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EXHIBIT 10.30
AGREEMENT
between
XXXXXX COMMUNICATIONS INC.
and
XXXXXX WORLDWIDE, INC.
* Portions of this Exhibit have
been omitted (based upon a request
for confidential treatment) and have
been filed separately with the
Securities and Exchange Commission
pursuant to Rule 406.
DATE: 12/2/96
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INDEX
Article Title
------- -----
1. Xxxxxxxxxxx Xxxxx
0. Xxxxxx'x Marketing Rights
3. Purchase Price
4. Orders
5. Terms of Payment
6. Delivery
7. Inspection and Acceptance
8. Safety Standards and Regulations
9. Warranty
10. Servicing and Spare Parts
11. Trademarks
12. Patents, etc.
13. Indemnification
14. Duration of the Agreement
15. Termination of the Agreement
16. Printed Materials
17. Disclosure of Information
18. Assignment
19. Notices
20. Exceptions
21. Entire Agreement
22. Arbitration
23 Governing Law and Trade Terms
24. Miscellaneous
Appendix I - Product Requirements
Appendix II - Price
Appendix III - Inspection Standards
Appendix IV - Milestone and Payment Schedule
Appendix V - Xxxxxx Exclusive Features
Appendix VI - Escrow Agreement
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AGREEMENT
THIS AGREEMENT ("the Agreement") is made and entered into this
_____________ day of _________________, 19____, by and between XXXXXX
COMMUNICATIONS, INC., a corporation duly organized and existing under the laws
of the State of Delaware with its principal place of business at 00000 Xxxxx
Xxxxx, Xxxxx, Xxxxxxxxxx 00000 (hereinafter referred to as "Xxxxxx") and XXXXXX
WORLDWIDE, INC., a Delaware corporation, having its principal place of business
at 0000 Xxxxxxxx Xxxxx, X.X., Xxxxxxx, Xxxxxxx 00000 (hereinafter referred to
as "Xxxxxx",) (collectively referred to as "the Parties").
WITNESSETH:
WHEREAS, Xxxxxx and Xxxxxx desire to work together to develop certain
products; and
WHEREAS, Xxxxxx will develop certain products in accordance with the
terms and conditions set forth in this Agreement; and
WHEREAS, Xxxxxx desires to purchase from Xxxxxx, and Xxxxxx is willing
to sell to Xxxxxx, certain products manufactured by Xxxxxx under the Xxxxxx
brand, for resale in certain territories; and
WHEREAS, Xxxxxx shall at its own expense direct its activities for the
sale of the products under Xxxxxx'x name and trademarks.
NOW, THEREFORE, in consideration of the mutual promises contained
herein the Parties hereto agree as follows:
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Article 1. DEVELOPMENT PHASE
(a) The period of time between the execution of this Agreement and
the completion of the milestones described in Appendix IV
("the Milestones") shall constitute the initial phase of this
Agreement ("the Initial Phase"). During the Initial Phase,
Xxxxxx will develop the Xxxxxx Digital Portable Recorder
without ***** the Xxxxxx Digital Portable Recorder with *****
and the Xxxxxx Portable Digital ***** ("the Products") in
accordance with the Product Requirements as set forth in
Appendix I hereto ("the Product Requirements"), and will
further meet all of the Milestones on or before the completion
date specified on Appendix IV for each Milestone ("the
Milestone Completion Dates"). If modifications or changes to
the Product Requirements affect the Purchase Price, as
defined in Article 3 of this Agreement, the parties shall
negotiate the price change in good faith.
(b) If Xxxxxx fails to either (i) develop the Product in
accordance with the Product Requirements or (ii) meet all of
the Milestones on the Milestone Completion Dates, and fails to
cure such failure within ten (10) days after written notice of
such failure, Xxxxxx will be in breach of this Agreement, and
Xxxxxx will be entitled to all of its rights and remedies set
forth in this Agreement.
(c) Xxxxxx hereby conveys to Xxxxxx all rights, title and interest
in any and all tooling, fixtures, and all other tools and test
devices used in the manufacturing, assembly and testing of the
Products ("the Product Tooling"). Xxxxxx will submit to
Lanier contemporaneously with the execution of this Agreement
a list of all Product Tooling
*This portion of the Exhibit has been
omitted (based upon a request
for confidential treatment) and have
been filed separately with the
Securities and Exchange Commission
pursuant to Rule 406.
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("the Product Tooling List"). The Product Tooling List shall include the
following information: (1) the vendor and the manufacturer of the Product
Tooling; (2) the cost of the Product Tooling; (3) the date purchased; (4) the
serial number of the Product Tooling, if applicable; and (5) the physical
location of the Product Tooling. This Product Tooling List shall be regularly
updated by Xxxxxx to include any changes, additions or deletions to the
information contained therein, and Xxxxxx shall provide Xxxxxx with an updated
Product Tooling List within five (5) days of the date on which the Product
Tooling List is amended.
Article 2. XXXXXX'X MARKETING RIGHTS
Xxxxxx shall have the exclusive right to sell and distribute the
Products throughout the entire world ("xxx Xxxxxxxxx").
Article 3. PURCHASE PRICE
The purchase price for the Products ("Purchase Price") is set forth in
Appendix II hereto. The Purchase Price may only be modified by mutual
written consent of both Parties to this Agreement. The Parties agree
that if market conditions change in any part of the Territory such
that a reduction of the Purchase Price is necessary in order for
Xxxxxx to be competitive in a particular marketplace, the Parties
agree to reduce the Purchase Price by an amount sufficient to allow
Xxxxxx to compete in that particular market. The parties further
agree that to the extent that market conditions dictate an increase of
the Purchase Price, the Purchase Price shall not exceed the then
current Consumer Price Index, as reported by the Federal Government.
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Article 4. ORDERS
(a) Xxxxxx shall provide Xxxxxx with a forecast report ("Forecast
Report") via Xxxxxx'x standard purchase order. The Forecast
Report shall reach Xxxxxx no later than the fifteenth (15th)
calendar day (3) months before the month in which the Products
forecasted on the Forecast Report are to be delivered. Xxxxxx
shall state in the Forecast Report the product name, model
number, description, quantity, price, payment terms, shipment
month and date, and destination of the Products to be
purchased by Xxxxxx.
(b) Xxxxxx shall be committed to purchase the number of units of
each model of the Products set forth in the Forecast Report
for the first three (3) months of any period forecasted for
pursuant to Article 4(a) ("the Firm Period"). Such commitment
is hereinafter referred to as the "Firm Quantify." The Firm
Quantity for any given month within the first three (3) months
of a Firm Period may not be reduced or increased by Xxxxxx in
any subsequent purchase order without the consent of Xxxxxx.
The number of units of each model of the Products forecasted
for month four (4) may be adjusted by +100% as it moved to
firm month three (3) and month five (5) forecast may be
adjusted by +100% as it becomes month four (4) forecast.
(c) Any terms or conditions printed on the face or the reverse
side of the Xxxxxx purchase order sheet and/or Xxxxxx'x
acknowledgment form shall not be part of this Agreement nor
shall they constitute the terms and conditions of the Sales
Contract for the Products, even in case such purchase order
sheet or Xxxxxx'x acknowledgment form is signed and returned
by Xxxxxx to Xxxxxx or Xxxxxx to Xxxxxx.
(d) Products purchased by Xxxxxx'x subsidiaries and affiliates
will be deemed to be Xxxxxx'x purchases for purposes of
tracking Xxxxxx'x yearly purchases.
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Article 5. TERMS OF PAYMENT
(a) The payment schedule for the Initial Phase of this Agreement
shall be in accordance with Appendix IV hereto.
(b) With respect to payment for purchase of the Products, Xxxxxx
shall render invoice upon shipment of the Products. Xxxxxx
shall state in the invoice the product name, model number,
description, destination, quantity, and payment term of the
Products. Payment shall be due within thirty (30) days from
either: (1) the date of receipt by Xxxxxx of Xxxxxx'x correct
invoice, or (2) Xxxxxx'x receipt of the Products, whichever is
later.
Article 6. DELIVERY
Xxxxxx will deliver the Products to Xxxxxx by the date specified in
the applicable purchase order. Delivery terms shall be F.O.B.
Fontana, California.
