Exhibit 10.31
PRIVATE LABEL/DISTRIBUTION AGREEMENT
THIS Private Label/Distribution Agreement ("Agreement") is made as of the
28th day of June, 1996 ("Effective Date"), between Memry Corporation, a Delaware
corporation with its principal place of business at 00 Xxxxxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxxxxxx 00000 ("Seller") and the Electronics Division of Raychem
Corporation, a Delaware corporation with its principal place of business at 000
Xxxxxxxxxxxx Xxxxx, Xxxxx Xxxx, Xxxxxxxxxx, 00000-0000 ("Buyer").
WHEREAS, Seller and Buyer are party to an Amended and Restated Asset
Purchase Agreement, dated as of May 10, 1996, as amended from time to time,
pursuant to which Seller is contemporaneously with the execution and delivery
hereof acquiring certain assets (including machinery and equipment, inventory,
trade secrets and other intellectual property) heretofore used by Buyer to
produce nickel titanium components sold by Buyer; and
WHEREAS, Buyer, principally through its Electronics Division, markets and
sells nickel titanium components, heretofore manufactured by Buyer, to its
customers throughout the world; and
WHEREAS, Buyer desires to secure for itself an uninterrupted source of
nickel titanium products from Seller subsequent to the execution and delivery
hereof, and Seller desires to be Buyer's exclusive supplier of such products,
both upon the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the premises, the agreements, covenants
and conditions herein contained, it is agreed as follows:
I. DEFINITIONS
For the purposes of this Agreement, the following terms shall have the
following respective meanings:
"Business Day" means a day on which banks are not required or authorized
to be closed in either the State of California or the State of Connecticut.
"Confidential Information" means any information or data disclosed
pursuant to this Agreement; provided, however, that information and data shall
not be deemed to be Confidential Information unless disclosed in writing and
clearly marked "confidential" or "proprietary" or, if disclosed orally, reduced
to writing and clearly marked "confidential" or "proprietary" and delivered to
the other party in such written and marked form within thirty (30) days
immediately following its oral
disclosure; and further provided, that information and data shall not be deemed
to be Confidential Information if:
1. it is available to the public at the time of disclosure to the
receiving party, or thereafter becomes available to the public through no fault
of the receiving party, but in such event only as of such later date;
2. it is independently made available to the receiving party by a
third party without restrictions on disclosure; or
3. it is known to the receiving party before disclosure to the
receiving party by the disclosing party or developed by the receiving party
without reference to any Confidential Information of the disclosing party.
Customer lists and specifications of Buyer shall, subject to the
exceptions in clauses (a) through (c) above, be deemed "Confidential
Information" under this Agreement.
"Excluded Customers" shall mean Bausch & Lomb, United States Surgical
Corporation, any successors to the businesses of any of the foregoing, and any
other actual or potential customer to the extent (and only to the extent) that
such customer uses Products for implant applications.
"Field of Use" shall mean the following worldwide fields of use
anywhere in the world:
A. Sealing and fastening devices and components.
B. Mechanical protection devices and components.
C. Actuators and actuating devices and components including
mechanical, electrical, and hydraulic components, except if
and to the extent that any such device has been developed by
Memry (i.e., existing fluid and vapor valves, as well as later
generation and derivative fluid and vapor valves) prior to the
effective date hereof.
D. Any component or device used in any of the 6 levels of
electrical and electronic assemblies as set forth in Exhibit
H.
E. Noise and vibration dampening devices and components, except
with respect to sporting and leisure goods.
F. Medical and dental devices and components.
G. Fluid (gas, liquid, slurry and dry powder) fittings and
couplings.
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H. Electrical interconnection devices and components.
I. Any application in any of the following industries:
(a) Automotive
(b) Aerospace
(c) Marine
(d) Military Ground Systems
(e) Rail and Mass Transit
(f) Commercial Electronics
(g) Industrial Electronics
"GAAP" means United States generally accepted accounting principles as in
effect on the date hereof, applied on a basis consistent with the preparation of
Buyer's historical financial statements.
"Inventions" means all discoveries, know-how, inventions, developments and
improvements, whether patentable or not.
"License Agreement" means the License Agreement of even date herewith
between Buyer and Seller.
"Net Sales" means gross sales of the Products (other than Products
manufactured by Seller or its assignees or successors in interest) billed and
shipped by or on behalf of Buyer and its subsidiaries, less competitive
discounts actually allowed (other than advertising allowances or fees or
commissions to salesmen or sales representatives), and returns, and shall not
include billed taxes and customs duties paid by Buyer, freight and transit
insurance or any sale to Buyer's employees for any reason other than resale or
distribution. If a Licensed Product constitutes a component of a larger product,
then the gross sales from the sale of the larger product shall be allocated
across its component parts in proportion to their separate purchase prices (as
evidenced by recent third party sales), and if no such separate purchase prices
exist, then in proportion to their relative manufacturing costs. Net Sales shall
not include sales between the parties hereto, sales by independent distributors,
or sales between Buyer and its subsidiaries. Notwithstanding the above,
royalties shall be paid on all net sales of Products recorded as sales by Buyer
and its subsidiaries under GAAP in their consolidated audited financial
statements.
"Permitted Customers" shall mean all actual and potential customers for
the Products in the Field of Use, excluding only the Excluded Customers.
