PORTIONS OF THIS EXHIBIT MARKED WITH A SERIES OF X'S HAVE BEEN DELETED PURSUANT
TO THE COMPANY'S APPLICATION FOR CONFIDENTIAL TREATMENT OF SUCH INFORMATION.
EXHIBIT 10.1
AGREEMENT
---------
THIS AGREEMENT ("Agreement") is made as of the 1st day of June, 1997
(the Effective Date"), by and between SENTECH EAS CORPORATION., a Florida
corporation, with offices at 000 Xxxxxxxxx 00 Xxxxxx, Xxxxxxxxx Xxxxx, XX 00000
("SenTech"), and KNOGO NORTH AMERICA INC. a Delaware corporation, with offices
at 000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxxx, XX 00000 ("Knogo").
R E C I T A L S
SenTech desires to have developed for it by a third party manufacturer
a design specification and a manufacturing specification for an 8MHz Swept RF
System (the "System").
Knogo is engaged in the business of designing, manufacturing and
distributing certain electronic security systems and is the owner of certain
proprietary information related thereto ("Knogo Technology") including but not
limited to that set forth in Annex A attached hereto.
SenTech and Knogo have expressed their interest in mutually cooperating
toward, among other things, the development, manufacture and marketing of the
System. SenTech desires to have Knogo manufacture and sell the System to
SenTech, Knogo desires to manufacture and sell the System to SenTech, and
SenTech and Knogo desire to address certain matters relating to the System, all
upon the terms and conditions set forth in this Agreement.
NOW THEREFORE, in consideration of the mutual and dependent provisions
hereinafter set forth, SenTech and Knogo, intending to be legally bound, agree
as follows:
1. MANAGING COORDINATORS
1.1 Knogo and SenTech each shall appoint a "Managing Coordinator" who
shall manage such party's performance under this Agreement, be the primary
manufacturing and technical interface with the other party and serve as the
focal point for the identification and resolution of any problems that may
surface during the course of development and manufacturing of the System. Each
party shall give prompt notice to the other party in the event there is a change
in its Managing Coordinator. The Managing Coordinators shall not have authority
to amend or modify the terms of this Agreement.
1.2 The initial Managing Coordinators for each party shall be:
Knogo: Xxxxxx Xxxxx
SenTech: Xxxx Xxxxxx
2. MANUFACTURING SPECIFICATIONS
2.1 Prior to the Effective Date, SenTech shall provide Knogo with the
manufacturing specification relating to the first generation System for Knogo's
review together with a requirements specification, an industrial design, and the
key components and manufacturing specifications (collectively, the "SenTech
Specs"). Upon the Effective Date, Knogo shall deliver a design specification
(the "Design Specification") for the System, which shall include a requirements
specification, an industrial design and other key components as described in
Annex B attached hereto. SenTech shall review and comment on the proposed Design
Specification no later than ten (10) days after the Effective Date for SenTech's
approval or disapproval. Knogo shall promptly revise the Design Specification to
incorporate any comments and changes requested by SenTech, and upon revision
shall promptly resubmit the Design Specification to SenTech for final comments
(which shall also be incorporated) and approval. Within thirty (30) days of the
delivery of the final Design Specification (as approved by SenTech), Knogo shall
prepare and deliver to SenTech a preliminary manufacturing specification (the
"Preliminary Manufacturing Specification") for the System. The Preliminary
Manufacturing Specification shall contain proposed milestones and goals for the
production and delivery of the System, test procedures, production targets, cost
reduction targets, recommendations for components and vendors and reliability
and quality assurance guidelines.
2.2 As soon as practicable after Knogo delivers the Preliminary
Manufacturing Specification to SenTech, SenTech shall review them with Knogo.
