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Exhibit 10.17
PURCHASE AND SALES AGREEMENT
This Purchase and Sales Agreement (the "Agreement") is entered
into as of December 29, 1994, by and between Xxxxx Instruments Corporation, a
California corporation ("Xxxxx") and Weidy Optical Co., Ltd., a Republic of
China corporation ("Weidy").
WHEREAS, Xxxxx manufactures astronomical and terrestrial
telescopes and other optical products, and also purchases astronomical and
terrestrial telescopes from Weidy and various other suppliers in the Republic of
China ("R.O.C."), Japan and the Republic of Korea;
WHEREAS, Xxxxx desires a smooth, uninterrupted flow of the
telescopes, telescope parts and telescope accessories from a single source in
order to better ensure that its product needs are fulfilled;
WHEREAS, Weidy desires to expand its business relationship
with Xxxxx and ensure a predictable stream of orders from Xxxxx for telescopes,
telescope parts and telescope accessories.
NOW, THEREFORE, in consideration of the mutual promises
contained herein, and intending to be legally bound, Xxxxx and Weidy hereby
agree as follows:
ARTICLE I.
DEFINITIONS
1.1 Definitions.
For purposes of this Agreement, the following definitions
shall apply:
"Effective Date" means January 1, 1995.
"Xxxxx Designed Products" means Products manufactured by Weidy
or a Weidy Affiliate to designs provided by Xxxxx, including, but not limited
to, Xxxxx telescope models 285, 390, 395 and 4500.
"Xxxxx Information" means certain confidential and proprietary
information of Xxxxx, including but not limited to, technical knowledge,
inventions, creations, know-how, formulations, recipes, specifications, designs,
methods, processes, techniques, data, rights, devices, drawings, instructions,
expertise, trade practices, trade secrets, commercial information and other
information relating to the
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design, manufacture, assembly, application, inspection, testing, maintenance,
packaging and sale of the Xxxxx Designed Products.
"Products" means telescopes, telescope parts and telescope
accessories manufactured by Weidy and Weidy Affiliates.
"Weidy Affiliate" means any company controlled by, sharing
common officers or directors with, or party to a consulting agreement with
Weidy, including, but not limited to, Special Optic, Inc., an R.O.C.
corporation.
"Weidy Australian Customer" means that certain customer of
Weidy in Australia who has purchased telescopes from Weidy through an agent in
Taiwan, R.O.C.
ARTICLE II.
OBLIGATIONS OF XXXXX
2.1 Purchase of Products Exclusively from Weidy.
Xxxxx agrees that all telescopes it purchases outside the
United States of America shall be purchased exclusively from Weidy during the
term of this Agreement.
2.2 Minimum Order in 1995.
On or before February 28, 1995 Xxxxx shall place purchase
orders with Weidy for not less than 50,000 telescopes in the aggregate for
shipment by Weidy to Xxxxx in 1995.
2.3 Annual Minimum Order After 1995.
For each year after 1995, Xxxxx shall place purchase orders
with Weidy for not less than 50,000 telescopes in the aggregate to be shipped in
such year (the "Annual Minimum Order"). The purchase orders constituting the
Annual Minimum Order must be placed as follows:
(a) Purchase orders for not less than 25,000
telescopes must be received by Weidy on or before November 30
of the preceding year; and
(b) Purchase orders for the remaining portion of the
Annual Minimum Order must be received by Weidy on or before
February 28 of such year.
2.4 The Weidy Australian Customer.
(a) Continued Sales. Xxxxx shall use reasonable
efforts to continue sales of telescopes manufactured by
Weidy to the Weidy Australian Customer. Xxxxx shall
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not be prohibited from selling Products to other customers in
Australia.
