Exhibit 10.1
(Portions of this Agreement and its Exhibits have been omitted
and marked confidential [****] and filed separately
with the Securities and Exchange Commission.)
OEM PURCHASE AGREEMENT
BY AND BETWEEN
PHILIPS MEDICAL SYSTEMS AND
BRAEMAR, INC.
OEM AGREEMENT
REV.5
Date: 10/01/03 Philips Confidential
TABLE OF CONTENTS
1. SCOPE OF AGREEMENT.....................................................1
2. DEFINITIONS............................................................2
3. ORDERS AND SHIPMENT OF OEM PRODUCTS....................................3
4. PRICES AND PAYMENT TERMS...............................................4
5. NONCOMPLYING PRODUCTS..................................................4
6. RETURN OF PRODUCTS.....................................................4
7. ENGINEERING PROCESS OR DESIGN CHANGES..................................5
8. QUALITY................................................................6
9. WARRANTIES.............................................................6
10. SUPPORT SERVICES.......................................................6
11. OBSOLESCENCE AND MANUFACTURING RIGHTS..................................8
12. TRAINING...............................................................9
13. MARKETING AND LICENSING................................................9
14. INTELLECTUAL PROPERTY PROTECTION......................................10
15. COUNTRY OF MANUFACTURE AND DUTY DRAWBACK RIGHTS.......................10
16. GOVERNMENTAL COMPLIANCE...............................................10
17. FORCE MAJEURE EVENTS..................................................11
18. EVENTS OF DEFAULT.....................................................11
19. CONFIDENTIAL INFORMATION..............................................12
20. INSURANCE REQUIREMENTS................................................12
21. LIMITATION OF LIABILITY...............................................13
22. TERMINATION...........................................................13
23. MISCELLANEOUS.........................................................13
Date: 10/01/03 Philips Confidential
OEM PURCHASE AGREEMENT
THIS AGREEMENT is entered into between PHILIPS MEDICAL SYSTEMS, a division of
Philips Electronics North American Corporation, a Delaware corporation
("Philips") and BRAEMAR, INC., a North Carolina corporation ("Supplier"),
effective as of September 1, 2003 (the "Effective Date"). The parties hereby
agree as follows:
1. SCOPE OF AGREEMENT
1.1 General. This Agreement specifies the terms and conditions under which
Supplier will sell, license and support the OEM Products listed in
Exhibit A to this Agreement. The OEM Products are regarded as "Original
Equipment Manufacturer" products that will either be sold separately or
incorporated into Philips Products for resale worldwide under the
Supplier's label or under Philips private label. The OEM Products and
the Philips Products will be marketed, serviced, and supported by
Philips field organization and channel partners, subject to the
marketing, service, and support obligations of Supplier pursuant to
this Agreement.
1.2 Eligible Purchasers. This Agreement enables Philips, Philips
Subsidiaries and Philips Subcontractors to purchase OEM Products from
Supplier under the terms of this agreement or any subsequent Product
Addendum. Unless a Product Addendum specifically refers to and amends a
term of this Agreement, the terms and conditions of this Agreement will
control and take precedence over any conflicting terms in a Product
Addendum.
1.3 Term Of Agreement. This Agreement will commence as of the Effective
Date and continue for a three-year period (the "Term"), unless
terminated earlier under the terms of this Agreement. After the initial
Term, this Agreement will continue automatically for two additional
one-year periods. This Agreement may be terminated at the end of the
initial Term or at the end of any subsequent renewal period if one
party provides the other at least 60 days prior notice of its intent to
terminate.
1.4 Non-exclusive Appointment. Subject to the terms and conditions of this
Agreement the Supplier appoints Philips as the Supplier's non-exclusive
distributor of the OEM Products worldwide commencing on the Effective
Date. Philips' distribution rights shall extend to any improved OEM
Products for Xxxxxx and event monitoring recorders.
1.5 Exclusive Appointment. Subject to the terms and conditions of this
Agreement and commencing on the Effective Date, the Supplier appoints
Philips as the Supplier's exclusive distributor of the OEM Products
that have been made compatible with EASI. The Supplier has the royalty
free rights to distribute through Philips the OEM Products that have
been made compatible with the EASI technology. The royalty free license
for EASI in the OEM Products is in effect only for the period of the
Agreement.
1.6 Product Ownership.
(1) DigiTrak Plus: Philips owns the case, mold, and PM Dx circuit.
Braemar owns the electrical design, circuits, firmware,
cabling, and developer software.
(2) 7XX Event Recorders Braemar owns 100%.
(3) 930 Event Recorder with EASI front end in the EASITrak case:
Philips will own 40% of the ER930 case with planned NRE funds.
If the 930 Event Recorder with EASI front end is released in
the new DigiTrak Plus improved case -- Philips owns the case
and the associated tools.
(4) For simplicity, Braemar will sell the ER 930 with EASI only to
Philips.
1.7 Sub-distributors and Manufacturer's Representatives. Philips may
appoint Sub-distributors, sales agents and manufacturer's
representatives to promote, distribute and sell the OEM Products in
Accordance with this Agreement. Philips shall be entitled to use its
standard form of distribution agreement for such Sub-distributors;
provided, however, that Philips shall at all times remain responsible
for performance of all of its obligations under this Agreement and
shall use its commercially reasonable efforts to bring its
Sub-distributors into compliance with this Agreement. If Supplier has
actual knowledge of improper acts or omissions on the part of such
Sub-distributors, it will use reasonable efforts to inform Philips of
such acts or omissions; provided, however, that such obligation shall
not relieve Philips of any of its obligations under this Agreement with
respect to such Sub-distributors.
1.8 Alliance Managers and Meetings. Each of the parties has appointed an
individual, to facilitate communications between the Parties relating
to the OEM Products and the relationship contemplated herein. These
individuals are shown in Exhibit C. These individuals shall meet not
less than quarterly to discuss the marketing, distribution, forecasts,
sales and business issues of the OEM Products as contemplated
hereunder; provided, however, that
Date: 10/1/03 [****] CONFIDENTIAL Page 1 of 43
nothing in this Agreement shall limit Philips' ability to set prices or
ASP for the OEM Products which charges to third parties. Notice of any
change to these appointed individuals shall be provided to the other
party.
2. DEFINITIONS
The following capitalized terms will have these meanings throughout this
Agreement.
2.1 "Delivery Date" means the date specified in an Order for the delivery
of OEM Products by Supplier to the destination required under the
Order.
2.2 "Documentation" means the user and technical manuals and other
documentation that Supplier will make available with the OEM Products.
2.3 "Eligible Purchasers" mean those parties authorized to purchase OEM
Products under this agreement as listed in Section 1.2 above.
2.4 "Failure Rate" means defects in design, material and workmanship
(excluding customer abuse) that occurred in warranted product over the
past year divided by the number of OEM products under warranty in the
past year.
2.4 "Forecast" means Philips' estimate of its purchase requirements over a
six-month period, or such other period designated by the parties.
2.5 "Intellectual Property Rights" means all rights in patents, copyrights,
moral rights, trade secrets, mask works, Marks and other similar
rights.
2.6 "Lead Time" means the time between the date an Order is sent and the
Delivery Date.
2.7 "Marks" means the trademarks, service marks, trademark and service xxxx
applications, trade dress, trade names, logos, insignia, symbols,
designs or other marks identifying a party or its products.
2.8 "Noncomplying Product" means any OEM Product received by Philips that
does not comply with the Specifications, or otherwise does not comply
with the requirements of an Order or other provisions of this
Agreement. Noncomplying Products include, without limitation,
dead-on-arrival products, overshipment and early shipments.
2.9 "OEM Products" means the products listed in Exhibit A all related
Documentation, Parts and other Deliverables provided pursuant to this
Agreement.
2.10 "Orders" means a written or electronic purchase order or release issued
by Philips to Supplier for purchase of the OEM Products.
2.11 "Parts" means the replacement parts, components, consumables or other
products that may be supplied in conjunction with or as additions to
the OEM Products.
2.12 "Philips Products" means the Philips products or systems that will
incorporate or be sold with the OEM Products and that will be marketed
and sold to end-user customers by Philips and its distributors.
2.13 "Philips Property" means all property, including without limitation,
models, tools, equipment, copies of designs, documentation and other
materials that may be furnished to Supplier by Philips or on Philips'
behalf or separately paid for by Philips for use by Supplier in
connection with this Agreement.
2.14 "Product Addendum" means an addendum to this Agreement entered into
between Supplier and an Eligible Purchaser naming additional OEM
Products and product specific requirements in addition to those
requirements specified in this Agreement.
2.15 "Software" means any software or firmware included or bundled with the
OEM Products, as designated in the description of OEM Products in
Exhibit A.
2.16 "Specifications" means the technical and functional requirements for
the OEM Products as specified or referenced in Exhibit A or as agreed
to by the parties.
Date: 10/1/03 [****] CONFIDENTIAL Page 2 of 43
2.17 "Subcontractor" means Philips dealers, distributors and manufacturers
representatives that may purchase OEM Products under the terms of this
Agreement on behalf of Philips.
2.18 "Subsidiary" means an entity controlled by or under common control with
a party to this Agreement, through ownership or control of more than
50% of the voting power of the shares or other means of ownership or
control, provided that such control continues to exist.
2.19 "Support" means ongoing maintenance and technical support for the OEM
Products provided by Supplier to Philips as more fully described in
Exhibit D.
2.20 "Technical Information" means Information means Supplier's
manufacturing information and technology deemed necessary by Philips to
support OEM Products and to exercise any manufacturing rights provided
under this Agreement, including, but not limited to: (i)
specifications, software, schematics, designs, drawings or other
materials pertinent to the most current revision level of manufacturing
of the OEM Products; (ii) copies of all inspection, manufacturing, test
and quality control procedures and any other work processes; (iii) jig,
fixture and tooling designs; (iv) supplier history files; (v) support
documentation; and (vi) any additional technical information or
materials listed in the Escrow Agreement (as described in Exhibit F
hereto) agreed to by the parties.
2.21 "Technical Materials" means jigs, fixtures, production software and
tools used by Supplier to manufacture the OEM Products.
3. ORDERS AND SHIPMENT OF OEM PRODUCTS
3.1 Orders, Order Acknowledgment, Forecasts, Lead Time, Inventory
Requirements, Order Changes, Shipment Requirements, Philips Options to
Accept Overshipments, Requirements for Meeting Delivery Dates and
Information Regarding No Advance Shipments. Each delivery of OEM
Products will be initiated by an Order issued to Supplier by Philips.
Philips' and Supplier's purchasing terms are listed in Exhibit G SMI
Agreement and the Philips Purchase Order Terms and Conditions attached
to each purchase order.
3.2 Emergency Orders. If Philips deems it necessary, Philips may order OEM
Products by facsimile on an emergency basis ("Emergency Order") subject
to the availability of such OEM Products in Supplier's inventory.
Supplier will use its best efforts to ship the Emergency Order to
Philips' stipulated destinations within [****] after the receipt by
Supplier. Subject to Philips' approval, Philips will pay any additional
expenses related to such Emergency Orders.
3.3 Title and Risk of Loss. Unless otherwise specified in writing by
Philips, shipments will be F.O.B. destination. If Philips designates
the carrier, shipments will be F.O.B. carrier. Title to OEM Product
hardware and media ordered under this Agreement and risk of loss or
damage will pass from Supplier to Philips upon Supplier's delivery of
the OEM Products to the common carrier specified by Philips, subject to
the provisions in Sections 3.4 and 3.5 below with respect to packing
and handling.
3.4 Packing List. Each delivery of OEM Products to Philips must include a
packing list that contains at least:
(a) The Order number and the Philips part number;
(b) The quantity of OEM Products or Parts shipped; and
(c) The date of shipment.
3.5 Packaging. Supplier must preserve, package, handle, and pack all OEM
Products so as to protect the OEM Products from loss or damage, in
conformance with good commercial practice, the Specifications,
Government Regulations, and other applicable standards. Special static
protection must be provided for OEM Products requiring such packaging.
3.6 Responsibility for Damage. Supplier will be liable for any loss or
damage due to its failure to properly preserve, package, handle, or
pack OEM Products. Philips will not be required to assert any claims
for such loss or damage against the common carrier involved. Further,
Philips will not be liable for any loss or damage due to a release of
chemicals or other hazardous materials to the environment prior to
Philips' actual receipt of the corresponding OEM Products.
Date: 10/1/03 [****] CONFIDENTIAL Page 3 of 43
4. PRICES AND PAYMENT TERMS
4.1 OEM Product Prices. Supplier's prices for the OEM Products are listed
in Exhibit B in U.S. currency unless otherwise stated, and may not be
increased without Philips' consent. The prices for Parts will be
Supplier's published prices, less any applicable discounts, unless the
parties agree to a price schedule for Parts. OEM Products and Parts
will also be subject to any applicable prompt payment discounts.
Supplier and Philips agree to review OEM Product prices semi-annually.
If, during the term, Supplier effectuates cost reductions in its
manufacturing and delivery processes, it will pass such reductions to
Philips and amend the prices accordingly.
