MIM/GLASS SEAL/HYBRID ASSEMBLY SUPPLY AGREEMENT
THIS MIM/GLASS SEAL/HYBRID ASSEMBLY SUPPLY AGREEMENT
("Agreement"), dated as of October 31, 1997 ("Effective Date"), is made by and
among XXXXXXX-XXXXXXX COMPANY, a California Corporation ("Xxxxxxx-Xxxxxxx");
STELLEX MICROWAVE SYSTEMS, INC., formerly known as X-X TSMD INC., a California
corporation and a wholly-owned subsidiary of Xxxxxxx-Xxxxxxx ("X-X TSMD"); and
TSMD ACQUISITION CORP., a Delaware corporation ("TSMD Acquisition").
WHEREAS, the parties have entered into that certain Stock
Purchase Agreement, dated as of August 29, 1997 (the "Purchase Agreement"),
whereby TSMD Acquisition has agreed to purchase, and Xxxxxxx-Xxxxxxx has agreed
to sell, all of the outstanding stock of X-X TSMD; and
WHEREAS, X-X TSMD operates a MIM/glass sealing and
hybrid assembly facility (the "Facility"); and
WHEREAS, Xxxxxxx-Xxxxxxx uses parts processed by the
Facility; and
WHEREAS, the execution of this Agreement is a condition to the
closing of the purchase and sale of the outstanding stock of X-X TSMD under the
Purchase Agreement;
NOW, THEREFORE, for and in consideration of the foregoing and
of the covenants, conditions, undertakings and mutual promises hereinafter set
forth, it is agreed by and among the parties as follows:
1. DEFINITIONS
For all purposes of this Agreement, except as otherwise
expressly provided:
(a) the terms defined in this Section 1 have the
meanings assigned to them in this Section 1 and include the
plural as well as the singular;
(b) all references in this Agreement to designated
"Sections," "Paragraphs," and other subdivisions are to the
designated Sections, Paragraphs, and other subdivisions of the
body of this Agreement;
(c) pronouns of either gender or neuter shall include,
as appropriate, the other pronoun forms; and
(d) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to any
particular Section, Paragraph, or other subdivision.
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* Indicates that certain material has been omitted pursuant to a request for
confidential treatment. Such material is contained in a copy of this document
provided to the Securities and Exchange Commission.
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As used in this Agreement and the Exhibits delivered pursuant
to this Agreement, the following definitions shall apply:
"Affiliate" means a Person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, a specified Person.
"Closing" means the consummation of the purchase and
sale of stock under the Purchase Agreement.
"Conditions of Purchase" means the Conditions of Purchase Form
(Form PAR-1012EG-PA (01/95)) modified as shown on Exhibit B.
"Effective Date" means the date of Closing.
"Glass Seal Part" means a part that includes glass to metal
seals.
"Hybrid Assembly Part" means an assembled microelectronic part
which may have undergone electrical testing and environmental screening.
"Intellectual Property Rights" means all industrial and
intellectual property rights, including, without limitation, patents, patent
applications (pending or otherwise), patent rights, copyrights, computer
firmware and software (existing in any form), Know-How, Trade Secrets,
proprietary processes, inventions and formulae.
"Know-How" means any information, including, but not limited
to, invention records, research and development findings, records and reports,
experimental and engineering reports, pilot designs, production designs,
production specifications, raw material specifications, quality control reports
and specifications, drawings, photographs, models, tools, parts, algorithms,
processes, methods, market and competitive analysis, or other information,
whether or not considered proprietary or a Trade Secret.
"MIM Part" means a metal injection molded part.
"Part" means a MIM Part, a Glass Seal Part or a Hybrid
Assembly Part.
"Requirements" means Xxxxxxx-Xxxxxxx'x requirements for Parts
as specified on a Xxxxxxx-Xxxxxxx Forecast Form as modified from time to time in
accordance with the terms and conditions of this Agreement.
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"Services" means services related to the manufacture of the
Parts, including, but not limited to research and development efforts.
"Trade Secrets" means any formula, pattern, device or
compilation of information which gives an opportunity to obtain an advantage
over competitors who do not know or use it, including, but not limited to,
formulas for chemical compounds, a process of manufacturing, treating or
preserving materials, a pattern for a machine or any forms, plans, drawings,
specifications, customer lists, marketing and competition analysis and project
management, inventory and cost control systems and techniques.
"Xxxxxxx-Xxxxxxx'x Forecast Form" means a form that reasonably
identifies a projected delivery schedule and specifies the quantity of Parts by
part number and type.
"Unit Prices" means the prices for Parts set forth on
Exhibit A.
2. SUPPLY, TERM
2.1 Supply and Purchase.
For the term of this Agreement, Xxxxxxx-Xxxxxxx shall
purchase, and X-X TSMD shall supply, Parts and Services according to the terms
and conditions set forth herein.
2.2 Term.
This Agreement shall commence on the Effective Date and shall
continue until December 31, 2000.