"Products" shall mean (i) Nickel Titanium Products listed on Exhibit A-1
hereto and (ii) Titanium Products listed on Exhibit A-2 hereto. Products listed
on Exhibit A-1 or A-2 shall meet the specifications identified in Exhibit B.
Products shall not include Tinel-Lock(R) Products, which are covered by a
separate agreement between the parties.
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"Nickel Titanium Products" shall mean nickel titanium products currently
being manufactured, sold and/or used by Buyer specifically set forth on Exhibit
A-1 hereto, as well as any other similar and/or derivative nickel titanium
products that (i) meet mutually agreed upon criteria for ongoing business, or
(ii) Buyer and Seller hereafter mutually agree should become Nickel Titanium
Products under this Agreement, or (iii) are developed or manufactured by or for
Seller for the Field of Use; or (iv) are jointly developed by Buyer and Seller
for the Field of Use.
"Tinel-Lock(R) Products" shall mean products using any nickel titanium
alloy for the termination of electrical/electronic braid in connector or
interconnect applications. Although this is typically a ring of Alloy `X'
(heat-to-shrink) used to compress an overall cable shield onto a connector
adapter, other covered applications include, without limitation:
(a) wire, braid strap and other electrical grounding
methods;
(b) metallic or non-metallic braid and straps used for
mechanical attachment of electrical/electronic or fiber optic cables and
interconnection.
"Titanium Products" shall mean products made almost entirely of Titanium
and containing no Nickel which (i) Buyer and Seller hereafter mutually agree
should become Products under this Agreement (and which will be listed on Exhibit
A-2 hereto at the time of the agreement), or (ii) are developed or manufactured
by or for Seller for the Field of Use; or (iii) are jointly developed by Buyer
and Seller for the Field of Use.
Various other defined terms used herein are defined throughout this
Agreement.
II. PURCHASE AND SALE
A. Purchase and Sale. Subject to and in accordance with the terms and
conditions hereof, Seller shall sell to Buyer the Products identified on Exhibit
A hereto from time to time. Except as specifically set forth herein, during the
term of this Agreement, the Buyer shall purchase its entire requirements for
Products, whether for direct sale to third parties or for use by Buyer as
components for products being manufactured and sold by Buyer, from Seller, and
shall not manufacture Products for its own use, or purchase Products from any
other third party. Additional products that become Products will be deemed added
to Exhibit A from time to time without the need for further action.
B. Specifications. The Products shall meet the specifications identified
in Exhibit B hereto. The Product Managers defined in Section 6 below, shall be
responsible for amending Exhibit B by mutual consent from time to time as
required to reflect agreed upon specifications or to add or
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delete specifications as Products are added to or deleted from Exhibit A.
C. Resale. Subject to the terms hereof, Buyer may resell the Nickel
Titanium Products under Buyer's own trade names using Buyer's trade literature
and/or all or portion of Seller's literature, except Seller's trade name or
trademarks. Subject to the terms hereof, Buyer shall resell the Titanium
Products only under Buyer's trade names, but in conjunction with Seller's
trademarks.
D. Commitments of Seller. Seller hereby agrees to conduct its business and
act in a manner as if the Seller were the named party therein in those
agreements of Buyer listed on Exhibit I (except that Seller shall not be
responsible for Buyer's conduct).
III. EXCLUSIVITY
A. Exclusivity. Buyer shall be the exclusive seller or distributor in the
Field of Use to Permitted Customers for Products during the term hereof. Seller
shall not market or sell Products or products similar to Products to any
Permitted Customer in the Field of Use either directly or indirectly through
OEMs, representatives, distributors or other third parties, other than Buyer
during the term hereof. Notwithstanding the two preceding sentences, however,
Seller may directly sell Products or other products similar to Products to
Permitted Customers in the Field of Use (i) for the first year following the
Effective Date hereof, to any customer who is an existing customer of Seller as
of the Effective Date as set forth on Exhibit G hereto; provided, however, that
this clause (i) only allows Seller to sell to any such customer during such
period products that have previously been sold to such customer by Seller prior
to June 30, 1996, or (ii) if, prior to its commercialization, a particular
product is being sold by Seller to a customer under a research and/or
development project.
IV. BUYER'S SALES EFFORTS
A. During the term hereof Buyer shall:
1. continuously use reasonable efforts to promote the sale of the
Products at its own cost, through advertisement and through distribution of
literature, pamphlets, catalogs, samples and other merchandising aids, and
maintain customer relations with Permitted Customers in the Field of Use, and to
refrain from acts that could reasonably be expected to be detrimental to the
interests of the Seller;
2. maintain at all times and at its own cost (i) a sales
organization which Buyer determines, in its reasonable discretion, is capable of
promoting and selling the Products to Permitted Customers within the Field of
Use, and (ii) an inventory of Products in such amounts as it determines, in its
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reasonable discretion, to be sufficient to supply its customers with Products
with reasonable promptness;
3. maintain product liability insurance for any products
incorporating the Products in an amount that is usual and customary for
Buyer's business;
4. assuming Seller provides all requisite information to Buyer,
comply with all applicable laws and regulations, relating to the storage,
packaging and sale of the Products; and
5. not knowingly sell or distribute the Products to Excluded
Customers, and shall not knowingly sell such Products to Permitted Customers for
sale or transportation to Excluded Customers, nor sell such Products to a third
party after the Seller has notified the Buyer that such third party is reselling
such Products to Excluded Customers.
