EXHIBIT 4.(a)(xxiii)
AGREEMENT
BETWEEN
SCI IRELAND LTD.
AND
XXXXX NETWORKS LIMITED
CONTENTS
1. Terms of the Agreement
2. Prices
3. Purchasing Procedure, Delivery & Terms of Payment
4. Technical Requirements & Quality standards
5. Inspection and Acceptance
6. Warranty
7. Proprietary rights and Confidentiality
8. Termination
9. Force Majeure
10. Arbitration
11. Inventory Indemnification
12. Miscellaneous Provisions
13. Agreement Party Rights
14. Product Indemnification
ATTACHMENTS
A. Price List
B. Authorisation To Procure
C. Schedule of Reports/Meetings and Service Level Agreements (SLA)
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AGREEMENT
This Agreement ("Agreement") dated November 30, 2001 is entered into by Xxxxx
Networks Ltd, of Wexham Springs, Xxxxxxxxx Xxxx, Xxxxxx, Xxxxxx, XX0 0XX England
(hereinafter referred to as Xxxxx)
And
SCI IRELAND Ltd., A company registered in Ireland having a place of business,
Xxxxxxxx Xxxx, Xxxxxx, Xx xxxx, Xxxxxxx (hereinafter referred to as SCI).
Whereas Xxxxx wishes to have products manufactured by SCI and SCI wishes to
manufacture such products (hereinafter referred to as Products) for Xxxxx, and
sell to Xxxxx at the prices and subject to terms and conditions of the
Agreement.
Now, therefore, in consideration of the premises and the mutual covenants herein
contained, the parties hereto agree as follows.
1.0 TERM OF THE AGREEMENT
The term of this Agreement shall be one (1) year from the Effective Date
and, unless terminated as provided in Section 8 below, will automatically
renew for one (1) year periods.
1.1 Definition of term `Days': Unless expressly stated as "working" days, the
use of `days' within this Agreement shall be interpreted to mean calendar
days.
2.0 PRICES
2.1 The unit prices are listed in the Price List set forth in Attachment A and
are (INCOTERMS 2000) DDP (Delivered Duty Paid) Xxxxx nominated location in
England. SCI and Xxxxx quarterly will review purchase prices, and any
increases or decreases in materials costs within the price shall be agreed
between the Parties as appropriate. Prices shall be as detailed in
Attachment "A" and reviewed on a quarterly basis. Product prices must be
agreed at least two weeks prior to the start of each quarter. All
increases in costs other than direct materials costs shall be subject to
six (6) month notice by SCI, save for increases driven by customer ECO
(Engineering Change Order) which may be applicable within six (6) months
subject to mutual agreement between Xxxxx and SCI. SCI will not make any
ECO changes without prior written authorization. All decreases in costs,
whether direct material costs or not, are to be encompassed within the
quarterly purchase prices to be mutually agreed between SCI and Xxxxx.
"SCI will assist Xxxxx in its cost reduction plans by providing
recommended process changes and reviewing specific and unique
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components which drive seventy-five (75%) percent of the Product price
during the quarterly review.
2.2 SCI warrants that at the effective date hereof prices set out in
Attachment "A" are no higher than those charged to any other customer of
SCI purchasing comparable quantities of Products or similar items under
comparable conditions affecting price.
3.0 PURCHASING PROCEDURE, DELIVERY & TERMS OF PAYMENT
3.1 Issuance and Acceptance of Orders
Purchase orders issued by Xxxxx to SCI shall be governed by this
Agreement, and will state the Products, quantities, delivery dates,
prices, destination, consignee at destination, and purchase order number.
The Purchase Order must also include revision of production documentation.
Purchase orders may be in the form of facsimile or email.
Order acknowledgement by SCI shall be made by email or facsimile within
five (5) working days from receipt of purchase order (or email or
facsimile purchase order, as the case may be) from Xxxxx.
3.1.1 Purchase orders shall be placed in accordance with and subject to the
following Minimum Order Quantities (MOQ):
Product Description MOQ
------- ------------------- -----
058-300 Xxxxxxxxxx 000
00-00 Xxxxxxxx Xxxxxx 00
00-00 XXXX Copper Module 42
58-34 TR Fiber Module 40
58-36 HSTR Fiber Module 96
58-37 Stacking Module 167
The MOQ volumes are to be reviewed quarterly by SCI and Xxxxx.
