Exhibit 10.07
AGREEMENT FOR
GILARDONI DISTRIBUTION, MANUFACTURE, LICENSE AND PURCHASE OF
VIVID PRODUCTS (OPERATOR CONSOLE & SYSTEMS)
Agreement effective August 27, 1997 (Effective Date) between
Vivid Technologies, Inc., a Massachusetts corporation having a
principal place of business at 00X Xxxxxxxx Xxx, Xxxxxx, XX
00000 (USA) and its subsidiaries (hereinafter referred to as
"Vivid"), and Gilardoni S.p.A., having a principal place of
business at Mandello del Lario (Como), Italy (hereinafter
referred to as "Gilardoni").
PART A - INTRODUCTORY MATTERS
1. Facts.
Gilardoni is a developer, manufacturer and distributor of a
line of FEP brand conventional x-ray-based systems and
components, which are used to inspect luggage, mail,
parcels, and break bulk cargo, which it distributes in Italy
and other countries.
Vivid is a developer and manufacturer of advanced x-ray
inspection systems which are used to inspect airline hold
baggage and other luggage, mail, parcels, and break bulk
cargo, as well as advanced x-ray inspection technology which
offers improved image quality, a proprietary operator
interface and automated processing capabilities. Vivid has
included this technology in its products, specifically its
Operator Console Assembly, and pursuant to a prior agreement
titled Distribution and Development Agreement (the "Prior
Agreement"), integrated said Operator Console Assembly for
use with the data acquisition modules of Gilardoni's FEP ME
640 (the "FEP Platform" as defined below) to develop a
"Joint System", as defined herein. Said Prior Agreement is
hereby agreed to be terminated, superseded by this
Agreement, and of no further effect as of the Effective
Date.
Under this Agreement, Gilardoni will market and sell the
Joint System in certain countries and Vivid Systems in
Italy, obtain the right to manufacture the Operator Console
Assembly in support thereof, including certain parts to be
purchased from Vivid, and will be evaluated by Vivid to
become a second source to Vivid for x-ray tubes and
monoblocs for its whole product range.
Under a separate agreement of even date herewith, Vivid will
distribute Gilardoni's systems in certain other countries of
the world, market and sell the Joint System in certain
countries, and obtain the right to manufacture the FEP
Platform in support thereof, including certain parts to be
purchased from Gilardoni, (hereinafter the "Associated
Agreement").
2. Definitions.
2.1 "Gilardoni System" means the current Gilardoni FEP line
of x-ray-based inspection systems, comprising its FEP
ME 640 and FEP ME 975 products, used to inspect
luggage, mail, parcels, and break bulk cargo, and spare
parts therefor.
2.2 "FEP Platform" means those modules of the Gilardoni FEP
ME 640 used for data acquisition and/or system control,
as described in more detail in Exhibit D hereto, and
spare parts therefor.
2.3 "FEP Products" means the Gilardoni System, and the FEP
Platform, including spare parts therefor.
2.3.1 "Monobloc/Inverter Assembly" means those
components of the FEP Platform described as such in
Exhibit D hereto, most particularly the "monobloc" and
"inverter board set" together with associated cables
and parts, to be purchased by Vivid from Gilardoni in
connection with its manufacture of FEP Platforms, Joint
Systems, and derivative products.
2.4 "Vivid System" means the current Vivid line of advanced
x-ray-based inspection systems, and future
developments, used to inspect airline hold baggage, as
well as other luggage, mail, parcels, and break bulk
cargo; except that the term Vivid Systems shall not
include products and technology purchased or licensed
from third-parties to the extent that Vivid's agreement
with said third-party precludes or prevents Vivid from
licensing or selling said product or technology to or
through Gilardoni; and spare parts therefor.
2.5 "Operator Console Assembly" means the Vivid display
console and associated software and hardware technology
together with associated cables and parts, as described
in Exhibit E hereto; and spare parts therefor.
2.6 "Joint System" means an x-ray-based inspection system
used to inspect luggage, mail, parcels, and/or break
bulk cargo, consisting of the Gilardoni FEP Platform
and the Operator Console Assembly, and spare parts
therefor.
2.7 "Vivid Product" means the Vivid System, and the
Operator Console Assembly (but only as incorporated
into the Joint System, or as sold as an upgrade for the
Gilardoni System), and spare parts therefor.
2.8 "Proprietary Information" means all confidential or
trade secret information so designated by a disclosing
party in writing. If Proprietary Information is
disclosed in one or more documents, the disclosing
party shall identify said document in writing as
containing proprietary or confidential information,
either by providing a proprietary or confidential or
similar legend on such document, or by providing, with
the document, a separate writing which identifies the
documents as containing proprietary or confidential
information. If Proprietary Information is only
disclosed orally or made available by inspection, the
disclosing party shall, within thirty (30) days after
such disclosure, deliver to the receiving party a
written description of such Proprietary Information
identifying where appropriate the place and time of
such oral disclosure, and the names of representatives
of the receiving party to whom such disclosures were
made. Proprietary Information shall not include
information which: (a) is or becomes in the public
domain through no action of the receiving party; or (b)
is generally disclosed to third parties by disclosing
party without restriction on such third parties; or (c)
is independently developed by the receiving party
without reference to disclosing party's Proprietary
Information; or (d) is received by the receiving party
from a third party which has the right to disclose such
information and without violation of this Agreement; or
(e) is approved for release by written authorization of
disclosing party; or (f) is disclosed pursuant to an
order of a court or governmental agency, providing that
the receiving party notifies disclosing party and
affords it an opportunity to oppose such order.
2.9 "Manufacturing Information" means all Proprietary
Information and other information necessary to
manufacture, test, install, service and use the item in
question and all subassemblies thereof, including a
xxxx of materials, and all technical and engineering
information, know how, trade secrets, proprietary
information, and data relating thereto, and the
documentation listed in Exhibit C hereto.
2.10 "Cost Plus" means direct costs of direct materials and
labor, and indirect manufacturing labor, plus an
allocation of 35% of said amount to cover overhead.
PART B - GILARDONI'S DISTRIBUTION RIGHTS
3. Appointment and Territory.
3.1 For the Term of this Agreement Vivid hereby appoints
Gilardoni as:
(a)(i) the exclusive distributor of Vivid Systems for
installation in Italy.
(a)(ii) the exclusive distributor of Vivid's Operator
Console Assembly but only as incorporated into the
Joint System, or as an upgrade for the Gilardoni
System, in Italy, Cyprus, Bulgaria, Tunisia, Brazil,
Argentina, and Romania, as well as Libya and Iran at
such time as the United States Government permits
export of these products and U.S.-source technology
thereto (and subject to Section 23.3 hereof).
(b) rights for the country of Greece shall be allocated
among the parties at a later time
Gilardoni agrees not to solicit any order for
installation of any Vivid Product outside of its
respective territories therefor, or except as permitted
by this Agreement without Vivid's advance written
consent. Gilardoni is not prohibited from accepting
orders for Vivid Products from customers in the
European Union, for installation in the European Union
but outside the Gilardoni territories described above,
provided that it first demonstrates by documentary
evidence that (1) the customer initiated the
transaction, and (2) it took no action to solicit the
order.
3.2 During the Term of this Agreement without the advance
written consent of the other party:
(a) Neither Gilardoni nor Vivid shall market or sell
for installation any x-ray-based system from any
manufacturer other than Gilardoni or Vivid to inspect
luggage, mail, parcels, or break bulk cargo; and
(b) Vivid will not itself market or sell Vivid Products
or any other x-ray based system to inspect luggage,
mail, parcels, or break bulk cargo for installation in
the territories assigned exclusively to Gilardoni, and
will not appoint any other reseller or distributor with
any right to market or sell Vivid Products in the
territories assigned exclusively to Gilardoni.
4. Marketing and Promotion.
4.1 Gilardoni will be solely responsible for all marketing
and sales of Vivid Products purchased pursuant to this
Agreement. Gilardoni and Vivid will work together to
develop appropriate marketing plans as reasonable and
necessary to promote the Vivid Product and the Joint
System.
4.2 Vivid hereby grants Gilardoni a non-exclusive, non-
transferable license to represents itself as an
"Authorized Distributor" of Vivid Systems and the
Operator Console Assembly in its respective territories
therefor, and to use the Vivid trademarks identified in
Exhibit A hereto in connection therewith. To the
extent that Gilardoni so represents itself with respect
to any item manufactured by Gilardoni as permitted by
this Agreement, Gilardoni will cause all such equipment
to be manufactured to product and quality
specifications at least equal to those utilized by
Vivid. Vivid may monitor Gilardoni's compliance with
this requirement.
4.3 Gilardoni may also distribute Vivid Systems and the
Joint System in its respective territories therefor
under its sole trademark, either by itself, or in
conjunction with Vivid's trademarks.
4.4 Gilardoni shall not register any Vivid trademarks in
any jurisdiction, but may request that Vivid register
or obtain appropriate legal protection for the Vivid
trademarks identified in Exhibit A hereto in the
Gilardoni Territory. Any such registration shall be
owned by Vivid. Payment of any registration or other
fees required in connection therewith shall be agreed
on a case-by-case basis.
