Exhibit 10.56
MANUFACTURING and TECHNICAL SUPPORT AGREEMENT
This Manufacturing Agreement (the "Agreement") is entered into as of the
11/th/ of June, 2001, by and between RF Monolithics, Inc., a corporation duly
organized under the laws of the State of Delaware, having its principal place of
business at 0000 Xxxxx Xxxx, Xxxxxx, XX, 00000, X.X.X. (hereinafter referred to
as "Company") and Morioka Seiko Instruments Inc. (MSI) a corporation duly
organized and existing under the laws of Japan with its principal place of
business at 61-1, Aza Itabashi Shizukuishi-cho Iwate-gun, Iwate 020-0596 Japan
(hereinafter referred to as "Contractor").
RECITALS
WHEREAS, Company desires to enter into an agreement with Contractor for
certain manufacturing and production services for Products (defined below),
whereby Contractor will Manufacture (as defined below) for Company certain
Products at the Factory (as defined below) in accordance with the Specifications
and instructions of Company; and
WHEREAS, Contractor is willing to Manufacture the Products for Company and
provide such services under the terms and conditions set forth below.
NOW THEREFORE, in consideration of the premises and mutual promises,
covenants and agreements hereinafter set forth, the parties hereto agree as
follows:
1. General Definitions. The terms set forth below in this Section 1 shall have
the meanings ascribed to them below:
Allowable Assembly Yield: means the yield below which yield Contractor
may be required to pay Company for 50% of the standard cost of Materials
supplied by Company, not including Die, for the number of failed units below the
Allowable Assembly Yield. The circumstances determining when payment is required
are defined in Section 2.1(e)(ii). The Allowable Assembly Yield is determined by
the Assembly Yield monthly average for the first three months following
Production Start Up of a Generic Product Family.
Affiliate: with respect to any Person, means any Person that directly
or indirectly controls, is controlled by or is under common control with such
Person.
Annual Review Process: means the process conducted by Company and
Contractor to review commitments for the coming year concerning Product pricing,
production levels, quality and service levels. This process normally occurs
during Company's first fiscal quarter (the three months ended November 30), to
review the previous year's performance.
Approved Vendor: shall have the meaning defined in Section 2.1(d)
hereof.
Approved Vendor List: shall have the meaning defined in Section 2.1(d)
hereof.
Assembly Outs: means the number of units, which pass from the last
operation of the assembly process, as depicted in the typical process flow
Schedule A, Typical Process Flow Chart, to the first operation of the test
portion of the manufacturing process, as depicted in Schedule B, Typical Test
Flow Chart.
Assembly Yield: means the ratio, expressed as a percentage, of the
number of Products (Units) started in the assembly flow (typically at Die mount)
to the number of Assembly Outs minus the
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number of Product units found to be defective at Fine and Gross Leak Test and
the number of Product units found to be defective at Test Final Visual
Inspection.
AY = (AO-FI)/AS
Where:
"AY" is the Assembly Yield;
"AS" is the number of products started in the assembly flow;
"AO" is the number of Assembly Outs;
"FI" is equal to the number of Product units found to be defective at Fine
and Gross Leak Test plus the number of Product units found to be defective
at the Test Final Visual Inspection.
Best Efforts: means a party's efforts in accordance with reasonable
commercial practice and/or consistent with its past practice.
Consignment: means property, including but not limited to equipment,
Die and Materials, that is owned by the Company that is used by the Contractor
to fulfill the purposes of this Agreement.
Defective Unit: means Products returned from Company's customers that
do not meet specification due to assembly processing problems. Reference
Section 2.2(b).
Die: means the chips that Company provides Contractor, either in
sliced or wafer form. This includes Die and transistors and integrated circuits
that Company may provide on a Consignment basis to Contractor.
Electrical Test: means a verification of the electrical functions of
Products.
FCA: Shall mean Free Carrier as defined in Incoterms 2000 as published
by the International Chamber of Commerce.
Factory: means the Contractor's manufacturing facility for Products
located 61-1, Aza Itabashi Shizukuishi-cho Iwate-gun, Iwate 020-0596 Japan.
Fine and Gross Leak Test: The test for hermeticity after Electrical
Test, as depicted in the typical test flow in Schedule B.
Finished Goods: means any Product that is 100% complete, tested, and
packed in a shipping carton awaiting shipment to Company.
Finishing Materials: Tubes, tape-and-reel, labels, tickets and
shipping cartons used to ship Finished Goods per Company Specifications
Generic Product Family: all Products assembled by the same process and
test sequence, as depicted in the typical process flow of Schedule A and as
depicted in the typical test flow chart of Schedule B.
Improvements: shall mean any invention, information, development,
technology or modification, of any nature or form, and any part or combination
of parts, or method of using or manufacturing such part or combination of parts,
developed during the term of this Agreement, which would improve a Product,
including, without limitation, any development that use of which affects the
Products in any of the following ways:
reduces product costs;
improves performance;
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improves handling in the manufacturing process;
broadens applicability;
increases marketability, or
improves appearance.
Joint Intellectual Property: shall have the meaning defined in
Section 15.3 hereof.
Manufacture: shall mean the complete process of assembly and test of
the Products into Finished Goods as required under this Agreement.
Manufacture Defect: means any defect which is attributable to the
Manufacture of a Product by Contractor under this Agreement.
Materials: shall mean all raw materials, Finishing Materials and
Die/wafers required by Contractor to Manufacture the Products.
New Products: means new items or variations of current Products that
the Company and the Contractor have agreed in writing to be covered by this
Agreement.
Order: means Purchase Order issued by the Company.
Other Support Services: shall have the meaning defined in Section 2.3
hereof.
Person: means any individual, firm, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization, government or agency or subdivision thereof or any other entity.
Product: means the Products manufactured according to process and
test flows provided from time-to-time by Company and similar to the typical
flows of Schedule A and Schedule B. From time-to-time the description of
Products may be amended by change requests and New Products agreed to by Company
and Contractor in accordance with Section 2.1(c).
Production Start Up: means the time of initial shipments of a Generic
Product Family as requested by the initial Weekly Start Schedule for that
Generic Product Family.
Provided Equipment: means any equipment, including but not limited to,
manufacturing and test equipment; supplies, Materials, and documentation which
Company provides to Contractor for use in providing services under this
Agreement and for which Company retains title of ownership.
Purchase Order: the ordering document provided by Company that
specifies the Product, services, prices and Product volumes that the Contractor
is to Manufacture.
Quarterly Operations Reviews: means the process conducted by Company
and Contractor to review yields, cycle times, delivery performance, quality
metrics and cost reduction roadmaps. This process normally occurs within 3 weeks
of the end of the Company's fiscal quarter (Nov. 30, Feb. 28, May 31, Aug. 31).
Shipping Date: means the date on which the finished Product is
delivered to the freight forwarder designated by Company.
Specifications: shall mean drawings, criteria, and documented
specifications including but not limited to Process Flow Chart, Test Flow Chart
and mount-bond diagram. Additional Specifications will be issued by Company in
similar form as additional Products are added to this Agreement.