Article 7. INSPECTION AND ACCEPTANCE
(a) Xxxxxx shall have the right to conduct, at Xxxxxx'x expense,
an inspection of the Products in Xxxxxx'x factory in
accordance with the inspection standards and procedures set
forth in Appendix III attached hereto and made an integral
part hereof. The inspection before delivery will be carried
out, at Xxxxxx'x option, by Xxxxxx during a designated
inspection period not exceeding five (5) working days each
time. Xxxxxx shall give Xxxxxx a minimum of fourteen (14)
days' advance notice that the Products will be ready for
conducting acceptance tests.
(b) If Xxxxxx rejects any of the Products, Xxxxxx may, at its sole
discretion, require Xxxxxx to:
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i) Rework the rejected Products, or
ii) Replace same with acceptable Products, or
iii) Rework itself the rejected Products. In this case,
Xxxxxx will furnish to Xxxxxx at no charge repair or
replacement parts necessary for the rework of the
rejected Products performed by Xxxxxx. In any case,
Xxxxxx conducts a 100% inspection of the lot in which
the rejected Products are included, Xxxxxx agrees to
pay Xxxxxx the labor charge at the rate separately
agreed upon between the Parties hereto.
Xxxxxx'x remedies set forth in this Article 7 are in addition
to, and not in lieu of, Xxxxxx'x rights and remedies otherwise
set forth in this Agreement.
Article 8. SAFETY STANDARDS AND REGULATIONS
Xxxxxx shall, at its cost and responsibility, take all necessary steps
so that the Products shall comply with the safety standards
established by UL (the "Standards") effective as of the date of
shipment of the Products. Additionally, Xxxxxx shall, at Xxxxxx'x
request, take all necessary steps so that the Products comply with the
safety standards established by CSA, FCC and CE (the "Additional
Standards").
Article 9. WARRANTY
(a) Xxxxxx warrants that title to the Products, when conveyed to
Xxxxxx on an F.O.B. basis, is good, that the transfer is
lawful, that the Products are delivered free from any security
interest or encumbrance except as otherwise agreed upon
between the Parties in writing, and that the Products meet the
Product Requirements set forth in Appendix I.
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(b) Xxxxxx warrants to Xxxxxx that the Products delivered under
this Agreement are free from defects and failures in design,
material and workmanship as well as in full compliance with
the Product Requirements.
(c) Xxxxxx'x product warranty period is one year after Xxxxxx'x
receipt of the Products or according to Xxxxxx'x written
product warranty, if longer. Conditions and remedies for
epidemic failure of the Products under this Agreement shall be
the following:
If any of the Products or component parts thereof exhibit
defects of the same kind and nature at the same place in the
Products and at an unusual frequency of not less than four
percent (4%) or different defects of not less than six percent
(6%) of the total quantity of the Products sold by Xxxxxx in
the Territory and such defects are the result of faulty
workmanship or design defects on the part of Xxxxxx or defects
in materials arising from any cause for which Xxxxxx is
responsible, then Xxxxxx agrees to give compensation, or
render assistance, to Xxxxxx to such extent as is specified
below.
i) Free supply (freight prepaid) by Xxxxxx of
replacement components parts for the component parts
found to be defective, and
ii) Rendition of technical assistance or advice to Xxxxxx
in repairing such defective Products or component
parts thereof as may be decided by Xxxxxx from time
to time, and
iii) Payment of reasonable charges for labor as agreed
between Xxxxxx and Xxxxxx.
Provided, however, that the foregoing Xxxxxx'x remedy shall
only be available subject always to the following conditions
being met, and in the
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event of failure of Xxxxxx to so meet, Xxxxxx'x right to claim
remedy as provided in subparagraphs i), ii), and iii) above
shall lapse:
i) Any particulars as to the Products or the component
parts thereof alleged or found to be defective shall
be furnished to Xxxxxx in writing within 30 days of
discovery by Xxxxxx of such defect,
ii) The contents of defects stated in i) immediately
above shall be subject to Xxxxxx'x verification, and
iii) Defective Products or component parts shall forthwith
be returned to Xxxxxx by Xxxxxx, freight payable at
destination, if Xxxxxx so requests.
(c) Except as provided in this Article 9, THERE IS NO WARRANTY
THAT THE PRODUCTS SOLD HEREUNDER SHALL BE MERCHANTABLE OR FIT
FOR ANY PARTICULAR PURPOSE, NOR IS THERE ANY OTHER WARRANTY,
EXPRESS OR IMPLIED, CONCERNING THE PRODUCTS.
IN NO EVENT SHALL XXXXXX OR XXXXXX BE LIABLE FOR ANY INDIRECT,
INCIDENTAL, SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES OR
LOSS, INCLUDING LOSS OF PROFIT.
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Article 10. SERVICING AND SPARE PARTS
(a) Xxxxxx shall provide spare parts for the Products ("the Spare
Parts") in accordance with the terms and conditions of this
Article 10. Xxxxxx shall provide Xxxxxx with a list of the
Spare Parts necessary to maintain the Products, together with
the prices (F.O.B. Fontana, California) in adequate lead time
to ensure initial Spare Parts shipment to coincide with the
delivery of the first volume production of Products.
Xxxxxx shall consecutively provide to Xxxxxx with a list of
all other Spare Parts necessary to maintain Products two (2)
calendar months prior to the first volume production of
Products.
Xxxxxx agrees to stock a reasonable quantity of Spare Parts
required to provide service and maintenance for the Products
in the Territory (in the reasonable judgment of Xxxxxx). The
Parties hereto agree that the prices of the Spare Parts
referred to in the Spare Parts List provided by Xxxxxx to
Xxxxxx separately shall not be changed during the term of the
production of Products to which such Spare Parts relate, but,
after the last production of each Product shall be reviewed
annually and adjusted, if necessary, based upon information in
writing from time to time which is provided to Xxxxxx by
Xxxxxx; provided, however, that such prices shall not increase
at a rate of exceeding seven percent (7%) per annum. Xxxxxx
must be given a 90- day notice prior to any price change.
(b) The initial price of all Spare Parts including packaging shall
be quoted in the Spare Parts List provided by Xxxxxx to Xxxxxx
separately so that total of all the unit prices of components
which compose the complete unit of the Products, shall not
exceed one hundred and twenty-five percent (125%) of the
initial price of the Products shown in Appendix II hereof.
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(c) Xxxxxx shall have the right to purchase from Xxxxxx Spare
Parts for units of the Products delivered hereunder during the
term of this Agreement and for a period of five (5) years
following the shipment of the last unit of each Product.
(d) The purchase order for Spare Parts shall be placed monthly
during the term of production of each Product, except in the
case of emergency. Such purchase order shall be placed on the
10th day of each calendar month for the shipment to be made
within the lead time specified in the Spare Parts List.
(e) After the last delivery of each Product, purchase order for
Spare Parts shall be placed maximum six (6) times a year
during the next five (5) years unless the Parties otherwise
agree in writing.
(f) Xxxxxx shall place a package order at a price mutually agreed
among the Parties (with package price not to exceed the sum of
the prices of the Spare Parts then in effect) three (3) months
prior to the expiration date of the retention period for each
Product Spare Parts.
(g) The Spare Parts shall be packed in individual industrial vinyl
pack and the pack shall be labeled with appropriate Xxxxxx
part number, Xxxxxx part number, and description.
Article 11. TRADEMARKS
The Products shall, in accordance with instructions of Xxxxxx, bear
the trademark of Xxxxxx. Xxxxxx agrees that any disputes or troubles
filed by any third party with respect to the said trademark or other
trademarks directed by Xxxxxx for use onto the Products shall be
settled at Xxxxxx'x sole responsibility and expense, provided Xxxxxx
notifies Xxxxxx promptly of such claims and cooperates fully at
Xxxxxx'x
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expense in Xxxxxx'x defense. Where it is required by any laws or
regulations in any country of the Territory to manifest the name of
the manufacturers of the Products, Xxxxxx may place the name or symbol
of Xxxxxx or any contraction, abbreviation, or simulation thereof or
other necessary marks onto the Products in a manner approved by
Xxxxxx. Nothing herein shall xxxxx Xxxxxx any rights in and to the
trademark "Xxxxxx."
