EXHIBIT 10.2
CONTRACT
FOR THE SUPPLY OF
UNCOOLED IMAGING MODULES
BETWEEN
XXXXX INFRARED SYSTEMS AB
XXXXXXXXXXXX 00
XXXXXXXX
XXXXXX
AND
LOCKHEED XXXXXX CORPORATION
IR IMAGING SYSTEMS
0 XXXXXX XXXX
XXXXXXXXX, XXXXXXXXXXXXX 00000
XXXXXX XXXXXX OF AMERICA
The bracketed portions of this contract marked with double asterisk [**] have
been omitted and filed separately with the Securities Exchange Commission
pursuant to 17 C.F.R (S)240.24b-2.
CONTRACT
FOR THE SUPPLY OF
UNCOOLED MICROBLOMETER MODULES
This is a Contract ("The Contract") by and between XXXXX Infrared Systems AB,
(hereinafter called the "Buyer"), having a place of business at Xxxxxxxxxxxx 00,
Xxxxxxxx, Xxxxxx, and Lockheed Xxxxxx Corporation, IR Imaging Systems
(hereinafter called the "Seller"), having a place of business at 0 Xxxxxx Xxxx,
Xxxxxxxxx, XX 00000, Xxxxxx Xxxxxx of America. The Buyer and the Seller may be
collectively referred to herein as the "Parties", and each may be referred to
herein as a "Party".
WHEREAS, the Buyer and Seller, on May 31st, 1994, entered into a Cooperative
Development and Exclusivity Agreement relating to Uncooled Imaging Modules which
contemplated but did not detail the production and sale of such equipment by the
Seller to the Buyer; and
WHEREAS, the parties entered into a contract for production and delivery of [**]
Uncooled Imaging Modules, and said contract is anticipated to be completed in
the near future; and
WHEREAS, the Buyer seeks to purchase additional quantities of Uncooled Imaging
Modules for the purpose of application to products of the Buyer,
NOW, THEREFORE, the Buyer and the Seller agree as follows:
The Seller shall sell, and the Buyer shall purchase Uncooled Imaging Modules, in
accordance with the Terms and Conditions herein set forth. The Contract is
executed in duplicate originals, of which one shall remain with the Buyer and
the other with the Seller. The Contract shall become effective as of the later
date set forth hereunder.
IN WITNESS WHEREOF, the Buyer and the Seller have caused this contract to be
executed by their duly authorized representatives as of the day and year last
written below.
Lockheed Xxxxxx Corporation XXXXX Infrared Systems AB
IR Imaging Systems
by _____________________________ by _____________________________
Title __________________________ Title __________________________
Date ___________________________ Date ___________________________
[**] Information omitted pursuant to 17 C.F.R. (S)240.24b-2.
CONTRACT INDEX
ITEM PAGE
COVER 1
SIGNATURE PAGE 2
CONTRACT INDEX 3
TERMS AND CONDITIONS
PREAMBLE. 4
Article 1 DEFINITIONS. 4
Article 2 DELIVERABLE ITEMS AND PRICES, OPTION, [**] ANS RELATED SOFTWARE SOURCE CODE; ACCEPTANCE 4
TESTING; DELIVERY SCHEDULE, JUST-IN-TIME SCHEDULING, SHIPMENT AND TRANSFER OF TITLE; SELLER'S
INVOICES AND BUYER'S PAYMENTS; NO SET OFF.
Article 3. EXCLUSIVITY. 7
Article 4. EXPORT LICENSES 10
Article 5. EXCUSABLE DELAYS 10
Article 6. WARRANTY 10
Article 7. LIQUIDATED DAMAGES. 12
Article 8. LIMITATION OF LIABILITY 12
Article 9. NOTICES. 13
Article 10. ASSIGNMENT 13
Article 11. COMPLIANCE WITH U. S. A. LAW 13
Article 12. CONFIDENTIALITY 14
Article 13. ADVERTISING. 14
Article 14. LAW. 14
Article 15. ARBITRATION. 14
Article 16 TERMINATION AND CANCELLATION 15
Article 17. LANGUAGE. 15
Article 18. CONFIGURATION MANAGEMENT; BUYER'S PARTICIPATION IN
PRODUCTION AND INSPECTION SYSTEM AUDITS; RELEASE OF
INFORMATION. 15
Article 19. GENERAL 16
EXHIBIT A UNCOOLED IMAGING MODULE SPECIFICATION
DOCUMENT NO. 14801ES017 REV. A A1
EXHIBIT B ACCEPTANCE TEST PROCEDURE
DOCUMENT #NO. 14801AP018 REV. A B1
EXHIBIT C CONTRACT DELIVERY SCHEDULE C1
[**] Information omitted pursuant to 17 C.F.R. (S)240.24b-2.