2.3 Termination by Xxxxxxx-Xxxxxxx Without Cause.
This Agreement may be terminated by Xxxxxxx-Xxxxxxx without
cause at any time by notice to X-X TSMD given one year prior to such termination
date. In the event that Xxxxxxx-Xxxxxxx gives such a notice, the termination
shall be effective on the date specified in such notice. Payment of research and
development costs, if any research and development projects have been
authorized, shall be prorated to the effective date of such a termination.
2.4 Termination With Cause.
If any party commits a material breach of this Agreement and
does not correct such breach within thirty (30) days after written notice
complaining thereof is given to such party, this Agreement may be terminated
forthwith by written notice to that effect from the complaining party. Such
termination will not prejudice or limit any other rights or
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remedies available to the non-breaching party. Such termination will not
prejudice or limit any other rights or remedies available to the non-breaching
party.
2.5 Maintenance of Facility and Processes.
For the term of this Agreement, X-X TSMD shall maintain the
Facility and the processes as necessary to manufacture the Parts listed on
Exhibit A.
2.6 Right to Reject.
Xxxxxxx-Xxxxxxx and X-X TSMD recognize that MIM technology is
in the early stages of its development. X-X TSMD reserves the right to reject a
research and development request or a production request if, in its reasonable
judgment, the MIM process cannot meet product specifications or requested
delivery dates.
3. RESEARCH AND DEVELOPMENT SERVICES.
3.1 Time and Materials.
*
3.2 Research and Development Authorization.
Xxxxxxx-Xxxxxxx shall authorize research and development
projects in the form of specific purchase orders for such projects as follows:
(i) At least sixty (60) days prior to the start of each
calendar quarter beginning after January 1, 1998, Xxxxxxx-Xxxxxxx will give
direction to X-X TSMD for the research and development projects to be performed
during that quarter. This direction will provide technical objectives, schedule
constraints, and spending limitations for each project.
(ii) Within two (2) weeks after providing the research and
development direction to X-X TSMD, Xxxxxxx-Xxxxxxx and X-X TSMD will review the
objectives and agree upon any modifications as necessary. The result of this
review will be a written Statement of Work for each research and development
project. The SOW shall be completed at least 30 days before the start of each
quarter.
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(iii) Xxxxxxx-Xxxxxxx may cancel at any time an authorization
to perform research and development services by reasonable notice to X-X TSMD.
3.3 Monthly Review.
X-X TSMD shall provide a monthly review of research and
development technical progress and projections to Xxxxxxx-Xxxxxxx for each month
in which such a review has not been presented at a meeting of the Operations
Council.
3.4 Diligence.
In performing the research and development projects authorized
by Xxxxxxx-Xxxxxxx, X-X TSMD shall act with at least that degree of care and
diligence that it devotes to its own research and development projects.
3.5 Payment.
X-X TSMD will submit monthly invoices for research and
development services which Xxxxxxx-Xxxxxxx shall pay 30 days from the date of
invoice.
4. FORECASTS, REQUIREMENTS, FULFILLMENT
4.1 Forecasts.
Xxxxxxx-Xxxxxxx shall provide X-X TSMD a rolling six (6) month
Requirements forecast for Parts on a Xxxxxxx-Xxxxxxx Forecast Form, updated
monthly. Such forecast is for Xxxxxxx-Xxxxxxx'x convenience only and shall in no
way create an obligation on Xxxxxxx-Xxxxxxx'x part to meet such forecast;
provided, however, that X-X TSMD shall not be obligated to meet lead times for
the amount of Parts in a specific authorization that exceeds by more than 15%
the quantity of such Parts specified in a Forecast Form.
4.2 Specific Authorization.
Xxxxxxx-Xxxxxxx agrees to provide X-X TSMD specific
Xxxxxxx-Xxxxxxx authorization to fulfill Requirements in the form of a purchase
order for Parts substantially in the form attached hereto as Exhibit B. Such
specific Xxxxxxx-Xxxxxxx authorization shall become effective upon receipt by
X-X TSMD. The terms of Conditions of Purchase attached to the purchase order
shall govern any purchase of Parts under this Agreement unless inconsistent with
this Agreement, in which case this Agreement controls.
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4.3 Cancellation of an Authorization.
In the event of a termination or a cancellation of a specific
Xxxxxxx-Xxxxxxx authorization to fulfill Requirements under this Agreement, X-X
TSMD shall undertake reasonable efforts to cancel all applicable subcontracted
materials/services and reduce component inventory through return for credit
programs or allocate components for alternate programs if applicable, at the
lowest possible cost to Xxxxxxx-Xxxxxxx.