3.1.2 SCI shall always accept PO's from the customer, the only exception being
where the customer does not meet the MOQ, or pricing is not agreed to as
stated. In such event, SCI must notify Xxxxx in writing within five (5)
working days of the PO being issued by Xxxxx.
3.2.1 Delivery
All ordered Products shall be delivered in accordance with the agreed upon
lead-time. SCI shall inform Xxxxx of availability of Products for delivery
at least five (5) working days in advance of the actual delivery date as
per the original schedule.
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Except as otherwise mutually agreed, the lead time for Products sold
hereunder shall be ninety (90) days from issuance of Purchase Order
("standard lead time").
Long lead items shall be purchased to forecast or mini-bills of material,
as required and agreed to by Xxxxx and SCI. When cancellations of such
purchases occur as a result of Xxxxx changing the order schedule or the
forecast, the financial responsibility will be Madge's, subject to the
"liability amounts" as defined monthly in Attachment B. SCI will use
commercially reasonable efforts to dispose of inventory on behalf of
Xxxxx.
In the event Xxxxx requests a lead time shorter than the standard lead
time, SCI shall use its commercially reasonable effort to accept the
shorter lead time and shall explicitly communicate to Xxxxx the
acceptance, non-acceptance, or additional costs (if any) to provide
materials required of the stated shorter lead time indicated on the
Purchase Order. Additional cost will be reviewed, and mutually agreed on a
case-by-case basis. If there is any change to the above mentioned shorter
lead-time delivery date acknowledged by SCI, SCI will notify Xxxxx by
email or facsimile of such occurrence within five (5) working days of such
occurrence.
3.2.2 In the event of a late delivery, SCI will pay for the premium freight cost
to expedite the Product delivery, unless the late delivery is due to
issues mutually agreed between Xxxxx and SCI as being outside of SCI's
direct control. In any event, SCI shall use reasonable commercial efforts
to meet the delivery date requested in Madge's Purchase Order.
3.2.3 Deliveries must be accompanied by appropriate paper work which must
include and clearly state: The PO Number, The Part Number, The Quantity
being delivered and the Country of Origin.
3.3 Procedure for Authorisation
Xxxxx will issue authorisations to SCI for activities in connection with
delivery of the ordered units.
These authorisations are divided into steps as follows:
3.3.1 Authorisation to Procure
This contains the authorisation to purchase all components. SCI may
procure all necessary components required to meet Purchase Orders placed
by Xxxxx, in a manner which takes into account the lead-times for the
materials in a responsible purchasing manner.
Authorisation to purchase specific components as required to build a
specified number of forecasted requirements, over and above those on
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order, shall be ordered upon written notification to order such materials
by Xxxxx, such requests to purchase shall be communicated to Xxxxx as per
Attachment B.
3.3.2 Authorisation to manufacture 4 weeks prior to confirmed delivery date
Unless Xxxxx advises by Facsimile or E-Mail no later than four (4) weeks
before confirmed delivery date, SCI will be deemed to have been authorised
to produce the number of units as ordered. Other than 3.3.3 below, this is
the total limit of SCI authorisation to produce.
3.3.3 Authorisation to Customise
The last authorisation specifies the final customisation, and will be
given no later than two (2) weeks before confirmed delivery date. However,
unless Xxxxx advises by Facsimile or E-Mail no later than two (2) weeks
before confirmed delivery date, SCI will be deemed to have been authorised
to produce the number of units as ordered. This is the total limit of SCI
authorisation to produce. Such final customisation will include Retail
Pack, Bulk Pack, and OEM Specific requirements.
3.4 Rescheduling/Cancellation of Purchase Orders
3.4.1 Xxxxx may issue Purchase Order revisions and reschedules by notifying SCI
in accordance with the following schedule:
Notice of Reschedule Reschedule Window
(Days Prior to Line (Days Out Reschedule
Item Delivery Date) a Delivery Date)
------------------- ----------------
0 to 14 (two weeks) No Reschedule
15 to 30 25% of Product volume
60 days (two months)
31 plus days 180 days (six months)
Reschedules beyond 60 days are subject to 1% per month inventory carrying
charge on the Purchase Order quantity and unit price being rescheduled.
3.4.2 Xxxxx may not cancel production of Products within fourteen (14) days of
their scheduled ship dates. Customer may reschedule production of Products
within thirty (30) days of the ship date as mutually agreed in Section
3.4.1 above. Xxxxx may cancel Purchase Orders by notifying SCI no later
than thirty (30) days prior to the scheduled delivery date(s), but will be
responsible for the Termination Inventory and handling charges in Section
11.