4.2 Changed Prices. If during the Term changed prices or price formulas are
put in effect by mutual agreement of Philips and Supplier, or reduced
prices or price formulas are otherwise put in effect by Supplier, such
prices or price formulas (if resulting in lower prices than the then
current price) will apply to all Orders issued by Philips after the
effective date of such prices or price formulas and to all unshipped
Orders.
4.3 Payment Procedure. Philips' and Supplier's purchasing terms are listed
in Exhibit G SMI Agreement and the Philips' Purchase Order Terms and
Conditions attached to each purchase order.
4.4 [****]. [****]. In addition, Philips may credit any amounts due under
this Agreement against future invoices.
4.5 Sales Taxes And Duties. Prices are exclusive of all taxes or duties
after delivery to the designated destination (other than taxes levied
on Supplier's income) that Supplier may be required to collect or pay
upon shipment of the OEM Products. Any such taxes or duties must appear
as a separate item on Supplier's invoice. Philips agrees to pay such
taxes or duties unless Philips is exempt from such taxes or duties.
Where applicable, Philips will provide Supplier with an exemption
resale certificate.
5. NONCOMPLYING PRODUCTS
5.1 Repairs Or Replacement. Philips may elect in its sole discretion,
subject to the provisions of Article 18 below, to return a Noncomplying
Product for replacement at Supplier's expense. In addition, Philips may
return for replacement an entire lot of OEM Products if a tested sample
of that lot contains Noncomplying Products. In the event of an
overshipment, Philips may elect to keep the additional units, subject
to the payment procedures in Section 4.3.
5.2 Repair Period. Supplier will return the replacement OEM Products as
soon as possible but in no event later than [****] workdays after
receipt of the Noncomplying Product from Philips. Supplier's
opportunity to cure any failure to meet such deadline, pursuant to
Article 18 below, will apply to only one such breach per part number
during the Term.
5.3 Product Defect. Supplier will notify Philips should a defect in any of
the OEM Products be found which it believes is likely to be associated
with an Epidemic Failure as set forth in Section 10.5 or cause a Safety
Standard Change as set forth in Section 7.5.
6. RETURN OF PRODUCTS
6.1 Return Materials Authorization. All OEM Products returned by Philips to
Supplier must be accompanied by a Return Materials Authorization
("RMA") as noted in Exhibit D. Unless further verification is
reasonably required by Supplier, Supplier will supply an RMA within
[****] of Philips' request. Philips may return the OEM Product without
an RMA if Supplier fails to provide one.
6.2 Return Charges. All Noncomplying Products returned by Philips to
Supplier, and all replacement or repaired OEM Products shipped by
Supplier to Philips to replace Noncomplying Products, will be at
Supplier's risk and expense, including transportation charges (round
trip charges for replacement or repaired OEM Products).
6.3 Duty To Remove Marks Or Destroy Noncomplying Products. Supplier agrees
not to sell, transfer distribute or otherwise convey any part,
component, product or service bearing or incorporating Philips Marks,
part numbers or other identifiers, including any Philips packaging,
copyrights or code, to any party other than to Eligible Purchasers.
Supplier will remove from all rejected, returned or un purchased OEM
Products any such Philips Marks or identifiers, even if such removal
would require destruction of the OEM Products. Supplier further agrees
not to represent that such OEM Products are built for Philips or to
Philips specifications. Supplier will defend and indemnify Philips
Date: 10/1/03 [****] CONFIDENTIAL Page 4 of 43
against any claims, losses, liabilities, costs or expenses that Philips
may incur as a result of Supplier's breach of this obligation.
7. ENGINEERING PROCESS OR DESIGN CHANGES
7.1 Supplier Proposed Changes. Supplier will not, without the prior written
consent of Philips, make or incorporate in OEM Products any of the
following changes (collectively, "Engineering Changes"):
(1) Process or design changes;
(2) Geographical relocation of manufacturing processes; or
(3) Process step discontinuances affecting the electrical
performance, the mechanical form, fit, or function, the
environmental compatibility or chemical characteristics,
software compatibility, or the life, reliability, or quality
of OEM Products.
7.2 Notice Of Proposed Change. Supplier will give Philips notice of any
proposed Engineering Change, and will provide evaluation samples and
other appropriate information as specified by Philips at least 90 days
prior to the first proposed shipment of any OEM Products involving an
Engineering Change. Regardless of whether Philips approves a proposed
Engineering Change, Lead Time will not be changed except as provided in
Section 3.1 above.
7.3 Philips Proposed Changes. Philips may change Philips-supplied drawings,
designs, or Specifications at any time prior to manufacture of
corresponding released OEM Products. Any such change will be effective
upon notice to Supplier. If any such change reasonably and directly
affects the prices or delivery schedules of OEM Products, an equitable
adjustment will be made provided that Supplier makes a written claim
for an adjustment within 30 days from the date Philips gives notice to
Supplier of the change and Philips agrees in writing to the adjustment.
7.4 Option To Terminate. If the parties are unable to agree, acting
reasonably and in good faith, upon an adjustment pursuant to Section
7.3 above, Philips may without any liability terminate this Agreement
as to any OEM Products affected.
7.5 Safety Standard Changes. Supplier will immediately give notice to
Philips if any upgrade, substitution or other change to an OEM Product
is required to make that product meet applicable safety standards or
other governmental statutes, rules, orders or regulations, even those
that are not defined as Engineering Changes is Section 7.1 above. All
affected OEM Products already purchased by Philips may, at Philips'
election, either be returned to Supplier for upgrade to current
revisions or upgraded by Philips in the field pursuant to the
procedures outlined in Section 10.7 below. If an OEM Product meets
applicable safety standards and other governmental requirements at the
time of manufacture, Supplier will absorb the costs of any subsequent
upgrade; substitution or other required change between the parties. If
such discussions render no equitable solution, the parties may either
mutually agree to escalate the matter to their respective vice
presidents or general managers, as applicable, or in the alternative,
divide the costs equally between them.
7.6 Supplier Product Development. Supplier agrees to integrate Philips'
EASI algorithm and software code into the OEM Products with NRE funding
as specifically identified in the addendums attached. Philips retains
ownership of the design of the OEM Products as adapted to work with the
EASI algorithm. Specific ownership rights are detailed in Section 1.6.
Supplier will be responsible for improvements to the design,
manufacture and verification of the OEM Products. Philips will be
responsible for NRE to complete product improvements above and beyond
product specification. Supplier agrees to supply Philips updateable
software releases with complete documentation to aid the Philips in
updating the OEM Products. Philips is responsible for using best
efforts to fully implement all Supplier provided software releases
across the entire installed product base in a timely manner. [****].
7.7 Philips Product Development. Philips will be available to support the
Supplier's efforts to integrate the EASI algorithm and as apart of the
acceptance testing of the adapted OEM Products (which include the EASI
algorithm), will test to verify that the Xxxxxx software and the OEM
Products continue to be compatible. It is understood by both parties
that the PC platforms to be tested include Windows 98,Windows 2000, and
Windows XP. Philips agrees to fund this testing as well as any
incremental regulatory approvals and localizations of the manuals that
are not covered in Exhibit A.
Date: 10/1/03 [****] CONFIDENTIAL Page 5 of 43
8. QUALITY
8.1 Quality Program. Supplier agrees to maintain an objective quality
program for all OEM Products. Supplier's program will be in accordance
with the current revision of Philips' Supplier Quality System
Requirements, and if applicable, any additional or substitute quality
requirements agreed to by the parties. Supplier will, upon Philips'
request, provide to Philips' copies of Supplier's program and
supporting test documentation.
8.2 Philips' Right To Inspect. Philips has the right to inspect, at
Supplier's plant, the OEM Products and associated manufacturing
processes. Manufacturing processes may be inspected at any time during
the Term. Philips' inspection may be for any reason reasonably related
to this Agreement, including assuring Supplier's compliance with
Philips' requirements. Philips' right of inspection will apply as well
to any vendor or subcontractor of Supplier. Supplier will inform such
vendors or, subcontractors of Philips' right to inspect, and, if
necessary, use all reasonable effort to secure such rights for Philips.
8.3 Supplier's Right to Audit. Supplier has the right to audit, at Philips
repair facilities, the service and repair processes at any time during
the Term. Supplier's audit may be Philips compliance with Supplier's
service repair requirements. This includes any vendor of Philips.
Philips will inform such vendors of Supplier's right to audit.
9. WARRANTIES
9.1 Product Warranties. Supplier warrants that all OEM Products will:
(1) Be manufactured, processed, and assembled by Supplier or by
companies under Supplier's direction.
(2) Conform to the Product Specifications, and other criteria
referred to in this Agreement or agreed to by the parties in
writing.
(3) Be new, except as otherwise provided by the parties.
(4) Conform strictly to the requirements of all Orders.
(5) Be free from defects in Supplier's design, material and
workmanship.
(6) Be free and clear of all liens, encumbrances, restrictions,
and other claims against title or ownership.
(7) Not violate or infringe any third party Intellectual Property
Rights and Supplier warrants that it is not aware of any facts
upon which such claim could be made. If Supplier learns of any
claim or any facts upon which claim could be made, it will
promptly notify Philips of this information.
(8) The DigiTrak Plus 24 hour, 48 hours, and Raytel labeled OEM
products are sold to Philips with the understanding that
Philips will absorb the cost of repair up to the repair rate
identified in Section 10.5.
(9) Excluded from this Warranty are expendable supply items
including, but not limited to electrodes, lead wires, patient
cables and batteries. End user abuse of any kind is also
excluded from the limited warranty.
9.2 Epidemic Failure Warranty. In addition to the warranties specified
above, Supplier warrants all OEM Products against epidemic failure for
a period of three years after receipt of that OEM Product or the
associated Philips Product by Philips customers. An epidemic failure
means the occurrence of same failure in any [****] or [****]% of OEM
Products, within a one-year time frame.
10. SUPPORT SERVICES
10.1 General. Philips will provide Primary Support for the Products supplied
by Supplier. Supplier will provide Philips with Secondary Support as
outline in Exhibit D. Supplier will maintain such number of qualified
personnel as necessary to provide timely and knowledgeable maintenance
and support service. Supplier warrants that all Support will be
provided in a professional and workmanlike manner. However, in no event
may Supplier us Philips Confidential Information or Philips Property to
provide such support without Philips' prior consent.
Date: 10/1/03 [****] CONFIDENTIAL Page 6 of 43
10.2 New Philips Products. Upon request by Philips, Supplier will use all
reasonable efforts to provide Philips with the OEM Products adapted for
use with new releases of Philips Products within timeframes and at such
additional costs, if any, to be negotiated by the parties, provided
that Philips makes available to Supplier such Philips Property as may
be reasonably necessary for Supplier to develop any adaptation.
10.3 Philips Property. Philips may provide to Supplier Philips Property
solely for use in Supplier's manufacturing, testing, adapting and
supporting the OEM Products. This includes latest versions of Philips
Analysis Software for product development and testing. All Philips
Property will be clearly segregated from Supplier's property and
identified as the sole property of Philips. Philips Property may not be
transferred, assigned, loaned or otherwise encumbered in any way.
Philips Property may be provided to third parties for fulfillment of
Supplier's obligations hereunder only upon Philips' prior written
consent. Philips property will be returned to Philips, at Supplier's
expense, upon termination of this Agreement.
10.4 Substitute Products. If Supplier develops any products that are more
efficient or less expensive than the comparable OEM Products available
under this Agreement, Philips will have the right to substitute the
newer products at the same price as the comparable OEM Products for all
subsequent purchases under this Agreement. Such substitute products
must be compatible with the current version of the Philips Products.
10.5 Failure Rate. Notwithstanding that the warranties given in Section 9.1
above apply to 100% of OEM Products, Supplier and Philips acknowledge
that the OEM Products are software based and it is expected that
defects will be addressed through software patches designed to be
installed directly by the Customers. Any defects that prohibit the
normal use of the OEM Products, as defined, or that require significant
workarounds must be addressed in a timely fashion, free of charge to
all Customers for the life of the OEM Products. A failure rate (as
defined in Section 2.4) of [****]% per year or less is expected. If the
actual failure rate for OEM Products exceeds this expected rate,
Supplier will provide additional engineering and technical support as
needed to bring the actual failure rate within the specified failure
rate. Supplier and Philips will review this data quarterly. Complete
documentation (as attached to Exhibit D), and reporting of product
failures, service, repair, and any RMA documentation shall be reported
monthly to Supplier as per Supplier's written requirements. Defective
materials, parts shall be returned with documentation monthly by the
tenth of each month to Supplier for ongoing Quality Improvement
initiatives.
10.6 Cost of Repair. The expected annualized failure rate is [****]%
(excluding customer abuse). Philips will absorb the cost of repair for
all products below that rate. Philips agrees to service, repair OEM
products in accordance with Supplier service and repair standards.
