Exhibit 10.06
AGREEMENT FOR
VIVID DISTRIBUTION, MANUFACTURE AND PURCHASE OF
GILARDONI PRODUCTS (SYSTEMS & FEP PLATFORM)
Agreement effective August 27, 1997 (Effective Date) between
Vivid Technologies, Inc., a Massachusetts corporation having a
principal place of business at 00X Xxxxxxxx Xxx, Xxxxxx, XX
00000 (USA) and its subsidiaries (hereinafter referred to as
"Vivid"), and Gilardoni S.p.A., having a principal place of
business at Mandello del Lario (Como), Italy (hereinafter
referred to as "Gilardoni").
PART A - INTRODUCTORY MATTERS
1. Facts.
Gilardoni is a developer, manufacturer and distributor of a
line of FEP brand conventional x-ray-based systems and
components, which are used to inspect luggage, mail,
parcels, and break bulk cargo, which it distributes in Italy
and other countries.
Vivid is a developer and manufacturer of advanced x-ray
inspection systems which are used to inspect airline hold
baggage and other luggage, mail, parcels, and break bulk
cargo, as well as advanced x-ray inspection technology which
offers improved image quality, a proprietary operator
interface and automated processing capabilities. Vivid has
included this technology in its products, specifically its
Operator Console Assembly, and pursuant to a prior agreement
titled Distribution and Development Agreement (the "Prior
Agreement"), integrated said Operator Console Assembly for
use with the data acquisition modules of Gilardoni's FEP ME
640 (the "FEP Platform" as defined below) to develop a
"Joint System", as also defined below. Said Prior Agreement
is hereby agreed to be terminated, superseded by this
Agreement, and of no further effect as of the Effective
Date.
Under this Agreement, Vivid will market and sell Gilardoni's
Systems in certain countries of the world, market and sell
the Joint System in certain countries, and obtain the right
to manufacture the Gilardoni FEP Platform in support
thereof, excluding certain parts to be purchased from
Gilardoni.
Under a separate agreement of even date herewith, Gilardoni
will market and sell the Joint System in certain other
countries, and obtain the right to manufacture the Operator
Console Assembly in support thereof, including certain parts
to be purchased from Vivid (hereinafter the "Associated
Agreement").
2. Definitions.
2.1 "Gilardoni System" means the current Gilardoni FEP line
of x-ray-based inspection systems, comprising its FEP
ME 640 and FEP ME 975 products, used to inspect
luggage, mail, parcels, and break bulk cargo, and spare
parts therefor.
2.2 "FEP Platform" means those modules of the Gilardoni FEP
ME 640 used for data acquisition and/or system control,
as described in more detail in Exhibit D hereto, and
spare parts therefor.
2.3 "FEP Products" means the Gilardoni System, and the FEP
Platform, including spare parts therefor.
2.3.1 "Monobloc/Inverter Assembly" means those
components of the FEP Platform described as such in
Exhibit D hereto, most particularly the "monobloc" and
"inverter board set" together with associated cables
and parts, to be purchased by Vivid from Gilardoni in
connection with its manufacture of FEP Platforms, Joint
Systems, and derivative products.
2.4 "Vivid System" means the current Vivid line of advanced
x-ray-based inspection systems used to inspect airline
hold baggage, as well as other luggage, mail, parcels,
and break bulk cargo; except that the term Vivid
Systems shall not include products and technology
purchased or licensed from third-parties to the extent
that Vivid's agreement with said third-party precludes
or prevents Vivid from licensing or selling said
product or technology to or through Gilardoni; and
spare parts therefor.
2.5 "Operator Console Assembly" means the Vivid display
console and associated software and hardware technology
together with associated cables and parts, as described
in Exhibit E hereto; and spare parts therefor.
2.6 "Joint System" means an x-ray-based inspection system
used to inspect luggage, mail, parcels, and/or break
bulk cargo, consisting of the Gilardoni FEP Platform
and the Operator Console Assembly, and spare parts
therefor.
2.7 "Vivid Product" means the Vivid System, and the
Operator Console Assembly (but only as incorporated
into the Joint System, or as sold as an upgrade for the
Gilardoni System), and spare parts therefor.
2.8 "Proprietary Information" means all confidential or
trade secret information so designated by a disclosing
party in writing. If Proprietary Information is
disclosed in one or more documents, the disclosing
party shall identify said document in writing as
containing proprietary or confidential information,
either by providing a proprietary or confidential or
similar legend on such document, or by providing, with
the document, a separate writing which identifies the
documents as containing proprietary or confidential
information. If Proprietary Information is only
disclosed orally or made available by inspection, the
disclosing party shall, within thirty (30) days after
such disclosure, deliver to the receiving party a
written description of such Proprietary Information
identifying where appropriate the place and time of
such oral disclosure, and the names of representatives
of the receiving party to whom such disclosures were
made. Proprietary Information shall not include
information which: (a) is or becomes in the public
domain through no action of the receiving party; or (b)
is generally disclosed to third parties by disclosing
party without restriction on such third parties; or (c)
is independently developed by the receiving party
without reference to disclosing party's Proprietary
Information; or (d) is received by the receiving party
from a third party which has the right to disclose such
information and without violation of this Agreement; or
(e) is approved for release by written authorization of
disclosing party; or (f) is disclosed pursuant to an
order of a court or governmental agency, providing that
the receiving party notifies disclosing party and
affords it an opportunity to oppose such order.
2.9 "Manufacturing Information" means all Proprietary
Information necessary to manufacture, test, install,
service and use the item in question and all
subassemblies thereof, including a xxxx of materials,
and all technical and engineering information, know
how, trade secrets, proprietary information, and data
relating thereto, and the documentation listed in
Exhibit C hereto.
2.10 "Cost Plus" means direct costs of direct materials and
labor, and indirect manufacturing labor, plus an
allocation of 35% of said amount to cover overhead.
PART B - VIVID'S DISTRIBUTION RIGHTS
3. Appointment and Territory.
3.1 For the Term of this Agreement Gilardoni hereby
appoints Vivid as:
(a)(i) the exclusive distributor of Gilardoni Systems
for installation in the United States, Mexico and
Canada;
(a)(ii) the exclusive distributor of (the FEP Platform
as incorporated into) the Joint System for all
countries of the World except Italy, Cyprus, Bulgaria,
Tunisia, Brazil, Argentina, Libya, Iran and Romania.
(b) a non exclusive distributor of Gilardoni Systems
for all countries of the World except Italy, Cyprus,
Bulgaria, Tunisia, Brazil, Argentina, Romania, Libya
and Iran.
(c) rights for the country of Greece shall be allocated
among the parties at a later time.
Vivid agrees not to solicit any order for installation
of an FEP Product outside of the Vivid territories
described above without Gilardoni's advance written
consent. Vivid is not prohibited from accepting orders
for FEP Products from customers in the European Union,
for installation in the European Union but outside the
Vivid territories described above, provided that it
first demonstrates by documentary evidence that (1) the
customer initiated the transaction, and (2) it took no
action to solicit the order.
3.2 During the Term of this Agreement without the advance
written consent of the other party:
(a) Neither Vivid nor Gilardoni shall market or sell
for installation any x-ray-based system from any
manufacturer other than Vivid or Gilardoni to inspect
luggage, mail, parcels, or break bulk cargo; and
(b) Gilardoni will not itself market or sell FEP
Products or any other x-ray based system to inspect
luggage, mail, parcels, or break bulk cargo for
installation in the territories assigned exclusively to
Vivid, and will not appoint any other reseller or
distributor with any right to market or sell FEP
Products in the territories assigned exclusively to
Vivid.
3.3 Notwithstanding any other provision of this Section 3,
Gilardoni is not prohibited from selling to any third-
party those components of its Gilardoni Systems which
it sells separately in the normal course of its
business (including but not limited to x-ray grids,
tubes, and electronic assemblies such as inverters,
monoblocs, and x-ray detector assemblies) either
separately or assembled. This Subsection 3.3 does not
apply and Gilardoni shall not sell components used in
(or based on components used in) its FEP Platform in
combinations that comprise an x-ray generator or a
detector set for use in inspecting luggage, mail,
parcels, or break bulk cargo in the territories for FEP
Platforms assigned exclusively to Vivid.
4. Marketing and Promotion.
4.1 Vivid will be solely responsible for all marketing and
sales of FEP Products purchased pursuant to this
Agreement. Vivid and Gilardoni will work together to
develop appropriate marketing plans as reasonable and
necessary to promote the FEP Product and the Joint
System.
4.2 Gilardoni hereby grants Vivid a non-exclusive, non-
transferable license to represents itself as an
"Authorized Distributor" of FEP Products, and to use
the Gilardoni trademarks identified in Exhibit A hereto
in connection therewith. To the extent that Vivid does
so, Vivid will cause all such equipment to be
manufactured to product and quality specifications at
least equal to those utilized by Gilardoni. Gilardoni
may monitor Vivid's compliance with this requirement.
4.3 Vivid may also distribute FEP Products and the Joint
System under its own trademark, either by itself or in
conjunction with Gilardoni's trademarks.
4.4 Vivid shall not register any Gilardoni trademarks in
any jurisdiction, but may request that Gilardoni
register or obtain appropriate legal protection for its
trademarks identified in Exhibit A hereto in the Vivid
Territory. Any such registration shall be owned by
Gilardoni. Payment of any registration or other fees
required in connection therewith shall be agreed on a
case-by-case basis.
