EXHIBIT 10.7
Note: Information in this document marked with an "(***)" has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
PerkinElmer
Manufacturing Terms and Conditions Agreement
BUYER:
Xenonics
0000 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
Effective as of January 6, 2003 (the "Effective Date"), the Buyer listed above
intends to place orders with PerkinElmer ("Company") for the manufacture of
certain items (the "Product"), the description of which, the pricing and the
time of delivery is described in greater detail in Attachment "A" attached
hereto. This Agreement provides the terms and conditions under which the Company
will undertake to manufacture the Product for the Buyer.
1. APPLICATION. This Agreement between the Company and the Buyer applies to
each and every order placed by the Buyer with the Company. Absent a specific
agreement in writing to the contrary, the Company agrees to manufacture ordered
Product in accordance with the Buyer's specifications, and under quality control
and workmanship standards IPC 610A Class 2.
2. MATTERS ADDRESSED. The terms and conditions of this Agreement and the
related "Attachments" are the controlling terms and conditions for the
manufacture and sale of the Product. This Agreement also identifies terms
associated with material procurement and inventory management, test and
packaging of the Products. Purchase orders issued shall be for the purpose of
establishing quantities, shipment dates, shipment locations, and other details
related to a specific purchase order. In the event of any conflict between the
terms of this Agreement and the terms of any of the Company's or the Buyer's
pre-printed forms, invoices, order acknowledgements or any other documents, the
terms of this Agreement shall prevail unless the parties mutually agree
otherwise in a document signed by both parties.
Subject to earlier termination as provided in this Agreement, the term of this
Agreement shall be three (3) years commencing on the effective date of this
Agreement. After the expiration of the initial term, and in the absence of
termination as provided in this Agreement, this Agreement shall be automatically
renewed for successive twelve (12) month terms. Intent on the part of the Buyer
to terminate the Agreement with the Company after the first three years, or
subsequently renewed years, requires written notice of 180 days to the Company
in advance of the agreement expiration date.
The Company acknowledges that the Buyer has certain proprietary rights regarding
the intellectual property of the Product as defined in Section 4.0. The Company
agrees to keep confidential all information provided by the Buyer, inducing
engineering drawings, schematics, diagrams, bills of materials, Production
documentation, test procedures, etc. and all information developed by the
Company relating to the Product, and agrees not to use such information in any
way other than the manufacture of the Product for sale to the Buyer.
3. PRICING. Pricing of the Product, for the quantities and on the delivery
schedule specified, is shown in Attachment "A". Prices are based on the
configuration specified in Attachment "A" and changes in the configuration of
the Product, the delivery schedule or other similar matters may result in
changes to the pricing of the Product, as noted below. Pricing is valid for all
deliveries occurring during the term
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specified in Attachment "A", unless otherwise agreed to by both parties. In no
event will prices for the Product be raised above the prices agreed upon in
Attachment "A". Unless otherwise specified in Attachment "A", prices do not
include specially designed packaging. All Product shipments shall be FOB Origin
at the address of the Company's manufacturing facility, and freight collect.
(a) PRICE CHANGES. Pricing for future product generations to be mutually
agreed upon by the Buyer and the Company.
(b) ADDITIONAL CHARGES. The Buyer will be responsible for additional
costs or expenses incurred by the Company, where such costs or expenses are
caused by the Buyer. The Buyer shall be responsible for overtime, material
storage charges, restocking and obsolescence charges, and similar expenses
incurred due to Production delays or interruptions caused by: (i) the Buyer's
change in Product specification or Product test requirements; (ii) the Buyer's
failure to provide sufficient quantities of consigned materials where applicable
to sustain the Production schedule; (iii) inferior quality of consigned
materials that cannot be used in Production of the Product; (iv) changes by the
Buyer in the packaging requirements; (v) changes in the Buyer's engineering,
manufacturing, design, or testing procedures that result in Production delays.
4. ATTACHMENTS. The following exhibits will be attached to this Agreement,
which constitute an integral part of the business relationship between the
Company and the Buyer. Those items selected below identify those documents,
drawings, specifications and standards that define the Product, which may
include control of Product design, manufacturing, testing, inspection schedules,
and quality control criteria:
9 Pricing Schedule Acceptance and Inspection Criteria
9 Approved or Qualified Vendor List
9 Assignments
9 Automation Programs
9 Xxxx of Material
9 Buyer Deliverables
9 Confidentiality Agreement
9 Configuration Table of Products
9 Consigned Inventory Material Agreement
9 Contract Revision History
9 Description of Functional Test Requirements
9 Deviations/Waivers in Writing
9 Electrostatic Discharge Requirements
9 Environmental Stress Screening Requirements
9 List of components with special conditions
9 Packaging Specification
9 Parts/Component Specifications
9 Price List
9 Product Specification(s)
9 Programs for IC's
9 Purchase Order (Copy of the Buyer's Purchase Order)
9 Quality Standard
9 Schedule or Method of Purchase Order Releases
9 Specifications
9 Special Material Liabilities
9 Statement of Work
9 Test Process
9 Workmanship Standards
9 Schedule A" Payment Schedule"
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5. PURCHASE ORDERS AND FORECASTS.