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3.4.3 When Xxxxx request for cancellation affects outstanding purchase orders,
SCI shall inform Xxxxx of impact of cost within two weeks from request for
cancellation. The terms of Section 11 and Attachment "B" shall apply in
calculating any cancellation costs. Madge's approval of the total costs
will be required, as quickly as is reasonably possible, after notification
from SCI for formal cancellation purposes. Cost associated with the
subsequent cancellation of orders issued to sub-suppliers shall be limited
to the liabilities detailed in Attachment "B" or any future mutually
agreed revisions of Attachment "B" and shall be paid by Xxxxx, following
negotiation (as outlined in Section 11.3) with Xxxxx, and only if the
material cannot be used elsewhere by SCI, subject to Madge's agreement.
The total liability of Xxxxx for cancellation of purchase orders shall in
no event exceed the liabilities detailed in this Section, Section 11, and
current version of Attachment "B."
3.5 Delivery Delays
In the event that SCI fails to deliver any Products within fifteen (15)
calendar days of the agreed upon PO delivery period, except for the terms
stated in Section 3.2.1, then Xxxxx shall have the right to cancel the
order or portion of the order. The Customer is responsible for Purchase
Order Cancellations or partial Purchase Order cancellations as set forth
in Section 11.1.
When Xxxxx issues Engineering Change Orders (ECO's) affecting outstanding
purchase orders, SCI shall inform Xxxxx of impact on delivery schedule and
price within fifteen (15) days of receiving such request. SCI will not
implement any changes without prior written approval of charges by Xxxxx.
SCI shall not be required to implement such change until the Parties have
mutually agreed upon the price.
Upon mutual agreement, the revised delivery schedule for outstanding
Purchase Orders shall be adjusted.
3.6 Terms of Payment
Payment terms are net thirty (30) days from the date of invoice in United
States dollars. The invoice date shall be no earlier than the ship date.
Payments are not subject to offset or setoff. In the absence of a bona
fide dispute, SCI may impose a late payment fee or interest charge on all
amounts past due by more than five (5) working days up to the maximum
charge or rate allowed by law. SCI's acceptance of a partial payment on
the undisputed portion of the Invoice is not a waiver of SCI's right to be
paid the remainder due.
3.7 Inclusions in Price
Prices are DDP INCOTERMS 2000.
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Purchase prices set forth in Attachment A, hereto, shall include the full
cost of ordered Products suitably packed.
4.0 TECHNICAL REQUIREMENTS & QUALITY STANDARDS
4.1 QA Standards, Procedures and Instructions
SCI shall implement quality procedures and instructions as defined below
and shall conform to either ISO 9002:1994 or ISO 9001:2000. In addition,
SCI's facility shall be UL approved.
4.1.1 Incoming Inspection
Xxxxx does not define incoming inspection methods or criteria, but expects
SCI to ensure that all incoming components conform to Xxxxx specifications
defined and described in the Bills of Materials (BOM), and that they are
of good condition and fit for assembly. Xxxxx reserves the right to audit
the procedures and methods used to achieve this at any time.
4.1.2 Handling Storage and Delivery
Xxxxx does not define handling storage or delivery methods or criteria but
expects SCI to ensure that component parts are handled, stored, and
delivered according to manufacturer and/or Madge's specification for that
part. Xxxxx reserves the right to audit the procedures and methods used to
achieve this at any time.
4.1.3 Workmanship
For Electronic Assembly SCI shall implement
a) ANSI/IPC 610 Rev C class 2 - Acceptability of Electronic Assembly
b) Any exceptions to ANSI/IPC 610 Rev C - as defined by Xxxxx
4.1.4 Manufacturing Control
Manufacturing control methods should be defined by internal SCI
documentation and these procedures should conform to ISO 9002:1994 or ISO
9001:2000 requirements. Xxxxx reserves the right to audit the procedures
and methods used to achieve this at any time.
4.2 In Circuit Test (ICT)
SCI shall be responsible for implementation and quality of ICT programmes
and fixtures.
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Xxxxx shall specify ICT requirements and make available to SCI source
programmes to support implementation of ICT programmes. SCI will develop
ICT programs from schematics and will write a list of untested components.
The untested components will be verified in the Functional Test or by
visual inspection.