Article 12. PATENTS,/COPYRIGHTS, TRADE SECRETS AND OTHER INTELLECTUAL
PROPERTY RIGHTS
(a) As used in this Agreement, the following terms shall have the
following meanings:
1. "Xxxxxx Base Technology" means all patents, design
rights, trade secrets, copyrights and other
intellectual property and industrial property rights
of Xxxxxx existing as of the Effective Date which is
embodied within or used in the manufacture and
production of the Products, including without
limitation hardware design, know-how, ideas,
techniques, concepts, processes, apparatus,
algorithms, software programs, software source
documents, formulae and other proprietary technology,
but expressly excluding therefrom Developed
Technology.
2. "Xxxxxx Base Technology" means all patents, design
rights, trade secrets, copyrights and other
intellectual property and industrial property rights
of Xxxxxx existing as of the Effective Date which is
embodied within or used in the manufacture and
production of the Products, including without
limitation hardware design, know-how, ideas,
techniques, concepts, processes, apparatus,
algorithms, software programs, software source
documents, formulae and other proprietary technology,
but expressly excluding therefrom
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Developed Technology.
3. "Developed Technology" means all patents, design
rights, trade secrets, copyrights and other
intellectual property and industrial property rights
developed pursuant to and during the term of this
Agreement by either party and capable of being
embodied within or used in the manufacture and
production of the Products, including without
limitation hardware design, know-how, ideas,
techniques, concepts, processes, apparatus,
algorithms, software programs, software source
documents, formulae and other proprietary technology.
4. "Triggering Event" means any event of default by
Xxxxxx and expiration of period of cure, as is more
particularly described in subparagraph (e) below.
(b) 1. Xxxxxx acknowledges that all right, title, and
interest in and to any and all Xxxxxx Base
Technology, or any portion thereof including material
or things furnished, supplied or delivered by Xxxxxx
to Xxxxxx are and shall remain the sole property of
Xxxxxx and that Xxxxxx shall not at any time during
or after the term of this Agreement do or cause to be
done, directly or indirectly, any act or thing which
impairs or tends to impair such rights, title or
interest of Xxxxxx to or in each Xxxxxx Base
Technology.
2. Xxxxxx acknowledges that all right, title and
interest in and to any and all Xxxxxx Base
Technology, or any portion thereof including material
or things furnished, supplied or delivered by Xxxxxx
to Xxxxxx are and shall remain the sole property of
Xxxxxx and that Xxxxxx shall not at any time during
or after the term of this Agreement do or cause to be
done, directly or indirectly, any act or
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thing which impairs or tends to impair such rights,
title or interest of Xxxxxx to or in each Xxxxxx Base
Technology.
3. Xxxxxx acknowledges that all right, title and
interest in and to any and all Developed Technology
is the sole property of Xxxxxx, and that Xxxxxx shall
not at any time during or after the term of this
Agreement to or cause to be done, directly or
indirectly, any act or thing which impairs or tends
to impair such rights, title or interest of Xxxxxx to
or in such Developed Technology. Xxxxxx agrees to
assign and hereby assigns and transfers over to
Xxxxxx the Developed Technology. Xxxxxx will provide
Xxxxxx with all current versions of the source code
for all Developed Technology. Xxxxxx will also
provide Xxxxxx with copies of all documentation
relating to the Developed Technology. Xxxxxx and its
employees and agents shall execute any and all
applications, assignments or other instruments which
Xxxxxx shall xxxx necessary to apply for and obtain
patents or other protection in United States or any
foreign country and/or to protect otherwise Xxxxxx'x
interests in the Developed Technology. Xxxxxx will
do all things necessary or proper to assist Xxxxxx in
obtaining patent or other protection, and in vesting
title to Developed Technology in Xxxxxx.
(c) During the term of this Agreement, Xxxxxx agrees to and hereby
grants to Xxxxxx a fully paid-up, royalty-free, worldwide,
non- exclusive license to the Developed Technology (1) to use
the Developed Technology to design, make, produce, repair
(including making Spare Parts), and distribute the Products as
more particularly described herein, and (2) to make, use,
copy, modify, enhance and otherwise use for such purposes as
Xxxxxx shall deem necessary or appropriate, and to sublicense
such rights, so long as Xxxxxx does not in so doing breach
other provisions of this Agreement (including without
limitation the exclusivity provisions of Article 3).
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Nothwithstanding the license granted herein, Xxxxxx shall not,
without the express written consent of Xxxxxx, use the Xxxxxx
Base Technology, nor the Developed Technology, including, but
not limited to, the Xxxxxx Exclusive Features listed in
Appendix V hereto, in any product which Xxxxxx develops for or
sells to any party other Xxxxxx, or in any product, or the
development of any product other than the Products.
(d) Xxxxxx grants to Xxxxxx, its subsidiaries, and its and their
respective customers, during and following the term hereof a
nontransferable and royalty-free immunity from suit under any
patent or patent application owned by Xxxxxx, to the extent
that such patent or patent application is part of the Base
Technology to the extent that any claim of such patent or
patent application reads on Products supplied by Xxxxxx to
Xxxxxx or made by or on behalf of Xxxxxx in accordance with
the terms of this Agreement. Xxxxxx further grants Xxxxxx a
fully paid-up, royalty free, non-exclusive license in
perpetuity to use the Vendor Base Technology.
(e) If, at any time during the term of this Agreement, any of the
following events shall occur, such event, upon the expiration
of the applicable period of time for cure, shall constitute a
"Triggering Event" hereunder:
1. Any bankruptcy, reorganization, debt arrangement, or
other case or proceeding under any bankruptcy or
insolvency law, or any dissolution or liquidation
proceedings commenced by or against Xxxxxx, and if
such case or proceeding is not commenced by Xxxxxx,
it is acquiesced in or remains undismissed for sixty
(60) days; or
2. Xxxxxx fails or is unable to meet each one of the
milestones set forth in Appendix IV as they become
due, upon the expiration of sixty (60) days written
notice from Xxxxxx specifying in reasonable detail
the nature of such failure without such failure
having been cured by
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Xxxxxx.
3. Xxxxxx is unable to meet Xxxxxx'x order requirements
as set forth in paragraph 5(b) of the Agreement,
where Xxxxxx accurately forecast such order
requirements under Article 5(a) and where Xxxxxx'x
failure to meet such order requirements is material
and chronic; or
4. Xxxxxx breaches this Agreement in material respects,
upon the expiration of sixty (60) days written notice
from Xxxxxx specifying in reasonable detail the
nature of such material breach without such material
breach having been cured by Xxxxxx or without Xxxxxx
having commenced cure and is diligently proceeding to
completion.
Xxxxxx agrees to place the source code for Xxxxxx
Base Technology and Developed Technology into an
escrow account with an escrow agent and under the
Escrow Agreement which is attached hereto as Appendix
VI, and Xxxxxx shall have access to all source codes
from and after the occurrence of a Triggering Event.
Upon the occurrence of a Triggering Event, and upon
the release of the source code to the Xxxxxx Base
Technology from the escrow, Xxxxxx hereby grants to
Xxxxxx the license to Xxxxxx Base Technology
described in paragraph (f) below.
(f) Upon the occurrence of a Triggering Event, and upon the
release of the source code to the Xxxxxx Base Technology from
the escrow, Xxxxxx agrees to and hereby grants to Xxxxxx, in
perpetuity, a royalty-bearing, worldwide exclusive license to
the Xxxxxx Base Technology to use the Xxxxxx Base Technology
to design, make, have made, produce, repair (including making
Spare Parts) and distribute the Products, and Xxxxxx and
Xxxxxx will negotiate in good faith to determine appropriate
royalty payments Xxxxxx shall make to Xxxxxx in exchange for
such right; provided, however, that
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the license granted to Xxxxxx in this paragraph shall be
royalty-free if the Triggering Event is one set forth in
Article 12(e)(1), or is the result of bad faith or willful
misconduct on the part of Xxxxxx. If the Parties are unable
to reach an agreement regarding royalty payments under this
Article 12(f) within ninety (90) days after the Triggering
Event, they agree to submit the dispute to arbitration
pursuant to Article 22 of this Agreement.
(g) Upon the occurrence of a Triggering Event, and upon the
release of the source code to the Xxxxxx Base Technology from
the escrow, Xxxxxx shall relinquish all Product Tooling to
Xxxxxx, and Xxxxxx shall have the right to continue and
proceed to design, make, have made, produce, repair (including
making Spare Parts) and distribute the Products during royalty
negotiations.