TERMS AND CONDITIONS
PREAMBLE
The Contract consists of the Cover Page, the Signature Page and the Index, plus
the Terms and Conditions in the Articles hereinafter set forth. If any
supporting data such as a Statement of Work, a work performance schedule,
specifications, drawings or other such documents are applicable to The Contract,
they are provided herein as the Exhibits identified in the Index. Conflicts, if
any, among the following parts of The Contract shall be resolved by taking them
in this order of precedence: (i) the Terms and Conditions; and (ii) the
Exhibits.
Article 1 DEFINITIONS.
1.1 The Buyer as used herein shall mean the Swedish Corporation above described
and its subsidiaries. It includes FLIR SYSTEMS AB which will become the new
name for the Buyer in June 1998.
1.2 The Seller as used herein shall mean Lockheed Xxxxxx Corporation, IR Imaging
Systems, an unincorporated Division of Lockheed Xxxxxx Corporation.
1.3 GROUND BASED SECURITY SYSTEMS as used herein shall mean the Buyer's imaging
cameras or observation systems which are permanently mounted on or at a fixed or
semi-fixed location (such as a pole, tripod, gate, building or tower), the
purpose of which cameras or systems is to detect intrusion or to otherwise
protect or provide security for the facility at which the equipment is located.
1.4 THERMOGRAPHY as used herein shall mean the use of thermal imaging systems to
determine the radiometric temperature of items and portions of items in an
imaged scene without direct physical contact to those items. Such information,
often displayed as a picture or pseudo-color picture, is used in a wide variety
of industrial applications.
Article 2 DELIVERABLE ITEMS AND PRICES, OPTION, VSP AND RELATED SOFTWARE SOURCE
CODE; ACCEPTANCE TESTING; DELIVERY SCHEDULE, JUST-IN-TIME SCHEDULING, SHIPMENT
AND TRANSFER OF TITLE; SELLER'S INVOICES AND BUYER'S PAYMENTS; NO SET OFF.
2.1 Deliverable Items, Prices and Option
2.1.1 The items to be delivered hereunder are identified in Table 2.1-1.
TABLE 2.1-1 Deliverable Items
Item Qty/UM Description Unit Price Extended Price
1 [**] Uncooled Imaging Module* $[**] $[**]
2 (Option per [**] Uncooled Imaging Module* $[**] $[**]
para. 2.1.2)
* As described in the "Uncooled Imaging Module Specification, Document No.
140801ES017, Rev. A", Exhibit A, hereto. The maximum number of NTSC only
units over any three months period will be 20 per cent; the maximum number of
PAL only units over any three months period will be 20 per cent.
[**] Information omitted pursuant to 17 C.F.R. (S)240.24b-2.
All U. S. A. taxes are included in the prices in Table 2.1-1. All taxes, duties,
fees or assessments of any nature levied against the Seller by any governmental
authority except the U. S. A. in connection with The Contract shall be the
responsibility of the Buyer, and shall be paid by the Buyer directly to the
governmental authority concerned. Prices do not include freight and insurance
charges associated with transportation beyond the FCA point, which shall be paid
by the Buyer.
2.1.2 Option.
The Buyer shall have the option, exercisable by no later than the close of the
Seller's business day on 30 April 1999, to increase the quantity of Uncooled
Imaging Modules to be delivered hereunder, by [**] units. Should the Buyer
exercise this Option, deliveries thereunder shall commence in the month
following the last scheduled delivery and at the same rate of delivery shown for
the final month of The Contract Delivery Schedule.
2.1.3 [**] and Related Software Source Code.
