CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT 10.1
FINAL
MANUFACTURING AGREEMENT
This Manufacturing Agreement ("Agreement"), is entered into as of November 22nd,
2005 ("Effective Date") between KEY TRONIC CORPORATION, a Washington
corporation, having its principal place of business at X.0000 Xxxxxxxx Xxxx,
Xxxxxxx, Xxxxxxxxxx 00000 ("Supplier") and CATCHER, INC., a Delaware corporation
having its principal place of business at 00000 Xxxxxxxxxxx Xxxx, Xxxxxxxx, XX
00000 ("Buyer").
1. SCOPE OF AGREEMENT
Supplier shall sell and Buyer shall purchase under the terms and
conditions of this Agreement the Products listed on Exhibit A. For
purposes of this Agreement, Product shall mean and be limited to those
products manufactured for Buyer by Supplier as listed on Exhibit A and
any mutually agreed upon modifications thereto. Unless otherwise
specifically agreed to in writing, this Agreement prevails over any
additional, conflicting or inconsistent terms and conditions appearing
on any quotation, purchase order, acknowledgement, invoice or other
form used by the parties in connection with this Agreement.
Supplier and Buyer may from time to time add Products to or delete
Products from this Agreement. Such additions or deletions shall be
accomplished by written addendum to this Agreement. Terms and
conditions that may be specific to additional Products will be set
forth in said addendum.
2. ORDERS AND FORECAST
Buyer shall provide Supplier once every month with a 12 month rolling
forecast of Buyer's requirements for Products. Buyer will provide
Supplier with a purchase order (Purchase Order) for Products to be
manufactured by Supplier. The forecasts shall not be treated as
authorization to manufacture Products. However, Supplier is authorized
to rely on forecasts for production planning purposes. Buyer shall
submit Purchase Orders to Supplier for all parts and materials to be
purchased by Supplier and incorporated into Products, including the
parts and materials set forth on Exhibit C. If any parts and materials
purchased by Supplier pursuant to this paragraph 2, including parts and
materials set forth on Exhibit C, remain in Supplier's inventory for a
period in excess of thirty (30) days, then Supplier shall, immediately
invoice Buyer for such parts and materials and payment shall be due ***
days following the date of invoice. The parties will review Exhibit C
once per month during the first three months of the term of this
Agreement and once every three months thereafter and shall amend
Exhibit C to add or delete parts and materials to reflect current
usage. Buyer will provide Supplier with a Purchase Order for Products
to be manufactured by Supplier during the twelve (12) weeks following
receipt of the Purchase Order for parts and materials.
Supplier and Buyer acknowledge that Supplier will incur non recurring
engineering ("NRE") costs in the amount of Fifty Eight Thousand Dollars
($58,000).
Buyer shall submit Purchase Orders to Supplier for all required custom
capital equipment, tooling, NRE and other associated charges. All such
orders will require that Buyer pay cash in advance prior to order
acceptance or entry by Supplier.
Supplier will respond within forty-eight (48) hours of receipt of each
purchase order as to its ability to fulfill requirements as set forth
in the purchase order provided. This response shall include a schedule
of anticipated deliveries against the purchase order. Purchase Orders
which are not accepted within the two (2) day period shall be deemed
rejected.
3. LEAD TIMES
So long as Buyer performs its obligations set out in Section 2 above
Supplier agrees that the manufacturing lead times for Products shall be
*** weeks. "Lead Time" means that length of time FROM the date of
Supplier's receipt of Buyer's written purchase order TO the date of
Supplier's tender of the Products set forth in such accepted order to
Buyer's carrier at Supplier's dock plus time for material acquisition.
Forecast and purchase order flexibility terms are set forth on Exhibit
F.