(h) Xxxxxx acknowledges and agrees that use of the Xxxxxx Base
Technology is furnished to Xxxxxx on a confidential basis for
the purposes described in paragraphs (f) and (g) above.
Xxxxxx may disclose portions of the Xxxxxx Base Technology to
third Parties as may be required in carrying out the purposes
described in paragraph (f) and (g) above.
Article 13. INDEMNIFICATION
(a) Infringement - Xxxxxx shall defend, indemnify and hold Xxxxxx
harmless from and against all damages, liability, losses and
expenses, including reasonable attorney's fees and court costs
incurred by Xxxxxx as a result of any claim, lawsuit, action
or proceeding against Xxxxxx in which it is determined by
judgment or settlement that Products infringe any United
States patent, copyright, trademark, trade name, trade secret,
or other proprietary right of any third party. Xxxxxx'x
obligation to indemnify Xxxxxx pursuant to Article 13 (a) is
subject to the exceptions set forth in Article 13 (c) of this
Agreement.
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(b) Product Liability - Xxxxxx shall defend, indemnify and hold
Xxxxxx harmless from and against all damages, liabilities,
losses and expenses, including reasonable attorney's fees and
court costs incurred by Xxxxxx as a result of any claim,
lawsuit, action or proceeding against Xxxxxx arising from any
defect in the Products attributable to Xxxxxx, as determined
by judgment or settlement.
(c) In the event of any such judgment under Sections 13(a) or
13(b), Xxxxxx shall have the right to appeal such judgment to
and through such appellate levels as Xxxxxx shall determine --
provided Xxxxxx shall bear the cost of such appeal and posts
such appropriate bond or bonds as necessary to stay the
execution of any such judgment pending such appeal. Xxxxxx
shall notify Xxxxxx in writing within five (5) business days
of first learning of any such claim, lawsuit, action or
proceeding. Each party shall provide the other with
reasonable assistance in defending such matters. Xxxxxx shall
have the exclusive right to contest, defend, or litigate any
matter in respect of which indemnification is claimed. Xxxxxx
shall have the exclusive right to settle -- either before or
after the initiation of litigation -- any matter in respect of
which indemnification is claimed.
VENDOR will maintain general liability and errors and
omissions insurance coverage for the term of this Agreement,
and will submit certificates of insurance evidencing said
coverage if so requested by Xxxxxx.
Article 14. DURATION OF THE AGREEMENT
This Agreement shall be deemed to come into force on the __________
day of _____________, 1996 and unless earlier terminated in accordance with the
provision of this Agreement shall continue in force and effect until and
including the __________ day of _______________, 2000. This Agreement shall be
automatically renewed for one (1)
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year and thereafter from year to year, unless either of the Parties hereto
gives the other party at least six (6) months prior written notice to terminate
this Agreement before the expiration of the initial or any renewed term of this
Agreement. If such prior written notice is sent by either party, then this
Agreement shall terminate on the initial or, as the case may be, duly renewed
expire date hereof.
Article 15. TERMINATION OF THE AGREEMENT
(a) In the event of happening of any of the following events to
either party, the other party may forthwith terminate, wholly
or partly, this Agreement and/or Sales Contract and/or any
other contract concluded under or in connection with this
Agreement by sending a written notice to the first party.
i) If either party hereto continues in default of any
obligation imposed on it herein and/or therein for
more than two (2) months or for more than any other
applicable cure period set forth in this Agreement,
after written notice has been dispatched by
registered airmail by the other party requesting the
party in default to remedy such default;
ii) If either party hereto is subjected to compulsory
execution, public auction, coercive collection for
its arrearage of taxes or public imposts, or
suspension of business by public authorities, or
appointment of any receiver or trustee of itself or
any substantial portion of its property, or if an
application or petition is submitted for bankruptcy,
corporate arrangement or commencement of corporate
reorganization under statutes for the relief of
debtors, or if either party hereto files voluntarily
against it an application or petition for bankruptcy,
corporate arrangement or commencement of corporate
reorganization or composition under statutes for the
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relief of debtors, or if either party hereto adopts a
resolution for discontinuance of this business or
transfers to another company all or an important part
of its assets or business or for a substantial
decrease of its capital or for dissolution, or makes
a general assignment for the benefit of creditors, or
if either party hereto admits in writing its
inability to pay debts as they become due, or if
either party is declared in default of any material
contract between it and the other hereto.
(b) In the event of termination or cancellation of this Agreement
for any reason whatsoever:
i) Either party may cancel any Sales Contract of the
Products which have been unshipped at the date of
such termination or cancellation. If any Sales
Contract is canceled for any reason whatsoever,
Xxxxxx may sell or otherwise dispose of the Products
covered under the Sales Contract so canceled
elsewhere in any manner by removing, at Xxxxxx'x cost
and expense, any Xxxxxx signs, marks, and/or labels
from the Products, and
ii) Each party hereto shall promptly return to the other
any materials or property in its possession or
custody, supplied by and belonging to the other party
in connection with this Agreement. Xxxxxx shall have
all ownership of and rights to all Product Tooling,
as set forth in Section 1(c) of this Agreement.
iii) All rights, title and interest in and to any and all
patents, design rights, copyrights, and other
industrial property rights relating to the Products
shall be handled in accordance with Article 12 of
this Agreement.
19
22
(c) Except as otherwise clearly provided herein, any termination
of this Agreement shall be without prejudice to any right
which shall have accrued to either party hereunder prior to
such termination.
Article 16. PRINTED MATERIALS
(a) Xxxxxx will supply units operating instructions (the
"Operating Instructions") or at Xxxxxx'x option, Xxxxxx may
prepare, at Xxxxxx'x expense, operating instructions for the
Products. Xxxxxx will supply Operating Instructions in both
electronic and hard copy formats. Xxxxxx may supply, at
Xxxxxx'x option, either camera-ready "stats" or operating
instructions ("Printed Materials") to Xxxxxx who shall, at its
sole cost, reproduce and package these Printed Materials with
each unit of the Products delivered to Xxxxxx. Xxxxxx may
elect to package these Operating Instructions at Xxxxxx'x
delivery site, based upon their requirements.
(b) At Xxxxxx'x option, Xxxxxx may prepare (but not print), at
Xxxxxx'x expense, Installation and Setup Instructions for the
Products. Xxxxxx may supply a camera-ready "stat" of these
materials to Xxxxxx. Otherwise, Xxxxxx shall develop and, in
all instances, reproduce and pack these Installation and Setup
Instructions with each unit of the Products sold to Xxxxxx.
(c) Xxxxxx shall prepare and print, at Xxxxxx'x expense, Field
Service Documentation for use by Xxxxxx Service Technicians,
and other persons specifically authorized by Lanier.
(d) Xxxxxx shall supply to Xxxxxx true and correct technical
information required by Xxxxxx for Xxxxxx to create the
Printed Materials referenced in subsections (a), (b), and (c)
above. Xxxxxx will supply all information in both electronic
and hard copy formats. In the case of Products of which
Xxxxxx has identical or similar models, the technical
information provided
20
23
by Xxxxxx to Xxxxxx can be, in part, Xxxxxx'x existing
documentation, provided such documentation is amended or
otherwise modified to reflect the specifications of the
Products sold to Xxxxxx. In the case of Products being
exclusive to Xxxxxx, Xxxxxx will create the necessary
technical information.
(e) Xxxxxx shall have a copyright on the Printed Materials
prepared by Xxxxxx in subsections (a), (b), and (c) above.
(f) Xxxxxx grants Xxxxxx the right to reproduce any copyright
materials, provided they are used only for and within Xxxxxx
Printed Materials.
(g) Xxxxxx grants Xxxxxx the right to reproduce any copyright
materials, provided they are used only for and within Xxxxxx
Printed Materials.
(h) Subject to the provisions of this paragraph, Xxxxxx may review
and approve all user documentation, technical documentation,
and product brochures which Xxxxxx will provide to its
customers along with the Products ("the Product
Documentation"). Xxxxxx' approval of the Product
Documentation shall not be unreasonably withheld. Xxxxxx
shall have seven (7) days from the date Xxxxxx provides Xxxxxx
with the Product Documentation to review the Product
Documentation and submit comments to Xxxxxx. If Xxxxxx is not
notified by Xxxxxx within seven (7) days after providing the
Product Documentation to Xxxxxx for its approval, the Product
Documentation shall be deemed approved by Xxxxxx.