Knogo shall promptly revise the Preliminary Manufacturing Specification to
incorporate any comments and changes requested by SenTech, and shall promptly
resubmit the Preliminary Manufacturing Specification to SenTech for SenTech's
review and final comments (which shall also be incorporated) and approval. Knogo
shall deliver the final manufacturing specification (the "Manufacturing
Specification") to SenTech within thirty (30) days after receipt of written
approval from SenTech of the Preliminary Manufacturing Specification, as
modified or revised pursuant to this Section, but in any event no later than
August 1, 1997. The Manufacturing Specification shall include all subjects set
forth in the Preliminary Manufacturing Specification as modified and such other
subjects as may be reasonably requested by the parties, subject to the
reasonable consent of the non-requesting party. The Design Specification, the
Preliminary Manufacturing Specification and the Manufacturing Specification,
each as approved by SenTech (collectively, the "Production File") shall upon
completion be attached hereto as Annex C and shall thereupon be incorporated
herein.
2.3 Subject to the provisions of Articles 7 and 8 hereof, the
Production File shall be owned jointly by Knogo and SenTech and shall be "Joint
Technology" (as defined in Section 8.2 below), and Knogo shall possess all
rights to use the Production File or any part thereof subject to the
restrictions set forth in this Agreement. SenTech shall promptly upon Knogo's
request execute and deliver such instruments and agreements as Knogo may
reasonably request in order to confirm the foregoing. SenTech shall notify Knogo
before disclosing any of the Production File to any third party and Knogo shall
have the right to review the Production File promptly and to delete, for a
reasonable business purpose, any of Knogo's confidential information contained
therein.
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3. WORKING SAMPLES.
3.1 Upon written approval by SenTech of the Manufacturing
Specification, Knogo shall produce and deliver to SenTech, no later than
September 1, 1997, one (1) prototype of the System, which shall be in conformity
with the Design Specification and the Manufacturing Specification (the "Working
Samples"), and in accordance with the development and delivery schedule set
forth in the Manufacturing Specification. The primary goal of the production of
the Working Samples shall be to test the design and performance of the System.
All components needed for the Working Samples shall be provided by Knogo.
3.2 If the parties agree during the course of development of the
Working Samples that changes should be made to the Manufacturing Specification
or the Design Specification, they shall embody such agreement in writing which
shall specifically amend Annex C. The parties shall attempt in good faith to
agree upon an equitable adjustment to accommodate the effect any such changes
may have upon the charges for development, payment schedule, delivery schedule
of Working Samples and Production Units (as defined below).
3.3 Knogo and SenTech shall test the Working Samples in accordance with
the test procedures to be developed and mutually agreed upon by the parties and
incorporated as part of the Manufacturing Specification. Such testing shall be
completed within forty-five (45) days after the delivery date of the Working
Samples to SenTech. If the Working Samples pass the test procedure and are in
conformity to and compliance with the Design Specification and the Manufacturing
Specification, SenTech shall provide Knogo with an acceptance notice and shall
place with Knogo an initial order for Production Units as described in Section
4.1.
3.4 If the Working Samples do not satisfactorily meet the requirements
of the test procedures contained in the Manufacturing Specification (the
"Acceptance Criteria"), or are otherwise not in conformity to and compliance
with the Design Specification or the Manufacturing Specification, other than due
solely to the fault of SenTech, SenTech shall give Knogo notice thereof and
shall specify in reasonable detail why the Working Samples do not meet the
Acceptance Criteria or are not acceptable to SenTech, and suggest necessary
corrections. Knogo shall promptly thereupon take necessary corrective action at
its sole cost, and, following correction and retesting, SenTech shall accept the
Working Samples if such Working Samples, as modified, meet the Acceptance
Criteria and are otherwise acceptable to SenTech. If the Working Samples do not
meet the Acceptance Criteria or are not in conformity to and compliance with the
Design Specification or the Manufacturing Specification, due solely to the fault
of SenTech in connection with the design or manufacture of the Working Samples,
Knogo shall nonetheless promptly take necessary corrective action so as to
ensure that the Working Samples meet the Acceptance Criteria and are in
conformity to and compliance with the Design Specification and the Manufacturing
Specification, provided that the cost of such corrective action shall be borne
by SenTech.
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3.5 The failure of SenTech to notify Knogo within forty-five (45) days
after its receipt of the Working Samples (or in the case of correction of any
deficiencies, within forty-five (45) days following receipt of the corrected
Working Samples) of any disapproval of the Working Samples or failure to meet
the Acceptance Criteria shall be deemed to constitute SenTech's acceptance of
the Working Samples.