(a) INITIAL PERIOD AND UPDATES. In order for the Company to plan its
Production schedule and to have on hand appropriate stores of raw materials, the
Buyer agrees to provide the Company with a firm purchase order for at least a
period of ninety (90) days ("Initial Period"), specifying the Product to be
produced and delivered within the Initial Period. In addition, the Buyer agrees
to provide the Company with a forecast of orders, material requirements, and
delivery schedules for an additional period of one hundred eighty (180) days
following the Initial Period. Individual purchase orders must specify part
number, quantity, revision level, price, and requested delivery dates. Forecasts
are for planning purposes only and do not constitute purchase orders. Unless
specifically agreed otherwise, on or before the first working day of each
calendar month, the Buyer agrees that it will thereafter provide the Company
with a monthly update of the purchase order and the forecast, keeping in place a
firm ninety (90) day purchase order and a current one hundred eighty (180) day
forecast
(b) DELAYS IN DELIVERY SCHEDULE. Except as provided in this section, any
purchase order with a delivery date within sixty (60) days is not subject to
change or rescheduling. Any order with a delivery date of at least sixty-one
(61) days but less than ninety (90) days, may be delayed or rescheduled one
time, for a maximum of thirty (30) days beyond the initial delivery date.
(c) EXPEDITED ORDERS. The Company will make reasonable efforts to
accommodate any request to advance the delivery date of Product. The Buyer will
pay any expedite fees, express freight charges, and overtime associated with an
expedited order. The Company Will advise the Buyer in advance of expedite
charges.
(d) EXTRAORDINARY CHANGE IN SCHEDULE. The Company will make reasonable
efforts to accommodate requests for a delay in a delivery date for a period
longer than provided for above, dependent on meeting applicable lead times,
component availability and manufacturing capacity. Any such extraordinary change
in schedule shall require a price supplement in the amount of 1.5% of the unit
price for all Product the delivery of which is delayed for each month of delay
and the Buyer shall reimburse the Company for any costs it may incur caused by
the delay, such as storage costs, material financing charges, plant
reconfiguration, Production schedule disruptions or other similar costs or
expenses. All extraordinary changes in schedule must be requested in writing
(e-mail is not acceptable) and shall not be effective until acknowledged in
writing by the Company and any extra charges and price supplement are agreed to
in writing by the Buyer.
(e) EXCUSABLE DELAY. No party shall be liable for any delay in
performing any of its obligations hereunder when such failure or delay is due to
circumstances beyond its reasonable control, including, without limitation, any
natural catastrophe, fire, war, riot or civil unrest, strike, lockout or other
labor disturbance, or any act, refusal to act, regulation, order or intervention
of any governmental authority. Upon the occurrence of such circumstances, the
affected party shall immediately notify the other party and keep the other
parties informed of any further developments. If such circumstances delay the
delivery of Product more than thirty (30) days beyond its scheduled delivery
date, then either party may at any time thereafter upon written notice to the
other parties, terminate the affected purchase order(s) or the affection
portion(s) of a purchase order.
No Party shall be liable for the consequences of any unforeseeable force majeure
event that (1) is beyond their reasonable control, (2) is not caused by the
fault or the negligence of such Party, (3) causes such Party to be unable to
perform its obligations under this Agreement and (4) cannot be overcome by the
exercise of due diligence. In the event of the occurrence of a force majeure
event, the Party unable to perform shall promptly notify the other Party. It
shall further pursue its best efforts to resume performance as quickly as
possible and shall suspend performance only for such period of time as is
necessary as a result of the force majeure event. If any force majeure event
continues for one hundred eighty (180) days or more, the party delayed or unable
to perform shall give immediate notice to the other party, and the party
affected by the other's delay or inability to perform may elect to terminate
this Agreement upon mutual agreement of the parties. Except as covered in the
preceding sections, the Company will comply in every respect with mutually
agreed upon delivery schedule.
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6. MATERIAL ACQUISITION. Based on the purchase orders and forecasts, as
updated as provided in SECTION 5(a), the Company shall be responsible for
insuring an adequate supply of materials to satisfy the Buyer's requirements.
The Company is responsible for insuring that the lead times respecting all
material are accurate. The Company will submit a component lead time report to
the Buyer upon request, but no more frequently than on a monthly basis.
(a) LIABILITY FOR MATERIAL ACQUISITIONS.