4. DELIVERY CHANGES
a. Buyer may, without penalty, change the mix of Products requested
within any forecast period provided however that, in the case of
Products for which purchase orders have been accepted the Products
incorporate only common components. Supplier will use its best efforts
to accommodate all such requests within material and capacity
constraints.
b. If a purchase order has not yet been submitted for a forecast
Product Buyer may, subject to the terms of Section 3, delay any
forecast Product delivery beyond the scheduled delivery by giving
Supplier at least *** weeks notice.
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED
c. Buyer may adjust the total units of Products forecasted for
manufacture (but for which no purchase order has been received and
accepted by Supplier) up or down in accordance with the terms of
Section 3. Such adjustments may be made no more than once every thirty
(30) days.
5. DELIVERY, TITLE AND RISK OF LOSS
Delivery will be FOB Supplier's dock located in El Paso, Texas. Risk of
loss and title to Products will pass to Buyer upon delivery to Buyer or
Buyer's designated carrier at Supplier's dock.
Supplier will maintain an on time delivery performance of *** to agreed
upon delivery date. For purposes of this Agreement, on time delivery is
defined as *** days early/*** day late to agreed upon delivery date at
Supplier's dock.
6. PRICES AND PAYMENT/COST REDUCTION
Prices for Products shall be as set forth on Exhibit B. Buyer shall pay
*** for all Products ordered and all parts and materials ordered prior
to order entry or provide Supplier with an *** in the amount of the
purchase price, in the form attached hereto as Exhibit G with such
other terms and conditions as Supplier may require prior to order
entry.
With respect to payments due from Buyer to Supplier hereunder, if full
payment is not made by Buyer by the due date then Buyer shall be liable
to Supplier for the lesser of interest at the rate of 1 1/2% per month
or the maximum interest allowed by law on all unpaid invoices. Such
interest shall be computed on the unpaid balance for each day payment
is not received after the date on which payment was originally due.
Payment terms to Buyer are subject to Supplier's credit policy.
Supplier's rights reserved under its credit policy include, but are not
limited to the following: the right to modify payments for habitual
late payment, including the right to require cash on delivery, cash in
advance with order entry or an irrevocable letter of credit prior to
order entry; the right to put any shipment on hold if outstanding
receivables are more than *** days past due; and the right to hold both
shipments and/or manufacturing if in Supplier's opinion there has been
a serious decline in the financial condition of Buyer, or Buyer has
failed to make any payment for more than *** days from the date of
Supplier's invoice. Production schedules may be set back *** weeks or
more at Supplier's option, depending upon shop work load at the time,
from the date of release following a manufacturing hold on Buyer's
Products. At any time and from time to time during the term of this
Agreement upon Supplier's request, Buyer shall provide Supplier with
Buyer's financial statements. Supplier shall notify Buyer in writing in
the event Supplier, at any time during the term hereof, elects to
exercise any of its aforesaid rights reserved under its credit policy.
7. WARRANTY
a. Supplier represents and warrants that the each Product
manufactured by Supplier under the terms of this Agreement will be free
from defects in Supplier supplied material and workmanship and will
conform to the specifications contained on Exhibit A for a period of
*** days after Product's date of manufacture.
b. Supplier shall, at Supplier's option, repair or replace any
product that does not conform to the specifications provided, (i)
Supplier is notified of the non-conforming Product within *** days
after discovery by Buyer that such item is non-conforming, or within
the warranty period as stated above, whichever is earlier and (ii) the
non-conforming Product is returned to Supplier at its factory,
transportation prepaid, in accordance with Supplier's instructions.
Transportation charges for Product returned to Supplier shall be at
Buyer's expense. Transportation for return of the repaired Product to
Buyer shall be at Supplier's expense. The warranty on repaired or
replaced items shall be the same as the original warranty period.
c. Supplier shall perform a failure analysis of all returned Product.