4.3 Functional Testing (Product Acceptance Test)
Xxxxx will make available to SCI test software and documentation to be
used in functional testing. SCI will locally purchase the necessary PCs to
be used in the functional test as specified by Xxxxx in the event that SCI
does not already have such PC's and subject to prior agreement with Xxxxx.
Any PC's paid for by Xxxxx shall reside with SCI on a "loan" basis & will
remain the property of Xxxxx.
All manufactured Products must pass the mutually agreed upon functional
test set by Xxxxx to verify the functional performance of the Products.
Xxxxx will also provide functionally operating boards to be used as `gold'
standards for verification and correlation of the functional test process.
Such boards will be on a "loan" basis to SCI and will remain the property
of Xxxxx.
Xxxxx will provide SCI with failure analysis support as per Madge's
request and documentation for each parameter in the functional test
software, which can have caused the rejection/failure.
Equipment, jigs or PC's, paid for by Xxxxx, and any equipment or boards
provided to SCI by Xxxxx remain the property of Xxxxx. SCI shall maintain
all such property in good order and ensure such product is adequately
insured and shall promptly return such equipment on termination of this
agreement.
4.4 Packaging
Packaging for Product shipments in standard containers, and packaging of
individual Products are specified in the relevant Xxxx of Material as
supplied by Xxxxx.
Xxxxx has the option to change from bulk to retail packaging prior to
shipment. SCI is under no obligation to change packaging procedure until a
mutual agreement is reached concerning any product price movements
associated with packaging revision.
4.5 Quality Standards
If SCI fails to comply with QA requirements (defined in Sections 4.1 -
4.4) and functional performance (Product Acceptance Test), Xxxxx has the
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right to terminate the agreement under the terms of Section 8.1 (b) and
Section 11 of this Agreement.
4.5.1 Quality Levels
Delivered Quality is deemed to be equal to Manufacturing Delivered Quality
and the target is 99% for products with an integral Power Supply, and
99.5% for modules and plug-in option cards. Xxxxx and SCI will review the
Delivered Quality each month as set forth in Attachment "C".
4.5.2 "Delivered Quality" lower than target
If Delivered Quality falls below 98% SCI will promptly issue to the
Customer a corrective action plan to get back to or above 99%.
5.0 INSPECTION AND ACCEPTANCE
5.1 Acceptance Tests
Until the parties will otherwise agree upon in writing, SCI shall perform
ICT and customer functional testing on 100% of the manufactured units of
Products before their delivery to Xxxxx. SCI warrants to Xxxxx that the
quality levels of the Products shall fully conform to the specifications
set out by Xxxxx. Xxxxx shall have the right to conduct, on ordered
Products, the Acceptance Tests in accordance with sampling procedures,
testing specifications, and quality levels described in Section 4.
According to the results thereof, it shall have the right to accept or
reject either the lots or, at Madge's option, the single defective units
thereof.
At any time Xxxxx may perform inspections in two steps.
Upon Xxxxx notification, and a mutually agreed upon inspection time and
date by both Parties, Product inspections may be performed at the premises
of SCI before delivery, and/or at a destination within ten (10) working
days after arrival of Products. SCI is not responsible for delays caused
by Madge's right to inspect Product prior to delivery.
If inspection tests are performed at the destination they will be
identical with the tests, which are performed at SCI's facility according
to the mutual agreed upon Product Acceptance Tests. Correlation between
the two test processes will be established and maintained throughout. SCI
has the option to verify any assembly, which is rejected at the final
destination, to ensure there are no correlation issues, prior to
finalisation of test report and disposition.
The mutually agreed upon inspection performed at SCI's premises will
result in a preliminary acceptance test report. An approved Acceptance
Test report allows SCI to ship Products.
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The inspection performed at destination within fifteen (15) days of
receipt by Xxxxx will result in a Final Acceptance Test report. Lots or
units of Products, as the case may be, duly rejected by Xxxxx, at SCI's
option, shall be replaced or repaired by SCI at its expense no more than
fifteen (15) working days from the date of SCI's receipt of the Products.
5.2 Transportation Costs of Rejected Products
Any unit of Products rejected pursuant to the provisions of Section 5.1
above shall be reshipped by Xxxxx, at SCI's expense, to SCI's premises,
subject to SCI's Return Material Authorisation procedure (RMA), and a
credit note should also be issued to Xxxxx. The replaced or repaired units
of Products shall be re-invoiced and shipped by SCI to the original
destination and the cost of any transportation shall be borne by SCI.
