SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 12, 1999
VIVID TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation)
0-28946 04-3054475
(Commission File Number) (I.R.S. Employer Identification No.)
10E Commerce Way, Woburn, MA 01801
(Address of Principal Executive Offices) (Zip Code)
(781) 938-7800
(Registrant's Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Item 7. Financial Statements and Exhibits
(c) Exhibits.
The registrant is filing this current report on Form 8-K for
the purpose of filing the following exhibits:
10.01 Agreement by and between the registrant and
Herbert Janisch.
10.02 Agreement by and between the registrant and
Ambassador L. Paul Bremer, III.
10.03 Promissory Note and Stock Pledge Agreement of
Kristoph D. Krug in favor of the registrant.
10.04 Promissory Note and Stock Pledge Agreement of
Daniel J. Silva in favor of the registrant.
10.05 Points of Agreement by and between the
registrant and Gilardoni S.p.A.
10.06 Agreement for Vivid Distribution, Manufacture,
License and Purchase of Gilardoni Products
(System and FEP Platform), by and between the
registrant and Gilardoni S.p.A.
10.07 Agreement for Gilardoni Distribution,
Manufacture, License and Purchase of Vivid Products
(Operator Console & Systems), by and between the
registrant and Gilardoni S.p.A.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
VIVID TECHNOLOGIES, INC.
Date: October 12, 1999 By: /s/ William J. Frain
William J. Frain
Chief Financial Officer and Treasurer
EXHIBIT INDEX
Exhibit No. Description
10.01 Agreement by and between the registrant and
Herbert Janisch.
10.02 Agreement by and between the registrant and
Ambassador L. Paul Bremer, III.
10.03 Promissory Note and Stock Pledge Agreement of
Kristoph D. Krug in favor of the registrant.
10.04 Promissory Note and Stock Pledge Agreement of
Daniel J. Silva in favor of the registrant.
10.05 Points of Agreement by and between the
registrant and Gilardoni S.p.A.
10.06 Agreement for Vivid Distribution,
Manufacture, License and Purchase of
Gilardoni Products (System and FEP Platform),
by and between the registrant and Gilardoni S.p.A.
10.07 Agreement for Gilardoni Distribution,
Manufacture, License and Purchase of Vivid
Products (Operator Console & Systems), by and
between the registrant and Gilardoni S.p.A.
____________
Exhibit 10.01
April 23, 1999
Mr. Herbert Janisch
73 Carter Drive
Framingham, Massachusetts 01701
Dear Herbert:
I am pleased to offer you the position of Chief Operating Officer
for Vivid Technologies, Inc. The position is of course on of
great importance to the Company and we will be counting heavily
on you to carry out all aspects of it in a competent and
aggressive manner.
1. Salary:$150,000 per year ($5,769.23 per biweekly pay
period; 26 pay periods per year. Your salary and performance
will be reviewed annually.
2. Bonus: You will receive a guaranteed bonus of $20,000 for
the remainder of Fiscal 99 ending September 30, 1999. For Fiscal
2000, beginning October 1, 1999 your bonus potential will be 100%
of your base salary based on sales and profitability goals of the
Company for the fiscal year to be determined. Total target
compensation package to be approximately $250,000. The final
bonus awarded will be at the sole discretion of the Compensation
Committee of Vivid's Board of Directors.
3. Car Allowance: You will receive a $600/Month car
allowance
4. Stock: We will recommend to the Board of Directors that you
be granted an option to purchase 50,000 shares of currently
authorized Company stock. This option, which we believe will
represent a valuable equity position in Vivid Technologies, Inc.,
will vest at a rate of 20% per year, beginning at the end of the
first year of your employment. A sample stock option agreement
is attached.
5. Life Insurance: Divided Ownership Plan equal to 2X base
salary paid for in full by the Company.
6. Medical Insurance offered for you and your dependents.
Options include a choice between Harvard Community Health Plan
(HMO) and Tufts Benefits Administrators. Employees contribute
25% of the costs of the plan they choose, while Vivid contributes
75%. There is no waiting period for participation in either
plan. The Company also offers a Dental Insurance plan for single
and family plans.
7. Long-term disability insurance in the amount of 60% of your
base salary, with the payments beginning 3 months after the start
of the disability.
8. Three weeks of paid vacation, one week mandatory shut down
surrounding the Christmas, Hanukkah and New Year holiday and nine
paid holidays per year.
9. The right to participate in the Company's 401(k) plan.
With regard to termination, we will pay base salary and certain
benefits including medical and dental insurance until you become
re-employed, but not to exceed six months from termination if
such a termination occurs within the first 12 months of
employment. With regard to takeover, the Company is currently
evaluating a Plan for Executives in the case of an unfriendly
takeover. The Company has certain measures in place, including a
Shareholder Rights Plan (Poison Pill) and will include protection
of key personnel. This will be raised at the next Board of
Directors meeting in June. If the Board does not approve
management's proposal, you will be given an additional six months
of base salary and benefits in the event of a termination
resulting from a change of control of the Company within the next
12 months.
We look forward to you joining Vivid no later than June 1, 1999.