PART C - PURCHASE TERMS
5. Purchase prices, payment and taxes.
5.1 Gilardoni agrees to sell and Vivid agrees to purchase
FEP Products, services and Monobloc/Inverter Assemblies
listed on Exhibit B hereto in accord with the terms of
this Agreement. Prices are quoted in U.S. Dollars as
set forth in Exhibit B hereto, provided that: (i)
lower prices to meet individual customer situations may
be negotiated on a case-by-case basis; and (ii) if
Gilardoni offers to any non-end user other party lower
prices and/or more advantageous terms for any of the
products, components or services offered pursuant to
this Agreement to Vivid, it shall offer the same prices
and/or terms to Vivid.
5.2 Except as levied by the Government of Italy or its
constituent jurisdictions, Vivid will pay or reimburse
Gilardoni for any taxes, VAT, import duties or other
government charges however designated, arising from or
based upon Gilardoni's sale of the FEP Products or
Monobloc/Inverter Assemblies to Vivid ("Taxes"), but
not including any income or corporate excise tax
assessed against, or levied on, Gilardoni. If
applicable, Vivid shall furnish Gilardoni with whatever
certificates or other instruments may be necessary or
appropriate to evidence that Gilardoni's sales of the
FEP Products or Monobloc/Inverter Assemblies to Vivid
are not subject to Taxes under applicable law.
5.3 Payment for all FEP Products and Monobloc/Inverter
Assemblies ordered under this Agreement (unless
otherwise agreed in writing in advance with respect to
a specific order) shall be due thirty (30) days after
Delivery. Payment terms are subject to change upon
mutual agreement between Gilardoni and Vivid.
5.4 All payments pursuant to this Agreement shall be made
by bank transfer in U.S. Dollars available at
Gilardoni's bank.
6. Forecasts, Purchase Orders, Product Integration, and
Shipping.
6.1 Forecast of Demand. Within thirty (30) days from the
date of last signature of this Agreement, Vivid shall
deliver to Gilardoni an initial forecast specifying the
quantities of Gilardoni Systems, FEP Platforms,
Monobloc/Inverter Assemblies, and spare parts to be
purchased by Vivid and supplied by Gilardoni during
each month of the following two quarters (the "Initial
Forecast"). Thereafter, within ten days of the start
of each calendar month, Vivid shall deliver to
Gilardoni a "rolling" forecast specifying the
quantities of Gilardoni Systems, FEP Platforms,
Monobloc/Inverter Assemblies, and spare parts to be
purchased by Vivid and supplied by Gilardoni during
each month of the following two quarters (the "Rolling
Forecast"). The Initial Forecast and each Rolling
Forecast shall be considered a firm purchase order
committing both parties with respect to the purchase
and sale of Gilardoni Systems, FEP Platforms, and
Monobloc/Inverter Assemblies, and spare parts over the
first three months thereof in accordance with Section
6.2, provided that Vivid's maximum forecast of
Monobloc/Inverter Assemblies over the first three
months forecasted shall be no more than ten (10) units
and provided that Vivid's maximum forecast of Gilardoni
Systems and/or FEP Platforms over the first two (2)
months forecasted shall be no more than ten (10) units.
As part of the Initial Forecast, Vivid shall specify
firm dates for delivery of any product to be delivered
in each of the first three months of said Initial
Forecast ("Firm Delivery Dates"). As part of each
subsequent Rolling Forecast, Vivid shall specify Firm
Delivery Dates for the third month thereof. Forecasts
of quantities to be purchased in the subsequent
quarter, in the Initial Forecast and Rolling Forecast,
shall be used by Gilardoni for purposes of planning and
manufacture of Monobloc/Inverter Assemblies for
inventory purposes, but Vivid shall not be bound by
said subsequent quarter forecast, nor shall Vivid be
liable to Gilardoni with respect to any changes
thereto.
6.2 Within ten (10) days following its receipt of the
Initial Forecast, and each Rolling Forecast, Gilardoni
(a) may modify the Firm Delivery Dates for product to
be delivered in the third month of said Rolling
Forecast (each month in connection with the Initial
Forecast) if the quantities of Products so ordered
makes this necessary to fit its production
capabilities, provided always that said modified Firm
Delivery Dates shall be within thirty (30) days of the
initial Vivid-requested Delivery Date; (b) shall
otherwise confirm Firm Delivery Dates requested for
each of the first three (3) months thereof and its
general capability to provide the numbers forecasted
for delivery during the subsequent quarter; and (c)
shall provide Vivid with a listing of all product held
in inventory pursuant to Section 6.2A hereof.
6.2A Inventory. Within ten days of the Effective Date,
Gilardoni shall establish a segregated inventory (held
solely for Vivid), of the quantity of Monobloc/Inverter
Assemblies described hereafter in this Section 6.2A.
Within thirty (30) days of Vivid's Initial Forecast,
Gilardoni shall consign to said segregated inventory at
least ten (10) Monobloc/Inverter Assemblies. Within
thirty days of each Rolling Forecast, Gilardoni shall
consign to and thereafter maintain in said segregated
inventory that quantity of Monobloc/Inverter Assemblies
equal to two times said Rolling Forecast for the
following six months, but not less than ten (10)
Monobloc/Inverter Assemblies (or such other number as
may be mutually agreed), provided always that Gilardoni
shall not be required to increase the number of
Monobloc/Inverter Assemblies held in said segregated
inventory by more than ten (10) units per month during
the first six months following Vivid's Initial
Forecast. At the end of six months following Vivid's
Initial Forecast, the parties will meet to review
Gilardoni's delivery performance and to consider a
reduction in Gilardoni's inventory requirement.
Afterwards, such reviews will take place every three
months . Any change to Gilardoni's obligation to
maintain inventory pursuant to this Section shall be
made only by mutual consent of the parties.
6.3 In the event that Gilardoni does not meet any Firm
Delivery Date for all or any part of the Gilardoni
Systems or FEP Platforms or Monobloc/Inverter
Assemblies ordered pursuant to Section 6.1 for any
reason and not withstanding Section 23.2 of this
Agreement, Vivid's price therefor shall be reduced by
two percent (2%) for each week of delay in Delivery to
a maximum price reduction of eight percent (8%).
Except as otherwise provided in this Agreement or
agreed in writing between the parties with respect to a
specific order, this restriction shall be in lieu of
any other right to claim damages for delay in delivery
of the subject products. (Additional Gilardoni
obligations with respect to the supply of
Monobloc/Inverter Assemblies are set forth in Section
17 of this Agreement.)
6.4 Unless otherwise agreed with respect to a specific
order of Gilardoni Systems or FEP Products or
Monobloc/Inverter Assemblies, all prices pursuant to
this Agreement are quoted, and product delivery
(Delivery) will be ex-works (Incoterms 1990).
Gilardoni will also pack product for shipment in accord
with Vivid's instructions, at the charges set out on
Exhibit B hereto. Upon Vivid request, Gilardoni will
arrange for drop shipment of FEP Product (and Joint
Systems) to Vivid customers, in accord with Vivid's
instructions, provided that Vivid shall be responsible
for all associated risk and shipping, customs, taxes,
insurance and whatever other charges are payable with
respect thereto. Provided that Vivid first establishes
credit terms reasonably acceptable to Gilardoni,
Gilardoni shall advance and invoice said amounts to
Vivid, said invoices to be due and payable as agreed.
6.5 Vivid shall stock spare parts to meet anticipated
demand. From time to time Vivid may be required to
order spare parts on an expedited basis. Gilardoni
shall use its best commercial efforts to ship such
expedited purchase orders within 24 hours following
receipt. Spare parts invoices are due and payable
thirty (30) days after receipt.
6.6 Upon request and in connection with Vivid sales of the
Joint System, Gilardoni will provide the service of
integrating Operator Console Assemblies with FEP
Platforms, and/or manufacture thereof, and testing the
resulting Joint Systems, using Vivid qualified assembly
and test procedures, on a schedule and at the Cost Plus
Formula set out in Exhibit B hereto.
7. Installation and Acceptance.
7.1 Vivid shall be solely responsible for installation, on-
site testing, and commissioning of all FEP Product sold
hereunder, as well as for customer training, support,
warranty, and service. Vivid shall supply such service
to customers at the times and for the fees that are
normal and customary in the trade and appropriate for
the product. Except as specifically provided for in
this Agreement, Gilardoni shall have no obligation or
liability for these matters. If Vivid fails to offer
such service to a customer or abandons a customer
contract, Gilardoni may offer said services directly to
said customer, at its sole risk, responsibility, and
expense, provided that Gilardoni informs Vivid in
advance in writing of its intent to contact said
customer, provides Vivid with five (5) business days to
respond or object, and does not initiate any contact
with said customer before expiration of said period and
resolution of any Vivid response or objection.
Notwithstanding any other Section of this Agreement,
each party (the "Indemnifying Party") shall indemnify
the other (the "Indemnified Party") for any loss,
damages, costs or other expenses incurred by the
Indemnified Party arising out of any action undertaken
by the Indemnifying Party pursuant to this Section 7.1.
7.2 Upon request, Gilardoni will provide installation, on-
site testing, commissioning, customer training,
support, warranty, and service for product at rates to
be negotiated.
8. Product Warranty.
8.1 Gilardoni warrants that FEP Products, Monobloc/Inverter
Assemblies, and any other product delivered by
Gilardoni hereunder shall be free from defects in
workmanship and material, and shall perform in
accordance with their then-current published functional
specifications under normal use and proper operating
conditions. This warranty will extend for a period of
12 months from the date of customer acceptance, or 16
months from the date of Delivery, whichever is earlier.
Gilardoni agrees to provide extensions to this warranty
under reasonable terms to be negotiated with Vivid for
specific customer situations.