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Test Final Visual Inspection: means a quality control visual
inspection immediately following Fine and Gross Leak Test, as depicted in the
typical test flow in Schedule B.
Test Yield: means the ratio, expressed in percentage, of the number of
Products (Units) started at Electrical Test to the number meeting Specifications
after Electrical Test, as depicted in the typical test flow in Schedule B.
Transfer: shall mean permission to use Company's intellectual
property to the extent permitted by the Agreement.
Value Added: the price for Materials and assembly/test services for
the Product supplied by Contractor.
Weekly Start Schedule: shall have the meaning defined in Section 2.6
hereof.
WIP Inventory: means the work-in-progress inventory of Product at the
Contractor.
Workweek: shall be seven (7) calendar days beginning on Monday and
ending on Sunday.
2. Services.
2.1 Contract Manufacturing Services:
(a) General. Contractor covenants and agrees to Manufacture the
Products that Company requests it to Manufacture at the Factory utilizing the
tools, machinery, equipment, fixtures and computer systems of Contractor and any
other Provided Equipment. Contractor agrees that the Manufacture of Products
hereunder shall be carried out in a good and workmanlike manner in compliance
with the Specifications and instructions of Company provided to Contractor in
writing from time to time as specified herein. Contractor shall have available
to Manufacture the Products all facilities, employees, equipment, spare parts,
computer systems and any other items required to Manufacture the Products.
Company shall provide to Contractor all Specifications, manuals and other
relevant Technical Information necessary to Manufacture the Products.
(i) Contractor may use its standard processes, so long as they
conform to the Company's Specifications and quality requirements.
(ii) Contractor shall assemble and test Product using Material
procured from suppliers on the Approved Vendor List or provided on a Consignment
basis, for an initial period, from Company and Die provided on a Consignment
basis from Company and under manufacturing processes approved by Company. Any
change to Manufacturing processes, Materials, or outsourcing services directly
affecting Products shall be approved in writing by Company prior to
implementation by Contractor.
(iii) Contractor agrees to provide manufacturing and production
services to meet Company's Manufacturing requirements in accordance with Section
2.6 and 2.7. Changes to forecast shall not affect Product pricing, unless
mutually agreed in writing by parties.
(iv) Contractor shall obtain, at its own expense, capital
equipment and tooling required to manufacture the Product. The parties shall
work together to specify and identify appropriate equipment and tools. However,
Contractor, at its sole discretion, shall determine the final configuration and
quantity of equipment and tooling obtained, so long as such decisions are
consistent with meeting Company's specifications and performance criteria.
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(b) Change Requests. Company shall have the right at any time to make
changes in drawings, designs, Specifications, Materials, packaging, quantities,
time and place of delivery and method of transportation. If any such changes
cause an increase or decrease in the cost or the time required for performance
of the order, Contractor shall notify Company in writing (stating the amount of
the increase or decrease), within five (5) days, after receipt of such notice.
There will be no change in manufacturing and production service until accepted,
in writing, by the Contractor. If such notice is timely given, an equitable
adjustment shall be made, and the Purchase Order shall be modified in writing
accordingly. Contractor agrees to accept any such changes and proceed with the
performance of this Agreement, subject to this paragraph.
(i) Changes to Specifications by Company will be made according
to Company's Engineering Change Procedure (000-0101-001) (the "Change
Procedure"). The Contractor will approve all changes relating to Products
manufactured at Contractor according to the Change Procedure.
(ii) If Contractor proposes to change the Specifications with
respect to any Product, it shall provide the Company written notice thereof and
shall implement such changes only upon written consent from the Company. In no
event shall the Contractor ship other than strictly in accordance with the
Specifications or amendments thereto, which the Company has approved in writing.
(c) New Products. Company may from time to time request Contractor to
Manufacture, and perform prototype and pilot testing for any future versions of
the Product developed after the date of this Agreement by Company (each a "New
Product"). Such request shall be accompanied by all Specifications and other
relevant documentation necessary to Manufacture the New Product. Upon receipt
of such information, Contractor shall provide to Company the price to perform
prototype and pilot assembly and test for such New Product and the estimated
time schedule required to implement the Manufacture of the New Product.
Contractor shall not be obligated to Manufacture or perform any services
hereunder with respect to such price and time schedule for implementation.
Company and Contractor agree to negotiate price, volumes and Production Start Up
schedules for New Products, should Contractor agree to Manufacture the New
Product.
(d) Approved Vendor List. With respect to each component part
comprising Materials, Contractor shall maintain a list of suppliers recommended
by Company to supply such part (the "Approved Vendor List"). Company may remove
any supplier from or add any supplier to the Approved Vendor List with respect
to any component part comprising Materials by giving notice thereof to
Contractor. A supplier or vendor not on the Approved Vendor List shall not
provide material or services for the Manufacture of the Product without the
Company's written authorization. Contractor may request removal or addition of
supplier to Approved Vendor List. Company will qualify at the request of
Contractor additional suppliers who meet Company's standards and will not
unreasonably disqualify a proposed supplier. Once Contractor qualifies a second
source, Company will respond in a timely manner to give Contractor adequate time
to meet its schedule requirements.
(e) Yields. Parties understand and agree that production yields are a
primary driver for Manufacturing cost effectiveness. Company shall provide Die,
which are consistent with Specifications established by Company, in sufficient
quantity to meet Manufacturing requirements. Both Company and Contractor will
work together to increase production yields. Yield improvement and cost
reduction goals will be established and evaluated at the Quarterly Operations
Reviews.
(i) Company outgoing testing and inspection of Materials
supplied by Company and incoming test and inspection by Contractor will be in
place to ensure the Die, packages and assembly Materials are in Specification as
they are introduced to the Contractor's assembly Factory.
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(ii) The Assembly Yield is primarily the responsibility of
Contractor. The Contractor is liable for the Materials supplied by Company,
according to the definition of Allowable Assembly Yield, during the fourth
through sixth months following Production Start Up. Beginning month seven (7)
after Production Start Up, Contractor shall be responsible for procurement of
all Materials required to Manufacture the Product except Die. Contractor shall
provide the types of Material and the quantity of each Material to replace the
Material provided by Company to Manufacture the Product, as depicted in Schedule
C, the Material Provision Schedule.
(iii) The Test Yield is a shared responsibility of Contractor
and Company. Contractor is responsible for yield loss at Electrical Test due to
assembly processing defects. Company is responsible for yield loss at Electrical
Test not due to assembly defects.
(iv) The Test Final Visual Inspection Yield is the
responsibility of Contractor.
(v) Should either party incur unacceptable yield loss,
based on monthly average yield, either party may request a failure analysis to
determine the cause of such failures. The requesting party shall bear the cost
of the analysis. However, if the analysis establishes that the unacceptable
yield loss is due primarily to the non-requesting party, the non-requesting
party shall reimburse the requesting party for the cost of the analysis.
(f) Annual Review Process. Company and Contractor shall meet annually
to review performance to the Agreement (Annual Review Process). Such review
shall include, but not be limited to, review of Contractor's performance to
Company's Specifications and quality and service standards, review of Product
pricing, and cost reductions.