The Seller intends at some future time (but is not required by this Contract) to
introduce a [**] Board set into its Uncooled Imaging Module to replace the
current [**] Board set. If the Seller introduces such replacement after delivery
of [**] modules under this contract but prior to delivery of [**] modules
hereunder, it shall reduce the module price for each such module containing [**]
by $[**]. If [**] is introduced between units [**] and [**], the $[**] unit
price reduction shall also apply to modules ordered by exercise of the option
granted above, if ordered with [**].
The Buyer acknowledges that introduction of [**] will cause a change in the
current FFE; and that the $[**] price reduction can only occur if the module is
identical to the then current production version in both hardware and software.
Subject to approval of the U.S. Government, which approval it shall be the
responsibility of the Buyer to obtain, the Seller agrees to provide to the
Buyer, at no charge, its proprietary [**] software source code and updates
thereto, embodied in the [**] based Uncooled Imaging Module; and to license the
Buyer to modify such software source code for use in the Buyer's products which
include the Seller's Uncooled Imaging Module.
Provision of such software source code and updates thereto shall not affect the
Seller's right to deliver modules to the Buyer which contain then current
Seller-based software.
2.2 Acceptance Testing
Prior to delivery of the Uncooled Imaging Modules hereunder, the Seller shall
perform on each unit Acceptance Tests described in the document "Uncooled
Imaging Module Acceptance Test Procedure, Document No. 14801AP018 Rev. A",
Exhibit B hereto, and each unit shall be required to pass the test. The tests
may be witnessed on a non-interference basis by designated employees of the
Buyer. Whether or not so witnessed, the tests shall be considered as the final
acceptance tests on the units, and the Seller shall prepare, certify and deliver
with the units copies of the test data. The Seller when requested by the Buyer,
shall provide approximate dates for scheduled acceptance testing of units, and
shall coordinate with the Buyer any visits for the purpose of witnessing tests.
[**] Information omitted pursuant to 17 C.F.R. (S)240.24b-2.
2.3 Delivery Schedule; Just-in-Time Scheduling; Shipment and Transfer of
Title.
2.3.1 Delivery Schedule.
The Seller shall deliver the Items hereunder to the Buyer in accordance with the
Contract Delivery Schedule, Exhibit C hereto.
2.3.2 Just-in-Time Scheduling.
To permit "just-in-time" receipt of inventory by the Buyer, the Buyer may elect
to increase the quantity of units to be delivered in any month by up to 50 per
cent of the quantity shown for that month in the Contract Delivery Schedule. In
the event of any such change, The Contract Delivery Schedule shall be changed
accordingly. Any such increase in quantity/schedule shall require five months
written notice in advance. Notice to increase quantity to be delivered in any
month may not be provided sooner than March, 1999.
In the event of any increase in quantity/schedule, the option exercise date set
forth in Article 2.1.2 shall be accelerated such that there shall be at least
seven months remaining in the amended Contract Delivery Schedule at the time of
exercise of the option.
The Buyer may elect to decrease the quantity of units to be delivered in any
month by up to 50 per cent of the quantity shown for that month in the Contract
Delivery Schedule. In the event of any such change, The Contract Delivery
Schedule shall be changed accordingly, but in no event will the final contract
delivery be extended more than six months from the last originally scheduled
delivery. Any such decrease in quantity/schedule shall require three months
written notice in advance.
2.3.3 Shipment and Transfer of Title.
All Shipment by the Seller hereunder shall be made FCA Xxxxx International
Airport, Boston, Massachusetts, U.S.A., in accordance with the definition and
provisions of the term "FCA" set forth in INCOTERMS, except that the Buyer shall
be responsible hereunder to obtain all necessary export licenses. Title to the
Uncooled Imaging Modules deliverable hereunder shall pass to the Buyer at the
FCA point, i. e., on delivery to the carrier at Xxxxx International Airport,
Boston, Massachusetts, U.S.A.