(b) Notice to Weidy Australian Customer. Promptly
after receiving the addresses from Weidy, Xxxxx shall contact
the Weidy Australian Customer and/or the Weidy Australian
Customer's selling agent in Taiwan, R.O.C. to notify them that
all subsequent orders for Products manufactured by Weidy must
be made to Xxxxx. Xxxxx agrees that the Weidy Australian
Customer may use the "Trust" brand name on Weidy telescopes
shipped to the Weidy Australian Customer but in no case shall
Weidy ship Xxxxx Designed Products, including but not
necessarily limited to, Xxxxx telescopes Models 285, 390, 395
or 4500 to the Weidy Australian Customer.
2.5 The Xxxxx Information.
Xxxxx shall provide the Xxxxx Information to Weidy, provided
that Weidy shall use the Xxxxx Information only in connection with the
manufacture of the Xxxxx Designed Products, and for no other purpose.
ARTICLE III.
OBLIGATIONS OF WEIDY
3.1 Weidy Sales.
Weidy hereby agrees not to manufacture Products for any party
other than Xxxxx and such consignees as Xxxxx may designate during the term of
this Agreement.
3.2 Permitted Weidy Sales.
Notwithstanding Section 3.1, Weidy may manufacture and
sell Products in Taiwan, R.O.C. provided that:
(a) such Products do not include Xxxxx Designed
Products or Products with 1.25-inch eyepieces; and,
(b) Weidy may not sell Products to any person in
Taiwan, R.O.C., other than Xxxxx, who is or is expected to
engage in the business of reselling such products to customers
outside Taiwan, R.O.C.
3.3 Notice of Prospects.
Weidy shall refer to Xxxxx all leads, prospects, and related
information which are directed to it or which it receives regarding potential
purchasers of the Products outside Taiwan, R.O.C.
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3.4 Weidy Affiliates.
Weidy shall use reasonable efforts to cause all Weidy
Affiliates to comply with the terms of this Article III.
3.5 Name and Address of Weidy Australian Customer.
Promptly after signing this Agreement, Weidy shall supply
Xxxxx with the name and address of the Weidy Australian Customer and its Taiwan,
R.O.C. agent.
ARTICLE IV.
PAYMENT
4.1 Payment.
Xxxxx shall provide Weidy with an irrevocable Letter of Credit
issued by a bank of good repute doing business in Taiwan, R.O.C. for the full
amount of the invoice covering each shipment of Products ordered by Xxxxx. The
Letter of Credit with respect to a shipment shall normally be delivered to Weidy
before the shipment date, but in no case shall it be delivered to Weidy more
than seven days after the shipment date.
ARTICLE V.
TERM AND TERMINATION
5.1 Initial Term and Renewal.
This Agreement will continue until December 31, 1999 unless
terminated sooner in accordance with this Article V. This Agreement may be
renewed for an additional five-year term upon the mutual agreement of the
parties. The parties agree that any such renewal of the Agreement, if mutually
agreed upon, shall be executed not later than December 31, 1998.
5.2 Termination By Either Party.
Either party may terminate this Agreement (i) at will upon
twelve months' written notice given to the other party before the date of the
end of this Agreement, or (ii) upon seven days' notice if any of the following
events occurs:
(a) The other party becomes insolvent, files a
voluntary petition in bankruptcy or liquidation, proposes any
dissolution, liquidation, reorganization, or recapitalization
with creditors, or takes any similar action under the laws of
any jurisdiction;
(b) The other party has any involuntary petition in
bankruptcy or liquidation filed against it, or a
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receiver is appointed or takes possession of the other party's
property, or any similar action is taken against the other
party under the laws of any jurisdiction; or
(c) The other party makes an assignment for the
benefit of creditors, is adjudicated as a bankrupt, or takes
any similar action under the laws of any jurisdiction; or
(d) The other party materially breaches this
Agreement and such breach is not cured within 60 days after
receipt of written notice thereof.
5.3 Termination By Weidy.
Weidy may terminate this Agreement immediately upon notice to
Xxxxx if Xxxxx fails to place the Annual Minimum Order for two consecutive
years.