(g) Quarterly Operations Review Process. Company and Contractor shall
conduct Quarterly Operations Reviews. Such meetings shall include, but not be
limited to, review of Contractor's Product yields, cycle times, delivery
performance, quality metrics and cost reduction roadmaps. The meeting may be
scheduled to combine with other reviews, such as the annual review, or may be
held via conference telephone call or video conference. Production yield
improvement and cost reduction goals will be established and progress toward
these goals will be reviewed quarterly.
2.2 Return Services
(a) Company will be the recognized source for the Product and will be
the sole contact for third parties with Product problems related to Company's
customers. Company will issue all warranties to third parties for the Product,
but will be entitled to exercise its rights under paragraph 2.2.(b) against
Contractor as to any defects specified therein.
(b) Product returns will be authorized by Company which will perform
the initial failure analysis on the units. Those units indicating a defect due
to assembly processing (Defective Unit) will be transmitted to Contractor
(material review board) for confirmation of failure analysis at Contractor's
expense and corrective action by the Contractor. Contractor's sole
responsibility and liability as a result of any such defect shall be to provide
compensation to Company for the amount charged to Company for each Defective
Unit. Company will provide Contractor with an example of "initial failure
analysis"
2.3 Other Support Services. From time-to-time during the term of this
Agreement, Company may request Contractor to perform Other Support Services such
as but not limited to the purchase of assembly Materials, previously consigned
by Company, and the drop shipment of Product to Company customers. In
connection with the performance of any Other Support Services, Company shall
issue a Purchase Order for the services which Company desires Contractor to
perform. Contractor shall notify the Company within five (5) working days of
their intent to provide the requested service and accept the Purchase Order. If
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Contractor intends to provide the requested service, Contractor shall furnish
Company the estimated time schedule to implement or complete the services and
the estimated cost to Company in excess of the Purchase Order issued for the
service. If such service results in modification to the cost of the Product, the
Purchase Order covering that product may be modified to reflect the cost change.
All prices and deliverables to be furnished by the Contractor with respect to
such services shall be mutually agreed to in writing by Company and Contractor.
2.4 Data. Contractor will periodically supply the Company with reasonably
requested data including, but not limited to yields, inventories and production
status. The frequency and format of the reporting will be agreed upon by the
Company and Contractor. As a minimum, Contractor will supply the Company with a
detailed inventory and/or a periodic physical inventory of all consigned raw
material and Die inventory on hand as of the last day of the prior month on the
third working day of each month.
2.5 Purchase Orders. Company shall provide Contractor with a Purchase
Order for Manufacture of Product for six (6) month's requirement in advance.
Contractor agrees to acknowledge Company's Purchase Order within two (2)
business days from receipt by facsimile or other electronic means. Thereafter,
the Purchase Order shall come into force and effect from the date of such
acknowledgement. Contractor as well as Company, shall be bound by all terms and
conditions set forth in the Purchase Order by the Contractor consistent with the
terms and conditions herein agreed upon. However, the Weekly Start Schedule
will determine quantities and Shipping Dates. In the event of any disagreement
between the Purchase Order and the Agreement, the terms of the Agreement shall
prevail.
2.6 Production and Shipping Dates. Four (4) days before the start of the
work week, Company shall provide Contractor with a Weekly Start Schedule and
Shipping Dates with a lead time reasonably acceptable to Contractor. The
estimated cycle time is two Workweeks after schedule start date of the Die.
Each Weekly Start Schedule will show start quantities by line, Shipping Dates,
and priorities. Contractor agrees to allocate sufficient Manufacturing capacity
for the Manufacture of Products to meet Company's Production and Shipping Dates,
and all Material acquired by Contractor to meet Company's Production and
Shipping Dates will be covered by the Buy-Back provisions of this Agreement.
Company agrees to supply Materials, including Die, a minimum of one day prior to
the associated starts at the Contractor. Contractor will not start more Product
than required by the Weekly Start Schedule without written approval from the
Company.
2.7 Forecast and Buy-Back Guarantee. Company shall endeavor to provide
monthly a three (3) month rolling forecast and quarterly a twelve (12) months
rolling forecast of Products to be Manufactured by Contractor under this
Agreement. Contractor shall acknowledge in writing, within one week of receipt,
acceptance of Company's three (3) month forecast or provide written notice to
Company of limited Factory capacity. Company agrees to buyback, at cost, all
Manufacturing related Materials inventory purchased by Contractor should Company
fail to Order forecasted quantities based on 100% of forecasted Materials for
the three month period and such failure to order is in no way attributable to
Contractor. The Company will not be required to buy back any Materials beyond
the third month of the twelve (12) month forecast. Notwithstanding the above,
Contractor will attempt to divert Materials to other manufacturing uses so as to
minimize this excess inventory cost to Company.
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Schedules Purpose of Schedule Variations
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Purchase Order Authorizes Only by changes, in writing, from
(Contractor), Shipment Company
(Company), Receiving
(Contractor) and Invoicing
(Company) Payment
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Weekly Start Schedule Provide weekly start schedule with The volume and line items are
delivery dates and priorities. firm.
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Three Month Forecast Provided for Material and labor Volume for first month is firm,
planning. but line items may change.
Second month may change from
previous forecast no more than +/-
25%. Third month may change from
previous forecast no more than +/-
50%.
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Twelve Month Forecast Provided for space, equipment and First three months are as above,
labor planning. but all other is for planning
purposes only.
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3. Technology Support
3.1 Technical Guidance For various technical guidance in accordance with
relative provisions set forth herein, Company shall make available to Contractor
the consulting services of engineering and manufacturing specialists of Company
(hereinafter called "Engineers") to assist Contractor in the manufacture in the
Factory using Know-How furnished by Company hereunder.
3.2 Dispatch of Engineers Company shall dispatch Company's Engineers, at
the request of Contractor, to Contractor's premises in the Factory on the
following terms and conditions:
In the case of technical assistance outside Company's premises by Company's
Engineers, Contractor shall reimburse the salary of the Engineers and all of
Company's out of pocket travel, meals, lodging and related expenses. (One man
work-day is the equivalent of eight consecutive hours.) Company may include in
Contractor's reimbursement the equivalent amount of the value for the technical
assistance outside of Company's premises requested solely by Contractor.
Company shall inform Contractor, in writing, of such amount and the
reimbursement amount is valid upon mutual agreement by both parties.
3.3 Developments and Improvements. Company shall disclose and license on a
non-exclusive basis to Contractor, solely for the purposes of Contractor's
performance under this Agreement, all of its Improvements to the Products that
come into existence for the assembly, packaging or testing of the
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Products that are not subject to contractual restrictions on disclosure with
third parties. Likewise, Contractor shall disclose and license on a non-
exclusive basis to Company, solely for the purposes of Company's performance
under this Agreement, all of its Improvements to the Products.
3.4 Disclosure of Suppliers. Company shall disclose the identity of its
suppliers for its manufacture of Product. Similarly, should Contractor develop
other suppliers for its manufacture of Product, it shall provide such
information to Company.