2.4 Seller's Invoices and Buyer's Payments.
2.4.1 Seller's Invoices.
2.4.1.1 Invoices for Module Deliveries. The Seller shall submit invoices to the
Buyer upon shipment of the items listed in Table 2.1-1 hereof, in the amount
determined by multiplying the Unit Price by the number of Units shipped. At the
time of invoice preparation, the Seller shall calculate any amounts due to the
Buyer pursuant to Article 7, "Liquidated Damages", hereof, in connection with
the shipment at hand, and include appropriate adjustments on the invoice.
2.4.1.2 Address for Invoice Submission. The Seller shall transmit this invoice
to the address set forth below: (i) by telefax on the date of the invoice; and
(ii) by mail or express delivery service on the date of the invoice or on the
next business day thereafter. The package shall contain an original and three
copies of the invoice and any attachments required hereunder.
XXXXX Infrared Systems AB
Xxx 0, X-000 00
Xxxxxxxx
Xxxxxx
Attention: Xxx. Xxx Xxxxxxx Accounting Department.
Telephone: 00 0 000 00 00
FAX: 00 0 000 00 00
2.4.2 Buyer's Payments.
The Buyer shall pay to the Seller the amount of Seller's invoice within 60 days
of the date of the invoice. The Buyer shall make payment to the Seller by wire
transfer of U. S. Dollars to the account set forth below.
Citibank
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Citibank Routing: ABA# 000000000
Lockheed Xxxxxx Corporation IR Imaging Systems
Account Number 00000000
2.5 No Set-off.
The Buyer shall not set off any amount owed by the Seller or any of its
affiliated companies to the Buyer against any amount owed by the Buyer to the
Seller under The Contract.
Article 3 EXCLUSIVITY
3.1 The Buyer shall have limited exclusivity in the commercial marketplace, as
defined below, with respect to the marketing of Infrared Thermal Imaging Systems
containing Uncooled Imaging Modules therein.
3.2 To that end, during the period of delivery of the Uncooled Imaging Modules
ordered hereunder, the Seller agrees not to provide or to deliver uncooled
microbolometer technology or Uncooled Imaging Modules or uncooled microbolometer
detector arrays or any information similar thereto [** 1.5 pages omitted]
[**] Information omitted pursuant to 17 C.F.R. (S)240.24b-2.
[**] Information omitted pursuant to 17 C.F.R. (S)240.24b-2.
3.3 Notwithstanding the above, the Seller shall have the right to deliver
Uncooled Imaging Modules or uncooled microbolometer technology or uncooled
microbolometer detector arrays or any information similar thereto or to
cooperate with any company in connection with any military or space program.
3.4 In addition, the Buyer shall have exclusivity which shall be limited to the
industrial/commercial marketplace for THERMOGRAPHY.
3.5 The Buyer shall have the non-exclusive right to sell to all other markets,
except that The Buyer shall have no right to and shall not, without the prior
written consent of the Seller, sell products which include the Seller's Uncooled
Imaging Modules where the end user is the U.S. Government and/or non-U.S.
military customers.
3.6 Notwithstanding paragraph 3.5 above, The Buyer shall have the non-exclusive
right to sell [**] to any customer except that the Buyer shall not without the
prior written consent of the Seller, sell or otherwise provide cameras or
systems for [**].
3.7 The Buyer shall not, without the prior written consent of the Seller, sell
or otherwise provide to any person or organization [**] UNCOOLED IMAGING MODULES
which are not part of a camera or system of the Buyer, except for repair or
replacement.
3.8 The Buyer, to this same end, for the same period of time, agrees not to
start any negotiations or cooperation or to take deliveries of uncooled infrared
focal plane arrays from any source; provided that if the Seller becomes
delinquent in deliveries by a cumulative total of at least [**] units over any
three month period, the Buyer may thereafter open discussions with another
potential source of uncooled infrared focal planes. If the Buyer purchases a
quantity of [**] units or more from any such second source, the mutual
exclusivity provisions of this Article 3 will thereupon be no longer in effect.
3.9 The Buyer will not sell products which include Uncooled Imaging Modules for
any of the
[**] Information omitted pursuant to 17 C.F.R. (S)240.24b-2.
following fields of use (which are excluded from the License Agreement between
the Seller and Honeywell, Inc.):
. [**]. The exclusion does not include applications [**] such as
surveillance, search and rescue etc.
