EXHIBIT 10.14
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AMENDED.
SUPPLY AGREEMENT
This Supply Agreement ("Agreement") is entered into between Systron
Xxxxxx Automotive Division, a division of BEI Technologies, Inc., a Delaware
corporation ("SDAD"), and Continental XxxXx XX & Co. oHG, a corporation
organized under the laws of Germany ("CT"). SDAD and CT may be referred to
herein individually as a "party" and collectively as the "parties."
RECITALS
A. SDAD is a manufacturer of inertial rate sensor products (as
defined below, "Rate Sensor Products"). Rate Sensor Products
range in complexity (and cost) from basic [*] elements (as
defined below, "[*]"), to [*] sensors, to [*] sensors (as
defined below, "[*]").
B. CT develops and markets brake-related systems for use in
automobiles and trucks. These systems include as components
certain [*] (referred to by the parties as [*]) that CT and
SDAD have jointly developed and that SDAD is supplying to CT
pursuant to a Development and Supply Agreement dated April 26,
2001 ("2001 Supply Agreement"). Under the 2001 Supply
Agreement, [*] in developing the [*] and in acquiring
production capacity used by SDAD to supply these [*] to CT.
C. CT also purchases certain [*] sensors from SDAD pursuant to a
Development and Supply Agreement dated May 30, 1997 (as
amended, the "1997 Supply Agreement" and together with the
2001 Supply Agreement, the "Existing Supply Agreements").
D. The parties now desire to modify their existing relationship
by transferring to CT [*]. During the transition of
production, SDAD would continue to supply CT under the 2001
Supply Agreement with [*] and certain [*] known as [*].
E. After the transition of production to CT, SDAD would supply CT
under this Agreement with components - such as [*] - to be
used in the manufacture of [*]. SDAD would also continue to
supply [*] under the 2001 Supply Agreement for [*] for the [*]
program and [*] sensors under the 1997 Supply Agreement.
F. In connection with the transfer of production to CT, the
parties wish to modify certain of CT's purchase obligations
under the 2001 Supply Agreement by [*] to purchase under the
2001 Supply Agreement.
G. In return for transferring production of [*] from SDAD to CT,
the parties desire that CT make a firm commitment (with
certain limited exceptions) for [*] to purchase from SDAD [*].
H. In transitioning production to CT, the parties desire that
SDAD grant CT a [*] license under SDAD's patents and know how
to assemble [*] as well as certain [*], all using components
supplied by SDAD.
I. Because CT has participated - financially and otherwise - in
the development of certain SDAD products, the parties desire
that SDAD supply its Rate Sensor Products [*], with certain
exceptions, in [*] (as defined below).
J. The parties desire that SDAD grant CT [*] to use certain of
SDAD's products for use in [*].
K. The parties desire that CT purchase from SDAD certain
equipment currently used by SDAD in the manufacture of [*] and
that CT reimburse SDAD for certain [*] of SDAD and its
suppliers incurred under the Existing Supply Agreements and
this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises set forth in
this Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. DEFINITIONS. Capitalized terms used in this Agreement are defined in
this Section 1 or in the Section where they are first used.
1.1 "Affiliate" means, with respect to either party, any Person
that directly or indirectly controls, is controlled by or is
under common control with that party, where "control" means
ownership of [*] or more of the outstanding voting securities
(but only as long as such Person meets these requirements).
1.2 "[*]" means an [*] that is designed by SDAD to drive a [*].
1.3 "Authorized Fabricator" means a third-party fabricator
licensed by SDAD to manufacture SDAD-proprietary [*] (not [*])
and designated by SDAD in accordance with Section 9.3.
1.4 "[*]" means a rate sensor [*] designed by SDAD under the 2001
Supply Agreement that is [*] and that [*].
1.5 "[*]" means the use of inertial rate sensors in [*] when
either directly linked to brakes or when used in combination
with a brake function as in a [*]. [*] do not include [*]
sensors that are not directly linked to brakes.
1.6 "Burden Rate" means that portion of the price of each Product
attributable to SDAD's overhead including amortized [*] Costs.
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HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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1.7 "[*].
1.8 "[*]" means an [*], including rate sensors, for use in motor
vehicles. [*] are examples of [*].
1.9 "[*]" means a particular configuration of [*] designed by SDAD
for sale to CT, including [*].
1.10 "[*]" means a particular configuration of [*] designed by SDAD
for sale to CT, including [*].
1.11 "Competitive Targets" has the meaning assigned to it in
Section 7.4(a).
1.12 "Confidential Information" means, with respect to either
party, all confidential and proprietary information of that
party, including, without limitation, documents, data,
reports, know-how and other information related to the past,
current or proposed operations, products, technology, services
and business of such party disclosed or otherwise made
available by such party to the other party in connection with
this Agreement and that the receiving party would reasonably
know or expect to be confidential or that is marked with a
legend indicating that such information or data is
confidential or, for oral information, that is reduced to
writing and so marked within thirty (30) days after
disclosure.
1.13 "Effective Date" means the date on which both parties have
executed this Agreement.
1.14 "[*]" or "[*]" means the [*] unit of the [*] which monitors
[*].
1.15 "[*]" or "[*]" constitutes [*] which utilize inertial sensors
to [*].
1.16 "F04" is a release state in development of a product defined
as functional samples, purpose is for presentation of
function.
1.17 "F05" is a release state in development of a product defined
as close to series production samples, which utilizes final
principle and circuit. The purpose is for the check of the
principle series suitability of interface and function.
1.18 "F06" is a release state in development of a product defined
as pre-series production samples in the final configuration
but not produced on production tooling. The purpose is for
unrestricted check of the series suitability and keeping of
product specification with customer release.
1.19 "F07" is a release state in development of a product defined
as series production samples in the final configuration and
produced on production tooling, purpose is for qualification
and limited production volume.
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1.20 "F08" is a release state in production of a product defined as
series production deliverables in the final configuration and
produced on production tooling, purpose is for series use.
1.21 "Intellectual Property Rights" means: (a) all patents and
other rights throughout the world in useful inventions and
ornamental designs that are granted under patent law,
including any rights in patent applications or rights to file
patent applications; (b) copyrights, moral rights and other
related rights throughout the world in works of authorship,
including all registrations and applications therefor; and (c)
rights throughout the world to proprietary know-how, trade
secrets and other confidential information, whether arising by
law or contractual obligation of non-disclosure, and all other
industrial property rights or other rights covering intangible
property recognized in any jurisdiction; provided, however,
that Intellectual Property Rights will not include trademarks,
service marks, logos, insignias or other proprietary trade
descriptions protected by law.
1.22 "[*]" means cars, vans, SUVs, and trucks not more than [*] in
weight. For the avoidance of doubt, Light Vehicles do not
include trucks in excess of [*] in weight or [*].
1.23 "[*]" means an SDAD-proprietary packaged [*] sensor including
[*] that is a [*] that is ready to integrate into CT's product
[*].
1.24 "[*]" means, for a particular calendar year, the [*] of Rate
Sensor Products that [*], in accordance with Section 3.
1.25 "[*]" means a packaged, SDAD-proprietary [*] element, [*].
1.26 "Order" has the meaning assigned to it in Section 4.3.
1.27 "Person" means any individual, partnership, corporation,
limited liability company or other entity or any government or
political subdivision, or any agency, department or
instrumentality thereof.
1.28 "Products" means the specific Rate Sensor Products to be
supplied by SDAD to CT under this Agreement. The Products to
be initially supplied are set forth on Schedule A.
1.29 "Rate Sensor Product" means [*],[*],[*],[*],[*] and any other
product or component family at or below the level of [*] that
constitutes or includes a rate sensor.
1.30 "SDAD Proprietary Know-How" has the meaning assigned to it in
Section 9.1.
1.31 "[*]" means a rate sensor module designed by SDAD under the
2001 Supply Agreement that [*] and that consists of a [*].
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1.32 "Specifications" means, with respect to a particular Product,
the technical specifications provided by SDAD for that Product
as agreed to and executed by the parties as of January 31,
2004. Specifications do not include advertising or marketing
materials.
1.33 "Transition Plan" means the transition plan as agreed to and
executed by the parties as of January 31, 2004.
2. STRUCTURE OF RELATIONSHIP.
2.1 SUPPLY. Subject to the terms and conditions of this Agreement,
SDAD will supply and CT will purchase the Products for use by
CT as components to [*] and other CT products. The parties may
from time to time add additional Products to Schedule A by
mutual agreement, and [*] any Rate Sensor Products that it
makes generally available to SDAD's other customers.
2.2 [*].
(A) Subject to its second source rights under Section
7.4, CT and its Affiliates will purchase from SDAD
[*] Rate Sensor Products for use in [*].
Notwithstanding the foregoing, (i) CT may [*]
schedule set forth in the Transition Plan; CT will
[*] to secure approval from its OEM customers to [*];
and (ii) CT may manufacture [*] in accordance with
the Transition Plan using components supplied by SDAD
under this Agreement or the Existing Supply
Agreements.
(B) [*]
(C) If either party breaches its obligations under this
Section 2.2, and such breach is not cured within
ninety (90) days after the non-breaching party
objects in writing, then the non-breaching party may,
in addition to its other remedies that may be
available at law or under this Agreement, terminate
[*] under this Section 2.2 by giving the breaching
party [*] days notice.
2.3 TRANSITION PLAN. Each party will fulfill its responsibilities
under the Transition Plan to transfer current production of
[*] under the 2001 Supply Agreement from SDAD to CT. The
Transition Plan is hereby incorporated by reference.
(A) In accordance with the Transition Plan, CT will
assume the following additional responsibilities in
connection with the manufacture of [*]:
(I) Design of products above the [*] level, upon
transfer of final assembly of [*].
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(II) Validation above the level of manufacture of
SDAD or its subcontractors.
(III) Procurement and validation of all components
above the level of manufacture of SDAD.
(IV) Failure analysis of products assembled by CT
down to the level of the part or assembly
supplied by SDAD. Upon transfer of
production of a [*] in accordance with the
Transition Plan, SDAD will have no further
obligation or liability under the 2001
Supply Agreement for [*], whether made by CT
or SDAD and whether made before or after the
transfer or production.
(V) Warranty to OEM customers for products
assembled by CT.
(VI) [*] costs that are incurred as a result of
[*] to support the transition of production
to CT as shown in the Transition Plan;
provided, however, that SDAD shall take any
reasonable effort to minimize such cost, to
be evaluated and negotiated in advance by
the joint project term.
(VII) Establishing price to OEM customers for
products assembled by CT.
(B) In accordance with the Transition Plan, SDAD will
maintain the following responsibilities:
(I) Manufacture of the [*] for all products and
[*].
(II) Design control over [*],[*].
(III) Design control and manufacture of [*] prior
to transfer of production to CT; upon
transfer of final assembly of a [*] to CT,
CT will assume design control of same.