3.6 Title and risk of loss or damage to Working Samples or
pre-production prototypes shall pass to SenTech upon delivery to SenTech, FOB,
Knogo's manufacturing facilities. If SenTech returns defective or disapproved
Working Samples or pre-production prototypes, risk of loss or damage shall pass
to Knogo when SenTech returns them to Knogo FOB SenTech's testing facilities.
3.7 RELATIVE TO THE WORKING SAMPLES, KNOGO DISCLAIMS ALL WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS OF ANY PARTICULAR PURPOSE.
4. PURCHASE ORDERS/PRODUCT FORECAST.
4.1 Upon its acceptance of the Working Samples, SenTech will place its
initial purchase order [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX] so long as the total value
of the combination is at least $375,000.00. Knogo agrees to deliver the first
Production Units ordered under the initial Purchase Order on or before February
1, 1998, as specified therein. SenTech's obligation to make such initial
Purchase Order shall be conditioned upon the acceptance by SenTech of the
Working Samples, notwithstanding anything set forth in the Purchase Order or
this Agreement. Knogo shall ship the Production Units as specified in the
Purchase Orders to SenTech's U.S. Warehouse. Knogo shall bear no responsibility
for payment of shipping expenses of the Production Units, FOB Knogo's
manufacturing facilities, and Knogo shall cause all shipping expenses incurred
at SenTech's request to be invoiced by the carrier(s) directly to SenTech. Knogo
agrees to accept such initial Purchase Order and manufacture and sell the
Production Units to SenTech on and subject to the terms and conditions of this
Agreement.
4.2 Subject to the terms and conditions of this Agreement, SenTech
shall submit a second Purchase Order [XXXXXXXXXXXXXXXXX] and third Purchase
Order [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX ] so long as the
total value of the combination is at least $750,000.00 and $1,125,000.00,
respectively by no later than January 31, 1999 and January 31, 2000,
respectively. SenTech may purchase additional Production Units by submitting
Purchase Orders from time to time during the term of this Agreement. Pricing for
Production Units beyond those ordered in the initial Purchase Order shall be
negotiated in good faith between the parties but the price of the Production
Units shall not increase more than five (5%) percent per year. Knogo agrees to
accept such second and third Purchase Orders and manufacture and sell Production
Units to SenTech on the terms and conditions of this Agreement. SenTech shall
issue such second and third Purchase Orders at least one hundred and twenty
(120) days prior to the first delivery date requested therein. Within fourteen
(14) days of receipt of such second and third Purchase Orders, Knogo
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shall furnish SenTech with a written order and shipment schedules so long as
such Purchase Order(s) shall be issued in accordance with the terms of this
Agreement. Knogo shall review this lead time every six (6) months to determine
if, in Knogo's reasonable judgment, it can be shortened, and shall notify
SenTech of the results of such reviews.
4.3 The risk of loss and title to the Production Units shall pass to
SenTech, FOB Knogo's manufacturing facilities.
4.4 Except for the initial, second and third Purchase Orders, SenTech
may cancel additional Purchase Orders or any portions thereof for any reason by
notice to Knogo at least sixty (60) days prior to the scheduled delivery date.
In the event of such cancellation, SenTech shall immediately pay Knogo for the
actual materials, labor costs and directly allocated overhead and general and
administrative costs directly incurred pursuant to Purchase Orders prior to the
effective date of the cancellation, plus a 15% profit on such costs, and Knogo
shall deliver to SenTech all completed and incomplete Production Units, work in
process and all components procured by Knogo before receipt of such cancellation
notice for such Purchase Orders.
4.5 Except as provided by Sections 4.1 and 4.2, SenTech shall have no
obligation to purchase any minimum quantities from Knogo under this Agreement.
5. MANUFACTURING.
5.1 SenTech may at any time during normal business hours of Knogo, upon
reasonable notice, conduct spot functional tests or other reviews of the
Production Units at Knogo's facility to determine compliance of the Production
Units with the Manufacturing Specification and the Design Specification. If any
Production Unit fails to pass the tests or reviews, SenTech may reject such
defective Production Unit and Knogo shall take all steps necessary to correct
any defects, at its sole cost.