All costs incurred by Supplier in connection with returned Product
which conforms to specifications and is not defective due to defects in
Supplier supplied materials or workmanship shall be reimbursed to
Supplier by Buyer.
d. Buyer shall request and obtain a return material authorization
number from Supplier for each defective Product prior to return of the
Product.
e. Supplier agrees to repair or replace defective Product within
thirty (30) days of receipt at Supplier's factory as long as necessary
materials are available. Supplier will make all reasonable efforts to
procure any necessary materials as quickly as possible. Buyer will be
responsible for any material expedite charges or air freight charges.
f. With respect to Products sold outside the United States, ***.
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED
g. In no event shall Supplier's aggregate liability with respect to
defective Products(s) exceed Supplier's value added portion of the
purchase price of defective Product(s).
8. PRODUCT CHANGES
a. Supplier shall not make any changes in the form, fit or function
of the Products or materials used for manufacture of the Products
without the prior written approval of Buyer. The costs of all changes
approved in advance by Buyer shall be paid for by Buyer.
b. Buyer may request Supplier to incorporate changes to Products via
engineering change orders or authorized red lined drawings. Supplier
shall make every reasonable effort to incorporate requested changes
within the time frame requested by Buyer. Buyer understands and agrees
that additional charges may be incurred for incorporation of requested
changes.
9. TOOLING
Buyer may provide to Supplier tools and equipment for Supplier's use in
manufacture of the Products. Said tools and equipment, if any, will be
listed as an Addendum to this Agreement.
Supplier agrees to keep Buyer owned Tools in good working condition as
it pertains to routine use, calibration and maintenance. Buyer agrees
to furnish or fund all required replacements and upgrades and perform
any major repairs required to the Tools unless replacements or repairs
are required as a result of the negligent acts or omissions of
Supplier.
Buyer represents and warrants that all Tools furnished by Buyer to
Supplier are the sole property of Buyer.
All Tools supplied to Supplier by Buyer shall be in good working
condition when delivered to Supplier and Buyer warrants that all
periodic maintenance with respect thereto has been performed to
schedule. Supplier shall perform an inspection on all Tools upon
delivery and notify Buyer of any defects or required maintenance or
repairs and Buyer shall furnish or fund any required replacement,
maintenance or repairs within 10 days of receipt of notice from
Supplier.
10. PROPERTY RIGHTS
Unless supplied or funded by Buyer, specifications, test and
manufacturing technology developed by Supplier for the purpose of
providing Product to Buyer under the terms of this Agreement are the
sole and exclusive property of Supplier. Specifications, technologies,
test or manufacturing procedures developed and funded by the Supplier
shall remain the exclusive property of Supplier and Buyer will have no
rights with respect thereto unless otherwise agreed to in writing by
the parties. All Product designs and modifications thereof are the sole
and exclusive property of Buyer. Buyer agrees to pay Supplier a
non-recurring engineering charge at the rate of $*** per hour for
Product design modifications developed by Supplier. This clause shall
survive any termination or expiration of this Agreement.
11. INDEMNIFICATION
Each party shall defend, indemnify and hold harmless the other party
from and against all damages, claims, liabilities and expenses arising
out of or resulting in any way from any act or omission of the
indemnifying party, its agents, employees or subcontracts. With respect
to Supplier, the indemnification obligations in this Section shall
include, but not be limited to claims arising out of or resulting in
any way from (a) a defect in Supplier supplied materials or
workmanship, (b) Supplier's non-compliance with Buyer's specifications;
or (c) Supplier's breach of any of the provisions of this Agreement.
With respect to Buyer, the indemnification obligations in this Section
shall include, but not be limited to claims arising out of or resulting
in any way from (a) Buyer's specifications as provided to Supplier
under this Agreement; or (b) Buyer's breach of any of the provisions of
this Agreement.
12. TAXES
Unless Buyer furnishes a valid exemption certificate, Buyer will bear
all sales and use taxes properly imposed by federal, state, municipal
or other local authorities with respect to purchases under this
Agreement.