However, cost sharing for failure rate analysis will commence six
months after contract signature and final agreement of Supplier
service/repair form with monthly service/repair data is fully
functional. Failed parts will be sent with service forms to Supplier
for product quality analysis and continual quality improvement. After
these conditions have been met for every percentage point above [****]%
that has been calculated at the quarterly review the Supplier will
cover the cost of parts and direct labor costs of product repair above
[****]% annualized failure rate until the rate falls below [****];
(excluding any unit opened outside Supplier factory after original ship
date). This Cost of Repair basis assumes that the actual measured
failure rate during the period from Contract signing until June 1, 2004
is around [****]%. If the actual failure rate is substantively
different Philips and the Supplier may renegotiate the failure rate for
cost of repair.
10.7 Class Failure Remedies. Upon the occurrence of any of the following
events: (i) a failure rate exceeding the rate specified in Section 10.5
above; (ii) an epidemic failure as described in Section 9.2; or (iii) a
safety standard change under Section 7.5 above (each referred to as a
"Class Failure"), Philips will have the following additional remedies
for a three-year period commencing upon receipt by Philips' end-user
customer of the OEM Product or the corresponding Philips Product.
(1) In the event of a Class Failure, Supplier will provide Philips
no later than [****] days following the Class Failure a root
cause analysis and corrective action plan. Philips will make
available such information and assistance reasonably required
to allow Supplier to conduct its root cause analysis and
provide its corrective action report.
(2) If, after review of the root cause analysis and corrective
action plan, Philips determines in its reasonable opinion that
the Class Failure necessitates a field stocking recall or
customer based recall or retrofit, Philips may then elect to
have the OEM Products: (i) updated by Supplier (via Customer
installable updater); (ii) replaced by Supplier in the field;
or (iii) replaced by Philips in the field, including products
in distributor inventory and Philips' installed base. If
Philips chooses to perform a field repair, Supplier will cover
the costs of the Philips Support organization as well as
provide the appropriate replacement OEM Products, Parts or
upgrades free of charge to Philips. Such OEM Products, Parts
or upgrades will have the highest shipping priority.
Date: 10/1/03 [****] CONFIDENTIAL Page 7 of 43
(3) Except as provided in Section 7.5 above regarding safety
standard changes, Supplier will, within [****] days after
completion of the recalls or retrofits, reimburse Philips for
its reasonable and direct costs in performing such services.
10.8 Survival Of Support Obligations. Supplier's maintenance and support
obligations specified in this Section 10, and in the Support Terms in
Exhibit D will run for the Term and any additional periods under
Section 1.3 above and will continue for a period of five years after
Philips ships the last Philips Product or an OEM Product. This
obligation includes making necessary Parts available to Philips, as
further provided in the Support Terms.
11. OBSOLESCENCE AND MANUFACTURING RIGHTS
11.1 Lifetime Buy Rights. Supplier acknowledges its obligation to
manufacture, supply and support the OEM Products without interruption
for the Term. If, however, after the first year of shipment of such
products, Supplier seeks to discontinue the supply or support of any
OEM Product (a "Discontinued Product"), Supplier will give notice to
Philips no less than [****] months in advance of the last date the
Discontinued Product can be ordered. After receipt of notice of
discontinuance, Philips may, at its option:
(1) Purchase from Supplier such quantity of the Discontinued
Product as Philips deems necessary for its future
requirements; and
(2) Manufacture the Discontinued Product under the manufacturing
rights granted in Section 11.2 below, without payment to
Supplier of any royalties or other charges.
11.2 Philips' Right To Manufacture. Subject to the terms of Section 11.1
above, Supplier grants to Philips, under Supplier's Intellectual
Property Rights, a perpetual, non-exclusive, worldwide, royalty-free
license to use, modify, reproduce, import, manufacture, distribute,
offer for sale and sell the Discontinued Product. Philips may
sublicense these rights to third parties, provided any such third party
complies with the terms of this license and any associated obligations
of confidentiality. In the event Philips elects to exercise this right:
(1) Supplier will release to Philips all Technical Information or
other materials deposited under the terms of the Deposit
Agreement, described below in Section 11.4, necessary for the
manufacture of the Discontinued Product. Philips will keep all
Technical Information confidential in accordance with the
terms of Article 19 below. If Supplier has failed to place
Technical Information in escrow or to update the escrow as
provided below, Philips might use the measures described in
paragraph (b) below to obtain such information.
(2) Supplier will furnish to Philips all Technical Materials at
their book value within [****] days after Philips has notified
Supplier of its exercise of its rights under this Article 11.
If the materials are not delivered within this time period,
Philips will have the right to collect such materials at
Supplier's plant or offices and Supplier agrees to assist
Philips in such collection. Philips will pay amounts due on
such materials within [****] days after receipt of Supplier's
invoice or receipt of the materials, whichever is later. If
Philips has to use measures to collect the materials itself,
it may deduct its costs from the book value of the materials.
(3) Supplier will furnish to Philips within seven days after
Philips' written request, the names and addresses of
Supplier's sources for Parts not manufactured by Supplier,
including the appropriate part numbers for commercially
available equivalents of electronic parts. Supplier will use
all reasonable efforts to ensure that Philips will have the
right to purchase all such Parts directly from Supplier's
vendors.
(4) Supplier will furnish to Philips without charge all Parts
catalogues, schematics, material lists, engineering change
orders, and other servicing documentation deemed necessary by
Philips to service and support the Discontinued Product.
(5) Supplier will assign to Philips any license rights it may have
with third parties for software, documentation or any
intellectual property used in the manufacture of the
Discontinued Product.
11.3 Consulting Services. In support of Technical Information conveyed to
Philips, Supplier will provide:
(1) Up to [****] hours of consulting services, as required by
Philips, provided that Philips bears the cost of reasonable
travel expenses; and
Date: 10/1/03 [****] CONFIDENTIAL Page 8 of 43
(2) Additional consulting services at the rate of [****] per
eight-hour workday, plus reasonable travel expenses of those
so engaged.
11.4 Escrow Agreement. At Philips' request and as security for the
fulfillment of Supplier's obligations under this Agreement, Supplier
will deposit a copy of the Technical Information, including any source
code for all software contained in the OEM Products (the "Deposit")
pursuant to the terms of Philips' standard Deposit Agreement, [attached
as Exhibit F]. Philips will have the right to inspect and verify that
the appropriate Deposit of current and complete information is being
made. Supplier will update the Deposit on a regular basis, but no less
than semi-annually, and at least once immediately prior to Philips'
exercise of its rights hereunder.
12. TRAINING
12.1 Technical Training. Supplier will provide to Philips up to three
technical/service training sessions for up to one day each, sufficient
to allow Philips to become fully familiar with the technical/support
attributes, service, and repair requirements/standards for each new OEM
Product. Training will be at no charge to Philips. Supplier will
provide product literature, learning products and service manuals for
each new OEM Product. Training may be conducted at the Supplier factory
or at the Philips repair center.
12.2 Sales Training. Supplier will develop for Philips to use with Customers
a computer based or web based training for use for each new OEM
Product. In addition Supplier will hold up to three sales training
sessions for up to one day each to allow Philips to become fully
familiar with each new OEM Product and its market. Training will be at
no charge to Philips. Supplier will provide product literature,
learning products; laptop based sales demonstration software, and all
other sales tools that have been created (such as PowerPoint
presentations) for each new OEM Product.
12.3 Additional Training. Philips may further request and Supplier will
provide additional training at no charge as reasonably necessary to
inform Philips personnel of upgraded, enhanced or new versions of the
OEM Products. Other training will be provided upon mutually agreeable
terms and conditions.
12.4 Philips' Rights In Training Classes And Materials. Philips may at no
charge use, reproduce, modify, display and perform either internally or
for Philips' customers, all training classes, methods, and materials
supplied or developed by Supplier under this Agreement. Philips' use
may be in any manner Philips reasonably deems appropriate.
13. MARKETING AND LICENSING
13.1 Marketing Authority. Philips will have the authority to market the OEM
Products and the Philips Products containing the OEM Products to the
extent it deems appropriate, in its sole discretion. Without limiting
the generality of the foregoing sentence, nothing in this Agreement
will be construed or interpreted to place a "best efforts" obligation
upon Philips with respect to marketing the Philips Products or OEM
Products or preclude Philips from independently developing, purchasing,
licensing, or marketing any product which performs the same or similar
function as the OEM Products. Philips will have the right to use its
own business and license terms for all marketing and distribution of
the OEM Products and Philips Products.
13.2 No Rights In Marks. Except as otherwise specified in the private
labeling section below, nothing in this Agreement should be construed
to grant either party any rights in the Marks of the other party.
Supplier acknowledges, however, that Philips may use the name of
Supplier and the name of the OEM Products in advertising and marketing
the OEM Products or the Philips Products. The OEM Products will be
affixed with copyright notices sufficient to give notice as to the
rights of the parties in their respective products.
13.3 Private Labeling. If Philips decides during the Term to create Philips
private label versions of the OEM Products, Supplier will ensure that
the OEM Products contain the Philips Marks, serial number format and
packaging specified by Philips and conforming to Philips specifications
for external appearance (which will not require any material change in
form or dimensions of the OEM Products or require commercially
unreasonable actions). Except as provided herein, Supplier will have no
other right or license in any Philips and are Philips private labels.
13.4 Software License. If the OEM Products include Software, Supplier hereby
grants to Philips, under Supplier's Intellectual Property Rights in
such Software, a non-exclusive, worldwide, fully paid-up license to
use, import, offer for sale and distribute the Software in object code
form as integrated with the OEM Products or the Philips Products. These
rights will extend to Philips Subsidiaries and third party channels of
distribution.
Date: 10/1/03 [****] CONFIDENTIAL Page 9 of 43
13.5 Documentation License. Supplier hereby grants Philips a non-exclusive,
non-transferable, worldwide, fully paid up license to use, reproduce,
distribute and prepare derivative works in Philips' name all
Documentation and other information, other than confidential
information, furnished by Supplier under this Agreement. Philips may
reproduce such Documentation without Supplier's logo or other
identification of source, subject to affixing copyright notices to all
copies of Documentation. These rights with respect to the Documentation
will extend to Philips Subsidiaries and third party channels of
distribution.
14. INTELLECTUAL PROPERTY PROTECTION
14.1 Supplier's Duty To Defend. Except as provided in Section 14.4 below,
Supplier will defend and hold harmless Philips and its Subsidiaries,
Subcontractors and customers from any claim that any OEM Product, any
combination of an OEM Product with an Philips Product, any Software,
Documentation or a Supplier Xxxx, or any product provided as part of
Supplier's Support services constitutes an unauthorized use or
infringement of any third party's Intellectual Property Rights.
Supplier will pay all costs; damages and expenses (including reasonable
attorneys' fees) incurred by Philips, its Subsidiaries, Subcontractors
or customers and will pay any award with respect to any such claim or
agreed to in any settlement of that claim.
14.2 Philips' Duty To Notify. Philips will give Supplier prompt notice of
any such claim or action, and will give Supplier the authority,
information, and reasonable assistance (at Supplier's expense)
necessary to defend. If Supplier does not diligently pursue resolution
of the claim nor provide Philips with reasonable assurances that it
will diligently pursue resolution, then Philips may, without in any way
limiting its other rights and remedies, defend the claim.
14.3 Remedies For Infringing Products. If the use or combination of any
product provided hereunder is enjoined (the "Infringing Product"),
Supplier will, at its sole expense and option:
(1) Procure for Philips and its customers the right to continue
using or combining the Infringing Product;
(2) Replace the Infringing Product with a non-infringing product
of equivalent function and performance; or
(3) Modify the Infringing Product to be non-infringing, without
detracting from function or performance.
14.4 Limitations. Supplier will be relieved of its indemnification
obligations under this Article 14 to the extent that the claim arises
solely and directly from Supplier's compliance with an Philips
Specification provided that all implementations of that Specification
constitute an unauthorized use or infringement of a third party
Intellectual Property Right.
15. COUNTRY OF MANUFACTURE AND DUTY DRAWBACK RIGHTS
15.1 Country Of Origin Certification. Upon Philips' request, Supplier will
provide Philips with an appropriate certification stating the country
of origin for OEM Products, sufficient to satisfy the requirements of
the customs authorities of the country of receipt and any applicable
export licensing regulations, including those of the United States.
15.2 Country Of Origin Marking. Supplier will xxxx each OEM Product, or the
container if there is no room on the OEM Product, with the country of
origin. Supplier will, in marking OEM Products, comply with the
requirements of the customs authorities of the country of receipt.
15.3 Duty Drawback. If OEM Products delivered under this Agreement are
imported, Supplier will when possible allow Philips to be the importer
of record. If Philips is not the importer of record and Supplier
obtains duty drawback rights to OEM Products, Supplier will, upon
Philips' request, provide Philips with documents required by the
customs authorities of the country of receipt to prove importation and
to transfer duty drawback rights to Philips.
16. GOVERNMENTAL COMPLIANCE
16.1 Duty To Comply. Supplier agrees to comply with all federal, state,
local and foreign laws, rules, and regulations applicable to its
performance of this Agreement or to OEM Products. Without limiting the
generality of the foregoing sentence, Supplier represents that:
(1) Supplier will comply with all equal employment opportunity and
non-discrimination requirements prescribed by Presidential
Executive Orders, including the requirements of Executive
Order 11246, the Vocational Rehabilitation Act, and the
Vietnam Era Veterans' Readjustment Assistance Act.