5.2 SenTech shall provide Knogo with specifications and artwork for the
labeling and packaging of the Production Units as may be required by SenTech in
order to identify SenTech and show its logo on the Production Units and/or
packaging. Knogo shall label the Production Units in accordance with said
specifications. All Production Units shall be packaged by Knogo in accordance
with SenTech's specifications and subject to SenTech's reasonable approval.
5.3 All Production Units shall be marked for identification purposes
with (i) unit model number; (ii) date code, (iii) FCC compliance legend; (iv)
Electronic Testing Laboratories (ETL) label; and (v) the appropriate patent
markings of the Knogo Technology and Joint Technology (collectively
"Identification"), in accordance with the sample Identification provided by
SenTech. Knogo shall be responsible for producing and affixing the
Identification to the Production Units at no additional cost to SenTech.
5.4 Knogo shall obtain FCC and ETL certification with respect to the
Production Units, for the sale of the Production Units in the United States.
6. FEES
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6.1 SenTech shall pay Knogo (a) 33% of the $175,000 non-recurring
engineering costs ("NRE") for the development of the Production Files and
Working Samples upon the execution of this Agreement; (b) 33% of the NRE upon
approval of the Production file by SenTech; and (c) the remaining portion of the
NRE upon acceptance of the Working Samples by SenTech. The NRE shall be capped
by Knogo at $175,000.00.
6.2 SenTech shall pay Knogo for the Production Units shipped to SenTech
in the initial Purchase Order [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]. Knogo shall
submit to SenTech, concurrently with each shipment, invoices in respect of
Production Units shipped to SenTech. SenTech shall pay Knogo within 60 calendar
days of receipt of invoice the amount set forth therein in U.S. dollars. Any
other fees, expenses or costs due hereunder shall be paid by SenTech to Knogo
within 60 days of receipt of an invoice relating thereto. Knogo may, at its sole
discretion, (a) charge a late payment penalty at a rate of 1.5% per month on all
payments due from SenTech that are not made in accordance with this Agreement
and/or (b) if any payment remains delinquent for a period of 90 days after the
due date, Knogo may stop all work under this Agreement and retain all work in
progress until all outstanding invoices are paid. Each party agrees that the
non-paying party shall be liable for all costs of collection, including but not
limited to reasonable attorney's fees, reasonably incurred by the other party
for the collection of any sums due hereunder.
7. CONFIDENTIAL INFORMATION
7.1 Before and during the term of this Agreement, it is anticipated
that each party will disclose to the other party certain information, including
but not limited to technology, design and manufacturing data, know-how, business
and financial plans or other information related to the subject matter of this
Agreement, either in writing, by other tangible medium or orally, which the
disclosing party considers to be and desires to be treated as confidential
("Confidential Information"). All Confidential Information shall be labeled or
identified as "Confidential" or "Proprietary" or with some similar designation
indicating its proprietary nature prior to any disclosure which is permitted
under this Section 7.
7.2 Without the prior written consent of the other party, or as
permitted by Section 7.4, neither party shall disclose the Confidential
Information of the other party to any third party, other than to its own
counsel, consultants, and employees and to employees of subsidiaries, affiliated
companies or independent contractors with a need to know who are bound by
confidentiality agreements comparable in scope to the provisions of this
Section, nor use the Confidential Information of the other party for any other
purpose than in the performance of this Agreement.
7.3 Each party shall use the same degree of care to avoid inadvertent
disclosure and impermissible use of the other party's Confidential Information
which the disclosing party employs with respect to its own proprietary
confidential information of a similar nature which it does not wish to have
disseminated, published or disclosed, but in no event shall handle the
Confidential Information with less than reasonable care.