13. NON-PUBLICITY
Supplier and Buyer shall not disclose to any third party any pricing or
product information relating to this Agreement. Both parties agree not
to publicize or otherwise make known to any third party any information
relating to this Agreement without prior written consent of the other
party.
14. LIMITATION OF LIABILITY
SUPPLIER SHALL NOT BE LIABLE TO BUYER FOR ANY INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES OR FOR LOST PROFITS OR LOST BUSINESS RESULTING IN
ANY WAY FROM THIS AGREEMENT EVEN IF ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES. THIS CLAUSE SHALL SURVIVE ANY TERMINATION OR EXPIRATION OF
THIS AGREEMENT.
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED
15. TERM AND TERMINATION
a. This Agreement shall commence on the Effective Date and shall
remain in effect until December 31st, 2009 and may be renewed for
additional consecutive terms of two (2) years, upon the mutual written
agreement of the parties at least ninety (90) days prior to the end of
the then current term.
b. Either party may terminate this Agreement immediately upon written
notice if the other party (i) fails to comply with any material term or
condition of this Agreement, (ii) becomes insolvent or makes a general
assignment for the benefit of creditors or (iii) has a petition under
the Bankruptcy Act filed by or against it and such petition is not
dismissed within sixty (60) days of the filing date.
c. Neither party may terminate this Agreement during the initial term
or any renewal term other than for cause. If Buyer's average monthly
purchases of Products falls below 2000 units at any time during the
initial term of this Agreement then Buyer shall immediately pay
Supplier the amount of Fifty Eight Thousand Dollars ($58,000) to
reimburse Supplier for all transition NRE costs.
d. Upon termination, the Supplier shall remain obligated to deliver
Products ordered by Buyer prior to termination and still required by
Buyer and Buyer shall be obligated to pay for all Products ordered
under the terms of this Agreement. Upon termination Supplier shall
return all Buyer furnished Equipment and any other material provided by
or owned by Buyer. Upon termination Buyer shall purchase from Supplier
at Supplier's cost all inventory of raw materials and components on
hand, on order or in transit purchased to Buyer's forecasts within lead
times set forth on Exhibit C and all work in process at Supplier's cost
plus normal margin.
16. GOVERNMENT APPROVALS. Supplier shall, at its sole expense, obtain any
and all necessary governmental approvals and other authorizations and
approvals which are appropriate or necessary to carry out the proposed
activities contemplated herein. Supplier shall obtain all necessary
governmental and regulatory approvals to sell the Products to Buyer.
17. QUALITY CONTROL AND TESTING. Supplier shall assure that all of its
processes and procedures comply with the quality control and testing
requirements set forth in Exhibit E and that the completed Products
conform to the finished product quality requirements set forth in
Exhibit E.
18. EXHIBITS
The following documents are attached to and made a part of this
Agreement:
Exhibit A Products and Specifications
Exhibit B Prices
Exhibit C Parts Lead Times and Unique Materials
Exhibit D KeyTronicEMS Quote #050102 dated 11/9/05
Exhibit E Quality Control and Testing
Exhibit F Order Flexibility
Exhibit G Form of Irrevocable Standby Letter of Credit
19. GENERAL PROVISIONS
a. ENTIRE AGREEMENT AMENDMENT.
This document and its Exhibits contain the entire Agreement between the
parties relating to the subject matter contained herein. All prior or
contemporaneous agreements, written or oral, between the parties
regarding the Products are superseded by this Agreement. This Agreement
may not be modified except by written document signed by an authorized
representative of each party.
b. FORCE MAJEURE.
Neither party shall be liable for delays or defaults due to fire,
windstorm, riot, act of God, act of the public enemy, or other similar
unforeseeable cause beyond the reasonable control and without the fault
or negligence of the party incurring such delay.
c. WAIVER.
No term of this Agreement shall be considered waived and no breach
excused by either party unless made in writing by the other party. No
consent, waiver, or excuse by either party, express or implied, shall
constitute a subsequent consent, waiver or excuse.
d. NON-ASSIGNMENT.