Sincerely,
/s/ S. David Ellenbogen
S. David Ellenbogen
Chief Executive Officer
Accepted: /s/ Herbert Janisch
Exhibit 10.02
Agreement Between
Vivid Technologies Inc. and Ambassador L. Paul Bremer, IIII
This agreement is entered into, effective from this date,
between Vivid Technologies, Inc. ("Vivid") and Ambassador L. Paul
Bremer, III ("Ambassador Bremer"). Under the terms of this
agreement, Vivid engages Ambassador Bremer, and Ambassador Bremer
agrees, to provide Vivid as required with advice ad counsel on
international political, economic, and commercial developments
which may effect Vivid's business interests in various countries
around the world.
In compensation for Ambassador Bremer's advice and counsel,
Vivid agrees to pay Ambassador Bremer $25,000 per year. Payment
will be made quarterly in advance with the first payment due on
the date of this agreement.
Agreed and accepted:
By: /s/ S. David Ellenbogen By: /s/ L. Paul Bremer, III
Vivid Technologies, Inc. L Paul Bremer, III
The term of this Agreement (the "Term") shall commence on the
date of Vivid's execution of this Agreement and shall end on the
first anniversary thereof; provided, however, that the Term of
this Agreement shall automatically be extended for additional
periods of twelve (12) months each unless and until either party
shall give written notice of termination to the other party not
less than 90 days prior to the scheduled commencement of any such
extended period. In no event shall the termination of this
Agreement affect or modify Vivid's obligation to pay the Fees as
set forth above.
Exhibit 10.03
PROMISSORY NOTE
$175,000.00 December 30, 1998
FOR VALUE RECEIVED, the undersigned (the "Obligor"), promises
to pay to Vivid Technologies, Inc. ("Holder") at 10E Commerce
Way, Woburn, Massachusetts, 01801 or order, the principal sum of
One Hundred Seventy-Five Thousand Dollars and No Cents
($175,000.00), together with interest in arrears on any and all
principal amounts outstanding and remaining unpaid hereunder from
time to time from the date hereof at the rate of 5.06% per annum,
the entire outstanding balance of principal and interest to be
due and payable on September 30, 1999.
This Note shall be secured as provided in the Pledge
Agreement between Obligor and Holder of even date herewith.
This Note may be prepaid at any time without penalty.
If any provisions of this Note shall be determined to be
invalid or unenforceable under law, such determination shall not
affect the validity or enforcement of the remaining provisions of
this Note. All agreements between the Obligor and the Holder are
hereby expressly limited so that in no contingency or event
whatsoever shall the amount paid or agreed to be paid to the
Holder for the use, forebearance or detention of the indebtedness
evidenced hereby exceed the maximum permissible under applicable
law. As used herein, the term "applicable law" shall mean the
law in effect as of the date hereof, provided, however, that in
the event there is a change in the law which results in a higher
permissible rate of interest, then this Note shall be governed by
such new law as of its effective date. In this regard, it is
expressly agreed that it is the intent of Obligor and Holder in
the execution, delivery and acceptance of this Note to contract
in strict compliance with the laws of the Commonwealth of
Massachusetts from time to time in effect. If, from any
circumstance whatsoever, fulfillment of any provision hereof or
of any related document at the time performance of such provision
shall be due, shall involve transcending the limit of validity
prescribed by law, then the obligation to be fulfilled shall
automatically be reduced to the limit of such validity, and if
from any circumstances the Holder should ever receive as interest
an amount which would exceed the highest lawful rate, such amount
which would be excessive interest shall be applied to the
reduction of the principal balance evidenced hereby and not to
the payment of interest.
At the option of the Holder, this Note shall become
immediately due and payable without further notice or demand, and
notwithstanding any prior waiver of any breach or default or
other indulgence, upon the occurrence at any time of any one or
more of the following events: (i) if Obligor shall fail to pay
any amount past due hereunder which is not cured within ten (10)
days after receipt of written demand therefor; (ii) if Obligor
shall make an assignment for the benefit of creditors, or if a
receiver of any of the undersigned's property shall be appointed,
or if a petition in bankruptcy or other similar proceeding under
any law for relief of debtors shall be filed by or against the
undersigned; or (iii) if Obligor shall cease to be an employee of
Vivid Technologies, Inc. for any reason. If suit is brought to
collect any sums due under this Note, the Holder shall be
entitled to collect all reasonable costs and expenses of suit,
including, but not limited to, reasonable attorney's fees.
All rights and obligations hereunder shall be governed by
and construed in accordance with the laws of the Commonwealth of
Massachusetts.
No delay or omission on the part of the Holder in exercising
any right hereunder (or any right under any instrument or agree
ment executed in connection herewith or which is given or may be
given to secure the indebtedness evidenced hereby) shall operate
as a waiver of such right, or of any other right, of such Holder,
nor shall any delay, omission or waiver on any one occasion be
deemed to be a bar to, or waiver of, the same or of any other
right on any future occasion.
This Note shall be non-transferable by the Holder.
WITNESS the hands and seals of the undersigned on the day
and year first above written.
