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EXHIBIT 10(u)
MANUFACTURING AGREEMENT
THIS MANUFACTURING AGREEMENT (the "Agreement") is entered into and
effective as of the 30 day of September, 1997, by and between AlliedSignal Inc.,
a Delaware corporation, by and through its Communications Systems business unit
having a principal place of business at 0000 Xxxx Xxxxx Xxxx, Xxxxxxxxx,
Xxxxxxxx 00000-0000 ("AlliedSignal") and Mykotronx, Inc., a California
corporation, having a principal place of business at 000 Xxx Xxxx Xxx, Xxxxx
000, Xxxxxxxx, Xxxxxxxxxx 00000 ("Mykotronx"). AlliedSignal and Mykotronx may be
individually referred to as a "Party" or collectively referred to as the
"Parties".
WHEREAS, the Parties have entered into in addition to this Agreement:
(a) an Asset Purchase Agreement (the "Purchase Agreement"), dated as of
September 30, 1997, which provides for the sale by AlliedSignal to Mykotronx of
certain assets including assets used in the manufacture and sale of the
"Products", as defined below, and certain ancillary components and parts used in
connection with the Products ("Ancillaries"); and (b) a Development Agreement on
such date ("Development Agreement") to develop a later generation product for
future sales (all three Agreements hereinafter referred to collectively as the
"Collective Agreements"). Capitalized terms used but not defined herein shall
have the meanings ascribed to them in the Purchase Agreement.
WHEREAS, the Parties have determined that it is mutually desirable for
AlliedSignal to continue to manufacture the Products for and in behalf of
Mykotronx.
WHEREAS, the Parties wish to enter into this Manufacturing Agreement
which shall set forth the terms and conditions upon which AlliedSignal shall
continue to manufacture Products for Mykotronx.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the Parties agree as follows:
1. TERM OF AGREEMENT; TERMINATION
(a) This Agreement shall expire on December 31, 1999, subject to
earlier termination pursuant to the provisions of this Agreement.
(b) Mykotronx may, at its option, terminate this Agreement prior to
December 31, 1999, by giving written notice to AlliedSignal of its desire to
terminate this Agreement. Such notice shall include the effective date of the
termination which date shall be not less than 180 days after the date of such
notice. Such notice shall be given, if at all, at any time after June 30, 1998,
but not later than June 30, 1999.
(c) Any provisions hereof that by their nature would be expected to
survive the termination of this Agreement shall survive and not be affected by
the termination or expiration of this Agreement, including, without limitation,
Sections 13, 18, 19, 23 and 24.
2. MANUFACTURING
A. AlliedSignal shall manufacture and/or purchase the products for
Mykotronx listed in EXHIBIT A annexed to this Agreement and made a part hereof,
to the specifications and/or part number configurations identified opposite each
product (hereinafter referred to as the "Product " or "Products"), including the
Ancillaries used in connection with the Products set forth in EXHIBIT A.
B. The Product is a conceptual configuration and the subject of the
Development Agreement. Upon completion of development of the Product, EXHIBIT A
hereto shall be amended to add the Product to this Agreement as a Product.
3. LICENSE TO MANUFACTURE
For the term of this Agreement, Mykotronx does hereby grant to
AlliedSignal a non-exclusive, royalty-free, irrevocable right and license: (i)
to use all Intellectual Property transferred to Mykotronx by AlliedSignal
pursuant to the Purchase Agreement and (ii) to make Products, or have the
Products made, including purchasing the Ancillaries used in connection with the
Products.
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4. PROHIBITION ON THIRD PARTY SALES
AlliedSignal agrees to manufacture the Products and/or Ancillaries used
in connection with the Products exclusively for Mykotronx and further agrees not
to sell any of the Products and/or Ancillaries used in connection with the
Products to any third party unless directed to do so in writing by Mykotronx.