Neither party shall assign this Agreement or its rights hereunder
without the prior written consent of the other party.
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED
e. CONTROLLING LAW.
This Agreement and its formation, operation and performance and the
terms of all sales of Product hereunder, shall be governed, construed,
performed and enforced in accordance within the laws of the State of
Washington without regard to its conflict of laws principles. Each
party irrevocably agrees that the state and federal courts of
Washington shall have exclusive jurisdiction to hear and determine any
suit action or proceedings which may arise out of or in connection with
this Agreement and, for such purposes, irrevocably submits to the
jurisdiction of those courts.
f. SEVERABILITY.
If any provision of this Agreement is held invalid, illegal or
unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired.
g. SURVIVING CLAUSES.
Any provision of this Agreement having it's performance period beyond
the term of this Agreement shall survive the termination or expiration
of this Agreement.
h. NOTICES.
All notices or other communications (except for services of process)
required or permitted to be given pursuant to this Agreement shall be
in writing and shall be conclusively deemed to have been received by a
party hereto on the day on which such notice or communication was
delivered by hand, prepaid telegram, facsimile, express overnight
courier service to the address set forth below ( or such other address
as such party may specify to the other party from time to time), or, if
sent postage prepaid by certified or registered mail, on the third
business day after the day on which such notice or communication was
mailed.
IF TO SUPPLIER:
Key Tronic Corporation
N. 0000 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Executive Vice President &
General Manager
IF TO BUYER:
Catcher, Inc.
00000 Xxxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Xxx Xxxxxxxx
Chairman + CTO
i. RELATIONSHIP OF PARTIES.
The relationship of the parties established by this Agreement is that
of independent contractors and nothing contained herein shall be
construed to constitute either party as the agent of the other party or
as partners, joint ventures, co-owners or otherwise as participants in
a joint or common undertaking.
KEY TRONIC CORPORATION CATCHER, INC.
("SUPPLIER") ("BUYER")
/s/ XXXXX X. XXXXX /s/ XXX XXXXXXXX
--------------------------------- ----------------------------------
NAME: XXXXX X. GATES_____________ NAME: XXX TABANKIN________________
TITLE: EXECUTIVE VP + GM________ TITLE: CHAIRMAN + CTO____________
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT A
PRODUCTS AND SPECIFICATIONS
PART NUMBER SPECIFICATION
Catcher Tablet *
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* Note: Specifications have not yet been developed and approved by Buyer.
See Exhibit D.
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT B
PRICES (SEE NOTES 1,2)
MINIMUM MONTHLY
PRODUCT MODEL NO. UNIT PRICE PURCHASE QUANTITY
-----------------------------------------------------------------------
Catcher Tablet *** ***
Catcher Tablet *** ***
Catcher Tablet *** ***
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Notes: 1. Prices are based upon KeyTronicEMS quote dated 11/9/05, #050102,
attached hereto as Exhibit D. Prices are subject to change if parts and
material costs, or process or test procedures change from those
reflected in the quote.
2. Final xxxx of materials has not yet been developed and approved by
buyer. See Exhibit D.
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT C
PARTS LEAD TIMES AND UNIQUE MATERIALS
XXXX OF MATERIAL PART NO ACQUISITION LEAD TIME
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DESCRIPTION
-------------------
(TBD)
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Note: Final xxxx of materials has not yet been developed and approved by buyer.
See Exhibit D.
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT D
KEYTRONICEMS QUOTATION DATED 11/9/05
REFERENCE # 050102
X.X. Xxx 00000
Xxxxxxx, Xxxxxxxxxx
00000-0000
QUOTATION
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TO: Catcher, Inc. DATE: 11/9/2005
ATTN: Xxxx Xxxxxx, VP Operations REFERENCE: 050102
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Key TronicEMS is pleased to submit the following quotation in accordance with
your request and the terms and conditions noted below.