Date: 10/1/03 [****] CONFIDENTIAL Page 10 of 43
(2) Each chemical substance contained in OEM Products is on the
inventory of chemical substances compiled and published by the
Environmental Protection Agency pursuant to the Toxic
Substances Control Act;
(3) All OEM Products will be shipped in conformance with
government or freight regulations and requirements applicable
to chemicals; and
(4) Supplier will provide complete and accurate material safety
data sheets prior to shipping any OEM Product.
16.2 Procurement Regulations. For OEM Products purchased under this
Agreement for incorporation into products to be sold under a federal
contract or subcontract, those applicable procurement regulations that
are required by federal statute or regulation to be inserted in
contracts or subcontracts will be deemed incorporated in this Agreement
and made to apply to all Orders.
16.3 Ozone Depleting Substances. Supplier hereby certifies that no OEM
Product nor any component of any OEM Product:
(1) Contains any "Class I Substance" or "Class 2 Substance", as
those term are defined in 42 USC Section 767: and implementing
regulations of the United States Environmental Protection
Agency at 40 CFR Part 82; as now in existence or hereafter
amended; or
(2) Has been manufactured with a process that uses any Class or
Class 2 Substance within the meaning of 42 USC Section 7671
and implementing regulations of the United States
Environmental Protection Agency at 40 CFR Part 82, as now in
existence or hereafter amended.
17. FORCE MAJEURE EVENTS
17.1 Delaying Causes. Subject to the provisions of this Article, Supplier
will not be liable for any delay in performance under this Agreement
caused by any "act of God" or other cause beyond Supplier's control and
without Supplier's fault or negligence (a "delaying cause").
Notwithstanding the above, Supplier will not be relieved of any
liability for any delay or failure to perform its defense obligations
with respect to third party Intellectual Property Rights or furnish
remedies for Infringing Products as described in Article 14 above.
17.2 Philips Option. Supplier will immediately give Philips notice of any
delaying cause and its best estimate of the expected duration of such
case. In the event of a delaying cause, Philips agrees to work with
Supplier to resolve the delay in a reasonable timeframe acceptable to
both parties. If agreement is not reached, Philips may act in its sole
discretion to:
(1) Terminate this Agreement or any part hereof as to OEM Products
not shipped; or
(2) Suspend this Agreement in whole or in part for the duration of
the delaying cause, buy similar products elsewhere, and deduct
from any quantities specified under this Agreement the
quantity so purchased.
17.3 Resumption Of Agreement. If Philips elects to purchase other similar
products in the event of a delaying cause, Philips may resume
performance under this Agreement once the delaying cause ceases and
extend the Term up to the length of time the delaying cause endured.
Unless Philips gives notice of termination as provided above within 30
days after notice from Supplier of the delaying cause, Philips will be
deemed to have elected to suspend this Agreement for the duration of
the delaying cause.
18. EVENTS OF DEFAULT
18.1 Notice Of Breach. If either party is in breach of any provision of this
Agreement, the non-breaching party may, by notice to the breaching
party, except as otherwise prohibited by the United States bankruptcy
laws, terminate the whole or any part of this Agreement or any Order,
unless the breaching party cures the breach within 30 days after
receipt of notice.
18.2 Causes Of Breach. For purposes of Section 18.1 above, the term "breach"
includes without limitation any:
(1) Proceeding, whether voluntary or involuntary, in bankruptcy or
insolvency by or against a party;
Date: 10/1/03 [****] CONFIDENTIAL Page 11 of 43
(2) Appointment, with or without a party's consent, of a receiver
or an assignee for the benefit of creditors;
(3) Failure by Supplier to make a delivery of OEM Products in
accordance with the requirements of this Agreement or any
Order;
(4) Failure by Supplier to replace or repair Noncomplying Products
in a timely manner as required by Article 5 above; or
(5) Other failure by a party to comply with any material provision
of this Agreement with additional failure to provide the
non-breaching party, upon request, with reasonable assurances
of future performance.
18.3 Philips' Rights Upon Breach by Supplier for Cause. In the event Philips
terminates this Agreement in whole or in part as provided above, in
addition to any other remedies provided Philips under this Agreement,
Philips may procure, upon such terms and in such manner as Philips
reasonably deems appropriate, products similar to the OEM, Product as
to which this Agreement is terminated. Supplier agrees to reimburse
Philips upon demand for all additional costs incurred by Philips in
purchasing, qualifying and testing such similar products. Supplier
further agrees to continue the performance of this Agreement to the
extent not terminated under the provisions of this Section.
18.4 Purchase Hold. If any Eligible Purchaser having the right to purchase
an OEM Product under this Agreement or under any other agreement with
Supplier believes in good faith that an OEM Product is defective, then,
irrespective of any other rights provided Philips hereunder, Philips
may implement a purchase hold to suspend purchases of such OEM Products
without any liability. Such purchase hold may be removed if Philips
reasonably believes that Supplier has taken sufficient action to
correct the defect or given sufficient assurances that such defect will
be corrected within a reasonable time.
19. CONFIDENTIAL INFORMATION
19.1 Confidential Information. During the Term, a party (the "Recipient")
may receive or have access to certain information of the other party
(the "Discloser") that is marked as "Confidential Information,"
including, though not limited to, information or data concerning the
Discloser's products or product plans, business operations, strategies,
customers and related business information. The Recipient will protect
the confidentiality of Confidential Information with the same degree of
care as the Recipient uses for its own similar information, but no less
than a reasonable degree of care, under the terms of the Confidential
Disclosure Agreement attached as Exhibit E (the "CDA"). To the extent
any term of this Agreement conflicts with any term in the CDA, the
terms of this Agreement will control and take precedence. Confidential
Information may only be used by those employees of the Recipient who
have a need to know such information for the purposes related to this
Agreement. The parties acknowledge that all Technical Information and
Forecasts are deemed Confidential Information to be protected for a
term of three years from the date of disclosure.
19.2 Exclusions. The foregoing confidentiality obligations will not apply to
any information that is (a) already known by the Recipient prior to
disclosure, (b) independently developed by the Recipient prior to or
independent of the disclosure, (c) publicly available through no fault
of the Recipient, (d) rightfully received from a third party with no
duty of confidentiality, (e) disclosed by the Recipient with the
Discloser's prior written approval, or (f) disclosed under operation of
law.
20. INSURANCE REQUIREMENTS
20.1 Insurance Coverage. Supplier will maintain Comprehensive or Commercial
General Liability Insurance (including but not limited to premises and
operations, products and completed operations, broad form contractual
liability, broad form property damage and personal injury liability)
with the following minimum limits:
Comprehensive General Liability: $1,000,000 combined single
limit Bodily Injury/Property Damage per occurrence and
$1,000,000 Products/Completed Operations Aggregate.
Commercial General Liability: $1,000,000 combined single limit
Bodily Injury/Property Damage per occurrence; and $1,000,000
General Aggregate (where applicable); $1,000,000
Products/Completed Operations Aggregate; and $1,000,000
Personal/Advertising Injury.
Date: 10/1/03 [****] CONFIDENTIAL Page 12 of 43
Coverage provided will extend to Supplier's legal liabilities that may
arise from use of the OEM Products or acts or omissions of Supplier
under this Agreement. Each policy obtained by Supplier will name
Philips, its officers, directors and employees as additional insureds.
In addition, such policies will permit Supplier to waive, on its own
behalf and on behalf of its insurers, any rights of subrogation against
Philips.
Such insurance policies will be written with appropriately licensed and
financially responsible insurers, and will provide for a minimum of 30
days written notice to Philips of any cancellation or reduction in
coverage. Certificates of insurance evidencing the required coverage
and limits will be furnished to Philips before any work is commenced
hereunder, and Supplier will deliver copies of policies or certificates
to the Philips contact listed in Exhibit C.
20.2 Claims Made Coverage. If any policies have "claims made" coverage,
Supplier will maintain such coverage with Philips named as an
additional insured for a minimum of three years after termination of
this Agreement. Any such coverage must have a retroactive date no later
than the date upon which work commenced under this Agreement.
20.3 Additional Requirements. All deductibles on policies providing coverage
will be paid by Supplier. In the event Supplier is self insured for
matters described in Section 20.1, Supplier agrees to respond to any
claims or losses made against or incurred by Philips in the same
fashion as if insurance had been purchased with the same or broader
coverage terms than what is generally available to similar suppliers.
In no event will the coverages or limits of any insurance required
under this Article, or the lack or unavailability of any other
insurance, be deemed to limit or diminish Supplier's obligations or
liability to Philips under this Agreement.
21. LIMITATION OF LIABILITY
UNLESS OTHER WISE STATED IN THIS AGREEMENT, NEITHER PARTY WILL BE
LIABLE FOR ANY SPECIAL OR CONSEQUENTIAL DAMAGES OF THE OTHER ARISING
OUT OF ANY PERFORMANCE OF THIS AGREEMENT OR IN FURTHERANCE OF THE
PROVISIONS OR OBJECTIVES OF THIS AGREEMENT, REGARDLESS OF WHETHER SUCH
DAMAGES ARE BASED ON TORT, WARRANTY, CONTRACT OR ANY OTHER LEGAL
THEORY, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
NOTWITHSTANDING THE ABOVE, SUPPLIER WILL BE RESPONSIBLE FOR ANY DAMAGES
OF ANY KIND INCLUDED IN AN AWARD OR SETTLEMENT OF A THIRD PARTY CLAIM
UNDER ARTICLE 14 ABOVE.
22. TERMINATION
22.1 Outstanding Orders. All Orders issued prior to the expiration of this
Agreement must be fulfilled pursuant to and subject to the terms of
this Agreement, even if the Delivery Dates are after expiration. Upon
termination of this Agreement for Supplier's breach, Philips may cancel
any outstanding Order or require Orders to be fulfilled even if a
Delivery Date is after the date of termination.
22.1 Return Of Philips Property. Supplier must return all Philips Property
to Philips upon expiration or termination. All such property must be in
good condition, normal wear and tear expected. Philips will determine
the manner and procedure for return. Philips will bear all return
freight costs if return is due to Philips convenience or an uncured
breach by Philips. Otherwise, Supplier will bear all such costs.
22.2 Surviving Provisions. Notwithstanding the expiration or early
termination of this Agreement, the provisions regarding Warranties in
Article 9, Support in Article 10, Manufacturing Rights in Article 11,
Marketing and Licensing in Article 13, Intellectual Property in Article
14, Confidentiality in Article 19, Insurance Requirements in Article
20, Limitation of Liability in Article 21, and the Miscellaneous
provisions below will each survive in accordance with their terms.
23. MISCELLANEOUS
23.1 Notices. All notices to be given under this Agreement must be in
writing addressed to the receiving party's designated recipient
specified in Exhibit C. Notices are validly given upon the earlier of
confirmed receipt by the receiving party or three days after dispatch
by courier or certified mail, postage prepaid, properly addressed to
the receiving party. Notices may also be delivered by telefax and will
be validly given upon oral or written confirmation of receipt. Either
party may change its address for purposes of notice by giving notice to
the other party in accordance with these provisions.
23.2 Exhibits. Each Exhibit attached to this Agreement is deemed a part of
this Agreement and incorporated herein wherever reference to it is
made.
Date: 10/1/03 [****] CONFIDENTIAL Page 13 of 43
23.3 Independent Contractors. The relationship of the parties established
under this Agreement is that of independent contractors and neither
party is a partner, employee, agent or joint venturer of or with the
other. Nothing in this Agreement precludes either party from
independently developing, manufacturing, selling or supporting products
similar to the OEM Products.
23.4 Assignment. Neither this Agreement nor any right, license, privilege or
obligation provided herein may be assigned, transferred or shared by
either party without the other party's prior written consent, and any
attempted assignment or transfer is void. Any merger, consolidation,
reorganization, transfer of substantially all assets of a party, or
other change in control or ownership will be considered an assignment
for the purposes of this Agreement (other than an Philips merger into a
wholly owned subsidiary). This Agreement will be binding on the
successors and permitted assigns of the parties and the name of the
party appearing herein will be deemed to include the names of such
party's successors or permitted assigns to the extent necessary to
carry out the intent of this Agreement.
23.5 No Waiver. The waiver of any term, condition, or provision of this
Agreement must be in writing and signed by an authorized representative
of the waiving party. Any such waiver will not be construed as a waiver
of any other term, condition, or provision except as provided in
writing, nor as a waiver of any subsequent breach of the same term,
condition, or provision.
23.6 Reference To Days. All references in this Agreement to "days" will,
unless otherwise specified herein, mean calendar days.
23.7 Headings. The Section headings used in this Agreement are for
convenience of reference only. They will not limit or extend the
meaning of any provision of this Agreement, and will not be relevant in
interpreting any provision of this Agreement.
23.8 No Publication. Neither party may publicize or disclose to any third
party, without the written consent of the other party, the terms of
this Agreement. Without limiting the generality of the foregoing
sentence, no press releases may be made without the mutual written
consent of each party.