. [**]. The use is undefined but it contemplates an installation in a
[**].
. [**].
Article 4 EXPORT LICENSES
The Buyer is advised that the Uncooled Imaging Modules deliverable under The
Contract are controlled in Category XII of the International Traffic in Arms
Regulations (ITAR). As such, the export of the deliverable items hereunder
requires a license from the United States Government.
Article 5 EXCUSABLE DELAYS
The Seller shall not be liable for delays in delivery due to causes beyond the
Seller's control and without the Seller's fault or negligence, including, but
not limited to: acts of God; natural disasters, fire, floods, explosions or
earthquakes; epidemics or quarantine restrictions; serious accidents; any act of
civil or military authority; war, insurrection or riot; and labor disputes;
providing that in such cases the Seller exercises due diligence in promptly
notifying the Buyer in writing of any known or anticipated delay, and
recommences the performance of its obligation on cessation of the delay.
Whatever the cause of any known or anticipated delay, the Seller shall be
responsible for informing the Buyer of the reason therefor, and when the Seller
expects to proceed with its obligations.
In the event of any such delay, the date of delivery or performance hereunder
shall be extended by a period equal to the time loss by reason of such delay.
In the event the Seller's production is curtailed for any of the above reasons,
the Seller may allocate its production among its various customers in a
commercially fair and reasonable manner.
Article 6 WARRANTY
6.1 The Seller warrants that Uncooled Imaging Modules (hereinafter, the "goods")
delivered under The Contract shall be free from defects in material and
workmanship under normal use and service, for a period of 15 months after
delivery of the goods to the FCA point.
6.2 The Seller warrants that goods delivered under The Contract shall be in
conformity with the "Uncooled Imaging Module Specification, Document No.
14801ES017 Rev. A, Exhibit A, hereto, for a period of 90 days after delivery of
the goods to the FCA point, except as follows:
(a) The vacuum life shall be warranted for a period of five years from the day
of delivery of any
[**] Information omitted pursuant to 17 C.F.R. (S)240.24b-2.
item, provided that no warranty of vacuum life shall apply unless the
module is operated in an environment that has an ambient temperature of
[**] or less and/or is stored at a temperature between the minimum storage
temperature and [**].
(b) The UIM performance under normal use and service shall be such that for
[**] months after delivery there shall be no more than [**] new
unsubstituted nonoperable pixels (NOP). A nonoperable pixel is defined as
one that produces a signal that differs by more than [**] from the median
of the signal from each of its [**] nearest neighboring pixels when
imaging an object having a temperature of [**] and operating in an ambient
environment with a temperature of [**].
6.3 If, during the warranty periods of paragraphs 6.1. and 6.2 hereof, (i) the
Seller is notified promptly in writing upon delivery of any defect described
therein in the goods, including a detailed description of such defect; (ii) such
goods are returned to the Seller transportation prepaid; and (iii) the Seller's
examination of such goods discloses to the Seller's satisfaction that such goods
are defective and such defects are not caused by accident, abuse, misuse,
neglect, alteration, improper installation, repair or alteration by someone
other than the Seller, improper testing, or use contrary to any instructions
issued by the Seller, then within eight weeks after the arrival of the returned
defective goods at the Seller's plant the Seller shall (at its sole option)
either repair or replace such goods. The Seller shall return any goods repaired
or replaced under this warranty to the Buyer transportation prepaid. Prior to
any return of goods by the Buyer pursuant to this Article, the Buyer shall
afford the Seller the opportunity to inspect such goods at the Buyer's location.
In any event, the Seller shall issue a Return Material Authorization to the
Buyer prior to any return of goods to the Seller by the Buyer.
6.4 With respect to the time of notice of a defect, the following special
provisions shall apply:
(a) If a defect is discovered during the first 90 days of the initial warranty
period, and if the Buyer has not delivered the item in question,
incorporated into the Buyer's product, to a customer of the Buyer, the
Buyer and the Seller shall proceed as in paragraph 6.3, above. If a
warranted defect is confirmed and the item is repaired or replaced under
the warranty, the item returned by the Seller to the Buyer shall bear the
warranty for an new initial period in accordance with paragraph 6.1 or
6.2, as applicable.
