EXHIBIT 10.21
SUBCONTRACT AGREEMENT BETWEEN
Corrosion Engineering Services, Inc.
and
UltraStrip Systems, Inc.
Subcontract Agreement Number CES-97-D-5170/0015/002
This subcontract agreement, effective as of the date this agreement is signed by
an authorized official of CES by and between Corrosion Engineering Services,
Inc. (Hereinafter referred to as "CES", "PRIME CONTRACTOR" or "PRIME"), and
UltraStrip Systems, Inc. (hereinafter referred to as "UltraStrip" or
"SUBCONTRACTOR").
WITNESSETH:
WHEREAS, CES is now engaged in the performance of certain projects under Prime
Contract NOO244-97-D-5170, with the U.S. Navy, and WHEREAS, CES desires
UltraStrip Systems, Inc. to accomplish non-skid material removal onboard
designated U.S. Navy ships, and related assignments as may be arranged to the
mutual satisfaction of both parties during the term of this subcontract, and
WHEREAS, CES desires to engage SUBCONTRACTOR, and SUBCONTRACTOR is qualified and
willing to perform the work for CES as a SUBCONTRACTOR.
NOW, THEREFORE, it is mutually agreed as follows:
1. STATEMENT OF WORK
-----------------
1.1 Unless otherwise provided, SUBCONTRACTOR shall provide the necessary
personnel, materials, services, and otherwise do all things necessary
for, or incident to, the accomplishment of subcontract work as set
forth in Exhibit A, Statement of Work. Future tasks that fit under the
prime contract Statement of Work may be added to the subcontract as an
Addendum to Exhibit A upon approval of CES.
1.2 SUBCONTRACTOR shall, as a result of the work accomplished pursuant to
Paragraph 1.1 and in accordance with the schedule, provide and deliver
to CES the deliverable items listed fully meeting the technical
requirements of this subcontract.
1.2.1 PUBLICATIONS
------------
Copies of all publications generated by work performed under this
subcontract shall be forwarded to CES prior to release to the public.
The SUBCONTRACTOR shall notify the Program Manager of the
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following: planned news releases, planned publicity, advertising
material concerning subcontract work, and planned presentations to
scientific meetings.
2. PERIOD OF PERFORMANCE
---------------------
The period of performance will commence on the effective date of this
agreement and continue until terminated by mutual consent or failure to
perform by SUB as determined by PRIME.
2.1 SUBCONTRACTOR is not obligated to initiate or to continue work or
provide services, and CES is not obligated to compensate SUBCONTRACTOR
for costs or expenses incurred or commitments made before the
effective date or after the period of performance specified above
unless specifically authorized in writing by either Xx. Xxxxxxx X.
Xxxx or Xx. Xxxx X. X'Xxxxx.
3. PROJECT DIRECTION
-----------------
PRIME names Xx. Xxxx X'Xxxxx and SUB names Xx. Xxxxxx XxXxxxx as technical
representatives for the subcontract. SUBCONTRACTOR agrees to notify CES of
any key personnel or representative changes, in writing, thirty (30) days
prior to such change taking place, except in the case of unexpected illness
or death of the key personnel, and to provide personnel with equal or
greater qualifications.
4. SUBCONTRACTS
------------
4.1 SUBCONTRACTOR shall not issue any subcontracts under this subcontract
agreement without prior written approval of CES by either Xx. Xxxxxxx
X. Xxxx or Xx. Xxxx X. X'Xxxxx.
4.2 SUBCONTRACTOR shall maintain property records of subcontractor
acquired, contractor furnished, and government furnished equipment and
shall submit the annual report of such property to CES, by 30
September of each year.
5. TRAVEL
------
5.1 SUBCONTRACTOR shall request approval in writing prior to initiating
any travel under this subcontract except that travel specified by CES.
5.2 Approval of Foreign Travel. The cost of foreign travel, defined as any
travel outside of the United States and its territories and
possessions, is allowable only when the specific written approval of
the CES Contract Manager is obtained prior to commencing the trip.
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6. TYPE OF CONTRACT: FIRM FIXED PRICE
----------------------------------
Subcontract is a firm fixed price contract.