PART C - PURCHASE TERMS
5. Purchase prices, payment and taxes.
5.1 Vivid agrees to sell and Gilardoni agrees to purchase
Vivid Systems, services and Operator Console Assemblies
listed on Exhibit B hereto in accord with the terms of
this Agreement. Prices are quoted in U.S. Dollars as
set forth in Exhibit B hereto, provided that: (i) lower
prices to meet individual customer situations may be
negotiated on a case-by-case basis; and (ii) if Vivid
offers to any other non-end user party lower prices
and/or more advantageous terms for any of the products,
components or services offered pursuant to this
Agreement to Gilardoni, it shall offer the same prices
and/or terms to Gilardoni.
5.2 Except as levied by the Government of the United States
or its constituent jurisdictions, Gilardoni will pay or
reimburse Vivid for any taxes, VAT, import duties or
other government charges however designated, arising
from or based upon Vivid's sale of the FEP Products or
Monobloc/Inverter Assemblies to Gilardoni ("Taxes"),
but not including any income or corporate excise tax
assessed against, or levied on, Vivid. If applicable,
Gilardoni shall furnish Vivid with whatever
certificates or other instruments may be necessary or
appropriate to evidence that Vivid's sales of the FEP
Products or Monobloc/Inverter Assemblies to Gilardoni
are not subject to Taxes under applicable law.
5.3 Payment for all Vivid Products ordered under this
Agreement (unless otherwise agreed in writing in
advance with respect to a specific order) shall be due
thirty (30) days after Delivery). Payment terms are
subject to change upon mutual agreement between
Gilardoni and Vivid.
5.4 All payments pursuant to this Agreement shall be made
by bank transfer in U.S. dollars available at Vivid's
bank.
6. Forecasts, Purchase Orders, Product Integration, and
Shipping.
6.1 Forecast of Demand. Within thirty (30) days from the
date of last signature of this Agreement, Gilardoni
shall deliver to Vivid an initial forecast specifying
the quantities of Vivid Systems and Operator Console
Assemblies to be purchased by Gilardoni and supplied by
Vivid during each month of the following two quarters
(the "Initial Forecast"). Thereafter, within ten days
of the start of each calendar month, Gilardoni shall
deliver to Vivid a "rolling" forecast specifying the
quantities of Vivid Systems and Operator Console
Assemblies to be purchased by Gilardoni and supplied by
Vivid during each month of the following two quarters
(the "Rolling Forecast"). The Initial Forecast and
each Rolling Forecast shall be considered a firm
purchase order committing both parties with respect to
the purchase and sale of Vivid Systems and Operator
Console Assemblies over the first three months thereof
in accordance with Section 6.2, provided that
Gilardoni's maximum forecast of Vivid Systems and
Operator Console Assemblies over the first three months
forecasted shall be ten (10) units of each. As part of
the Initial Forecast, Gilardoni shall specify firm
dates for delivery of product to be delivered in each
of the first three months of said Initial Forecast
("Firm Delivery Dates"). As part of each subsequent
Rolling Forecast, Gilardoni shall specify Firm Delivery
Dates for the third month thereof. Forecasts of
quantities to be purchased in the subsequent quarter,
in the Initial Forecast and Rolling Forecast, shall be
used by Vivid for purposes of planning and manufacture
of Vivid Systems and Operator Console Assemblies for
inventory purposes, but Gilardoni shall not be bound by
said subsequent quarter forecast, nor shall Gilardoni
be liable to Vivid with respect to any changes thereto.
6.2 Within ten (10) days following its receipt of the
Initial Forecast, and each Rolling Forecast, Vivid (a)
may modify the Firm Delivery Dates for product to be
delivered in the third month of said Rolling Forecast
(each month in connection with the Initial Forecast) if
the quantities of Products so ordered makes this
necessary to fit its production capabilities, provided
always that said modified Firm Delivery Dates shall be
within thirty (30) days of the initial Gilardoni-
requested Delivery Date; (b) shall otherwise confirm
Firm Delivery Dates requested for each of the first
three (3) months thereof and its general capability to
provide the numbers forecasted for delivery during the
subsequent quarter.
6.3 In the event that Vivid does not meet Gilardoni's
demand for all or any part of the Vivid Systems or
Operator Console Assemblies ordered pursuant to Section
6.1 for any week for any reason and not withstanding
Section 23.2 of this Agreement, Gilardoni's purchase
price therefor shall be reduced by two percent (2%) for
each week of delay in Delivery with a maximum price
reduction of eight percent (8%). Except as otherwise
provided in this Agreement or agreed in writing between
the parties with respect to a specific order, this
reduction shall be in lieu of any other right to claim
damages for delay in Delivery of the subject products.
6.4 Unless otherwise agreed with respect to a specific
order of Vivid Systems or Operator Console Assemblies,
all prices pursuant to this Agreement are quoted, and
product delivery (Delivery) will be ex-works (Incoterms
1990), packed for air shipment in accord with Vivid's
standard procedures. Upon Gilardoni request, Vivid
will arrange for drop shipment of Vivid Product (and
Joint Systems) to Gilardoni customers, or other
packaging, in accord with Gilardoni's instructions,
provided that Gilardoni shall be responsible for all
associated risk and shipping, customs, taxes,
insurance, and whatever other charges are payable with
respect thereto. Provided that Gilardoni first
establishes credit terms reasonably acceptable to
Vivid, Vivid shall advance and invoice said amounts to
Gilardoni, said invoices to be due and payable as
agreed.
6.5 Gilardoni shall stock spare parts to meet anticipated
demand. However, from time to time Gilardoni may be
required to order spare parts on an expedited basis.
Vivid shall use its best commercial efforts to ship
such expedited purchase orders within 24 hours
following receipt. Spare parts invoices are due and
payable thirty (30) days after receipt.
6.6 Upon request and in connection with Gilardoni sales of
the Joint System, Vivid will provide the service of
integrating FEP Platforms with Operator Console
Assemblies, and or manufacture thereof, and testing the
resulting Joint Systems, using Gilardoni qualified
assembly and test procedures, on a schedule and at the
Cost Plus Formula set out in Exhibit B hereto.
7. Installation and Acceptance.
7.1 Gilardoni shall be solely responsible for installation,
on-site testing, and commissioning of all Vivid Product
sold hereunder, as well as for customer training,
support, warranty, and service. Vivid shall provide to
Gilardoni at Vivid's facilities, free of charge, a
reasonable training period of up to one (1) week
respecting such matters for Vivid Systems and the
Operator Console Assembly. Gilardoni shall be
responsible for and shall pay all travel and living
expenses associated with such training. Gilardoni
shall supply such service to customers at the times and
for the fees that are normal and customary in the trade
and appropriate for the product. Except as
specifically provided for in this Agreement, Vivid
shall have no obligation or liability for these
matters. If Gilardoni fails to offer such service to a
customer or abandons a customer contract, Vivid may
offer said services directly to said customer, at its
sole risk, responsibility, and expense, provided that
Vivid informs Gilardoni in advance in writing of its
intent to contact said customer, provides Gilardoni
with five (5) business days to respond or object, and
does not initiate any contact with said customer before
expiration of said period and resolution of any
Gilardoni response or objection. Notwithstanding any
other Section of this Agreement, each party (the
"Indemnifying Party") shall indemnify the other (the
"Indemnified Party") for any loss, damages, costs or
other expenses incurred by the Indemnified Party
arising out of any action undertaken by the
Indemnifying Party pursuant to this Section 7.1.
7.2 Upon request, Vivid will provide installation, on-site
testing, commissioning, customer training, support,
warranty, and service for product at rates to be
negotiated.
8. Product Warranty.
8.1 Vivid warrants that Vivid Products and Operator Console
Assemblies delivered by Vivid hereunder shall be free
from defects in workmanship and material, and shall
perform in accordance with their then-current published
functional specifications under normal use and proper
operating conditions. This warranty will extend for a
period of 12 months from the date of customer
acceptance, or 16 months from the date of Delivery,
whichever is earlier. Vivid agrees to provide
extensions to this warranty under reasonable terms to
be negotiated with Gilardoni for specific customer
situations.
8.2 In the event that warranted products are deemed
defective or otherwise in breach of the warranty set
out in Section 8.1. above, Gilardoni shall identify,
remove, and return to Vivid the defective product,
component, or sub-assembly, and Vivid shall repair or
replace, in a timely manner, at its discretion, any
such defective product, component or sub-assembly.
Warranty claims shall be initiated by contacting Vivid
by telephone or facsimile, obtaining a return material
authorization number, and shipping items returned under
warranty to Vivid's designated facility, freight
prepaid by Gilardoni, all in accord with Vivid's then-
current returned material authorization procedure,
Vivid's current returned material authorization
procedure is attached as Exhibit F hereto. Vivid shall
return items replaced or repaired under warranty as
designated by Gilardoni, on a DDP basis (Incoterms
1990). Items returned shall become Vivid property.
8.3 Vivid provides the Additional Warranty that Vivid
Products and Operator Console Assemblies provided by
Vivid pursuant to this Agreement shall be free of major
safety hazards, and for a period of five years from
date of customer acceptance will be free of epidemic or
systemic failure. A major safety hazard is defined as
a defect which prevents the safe operation of the
product at its place of installation, such as an
electric shock, personal radiation exposure, or fire
risk (and not including risks to aircraft, passengers,
or operators associated with failure to detect
contraband material). A systemic or epidemic failure
shall exist when defects of the same root cause occur
in any non-expendable parts in ten percent (10%) or
greater of Vivid Products or Operator Console
Assemblies delivered pursuant to this Agreement within
any 24 month period, or the actual Mean Time Between
Failure (hereafter "MTBF") of any part of said Vivid
Products as delivered is lower than 95% of Vivid's
published MTBF figure for said part(s). In such event,
Gilardoni and Vivid shall immediately devise a
corrective action plan, under which Vivid shall provide
all parts, materials and technical assistance, and
Gilardoni shall supply all labor, reasonably needed to
replace all affected parts in Vivid Products and
Operator Console Assemblies purchased and resold
pursuant to this Agreement. In the event the expenses
of one party associated with said corrective action are
more than fifty percent (50%) greater than the expenses
of the other party, then Gilardoni and Vivid shall
share the cost of such corrective action on an equal
basis. Not covered by this Section 8.3 is a change in
regulatory requirements.