5. FORECASTS
Commencing not later than November 1, 1997, Mykotronx shall submit in
writing to AlliedSignal a forecast of Products and Ancillaries that Mykotronx
expects will be required for sale within the next six (6) months. The forecast
shall include the total quantity and type of Products and Ancillaries,
identified by part number, and such forecast shall be revised monthly. Forecasts
are for general planning purposes only and, accordingly, Mykotronx shall not be
responsible for forecasts that later turn out to be inaccurate.
6. PURCHASE ORDERS
A. Notwithstanding the provisions set forth in the paragraph entitled
FORECASTS, Mykotronx shall issue purchase orders ("Purchase Orders") for all
Products ordered which shall include the unit price, quantity, cumulative price,
anticipated delivery date, place of delivery and method of transportation and
carrier. Any terms and conditions contained in a Purchase Order that are
inconsistent with the terms and conditions set forth in this Agreement shall
have no force and effect unless set forth in writing executed by both Parties.
AlliedSignal agrees to accept mandatory flowdown clauses similar to those
accepted by Mykotronx in its prime contracts and to incorporate the terms and
conditions thereof in the Purchase Orders. In addition, the Parties agree to
negotiate in good faith to incorporate termination provisions similar to those
accepted by Mykotronx in its prime contract(s) with its customers for the
Products. Other additional terms and conditions shall have no force and effect.
B. Deliveries shall be made pursuant to reasonable manufacturing
schedules based on no less than a sixty (60) day lead time.
C. Mykotronx agrees to place Purchase Orders for a minimum quantity of
___ Units for delivery per month and shall not exceed a maximum quantity of ___
Units for delivery per month (except as contemplated otherwise in this Section
6.C). Any requirements for a quantity of less than ___ Units (but not less than
___ Units) or more than ___ Units (but not more than ___ Units) shall be priced
as provided on Part III of Exhibit B, and the delivery schedule shall be
adjusted if impacted by an order outside the _______ minimum-maximum quantity
range. "Units" shall mean, collectively, the Product embeddable _____ COMSEC
module, the Product high speed embeddable ____ COMSEC module, the ____, and the
Product (which is the subject of the Development Agreement). If the Product has
not been endorsed by the NSA by January 1, 1999, then, commencing in January
1999, and continuing on a month-to-month basis thereafter, Mykotronx shall be
relieved of its obligation to purchase a minimum number of Units until the first
calendar month after the month in which the Product receives NSA endorsement.
D. Payment for Products and/or Ancillaries ready for delivery shall be
made by Mykotronx on a net thirty (30) basis from receipt of the invoice from
AlliedSignal with respect to deliveries under the IDIQ and on a net forty-five
(45) basis for all other deliveries (including purchase orders for Mykotronx to
be shipped to its inventory). Invoices shall be transmitted to Mykotronx at the
time the Products are deemed "accepted" as provided in Section 12 hereof.
E. Notwithstanding anything which may be to the contrary herein,
Mykotronx shall deliver to AlliedSignal an initial Purchase Order hereunder not
later than November 1, 1997. Such initial Purchase Order shall cover Mykotronx'
orders for Products for the period October 1, 1997, through December 31, 1997,
and for each month in such period shall include orders for at least ____ Units
in the aggregate per month. In addition the Purchase Order for the month of
October 1997 shall include orders that reflect by AlliedSignal in such month
pursuant to the next sentence of this Section 6.E. For the period from October
1, 1997 through the date Mykotronx delivers the initial Purchase Order,
AlliedSignal shall continue to manufacture and ship Products in a manner that
is, at a minimum, sufficient to satisfy existing outstanding obligations under
the Customer Contracts, and Mykotronx shall be deemed to have ordered such
Products as if it had delivered a Purchase Order therefor.
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7. PRICING
A. Pricing for the Products and/or Ancillaries ("Transfer Price") shall
remain firm through December 31, 1999, as shown in Part I of EXHIBIT B annexed
hereto and made a part of this Agreement, except that such prices may be
adjusted to reflect an increase in the cost of material (applying burden rates
applicable thereto) in accordance with the formula set forth in Part Il of
EXHIBIT B. In addition, in the event that any raw materials or component parts
are supplied by Mykotronx, an appropriate decrease will be made in the transfer
price.