Article 17. DISCLOSURE OF INFORMATION
(a) All information, suggestions, or ideas transmitted by either
party to the other party in connection with this Agreement or
the performance hereunder and designated by the transmitting
party as secret or confidential
21
24
shall be treated as secret or confidential by the receiving
party and shall not be divulged or disclosed to any third
party, provided that Xxxxxx may disclose portions of the
information designated confidential to third Parties as may be
required in selling and distributing the Products in the
manner contemplated by the Agreement. It is specifically
agreed that any technical know-how and marketing information
(such as specifications, design, manufacturing know how, price
and other sales conditions) shall be hereby regarded as secret
and confidential per se without making such designation.
(b) Prior written approval of press release and any other
publicity in reference to this Agreement shall be obtained by
the releasing party from the other party.
(c) Unless otherwise agreed in writing by the Parties, neither
party hereto shall advertise, publicize, or otherwise disclose
the commercial terms of this Agreement, except for disclosure
to the United States and the Territory's governmental
authorities as may be required by applicable laws or
regulations to the minimum extent required and to the related
Parties as required for the performance of this Agreement or
for the mutual benefit of the Parties.
(d) The provisions of this Article 17 will survive for a period of
two (2) years from the date of expiration or termination of
this Agreement.
Article 18. ASSIGNMENT
Neither party shall assign, transfer, or otherwise dispose of this
Agreement in whole or in part or of any right or obligation hereunder
to any third party without the prior written consent of the other
party, which shall not be reasonably withheld. If there is a change
in control or ownership of either party, the party must obtain written
consent from the other party prior to assigning or transferring
22
25
this Agreement to the party under new control or ownership.
Article 19. NOTICES
(a) Except as otherwise provided herein, all notices to be given
or made under this Agreement shall be in writing and be deemed
duly given when personally delivered or sent by registered or
certified air mail, postage prepaid, with information copy by
facsimile transmission or by facsimile, and addressed to the
principal office of the Parties as indicated hereinabove or to
such other address as either party may hereafter furnish to
the other party in writing.
(b) All notices shall be deemed to have been given or made on the
day of dispatch.
Article 20. EXCEPTIONS
(a) Neither party (the "Affected Party") shall be liable to the
other in any manner for failure or delay to fulfill all or
part of this Agreement, directly or indirectly, owing to Act
of God, governmental orders or restriction, war, threat of
war, warlike conditions, hostilities, sanctions, mobilization,
blockade, embargo, detention, revolution, riot, strike,
lockout, accident, or any other causes for circumstances
beyond its control.
(b) In the event of any delay or failure due to the cause or
causes given in the preceding paragraph (a), the affected
party shall send by cable or telex or otherwise a written
notice stating the reasons therefor to the other party (the
"Unaffected Party") as promptly as possible. The performance
of the Affected Party shall be deemed suspended as long as,
and to the extent that, any such cause(s) continues, but this
Agreement and/or Sales Contract and/or any other contract
concluded under or in connection with this Agreement then
executory shall not be regarded terminated, frustrated,
23
26
or canceled simply as a result of such delay or failure and
the Parties hereto shall continue once more with their
performance when the cause or causes of such delay or failure
have ceased or have been eliminated; provided, however, that
if such delay or failure extends or is reasonably anticipated
to extend for a period of more than three (3) months, the
Unaffected Party may without any liability on its part
terminate or cancel this Agreement and/or the said Sales
Contract and/or any other contract concluded under or in
connection with this Agreement by sending a written notice to
the affected party.
c) It is specifically understood and agreed that if a party
cancels any Sales Contract pursuant to paragraph (b) above,
Xxxxxx may sell the Products elsewhere and in any manner by
removing any Xxxxxx signs, marks, and labels on the Products
destined for Xxxxxx.
Article 21. ENTIRE AGREEMENT
This Agreement and the Appendices attached hereto constitutes the
entire agreement between the Parties as to the subject matter hereof for all
matters arising on or after the execution of this Agreement. This Agreement
supersedes all previous understandings, commitments, and agreements whether
oral or written relating to the subject matter hereof with respect to
transactions arising hereunder. No modification, amendment, or supplement of
this Agreement shall be binding upon the Parties hereto except by mutual
express written consent of subsequent date by an authorized representative or
officer of each of the Parties hereto.
24
27
Article 22. ARBITRATION
All disputes and differences between Xxxxxx and Xxxxxx arising out of
or under this Agreement shall be settled amicably through
negotiations. In case such dispute or difference cannot be settled
amicably, it shall be referred to arbitration consisting of three (3)
arbitrators. Such arbitration shall be held in Atlanta, Georgia, in
accordance with the rules of the American Arbitration Association.
Article 23. GOVERNING LAW AND TRADE TERMS
(a) It is mutually agreed that, except as otherwise required by
mandatory provisions of applicable laws of the Territory, the
terms of this Agreement and the performance hereunder shall in
all respects be governed, construed, and interpreted in
accordance with the internal (as opposed to the conflicts of
laws provisions) laws of the State of Georgia, U.S.A.
Article 24. MISCELLANEOUS
(a) WAIVER: A waiver by a party hereto of any particular
provision hereof shall not be deemed to constitute a waiver in
the future of the same or any other provision of this
Agreement.
(b) SEPARABILITY: The Parties hereto agree that, in the event of
one or more of the provisions hereof being subsequently
declared invalid or unenforceable by court or administrative
decision, such invalidity or unenforceability or any of the
provisions shall not in any way affect the validity or
enforceability of any other provisions hereof except those
invalidated or unenforceable provisions which comprise an
integral part of or are otherwise clearly inseparable from
such other provisions.
25
28
(c) TITLES: The Article titles in this Agreement have been
inserted for convenience only and shall in no way be used in
the interpretation hereof.
(d) EXPENSES: Unless otherwise expressly agreed herein or
otherwise in writing by the Parties hereto, each party shall
bear all expenses and disbursements incurred or made by itself
or any other investment made by itself in connection with or
in pursuant of this Agreement, and neither party shall be
entitled to compensation from the other party for the said
expenses, disbursements, or investment, whether on termination
of this Agreement for any reason whatsoever or otherwise,
unless otherwise expressly agreed upon in writing by the other
party.
(e) BINDING EFFECT: This Agreement shall inure to the benefit of
and be binding upon Xxxxxx and Xxxxxx and their respective
successors and assigns.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be signed
by their respective representatives or officers duly authorized thereunto as of
the date first above written.
XXXXXX COMMUNICATIONS, INC. XXXXXX WORLDWIDE, INC.
By: /s/ XXXXX X. XXXXXX By: /s/ XXXXX X. XXXXXX
------------------------- -------------------------
Xxxxx X. Xxxxxx Xxxxx X. Xxxxxx
---------------------------- ----------------------------
Name Name
Chief Operating Officer V.P. Product Marketing
---------------------------- ----------------------------
Title Title
12/ 26 /96 01/ 06 /97
---------------------------- ----------------------------
Date Date
26
29
APPENDIX I - PRODUCT REQUIREMENTS
VERSION 1.8
DECEMBER 13, 1996
OVERVIEW
Below are the Product Requirements for the Xxxxxx Digital Portable Recorder
without ***** and the Xxxxxx Digital Recorder with ***** (the "Recorder
Products").
PHYSICAL REQUIREMENTS:
1. The Recorder Products will be hand held portable units with dimensions not
to exceed a width of ***** a height of ***** and a length of *****.
2. The Recorder Products construction will be able to withstand a drop of 3
feet on to a hard concrete surface without sustaining damage which
results in their inability to operate as specified.
3. The Recorder Products will be designed and constructed of materials which
allows for the ***** by qualified and trained Lanier service personnel.
4. The Recorder Products will be designed for access and serviceability to
***** and around any ***** and/or knobs. This function will be performed
by a qualified and trained Xxxxxx field service technician.
5. The Recorder Products will comply with FCC part 15 class B radiated
emissions standards and be so marked by the manufacturer.
6. The Recorder Products will be compliant with the European CE standard and
be so marked by the manufacturer.
7. The playback specifications using the Xxxxxx ***** plugged into the *****
will have the following characteristics: Frequency Response ***** Signal to
Noise Ratio ***** Total Harmonic Distortion *****.