8.2 In the event that warranted products are deemed
defective or otherwise in breach of the warranty set
out in Section 8.1 above, Vivid shall identify, remove,
and return to Gilardoni the defective product,
component, or sub-assembly, and Gilardoni shall repair
or replace, in a timely manner, at its discretion, any
such defective product, component or sub-assembly.
Warranty claims shall be initiated by contacting
Gilardoni by telephone or facsimile, obtaining a return
material authorization number, and shipping items
returned under warranty to Gilardoni's designated
facility, freight prepaid by Vivid, all in accord with
Gilardoni's then-current returned material
authorization procedure. Gilardoni's current returned
material authorization procedure is attached as Exhibit
F hereto. Gilardoni shall return items replaced or
repaired under warranty as designated by Vivid, on a
DDP basis (Incoterms 1990). Items returned shall
become Gilardoni property.
8.3 Gilardoni provides the Additional Warranty that FEP
Products and Monobloc/Inverter Assemblies shall be free
of major safety hazards, and for a period of five years
from date of customer acceptance will be free of
epidemic or systemic failure. A major safety hazard is
defined as a defect which prevents the safe operation
of the product at its place of installation, such as an
electric shock, personal radiation exposure, or fire
risk (and not including risks to aircraft, passengers,
or operators associated with failure to detect
contraband material). A systemic or epidemic failure
shall exist when defects of the same root cause occur
in any non-expendable parts in ten percent (10%) or
greater of FEP Products or Monobloc/Inverter Assemblies
delivered pursuant to this Agreement within any 24
month period, or the actual mean time between failure
(hereafter "MTBF") of any part of said FEP Products or
Monobloc/Inverter Assemblies as delivered is lower than
95% of Gilardoni's published MTBF figure for said
part(s). In such event, Gilardoni and Vivid shall
immediately devise a corrective action plan, under
which Gilardoni shall provide all parts, materials and
technical assistance, and Vivid shall supply all labor,
reasonably needed to replace all affected parts in FEP
Products or Monobloc/Inverter Assemblies purchased and
resold pursuant to this Agreement. In the event the
expenses of one party associated with said corrective
action are more than fifty percent (50%) greater than
the expenses of the other party, then Gilardoni and
Vivid shall share the cost of such corrective action on
an equal basis. Not covered by this Section 8.3 is a
change in regulatory requirements.
8.4 The parties may agree that FEP Products or
Monobloc/Inverter Assemblies supplied in connection
with any individual situation shall meet such other
specifications as may be agreed between Gilardoni and
Vivid.
10. Exclusive Warranty.
10.1 THE WARRANTIES SET OUT IN SECTIONS 8 AND 9 HEREOF ARE
EXCLUSIVE, AND NO OTHER WARRANTY, WHETHER EXPRESS OR
IMPLIED, WRITTEN OR ORAL, SHALL APPLY TO THE SUBJECT OF
THIS AGREEMENT. GILARDONI SPECIFICALLY DISCLAIMS ANY
IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE AND ANY LIABILITY FOR DIRECT,
INDIRECT, CONSEQUENTIAL OR ANY OTHER DAMAGE, INCLUDING
LOSS OF PROFITS, TO VIVID, ANY CUSTOMER OF SAME, OR ANY
THIRD PARTY.
PART C - MANUFACTURING RIGHTS
14. Gilardoni Manufacturing Information and Software.
14.1 Within thirty (30) days of the Effective Date,
Gilardoni will furnish to Vivid, on a non-exclusive
basis, all Gilardoni Manufacturing Information (Product
Design frozen May 1, 1997) related to FEP Platform
(except information needed to manufacture the Monobloc
and Inverter Board Set), and will provide pursuant to
the Software License set out in Section 19C hereof,
such Software as may be needed to test, install,
service and use said FEP Platform and all subassemblies
thereof (including the Monobloc and Inverter Board
Set). Gilardoni Manufacturing Information will be
prepared by Gilardoni in English, and shall be in
accord with technical standards used by Gilardoni at
the time of preparation thereof. Vivid will treat all
Gilardoni Manufacturing Information, amendments,
updates and revisions thereto, Software, and consulting
assistance disclosed or provided pursuant to this
Agreement as Proprietary Information and in accord with
the provisions of Section 20.
Vivid shall pay to Gilardoni a non-refundable advance
royalty of five-hundred one thousand United States
Dollars (US$501,000) for a license to use said
Gilardoni Manufacturing Information and Software for
the purposes provided this Part C. Said advance
royalty shall be creditable against Vivid per unit
royalties payable pursuant to Section 15.2 hereof, and
shall be paid in accord with the following schedule:
(a) one hundred fifty thousand United States Dollars
(US$150,000) within ten (10) days following the later
of Vivid's receipt of said Gilardoni Manufacturing
Information and Software and Vivid's receipt of the
first two FEP Platforms to be supplied for development
purposes (as described in Exhibit B hereto).
(b) one hundred fifty thousand United States Dollars
(US$150,000) within ten (10) days following completion
of acceptance testing of said two FEP Platforms
(provided that Gilardoni is then in compliance with the
delivery schedule for additional FEP Platforms to be
used for demonstration purposes); both parties using
reasonable commercial efforts to complete acceptance
testing by June 1, 1997.
(c) two hundred one thousand United States Dollars
(US$201,000) within ten (10) days following Vivid's
first (revenue) shipment of a Vivid manufactured Joint
System, with both parties using reasonable commercial
efforts to make said shipment by January 1, 1998.
14.2 In order to assist Vivid in understanding the Gilardoni
Manufacturing Information, and to assist Vivid in the
manufacture of FEP Platform, Gilardoni shall upon
request of Vivid, provide reasonable consulting
assistance by telephone without charge to technically
qualified personnel of Vivid, subject to the
availability of qualified personnel within the employ
of Gilardoni (together with up to one week of on-site
consulting assistance without charge, and such
additional time as may be reasonably necessary at
Gilardoni's daily rates). Vivid shall be responsible
for and shall pay all travel and living expenses
associated with such assistance.
15. Manufacturing Rights and Royalties.
15.1 Subject to the terms of this Agreement, and upon
payment for the Gilardoni Manufacturing Information
described in Section 14 above, Vivid may manufacture
and have manufactured, in the United States and in such
other countries of Vivid's exclusive territory as may
be agreed where such manufacturing is reasonably
commercially necessary in connection with Vivid's sales
and marketing efforts therein by Gilardoni (Gilardoni's
agreement thereto shall not be unreasonably withheld,
provided that Gilardoni's intellectual property rights
in its products are adequately protected) such
quantities of the FEP Platform and any spare parts
excluding Monobloc/Inverter Assemblies therefore as
Vivid may require to fully execute its rights under
this Agreement.
15.2 In partial consideration of the rights granted to Vivid
under this Part C, Vivid shall pay to Gilardoni a per
unit royalty for each FEP Platform or other device sold
or otherwise disposed of which incorporates any of the
Gilardoni Manufacturing Information or Software
provided to Vivid pursuant to this Part C ("Licensed
Products") at the rate of:
(a) three thousand United States Dollars (US$3,000) for
each of the first one-hundred sixty-seven (167)
systems, said per unit royalty to be credited against
the advance royalty payment described in Section 14.1
above; and
(b) two thousand United States Dollars (US$2,000) for
each of additional system beyond said first one-hundred
sixty-seven systems.
15.2.1 Reports and Payments. Within 60 days after the
conclusion of each calendar quarter, Vivid shall
deliver to Gilardoni a report covering said calendar
quarter, listing the number of Licensed Products sold
or otherwise disposed of, the countries of
installation, and the total royalty payable or credited
against the Advance Royalty described above. All such
reports shall be treated as Proprietary Information and
shall not be disclosed to any third party. If no
royalties are due or creditable for any calendar
quarter, the report so shall state. Concurrent with
said report, Vivid shall remit to Gilardoni any royalty
payment due for the applicable calendar quarter.
Gilardoni shall instruct Vivid as to the method of
payment. All other payments pursuant to this Part C
shall be made within thirty (30) days of invoice. All
payments shall be payable in U.S. Dollars.
15.2.3 Records. Vivid shall maintain complete and
accurate records of Licensed Products and amounts
payable to Gilardoni in relation to Licensed Products
for a period of at least three years after the
conclusion of any calendar quarter. Gilardoni shall
have the right, at its expense, to cause such records
to be audited during normal business hours by an
independent certified public accountant of Gilardoni's
choice for the purpose of verifying any reports and
payments delivered under this agreement. In the event
any audit performed under this section reveals an
underpayment in excess of five percent (5%) in any
calendar quarter, Vivid shall bear the full cost of
such audit. Gilardoni may exercise its rights under
this section once each year with prior reasonable
notice. Payments not paid on or before the date such
payments are due under this Part C, shall bear
interest, to the extent permitted by law under, at 1.5%
above the United States prime rate of interest, as
reported in the Wall Street Journal, and calculated
based on the number of days that payment is delinquent.
17. Vivid Option to Manufacture Monobloc/Inverter Assembly.
17.1 Escrow Agreement. Within thirty (30) days of the date
of this Agreement, Gilardoni agrees to enter into and
maintain an agreement acceptable to Vivid with a
mutually agreed escrow agent in the United States for
the term of this Agreement, under which agreement,
Gilardoni will provide to and maintain with said escrow
agent, current copies of all specifications, plans
vendor information, and other intellectual property
necessary to manufacture Monobloc/Inverter Assemblies
(hereafter "Monobloc Escrow Information"). Said escrow
agent shall be authorized to release said Monobloc
Escrow Information to Vivid upon notice of Vivid's
exercise of its option to manufacture granted pursuant
to this Section 17 In the event of such Vivid
exercise, Vivid shall treat all such Monobloc Escrow
Information in accord with Section 20.2 hereof and
shall use said intellectual property solely for the
purposes permitted by this Section 17. The terms of
Sections 20.3 and 20.4 shall not apply to Monobloc
Escrow Information obtained by Vivid pursuant to this
Section 17.