B. The price to be paid by Mykotronx to AlliedSignal for the Presidio
module on a pass-through basis shall be fixed at $____ per unit; provided,
however, that in the event that any materials relating to the Presidio module
are supplied by Mykotronx, an appropriate decrease will be made in such $____
base transfer price net of the amount, if any, accruing to the benefit of
AlliedSignal pursuant to the next sentence of this Section 7.B. In the event the
Presidio module cost is less than or exceeds the $____ unit cost, Mykotronx and
AlliedSignal shall share any price decrease benefit and/or price increase cost
on an equal basis below and above such unit cost, but AlliedSignal's maximum
liability or benefit under this provision for Presidio cost increases above or
decreases below the $____ per unit cost shall cumulatively not exceed $______.
Upon AlliedSignal incurring $______ in costs for its share of price increases in
excess of $____ per unit, Mykotronx shall thereafter be responsible for all such
costs of the Presidio module.
C. Upon completion of the development of the Product pursuant to the
Development Agreement, an initial Transfer Price shall be established for this
new Product which shall be determined in a manner consistent with the manner in
which the initial transfer prices hereunder were determined. In furtherance and
not in limitation of the foregoing, such price shall include AlliedSignal's
material costs plus burden (at 1997 rates) and labor costs plus burden at 1998
rates, plus 1.5% for warranty and 1% for administrative requirements, with no
other general and administrative expenses included in the Transfer Price of the
Product. After the initial Transfer Price has been determined, such initial
Transfer Price shall be added to Part I of EXHIBIT B hereto, and such price
shall remain firm through December 31, 1999, except that such price may be
adjusted to reflect an increase in the cost of material (applying burden rates
applicable thereto) in accordance with the formula set forth in Part II of
EXHIBIT B or as otherwise contemplated in Section 7.B, this Section 7.C or
Section 7.D. In addition, in the event that any raw materials or component parts
are supplied by Mykotronx, an appropriate decrease will be made in the transfer
price.
D. Notwithstanding anything which may be to the contrary herein, the
transfer price for the Product (with respect to orders placed for delivery
within the month ___ minimum/ ___ maximum Unit range) shall not exceed $ ____
per unit (the "Cap"), provided, however , that the Cap shall be increased on a
dollar for dollar basis to the extent that the cost of the Presidio module
exceeds $____ per unit. For Product Units that are ordered for delivery outside
of the monthly ___ minimum/ ___ maximum range, AlliedSignal will offer Transfer
Prices which shall be determined in a manner consistent with the 90% learning
curve methodology used to determine the ranges outside the ___ minimum/ ___
maximum ranges set forth in Part III of Section B.
E. Attached hereto as Exhibit C is a list of the elements included in
the build up of the Transfer Price. If any element relating to price has been
included in the build up of the Transfer Price, then, notwithstanding any
provision which may be to the contrary herein, Mykotronx shall not be charged
separately for such cost elements. If it is determined that inadvertently
Mykotronx has been charged separately for a cost that is included in the
transfer price, then AlliedSignal shall give Mykotronx a credit for the amount
of such overcharge and shall thereafter cease to xxxx Mykotronx separately for
such charges.
8. CHANGES
Any changes to the drawings, designs or specifications of the Products
required by Mykotronx shall be communicated to AlliedSignal in writing. The
delivery date and the price of the Products shall be adjusted if any such
changes agreed upon by the Parties cause a delay in delivery or increase in the
costs of manufacture of the Products. Anything to the contrary notwithstanding,
AlliedSignal shall assume the costs of all changes cumulatively on a recurring
and non-recurring basis up to $______ (net of any such costs that are included
in the Transfer Price) and Mykotronx shall thereafter be responsible for the
costs incurred by AlliedSignal in implementing changes to the Products.