8.4 The parties may agree that Vivid Products or Operator
Console Assemblies supplied in connection with any
individual situation shall meet such other
specifications as may be agreed between Vivid and
Gilardoni.
10. Exclusive Warranty.
10.1 THE WARRANTIES SET OUT IN SECTIONS 8 AND 19A HEREOF ARE
EXCLUSIVE, AND NO OTHER WARRANTY, WHETHER EXPRESS OR
IMPLIED, WRITTEN OR ORAL, SHALL APPLY TO THE SUBJECT OF
THIS AGREEMENT. VIVID SPECIFICALLY DISCLAIMS ANY
IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
PART C - MANUFACTURING RIGHTS
14. Vivid Manufacturing Information and Software.
14.1 Within thirty (30) days of the Effective Date, Vivid
will furnish to Gilardoni, on a non-exclusive basis,
all Vivid Manufacturing Information related to Operator
Console Assembly and will provide pursuant to the
Software License set out in Section 19C hereof, such
Software as may be needed to test, install, service and
use said Operator Console Assembly ("Vivid Software"),
all as specified in Exhibit C and Exhibit E hereof.
Vivid will not supply Source Code for any Software.
Except as expressly provided in Section 19C hereof,
Gilardoni shall not modify Software without Vivid's
advance written consent. Vivid Manufacturing
Information will be prepared by Vivid in English, and
shall be in accord with technical standards used by
Vivid at the time of preparation thereof. Gilardoni
will treat all Vivid Manufacturing Information,
amendments, updates and revisions thereto, Software,
and consulting assistance disclosed or provided
pursuant to this Agreement as Proprietary Information
and in accord with the provisions of Section 20 hereof.
14.2 In order to assist Gilardoni in understanding the Vivid
Manufacturing Information, and to assist Gilardoni in
the manufacture of Operator Console Assembly, Vivid
shall upon the request of Gilardoni, provide reasonable
consulting assistance by telephone without charge to
technically qualified personnel of Gilardoni, subject
to the availability of qualified personnel within the
employ of Vivid (together with up to one week of on-
site consulting assistance without charge, and such
additional time as may be reasonably necessary at
Vivid's daily rates). Gilardoni shall be responsible
for and shall pay all travel and living expenses
associated with such assistance.
15. Manufacturing Rights and Royalties
15.1 Subject to the terms of this Agreement, Gilardoni may
manufacture and have manufactured, in Italy or such
other countries of Gilardoni's exclusive territory as
may be agreed where such manufacturing is reasonably
commercially necessary in connection with Gilardoni's
sales and marketing efforts therein (Vivid's agreement
thereto shall not be unreasonably withheld, provided
that Vivid's intellectual property rights are
adequately protected) such quantities of the Operator
Console Assemblies and any spare parts therefore as
Gilardoni may require to fully execute its rights under
this Agreement.
15.2 In partial consideration of the rights granted to
Gilardoni under this Part C, Gilardoni shall pay to
Vivid a per unit royalty for each Operator Console
Assembly or other device sold or otherwise disposed of
(a) which incorporates any of the Manufacturing
Information (and utilizes Gilardoni's imaging software
marketed as of the date of this Agreement but no Vivid
Software) provided to Gilardoni pursuant to this
Section C at the rate of twelve hundred fifty United
States Dollars (US$1,250) for each such device, or (b)
which incorporates any Vivid Software (and such
Manufacturing Information as Gilardoni shall determine)
at the rate of three thousand United States Dollars
(US$3,000) for each such device. Except as permitted by
this Section, Gilardoni shall for the term of this
Agreement, (i) not sell any Operator Console Assembly,
or other device which incorporates any of the
Manufacturing Information, with any imaging or threat
detection software other than Vivid Software or
Gilardoni's imaging software marketed as of the date of
this Agreement, and (ii) license from Vivid all threat
detection and advanced imaging software used in
connection with any Operator Console Assembly or other
device which incorporates any of the Manufacturing
Information.
15.2.1 Reports and Payments. Within 60 days after the
conclusion of each calendar quarter, Gilardoni shall
deliver to Vivid a report covering said calendar
quarter, listing the number of Licensed Products sold
or otherwise disposed of, the countries of installation
and the total royalty payable or credited against the
Advance Royalty described above. All such reports
shall be treated as Proprietary Information and shall
not be disclosed to any third party. If no royalties
are due or creditable for any calendar quarter, the
report so shall state. Concurrent with said report,
Gilardoni shall remit to Vivid any royalty payment due
for the applicable calendar quarter. Vivid shall
instruct Gilardoni as to the method of payment. All
other payments pursuant to this Part C shall be made
within thirty (30) days of invoice. All payments shall
be payable in U.S. dollars.
15.2.3 Records. Gilardoni shall maintain complete and
accurate records of Licensed Products and amounts
payable to Vivid in relation to Licensed Products for a
period of at least three years after the conclusion of
any calendar quarter. Vivid shall have the right, at
its expense, to cause such records to be audited during
normal business hours by an independent certified
public accountant of Vivid's choice for the purpose of
verifying any reports and payments delivered under this
agreement. In the event any audit performed under this
section reveals an underpayment in excess of five
percent (5%) in any calendar quarter, Gilardoni shall
bear the full cost of such audit. Vivid may exercise
its rights under this section once each year with prior
reasonable notice. Payments not paid on or before the
date such payments are due under this Part C, shall
bear interest, to the extent permitted by law under, at
1.5% above the United States prime rate of interest, as
reported in the Wall Street Journal, and calculated
based on the number of days that payment is delinquent.
16. Second Source for Vivid components.
16.1 Vivid shall evaluate Gilardoni as an alternate supplier
of monoblocs, x-ray tubes and generators for its other
Vivid products in accord with the following criteria:
Within ninety (90) days following the Effective Date,
the parties shall agree upon a plan pursuant to which
Vivid shall consider establishing a second source for
monoblocs, x-ray tubes and generators for some or all
of its products, with appropriate milestone dates, such
that Vivid shall use reasonable commercial efforts to
complete its evaluation of Gilardoni as a second source
for such components within one year of the Effective
Date.
18. No Vivid Product Warranty; Gilardoni Solely Responsible;
Indemnification & Insurance.
18.1 Vivid makes no warranty or representation for any
purpose with respect to Vivid Manufacturing Information
or Software licensed hereunder, except that Vivid shall
use its best efforts to verify that such Vivid
Manufacturing Information and Software are the same
information, data, and software as is used by Vivid and
that it has been prepared in accordance with good
industry standards. Vivid makes no warranty that said
Vivid Manufacturing Information or Software is
complete, accurate, or free from defects. Consulting
assistance shall be provided in a workmanlike fashion,
with no warranty of any particular result. VIVID
SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
18.2 VIVID DISCLAIMS ALL WARRANTIES SET OUT IN SECTION 8 OF
THIS AGREEMENT WITH RESPECT TO ANY OPERATOR CONSOLE
ASSEMBLIES, SOFTWARE, OR OTHER PRODUCT, SERVICE OR
ASSISTANCE PROVIDED, MANUFACTURED, SOLD, OR USED
PURSUANT TO THIS PART C.
18.3 Gilardoni shall be solely responsible for all product
warranties and all liabilities relating to any product
manufactured pursuant to the rights granted by this
Part X. Xxxxxxxxx shall perform and fulfill all terms
and obligations of each such warranty. Vivid shall not
have any warranty obligation or liability with respect
to such products to subdistributors or customers of
Gilardoni.
18.4 Notwithstanding Section 22 hereof, Gilardoni shall
indemnify, defend and hold Vivid and its successors,
heirs, and assigns (the "Indemnitee"), against all
liability, damage, loss or expense (including
reasonable attorney's fees and expenses of litigation)
incurred or imposed by or upon the Indemnitee in
connection with any claim, suit, action, demand, or
judgment arising out of any theory of liability
(including without limitation actions in the form of
tort, warranty, or strict liability and regardless of
whether the action of has any factual basis) concerning
any product, process or service that is made, used or
sold pursuant to any right or license granted under
this Part C; provided, however, that such
indemnification shall not apply to any liability, loss,
damage or expense to the extent attributable to the
grossly negligent activities or intentional misconduct
of the Indemnitee or (ii) the settlement of a claim,
suit, action or demand by the Indemnitee without prior
written approval of Gilardoni.
PART D - GENERAL TERMS
19. Ownership of Technology; Improvements and New Products.
19.1 As between Vivid and Gilardoni, each party shall
maintain all of its ownership rights in all patents,
copyrights, trade secrets, trademarks, designs, and
other intellectual property as of the Effective Date
hereof. Each party shall own all improvements to its
own or the other party's products subject to this
Agreement (hereinafter "Improvements") which it may
individually make, and may exploit and utilize said
Improvements for any purpose whatsoever. Each party
shall offer to sell and/or license the other party to
purchase, distribute and utilize Improvements pursuant
to this Agreement at charges and terms to be agreed.