23.9 Severability. If any provision in this Agreement is held invalid or
unenforceable by a body of competent jurisdiction, such provision will
be construed, limited or, if necessary, severed to the extent necessary
to eliminate such invalidity or unenforceability. The parties agree to
negotiate in good faith a valid, enforceable substitute provision that
most nearly effects the parties' original intent in entering into this
Agreement or to provide an equitable adjustment in the event no such
provision can be added. The other provisions of this Agreement will
remain in full force and effect.
23.10 Entire Agreement. This Agreement comprises the entire understanding
between the parties with respect to its subject matters and supersedes
any previous communications, representations, or agreements, whether
oral or written. For purposes of construction, this Agreement will be
deemed to have been drafted by both parties. No modification of this
Agreement will be binding on either party unless in writing and signed
by an authorized representative of each party.
23.11 Governing Law. This Agreement will be governed in all respects by the
laws USA without reference to any choice of laws provisions.
APPROVED AND AGREED TO:
SUPPLIER: PHILIPS TECHNOLOGIES, INC.
By: /s/ Xxxxx X. Xxxxxxxxxxx By: [****]
---------------------------------------
Typed Name: Xxxxx X. Xxxxxxxxxxx Typed Name: [****]
--------------------
Title: President and CEO Title: Vice President/General Manager - [****]
----------------- ---------------------------------------
Date: 10/1/03 [****] CONFIDENTIAL Page 14 of 43
EXHIBIT A - EXISTING OEM PRODUCTS AND SPECIFICATIONS
------------------------------------------------ ---------------------- ----------------------------------------------
PHILIPS SUPPLIER PRODUCT NAME
PART NO. PART NO.
------------------------------------------------ ---------------------- ----------------------------------------------
[****] [****] [****]
------------------------------------------------ ---------------------- ----------------------------------------------
[****] [****] [****]
------------------------------------------------ ---------------------- ----------------------------------------------
[****] [****] [****]
------------------------------------------------ ---------------------- ----------------------------------------------
[****] [****] [****]
------------------------------------------------ ---------------------- ----------------------------------------------
[****] [****] [****]
------------------------------------------------ ---------------------- ----------------------------------------------
[****] [****] [****]
------------------------------------------------ ---------------------- ----------------------------------------------
[****] [****] [****]
------------------------------------------------ ---------------------- ----------------------------------------------
[****] [****] [****]
------------------------------------------------ ---------------------- ----------------------------------------------
[****] [****] [****]
------------------------------------------------ ---------------------- ----------------------------------------------
[****] [****] [****]
------------------------------------------------ ---------------------- ----------------------------------------------
[****] [****] [****]
------------------------------------------------ ---------------------- ----------------------------------------------
[****] [****] [****]
------------------------------------------------ ---------------------- ----------------------------------------------
ACCESSORIES / SPARES / EVENT RECORDERS / SCANNERS
------------------------------------ ------------------------------ -------------------------------------
PHILIPS SUPPLIER PRODUCT NAME
PART NO. PART NO.
------------------------------------ ------------------------------ -------------------------------------
[****] [****] [****]
------------------------------------ ------------------------------ -------------------------------------
[****] [****] [****]
------------------------------------ ------------------------------ -------------------------------------
[****] [****] [****]
------------------------------------ ------------------------------ -------------------------------------
[****] [****] [****]
------------------------------------ ------------------------------ -------------------------------------
[****] [****] [****]
------------------------------------ ------------------------------ -------------------------------------
[****] [****] [****]
------------------------------------ ------------------------------ -------------------------------------
[****] [****] [****]
------------------------------------ ------------------------------ -------------------------------------
[****] [****] [****]
------------------------------------ ------------------------------ -------------------------------------
[****] [****] [****]
------------------------------------ ------------------------------ -------------------------------------
LANGUAGES: English, Spanish, French, German, Italian and Dutch. All languages
are included on each recorder.
Date: 10/1/03 [****] CONFIDENTIAL Page 15 of 43
EXHIBIT B - EXISTING OEM PRODUCTS SUPPLIER PRICING
OCTOBER 1, 2003
---------------------------- ------------------ -------------------------------------------- -----------------------
PHILIPS SUPPLIER PRODUCT NAME PHILIPS COST
PART NO. PART NO.
---------------------------- ------------------ -------------------------------------------- -----------------------
[****] [****] [****] [****]
---------------------------- ------------------ -------------------------------------------- -----------------------
[****] [****] [****] [****]
---------------------------- ------------------ -------------------------------------------- -----------------------
[****] [****] [****] [****]
---------------------------- ------------------ -------------------------------------------- -----------------------
[****] [****] [****] [****]
---------------------------- ------------------ -------------------------------------------- -----------------------
[****] [****] [****] [****]
---------------------------- ------------------ -------------------------------------------- -----------------------
[****] [****] [****] [****]
---------------------------- ------------------ -------------------------------------------- -----------------------
[****] [****] [****] [****]
---------------------------- ------------------ -------------------------------------------- -----------------------
[****] [****] [****] [****]
---------------------------- ------------------ -------------------------------------------- -----------------------
[****] [****] [****] [****]
---------------------------- ------------------ -------------------------------------------- -----------------------
[****] [****] [****] [****]
---------------------------- ------------------ -------------------------------------------- -----------------------
[****] [****] [****] [****]
---------------------------- ------------------ -------------------------------------------- -----------------------
[****] [****] [****] [****]
---------------------------- ------------------ -------------------------------------------- -----------------------
ACCESSORIES AND SPARES
------------------------------- ------------------- --------------------------------------------- ----------------------
PHILIPS SUPPLIER PRODUCT NAME PHILIPS COST
PART NO. PART NO.
------------------------------- ------------------- --------------------------------------------- ----------------------
[****] [****] [****] [****]
------------------------------- ------------------- --------------------------------------------- ----------------------
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Date: 10/1/03 [****] CONFIDENTIAL Page 16 of 43
EXHIBIT C - RECIPIENTS FOR RECEIPT OF NOTICES
Xxxxxxxx Xxxxx
Materials Manager
Philips Medical Systems
0000 X. Xxxx Xxx.
Xxxxxx, XX 00000
(000) 000-0000 phone
(000) 000-0000 fax
Xxxxxx Xxxxxxxxxxx
President & CEO
BRAEMAR, Inc.
00000 Xxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
(000) 000-0000 phone
(000) 000-0000 fax
Date: 10/1/03 [****] CONFIDENTIAL Page 17 of 43
EXHIBIT D - SUPPORT TERMS
Braemar DigiTrak Plus recorder repairs follow two separate, but related paths.
The repair process is dependent on the customer's geographic location. All
domestic customers follow an express repair process while all international
customers follow an exchange process.
Domestic customers call Philips North American Response Center (Atlanta), where
an electronic customer case is created (in Clarify), if required the customer is
routed to a Response Center Engineer RCE. If the RCE determines a repair is
needed, the repair details are noted in Clarify, the customer is faxed a sheet
telling them to ship the repair to the Repair Center (Dallas) and a repair case
is opened (Polaris). The Response Center case is closed. The information in
Clarify includes serial number, customer, symptoms etc. and can be queried from
SAP. The engineers at the Repair Center work a list of repair cases (Polaris)
and perform the required repair, update and or configuration. When the repair is
complete the technician closes the repair case and the device is shipped back to
the customer. During the repair the data required by Braemar for warranty
repairs and product feedback is collect on a form that is under development and
will be completed by September 30, 2003. During the repair process details of
the repair are directly entered into SAP. The details include the device s/n,
most pervasive failures and the former firmware version. A detailed failure
report is pulled from SAP and provided to Braemar monthly. The report includes
monthly input data in an format, agreed upon by both parties. Reconfiguration
data is stored in an electronic format with backups/archiving performed monthly.
International customers contact their individual SSD's (service Support
Divisions), request a repair and send their device to the local SSD. The device
is sent to SLI (Systems Logistics International) and a replacement is sent to
the customer. SLI periodically ships batches of recorders to the Repair Center
where they are repaired and documented in the same way as Domestic repairs.
Batches of recorders are returned to SLI when ordered.
Date: 10/1/03 [****] CONFIDENTIAL Page 18 of 43
EXHIBIT E - CONFIDENTIAL DISCLOSURE AGREEMENT
PHILIPS CONFIDENTIAL DISCLOSURE AGREEMENT
================================================================================
Effective Date: 4/1/02
The parties as specified below agree on the following terms:
I. DEFINITION OF CONFIDENTIAL INFORMATION
In this Agreement, Confidential Information shall mean information
exchanged on or after the Effective Date, which:
is disclosed by both parties, or, if checked here, is disclosed D only
by Participant or X only by Philips, concerns WIRELESS CONNECTIVITY,
EASI ALGORITHM AND XXXXXX FORECAST/FUTURE PLANS AND EVENT RECORDER
FUTURES is MARKED AS BEING CONFIDENTIAL at the time of disclosure, or
if unmarked (e.g. orally or visually disclosed), is designated as being
confidential at the time of disclosure and is confirmed as such in
writing by the disclosing party within thirty days of the disclosure,
and prior to receipt from the disclosing party was neither publicly
available nor in the receiving party's possession without a duty of
confidentiality. Information shall cease to qualify as Confidential
Information once it becomes publicly available without breach of this
Agreement, is rightfully obtained by the receiving party from another
source without a duty of confidentiality, or is independently developed
or ascertained by the receiving party.
1. In this Section 1, the term 'receiving party' shall include
such party's Associates. An Associate is any subsidiary,
parent, subsidiary of the parent, or corporate affiliate of a
receiving party, whether any such relationship is of direct or
indirect nature.
II. OBLIGATIONS
1. Confidential Information may only be used:
(a) if received by Participant or its Associates, for the
purpose of: DEVELOPING FUTURE PRODUCT PLANS AND
ENHANCING THE PARTNERSHIP. THIS INFORMATION IS
ACCEPTED "AS IS" PHILIPS MEDICAL SYSTEMS MAKES NO
WARRANTY, EXPRESSED OR IMPLIED TO THE FITNESS OF THIS
INFORMATION FOR ANY PURPOSE. NO SUPPORT, TECHNICAL OR
OTHERWISE, WILL BE PROVIDED BY PHILIPS MEDICAL
SYSTEMS IN CONNECTION WITH THE USE OF THIS
INFORMATION, AND PHILIPS MEDICAL SYSTEMS DOES NOT
GUARANTEE THAT THIS APPLICATION WILL FUNCTION.
(b) if received by Philips or its Associates, for the
purpose of:
2. A party receiving Confidential Information shall use the same
degree of care, but in any case no less than a reasonable
degree of care, to prevent unauthorized use, dissemination or
publication thereof, as it uses to protect its own information
of a similar confidential nature.
3. The obligations under this Section II shall terminate three
years or, if filled in here, then 10 years after the Effective
Date.
III. WARRANTIES
4. A receiving party may pass Confidential Information to its
Associates and hereby warrants that these Associates will
abide by all terms and conditions of this Agreement.
5. Each party warrants that it has the right to make the
disclosures under this Agreement.
Date: 10/1/03 [****] CONFIDENTIAL Page 19 of 43
6. NO OTHER WARRANTIES ARE MADE BY EITHER PARTY UNDER THIS
AGREEMENT. CONFIDENTIAL INFORMATION IS PROVIDED "AS IS" WITH
NO WARRANTY AS TO ITS ACCURACY OR COMPLETENESS.
IV. MISCELLANEOUS
7. Without regard to choice of law provisions, this Agreement is
governed by and will be construed in accordance with the laws
of the State of New York and the USA or, if filled in here,
then the laws of: ______
8. Neither party acquires any intellectual property rights under
this Agreement except the rights granted in Section 11.1.
9. This Agreement imposes no obligation on either party to
purchase, sell, license, transfer or otherwise dispose of any
technology, services or products.
10. This Agreement does not create any agency or partnership
relationship.
Philips Participant
Philips Medical Systems North America Company Company Name: BRAEMAR, Inc
Address: 0000 Xxxxxxxxx Xxxx Address: 00000 Xxxx Xxxxx
Xxxxxxx: Xxxxxxx XX 00000 Address: Xxxxxxxxxx, XX 00000 Functional Mgr.'s Signature:
Authorized Signature: Xxxxx Xxxxxxxxxxx
Printed Name: Xxx Xxxxxxxxxx Printed Name: Xxxxxx Xxxxxxxxxxx
Title, Entity/Division: Marketing/OP Manager CDY Title: Vice President and General Manager
Date: 10/1/03 [****] CONFIDENTIAL Page 20 of 43
EXHIBIT F - THREE PARTY ESCROW AGREEMENT
BY
AND
AMONG
PHILIPS MEDICAL SYSTEMS,
BRAEMAR, INC.
AND
DSI TECHNOLOGY ESCROW SERVICES, INC.
DATED
OCTOBER 1, 2003
Date: 10/1/03 [****] CONFIDENTIAL Page 21 of 43
THREE PARTY ESCROW AGREEMENT
Account Number: __________________________
THIS ESCROW AGREEMENT is entered into by and among, DSI TECHNOLOGY ESCROW
SERVICES, INC. a Delaware corporation located at 0000 Xxx Xxxx Xxxxx, Xxxxx 000,
Xxx Xxxxx, XX 00000 ("DSI"); BRAEMAR, Inc., a corporation with offices at 00000
Xxxx Xxxxx, Xxxxxxxxxx, XX 00000 ("Supplier") and Philips Medical Systems, a
Delaware corporation with principal offices at 0000 Xxxxxxxxx Xxxx, Xxxxxxx XX
00000 ("Philips").