(i) LONG LEAD TIMES. The Company will identify material with a
lead time greater than ninety (90) days, for Product requirements identified on
the 180 day forecast, and provide a list of such material to the Buyer on a
monthly basis (within ten (10) days following receipt of the monthly updated
purchase order and forecast). The Company will place orders for such long lead
time material only upon the Buyer's approval and the Company will have no
liability for delays in delivery occasioned by the Buyer's failure to approve
within 10 working days of the request for approval. Upon approval of the Buyer
for the Company to purchase long leadtime material the Buyer agrees that it
shall be responsible for all costs associated with the long lead time material
in the event such material is not used in accordance with the monthly purchase
order and forecast upon which the order was placed.
(ii) NON-RETURNABLE. The Company will identify material that, once
ordered, cannot be returned or cancelled, and provide a list of such material to
the Buyer on a monthly basis (within ten (10) days following receipt of the
monthly updated purchase order and forecast). The Company will place orders for
such non-returnable material only upon the Buyer's approval and the Company will
have no liability for delays in delivery occasioned by the Buyer's failure to
approve in a timely manner. Upon approval, the Buyer agrees that it shall be
responsible for all costs associated with the non-returnable material in the
event such material is not used in accordance with the monthly purchase order
and forecast upon which the order was placed.
(iii) MINIMUM QUANTITY. The Company will identify material that
requires each order to meet a minimum quantity (where such minimum exceeds the
amount necessary to fulfill the firm purchase orders in place at the relevant
time), and provide a list of such material to the Buyer on a monthly basis
(within ten (10) days following receipt of the monthly updated purchase order
and forecast). The Company will place orders for such minimum quantity material
only upon the Buyer's approval and the Company will have no liability for delays
in delivery occasioned by the Buyer's failure to approve in a timely manner.
Upon approval, the Buyer agrees that it shall be responsible for all costs
associated with the non-returnable material in the event such material is not
used in accordance with the monthly purchase order and forecast upon which the
order was placed.
(iv) CRITICAL PARTS. With each monthly updated purchase order and
forecast, the Buyer will provide the Company with a specification of those items
of Product that it deems to be "Critical Parts", with the associated
specification of those materials necessary to manufacture the Critical Parts
(the "safety stock"). The Company will incorporate the Critical Items (and the
associated safety stock quantities) into its Material Resources Planning
("MRP"). The Company will keep on-hand sufficient safety stock as necessary to
facilitate delivery of limited quantities of Critical Parts within five (5)
days. The Buyer agrees that it shall be responsible for all costs associated
with the Critical Parts and safety stock the Company is required to maintain in
inventory pursuant to this section.
(iii) STALE INVENTORY. The Company may invoice the Buyer for any
approved material (including safety stock) that has been held in inventory for
more than sixty (60) days. the Buyer agrees that it shall be responsible for all
costs associated with such stale inventory, provided that the Buyer will receive
a credit for any amounts paid under this section when and if such stale
inventory is used in manufacturing Product.
(b) ATTRITION. Regularly, due to standard manufacturing processes and
component defect rates, parts will be consumed that are unusable for Production.
Such attrition losses have been factored into price computations and quotations
as shown in Attachment "A", based on the following assumptions as to attrition
rates: A items at 1/2%, B items at 1-1/2% and C items at 2% (as shown on
Attachment "A"). In
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the event these attrition rate assumptions prove to be materially incorrect, due
to the Buyer-required short-run manufacturing builds or higher than expected
test failures due to the Buyer design factors The attrition rate assumptions
will be restated and the Buyer agrees that it will pay any increase in
Production costs associated with such increase attrition rate.
(i) DEFINITION. Attrition as used in this Agreement, can have one
of several causes. "Fallout" is caused by occasional machine damage to parts or
by consumption of parts in machine set-up, such as leader taped parts consumed.
"Failures" are components that do not pass ICT or functional test, whether the
testing is performed before or after the parts are subjected to standard
assembly processes. "Rework" is the consumption of additional parts used to
replace components that have failed or been damaged during manufacturing.
"Damage" refers to any physical destruction of components or their packaging or
labeling either before or during assembly. "Shrinkage" is the unaccountable loss
of small quantities of parts.
(c) CANCELLATIONS OR CHANGES TO PURCHASE ORDERS. In the event of a
cancellation of or change to a purchase order by the Buyer, the Buyer agrees to
purchase from Company, at the Company's cost plus a 30% overhead and profit
adder, all material acquired on the Buyer's behalf that is rendered unusable or
that has been modified, customized, programmed or manufactured to the Buyer's
unique specifications.
7. CANCELLATION; EXPIRATION. Upon cancellation of a purchase order by the
Buyer, or upon termination of this Agreement for any reason by the Buyer, the
Buyer shall be responsible for all Product and raw materials on-hand or on order
to the extent such Product and materials was ordered or produced in good faith
pursuant to the monthly purchase orders and forecast provided for in SECTION
5(a). Upon cancellation of a purchase order, or upon termination of this
Agreement for any reason, the Buyer shall be invoiced for, and agrees to pay,
the following:
(a) All finished Product scheduled for shipment within the ninety (90)
days immediately following the receipt by the Company of the cancellation or
termination notice.