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9. SHIPMENTS, FACTORY RELOCATION; FACTORY QUALIFICATION
A. Method of transportation and carrier are to be in accordance with
the instructions contained in the Purchase Orders. All shipments shall be FOB
AlliedSignal shipping dock, Baltimore, Maryland, or such other FOB Origin point
designated by AlliedSignal. The cost of insurance and freight shall be paid for
by Mykotronx except for freight for shipment under the IDIQ which shall be
absorbed by AlliedSignal as part of the Transfer Price. Title and the risk of
loss, damage and destruction shall pass to Mykotronx at the FOB point. Shipments
shall be made directly to Mykotronx customers, per instructions to AlliedSignal
by Mykotronx as set forth in Purchase Orders.
B. In the event AlliedSignal elects to reorganize, merge, sell or
otherwise change the structure of the business organization manufacturing the
Products and/or the Ancillaries, AlliedSignal without the consent of any Party
may move the factory. In such event, AlliedSignal shall notify Mykotronx one
hundred twenty (120) days in advance of such move and AlliedSignal shall be
responsible for any required requalification related to the Products and/or
Ancillaries. For purposes of this Agreement, "AlliedSiginal Facility" shall mean
the current location of the manufacturing operations, which is 0000 Xxxx
Xxxxx Xxxx, Xxxxxxxxx, Xxxxxxxx 00000, or such other location to which the
operations may be moved in accordance with this Section 9.B.
C. During the term of this Agreement, AlliedSignal shall maintain
facility clearance, COMSEC Account and Security clearance and controls as
required by the flow down provisions per DD 254 of the IDIQ for the AlliedSignal
Facility.
10. DELIVERY DATE-LIQUIDATED DAMAGES
A. Delivery will be accomplished within the time specified on the face
of the Purchase Order ("Due Date'), provided such date allows proper lead time
as set forth in this Agreement. Anything to the contrary notwithstanding,
AlliedSignal shall not be liable for any reasonable delay in production or
delivery, until it receives a fifteen (15) day advance notice ("Notice Period")
of such delinquency giving AlliedSignal sixty (60) days from the expiration of
the Notice Period to cure the delinquency ("Cure Period"), for a total of 75
days from the date the notice is received; provided, however, that the Notice
Period and Cure Period shall not apply to delays in production or delivery that
are the result of the relocation of the manufacturing operations as contemplated
in Section 9. Delivery shall be deemed complete when the Products are delivered
to the FOB point.
B. In the event AlliedSignal fails to cure the delinquency prior to the
expiration of the Notice Period and Cure Period, AlliedSignal shall pay to
Mykotronx as liquidated damages, a sum of one percent (1%) of the Transfer Price
of the Products and/or Ancillaries that were ordered by Mykotronx' customers and
remain unshipped for each month (beyond the seventy-five (75) day Notice and
Cure Period) that such Products so remain unshipped, not to exceed a total of
($_______) of liquidated damages in the aggregate. Anything to the contrary
notwithstanding, no liquidated damages under this section entitled DELIVERY
DATE-LIQUIDATED DAMAGES shall be due and owing: (1) for Products that remain
unshipped as of September 30, 1998 (which are addressed in the Development
Agreement); or (2) if the delays in delivery are caused by the U.S. Government
or any of its agencies or departments (which are not attributable to the
performance or non-perfonnance by AlliedSignal) or by force majeure events.
C. In the event AlliedSignal is obligated by the terms of this
Agreement to pay liquidated damages to Mykotronx, AlliedSignal shall pay such
sum on a net thirty (30) basis from receipt of Mykotronx' invoice for same,
provided AlliedSignal does not dispute such invoice.
11. FORCE MAJEURE
In the event a delay in production or delivery occurs which delay is
occasioned by: (a) acts of God, including but not limited to fire, floods or
unusually severe weather; (b) civil or military authority, war, hostility,
riots, government action in its contractual or sovereign capacity; (c) strikes
or other labor actions; or (d) where such delay is occasioned by other causes
beyond the control of AlliedSignal and without its fault or negligence, then the
date or dates for delivery of the equipment shall be extended for a period equal
to the time lost by reason of any such delay. Anything to the contrary
notwithstanding, AlliedSignal shall be responsible for delays caused by
subcontractors failing to make timely deliveries unless such delays are caused
by force majeure events, subject to the limitations set forth in paragraph B of
the section, entitled DELIVERY DATES-LIQUIDATED DAMAGES.