(IV) SDAD may either manufacture or subcontract
manufacturing of [*] and [*] in accordance
with the Transition Plan. SDAD will be
responsible for the selection and
performance of its subcontractors.
Subcontractors must be validated through the
industry-standard PPAP process. CT may
contradict the use of a specific
subcontractor subject to the presentation of
a valid reason. Such reason is subject to
acceptance by SDAD, which acceptance may not
be unreasonably withheld.
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HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
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2.4 EXISTING AGREEMENTS.
(A) The Existing Supply Agreements will remain in effect
in accordance with their terms subject to this
Section 2.4, with respect to the specific components
supplied thereunder. Thus, the 2001 Development and
Supply Agreement will continue to govern purchases by
CT from SDAD of [*], [*], and [*]. The 1997
Development and Supply Agreement will continue to
govern [*] rate sensors in the [*] as specified
therein.
(B) Notwithstanding the foregoing, the following will
apply to the Existing Supply Agreements as of the
Effective Date of this Agreement notwithstanding any
provision in those agreements to the contrary:
(I) CT may fulfill its obligation under [*] of
the 2001 Supply Agreement [*] over the term
of the 2001 Supply Agreement.
(II) Upon transfer of production of a [*] to CT
in accordance with the Transition Plan, SDAD
will have no further obligation or liability
under the 2001 Supply Agreement for [*],
documentation, configuration control, or
indemnity (including those obligations set
forth in Sections [*] of the 2001 Supply
Agreement) of such [*] as manufactured by
CT.
(C) In the event of any conflict or inconsistency between
the provisions of this Agreement and those in the
Existing Supply Agreements, the provisions of this
Agreement will control.
(D) For the avoidance of doubt, the supply of [*] will be
governed only by this Agreement.
3. PRICES AND VOLUME COMMITMENT.
3.1 PRICES. The parties will negotiate in good faith prices for
each calendar year based on CT's [*] for that year, and,
additionally, taking into account [*]. Prices for [*] are set
forth in Schedule B. Prices do not include shipping expense or
insurance, which will be separately invoiced.
3.2 [*].
3.3 ANNUAL NEGOTIATIONS. The parties will negotiate in good faith
each year to agree by [*] of that year upon Burden Rates and
prices for the coming calendar year based on CT's proposed [*]
and the methodology set forth in Schedule C. Once the parties
have reached an agreement, they will prepare and execute an
addendum to Schedule B setting forth the [*], pricing and
Burden Rate for the coming year.
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3.4 OTHER ADJUSTMENTS. The parties may otherwise adjust Schedule B
by mutual agreement during the course of a calendar year, such
as to add or remove Products or take other pricing action on
which they each agree. Additionally, the parties contemplate
that SDAD will subcontract the manufacturing of [*]. In that
case, any increase or decrease in the baseline price charged
to SDAD by [*] will be [*] as an adjustment in the price
charged to CT by SDAD for such [*] notwithstanding any
provision in the Existing Agreement to the contrary.
3.5 TARGET PRICES. The parties have already specified target
prices until calendar year [*] on [*]. The parties recognize
that CT's [*] and BEI's [*] for calendar years [*] are not
aligned as to [*]. To achieve cost benefits along with CT's
desired target prices, BEI commits to: (a) execute its [*];
(b) implement the [*] process; and (c) restructure [*]. SDAD
will prepare a pricing model for [*] as of the close of
calendar year [*] and thereafter the parties will meet to
review and establish target prices for calendar years [*].
4. ORDER, DELIVERY AND ACCEPTANCE.
4.1 FORECASTS. CT will provide a good faith, non-binding [*]
forecast of its and its Affiliates' requirements, on a [*]
basis, for Products ("Forecast"). The Forecast will form the
basis of capacity planning and capital investment by CT and
SDAD. CT may change the Forecast for a particular [*] notice
to SDAD so long as the change does not exceed SDAD's capacity
or the supply-chain availability of materials, and so long as
CT continues to meet the applicable [*] for the [*] falls.
4.2 CAPACITY. SDAD will maintain a capacity each year at
agreed-upon levels, including a [*] capacity. If CT proposes a
Forecast that would require SDAD to increase its capacity,
then parties will agree on a plan for increasing capacity of
SDAD or its suppliers to meet the Forecast, including funding
participation by CT of any required capital investment.
4.3 PURCHASE ORDER INITIATION. All purchase and sales between SDAD
and CT shall be initiated by CT's issuance of written purchase
order or by telephone confirmed by written purchase order
("Purchase Order"). The initial Purchase Order issued shall
state unit quantities, unit price, unit description, requested
delivery date and shipping instructions. CT may issue EDI
orders under such Purchase Orders ("EDI Orders" and together
with the Purchase Orders, "Orders") which shall reflect units
part number, quantities required and requested delivery dates.
The subject EDI Order shall be a binding extension of its
initial Purchase Order regarding quantity of units to be
delivered and required delivery of units, except as limited by
contractual capacity, lead-time planning and supply-chain
material availability. For all Products, CT shall issue Orders
for material at least [*] prior to requested deliveries and
for production at least [*] days prior to requested delivery
to expend labor for production delivery of units. Orders to
expend labor
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shall be for firm quantities to be delivered, with [*] from
the beginning of the [*] period.
4.4 PURCHASE ORDER ACCEPTANCE. SDAD's acceptance of an Order shall
be by written acknowledgment thereof by SDAD. Orders not
acknowledged within [*] weeks of receipt are accepted subject
to determination of actual receipt verification and procedural
protocol for submission. SDAD, upon acceptance shall fulfill
CT's purchase orders complying with the terms of the
Agreement. If CT requests either a delivery prior to the
required [*] lead time or a shipment volume that would exceed
the Forecast or SDAD's capacity, then SDAD will use
commercially reasonable efforts to accommodate such request on
prices and terms to be mutually agreed upon between the
parties.
4.5 PURCHASE ORDER TERMS AND CONDITIONS. The terms and conditions
of this Agreement, shall control all sales of Products
hereunder, and any additional or different terms or conditions
to the contrary, in a purchase order, acknowledgment, or
similar document, shall be of no effect (unless approved by
the express written consent of the other party).
4.6 PURCHASE ORDERS FROM CT AFFILIATES. Subject to direction from
Continental Xxxxx, Frankfurt and receipt of acceptance of an
Order, SDAD will deliver Products hereunder to CT's Affiliates
worldwide under the terms and conditions of this Agreement.
Pricing shall be based on this Agreement, with adjustments for
any additional requirements not accounted for in this
Agreement.
4.7 DELIVERY. Delivery of Products hereunder shall be F.O.B.
SDAD's manufacturing facility in Concord, CA, USA or the
manufacturing facility in which the units were produced. Title
to and all risk of loss or damage with respect to the Products
shall pass to CT upon their delivery by SDAD or its
subcontractor to the carrier at the F.O.B. point.
4.8 ACCEPTANCE. CT, either directly or through its Affiliate, may
reject any specific units of Products that do not conform to
their applicable Specifications and then-current
mutually-agreed acceptance test procedures, upon CT giving
notice as soon as CT detects such nonconformance in the normal
course of CT's business practices. Rejection of certain units
within a delivery lot does not entitle CT to reject the whole
lot.
4.9 RETURNS PROCEDURE. To return a Product for any reason
permitted under this Agreement, CT must notify SDAD in writing
of its proposed return, and request a return merchandise
authorization ("RMA") number, which SDAD will promptly provide
in circumstances when CT is entitled to return Products.
Within [*] days after receipt of the RMA number, CT may return
the relevant Product, complete with its original packaging and
documentation, to SDAD freight pre-paid (except as otherwise
provided herein) with the RMA number displayed on the outside
of the shipping container. CT must comply with SDAD's
reasonable shipping
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instructions in returning Products. SDAD may reject any
attempted return of a Product that is not made substantially
in accordance with this Section 4.9.
5. PAYMENT.
5.1 INVOICING AND PAYMENT. SDAD shall invoice CT (or, at CT's
request, the Affiliate of CT through which CT placed the
applicable Order) on or after delivery. Payment to SDAD for
Products sold hereunder shall be due [*] days after the date
of delivery, by wire transfer to such bank or account as SDAD
may from time to time designate in writing. If CT fails to pay
all or any portion within [*] days, SDAD reserves the right to
assess interest charges at [*] per annum on such amounts from
the date due until paid. CT agrees to pay such charges and all
associated collection and legal fees.
5.2 TAXES AND DUTIES. Prices do not include, and CT will be
responsible for paying, any applicable tax, duty or other
governmental charge on the sale and transfer of Products,
including sales tax, excise tax, withholding tax, value-added
tax and customs duties, except for taxes based on SDAD's net
income.
5.3 [*]. To the extent that the total number of units of Rate
Sensor Products ordered by CT and its Affiliates for delivery
during a particular calendar year under this Agreement and the
Existing Supply Agreements ("Actual Shipments") is [*] of the
[*] for that year, CT will pay SDAD [*] equal to [*] of the
[*]; provided, however, that no [*] will be payable for any
portion of such shortfall that was caused by SDAD's material
breach of this Agreement or by a force majeure event as
defined in Section 15.12. In any case however, the parties
agree to give notice in writing to each other as soon as
circumstances are detected which may lead to such deviation.
For clarity, SDAD will not be entitled to an [*] for
shortfalls of [*] of the [*].
SDAD will calculate and invoice the [*] by [*] of each year
based on actual [*] to date shipments through [*] and CT's
Forecast and Orders for the [*] of that year. To the extent
actual shipments in the [*] vary from the Forecast and Orders,
SDAD will issue a credit or supplemental invoice by no earlier
than [*] days before the end of the [*] to reconcile the
previously billed [*] for that [*].
To the extent that Actual Shipments in a given
calendar year exceed [*] for that year, the parties will meet
to determine the over-absorption of fixed overhead and G&A
that SDAD will refund to CT. For clarity, such refund will be
based only on the number of units by which Actual Shipments
[*]. The parties recognize that SDAD may have incurred
additional costs not contemplated in the annual fixed burden
due to implementation of capacity or additional infrastructure
to support the additional demand and that SDAD shall be
entitled to recover these costs.
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5.4 AUDIT RIGHTS. During [*], each party on ten (10) days notice
may audit the other party's business records directly
pertaining to the performance of this Agreement (including the
computation of impaired [*] Costs). Any such records and
information will be deemed to be Confidential Information of
the audited party, and if the auditing party conducts the
audit using third party auditors, such auditors must, as a
condition to gaining access to such records, execute customary
and reasonable confidentiality agreements with the audited
party. The auditing party will conduct such audit at its own
expense during normal business hours of the audited party or
its Affiliates, as the case may be, in a manner that minimizes
disruption to the audited party's business activities. Such
audits will be conducted for the sole purpose of verifying
compliance with the terms of this Agreement and the accuracy
of amounts claimed by the audited party.
6. [*] COSTS.