AGREEMENT
The parties hereby agree as follows:
1. GENERAL. This Escrow Agreement is entered into in furtherance of the
provisions and objectives of that certain OEM Purchase Agreement
effective as of September 1, 2003 between Philips and Supplier (the
"Master Agreement") regarding supply of those products specified in
such Master Agreement ("Product(s)"). This Escrow Agreement is
effective as of (the "Effective Date"). Contrary terms contained in the
Master Agreement will supersede and take precedence over the terms
contained in this Escrow Agreement.
2. DEPOSIT.
2.1 Supplier will deposit with DSI those materials specified in
Exhibit I (the "Deposit"), and keep the Deposit at the current
revision level on a quarterly basis commencing with the
Effective Date. All Deposits will be in either printed or
machine-readable format. The Deposit must also include current
regulatory concurrence letters.
2.2 In addition, during the initial or any renewal term of this
Escrow Agreement, Supplier will promptly update the Deposit
whenever Supplier issues a new version or release of the
product that is the subject matter of the Master Agreement, or
otherwise makes any revisions or changes to its manufacturing
process relating to the Deposit. Supplier also agrees to
comply with DSI's reasonable requests for the replacement of
Deposit materials likely to physically degrade.
2.3 DSI will destroy any replaced Deposit unless Philips instructs
DSI to retain it within twenty (20) days of notice from DSI of
such replacement. Retention of the replaced Deposit may incur
an additional fee, as specified in DSI's fee schedule.
3. VERIFICATION AND DELIVERY. The Deposit will be packaged for storage as
reasonably instructed by DSI and accompanied by a cover sheet
identifying the contents as indicated in Exhibit 2. Risk of loss or
damage to the Deposit during shipment will lie with the party sending
it. Philips will have the right to verify, at Supplier's site, each
Deposit before shipment. Supplier will give Philips fifteen (15) days
advance written notice and opportunity to inspect, witness compilation,
test and otherwise reasonably assure itself of the contents of the
Deposit to be shipped. Philips may authorize a third party to act in
its
Date: 10/1/03 [****] CONFIDENTIAL Page 22 of 43
place, provided that the third party agrees to any confidentially
obligations assumed by Philips in the Master Agreement. Supplier hereby
grants Philips and DSI, free of charge, the right to use the facilities
of Supplier, including its computer systems, to verify the Deposit.
Supplier will make available technical support personnel as necessary
to verify the Deposit.
4. STORAGE OF DEPOSIT. DSI will safe keep the Deposit in a security vault
and exercise the same high standard of care to protect the Deposit
which DSI would use to protect other items of this nature which DSI
might hold, but in no event less than that standard of care customary
in the industry.
5. USE AND NONDISCLOSURE. Except as provided in this Escrow Agreement, DSI
will not disclose or make any use of the Deposit, nor will DSI disclose
or make use of any confidential information provided to DSI by Supplier
or Philips in connection with this Escrow Agreement without the prior
written consent of Supplier or Philips, respectively. These obligations
will continue indefinitely notwithstanding termination of this Escrow
Agreement.
6. RECORDS AND AUDIT RIGHTS. DSI will keep complete written records of the
activities undertaken and materials prepared pursuant to this Escrow
Agreement. Upon reasonable notice to DSI during the term of this Escrow
Agreement, Supplier and Philips will be entitled to inspect the records
of DSI with respect to this Escrow Agreement at reasonable times during
normal business hours at DSI's facilities and to inspect the Deposit
required then to be held by DSI; Provided, however, that Supplier shall
be given the opportunity to be present whenever Philips inspects the
Deposit.
7. RELEASE OF DEPOSIT
7.1. The Deposit will be released to Philips upon the occurrence of
any of the following events:
Failure of Supplier, within ninety (90) days after Philips'
giving notice, to fulfill a material obligation as required in
the Master Agreement (e.g. manufacturing, required engineering
changes, support);
Failure of Supplier, within (90) days after Philips' giving
notice, to fulfill its obligations to update the Deposit as
required hereunder;
Immediately upon breach by Supplier of Section 11.6 or 11.7
of the Master Agreement;
Failure of the Supplier to continue to do business in the
ordinary course;
Unless prohibited by law, the filing of a petition by or
against Supplier for relief under the United States Bankruptcy
Code; a general assignment for the benefit of creditors by
Supplier; the appointment of a general receiver or trustee in
bankruptcy for Supplier's business or property; or action by
Supplier under any state insolvency or similar law for the
purpose of its bankruptcy, reorganization,
Date: 10/1/03 [****] CONFIDENTIAL Page 23 of 43
or liquidation. However, the occurrence of the described
events will not apply if, within thirty days thereafter,
Supplier (including its receiver or trustee in bankruptcy)
provides assurances, reasonably satisfactory to Philips, of
Supplier's continuing ability and willingness to fulfill all
of its material obligations under the Master Agreement; or
The occurrence of a force majeure, event relating to an
obligation of Supplier under the Master Agreement uncured
within 120 days after its occurrence.
7.2 If Philips notifies DSI of the occurrence of a release
condition as defined above, and a request for release, DSI
will immediately notify Supplier and provide Supplier with a
copy of the notice from Philips. Supplier will have ten (10)
business days from the date DSI sends its notice to notify
DSI, with a copy to Philips, that the release condition has
not occurred or has been cured. Failing such timely notice,
DSI will release a copy of the Deposit to Philips. However, if
DSI receives timely notice from Supplier, DSI will not, unless
Philips exercises its rights to the procedures as specified
below in Section 9, release a copy of the Deposit but will
instead institute the Dispute Resolution Process in Section 10
within ten (10) business days of such timely notice.
8. RELEASE PENDING DETERMINATION. In the event that Philips, despite
Supplier's assertion otherwise, determines in good faith that an
uncured release condition has occurred, then Philips will have the
right to demand immediate release of the Deposit, subject to the
following. Prior to the release of the Deposit, Philips will be
required to post a bond with Supplier, payable to Supplier, in an
amount to be mutually agreed not to exceed the total amount Philips
would owe Supplier under the Master Agreement with respect to the
Product that is subject of the Deposit. Should the Dispute Resolution
Process ultimately determine that an uncured release condition has in
fact not occurred, then Philips will immediately return the Deposit to
DSI and Philips will release the bond to Supplier. Philips' aggregate
liability to Supplier under this Article for causing a release of the
Deposit under this Section 8 based on an alleged uncured release
condition which has in fact not occurred will be limited to the sum of:
(a) the $1,000 royalties for each XX 0000xxx XX 2000 Software Kit
payable to Supplier in accordance with Section 12.2 of the Master
Agreement; and (b) $2,000 for each CH 2000 and $500 for each CH 2000
Software Kit which is sold by Philips after such release of the
Deposit.
9. DISPUTE RESOLUTION PROCESS. DSI will first notify Supplier and Philips
in writing of contrary instructions from Philips and Supplier for
release of the Deposit. Within ten (10) business days after the date
the notice is sent by DSI, three neutral, independent arbitrators will
be appointed from a list supplied by either the American Arbitration
Association or JAMS Endispute, one each by Supplier, Philips and DSI.
Each party will notify the others of its arbitrator's identity within
the ten-day (10) period or forfeit its right to appoint one.
On the tenth (10th) business day after the dispute notice from DSI
notifying Supplier and Philips of the receipt of contrary instructions,
the arbitrators will meet at the offices of DSI and will hear testimony
and other evidence that Supplier and Philips may wish to
Date: 10/1/03 [****] CONFIDENTIAL Page 24 of 43
present with respect to the dispute. The meetings will proceed with at
least two appointed arbitrators who attend the meetings, and will be
conducted from 8:00 am. to 5:00 p.m. on no more than five (5)
consecutive business days, national holidays excluded. Philips will
present up to two days of evidence followed by up to two days of
presentation from Supplier, followed by a final day reserved for
rebuttal by each party in the morning and afternoon, respectively.
Supplier, Philips and DSI agree that the evidence and, results of the
hearings will not be disclosed to third parties.
Within two (2) business days after the close of the presentations, the
arbitrators will resolve the dispute by majority vote. An abstention
will be deemed a vote in favor of release. The parties agree that this
decision will be final, binding, not subject to appeal and enforceable
by a court of competent jurisdiction. All costs of the arbitrators will
be borne by the unsuccessful party.
10. JOINT RELEASE. Philips and Supplier may, by joint written instruction
to DSI, authorize the release of the Deposit or a copy of it to the
party named in the instruction.
11. RIGHTS IN THE DEPOSIT
11.1 DSI's Rights. Supplier hereby grants to DSI ownership of and
title to those physical copies of the Deposit delivered to DSI
subject to DSI's agreement to use, reproduce and release the
Deposit only as necessary to fulfill its obligations under
this Escrow Agreement.
11.2 Philips' Rights. Supplier hereby grants to Philips a present
license in the intellectual property content of the Deposit,
exercisable upon release of the Deposit by DSI to Philips.
Philips' license is worldwide, non-exclusive and royalty
bearing in accordance with Section 12.2 of the Master
agreement. Philips' license is limited in duration to the term
of the Master Agreement, as may be renewed. Philips' license
is restricted to the furtherance of Philips' rights or
fulfillment of Supplier's obligations as set forth in the
Master Agreement, as may be amended or extended. If the Master
Agreement is terminated before, concurrently with or after the
exercise of Philips' right to access the Deposit under this
Escrow Agreement, the duration and scope of the foregoing
license will be interpreted as if the Master Agreement was not
so terminated. The foregoing license includes the right to
reproduce, translate, modify and distribute copies,
translations, derivative works, compilations and collective
works of any Deposit user documentation or software (in
machine-readable form only). For all other intellectual
property content of the Deposit, Philips' license includes the
right to make, have made, use, sell, import, offer for sale
and distribute products based on the Deposit under any
intellectual property right including patent, copyright, mask
work, trade secret or other similar right. In all cases,
Philips' license includes the right to use subcontractors or
sublicensees provided they comply with any confidentiality
obligations assumed by Philips in the Master Agreement. In
addition, Supplier grants to Philips the right to use the
materials from Supplier's vendors and subcontractors
reasonably required for the manufacture, support and
distribution of the products to which the Deposit relates
("Related Materials") or
Date: 10/1/03 [****] CONFIDENTIAL Page 25 of 43
will use its best efforts to allow Philips to procure the
Related Materials from Supplier's vendors and subcontractors.
Philips will treat the Deposit and Related Materials as
confidential information according to the terms of the Master
Agreement. If permitted by local authority, Supplier hereby
grants to Philips the right to utilize its manufacturing and
distribution approvals anywhere in the world.
12. TERM AND TERMINATION. This Escrow Agreement will have an initial term
of one (1) year, renewable upon receipt by DSI of the specified renewal
fee. If DSI does not receive the renewal fee by the anniversary date of
this Escrow Agreement, DSI will give notice to Supplier and Philips. If
the fee is not received from Supplier or Philips within thirty (30)
days of such notice, this Escrow Agreement will expire. Upon expiration
of this Escrow Agreement, DSI will, at Supplier's option, either
destroy or return the Deposit to Supplier. All obligations of DSI under
this Escrow Agreement will terminate thereafter, except for those
stated in the Use and Nondisclosure Section of this Escrow Agreement.
13. FEES. Unless otherwise agreed, all fees will be due from Philips in
full upon receipt of DSI's invoice. Fees will be those specified in
DSI's schedule of fees in effect for the initial term of this Escrow
Agreement plus taxes. DSI shall notify Supplier and Philips at least
ninety (90) days prior to expiration of the initial term (or any
renewal term) of this Escrow Agreement of any scheduled increase for
the succeeding renewal term.
14. INDEMNIFICATION. DSI will be responsible for performing its obligations
under this Agreement and to act in a reasonable and prudent manner with
regard to this escrow arrangement. Provided DSI has acted in the manner
stated in the preceding sentence, Supplier and Philips each agree to
indemnify, defend and hold harmless DSI from any and all claims,
actions, damages, arbitration fees and expenses, costs, attorney's fees
and other liabilities incurred by DSI relating in any way to this
escrow arrangement.
15. MISCELLANEOUS.
15.1 Account Representatives and Notices. Supplier, Philips and DSI
will each designate an authorized individual(s) to receive
notices and otherwise act on behalf of Supplier in connection
with this Escrow Agreement, as set forth in Exhibit 3.
Representatives may be changed by written notice to the other
parties. Notices are validly given upon the earlier of
confirmed receipt by the receiving party or three days after
dispatch by courier or certified mail, postage prepaid,
properly addressed to the receiving party. Notices may also be
delivered by telefax and will be deemed received upon oral or
written confirmation of receipt. Unless otherwise provided in
this Agreement, all documents and communications may be
delivered by first class mail.