/s/ William J. Frain /s/ Kristoph D. Krug
Witness Kristoph D. Krug
Exhibit 10.04
PROMISSORY NOTE
$300,000.00 October 5, 1998
FOR VALUE RECEIVED, the undersigned (the "Obligor"), promises
to pay to Vivid Technologies, Inc. ("Holder") at 10E Commerce
Way, Woburn, Massachusetts, 01801 or order, the principal sum of
Three Hundred Thousand Dollars and No Cents ($300,000.00),
together with interest in arrears on any and all principal
amounts outstanding and remaining unpaid hereunder from time to
time from the date hereof at the rate of 5.06% per annum, the
entire outstanding balance of principal and interest to be due
and payable on September 30, 1999.
This Note shall be secured as provided in the Pledge
Agreement between Obligor and Holder of even date herewith.
This Note may be prepaid at any time without penalty.
If any provisions of this Note shall be determined to be
invalid or unenforceable under law, such determination shall not
affect the validity or enforcement of the remaining provisions of
this Note. All agreements between the Obligor and the Holder are
hereby expressly limited so that in no contingency or event
whatsoever shall the amount paid or agreed to be paid to the
Holder for the use, forebearance or detention of the indebtedness
evidenced hereby exceed the maximum permissible under applicable
law. As used herein, the term "applicable law" shall mean the
law in effect as of the date hereof, provided, however, that in
the event there is a change in the law which results in a higher
permissible rate of interest, then this Note shall be governed by
such new law as of its effective date. In this regard, it is
expressly agreed that it is the intent of Obligor and Holder in
the execution, delivery and acceptance of this Note to contract
in strict compliance with the laws of the Commonwealth of
Massachusetts from time to time in effect. If, from any
circumstance whatsoever, fulfillment of any provision hereof or
of any related document at the time performance of such provision
shall be due, shall involve transcending the limit of validity
prescribed by law, then the obligation to be fulfilled shall
automatically be reduced to the limit of such validity, and if
from any circumstances the Holder should ever receive as interest
an amount which would exceed the highest lawful rate, such amount
which would be excessive interest shall be applied to the
reduction of the principal balance evidenced hereby and not to
the payment of interest.
At the option of the Holder, this Note shall become
immediately due and payable without further notice or demand, and
notwithstanding any prior waiver of any breach or default or
other indulgence, upon the occurrence at any time of any one or
more of the following events: (i) if Obligor shall fail to pay
any amount past due hereunder which is not cured within ten (10)
days after receipt of written demand therefor; (ii) if Obligor
shall make an assignment for the benefit of creditors, or if a
receiver of any of the undersigned's property shall be appointed,
or if a petition in bankruptcy or other similar proceeding under
any law for relief of debtors shall be filed by or against the
undersigned; or (iii) if Obligor shall cease to be an employee of
Vivid Technologies, Inc. for any reason. If suit is brought to
collect any sums due under this Note, the Holder shall be
entitled to collect all reasonable costs and expenses of suit,
including, but not limited to, reasonable attorney's fees.
All rights and obligations hereunder shall be governed by
and construed in accordance with the laws of the Commonwealth of
Massachusetts.
No delay or omission on the part of the Holder in exercising
any right hereunder (or any right under any instrument or agree
ment executed in connection herewith or which is given or may be
given to secure the indebtedness evidenced hereby) shall operate
as a waiver of such right, or of any other right, of such Holder,
nor shall any delay, omission or waiver on any one occasion be
deemed to be a bar to, or waiver of, the same or of any other
right on any future occasion.
This Note shall be non-transferable by the Holder.
WITNESS the hands and seals of the undersigned on the day
and year first above written.
/s/ William J. Frain /s/ Daniel J. Silva
Witness Daniel J. Silva
Exhibit 10.05
POINTS OF AGREEMENT
Gilardoni S.pA. & Vivid meeting
October 23, 1997
1. a) Gilardoni to pay Vivid $3,000 royalty per system for the
first 100 systems. No royalty due thereafter.
b) Vivid to pay Gilardoni a royalty of $3,000 for the first
167 systems in the form of a prepaid royalty. Vivid to pay
remaining $201,000 to Gilardoni per contract. No royalty due
thereafter.
2. Documentation for new Model APS to be forwarded to Gilardoni
in a timely manner as released.
3. Both parties agree to utilize a mutually agreeable revision
control procedure.
4. Parties agree to reduce prices in contract as follows:
a) Monobloc/inverter assembly $5,250 USD maximum.
b) Operator console assembly $5,100 USD maximum.
5. All other terms and conditions of the contract to be in effect.
Agreed:
/s/ Richard Bisson /s/ Stephen Reber
Richard Bisson Stephen Reber
Gilardoni S.p.A Vivid Technologies, Inc.
October 23, 1997 October 23, 1997
Exhibit 10.06
AGREEMENT FOR
VIVID DISTRIBUTION, MANUFACTURE AND PURCHASE OF
GILARDONI PRODUCTS (SYSTEMS & FEP PLATFORM)
Agreement effective August 27, 1997 (Effective Date) between
Vivid Technologies, Inc., a Massachusetts corporation having a
principal place of business at 10E Commerce Way, Woburn, MA
01801 (USA) and its subsidiaries (hereinafter referred to as
"Vivid"), and Gilardoni S.p.A., having a principal place of
business at Mandello del Lario (Como), Italy (hereinafter
referred to as "Gilardoni").