7.4 This Section shall not apply to, and neither party shall be liable
for, the disclosure and use of any such Confidential Information which is:
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a. Already in the possession of the receiving party or its
subsidiaries or affiliated companies without an obligation of
confidentiality as shown by documentary evidence;
b. Publicly known through no fault of the receiving party;
c. Obtained by the receiving party from a third party who did
not owe the disclosing party a duty to preserve its confidentiality;
d. Approved in writing for release by the disclosing party; or
e. Required to be disclosed by a court or other government
authority; provided that prompt notice is given to the disclosing party
and the receiving party cooperates with the disclosing party if
requested to do so to resist disclosing such material or information.
7.5 SenTech and Knogo agree that either party's breach of this Section
7 will cause the other party irreparable injury for which it will not have an
adequate remedy at law. In the event of a breach of this Section, the
non-breaching party shall be entitled to injunctive relief in addition to any
other remedies it may have at law or in equity.
7.6 Except as provided in Section 8.2, all Confidential Information is
and shall remain the property of the disclosing party. Confidential Information,
and any copies thereof, shall be returned to the disclosing party if requested
at any time or upon termination of this Agreement.
7.7 The obligations of SenTech and Knogo under this Section shall
survive the expiration or termination of this Agreement for a period of five (5)
years after the Effective Date.
8. PATENTS, INVENTIONS, COPYRIGHTS
8.1 The Knogo Technology, Knogo's Confidential Information, patent
rights and other intellectual property rights which have general applicability
to System, including, but not limited to that described in Annex A, which were
developed by Knogo prior to the execution this Agreement, shall at all times be
and remain the exclusive property of Knogo.
8.2 Knogo hereby agrees to assign an undivided one-half interest in and
to, and the employees of Knogo will by written agreement agree to assign, to
SenTech (or to SenTech through Knogo) all inventions, discoveries, industrial
designs, copyrights, mask works and improvements relating to work performed by
Knogo for SenTech, whether or not such discoveries or improvements are
patentable or copyrightable and whether or not made solely or jointly with
others (collectively, "Joint Technology"). Joint Technology shall include all
patents, copyrights, mask works, and industrial designs, whether filed jointly
or not. Ownership of the Joint Technology does not give rise to any ownership,
license or right to use or sub-license the technology contributed or provided by
one party pursuant to this Agreement separate and apart from the technology
jointly developed to produce the System.
8.3(a) Knogo shall have the first option to file patent, copyright,
mask work or industrial design applications based upon the Joint Technology
inventions conceived or reduced to practice
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during the term of this Agreement and to obtain US and/or foreign patents,
copyrights, mask works and other design protection covering such Joint
Technology; such patent, copyright and mask work applications shall include
appropriate assignments as contemplated by Section 8.2. SenTech and Knogo shall
confer on the filing of all such Joint Technology patent, copyright, mask work
or design applications. In the event Knogo elects not to file one or more
patent, design and copyright applications on the Joint Technology as provided in
this Section, Knogo may notify SenTech of such decision, and SenTech shall after
receipt of such notice have the right to do so at its expense.
(b) The parties shall share equally the obligation to pay all fees
and expenses for searching, preparing, prosecuting, maintaining, reissuing, and
reexamining all patent, copyright, mask work and design applications and
patents, copyrights, mask works and design registrations covering the Joint
Technology. However, if there has been an election not to proceed as provided in
the preceding subparagraph, then as to the non-elected patent, mask work and/or
copyright application, the party electing to proceed will have sole
responsibility for all fees and expenses related to that patent, mask work and
copyright.
(c) The parties shall fully cooperate in the execution of all
documents necessary to file patent, copyright and design applications and to
obtain and to enforce all patents, copyrights and design applications covering
the Joint Technology throughout the world.
8.4(a) Knogo shall indemnify, defend and hold SenTech, its affiliates,
customers or other users harmless from any and all damages, liability, causes of
action, claims, costs and expenses (including reasonable legal fees)
(collectively, "Knogo Claims") deriving from or in connection with any Knogo
Claim by a third party that the sale and/or use of the Production File, Joint
Technology or any System supplied under this Agreement infringes any patent,
trademark, tradename, trade secret, copyright or other right arising under this
Agreement.
(b) SenTech shall give notice as promptly as reasonably practicable to
Knogo of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify Knogo shall not relieve Knogo from
any liability which it may have otherwise than on account of this indemnity
agreement. SenTech may also participate at its own expense in the defense of any
such action, provided that the counsel selected by Knogo shall control the
defense.