6.1 REIMBURSEMENT OF [*] COSTS. Upon the occurrence of each of the
transfer of final [*] and the transfer of final [*] (each, a
"Transfer Milestone"), in accordance with the Transition Plan,
CT will promptly pay to SDAD an amount equal to SDAD's [*]
Costs as relating to [*]. Such [*] Costs will not include any
[*] Costs attributable [*] Equipment (defined below) sold to
CT under Section 6.2 or to equipment that SDAD is reasonably
able to re-use for a production purpose other than to perform
[*]. SDAD will use reasonable efforts to minimize [*] Costs
associated with [*] between the Effective Date and the
transfer of final assembly to CT.
6.2 PURCHASE OF EQUIPMENT. Within [*] days after the occurrence of
each Transfer Milestone, CT will purchase from SDAD the
equipment and tooling used by SDAD in final assembly,
calibration or testing of the transferred production ("[*]
Equipment") on the following terms and in accordance with the
Transition Plan; CT will reimburse SDAD for [*]:
(A) EXCEPT AS PROVIDED IN SECTION 6.2(C), [*] EQUIPMENT
IS SOLD ON AN AS IS/WHERE IS BASIS WITHOUT WARRANTY
OF ANY KIND; SDAD HEREBY DISCLAIMS ALL EXPRESS,
IMPLIED OR STATUTORY WARRANTIES INCLUDING ANY IMPLIED
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, TITLE OR NON-INFRINGEMENT.
(B) The purchase price for the [*] Equipment will be
equal to [*]; the purchase price will be payable on
delivery but no later than [*] days after the
applicable Transfer Milestone; provided, however,
that any audit permitted hereunder with respect to
the schedule of [*] Equipment and the net book value
of same must be conducted within such [*] day period.
(C) In case of existing warranty rights vis a vis the
original manufacturer of [*] Equipment, SDAD will
transfer such warranty rights to CT (if such
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rights are in effect and transferable) and assist CT
with any possible warranty claim. SDAD shall in
addition transfer any [*]. To the extent such
material is proprietary to SDAD, it will be included
in the SDAD Proprietary Know-How licensed to CT under
Section 9.1 with the exclusion of any license fee to
be paid by CT. SDAD however shall be responsible that
CT gets clear title to such equipment without
existence of any third party rights except as
applicable to any third-party software licenses. In
any case of such transfer the parties shall make a
joint technical test at SDAD's working place to prove
that such equipment is workable and can be used for
further production.
(D) Delivery will be FOB (UCC) the location of the [*]
Equipment no later than [*] days after the applicable
Transfer Milestone; CT will be responsible for
arranging and paying for shipping; title and risk of
loss transfer to CT upon delivery. If CT has not made
arrangements for shipping the [*] Equipment within
[*] days after the applicable Transfer Milestone,
then SDAD will store, or otherwise reasonably dispose
of, the equipment at CT's expense.
(E) SDAD will prepare and execute a xxxx of sale in a
form reasonably acceptable to CT that itemizes each
piece of [*] Equipment that has been purchased and
price for same, and will deliver the xxxx of sale to
CT concurrently with payment for the equipment.
(F) SDAD will have an option to repurchase from CT, on
the same terms as were made available to CT under
Section 6.2(a) through Section 6.2(e), any piece of
the [*] Equipment at [*], if CT stops using the
equipment for regular production activity or if CT
intends to transfer equipment to a third party
(whether by sale or lease or otherwise) for any
reason other than to continue production of CT volume
requirements. Before transferring the equipment to a
third party, CT will notify SDAD of CT's intention to
do so. Upon its receipt of such notice, SDAD will
have [*] days to exercise the option to purchase as
set forth in this Section. If SDAD does not exercise
its option under this Section by the end of such [*]
day period, then CT may, at any time during the
following [*] months, transfer such equipment to a
third party. If CT does not transfer the equipment
within such [*] month time period, then SDAD's option
rights under this Section will be reinstated and CT
must again notify SDAD in accordance with this
Section prior to transferring the equipment. CT will
also notify SDAD within [*] days after CT stops using
the equipment for regular production, and SDAD may at
any time thereafter exercise the option to purchase
as set forth in this Section.
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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6.3 RESIDUAL [*] COSTS.
(A) "Residual [*] Costs" means SDAD's [*] Costs as of the
Effective Date (less the reimbursement [*] Costs paid
by CT under Section 6.1 and the purchase price of [*]
Equipment paid by CT under Section 6.2) and any
future [*] Costs acquired by mutual agreement after
the Effective Date (such as to expand capacity or
develop new Products). The Transition Plan includes a
[*] for the [*] departments and estimated [*] for
those departments [*]. The parties will update this
Schedule as additional agreed-upon Residual [*] Costs
are acquired.
(B) Residual [*] Costs as of the Effective Date will be
amortized over [*] and incorporated in the Burden
Rate. Residual [*] Costs acquired after the Effective
Date will be [*] as mutually agreed by the parties.
As to such future Residual [*] Costs, the [*].
6.4 RECOVERY OF CERTAIN IMPAIRED RESIDUAL [*] COSTS. If CT's
obligation to purchase a Product is reduced or cancelled
because the Agreement, expires, terminates or is not
enforceable in whole or in part, or because CT exercises its
rights to use a second source (including itself or its
Affiliates) in accordance with Section 7.4, then CT will
reimburse SDAD for that [*] Costs relating to [*] departments
that becomes impaired as a result of such event ("Impaired
Residual [*] Costs") in accordance with the following:
(A) If CT terminates the Agreement for cause in
accordance with Section 14.2 based on a material
breach by SDAD that has not been cured (other than a
failure to meet the Competitive Targets), then CT
will [*].
(B) If the Agreement expires or if SDAD terminates for
cause in accordance with Section 14.2 based on a
material breach by CT that has not been cured, then
CT will [*].
(C) Except as provided in Section 6.4(f), if CT exercise
its rights under Section 7.4 to procure a Product
from a second source based on SDAD's failure to meet
Competitive Targets, then CT will reimburse SDAD for
the resulting Impaired Residual [*] Costs in
accordance with the following allocations:
(I) If SDAD has proposed solutions conforming to
the valid Specifications that, if
implemented, would have resulted in SDAD
meeting the Competitive Targets, then CT
will [*].
(II) If the negotiated price for the Product in
question is at or below the target price
(specified in Schedule B) for the year in
which
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HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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SDAD fails to meet the Competitive Price
Targets for the Product, then CT will [*].
(III) If the negotiated price for the Product in
question is above the target price for that
given year, and SDAD is unable to meet the
Competitive Price Target despite SDAD [*]
while conforming with the valid
Specifications, then CT will [*].
(D) In all other cases, the parties will negotiate in
good faith [*].
(E) [*].
(F) For future [*] Costs made by SDAD for [*] departments
which are not covered by the Transition Plan, the
parties will mutually agree upon the investment and
the apportionment of any Impaired Residual [*] Costs
so invested. (For example, [*]). SDAD's financial
participation resulting therefrom will be added to
[*].
(G) The payment for Impaired Residual [*] Costs is
reimbursement for SDAD's investment and is not an
acquisition of any specific asset nor does title
transfer to CT, except as provided in this Section
6.4(g). SDAD will work diligently to find economic
value for the impaired assets during the [*] after
each payment by CT of reimbursement for SDAD's
Impaired Residual [*] Costs. If SDAD is successful in
finding such economic value, then SDAD will negotiate
with CT to determine a refund payable to CT, [*] with
respect such asset's newly-found economic value. If
SDAD is unable to find economic value at the end of
the [*] period, then with respect to non-common
utilized equipment (i.e. equipment not used by other
SDAD customers) that was purchased by SDAD
specifically to meet CT's capacity demand, then SDAD
will deliver and transfer title in such non-common
utilized equipment to CT. Alternatively, SDAD will
[*] for such non-common utilized equipment that SDAD
wishes to retain, and thereby retain title with SDAD.
7. OTHER MATTERS.
7.1 TRANSITION COSTS. CT assumes (and agrees to reimburse SDAD to
the extent it is required to pay) all liabilities of SDAD to
its third party contractors that arise as a direct consequence
of the termination by SDAD of orders or contracts with such
contractors in accordance with the Transition Plan.
7.2 PRODUCT DEVELOPMENT. CT will be responsible for all future
design activities for products that CT assembles or otherwise
manufactures. CT will not knowingly make changes to the design
of the product which are not consistent with the
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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capabilities of the design, performance and process of the
Products that are provided by SDAD as components to such CT
products.
7.3 TECHNICAL SUPPORT. Subject to availability of SDAD's
personnel, CT may purchase from SDAD technical support
services for products and processes above the level of [*],
pursuant to separate agreement on such terms and prices as the
parties may agree.
7.4 COMPETITIVENESS. [*]. If [*] because a Product supplied by
SDAD is not competitive in [*], then CT may purchase that
Product (or a comparable substitute) from another source in
accordance with this Section 7.4, and thus [*] its obligation
hereunder to purchase that Product from SDAD.
(A) SDAD will meet the following targets (collectively,
the "Competitive Targets") with respect to any given
reference date:
(I) The price charged by SDAD for each Product
under this Agreement [*] (or a substitute
meeting comparable [*]) that is the subject
of a legally-binding offer by a bona fide
named second source, including CT or an
Affiliate of CT subject to Sections 7.4(e)
and 7.4(f), that has capacity available to
manufacture the Product and guarantees the
[*].
(II) SDAD must deliver each Product to CT on the
scheduled delivery day in at least [*] of
all deliveries under Conforming Orders as
measured over the [*] period preceding any
given reference date; for purposes of this
clause, a "Conforming Order" is an Order
placed in accordance with Section 4 of the
Agreement.
(III) Each Product must have an [*] over the
[*] period preceding any given reference
date) that is less than the target [*] rate
in effect on date that the Product is
delivered to CT. For Products other than the
[*] the target [*] rates will be as follows:
[*] upon execution of contract
[*] upon completion of all
milestones of the Transition Plan
[*] from and after [*] (but only for
[*]) [*] from and after [*] (but
only for [*])
The quality targets are the reasonable
result of careful considerations in line
with general business and marketing
conditions. In case however SDAD should give
evidence that such quality targets cannot be
achieved even under SDAD's requested
assistance of CT's quality expertise, as
requested by SDAD, for general objective
reasons then the parties shall agree on an
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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adjustment of the quality targets according
to the joint quality findings.
For the [*] however, based on the defined
quality targets of CT, the parties shall
jointly define and establish milestones to
achieve the [*] target of [*] within [*]
months after SOP at the latest. In case
however, based on joint findings, these
quality targets should not be achievable for
objective reasons then the quality target
shall be jointly adjusted accordingly.
This however, shall not relieve SDAD from
its obligation to take any reasonable effort
to achieve such target and CT, upon request,
to assist with any reasonable quality
assistance within such activities.
For purposes of determining under this
Section 7.4(a)(iii) whether a Product's [*]
rate is below the applicable target [*]
rate, the following [*] will not be counted:
[*].