6.1 ESTIMATED COST
--------------
The firm fixed price shall be defined for each listed tasking in
Exhibit A.
6.2 LEVEL OF EFFORT
---------------
A. The SUBCONTRACTOR agrees to provide the total level of effort
defined by task in Exhibit A.
B. It is understood and agreed that the rate of direct labor hours
expended each month may fluctuate in pursuit of the technical
objective.
C. It is understood that the mix of labor categories provided by the
SUBCONTRACTOR by task under the contract, as well as the
distribution of effort among those categories, may vary
considerably from the initial mix and distribution of effort that
was proposed by the SUBCONTRACTOR.
D. Nothing herein shall be construed to alter or waive any of the
rights or obligations of either party pursuant to the Clause
entitled "Limitation of Costs" or "Limitation of Funds", either of
which incorporated herein applies to this subcontract.
6.3 INCORPORATION OF FAR CLAUSES
----------------------------
All FAR provisions invoked under the CES' prime contract will be
incorporated within the subcontract exhibits. PRIME CONTRACTOR agrees
to provide copies of all such clauses to SUBCONTRACTOR prior to
execution of Exhibit (A).
7. PAYMENTS AND SUBMISSION OF VOUCHERS OR INVOICES
-----------------------------------------------
7.1 Invoices shall be submitted monthly with the price defined for each
task effort in Exhibit (A) and reference the subcontract number:
CES-97-D- 5170/0015/002. Subcontractor invoices shall be billed in
labor hours and material costs.
7.2 Submit invoices to:
CES, a California Corporation
0000 Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
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7.3 Payment will be made to the SUBCONTRACTOR within fifteen (15) days of
CES receiving payment from the government.
8. CLAIMS
------
SUBCONTRACTOR agrees to hold CES harmless of any claims, insurance or
otherwise, arising out of the SUBCONTRACTOR'S sole negligence in the
performance of the tasks specified herein.
9. INSPECTION AND ACCEPTANCE
-------------------------
CES, or its duly authorized representative, shall be authorized to perform
inspection and acceptance of materials and services in accordance with the
provisions of and at the location(s) specified in the Statement of Work.
Inspection and acceptance shall be in accordance with FAR 52.246-3
(supplies) and FAR 52.246-5 (services). Approval by CES under this
agreement shall not release SUBCONTRACTOR from responsibility to meet all
the requirements of the agreement. The provisions of this paragraph are not
to be construed as a limitation of the rights of CES, and the obligations
of SUBCONTRACTOR as provided for in this agreement.
10. CHANGES
-------
CES may at any time, by mutual written agreement, make changes within the
general scope of this Agreement. 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 Subcontract Agreement, an equitable adjustment
shall be made in the total subcontract price or the delivery schedule, or
both, and the subcontract shall be modified in writing accordingly. Any
claim by SUBCONTRACTOR for adjustment under this clause must be asserted
within thirty (30) days from the date of receipt by CES of the notification
of change. Written authorization for changes or additions in projects and
operating activities shall be obtained in advance before commitments are
made.
11. STANDARDS OF WORK
-----------------
SUBCONTRACTOR agrees that the performance of work and services pursuant to
the requirements of this subcontract shall conform to high professional
standards.
12. CONFIDENTIAL INFORMATION
------------------------
SUBCONTRACTOR agrees that they will not, during the term of this
Subcontract Agreement, or thereafter for the period of three years,
disclose any confidential information whatsoever obtained from CES, without
due authorization from a responsible officer thereof unless such
information shall have been previously published by CES. Contractor agrees
to the same terms relating to confidential information obtained from
SUBCONTRACTOR.
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13. LIMITATION OF DAMAGES
---------------------
In no event shall either party be liable to the other for any incidental or
consequential damages arising out of this subcontract.
14. DISPUTES
--------
Any dispute arising between the parties under this agreement may be decided
by a court of competent jurisdiction or arbitration, but nothing in this
article shall excuse SUBCONTRACTOR from proceeding with the performance of
the undisputed portion of this subcontract through the pendency of any such
dispute.