8.5(a) If a third party allegedly, actually or imminently threatens to
infringe on any patent, industrial design, copyright or trade secret covering
the Joint Technology, the parties shall promptly notify one another and provide
all material information concerning any such act by any third party.
(b) Both parties shall use their good faith efforts in cooperation
with each other to terminate such infringement or misappropriation without
litigation. If the efforts of the parties are not successful in abating the
infringement or misappropriation within thirty (30) days after the infringer or
misappropriator has been formally notified of the infringement or
misappropriation, either party shall have the right to and agree to:
i) Commence suit on their own account upon thirty (30)
days notice from the date of termination of the thirty (30) day notice period of
(b) to the other party,
8
ii) Within the thirty (30) days specified in 8.5(b)(i),
the other party may give notice to said party of its intention to join such
suit,
iii) All expenses of such suit are the responsibility of
the party of account in such suit and said party of account shall receive all
recoveries,
iv) If such suit is joined by both parties, Knogo shall
select counsel and all expenses and recoveries will be apportioned according to
the actual damages to each party or by any other agreed upon formula, and
v) Each party agrees to cooperate fully with the other in
litigation proceedings instituted hereunder and, upon request and expense of the
party bringing suit, the other party shall agree to be joined and make available
to the party bringing suit all relevant records, papers, information, samples,
specimens, and the like which may be relevant and in its possession, custody or
control.
8.6(a) Knogo shall acquire no right or license to use any of SenTech's
trademarks, service marks or trade names. Knogo shall not use any of SenTech's
trademarks, service marks or trade names in any advertising copy, promotional
material, signs or other written materials other than as expressly authorized in
writing by SenTech.
(b) SenTech shall acquire no right or license to use any of Knogo's
trademarks, service marks or trade names. SenTech shall not use any of Knogo's
trademarks, service marks or trade names in any advertising copy, promotional
material, signs or other written materials other than as expressly authorized in
writing by Knogo
8.7 SenTech shall not modify, merge, translate, decompile, decode,
reverse engineer or otherwise alter, use, copy or transfer any components or
software provided by Knogo including, without limitation, that listed on Annex
A, to Knogo, or in whole or in part, except as specifically provided in this
Agreement.
8.8 Notwithstanding Section 8.2, SenTech shall have the sole and
exclusive rights to the mold for the Production Units developed in accordance
with this Agreement.
9. TECHNICAL SUPPORT: WARRANTY
9.1 Knogo warrants (the "Warranty") to SenTech that each Production
Unit sold and delivered under this Agreement shall be free from defects in
design, workmanship, manufacturing process and materials (excluding materials
provided by SenTech) and shall comply with the Design Specification and the
Manufacturing Specification, which Warranty shall remain in effect (a) for the
Production Units for a period of 90 days from the date of installation by Knogo
(hereinafter referred to as the "Production Unit Warranty Period") and (b) for
the Production Unit PCBs for a period of one-year from the date of shipment by
Knogo (hereinafter referred to as the "the PCB Warranty Period"). The provisions
of this Section 9 shall survive the termination of this Agreement.
9
9.2 If any Production Unit or Production Unit PCB sold and/or delivered
by Knogo hereunder does not comply with the Warranty requirements set forth
above during the Production Unit Warranty Period or the PCB Warranty Period,
Knogo shall investigate any warranty claim to determine the nature and cause of
the Warranty defect and notify SenTech of the results of its investigation
within ten (10) business days of receipt. Knogo shall, at its sole option,
either repair or replace the defective Production Unit or Production Unit PCB at
Knogo's sole expense (including parts and labor). Any Production Unit or
Production Unit PCB to be repaired by Knogo hereunder shall be returned to Knogo
at the address set forth in Section 13.7, unless otherwise agreed by the parties
in writing. Transportation of such items to Knogo shall be the responsibility of
SenTech, at SenTech's sole expense and risk of loss, and transportation of such
items back to SenTech shall be the responsibility of Knogo, at Knogo's sole
expense and risk of loss. The Production Unit Warranty Period or PCB Warranty
Period shall be extended by an amount equal to any time period during which any
Production Unit or Production Unit PCB covered by the Warranty is being repaired
or replaced by Knogo hereunder. [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
9.3 The Warranty is conditioned upon the Production Unit and Production
Unit PCB being used and maintained in accordance with any written instructions
furnished by Knogo to SenTech. Any failure or defect due to normal wear and tear
is excluded from the Warranty. Physical damage to a Production Unit or
Production Unit PCB due to shipping and handling must be reported to Knogo
within 60 calendar days of receipt of shipment. After 60 days, such damage is
the responsibility of SenTech.