17.2 Gilardoni hereby grants Vivid an option, exercisable by
Vivid pursuant to the terms of this Section 17, to a
non-exclusive, nontransferable, royalty-free license to
manufacture or have manufactured at a manufacturing
facility in the United States (or such other country as
the parties may agree), for the sole purpose of
manufacturing Monobloc/Inverter Assemblies for use
pursuant to the terms of this Agreement.
17.3 Not withstanding Section 23.2 of this Agreement, in the
event that (a) Gilardoni for any reason (i) fails for
thirty (30) days to deliver to Vivid the quantity of
Monobloc/Inverter Assemblies on the Firm Delivery Dates
specified pursuant to Sections 6.1 and 6.2 hereof, or
(ii) notifies Vivid that it will not deliver to Vivid
the quantity of Monobloc/Inverter Assemblies specified
in Vivid's Rolling Forecast for any future month, or
(iii) fails to comply with Section 6.2A hereof, or (iv)
violates Section 23.5 hereof, or (b) Vivid becomes
entitled to terminate this Agreement pursuant to
Section 21.5, or Section 21.4 hereof, Vivid shall be
entitled, upon written notice, to withdraw from escrow
the Monobloc Escrow Information, and thereafter to
itself manufacture, or to have manufactured, or
purchase all or part of its requirements of
Monobloc/Inverter Assemblies from third parties. Any
Vivid exercise of this right shall not relieve
Gilardoni of its obligations to supply
Monobloc/Inverter Assemblies pursuant to this
Agreement. Except as permitted by this Section, Vivid
shall purchase from Gilardoni all Monobloc/Inverter
Assemblies required for FEP Platforms manufactured
pursuant to Section 15 hereof.
18. No Gilardoni Warranty; Vivid Solely Responsible;
Indemnification & Insurance.
18.1 Gilardoni makes no warranty or representation for any
purpose with respect to Gilardoni Manufacturing
Information or Software licensed hereunder, except that
Gilardoni shall use its best efforts to verify that
such Gilardoni Manufacturing Information and Software
are the same information, data, and software as is used
by Gilardoni and that it has been prepared in
accordance with good industry standards. Gilardoni
makes no warranty that said Gilardoni Manufacturing
Information or Software is complete, accurate, or free
from defects. Consulting assistance shall be provided
in a workmanlike fashion, with no warranty of any
particular result. GILARDONI SPECIFICALLY DISCLAIMS
ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE.
18.2 GILARDONI DISCLAIMS ALL WARRANTIES SET OUT IN SECTION 8
OF THIS AGREEMENT WITH RESPECT TO ANY FEP PLATFORM,
SOFTWARE, OR OTHER PRODUCT, SERVICE OR ASSISTANCE
PROVIDED, MANUFACTURED, SOLD, OR USED PURSUANT TO THIS
PART C.
18.3 Vivid shall be solely responsible for all product
warranties and all liabilities relating to any product
manufactured pursuant to the rights granted by this
Part C. Vivid shall perform and fulfill all terms and
obligations of each such warranty. Gilardoni shall not
have any warranty obligation or liability with respect
to such products to subdistributors or customers of
Vivid.
18.4 Vivid shall indemnify, defend and hold Gilardoni and
its successors, heirs, and assigns (the "Indemnitee"),
against all liability, damage, loss or expense
(including reasonable attorney's fees and expenses of
litigation) incurred or imposed by or upon the
Indemnitee in connection with any claim, suit, action,
demand, or judgment arising out of any theory of
liability (including without limitation actions in the
form of tort, warranty, or strict liability and
regardless of whether the action of has any factual
basis) concerning any product, process or service that
is made, used or sold pursuant to any right or license
granted under this Part C; provided, however, that such
indemnification shall not apply to any liability, loss,
damage or expense to the extent attributable to the
grossly negligent activities or intentional misconduct
of the Indemnitee or (ii) the settlement of a claim,
suit, action or demand by the Indemnitee without prior
written approval of Vivid.
PART D - GENERAL TERMS
19. Ownership of Technology; Improvements and New Products.
19.1 As between Gilardoni and Vivid, each party shall
maintain all of its ownership rights in all patents,
copyrights, trade secrets, trademarks, designs, and
other intellectual property as of the Effective Date
hereof. Each party shall own all improvements to its
own or the other party's products subject to this
Agreement (hereinafter "Improvements") which it may
individually make, and may exploit and utilize said
Improvements for any purpose whatsoever. Each party
shall offer to sell and/or license the other party to
purchase, distribute and utilize Improvements pursuant
to this Agreement at charges and terms to be agreed.
19.1.1 The parties may mutually agree to enter into a
separate agreement to undertake joint development work,
and as to the allocation of any intellectual property
rights resulting therefrom. Except as so agreed,
Improvements which are jointly made shall be jointly
owned. Each party shall have the right, in its sole
discretion to file, prosecute and maintain at its own
expense any application for patent, copyright, or other
legal protection in any country on any jointly made
Improvement. Each party shall give the other all
reasonable assistance in obtaining such patent,
copyright, or other legal protection. Title to any
such patent, copyright, or other legal protection shall
be joint. Each party may exploit and utilize said
jointly made Improvement for any purpose whatsoever,
without any obligation to account, share revenues, or
pay royalties to the other with respect to said
Suggestion.
19.2 For the purpose of clarity, the parties specifically
agree that (a) Vivid shall obtain no license or
ownership rights, and no right to use FEP Products or
Monobloc/Inverter Assemblies or other Gilardoni
products, or Gilardoni improvements to any of the
above, except as specifically provided in this
Agreement; (b) Gilardoni shall obtain no license or
ownership rights, and no right to use the Operator
Console Assembly or other Vivid products, or Vivid
improvements to any of the above, except as
specifically provided in this Agreement; (c) Vivid
shall obtain no license or ownership rights, and no
right to use the Gilardoni Manufacturing Information,
Gilardoni Proprietary Information, or Software,
relating to the FEP Platform or to any other Gilardoni
products except as specifically provided in this
Agreement; and (d) Gilardoni shall obtain no license or
ownership rights, and no right to use the Vivid
Manufacturing Information, Vivid Proprietary
Information, or Software, relating to the Operator
Console Assembly or to any other Vivid products except
as specifically provided in this Agreement.
19A. Intellectual Property Warranty.
19A.1 Gilardoni warrants that as of the Effective Date
of this Agreement, to its best knowledge, that in the
territories assigned to Vivid: (a) the FEP Products and
Monobloc/Inverter Assemblies do not infringe any trade
secret, trademark, patent, copyright or other
intellectual property or proprietary right belonging to
any third party; and (b) no pending patent application
of a third party has claims which cover the FEP
Products; or Monobloc/Inverter Assemblies provided that
Gilardoni does not warrant that FEP Products or
Monobloc/Inverter Assemblies do not infringe (i) United
States Patent No. 4,366,382, dated December 28,1982,
titled "X-Ray Line Scan System For Use In Baggage
Inspection", Xxxxxxx X. Xxxxxxxx, Inventor, initially
assigned to Scanray Corporation, Harbor City,
California, and purportedly assigned subsequently to
EG&G Astrophysics Research Corporation (hereinafter the
"EGG Patent") or (ii) United States Patent Nos.
4,626688 and 5,138,167 dated December 2, 1986 and
August 11, 1992 respectively, and titled Split Energy
Level Radiation Detection, and Split Energy Radiation
Detection, respectively, Inventor, Xxxx X. Xxxxxx (and
counterpart patents in other nations), purportedly
assigned to the University of Alabama, and purportedly
licensed subsequently to Lunar Corporation (hereinafter
the "Xxxxxx Patents").
19A.2 Without prejudice to Section 19A.1, Gilardoni and
Vivid represent that as of the Effective Date of this
Agreement, they have no actual knowledge that current
FEP Products or Monobloc/Inverter Assemblies infringe
any patent belonging to any third party, provided that
the parties do not make such representation with
respect to the EGG Patent or the Xxxxxx Patents. The
parties understand and acknowledge that Gilardoni and
Vivid have not conducted any sort of patent search,
product review, or clearance review with respect to the
FEP Products or Monobloc/Inverter Assemblies or any
other Gilardoni product in connection with this
representation or their consideration whether to enter
into this Agreement, and that this representation is
provided solely on the basis of Gilardoni's and Vivid's
general knowledge acquired in connection with their
usual ongoing businesses.
19A.3 Vivid represents and warrants that it has obtained
and shall maintain for the Term of this Agreement, a
license to the EGG Patent permitting Vivid to undertake
all activities permitted to it by this Agreement.
19B. Infringement.