8. The Recorder Products will have a ***** with the following
characteristics: Frequency Response ***** Signal to Noise Ratio *****,
and a Total Harmonic *****.
9. The Recorder Products will be able to withstand a ***** without damage or
the loss of function or data.
*This portion of the Exhibit has
been omitted (based upon a request
for confidential treatment) and
filed separately with the Securities
and Exchange Commission pursuant to
Rule 406.
1
30
10. The Operating Environmental Limits will be as follows: a temperature
range of ***** and a humidity range between ***** maximum. The Storage
Environmental Limits will be as follows: a temperature range of ***** and a
humidity range between ***** maximum.
11. The Recorder Products will be made of high grade material that will
withstand a temperature range of ***** relative humidity (non-condensing)
without affecting the color, labeling, and shape. When the Recorder
Products' temperature returns to that which is within the Operating
Environmental Limits, the Recorder Products will again be required to
operate as specified.
12. The Recorder Products' weight distribution will be ***** of the Recorder
Products is *****.
13. The Recorder Products will have a high degree of fit and finish providing
for a high quality product. This is to be worked out and agreed upon by
both parties during the design phase.
14. ***** will be located on the top of the Recorder Products to be ***** of a
***** or ***** operation in progress.
15. A ***** will be located on the ***** the Recorder Products ***** that the
Recorder Products are *****.
16. A ***** will be located on the Recorder Products ***** and will be used
to ***** either the ***** and/or ***** function.
17. ***** will be located on the ***** of the Recorder Products in order for it
to *****. The Recorder Products should operate under ***** when no *****
are ***** in the Recorder Products. When ***** are installed in the
Recorder Products, power from *****.
18. A ***** will be located on the ***** of the Recorder Products. When viewing
the ***** of the Recorder Products, the current ***** corresponding to the
***** will be indicated in some way from the side of the Recorder Products.
The functions associated with the ***** will be ***** and are typically
labeled: *****.
19. The ***** will ***** between ***** from the ***** with the exception of
the *****. To engage the *****.
*This portion of the Exhibit has
been omitted (based upon a request
for confidential treatment) and
filed separately with the Securities
and Exchange Commission pursuant to
Rule 406.
2
31
20. The Recorder Products will have a *****. The ***** is enabled when the
*****. If there is a ***** then the ***** will be *****.
21. The ***** for setting the ***** will be located on the ***** of the
Recorder Products and will be labeled ***** for the *****: ***** and
*****.
22. ***** will be incorporated into the design to accommodate both *****
usage.
23. ***** will be located on the ***** the Recorder Products in order to
accommodate the *****. The ***** will be ***** when the ***** is being
used.
24. ***** will be located on the ***** the Recorder Products in order to
accommodate a ***** with *****. When the ***** is inserted into the hand
held Recorder Products, the *****.
25. Provisions for an ***** will be made in order to *****. The ***** for *****
will be at a ***** between ***** between the ***** is ***** in and the
***** of the Recorder Products. The operational ***** for ***** will be
***** about the ***** of the *****.
26. The Recorder Products will have a ***** with the ***** occupying the *****
located just below the *****. Additionally, ***** such as ***** and *****
will be specified in industrial design proposals to be reviewed during
"Stage I: Concepts". The design proposals for the ***** and for needed
***** will be based on ***** of the user performing the specified functions
and tasks. *****
27. The Recorder Products will contain a *****. The minimum or standard
configuration will be one with at least *****.
28. The Recorder Products will have a ***** with an area for *****. In
addition, specific areas ***** will be used for the *****.
*This portion of the Exhibit has
been omitted (based upon a request
for confidential treatment) and
filed separately with the Securities
and Exchange Commission pursuant to
Rule 406.
3
32
29. The Recorder Products will have one or more ***** to be used as the *****
the Recorder Products and the ***** will make use of the ***** for their
required purposes.
30. The Recorder Products will ***** the ***** for ***** or ***** and *****.
See *****.
31. A ***** will be located on the Recorder Products to be used for *****. The
***** will be labeled with an ***** or a recognizable symbol or graphic.
32. ***** the Recorder Products and the ***** will make use of a *****. The
decision of which to use will be based on an evaluation of *****
constraints.
33. The ***** used in the Recorder Products, *****.
34. The Recorder Products will operate on ***** will depend on the *****
selection. ***** should be utilized to ***** when the Recorder Products are
*****.
35. The Recorder Products should be able to ***** with ***** present for a
period of ***** using *****.
36. The ***** will automatically begin ***** Products *****.
37. The ***** will be allowed without the loss of *****.
REQUIREMENTS:
38. The selection of the ***** to be used in the Recorder Products will be
contingent on the ***** which will ***** on the *****.
39. Voice encoding and decoding will be done using *****.
*This portion of the Exhibit has
been omitted (based upon a request
for confidential treatment) and
filed separately with the Securities
and Exchange Commission pursuant to
Rule 406.
4
33
40. The selection of the ***** will include a ***** conducted by *****.
REQUIREMENTS:
41. The ***** memory space will be used for the *****.
42. ***** will be ***** via the *****. The required amount of ***** will be
based on the ***** specifications pertaining to ***** the number of *****,
the specified ***** the number of *****.
43. All system parameters relating to the ***** will be *****. This will allow
***** to be ***** rather than *****.
44. An ***** will be ***** into the *****. The ***** will be made up of *****.
45. Initially, the maximum allowed length of a ***** will be *****. The
maximum length should be *****.
46. Initially, the ***** will be *****. The total number should be ***** from
the ***** based on *****.
47. The Recorder Products will ***** and ***** used in the ***** to be *****
based on a *****.
48. Initially, the Recorder Products will be configured to *****. However, the
***** will ultimately be the ***** on the ***** that will be *****.
49. Initially, the ***** will be *****.
*This portion of the Exhibit has
been omitted (based upon a request
for confidential treatment) and
filed separately with the Securities
and Exchange Commission pursuant to
Rule 406.
5
34
50. The ***** for the user will follow a *****.
51. Appropriate *****. The user will *****.
END USER FUNCTIONALITY
52. The user will be able to perform the *****.
53. The standard controls supported are *****.
54. While in *****.
55. When in *****.
56. When the ***** the Recorder Products will ***** when configured to do so.
This will act as *****.
57. When configured to do so, the user will ***** and will *****. When all
***** the Recorder Products *****.
*This portion of the Exhibit has
been omitted (based upon a request
for confidential treatment) and
filed separately with the Securities
and Exchange Commission pursuant to
Rule 406.
6
35
58. An optional, ***** will ***** to indicate that the Recorder Products is
*****.
59. The ***** will be ***** only when the *****.
60. When the user places the ***** will begin and the ***** relation to the
***** and a *****.
61. When the user places the *****.
62. The user will be able to ***** by using *****.
63. In order to listen to ***** the user will *****. This is noted by *****.
64. The user will be able to ***** the Recorder Products will *****. Taking
the Recorder Products out of ***** the Recorder Products *****.
65. Whenever the Recorder Products is in *****.
66. The user will be able to ***** the Recorder Products is ***** and a
Recorder Products is ***** will be *****.
*This portion of the Exhibit has
been omitted (based upon a request
for confidential treatment) and
filed separately with the Securities
and Exchange Commission pursuant to
Rule 406.
7
36
67. When entering the ***** will ***** used on the ***** of the ***** is
within the *****.
68. The user will be able to *****.
69. The user will be able to *****.
70. The user will be able to ***** when the Recorder Products is *****. The
***** will be updated at the time the ***** information. ***** the same
***** will ***** the ***** to ***** will be ***** information.
71. The user will be able to ***** for ***** by ***** the ***** and the *****
followed by the *****. To *****, the user must first ***** in the *****
where the *****. Secondly, the user must ***** and perform a *****. The
actual ***** will be performed on the ***** by *****.
72. The user will be able to *****. The user will simply *****. The *****
information ***** will be updated to indicate *****.
73. The current ***** will be ***** whenever ***** the Recorder Products. When
the *****.
*This portion of the Exhibit has
been omitted (based upon a request
for confidential treatment) and
filed separately with the Securities
and Exchange Commission pursuant to
Rule 406.
8
37
*****
74. The user will be able to ***** whenever the Recorder Products are *****.
75. When ***** the Recorder Products will ***** as defined in the function
matrices.
76. A ***** will be allowed to ***** and have ***** to be ***** or ***** to
be *****.