V. MANUFACTURING COST.
A. Seller shall make reasonable commercial efforts to reduce prices to
Buyer by continuously seeking lower raw material costs and improving its
processes and efficiencies to reduce manufacturing costs while maintaining
quality levels acceptable to Buyer and while meeting all of the terms and
conditions of this Agreement.
VI. PRODUCT MANAGERS
A. During the term of this Agreement, the parties shall each designate one
(1) Product Manager who shall be responsible for managing the relationship
between Seller and Buyer ("Product Manager"). The Product Managers shall confer
on a regular basis.
VII. TERMS AND CONDITIONS
A. Purchase Orders. Buyer shall purchase Products by submitting to Seller
purchase orders for specific Products. Purchase orders shall specify the type
and quantity of Products to be purchased, the price, the delivery date, the
purchase order number, and test report and certification requirements. Purchase
orders shall be deemed accepted by Seller three Business Days after receipt,
unless Seller notifies Buyer within said period that it is rejecting such
purchase order in accordance with Section 7.4(a) below.
B. Pricing.
1. The initial purchase price for each Product listed on Exhibit A-1
hereto is set forth opposite the description of such Product on said Exhibit
A-1, and is intended to be the price for such Product for the period commencing
on the date hereof and continuing through June 30, 1997. The parties agree to
amend the purchase price for each Product effective as of every July 1 during
the term hereof, and to commence negotiations on said
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purchase price adjustments on or about each April 1 during the term hereof. New
Products added to Exhibit A from time to time, whether to Exhibit A-1 or A-2,
will be priced at a mutually agreed upon price for such Product through the
period ending on the immediately subsequent June 30. [NOTE: REMAINING TWO
SENTENCES OF THIS PARAGRAPH OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION, PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.]
2. In the event the parties cannot agree as to new pricing as of
June 1 of each year, the parties shall mutually agree on an individual, not
affiliated with either party, who shall make a final decision regarding pricing
(in accordance with the basis set forth in Section 7.2(a) above) by June 15 of
each year.
C. Rolling Forecasts. Every calendar quarter during the term hereof, at
least one (1) full month prior to the commencement thereof, Buyer shall submit
to Seller its good-faith estimated requirements for the total dollar volume to
be purchased pursuant to this Agreement for each of the next six (6) calendar
quarters ("Buyer's Forecast"). Exhibit C hereto, which will be provided by June
1, 1996, consists of Buyer's Forecast for the period July 1, 1996, through
December 31, 1997 (the "Initial Forecast"), which Initial Forecast shall remain
in effect as Buyer's Forecast without amendment until submission of the six (6)
quarter forecast for the period October 1, 1996, through March 31, 1998, which
forecast will be due on or prior to September 1, 1996. Buyer will make
commercially reasonable efforts to make non-binding forecasts on a Product by
Product basis. Buyer and Seller shall each review Forecasts to assess whether it
would require an unreasonable spike in capacity (i.e., ramp-ups from one quarter
to the next or from the forecast for such quarter from one Buyer's Forecast to
the next) in which event the Buyer and Seller shall agree upon a mutually
acceptable alternative forecast. Ramp-ups of up to 25% per quarter in all events
shall be deemed reasonable.
D. Security Stock; Minimum Take Requirements.
1. Seller covenants and agrees for every month during the term
hereof to have available for immediate delivery to Buyer, raw material and
manufacturing capacity sufficient to supply Buyer with an amount of Products
equivalent to 40% of the amount forecasted in Buyer's Forecast for the quarter,
except if and to the extent that changes in Product mix materially increase the
amount of manufacturing capacity necessary to process a given
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volume of raw material. Seller shall only have the right and ability to reject
purchase orders for which it is not required to have sufficient raw material and
manufacturing capacity.
2. Buyer covenants and agrees for every calendar quarter during the
term hereof either to order from Seller Products with an aggregate purchase
price equal to (i) One hundred percent (100%) of the Buyer's Forecast in dollar
volume for the first succeeding quarter after the delivery of the Buyer's
Forecast for such quarter, (ii) sixty-five percent (65%) of the Buyer's Forecast
amount in dollar volume for the second succeeding calendar quarter after the
Buyer's Forecast, and (iii) fifteen percent (15%) of the Buyer's Forecast in
dollar volume for the third succeeding quarter after the Buyer's Forecast, or
pay to Seller the difference between the amount of Product so ordered and the
greater of (i), (ii) or (iii) above.
E. Payment Terms; Invoice. Payment terms are net thirty (30) days after
Buyer's receipt of Seller's invoice or the date of shipment (whichever is
later). The Buyer description and part number must be referenced on all invoices
and packing lists. All outstanding sums owed to Seller by Buyer shall accrue
interest at a rate of 1.0% per month (or any part thereof) if unpaid within
thirty (30) days after the due date therefor.
F. Terms and Conditions. Except as otherwise provided herein, each sale
hereunder shall be governed by Buyer's Standard Terms and Conditions of Purchase
("Order Terms") attached hereto as Exhibit D. Such terms and conditions are
hereby incorporated herein by reference. Any preprinted terms and conditions in
any acknowledgment, invoice or other document submitted by Seller are superseded
by the terms of this Agreement. In the event of any inconsistency between this
Agreement and the Order Terms, this Agreement shall be controlling.