15. AMENDMENTS
----------
Subject to the article of this subcontract entitled, "Changes", this
Agreement may not be modified, amended or waived except by written
instrument signed by the parties hereto.
16. NOTICES
-------
Notices by one party or the other shall be sent registered mail, return
receipt requested as follows:
TO: PRIME TO: SUBCONTRACTOR
CES, a California Corporation UltraStrip Systems, Inc.
Xx. Xxxxxxx X. Xxxx Xx. Xxxxxx XxXxxxx
0000 Xxxxxx Xxxx, Xxxxx 000 0000 X.X. Xxxxxx Xxxxxxx
Xxx Xxxxx, XX 00000 Xxxxxx, XX 00000
17. RELATIONSHIP TO PARTIES
-----------------------
CES and SUBCONTRACTOR agree that SUBCONTRACTOR is an independent contractor
and not an agent or employee of CES.
18. INTERPRETATION
--------------
This agreement is to be governed by and constructed under the laws of the
State of California.
19. EFFECTIVE DATE
--------------
The effective date of this Subcontract shall be the date it is signed by an
authorized official of CES.
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20. GENERAL PROVISIONS
-------------------
SUBCONTRACTOR shall, under this subcontract agreement, be subject to the
terms and conditions as set forth in this agreement.
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE CAUSED THIS AGREEMENT TO BE
EXECUTED.
PRIME CONTRACTOR: CES, a California Corporation
BY: /s/ Xxxxxxx X. Xxxx
-----------------------
Xxxxxxx X. Xxxx
TITLE: Chief Operating Officer
DATE: 9 Feb 01
SUBCONTRACTOR: UltraStrip Systems, Inc.
BY: /s/ Xxxxxx XxXxxxx
------------------------
Xxxxxx XxXxxxx
TITLE: President
DATE: 2-12-2001
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SUBCONTRACT AGREEMENT BETWEEN
Corrosion Engineering Services, Inc.
And
UltraStrip Systems, Inc.
Subcontract Agreement Number NO0244-97 -0-5170/0015/002
EXHIBIT A - Statement of Work
1. Scope of Work: Removal of 100,000 square feet of Non-Skid material from
the after half of the Flight Deck on the USS Eisenhower (CVN-69), including
the waist catapults, at a price of $6.75 per square foot in accordance with
your quote dated January 26, 2001. A schematic delineating the area
assigned to UltraStrip will be provided no later than February 28, 2001
2. Upon review of the predicted production rate and the daily actual
production rate by CES, if the actual production rate is less than the
predicted rate, and if, in the sole assessment of CES, the actual
production rate places either the March 5, 2001 completion date for the
waist catapults or the March 30, 2001 completion date for the removal of
the remainder of the 100,000 square feet of non-skid, CES shall have the
right to terminate the production effort, assess the number of square feet
executed by the contractor and pay the prorated value based on the
contractor's per square foot price ($6.75 per square foot - UltraStrip) for
that contiguous surface area CES deems satisfactory. In this event the
contractor will NOT be compensated for the total square footage (100,000
square feet) or any other incidental costs.
3. Period of Performance: February 28, 2001 through March 30, 2001. The waist
catapult area must be completed no later than March 5, 2001. Following
completion of the removal of non-skid in the vicinity of the waist
catapults, UltraStrip is to proceed from amidships to aft on the Flight
Deck.
4. Cost: Mobilization to the site to be at a cost of $15,000.00. Removal and
disposal of all waste to be at a cost of $15,000.00
5. Fixed Price Not to Exceed: $705,000.00
6. Stand-By Time: To be paid at a cost of $550.00 per hour per crew for acts
of God and for delays not caused by UltraStrip. Crew defined as a full
shift. Delays to be paid at a maximum of 4 hours per day. An inclement
weather plan is required, as per the Request for Quotation. Stand-By Time
shall be approved on a daily basis by CES with written explanation as to
the cause(s) for Stand-By Time requirements submitted to and approved by
CES. Further, if, in the opinion of CES, excessive Stand-By Time
requirements jeopardize completion targets defined in Paragraph 2 above,
CES shall have the right to reallocate work areas (increase or decrease) in
order to meet project deadlines.