(B) If SDAD fails to meet the Competitive Targets with
respect to a particular Product (other than an [*]),
then CT may, as its exclusive remedy, purchase that
Product (or a comparable substitute if the Product is
proprietary to SDAD) from a named second source,
subject to the fulfillment of any pending Orders if:
(i) CT notifies SDAD in writing of CT's intention to
purchase the Product from the second source,
specifying, in reasonable detail, the proposed second
source, the specific Products and the Competitive
Targets that SDAD has failed to meet ("Notice of
Intent"); such notice must be given within a
reasonable time after SDAD fails to meet the
Competitive Targets; (ii) CT uses its best efforts to
help SDAD meet the Competitive Targets cited in the
Notice of Intent; and (iii) despite the best efforts
of both parties, SDAD is not able to meet, within [*]
after its receipt of the Notice of Intent, the
Competitive Targets cited in the Notice of Intent. If
SDAD effects cure within the allotted [*] period,
then CT may not undertake the second-source purchase
of such Product as described in its Notice of Intent.
Otherwise, CT may undertake the second-source
purchase of such Product as described in its Notice
of Intent Only in case such Notice of Intent is given
to SDAD within the time frame of [*] and [*], then
second source supply shall not start earlier than the
[*] following the expiration of the [*] cure period.
(C) No [*] provision in this Agreement, including Section
[*], will apply to any Product for which CT elects to
procure from a second source pursuant to this
Section.
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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(D) In case that CT, in accordance with the provision
above, reduces delivery volume or replaces SDAD as
delivery source because of missing competitiveness
and informs SDAD of such decision accordingly in
writing, then SDAD is granted an option to [*].
(E) [*]. CT shall during the lifetime of such contract
immediately inform SDAD in case [*].
(F) CT may not, [*], exercise its second source rights
under Section 7.4 with itself or its Affiliate as the
proposed second source. [*], CT may exercise its
second source rights under Section 7.4 with itself or
its Affiliate as the proposed second source, but
subject to the following: (i) CT and its Affiliates
may not act as a second source for any purpose for
orders placed [*], notwithstanding any provision in
this Agreement to the contrary; (ii) CT and its
Affiliates may not act as a second source for [*],
notwithstanding any provision in this Agreement to
the contrary; (iii) the comparison of SDAD's price
with the price offered by CT or its Affiliate, for
purposes of determining whether the Competitive Price
Target has been met, must [*]; (iv) if CT or its
Affiliate in any circumstance acts as a second
source, then [*] Sections [*] will automatically
terminate and the provisions of [*] will apply.
(G) In case SDAD's [*] development activities after joint
analysis of the parties cannot be successfully
completed, then CT and SDAD shall no longer be
restricted by this Agreement with regard to the [*].
For purposes of clarity, in such event, CT may
purchase [*]type products from a second source,
including CT itself or an Affiliate, subject to
Section 6.4(d), and the [*]will terminate, and [*].
8. OWNERSHIP OF INTELLECTUAL PROPERTY RIGHTS.
8.1 SDAD OWNERSHIP RIGHTS. As between the parties, SDAD will own
all right, title and interest in and to Intellectual Property
Rights including any designs, patterns, schematics, copyrights
and other proprietary rights and know-how, embodied in the
Products (including but not limited to any [*]) offered by or
on behalf of SDAD pursuant to the Agreement. SDAD will have
the exclusive right to apply for or register patents,
copyrights, and such other proprietary protections as it
wishes with respect to such Intellectual Property Rights.
Integration of SDAD's technology into a [*] and/or [*]
supplied by CT does not transfer ownership of rights or rights
thereof. Notwithstanding any provision of this Agreement to
the contrary, SDAD will retain rights and sole interest in any
[*] and any [*].
8.2 CT OWNERSHIP RIGHTS. Subject to the rights of SDAD in
accordance with the terms of this Agreement, herein, as
between the parties CT will own all right, title and interest
in and to any Intellectual Property Rights, including designs,
patterns, schematics, logic, copyrights, other proprietary
rights and know-how embodied in
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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the [*] as developed by CT pursuant to the Existing Supply
Agreements. For purposes of this Section, "[*]" means the
following items as used in the [*]: [*] and [*] supplied to CT
by [*]. CT will have the exclusive right to apply for or
register patents, copyrights, and such other proprietary
protections as it wishes with respect to such Intellectual
Property Rights.
8.3 JOINT SDAD/CT OWNERSHIP RIGHTS. Subject to mutual future
agreement, SDAD and CT may perform joint development efforts
for increased automotive market competitiveness. Both
companies may elect to pursue joint worldwide right, title and
interest in any designs, patterns, schematics, copyrights and
other proprietary rights and know-how embodied in jointly
developed systems. SDAD will retain rights and sole interest
in any [*] and any [*], whether or not jointly developed. CT
will retain rights and sole interest in any packaging
technology that it provides to SDAD in such joint development
efforts. CT on request of SDAD accepts to grant SDAD a [*]
unlimited right and license, with right to sublicense to SDAD
subcontractor, to use such CT [*] technology in SDAD's [*]
business, however, after expiration of this Agreement, SDAD
will pay a license fee [*].
8.4 PROTECTION OF PROPRIETARY RIGHTS. Each party agrees to execute
such documents, render such assistance, and take such other
action as reasonably requested, to apply for, register,
perfect, confirm and protect the requesting party's rights in
its proprietary rights relating to this Agreement. SDAD and CT
may document the other party's proprietary information on its
own internal documentation as required to conduct the project,
without explicit written permission from the other party. Each
party shall document by listing the documents that have the
other party's proprietary data and supply this listing to the
other party. Documents containing the other party's
proprietary data shall be noted as such. Dissemination of such
documents shall be restricted and not provided to third
parties without the prior express written approval of the
other party.
8.5 CONFIDENTIALITY. The provisions of Schedule D are hereby
incorporated by reference. It is understood and agreed between
the parties that any disclosure of information on the
agreement and its content by one party requires the prior
approval of the other party before announcement. Such approval
may however not be withheld to the extent such disclosure of
information and/or announcement is required by law.
8.6 FURTHER ASSURANCES. If under applicable mandatory law the
allocation of Intellectual Property Rights set forth in this
Section 8 does not automatically vest in the party entitled to
own such rights as set forth in this Section (the "Entitled
Party"), then the other party (the "Assigning Party") hereby
irrevocably transfers, conveys and assigns (and covenants to
irrevocably transfer, convey and assign) to the Entitled Party
such of its right, title and interest in the Entitled Party's
Intellectual Property Rights as necessary to achieve the
allocation of ownership set forth in this Section 8.
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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9. LICENSE OF INTELLECTUAL PROPERTY RIGHTS.
9.1 DELIVERY AND LICENSE OF [*] TECHNOLOGY. SDAD has, prior to the
Effective Date, and will, during the term of this Agreement,
deliver to CT certain confidential and proprietary technology
including know-how for use by CT in [*] and in [*] for use in
the [*] ("SDAD Proprietary Know-How"). CT will treat SDAD
Proprietary Know-How as Confidential Information of SDAD.
Subject to the Transition Plan and the terms of this
Agreement, SDAD hereby grants CT the following licenses
throughout the world during the term of this Agreement:
(A) a [*] license under the SDAD Proprietary Know-How
solely to [*] for the [*] using [*] supplied by SDAD
or, as applicable to [*], an [*];
(B) a [*], license under the SDAD Proprietary Know-How
solely to [*]: (i) [*] supplied by SDAD, and (ii) [*]
either supplied by SDAD under the 2001 Supply
Agreement or manufactured by or for CT under the
license of Section 9.1(a); and
(C) a [*], license under the patents listed in Schedule E
solely to [*] the [*] using [*] and [*] supplied by
SDAD or an [*]; and [*] units that incorporate such
[*];
provided however that, relative to the have made
rights contained in this Section 9.1, any third party
supplier of CT will keep confidential any SDAD
Proprietary Know-How to the same extent as CT's
obligations under this Agreement and shall only make
use of such know-how for the production of CT's
requirements. CT however shall advise SDAD of the
disclosure to any third party CT supplier.
9.2 [*] LICENSE TO USE AND SELL [*]. The Products include [*] as
designated in Schedule A. [*] are subject to patents and other
Intellectual Property Rights of SDAD including the patents
listed on Schedule E (collectively, the "[*] IP"). CT
acknowledges and agrees that sales of [*] under this Agreement
to CT or any of its Affiliates are not unconditional and that
SDAD's rights in [*] IP (including SDAD's exclusive right to
use and sell under applicable patent law) remain in full
effect and are not exhausted upon sale of [*] by SDAD to CT or
any of its Affiliates. Subject to the foregoing and the other
terms of this Agreement, SDAD hereby grants CT the following
license [*]:
(A) an [*] license under the [*] IP, during the [*]
(defined below), to use [*] supplied by SDAD [*]
solely for use in [*], and to [*], subject to the
reservations of Section 9.5; and
(B) a [*] license under the [*] IP, during the term of
this Agreement, to use [*] supplied by SDAD to [*]
solely for use in [*], and to [*].
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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9.3 LICENSE TO MANUFACTURE [*]. Subject to and in accordance with
the Transition Plan and the terms of this Agreement, SDAD
grants CT an [*] license under SDAD's applicable Intellectual
Property Rights to have the [*] made by an [*] and to use,
sell, offer for sale and import such [*] supplied by SDAD.
SDAD will from time to time designate one or more [*] in
writing to CT. CT must make its own arrangements with [*],
subject to the terms and conditions of this Agreement. SDAD
will have no responsibility for the performance of the [*] and
no liability arising out of any contract between CT and the
[*]. For the avoidance of doubt, CT will not be entitled under
this Section to any [*]. CT may at its own expense and risk
contract with the [*] to provide an [*] pursuant to this
license that is manufactured with quality control or other
processes specified by CT; provided, however, that CT must
permit and require the [*] to assign a [*] produced using such
modified process so that SDAD's other customers can continue
to order the non-modified [*] from the [*] under its original
part number.
9.4 [*] TERM. The "[*] Term" commences upon the Effective Date and
terminates on the earlier of [*] or [*] CT has initiated
continuous series production of [*] using the [*]; provided,
however, that the [*] Term will end and the license granted
under Section 9.2 will become [*] if: (a) [*]; or (b) CT by
its own actions does not make a commitment to meeting defined
milestones that would result in continuous series production
by [*].
9.5 RESERVATION OF RIGHTS. SDAD may use and further license the
SDAD Proprietary Know-How to any party without restriction.
Subject only to CT's [*] rights under Section 9.2, SDAD may
sell [*] to third parties. Notwithstanding any provision in
this Agreement to the contrary (including Sections [*]), SDAD
may: (a) make, have made, use, sell, offer for sale and import
[*] in [*] at any time, [*], but only [*]; and (b) sell [*] to
[*] Rate Sensor Products from SDAD (including [*]), for use in
[*]. After the expiration or other termination of the [*]Term,
SDAD will be free to [*].