15.2 Authenticity. DSI may act in reliance upon any instruction;
instrument or signature believed to be genuine and may assume
that it has been duly authorized. DSI will not be required to
inquire into the truth or evaluate the merit of any statement
or representation contained in any notice or document.
Date: 10/1/03 [****] CONFIDENTIAL Page 26 of 43
15.3 Merger. The Master Agreement and this Escrow Agreement,
including the Exhibits, constitutes the entire agreement
between the parties concerning the subject matter hereof and
will supersede all previous communications, representations,
understandings, and agreements, oral or written, between the
parties. DSI is not a party to the License Agreement between
Supplier and Philips and has no knowledge of the terms or
provisions of any such License Agreement. DSI's only
obligations to Supplier and Philips are as set forth in this
Agreement.
15.4 Depositor's Representations. Supplier represents as follows:
Supplier lawfully possesses all of the Deposit Materials
deposited with DSI; With respect to all of the Deposit
Materials, Supplier has the right and authority to grant to
DSI and Philips the rights as provided in this Agreement; The
Deposit Materials are not subject to any lien or other
encumbrance.
15.5 Right to Make Copies. DSI shall have the right to make copies
of the Deposit Materials as reasonably necessary to perform
this Agreement. DSI shall copy all copyright, nondisclosure,
and other proprietary notices and titles contained on the
Deposit Materials onto any copies made by DSI. With all
Deposit Materials submitted to DSI, Supplier shall provide any
and all instructions as may be necessary to duplicate the
Deposit Materials including but not limited to the hardware
and/or software needed.
15.6 Disposition of Deposit Materials Upon Termination. Subject to
the foregoing termination provisions, and upon termination of
this Agreement, DSI shall destroy, return, or otherwise
deliver the Deposit Materials in accordance with Supplier's
instructions. If there are no instructions, DSI may, at its
sole discretion, destroy the Deposit Materials or return them
to Supplier. DSI shall have no obligation to destroy or return
the Deposit Materials if the Deposit Materials are subject to
another escrow agreement with DSI.
15.7 Regulations. Supplier and Philips are responsible for and
warrant compliance with all applicable laws, rules and
regulations, including but not limited to customs laws,
import, export, and re-export laws and government regulations
of any country from or to which the Deposit Materials may be
delivered in accordance with the provisions of this Agreement.
15.8 Assignment. No party may assign any rights or obligations of
this Escrow Agreement without the prior written consent of the
others. Notwithstanding the foregoing, PHILIPS, or its
permitted successive assignees or transferees, may assign or
transfer this Agreement or delegate any rights or obligations
hereunder without consent in connection with a merger,
reorganization, transfer, sale of assets or product lines, or
change of control or ownership of PHILIPS or all or
substantially all of the assets or business of the Healthcare
Solutions Group, or its permitted successive assignees or
transferees. Without limiting the foregoing, this Agreement
will be binding upon and inure to the benefit of the parties
and their permitted successors and assigns. However, DSI shall
have no obligation in performing this Agreement to recognized
any successor or assign of Depositor or
Date: 10/1/03 [****] CONFIDENTIAL Page 27 of 43
Preferred Beneficiary unless DSI receives clear, authoritative
and conclusive written evidence of the change of parties.
15.9 Exhibits. Each Exhibit attached to this Agreement is deemed a
part of this Escrow Agreement and incorporated herein wherever
reference to it is made.
15.10 Independent Contractors. The relationship of the parties
established under this Agreement is that of independent
contractors and neither party is a partner, employee, agent
or joint venturer of or with the other.
15.11 No Waiver. The waiver of any term, condition, or provision of
this Agreement must be in writing and signed by an authorized
representative of the waiving party. Any such waiver will not
be construed as a waiver of any other term, condition, or
provision except as provided in writing, nor as a waiver of
any subsequent breach of the same term, condition, or
provision.
15.12 Definition Of Days. All references in this Agreement to "days"
will, unless otherwise specified herein, mean calendar days.
15.13 Headings. The Section headings used in this Agreement are for
convenience of reference only. They will not limit or extend
the meaning of any provision of this Agreement, and will not
be relevant in interpreting any provision of this Agreement.
15.14 No Publication. Neither party may publicize or disclose to any
third party, without the written consent of the other party,
the terms of this Agreement. Without limiting the generality
of the foregoing sentence, no press releases may be made
without the mutual written consent of each party.
15.15 Severability. If any provision in this Agreement is held
invalid or unenforceable by a body of competent jurisdiction,
such provision will be modified or, if necessary, severed to
the extent necessary to eliminate such invalidity or
unenforceability. The parties agree to negotiate in good faith
a valid, enforceable substitute provision that most nearly
effects the parties' original intent in entering into this
Agreement or to provide an equitable adjustment in the event
no such provision can be added. The other provisions of this
Agreement will remain in full force and effect.
15.16 Governing Law. This Agreement will be governed in all respects
by the laws of the State of California without reference to
any choice of laws provisions. The parties hereby consent to
the exclusive jurisdiction and venue of the courts located in
California. The parties hereby waive any application of the
United Nations Convention on the Sale of Goods with respect to
the performance or interpretation of this Agreement.
15.17 Counterparts. This Agreement may be executed in counterparts,
each of which will be deemed an original.
Date: 10/1/03 [****] CONFIDENTIAL Page 28 of 43
EXHIBIT 1: DEPOSIT
Hardware Manufacturing Materials (whenever relevant)
----------------------------------------------------
1. Design Specifications for the Product.
2. Electronic or paper copies of manufacturing drawings,
specifications, schematics, and other drawings pertinent to
manufacture Products and Spare Parts at the revision level
then in effect.
3. Final test procedures.
4. Printed circuit board layouts in machine-readable form.
5. Materials lists, broken down by assembly, including reference
designators.
6. Source code of and master samples of programmable hardware,
such as ROM/PROM firmware, PALs,
7. Vendor contact information.
Source Code (whenever relevant)
-------------------------------
1. A copy of source code.
2. A description of the development system, hardware, software,
compilers and the like sufficient for Philips to continue
development and support of the software included in the Master
Agreement.
EXHIBIT 2: DEPOSIT COVER SHEET
Deposit Account Name ____________________________
Deposit Account Number _________________________
_____ Deposit _____ Supplement to Deposit _____ Replacement of Deposit
Program Name ____________________________________________________ Version _____
Date _____________CPU/OS _____________ Compiler______________
Application ___________
Utilities needed ___________
Special Operating Instructions ________________________________________________
Media _______________________________________ Quantity _____
Date: 10/1/03 [****] CONFIDENTIAL Page 29 of 43
EXHIBIT 3: ACCOUNT REPRESENTATIVES
SUPPLIER:
---------
Copy to:
--------
Name
---------------------------------------
Title
--------------------------------------
Address
-------------------------------------
-------------------------------
Phone
--------------------------------------
PHILIPS:
--------
Copy to:
--------
Name
---------------------------------------
Title
--------------------------------------
Address
-------------------------------------
-------------------------------
Phone
--------------------------------------
HOLDER:
-------
Name
---------------------------------------
Date: 10/1/03 [****] CONFIDENTIAL Page 30 of 43
EXHIBIT G - SMI AGREEMENT
1. This Agreement is effective as of _____4/01/03______ (Effective Date)
between Philips Medical Systems, 0000 Xxxxxxxxx Xxxx, Xxxxxxx, XX 00000
XXX, and BRAEMAR INC., XXXXXXXXXX, XX 00000
2. The intent of this Agreement is to outline items and topics specific to
the Supplier Managed Inventory (SMI) Program. This Agreement, and
attached exhibits, represent the entire agreement of the parties with
respect to supply of Philips Product and notice of objection to any
additional or different terms or conditions is hereby given. No
modification of any of the terms or conditions of this Agreement shall
be binding on either party unless in wilting and signed by the
authorized representative of each party. In the event of a conflict
between the terms in the body of this Agreement and the terms in the
Exhibits to this Agreement or purchase order terms, the terms stated in
the body of this Agreement shall control.
3. Supplier shall deliver the finished goods inventory listed in Exhibit B
to Philips as Philips Product.
4. The Agreement Term shall be for a period of [ONE (1) YEAR], unless
otherwise terminated. This Term may be extended by mutual agreement
between Philips and Supplier. Upon expiration of the Term, existing
stock will be carried over to the next agreement.
5. This SMI Agreement may be terminated at the option of either party upon
[SIXTY (60)] days written notice to the other. Philips will only be
responsible for finished goods inventory as described in Exhibit A plus
raw materials and work in process required to support the Upper Stock
Limits (USL) and Lower Stock Limits (LSL) for the finished goods
inventory, up to the maximum commitment levels associated with each
part number.
Upon notice of termination of Agreement, Supplier agrees (a) to offer
Philips first right of purchase, then (b) to dispose of finished goods
inventory described in Exhibit A, raw materials and work in process at
no charge to Philips where possible, and to inform Philips of potential
charges for disposal otherwise. Supplier agrees not to sell, transfer,
distribute or otherwise convey any part, component, product or service
-- bearing or incorporating Philips Marks, part numbers or other
identifiers, including any Philips packaging, copyrights or code, to
any other party. Upon Philips approval, Supplier will remove from all
Philips Products at Supplier any such Philips Marks or identifiers,
even if such removal would require destruction of the Philips Products.
Supplier further agrees not to represent that such Philips Products are
built for Philips or to Philips specifications. Supplier will defend
and indemnify Philips against any claims, losses, liabilities, costs or
expenses that Philips may incur as a result of Supplier's breach of
this obligation.
The rights and obligations of this Agreement, which by their nature
extend beyond the termination or expiration of this Agreement, shall
survive and continue after any termination or expiration of this
Agreement.
6. Philips will issue blanket purchase orders to serve as authorizations
for receipt of Philips Product. Supplier will use the SMI forecasts,
USL and LSL in determining shipment quantity and frequency for each
Philips Product listed in Exhibit A. At any time during the
Date: 10/1/03 [****] CONFIDENTIAL Page 31 of 43
term of this agreement, SMI forecast quantities may be increased or
decreased by Philips. If during the Term changed prices or price
formulas are put in effect by mutual agreement of Philips and Supplier,
or reduced prices or price formulas are otherwise put in effect by
Supplier, such prices or price formulas (if resulting in lower prices
than the then current price) will apply to all purchase orders issued
by Philips after the effective date of such prices or price formulas
and to all unshipped purchase orders.
7. Supplier has the responsibility to direct their procurement,
production, and shipping activities in part by utilizing the tools/data
available in the Noctume daily reports to deliver Philips Product at
levels driven by the agreed upon metrics/parameters. The primary
measures of success are the Supplier's ability to maintain inventory
levels between the USL and LSL, and further to meet the targeted
inventory levels for each part. If due to Supplier's failure to timely
ship Philips Product the specified method of transportation would not
permit Supplier to maintain the LSL, the actions and consequences
specified in Section 3.2 of Philips Purchase Order Terms and Conditions
(A-Q2920-40540 Rev. A) apply. If the Supplier exceeds the USL by more
than three days of inventory over the Average Usage reported by
Nocturne for the previous thirty (30) days, the actions and
consequences specified in Section 3.3 of Philips Purchase Order Terms
and Conditions (A-Q2920-40540 Rev. A) apply.
8. The parties designated the following persons as their agreement
Coordinators. Each party will advise the other party in writing of any
successor or designee of the named Agreement Coordinator. Unless
otherwise agreed by the parties, notices concerning this Agreement will
be provided to the appropriate Agreement Coordinator and addressed as
follows:
------------------------------------------------------------ ---------------------------------------------------------
PHILIPS MEDICAL SYSTEMS BRAEMAR INC.
------------------------------------------------------------ ---------------------------------------------------------
Coordinator: Xx Xxxxxxx Coordinator: Xxxxx Xxxxxxxxxxx President
------------------------------------------------------------ ---------------------------------------------------------
0000 XXXXXXXXX XXXX 00000 XXXX XXXXX
XXXXXXX, XX 00000 XXXXXXXXXX, XXXXXXXXX 00000.0000
------------------------------------------------------------ ---------------------------------------------------------
Phone: [****] Phone: 000-000-0000
Fax: [****] Fax: 000-000-0000
------------------------------------------------------------ ---------------------------------------------------------
By signing and dating this document, the parties below indicate their agreement
with and acceptance of this Agreement, including all Exhibits.
/s/ Xxxxx Xxxxxxxxxxx
------------------------------------- --------------------------------------
Name Date Name Date
Title: Title: President & CEO
--------------------------- --------------------------------
PHILIPS MEDICAL SYSTEMS BRAEMAR INC.
Date: 10/1/03 [****] CONFIDENTIAL Page 32 of 43
EXHIBIT H - NEW EVENT RECORDER WITH LCD SPECIFICATION
(EASITRAK 12 REPLACEMENT)
1. SCOPE
This device is intended to replace the EASITrak model ER730 product. The design
is to incorporate the ER730 case with new LCD and utilize the new technology
(ER800) platform. Hardware, interfaces, and programming, etc. will be the same
as existing ER730 device as much as possible to speed time to market and
minimize costs. This document is to define the market requirements for an EGG
measurement device to be used by the patient in the home. The device will
automatically send the ECG data file via RF to another device in the house. The
cost of the device is a primary consideration. Cost goal does not include
accessories (manuals, cases, lead set, or batteries) but these designs are to be
equally cost effective.
