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EXHIBIT 10.21
THE REGISTRANT HAS REQUESTED THAT CERTAIN PORTIONS OF THIS EXHIBIT
BE GIVEN CONFIDENTIAL TREATMENT. AN UNREDACTED VERSION OF THIS
EXHIBIT HAS BEEN FILED WITH THE COMMISSION.
SUPPLY AGREEMENT, DATED SEPTEMBER 12, 1997, BETWEEN
QMD, A DIVISION OF R&M ELECTRONICS, INC., AND C3, INC.
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REDACTED--OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION AND IS
DENOTED HEREIN BY *****
SUPPLY AGREEMENT
This Supply Agreement (this "Agreement") is dated this 12th day of
September, 1997, between QMD, A DIVISION OF R&M ELECTRONICS, INC. ("QMD") and
C3, Inc. ("Customer").
Statement of Purpose
Customer is engaged in the manufacture, marketing, distribution and sale
of the gemological testing instrumentation known as the Model 590 (the
"Product"). The parties desire to enter into this Agreement to formalize the
terms upon which QMD will manufacture the Product and supply it to Customer and
upon which Customer will purchase the Product from QMD.
Therefore, in consideration of the foregoing and other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows.
1. Supply of the Product. During the term of this Agreement, QMD agrees
to manufacture and supply, and Customer agrees to purchase, the Product pursuant
to the terms of this Agreement.
2. Term of Agreement. The initial term of the Agreement (the "Initial
Term") shall be one year; provided that the Agreement will continue
automatically thereafter for calendar year terms until either party delivers to
the other written notice at least 90 days prior to the end of the then current
term of the notifying party's desire to terminate the Agreement as of the end of
the then current term. At the end of the Initial Term, the parties may agree in
writing to new quantity and/or price terms; provided, however, that if no new
quantity and/or price terms are agreed upon by the parties, the quantity and/or
price terms in effect during the Initial Term pursuant to Paragraph 3 and
Paragraph 4 of this Agreement shall remain in effect until the parties agree in
writing to new terms.
3. Quantity. QMD agrees that for the Initial Term it will manufacture
and supply to Customer a minimum of ***** Products per year, and Customer agrees
to purchase the same. QMD further agrees to use its best efforts to manufacture
additional Products upon the submission by Customer of a purchase order or
purchase orders for such additional Products.
4. Price. Customer agrees to pay QMD ***** for each Product. This price
shall remain firm for the Initial Term; provided, however, that if the price of
any of the components provided by QMD pursuant to Paragraph 5 changes (increases
or decreases), the price paid by Customer for the Product may be adjusted to
reflect such changes.
5. Supply of Component Parts. All component parts used in the
manufacture of the Model 590 shall be supplied by QMD; except that Customer
shall provide to QMD, in amounts sufficient to comply with Paragraph 3 of the
attached Terms and Conditions, (i) the chip manufactured by Cree, Inc. and used
in the Product and (ii) the casing for the Product.
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6. Terms and Conditions. The purchase of the Products by Customer shall
be governed by the terms and conditions attached to this Agreement. These terms
and conditions may be superseded only by written agreement signed by both C3 and
QMD.
7. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original, but all of which
together shall constitute one and the same instrument.
8. Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties to this Agreement and their respective successors and
permitted assigns. Neither this Agreement nor any of the rights, interest or
obligations hereunder shall be assigned by any of the parties to this Agreement
without the prior written consent of all other parties to this Agreement, and
any purported assignment without such consent shall be void.
9. Third Party Beneficiaries. None of the provisions of this Agreement
or any document contemplated by this Agreement is intended to grant any right or
benefit to any person or entity which is not a party to this Agreement.
10. Amendment. Any waiver, amendment, modification or supplement of or
to any term or condition of this Agreement shall be effective only if in writing
and signed by all parties hereto, and the parties to this Agreement waive the
right to amend the provisions of this Agreement orally.
11. Governing Law. This Agreement shall be governed by the laws of the
State of North Carolina without regard to conflicts of laws principles.
12. Severability. In the event that any provision in this Agreement is
determined to be invalid, illegal or unenforceable in any respect, the remaining
provisions of this Agreement will not be in any way impaired, and the illegal,
invalid or unenforceable provision will be fully severed from this Agreement and
there will be automatically added a replacement provision as similar in terms
and intent to such severed provision as may be legal, valid and enforceable.
13. Entire Agreement. This Agreement and the attached Terms and
Conditions constitute the entire contract between the parties to this Agreement
pertaining to the subject matter of this Agreement, and supersede all prior and
contemporaneous agreements and understandings between the parties with respect
to such subject matter.
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IN WITNESS WHEREOF, each of the parties has executed and delivered this
Agreement, or has caused this Agreement to be executed and delivered by its duly
authorized officer, as of the date first above written.
C3, INC.
By: /s/Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: President
QMD, A DIVISION OF
R&M ELECTRONICS, INC.
