1
EXHIBIT 10.13
ARROW/▇▇▇▇▇▇▇▇ ELECTRONICS GROUP
CONSIGNED INVENTORY AGREEMENT
Agreement, made of this June 22, 1994, between Arrow/▇▇▇▇▇▇▇▇ Electronics
Group, with its principal place of business at ▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇▇▇ ("Arrow") and Transcrypt International ("Customer"), with a
principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇.
1. Arrow shall maintain at Customer's location stocks of the device types
listed on Schedule A annexed hereto (hereinafter the "Products"). Schedule A
may be amended at any time by Agreement of both parties, subject to all of the
terms and conditions of this Agreement. All right and title to the Products on
Customer's premises shall remain with Arrow until delivery (as hereinafter
defined).
2. Customer shall maintain, at its sole cost and expense, a secure area
within which to store the Products. All Products described in Schedule A shall
be physically segregated from all other inventory and property. The consigned
inventory storage area ("CISA") shall be kept locked at all times, and may be
accessed by such Arrow employees as Arrow may designate and the following
Customer employee only: ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
Arrow employees will have access to Customer's location and the CISA
at any time during Customer's normal business hours.
3. On a weekly basis, the Customer will inform Arrow of the quantity and
parts used, and will give Arrow a purchase order number on which these items
are to be billed. Customer will acknowledge receipt of each delivery of
Products to the CISA by promptly returning to Arrow a signed copy of Arrow's
packing slip.
4. The prices for all material ordered hereunder shall be as set forth in
Schedule A and shall remain fixed, but may be revised upward or downward
depending on price changes from manufacturer that would be passed through to
buyer. Buyer may accept or reject the new pricing and by mutual written
consent amend Schedule A, accordingly.
2
Page 2 of 3
5. As often as once a month, and no less than once a quarter, a physical
count of the Consigned inventory will be performed by an Arrow representative.
Customer shall have an authorized representative review such physical inventory
and shall initial the physical inventory listing of parts and quantities. In
the event Customer does not make authorized personnel available for such
purposes, Customer hereby agrees that Arrow's count will be deemed by Customer
to be complete and accurate.
If the physical count does not agree with the on-hand quantity for
this warehouse according to the Arrow on-line system (after assuring that all
recent shipments to the Customer have been put into stock), the discrepancies
must be resolved with the Customer. The Customer is responsible for the
security and control of Arrow inventory on the site, and will be billed for any
unexplained shortages at the time of the audit. Customer shall at all times
bear risk of loss of Product in the CISA by any cause whatsoever, shall
maintain sufficient insurance coverage to cover any such loss, and will provide
to Arrow a certificate of insurance, naming Arrow as an additional insured,
evidencing such coverage.
6. Arrow reserves the right to cease or limit the replenishment of any
Product, or to remove Product from the CISA in the event that Customer fails to
keep its account current or if, and to the extent that, the total dollar value
of Product in the CISA together with the amount of the payable outstanding from
Customer to Arrow for more than 30 days (whether or not related to the purchase
of Product hereunder) exceeds Customer's then current Arrow credit limit.
7. This contract will continue in full force and effect for one year from
the date hereof, but may be terminated by either party, with or without cause,
on 60 day's notice to the other, or without further notice in the event that
either party gives written notice to the other of a substantial default
hereunder and the other party fails to cure the same within 30 days of its
receipt of such notice. In the event this Agreement is terminated by either
party and, as of the effective date of any such termination Customer has not
then purchased under the terms hereof all of its estimated annual requirement
for such Product, Customer shall purchase the Product in the CISA on the
effective date of such termination.
3
Page 3 of 3
8. The Products will be covered by the manufacturers' standard warranty
therefor, the warranty period beginning to run on the date upon which said
Product was delivered to the CISA.
9. During the term of this Agreement, Customer's authorized personnel may
enter the CISA and remove Product for Customer's use (such removal constituting
"delivery" hereunder).
Title to the Product will pass to Customer upon delivery, but Arrow
will retain a security interest in such Products after delivery until payment
has been made therefor. At any time, and from time to time, during the term of
this Agreement, Arrow may file financing statements (UCC-1) with appropriate
authorities as evidence of its title in the Product maintained in the CISA and
its security interest in the delivered Products. Customer hereby authorizes
Arrow to execute and irrevocably appoints Arrow its attorney in fact for the
execution of such documents. Customer agrees that it will not permit any lien
or encumbrance of any sort to be created or executed against the Product in the
CISA. Customer warrants and represents that no part of this Agreement
constitutes a violation of the terms of, or default under, any other Agreement
it may have with suppliers, creditors or otherwise.
ARROW/▇▇▇▇▇▇▇▇ ELECTRONIC GROUP TRANSCRYPT INTERNATIONAL
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: [SIG]
------------------------------ ------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President, Strategic Sales
Date: 8-23-94 Date: 8-16-94
------------------------- ---------------------------
4
ARROW/▇▇▇▇▇▇▇▇ ELECTRONICS GROUP
CONSIGNED INVENTORY AGREEMENT
SCHEDULE "A"
TRANSCRYPT INTERNATIONAL
PART # NEDA CONSIGNMENT STOCK RESALE
------ ---- ----------------- ------
MC68HC705C8FB 5236 5,000 11.25
LMT358D 5236 3,000 .39
LMT324D 5236 6,000 .36
MC14053BDR2 5236 5,000 .346