3.5 Management and Technical Review Meeting. The parties shall meet at
least quarterly for the first year and on such periodic schedule thereafter as
the parties agree, to review the progress of the technology transfer and other
issues of interest to the parties. The first two quarterly meetings shall be in
Dallas and thereafter shall be at the assembly site.
3.6 Access to Facilities. Upon written request, each party shall make its
facilities available to the other during normal hours of operation. The hosting
party shall provide reasonable accommodation to the visiting party including
telephone, internet and facsimile access.
3.7 Identification of Second Sourcing Opportunities. Each party shall use
reasonable efforts to identify to the other party, opportunities for a second
source to such party's customers.
4. Deliveries
4.1 Deliveries. Contractor will Manufacture the Products as required by
this Agreement and the Order, in the priority sequence reasonably requested by
the Weekly Start Schedule and within the reasonably requested time frames. In
the event that Contractor cannot meet a Weekly Start Schedule or cannot deliver
the Products by the Shipping Date, Contractor will notify Company, a minimum of
one Workweek prior to the Shipping Date.
4.2 Delivery Point. Once Manufacture of the Products has been completed,
Contractor shall be responsible for delivering the Finished Goods FCA, (as
defined in Incoterms (2000) published by the International Chamber of Commerce)
and to a freight forwarder specified by Company in its Order. Company shall be
responsible for freight and related costs. "Delivery Point" as used in this
Agreement shall mean the specific time and location that the Product is
delivered to the shipper specified on the Order.
4.3 Time of Essence. Contractor acknowledges and agrees that time is of
the essence and delivery performance is crucial in Company's evaluation of
Contractor's performance. No partial shipments are allowed unless expressly
authorized in advance and in writing by the Company, on a case-by-case basis.
Late deliveries will be a subject of the Quarterly Review Process and may be
subject to compensation discussions.
4.4 Risk of Loss. Company will insure Company assets against any risk of
loss during transit to and from Contractor and while located in Contractor's
facility.
4.5 Delivery of Die. Company will properly pack all Die and Materials
provided by Company to facilitate safe transport to Contractor. Die shipments
shall be clearly labeled to identify part number, lot number and quantity.
5. Price and Payment.
5.1 Price and Payment of Manufacturing Services. During the term of this
Agreement, Company shall pay for the services provided by Contractor under
Section 2.1 hereof for the Manufacture of Products and prices for such service
shall be denominated in Japanese Yen and shall be firm for a period of 90 days
beginning upon signing of the Agreement. The initial price shall be the US
dollar price per unit agreed
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upon by the parties and converted to Japanese Yen based upon the previous ninety
(90) day average dollar-to-Yen conversion rate ("Base Conversion Rate") as noted
in the Wall Street Journal. The pricing shall be reviewed every ninety (90) days
and adjusted as follows:
Every ninety (90) days a new Base Conversion Rate will be calculated as
the sum of the prior Base Conversion Rate plus the most recent ninety (90) day
average conversion rate divided by two. If there is a greater than five percent
(5%) change in Base Conversion Rate over prior calculated rate, new pricing will
be effected based on the initial US dollar price converted to Japanese Yen based
on the revised Base Conversion Rate and will be reflected on the Company
Purchase Order.
Any modifications, amendments and changes to the Specifications and the
Manufacture of any New Product shall be at such prices mutually agreed to by
Contractor and Company in Sections 2.1 (b) and Section 2.1 (c), respectively.
The Company will be charged for all units tested at Final Electrical Test minus
those units failing at Fine and Gross Leak Test and/or Test Final Visual
Inspection, as depicted in the typical test flow in Schedule B. Failures at
Electrical Test will be subject to sample failure analysis on a monthly basis
and may result in credits to Company for assembly related failures. The
invoice amount shall be determined as follows:
I=(AO - FI)(AP + TP)
Where:
"I" is equal to the invoice amount;
"AO" is equal to the Assembly Outs;
"FI" is equal to the number of Product units found to be defective at
Fine and Gross Leak Test plus the number of Product units found to be defective
at the Test Final Visual Inspection;
"AP" is equal to the assembly price; and
"TP" is equal to the test price.
With each shipment, Contractor will send Company an invoice for all
services provided by Contractor under Section 2.1 hereof for Products
Manufactured by Contractor and delivered to the Delivery Point. Company shall
pay Contractor the amount invoiced within thirty (30) days following the
issuance of such invoice.
5.2 Payment for Other Support Services, as described in Section 2.3, will be
according to Section 5.1, if the cost of said Other Support Services has been
incorporated into the Product price of the Purchase Order issued covering
manufacturing of said product, or will be invoiced separately according to the
Purchase Order issued by Company and covering such services as described in
Section 2.3 if they have not been incorporated into the Product price in the
Purchase Order for said product.
5.3 General Payment Terms. The parties agree that prices will be fixed in
Japanese Yen as provided in Section 5.1. Changes in exchange rate, as well as
all other factors will be taken into account during the Annual Review Process
6. Inspection and Access by Company
6.1 Inspection. Contractor hereby agrees to allow Company's personnel access
with three days prior notice to the Factory during regular business hours or
other facilities at which the Products are being Manufactured, in order for
Company's personnel to ascertain compliance on the part of Contractor with all
of the terms and conditions of this Agreement and Specifications provided by
Company in connection with the process of Manufacture. Contractor shall provide
competent personnel in the Factory to perform inventories of Materials, WIP
Inventory and Finished Goods located at the Factory.
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6.2 Acceptance. All shipments of Finished Goods are subject to Company's
workmanship inspection, agreed test procedures and quality audit upon receipt of
Finished Goods in accordance with Company's Quality Standards. Acceptance of
Products in no event constitutes a waiver of any of Company's rights or remedies
arising from or related to warranty requirements (Section 9.5) nonconforming
Products or any other breach of this Agreement. Company will provide quality
standards to Contractor.
7. Rejection
7.1 Manner of Rejection: Company may reject any Product manufactured by the
Contractor if such Product fails to meet the Specifications or contain a
Manufacture Defect when inspected by the Company. The Company shall notify the
Contractor within five (5) days of receipt of the Product if the Product is
rejected. The Company may, at it's option, (i) return the Product to the
Contractor for rework,(ii) rework the Product, and charge any labor cost, not to
exceed Contractors Value Added, to the Contractor, or (iii) scrap the Product if
it cannot be reworked. If the Product is scrapped, the Contractor will
reimburse the Company for the amount charged to the Company for the Product so
scrapped.
7.2 Restrictions on Disposal of Rejected Products. Contractor may not, under
any circumstances or for any reason, sell or offer for sale any Products
rejected hereby, without the express written consent of Company. All scrap
emanating from the Manufacture of Product for Company by Contractor shall be
returned to Company for disposition unless Company notifies Contractor, in
writing, authorizing alternate disposition.
8. Representations, Warranties and Covenants of Company: The Company
represents and warrants to Contractor, and covenants as follow:
8.1 Corporate Status and Good Standing. Company is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation with full corporate power and authority under its
articles of incorporation and bylaws to own and lease its properties and to
conduct its business as the same exists. Company is duly qualified to do
business as a foreign corporation in all states or jurisdictions in which the
nature of its business requires such qualification, except where the failure to
be so qualified would not have an adverse effect on such party.