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7. Production Schedule: In order to properly support the goal of demonstrating
the high production rate of the UltraStrip system, it will be necessary to
document the actual versus predicted production rates. Predicted rates are
based on the production schedule included in your quote dated January 26,
2001. The actual square feet removed will be calculated daily and agreed to
in writing and signed by the CES on-site xxxxxxx and the Ultrastrip Project
Operations Manager prior to the end of each production day.
8. It is UltraStrip's obligation to arrange and pay for any support services
in order to accomplish the tasking as provided for in the RFQ.
PRIME CONTRACTOR: Corrosion Engineering Services, Inc.
SIGNATURE: /s/ Xxxxxxx X. Xxxx
-------------------
BY: Xxxxxxx X. Xxxx
TITLE: Chief Operating Officer
DATE: February 9, 2001
ACCEPTANCE: /s/ Xxxxxx XxXxxxx, President
-----------------------------
DATE: 2-12-01
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ADDITIONAL TERMS AND CONDITIONS
1. ACCEPTANCE AND TERMS AND CONDITIONS:
A. Seller should accept this order and any amendments thereto by signing
the acceptance copy and returning it to Purchaser promptly.
B. By acceptance of this order Seller agrees to be bound by, and to
comply with all the terms and conditions of this order, including any
supplements thereto, and all specifications and other documents
referred to in this order. However, performance of the work called for
by this order in the absence of Seller's written acknowledgement
thereof shall be deemed acceptance of this order.
C. This order does not constitute an acceptance by Purchaser of any offer
to sell, any quotation, or any proposal. Reference in this order to
any such offer to sell, quotation, or proposal shall in no way
constitute a modification of any of the terms and conditions of this
order. AN ATTEMPTED ACKNOWLEDGEMENT OF THIS ORDER CONTAINING TERMS AND
CONDITIONS INCONSISTANT WITH OR IN ADDITION TO THE TERMS AND
CONDITIONS OF THIS ORDER IS NOT BINDING UPON PURCHASER UNLESS
SPECIFICALLY ACCEPTED BY PURCHASER IN WRITING, AND PURCHASER HEREBY
OBJECTS THERETO.
2. DEFAULT: Time is of the essence of this Purchase Order. Except in instances
of delay, which are due to causes beyond the reasonable control and without
the fault or negligence of Seller and all of its suppliers, direct and
indirect at every subcontract level. Purchaser may, by written notice of
default to Seller, terminate the whole or any part of this order in anyone
of the following circumstances: (1) if Seller fails to perform within the
time specified herein or any extension thereof; or (2) if Seller fails to
perform any of the other provisions of this order, or so fails to make
progress as to endanger performance of this order in accordance with its
terms, and in either of these two circumstances does not cure such failure
within a period of ten (10) days or such longer period as Purchaser may
authorize in writing after receipt of notice from Purchaser specifying such
failure; and, upon such termination, Purchaser may procure, upon such terms
as it shall deem appropriate, supplies or services similar to those so
terminated, in which case Seller shall continue performance of this order
to the extent not terminated and shall be liable to Purchaser for any
excess costs for such similar supplies or services. As an alternate remedy,
and in lieu of termination for default, Purchaser, at its sole discretion
may elect, (1) to extend the delivery schedule and/or (2) to waive other
deficiencies in Seller's performance, in which case an equitable reduction
in the purchase order price shall by negotiated. In the event Seller for
any reason anticipates difficulty in complying with the required delivery
date, or in meeting any of the other requirements of this order. Seller
shall promptly notify Purchaser in writing. If seller does not comply with
Purchaser's delivery schedule, Purchaser may require delivery by fastest
way and charges resulting from the premium transportation must be fully
prepaid and absorbed by the Seller. The rights and
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remedies of the Purchaser provided in this clause shall not be exclusive
and are in addition to any other rights and remedies provided by law or
under this purchase order.
3. INSPECTION:
A. All goods (which throughout this order includes without limitation raw
materials, components, intermediate assemblies, tools and end
products) shall be subject to inspection and test by the Purchaser and
its Customer (which throughout this clause shall include without
limitation the Federal Government including its surveillance and/or
regulatory agencies) to the extent practicable at all times and places
including the period of manufacture and in any event prior to final
acceptance by the Purchaser and its Customer.