9.6 ROYALTIES. Royalties payable under this Section 9 will be
included in the price of the [*] and other Products that CT is
required to use in exercising its license rights under this
Section 9. Should CT be entitled under the terms of this
Agreement to use a second source of Rate Sensor Products, and
should in that case CT desire to use SDAD Proprietary Know-How
to manufacture [*] that do not include Products supplied by
SDAD, then the parties will agree on license terms to permit
such use that are otherwise consistent with the terms of this
Agreement, including a reasonable royalty rate, not to exceed
[*] of the [*] of such [*], payable to SDAD.
9.7 EXCLUSIONS. No rights are granted by SDAD under this Section 9
to: (i) any source code of any software or HDL files for any
[*]; (ii) modify the [*]; (iii) use the [*] to develop sensors
having similar functions as the [*]; or (iv) manufacture or
have manufactured a [*] or any other rate sensor. CT, for
itself and its
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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Affiliates, agrees that it and they will not disassemble,
decompile or otherwise reverse engineer any software in the
[*] except to the extent permitted according to compulsory
applicable law notwithstanding the foregoing prohibition, and
then only upon giving prior notice to SDAD that gives a
detailed explanation as to the reverse engineering to be
performed and the legal basis for doing so.
9.8 PROHIBITIONS. CT expressly agrees for itself and its
Affiliates not to use, sell, offer for sale, or otherwise
dispose of SDAD Proprietary Know-How or [*] except as
expressly permitted by this Agreement. CT may not assign,
sublicense or otherwise transfer the license rights granted
under this Section 9, except that CT may sublicense the rights
granted under this Section 9 to its Affiliates; provided,
however, that CT gives SDAD prior written notice of such
sublicenses and further provided that each Affiliate to whom
CT grants a license agrees in writing to be bound by the terms
and conditions of this Agreement applicable to CT in respect
of such license, including the provisions of this Section 9.
9.9 REMEDIES. If CT breaches its obligations under this Section 9,
and such breach is not cured within [*] days after SDAD
objects in writing, then SDAD may, in addition to its other
remedies that are available at law or under this Agreement,
terminate at its election [*] or [*] by giving CT [*] days
notice.
9.10 MARKING. CT will xxxx any [*] manufactured under the licenses
of this Section 9 with patent numbers specified by SDAD in
accordance with applicable law including 35 U.S.C. 287 in the
United States.
10. WARRANTIES.
10.1 MUTUAL REPRESENTATIONS AND WARRANTIES. Each party represents
and warrants, solely to and for the benefit of the other,
that: (a) it is a corporation duly organized and in good
standing under the laws of its respective jurisdiction of
incorporation indicated in the preamble to this Agreement; (b)
it has the full corporate right, power and authority to enter
into this Agreement, grant the rights set forth herein and
perform its obligations hereunder; (c) its performance of this
Agreement, and the other party's exercise of such other
party's rights under this Agreement, will not conflict with or
result in a breach or violation of any of the terms or
provisions or constitute a default under any other agreement
by which it is bound; (d) when executed and delivered, this
Agreement will constitute a legal, valid and binding
obligation enforceable against it in accordance with its
terms; and (e) it will comply with all applicable laws,
regulations and orders of any governmental authority of
competent jurisdiction in its performance of this Agreement.
10.2 LICENSED IP. SDAD warrants to and for the sole benefit of CT
that SDAD owns the SDAD Proprietary Know-How and has the right
to grant the licenses granted in Section 9.1 and 9.2. CT's
exclusive remedy for breach of this warranty is to seek
indemnification under Section 11.2. SDAD makes no warranty or
promise
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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under this Agreement: (a) as to the validity or scope of the
SDAD Proprietary Know-How or any other Intellectual Property
Rights licensed hereunder; (b) that the use, manufacture, or
sale of any product, process or service using the SDAD
Proprietary Know-How will be free from infringement of the
Intellectual Property Rights of any third-party; (c) that SDAD
will file, register, prosecute, maintain, or enforce any
patent or other Intellectual Property Right; or (d) that SDAD
Proprietary Know-How will meet CT's requirements or achieve
any particular result.
10.3 PRODUCT WARRANTY. SDAD warrants to and for the sole benefit of
CT that, for a period ending on the earlier of: (a) [*]; or
(b) [*] ("Product Warranty Period"), each Product (other than
any [*] procured by CT or its Affiliate from an [*]) will be
free from defects in materials and workmanship and will
perform in accordance with its applicable Specifications. CT's
exclusive remedy for breach of this warranty is to notify SDAD
of the breach in writing during the applicable Product
Warranty Period, whereupon SDAD, as its sole obligation and
liability, will either repair or replace the defective Product
or, at SDAD's election refund to CT the price paid for the
defective Product. This warranty does not apply to Products
that have been subject to misuse, unauthorized, modification,
neglect, improper testing or installation, attempts to repair
or accident, flood, fire, radiation or other hazard. [*], then
the parties shall agree on such [*]. The price for those parts
under such [*] shall then jointly be adjusted according to the
economic effects of such [*].
10.4 [*]. SDAD warrants to and for the sole benefit of CT that, for
a period ending on the earlier of: (a) [*]; or (b) [*] ("[*]
Warranty Period"), that the design of such [*] will conform to
the [*] Specifications. The foregoing warranty applies only to
[*] purchased by CT or its Affiliate from an [*]. SDAD does
not warrant under this Section 10.4 that any [*] purchased
from an [*] will be free from defects [*] relating to or
occurring in the [*]. CT's exclusive remedy for breach of this
warranty is to notify SDAD of the breach in writing during the
applicable [*] Warranty Period, whereupon SDAD, as its sole
obligation and liability, will[*]. In case however a car
manufacturer requests a longer warranty period, then the
parties shall agree on such longer warranty period which shall
not be in excess of the warranty period granted by CT. The
price for those parts under such longer warranty period shall
then jointly be adjusted according to the economic effects of
such period extension.
10.5 DISCLAIMER. THE WARRANTIES OF SECTIONS 10.1 THROUGH 10.4 ARE
IN LIEU OF ANY OTHER WARRANTY WITH RESPECT TO THE PRODUCTS,
SDAD PROPRIETARY KNOW-HOW OR OTHER INTELLECTUAL PROPERTY
LICENSED HEREUNDER, WHETHER EXPRESSED OR IMPLIED, WRITTEN OR
ORAL, WHICH SDAD HEREBY DISCLAIMS, INCLUDING ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE,
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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TITLE, NONINFRINGEMENT AND ANY IMPLIED WARRANTIES ARISING FROM
USAGE OF TRADE, COURSE OF DEALING OR COURSE OF PERFORMANCE. TO
THE EXTENT THAT SDAD MAY NOT DISCLAIM ANY WARRANTY AS A MATTER
OF APPLICABLE LAW, THE SCOPE AND DURATION OF SUCH WARRANTY
WILL BE THE MINIMUM PERMITTED UNDER SUCH LAW. SDAD
SPECIFICALLY DISCLAIMS ANY WARRANTY HEREUNDER WITH RESPECT TO
[*] THAT ARE MANUFACTURED OR ASSEMBLED BY CT (REGARDLESS OF
WHETHER SUCH [*] WERE DESIGNED BY SDAD) AND FOR ANY GOOD OR
SERVICE THAT CT PROCURES FROM A THIRD PARTY (INCLUDING AN
AUTHORIZED FABRICATOR) IN CONNECTION WITH CT'S MANUFACTURE OF
[*] AND [*].
11. IP INDEMNIFICATION.
11.1 OBLIGATIONS OF CT. CT agrees (a) to assume the defense of any
suit or claim brought against SDAD for infringement of any
patent, copyright or other proprietary rights arising from or
caused by the manufacture, sale or use of the [*] or other
products by CT or the use by SDAD of specifications,
technology, designs or customer furnished (CF) material
provided to SDAD by CT, (b) to pay the expense of such
defense, and (c) to indemnify SDAD against any money damages
or costs, including counsel fees, awarded in such suits or
claims by reason of such infringement; provided that (i) CT be
given exclusive control of the defense of such suit or claim
and all negotiations relative to the settlement thereof; after
consultation with SDAD, (ii) CT will have no responsibility
under this Section to the extent that the suit or claim will
have arisen solely in connection with the sale or use of
Products supplied by SDAD or because of specifications,
technology or designs contributed by SDAD to CT as SDAD
Proprietary Know-How and (iii) SDAD promptly informs CT in
writing of any, suits or claims with respect to which CT
assumes responsibility hereunder; provided, however, that no
failure or delay in providing such notice will relieve CT of
any of its obligations under this Section 11.1 except to the
extent CT is actually prejudiced thereby. If specifications,
technology, designs or CF material furnished by CT to SDAD for
use under this Agreement are, or in the opinion of CT may
become, the subject of any claim, suit or proceeding for
infringement of any [*], or if it is adjudicatively determined
that the specifications, technology or designs infringe any
[*], or if the manufacture, sale or use of the [*], or any
part thereof, is, as a result, enjoined, then CT may, at its
option and expense; (i) procure for SDAD and its customers the
right under such [*] to use the specifications, technology or
designs as required to perform hereunder; (ii) suitably modify
such specifications, technology or designs (iii) replace the
specifications, technology or designs with other suitable
alternatives; or (iv) if the use of such specifications,
technology or designs is prevented by injunction,
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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remove such specifications, technology or designs. CT will not
be liable for any cost or expenses incurred without its prior
written authorization.
SDAD will have the right to participate in the defense of any
such suit or claim with its own counsel and at its own
expense. CT will not settle a claim without SDAD's prior
written consent, which consent will however not unreasonably
be withheld, if (a) any portion of the settlement would
involve an admission that a Product directly or indirectly
infringes any proprietary right of any third party, (b) the
settlement would involve a payment by SDAD for which SDAD
would not be indemnified by CT under this Section 11.1, or (c)
the settlement does not include a complete release of SDAD.
11.2 OBLIGATIONS OF SDAD. SDAD agrees (a) to assume the defense of
any suit or claim brought against CT for the infringement of
any patent, copyright or other proprietary right arising from
or caused by the manufacture, sale or use of the Products or
the disclosure of SDAD Proprietary Know-How by SDAD to CT, (b)
to pay the expense of such defense, and (c) to indemnify CT
against any money damages or costs, including counsel fees,
awarded in such suits or claims by reason of such
infringement; provided that (i) SDAD will be given exclusive
control of the defense of such suit or claim and all
negotiations relative to the settlement thereof, after
consultation with CT, (ii) SDAD will have no responsibility
under this Section to the extent that the suit or claim arises
from the use of specifications, technology or designs
contributed by CT hereunder or from the combination or use of
Products or SDAD Proprietary Know-How with other components or
processes if the Product or SDAD Proprietary Know-How by
itself would not have directly infringed, and (iii) CT
promptly informs SDAD in writing of any suits or claims with
respect to which SDAD assumes responsibility hereunder,
provided however, that no failure or delay in providing such
notice will relieve SDAD of any of it obligations under this
section except to the extent SDAD is actually prejudiced
thereby. SDAD will not be liable for any costs or expenses
incurred without its prior written authorization. If CT
chooses to provide its own defense, CT will bear that expense.