(b) All work-in-process at the Company or incurred liabilities, at the
Company's cost plus a 30% overhead and profit adder.
(c) All raw materials, subassemblies, and other material purchased to
fill a purchase order, or authorized to be purchased by the Buyer which are on
hand or on order at receipt of the notice, including material purchased pursuant
to a Buyer forecast, at the Company's cost plus a 30% overhead and profit adder.
Without limitation, this provision includes piece part inventory made obsolete
or excess due to changes to the specifications or Products, minimum buy
quantities, and reel quantities.
8. SUBSTITUTIONS OF MATERIALS. The Company will only purchase and use
materials in the manufacture of the Product that are specified and approved by
the Buyer Any changes are subject to the Buyer's advance written consent. The
Company shall not substitute material used in the manufacture of the Product
without the prior written approval of the Buyer. If the Company is unable with
reasonable efforts to obtain approved materials in sufficient quantities or in a
timely manner, and the Buyer fails or refuses to consent to a reasonable
substitute material, within five (5) days of the Company's request thereof, the
Company shall not be responsible for any resulting delays in the delivery of
Product.
9. ENGINEERING CHANGE ORDERS. The Buyer may, upon written notice to the
Company, make changes in the design, performance, specifications or other
parameters of any Product manufactured by the Company under this Agreement
("Change Order"). All Change Orders are subject to cost review by the Company.
The Company shall advise the Buyer of any adjustments to the price and delivery
schedule resulting from all Change Orders. The minimum cost for the
implementation of a Change Order shall be $500.00, provided that any Change
Order which is required to be implemented within a period of less than ten (10)
working days following receipt shall be subject to a minimum cost of $1,500.00.
All costs incurred by the Company in reworking processes or retooling, as
documented in reasonable detail, shall be fully reimbursed by the Buyer. The
Company will provide, within five (5) working days from
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receipt of a Change Order, a written statement setting forth any cost
modification, pricing impact, and Production or delivery changes, together with
an explanation of the sources of the charges, as required. The Company will use
its reasonable best efforts to halt Production and minimize costs incurred in
the event of receipt of a Change Order. All materials, components, and
work-in-process that have or will become unused or obsolete as a result of
Change Orders by the Buyer shall be purchased by the Buyer, at the Company's
cost plus a 30% overhead and profit adder.
10. TESTING; ACCEPTANCE; REJECTION OF PRODUCT. Initial acceptance of any
Product shall occur at the Company's facility based upon satisfactory completion
of mutually agreed upon acceptance test procedures or inspections, designed to
demonstrate specification compliance. Thereafter, in the event any Product
shipped to the Buyer or the Buyer's designee that is determined by the Buyer or
the Buyer's designee not to conform to the specifications or to be otherwise
defective, may be rejected by the Buyer or the Buyer's designee upon inspection
at the Buyer's or the Buyer's designee's facility within thirty (30) business
days following receipt. The Buyer shall promptly notify the Company of any
rejection, including the reason for the rejection, and the Company shall issue a
Product Return Authorization ("PRA"). Any Product so rejected shall be promptly
returned to the Company. All returns shall be shipped FOB Destination, the
Company's place of business, in the original shipping container. The Company
shall make its best effort to repair such rejected Product within fifteen (15)
business days from receipt and redeliver them to the Buyer. (See also SECTION 15
- WARRANTY).
11. PAYMENT TERMS. Payment Terms for all Product shall be in compliance with
Schedule A (attached). All overdue amounts shall bear interest at the rate of
2.0% per month, or the maximum rate permitted by applicable law, whichever is
less, until paid in full. Interest shall accrue on a daily basis. In the event
any payment due is not received within sixty (60) calendar days from date of
invoice, the Company reserves the right to suspend delivery of all pending
shipments to the Buyer under any outstanding purchase orders.
12. DELIVERY TERMS AND PROCEDURES. Terms of delivery are FOB Origin, the
Company's location of manufacture, via the carrier chosen by the Company. The
Buyer shall be responsible for all shipping and other delivery expenses. Each
delivery of Product shall include a packing slip, which shall include an
itemization of the part numbers and quantity delivered in the individual
shipment. The Company and the Buyer hereby agree that the packing slip or
freight carriers Standard Xxxx of Lading countersigned by the Buyer or the
Buyer's Agent constitutes proof of delivery of the itemized Product. The Company
shall invoice the Buyer upon shipment of the Product. The Buyer will furnish the
Company with shipping instructions and destinations, and the Company agrees to
prepare all deliveries according to instructions.