B. If any inspection or test is made on the premises of Seller or its
supplier, Seller, without additional charge, shall provide all
reasonable facilities and assistance for the safety and convenience of
the inspectors in the performance of their duties. All inspections and
tests on the premises of Seller or its supplies shall be performed in
such a manner as not to unduly delay the work.
C. Final acceptance or rejection of the goods shall be made as promptly
as practical after delivery, except as otherwise provided in this
order, but failure to inspect and accept or reject goods, or failure
to detect defects by inspection, shall neither relieve Seller from
responsibility for such goods as are not in accordance with the order
requirements nor impose liabilities on Purchaser thereof.
D. Seller shall provide and maintain an inspection and process control
system acceptable to Purchaser and its Customer covering the goods
hereunder. Records of all inspection work by Seller shall be kept
complete and available to Purchaser and its Customer during the
performance of this order and for such longer periods as may be
specified in this order.
4. WARRANTIES:
A. Seller warrants that all goods and services sold hereunder or pursuant
hereto will be free of any claim of any nature by any third person and
that Seller will convey clear title thereto to Purchaser as provided
hereunder.
B. Seller warrants and represents that all goods sold hereunder or
pursuant hereto will be of merchantable quality, free from all defects
in design, workmanship and materials, and will be fit for the
particular purposes for which they are purchased and that the goods
are provided in strict accordance with the specifications, samples,
drawings, designs or other requirements (including performance
specifications) approved or adopted by Purchaser.
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C. Any attempt by Seller to limit, disclaim, or restrict any such
warranties or remedies of Purchaser, by acknowledgement or otherwise,
in accepting or performing this order, shall be null, void, and
ineffective without Purchaser's written consent.
5. REJECTIONS: If any of the goods ordered are found at any time to be
defective in material or workmanship, or otherwise not in conformity with
the requirements of this order, including any applicable drawings and
specifications, Purchaser, in addition to such other rights, remedies and
choices as it may have by contract or by law, at its option and sole
discretion may:
A. Reject and return such goods at sellers expense; B. require Seller to
inspect the goods and remove and replace non-conforming goods with
goods that conform to this order. If Purchaser elects option B above
and Seller fails, to promptly make the necessary inspection, removal
and replacement, Purchaser may at its option inspect and sort the
goods; Seller shall pay the cost thereof.
6. CHANGES: The purchaser may at any time, in writing, make changes within the
general scope of this Purchase Order, in any one or more of the following:
A. drawings, designs, or specification where the goods to be furnished are
to be specially manufactured for the Purchaser in accordance therewith; B.
method of shipment or packing; C. place of delivery; and D. the amount of
Government-furnished property. If any such change causes an increase or
decrease in the cost of, or the time required for the performance of any
work under this contract, whether changed or not changed, and equitable
adjustment shall be made in the contract price or delivery schedule, or
both, and the Purchase Order shall be modified in writing accordingly. Any
claim by the Seller for adjustment under this clause must be asserted
within thirty (30) days from the date of receipt by the Seller of the
notification of change; provided, however, that the Purchaser, if he so
chooses, may receive and act upon any such claim asserted at any time prior
to final payment under this contract. Any change in this order shall be
authorized only by a duly executed Purchase Order Amendment hereto.
7. NON-ASSIGNMENT: Assignment of this order or any interest therein or any
payment due or to become due hereunder, without the written consent of the
Purchaser shall be void.
8. FEDERAL ACQUISTION REGULATION: The following Federal Acquisition Regulation
(FAR) clauses, in effect on the date hereof, are incorporated herein by
reference. The term "Contractor" shall mean "Seller" the term "contract"
shall mean this order, and the term "Government", "Contracting Officer" and
equivalent phrases shall mean Buyer, as applicable, to fulfill the intent
of such clauses. All references to disputes procedures in Government
clauses incorporated by reference shall be deemed to be superseded by
Article 21 "Disputes".