8.2 Authorization. Company has full corporate power and authority under its
articles of incorporation and bylaws and its managers and members have taken all
necessary action to authorize it, to execute and deliver this Agreement and the
exhibits and schedules hereto, to consummate the transactions contemplated
herein and to take all actions required to be taken by it pursuant to the
provisions hereof, and each of this Agreement and the exhibits hereto
constitutes the valid and binding obligations of Company, enforceable in
accordance with its terms, except as enforceability may be limited by general
equitable principles, bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally.
8.3 Non-Contravention. Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated herein or therein, does or
will violate, conflict with, result in breach of or require notice or consent
under any law, the articles of incorporation or bylaws of Company or any
provision of any agreement or instrument to which Company is a party.
8.4 Validity. There are no pending or threatened judicial or administrative
actions, proceedings or investigations which question the validity of this
Agreement or any action taken or contemplated by Company or in connection with
this Agreement.
11 Initials: Contractor____Company____
9. Representations and Warranties of Contractor. Contractor represents and
warrants to Company the following:
9.1 Corporate Status and Good Standing. Contractor is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization, with full corporate power and authority under its
certificate or articles of organization and regulations to own and lease its
properties and to conduct its business as the same exists. Contractor is duly
qualified to do business as a foreign corporation in all states or jurisdictions
in which the nature of its business requires such qualification, except where
the failure to be so qualified would not have an adverse effect on such party.
9.2 Authorization. Contractor has full corporate power and authority under
its certificate or articles of organization and regulations and its board of
directors and stockholders have taken all necessary action to authorize it, to
execute and deliver this Agreement and the exhibits and schedules hereto, to
consummate the transactions contemplated herein and to take all actions required
to be taken by it pursuant to the provisions hereof or thereof, and each of this
Agreement and exhibits hereto constitutes the valid and binding obligation of
Contractor, enforceable in accordance with its terms, except as enforceability
may be limited by general equitable principles, bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally.
9.3 Non Contravention. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated herein or
therein, does or will violate, conflict with or result in breach of, or require
notice or consent under any law, the certificate or article or regulations of
Contractor or any provision of any agreement or instrument to which Contractor
is a party.
9.4 Validity. There are no pending or threatened judicial or administrative
actions, proceedings or investigations which question the validity of this
Agreement or any action taken or contemplated by Contractor in connection with
this Agreement.
9.5 Warranty: Contractor warrants that (i) for a period of twelve (12)
months after the date of delivery to the Delivery Point, the Products will not
contain any Manufacture Defect; and (ii) Contractor has complied in all material
respects with all applicable local, foreign, domestic and other laws, rules,
regulations and requirements. THE FOREGOING WARRANTIES ARE EXCLUSIVE AND IN
LIEU OF ALL OTHER EXPRESS AND IMPLIED WARRANTIES WHATSOEVER, INCLUDING BUT NOT
LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR PARTICULAR
PURPOSE. In the event of any breach by Contractor of the warranties contained
herein, Contractor's liability shall be limited to an amount equal to the Value
Added by Contractor to the devices assembled pursuant to this Agreement.
Notwithstanding the foregoing, the parties recognize that Die may be supplied
by Company for use in the Manufacture of Products. Contractor makes no warranty
to Company as to the quality of functionality of the Die supplied by Company.
10. Labor
During the term of this Agreement, Contractor agrees that it shall be solely
responsible for the payment of all wages, fringe benefits, social security,
unemployment and similar expenses and taxes in respect of Contractor's employees
and applicable to the Manufacture of the Products and the performance of any
procurement services and support services contemplated under this Agreement. As
required by any applicable law, Contractor warrants and agrees that it has
produced and shall maintain in effect full statutory coverage for workers'
compensation, employers' liability and disability insurance for all of its
employees. Contractor further agrees and warrants that it has and shall comply
with all applicable Japanese national and local labor laws and other applicable
wage and hour and other labor laws, including without limitation, all child
labor, minimum wage, overtime and safety related laws.
12 Initials: Contractor____Company____
11. Ownership of Materials, Provided Equipment and Supplies.
11.1 Ownership. Contractor understands and acknowledges that it shall under
no circumstances be considered to have any ownership or proprietary interest in
Provided Equipment. Contractor agrees to segregate and label such Provided
Equipment. Contractor will not mortgage, pledge, assign or borrow against such
Provided Equipment.
11.2 Storage/Use. Contractor shall: (a) take delivery, store and use at the
Factory the Provided Equipment using the same degree of care as Contractor
exercises in respect of its own similar property; and (b) inform Company of the
exact location of the Provided Equipment, if it is located outside the
Contractor's principal manufacturing or storage facilities, as well as the
location of all Finished Goods and WIP Inventory stored outside of Contractor's
principal manufacturing or storage facilities. Contractor agrees to comply with
Company's reasonable instructions as to the performance of any preventive
maintenance on any Provided Equipment, said Preventive Maintenance shall be at
Contractor's sole expense. All repairs will be the responsibility of
Contractor. Company shall maintain insurance, at his sole discretion, for all
Provided Equipment owned by or paid for by Company, while in Contractor's
Factory. The Parties shall under separate agreement, agree on the
lease/purchase price for the Provided Equipment to be charged to Contractor by
Company prior to delivery of Provided Equipment by Company to Contractor's
Factory.
12. Indemnification.
12.1 Contractor's Indemnification. Contractor shall indemnify Company and
its Affiliates (including their officers, directors, employees and agents)
against, and hold harmless from and against, any and all claims, actions, causes
of action, arbitrations, proceedings, losses, damages, liabilities, judgments
and expenses (including without limitation, reasonable attorneys' fees)
("Indemnified Amounts") incurred by Company or any of its Affiliates as a result
of (i) any material error, inaccuracy, breach or misrepresentation in any of the
representations and warranties made by Contractor in this Agreement; (ii) any
claim or allegation that Contractor or any of its contractors, representatives
and agents, have not fully discharged all obligations under labor laws as set
forth in Section 10; (iii) any dispute with a subcontractor, employee,
independent contractor, manufacturer, agent or supplier; (iv) the operation by
Contractor of the Factory during the term of this Agreement; and (v) any
Manufacture Defect. Company shall be entitled to recover its reasonable and
necessary attorneys' fees and litigation expenses incurred in connection with
successful enforcement of its rights under this Section 12.1. Any liability
under this Section 12.1 of the Contractor shall be limited in the aggregate to a
maximum amount equal to (i) with respect to claims based on a Manufacture
Defect, the price paid by Company for the Finished Goods (Value Added) subject
to such claim and (ii) with respect to claims based on the performance of any
services hereunder, the price paid by Company for such services.