19B.1 Except with respect to the EGG Patent or the
Xxxxxx Patents, in the event that any claim, suit, or
other legal proceeding is threatened or commenced
against Vivid that is founded, in whole or in part, on
an allegation that any FEP Product or FEP Component
infringes any trade secret, trademark, patent,
copyright or other intellectual property rights
belonging to a third party, Vivid will give Gilardoni
prompt written notice thereof and Gilardoni may elect
to assume primary control of the defense to or
settlement of such dispute. Vivid shall cooperate
fully with Gilardoni in any such defense, settlement or
compromise made by Gilardoni. Neither Vivid nor
Gilardoni shall enter into any settlement agreement or
other voluntary resolution of any such claim, suit, or
other legal proceeding without obtaining the other's
prior written consent thereto. If Vivid has complied
fully with the procedures set forth in this Section,
Gilardoni will indemnify and hold Vivid harmless from
and against any loss, cost, damage, or other expenses
incurred by Vivid as a result of such claim, suit, or
legal proceeding. In addition, if a final injunction
is obtained against Vivid's use of the FEP Product, or
if in the opinion of Gilardoni the FEP Product is
likely to become subject of a successful claim of
infringement, Gilardoni may, at its option and expense
(a) procure for Vivid the right to continue
distributing and using the FEP Product; or (b) replace
or modify the FEP Product so that it becomes non-
infringing, or (c) if neither (a) or (b) are reasonably
available, accept return of FEP Product sold hereunder,
grant a credit therefore as depreciated on a five-year
straight-line basis and terminate this Agreement. This
indemnification procedure shall be null and void and
Gilardoni shall have no liability to the extent that
any claim is based on any use of the FEP Product in
combination with any item not supplied or approved in
writing by Gilardoni, or if the FEP Product has been
tampered with, or modified in any way except as
provided in this Agreement without the express written
consent of Gilardoni, or if Vivid or its sub-
distributor, affiliate, or customer has any property
interest in said claim, suit, or legal proceeding, or
any license to any right so asserted.
19B.2 With respect to the EGG Patent, Vivid and
Gilardoni agree that, as between Vivid and Gilardoni,
Vivid shall be solely responsible for all and any
claims, consequences and charges relating to activities
pursuant to this Agreement regarding the EGG Patent in
the Vivid territories described in Section 3.1 hereof.
19B.3 With respect to the Xxxxxx Patents, Vivid and
Gilardoni agree that Vivid will be solely responsible
for obtaining and maintaining rights permitting its
activities pursuant to this Agreement. As between
Vivid and Gilardoni, Vivid shall be solely responsible
for all and any claims, consequences and charges
relating to its activities pursuant to this Agreement
regarding the Xxxxxx Patents.
19C. Software License.
19C.1 Under this Agreement, computer software
("Software") may be delivered in printed or machine
readable form. No software in source code format will
be supplied pursuant to this Agreement. Title to
Software, including all patents, copyrights, and
property rights applicable thereof, shall at all times
remain with Gilardoni. Software is valuable to
Gilardoni and shall be treated as Proprietary
Information subject to Section 20 of this Agreement.
Vivid shall maintain all copyright, proprietary, and
other notices on the Software. Vivid is granted a non-
exclusive license for the Term of this Agreement to
provide perpetual sub-licenses to Software provided
with FEP Product purchased hereunder to its customers
solely for operation or testing of FEP Product
purchased pursuant to this Agreement and on which
Software is first installed, provided that each such
customer first agrees in writing to be bound by terms
and conditions equivalent to those contained in this
Agreement. Vivid shall not decompile, reverse engineer
or reverse assemble, analyze or otherwise examine the
Software, including any hardware or firmware
implementation thereof for the purpose of reverse
engineering. Vivid is permitted to undertake standard
remedial analyses of software necessary to diagnose
problems therewith. NOTE: The parties understand that
no operating Software is provided as part of the FEP
Platform.
19D. Design Changes and Product Enhancements.
19D.1 The parties agree to each use their reasonable
commercial efforts to work together to coordinate their
product development efforts with the aim of assuring
that (a) the Operator Console Assemblies and FEP
Platforms distributed by Gilardoni and Vivid are
compatible in form and function, and (b) their
respective product lines are otherwise compatible.
Notwithstanding the foregoing, nothing in this
Agreement shall be interpreted to limit or otherwise
affect either party's right to change or improve any
design, technical specification, or capability of its
products. Provided that before making any change to
the Monobloc/Inverter Assembly, Gilardoni shall: (a)
first provide Vivid with ninety (90) days advance
written notice of any such change and an opportunity to
incorporate such change into its products on terms and
charges to be agreed; (b) upon Vivid's notice that said
design change affects the functioning of its products,
continue to provide the unchanged Monobloc/Inverter
Assembly for a reasonable period of time to be agreed
upon, so that Vivid may modify its products in accord
with its normal design cycle; and (c) continue to
provide spare parts and an upgrade path for customers
provided with products including the old version of the
Monobloc/Inverter Assembly.
19D.2 From time to time either party may develop
enhancements or improvements to its component or the
other party's component of the Joint Product. Said
party shall notify the other of the details of all such
enhancements and improvements and offer to sell or
license said enhancements or improvements to the other,
and to permit the other to manufacture all such
enhancements and improvements pursuant to this
Agreement, for reasonable royalties and fees to be
agreed.
20. License and Confidentiality Agreement.
20.1 Subject to each party's compliance with its obligations
under this Agreement, each party grants to the other a
license to use all patents and copyrights embodied in
its equipment and systems subject to this Agreement,
for purposes of designing, integrating, manufacturing,
and selling the Joint System during the Term, all in
accord with this Agreement.
20.2 Manufacturing Information and other Proprietary
Information will be held in confidence using the same
degree of care as receiving party uses for its own
information of like importance. Receiving party will
disclose said information only to its employees and
agents who need to know said information for the
performance of this Agreement, and who are bound to
protect its confidentiality. At the end of the Term,
or upon request of the disclosing party (whichever is
earlier), the receiving party shall return or destroy
all documents containing such Manufacturing Information
and other Proprietary Information except for
information necessary to activities which continue to
be permitted under this Agreement. In each case,
receiving party's counsel may maintain one set of said
documents under seal for its records.
20.3 Both parties acknowledge that the other party has
substantial experience and expertise in the technical
subject matter of this agreement. Each party may
utilize this experience and expertise, as well as
Proprietary Information and Manufacturing Information
to make improvements and changes to its component of
the Joint Product, the other party's component of the
Joint Product, and its other products. Nothing in this
Agreement shall prevent these activities.
20.4 Notwithstanding the provisions of Section 20.2 hereof,
each party shall be free to use "Residual Information"
for any purpose, including the development,
manufacture, marketing, and maintenance of products and
service. "Residual Information" means Proprietary
Information in non-tangible form (that is, not in
written or documentary form, including magnetic or
electronic form), which may be retained in the minds of
those employees and other personnel who have rightfully
had access to the Proprietary Information under this
Agreement.
20.5 Information which a party believes to be highly
proprietary and to require additional protection, may,
upon mutual agreement, be subject to additional
confidentiality protections. In such case, the
disclosing party shall describe the highly proprietary
information to be disclosed, and propose any additional
protections to be applied to said information.
Receiving party may agree to accept said highly
proprietary information under the terms proposed,
decline to accept it, or propose alternative terms for
disclosing party to accept before receipt of the
information.
21. Term and Termination.
21.1 This Agreement shall become effective on the effective
date hereof, and shall continue for a Term extending
for three (3) years thereafter, unless extended or
earlier terminated pursuant to this Section. Upon
expiration of the Term, this Agreement shall
automatically renew for subsequent one (1) year Terms
under the same terms and conditions, unless terminated
pursuant to the terms of this Section.
21.2 Vivid and Gilardoni may at any time mutually agree in
writing to terminate this Agreement.
21.3 After two (2) years following the Effective Date, and
at any time during any renewal Term of this Agreement,
either party may terminate this Agreement on three-
hundred sixty-five (365) days advance written notice to
the other party for any reason or for no reason.
21.4 Either party may terminate this Agreement for material
default of the other party, effective 30 days following
notice to the defaulting party, unless within said 30
days the party receiving said notice takes all
reasonable steps to remedy the default, and shall fully
remedy said default within 90 days of said notice. If
the receiving party does not so fully remedy said
default within 90 days of said notice, termination
shall become effective without further notice or other
action by the terminating party.
21.5 Either party may terminate this Agreement, effective
immediately upon notice, in the event that: (a)
proceedings are instituted by the other party in
bankruptcy, reorganization, receivership, or
dissolution; or (b) proceedings are instituted against
the other party in bankruptcy, reorganization, or
receivership, or dissolution and such proceedings have
not been dismissed or otherwise terminated within 60
days following the date they were initiated; or (c) if
the other party makes an assignment for the benefit of
creditors.
21.6 Upon termination or expiration of this Agreement for
any reason, neither party shall have any obligation or
liability to the other or to any employee, agent or
representative of the other for any damages,
indemnification, expenditures, loss of profits or
prospective profits of any kind, sustained or alleged
to have been sustained or arising out of such
expiration or termination (not including any claim for
monies due under this Agreement for goods purchased, or
for damages resulting from breach of any term of this
Agreement), both parties hereby irrevocably waiving any
such rights granted by the laws of their respective
countries or of any other jurisdiction. Both parties
hereby covenant and agree that they will bring no
action or proceeding of any nature whatsoever in any
court, before any tribunal, or under any arbitration
proceeding provided for herein, seeking or claiming any
such damages, indemnification, expenditures, loss of
profits or prospective profits. Each party recognizes
and acknowledges that the other party is entering into
this Agreement in reliance upon and in consideration of
the agreements and covenants contained herein. Each
party hereby indemnifies and holds harmless the other
party from and against any claim, cost, damages and
liability whatsoever asserted by either party or any
subdistributor, employee, agent, or representative
thereof under any applicable termination, labor,
franchise, social security, or similar laws or
regulations of any jurisdiction.
22. LIMITATION OF LIABILITY.
22.1 NEITHER PARTY'S LIABILITY TO THE OTHER FOR ANY CAUSE
WHATSOEVER, REGARDLESS OF THE FORM OF ANY CLAIM OR
ACTION, SHALL EXCEED THE AGGREGATE PRICE PAID BY VIVID
UNDER THIS AGREEMENT DURING THE CALENDAR YEAR ENDING ON
THE DATE THE CAUSE OF ACTION ACCRUES, OR ONE MILLION
UNITED STATES DOLLARS (US$1,000,000), WHICHEVER AMOUNT
IS GREATER.