Security Requirements 52-204-2
New Material 52-210-5
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Priorities, Allocations, and Allotments 52-212-8
Government Delay of Work 00-000-00
*Examination of Records by Comptroller
General ($10,000) (Except subparagraph) 52-215-1
*Audit Negotiation($10,000) 52-215-2
*Utilization of Small Business Concerns and
Small Disadvantaged Business Concerns ($10,000) 52-219-8
*Small Business and Small Disadvantaged
Business Subcontracting Plan ($500,000) 52-219-9
*Labor Surplus Area Subcontracting Program ($500,000) 52-220-4
Equal Opportunity 00-000-00
*Affirmative Action for Special Disabled and Vietnam
Era Veterans ($10.000) 00-000-00
*Affirmative Action for Handicapped 00-000-00
Workers ($25,000)
Buy American Act-Supplies 52-225-3
Government Property (Fixed Price Contracts) 52-245-2
*Note - Clause is applicable if order exceeds the amount indicated.
9. TERMINATION: (a) Buyer may terminate this order, in whole or in part in
accordance with the provisions of the "Default (Fixed Price Supply and
Service)" clause set forth in FAR 52-249-8 if Seller fails to comply with
any of the provisions hereof, or if Seller becomes the subject of a
proceeding under state of federal law for relief of debtors or makes an
assignment for the benefit of creditors. (b) Without affecting its right to
terminate this order under paragraph (a) hereof, Buyer may, for its
convenience, terminate this order in whole or, from time to time, in part,
in accordance with the provisions of the "Termination for Convenience of
the Government (Fixed Price)" clause set forth in FAR 52-249-2 except the
term "1 year" in paragraph (d) is changed to "6 months" (c) The FAR clauses
referred to in paragraphs (a) and (b) are hereby incorporated herein by
references as in effect on the date hereof.
10. RIGHTS IN DATA: If this order is placed under a Government contract having
rights in data and computer software clauses, the provisions thereof are
incorporated herein and replace Article 15 "information" Seller assumes the
obligations of such clauses as they pertain to this order.
11. DoD CONTRACTS: If this order is placed under a Department of Defense (DoD)
contract, the following DoD FAR Supplement clause in effect on the date
hereof applies.
Pricing of Adjustments 00-000-0000
12. CONFIDENTIAL OR PROPRIETARY INFORMATION: Any knowledge or information which
the Seller shall have disclosed or may hereafter disclose to the Purchaser,
and which in any way relates to the goods or services covered by this order
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and Purchaser's Material Schedule, shall not, unless otherwise specifically
agreed to in writing by the Purchaser, be deemed to be confidential or
proprietary information and shall be acquired by Purchaser, free from any
restrictions (other than a claim for patent infringement) as part of the
consideration for this order and Purchaser's Material Schedule.
13. FOR WORK ON PURCHASER'S OR ITS CUSTOMERS' PREMISES: If Seller's work under
the order involves operations by Seller on the premises of Purchaser or one
of its customers, Seller shall take all necessary precautions to prevent
the occurrence of any injury to person or property during the progress of
such work and except to the extent that any such injury is due solely and
directly to Purchaser's or its customer's negligence, as the case may be,
shall indemnity Purchaser against all loss which may result in any way from
any act or omission of the Seller, its agents, employees, or
subcontractors, and Seller shall maintain such Public Liability Property
Damage and Employee's Liability and Compensation Insurance as will, in
Purchaser's sole judgement, protect Purchaser from said risks and from any
claims under any applicable Worker's Compensation and Occupational Disease
Acts.
14. INSOLVENCY: If Seller ceases to conduct its operations in the normal course
of business, including inability to meet its obligations as they mature, or
if any proceedings under the bankruptcy or insolvency laws is brought by or
against Seller, or a receiver for Seller is appointed or applied for or an
assignment for the benefit of creditors is made by the Seller, Purchaser
may terminate this order without liability, except for deliveries
previously made or for goods covered by this order then completed and
subsequently delivered in accordance with the terms of this order
15. PROPRIETARY INFORMATION: Seller shall keep confidential any technical,
process or economic information derived from drawings, specifications, and
other data furnished by Purchaser in connection with this order and shall
not divulge, export, or use directly or indirectly, such information for
the benefit of any other party without obtaining Purchaser's prior written
consent. Access to proprietary information shall be restricted to company
personnel with a need to know and engaged in a permitted use of such
proprietary information. Except as required for the efficient performance
of this order, Seller shall not make copies or permit copies to be made of
such drawings, specifications, or other data without the prior written
consent of Purchaser. If any reproduction is made with prior consent, this
notice shall be provided thereon. Upon completion or termination of this
order, Seller shall promptly return to Purchaser all materials and any
copies thereof, except for one record copy, incorporating such information.