(b) If a defect under paragraph 6.1 is discovered after the first 90 days of
the initial warranty period, or if the Buyer has delivered a defective
item, incorporated into the Buyer's product, to a customer of the Buyer,
the Buyer and the Seller shall proceed as in paragraph 6.3, above. If a
warranted defect is confirmed and the item is repaired or replaced under
the warranty, the warranty period for the item shall be extended by the
amount of time between the Buyer's notice of defect and the Seller's
return of the item to the Buyer at the FCA point.
6.5 The foregoing warranty constitutes the Seller's exclusive liability, and
the exclusive remedy of the Buyer, for any breach of any warranty or other
nonconformity of the goods covered by The Contract.
[**] Information omitted pursuant to 17 C.F.R. (S)240.24b-2.
6.6 THIS WARRANTY IS EXCLUSIVE, AND IN LIEU OF ALL OTHER WARRANTIES, EXPRESS,
IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE, WHICH ARE HEREBY EXPRESSLY DISCLAIMED.
Article 7 LIQUIDATED DAMAGES.
The Seller guarantees delivery of the Uncooled Imaging Modules in accordance
with the Contract Delivery Schedule set forth in Exhibit C hereto. It is agreed
by the parties that if actual damages arise by reason of the Seller's delay in
delivery, such damages would be difficult to determine accurately. Therefore,
the Seller agrees that in the event that the delivery of any Uncooled Imaging
Module is delayed for more than one full calendar week beyond a grace period of
three (3) weeks after such guaranteed delivery time for other than excusable
causes as defined in Article 5, "Excusable Delays" hereof, the Seller shall pay
to the Buyer as fixed, agreed and liquidated damages for each additional full
calendar week beyond said grace period in making delivery, one-half of one
percent (0.5%) of the Contract Unit price of the delayed Uncooled Imaging Module
per full calendar week of delay, and the Seller shall be liable for the amount
thereof; PROVIDED, that the Seller's liability under this Article is limited to
four percent (4.0%) of the Contract Unit price of the delayed Uncooled Imaging
Module causing the actual damages. Seller's payment of liquidated damages, as
herein provided, shall be the Buyer's sole remedy for delays due to causes for
which the Seller is responsible under this Contract.
Article 8 LIMITATION OF LIABILITY
8.1 The total liability of the Seller for any and all claims, whether in
contract, warranty, tort or otherwise, arising out of, connected with or
resulting from the performance or non-performance of The Contract, or from the
manufacture, sale, delivery, resale, repair, replacement or use of any product
or the furnishing of any service, shall not exceed the price allocable to the
product or service that gives rise to the claim. This total cumulative liability
limitation specifically applies to, but is not limited to, those liabilities of
the Seller that may arise from claims under the provisions of Article 6 of The
Contract entitled "Warranty" and Article 7 of The Contract entitled, "Liquidated
Damages". Except as to title, any such liability shall terminate upon expiration
of the warranty period for the last warranted Item delivered hereunder.
8.2 IN NO EVENT SHALL THE SELLER BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL
OR CONSEQUENTIAL DAMAGES RESULTING FROM THE SELLER'S PERFORMANCE OR FAILURE TO
PERFORM UNDER THE CONTRACT, OR THE FURNISHING, PERFORMANCE, OR USE OF ANY GOODS
OR SERVICES SOLD PURSUANT HERETO, WHETHER DUE TO A BREACH OF CONTRACT, BREACH OF
WARRANTY, THE NEGLIGENCE OF THE SELLER, OR OTHERWISE.
Article 9 NOTICES
9.1 Any notice, request, or correspondence of either the Buyer or the Seller to
the other with reference to The Contract shall be in the English language.
9.2 Buyer's address for notices from the Seller shall be as follows:
XXXXX Infrared Systems AB
Xxx 0, X-000 00
Xxxxxxxx
Xxxxxx
Attention: Mr. Arne Almerfors
Managing Director
Telephone: 00 0 000 00 00
FAX: 00 0 000 00 00
9.3 Seller's address for notices from the Buyer shall be as follows:
Lockheed Xxxxxx Corporation
IR Imaging Systems
0 Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xx. Xxxx X. Xxxxxx
International Contracts Manager, M/S 340
Telephone: 000-000-0000
FAX: 000-000-0000
Article 10 ASSIGNMENT
10.1 Neither the Buyer nor the Seller may assign its rights under The Contract
without the prior written consent of the other, and any purported assignment
without such consent shall have no force or effect. Such consent shall not be
unreasonably withheld.