19.1.1 The parties may mutually agree to enter into a
separate agreement to undertake joint development work,
and as to the allocation of any intellectual property
rights resulting therefrom. Except as so agreed,
Improvements which are jointly made shall be jointly
owned. Each party shall have the right, in its sole
discretion to file, prosecute and maintain at its own
expense any application for patent, copyright, or other
legal protection in any country on any jointly made
Improvement. Each party shall give the other all
reasonable assistance in obtaining such patent,
copyright, or other legal protection. Title to any
such patent, copyright, or other legal protection shall
be joint. Each party may exploit and utilize said
jointly made Improvement for any purpose whatsoever,
without any obligation to account, share revenues, or
pay royalties to the other with respect to said
Suggestion.
19.2 For the purpose of clarity, the parties specifically
agree that (a) Vivid shall obtain no license or
ownership rights, and no right to use FEP Products,
Monobloc/Inverter Assemblies, or other Gilardoni
products, or Gilardoni improvements to any of the
above, except as specifically provided in this
Agreement; (b) Gilardoni shall obtain no license or
ownership rights, and no right to use the Operator
Console Assembly or other Vivid products, or Vivid
improvements to any of the above, except as
specifically provided in this Agreement; (c) Vivid
shall obtain no license or ownership rights, and no
right to use the Gilardoni Manufacturing Information,
Gilardoni Proprietary Information, or Software,
relating to the FEP Platform or to any other Gilardoni
products except as specifically provided in this
Agreement; and (d) Gilardoni shall obtain no license or
ownership rights, and no right to use the Vivid
Manufacturing Information, Vivid Proprietary
Information, or Software, relating to the Operator
Console Assembly or to any other Vivid products except
as specifically provided in this Agreement.
19A. Intellectual Property Warranty.
19A.1 Vivid warrants that as of the Effective Date of
this Agreement, to its best knowledge, that in the
territories assigned to Gilardoni: (a) the Vivid
Products and Operator Console Assemblies do not
infringe any trade secret, trademark, patent, copyright
or other intellectual property or proprietary belonging
to any third party; and (b) no pending patent
application of a third party has claims which cover the
Vivid Products, or Operator Console Assemblies.
19A.2 Without prejudice to Section 19A.1, Vivid and
Gilardoni represent that as of the Effective Date of
this Agreement, they have no actual knowledge that
current Vivid Products or Operator Console Assemblies
infringe any patent belonging to any third party,
provided that the parties do not represent that Vivid
Products and Operator Console Assemblies do not
infringe United States Patent No. 4,366,382, dated
December 28,1982, titled "X-Ray Line Scan System For
Use In Baggage Inspection", Xxxxxxx X. Xxxxxxxx,
Inventor, initially assigned to Scanray Corporation,
Harbor City, California, and purportedly assigned
subsequently to EG&G Astrophysics Research Corporation
(hereinafter the "EGG Patent"). The parties understand
and acknowledge that Vivid and Gilardoni have not
conducted any sort of patent search, product review, or
clearance review with respect to the Vivid Products or
any other Vivid product in connection with this
representation or their consideration whether to enter
into this Agreement, and that this representation is
provided solely on the basis of the parties' general
knowledge acquired in connection with their usual
ongoing businesses.
19B. Infringement.
19B.1 In the event that any claim, suit, or other legal
proceeding is threatened or commenced against Gilardoni
that is founded, in whole or in part, on an allegation
that any Vivid Product infringes any trade secret,
trademark, patent, copyright or other intellectual
property rights belonging to a third party, Gilardoni
will give Vivid prompt written notice thereof and Vivid
may elect to assume primary control of the defense to
or settlement of such dispute. Gilardoni shall
cooperate fully with Vivid in any such defense,
settlement or compromise made by Vivid. Neither
Gilardoni nor Vivid shall enter into any settlement
agreement or other voluntary resolution of any such
claim, suit, or other legal proceeding without
obtaining the other's prior written consent thereto.
If Gilardoni has complied fully with the procedures set
forth in this Section, Vivid will indemnify and hold
Gilardoni harmless from and against any loss, cost,
damage, or other expenses incurred by Gilardoni as a
result of such claim, suit, or legal proceeding. In
addition, if a final injunction is obtained against
Gilardoni's use of the Vivid Product, or if in the
opinion of Vivid the Vivid Product is likely to become
subject of a successful claim of infringement, Vivid
may, at its option and expense (a) procure for
Gilardoni the right to continue distributing and using
the Vivid Product, or (b) replace or modify said
product so that it becomes non-infringing, or (c) if
neither (a) or (b) are reasonably available, accept
return of Vivid Product sold hereunder, grant a credit
therefore as depreciated on a five-year straight-line
basis and terminate this Agreement. This
indemnification procedure shall be null and void and
Vivid shall have no liability to the extent that any
claim is based on any use of the Vivid Product in
combination with any item not supplied or approved in
writing by Vivid, or if the Vivid Product has been
tampered with, or modified in any way except as
provided in this Agreement without the express written
consent of Vivid, or if Gilardoni or its sub-
distributor, affiliate, or customer has any property
interest in said claim, suit, or legal proceeding, or
any license to any right so asserted.
19C. Software License.
19C.1 Under this Agreement, computer software
("Software") may be delivered in printed or machine
readable form. No Software in source code format will
be supplied pursuant to this Agreement. Title to
Software, including all patents, copyrights, and
property rights applicable thereof, shall at all times
remain with Vivid. Software is valuable to Vivid and
shall be treated as Proprietary Information subject to
Section 20 of this Agreement. Gilardoni shall maintain
all copyright, proprietary, and other notices on the
Software. Gilardoni is granted a non-exclusive license
for the Term of this Agreement to provide perpetual sub-
licenses to Software provided with Vivid Product
purchased hereunder to its customers solely for
operation, or testing, of Vivid Product (and Joint
Systems) purchased pursuant to this Agreement and on
which Software is first installed, provided that each
such customer first agrees in writing to be bound by
terms and conditions equivalent to those contained in
this Agreement. On condition that Vivid shall upon
request, provide information in compliance with EC
Council Directive of 14th May 1991 sufficient to create
interfaces to other computer programs, Gilardoni shall
not decompile, reverse engineer or reverse assemble,
analyze or otherwise examine the Software, including
any hardware or firmware implementation thereof for the
purpose of reverse engineering. Gilardoni is permitted
to undertake standard remedial analyses of Software
necessary to diagnose problems therewith.
19D. Design Changes and Product Enhancements.
19D.1 The parties agree to each use their reasonable
commercial efforts to work together to coordinate their
product development efforts with the aim of assuring
that (a) the Operator Console Assemblies and FEP
Platforms distributed by Vivid and Gilardoni are
compatible in form and function, and (b) their
respective product lines are otherwise compatible.
Notwithstanding the foregoing, nothing in this
Agreement shall be interpreted to limit or otherwise
affect either party's right to change or improve any
design, technical specification, or capability of its
products provided that before making any change to the
Operator Console Assembly, Vivid shall: (a) first
provide Gilardoni with ninety (90) days advance written
notice of any such change and an opportunity to
incorporate such change into its products on terms and
charges to be agreed; (b) upon Gilardoni's notice that
said design change affects the functioning of its
products, continue to provide the unchanged Operator
Console Assembly for a reasonable period of time to be
agreed upon, so that Gilardoni may modify its products
in accord with its normal design cycle; and (c)
continue to provide spare parts and an upgrade path for
customers provided with the old version of the Vivid
Product.
19D.2 From time to time either party may develop
enhancements or improvements to its component or the
other party's component of the Joint Product. Said
party shall notify the other of the details of all such
enhancements and improvements and offer to sell or
license said enhancement or improvements to the other,
and to permit the other to manufacture all such
enhancements and improvements pursuant to this
Agreement, for reasonable royalties and fees to be
agreed.
20. License and Confidentiality Agreement.
20.1 Subject to each party's compliance with its obligations
under this Agreement, each party grants to the other a
license to use all patents and copyrights embodied in
its equipment and systems subject to this Agreement,
for purposes of designing, integrating, manufacturing,
and selling the Joint System during the Term, all in
accord with this Agreement.
20.2 Manufacturing Information and other Proprietary
Information will be held in confidence using the same
degree of care as receiving party uses for its own
information of like importance. Receiving party will
disclose said information only to its employees and
agents who need to know said information for the
performance of this Agreement, and who are bound to
protect its confidentiality. At the end of the Term,
or upon request of the disclosing party (whichever is
earlier), the receiving party shall return or destroy
all documents containing such Manufacturing Information
and other Proprietary Information except for
information necessary to activities which continue to
be permitted under this Agreement. In each case,
receiving party's counsel may maintain one set of said
documents under seal for its records.
20.3 Both parties acknowledge that the other party has
substantial experience and expertise in the technical
subject matter of this agreement. Each party may
utilize this experience and expertise, as well as
Proprietary Information and Manufacturing Information
to make improvements and changes to its component of
the Joint Product, the other party's component of the
Joint Product, and its other products. Nothing in this
Agreement shall prevent these activities.
20.4 Notwithstanding the provisions of Section 20.2 hereof,
each party shall be free to use "Residual Information"
for any purpose, including the development,
manufacture, marketing, and maintenance of products and
service. "Residual Information" means Proprietary
Information in non-tangible form (that is, not in
written or documentary form, including magnetic or
electronic form), which may be retained in the minds of
those employees and other personnel who have rightfully
had access to the Proprietary Information under this
Agreement.