12.2 Company's Indemnification. Company shall indemnify Contractor and its
Affiliates (including their officers, directors, employees and agents) against,
and hold harmless from and against, any and all Indemnified Amounts incurred by
Contractor or any of its Affiliates as a result of; (i) any material error,
inaccuracy, breach or misrepresentation in any of the representations and
warranties made by Company in this Agreement; (ii) any dispute with a
subcontractor, employee, independent contractor, agent or supplier (including
Approved Vendors) related in any way to this Agreement; and (iii) any of the
Products and its design (other than a Manufacture Defect). Contractor shall be
entitled to recover its reasonable and necessary attorneys' fees and litigation
expenses incurred in connection with successful enforcement of its rights under
this Section 12.2.
13. Termination
13 Initials: Contractor____Company____
This AGREEMENT shall take effect on the 11/th/ of June, 2001 and shall
continue in force until the 10/th/ of June, 2004, thereafter renewable yearly at
mutually agreeable terms and reviewed yearly unless terminated earlier per
Section 13.1 of this Agreement.
13.1 Subject to the provision of Section 13.3, this Agreement may be
terminated in accordance with the following provisions:
(a) Either party may terminate this Agreement by giving notice in
writing to the other party in the event the other party is in material breach of
this Agreement and shall have failed to cure such breach within thirty (30) days
of receipt of written notice thereof from the first party.
(b) Either party may terminate this Agreement at any time by giving
notice in writing to the other party, which shall be effective upon dispatch,
should the other party file a petition at any time as to its bankruptcy, be
declared bankrupt, become insolvent, make an assignment for the benefit of
creditors, go into liquidation or receivership or otherwise lose control of its
business.
(c) Company may terminate this Agreement without cause upon 365 days
written notice to Contractor.
(d) Contractor may terminate this Agreement without cause upon 365 days
written notice to Company.
(e) Company may terminate, if the Contractor at any time has a change in
control.
13.2 For purposes of Section 13.1(e) above, a "change in control" shall be
deemed to have occurred at such time ownership of not less than 50% of the
equity securities of Contractor undergo a change in ownership during the term of
this Agreement, excluding from such calculation transfers that do not change the
Person in ultimate control of Contractor.
13.3 Rights and Obligations on Termination. In the event of termination of
this Agreement pursuant to Section 13.1 above, the parties shall have the
following rights and obligations:
(a) Termination of this Agreement shall not release either party from
the obligation to make payment of all amounts then due and payable.
(b) In the event of termination under Section 13.1(c), Company will
purchase from Contractor all scheduled Finished Goods and Materials inventory
affected by termination. Contractor agrees, in the event of termination under
Section 13.1 (c) to, (i) immediately terminate all open purchase orders for
Materials, (ii) pursue the return for refund or credit of Materials already
received but not in Manufacture, and (iii) follow all reasonable instructions to
minimize the cost of such termination to Company.
(c) In the event of termination under Section 13.1, Contractor shall
return all of Company's Materials, documents, Provided Equipment and supplies
via ship method requested by Company. The shipping cost will be at the expense
of the Company.
(d) Contractor's obligation under Section 9 will still be enforced
notwithstanding termination of this Agreement.
13.4 Remedies. In the event either party breaches in any material respect
any representations, warranties or covenants hereunder or fails to comply in any
material respect with any term or requirement of this Agreement, in addition to
any other remedies the non-breaching party shall be entitled to (a) terminate
this Agreement in accordance with Section 13.1; (b) recover any and all actual
costs, expenses and
14 Initials: Contractor____Company____
damages, (including reasonable attorneys' fees); and/or (c) offset any amounts
due to the non-breaching party by any actual costs and expenses incurred by the
non-breaching party as a result of such breach or failure to comply. Remedies
herein shall not be exclusive but shall be cumulative of any other remedy herein
or under any other statute or law. Upon such termination, none of the parties
nor any other Person shall have any liability or further obligation arising out
of this Agreement except for any liability resulting from its breach of this
Agreement prior to termination, except that the provisions of Sections 14, 15,
16, 17.1,17.15, and 17.16 shall continue to apply.
14. Confidentiality.
14.1 Neither Contractor nor its Affiliates will, directly or indirectly,
disclose or provide to any other Person any non-public information of a
confidential nature concerning the business or operations of Company or its
Affiliates, including without limitation, any trade secrets or other proprietary
information of Company or its Affiliates, known or which becomes known to
Contractor or Affiliates thereof as a result of the transactions contemplated
hereby or Contractor's operation of the Factory, except as is required in
governmental filings or judicial, administrative or arbitration proceedings.
Such non-public or confidential information excludes information which: (i) at
the time such disclosure is in the public domain through no fault of Contractor
or its Affiliates; (ii) after such disclosure becomes part of the public domain
through no fault of the receiving party; (iii) at the time of such disclosure
is already known to the receiving party as shown by its written records; or (iv)
has been or may be lawfully acquired (required) by the receiving party from a
third party having the right to disclose in no violation of any confidentiality
obligation. In the event that Contractor or any Affiliate becomes legally
required to disclose any such information in any governmental filings or
judicial, administrative or arbitration proceedings, Contractor shall, and shall
cause any Affiliate to, provide Company with prompt notice of such requirements
so that Company may seek a protective order or other appropriate remedy. In the
event that such protective order or other remedy is not obtained, Contractor
shall, and shall cause any Affiliate to, furnish only that portion of the
information that Contractor or its Affiliate, as the case may be, is advised by
its counsel as legally required, and such disclosure shall not result in any
liability hereunder unless such disclosure was caused by or resulted from a
previous disclosure by Contractor or any Affiliate that was not permitted by
this Agreement.
14.2 During the period of this Agreement, in which Contractor is obligated
to manufacture Product, Contractor agrees not to market products competitive
with the Products. Contractor affirms that Contractor is not currently
manufacturing products competitive with the Products and it further covenants
that it will not begin manufacturing any such competitive products during the
term of this Agreement.
15. Intellectual Property/Data Rights.
15.1 All Contractor intellectual property owned by Contractor before the
date of this agreement shall remain the sole property of Contractor and any
intellectual property developed solely by the Contractor during the term of this
agreement shall be the sole property of Contractor subject, however, to the
provisions of Section 3.3, which shall control as to Improvements to the
Products or to Company's intellectual property.
15.2 All Company intellectual property owned by Company before the date of
this agreement shall remain the sole property of Company and any intellectual
property developed solely by the Company during the term of this agreement shall
be the sole property of Company subject, however, to the provisions of Section
3.3, which shall control as to Improvements to the Products or to Contractor's
intellectual property.
15.3 Except as otherwise provided in Section 3.3, all intellectual
property that is jointly developed by Contractor and Company during the term of
and in connection with the performance of this agreement shall be jointly owned
(the "Joint Intellectual Property"). Contractor and Company agree to take such
actions and sign such agreements as may be necessary to protect or perfect the
other's individual
15 Initials: Contractor____Company____
intellectual property or its joint interest in Joint Intellectual Property and
to allow the other party to exploit the Joint Intellectual Property in a manner
not inconsistent with this Agreement.
15.4 Contractor agrees to execute all papers and provide requested
assistance, at Company's request and expense during and subsequent to its work
for Company, to enable Company or its nominees to obtain patents, copyrights,
and legal protection for Joint Intellectual Property in any country.