10.2 Such consent shall not be required in the case where the assignment is to
be made to a successor-in-interest to that part of the business of the assignor
that includes The Contract, provided that the successor-in-interest agrees to be
bound by the obligations hereunder of the assignor.
Article 11 COMPLIANCE WITH U. S. A. LAW
The Seller's performance under The Contract shall comply with the federal, state
and local laws and regulations of the U. S. A.
Article 12 CONFIDENTIALITY
The Buyer and the Seller agree that The Contract and performance hereunder will
be kept confidential and will be dealt with in accordance with each party's
usual procedures relating to proprietary information. No publicity will be
released by either the Buyer or the Seller without the prior written consent of
the other.
Article 13 ADVERTISING
Neither the Buyer nor the Seller shall make use of the other's name for
publicity purposes, and neither shall use any information or news contained in
or connected with The Contract unless the other has given its written consent.
Article 14 LAW
The Contract shall be governed by the laws of the Commonwealth of Massachusetts
and of the United States of America as to all matters of interpretation,
performance and remedies insofar as such law is existent and can or will be
applied in the jurisdiction in which either the Buyer or the Seller may seek
adjudication of any such matter.
Article 15 ARBITRATION
In the event that disputes arise under the terms of The Contract on which there
is continuing disagreement for more than thirty (30) days, either the Buyer or
the Seller may elect by a thirty (30) days Notice in writing, to submit the
matter to Arbitration. If the dispute is not settled within said thirty (30) day
period of such Notice, the following shall apply to such Arbitration which shall
be the exclusive mechanism for resolution of disputes hereunder should the Buyer
and the Seller be unable amicably to resolve such disputes.
(a) The Arbitration shall be conducted in London, England.
(b) The Arbitration shall be conducted under the Rules of Conciliation and
Arbitration of the International Chamber of Commerce.
(c) The costs of the Arbitration shall be distributed equally between the Buyer
and the Seller, and each shall otherwise bear its own additional or other
expenses and fees.
(d) The Decision of the Arbitration Tribunal shall be binding on the Buyer and
the Seller, and such Decision shall be enforceable in any Court having
jurisdiction of the party against whom any such decision or award is
granted.
Article 16 TERMINATION AND CANCELLATION
16.1 The Contract may be terminated, as hereinafter provided, by either party
for material breach or default of the terms or conditions hereof. In the event
of such termination a sixty-day Notice in writing setting forth the breach or
default shall be provided; however, should the party receiving the Notice
correct said breach or default complained of during said sixty-day period, then
the Notice shall be considered null and void as if the same had not been sent.
16.2 The Contract shall be automatically canceled in the event of bankruptcy,
voluntary or involuntary winding up, the appointment of a receiver of the assets
or business, making of an assignment for the benefit of creditors, or the
termination of the operation of the business of either the Buyer or the Seller.
16.3 In the event of termination or cancellation of The Contract for any reason,
the obligations of the Buyer and the Seller to comply with the terms and
conditions of The Contract shall continue up to the effective date of such
termination.
16.4 Termination or cancellation of The Contract shall not affect obligations
of confidentially assumed hereunder by either the Buyer or the Seller.
Article 17 LANGUAGE
The English Language shall be used in all communications between the Seller and
the Buyer relating to The Contract.
Article 18 CONFIGURATION MANAGEMENT; BUYER'S PARTICIPATION IN PRODUCTION AND
INSPECTION SYSTEM AUDITS; RELEASE OF INFORMATION.
18.1 Configuration Management. The Seller shall maintain a configuration
management system for control of changes in the Uncooled Imaging Module.