G. Delivery. Time is of the essence for Purchase Orders. Standard delivery
for Products is six (6) weeks after receipt of Buyer's order. The parties may
agree on shorter lead times to meet customer needs. If Seller does not meet the
committed ship date Buyer may, at Buyer's option, without incurring any
liability, (a) extend the time for delivery, or (b) cancel all or any part of
the Purchase Order. The delivery dates for all Products sold pursuant to this
Agreement shall be deemed to be the dates on which they are placed by Seller
into the possession of Buyer's designated carrier, packed and ready for shipment
to Buyer's designated location. Invoices shall not precede the delivery dates.
Seller shall ship Products F.O.B., Seller's facility. All Products shall be
shipped by Buyer's designated standard land carrier unless otherwise specified
by Buyer. In the event that Buyer requests delivery by air carrier, Seller shall
use Buyer's designated standard air carrier unless otherwise specified by Buyer.
Delivery shall be made to Buyer's plant at Menlo Park, California, unless
otherwise specified by Buyer in writing.
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H. Packaging Requirements. The Nickel Titanium Products shall be packed
using materials with Buyer's trade name as directed by Buyer. The Titanium
Products shall be packed using materials with Buyer's trade name and Seller's
trademarks, in a manner reasonably satisfactory to both Buyer and Seller.
Packaging and labeling requirements are defined in Exhibit E.
I. Warranty. Seller warrants the Products as set forth in the Order Terms.
Seller also warrants that the Products meet the specifications identified in
Exhibit B. These warranties shall be for a term of three (3) years from the date
of shipment of the Products. These warranties shall inure to the benefit of
Buyer, its successors and assigns and to subsequent purchasers of the Products
and shall survive acceptance and use of, and payment for, the Products.
J. Cancellations. Buyer shall have the right to cancel any order. In the
event Buyer cancels any order of Products upon less than thirty (30) days
notice, Buyer shall pay Seller a reasonable charge, to be negotiated in good
faith by the parties, for Seller's costs and expenses, which Seller shall use
its best efforts to properly mitigate. In no event shall the costs and expenses
exceed the purchase price for the Products described in the canceled order or
include consequential damages or lost profits. Buyer shall not pay any
cancellation charge if cancellation is due to Seller's failure to ship Products
in a timely manner pursuant to Section 7.7. Cancellation shall not in any way
affect Buyer's "take or pay" obligations set forth in Section 7.4(b) except to
the extent that cancellation results from a failure to perform by Seller.
K. Returns.
1. Seller agrees to accept return of any Product that fails to
function as warranted in Section 7.9 In the event of a return pursuant to this
Section, Seller shall perform testing and analysis of the returned Product and
issue a written report to Buyer explaining the cause of the failure. Seller will
insure that problems detected in returned Products or reported to Seller are
corrected in future shipments of Products. Seller agrees to replace returned
Products with new Products immediately or to credit Buyer for the full amount of
the purchase price. IN NO EVENT SHALL SELLER BE LIABLE FOR ANY INCIDENTAL,
SPECIAL OR CONSEQUENTIAL DAMAGES RESULTING FROM THE USE OF ANY OF THE PRODUCTS
BY ANY PERSON; PROVIDED THAT THIS SHALL NOT LIMIT LIABILITY IN THE EVENT OF A
THIRD PARTY CLAIM AGAINST BUYER EXCEPT TO THE EXTENT OF SUCH LIABILITY; AND
FURTHER PROVIDED THAT THIS LIMITATION SHALL NOT APPLY TO COSTS ASSOCIATED WITH
FIXING CUSTOMER PROBLEMS. THE PARTIES SHALL COOPERATE IN ADDRESSING CUSTOMER
PROBLEMS AND WILL EQUITABLY SHARE THE COSTS.
2. Buyer shall carefully inspect all goods promptly upon the receipt
from the carrier. Any claim for breach of warranty hereunder must be presented
to the Seller, in writing, within thirty (30) days after discovery by Buyer of
the alleged
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defect and that a claim hereunder is probable. Failure to make a claim within
such specified period shall constitute a waiver of the claim only to the extent
that the Seller was thereby prejudiced. Claims must be accompanied by supporting
proof to the extent reasonably available.
L. Insurance. On written request from Buyer, Seller shall deliver to Buyer
a certificate of insurance evidencing that Seller maintains product liability
insurance for the Products in an amount that is usual and customary for Seller's
business.
VIII. Status of Buyer
A. The parties expressly agree that the relationship established by this
Agreement as between Seller and Buyer is solely that of buyer and seller, and
Seller shall have no right to, and shall not, exercise any supervision or
direction over the Buyer or any of its employees. Nothing contained herein shall
create a partnership, joint venture, or any other business relationship between
Seller and Buyer, other than that of buyer and seller of Products hereunder.
B. Buyer shall not have authority to obligate or bind Seller with respect
to any matter, or make any contract, sale, agreement, warranty or
representation, express or implied, on behalf of Buyer.