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12. INSPECTION AND ACCEPTANCE
Acceptance of Products shall take place at the AlliedSignal Facility:
(a) with respect to orders to be shipped to a Government customer when such
customer delivers to AlliedSignal a signed fonn DD 250 authorizing shipment of
Products and/or Ancillaries; (b) with respect to all other orders (excluding
orders delivered to the account of Mykotronx), when AlliedSignal signs-off on a
commercial shipper accompanied by a Certificate of Conformance, authorizing
shipment of the Products and/or Ancillaries, or (c) with respect to orders
delivered to the account of Mykotronx, when AlliedSignal signs off on a
Certificate of Conformance. Upon reasonable prior notice, during normal business
hours Mykotronx or its customers for the Products and/or Ancillaries may inspect
the Products and/or Ancillaries, including testing thereof, at the AlliedSignal
Facility.
13. WARRANTY
(a) AlliedSignal warrants to Mykotronx' customers that the Products it
delivers hereunder will be free from defects in material and workmanship at the
time of acceptance. This Warranty will terminate one (1) year after the date of
such acceptance or such longer period as is required by the Indefinite
Delivery-Indefinite Quantity ("IDIQ") contract with the NSA ("Warrantv Period").
Notification of any such defect must be given by Mykotronx to AlliedSignal
within the Warranty Period. AlliedSignal's obligation under this Warranty is
limited to repairing or replacing any Product which is determined by
AlliedSignal to be xxxxxxxxx.Xxxxxx or replacement will be accomplished at the
AlliedSignal Facility. Defective items returned to AlliedSignal pursuant to this
Warranty will be delivered to the AlliedSignal Facility, freight prepaid.
AlliedSignal will return such items to Mykotronx or its customer at Mykotronx's
option, freight prepaid. Products replaced will become the property of
AlliedSignal.
(b) In addition, for so long as AlliedSignal is manufacturing Products
for Mykotronx hereunder, if and as requested by Mykotronx, AlliedSignal shall
repair or replace out-of-warranty Products on the terms and conditions provided
in Section 14.C.
(c) This Warranty does not cover components that are expendable in
normal use and thus have an unpredictable service life, such as batteries.
(d) Products that have been repaired or replaced during the Warranty
Period are warranted for the remainder of the unexpired portion of the original
Warranty Period or as otherwise required by the IDIQ.
(e) If AlliedSignal does not find any defects in workmanship or
material, or if the Warranty Period has expired, AlliedSignal's regular charges
shall apply and Mykotronx shall pay all such charges including transportation
costs.
(f) AlliedSignal is released from all obligations under its Warranty in
the event repairs or modifications are made by persons other than its own
authorized personnel unless such work is authorized in writing by AlliedSignal.
THIS WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, WHICH ARE HEREBY EXPRESSLY DISCLAIMED. ALLIEDSIGNAL'S LIABILITY UNDER
THIS WARRANTY IS EXPRESSLY LIMITED TO THE REPAIR OR REPLACEMENT, AT ITS OPTION,
OF ANY PRODUCT CONTAINING A DEFECT IN MATERIAL OR WORKMANSHIP AT THE TIME OF
DELIVERY. IN NO EVENT SHALL ALLIEDSIGNAL BE LIABLE FOR DIRECT, INDIRECT,
INCIDENTAL, CONSEQUENTIAL, EXEMPLARY OR OTHER DAMAGES RESULTING FROM DEFECTS IN
MATERIAL OR WORKMANSHIP IN THE PRODUCTS DELIVERED. THE SOLE REMEDY SHALL BE
REPAIR OR REPLACEMENT FOR ANY SUCH DEFECTS UNDER THE TERMS OF THIS WARRANTY.