4.4 Compensation for Cancellation.
In the event of a termination or a cancellation of a specific
Xxxxxxx-Xxxxxxx authorization to fulfill Requirements under this Agreement,
and/or discontinuance of Requirement or excess material created by
Xxxxxxx-Xxxxxxx initiated engineering change, Xxxxxxx-Xxxxxxx shall compensate
X-X TSMD for Requirements and material inventory as follows:
(i) the contract price of all duly authorized and
completed Requirements already furnished to Xxxxxxx-Xxxxxxx or in
X-X TSMD's possession;
(ii) the cost of Xxxxxxx-Xxxxxxx unique material inventory,
whether in raw form or work in process, and not returnable to the vendor or
usable for other Requirements or other customers;
(iii) the cost of Xxxxxxx-Xxxxxxx unique material on
order which cannot be cancelled;
(iv) any vendor cancellation charges incurred with respect to
Xxxxxxx-Xxxxxxx unique material cancelled or returned to the vendor, or
otherwise set forth in addenda to this Agreement; and
(v) an administrative charge of 12.5% of the costs
described in (ii) and (iii) above.
5. DELIVERY
5.1 On-Time Delivery.
X-X TSMD shall target 100% on time delivery, defined as a
delivery of Requirements by X-X TSMD within a window of ten (10) days early and
zero days late of the delivery date specified in a purchase order unless the
quantity of Parts ordered exceeds by more than 15% the quantity forecasted, in
which case X-X TSMD will deliver such additional quantity within a reasonable
period.
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5.2 FOB Point.
The FOB point shall be Palo Alto, California in the absence of
a documented mutual agreement to some other FOB term with the issuance of any
specific Xxxxxxx-Xxxxxxx authorization to fulfill Requirements.
5.3 Schedule Changes.
X-X TSMD shall make reasonable efforts to comply with any
requested schedule improvements/changes, without cost impact. X-X TSMD shall be
expected to accept Xxxxxxx-Xxxxxxx requests for delays in delivery schedule,
with rescheduling of ship dates to within thirty (30) days of the original
delivery schedule, without cost impact, in the absence of a documented mutual
agreement to some other definition of flexibility in delivery re-scheduling with
the issuance of any specific Xxxxxxx-Xxxxxxx authorization to fulfill
Requirements.
5.4 Delays.
Upon learning of any potential delivery delays, X-X TSMD shall
notify Xxxxxxx-Xxxxxxx as to the cause and extent of such delay. If X-X TSMD
fails to make deliveries at the specified time and such failure is caused by X-X
TSMD, X-X TSMD shall, at no cost to Xxxxxxx-Xxxxxxx, employ accelerated measures
such as material expediting fees, premium transportation costs, or labor
overtime required to meet the specified delivery schedule.
6. PAYMENT FOR PARTS
6.1 Payment.
For the supply of Parts under this Agreement, Xxxxxxx-Xxxxxxx
agrees to pay Xxxxxxx-Xxxxxxx'x Unit Prices determined in accordance with this
section. Payment for research and development costs is set forth in Section 3.5.
6.2 Unit Prices.
(i) For each Part on Exhibit A, Xxxxxxx-Xxxxxxx shall pay the
Unit Price set forth therein. The Unit Prices set forth on Exhibit A are
guaranteed through January 1, 1999. Thereafter, Unit Prices may be adjusted by
no more than 10% for each succeeding year if such adjustment is justified by
cost data supplied by X-X TSMD. Such cost data is subject to audit. For Parts
not listed on Exhibit A, the parties will negotiate Unit Prices. X-X TSMD shall
propose Unit Prices for such Parts and the basis for such proposal will be
subject to audit.
(ii) Price is guaranteed only to the extent that Xxxxxxx-
Xxxxxxx'x Requirements do not exceed, in any quarter, 25% of MIM capacity or
10% of hybrid assembly capacity. X-X TSMD is
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not obligated to meet Requirements in excess of these capacities but will
negotiate with Xxxxxxx-Xxxxxxx in good faith to modify the price and delivery
schedule to accommodate those Requirements.
6.3 Date.
Unit Prices shall be paid net 30 days from the date of
invoice.
6.4 Minimum Purchase Obligation.
For 1998, Xxxxxxx-Xxxxxxx will purchase all of its
requirements from X-X TSMD of the WJ-2940-002A Part listed on Exhibit A until
the later to occur of (a) the shipment of five thousand (5,000) units of such
Part, or (b) October 31, 1998.
7. ENGINEERING CHANGES
7.1 Engineering Changes submitted by Xxxxxxx-Xxxxxxx.
Xxxxxxx-Xxxxxxx may submit engineering changes for
incorporation into the Requirements. Such change orders will include reasonable
documentation to permit an investigation of the impact of the engineering
change. X-X TSMD will review the engineering change and report to
Xxxxxxx-Xxxxxxx within ten (10) working days. If any such change affects the
price, delivery, or quality performance of the affected Requirements, a
reasonable adjustment will be negotiated between Xxxxxxx-Xxxxxxx and X-X TSMD
prior to implementation of the change.
7.2 Changes requested by X-X TSMD.
X-X TSMD agrees not to undertake process changes, design
changes, or process step discontinuance affecting electrical performance and/or
mechanical form and fit of Requirements without prior written notification and
concurrence of Xxxxxxx-Xxxxxxx, which concurrence will not be unreasonably
withheld. In the absence of some other documented mutual agreement applying to
this Agreement as a whole, or to the issuance of any specific Xxxxxxx-Xxxxxxx
authorization to fulfill Requirements, said advance written notification shall
be required ninety (90) days prior to the subject change.