PART A - INTRODUCTORY MATTERS
1. Facts.
Gilardoni is a developer, manufacturer and distributor of a
line of FEP brand conventional x-ray-based systems and
components, which are used to inspect luggage, mail,
parcels, and break bulk cargo, which it distributes in Italy
and other countries.
Vivid is a developer and manufacturer of advanced x-ray
inspection systems which are used to inspect airline hold
baggage and other luggage, mail, parcels, and break bulk
cargo, as well as advanced x-ray inspection technology which
offers improved image quality, a proprietary operator
interface and automated processing capabilities. Vivid has
included this technology in its products, specifically its
Operator Console Assembly, and pursuant to a prior agreement
titled Distribution and Development Agreement (the "Prior
Agreement"), integrated said Operator Console Assembly for
use with the data acquisition modules of Gilardoni's FEP ME
640 (the "FEP Platform" as defined below) to develop a
"Joint System", as also defined below. Said Prior Agreement
is hereby agreed to be terminated, superseded by this
Agreement, and of no further effect as of the Effective
Date.
Under this Agreement, Vivid will market and sell Gilardoni's
Systems in certain countries of the world, market and sell
the Joint System in certain countries, and obtain the right
to manufacture the Gilardoni FEP Platform in support
thereof, excluding certain parts to be purchased from
Gilardoni.
Under a separate agreement of even date herewith, Gilardoni
will market and sell the Joint System in certain other
countries, and obtain the right to manufacture the Operator
Console Assembly in support thereof, including certain parts
to be purchased from Vivid (hereinafter the "Associated
Agreement").
2. Definitions.
2.1 "Gilardoni System" means the current Gilardoni FEP line
of x-ray-based inspection systems, comprising its FEP
ME 640 and FEP ME 975 products, used to inspect
luggage, mail, parcels, and break bulk cargo, and spare
parts therefor.
2.2 "FEP Platform" means those modules of the Gilardoni FEP
ME 640 used for data acquisition and/or system control,
as described in more detail in Exhibit D hereto, and
spare parts therefor.
2.3 "FEP Products" means the Gilardoni System, and the FEP
Platform, including spare parts therefor.
2.3.1 "Monobloc/Inverter Assembly" means those
components of the FEP Platform described as such in
Exhibit D hereto, most particularly the "monobloc" and
"inverter board set" together with associated cables
and parts, to be purchased by Vivid from Gilardoni in
connection with its manufacture of FEP Platforms, Joint
Systems, and derivative products.
2.4 "Vivid System" means the current Vivid line of advanced
x-ray-based inspection systems used to inspect airline
hold baggage, as well as other luggage, mail, parcels,
and break bulk cargo; except that the term Vivid
Systems shall not include products and technology
purchased or licensed from third-parties to the extent
that Vivid's agreement with said third-party precludes
or prevents Vivid from licensing or selling said
product or technology to or through Gilardoni; and
spare parts therefor.
2.5 "Operator Console Assembly" means the Vivid display
console and associated software and hardware technology
together with associated cables and parts, as described
in Exhibit E hereto; and spare parts therefor.
2.6 "Joint System" means an x-ray-based inspection system
used to inspect luggage, mail, parcels, and/or break
bulk cargo, consisting of the Gilardoni FEP Platform
and the Operator Console Assembly, and spare parts
therefor.
2.7 "Vivid Product" means the Vivid System, and the
Operator Console Assembly (but only as incorporated
into the Joint System, or as sold as an upgrade for the
Gilardoni System), and spare parts therefor.
2.8 "Proprietary Information" means all confidential or
trade secret information so designated by a disclosing
party in writing. If Proprietary Information is
disclosed in one or more documents, the disclosing
party shall identify said document in writing as
containing proprietary or confidential information,
either by providing a proprietary or confidential or
similar legend on such document, or by providing, with
the document, a separate writing which identifies the
documents as containing proprietary or confidential
information. If Proprietary Information is only
disclosed orally or made available by inspection, the
disclosing party shall, within thirty (30) days after
such disclosure, deliver to the receiving party a
written description of such Proprietary Information
identifying where appropriate the place and time of
such oral disclosure, and the names of representatives
of the receiving party to whom such disclosures were
made. Proprietary Information shall not include
information which: (a) is or becomes in the public
domain through no action of the receiving party; or (b)
is generally disclosed to third parties by disclosing
party without restriction on such third parties; or (c)
is independently developed by the receiving party
without reference to disclosing party's Proprietary
Information; or (d) is received by the receiving party
from a third party which has the right to disclose such
information and without violation of this Agreement; or
(e) is approved for release by written authorization of
disclosing party; or (f) is disclosed pursuant to an
order of a court or governmental agency, providing that
the receiving party notifies disclosing party and
affords it an opportunity to oppose such order.