13. TAXES AND DUTIES. The prices and fees set by the Company for Product or
services do not include sales, use, property, value added taxes, or any other
taxes, duties or charges not based or the Company's net income, all of which
shall be paid by the Buyer. Any such tax, duty or charge that the Company may be
required to collect or pay, shall either be paid by the Buyer to the Company
with the appropriate invoice, or the Buyer shall provide to the Company with a
valid resale certificate numbers and other documentation satisfactory to the
applicable taxing authority to substantiate any claim of exemption from any such
tax or charge. Such taxes, duties or charges, when applicable, will appear as
separate line items on the invoice. Any increase in the cost of material used in
the manufacture of Product that is attributable to an increase in or addition of
a duty, tariff or similar imposition by any governmental entity after the
effective date of the respective attachments to this Agreement, shall be added
to the purchase price paid by the Buyer.
14. EQUIPMENT AND MATERIAL FURNISHED BY BUYER. If the Buyer is to provide any
equipment or materials for the Company's use in the manufacture of Product, as
outlined in Attachment "A", the Buyer warrants that such furnished equipment or
material shall be fit for its intended purpose and delivered to the Company in a
timely manner. The Buyer shall be responsible for any schedule delay, reasonable
inventory carrying charges, and allocated equipment downtime charges associated
with late or non-delivery of equipment or material furnished by the Buyer. The
Company shall be responsible for reasonable diligence and care in the use and
protection of any equipment furnished by the Buyer, but
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shall not be liable for repair or replacement due to normal failure or wear and
tear, or for regular maintenance costs.
15. WORKMANSHIP; QUALITY CONTROL. Workmanship standard is IPC 610C Class 3.
The Buyer may modify this workmanship standard, or substitute a different
workmanship standard, upon reasonable written notice. The Buyer understands and
agrees that, depending on the scope of the modification, a change in the
workmanship standard may necessitate an adjustment to the pricing to compensate
for increased costs.
16. WARRANTY. For a period of one hundred and eighty (180) days following the
date of shipment, the Company warrants that Product manufactured by the Company
for the Buyer will conform to the specifications provided by the Buyer and will
be free from defects in materials and workmanship. The Company assumes no
liability and offers no warranty for defective or damaged components that are
provided by the Buyer. The above warranty does not extend to any damage, defect
or malfunction caused by misuse or abuse of Product by the Buyer, or
environmental conditions. Warranty does not extend to defects caused during
shipment on FOB origin shipments. These are freight claims and are to be handled
separately from warranty.
(a) WARRANTY CLAIMS. The Buyer shall promptly notify the Company of any
Product that Buyer's claims is defective and covered by the warranty, including
a description of the defect. The Company will issue a Product Return
Authorization ("PRA"), and the defective Product shall be shipped to the Company
FOB Destination, the Company's place of business (as designated by the Company).
The Company shall make its best effort to repair or replace such defective
Product within fifteen (15) business days from receipt and redeliver them to the
Buyer. The Company reserves the right to inspect any Product claimed to be
defective prior to issuing a PRA.
(b) WARRANTY OBLIGATION. The warranty period is one hundred eighty (180)
days from the date of shipment. The Company's obligation under the warranty is
limited to correction of defects in materials or workmanship respecting the
Product, and in any components or assemblies manufactured by the Company and
used in the manufacture of the Product. The Company may, at its option, repair
or replace a defective item, or issue a credit for the defective item.
(c) LIMITATIONS. The foregoing warranty provisions set forth the
Company's sole obligations and represent the Buyer's exclusive remedies for
claims based upon defects in, or failure of, any Product manufactured hereunder.
The Company hereby specifically disclaims any and all other warranties with
respect to Product manufactured hereunder, including any warranty of
merchantability and fitness for any particular purpose. This warranty extends
only to the Buyer and not to any other third parties. IN NO EVENT SHALL THE
COMPANY BE LIABLE TO THE BUYER OR ANYONE ELSE FOR INCIDENTAL OR CONSEQUENTIAL
DAMAGES, HOWEVER OCCASIONED. The Company shall not be liable for any special,
indirect, incidental or consequential damages of any kind or nature whatsoever,
including, without limitation, lost goodwill, lost resale profits, work stoppage
or impairment of other goods, and whether arising out of breach of any express
or implied warranty, breach of contract, tort (including negligence), product
liability or otherwise. The Buyer's recovery from the Company for any claim
shall not exceed Buyer's purchase price for the affected Product.
(d) EXCLUSIONS. This warranty shall be void with respect to Product
which has been modified or repaired by unauthorized sources or subject to
misuse, neglect, or damage from improper packaging for shipment to the Company.
Pricing and delivery for out-of-warranty repairs shall be in accordance with
quotations submitted by the Company. A $ 500.00 evaluation fee shall apply to
all out-of-warranty repair work, in addition to repair charges. Any Product
returned to the Company which, after inspection and test by the Company, is
found to be free of defects, shall be subject to a $500.00 "No Defect Found"
charge".