16. WAIVER: No claim or right arising out of a breach of this contract can be
discharged in whole or in part by a waiver or renunciation of the claim or
right unless the waiver or renunciation is supported by consideration and
is in writing signed by the aggrieved party. The failure of Purchaser to
enforce at any time or for any period of time any of the provisions hereof
shall not be construed to be a waiver of such
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provisions nor the right of Purchaser thereafter to enforce each and every
such provision.
17. PATENTS: Seller shall defend any suit or proceeding brought against
Purchaser or its customers that is based on a claim that any article or
apparatus, or any part thereof constituting goods furnished under this
order (or Purchaser's Material Schedule), as well as any device or process
necessarily resulting from the use thereof, constitutes an infringement of
any patent of the United States, if notified promptly in writing and given
authority, information, and assistance (at Seller's expense) for the
defense of same, and Seller shall pay all damages and costs awarded
therein. In case use of said article or apparatus, part or device is
enjoined, Seller shall, at its own expense and at its option, either
procure for Purchaser the right to continue using said article or
apparatus, part or device; or replace same with a non-infringing
equivalent; or remove said article or apparatus and refund the purchase
price and the transportation and installation costs thereof.
18. EXTRA CHARGES: Charges exceeding this amount shall not be allowed unless
specifically agreed to by Purchaser in writing.
19. DELIVERY SCHEDULE: Unless otherwise agreed in writing, Seller shall not
make material commitments or production arrangements in excess of the
amount or in advance of the time necessary to meet Purchaser's delivery
schedule. It is Seller's responsibility to comply with this schedule, but
not to anticipate Purchaser's requirements.
20. EXCUSABLE DELAYS: Whenever any other actual or potential event is delaying
or threatening to delay delivery of the goods, or performance of the
services under this purchase order, Seller shall, as soon as possible, give
notice thereof to the Purchaser. Seller shall not be liable for damages or
delays in delivery due to causes beyond its reasonable control. However, if
Seller for any reason does not comply with Purchaser's delivery schedule,
Purchaser, in addition to its remedies at law, may at its option approve a
revised delivery schedule or terminate this order without liability on the
part of the Purchaser on account thereof. If Purchaser approves a revised
delivery schedule and directs that Seller ship by a method other than
indicated on the face of this order, Seller agrees to pay any additional
transportation charges incurred as a result of such direction.
21. DISPUTES: Good-Faith Negotiations. If any dispute arises under this
agreement that is not settled promptly in the ordinary course of business,
the parties shall seek to resolve any such dispute between them, first, by
negotiating promptly with each other in good faith in face-to-face
negotiations. If the parties are unable to resolve the dispute within 10
business days (or such period as the parties shall otherwise agree) through
these face-to-face negotiations, then any such dispute shall be settled by
appropriate legal proceedings. Pending a final decision of any dispute
hereunder. Seller shall proceed diligently with the performance of this
purchase order.
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Venue: All arbitration and suits under this agreement shall be held in San
Diego, California.
22. ENTIRE AGREEMENT: This Purchase Order, with such documents as are expressly
incorporated herein by reference, is intended by the parties as a final
expression of their agreement with respect to such terms as are included
herein, and is intended also as a complete and exclusive statement of the
terms of their agreement. No course of prior dealings between the parties
and no usage of the trade shall be relevant to determine the meaning of
this agreement even though the accepting or acquiescing party has knowledge
of the nature of the performance and opportunity for objection.
Any change to the terms and conditions of this lease must be in writing and
signed by Lessor and Lessee. No oral changes are binding. We may delay or
refrain from enforcing any of our rights under this lease without losing
them.
7