C. Buyer shall conduct business solely in its own name and not that of
Seller and shall not use the words "Agent," "Agency" or words of similar import
on stationery, signs, documents, telephone listings, or otherwise in connection
with the name of Seller.
IX. SUBAGREEMENTS
A. The Buyer may distribute or sell Products purchased pursuant to this
Agreement through third party distributors, representatives or resellers without
the consent of the Seller. Buyer will give Seller prompt written notice of any
such subagreements.
X. TERM AND TERMINATION
A. Initial Term. The initial term of this Agreement shall be the period
commencing on the Effective Date and ending on June 30, 2001. Thereafter, the
term of this Agreement shall be automatically renewed for an unlimited number of
successive one (1) year renewal terms; provided, however, that either party
hereto may prevent such automatic renewal by notifying the other party in
writing of its desire not to renew this Agreement at least six (6) months prior
to the expiration of the initial term or any renewal term hereof.
B. Termination. This Agreement may be terminated at any time during the
term as follows:
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1. by either party, at any time and for any reason, by written
notice to the other party given on or after June 30, 1998 delivered at least one
(1) year prior to the date of termination;
2. by either party following thirty (30) days notice that the other
party is in breach of any of its material obligations under this Agreement and a
failure of the breaching party to cure the breach within the thirty (30) day
period, unless the breach is not capable of being cured in which case this
Agreement shall terminate immediately following notice. Nothing contained in
this paragraph shall in any way limit a party's right to terminate this
Agreement immediately upon notice as provided in Section 10.2(c) or (d). If
either party fails to keep or perform any of its material obligations hereunder
and such default continues for a period of thirty (30) days after the defaulting
party has been notified of the default by the other party, then the
non-defaulting party may suspend this Agreement forthwith upon written notice to
the other party until such time as the default has been cured. However, a
non-defaulting party who has suspended performance pursuant to this Section
10.2(b) shall not be precluded from terminating the Agreement pursuant to
Sections 10.2(b), (c) or (d) from pursuing its other lawful rights in the event
that the defaulting party does not cure the default prior to such termination.
3. by either party immediately (i) if any proceeding in bankruptcy,
reorganization or arrangement for the appointment of a receiver or trustee to
take possession of the other party's assets or any other proceeding under any
law for relief from creditors shall be instituted by or against the other party;
or (ii) if the other party shall make an assignment for the benefit of its
creditors. Each party shall immediately give written notice to the other party
of the occurrence of any event of the type described in this Section 10.2(c); or
4. by Buyer immediately if, without Buyer's consent,
(i) ownership of more than 25% of the issued and outstanding
stock of Seller on a fully-diluted basis is transferred, beneficially or of
record, to a person or entity or group of persons or entities that Buyer
reasonably deems to be a competitor;
(ii) all or substantially all of Seller's assets are
transferred in a single transaction or series of transactions; or
(iii) there is a change of more than one-half of Seller's
board of directors in a one-year period.
C. Rights on Termination.
1. Upon termination of this Agreement, Buyer may sell all of its
inventory of Products.
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2. Notwithstanding anything to the contrary set forth in this
Agreement, upon (i) the termination of this Agreement for any reason, or (ii)
upon Seller's inability or unwillingness to supply as defined in Section 14 of
this Agreement, Buyer shall be entitled to exercise its rights to the License
Agreement.
XI. TECHNICAL SERVICE AND SUPPORT
A. Engineering Support. During the term of this Agreement, Seller shall
make available to Buyer at no cost, at Buyer's request, reasonable engineering
support for customer applications.
B. Customer Tours. Seller shall make its plant available, upon
reasonable notice and at a reasonable time, to Buyer for the purpose of
conducting tours for Buyer's customers.
XII. LISTING AND APPROVAL
A. Listing. Seller agrees to use commercially reasonable efforts both to
obtain necessary government or regulatory approvals and agency listings and to
assist Buyer in obtaining, as necessary, such approvals and listings for
Products.
XIII. INTELLECTUAL PROPERTY
A. Buyer's Trademark.
1. Seller hereby acknowledges Buyer's ownership of all right, title
and interest in Buyer's trademarks and trade names which Buyer uses to sell the
Nickel Titanium Products. Seller further acknowledges that it shall acquire no
interest therein by virtue of this Agreement or the performance by either party
of their respective duties and obligations hereunder. Buyer hereby acknowledges
Seller's ownership of all right, title and interest in Seller's trademarks and
trade names which Buyer uses to sell the Titanium Products. Buyer hereby
acknowledges that, except as set forth in Section 13.1(b) below, it shall
acquire no interest therein by virtue of this Agreement or the performance by
either party of their respective duties and obligations hereunder.
2. Buyer hereby grants Seller during the term of this Agreement a
fully paid-up, royalty-free, non-transferable, nonexclusive, limited license to
use Buyer's trademarks and trade names specified by Buyer for the purpose of
placing such trademarks and trade names on Nickel Titanium Products, and
packaging therefor, to be sold to Buyer (and only to Buyer) pursuant to this
Agreement. Seller hereby grants to Buyer during the term of this Agreement a
fully paid, royalty-free, non- transferable, nonexclusive, limited license to
use Seller's trademarks and trade names specified by Seller for the purpose of
placing such trademarks and trade names on Titanium Products and packaging
therefor, to be sold to Buyer pursuant to this Agreement.