If Products furnished by SDAD for use in the [*] units are, or
in the opinion of SDAD may become the subject of any claim,
suit, or proceeding for infringement of any [*] or if the sale
or use of the Products, or a part thereof, is, as a result
enjoined, then SDAD may, at its option and expense; (i)
procure for CT and its customers the right under such [*] to
use the Product as incorporated in the [*]; (ii) suitably
modify the specifications, technology or designs utilized in
the Product; (iii) replace the specifications, technology or
designs utilized in the Product with other suitable
alternatives; or (iv) if the use of the specifications,
technology or designs utilized in the Product is prevented by
injunction, remove such specifications, technology or designs
utilized in the Product.
CT will have the right to participate in the defense of any
such suit or claim with its own counsel and at its own
expense. SDAD will not settle a claim without
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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CT's prior written consent, which consent will however not
unreasonably be withheld, if (a) any portion of the settlement
would involve an admission that a [*] directly or indirectly
infringes any proprietary right of any third party, (b) the
settlement would involve a payment by CT or which SDAD would
not be indemnified by CT under this Section 11.2, or (c) the
settlement does not include a complete release of CT.
11.3 ENTIRE LIABILITY. This indemnity states the entire liability
of the parties for infringement by Products or the
SDAD-Proprietary Know How and is in lieu of any other
indemnity, express, implied or statutory and no agreement
altering it will be binding upon either party unless in
writing and signed by a duly authorized officer or
representative of each party.
12. PRODUCTS LIABILITY INDEMNITY.
12.1 PRODUCTS LIABILITY INDEMNITY BY CT. CT will defend, indemnify
and hold SDAD harmless from and against all claims,
liabilities and expenses, including reasonable attorneys'
fees, arising out of the death of or bodily injury to any
person or persons or damage to property resulting from CT's
manufacturing or marketing of CT's products into which SDAD's
Products are incorporated; provided, however, that (i) SDAD
provides CT prompt written notice of any such claims provided,
however, that any failure or delay in providing such notice
will not relieve CT of its obligations under this section,
except to the extent that CT is actually prejudiced by such
failure or delay, (ii) CT will not be obligated to indemnify
SDAD for any claims in connection with any settlement unless
CT consents in writing to such settlement and (iii) CT will
have the exclusive right to defend any such claim. CT will not
have the right to settle any such claim without prior written
consent of SDAD, which consent cannot be unreasonably
withheld.
12.2 PRODUCTS LIABILITY INDEMNITY BY SDAD. SDAD will defend,
indemnify and hold CT harmless from and against all claims and
expenses, including reasonable attorneys' fees, arising out of
the death of or bodily injury to any person or persons or
damage to property resulting from [*] in Products supplied by
SDAD hereunder (other than [*]) ; provided, however, that (i)
CT provides SDAD prompt written notice of any such claim
provided, however, that any failure or delay in providing such
notice will not relieve SDAD of its obligation under this
section except to the extent that SDAD is actually prejudiced
by such failure or delay; (ii) SDAD will not be obligated to
indemnify CT for any loss in connection with any settlement
unless SDAD consents in writing to such settlement; and (iii)
SDAD will have the exclusive right to defend any such claim.
SDAD will not have the right to settle any such claim without
the prior written consent of CT, with consent cannot be
unreasonably withheld.
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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12.3 INSURANCE. During the term of this Agreement and for [*]
thereafter, each party will maintain, at its own expense,
commercial property, casualty, and liability insurance in
amounts customary for businesses operating in such party's
respective industry, which at a minimum will include
comprehensive general liability insurance with coverage of at
least [*] dollars ($[*]) in product liability insurance.. Each
party will provide the other party with prompt written notice
of any material changes in its insurance coverage.
13. LIMITATIONS OF LIABILITY.
13.1 EXCEPT AS PROVIDED IN THIS SECTION 13, NEITHER SDAD NOR CT
WILL BE LIABLE OR OBLIGATED IN ANY MANNER FOR ANY SPECIAL,
INDIRECT, INCIDENTAL, EXEMPLARY, PUNITIVE, OR CONSEQUENTIAL
DAMAGES UNDER ANY CAUSE OF ACTION AND EVEN IF INFORMED OF THE
POSSIBILITY THEREOF IN ADVANCE, ARISING OUT OF THIS AGREEMENT
OR BY REASON OF BREACH OF THIS AGREEMENT. THESE LIMITATIONS
WILL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF
ANY EXCLUSIVE REMEDY.
13.2 SDAD'S AND CT'S LIMITATIONS OF LIABILITY AND DAMAGES IN THIS
SECTION 13 WILL NOT APPLY IN CASES OF GROSS NEGLIGENCE OR
FRAUDULENT INTENT, OR TO CLAIMS BY EITHER PARTY FOR
MISAPPROPRIATION OF ITS CONFIDENTIAL INFORMATION OR
INFRINGEMENT OF SUCH PARTY'S INTELLECTUAL PROPERTY RIGHTS, OR
[*].
13.3 NOTWITHSTANDING ANY PROVISION IN THIS AGREEMENT TO THE
CONTRARY, SDAD WILL HAVE NO OBLIGATION OR RESPONSIBILITY
WHATSOEVER WITH RESPECT TO ANY THIRD PARTY SUPPLIER ENGAGED BY
CT TO PERFORM FINAL ASSEMBLY OR TO PROVIDE [*] UNITS OR OTHER
COMPONENTS OR ANY ASPECT OF ANY RATE SENSOR PRODUCT ABOVE THE
LEVEL OF THE PRODUCT SUPPLIED BY SDAD.
13.4 NOTHING IN THIS SECTION SHALL ALLOW CT TO [*] OR OTHERWISE [*]
TO PURCHASE [*] OF RATE SENSOR PRODUCTS FROM SDAD UNDER THIS
AGREEMENT OR THE EXISTING SUPPLY AGREEMENTS HEREUNDER OR TO
AVOID OR LIMIT CT'S LIABILITY FOR SDAD'S DAMAGES ATTRIBUTABLE
TO CT'S FAILURE TO MEET THIS OBLIGATION, UNLESS THAT FAILURE
IS A RESULT OF A MATERIAL BREACH BY SDAD OF THIS AGREEMENT OR
THE EXISTING SUPPLY AGREEMENT WHICH IS NOT CURED BY SDAD
WITHIN [*] DAYS AFTER CT NOTIFIES SDAD OF THE BREACH IN
WRITING.
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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13.5 THE PARTIES ACKNOWLEDGE THAT THE PRICES CHARGED BY SDAD FOR
PRODUCTS REFLECT THE ALLOCATION OF RISK BETWEEN THE PARTIES
AND THAT NEITHER PARTY WOULD ENTER INTO THIS AGREEMENT WITHOUT
THESE LIMITATIONS ON ITS LIABILITY.
14. TERM AND TERMINATION.
14.1 TERM. This Agreement will commence upon the Effective Date and
will remain in effect for an initial term of [*]. The term of
this Agreement may be extended by mutual agreement of the
parties to be reached at least [*] months before expiration of
the then-current term.
14.2 TERMINATION FOR CAUSE. Either party will have the right to
terminate the Agreement for cause hereunder upon the
occurrence of any of the following events of default (subject
to the other party's ability to cure or remedy such event as
described in Section 14.3):
(A) The other party materially breaches any of its
confidentiality, nondisclosure or other obligations
under the Agreement; or
(B) The other party becomes the subject of any voluntary
or involuntary bankruptcy proceeding or any other
proceeding concerning insolvency, dissolution,
cessation of operations, reorganization of
indebtedness, an assignment for the benefit of
creditors, or the like, and the proceeding is not
resolved in its favor within ninety (90) days after
appropriate service of process.
14.3 RIGHT TO CURE EVENT OF DEFAULT. Other than an event described
in Section 14.2(b), upon the occurrence of any event of
default entitling a party to terminate the Agreement, the
non-defaulting party will send written notice of termination,
specifying the nature of the default, to the other party. The
defaulting party will have [*] days following the date such
notice is given to cure the default or to resolve the default
to the non-defaulting party's reasonable satisfaction. Failure
to cure or to resolve the default will result in termination
without further notice by the non-defaulting party, unless
such non-defaulting party extends the cure period by written
notice or withdraws the default notice. However, the willful
material breach of Section 8.5 (Confidentiality) will be
considered a breach, which cannot be cured and may be the
basis for immediate termination of the Agreement.
14.4 EFFECT OF TERMINATION. Upon the expiration or other
termination of this Agreement for any reason, the following
will apply:
(A) Subject to the terms and conditions of this
Agreement, CT may buy a Product for [*] following
termination in accordance with the terms of this
Agreement, but only if CT has commenced production of
CT's products using the Product prior to termination
of this Agreement and only to the
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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extent that alternatives to the Product are not
reasonably available from other suppliers, taking
into account [*]. The parties will negotiate prices
for such post-termination sales at the time this
Agreement terminates.
(B) For [*] following termination, SDAD will produce and
deliver Products to CT in accordance with the terms
of this Agreement, as necessary for CT to fulfill its
warranty obligations to its customers with respect to
CT's products in production at the time of
termination, at prices to be negotiated by the
parties at the time this Agreement terminates.
(C) CT will destroy or return and will not use, or cause
to be used, any of SDAD's Confidential Information or
patented technology that SDAD provides to CT during
the term of this Agreement, except as necessary to
exercise its post-termination rights under Section
14.4(e). Upon SDAD's request, CT will certify its
compliance with this Section within [*] after
termination.
(D) SDAD will destroy or return and will not use, or
cause to be used, any of CT's Confidential
Information or patented technology that CT provides
to SDAD for use in the [*], except as may be required
for SDAD to perform its post-termination sales
obligations under Sections 14.4(a) and (b). Upon CT's
request, SDAD will certify its compliance with this
Section within thirty (30) days after termination.
(E) The licenses and sublicenses granted under Section 9
will terminate, except that subject to all the terms
and conditions of this Agreement, CT may continue to
[*], subject to the terms of this Agreement, solely
as necessary to build CT products using Products
ordered during the term of this Agreement or supplied
after termination of this Agreement under Section
14.4(a) or 14.4(b) and further subject to Section
14.5.
(F) If this Agreement terminates during a calendar year
for any reason (other than a termination for cause by
CT in accordance with Section 14.2), then within [*]
days after such termination, CT will [*] for that
year calculated by SDAD in accordance with Section
5.3 but based on actual [*] as of the date of
termination without regard to the Forecast or pending
Orders. In accordance with Section 5.3, SDAD will
reconcile the [*] by [*] of the year in which this
Agreement terminates to take into account any
post-termination [*] made under Sections 14.4(a) and
14.4(b).