22.2 NEITHER PARTY SHALL IN ANY EVENT BE LIABLE TO THE OTHER
FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES
ARISING OUT OF OR IN CONNECTION WITH THE USE OR
PERFORMANCE OF ANY PRODUCT OR THIS AGREEMENT, INCLUDING
BUT NOT LIMITED TO (a) ANY LOSS OF DATA, PROFITS OR USE
OF ANY PRODUCTS, OR (b) ANY LIABILITY RELATING, IN ANY
WAY, TO ANY ALLEGED OR ACTUAL FAILURE OF ANY PRODUCT OR
SYSTEM TO DETECT ANY ITEM OR ITEMS, SUCH AS ONE OR MORE
WEAPON(S), EXPLOSIVE(S), OR INCENDIARY DEVICE(S),
INCLUDING ANY LIABILITY RELATING, IN ANY WAY, TO DAMAGE
OR INJURY TO ANY AIRCRAFT, TERMINAL FACILITY, OR OTHER
PROPERTY, OR TO ANY PERSON OR PERSONS.
22.3 NEITHER PARTY SHALL BE LIABLE TO THE OTHER'S CUSTOMERS,
SUB-DISTRIBUTORS OR THIRD PARTIES FOR ANY DAMAGES,
INCLUDING BUT NOT LIMITED TO: (a) DAMAGES CAUSED BY
FAILURE TO PERFORM COVENANTS AND RESPONSIBILITIES, BY
REASON OF NEGLIGENCE OR OTHERWISE; (b) DAMAGES CAUSED
BY REPAIRS OR ALTERATIONS DONE WITHOUT THE PARTIES'
JOINT WRITTEN APPROVAL; (c) DAMAGES DUE TO PRODUCT
DETERIORATION DURING PERIODS OF STORAGE; OR (d) ANY
SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING
OUT OF OR IN CONNECTION WITH THE USE OR PERFORMANCE OF
ANY PRODUCT, OR THIS AGREEMENT, INCLUDING BUT NOT
LIMITED TO (a) ANY LOSS OF DATA, PROFITS OR USE OF ANY
PRODUCTS, OR (b) ANY LIABILITY RELATING, IN ANY WAY, TO
ANY ALLEGED OR ACTUAL FAILURE OF ANY PRODUCT OR SYSTEM
TO DETECT ANY ITEM OR ITEMS, SUCH AS ONE OR MORE
WEAPON(S), EXPLOSIVE(S), OR INCENDIARY DEVICE(S),
INCLUDING ANY LIABILITY RELATING, IN ANY WAY, TO DAMAGE
OR INJURY TO ANY AIRCRAFT, TERMINAL FACILITY, OR OTHER
PROPERTY, OR TO ANY PERSON OR PERSONS; EACH PARTY SHALL
INDEMNIFY THE OTHER AGAINST ALL SUCH CLAIMS ASSERTED BY
CUSTOMERS OR SUB-DISTRIBUTORS OR OTHER THIRD PARTIES.
22.4 This Section 22 shall not apply to Sections 19A, 19B,
23.3, and 23.4 of this Agreement.
23. GENERAL
23.1 Survival. Sections 2, 8 - 13, 19, 19A, 19B, 19C, 19D,
20, 21.6, 22, and 23 shall survive termination of this
Agreement. Notwithstanding any termination of this
Agreement, Vivid shall have the right to purchase, and
Gilardoni agrees to sell, replacement Monobloc/Inverter
Assemblies, spare parts for FEP Products, and
replacement parts therefor (including x-ray tubes, P.C.
boards, transformers and all other components therefor
necessary for Vivid to replace or repair failed
components and assemblies at Gilardoni's then-standard,
commercially reasonable prices for a period extending
for ten (10) years from the date of Gilardoni's last
sale to Vivid of an FEP Platform, System or
Monobloc/Inverter Assembly pursuant to this Agreement.
23.2 Force Majeure. Neither party shall be deemed to be in
default pursuant to this Agreement so long as its
failure to perform any of its obligations hereunder is
occasioned solely by fire, labor disturbance, acts of
civil or military authorities, acts of God, or any
similar cause beyond such party's control.
23.3 Export Controls. Notwithstanding anything contained in
this Agreement to the contrary, Vivid agrees that it
will not in any form export, re-export, resell, ship or
divert, or cause to be exported, re-exported, resold,
shipped or diverted, directly or indirectly, any
product or technical data furnished hereunder or the
direct product of any such technical data to any
country for which the United States Government or any
agency thereof at the time of export or re-export
requires an export license or other governmental
approval, without first obtaining such license or
approval. Vivid represents that it is knowledgeable
respecting United States export regulations and
licensing requirements concerning the subject of this
Agreement, and warrants that it shall comply with such
regulations and maintain all necessary licenses and
permissions.
23.4 Compliance with Laws. Each party shall comply with all
laws, rules, regulations, governmental requirements and
industry standards existing with respect to all
products subject to this Agreement and its activities
in the countries in which it operates, as well as all
applicable laws of Italy and the United States,
including the United States Foreign Corrupt Practices
Act and regulations promulgated thereunder.
Notwithstanding Section 22 of this Agreement, each
party shall indemnify and hold harmless the other from
any and all fines, damages, losses, costs and expenses
(including reasonable attorneys' fees) incurred as a
result of the indemnifying party's breach of Sections
23.3 and 23.4 of this Agreement.
23.5 Assignment. With the exception of sub-licensing rights
expressly provided in Section 19D of this Agreement,
neither party may assign any of its rights except
rights to the payment of money or delegate any of its
obligations under this Agreement to any third party
without the express written consent of the other. For
purposes of this Section 23.5, the term "assignment"
shall include the transfer of ownership or management
control of either party to any party then manufacturing
any x-ray based system used to inspect airline hold
baggage or other luggage, mail, parcels, or break bulk
cargo. If either party violates this provision, the
other party may at its option and upon thirty (30) days
notice terminate this Agreement.
23.6 Notices. Notices required or permitted to be given
under this Agreement shall be in writing and mailed,
postage prepaid, by first class registered or certified
mail, return receipt requested, to the address
indicated below:
If to Vivid:
Vivid Technologies, Inc.
00X Xxxxxxxx Xxx
Xxxxxx, XX 00000 (USA)
Attention: Xx. Xxxxxxx Xxxxx, President & COO
Copy To: Law Department
If to Gilardoni:
Gilardoni S.p.A.
Direzione e Stabilimento
Xxx Xxxxxx Xxxxxxxxx, 0
00000 Xxxxxxxx del Lario
(Como) ITALIA
Attention: Xx. Xxxxxxx Xxxxxx
Xx. Xxxxxx Xxxxxx
Xx. Xxxxx Xxxxxxxxx
Either party may change its address to be used on
notices by giving notice of such change to the other
party as provided in this paragraph.
23.7 Independent Contractor Status. The parties are
independent contractors, and this Agreement shall not
be deemed to constitute either party the partner, joint
venturer, servant, employee, or agent of the other.
Neither party has the right, power or authority to
obligate the other party under this Agreement to any
contract or other obligation.
23.8 Waiver. The waiver of either party of a default or
breach of any provision of this Agreement by the other
party shall not operate or be construed as a waiver of
any subsequent default or breach.
23.9 Governing Law; Arbitration of Disputes. This Agreement
shall be subject to the laws of the State of New York,
USA (not including its conflict of laws provisions);
and the parties consent to be bound by the provisions
of such laws regardless of the forum in which such laws
are applied. Notwithstanding the above, any dispute
arising out of, or relating to this contract, which the
parties have not been able to settle amicably shall be
finally settled by arbitration, in accordance with the
Rules of Conciliation and Arbitration of the
International Chamber of Commerce. The arbitration
shall be conducted by three (3) arbitrators, consisting
of one arbitrator chosen by Vivid one arbitrator chosen
by the Gilardoni, and one arbitrator chosen by the two
arbitrators so chosen, provided that in the case of any
dispute involving a claim of less than $500,000 United
States Dollars the parties will jointly choose a single
arbitrator, or if they are unable to agree on an
arbitrator, a single arbitrator will be chosen pursuant
to the procedures of the International Chamber of
Commerce. The arbitrators shall render their judgment
within six (6) months of any notice to arbitrate. The
place of arbitration shall be London, England. The
governing law of the contract shall be the laws of the
State of New York. Proceedings shall be conducted in
English. Any arbitrator shall not be entitled to award
punitive damages. Judgment upon any arbitration award
so rendered may be entered in any court having
jurisdiction, or application may be made to any such
court for confirmation of such award or a judicial
acceptance of such award, and for an order of
enforcement or other legal remedy, as the case may be.
23.10 Insurance. Each party (the "Insuring Party")
shall maintain, to the extent commercially available,
for Term of this Agreement and for five years
thereafter, Product Liability insurance covering
aviation and other risks related to products licensed
or sold (a) by the Insuring Party to the other party
pursuant to this Agreement, or (b) otherwise by the
Insuring Party to others, in an amount not less than
fifty million United States dollars (US$50,000,000) for
any occurrences during the period of the policy.
23.11 Amendment. This Agreement may not be changed or
amended unless in a writing specifically referencing
and purporting to amend this Agreement, and signed by
both parties.
23.12 Entire Agreement. This Agreement contains the
entire Agreement of the parties, and except for the
Agreement for Gilardoni Distribution, Manufacture,
License and Purchase of Vivid Products (Operator
Console & Systems), supersedes all prior agreements,
understandings, representations, conditions,
warranties, and covenants, whether oral or written,
between the parties. The prior Agreement is agreed to
be terminated and to be of no further effect.