2.9 "Manufacturing Information" means all Proprietary
Information necessary to manufacture, test, install,
service and use the item in question and all
subassemblies thereof, including a bill of materials,
and all technical and engineering information, know
how, trade secrets, proprietary information, and data
relating thereto, and the documentation listed in
Exhibit C hereto.
2.10 "Cost Plus" means direct costs of direct materials and
labor, and indirect manufacturing labor, plus an
allocation of 35% of said amount to cover overhead.
PART B - VIVID'S DISTRIBUTION RIGHTS
3. Appointment and Territory.
3.1 For the Term of this Agreement Gilardoni hereby
appoints Vivid as:
(a)(i) the exclusive distributor of Gilardoni Systems
for installation in the United States, Mexico and
Canada;
(a)(ii) the exclusive distributor of (the FEP Platform
as incorporated into) the Joint System for all
countries of the World except Italy, Cyprus, Bulgaria,
Tunisia, Brazil, Argentina, Libya, Iran and Romania.
(b) a non exclusive distributor of Gilardoni Systems
for all countries of the World except Italy, Cyprus,
Bulgaria, Tunisia, Brazil, Argentina, Romania, Libya
and Iran.
(c) rights for the country of Greece shall be allocated
among the parties at a later time.
Vivid agrees not to solicit any order for installation
of an FEP Product outside of the Vivid territories
described above without Gilardoni's advance written
consent. Vivid is not prohibited from accepting orders
for FEP Products from customers in the European Union,
for installation in the European Union but outside the
Vivid territories described above, provided that it
first demonstrates by documentary evidence that (1) the
customer initiated the transaction, and (2) it took no
action to solicit the order.
3.2 During the Term of this Agreement without the advance
written consent of the other party:
(a) Neither Vivid nor Gilardoni shall market or sell
for installation any x-ray-based system from any
manufacturer other than Vivid or Gilardoni to inspect
luggage, mail, parcels, or break bulk cargo; and
(b) Gilardoni will not itself market or sell FEP
Products or any other x-ray based system to inspect
luggage, mail, parcels, or break bulk cargo for
installation in the territories assigned exclusively to
Vivid, and will not appoint any other reseller or
distributor with any right to market or sell FEP
Products in the territories assigned exclusively to
Vivid.
3.3 Notwithstanding any other provision of this Section 3,
Gilardoni is not prohibited from selling to any third-
party those components of its Gilardoni Systems which
it sells separately in the normal course of its
business (including but not limited to x-ray grids,
tubes, and electronic assemblies such as inverters,
monoblocs, and x-ray detector assemblies) either
separately or assembled. This Subsection 3.3 does not
apply and Gilardoni shall not sell components used in
(or based on components used in) its FEP Platform in
combinations that comprise an x-ray generator or a
detector set for use in inspecting luggage, mail,
parcels, or break bulk cargo in the territories for FEP
Platforms assigned exclusively to Vivid.
4. Marketing and Promotion.
4.1 Vivid will be solely responsible for all marketing and
sales of FEP Products purchased pursuant to this
Agreement. Vivid and Gilardoni will work together to
develop appropriate marketing plans as reasonable and
necessary to promote the FEP Product and the Joint
System.
4.2 Gilardoni hereby grants Vivid a non-exclusive, non-
transferable license to represents itself as an
"Authorized Distributor" of FEP Products, and to use
the Gilardoni trademarks identified in Exhibit A hereto
in connection therewith. To the extent that Vivid does
so, Vivid will cause all such equipment to be
manufactured to product and quality specifications at
least equal to those utilized by Gilardoni. Gilardoni
may monitor Vivid's compliance with this requirement.
4.3 Vivid may also distribute FEP Products and the Joint
System under its own trademark, either by itself or in
conjunction with Gilardoni's trademarks.
4.4 Vivid shall not register any Gilardoni trademarks in
any jurisdiction, but may request that Gilardoni
register or obtain appropriate legal protection for its
trademarks identified in Exhibit A hereto in the Vivid
Territory. Any such registration shall be owned by
Gilardoni. Payment of any registration or other fees
required in connection therewith shall be agreed on a
case-by-case basis.
PART C - PURCHASE TERMS
5. Purchase prices, payment and taxes.
5.1 Gilardoni agrees to sell and Vivid agrees to purchase
FEP Products, services and Monobloc/Inverter Assemblies
listed on Exhibit B hereto in accord with the terms of
this Agreement. Prices are quoted in U.S. Dollars as
set forth in Exhibit B hereto, provided that: (i)
lower prices to meet individual customer situations may
be negotiated on a case-by-case basis; and (ii) if
Gilardoni offers to any non-end user other party lower
prices and/or more advantageous terms for any of the
products, components or services offered pursuant to
this Agreement to Vivid, it shall offer the same prices
and/or terms to Vivid.
5.2 Except as levied by the Government of Italy or its
constituent jurisdictions, Vivid will pay or reimburse
Gilardoni for any taxes, VAT, import duties or other
government charges however designated, arising from or
based upon Gilardoni's sale of the FEP Products or
Monobloc/Inverter Assemblies to Vivid ("Taxes"), but
not including any income or corporate excise tax
assessed against, or levied on, Gilardoni. If
applicable, Vivid shall furnish Gilardoni with whatever
certificates or other instruments may be necessary or
appropriate to evidence that Gilardoni's sales of the
FEP Products or Monobloc/Inverter Assemblies to Vivid
are not subject to Taxes under applicable law.