9.4 Knogo shall provide to SenTech a contact person of Knogo who will
be SenTech's contact for Warranty claims and questions.
10. REPRESENTATIONS
10.1 Each party represents and warrants to the other that such party
has the rights, licenses, permits and power to perform all obligations incurred
by it hereunder as provided and required under this Agreement.
10.2 Except as specifically provided in this Agreement, (i) Knogo
acknowledges and agrees that SenTech owns and shall have world-wide rights to
the Production Units developed in connection with this Agreement, and (ii) Knogo
agrees that it will not at any time sell, offer to sell, license or otherwise
transfer to any other entity the Production Units or any other product identical
in appearance or substantially similar in content to the Production Units.
10.3 SenTech acknowledges that Knogo or its Affiliates may manufacture
and sell other security systems other than the Production Units to customers
other than SenTech.
10.4 Knogo warrants and represents that its entry into this Agreement
with SenTech does not violate any other Agreement in which it is a party.
11. TERM AND TERMINATION
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11.1 This Agreement shall have a term of three (3) years commencing on
the date hereof. In the event SenTech terminates this Agreement prior to the
completion of the Production File and/or delivery of the Working Samples,
SenTech shall immediately pay Knogo for all actual NRE incurred by Knogo and
shall assign any and all Joint Technology to Knogo. This Agreement shall not be
renewed except pursuant to a written agreement executed by both parties. At
least ninety (90) days before the scheduled end of the term the parties shall
confer regarding whether the parties desire to renew the Agreement.
11.2 The failure of a party to enforce any right to termination
contained herein shall not in any manner act as a waiver of such party's right
to terminate this Agreement.
11.3 Notwithstanding anything set forth in this Agreement, the
provisions of Section 2.3 and Articles 7, 8, and 9 shall survive the expiration
or earlier termination of this Agreement.
12. DEFAULTS AND REMEDIES
12.1 The following events and/or conditions shall constitute a default
under this Agreement:
a. The failure by a party to comply with any of the covenants or
conditions set forth and this Agreement, which failure continues for a period of
thirty (30) days after notice thereof from the non-defaulting party to the
defaulting party.
b. If a party makes or has made to the other party any
representation, warranty or disclosure pursuant to this Agreement which is or
was materially false or misleading on the date as of which made.
c. If a party becomes the subject of a proceeding under the
United States Bankruptcy Code, if an assignment is made of a party's assets for
the benefit of creditors, if a receiver, trustee in bankruptcy or like official
is appointed to take all or part of a party's assets, or if a party ceases doing
business in the ordinary course of business.
12.2 Upon an event of default by a party, the non-defaulting party
shall have the right to do any one or more of the following:
a. Pursue any rights and remedies available under applicable law
or as otherwise specified in this Agreement.
b. Terminate the rights of the defaulting party under this
Agreement upon notice to the defaulting party, without limiting the rights and
remedies of the non-defaulting party.
c. The non-defaulting party may terminate all of its obligations
under this Agreement.
d. Terminate this Agreement upon notice to the defaulting party.
All of the remedies provided for in this Agreement shall be cumulative,
and not exclusive.
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12.3 If Knogo defaults hereunder prior to the termination of this
Agreement, Knogo shall to the extent reasonably practicable, cooperate, at
Knogo's expense, with SenTech to have a third party manufacture Production Units
or Production Unit PCBS using the Joint Technology on SenTech's behalf and at
SenTech's expense.