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3. Buyer reserves the right to approve all uses by Seller of Buyer's
proprietary names and marks on the Nickel Titanium Products (and related
packaging materials) in advance. Seller reserves the right to approve all uses
by Buyer of Seller's proprietary names and marks on the Titanium Products (and
related packaging materials) in advance.
B. Copyright License. Seller grants Buyer a license to use any literature,
data sheets or other documents, without using Seller's trade name, relating to
Products in connection with the marketing or sale of Products purchased by Buyer
pursuant to this Agreement.
XIV. INTERRUPTION OF, INABILITY OR UNWILLINGNESS TO SUPPLY
A. Non-Supply; Delayed Deliveries.
1. Non-Supply. In addition to other remedies available pursuant to
this Agreement or in law or equity, in the event Seller is unable or unwilling
to supply Products pursuant to the terms of this Agreement for any period longer
than thirty (30) days which materially interrupts the continuous supply of
Products to Buyer pursuant to the terms of this Agreement, Buyer shall be
entitled to exercise its rights under the License Agreement until such time as
the continuous supply is reestablished. The exclusivity requirements of Section
2.1 shall also be suspended during this period.
2. Delayed Deliveries. In addition to other remedies available
pursuant to the Agreement or in law or equity, should repeated, unexcused,
delayed deliveries of more than three percent (3%) of an ordered quantity occur
more than twelve (12) times over a calendar year period with an average delay of
ten (10) business days or of one (1) single delayed delivery exceeding one (1)
month, then Buyer shall be entitled to exercise its rights under the License
Agreement with respect to the delayed Product or Products, and the exclusivity
required for purchases by Section 2.1 shall not apply to such Product or
Products. Exercise of rights under the License Agreement does not by itself
constitute a termination of this Agreement.
XV. QUALITY CONTROL
A. Quality Control. Seller must meet Buyer's requirements for certified
suppliers, as set forth in Exhibit J, and commercially reasonable quality
control standards as provided by Buyer to Seller from time to time. Products
shall also be manufactured and supplied to the specifications agreed to on
Exhibit B. Seller shall use reasonable commercial efforts to obtain ISO 9000
certification.
B. Compliance With Laws. All Products sold to Buyer by Seller shall be new
and tested per industry standards and shall comply with the specifications
identified in Exhibit B hereto. Products shall also meet and be manufactured in
accordance with
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the applicable statutory and regulatory requirements and any applicable federal,
state or local requirements including Good Manufacturing Practices if required.
C. QC Records. Seller shall be required to submit appropriate QC records
per Buyer's requirements.
D. Test Report Requirement. Seller must supply test data and certification
for each Product as required by the Purchase Order. Test reports certified by
Seller's quality control department ("Certified Test Report"), containing the
information as defined in Exhibit F, must be provided to Buyer or its customers
upon Buyer's request.
E. Changes. Seller shall not make any material changes or process changes
with respect to any Products manufactured by Seller and sold to Buyer without
Buyer's prior written consent, which shall not be unreasonably withheld or
delayed. It will not be unreasonable for Buyer to withhold consent if Buyer's
customers need to consent to such changes. The Product Managers shall establish
a system for managing this consent process.
F. Audit. Buyer shall have the right to perform quality inspections of
Seller's manufacturing facility and manufacturing process relating to Products
at reasonable times and upon reasonable notice.
XVI. CONFIDENTIAL INFORMATION
A. Confidential Information. The receiving party shall, from the date of
disclosure of any Confidential Information and for a period of ten (10) years
thereafter, use the information solely for its own internal use consistent with
this Agreement, not disclose the information to any person or persons outside
its organization, and disclose the information to any person or persons within
its organization only on a "need to know" basis.
B. If either party is compelled to make a disclosure of any Confidential
Information of the other party by law or government rule or regulation:
1. such disclosure shall be limited to the extent required; and
2. the other party shall have an opportunity to review the
information at least thirty (30) days before disclosure; and
3. the disclosing party shall promptly apply for applicable
protective orders.
Notwithstanding the foregoing, such review shall not make the reviewing party
responsible for the content of the disclosure.
XVII. JOINT INVENTIONS AND INVENTIONS SOLELY BY BUYER
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A. Nickel Titanium Products Joint Inventions. It is anticipated that the
parties will work together to develop new Nickel Titanium Products during the
term of this Agreement. Any Invention relating to Nickel Titanium Products or
related products, process or materials made jointly by both parties will be
jointly owned by both parties ("Nickel Titanium Joint Inventions"). During the
term of this Agreement, Buyer shall have the exclusive right to sell or
distribute such Nickel Titanium Joint Inventions to Permitted Customers in the
Field of Use. Following termination of the Agreement, Buyer may, at its option,
elect to continue its exclusivity with respect to the Nickel Titanium Joint
Inventions to Permitted Customers in the Field of Use, even as to manufacture,
distribution or sale by Seller, by paying Seller a [NOTE: PERCENTAGE OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, PURSUANT TO RULE
24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.]
royalty on Net Sales of such Nickel Titanium Joint Inventions.