5.3 Payment for all FEP Products and Monobloc/Inverter
Assemblies ordered under this Agreement (unless
otherwise agreed in writing in advance with respect to
a specific order) shall be due thirty (30) days after
Delivery. Payment terms are subject to change upon
mutual agreement between Gilardoni and Vivid.
5.4 All payments pursuant to this Agreement shall be made
by bank transfer in U.S. Dollars available at
Gilardoni's bank.
6. Forecasts, Purchase Orders, Product Integration, and
Shipping.
6.1 Forecast of Demand. Within thirty (30) days from the
date of last signature of this Agreement, Vivid shall
deliver to Gilardoni an initial forecast specifying the
quantities of Gilardoni Systems, FEP Platforms,
Monobloc/Inverter Assemblies, and spare parts to be
purchased by Vivid and supplied by Gilardoni during
each month of the following two quarters (the "Initial
Forecast"). Thereafter, within ten days of the start
of each calendar month, Vivid shall deliver to
Gilardoni a "rolling" forecast specifying the
quantities of Gilardoni Systems, FEP Platforms,
Monobloc/Inverter Assemblies, and spare parts to be
purchased by Vivid and supplied by Gilardoni during
each month of the following two quarters (the "Rolling
Forecast"). The Initial Forecast and each Rolling
Forecast shall be considered a firm purchase order
committing both parties with respect to the purchase
and sale of Gilardoni Systems, FEP Platforms, and
Monobloc/Inverter Assemblies, and spare parts over the
first three months thereof in accordance with Section
6.2, provided that Vivid's maximum forecast of
Monobloc/Inverter Assemblies over the first three
months forecasted shall be no more than ten (10) units
and provided that Vivid's maximum forecast of Gilardoni
Systems and/or FEP Platforms over the first two (2)
months forecasted shall be no more than ten (10) units.
As part of the Initial Forecast, Vivid shall specify
firm dates for delivery of any product to be delivered
in each of the first three months of said Initial
Forecast ("Firm Delivery Dates"). As part of each
subsequent Rolling Forecast, Vivid shall specify Firm
Delivery Dates for the third month thereof. Forecasts
of quantities to be purchased in the subsequent
quarter, in the Initial Forecast and Rolling Forecast,
shall be used by Gilardoni for purposes of planning and
manufacture of Monobloc/Inverter Assemblies for
inventory purposes, but Vivid shall not be bound by
said subsequent quarter forecast, nor shall Vivid be
liable to Gilardoni with respect to any changes
thereto.
6.2 Within ten (10) days following its receipt of the
Initial Forecast, and each Rolling Forecast, Gilardoni
(a) may modify the Firm Delivery Dates for product to
be delivered in the third month of said Rolling
Forecast (each month in connection with the Initial
Forecast) if the quantities of Products so ordered
makes this necessary to fit its production
capabilities, provided always that said modified Firm
Delivery Dates shall be within thirty (30) days of the
initial Vivid-requested Delivery Date; (b) shall
otherwise confirm Firm Delivery Dates requested for
each of the first three (3) months thereof and its
general capability to provide the numbers forecasted
for delivery during the subsequent quarter; and (c)
shall provide Vivid with a listing of all product held
in inventory pursuant to Section 6.2A hereof.
6.2A Inventory. Within ten days of the Effective Date,
Gilardoni shall establish a segregated inventory (held
solely for Vivid), of the quantity of Monobloc/Inverter
Assemblies described hereafter in this Section 6.2A.
Within thirty (30) days of Vivid's Initial Forecast,
Gilardoni shall consign to said segregated inventory at
least ten (10) Monobloc/Inverter Assemblies. Within
thirty days of each Rolling Forecast, Gilardoni shall
consign to and thereafter maintain in said segregated
inventory that quantity of Monobloc/Inverter Assemblies
equal to two times said Rolling Forecast for the
following six months, but not less than ten (10)
Monobloc/Inverter Assemblies (or such other number as
may be mutually agreed), provided always that Gilardoni
shall not be required to increase the number of
Monobloc/Inverter Assemblies held in said segregated
inventory by more than ten (10) units per month during
the first six months following Vivid's Initial
Forecast. At the end of six months following Vivid's
Initial Forecast, the parties will meet to review
Gilardoni's delivery performance and to consider a
reduction in Gilardoni's inventory requirement.
Afterwards, such reviews will take place every three
months . Any change to Gilardoni's obligation to
maintain inventory pursuant to this Section shall be
made only by mutual consent of the parties.
6.3 In the event that Gilardoni does not meet any Firm
Delivery Date for all or any part of the Gilardoni
Systems or FEP Platforms or Monobloc/Inverter
Assemblies ordered pursuant to Section 6.1 for any
reason and not withstanding Section 23.2 of this
Agreement, Vivid's price therefor shall be reduced by
two percent (2%) for each week of delay in Delivery to
a maximum price reduction of eight percent (8%).