20.5 Information which a party believes to be highly
proprietary and to require additional protection, may,
upon mutual agreement, be subject to additional
confidentiality protections. In such case, the
disclosing party shall describe the highly proprietary
information to be disclosed, and propose any additional
protections to be applied to said information.
Receiving party may agree to accept said highly
proprietary information under the terms proposed,
decline to accept it, or propose alternative terms for
disclosing party to accept before receipt of the
information.
21. Term and Termination.
21.1 This Agreement shall become effective on the effective
date hereof, and shall continue for a Term extending
for three (3) years thereafter, unless extended or
earlier terminated pursuant to this Section. Upon
expiration of the Term, this Agreement shall
automatically renew for subsequent one (1) year Terms
under the same terms and conditions, unless terminated
pursuant to the terms of this Section.
21.2 Gilardoni and Vivid may at any time mutually agree in
writing to terminate this Agreement.
21.3 After two (2) years following the Effective Date, and
at any time during any renewal Term of this Agreement,
either party may terminate this Agreement on three-
hundred sixty-five (365) days advance written notice to
the other party for any reason or for no reason.
21.4 Either party may terminate this Agreement for material
default of the other party, effective 30 days following
notice to the defaulting party, unless within said 30
days the party receiving said notice takes all
reasonable steps to remedy the default, and shall fully
remedy said default within 90 days of said notice. If
the receiving party does not so fully remedy said
default within 90 days of said notice, termination
shall become effective without further notice or other
action by the terminating party.
21.5 Either party may terminate this Agreement, effective
immediately upon notice, in the event that: (a)
proceedings are instituted by the other party in
bankruptcy, reorganization, receivership, or
dissolution; or (b) proceedings are instituted against
the other party in bankruptcy, reorganization, or
receivership, or dissolution and such proceedings have
not been dismissed or otherwise terminated within 60
days following the date they were initiated; or (c) if
the other party makes an assignment for the benefit of
creditors.
21.6 Upon termination or expiration of this Agreement for
any reason, neither party shall have any obligation or
liability to the other or to any employee, agent or
representative of the other for any damages,
indemnification, expenditures, loss of profits or
prospective profits of any kind, sustained or alleged
to have been sustained or arising out of such
expiration or termination (not including any claim for
monies due under this Agreement for goods purchased, or
for damages resulting from breach of any term of this
Agreement), both parties hereby irrevocably waiving any
such rights granted by the laws of their respective
countries or of any other jurisdiction. Both parties
hereby covenant and agree that they will bring no
action or proceeding of any nature whatsoever in any
court, before any tribunal, or under any arbitration
proceeding provided for herein, seeking or claiming any
such damages, indemnification, expenditures, loss of
profits or prospective profits. Each party recognizes
and acknowledges that the other party is entering into
this Agreement in reliance upon and in consideration of
the agreements and covenants contained herein. Each
party hereby indemnifies and holds harmless the other
party from and against any claim, cost, damages and
liability whatsoever asserted by either party or any
subdistributor, employee, agent, or representative
thereof under any applicable termination, labor,
franchise, social security, or similar laws or
regulations of any jurisdiction.
22. LIMITATION OF LIABILITY.
22.1 NEITHER PARTY'S LIABILITY TO THE OTHER FOR ANY CAUSE
WHATSOEVER, REGARDLESS OF THE FORM OF ANY CLAIM OR
ACTION, SHALL EXCEED THE AGGREGATE PRICE PAYABLE BY
GILARDONI UNDER THIS AGREEMENT DURING THE CALENDAR YEAR
ENDING ON THE DATE THE CAUSE OF ACTION ACCRUES, OR ONE
MILLION UNITED STATES DOLLARS (US$1,000,000), WHICHEVER
AMOUNT IS GREATER.
22.2 NEITHER PARTY SHALL IN ANY EVENT BE LIABLE TO THE OTHER
FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES
ARISING OUT OF OR IN CONNECTION WITH THE USE OR
PERFORMANCE OF ANY PRODUCT OR THIS AGREEMENT, INCLUDING
BUT NOT LIMITED TO (a) ANY LOSS OF DATA, PROFITS OR USE
OF ANY PRODUCTS, OR (b) ANY LIABILITY RELATING, IN ANY
WAY, TO ANY ALLEGED OR ACTUAL FAILURE OF ANY PRODUCT OR
SYSTEM TO DETECT ANY ITEM OR ITEMS, SUCH AS ONE OR MORE
WEAPON(S), EXPLOSIVE(S), OR INCENDIARY DEVICE(S),
INCLUDING ANY LIABILITY RELATING, IN ANY WAY, TO DAMAGE
OR INJURY TO ANY AIRCRAFT, TERMINAL FACILITY, OR OTHER
PROPERTY, OR TO ANY PERSON OR PERSONS.
22.3 NEITHER PARTY SHALL BE LIABLE TO THE OTHER'S CUSTOMERS,
SUB-DISTRIBUTORS OR THIRD PARTIES FOR ANY DAMAGES,
INCLUDING BUT NOT LIMITED TO: (a) DAMAGES CAUSED BY
FAILURE TO PERFORM COVENANTS AND RESPONSIBILITIES, BY
REASON OF NEGLIGENCE OR OTHERWISE; (b) DAMAGES CAUSED
BY REPAIRS OR ALTERATIONS DONE WITHOUT THE PARTIES'
JOINT WRITTEN APPROVAL; (c) DAMAGES DUE TO PRODUCT
DETERIORATION DURING PERIODS OF STORAGE; OR (d) ANY
SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING
OUT OF OR IN CONNECTION WITH THE USE OR PERFORMANCE OF
ANY PRODUCT, OR THIS AGREEMENT, INCLUDING BUT NOT
LIMITED TO (a) ANY LOSS OF DATA, PROFITS OR USE OF ANY
PRODUCTS, OR (b) ANY LIABILITY RELATING, IN ANY WAY, TO
ANY ALLEGED OR ACTUAL FAILURE OF ANY PRODUCT OR SYSTEM
TO DETECT ANY ITEM OR ITEMS, SUCH AS ONE OR MORE
WEAPON(S), EXPLOSIVE(S), OR INCENDIARY DEVICE(S),
INCLUDING ANY LIABILITY RELATING, IN ANY WAY, TO DAMAGE
OR INJURY TO ANY AIRCRAFT, TERMINAL FACILITY, OR OTHER
PROPERTY, OR TO ANY PERSON OR PERSONS; EACH PARTY SHALL
INDEMNIFY THE OTHER AGAINST ALL SUCH CLAIMS ASSERTED BY
CUSTOMERS OR SUB-DISTRIBUTORS OR OTHER THIRD PARTIES.
22.4 This Section 22 shall not apply to Sections 19A, 19B,
23.3 and 23.4 of this Agreement.
23. GENERAL
23.1 Survival. Sections 0, 0, 00, 00, 00, 00X, 00X, 00X,
00, 21.6, 22, and 23 shall survive termination of this
Agreement. Notwithstanding any termination of this
Agreement, Gilardoni shall have the right to purchase,
and Vivid agrees to sell, replacement parts for Vivid
Products sold pursuant to this Agreement at Vivid's
then-standard, commercially reasonable prices for a
period extending for ten (10) years from the date of
Vivid's last sale to Gilardoni of an Operator Console
Assembly, or System pursuant to this Agreement.
23.2 Force Majeure. Neither party shall be deemed to be in
default pursuant to this Agreement so long as its
failure to perform any of its obligations hereunder is
occasioned solely by fire, labor disturbance, acts of
civil or military authorities, acts of God, or any
similar cause beyond such party's control.
23.3 Export Controls. Notwithstanding anything contained in
this Agreement to the contrary, each party agrees that
it will not in any form export, re-export, resell, ship
or divert, or cause to be exported, re-exported,
resold, shipped or diverted, directly or indirectly,
any product or technical data furnished hereunder or
the direct product of any such technical data to any
country for which the United States Government or any
agency thereof at the time of export or re-export
requires an export license or other governmental
approval, without first obtaining such license or
approval. Each party represents that it is
knowledgeable respecting United States export
regulations and licensing requirements concerning the
subject of this Agreement, and warrants that it shall
comply with such regulations and maintain all necessary
licenses and permissions. Gilardoni acknowledges
receipt of a letter dated 20 May 1997 from Xxxxx X.
Aldo, Vice President, Marketing & Sales for Vivid to
Xxxxxxx Xxxxxx of Xxxxxxxxx describing certain of these
restrictions as of that date.
23.4 Compliance with Laws. Each party shall comply with all
laws, rules, regulations, governmental requirements and
industry standards existing with respect to all
products subject to this Agreement and its activities
in the countries in which it operates, as well as all
applicable laws of Italy and the United States,
including the United States Foreign Corrupt Practices
Act and regulations promulgated thereunder.
Notwithstanding Section 22 of this Agreement, each
party shall indemnify and hold harmless the other from
any and all fines, damages, losses, costs and expenses
(including reasonable attorneys' fees) incurred as a
result of the indemnifying party's breach of Sections
23.3 and 23.4 of this Agreement.