(G) Neither party will have any further obligations [*]
and the [*] Term (as defined in Section 9.4) will
terminate.
(H) The Existing Supply Agreements will remain in effect
in accordance with their terms, subject to Section
2.4 of this Agreement.
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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(I) The expiration or other termination of this Agreement
will not relieve either party of any obligation or
liability accrued under this Agreement prior to
termination or rescind any payment made by either
party or anything done by either party prior to
termination.
14.5 SURVIVAL CLAUSE. The following provisions will survive
expiration or other termination of this Agreement for any
reason: [*]. After termination of the agreement, CT is granted
an option to have a non exclusive license in accordance with
Section 9 only however on those rights which have already been
granted and used by CT for its production to continue with its
production programs. For such non-exclusive license, CT agrees
to pay SDAD a license fee [*].
15. GENERAL PROVISIONS.
15.1 NOTICE. Any notice provided for or permitted under this
Agreement will be treated as having been given when (a)
delivered personally, (b) sent by confirmed facsimile, telex
or telecopy, or (c) sent by commercial overnight courier with
written verification of receipt, to the party to be notified,
at the address set forth below, or at such other place of
which the other party has been notified in accordance with the
provision of this Section.
If to SDAD: SYSTRON XXXXXX AUTOMOTIVE DIVISION
BEI TECHNOLOGIES, INC.
0000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
XXX
Attention: [*]
Fax: [*]
[*]
With a copy to: Xxxxxx Godward LLP
Xxx Xxxxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
XXX
Attention: [*]
Fax: [*]
If to CT: Continental Xxxxx XX & Co. oHG
Xxxxxxxxxxxxxxx 0
00000 Xxxxxxxxx
Xxxxxxx
Attention: [*]
Fax: [*]
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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15.2 COMPLIANCE WITH EXPORT RESTRICTIONS.
(A) The ultimate shipment of Products to CT or any of its
Affiliates shall be subject to the right and ability
of SDAD to obtain any export licenses or other
approvals that may be required under United States
export control laws, regulations and requirements
presently in effect or which may be in effect or
hereafter adopted.
(B) CT hereby agrees: (i) to assist SDAD in obtaining any
such required export licenses or other approvals by
supplying such documentation or information as may be
requested by SDAD (ii) to comply with export control
laws, regulations and requirements of the government
of the United States (iii) to maintain the necessary
records to comply with such laws, regulations and
requirements; (iv) to not re-export any Product
except in compliance with such laws, regulations and
requirements; (v) to obtain all import licenses or
other approvals necessary to import Products; (vi) to
refrain from selling, transferring, or otherwise
disposing of the Products in violation of the export
control laws, regulations and requirements of the
United States of America; and (vii) to indemnify,
defend and hold harmless SDAD from any and all fines,
damages, losses, costs and expenses (including
reasonable attorneys' fees) incurred by SDAD as a
result of any breach of this Section 15.2 by CT or
any of CT's Affiliates or customers.
(C) CT hereby expressly acknowledges that the technical
data and the direct product thereof associated with
the Products are subject to export control laws,
regulations and requirements of the United States of
America and agrees that neither the technical data
nor the direct product thereof will be transferred,
directly or indirectly, to any destination contrary
to the provisions of License Exception TSR of the
Export Administration Regulations as well as the
applicable provisions (if any) of the International
Trafficking in Arms Regulations (ITAR) and such other
regulations as the U.S. Department of Commerce, the
U.S. Department of State and the U.S. Department of
Treasury may issue from time to time. This provision
shall survive the termination of this agreement. CT
hereby provides its assurance that it will not
participate in any transaction which may involve any
commodity or technical data, or the direct product
thereof, exported or to be exported from the United
States of America, or in any re-export thereof, or in
any other transaction that is subject to export
controls of the United States of America, if a person
denied export privileges from the United States of
America, may obtain any benefit from or have any
interest in, directly or indirectly, these
transactions. CT further provides its assurance that
it will not participate knowingly in any transaction
with a party engaged, directly or indirectly, in the
design,
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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development, stockpiling or use of nuclear, chemical
or biological weapons or missiles.
15.3 WAIVER. No term or provision hereof will be considered waived
by either party, and no breach excused by either party, unless
such waiver or consent is in writing signed by both parties.
No consent by either party to, or waive of, a breach by either
party, whether express or implied, will constitute a consent
to, waiver or, or excuse of any other, different, or
subsequent breach by either party.
15.4 ASSIGNMENT. SDAD or CT may assign the Agreement to any person
to whom it transfers all or substantially all of its
proprietary rights in [*] or the [*], respectively, so long as
such assignee agrees to be bound by all provisions of this
Agreement applicable to the assigning party. Otherwise,
neither party may assign, voluntarily, by operation of law, or
otherwise, any rights or delegate any duties under this
Agreement without the other party's prior written consent,
such consent not to be unreasonably withheld, and any attempt
to do so without that consent will be void. The Agreement will
bind and inure to the benefit of the parties and their
respective successors and permitted assigns.
15.5 RELATIONSHIP OF THE PARTIES. The parties to the Agreement are
independent contractors. There is no relationship of agency,
partnership, joint venture, employment, or franchise between
the parties. Neither party has the authority to bind the other
or to incur any obligation on its behalf. Neither party has
the power or authority as agent, employee or in any other
capacity to represent, act for, bind or otherwise create or
assume any obligation on behalf of the other party for any
purpose whatsoever. There are no third party beneficiaries
under this Agreement, including CT's Affiliates. CT will
defend and indemnify SDAD against any claim by an Affiliate of
CT arising under or relating to this Agreement. With respect
to the performance or breach of this Agreement, an act or
omission of an Affiliate of a party will be deemed an act or
omission of the party.
15.6 AMENDMENT. The Agreement may be amended or supplemented only
by a writing that is signed by duly authorized representatives
of both parties.
15.7 GOVERNING LAW AND JURISDICTION. The Agreement shall be
governed by and constituted under the laws of the United
States and the State of Michigan, without regard to that
state's conflict of laws principles. The United Nations
Convention on Contracts for the International Sale of Goods
will not apply to this Agreement. Any legal action arising out
of or relating to this Agreement or the transactions
contemplated hereby will be instituted exclusively in the
federal courts for the Eastern District of Michigan or the
state court sitting in Oakland County, Michigan, and each
party (on behalf of itself and, in the case of CT, its
Affiliates) hereby irrevocably submits to the exclusive
jurisdiction of such courts in any such action, and agrees not
to assert as a defense that an action brought before such
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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courts is brought in an inconvenient forum or that the venue
of such action is improper.
15.8 SEVERABILITY. If at any time any provision of this Agreement
is or becomes illegal, invalid or unenforceable in any respect
under the law of any jurisdiction, neither the legality,
validity or enforceability of the remaining provisions hereof
nor the legality, validity, or enforceability of such
provision under the law of any other jurisdiction will in any
way be affected or impaired thereby, and the remainder of the
provisions of this Agreement will remain in full force and
effect. The parties will endeavor in good faith negotiations
to replace any illegal, invalid or unenforceable provision
with a valid, legal and enforceable provision, the economic
effect of which comes as close as possible to the illegal,
invalid or unenforceable provision. If any [*] provision in
this Agreement, including the provisions of Sections [*], is
unenforceable under the laws of a particular jurisdiction,
then the [*] provisions of this Agreement will not apply to
either party solely in such jurisdiction but will otherwise
remain in force.
15.9 EQUITABLE RELIEF. Each party acknowledges that money damages
may not be an adequate remedy for breach this Agreement,
including Sections [*], and agrees that the other party may
apply to any court of law or equity of competent jurisdiction
for specific performance or injunctive relief (without posting
a bond or other security or showing irreparable harm) to
enforce or prevent any violation of those provisions of this
Agreement notwithstanding the exclusive jurisdiction and venue
provisions of Section 15.7.
15.10 ATTORNEYS FEES. In any action, suit or proceeding to enforce
or construe the provisions of this Agreement, the prevailing
party will be entitled to recover its reasonable attorney's
fees, court costs and other expenses incurred in connection
with such proceeding in addition to any other relief that it
may receive without regard to the limitations of liability
imposed in Section 13.
15.11 COSTS AND EXPENSES. Except as expressly provided for elsewhere
in this Agreement, each party will be responsible for all
costs and expenses incurred by it in performing its
obligations or exercising its rights under this Agreement.
15.12 FORCE MAJEURE. Any delay in or failure of performance by
either party under this Agreement (other than failure to pay
amounts owed) will not be considered a breach of this
Agreement and will be excused to the extent caused by any
occurrence beyond the reasonable control of such party
including, but not limited to fires, floods, epidemics,
famines, earthquakes, hurricanes and other natural disasters
or acts of God; regulation or acts of any civilian or military
authority or act of any self-regulatory authority; wars,
terrorism, riots, civil unrest, sabotage, or theft or other
criminal acts of third parties; failure of electronic or
mechanical equipment; and fluctuations in or failures of
electric power, heat, light, air
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
-32-
conditioning or telecommunications and shortages of
relied-upon services or supplies. This Section will not excuse
delay or failure to pay money when due.
15.13 CONSTRUCTION. The following rules will govern construction of
this Agreement:
(A) section headings are for convenience only and are not
to be used in interpreting this Agreement;
(B) as used in this Agreement, the word "including" means
"including but not limited to";
(C) in constructing the terms of this Agreement, no
presumption will operate in favor of or against any
party as a result of its counsel's role in drafting
the terms and provisions hereof;
(D) all references to Sections, Schedules and Exhibits
refer to the Sections, Schedules and Exhibits,
respectively, of this Agreement unless otherwise
indicated;
(E) in the event of a conflict between the main body of
this Agreement and its Schedules or Exhibits, the
language of this Agreement controls unless the
Schedule or Exhibit expressly references the
conflicting section of this Agreement (e.g.,
"Notwithstanding Section 5, the following will
apply...");
(F) any capitalized terms used in any Schedule or Exhibit
but not otherwise defined therein will have the
meaning as defined in this Agreement;
(G) all capitalized terms defined herein apply equally to
both the singular and plural forms of such terms;
(H) all monetary amounts refer to U.S. dollars unless
otherwise indicated;
(I) all times are with reference to the Pacific time zone
unless otherwise indicated; and
(J) references to the "term" of this Agreement will
include the initial term and any renewal term unless
otherwise indicated.
15.14 ENTIRE AGREEMENT. This Agreement, including all Schedules and
Exhibits, constitutes the final and entire agreement between
the parties and is intended as the complete and exclusive
statement thereof, regarding the supply of Rate Sensor
Products by SDAD to CT. This Agreement supersedes all prior or
contemporaneous agreements (other than the Existing Supply
Agreements), understandings and communications between the
parties relating to the subject matter hereof (including the
term sheet dated [*]), which hereafter will have no
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
-33-
effect. Subject to Section 2.4, the Existing Supply Agreements
will remain in force in accordance with their terms.