Except as otherwise provided in this Agreement or
agreed in writing between the parties with respect to a
specific order, this restriction shall be in lieu of
any other right to claim damages for delay in delivery
of the subject products. (Additional Gilardoni
obligations with respect to the supply of
Monobloc/Inverter Assemblies are set forth in Section
17 of this Agreement.)
6.4 Unless otherwise agreed with respect to a specific
order of Gilardoni Systems or FEP Products or
Monobloc/Inverter Assemblies, all prices pursuant to
this Agreement are quoted, and product delivery
(Delivery) will be ex-works (Incoterms 1990).
Gilardoni will also pack product for shipment in accord
with Vivid's instructions, at the charges set out on
Exhibit B hereto. Upon Vivid request, Gilardoni will
arrange for drop shipment of FEP Product (and Joint
Systems) to Vivid customers, in accord with Vivid's
instructions, provided that Vivid shall be responsible
for all associated risk and shipping, customs, taxes,
insurance and whatever other charges are payable with
respect thereto. Provided that Vivid first establishes
credit terms reasonably acceptable to Gilardoni,
Gilardoni shall advance and invoice said amounts to
Vivid, said invoices to be due and payable as agreed.
6.5 Vivid shall stock spare parts to meet anticipated
demand. From time to time Vivid may be required to
order spare parts on an expedited basis. Gilardoni
shall use its best commercial efforts to ship such
expedited purchase orders within 24 hours following
receipt. Spare parts invoices are due and payable
thirty (30) days after receipt.
6.6 Upon request and in connection with Vivid sales of the
Joint System, Gilardoni will provide the service of
integrating Operator Console Assemblies with FEP
Platforms, and/or manufacture thereof, and testing the
resulting Joint Systems, using Vivid qualified assembly
and test procedures, on a schedule and at the Cost Plus
Formula set out in Exhibit B hereto.
7. Installation and Acceptance.
7.1 Vivid shall be solely responsible for installation, on-
site testing, and commissioning of all FEP Product sold
hereunder, as well as for customer training, support,
warranty, and service. Vivid shall supply such service
to customers at the times and for the fees that are
normal and customary in the trade and appropriate for
the product. Except as specifically provided for in
this Agreement, Gilardoni shall have no obligation or
liability for these matters. If Vivid fails to offer
such service to a customer or abandons a customer
contract, Gilardoni may offer said services directly to
said customer, at its sole risk, responsibility, and
expense, provided that Gilardoni informs Vivid in
advance in writing of its intent to contact said
customer, provides Vivid with five (5) business days to
respond or object, and does not initiate any contact
with said customer before expiration of said period and
resolution of any Vivid response or objection.
Notwithstanding any other Section of this Agreement,
each party (the "Indemnifying Party") shall indemnify
the other (the "Indemnified Party") for any loss,
damages, costs or other expenses incurred by the
Indemnified Party arising out of any action undertaken
by the Indemnifying Party pursuant to this Section 7.1.
7.2 Upon request, Gilardoni will provide installation, on-
site testing, commissioning, customer training,
support, warranty, and service for product at rates to
be negotiated.
8. Product Warranty.
8.1 Gilardoni warrants that FEP Products, Monobloc/Inverter
Assemblies, and any other product delivered by
Gilardoni hereunder shall be free from defects in
workmanship and material, and shall perform in
accordance with their then-current published functional
specifications under normal use and proper operating
conditions. This warranty will extend for a period of
12 months from the date of customer acceptance, or 16
months from the date of Delivery, whichever is earlier.
Gilardoni agrees to provide extensions to this warranty
under reasonable terms to be negotiated with Vivid for
specific customer situations.
8.2 In the event that warranted products are deemed
defective or otherwise in breach of the warranty set
out in Section 8.1 above, Vivid shall identify, remove,
and return to Gilardoni the defective product,
component, or sub-assembly, and Gilardoni shall repair
or replace, in a timely manner, at its discretion, any
such defective product, component or sub-assembly.
Warranty claims shall be initiated by contacting
Gilardoni by telephone or facsimile, obtaining a return
material authorization number, and shipping items
returned under warranty to Gilardoni's designated
facility, freight prepaid by Vivid, all in accord with
Gilardoni's then-current returned material
authorization procedure. Gilardoni's current returned
material authorization procedure is attached as Exhibit
F hereto. Gilardoni shall return items replaced or
repaired under warranty as designated by Vivid, on a
DDP basis (Incoterms 1990). Items returned shall
become Gilardoni property.