23.5 Assignment. With the exception of sub-licensing rights
expressly provided in Section 19D of this Agreement,
neither party may assign any of its rights except
rights to the payment of money or delegate any of its
obligations under this Agreement to any third party
without the express written consent of the other. For
purposes of this Section 23.5, the term "assignment"
shall include the transfer of ownership or management
control of either party to any party then manufacturing
any x-ray based system used to inspect airline hold
baggage or other luggage, mail, parcels, or break bulk
cargo. If either party violates this provision, the
other party may at its option and upon thirty (30) days
notice terminate this Agreement.
23.6 Notices. Notices required or permitted to be given
under this Agreement shall be in writing and mailed,
postage prepaid, by first class registered or certified
mail, return receipt requested, to the address
indicated below:
If to Vivid:
Vivid Technologies, Inc.
00X Xxxxxxxx Xxx
Xxxxxx, XX 00000 (USA)
Attention: Xx. Xxxxxxx Xxxxx, President & COO
Copy To: Law Department
If to Gilardoni:
Gilardoni S.p.A.
Direzione e Stabilimento
Xxx Xxxxxx Xxxxxxxxx, 0
00000 Xxxxxxxx del Lario
(Como) ITALIA
Attention: Xx. Xxxxxxx Xxxxxx
Xx. Xxxxxx Xxxxxx
Xx. Xxxxx Xxxxxxxxx
Either party may change its address to be used on
notices by giving notice of such change to the other
party as provided in this paragraph.
23.7 Independent Contractor Status. The parties are
independent contractors, and this Agreement shall not
be deemed to constitute either party the partner, joint
venturer, servant, employee, or agent of the other.
Neither party has the right, power or authority to
obligate the other party under this Agreement to any
contract or other obligation.
23.8 Waiver. The waiver of either party of a default or
breach of any provision of this Agreement by the other
party shall not operate or be construed as a waiver of
any subsequent default or breach.
23.9 Governing Law; Arbitration of Disputes. This
Agreement shall be subject to the laws of the State of
New York, USA (not including its conflict of laws
provisions); and the parties consent to be bound by the
provisions of such laws regardless of the forum in
which such laws are applied. Notwithstanding the
above, any dispute arising out of, or relating to this
contract, which the parties have not been able to
settle amicably shall be finally settled by
arbitration, in accordance with the Rules of
Conciliation and Arbitration of the International
Chamber of Commerce. The arbitration shall be
conducted by three (3) arbitrators, consisting of one
arbitrator chosen by Gilardoni, one arbitrator chosen
by Vivid, and one arbitrator chosen by the two
arbitrators so chosen, provided that in the case of any
dispute involving a claim of less than five hundred
thousand United States Dollars (US$500,000) the parties
will jointly choose a single arbitrator, or if they are
unable to agree on an arbitrator, an arbitrator will be
chosen pursuant to the procedures of the International
Chamber of Commerce. The arbitrators shall render
their judgment within six (6) months of any notice to
arbitrate. The place of arbitration shall be London,
England. The governing law of the contract shall be
the laws of the State of New York. Proceedings shall
be conducted in English. Any arbitrator shall not be
entitled to award punitive damages. Judgment upon any
arbitration award so rendered may be entered in any
court having jurisdiction, or application may be made
to any such court for confirmation of such award or a
judicial acceptance of such award, and for an order of
enforcement or other legal remedy, as the case may be.
23.10 Insurance. Each party shall maintain, to the
extent commercially available, for Term of this
Agreement and for five (5) years thereafter, Product
Liability insurance covering aviation and other risks
related to products purchased or sold pursuant to this
Agreement in an amount not less than fifty million
United States dollars (US$50,000,000) for any
occurrences during the period of the policy.
23.11 Amendment. This Agreement may not be changed or
amended unless in a writing specifically referencing
and purporting to amend this Agreement, and signed by
both parties.
23.12 Entire Agreement. This Agreement contains the
entire Agreement of the parties, and except for the
Agreement for Vivid Distribution, Manufacture and
Purchase of Gilardoni Products (Systems & FEP
Platform), supersedes all prior agreements,
understandings, representations, conditions,
warranties, and covenants, whether oral or written,
between the parties. The prior Agreement is agreed to
be terminated and to be of no further effect.
IN WITNESS WHEREOF, the parties have hereunto set their
hands and seals as of the date first above-written.
GILARDONI, S.p.A. VIVID TECHNOLOGIES, INC.
By: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxxxxx Xxxxx
Printed Name: Xxxxxxx Xxxxxx Printed Name: Xxxxxxx Xxxxx
Title: Managing Director Title: President & COO
EXHIBIT A
VIVID TRADEMARKS
Vivid Technologies, Incorporated (LOGO)
APS
H-1
SDE
VIS
VIS-M
VIS-W
VDS-II
VDS-III
Rapid Detection System
EXHIBIT B
VIVID PRODUCTS AND PRICES
OPERATOR CONSOLE ASSEMBLIES
PRICE: "Cost Plus" a negotiated profit, not to
exceed a total price of US$6,100.
VIVID SYSTEMS (AND NEW PRODUCTS AND IMPROVEMENTS)
PRICE: Ten percent (10%) discount from Vivid
list prices. Vivid to consider but have
no obligation to grant to Gilardoni a
discount from Vivid list prices of up to
thirty percent (30%) on a case by case
basis, where heavy discounting to the
end-user customer so requires.
PRODUCT INTEGRATION SERVICES
PRICE: "Cost Plus" a negotiated profit not to
exceed 15% of said Cost Plus number.
PACKING FOR AIR SHIPMENT
PRICE: "Cost Plus" a negotiated profit, not to
exceed 15% of said Cost Plus number.
SPARE PARTS PER SECTION 23.1
PRICE: "Cost Plus" a negotiated profit, not to
exceed 50% of said Cost Plus number,
with the total price not to exceed
Vivid's then-standard commercially
reasonable prices.
EXHIBIT C
VIVID MANUFACTURING INFORMATION
All information necessary to manufacture, test, install, service
and use the Operator Console Assembly and all subassemblies
thereof (not including source code for Software associated
therewith), including but not limited to a xxxx of materials, and
all technical and engineering information, know how, trade
secrets, proprietary information, and data relating thereto, as
specified hereafter:
TITLE DOCUMENTATION #
Assembly, Advanced Console 0000-00000-00 Rev.A0
(Handcarry/II)
Parts List 0000-00000-00 Rev.A0
Assembly, ISA Console Transition Board 0000-00000-00 Rev.B0
Parts List 0000-00000-00 Rev.B0
Assembly, Advanced Console Interface 0000-00000-00 Rev.B0
Board
Parts List 0000-00000-00 Rev.B0
Cable Assembly, Trans. Board LPT1 to 0000-00000-00 Rev.A0
Bulkhead
Parts List 0000-00000-00 Rev.A0
Cable Assembly, Trans. Board COM1 to 0000-00000-00 Rev.B0
Bulkhead
Parts List 0000-00000-00 Rev.B0
Assembly, Procedure for Advanced Console 8000-10211-AP Rev.B0
Models: Workstation (1000-10211-01)
Handcarry/VDS II (1000-10211-02)
Assembly, Procedure for Advanced Console 8000-10216-AP Rev. A0
Storage Compartment
AVAILABLE COMPONENTS FOR A "COMPLETE"
OPERATOR CONSOLE WORKSTATION ASSEMBLY
Assembly, Advanced Console Pushbutton 0000-00000-00 Rev.A0
Switch
Parts List 0000-00000-00 Rev.A0
Assembly, Advanced Console Estop Switch 0000-00000-00 Rev.A0
Parts List 0000-00000-00 Rev.A0
Assembly, Advanced Console Keyswitch 0000-00000-00 Rev.A0
Parts List 0000-00000-00 Rev.A0
Assembly, Advanced Console Speaker 0000-00000-00 Rev.A0
Parts List 0000-00000-00 Rev.A0
Assembly, Storage Compartment Advanced 0000-00000-00 Rev.A0
Console
Parts List 0000-00000-00 Rev.A0
Assembly, Cable Bracket Advanced Console 0000-00000-00 Rev.A1
LPT1 & COM1
Parts List 0000-00000-00 Rev.A1
Assembly, Advanced Console Touch Pad 0000-00000-00 Rev.A1
Parts List 0000-00000-00 Rev.A1
Assembly, Computer Enclosure 0000-00000-00 Rev.05
Parts List 0000-00000-00 Rev.05
Cable Assembly, Speaker Extension 0000-00000-00 Rev.A0
Parts List 0000-00000-00 Rev.A0
Modified Socket Wrench, 16MM 0000-00000-00 Rev.A0
Housing, Advanced Console 0000-00000-00 Xxx.XX
Plate, Mounting, Advanced Console 0000-00000-00 Rev.A0
Plate, Bottom, Advanced Console 0000-00000-00 Rev.A0
Gasket, Sponge Advanced Console 0000-00000-00 Rev.A0
Backing, Sponge, Advanced Console 0000-00000-00 Rev.A1
Door, Storage Compartment Advanced 0000-00000-00 Rev.A0
Console
Support Storage Compartment Advanced 3000-10319-xx Rev.A0
Console
Cover, Storage Compartment Advanced 0000-00000-00 Rev.A0
Console
Base Plate, Storage Compartment Advanced 0000-00000-00 Rev.A0
Console
Rod, Storage Compartment Advanced Console 0000-00000-00 Rev.A0
Housing, Computer Enclosure 0000-00000-00 Rev.O2
Door, Computer Enclosure 0000-00000-00 Rev.O2
Panel, Computer Enclosure 0000-00000-00 Rev.O2
Gasket, Sponge, Computer Enclosure, Left 0000-00000-00 Rev.O1
Gasket, Sponge, Computer Enclosure, Right 0000-00000-00 Rev.O1
Gasket, Sponge, Computer Enclosure, 0000-00000-00 Rev.01
Bottom
Foam, Packing, Computer Enclosure 0000-00000-00 Rev.O1
PCB, ISA Console Transition Board 0000-00000-00 Rev.B0
PCB, Advanced Console Interface Board 0000-00000-00 Rev.B0
Label, Advanced Console Keypad, 0000-00000-00 Rev.A0
Handcarry/II
Label, Vivid Logo 0000-00000-00 Rev.A0
Label, Vivid Icon Logo Transfer 0000-00000-00 Rev.O1
PARTS SPECIFICATIONS LISTS
FOR THE FOLLOWING PRODUCTS
600 VA Uninterruptable Power Supply for 0000-00000-00 Rev. A0
230 VAC 50 Hz Applications
Uncased SMT3 Controller for the 0000-00000-00 Rev. A0
ClearTrekT Capacitive Glass Sensor
ClearTrekT Safety Laminated Capacitive 0120-10067-00 Rev.A0
Glass Sensor, 5.75" x 7.65" x 0.125"
000 XXx Xxxxxxx Based Tower Computer 0000-00000-00 Rev.C0
System for the APS System
ATI Technologies, "Pro Turbo" Video 0000-00000-00 Rev.A0
Graphics Accelerator for 4Mb PCI Bus
Systems
Desk 34W x 28D x 30H, Rubbermaid, Black 0000-00000-00 Rev.A0
1.0 Meter IEC-320 Jumper Cord Set with 0000-00000-00 Rev.C0
Male/Female Terminations
2.5 Meter IEC-320 Jumper Cord Set with 0000-00000-00 Rev.B0
Male/Female Terminations
24 Inch MicroTouch RS232 Controller Cable 0000-00000-00 Rev.A0
Cable D-Sub 9 Male, Female 1 to 1 0180-10041-02 Rev.A0
WiringThumb Screws 2.5 ft.