15.5 Company agrees to execute all papers and provide requested
assistance, at Contractor's request and expense during and subsequent to its
work for Contractor, to enable Contractor or its nominees to obtain patents,
copyrights, and legal protection for Joint Intellectual Property in any country.
15.6 Upon termination of this Agreement, whether by expiration,
cancellation, or otherwise, Contractor agrees to promptly deliver to a proper
Company representative all data, documents, and other records which relate to
the business activities of Company, and all other Materials and badges which are
the property of Company.
16. Intellectual Property Infringement and Indemnification
16.1 Company shall hold Contractor harmless against any expense or loss
resulting from a claim of infringement of patents, trademarks, copyrights or
other intellectual property rights arising from compliance with (1) Company's
designs, Specifications or instructions, (2) modifications or other changes to
the Products or components thereof made by Company, or its customers,
distributors or users, (3) combinations of any Product or components thereof
with products or equipment not supplied by Contractor or (4) any cause for which
Company, or its customers, distributors or user are responsible except for the
above cause in this Section; provided, however, that Contractor shall (1)
promptly notify Company in writing of such claims, suits or other proceeding,
(2) permit Company to have the sole and exclusive rights, titles and authorities
to defend, prosecute, negotiate, compromise and otherwise handle such claims,
suits or other proceeding provided that Contractor shall approve settlements
affecting the Contractor's intellectual property or other assets, operations or
value, and (3) cooperate fully with Company, including, without limitation,
providing such information as Company may reasonably request. Without limiting
the generality of the foregoing, Company may, at its option and expense, either
(1) promptly procure for Contractor the right to continue using the Products or
components thereof which are subject to the claim, suit or other proceeding in
question, (2) replace the infringing material with non-infringing, functionally
equivalent material, (3) promptly modify the Products or components thereof
which are subject to the claim, suit or other proceeding in question, so that
they are non-infringing, without materially altering the performance,
characteristics or functions thereof or (4) terminate this Agreement and refund
the aggregate amount of payments made by Contractor for such infringing
Products.
16.2 Contractor shall hold Company harmless against any expense or loss
resulting from a claim of infringement of patents, trademarks, copyrights or
other intellectual property rights arising from (1) Contractor's actions not
necessitated by Company's designs, specification or instructions; (2)
modifications or other changes to the Products or components thereof not made by
Company, or its customers, distributors or users, (3) combinations of any
Product or components thereof with products or equipment supplied by Contractor
or (4) any cause for which Contractor, or its customers, distributors or user
are responsible except for the above cause; provided, however, that Company
shall (1) promptly notify Contractor in writing of such claims, suits or other
proceeding, (2) permit Contractor to have the sole and exclusive rights, titles
and authorities to defend, prosecute, negotiate, compromise and otherwise handle
such claims, suits or other proceeding provided that Company shall approve
settlements affecting the Company's intellectual property or other assets,
operations or value, and (3) cooperate fully with Contractor, including, without
limitation, providing such information as Contractor may reasonably request.
Without limiting the generality of the foregoing, Contractor may, at its option
and expense, either (1) promptly procure for Company the right to continue using
the Products or components thereof which are subject to the claim, suit or other
proceeding in question, (2) replace the infringing material with non-infringing,
functionally
16 Initials: Contractor____Company____
equivalent material, (3) promptly modify the Products or components thereof
which are subject to the claim, suit or other proceeding in question, so that
they are non-infringing, without materially altering the performance,
characteristics or functions thereof or (4) terminate this Agreement and refund
the aggregate amount of payments made by Company for such infringing Products.
16.3 If for any reasonable business justification Contractor is unable to
assume the defense, prosecution, negotiation, compromise or other handling of
any claim, suit or other proceeding for which Company seeks indemnity, Company
may, at Contractor's cost , defend, prosecute, negotiate, compromise and
otherwise handle such claim, suit or other proceeding. Company shall advise
Contractor in writing as to all material aspects relating to such claim, suit or
other proceeding and, in any event, shall report to Contractor thereon in
writing on a regular basis. In no event shall Company compromise or otherwise
settle such claim, suit or other proceeding without Contractor's prior written
consent, which shall not be unreasonably withheld. If Company makes any such
compromise or settlement without Contractor's prior written consent, Company
shall be solely responsible for all costs and damages of such compromise or
other settlement.
16.4 Notwithstanding the foregoing, the amount recoverable against
Contractor for said liabilities, damages, losses, costs and expenses shall not
in any event exceed the aggregate amount Company has paid to Contractor under
this Agreement for the Product.
16.5 CONTRACTOR MAKES NEITHER WARRANTY NOR REPRESENTATION, EXPRESS OR
IMPLIED, WITH RESPECT TO THE PRODUCT AND COMPONENTS THEREOF EXCEPT AS SET FORTH
ABOVE.
16.6 If for any reasonable business justification Company is unable to
assume the defense, prosecution, negotiation, compromise or other handling of
any claim, suit or other proceeding for which Contractor seeks indemnity,
Contractor may, at Company's cost , defend, prosecute, negotiate, compromise and
otherwise handle such claim, suit or other proceeding. Contractor shall advise
Company in writing as to all material aspects relating to such claim, suit or
other proceeding and, in any event, shall report to Company thereon in writing
on a regular basis. In no event shall Contractor compromise or otherwise settle
such claim, suit or other proceeding without Company's prior written consent,
which shall not be unreasonably withheld. If Contractor makes any such
compromise or settlement without Company's prior written consent, Contractor
shall be solely responsible for all costs and damages of such compromise or
other settlement.
17. General Provisions.
17.1 Expenses. Each party shall pay its own expenses, including the fees
and disbursements of its counsel in connection with the negotiation, preparation
and execution of this Agreement and the consummation of the transactions
contemplated herein, except as otherwise provided herein.
17.2 Entire Agreement. This Agreement, including all schedules and
exhibits hereto, constitutes the entire agreement of the parties and supersedes
all previous proposals, oral or written, and all negotiations, conversation or
discussions heretofore and between the parties with respect to the subject
matter hereof, and may not be modified, amended or terminated except by a
written instrument specifically referring to this Agreement signed by all the
parties hereto.
17.3 Waivers and Consents. All waivers and consents given hereunder shall
be in writing. No waiver by any party hereto of any breach or anticipated
breach of any provision hereof by any other party shall be deemed a waiver of
any other contemporaneous, preceding or succeeding breach or anticipated breach,
whether or not similar.
17 Initials: Contractor____Company____
17.4 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 (and then
two business days after) it is sent by registered or certified mail, return
receipt requested, postage prepaid, and addressed to the intended recipient as
set forth below:
If to Contractor, to: Xxx Xxxxxxx
Morioka Seiko Instruments Inc.
61-1, Aza Itabashi Shizukuishi-cho
Iwate-gun, Iwate 020-0597
JAPAN
Facsimile:x00-00-000-0000
E-Mail:xxxxx.xxxxxxx@xxx.xx.xx
If to Company, to: Xxxxx X. Xxxx
R F Monolithics
0000 Xxxxx Xxxx
Xxxxxx, XX 00000
XXX
Facsimile: (000) 000-0000
E-Mail: dkirk@rfm,com
_____________
Any 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, telecopy, 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. Any 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.