The Company warrants that all Products will be free from defects in material and
workmanship, will be fit and sufficient for the purposes intended, and will
conform to alt specifications (as set forth in Section 4.0) for a period of 180
calendar days from the date of shipment The foregoing warranty is in lieu of all
other
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warranties, express or implied, including without limitation, the implied
warranty of merchantability and fitness for a particular purpose, and any
implied warranty arising from the course of performance, course of dealing or
usage of trade are hereby expressly disclaimed. Notwithstanding any provision to
the contrary, in no event shall either Part'/s liability under this Agreement or
otherwise include any special, incidental or consequential damages of any
character arising out of or in connection with the furnishing of any Products,
goods, parts or service, hereunder, or the performance, use of, or inability to
use, any Products, goods, parts or service, or the breach of this Agreement or
any warranty, whether based on contract, tort or any other legal theory, even if
the Company or the Buyer shall have knowledge of the possibility of such
potential loss or damage. The Company's liability shall in no case exceed the
unit price allocable to the item furnished by the Buyer which gives rise to the
claim.
17. INSURANCE. The Company will maintain adequate insurance to protect from
fire, theft and damage its materials inventory used for the manufacture of
Product, all Product on the premises of the Company, any consigned inventory,
test fixtures, capital equipment, returned materials, and other property of the
Buyer on the premises of the Company.
18. CONFIDENTIALITY. The Company recognizes that in the course of its
manufacturing services under this Agreement, the Buyer may disclose certain
confidential information or trade secrets relating to the design and
specifications of the Product. The Company agrees that it will take reasonable
measures to keep all such information confidential, including advising its
employees that the information is confidential and may not be disclosed to or
used by unauthorized persons. If and to the extent any confidential information
or trade secrets of the Company are disclosed to the Buyer, the Company xxxx
advise the Buyer and the Buyer agrees to take similar measures to preserve the
confidentiality of such information. In the event the Company is required in
response to an order by a court or other governmental body, to disclose any of
the Buyer's confidential information, the Company agrees to notify the Buyer of
such required disclosure and to permit the Buyer to seek a protective order or
other protective measures, if any are available, regarding such confidential
information
19. CANCELLATION; AMENDMENT. This Agreement is not subject to cancellation
during any period of time that there is any outstanding purchase orders
hereunder this Agreement, or if this Agreement has a fixed term, during the
period of such fixed term. Upon the termination or cancellation of any purchase
order, the Buyer shall be responsible for alt reasonable cancellation charges,
as provided in Section 7, (a), (b) and (c).
(a) BREACH. Either party may terminate this Agreement upon a material
breach by the other party; provided, however, that no breath may occur until the
defaulting shall have received a thirty (30) day written notice of the
circumstances alleged to constitute a breach and has failed to cure the breach
such thirty (30) day period, or if the nature of the breach is such that more
than thirty (30) days are required for its cure, the defaulting party commences
such cure within the thirty(30) day period and thereafter diligently pursues the
same to completion.
(b) INSOLVENCY. This Agreement will terminate automatically upon any of
the following events: (i) the making by any party of any general assignment for
the benefit of creditors, (ii) the filing by or against any party of a petition
to have such party adjudged a bankrupt or a petition for reorganization or
arrangement under any law relating to bankruptcy (unless, in the case of a
petition filed against the party, the same is dismissed within sixty (60) days),
(iii) the appointment of a trustee or receiver to take possession of
substantially all of a party's assets, where possession is not restored within
sixty (60) days, or (iv) the attachment, execution or other judicial seizure of
substantially all of a party's where such seizure is not discharged within sixty
(60) days.
(c) AMOUNTS DUE. Upon termination of this Agreement for any reason, all
amounts then owing to the Company, whether or not then due, shall become
immediately due and payable in full: any shipments after termination shall be
C.O.D. at the Company's option. With respect to any purchase orders then
outstanding, the portion of such purchase orders that contemplates delivery of
Product more than thirty (30) days after the effective date of termination,
shall be automatically terminated. The
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provision of this Agreement shall continue to apply to all of the Buyer's
purchase orders that have been issued prior to the effective date of the
termination and will be filled after the effective date of termination.
20. INDEMNIFICATION.
(a) INFRINGEMENT. The Buyer agrees to indemnify and hold the Company
harmless from any suit, claim or proceeding brought against the Company alleging
that any Product or part thereof manufactured pursuant to this Agreement
directly or indirectly infringes any patent, copyright, trademark or mask work.
The foregoing indemnity shall not apply to alleged infringement by the Company's
manufacturing processes or designs. The Buyer agrees to indemnify and hold the
Company harmless from any suit, claim or proceeding brought against the Company
which alleges loss, damage, expense or injury, including without limitation
total or partial Product recalls, which arise from any alleged failure to warn
or defect in design regarding any Product. The Company will promptly give the
Buyer notice of any circumstances to which the Buyer's indemnification
obligation may apply. In any action or proceeding to which the Buyer's
indemnification obligation applies, the Buyer shall defend the Company at the
Buyer's expense by counsel approved in writing by the Company, which approval
shall not be unreasonably withheld.