8. CONFIDENTIAL INFORMATION
8.1 Nondisclosure Agreement.
Xxxxxxx-Xxxxxxx and X-X TSMD agree to execute, as part of this
Agreement, a Nondisclosure Agreement for the reciprocal protection of
confidential information of both parties. X-X TSMD shall not disclose to third
parties confidential process and design rule information relating to the
manufacture of Parts for
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Xxxxxxx-Xxxxxxx except as necessary for such manufacture, which disclosure shall
only be made pursuant to a confidentiality agreement approved by
Xxxxxxx-Xxxxxxx.
9. ASSIGNMENT, FORCE MAJEURE
9.1 Assignment.
Neither party shall delegate, assign or transfer its rights or
obligations under this Agreement, whether in whole or part, without the written
consent of the other party. Not withstanding the foregoing, X-X TSMD shall have
the right to (i) assign its rights under this Agreement to any Affiliate of X-X
TSMD or TSMD Acquisition, upon the condition that such Affiliates are bound by
the terms and conditions of this Agreement; and (ii) transfer their rights under
this Agreement upon the sale of all or substantially all of the assets of X-X
TSMD or TSMD Acquisition. Xxxxxxx-Xxxxxxx shall have the right to (i) assign its
rights under this Agreement to any of its Affiliates upon the condition that
such Affiliates are bound by the terms and conditions of this Agreement; and
(ii) transfer their rights under this Agreement upon the sale of all or
substantially all of the assets of Xxxxxxx-Xxxxxxx.
9.2 Force Majeure.
Neither party shall be liable for any failure or delay in its
performance under this Agreement due to acts of God, acts of civil or military
authority, fires, floods, earthquakes, riots, wars or any other cause beyond the
reasonable control of the delayed party provided that the delayed party: (i)
gives the other party written notice of such cause within fifteen (15) days of
the discovery of the event; and (ii) uses its reasonable efforts to remedy such
delay in its performance.
10. INTELLECTUAL PROPERTY RIGHTS AND DESIGN RULES.
10.1 Intellectual Property Rights.
All Intellectual Property Rights relating to the design of
Parts manufactured exclusively for Xxxxxxx-Xxxxxxx shall be the exclusive
property of Xxxxxxx-Xxxxxxx. All Intellectual Property Rights arising prior to
the termination date and relating to the processing or fabrication of Parts
shall be the property of X-X TSMD but shall be licensed to Xxxxxxx-Xxxxxxx on a
royalty-free, non-exclusive, perpetual basis, without the right to sublicense
except to Affiliates. Any patents or patent applications that claim any
invention relating to the processing or fabrication of Parts shall be the
property of X-X TSMD but shall be licensed to Xxxxxxx-Xxxxxxx on the same terms
and conditions as set forth in the Cross License. The parties agree to cooperate
in the execution of such a patent license.
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10.2 Design Rules and Process Specifications.
X-X TSMD shall maintain and update no less frequently than
every six (6) months for Xxxxxxx-Xxxxxxx'x use copies of design rules and
process specifications for Xxxxxxx-Xxxxxxx products. On the termination of this
Agreement, X-X TSMD will promptly transfer such copies to Xxxxxxx-Xxxxxxx, but
X-X TSMD may retain copies for its own use provided that such use does not
violate any prohibition on the use of Intellectual Property.
11. OPERATIONS COUNCIL AND AUDIT RIGHTS.
11.1 Operations Council.
The parties shall appoint an Operations Council consisting of
an equal number of representatives, but no less than four, from each party. The
Operations Council shall meet regularly, but no less frequently than quarterly.
The Operations Council shall also convene at any time at the request of either
party so long as such party provides one week's notice to the other party. The
Operations Council will be responsible for the folllowing:
(a) Reviewing Requirements Forecasts and production
capacities;
(b) Reviewing and approving actual and projected
expenditures for research and development and
capital acquisition;
(c) Adjusting pricing and delivery targets at
specified intervals;
(d) Reviewing process costs, process costs
multipliers, process yields and yield drivers;
(e) Reviewing lead times including queue times and
factory cycle times;
(f) Reviewing summaries of research and development
progress prepared by X-X TSMD, including summaries of
research and development funded by X-X TSMD that adds
to the value of the Intellectual Property Rights of
the parties.
11.2 Audit Rights.
As specified herein, Xxxxxxx-Xxxxxxx has the right
to audit certain costs and expenditures in connection with research and
development projects and the costs, data and methods used to adjust payments to
X-X TSMD. Such audits will occur on reasonable notice to X-X TSMD and will be
conducted in accordance with Generally Accepted Accounting Principles.
X-X TSMD agrees
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to cooperate with such audits and provide such assistance and support, at no
costs to Xxxxxxx-Xxxxxxx, as Xxxxxxx-Xxxxxxx may reasonably request.