IN WITNESS WHEREOF, the parties have hereunto set their
hands and seals as of the date first above-written.
GILARDONI, S.p.A. VIVID TECHNOLOGIES, INC.
By: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxxxxx Xxxxx
Printed Name: Xxxxxxx Xxxxxx Printed Name: Xxxxxxx Xxxxx
Title: Managing Director Title: President & COO
EXHIBIT A
GILARDONI TRADEMARKS
1. FEP ME 640
2. FEP ME 975
3. FEP TDS 640
4. GRAPHIC OF GILARDONI LOGO
Security Technology
5. GRAPHIC OF GILARDONI LOGO
EXHIBIT B
GILARDONI PRODUCTS AND PRICES
FEP PLATFORMS FOR DEVELOPMENT PURPOSES
8 units at US$32,000 each (ex-works Mandello - Incoterms 1990,
packed for air shipment (cost: US$450 each unit) as follows:
April 10, 1997 2 units
Product Specifications and Acceptance Criteria to
be agreed by April 10, 1997
Acceptance Testing to be complete by June 10, 1997
May 30, 1997 3 units
June 15, 1997 3 units
FEP PLATFORMS FOR PRODUCTION PURPOSES
PRICE: "Cost Plus" a US$3000 profit, not to
exceed a total price of US$29,500.
MONOBLOC/INVERTER ASSEMBLIES
PRICE: US$6,250 for first 100 units
US$5,250 for all subsequent purchases
GILARDONI SYSTEMS (AND NEW PRODUCTS AND IMPROVEMENTS)
PRICE: to be agreed
PRODUCT INTEGRATION SERVICES
PRICE: "Cost Plus" a negotiated profit, not to
exceed 15% of said Cost Plus number.
PACKING FOR AIR SHIPMENT
PRICE: "Cost Plus" a negotiated profit, not to
exceed 15% of said Cost Plus number, or
US$450 per FEP Platform or Gilardoni
System.
Packing for Monobloc/Inverter
Assemblies Included In Above Price.
SPARE PARTS PER SECTION 23.1
PRICE: "Cost Plus" a negotiated profit, not to
exceed 50% of said Cost Plus number,
with the total price not to exceed
Gilardoni's then-standard commercially
reasonable prices.
GILARDONI MANUFACTURING INFORMATION
All information necessary to manufacture, test, install, service
and use the FEP Platform and all subassemblies thereof (not
including information needed to manufacture the Monobloc/Inverter
Assembly), including but not limited to a xxxx of materials, and
all technical and engineering information, know how, trade
secrets, proprietary information, and data relating thereto, as
specified hereafter:
1. Part Specifications: For each item referenced in the Xxxx
of Material that is a standard purchased part, the following
information will be provided: description, measurement unit,
specification of the part, vendor part number, name and
address of the vendor.
2. Fabrication Drawings: For each item referenced in the Xxxx
of Material that is not a standard purchased part and
therefore should be fabricated, a detailed dimensional
drawing depicting how the individual parts are fabricated by
Gilardoni will be supplied. The drawings include the
necessary information for an independent fabricator to
manufacture the parts, including materials used, finish (if
any), type of paint and color (if any), tolerance
requirements, etc. Any part which cannot be defined or
purchased per a Part Specification will have a Fabrication
or detail drawing. This includes any parts which are
purchased as standard parts, and altered or modified to meet
additional requirements for the product.
3. Assembly Drawings: Drawings depicting individual parts and
how they are integrated by Gilardoni into a complete
assembly or sub-assembly. This includes Printed Circuit
Boards, with any specific notes or details which may be
required to assemble the boards.
4. Assembly Procedures: Instructions on how Gilardoni
assembles a particular assembly or sub-assembly to be used
in conjunction with assembly drawings and Parts Lists to
manufacture individual or final assemblies. The document
will list the necessary tools required, any prerequisite
setups required, precautionary or clarification notes, and
step by step instructions listed in the order to be
performed.
5. Test Procedures: Instructions on how Gilardoni tests
individual items, Printed Circuit Boards, sub-assemblies,
and final product. The document will list all that is used
by Gilardoni: the necessary tools and test equipment, step
by step instructions for testing the item, pass/fail
criteria limits.
6. Xxxx of Materials (BOM's): Also known as Part List.
Complete list of parts used in a particular assembly or sub-
assembly. The BOM (or list of Parts) will be made up from
parts either defined by a Part Specification, a Fabrication
Drawing, or another Assembly. The Assembly Drawings,
Assembly Procedures, Test Procedures, Unique or Special
Tools (defined via Part Spec), Test Fixtures (if
applicable), Schematic Drawings (for PCB's), Programmed
devices and their associated Firmware Files (if applicable),
Configuration Drawings (if applicable), and User
Documentation (for top level BOM) can be included in the BOM
or their relationship with the parts listed on the BOM can
be established by means of a specific list..
7. Configuration Drawings: Drawings or instructions which
provide, where applicable, instructions for setting up a
particular configuration. i.e. switch or jumper settings on
Boards.
8. Text Fixtures: Assemblies and individual items, not being
standard purchased parts, used for the purpose of testing
assemblies or individual parts will have supporting
documentation necessary to reproduce them, i.e. there will
be, where applicable, Part Specifications, Fabrication
Drawings (if required), Bills of Materials listing all parts
used, Assembly Drawings, Assembly Procedures, Calibration
Procedures, Software (if required), etc. provided that these
do not disclose, without written authorization, third party
reserved information.
9. Printed Circuit Board Schematics: Drawings depicting the
functional and electrical representation of Printed Circuit
Boards including source files for programmed devices. Test
vectors and libraries are not included.
10. Printed Circuit Board Artwork Files: Drawings and files
required to reproduce the raw unpopulated Printed Circuit
Boards, Gerber Files, Drill Files, Tool Files. Films are
not included.
11. PLD or PROM Devices: Files used to program Programmable
Logical Devices (PLD's) or Programmable Read Only Devices
(PROM's), including Test Vector Files.
12. User Documentation: Manual providing user information on
how to operate the system in the same Gilardoni format as
already received by Vivid.
13. Technical Documentation: Manual providing customer support
personnel with the necessary information needed to install
and service the product. i.e. installation guidelines,
replacement procedures, alignment and calibration
procedures, etc. in the same format already received by
Vivid and according to Gilardoni's standards.
14. Additional Documentation: Technical and process information
already available in Gilardoni and not included in the above
list, relative to the FEP Platform (excluding
Monobloc/Inverter Assembly), that could be required for this
specific project.
As much as the above documentation as possible should be provided
in electronic form, along with paper form; all Fabrication and
Assembly drawings will be provided in paper form. Further, paper
form will be provided if electronic form of proper format is not
available or if by itself it is not adequate. The following are
the preferred formats for the electronic source files.
1. Part Lists or BOM's: DOS compatible plain text files, or
Windows 3.1 Microsoft Excel 5.0c format files.
2. Schematic Drawings: Cadence Concept, rev.1.3 for Risc 3000
Workstations running AIX w.3.2, available on DOS 6.0 formatted
floppy discs.
3. Printed Circuit Board Fabrication Drawings: Cadence
ValidPackager, rev.5.0 for Risc 6000 Workstations running AIX
w.3.2, available on DOS 6.0 formatted floppy discs. For net
Lists: ASCI TXT files for DOS 5.0, File Gerber, w.2.4 of the
Gerber standard, with measure units expressed in inches.
4. Procedures and User Documentation: Word for Windows version
6.0c. or DOS compatible plain text files or Pagemaker 4.0 for
Macintosh.
NOTE: Modifications, conversions, and enhancements of either
party's Manufacturing Information by the other party shall be
treated as an enhancement pursuant to Section 19D.2 of this
Agreement.
FEP PLATFORM SPECIFICATIONS
(INCLUDING MONOBLOC/INVERTER ASSEMBLY)
FEP PLATFORM SPECIFICATIONS - CODE 05141031
The product is composed by the following subsystems:
Code 10248900, Monobloc n.1
Code 10291000, FEP ME 640 unit n.1
Code 10291100, Diode array n.1
Code 10292900, Curtains, 0.5 mm lead equiv. n.2
Code 20015031, transfer board n.1
Code 20015793, Monobloc power supply n.1
Code 20015819, Interface board n.1
Code 20015849, metalflex cable, mt. 6 n.1
Design and know how information will not be supplied for Monobloc
and Monobloc Power Supply.
PRODUCT SPECIFICATIONS
1. Regulatory Specification
1.1. General Product Safety Compliance 92/59/CEE
1.2. 89/392/CEE
1.3. DPR 547 on 27/04/1955
1.4. DPR 185 on 13/02/1964
1.5. DL 230 on 17/03/1995
1.6. Machine Safety EN 292-1
1.7. Machine Safety EN 292-2
1.8. Machine Safety EN 60204-1 (IEC 204-1, CEI EN 60204-1)
1.9. EMC, 89/336/CEE
1.10. Low Voltage", 73/23/CEE
1.11. Basic norm on EMC En 55011/CEI 110-6
1.12. Generic norm on EMC emittance En 50081/CEI 110-7
1.13. Generic norm on EMC immunity En 55082/CEI 110-8
1.14. UL 187
1.15. ICRP recommendations on radiological protection
2. Size, Weight, Layout Specifications
2.1. Size of tunnel opening is 0.6 m. wide, 0.4 m. height
2.2. Maximum packaged weight, 900 Kg.
2.3. Standard cable length (maximum allowable tunnel - console
distance) is 6 meters; 20 and 30 (maximum allowed) meters
optional;
3. Functional Specifications
3.1. Belt:
3.1.1. Speed 0.25 m./sec. @ 60Hz, 0.20 m./sec. @ 50 Hz
within 10% error
3.1.2. Length: 2570 mm.
3.1.3. Height from ground: 625 mm.
3.2. Monobloc:
3.2.1. Positioned below the belt
3.2.2. High frequency 30 kHz Generator
3.2.3. Voltage to the Tube 140 Kvcc
3.2.4. Current to the tube 0.5 mA
3.2.5. Dose to the baggage less than or equal to 1.4
Sv/Inspection
3.3. Detectors:
3.3.1. L shaped detector arrays positioned above the belt
3.3.2. Number of detectors: 576 for High Energy, 576 for
Low Energy.
