to purchase no less than 50% of the Product quantities purchased during
the last full calendar year in which this Agreement was in effect.
5. Term. Unless earlier terminated pursuant to the terms hereof,
this Agreement will continue until December 31, 2003. This Agreement may be
renewed for additional one year periods upon the mutual agreement of the
parties. The parties agree that any such renewal of the Agreement shall be
executed not later than six months prior to the termination of this Agreement.
6. Termination.
A. Either party may terminate this Agreement (i) at will upon
twelve months' written notice given to the other party before the date of the
end of this Agreement ("Termination without Cause"), or (ii) upon seven days'
notice if any of the following events occurs ("Termination with Cause"):
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(i) The other party becomes insolvent, files a voluntary
petition in bankruptcy or liquidation, proposes any dissolution, liquidation,
reorganization, or recapitalization with creditors, or takes any similar action
under the laws of any jurisdiction;
(ii) The other party has any involuntary petition in
bankruptcy or liquidation filed against it, or a receiver is appointed or takes
possession of the other party's property, or any similar action is taken against
the other party under the laws of any jurisdiction;
(iii) The other party makes an assignment for the benefit
of creditors, is adjudicated as a bankrupt, or takes any similar action under
the laws of any jurisdiction; or
(iv) The other party materially breaches this Agreement
and such breach is not cured within 60 days after receipt of written notice
thereof.
B. In the event of termination of this Agreement:
(i) Xxxxx shall remain obligated to accept Products
delivered by Weidy in accordance with the purchase orders placed by Xxxxx prior
to the termination of this Agreement and Xxxxx shall remain obligated to pay for
such Products according to the terms hereof;
(ii) Weidy shall remain obligated to ship Products in
accordance with the purchase orders placed by Xxxxx prior to the termination of
this Agreement; and
(iii) Both parties shall remain obligated to comply with
the provisions of Section 8, 10, 12, 14, 16, 17 and 18 hereof.
C. The parties recognize and agree that upon termination of this
Agreement Weidy may continue to manufacture and ship Products for Xxxxx in such
quantities and upon acceptance of such orders as Weidy and Xxxxx determine, and
Xxxxx shall be responsible for the payment thereof.
7. Tooling. All Xxxxx Owned Tooling shall be owned exclusively by
Xxxxx and will be held by Weidy under Xxxxx'x consent solely for use in
manufacturing the Products. Weidy agrees to store all the Xxxxx Owned Tooling in
a designated area within the Weidy facility in Taiwan when not in use and to
permanently and prominently xxxx all such Xxxxx Owned Tooling "Property of Xxxxx
Instruments." Weidy further agrees to retain such markings on all such Xxxxx
Owned Tooling at all times. The location of such storage shall be mutually
determined by Weidy and Xxxxx. Weidy agrees to immediately release all Xxxxx
Owned Tooling to Xxxxx at any time upon Xxxxx'x demand and to not remove any of
such Xxxxx Owned Tooling from the Weidy facility in Taiwan without Xxxxx'x prior
written consent. Weidy agrees that it is solely responsible for the maintenance
and safekeeping of the Xxxxx Owned Tooling and for any subsequent damage to or
loss of any of the Xxxxx Owned Tooling and that Weidy will promptly (at Xxxxx'x
discretion) (i) reimburse Xxxxx for the replacement cost of such damaged or lost
Xxxxx Owned Tooling, or (ii) replace such damaged or lost Xxxxx Owned Tooling.
8. Confidential Information.
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A. Confidential Information. Relying on the provisions and
remedies of this Agreement, Xxxxx agrees to furnish to Weidy or its agents
("Representatives") certain confidential and proprietary information of Xxxxx,
including but not limited to, technical knowledge, inventions, creations,
know-how, formulations, recipes, specifications, designs, methods, processes,
techniques, data, rights, devices, drawings, instructions, expertise, trade
practices, trade secrets, commercial information and other information relating
to the design, manufacture, assembly, application, inspection, testing,
maintenance, packaging and sale of the Products (collectively, the "Confidential
Information").
B. Obligations of Weidy. In consideration for providing the
Confidential Information, Weidy agrees that the Confidential Information will be
used solely in connection with the manufacture of the Products in accordance
with this Agreement, will not be used for any other purpose, will not be used in
any way directly or indirectly detrimental to Xxxxx and will be kept
confidential by Weidy, except that Weidy may disclose the Confidential
Information or portions thereof to those of its Representatives who need to know
such information for the purpose of implementing this Agreement. The term
"Confidential Information" shall not include information generally available to
the public other than as a result of a disclosure made in violation of this
Agreement, any similar agreement, or by any person with a legal, contractual or
fiduciary obligation of confidentiality.
C. Obligations Upon Termination. Upon termination of this
Agreement, or at the request of Xxxxx, Weidy shall immediately return to Xxxxx
all documentation in its possession, in any written or recorded form, containing
any of the Confidential Information, unless Weidy receives Xxxxx'x prior written
consent to retain such Confidential Information for its use in fulfilling
subsequent orders by Xxxxx for the Products.
9. Pricing. Weidy agrees to offer the Products to Xxxxx at prices
that are competitive with the prices of other Asian telescope manufacturing
companies for substantially similar products of substantially similar quality.
10. Use of Xxxxx Trademark and Logo. During the term of this
Agreement, Weidy may use the Xxxxx trademark and logo, on and in connection with
the manufacture of the Products exclusively for Xxxxx. Other than in connection
with this Agreement, Weidy acknowledges it has no other rights in or to the
Xxxxx trademark or logo.
11. Product Warranty. Weidy agrees to manufacture the Products for
Xxxxx of a quality level that Xxxxx requires, and which are suitable for sale by
Xxxxx to Xxxxx dealers and distributors throughout the world.