SCI shall not be responsible for transportation costs if no defects are
found (NDF) and will charge Xxxxx a mutually agreed upon NDF charge.
5.3 Attendance at SCI's Plant
Xxxxx reserves the right in accordance with SCI's safety and security
requirements, to place at any time, on reasonable notice, one or more
engineer(s) in the manufacturing plant of the Products to carry out
acceptance tests referred to in Section 5.1. Xxxxx shall be responsible
for the actions and/or inaction of its employees while its employees are
in the manufacturing plant of the Products.
The salaries of said engineer(s) as well as their travel and living
expenses are borne by Xxxxx. SCI agrees to furnish said engineer(s) with
reasonable working facilities as necessary for their job. SCI will make
suitable arrangements so that said engineer(s) have access to the areas
where Xxxxx Products are manufactured and tested. Such engineer(s) shall
be empowered to reject the Products to be delivered to Xxxxx in the event
that such Products fail the acceptance requirements.
6.0 WARRANTY.
6.1 SCI represents and warrants to Xxxxx that each Product shall be free from
defects in workmanship and materials for a period of fifteen (15) months
from ship date (the Product Warranty). The material portion of the Product
Warranty shall not apply (i) to any materials consigned or supplied to SCI
by Xxxxx, (ii) to any Product that has been abused, damaged, altered or
misused, or (iii) to any Product damaged as a result of causes external to
the Product. The Products shall be considered free from defects in
workmanship, if they are manufactured in accordance with mutually agreed
upon manufacturing workmanship standards, conform to the Product
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Specifications, and successfully complete mutually agreed Product
Acceptance Tests.
6.1.1 ALL CLAIMS FOR BREACH OF WARRANTY MUST BE RECEIVED BY SCI NO LATER THAN
THIRTY (30) DAYS AFTER THE EXPIRATION OF THE WARRANTY PERIOD. THE PRODUCT
WARRANTY IS THE ONLY WARRANTY GIVEN BY SCI. SCI MAKES, AND XXXXX RECEIVES,
NO OTHER WARRANTY EITHER EXPRESSED OR IMPLIED. ALL WARRANTIES OF
MERCHANTABILITY OF FITNESS FOR A PARTICULAR PURPOSE OR USE, AND ALL
IMPLIED WARRANTIES OF TITLE OF ANY CONSIGNED MATERIALS, ARE EXPRESSLY
DISCLAIMED AND EXCLUDED.
6.1.2 Unless expressly agreed to by SCI in writing, SCI makes no warranty that
the products will (1) meet any specifications not set forth herein, or (2)
receive the approval of or be certified by underwriters laboratory, any
federal, state, local or foreign government agency (including without
limitation the Federal Communications Commission) or any other person or
entity. SCI will assist Xxxxx in obtaining such approvals or certificates
or meeting such specifications.
6.1.3 Madge's exclusive remedy for any breach of the Product Warranty shall be
at SCI's option, to repair at SCI facility, replacement of defect Product,
or refund of Product purchase price. All Warranty repairs performed by SCI
will be: (1) in accordance with the current Product Specifications and
Acceptance Tests, (2) placed in new packaging, and (3) shipped to Xxxxx or
Xxxxx Customer, as applicable. In the event that a Product is "no defect
found" (NDF), after return to SCI, Xxxxx shall pay the return shipping and
mutually agreed NDF charges.
6.1.4 SCI will inspect all defective Warranty returns upon receipt. SCI will
endeavour to action the chosen warranty option (repair, replacement, or
refund) within fifteen (15) days of receipt. SCI's root cause defective
Product investigation of why the Product failed will include investigation
of the Xxxxx reported symptoms. Such repaired Warranty Products shall be
warranted for the remainder of its original Warranty or ninety (90) days,
whichever is longer. Product Warranty repairs by a party other than SCI
shall render the Product Warranty as null and void.
6.1.5 Xxxxx warrants to SCI that Xxxxx documentation and other data provided for
manufacture of the Product is accurate and complete, unless Xxxxx informs
SCI otherwise.
6.1.6 Upon Xxxxx request and mutual agreement on terms and conditions, SCI
will provide Non-Warranty Product (outside the Product Warranty period)
repairs.
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6.2 Survival of Warranty
Section 6 shall survive termination of this Agreement as stated or upon
SCI's fulfilment of Madge's request to return Xxxxx-owned test equipment
and fixtures.