15.15 COUNTERPARTS. The Agreement may be executed simultaneously in
counterparts, each of which will constitute an original, but
all of which together shall constitute one and the same
instrument.
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
-34-
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized representatives to execute and deliver this Agreement as of the
Effective Date.
CONTINENTAL XXXXX XX AND CO. OHG
By: /s/ [*]
-----------------------------------------
Its: [*]
--------------------------------------
Date: March 2, 2004
By: /s/ [*]
-----------------------------------------
Its: [*]
--------------------------------------
Date: March 2, 2004
SYSTRON XXXXXX AUTOMOTIVE DIVISION
OF BEI TECHNOLOGIES, INC.
By: /s/ [*]
-----------------------------------------
Its: [*]
--------------------------------------
Date: March 2, 2004
By: /s/ [*]
-----------------------------------------
Its: [*]
--------------------------------------
Date: March 2, 2004
[*]
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
-35-
TABLE OF SCHEDULES
Schedule A: Products Supplied under this Agreement
Schedule B: Target Quantities and Pricing
Schedule C: Methodology for Setting Price and Burden Rate
Schedule D: Confidentiality Provisions
Schedule E: SDAD Patents
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
SCHEDULE A
PRODUCTS SUPPLIED UNDER THIS AGREEMENT
The products supplied under this contract extension may include:
ITEM SDAD P/N COMMENTS
[*]
Subject to the Transition Plan, the following items are supplied under the
Existing Agreements:
[*] Entire Product Family
[*]
[*]
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
A-1
SCHEDULE B
TARGET QUANTITIES AND PRICING
CT TARGET PRICING
--------------------------------------------------------------------------
CY04 CY05 CY06 CY07 CY08 CY09
--------------------------------------------------------------------------
[*]
[*]
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
B-1
SDAD QUOTED PRICING
--------------------------------------------------------------------------
[*] Y09
--------------------------------------------------------------------------
[*]
NOTES:
1. This analysis represents current configurations and specification.
2. No changes have been assumed in the [*]
3. Price targets are dependant on CT volumes noted above. Volume variances will
impact annual negotiated prices.
(Continued)
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
B-2
4. Burden rates are dependant on [*]
5. Prices incorporated additional SDAD investment to achieve capacity as
established by the joint CT transition team into the[*]
6. Increased volume year over year reflected in above target prices.
7. Nugget price targets were derived utilizing[*]
8. Burden rates for CY04 are the FY04 SDAD annual operating plan rates.
9. Capital assets are depreciated over a [*].
* * * *
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
B-3
SCHEDULE C
METHODOLOGY FOR SETTING PRICE AND BURDEN RATE
PUBLISHING OF CT ANNUAL DEMAND REQUIREMENTS
Continental Xxxxx production demands (both FPV and CPV) on SDAD will be
published in accordance with section 3.2 of the contract. This data provides the
foundation for SDAD to develop its [*] for the coming year.
DEVELOPMENT OF SDAD ANNUAL OPERATING PLAN
On an annual basis, SDAD develops a detailed operating plan for the next year on
a department by department, and account by account basis. This plan includes
SG&A costs, which are Selling, General and Administration, as well as
Engineering & R&D and corporate allocations. These costs will typically include
salaries, fringe benefits, supplies, and materials, depreciation, legal and
audit, travel, etc. The other major cost group is Overhead costs, with consists
of the manufacturing departments for [*], as well as the support departments for
Quality, Materials/Logistics and Manufacturing Engineering and maintenance.
These costs will typically include salaries, fringe benefits, (on both direct
and indirect employees), manufacturing supplies, depreciation, facilities,
repair and maintenance, freight and customs, etc.
These costs are review and approved through all levels of management up through
BEI corporate.
CALCULATION OF BURDEN RATE (SG&A AND OVERHEAD RATES)
In general the calculation of burden rates is developed by taking [*]. In
developing the overhead rate, [*].
CALCULATION OF SELLING PRICE
The calculation of selling price consists of taking [*]. [*]
CALCULATION OF UNDER-UTILIZATION COSTS
Any under-utilization costs are calculated as per section 5.3 of the contract.
The rate that is multiplied against the applicable volume reduction is the fixed
burden rate. The fixed burden rate consists of all SG&A, Corporate and fixed
overhead rates. The fixed overhead rates, exclude such costs as the fringe
benefits of direct employees, and variable manufacturing supplies, as these
costs are assumed to fluctuate with volume changes.
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
C-1
SCHEDULE D
CONFIDENTIALITY PROVISIONS
This Agreement is effective between
Systron Xxxxxx Automotive Division a division of BEI Sensors and Systems
Company, having a principal place of business at 0000 Xxxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxxxx 00000-0000 (hereinafter "SDID").
and
Continental Xxxxx XX & CO oHG,
a corporation of Germany, having a principal place of business at 7
Xxxxxxxxxxxxxxx, 00000 Xxxxxxxxx/Xxxx, Xxxxxxx Xxxxxxxx of Germany (hereinafter
"CT").
1. Information, Documents, Samples
CT, or their representative, and SDAD, or their representative (hereinafter
each "Company" and collectively "Companies") will supply to each other for
the purpose of the supply relationship between SDAD and CT concerning Rate
Sensor Products
- various oral information including the SDAD Proprietary Know-How
and other Confidential Information (hereinafter "Information")
and/or
- documents such as hardware, firmware, software and related
papers, computer printouts, other data carriers, electronic data
processing records,
programs and/or other documents, in particular illustrative
media, drawings, descriptions, specifications, reports, cards,
microfilms, (hereinafter "Documents") and/or samples or models
(hereinafter "Samples").
2. Confidentiality, Restriction of Use
The Companies agree to keep confidential all Information and Documents
and/or Samples supplied to each other, to keep them under lock and key when
stored. The receiving Company will give access to Information, Documents
and/or Samples only to those of its employees who need to know. All
employees of the receiving Company are obliged to confidentiality, even if
they are not directly involved in the project.
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
D-1
4. Property
The Information and the Documents and/or Samples supplied remain the
property of the respective supplier. They are supplied on a lend basis
only. The Companies shall return the Documents and/or Samples at any
time upon request.
4. Exceptions
Notwithstanding any other provisions of this Agreement, the commitment
of confidentiality shall not apply to any information which:
(a) is or becomes publicly known through no wrongful act on the
receiving companies' part;
(b) is already known to the receiving Company at the time of
disclosure through the supplying Company or their
representative and is designated to be known by the receiving
Company without undue delay;
(c) is received by the Companies from a third party through no
wrongful act on the part of the third party or the receiving
company or anyone else.
5. Reproduction
The Documents and/or Samples supplied may not be reproduced. Only in
special cases will the Companies check whether prior express written
consent to reproduce the Documents, which may however be withdrawn at any
time, can be given. In the event that such consent is withdrawn, the
companies shall also return the copies of the Documents upon request.
6. Conditions of Delivery
The supplied Information, Documents and/or Samples-are entrusted to each of
the Companies pursuant the regulations of the Laws Prohibiting Unfair
Competition.
The Companies may use them solely for the purpose provided or permitted by
each other. In particular, the Companies may not use them for
manufacturing, or having manufactured, the products concerned for
themselves or for third parties and may not dismantle Samples, except as
expressly licensed under the Supply Agreement dated January 16, 2004.
7. Reserve of Rights
The Companies reserve all rights, including copyrights, in respect of the
supplied Samples and/or Information and Documents and the products and
parts thereof depicted therein as well as their information contained, at
home and abroad, also in the event of a patent being granted or a utility
model being registered.
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
D-2
8. Subject Matter
Nothing contained in this Agreement shall constitute an obligation for
either Company to supply specific Information, Documents and/or Samples to
the other Company. Nothing in this Agreement shall grant to either Company
the right to make commitments to any kind for or on behalf of the other
Company. This Agreement shall not constitute, create, give effect to or
otherwise imply a joint venture or partnership or formal business
Organization of any kind. The exchange of Information, Documents and/or
Samples hereunder does not constitute or otherwise imply an offer,
acceptance, or promise for any-future contract, or amendment to any
existing contract between the Companies.
9. Disclosure to Third Parties
Unless otherwise provided in this Agreement, the Information, the Documents
and any copies thereof and/or the Samples may not be disclosed to third
parties without the prior written consent of the respective supplying
Company. If the respective supplying Company consents to the disclosure to
a third party, the receiving Company shall, prior to such disclosure, make
it binding on the third party to abide by the preceding provisions.
10. Applicable Law
This Agreement shall be interpreted and ruled in accordance with the Law of
the State of Michigan, and place of venue will be in Oakland County,
Michigan, USA.
IN WITNESS WHEREOF, the companies have executed this Agreement effective the
date of signature of the last of the Companies set forth below.
CONTINENTAL XXXXX XX AND CO. OHG SYSTRON XXXXXX AUTOMOTIVE DIVISION
OF BEI TECHNOLOGIES, INC.
By: _________________________________ By: ___________________________________
Name: _______________________________ Name: _________________________________
Title: ______________________________ Title: ________________________________
Date: _______________________________ Date: _________________________________
By: _________________________________ By: ___________________________________
Name: _______________________________ Name: _________________________________
Title: ______________________________ Title: ________________________________
Date: _______________________________ Date: _________________________________
By: _________________________________ By: ___________________________________
Name: _______________________________ Name: _________________________________
Title: ______________________________ Title: ________________________________
Date: _______________________________ Date: _________________________________
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
D-3
SCHEDULE E
SDAD PATENTS
The intellectual property, trade secrets and patents involved in the upcoming
contract extension between Systron Xxxxxx Automotive Division of BEI
Technologies Inc. (SDAD) and Continental Xxxxx (CT) fall into three categories:
1) Items that relate to SDAD core technologies [*]
All rights to patents, trade secrets and other technology related to the
manufacture of these devices shall remain the property of SDAD. CT will procure
[*] directly from SDAD. CT will procure [*] with written license permission for
procurement from SDAD. Since these items are not licensed to CT, there is no
listing of patents in this category.
BEI will provide specifications to CT containing adequate information to perform
these procurements. The specifications will not contain detail design
characteristics.
2) Items that relate to final assemblies: [*]
The following patents shall be nonexclusively licensed by SDAD to CT for CT use
in [*] in accordance with Section 9.1 of the Agreement.
SDAD patents applicable to Cluster Assemblies are:
US Patent
[*]
US Patent
[*]
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
E-1
US Patent
[*]
Other intellectual property and trade secrets shall include training and
on-going support of CT in the design of final assembly circuit boards and
housings that utilize [*]. This information will impart significant proprietary
knowledge, including for example [*]. CT will keep this information in
confidence for the benefit of SDAD.
3) Items that relate to [*]
The [*] shall be manufactured by SDAD and all intellectual property,
patents and trade secrets shall remain the sole property of SDAD. The following
patents will be licensed to CT solely for use and distribution of [*] in
accordance with Section 9.2 of the Agreement
[*] patents are:
[*]
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SUCURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
E-2