B. Titanium Products Joint Inventions. It is anticipated that the parties
will work together to develop new Titanium Products during the term of this
Agreement. Any Invention relating to Titanium Products or related products,
process or materials made jointly by both parties will be jointly owned by both
parties ("Titanium Joint Inventions" and together with the Nickel Titanium Joint
Inventions, the "Joint Inventions"). During the term of this Agreement, Buyer
shall have the exclusive right to sell or distribute such Titanium Joint
Inventions to Permitted Customers in the Field of Use. Following termination of
the Agreement, Buyer may, at its option, elect to continue its exclusivity with
respect to the Titanium Joint Inventions to Permitted Customers in the Field of
Use, for distribution or sale by Seller, by paying Seller a [NOTE: PERCENTAGE
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION,
PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.] royalty on Net Sales of such Titanium Joint Inventions.
C. Patents for Joint Inventions. In the event of such Joint Inventions, if
Buyer and Seller both wish to seek or maintain patent protection for a Joint
Invention, the costs of seeking or maintaining such patent protection shall be
divided equally between them. If only one (1) of Buyer and Seller wishes to seek
or maintain patent protection for a Joint Invention ("First Party"), it shall be
entitled to do so at its own expense, and the other party ("Second Party") shall
provide, at the First Party's expense, all reasonable assistance to that end. If
the First Party, with respect to one or more countries, thereafter decides not
to seek patent protection for, or decides to abandon a patent application or
patent relating to, the Joint Invention, the First Party shall notify the Second
party in writing of its decision. The Second Party shall then be entitled, after
payment of half the out-of-pocket costs already incurred by the First Party in
seeking or maintaining patent protection, to require that all rights in the
Joint Invention in said country or countries be assigned to it so that it can
seek or maintain patent protection for the Joint Invention in said country or
countries. The notification shall be in writing and shall be made in a timely
fashion which preserves the patent rights. The First Party shall thereafter
provide, at the Second Party's expense, all reasonable assistance in seeking or
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maintaining patent protection for the Joint Invention in said country or
countries.
D. Products Proposed or Invented Solely by Buyer. It is anticipated that
Buyer will work to develop new Products during the term of this Agreement. Any
Invention relating to Nickel Titanium Products or Titanium Products made solely
by Buyer will be owned by Buyer. Such Inventions will become Products only if
accepted as Products by Seller. Seller hereby grants Buyer and its affiliates an
exclusive, perpetual, worldwide, irrevocable right and license, with the right
of sublicense and assignment, to utilize the Seller's "Licensed Technology" (as
defined in the License Agreement of even date between the parties) to make, have
made, use, import, offer for sale, and sell (a) products invented solely by
Buyer that would become Products except that Seller does not agree to include
them as such and (b) products that Buyer proposes to Seller for manufacture and
Seller decides not to manufacture.
XVIII. COOPERATION PROVISIONS
A. General Cooperation.
1. The parties agree to explore the possibility of Buyer purchasing
components made on traditional automatic screw machines from Seller's Xxxxxx
Machine Corporation subsidiary.
2. The parties agree to schedule and cause meetings of Seller's
President and the division manager of Buyer's Electronics Division, as well as
other appropriate personnel on both sides reasonably acceptable to the parties,
to be held not less than twice per calendar year in metropolitan San Francisco,
California (or such other site as is mutually acceptable to the parties). The
purpose of said meeting shall be to discuss how the parties are performing their
obligations under this agreement, how the relationships arising from said
agreements might be improved upon and strengthened and what other supply, sales,
distribution and/or similar relationships the parties might establish that would
prove to be mutually beneficial.
B. Agreements as to Titanium Products Post Closing. In the event that this
Agreement is terminated for any reason, Buyer may, by giving written notice to
Seller, continue to purchase Titanium Products from Seller, and resell said
Titanium Products to Permitted Customers in the Field of Use in accordance with
all the terms and conditions hereof, including without limitation Seller's
obligations under Section 7.4(b); provided, however, that Section 3.1 hereof
shall no longer be operative (i.e., Buyer shall no longer be an exclusive seller
and/or distributor). Pricing to Buyer shall initially be the lesser of (a) the
best price at which such Titanium Products are sold to Seller's distributors or
(b) a price that equals the average of Buyer's gross margin over the preceding
12 months for Titanium Products. Prices shall be reviewed at the end of the
first 12 months of this arrangement and annually thereafter. Pricing will
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thereafter be based on the lower of (a) the best price at which such Titanium
Products are sold to Seller distributors or (b) a [NOTE: PERCENTAGE OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, PURSUANT TO RULE
24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.]
discount from average end user prices.
C. License for Titanium Products. Subject to the limitations set forth in
the immediately succeeding sentence, Seller hereby grants to Buyer a
non-exclusive, perpetual, worldwide, irrevocable right and license (the
"Titanium License"), with the right of sublicense and assignment, to utilize the
Titanium Licensed Technology to make, have made, use, import, offer for sale,
and sell Titanium Products to Permitted Customers in the Field of Use.
Notwithstanding the foregoing, Buyer's right to practice under the Titanium
License shall become effective only at such time as this Agreement has been
terminated, Buyer has given the notice specified in Section 18.2 and Seller has
materially breached its obligations to supply Titanium Products under said
Section 18.2 in a manner that would allow a party hereto to terminate the
Agreement under the standards of Section 10.2(b). If the Titanium License shall
become effective as aforesaid, Buyer shall pay to Seller a royalty of [NOTE:
PERCENTAGE OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION, PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.] of Net Sales of Licensed Products during the life of the
Titanium Patents. For purposes of this Section 18.3, the following terms shall
have the following definitions:
1. "Titanium Licensed Technology" means any and all of the
Proprietary Rights (as defined in the License Agreement) now owned or licensed
or hereafter acquired by Seller relating to Titanium Products.