7.0 PROPRIETARY RIGHTS AND CONFIDENTIALITY
7.1 All existing intellectual property owned by or licensed to Xxxxx will
remain owned by and licensed to Xxxxx. Xxxxx shall xxxxx licenses to SCI
to use Xxxxx intellectual property to the extent that such licenses will
assist SCI in SCI obligations pursuant to this Agreement. Xxxxx shall own
any inventions, discoveries, and manufacturing technology related to Xxxxx
Product(s) developed by SCI and paid for by Xxxxx under this Agreement.
7.2 The proprietary rights to all product and documentation delivered
hereunder by Xxxxx shall remain solely with Xxxxx.
SCI and its employees covenants and agrees that he/she will not reveal or
disclose to any person or persons outside the company any data or
information that he/she acquires either verbally or in writing from Xxxxx
or to use this information for the benefit of anyone other than Xxxxx.
Such information will include, but is not limited to: technological
techniques, product plans, customers' yields and pricing policies and the
figures about the product produced or planned.
Xxxxx shall not disclose SCI processes or pricing or technology to any
person or persons outside of the Contract relationship. The Bilateral
Non-Disclosure Agreement between the Parties executed on April 4, 2001
shall remain enforce and binding for the duration of this Agreement.
SCI shall not be liable for disclosure of any such information if the
same:
(a) was in public domain at the time it was disclosed
(b) is documented that it was known to SCI at the time it was disclosed
(c) is disclosed with prior written permission of Xxxxx
(d) is documented that it became known to SCI from a source other than
Xxxxx without breach of this Agreement.
(e) is independently developed.
8. TERMINATION
8.1 Either Party may terminate this Agreement by written notice to the other
party in the event that such other party:
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(a) file a petition of bankruptcy, or is adjudicated bankrupt, or makes a
general assignment for the benefit of the creditors, or becomes insolvent
or otherwise unable to meet its financial and business obligations in a
reasonable manner after they become due, or (b) fail to perform any of its
material obligations under this Agreement, and such failure is not
remedied within thirty (30) days after a notification of default by the
non-defaulting party, if the default can be remedied in this timescale. If
SCI is the defaulting Party, SCI must within this thirty (30) day period,
provide a detailed plan setting out when the breach will be remedied which
will be at least within 60 days of the notice being served.
8.1.1 Either Party may terminate this Agreement for any cause with one hundred
and eighty (180) days written notice of termination to the other party.
8.2 Under expiration or termination of this Agreement for any cause, the
rights and obligations of the parties under this Agreement shall
terminate, except for such rights and obligations which are expressly
provided herein to survive the expiration or termination of this Agreement
which are those rights and obligations in Sections 6, 7, 8, 10, 11, 12,
13, 14, 15, and any payment obligations accrued prior to such expiration
or termination.
8.3 Under expiration or termination of this Agreement for any cause, SCI shall
promptly return to Xxxxx any equipment, jigs, or PC's paid for by Xxxxx,
and any equipment or boards provided to SCI by Xxxxx.
8.4 Under expiration or termination of this Agreement for any cause, SCI shall
provide all commercially reasonable and practical assistance to Xxxxx to
transition production to another manufacturer.
8.5 The provisions for termination of this Agreement and their exercise shall
not constitute a waiver by either party, or a substitute for, any relief
or remedy that is otherwise available.
9.0 FORCE MAJEURE
Neither party shall be liable for delays in or failures of performance due
to causes beyond such party's reasonable control, including, but not
limited to, Acts of God, acts of civil or military authority, priorities
under governmental authority, legal restrictions, fires, explosions,
embargoes, mobilisations, riots, epidemics: and to the extent the
following are on a national basis, strikes, industrial disturbances,
electricity, oil or transport, or restrictions in the use of power.
In the event of any such delay or failure the affected party shall send
written telegraphic notice of the same and the reason thereof to the other
party within seven (7) calendar days from the time the affected party
knew, or should have known, of the force majeure in question. The
performance of the affected party shall be deemed suspended so long as and
to the extent that any such force majeure continues; provided however,
that after ninety (90) consecutive or cumulative days of such suspension
on the part of
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either party, the other party may terminate the affected installments
under any Purchase Order.