14. SUPPORT AND TRANSITION SERVICES
A. AlliedSignal shall maintain a dedicated hotline to handle customer
inquiries for the Products. Such hotline shall be open 24 hours a day seven days
a week, but shall be manned by one person between the hours of 8 A.M. and 4:00
P.M. weekdays. Calls received on a voice recorder during time periods in which
the telephone is not manned shall be addressed on the next business day.
B. In-warranty service during the term of this Agreement shall be
performed by AlliedSignal for the Products at no additional cost to Mykotronx
other than as included in the Transfer Prices.
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C. Out-of-warranty service during the term of this Agreement shall be
performed by AlliedSignal for the Products to be billed to Mykotronx and paid to
AlliedSignal at the rate of $___ per Unit in 1997 and 1998 and $___ per Unit in
1999. Prior to performing any out-of-service warranty repair AlliedSignal shall
test/troubleshoot the unit in a manner consistent with its past practices..
D. The furnishing of personnel for travel to a customer location, if
necessary, shall be performed by AlliedSignal during the term of this Agreement
to be billed to Mykotronx and paid to AlliedSignal at the then existing hourly
rates as set forth in AlliedSignal's then current forward pricing rates for the
personnel traveling, in addition to reasonable expenses incurred for travel,
meals and lodging.
E. AlliedSignal shall provide to Mykotronx at no cost office space,
telephone service and access to office equipment and supplies reasonably
necessary to support Mykotronx personnel at AlliedSignal's manufacturing site
for the purpose of understanding the manufacturing processes of the Product and
the acquired assets. In addition, Mykotronx will have access to AlliedSignal
employees in order to facilitate its understanding thereof.
15. TRANSFER OF EQUIPMENT/RECORDS
A. The Personal Property as defined in the Purchase Agreement may be
purchased by Mykotronx upon the expiration of this Agreement as provided in
section 13.5 of the Purchase Agreement.
B. During the term of this Agreement, AlliedSignal shall provide when
issued the following production detail and status reports:
Master Production Schedule
Business Requirement Plan
MRP Exception Report
Linearity Report
Drill Down Report
Scrap Report
ICAT Meeting Report
Field Service\Hotline Database
16. PRODUCT DEFECTS OR RECALL
AlliedSignal, at its cost, shall be responsible for the correction of
any design defects found in Products shipped by AlliedSignal, including the
costs of recalling the Products and engineering services to make such
corrections.
17. ORDERLY TRANSITION
Upon the expiration of this Agreement AlliedSignal shall provide, at no
additional cost, reasonable assistance to Mykotronx in effectuating an orderly
transition of the acquired assets to a location designated by Mykotronx. Such
activities shall be arranged so as to minimize any interruption of
AlliedSignal's normal business operations. Mykotronx shall assume the costs of
such transition, including the costs of crating, packing, transportation,
insurance, indexing and cataloging information and such other costs incurred in
transferring a product line to another location.
18. LIMITATION ON DAMAGES
A. Notwithstanding anything to the contrary in the Collective
Agreements, AlliedSignal's liability under the clauses entitled: (a) PRICING,
and DELIVERY DATE-LIQUIDATED DAMAGES of this Agreement and (b) PRODUCT DELIVERY
DATE-LIQUIDATED DAMAGES of the Development Agreement shall not exceed ($______)
in the aggregate.
B. IN NO EVENT SHALL EITHER PARTY HERETO BE LIABLE TO THE OTHER PARTY
HERETO FOR INDIRECT, INCIDENTALS CONSEQUENTIAL OR EXEMPLARY DAMAGES THAT ARE
CLAIMED TO BE INCURRED BY THE OTHER PARTY WHETHER SUCH CLAIM ARISES UNDER
CONTRACT, TORT (INCLUDING STRICT LIABILITY) OR OTHER THEORY OF LAW RELATED TO
PERFORMANCE HEREUNDER OR AN ALLEGED BREACH OF A CONTRACT HEREUNDER.