12. MISCELLANEOUS
12.1 Currency.
Currency will be in U.S. dollars.
12.2 Amendments; Waivers.
This Agreement and any exhibit attached hereto may be amended
only by agreement in writing of Xxxxxxx-Xxxxxxx and X-X TSMD. No waiver of any
provision nor consent to any exception to the terms of this Agreement shall be
effective unless in writing and signed by the party to be bound and then only to
the specific purpose, extent and instance so provided.
12.3 Exhibits; Integration.
This Agreement, together with the exhibits attached hereto,
constitutes the entire agreement among the parties pertaining to the subject
matter hereof and supersedes all prior agreements and understandings of the
parties in connection therewith except for the Purchase Agreement; provided,
however, this Agreement does supersede Exhibit D to the Purchase Agreement (the
"MIM/Glass Seal/Hybrid Assembly Term Sheet"). Without limiting the foregoing,
the parties acknowledge and agree that the exercise of any rights under this
Agreement, including a party's rights following a termination of this Agreement,
is limited by the restrictions on competitive activities set forth in Section
5.1 of the Purchase Agreement.
12.4 Governing Law.
This Agreement, the legal relations between the parties, and
any Action, whether contractual or non-contractual, instituted by any party with
respect to matters arising under or growing out of or in connection with or in
respect of this Agreement, including, but not limited to, the negotiation,
execution, interpretation, coverage, scope, performance, breach, termination,
validity, or enforceability of this Agreement, shall be governed by and
construed in accordance with the laws of the State of California applicable to
contracts made and performed in such State and without regard to conflicts of
law doctrines.
12.5 Headings.
The descriptive headings of the Articles, Sections and
subsections of this Agreement are for convenience only and do not constitute a
part of this Agreement.
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12.6 Counterparts.
This Agreement and any amendments hereto may be executed in
one or more counterparts. All of such counterparts shall constitute one and the
same agreement and shall become effective when one or more counterparts have
been signed by each party and delivered to the other party.
12.7 Notices.
Any notice or other communication hereunder must be given in
writing and (a) delivered in person, (b) transmitted by telex, telefax or
telecommunications mechanism (provided that any notice so given is also mailed
or delivered as provided in clause (c)) or (c) mailed by certified or registered
mail, postage prepaid, receipt requested or delivered by reputable overnight
courier service as follows:
If to X-X TSMD, addressed to:
Stellex Microwave Systems, Inc.
c/o Mentmore Holdings, Inc.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Facsimile: 000-000-0000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
With a copy to:
O'Melveny & Xxxxx
Embarcadero Center West
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000-0000
Facsimile: 000-000-0000
Attn: Xxxxxx X. Xxxxx, Esq.
If to Xxxxxxx-Xxxxxxx, addressed to:
Xxxxxxx-Xxxxxxx Company
Stanford Research Park
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000-0000
Facsimile: 000-000-0000
Attn: Vice President and Chief Financial Officer
or to such other address or to such other person as any party shall have last
designated by such notice to the other parties. Each such notice or other
communication shall be effective (i) if given by telecommunication, when
transmitted to the applicable number so specified in (or pursuant to) this
Section 12.6 and an appropriate answerback is received, (ii) if given by mail or
by overnight delivery, three days after such communication is deposited in the
mails with first class postage prepaid or
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delivered to the overnight courier, addressed as aforesaid or (iii) if given by
any other means, when actually delivered at such address.
12.8 Expenses.
Xxxxxxx-Xxxxxxx and X-X TSMD shall each pay their own expenses
incident to the negotiation, preparation and performance of this Agreement
except as specifically set forth herein.
12.9 Remedies; Waiver.
To the extent permitted by Law, all rights and remedies
existing under this Agreement and any related agreements or documents are
cumulative to and not exclusive of, any rights or remedies otherwise available
under applicable Law. No failure on the part of any party to exercise or delay
in exercising any right hereunder shall be deemed a waiver thereof, nor shall
any single or partial exercise preclude any further or other exercise of such or
any other right.
12.10 Attorney's Fees.
In the event of any Action by any party arising under or out
of, in connection with or in respect of this Agreement, the prevailing party
shall be entitled to reasonable attorney's fees, costs and expenses incurred in
such Action.
12.11 Representation By Counsel; Interpretation.
Xxxxxxx-Xxxxxxx and X-X TSMD each acknowledge that each party
to this Agreement has been represented by counsel in connection with this
Agreement. Accordingly, any rule of Law or any legal decision that would require
interpretation of any claimed ambiguities in this Agreement against the party
that drafted it has no application and is expressly waived. The provisions of
this Agreement shall be interpreted in a reasonable manner to effect the intent
of the parties.
12.12 Specific Performance.
Xxxxxxx-Xxxxxxx and X-X TSMD each acknowledge that, in view of
the uniqueness of the transactions contemplated by this Agreement, each party
would not have an adequate remedy at law for money damages in the event that
this Agreement has not been performed in accordance with its terms, and
therefore agrees that the other party shall be entitled to specific enforcement
of the terms hereof in addition to any other remedy to which it may be entitled,
at law or in equity.