5.4 Effect of Termination.
Upon termination of this Agreement, all rights and obligations
of the parties hereunder shall cease except:
(a) Xxxxx shall remain obligated to pay amounts due
to Weidy for Products shipped prior to termination;
(b) Weidy shall remain obligated to ship Products for
which it has already received payment, or to refund
the payment price to Xxxxx;
(c) Both parties shall remain obligated to comply
with the provisions of Article VI hereof.
The parties recognize and agree that upon termination of this
Agreement Weidy shall continue to manufacture and ship Products for Xxxxx in
such quantities and upon acceptance of such orders as Weidy determines.
ARTICLE VI.
CONFIDENTIALITY
6.1 Confidentiality of the Xxxxx Information.
Xxxxx shall and prior hereto has provided the Xxxxx
Information to Weidy, all of which is hereby designated as confidential. Weidy
unconditionally agrees to, and shall cause its employees, agents and all Weidy
Affiliates to comply with, the following:
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(a) Obligation of Weidy. The Xxxxx Information will be used
solely in connection with the manufacture of the Products in accordance with
this Agreement, will not be used for any other purpose, will not be used in any
way directly or indirectly detrimental to Xxxxx and will be kept confidential by
Weidy, except that Weidy may disclose the Xxxxx Information or portions thereof
to those of its officers, employees, agents and representatives who need to know
such information for the purpose of implementing this Agreement. Weidy agrees to
be responsible for any breach of this Article VI by such persons.
(b) Obligation Upon Termination. Upon termination of this
Agreement Weidy will use reasonable efforts promptly to return to Xxxxx all
documentation in its possession, in any written or recorded form, containing any
Xxxxx Information, unless Weidy receives Xxxxx'x written consent to retain such
Xxxxx Information for its use in fulfilling subsequent orders by Xxxxx for
Products.
ARTICLE VII.
TRADEMARK
7.1 Use of Xxxxx Trademark.
Weidy may use the Xxxxx trademark, on and in connection with
the manufacture of the Products for Xxxxx.
ARTICLE VIII.
WARRANTIES
8.1 Product Warranty.
Weidy agrees to manufacture Products for Xxxxx of a quality
level that Xxxxx requires, and which are suitable for sale by Xxxxx to Xxxxx
dealers and distributors throughout the world.
8.2 Product Malfunction.
Weidy shall promptly repair or replace any Product which
malfunctions, fails to operate, or is otherwise defective within a reasonable
time of the shipping date to Xxxxx.
ARTICLE IX.
ARBITRATION
9.1 Arbitration.
All disputes, claims and controversies concerning the
validity, interpretation, performance, termination or breach of
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this Agreement shall be referred to arbitration in Stockholm, Sweden under the
auspices of the Arbitration Institute of the Stockholm Chamber of Commerce. The
arbitration proceedings shall be conducted in English and the arbitration
tribunal shall apply the Arbitration Rules of the United Nations Commission on
International Trade Law in effect on the date hereof (the "Rules"); provided,
however, that this clause shall not be construed to limit or to preclude either
party from bringing any action in any court of competent jurisdiction for
injunctive or other provision or relief as necessary or appropriate.
9.2 Arbitrators.
Each party shall within 30 days after receipt of the request
for arbitration appoint an arbitrator, and the two so appointed shall within a
further 30 days appoint a third, presiding arbitrator, who may not be a citizen
or resident of either the Republic of China or the United States of America. If
they fail to agree within the stated period, the presiding arbitrator shall be
appointed in accordance with the Rules.
9.3 Procedure and Award.
The arbitrators shall conduct hearings in English; permit
cross-examination of all witnesses; and, by majority vote, render a written
decision stating reasons therefor within two months after the request for
arbitration. Any award or determination of the arbitrators shall be final,
nonappealable and conclusive upon the parties, and judgment thereon may be
entered by any court of competent jurisdiction.