Cable D-Sub 25 Male, Female 1 to 1 0180-10042-15 Rev.A0
wiring, with Thumb Screws 15 ft.
Fully Threaded Metric Socket Cap Screw, 0000-00000-00 Rev.A0
M3 x 6mm
Fully Threaded Metric Socket Cap Screw, 0000-00000-00 Rev.A0
M3 x 12mm
Fully Threaded Metric Socket Cap Screw, 0000-00000-00 Rev.A0
M4 x 5mm
Screw, Xxxx Xxxx, XX 000, X0 x 8mm 0000-00000-00 Rev.A0
Locknut, Nylon Insert 4-40 0215-10134-00 Rev.A0
Nut, Hex M4 BN109 0216-10005-00 Rev.A0
Nut, Hex M3 BN109 0000-00000-00 Rev.A0
Nut, Hex, Cap (DIN 917) X0, XX 0000-00000-00 Rev.A0
Washer, Flat 1/4" SS 0000-00000-00 Rev.A0
Grommet Edging, 1/16" x 1/8" 0000-00000-00 Rev.A0
Spacer, 8MM OD x 4MM ID x 16MM L, SS 0000-00000-00 Rev.A0
Label, 1" x 2.2" Blank 0000-00000-00 Rev.A0
Label, 1.9" x 3.2" Blank Adhesive Back 0000-00000-00 Rev.A0
Compact TO-220 Heat Sink for Limited 0000-00000-00 Rev.A0
Space
PC Input/Output Card Bracket for a 9 Way 0000-00000-00 Rev.A0
and a 25 Way "D" Type Connector
2.5 inch Diameter, 200mW (Maximum) 0000-00000-00 Rev.A0
Speaker
Push Lock, Keylock 0000-00000-00 Rev.A0
Rubber Button Bumper for a 5/16 Hole in 0000-00000-00 Rev.A0
0.078 Material
Foot, Bumper, Self Lock, .305 Hole 0000-00000-00 Rev.A0
Lock, Cam, .75 DIA x .625 L 0000-00000-00 Rev.A0
Bumper, Rubber Button, 1.88 DIA 0000-00000-00 Rev.A0
Hinge, Concealed, 1.5" x .5" 0000-00000-00 Rev.A0
9 Socket D-Subminiature Open Cover 0000-00000-00 Rev.B0
Insulation Displacement Connector with
Strain Relief and 4-40 Mounting Inserts
2 Pin Locking, Polarizing Straight Header 0000-00000-00 Rev.B0
4 Pin Locking, Polarizing Straight Header 0000-00000-00 Rev.B0
6 Pin Locking, Polarizing Straight Header 0000-00000-00 Rev.B0
0.1" Centers 2 Position Crimp Receptacle 0000-00000-00 Rev.B0
0.1" Centers 3 Position Crimp Receptacle 0000-00000-00 Rev.B0
0.1" Centers 4 Position Crimp Receptacle 0000-00000-00 Rev.B0
Straight, 4 Wall, High Temp, Low Profile 0000-00000-00 Rev.B0
Header
Connector 26 Pin PCB Header Low Profile 0000-00000-00 Rev.A0
Straight, 4 Wall
10 Contact 0.100 inch by 0.100 inch 0000-00000-00 Rev.B0
Wiremount Connector
26 Contact 0.100 inch by 0.100 inch 0000-00000-00 Rev.B0
Wiremount Connector
Conn. Dsub 25 Pos Socket Rt Angle PC 0000-00000-00 Rev.A0
MT w/thr inserts
9-Position HD-20 Front Metal-Shell Right- 0000-00000-00 Rev.A0
Angle Posted Connector
Two Pin Right Angle PCB Mount Header 0000-00000-00 Rev.A0
DB-25 Series 318 Right Angle Printed 0000-00000-00 Rev.A0
Circuit Board Mount Connector with
Mounting inserts
Connector D-Sub 25 male IDC ribbon 0000-00000-00 Rev.A0
Contact Pin for 0.1" (Centers) Receptacle 0000-00000-00 Rev.B0
Mounting Hardware, Xxxxx Xxxx Socket 0000-00000-00 Rev.A0
Xxxx Xxxx Socket (4-40 x 0.5") with 0000-00000-00 Rev.B0
mounting hardware
Fuse, 0X Xxx-xxxx XX XX 0000-00000-00 Rev.A0
Power Strip, 10A 0000-00000-00 Rev.A0
Sealed General Purpose SPDT Printed 0000-00000-00 Rev.B0
Circuit Board Mount Relay with 5 Amp
Contacts and 12 VDC Coil
3.9" x .10" Nylon Cable Tie 0000-00000-00 Rev.B0
Nylon Cable Tie, 0.1 inches Wide by 8 0380-10001-01 Rev.B0
inches Long
Clamp, Cable #8 Mounting Hole 0000-00000-00 Rev.A0
74LS244 Low Power Schottky Octal 0000-00000-00 Rev.B0
Buffer/Line Driver with 3-State Outputs
Octal D-Type Flip Flop with Clear 0000-00000-00 Rev.A0
Voltage Regulator, 3 Terminal, 5V/1.5A 0000-00000-00 Rev.B0
NPN Silicon Darlington Transistor, VCE - 0000-00000-00 Rev.A0
40 Volts (Min), ic=0.5 Amps (Max), Gain =
10,000 (Min)
Diode, Rectifier IN400I 50V 0000-00000-00 Rev.A0
4.7 Volt 500 Milliwatt Hermetically 0000-00000-00 Rev.A0
Sealed Glass Silicon Zener Diode
Undervoltage Sensing Circuit 0000-00000-00 Rev.A0
0.Inf/50 DC Ceramic Capacitor, Axial Lead 0000-00000-00 Rev.A0
Cap. IMF 35V Tant Axial 0000-00000-00 Rev.A0
Capacitor 10 UF 25V Tant Radial Dipped 0000-00000-00 Rev.A0
.1005P
33 uf/25 VDC Solid Tantalum Resin Dipped 0000-00000-00 Rev.C0
Capacitor
Metal Film Resistor, 1.00 Kohm, 1/4 Watt, 0000-00000-00 Rev.D0
+- 1%, +-100 ppm/oC (maximum)
Metal Film Resistor, 10.0 Kohm, 1/4Watt, 0000-00000-00 Rev.D0
+-1%, +-100 ppm/o C (maximum)
Metal Film Resistor, 2.21 Kohm, 1/4Watt, 0000-00000-00 Rev.B0
+-1%,+-100 ppm/oC (maximum)
Metal Film Resistor, 000 Xxx, 0/0Xxxx, x- 0000-00000-00 Rev.C0
1%, +-100 ppm/oC (maximum)
1.0 Kohm DIP Resistor Network 0000-00000-00 Rev.A0
Double Pole (Maintained) Panel Switch 0000-00000-00 Rev.A1
with Red Mushroom Cap
Switch, 4POS DIP SPST Rocker 0000-00000-00 Rev.A0
Three Position Ultra Miniature SPDP 0000-00000-00 Rev.A1
Printed Circuit Board Toggle Switch with
Center Off
SPDT Panel Mounted Pushbutton Switch with 0000-00000-00 Rev.A0
White Cap and Black Enclosure
SPDT Panel Mounted Pushbutton Switch with 0000-00000-00 Rev.A0
White Round Cap and Black Enclosure
DPDT Panel Mount Two Position Xxx Switch 0000-00000-00 Rev.A0
(Remove key left; Retain key right)
DPDT Panel Mount Two Position Key Switch 0000-00000-00 Rev.A0
(Remove key left; Retain key right)
Locking Washer, Anti-Rotation 0000-00000-00 Rev.A0
LED Package (4) Right Angle per mount Red 0000-00000-00 Rev.A0
W Red Lens
Super Bright Green T-1 3/4 Light Emitting 0000-00000-00 Rev.B0
Diode (LED) with a Water Clear Lens
#22 AWG UL1430 Black PVC Insulated 0000-00000-00 Rev.B0
Stranded Copper Wire
#22 AWG UL1430 Red PVC Insulated Stranded 0000-00000-00 Rev.B0
Copper Wire
#22 AWG UL1430 White PVC Insulated 0000-00000-00 Rev.B0
Stranded Copper Wire
25 Conductor 28 AWG .50" Centers Flat 0000-00000-00 Rev.B0
Cable
Cable 9 conductor ribbon 28 AWG 0000-00000-00 Rev.A0
Loctite Instant Adhesive #403 0540-10048-00 Rev.A0
Tool Socket Wrench Tschudin & Xxxx ESTOP 0000-00000-00 Rev.A0
Switch 16mm Diameter
Tool Socket Wrench NKK Push Button Switch 0000-00000-00 Rev.A0
25mm Diameter
NOTE: Modifications, conversions, and enhancements of either
party's Manufacturing Information by the other party shall be
treated as an enhancement pursuant to Section 19D.2 of this
Agreement.