(b) NEGLIGENCE. The Buyer agrees to indemnify and hold the Company, its
officers, directors, agents and employees harmless from and against any and all
claims, losses, expenses (including reasonable attorney's fees), demands, or
judgments ("Claims") which result from or arise out of: (i) the presence of the
Buyer, or equipment or tools used by the Buyer in the performance of this
Agreement, on the premises of the Company; or (ii) the performance by the Buyer
or its personnel of any activity or service for or on behalf of the Company; or
(iii) the acts, errors, omissions, or negligence of the Buyer or the Buyer's
personnel; or (iv) the use by the Buyer of the Company's equipment, tools, or
facilities. The Company will promptly give the Buyer notice of any circumstances
to which the Buyer's indemnification obligation may apply. In any action or
proceeding to which the Buyer's indemnification obligation applies, the Buyer
shall defend the Company at the Buyer's expense by counsel approved in writing
by the Company, which approval shall not be unreasonably withheld.
The Company shall indemnify, defend and hold the Buyer harmless from and against
any and all claims, liabilities, losses and damages asserted by any person
relating to or any way connected with the possession, use or operation of
Products insofar as the Buyer handles, stores and ships Products according to
the Company's specifications, subject to the understanding that the Company
shall have the opportunity to control the defense or final settlement of any
claim and the Buyer shall provide the Company with any assistance as it may
reasonably require. This indemnification shall not apply to injuries or damages
resulting from defects in the design of systems in which the Product is
incorporated or from the failure of the Buyer to incorporate appropriate safety
precautions in the design of systems in which the Product is incorporated.
21. NON COMPETE CLAUSE.: The Company agrees to not compete in the sale and
marketing of the specific Product defined by this Agreement known as the
Nighthunter Hand Held IR illuminator.
(a) RESTRICTION OF BUSINESS. This Agreement shall in no way be construed
to restrict either party in regards to current and future business whatsoever.
Each party is and remains an independent contractor engaged in its own and
entirely separate business. Any future business opportunities are not covered
under this Agreement and will need to be managed by future and separate
agreements.
(b) EXCLUSIVITY OF MANUFACTURING. The Buyer agrees that the Company will
be the sole and exclusive manufacturer of the Product (s) covered by this
Agreement for the period as defined by the term of this Agreement The Company
agrees that the Buyer may manufacture such Product as needed for samples and/or
for Product development or if the Company is in breach of this Agreement, but
will not compete in the manufacture of goods for sale that are covered by this
Agreement.
-9-
22. MISCELLANEOUS.
(a) INDEPENDENT BUSINESSES. This Agreement shall in no way be construed
to constitute any one party hereto an agent, employee, partner, joint venture or
legal representative of the other party for any purpose whatsoever. Each party
is and remains an independent contractor engaged in its own and entirety
separate business. No party is authorized to enter into any agreement for or on
behalf of the other party, collect any obligation due or owed to the other
party, accept service of process for the other party, make any representation on
behalf of the other party, or bind the other party in any manner whatsoever
without the other party's express and particularized prior written consent.
(b) NOTICES. All notices and other communications under this Agreement
("Notice") shall be in writing and shall be deemed given: (1) when personally
delivered, or (2) two (2) business days after being deposited in the United
States mail, postage prepaid, certified or registered, or (3) the next business
day after being deposited with a recognized overnight mail or courier delivery
service, or (4) when transmitted by facsimile or telecopy transmission, with
receipt acknowledgment upon transmission, addressed as follows:
COMPANY: [ILLEGIBLE]
1/10/03
FAX No. (__) _______
BUYER: Xenonics, Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
FAX No. (000) 000 0000
Notice of change of address will be given by written notice in the same manner
set forth in this paragraph.
(c) ASSIGNMENT. No party may assign this Agreement without the prior
written consent of the other parties. Any prohibited assignment or attempted
assignment without the other party's prior written consent shall be void.
(d) BINDING EFFECT. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and assigns (to
the extent the Agreement is assignable). No other party shall have any rights
under or be deemed a beneficiary of this Agreement.
(e) WAIVER. No delay or failure by either party to exercise or enforce
at any time any right or provision of this Agreement shall be considered a
waiver thereof or of such party's right thereafter to exercise or enforce each
and every right and provision of this Agreement. A waiver to be valid shall be
in writing, but need not be supported by consideration. No single waiver shall
constitute a continuing or subsequent waiver.
(f) SEVERABILITY. If any provision of this Agreement shall be held
illegal, invalid or unenforceable, in whole or in part, such provision shall be
modified to render it legal, valid and enforceable while to the fullest extent
possible preserving the business and financial intent and impact of the original
provision; and the legality, validity and enforceability of all other provisions
of this Agreement shall not be affected thereby.