This document is to be superseded by an Engineering Specification at an
appropriate point in the project as defined by the project plan.
2. APPLICABLE DEVICE REQUIREMENTS: THE DEVICE WILL MEET THE REQUIREMENTS
OF THE FOLLOWING:
2.1. ANSI/AAMI EC38-1998
2.2. FDA 510K
2.3. Medical Device Directive
2.4. FDAQSR
2.5. EN60601-1-1 Safety
2.6. EN60601-1-2 Emissions & Immunity
2.7. EN60601-2-47
3. DEVICE DESIGN
3.1. The ERNG is to incorporate all the features and functions of
the current EASITrak and the new ER800 series device with the
following requirements of this document.
3.2. Physical Requirements
3.2.1. Case Design
3.2.1.1. [****]
3.2.1.2. [****]
3.2.1.3. [****]
3.2.1.4. [****]
3.2.1.5. [****]
3.2.1.6. [****]
3.2.1.7. [****]
3.2.1.8. [****]
3.2.1.9. [****]
3.2.1.10. [****]
Date: 10/1/03 [****] CONFIDENTIAL Page 33 of 43
3.2.1.11. [****]
3.2.1.12. [****]
3.2.1.13. [****]
3.2.2. Case LCD
3.2.2.1. [****]
3.2.2.2. [****]
3.2.3. Case Power
3.2.3.1. [****]
3.2.3.2. [****]
3.2.3.3. [****]
3.2.3.4. [****]
3.2.4. Case Ruggedness
3.2.4.1. [****]
3.2.4.2. [****]
3.2.4.3. [****]
3.2.4.4. [****]
3.2.5. Patient Cabling
3.2.5.1. [****]
3.2.5.2. [****]
3.2.5.3. [****]
3.2.5.4. [****]
3.2.5.5. [****]
3.2.6. Programming
3.2.6.1. [****]
3.2.6.2. [****]
3.2.6.3. [****]
3.2.6.4. [****]
3.2.6.5. [****]
3.2.7. Speaker
3.2.7.1. [****]
3.2.7.2. [****]
3.2.7.3. [****]
3.2.7.4. [****]
3.3. Functional requirements
3.3.1. Algorithm
3.3.1.1. [****]
3.3.1.2. [****]
3.3.1.3. [****]
3.3.1.4. [****]
Date: 10/1/03 [****] CONFIDENTIAL Page 34 of 43
3.3.1.5. [****]
3.3.1.6. [****]
3.3.1.7. [****]
3.3.1.8. [****]
3.3.2. Data Communication
3.3.2.1. [****]
3.3.2.2. [****]
3.3.2.3. [****]
3.3.2.4. [****]
3.3.2.5. [****]
3.3.2.6. [****]
3.3.2.7. [****]
3.3.2.8. [****]
3.3.2.9. [****]
3.3.2.10. [****]
3.3.3. Patient Cable
3.3.3.1. [****]
3.3.3.2. [****]
3.3.3.3. [****]
3.3.3.4. [****]
3.3.3.5. [****]
3.3.3.6. [****]
3.3.4. Program Protocols - Pre/Post (exact) recording time
TBD by Philips
3.3.4.1. [****]
3.3.4.2. [****]
3.3.4.3. [****]
3.3.4.4. [****]
3.3.4.5. [****]
3.3.4.5.1. [****]
3.3.4.5.2. [****]
3.3.4.5.3. [****]
3.3.4.5.4. [****]
3.3.4.5.5. [****]
3.3.4.5.6. [****]
3.3.4.6. [****]
3.3.5. Audible Indicators - Polite Tones
3.3.5.1. [****]
3.3.5.2. [****]
3.3.5.3. [****]
3.3.5.4. [****]
3.3.5.5. [****]
3.3.5.6. [****]
Date: 10/1/03 [****] CONFIDENTIAL Page 35 of 43
3.3.6. Battery Life
3.3.6.1. [****]
3.3.6.2. [****]
3.3.7. Upgrade Strategy
3.3.7.1. [****]
3.3.7.2. [****]
3.3.7.3. [****]
3.4. Electrical Requirements similar new technology ER800 platform
3.4.1. [****]
3.4.2. [****]
3.4.3. [****]
3.4.4. [****]
3.4.5. [****]
3.4.6. [****]
3.4.7. [****]
3.4.8. [****]
3.4.9. [****]
3.4.10. [****]
3.5. Data Communications requirement
3.5.1. [****]
3.5.2. [****]
3.5.3. [****]
3.6. Patient Interface requirements
3.6.1. [****]
3.6.2. [****]
3.6.3. [****]
3.6.4. [****]
3.6.4.1. [****]
3.6.4.2. [****]
3.6.4.3. [****]
3.6.4.4. [****]
3.6.4.5. [****]
3.6.4.6. [****]
3.7. Language Support requirements
3.7.1. Same as [****]
3.7.2. Will support Philips CE Xxxx
Date: 10/1/03 [****] CONFIDENTIAL Page 36 of 43
3.7.3. Operation/Service manuals must be localized and
available on a single CD - Dutch, French, German,
Italian, Spanish
3.8. ESD/EMC requirements
3.8.1. [****]
3.8.2. [****]
4. DESIGN VERIFICATION AND VALIDATION
4.1. [****]
4.2. [****]
4.3. [****]
5. PROJECT DELIVERABLES
5.1. [****]
5.2. [****]
5.3. [****]
5.4. [****]
5.5. [****]
5.6. [****]
5.7. [****]
6. NRE REQUIREMENTS
6.1. [****]
6.1.1. [****]
6.1.1.1. [****]
6.1.1.2. [****]
6.1.1.3. [****]
6.1.2. [****]
6.1.3. [****]
6.1.4. [****]
6.1.5. [****]
7. DEVICE COST
7.1. Complete kit cost including device, cable, case, IFU,
physician user IFU, foam, patient use card will be $[****] per
unit.
Date: 10/1/03 [****] CONFIDENTIAL Page 37 of 43
8. PRODUCT FORECAST
8.1. Philips to provide six month rolling forecast
9. PROJECTED SCHEDULE
9.1. [****]
9.2. [****]
9.3. [****]
9.4. [****]
Date: 10/1/03 [****] CONFIDENTIAL Page 38 of 43
EXHIBIT I - NEW EVENT RECORDER WITHOUT LCD SPECIFICATION
(HOMETRAK REPLACEMENT)
1.0 SCOPE
This document is intended to define the market requirements for a next
generation Philips Event Recorder targeted at the low cost market segment. The
device is not to have an LCD and provide similar functionality as the ER730 with
ER 800 platform technology - I channel recording, with and without algorithm,
basic feature set. It is designed to be a low end offering along with an updated
EASITrak with LCD full-featured model. The Low Cost ER will be cased in the
EASITrak case (without LCD) and will be offered with the updated LCD model to
Philips customers. The Low Cost ER will replace the HomeTrak device. This
document is to define the market requirements for an ECG measurement device to
be used by the patient in the home. The device will automatically send the ECG
data file via RF to another device in the house. The cost of the device is a
primary consideration. Cost goal does not include accessories (manuals, cases,
lead set, or batteries) but these designs are to be equally cost effective.
Utilize parts from the ER730 and DigiTrak Plus programs if they are compatible
with the design concepts of this ER. Likely candidates may be patient cables,
battery doors, belt clips, necklaces, program plugs, etc.
2. APPLICABLE DEVICE REQUIREMENTS: THE DEVICE WILL MEET THE REQUIREMENTS
OF THE FOLLOWING:
2.1. ANSI/AAMI EC38-1998
2.2. FDA 510K
2.3. Medical Device Directive
2.4. FDA QSR
2.5. EN60601-1-1 Safety
2.6. EN60601-1-2 Emissions & Immunity
2.7. EN606601-2-47
3. DEVICE DESIGN
3.1. The [****] is a low cost design intended to incorporate the
BASIC features and functions of the ER800 series device with
the following requirements of this document. The device will
not incorporate lead loss or two channel recording.
3.2. Physical Requirements
3.2.1. Case Design
3.2.1.1. [****]
3.2.1.2. [****]
3.2.1.3. [****]
3.2.1.4. [****]
3.2.1.5. [****]
3.2.1.6. [****]
3.2.1.7. [****]
Date: 10/1/03 [****] CONFIDENTIAL Page 39 of 43
3.2.1.8. [****]
3.2.1.9. [****]
3.2.1.10. [****]
3.2.1.11. [****]
3.2.2. Case Power
3.2.2.1. [****]
3.2.2.2. [****]
3.2.2.3. [****]
3.2.3. Case Ruggedness
3.2.3.1. [****]
3.2.3.2. [****]
3.2.3.3. [****]
3.2.3.4. [****]
3.2.4. Patient Cabling
3.2.4.1. [****]
3.2.4.2. [****]
3.2.5. Programming
3.2.5.1. [****]
3.2.5.2. [****]
3.2.5.3. [****]
3.2.5.4. [****]
3.2.5.5. [****]
3.2.5.6. [****]
3.2.5.7. [****]
3.2.5.8. [****]
3.2.5.9. [****]
3.2.5.10. [****]
3.2.5.11. [****]
3.2.5.12. [****]
3.2.5.13. [****]
3.2.6. Speaker
3.2.6.1. [****]
3.2.6.2. [****]
3.2.6.3. [****]
3.2.6.4. [****]
3.2.6.5. [****]
3.2.6.6. [****]
3.3. Functional requirements
3.3.1. Algorithm
Date: 10/1/03 [****] CONFIDENTIAL Page 40 of 43
3.3.1.1. [****]
3.3.1.2. [****]
3.3.1.3. [****]
3.3.1.4. [****]
3.3.1.5. [****]
3.3.1.6. [****]
3.3.1.7. [****]
3.3.1.8. [****]
3.3.1.9. [****]
3.3.2. Recording Time
3.3.2.1. [****]
3.3.2.2. [****]
3.3.2.3. [****]
3.3.2.4. [****]
3.3.2.5. [****]
3.3.3. Data Communication
3.3.3.1. [****]
3.3.3.2. [****]
3.3.3.3. [****]
3.3.3.4. [****]
3.3.3.5. [****]
3.3.3.6. [****]
3.3.3.7. [****]
3.3.3.8. [****]
3.3.3.9. [****]
3.3.3.10. [****]
3.3.3.11. [****]
3.3.3.12. [****]
3.3.3.13. [****]
3.3.4. Audible Indicators - Polite Tones
3.3.4.1. [****]
3.3.4.2. [****]
3.3.4.3. [****]
3.3.4.4. [****]
3.3.4.5. [****]
3.3.4.6. [****]
3.3.5. Battery Life
3.3.5.1. [****]
3.3.5.2. [****]
3.3.6. Upgrade Strategy
3.3.6.1. [****]
Date: 10/1/03 [****] CONFIDENTIAL Page 41 of 43
3.3.6.2. [****]
3.4. Electrical Requirements similar new technology ER800 platform
3.4.1. [****]
3.4.2. [****]
3.4.3. [****]
3.4.4. [****]
3.4.5. [****]
3.4.6. [****]
3.4.7. [****]
3.4.8. [****]
3.4.9. [****]
3.4.10. [****]
3.5. Data Communications requirement
3.5.1. [****]
3.5.2. [****]
3.5.3. [****]
3.6. Patient Interface requirements
3.6.1. [****]
3.6.2. [****]
3.6.3. [****]
3.6.4. [****]
3.7. Language Support requirements
3.7.1. Same as [****]
3.7.2. Will support Philips CE Xxxx
3.7.3. Operation/Service manuals must be localized and
available on a single CD - Dutch, French, German,
Italian, Spanish
3.8. ESD/EMC requirements
3.8.1. [****]
3.8.2. [****]
4. DESIGN VERIFICATION AND VALIDATION
4.1. [****]
4.2. [****]
4.3. [****]
Date: 10/1/03 [****] CONFIDENTIAL Page 42 of 43
5. PROJECT DELIVERABLES
5.1. [****]
5.2. [****]
5.3. [****]
5.4. [****]
5.5. [****]
5.6. [****]
5.7. [****]
6. NRE REQUIREMENTS
6.1. [****]
6.2. [****]
6.3. [****]
7. DEVICE COST
7.1. The device is intended to fill a low cost product niche for
Event Recording identified by Philips. Complete kit cost (no
LCD, without algorithm) including device, cable, case, IFU,
physician user IFU, foam, patient use card will be $[****] per
unit.
7.2. Complete kit cost (no LCD, with algorithm) including device,
cable, case, IFU, physician user IFU, foam, patient use card
will be $[****] per unit.
8. PRODUCT FORECAST
8.1. Philips to provide six month rolling forecast. Currently
projected at [****] levels but Philips has had historically
low unit sales experience. Therefore, this device will be
launched with minimal inventory and sales will drive inventory
levels and finished goods levels.
9. PROJECTED SCHEDULE
9.1. [****]
9.2. [****]
9.3. [****]
Date: 10/1/03 [****] CONFIDENTIAL Page 43 of 43