Subject to paragraph 18.3, below, the Seller shall provide copies of all
Engineering Change Orders (ECOs) to the Buyer as they are approved by the
Seller's Configuration Review Board (CRB). The Seller shall forward minor
changes (class II ECO's) to the Buyer in the Seller's format for the Buyer's
information. The Seller shall forward major changes (class I ECO's) to the Buyer
for approval. The Seller shall classify class I ECO's as "Routine" or "Urgent".
"Routine" ECOs shall be within 60 calendar days of the date sent. If the Buyer
fails to respond within this time, the Seller may assume the Buyer's approval.
For "Urgent" ECOs, the disposition time limit shall be 20 calendar days.
The Seller shall at its option prepare and submit proposals for equitable
adjustment of the contract price, delivery and other terms for any ECO activity
arising from Buyer-initiated changes, including those due to the needs of the
Buyer's vendors. The Seller shall include rough-order-of-magnitude estimates of
price impact with the initial technical proposals, and follow with formal price
proposals if the Buyer decides to go forward.
18.2 Buyer's Participation in Production and Inspection System Audits.
The Buyer may, during the period of performance of The Contract, participate in
inspections and conduct on-site audits of the Seller's procedures that govern
the production and inspection thereunder. The Buyer shall make arrangements with
the Seller in advance of such participation and conduct of audits. The
activities shall be conducted on a non-interference basis at reasonable and
mutually
accepted times and intervals. The Seller should provide sufficient details
concerning status of work in progress and vendor material deliveries for the
Buyer to determine the integrity of the Contract Delivery Schedule. The Seller
shall provide suitable office arrangements for one on-site resident Buyer
representative. If the representative is a foreign national, special
restrictions on access will apply.
18.3 Release of Information. The Seller shall not, in connection with the
activities identified in this Article, be required to divulge information about
its Uncooled Imaging Module for which U. S. Government regulations require an
Export License.
Article 19 GENERAL
19.1 The headings and titles to and within the Articles of The Contract are
inserted for convenience only and shall not be deemed a part hereof or affect
the construction or interpretation of any provision hereof.
19.2 No cancellation, modification, amendment, deletion, addition or other
change in The Contract or any provision hereof or waiver of any right or remedy
herein provided, shall be effective for any purpose unless specifically set
forth in writing and signed by the Buyer and the Seller. No waiver of any right
or remedy in respect of any occurrence or event on one occasion shall be deemed
a waiver of such right or remedy in respect of such occurrence or event on any
other occasion.
19.3 The Buyer may use its standard purchase order forms in the administration
of The Contract. The Buyer and the Seller agree that such use is only for the
administrative convenience of the Buyer and that no provisions on the face or
reverse of such forms or the Buyer's attachments thereto shall have any effect
on The Contract or the subject matter of the purchase order except as required
to identify The Contract and the purchase order.
19.4 The Contract contains the entire agreement between the Parties concerning
production and delivery of Uncooled Imaging Modules in the quantities described
herein, and supersedes any previous understanding, commitment or agreement,
oral or written, with respect thereto.
EXHIBIT A
UNCOOLED IMAGING MODULE
SPECIFICATION,
DOCUMENT No. 14801ES017 REV. A
[**Technical specifications document of 8 pages has been omitted]
[**] Information omitted pursuant to 17 C.F.R. (S)240.24b-2.
EXHIBIT B
UNCOOLED IMAGING MODULE
ACCEPTANCE TEST PROCEDURE,
DOCUMENT No. 14801AP018 REV. A
[**Technical specification and testing procedures document
of 12 pages has been omitted]
[**] Information omitted pursuant to 17 C.F.R. (S)240.24b-2.
EXHIBIT C
CONTRACT DELIVERY SCHEDULE
YEAR MONTH MODULE QUANTITY
DELIVERABLE UNDER ITEM 1, TABLE
2.1-1
1998 SEP [**]
OCT [**]
NOV [**]
DEC [**]
1999 JAN [**]
FEB [**]
MAR [**]
APR [**]
MAY [**]
JUN [**]
JUL [**]
AUG [**]
SEP [**]
OCT [**]
NOV [**]
(SCHEDULE FOR ORIGINAL CONTRACT; AMEND AS NECESSARY DURING PERIOD OF
PERFORMANCE)
[**] Information omitted pursuant to 17 C.F.R. (S)240.24b-2.