By: /s/Xxxxxxx X. X'Xxx
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Name: Xxxxxxx X. X'Xxx
Title: President
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QMD - TERMS AND CONDITIONS
The following Terms and Conditions apply to all Purchase Orders received
by QMD, A DIVISION OF R&M ELECTRONICS, INC. (hereinafter "QMD") from C3, Inc.
(hereinafter "Customer") for the gemological testing instrument known as the
Model 590 (the "Product"). These Terms and Conditions may be superseded only by
written agreements signed by both C3 and QMD.
Terms and Conditions.
1. Customer will issue a purchase order for delivery of the Product
covering a minimum of 90 days deliveries. Products purchased are
non-cancelable and non-reschedulable other than as provided in paragraph
5.
2. Turnkey Warranty: QMD will repair or replace, at its option, any
Product found defective in materials (other than materials supplied by
Customer) or workmanship (IPC-610B Class 2) within ninety (90) days after
delivery to Customer. Customer will return any Product found defective
under this warranty to QMD freight prepaid.
QMD MAKES NO OTHER WARRANTIES OR REPRESENTATIONS OF ANY KIND, WHETHER
EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE, OR ANY OTHER WARRANTY WITH RESPECT TO THE GOODS
OR SERVICES PROVIDED HEREUNDER, WHETHER USED ALONE OR IN CONNECTION WITH
ANY OTHER EQUIPMENT OR PRODUCT. CUSTOMER'S SOLE AND EXCLUSIVE REMEDY, AND
THE LIMIT OF QMD'S LIABILITY FROM LOSS FROM ANY CAUSE WHATSOEVER SHALL IN
NO EVENT EXCEED THE PURCHASE PRICE OF THE GOODS OR SERVICES AS TO WHICH A
CLAIM IS MADE. IN NO EVENT SHALL QMD BE LIABLE FOR ANY DAMAGES RESULTING
FROM CUSTOMER'S INABILITY OR FAILURE TO PERFORM WORK, OR FOR ANY LOST
PROFITS OR OTHER CONSEQUENTIAL EXEMPLARY OR SPECIAL DAMAGES RELATING IN
WHOLE OR IN PART TO CUSTOMER'S RIGHTS UNDER THIS AGREEMENT (EVEN IF QMD
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES), OR FOR ANY OTHER
INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER CUSTOMER'S CLAIMS ARE BASED
UPON CONTRACT, NEGLIGENCE OR OTHERWISE.
3. All material supplied by the Customer will be of acceptable quality
and will be provided prior to the beginning of the month in which the
material is required for assembly of products. Customer will provide a
reasonable oversupply (up to 3%) of these parts to cover manufacturing
fallout. All unused components will be returned (or retained for future
production) at your request including any damaged parts.
4. Completed Products will be delivered FOB Raleigh, NC.
5. QMD will cancel or reschedule Products to be delivered under the
following conditions:
a. The Product orders to be canceled or rescheduled are not due
to be delivered within 90 days of receipt of written notice.
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REDACTED--OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION AND IS
DENOTED HEREIN BY *****
b. Customer agrees to pay to QMD all reasonable costs of
cancellation and rescheduling including:
1. All restocking charges required by vendors.
2. All return freight and repackaging costs.
3. The cost of all material that cannot be returned to the
vendor for credit. Upon receipt of Customer's payment for this
material, QMD will make available all material that cannot be
returned for disposition by Customer.
4. Material Management fees of 12% of the purchase price
for all material canceled or returned to the vendor.
5. All expedited freight costs if required by rescheduling.
c. The material for rescheduled Products can be procured and the
products can be manufactured by the rescheduled delivery date.
6. The terms of payment for the Products shipped are 1% 10 net 30 days.
Amounts due beyond 35 days will be assessed interest at the highest rate
allowed by law as a deterrent to late payment. Customer further agrees to pay
all reasonable expenses, including court costs, legal and administrative
expenses, and attorney fees paid or incurred by QMD in endeavoring to collect
delinquent amounts due and payable from Customer.
7. Neither party shall institute a proceeding in any court or
administrative agency to resolve a dispute between the parties arising out of
or related to their agreements before that party has sought to resolve the
dispute through direct negotiation with the other party. If the dispute is not
resolved within three weeks after a demand for direct negotiation, the parties
shall seek relief through arbitration in Raleigh, North Carolina administered
by the American Arbitration Association under its commercial arbitration rules
and procedures then in effect. Judgment on the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.
8. Lead-time on follow on orders based on QMD's fax to X. Xxxxx,
C3 9/09/97.
1. Eight weeks lead-time based on a ***** minimum per tester to
purchase power packs from a distributor, rather than the
manufacturer's 12 week lead time.
2. Order power packs from manufacturers and stock a safety
reserve to cover the difference in lead time.
3. The lead time will be 8 weeks with action taken on item 1 or
2 above.
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Our agreement to these Terms and Conditions is evidenced by the signature
of a duly authorized officer below:
C3, INC. QMD, A DIVISION OF
R&M ELECTRONICS, INC.
Name: Xxxx X. Xxxxxx Name: Xxxxxxx X. X'Xxx
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Title: President Title: President
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Date: 9/12/97 Date: 9/15/97
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