13. MISCELLANEOUS
13.1 All disputes arising between the parties concerning the validity,
construction, interpretation or effect of any provision of this Agreement, or
the rights and obligations created hereunder shall be brought before a
conciliation committee of executives representing both parties which shall,
within two (2) weeks after being informed of the dispute, attempt to work out a
recommendation for settlement of the dispute.
13.2 Unless otherwise mandated by applicable law, any dispute which
cannot be settled amicably by conciliation as provided above shall be heard,
settled and decided under the Commercial Arbitration Rules of the American
Arbitration Association by arbitrator(s) appointed in accordance with such
Rules. Such arbitration shall be held in New York, New York. The award in such
arbitration shall be binding, final and enforceable in any court of competent
jurisdiction.
13.3 The captions used herein are for convenience of reference only and
shall not be deemed as in any way affecting the substantive meaning of the
provisions to which such captions refer.
13.4 Neither party may assign or otherwise transfer or convey any of
its rights or obligations under this Agreement to any other party without the
prior written consent of the non-assigning party, which consent may not be
unreasonably withheld.
13.5 Any provision of this Agreement found to be prohibited by law
shall be disregarded to the extent of such prohibition without invalidating any
other provision of this Agreement.
13.6 If the performance of this Agreement, or any obligation hereunder
is prevented or restricted by reason of fire, work stoppage, war, government
action, natural disaster, or other cause beyond the reasonable control of the
party so affected (an "Excusable Delay"), such party, upon giving notice to the
other, shall be excused from performance to the extent of such prevention or
restriction, PROVIDED, HOWEVER, that the affected party shall use its reasonable
good faith efforts to remove such condition as soon as possible. In the event
such Excusable Delay continues for more than three months without an expected
resolution in the foreseeable future, either party may seek to terminate this
Agreement and, in that event, the parties shall negotiate a fair and equitable
resolution of the Agreement, provided that potential future profits shall not be
taken into account.
13.7 Any notices or other communications hereunder shall be in writing
and shall be sent to the recipient party at its address or facsimile number set
forth below by fax or registered mail:
If to SenTech:
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000 Xxxxxxxxx 00 Xxxxxx
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xx. Xxxx Xxxxxxxx, President
If to Knogo:
000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Tel.: (000) 000-0000
Fax: (000) 000-0000
Attention: Xx. Xxxxxx Xxxxxxxxx, President
Any such notice shall be effective on delivery if delivered in person;
when receipt is acknowledged or confirmed if sent by facsimile; upon signature
of receipt if sent by prepaid certified mail; and upon the expiration of the
second business day after such notice is sent by Federal Express or other
reputable overnight delivery service. The parties may, by notice given in
accordance herewith, designate other addresses and/or facsimile numbers for
receipt of notice.
13.8 The terms and conditions herein set forth the entire agreement
between the parties and shall supersede all previous communications and
agreements either oral or written, between the parties with respect to the
subject matter of this Agreement. This Agreement can be modified only by a
written amendment executed by both parties.
13.9 Without limiting the foregoing, the terms and conditions set forth
in this Agreement shall supersede any inconsistent terms and conditions set
forth in any Purchase Order or other standard form used by either party.
13.10 This Agreement shall not be construed to create between the
parties the relationship of principal and agent, joint venturers, co-partners or
any other similar relationship, the existence of which is hereby expressly
denied by each party. Each party is an independent contractor with respect to
the other.
13.11 Each of the parties agrees that, during the term of this
Agreement and for a period of six (6) months following the termination of this
Agreement, neither party will, except with the other party's prior written
approval, solicit, offer employment to, or contract with the other party's
employees or contractors.
13.12 This Agreement and performance by the parties hereunder shall be
governed by and construed in accordance with the laws of the State of New York,
USA without application of its conflicts of law provisions or principles.
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IN WITNESS WHEREOF, this Agreement has been duly executed by each party
by its duly authorized representative on the date first set forth above.
SENTECH EAS CORPORATION
By: /s/ Xxxx Xxxxxxxx
Name: Xxxx Xxxxxxxx
Title: President and Chief Executive Officer
KNOGO NORTH AMERICA INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: President and Chief Executive Officer
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