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C. The terms "indirect, incidental, consequential or exemplary damages"
as used herein shall include, but is not limited to, punitive damages, loss of
use, loss of business reputation, increased expense of operation, loss of
profit, cost of money and loss of use of capital or revenue arising at any time.
D. A claim under this Agreement, the Purchase Agreement, or the
Manufacturing Agreement shall preclude a claim on the same subject matter under
any of the other three Agreements.
19. NO SET-OFF
All monies owed for orders placed under a Purchase Order shall be due
and payable under the terms of this Agreement and Mykotronx shall not set off
said sum due AlliedSignal under any Purchase Order from sums, whether liquidated
or not, that are or may be due Mykotronx which arise out of a different
transaction or Purchase Order with AlliedSignal, its divisions, subsidiaries or
affiliates.
20. FURTHER ASSURANCES
The Parties covenant and agree that, subsequent to the execution and
delivery of this Agreement and without any additional consideration, each of the
Parties shall execute and deliver any further legal instruments and perform such
acts which are or may become necessary to effectuate the purposes of this
Agreement.
21. RELATIONSHIP
AlliedSignal is an independent contractor engaged by Mykotronx in the
manufacture of Products. Nothing in the Agreement shall constitute AlliedSignal
as an employee, agent or general representative of Mykotronx. This Agreement
shall not constitute appointment of either Party as the legal representative or
agent of the other, nor shall either Party have the right or authority to
assume, create or incur any liability or any obligation of any kind, express or
implied, against, or in the name of, or on behalf of, the other Party.
22. INSOLVENCY
Either Party may cancel this Agreement in the event of the suspension
of the other Party's business, insolvency of the other Party, the institution of
bankruptcy, reorganization, arrangement or liquidation proceedings involving or
affecting the other Party, or any assignment for the benefit of creditors of the
other Party, or receivership that the other Party places itself in or may be
placed in.
23. CHOICE OF LAW
This Agreement shall be governed, construed and enforced under the laws
of the State of New York, excluding its conflict of laws provisions.
24. RESOLUTION OF DISPUTES
In the event of a dispute relating to this Agreement, the parties shall
make a good faith effort to settle any differences without resorting to
arbitration. If settlement of the dispute is not possible either party may
invoke arbitration. However, the party wishing to initiate arbitration shall
give thirty (30) days prior notice to the other party. During this thirty (30)
day period selected upper management personnel shall further attempt to resolve
the dispute. Any unresolved dispute arising out of or relating to this
Agreement, including its interpretation, validity, scope and enforcability,
shall be resolved by arbitration to be held exclusively in the City of New York,
New York. Such arbitration shall be the parties' exclusive remedy. The
arbitration shall apply the law of the State of New York to the dispute,
exclusive of its conflict of laws and shall be conducted in accordance with the
then-existing Commercial Arbitration Rules of the American Arbitration
Association. The arbitrator shall be empowered to assess compensatory damages
except in areas where this Agreement exempts any party from liability or limits
such damages. The judgment of the arbitrator shall be final and binding on the
parties and any party may enter the arbitration award as a final judgment in a
court of competent jurisdiction with power to enforce the arbitration award. The
parties shall pay their own arbitration expenses and shall equally share the
arbitrator's costs and fees and the arbitrator shall allocate such costs and
fees equally between the parties as part of the award.
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25. ASSIGNMENT
This Agreement may not be assigned without the prior written consent of
the other Party which consent shall not be unreasonably withheld by any party,
provided, however , that without any such consent (i) AlliedSignal may assign
any of its rights hereunder to any wholly owned subsidiary of AlliedSignal or to
any purchaser of substantially all of the assets of the business unit to which
the Products relate, and
(ii) Mykotronx may assign any of its rights hereunder to any
wholly-owned subsidiary of Rainbow or to any purchaser of substantially all of
the assets of Rainbow. In addition, AlliedSignal may assign to a bank or lending
institution any proceeds due under this Agreement without the consent of
Mykotronx.