77. A ***** will determine if the user will *****.
78. A ***** will determine if the ***** and any other ***** will be *****
whenever a *****.
79. The Recorder Products will be ***** as to what ***** is placed on the
*****.
80. The ***** will be allowed to be ***** if and only if it has been *****.
The ***** will result in the ***** being placed in a *****.
81. The next level of ***** is one in which the current ***** user will be
able to *****.
82. The level ***** is one in which the user will be able to ***** the user is
solely responsible for the *****.
*This portion of the Exhibit has
been omitted (based upon a request
for confidential treatment) and
filed separately with the Securities
and Exchange Commission pursuant to
Rule 406.
9
38
XXXXXX DIGITAL PORTABLE RECORDER
*****
PRODUCT REQUIREMENTS
VERSION 1.1
DECEMBER 2, 1996
OVERVIEW
The Xxxxxx Digital Portable Recorder *****.
REQUIREMENTS
1. A ***** will be located on *****.
2. The ***** will provide ***** the Recorder Products in order ***** the
Recorder Products to ***** and ***** the Recorder Products *****.
3. The ***** construction will be able to ***** without ***** operate as
specified.
4. The ***** will be ***** which allows for the ***** by qualified and
trained Lanier service personnel.
5. The ***** will comply with ***** standards and be so marked by the
manufacturer.
6. The ***** will be compliant with the European CE standard and be so marked
by the manufacturer.
7. The ***** will be able to withstand a ***** without damage or the loss of
function or data.
*This portion of the Exhibit has
been omitted (based upon a request
for confidential treatment) and
filed separately with the Securities
and Exchange Commission pursuant to
Rule 406.
10
39
8. The Operating Environmental Limits will be as follows: a temperature range
of ***** and a humidity range between ***** maximum. The Storage
Environmental Limits will be as follows: a temperature range of ***** and
a humidity range between ***** maximum.
9. The ***** will be made of high grade material that will withstand a
temperature range of ***** and humidity levels of ***** relative humidity
(non-condensing) without affecting the color, labeling, and shape. When the
***** temperature returns to that which is within the Operating
Environmental Limits, the ***** will again be required to operate as
specified.
10. A ***** will accommodate the ***** from a ***** will be ***** when the
***** is being used *****.
11. The ***** will have a ***** which will *****.
12. The ***** will have an ***** which will *****.
13. The ***** will have a ***** which will *****.
14. The ***** will interpret the ***** and will *****.
15. The ***** will have a ***** to be used for *****.
16. ***** the Recorder Products ***** will make use of a *****. The decision
***** will be based on *****.
17. The ***** will have ***** to be used as the ***** Recorder Products. *****
will make use of the ***** for their required purposes.
*This portion of the Exhibit has
been omitted (based upon a request
for confidential treatment) and
filed separately with the Securities
and Exchange Commission pursuant to
Rule 406.
11
40
APPENDIX II - PRICE
I. Initial Phase Pricing
A. NON-RECURRING ENGINEERING EXPENSES
1. Industrial Design (Recorder ********************):
Concept/Research/Sketches/Vol models
o Renderings/Mock-ups
o User Interface evaluation
o Detailing
o Color Study
o Model
o Layout
o Part Files
o Prototype
o Liaison
o Misc. Liaison Activity/Meetings
NRE $*******
2. Software:
o *********************(customized to Xxxxxx
specifications i.e., *****)
o ********************** Testing
o Modifications to the ************** to support
Lanier feature set
o Modification of the ***** and ***** to reflect
the ***** **********
NRE $*******
3. Hardware (Digital Portable Recorder *****):
Design
o Development
o **********
5 Debug PCBs (fabrication and tooling)
o 10 Prototype PCBs (fabrication and tooling)
o 10 Production PCBs (fabrication and tooling)
o SLA models
o 20 Soft tooling models
* This portion of the Exhibit has been omitted (based
upon a request for confidential treatment) and
filed separately with the Securities and Exchange
Commission pursuant to Rule 406.
12
41
o************
o 5 Debug PCBs (fabrication and tooling)
o 10 Prototype PCBs (fabrication and tooling)
o 10 Production PCBs (fabrication and tooling)
o 3 SLA models
o 20 Soft tooling models
25 LCDs (includes tooling and fabrication)
o FCC and CE Testing
Does not include development of manufacturing
assembly and test fixtures which will be
part of our joint identification, qualification
and selection of a manufacturer.
NRE $*******
4. Other Non-Recurring Expenses
Project Management
o Technical Writer
o Quality & Manufacturing Engineer
o Internal Test Engineering (hardware and software)
o Alpha Test Labor (*****)
NRE $*******
5. Manufacturing:
Tooling for Plastics (assuming that we can use the *****
for both recorder models) Recorder: $*****
(assumes a ***** case configuration)
Final tooling prices will depend on the final industrial
design selection
NRE $********
6. TOTAL NON-RECURRING ENGINEERING EXPENSE $********
*This portion of the Exhibit has been omitted (based upon
a request for confidential treatment) and filed
separately with the Securities and Exchange Commission
pursuant to Rule 406.
13
42
II. PRODUCT PRICE
Xxxxxx Digital Portable ***** $*****
Includes:
*******************************************
Xxxxxx Digital Portable ***** $*****
Includes:
*******************************************
Xxxxxx Digital Portable ***** $*****
Includes:
*******************************************
*This portion of the Exhibit has been omitted (based upon
a request for confidential treatment) and filed
separately with the Securities and Exchange Commission
pursuant to Rule 406.
14
43
APPENDIX III - INSPECTION STANDARDS
1.0 Purpose
2.0 Reference Documentation
3.0 Sample Plans and AQL Levels
4.0 Definitions
5.0 Inspection
6.0 Rejection
7.0 Changes of Revisions
8.0 Source Inspection
9.0 Corrective Action
10.0 Charges
11.0 AQL by Product category
15
44
1.0 PURPOSE
The primary purpose is to establish;
1.1 Receiving (Incoming) Inspection standards for
all products.
1.2 ANSI/ASQC Z1.4-1993 as the standard for Buyer
incoming Inspection unless specified otherwise in this
document. The term used in this document;
"Authorized Representative", or in XXXX/XX XX X0.0-0000,
"Responsible Authority", shall be Buyer's Quality
Assurance.
1.3 Classification of Major and Minor defects and
the AQL for each class.
1.4 The acceptance of products under this document
does not in way release Seller of warranty
responsibility for said products.
2.0 REFERENCE DOCUMENTATION
The list is an addition to the specifications required by the
contract. Any conflict between these documents and the specific product
specification, the product specification takes precedence.
2.1 ANSI/IPC-A-610 Acceptability of PWB Assemblies
2.2 ANSI/ASQC Z1.4-1993 Sampling Procedures and
Tables for Inspection by Attributes
2.3 IPC-R-700 Modification and Repair of PWB
Assemblies
3.0 SAMPLE PLANS AND AQL LEVELS
3.1 Inspection on a lot by lot basis shall be made
in compliance with ANSI/ASQC Z1.4-1993.
3.2 Sample size, accept/reject criteria for each
received lot shall be governed by ANSI/ASQC Z1.4-1993.
3.3 Single sample plans for Normal, Reduced and
Tightened inspection shall be at General
Inspection Level II.
3.4 Destructive inspection shall be single
sample Special Inspection Level S-3.
3.5 Two defect classes only shall be used for
Sample Plan
3.5.1 Major defect class. (See 11.0)
3.5.2 Minor defect class. (See 11.0)
3.6 Defect classes and applicable AQL will be
established for each product category.
16
45
4.0 DEFINITIONS
4.1 Safety or Hazard Defect; All
shipments must be certified by Seller to
be defect free of any defect that is, or
may generate, a condition that is a
safety or hazard defect. Any Safety or
Hazard defect shall be cause for
rejection of lot.
4.2 Major Defect; Major defect is a defect,
mechanical, electrical functional or appearance that
will or is likely to result in failure to operate or
to perform outside of acceptable limits for the
intended end use or application. Major defect is
a defect, packaging or labeling that will result in
inability of buyer to ship product through their
distribution channels.
4.3 Minor Defect; Minor defect is a defect,
other than Major, that is not likely to result in
failure, but "down grades" the product in terms of
the intended end use or application.