PARTY OBLIGATIONS: If SCI is the party claiming the force majeure event,
SCI will submit within thirty (30) days a plan of action to cure the
Product delivery or other breach. If Xxxxx is the party claiming the force
majeure event, SCI will work with Xxxxx on rescheduling Product deliveries
on current Purchase Orders. In the event the Parties agree to terminate
this Agreement during a force majeure event, Xxxxx will be responsible for
fulfilling its obligations at the date of termination as set forth in this
Agreement, including but not limited to, outstanding invoice payments, and
termination obligations as stated in Section 11.
10. ARBITRATION
Any and all disputes that may arise under or in connection with the
interpretation, performance or non-performance, or termination of this
Agreement, shall be settled promptly by negotiation between the parties.
If the parties cannot resolve the dispute within thirty (30) days of the
matter in dispute being raised by the relevant party, the dispute shall be
escalated to Madge's VP Operations and SCI Ireland's Senior or Executive
VP for final resolution.
If resolution of the dispute is not reached within fifteen (15) days from
the date of being escalated by the parties to their respective senior
management referred to above, either party may request that such dispute
be resolved in accordance with the Rules of the London Court of
International Arbitration. Such arbitration shall take place in London and
shall be conducted in the English language by one arbitrator if Xxxxx and
SCI agree on one individual and if the parties do not so agree by three
arbitrators; one of which will be selected by each party, and the third
will be selected by the other two arbitrators.
The decision of the arbitrators shall be final and without appeal and may
be enforced in any Court having jurisdiction over the parties or their
assets.
The arbitrators shall decide all disputes in accordance with equity and
good commercial practice. The arbitrator's award may include direct
damages against either party but under no circumstances will the
arbitrators be authorised to nor shall they award punitive, consequential
or multiple damages against either party.
The provisions of this Section 10 shall survive for five (5) years after
the termination or expiration of this Agreement.
11.0 INVENTORY INDEMNIFICATION
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11.1 Upon cancellation of a Purchase Order, order or any portion thereof, or
upon expiration of this Agreement or termination of this Agreement for any
reason, Xxxxx shall be responsible for:
(i) all finished Products scheduled for shipment within the thirty (30)
days immediately following SCI's receipt of the cancellation or
termination notice (the "Notice");
(ii) all work-in-process at receipt of the Notice shall have manufacture
completed by SCI and free from defects in line with the quality standards
set out in this agreement, unless Xxxxx requests otherwise in writing
(facsimile or e-mail ); and
(iii) all components (as expressed in current Attachment "B"),
subassemblies and other material purchased to fill a Purchase Order or
order or authorised to be purchased by Xxxxx which are on hand or on order
at receipt of the Notice. Without limitation (other than as expressed in
Attachment "B") this includes inventory made obsolete or excessive due to
change to the specifications or Products, minimum buy quantities, and reel
quantities. Item (i)-(iii) are referred to as the "Termination Inventory".
In calculating the quantity of finished Products under (i) above, Products
rescheduled for manufacture and shipment during the forty-five (45) days
immediately prior to receipt of the Notice may be counted by SCI.
11.2 SCI will make every reasonable effort to use the Termination Inventory on
other current programs at the Plant where the Products are manufactured,
will cancel all outstanding material orders with vendors, and will attempt
to return piece parts to vendors. Xxxxx will be responsible for costs,
charges and fees actually incurred by SCI to cancel or return any portion
of the Termination Inventory to vendors and, upon mutual agreement, the
cost to modify the Products for other programs.
11.3 Within thirty (30) days from termination or cancellation, SCI will
invoice, and Xxxxx will purchase (subject to mutual agreement following
audit by Xxxxx) the Termination Inventory remaining after vendor
cancellations and returns and after other program use, as follows: (i) for
inventory and authorised long lead time components (save for such long
lead-time components not yet delivered to SCI that shall be invoiced and
ship to Xxxxx upon arrival) at SCI's standard cost, plus a reasonable
handling charge; (ii) for WIP, at a reasonable pro rata, percentage of the
finished Product purchase price; and (iii) for finished Product, at the
purchase price in effect at termination or cancellation. Xxxxx will be
responsible for any negative price differentials between the price SCI
paid for the Piece Part Inventory and authorised long lead time components
and the price at which SCI was able to return and/or utilise the items on
other programs. SCI will credit Xxxxx for any positive price
differentials.
12.0 MISCELLANEOUS PROVISIONS
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12.1 The rights and obligations of either party under this Agreement cannot be
transferred or assigned to a third party without the prior written consent
of the other party except that assignment to an affiliate of each of the
Parties is allowed without consent. No other person or entity shall have
any rights under or in connection with this Agreement
12.2 This Agreement shall not be considered modified, altered, changed or
amended in any respect unless in writing and signed by an authorised
representative of each of the parties hereto.