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MINIMUM
MONTHLY SHIPMENT
ITEM KTC MODEL NUMBER CUSTOMER PART NUMBER SHIP QTY QUOTED PRICE QUANTITY * FCA
---------- ----------------- -------------------- ------------ ------------- ------------- -------------------------
1 CATCHER TABLET *** *** EL PASO, TX
2 CATCHER TABLET *** *** EL PASO, TX
3 CATCHER TABLET *** *** EL PASO, TX
4
5 TRANSFER NRE $58,000
6 TOOLING /
FIXTURES $204,950
7 PROJECT NRE $84,500
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NOTES
1. This quote is based on electrical assembly BOMs generated 8/25/05 by D2M.
Final assembly time estimates are based on ProE files and the Power Point
assembly procedure document from Design Edge on 9/22/05. The electrical files
used for quote are not consistent (will not work) with the current mechanical
files.
2. The quote assumes that the *** mother board and the *** cameras were used
only for prototyping and are not included in the quote. The *** cameras are
included. There were also listed two *** fingerscanner modules, one on the M/B
and the other on the Biometric board. It is our understanding that only one
fingerscanner module will be used, so the module on the M/B was removed.
3. The standard lead time is TBD.
4. No Clean Solder process quoted.
5. IPC-A610-C class 2 acceptability standard quoted on all PCBA's.
6. Payment Terms are ***, FCA El Paso.
7. Functional Test is included at *** minutes per unit. Individual PCBA's also
have estimated test times.
8. KTC is not liable for loss or damage of product FCA El Paso, Tx
9. This quote assumes all terms and conditions are accepted and can not be
varied without written consent from KTC.
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED
10. The minimum run quantity is 2,000 for 25K volume quote, 4,000 for 50K volume
quote, and 8,000 for 100K annual volume quote.
11. ICT test fixture lead-time 4 - 8 weeks after sample functional samples are
available.
12. No qualification/reliability testing or Ongoing Reliability Test (ORT)
quoted. The quote does assume a burn in time at ambient temperature with a fully
automated (non-attended) test.
13. Custom tooling includes estimates for ICT's for the M/B, D/B and
microcontroller board.
14. NRE costs for final assembly test development and functional tests for
individual PCBAs are not quoted at this time.
15. The *** part was not quoted but an estimate of $5.00 is used in the quote
16. Two battery packs are included in the quote.
17. Quote uses Caprock quote of 9/23/05 and Chicago White Metal quote of
9/27/05. All exceptions and notes from those quote apply. Of particular note,
Chicago White Metal does not include finishing / machining operations as the
requirements are not defined.
18. Other than the Caprock and CWM quotes, no mechanical part quotes have been
done. The additional mechanical parts required are included in the quote at an
estimated *** volumes.
19. PCB cost for the mother board is assumed to be a cost of *** times the
daughter board PCB cost.
20. All assembled cables (without AVL or specifications) have estimated prices.
21. Any component that has a shorter manufacturer warranty period than the
agreed upon warranty for workmanship and adherence to specifications will not be
covered after the expiration of its' individual warranty.
22. Both the LCD and the camera have been identified by their respective
manufacturers ***.
23. The mother board assembly time is assumed to be *** times the assembly time
of the daughter board (based on part count).
24. No parts/assemblies require soldering at final assembly
25. No parts/assemblies require Heat Staking
26. No parts/assemblies require Ultrasonic Welding at KTC
27. No parts/assemblies require any type of marking such as Pad Printing or
Laser Marking
28. No packaging specs or requirements available, costs are estimated.
29. *** to be waived for long-term contract. (minimum of 3 years)
30. The quote assumes the customer will supply all required component
specification and assembly drawings.
31. No development reliability testing or agency testing is quoted. These can be
quoted with further definition of the requirements.
32. The quote assumes that Catcher will pay directly to the supplier for any NRE
or other setup charges for any sub component / assemblies (i.e. part tooling,
battery assembly fixturing, etc.).