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12.13 Severability.
If any provision of this Agreement is determined to be
invalid, illegal or unenforceable by any Governmental Entity, the remaining
provisions of this Agreement shall remain in full force and effect provided that
the essential terms and conditions of this Agreement for Xxxxxxx-Xxxxxxx and X-X
TSMD remain valid, binding and enforceable.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first above written.
XXXXXXX-XXXXXXX COMPANY
By: /s/ W. Xxxxx Xxxxxxx
--------------------------
Name: W. Xxxxx Xxxxxxx
------------------------
Title: President and CEO
------------------------
STELLEX MICROWAVE SYSTEMS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxx
------------------------
Title: Treasurer
------------------------
TSMD ACQUISITION CORP.
By: /s/ Xxxxxxx X. Xxx
--------------------------
Name: Xxxxxxx X. Xxx
------------------------
Title: Vice President
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EXHIBIT A
Unit Prices
Oct. 22, 1997
Pricing update for the DRO, WJ-2949-002A
Quantity Unit Price (Turnkey) Unit Price (Consigned GaAs & T/F)
1,300 * *
2,600
3,500
3,900
5,200
10,400
The redesigned piece estimate is for planning purpose only as follows:
Quantity Unit Price (Turnkey) Unit Price (consigned GaAs & T/F)
1,300 * *
2,600
3,500
3,900
5,200
10,400
*
Key conditions:
Stellex will build to print for Xxxxxxx-Xxxxxxx.
Stellex is responsible for resolution of any process related or workmanship
related problem.
Xxxxxxx-Xxxxxxx and Stellex will cooperate with one another to resolve technical
issues affecting design performance. An example would be, where a component used
in production is no longer available from the original manufacture, such as the
recent issue with the NE747 transistor.
Products will be manufactured to Xxxxxxx-Xxxxxxx forecasts, based on a 10 week
lead time, and will be delivered and billed upon run closure.
Warranty of the product is for 1 year from the time Xxxxxxx-Xxxxxxx delivers to
their customer.
SME PRICING SCHEDULE
ITEM PRICE (ea) Quantity
ALL ON SME LIST * Total SME orders between 1000 and 5000
per week for the total of all SME
products.
ALL ON SME LIST * Total SME orders between 100 and 1000
per week for the total of all SME
products.
SME LIST
WJ-SME1400B-10
WJ-SME1400B-13
WJ-SME1400B-17
WJ-SME1900-17
WJ-SME1901
WJ-SME1902
WJ-SME1902A
WJ-SME1904
WJ-SME1906
WJ-SME1907
WJ-SME900-17
WJ-SME902
EXHIBIT B
Purchase Order
CONDITIONS OF PURCHASE
Where "WJ" appears in the "Conditions of Purchase" this shall mean
Xxxxxxx-Xxxxxxx Company, or any subsidiary.
1. ACCEPTANCE AND MODIFICATION OF AGREEMENT.
This order becomes a binding contract, subject to the terms and
conditions hereof, when accepted by acknowledgment or commencement of
performance. Any modification of this order, to be valid, must be in
writing and signed by WJ's authorized purchasing representative. Any
acknowledgment form or other form of Seller containing terms and
conditions of sale submitted by Seller to WJ shall not have the effect
of modifying the terms and conditions hereof. WJ will consider Seller's
request for changes only if such request is made in writing and
directed to specific clauses in this order. No change shall be binding
upon WJ unless specifically accepted in writing.
2. PACKING, SHIPPING, DELIVERY AND RISK OF LOSS.
a) Packing and Shipping
All shipments will be packed to prevent damage in transit,
assure lowest transportation cost and meet carrier's tariff
requirements. No charge will be made for boxing, crating or
storage without prior written authorization of WJ.
Shipping costs shall be paid according to F.O.B. designation.
Where WJ is designated as paying freight, Seller bears cost of
delivery of goods to Shipper and WJ pays shipping costs in
transit. Where Seller is designated as paying freight, Seller
bears all shipping costs prior to receipt by WJ.
In the absence of specific instructions from WJ, shipment
shall be forwarded by that means of shipment necessary to
comply with the delivery date specified on the purchase order.
Seller shall not insure shipments in excess of carrier's
maximum liability. Materials shipped on this order must not be
in excess of quantity ordered. Over shipments may be returned
at Seller's expense.
b) Delivery
Time is of the essence in this order. Production schedules at
WJ are dependent upon the delivery dates specified herein, and
delays will substantially impair the value of the contract.
Seller shall bear any premium shipping costs necessary to meet
contractual delivery schedule. Seller shall report any
anticipated delay immediately for whatever cause, including
labor disputes, material shortages or other events affecting
delivery. WJ reserves the right to terminate this order for
anticipated delay and for any untimely delivery. Advanced
shipments may not be made without WJ's prior authorization.
c) Risk of Loss
Irrespective of the "F.O.B." designation on the face of this
order, title shall pass
to WJ upon receipt and acceptance by WJ at is facility and
Seller shall bear the risk of loss until such receipt by WJ.