(g) AMBIGUITIES. This Agreement shall be fairly interpreted in
accordance with its terms without any strict construction in favor of or against
either party arid ambiguities shall not be interpreted against the drafting
party.
-10-
(h) TECHNICAL ASSISTANCE. Personnel designated by the Buyer may freely
communicate with designated personnel of the Company with respect to technical
assistance and exchanging information. The Buyer's designated personnel shall
provide technical assistance and answer questions as requested from time to time
by the Company personnel. However, such technical assistance and information
provided shall not entitle the Company to deviate from its obligations under
this Agreement, unless a written notice of change with respect to the Products
is released by the Buyer, or unless this Agreement is amended by mutual written
consent.
(i) RESOLUTION OF DISPUTES. The parties shall make a good faith effort
to settle any dispute or claim arising under this Agreement. If the parties fail
to resolve such disputes or claims, the parties agree first to try in good faith
to settle the dispute by mediation under the Commercial Mediation Rules of the
American Arbitration Association, before resorting to arbitration. Thereafter,
any remaining unresolved controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be settled by arbitration in Orange
County, California, in accordance with the Commercial Arbitration Rules of the
American Arbitration Association any judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.
(j) GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California, excluding
conflict of law rules and principles.
(k) WARRANTY OF AUTHORITY. The persons signing this Agreement represent
and warrant that they have the requisite authority to bind the parties on whose
behalf they are signing.
(l) ENTIRE AGREEMENT. This Agreement, with alt its attachments and
exhibits, constitutes the entire agreement between the parties hereto relating
to the subject matter hereof and supersedes all prior oral and written and all
contemporaneous oral negotiation, commitments and understandings of the parties.
This Agreement may not be changed or amended except by a writing executed by all
parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the Effective. Date, as set forth above.
THE COMPANY THE BUYER
PERKINELMER ELECTRONICS, INC. XENONICS, INC.
By: [ILLEGIBLE] By: /s/ Xxxx X. Xxxxxxxx
----------------------------------- --------------------------------
(Name) Xxxx X. Xxxxxxxx
Its: PKI, AERO Product Line G.M. By: /s/ Chairman and CEO
----------------------------------- --------------------------------
(Title) Chairman and CEO
-11-
ATTACHMENT A
2004 PRICING
Agreement on NH II
Between Xenonics and PerkinElmer
January 7, 2004
The following is a pricing schedule in support of paragraph 3 of the above
subject contract. These prices are applicable to Purchase Orders placed by
Xenonics and accepted by PerkinElmer in calendar year 2004 for delivery in
calendar year 2004.
PerkinElmer's minimum order policy for this product line is ${***}. This policy
may be waived by PerkinElmer in support of the customers with express written
permission of the Product Line Leader.
Prior to order acceptance:
PerkinElmer will review any terms and conditions outside of the Agreement.
PerkinElmer will verify there is either a contractually invoked FAR (Federal
Acquisition Regulation) with a supporting government claims process or the
Purchase Order is binding and non-cancelable backed by suitable financial credit
or the order is prepaid. Orders over $1M per line item require PerkinElmer
corporate review prior to acceptance.
Table 1 - Configuration End Items
PerkinElmer Description 2004 Price
Part Number /each
0-00000-00 NH II Kit, Army Version ${***}
0-00000-00 NH II Kit, Marine Version ${***}
0-00000-00 NH II Kit, Seals Version ${***}
0-00000-00 XX Xxx, Xxxxxx XX Ver. ${***}
0-00000-00 NH II Illuminator ${***}
0-00000-00 Fast D/C Charger ${***}
* assumes camo bag and shipping containers supplied by customer
Table 2 - Field Repair Parts
PerkinElmer Description 2004 Price
Part Number /each
0-00000-00 Lamp Module, NH II ${***}
22-1002 Battery, NH II ${***}
0-00000-00 Filter Assembly, NH II ${***}
0-00000-00 AC/DC Power Conv., NH II ${***}
0-00000-00 Kit, Battery Cap, NH II ${***}
0-00000-00 Glass, Front, NH II ${***}
0-00000-00 Reflector, NH II ${***}
12-1024 Carrying Strap, NH II ${***}
{***} Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
- 1 -
Table 3 - Unit Repair Kits
PerkinElmer Description 2004 Price
Part Number /each
0-00000-00 Repair Kit, Light Engine, NH II ${***}
0-00000-00 Repair Kit, Switch, NH II ${***}
Table 4 - PerkinElmer Depot Repair
PerkinElmer Description 2004 Price
Part Number /each
R2-34110-01 Repair Services, Illuminator ${***}
Unit, NHII
R2-34180-01 Repair Services, Fast Charger ${***}
Unit, NHII
{***} Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
- 2 -