33. Budgetary Quote.
34. If at any time on hand inventory exceeds 60 days net due to forecast
reductions, KTC reserves the right to sell the excess inventory to the customer
and re-purchase as needed.
35. KTC assumes that any obsolete inventory (as defined by forecast demand) will
be immediately purchased and dispositioned by customer.
36. KTC and the customer can identify long lead time components and generate a
list of necessary buffer stock items based the lead time of the possible 50%
stretch in demand.
37. KTC assumes buy and build to PO/Release.
38. Price is based upon *** aggregate volume
39. KTC represents and warrants that each product manufactured by KTC will be
free from defects in KTC supplied material and workmanship for a period of one
year following the date of manufacture.
40. Since all of the test procedures and quality standards are not defined, KTC
is unsure of the production volumes the test equipment quoted will support.
41. Memory pricing reduced by ***/unit on 11/9/05 per Xxx Xxxxxxxx of Catcher,
Inc. If this price reduction is not valid or accurate, KTC reserves the right to
re-quote.
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED
Prices quoted above are currently applicable to the quantities as covered by
this Quotation. If any decrease in quantity or elimination of one or more items
arises, or if the entire quantity of all items is not shipped within one year
from the date of order a revision of the prices quoted above may be required (as
to order balances as well as to quantities already invoiced) to conform to our
existing schedules.
This quotation is valid for thirty (30) days from date of issue.
By:
Xxxxx Xxxxx
----------------------------------
(not valid without signature)
EXHIBIT E
QUALITY CONTROL AND TESTING
1. Catcher Quality Plan*
2. Catcher Test Plan*
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* Plan has yet to be developed and approved by Buyer and Supplier.
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT F
ORDER FLEXIBILITY
* Operations Plan Customer and KTC to Support Production *
Objective:
1) Support customer/market requirements.
2) Support customer production and business requirements
3) Support KTC production and business requirements
Approach:
1) KTC will procure (place PO's) for raw materials to PO and allow for
reasonable fluctuations in deliveries.
Concepts:
Forecasting/Ordering:
Customer will give KTC monthly requirements document consisting of:
1) 3 months of purchase orders.
2) An additional 9 months forecast.
* Overall view of 12 months with waterfall charts that track changes
over time.
Scheduling of Orders:
1) KTC will commit back within 2 business days specific ship dates on new
orders that are consuming forecast at lead time.
2) 5-7 business days on expedited or de-expedited changes within lead time
or outside of forecasted quantities.
Adjustments to Requirements & Schedule firm up process
0-30 days No changes
30-60 days ***
-
60-150 days ***
-
150 + days ***
-
PO'S
1) Non-Cancellable, Non-Reschedulable within *** weeks.
2) Non-Cancellable, Reschedulable per percentages above not to exceed ***
day slide.
3) KTC will provide flexibility assurance dependent upon materials
availability and customer provided equipment capacity.
FORECAST
1) Non-Cancellable, Reschedulable per allowable percentages
2) With each months requirements document KTC will firm up the following
months schedule
Minimum Build/order requirements
1) Customer recognizes that KTC has minimum build qtys to be cost
effective.
2) Above guidelines will be overlayed against customer ordering minimum
requirements.
Normal Planning Model:
KTC's inventory planning process is:
1) Procure material to PO and part lead time to have in house 3-4 weeks
ahead of build date
2) KTC only plans material deliveries to the quantities on the PO, no
buffer stocks are planned.
Excess Inventory:
1) It is recognized that any changes in requirements may result in excess
inventory at KTC.
2) If KTC develops inventories of greater than (30 days) due to schedule
changes they reserve the right to invoice customer for excess inventory.
KTC will then buy back as needed.
3) For parts where no forecasts exist, KTC will consider the parts
obsolete and look to customer for appropriate disposition.
12
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED
13
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT G
***
14
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