3. WARRANTIES
Acceptance of this order by Seller constitutes affirmation of fact by
Seller that goods delivered and services furnished under this order,
and the preservation, packaging, marking and preparation for shipment
of any such goods, will be of good quality and workmanship and will
conform with the specifications, model description of goods or other
requirements of this order, and shall be of merchantable quality and
fit for the purpose intended. Such warranties, together with Seller's
service warranties and guarantees, if any, shall survive inspection,
test acceptance of any payment for the items and shall run to WJ, its
successors, assigns and customers.
Except for latent defects, notice of any defect or nonconformity must
be given by WJ to the Seller within one (1) year after acceptance. WJ
may at its option, return the defective or nonconforming item at
Seller's expense for credit, or require prompt correction or
replacement or have the defective item corrected or replaced at
Seller's expense. Defective or nonconforming items shall not be
corrected or replaced unless specified on WJ's written order. Items
required to be corrected or replaced shall be subject to the provisions
of this clause and the clause hereof entitled "Inspection" in the same
manner and to the same extent as items originally delivered under this
order. However, all warranties for corrected or replaced goods shall
run for a period of one (1) year from the date of acceptance of such
corrected or replaced goods.
The rights of WJ provided in this clause are in addition to any order
rights provided by law, equity or by this order, including but not
limited to Seller indemnification of WJ for any loss or damage
resulting from the breach of any warranty expressed above. Express or
specially negotiated warranties shall not extinguish the warranties set
forth above. The goods and services furnished hereunder shall be deemed
unique under U.C.C. Section 2716.
4. [Deleted].
5. [Deleted].
6. RESPONSIBILITY FOR PROPERTY
Seller shall bear the risk and be responsible for any loss or damage to
materials, tools, equipment, data or other property furnished by WJ to
Seller.
7. CHANGES
a) WJ may at any time, by written notice to Seller, signed by
WJ's authorized purchasing representative, make changes,
within the general scope of this order, in any one or more of
the following: (i) drawings, designs or specifications, where
the goods to be furnished are to be specially manufactured for
WJ in accordance therewith; (ii) method of shipment or
packing; (iii) place of delivery; and (iv) quantities and
delivery schedules provided herein. If any such change
causes an increase or decrease in the cost of or the time
required for the performance of any part of the work under
this order, an equitable adjustment shall be made in the order
price or delivery schedule, or both, and this order shall be
modified in writing accordingly. Any claim by the Seller for
adjustment under this clause must be asserted within twenty
(20) days from the date of receipt by the Seller of the
notification of change; provided, however, that WJ if it
decides that the facts justify such action, may receive and
act upon any such claim asserted at any time prior to final
payment under this order. However, nothing in this clause
shall excuse the Seller from proceeding with the contract as
changed.
b) WJ technical personnel may exchange technical information with
Seller's technical personnel concerning goods to be furnished.
Any such exchange of information shall be only by way of
assistance and shall in no way relieve Seller of obligations
to perform this order. WJ shall not be bound by any change
effective by Seller unless change is authorized by WJ in
accordance with paragraph (a) of this clause.
8. SUSPENSION OF WORK
WJ may, by written order, suspend all or part of the work to be
performed under this order for any period not to exceed ninety (90)
days. Within such period, or any extension thereof to which the parties
may agree, WJ shall either cancel such suspensions or terminate the
work covered by suspension in accordance with paragraphs 9 or 10
hereof. Seller shall resume work whenever a suspension is canceled or
expires. An equitable adjustment shall be made in the delivery
schedule, or order price, or both, if the suspension results in a
change in Seller's costs of performance or ability to meet the order
delivery schedule, provided Seller asserts a claim for adjustment
within twenty (20) days after the end of the period of suspension, and
provided the suspended work is not terminated in accordance with
paragraph 11 hereof.
9. [Deleted].
10. [Deleted].
11. [Deleted].
12. PATENTS, TRADEMARKS, TRADE NAMES AND COPYRIGHTS
Seller agrees to indemnify and save harmless WJ, its officers, agents,
successors, assigns and customers against all damages, claims, demands,
attorneys' fees and costs of any kind for actual or alleged
infringement of any trade name, trademark, copyrights or patent (unless
the goods ordered are of WJ's design) arising in connection with the
possession, sale or use of any goods or services furnished by Seller
hereunder.
13. COMPLIANCE WITH LAWS
Seller warrants that (i) in the performance of this order it will
comply with all applicable laws including but not limited to local,
state and federal laws and regulations including
but not limited to the Departments of Commerce Department of
Transportation and the U.S. and California Environmental Protection
Agencies. (ii) no law, rule or ordinance of the United States, a state
or any other governmental agency has been violated in the manufacture
or sale of the items or in the performance of services covered by this
order, and will defend and hold WJ harmless from loss, cost or damage
as result of any such actual or alleged violation, or breach of the
warranties herein.