3.3.3. Horizontal/Vertical layout: 384 diodes horizontal,
192 vertical
3.3.4. Low Energy Scintillator: GdOS Screens
3.3.5. High Energy Scintillator: CdW04 Scintillating
Crystals
3.4. Interface Board
3.4.1. ISA standard PC bus IEEE - P996 Draft D2 interface
3.4.2. Shared memory mapping
3.4.3. 14 pin connector daughter board interface
3.4.4. Programmable Acquisition Mode
3.4.5. Four eight bits I/O Ports
3.4.6. 8 Kbytes non volatile RAM
3.5. Transfer Board
3.5.1. ISA standard PC bus IEEE - P996 Draft D2 interface
3.5.2. Shared memory mapping
3.5.3. Transfer Rate 13824 Kbits/sec.
4. Operational Specifications
4.1. Operating Temperature 0 degrees to +40 degrees Celsius
4.2. Storage Temperature -20 degrees to +60 degrees Celsius
4.3. Humidity 95% non-condensing
4.4. Power Supply 220 V, 50 or 60 Hz, 1500 VA, Single Phase
4.5. Baggage forward movement for inspection with image
acquisition; backward movement without image acquisition
allowed for 13 sec. For luggage repositioning.
4.6. 100% Duty cycle
4.7. Protection from abrasion of metal parts subject to scraping
assured by Stainless Steel parts.
5. Documentation Specifications
5.1. Operating Instructions
5.2. The Technical Manual, not supplied with each equipment,
includes:
5.2.1. Introduction
5.2.2. Installation Instructions
5.2.3. Maintenance Instructions
5.2.4. Spare parts List
5.2.5. Troubleshooting
5.2.6. Wiring Diagram Collection
6. Safety Specifications
6.1. Average dose to the luggage less than or equal to 1.4
Sv/Inspection or 0.14 mR/inspection
6.2. Maximum leakage radiation less than 1.0Sv/hr. or 0.1
mRem/hr. within 10 cm. From the skin
6.3. Film Safety Equal to or greater than 1600 ASA film speed
6.4. Two Emergency E-stop push-buttons front/back to power off
the Monobloc and the Belt motor
6.5. Protection against leakage radiation resulting from cover
removal with Interlock Switches to power off the Monobloc
and the Belt motor
6.6. X-ray emission warning 2 yellow lamp front/back must light
when X-ray are on
6.7. Warning label "x-ray radiation danger" label on both the
tunnel openings of the equipment
6.8. Protection against scattered radiation from the front/back
opening 0.5 mm. Lead equivalent lead curtains must be used.
6.9. Protection against insertion of the hands on the output side
of the tunnel by means of Plexiglas protection 0.3 meters long.
NOTE: This is a top level description which simply makes sections 2.2 and
2.3.1 more specific
EXHIBIT E
VIVID TECHNOLOGIES'
OPERATOR CONSOLE ASSEMBLY SPECIFICATIONS
NOTE: This is a top level description which simply makes section
2.5 more specific.
The Operator Console is an electro-mechanical assembly attached
to a Pentium based PC operating at a minimum of 133 Mz with 32
Meg of RAM (to be supplied by Gilardoni), which is attached to
the FEP platform to operate and control the joint system.
The Operator Console Assembly is ergonomically designed to allow
the operator to maintain their attention on the bag images
without having to look down from the display. All imaging
functions are represented by icons on the display and controlled
through the touch pad. The console is designed to minimize
operator fatigue and the stresses usually associated with
prolonged screening. (A lockable console storage compartment,
computer enclosure, and display table are optional accessories
available at for purchase at additional cost.)
Operator Console software causes threat information to be
displayed in color over a single high resolution, xxxx-scale
image with two selectable preset options targeting either
explosives or narcotics.
Advanced computer-based image processing provides real-time
automated threat detection and image analysis, for simultaneous
detection of commerccial and military bulk and sheet explosives,
as well as conventional imaging modes (all in operator assist
mode). . To accomplish this, the system uses a single program
with adjustable sensitivity levels for controlling the
relationship between Detection rate (Pd), Alarm rate (Pfa) and
threat material thickness.
For purposes of this Agreement, "real time" means that the "
threat overlays" appear on the screen coincident with the "normal
image" of the bag. To accomplish this the "composite image" of
the bag (threat overlays plus normal image) appear on the screen
after some latency. This latency is defined as the time between
when the bag first intercepts the X-xxx xxxx (begin item) and
when the bag actually begins to be displayed on the video
monitor. The maximum latency is 120 lines. The latency is
transparent to the operator because the composite bag image
appears on the screen before the bag exits the inspection tunnel.
Imaging Capability (with 17" Display, high resolution SVGA, 60 Hz
refresh rate 1024 x 768, 256 colors; 0.25 mm dot pitch; and above
described computer)
Resolution: 38 AWG (0.1 mm Cu) guaranteed
Penetration: Minimum 22 mm steel
Advanced Image Enhancements Standard Image Enhancements
Semiautomatic Threat Alert 2X and 4X Zoom
Contrast Window Enhancement Tri-material
Density Alert Pseudo Color
Contrast Adjustment
Edge Enhancement
Reverse Video
Home Key
EXHIBIT F
GILARDONI'S CURRENT RETURN MATERIAL AUTHORIZATION PROCEDURE
Summary
1. SCOPE
2. PROCEDURE
3. RECORDS
REFERENCES
- PMI 007: Gestione resi (Return material management)
- PMI 012: Gestione ordini dei clienti (Customer order management)
1. SCOPE
Scope of the procedure is to define how Gilardoni's Customer
Service executes the return of materials from Customer location
to Gilardoni's facility.
2. PROCEDURE
1. Customer contacts Gilardoni Customer Service to review
claim.
2. Customer Service determines validity of claim and completes
the attached RMA Form `A'. The following information will be
requested from the customer.
2.1. Refer to RMA Form `A'.
3. Customer Service verifies warranty status, receives
authorized signature and contacts customer for options and
decision. Customer Service may request that the customer scrap
the defective part.
3.1. Under Product Warranty
3.1.1. The customer will be issued an RMA number. Customer
will be instructed on the proper packaging. The RMA number
must be clearly displayed on the outside packaging of the
returned item. All the associated shipping costs of
returns are the customer's responsibility.
3.1.2. Customer Service requests a zero dollar revenue Sale
Order (see PMI 012 and PMI 007) and delivers the replacements
part.
3.1.3. Customer Service files the RMA form in the filing
system.
3.1.4. The customer will contact the shipping company to
ensure that the return part complies with all Customs
Regulations. The defective part must be received by Gilardoni
within 30 days or an invoice may be issued for the full amount.
3.2. Out of Product Warranty
3.2.1. Customer Service provides a quote to the customer for
replacing the defective part. The quote may follow the terms and
conditions established by a Maintenance/Service Contract, an
amendment to the standard warranty, or the standard out of
warranty policy. Customer will be instructed on the proper
packaging. All the associated shipping costs of returns are the
customer's responsibility.
3.2.2. Customer Service requests a Sales Order (see PMI 012
and PMI 007) and delivers the replacement part.
3.2.3. The customer will contact the shipping company to
ensure that the return part complies with all Customs
Regulations. The defective part must be received by Gilardoni
within 30 days or an invoice may be issued for the full amount.
NOTE:
Any parts returned whether they are under warranty coverage or
not, that exhibit a `NO PROBLEM FOUND' (NPF) condition after
testing at Gilardoni's facility, may incur a cost to cover
the expense of testing and associated shipping charges,
which may be invoiced to the sender.
3.3. Product Upgrade
3.3.1. Customer Service provides a quote to the customer for
upgrading the product. The quote may follow the terms and
conditions established by a Maintenance/Service Contract, an
amendment to the standard warranty, or the standard out of
warranty policy. Customer will be instructed on the proper
packaging. All the associated shipping costs of returns are the
customer's responsibility.
3.3.2. Customer Service requests a Sale Order to sales office
(see PMI 012 and PMI 007).
3.3.3. The customer will contact the shipping company to
ensure that the return part complies with all Customs
Regulations. The customer will ship the product to Gilardoni.
3.3.4. The product will be shipped, in accordance with the
quote/order, to the customer once the upgrade has been
completed.
3. RECORDS
A copy of RMA forms will be maintained in and by Customer Service
for a minimum of three years.
TODAY'S DATE: ___________
CUSTOMER: _______________________________
PRODUCT+MODEL #: _______________________ INVOICE #: ________________
PART NAME + #: __________________________ DELIVERY DATE: __________
PART SERIAL #: ___________________________ CLAIM DATE: ______________
CLAIM DESCRIPTION AND REQUEST
Description:
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
Request:
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
GILARDONI'S REPLY
Warranty: yes RMA number: __________
no
Repairable: yes no
Return: yes no
Other: Scrap item Free of charge replacement Product upgrade
Notes:
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
Authorization Signature: _____________________
X. Xxxxxxxxx
or X. Xxxxxxx