ARTICLE X.
MISCELLANEOUS
10.1 Government Approvals.
It is the obligation of each party to obtain any governmental
approvals required for such party to discharge its respective obligations under
this Agreement. Each party shall assist the other in obtaining any such
approvals.
10.2 Effectiveness.
This Agreement shall become effective on the Effective Date.
However, until March 31, 1995 Weidy may continue to ship Products ordered
pursuant to purchase orders received by Weidy before the Effective Date.
10.3 Assignment.
This Agreement shall not be assigned by either party without
the prior consent of the other party.
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10.4 Notices.
All written notices permitted or required to be delivered by
the provisions of this Agreement shall be given in writing and (a) delivered in
person, (b) transmitted by telex, telefax or telecommunications mechanism, or
(c) mailed, postage prepaid, receipt-requested as follows:
IF TO XXXXX, ADDRESSED TO:
Xxxxx Instruments Corporation
00000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
X.X.X.
Facsimile (000) 000-0000
Attention: Xxxx X. Xxxxxx, Chairman
IF TO WEIDY, ADDRESSED TO:
Weidy Optical Co., Ltd.
48 Puwei Tsun
Peipu
Taiwan, R.O.C.
Facsimile (000) 00-000000
Attention: Xx. X. Xxx, President
or to such other addresses as the parties may from time to time designate in
writing. Each such notice shall be effective, (i) if given by telecommunication,
when transmitted to the applicable number so specified in (or pursuant to) this
Section 10.4 and an appropriate answer back or confirmation of transmission is
received, (ii) if given by mail, seven days after such communication is
deposited in the mails with first class postage prepaid, properly addressed, or
(iii) if given by any other means, when actually received at such address.
10.5 Waiver and Delay.
No waiver by either party of any breach or series of breaches
or defaults in performance by the other party, and no failure, refusal or
neglect of either party to exercise any right, power or option given to it
hereunder or to insist upon strict compliance with or performance of either
parties obligations under this Agreement, shall constitute a waiver of the
provisions of this Agreement with respect to any subsequent breach thereof or a
waiver by either party of its right at any time thereafter to require exact and
strict compliance with the provisions thereof.
10.6 Successors and Assigns.
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This Agreement shall be binding upon and inure to the benefit
of the successors and assigns of the parties hereto, subject to the restrictions
on assignment contained herein.
10.7 Entire Agreement.
This Agreement contains all of the terms and conditions agreed
upon by the parties hereto with reference to the subject matter hereof. No other
agreements, oral or otherwise shall be deemed to exist or to bind either of the
parties hereto, and all prior agreements and understandings are superseded
hereby. This Agreement cannot be modified or changed except by written
instrument signed by both of the parties hereto.
10.8 Headings.
The headings used in this Agreement are used for reference
only and shall not affect the meaning or interpretation of this Agreement.
10.9 Counterparts.
This Agreement and any amendments to this Agreement may be
executed in several counterparts, each of which shall be deemed an original, but
all of which shall constitute one and the same agreement or amendment, as the
case may be.
10.10 Force Majeure.
Neither party shall be liable for damages due to any cause
beyond its control, including, without limitation, acts of God, acts of civil or
military authority, fire, riots, civil commotions, war, embargo, blockage,
boycotts, floods, epidemics, delays in transportation or governmental
restrictions.
10.11 Severability.
If any provision or term of this Agreement shall for any
reason be held illegal or unenforceable, such provision or term shall in no way
affect the validity of this Agreement or its remaining terms and conditions.
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IN WITNESS WHEREOF this Agreement has been signed by a duly
authorized officer of each party as of the day and year first above written.
WEIDY OPTICAL CO., LTD.,
a Republic of China corporation
By: /s/ XXXXX XXX
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Its: President
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XXXXX INSTRUMENTS CORPORATION,
a California corporation
By: /s/ XXXX X. XXXXXX
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Its: Chairman & CEO
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