14. HAZARDOUS MATERIALS
a) If goods or services provided hereunder include hazardous
materials as defined by relevant local, state or national law,
Seller represents and warrants that Seller and its employees
providing Services to Buyer understand the nature of and
hazards associated with the handling, transportation, and use
of such hazardous materials, as applicable to Seller.
Seller will be fully responsible for indemnification of any
liability resulting from Seller's actions in connections with
(i) providing such hazardous materials to Buyer, or (ii) the
use of such hazardous materials in providing Services to
Buyer.
b) Seller will promptly provide Buyer with safety data sheets and
any other documentation reasonable necessary to enable Buyer
to comply with applicable laws and regulations.
c) Seller hereby certifies that Items supplied to Buyer do not
"contain" and are not "manufactured with" any ozone depleting
substances, as those terms are defined by law.
15. ASSIGNMENT OF RIGHTS
The term "subcontract" includes but is not limited to purchase orders,
changes and/or modifications thereto. Neither this order nor any right
or obligation hereunder (including claims for moneys due) shall be
assigned by Seller without prior written consent of WJ. All claims for
moneys due or to become due from WJ shall be subject to set-off or
counterclaim arising out of this or any other WJ contract with Seller,
whether before or after date of this order.
16. [Deleted].
17. [Deleted].
18. TAXES
Except as may be otherwise provided in the order, no sales tax shall be
payable, and the price is inclusive of all other applicable taxes.
19. INSOLVENCY
In the event of any proceeding, voluntary or involuntary, in bankruptcy
or insolvency by or against Seller, or in the event of the appointment,
with or without the Seller's consent,
of an assignee for the benefit of creditors, or of a receiver, WJ may
elect to cancel any unfulfilled part of this order without further cost
or liability.
20. INDEMNIFICATION AND INSURANCE
a) Seller agrees to protect, defend, indemnify and hold Buyer
harmless from and against any and all claims, liabilities,
demands, penalties, forfeitures, suits, judgments and the
associated costs and expenses (including attorney's fees),
which Buyer may hereafter incur, as a result of death or
personal injury (including bodily injury) to any person,
destruction or damage to any property, or any violation of
governmental law, regulation, or orders, caused, in whole or
by (a) Seller's breach of any term or provision of this
Agreement, (b) errors, omissions, or willful acts by Seller,
its employees, agents, or subcontractors in the performance of
this Agreement, (c) the presence of Seller's agents,
employees, or subcontractors ("personnel") or equipment on WJ
property, or (d) the use by Seller's personnel of WJ provided
property and equipment, whether or not claims are based on the
condition of such property and equipment or any alleged
negligence of WJ in permitting its use.
b) Seller represents that it carries insurance in at least the
following amounts:
i) Worker's Compensation--statutory limits
ii) Employer's Liability--$500,000 per employee
iii) Blanket General Liability--$1,000,000
iv) Automobile Liability--$1,000,000
Such policies or certificates of insurance shall be furnished
to WJ upon request.
21. INDEPENDENT CONTRACTOR
In performing Services under this Agreement, Seller shall be deemed an
independent contractor and its personnel and other representatives
shall not act as nor be agents or employees of Buyer. As an independent
contractor, Seller will be solely responsible for determining the means
and methods for performing the required Services. Seller shall have
complete charge and responsibility for personnel employed by Seller;
however, Buyer reserves the right to instruct Seller to remove Buyer's
premises immediately any of Seller's personnel who is in breach of
Section 22 of this Agreement. Such removal shall not affect Seller's
obligation to provide Services under this Agreement.
22. SECURITY
Seller confirms, to the best of its knowledge, that employees of Seller
performing work at Buyer's facilities have no record of criminal
convictions involving drugs, assaultive or combative behavior or theft
within the last five years. Seller understands that such employees may
be subject to criminal history investigations by Buyer at Buyer's
expense and will be denied access to Buyer's facilities if any such
criminal convictions are discovered.
23. DISPUTES
a) Any dispute arising under this purchase order which is not
settled by agreement of the parties shall be settled by
arbitration, under the commercial rules of the American
Arbitration Association, applying California law, with venue
at Palo Alto, California. Pending decision or settlement of
any dispute, Seller shall proceed diligently with the
performance of this purchase order. Failure of Seller to so
proceed shall be cause for default termination.
b) [Deleted].
24. [Deleted].
25. NONWAIVER
WJ's failure to insist on strict performance of any provision of this
order, or acceptance of nonconforming goods or services shall not be
deemed to be a waiver of WJ's rights or remedies, or a waiver of any
subsequent default in performance.
26. PRECEDENCE
In the event of any inconsistency among the referenced documents,
attachments, drawings, specifications or other provisions of this
order, the following order of precedence shall apply:
a) Special terms and conditions
b) General terms and conditions
c) Specifications
d) Drawings
e) All other attachments or documents incorporated herein by
reference
27. [Deleted].