EXHIBIT D
FEP PLATFORM SPECIFICATIONS
(INCLUDING MONOBLOC/INVERTER ASSEMBLY)
FEP PLATFORM SPECIFICATIONS - CODE 05141031
The product is composed by the following subsystems:
Code 10248900, Monobloc n.1
Code 10291000, FEP ME 640 unit n.1
Code 10291100, Diode array n.1
Code 10292900, Curtains, 0.5 mm lead equiv. n.2
Code 20015031, transfer board n.1
Code 20015793, Monobloc power supply n.1
Code 20015819, Interface board n.1
Code 20015849, metalflex cable, mt. 6 n.1
Design and know how information will not be supplied for Monobloc
and Monobloc Power Supply.
PRODUCT SPECIFICATIONS
1. Regulatory Specification
1.1. General Product Safety Compliance 92/59/CEE
1.2. 89/392/CEE
1.3. DPR 547 on 27/04/1955
1.4. DPR 185 on 13/02/1964
1.5. DL 230 on 17/03/1995
1.6. Machine Safety EN 292-1
1.7. Machine Safety EN 292-2
1.8. Machine Safety EN 60204-1 (IEC 204-1, CEI EN 60204-1)
1.9. EMC, 89/336/CEE
1.10. "Low Voltage", 73/23/CEE
1.11. Basic norm on EMC En 55011/CEI 110-6
1.12. Generic norm on EMC emittance En 50081/CEI 110-7
1.13. Generic norm on EMC immunity En 55082/CEI 110-8
1.14. UL 187
1.15. ICRP recommendations on radiological protection
2. Size, Weight, Layout Specifications
2.1. Size of tunnel opening is 0.6 m. wide, 0.4 m. height
2.2. Maximum packaged weight, 900 Kg.
2.3. Standard cable length (maximum allowable tunnel - console
distance) is 6 meters; 20 and 30 (maximum allowed) meters
optional;
3. Functional Specifications
3.1. Belt:
3.1.1. Speed 0.25 m./sec. @ 60Hz, 0.20 m./sec. @ 50 Hz within
10% error
3.1.2. Length: 2570 mm.
3.1.3. Height from ground: 625 mm.
3.2. Monobloc:
3.2.1. Positioned below the belt
3.2.2. High frequency 30 kHz Generator
3.2.3. Voltage to the Tube 140 Kvcc
3.2.4. Current to the tube 0.5 mA
3.2.5. Dose to the baggage less than or equal to 1.4
Sv/Inspection
3.3. Detectors:
3.3.1. L shaped detector arrays positioned above the belt
3.3.2. Number of detectors: 576 for High Energy, 576 for Low
Energy.
3.3.3. Horizontal/Vertical layout: 384 diodes horizontal, 192
vertical
3.3.4. Low Energy Scintillator: GdOS Screens
3.3.5. High Energy Scintillator: CdW04 Scintillating Crystals
3.4. Interface Board
3.4.1. ISA standard PC bus IEEE - P996 Draft D2 interface
3.4.2. Shared memory mapping
3.4.3. 14 pin connector daughter board interface
3.4.4. Programmable Acquisition Mode
3.4.5. Four eight bits I/O Ports
3.4.6. 8 Kbytes non volatile RAM
3.5. Transfer Board
3.5.1. ISA standard PC bus IEEE - P996 Draft D2 interface
3.5.2. Shared memory mapping
3.5.3. Transfer Rate 13824 Kbits/sec.
4. Operational Specifications
4.1. Operating Temperature 0 degrees to +40 degrees Celsius
4.2. Storage Temperature -20 degrees to +60 degrees Celsius
4.3. Humidity 95% non-condensing
4.4. Power Supply 220 V, 50 or 60 Hz, 1500 VA, Single Phase
4.5. Baggage forward movement for inspection with image
acquisition; backward movement without image acquisition
allowed for 13 sec. For luggage repositioning.
4.6. 100% Duty cycle
4.7. Protection from abrasion of metal parts subject to scraping
assured by Stainless Steel parts.
5. Documentation Specifications
5.1. Operating Instructions
5.2. The Technical Manual, not supplied with each equipment,
includes:
5.2.1. Introduction
5.2.2. Installation Instructions
5.2.3. Maintenance Instructions
5.2.4. Spare parts List
5.2.5. Troubleshooting
5.2.6. Wiring Diagram Collection
6. Safety Specifications
6.1. Average dose to the luggage less than or equal to 1.4
Sv/Inspection or 0.14 mR/inspection
6.2. Maximum leakage radiation less than 1.0Sv/hr. or 0.1
mRem/hr. within 10 cm. From the skin
6.3. Film Safety Equal to or greater than 1600 ASA film speed
6.4. Two Emergency E-stop push-buttons front/back to power off
the Monobloc and the Belt motor
6.5. Protection against leakage radiation resulting from cover
removal with Interlock Switches to power off the Monobloc
and the Belt motor
6.6. X-ray emission warning 2 yellow lamp front/back must light
when X-ray are on
6.7. Warning label "x-ray radiation danger" label on both the
tunnel openings of the equipment
6.8. Protection against scattered radiation from the front/back
opening 0.5 mm. Lead equivalent lead curtains must be used.
6.9. Protection against insertion of the hands on the output side
of the tunnel by means of Plexiglas protection 0.3 meters
long.
NOTE: This is a top level description which simply makes sections
2.2 and 2.3.1 more specific
EXHIBIT E
VIVID TECHNOLOGIES'
OPERATOR CONSOLE ASSEMBLY SPECIFICATIONS
NOTE: This is a top level description which simply makes section
2.5 more specific.
The Operator Console is an electro-mechanical assembly attached
to a Pentium based PC operating at a minimum of 133 Mz with 32
Meg of RAM (to be supplied by Gilardoni), which is attached to
the FEP platform to operate and control the joint system.
The Operator Console Assembly is ergonomically designed to allow
the operator to maintain their attention on the bag images
without having to look down from the display. All imaging
functions are represented by icons on the display and controlled
through the touch pad. The console is designed to minimize
operator fatigue and the stresses usually associated with
prolonged screening. (A lockable console storage compartment,
computer enclosure, and display table are optional accessories
available at for purchase at additional cost.)
Operator Console software causes threat information to be
displayed in color over a single high resolution, xxxx-scale
image with two selectable preset options targeting either
explosives or narcotics.
Advanced computer-based image processing provides real-time
automated threat detection and image analysis, for simultaneous
detection of commerccial and military bulk and sheet explosives,
as well as conventional imaging modes (all in operator assist
mode). . To accomplish this, the system uses a single program
with adjustable sensitivity levels for controlling the
relationship between Detection rate (Pd), Alarm rate (Pfa) and
threat material thickness.
For purposes of this Agreement, "real time" means that the "
threat overlays" appear on the screen coincident with the "normal
image" of the bag. To accomplish this the "composite image" of
the bag (threat overlays plus normal image) appear on the screen
after some latency. This latency is defined as the time between
when the bag first intercepts the X-xxx xxxx (begin item) and
when the bag actually begins to be displayed on the video
monitor. The maximum latency is 120 lines. The latency is
transparent to the operator because the composite bag image
appears on the screen before the bag exits the inspection tunnel.
Imaging Capability (with 17" Display, high resolution SVGA, 60 Hz
refresh rate
1024 x 768, 256 colors; 0.25 mm dot pitch; and above described
computer)
Resolution: 38 AWG (0.1 mm Cu) guaranteed
Penetration: Minimum 22 mm steel
Advanced Image Enhancements Standard Image Enhancements
Semiautomatic Threat Alert 2X and 4X Zoom
Contrast Window Enhancement Tri-material
Density Alert Pseudo Color
Contrast Adjustment
Edge Enhancement
Reverse Video
Home Key
EXHIBIT F
VIVID TECHNOLOGIES' CURRENT
RETURN MATERIAL AUTHORIZATION PROCEDURE