26. HEADINGS AND DEFINITIONS
The headings of the articles, sections or paragraphs used in this
Agreement are included for convenience only and are not to be used in construing
or interpreting the Agreement.
27. SEVERABILITY
In the event that any provision of this Agreement is held to be invalid
or unenforceable in a court of competent jurisdiction, the provision shall be
modified as necessary to render it enforceable with a meaning substantially
meeting the intent of the Parties hereto or, if such modification is not
possible, stricken from the Agreement. Such holding shall not affect the
validity or enforceability of any other provision herein.
28. AMENDMENT
This Agreement may be amended only by written agreement duly executed
by the Parties hereto.
29. WAIVERS
Any waiver of rights hereunder must be set forth in writing. A waiver
of any breach or failure to enforce any of the terms and conditions of this
Agreement shall not in any way affect, limit or waive either Party's rights at
any time to enforce strict compliance thereafter with every term or condition of
this Agreement
30. COMMUNICATIONS AND NOTICE
Any notice or communication required under this Agreement shall be
given in writing to the following addresses and shall be deemed received within
three (3) business days after the date sent by first class, registered or
certified mail:
If to AlliedSignal: If to Mykotronx:
AlliedSignal Communications Systems Mykotronx, Inc.
0000 Xxxx Xxxxx Xxxx 000 Xxx Xxxx Xxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000-0000 Xxxxxxxx, Xxxxxxxxxx 00000
Attn: Director of Contracts Attn: Director of Contracts
with a copy to:
Mykotronx, Inc.
000 Xxx Xxxx Xxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: Program Manager
31. KEY EMPLOYEES
AlliedSignal shall dedicate the "Manufacturing Key Personnel" (as
defined in the letter agreement, dated the date hereof, between AlliedSignal and
Mykotronx) to the performance of AlliedSignal's obligations hereunder to the
extent such obligations require such individual's full-time performance. In the
event any Manufacturing Key Personnel inform AlliedSignal of plans to leave the
employ of AlliedSignal, AlliedSignal shall use reasonable efforts to retain such
person; provided, however , that the foregoing shall not require AlliedSignal to
offer any bonuses or increase salaries or benefits other than at AlliedSignal's
discretion. Further, the foregoing shall not prevent AlliedSignal, in its sole
discretion, from offering any Manufacturing Key Personnel a promotion, or
prevent any Manufacturing Key Personnel from accepting any
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promotion or transfer (within AlliedSignal or otherwise); provided, however,
that the General Manager of the Communications Systems division of AlliedSignal
shall, in any event, use reasonable efforts to balance the needs of the
Manufacturing Key Personnel and the needs of the project in a manner that is
intended to be equitable to all of the parties concerned. In the event any
Manufacturing Key Personnel gives AlliedSignal notice that he or she has elected
to leave AlliedSignal's employ, AlliedSignal shall give notice to Mykotronx and
Mykotronx shall no longer be subject to the non- solicitation clause of the
Asset Purchase Agreement with respect to such person. AlliedSignal shall use
reasonable efforts, as quickly as is reasonably practicable, to replace any
Manufacturing Key Personnel who leaves his or her current position with an
individual of similar qualifications.
32. ENTIRE AGREEMENT
This Agreement, the Confidentiality Agreement referred to in Section
15.3 of the Purchase Agreement, and the other agreements and documents executed
and delivered by the parties hereto and/or their affiliates simultaneously
herewith including without limitation the Collective Agreements constitute the
entire understanding between the Parties and supersedes any prior written or
oral agreement or understanding with respect to the manufacturing of Products
for Mykotronx. No modification of this Agreement, or waiver or addition to any
of its terms and conditions, shall be binding upon either Party unless made in
writing and signed by the Parties' authorized representatives.
IN WITNESS WHEREOF the Parties have caused this Manufacturing Agreement
to be executed as of the 30th day of September 1997.
AlliedSignal Inc. Mykotronx, Inc.
By: By:
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Print Name: Xxxx X. Xxxxxx Print Name: Avi Margalith
Title: VP & General Manager Title: President