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12. Product Malfunction. Weidy shall promptly repair or replace any
Product which malfunctions, fails to operate, or is otherwise defective within a
reasonable time of the shipping date to Xxxxx.
13. Quality Control Inspectors. Weidy agrees that Xxxxx may retain at
Weidy's facilities up to two Xxxxx employees for the purpose of quality control
inspections and other related functions, and that these Xxxxx employees shall
have all reasonable access to Weidy's facilities at any time during normal
business hours. Notwithstanding the above, Weidy shall have the right to
disapprove of any particular Xxxxx employee acting as a quality control
inspector provided a commercially reasonable justification is given by Weidy for
such disapproval.
14. Payment. Xxxxx agrees to pay Weidy for all the Products shipped
by Weidy to Xxxxx or to its customers at Xxxxx'x request in US Dollars within
three business days of Xxxxx'x receipt of a copy of the commercial invoice and
on-board Xxxx of Lading, or air waybill, as applicable. Payment shall be made by
wire transfer to a bank or other financial institution as directed by Weidy.
15. Government Approvals. It is the obligation of each party to
obtain any governmental approvals required for such party to discharge its
respective obligations under this Agreement. Each party shall assist the other
in obtaining any such approvals.
16. Specific Performance. It is recognized by the parties hereto that
certain of the rights which are subject to this Agreement are unique and are of
such a nature as to be inherently difficult or impossible to value monetarily.
It is therefore agreed that, in the event of a breach of this Agreement by
either party, an action at law for damages or other remedies at law may be
inadequate to protect the unique rights and interests of the other party.
Therefore, the parties hereto agree that in the event of any controversy
concerning the subject matter of this Agreement, the terms of this Agreement
shall be enforceable in equity for specific performance. Such a remedy shall,
however, be cumulative and not exhaustive, and shall be in addition to any other
remedies available.
17. Governing Law. Any proceeding or legal action commenced or
brought by Xxxxx under this Agreement shall be submitted to a competent court of
and governed by the applicable law of Taiwan, R.O.C. Xxxxx for itself and any
successor or assign, hereby consents and submits to the exclusive jurisdiction
of the courts of Taiwan, R.O.C. for any actions, suits or proceedings arising
out of or related to this Agreement which are brought by Xxxxx. Any proceeding
or legal action commenced or brought by Weidy under this Agreement shall be
submitted to a competent court of and governed by the internal laws of the State
of California, U.S.A., without giving effect to the principles of conflict of
laws thereof. Weidy for itself and any successor or assign, hereby consents and
submits to the exclusive jurisdiction of the courts of the State of California,
U.S.A. located in the County of Orange for any actions, suits or proceedings
arising out of or related to this Agreement which are brought by Weidy.
18. Further Assurances. Each party hereto shall execute any and all
further documents or instruments or perform any reasonable actions which either
party hereto may deem reasonably necessary and proper to carry out the purposes
of this Agreement.
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19. Severability. If any provision or term of this Agreement shall
for any reason be held illegal or unenforceable, such provision or term shall be
adjusted rather than voided to the extent possible and shall in no way affect
the validity of this Agreement or its remaining terms and conditions.
20. Force Majeure. Neither party shall be liable for damages due to
any cause beyond its control, including, without limitation, acts of God, acts
of civil or military authority, fire, riots, civil commotions, war, embargo,
blockage, boycotts, floods, epidemics, delays in transportation or governmental
restrictions.
21. Amendment. No amendment to this Agreement shall be effective
unless it is in writing and signed by each of the parties hereto.
22. Counterparts. This Agreement may be executed in one or more
counterparts which together shall constitute a single agreement.
23. Waiver and Delay. No waiver by either party of any breach or
series of breaches or defaults in performance by the other party, and no
failure, refusal or neglect of either party to exercise any right, power or
option given to it hereunder or to insist upon strict compliance with or
performance of either parties obligations under this Agreement, shall constitute
a waiver of the provisions of this Agreement with respect to any subsequent
breach thereof or a waiver by either party of its right at any time thereafter
to require exact and strict compliance with the provisions thereof.
24. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the parties hereto,
subject to the restrictions on assignment contained herein.
25. Assignment. This Agreement shall not be assigned by either party
without the prior consent of the other party.
26. Entire Agreement. This Agreement contains all of the terms and
conditions agreed upon by the parties hereto with reference to the subject
matter hereof. No other agreements, oral or otherwise shall be deemed to exist
or to bind either of the parties hereto, and all prior agreements and
understandings are superseded hereby, including (i) that certain Purchase and
Sale Agreement, dated as of December 29, 1994, by and between Xxxxx and Weidy
and (ii) that certain Letter Agreement, dated as of June 26, 1997, by and
between Xxxxx and Weidy. This Agreement cannot be modified or changed except by
written instrument signed by both of the parties hereto.
27. Representation by Counsel. The parties hereto acknowledge that
each of them has had the opportunity and has been encouraged to seek and be
represented by competent legal counsel in connection with this Agreement. Each
party knowingly and voluntarily waives any right such party may have to object
to the provisions hereof based in any way on a claim of inadequate legal
representation.
IN WITNESS WHEREOF, each of the undersigned has caused this
Agreement to be executed as of the date set forth above.
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XXXXX INSTRUMENTS CORP., WEIDY OPTICAL CO., LTD,
A DELAWARE CORPORATION A REPUBLIC OF CHINA CORPORATION
/s/ Xx. Xxxx Xxxxxx /s/ Mr. Xxxxx Xxx
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Name: Xx. Xxxx Xxxxxx Name: Mr. Xxxxx Xxx
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Title: Chairman and CEO Title: President
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