4.4 "Defect" and "Defective" - Definition and
application to sampling plans shall be per ANSI/ASQC
Z1.4-1993. Accept/Reject criteria shall be per
"Defective" definition.
5.0 LOT INSPECTION
Each lot shall be inspected within 14 days from the date of receipt by
Buyer or Buyer's authorized agent, at Buyer's authorized agent, at
Buyer's expensive. The 14 day period shall be waived if conditions
beyond Buyer's control make it unreasonable or impossible to perform
the lot inspection within the 14 day period.
5.1 Inspection reports; Buyer agrees to furnish one
copy of buyer's inspection reports on a lot by lot basis
to Seller Corporate Quality Assurance.
5.2 Rejected Lot; Buyer shall notify Seller
promptly when a lot is rejected. See paragraph 6.0
herein.
5.3 Repairs. See paragraph 10.0 herein.
46
6.0 LOT REJECTION
6.1 Buyer shall have the right to reject any lot that
fails to meet the AQL levels specified in paragraph 3.0
herein.
6.2 Seller shall notify Buyer of return method within
5 days of notification of lot rejection. After 5 days,
Buyer shall return lot at the method of their choosing.
6.3 All additional inspection, handling , etc.
created by this rejection shall be charged to Seller.
See paragraph 10.0 herein.
6.4 If Seller requests space to rework/repair
rejected lot and buyer agrees, see paragraph 10.2 herein.
7.0 CHANGES OR REVISIONS
Engineering changes will be implemented in accordance with the "Class
of Engineering Change" specified in Engineering Standard ES005.
8.0 SOURCE INSPECTION
8.1 These same AQL provisions apply if Buyer elects to
perform source inspection at Seller's facility.
8.2 Seller agrees to hold shipments for source
inspection provided Buyer performs said inspection within 10
days of shipment availability notice to Buyer.
8.3 Source inspection constitutes final acceptance
when used and is an alternate to paragraph 5.0.
8.4 Source inspection does not release Seller of
warranty responsibility on individual units found
defective during warranty period.
47
9.0 CORRECTIVE ACTION
9.1 If 3 consecutive lots of like product is rejected,
Seller shall hold all shipments of the product until written approval
has been given to Seller's "corrective plan" to improve the quality
of submitted products, by the Buyers Authorized Representative.
10.0 CHARGES
10.1 Seller agrees to pay an additional expenses for labor,
materials, handling, etc. required for additional inspection of
products, created by rejected shipments.
10.1.1 Charge for labor shall be $50.00 per person per hour.
10.2 If Seller requests, and Buyer agrees, space will be provided
to Seller for repairs of rejected shipments at the rate of $200.00
per day.
10.2.1 See paragraph 10.1.1 herein for additional charges.
10.2.2 Hours available are 8 am to 4 pm Monday through Friday only.
10.2.3 It shall be Sellers responsibility to furnish all tools and
supplies.
11.0 ACCEPTABLE QUALITY LEVELS (AQL)
Unless otherwise specified, the following AQL'S will apply to incoming
material.
CRITICAL DEFECT - NO AQL- PRODUCT MUST BE 100%
DEFECT FREE MAJOR DEFECT will be inspected at 1% AQL.
MINOR DEFECT will be inspected at 2.5% AQL.
If there are any questions pertaining to this document, contact
XXXXXX WORLDWIDE INC.
Voice Products Division
Manager, Quality Assurance
0000 X. Xxxxx Xxxxxxx Xx.
Xxxxxx, Xx. 00000
000-000-0000
48
APPENDIX IV
MILESTONE AND PAYMENT SCHEDULE
MILESTONES Milestone
Completion
Milestone 1 - Xxxxxx will pay Xxxxxx 25% of Non-recurring Date
Engineering Expenses ("NRE"), as set forth in Appendix II,
when, in Xxxxxx'x reasonable opinion, Xxxxxx has completed
all of Xxxxxx' requirements with respect to Gate 4 (as set
forth in Attachment 1 hereto) for Xxxxxx Digital Portable
******************************************* Effective
******************************************************** Date of
*************. Agreement
Milestone 2 - XXXXXX will pay Xxxxxx 15% of NRE when, in
Xxxxxx'x reasonable opinion, Xxxxxx has completed all of
Xxxxxx' requirements with respect to Gate 5 (as set forth 3/14/97
in Attachment 1 hereto).
Milestone 3 - XXXXXX will pay Xxxxxx 17.5% of NRE when, in
Xxxxxx'x reasonable opinion, Xxxxxx has completed all of 4/1/97
Xxxxxx' requirements with respect to Gate 6 (as set forth
in Attachment 1 hereto).
Milestone 4 - Xxxxxx will pay Xxxxxx 10% of NRE when, in
Xxxxxx'x reasonable opinion, Xxxxxx has completed all of 11/14/97
Xxxxxx' requirements with respect to Gate 7 (as set forth
in Attachment 1 hereto).
*THIS PORTION OF THE EXHIBIT HAS BEEN OMITTED (BASED UPON
A REQUEST FOR CONFIDENTIAL TREATMENT) AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 406.
49
Milestone 5 - XXXXXX will pay Xxxxxx 17.5% of NRE when, in 12/31/97
Xxxxxx'x reasonable opinion, Xxxxxx has completed all of
Xxxxxx' requirements with respect to Gate 8 (as set forth
in #Attachment 1 hereto).
Milestone 6 - XXXXXX will pay Xxxxxx 15% of NRE when, in *****
Xxxxxx'x reasonable opinion, Xxxxxx has completed all of
Xxxxxx' requirements with respect to Gate 10 (as set forth
in Attachment 1 hereto).
*This portion of the Exhibit has been omitted (based upon
a request for confidential treatment) and filed
separately with the Securities and Exchange Commission
pursuant to Rule 406.
50
ATTACHMENT 1 TO APPENDIX IV
XXXXXX PRODUCT TO MARKET PROCESS
DEVELOPMENT METHODOLOGY
DESCRIPTION OF TERMS
GATE 4 DELIVERABLES
1. PRODUCT REQUIREMENTS DOCUMENT
(As defined in Xxxxxx'x Product To Market Handbook ("The PTM Handbook")
incorporated herein by reference).
2. PRELIMINARY PROJECT PLAN
(As defined in the PTM Handbook).
GATE 5 DELIVERABLES
1. PRODUCT CHARACTERISTIC DOCUMENT
(as defined in the PTM Handbook).
2. FINAL PROJECT PLAN
(As defined in the PTM Handbook).
GATE 6 DELIVERABLES
1. DESIGN DOCUMENT
(As defined in the PTM Handbook).
GATE 7 DELIVERABLES
1. WORKING PROTOTYPE
(As defined in the PTM Handbook).
2. FINAL ALPHA TEST PLAN
(As defined in the PTM Handbook).
3. ALPHA TEST SCRIPTS
(As defined in the PTM Handbook).
GATE 8 DELIVERABLES
1. ALPHA TESTED PRODUCT
(As defined in the PTM Handbook).
2. FINAL BETA TEST PLAN
(As defined in the PTM Handbook).
GATE 10 DELIVERABLES
1. BETA TESTED PRODUCT
(As defined in the PTM Handbook).
51
APPENDIX V
Xxxxxx Exclusive Features
DIGITAL PORTABLE
o Built-in *****
o Built-in *****
o Ability to ***** the Digital Portable with any/all *****
o Each dictated job can *****, including, but not limited to:
@ *****
@ *****
@ *****
@ *****
@ *****
@ *****
@ *****
@ *****
o *****
o *****
o ***** - Allows user to *****
o ***** - The ability to use ***** features of the portable
o *****
o *****
o *****
*This portion of the Exhibit has
been omitted (based upon a request
for confidential treatment) and
filed separately with the Securities
and Exchange Commission pursuant to
Rule 406.
1
52
*****
DIGITAL PORTABLE
o ***** the digital portable *****
o ***** the digital portable *****
*****
o *****
o ***** the digital portable *****
o ***** the digital portable *****
@ *****
@ *****
@ *****
@ *****
@ *****
*****
o ***** digital portable *****
o ***** the digital portable *****. User then has a *****
o User can then *****
o ***** provides the capability of ***** which includes but not limited
to *****
*This portion of the Exhibit has been omitted (based upon
a request for confidential treatment) and filed
separately with the Securities and Exchange Commission
pursuant to Rule 406.
2