2. "Titanium Patents" means Patents (as defined in the License
Agreement) owned by Seller having one or more claims covering the Titanium
Products manufactured or sold by Buyer.
XIX. MISCELLANEOUS
A. Entire Agreement. This Agreement (together with Exhibits attached
hereto as such Exhibits may be amended from time to time in accordance with this
Agreement) constitutes the entire Agreement between Seller and Buyer with
respect to the sale of Products to Buyer and the resale of Products by Buyer.
All prior or contemporaneous agreements, whether written or oral, and all
proposals, understandings and communications between or involving Seller and
Buyer are hereby canceled and superseded. This Agreement may be amended only by
a written instrument executed by both parties.
B. Amendments and Waivers. No amendment of any provision of this Agreement
shall be valid unless the same shall be in writing and signed by the Buyer and
the Seller. No waiver by either Party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or
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affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
C. Severability. If any provision of this Agreement is held to be
unenforceable for any reason, it shall be adjusted rather than voided, if
possible, in order to achieve the intent of the parties to the extent possible.
In any event, all other provisions of this Agreement shall be deemed valid and
enforceable to the full extent.
D. Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties named herein and their respective successors
and permitted assigns. Neither party may assign either this Agreement or any of
its rights, interests, or obligations hereunder without the prior written
approval of the other party. For purposes of the foregoing sentence, an event
after which those persons who were the beneficial owners of a party immediately
prior to such event beneficially own less than a majority of a party immediately
after such event shall be deemed to constitute an assignment.
E. Force Majeure. Neither Seller nor Buyer shall be liable for its failure
to perform its obligations under this Agreement due to events beyond its
reasonable control including, but not limited to, strikes, riots, wars, fire,
acts of God, labor unrest and acts in compliance with applicable law,
regulation, or order (whether valid or invalid) of any governmental body.
F. Status of Parties. This Agreement will not be construed as creating any
agency, partnership, joint venture, or other similar legal relationship between
the parties; nor will either party hold itself out as the agent, partner, or
co-venturer of the other party. Both parties shall be, and shall act as,
independent contractors.
G. Applicable Law. This Agreement and all transactions hereunder shall be
governed by and construed according to the laws of the State of California,
excluding the choice of laws rules thereof.
H. Survival. Sections 10.1, 16.1, 16.2, 17, 18.2, 18.3 and 19.10 shall
survive termination of this Agreement.
I. Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if three (3)
business days thereafter if registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
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If to the Seller: Copy (which shall not constitute notice) to:
Raychem Corporation Raychem Corporation
Electronics Division 000 Xxxxxxxxxxxx Xxxxx
000 Xxxxxxxxxxxx Xxxxx Xxxxx Xxxx, XX 00000-0000
Xxxxx Xxxx, XX 00000 Attn: Legal Department MS 120/8502
Telecopier: Telecopier: (000) 000-0000
If to the Licensee: Copy (which shall not constitute notice) to:
Memry Corporation Xxxx Xxxxx & Xxxxxxx
00 Xxxxxxxx Xxxxx Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000 Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xx. Xxxxx X. Xxxxx Attn: Xxxxx X. Xxxxx, Esq.
Telecopier: (000) 000-0000 Telecopier: (000) 000-0000
Either party may send any notice, request, demand, claim or other
communication hereunder to the intended recipient at the address set forth above
using any other means (including personal delivery, expedited courier, messenger
service, telecopier, telex, ordinary mail, or electronic mail), but no such
notice, request, demand, claim, or other communication shall be deemed to have
been duly given unless and until it actually is received by the intended
recipient. Either party may change the address to which notices, requests,
demands, claims, and other communications hereunder are to be delivered by
giving the other Party notice in the manner herein set forth.
J. Attorneys' Fees. If legal action is commenced to enforce the
performance of any part of this Agreement, the prevailing party shall be paid by
the other party reasonable attorneys' fees and expenses.
K. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but which together shall
constitute one and the same instrument.
L. Headings. The headings of the Sections of this Agreement are for
convenience and shall not be used to interpret this Agreement.
M. Remedies. Remedies provided herein are not exclusive. Delay in
enforcing any right or remedy as a result of any breach hereof shall not be
deemed a waiver of that or any subsequent breach.
N. Compliance With Federal Laws. Seller shall comply with all applicable
federal employment, equal opportunity, affirmative action and environmental laws
in the operation of Seller's business and shall provide Buyer with any Material
Safety Data Sheets or other information required by any federal, state or local
statute or regulation.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives and it shall be effective as of the
date first above written.
MEMRY CORPORATION RAYCHEM CORPORATION
By: /s/Xxxxxxx X. Xxxxxx, Xx. /s/ Xxxxxx X. Xxxxx
---------------------------------- -------------------------------------
Print Name: Xxxxxxx X. Xxxxxx, Xx. Print Name: Xxxxxx X. Xxxxx
Title: Senior Vice President Title: Vice President
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Exhibits Intentionally Omitted
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