12.3 Notices under this Agreement shall be considered given when received by
the other party by telex or facsimile or by personal delivery,
confirmation copy by airmail, to the address indicated on the first page
of this Agreement, to the attention of
SCI: SCI Ireland Ltd. Attention: Plant Manager, cc: Program Manager. Fax
no:x000 00 00000 , x000 00 00000
Xxxxx: Xxxxx Networks Limited, Wexham Springs, Xxxxxxxxx Xxxx, Xxxxxx,
Xxxxxx XX0 0XX, England. Attention: VP Operations. Fax no: +44 1753
661206; cc: Legal Department fax no: x00 0000 000000.
Any change of the Authorised Representative by either party shall be
notified in writing to the other party.
12.4 This Agreement with attachments and such changes and amendments made from
time to time in writing signed by authorised representatives of the
parties constitutes the complete governing conditions between the parties
with respect to the extent of the Agreement, and supersedes any previous
agreement, memorandum letter of intent (including LOA), representation or
understanding regarding the subject matter hereof, save for the mutual Non
Disclosure Agreement dated April 4th 2001 the terms of which are
incorporated into this Agreement by reference.
12.5 Any failure by the other party to enforce any provision of this Agreement
shall in no way constitute a waiver or affect its rights to require the
performance thereof by the other party nor affect the validity of any
other provisions, except when this Agreement expressly provides otherwise.
12.6 All performances under this Agreement by either party shall be performed
as an independent business entity, and not as an agent of the other party.
No persons furnished by either party shall be considered the other party's
employees or agents, and each party shall be responsible for its
employees' compliance with all laws, rules and regulations involving
employment of labour, hours of labour, working conditions, payment of
wages and payment of taxes, such as unemployment, social security and
other payroll taxes, including applicable contributions from such persons
when required by law.
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12.7 It is agreed that the laws of England hereunder, shall govern the validity
and construction of this Agreement and performance.
12.8 SCI shall do everything necessary to comply with INCOTERMS (2000) DDP.
Madge's VAT number and other required export information shall be provided
by Xxxxx, upon SCI request. SCI will prepare the necessary export
documentation to comply with applicable US and local government export
control statues and regulations.
12.9 Xxxxx hereby certifies that it will not knowingly export, directly or
indirectly, any US origin technical data or software acquired from SCI or
any direct product of that technical data or software, to any country for
which the US Government requires an export license or other approval,
without obtaining such approval from the US Government.
13. This agreement is solely for the benefit of the parties and any person who
is not a party to the term of this agreement has any rights under the
Contracts (Rights of Third Parties) Xxx 0000 to enforce any term of this
Agreement.
14.1 SCI agrees to promptly defend, indemnify and hold Xxxxx, its successors
and assigns, harmless from and against all claims, losses and expenses of
every kind (including attorney's fees and costs) relating to any claim
that a Product has a manufacturing defect. SCI will not have liability to
the extent that a claim results from the Product design or specifications
of Xxxxx.
14.2 Xxxxx is responsible for design of the Products. Xxxxx agrees to promptly
defend, indemnify and hold SCI, its successors and assigns, harmless from
and against all claims, losses and expenses of every kind (including
attorney's fees and costs) relating to (a) any claim or threatened claim
that any Product, or portion thereof, infringes any patent, trademark,
copyright, mask work or any property right, whether foreign or domestic,
of any third party; or (b) the distribution, sale or use of any Product or
part thereof, whether by Xxxxx or third party and whether any such claim
is based upon contract, tort or any other legal theory provided that in no
event shall Madge's liability under the terms of this Agreement exceed the
sum of $3,000,000 (three million dollars).
14.3 In no event shall either party be liable for any special, incidental,
punitive, exemplary or consequential damages, whether based upon contract,
tort, or any other legal theory (including without limitation lost profits
and opportunity.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly empowered representatives as follows:
Xxxxx Networks, Ltd.
by /s/ Xxx Xxxxxxx
date January 10, 2002
SCI
by Xxxxx Xxxxx
date January 18, 2002
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Attachment "A"
Price list
Attachment "B"
Authorisation To Procure
Attachment "C"
Schedule of Reports/Meetings and Service Level Agreements (SLA)
Schedules are available upon request.
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