17.5 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors, legal representatives and assigns. No third party shall have any
rights hereunder. No assignment shall release the assigning party.
17.6 Choice of Law; Section Heading. This Agreement is performable, in
part, in Dallas County, Texas and, in part, in the Japan, and shall be governed
by and construed in accordance with laws of the State of California, U.S.A.,
without giving effect to any choice or conflict of law provision or rule
(whether of the State of California or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
California. The United Nations Convention On Contracts For The International
Sale Of Goods shall not apply to this Agreement. The section headings contained
in this Agreement are for reference purposes only and shall not affect the
meaning or interpretation of this Agreement.
17.7 Severability: If any term or provision of this Agreement or the
application thereof to any Person or circumstance shall be deemed invalid,
illegal or unenforceable to any extent or for any reason, such provision shall
be severed from this Agreement and the remainder of this Agreement and the
application thereof shall not be affected and shall be enforceable to the
fullest extent permitted by law. A provision which is valid, legal and
enforceable shall be substituted for the severed provision.
17.8 Construction: The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this agreement. Any reference
18 Initials: Contractor____Company____
to any federal, state, local, or foreign statute or law shall be deemed also to
refer to all rules and regulations promulgated thereunder, unless the context
requires otherwise.
17.9 Force Majeure: Neither party shall be liable for loss or damage or
deemed to be in breach of this Agreement if its failure to perform its
obligations results from (i) compliance with any law, ruling, order, regulation,
requirement, or instruction of any federal, state, foreign, or municipal
government or any department or agency thereof; (ii) acts of God; or (iii)
fires, strikes, embargoes, war, or riot. The party experiencing such cause or
delay shall immediately notify the other party of the circumstances which may
prevent or significantly delay its performance hereunder and shall use its best
efforts to alleviate the effects of such cause or delay. Any delay resulting
from any of these causes shall extend performance accordingly or excuse
performance, in whole or in part, as may be reasonable.
17.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
17.11 Agency. Contractor is an independent contractor. Nothing in this
Agreement shall be construed to constitute either party the agent of the other
party and neither party shall represent to any third party that it has any right
or authority to act as the agent for or otherwise to represent the other party.
17.12 Bankruptcy. If during the term of this Agreement a petition in
bankruptcy is filed by or against Contractor, or if Contractor, as a debtor,
seeks or takes the benefit of any insolvency or debtor's relief proceeding, or
if Contractor shall file or attempt to file an assignment for the benefit of
creditors, or if Contractor shall apply to its creditors to compound its debts,
then in any such event, Company shall have the right to decline to take further
deliveries hereunder or Company may, without prejudice to any other lawful
remedy, cancel this Agreement, and in either case, Contractor shall upon demand
deliver to Company all Provided Equipment, Materials, WIP Inventory, Finished
Goods, tooling and other property of Company in Contractor's custody. If during
the term of this Agreement a petition in bankruptcy is filed by or against
Company, or if Company, as a debtor, seeks or takes the benefit of any
insolvency or debtor's relief proceeding, or if Company shall file an assignment
for the benefit of creditors, or if Company applies to its creditors to compound
its debts, then in any such event, Contractor may without prejudice to any other
lawful remedy, cancel this Agreement.
17.13 Assignment of Obligations. Neither party may assign this Agreement
without the prior written consent of the other party; provided that Company may
assign this Agreement to any Person acquiring all or substantially all of
Company's assets.
17.14 Export & Import Laws/Regulations. The parties shall comply with
all applicable Japanese and International Export and Import laws and regulations
in the execution of this Agreement. Contractor shall execute such other
agreements and documents as Company requests, from time to time, in order to
ensure compliance with said laws.
17.15 Dispute Resolution.
(a) Negotiation. In the event of any dispute or disagreement between
parties as to the interpretation of any provision of this Agreement (or the
performance of obligations hereunder), the matter, upon written request of
either party, shall be referred to representatives of the parties for decision,
each party being represented by a senior executive officer who has no direct
operational responsibility for the matters contemplated by this Agreement. The
representatives shall promptly meet in a good faith effort to resolve the
dispute. If the representatives do not agree upon a decision within 30 calendar
days after reference of the matter to them, each of the parties shall be free to
exercise all other remedies available to it.
19 Initials: Contractor____Company____
(b) Arbitration. Any controversy, dispute or claim arising out of or
relating in any way to this Agreement or the other agreements contemplated
hereby or the transactions arising hereunder or thereunder that cannot be
resolved by negotiation pursuant to paragraph (a) above shall, be settled
exclusively by binding arbitration in Texas and in accordance with the current
Commercial Arbitration Rules of the State of California. The parties shall
endeavor to select a mutually acceptable arbitrator knowledgeable about issues
relating to the subject matter of this contract. In the event the parties are
unable to agree upon an arbitrator, each party will select an arbitrator and the
arbitrators in turn shall select a third arbitrator. The language of the
arbitration will be in English. The fees and expenses of the arbitrator shall
be shared equally by the parties and advanced by them from time to time as
required; provided that at the conclusion of the arbitration, the arbitrator may
award costs and expenses (including the costs of the arbitration previously
advanced and the fees and expenses of attorneys, accountant and other experts)
plus interest, to the prevailing party to the extent that in the judgment of the
arbitrator it is fair to do so. No pre-arbitration discovery shall be
permitted, except that the arbitrator shall have the power in his or her sole
discretion, on application by any party, to order pre-arbitration examination
solely of those witnesses and documents that any other party intends to
introduce in its case-in-chief at the arbitration hearing. The arbitrator shall
render his or her award within 90 days of the conclusion of the arbitration
hearing. Notwithstanding anything to the contrary provided in this Section
17.15 and without prejudice to the above procedures, either party may apply to
any court of competent jurisdiction for temporary injunctive or other
provisional judicial relief if such action is necessary to avoid irreparable
damage or to preserve the status quo until such time as the arbitration panel is
convened and available to hear such party's request for temporary relief. The
award rendered by the arbitrator shall be final and not subject to judicial
review and judgment thereon may be entered in any court of competent
jurisdiction. Any monetary award will be made and payable in U.S. dollars free
of any tax or other deduction.
17.16 English Controlling. For purposes of convenience, this Agreement
may be translated but it is understood that the English version of this
Agreement (and the schedules and exhibits) will control for all purposes. In
case of a conflict in meaning between the two versions, the parties are
responsible for performing in accordance with the English version hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first above written.
RF MONOLITHICS, INC. MORIOKA SEIKO INSTRUMENTS INC.
Xxxxx X. Xxxx Kennosuke Fujieda
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(Printed Name) (Printed Name)
/s/ Xxxxx X. Xxxx /s/ Kennosuke Fujieda
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(Signature) (Signature)
President and CEO President
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(Title) (Title)
the 11/th/ June 2001 the 11/th/ June 2001
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(Date) (Date)
20 Initials: Contractor____Company____