8.3 Gilardoni provides the Additional Warranty that FEP
Products and Monobloc/Inverter Assemblies shall be free
of major safety hazards, and for a period of five years
from date of customer acceptance will be free of
epidemic or systemic failure. A major safety hazard is
defined as a defect which prevents the safe operation
of the product at its place of installation, such as an
electric shock, personal radiation exposure, or fire
risk (and not including risks to aircraft, passengers,
or operators associated with failure to detect
contraband material). A systemic or epidemic failure
shall exist when defects of the same root cause occur
in any non-expendable parts in ten percent (10%) or
greater of FEP Products or Monobloc/Inverter Assemblies
delivered pursuant to this Agreement within any 24
month period, or the actual mean time between failure
(hereafter "MTBF") of any part of said FEP Products or
Monobloc/Inverter Assemblies as delivered is lower than
95% of Gilardoni's published MTBF figure for said
part(s). In such event, Gilardoni and Vivid shall
immediately devise a corrective action plan, under
which Gilardoni shall provide all parts, materials and
technical assistance, and Vivid shall supply all labor,
reasonably needed to replace all affected parts in FEP
Products or Monobloc/Inverter Assemblies purchased and
resold pursuant to this Agreement. In the event the
expenses of one party associated with said corrective
action are more than fifty percent (50%) greater than
the expenses of the other party, then Gilardoni and
Vivid shall share the cost of such corrective action on
an equal basis. Not covered by this Section 8.3 is a
change in regulatory requirements.
8.4 The parties may agree that FEP Products or
Monobloc/Inverter Assemblies supplied in connection
with any individual situation shall meet such other
specifications as may be agreed between Gilardoni and
Vivid.
10. Exclusive Warranty.
10.1 THE WARRANTIES SET OUT IN SECTIONS 8 AND 9 HEREOF ARE
EXCLUSIVE, AND NO OTHER WARRANTY, WHETHER EXPRESS OR
IMPLIED, WRITTEN OR ORAL, SHALL APPLY TO THE SUBJECT OF
THIS AGREEMENT. GILARDONI SPECIFICALLY DISCLAIMS ANY
IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE AND ANY LIABILITY FOR DIRECT,
INDIRECT, CONSEQUENTIAL OR ANY OTHER DAMAGE, INCLUDING
LOSS OF PROFITS, TO VIVID, ANY CUSTOMER OF SAME, OR ANY
THIRD PARTY.
PART C - MANUFACTURING RIGHTS
14. Gilardoni Manufacturing Information and Software.
14.1 Within thirty (30) days of the Effective Date,
Gilardoni will furnish to Vivid, on a non-exclusive
basis, all Gilardoni Manufacturing Information (Product
Design frozen May 1, 1997) related to FEP Platform
(except information needed to manufacture the Monobloc
and Inverter Board Set), and will provide pursuant to
the Software License set out in Section 19C hereof,
such Software as may be needed to test, install,
service and use said FEP Platform and all subassemblies
thereof (including the Monobloc and Inverter Board
Set). Gilardoni Manufacturing Information will be
prepared by Gilardoni in English, and shall be in
accord with technical standards used by Gilardoni at
the time of preparation thereof. Vivid will treat all
Gilardoni Manufacturing Information, amendments,
updates and revisions thereto, Software, and consulting
assistance disclosed or provided pursuant to this
Agreement as Proprietary Information and in accord with
the provisions of Section 20.
Vivid shall pay to Gilardoni a non-refundable advance
royalty of five-hundred one thousand United States
Dollars (US$501,000) for a license to use said
Gilardoni Manufacturing Information and Software for
the purposes provided this Part C. Said advance
royalty shall be creditable against Vivid per unit
royalties payable pursuant to Section 15.2 hereof, and
shall be paid in accord with the following schedule:
(a) one hundred fifty thousand United States Dollars
(US$150,000) within ten (10) days following the later
of Vivid's receipt of said Gilardoni Manufacturing
Information and Software and Vivid's receipt of the
first two FEP Platforms to be supplied for development
purposes (as described in Exhibit B hereto).
(b) one hundred fifty thousand United States Dollars
(US$150,000) within ten (10) days following completion
of acceptance testing of said two FEP Platforms
(provided that Gilardoni is then in compliance with the
delivery schedule for additional FEP Platforms to be
used for demonstration purposes); both parties using
reasonable commercial efforts to complete acceptance
testing by June 1, 1997.
(c) two hundred one thousand United States Dollars
(US$201,000) within ten (10) days following Vivid's
first (revenue) shipment of a Vivid manufactured Joint
System, with both parties using reasonable commercial
efforts to make said shipment by January 1, 1998.
14.2 In order to assist Vivid in understanding the Gilardoni
Manufacturing Information, and to assist Vivid in the
manufacture of FEP Platform, Gilardoni shall upon
request of Vivid, provide reasonable consulting
assistance by telephone without charge to technically
qualified personnel of Vivid, subject to the
availability of qualified personnel within the employ
of Gilardoni (together with up to one week of on-site
consulting assistance without charge, and such
additional time as may be reasonably necessary at
Gilardoni's daily rates). Vivid shall be responsible
for and shall pay all travel and living expenses
associated with such assistance.
15. Manufacturing Rights and Royalties.
15.1 Subject to the terms of this Agreement, and upon
payment for the Gilardoni Manufacturing Information
described in Section 14 above, Vivid may manufacture
and have manufactured, in the United States and in such
other countries of Vivid's exclusive territory as may
be agreed where such manufacturing is reasonably
commercially necessary in connection with Vivid's sales
and marketing efforts therein by Gilardoni (Gilardoni's
agreement thereto shall not be unreasonably withheld,
provided that Gilardoni's intellectual property rights
in its products are adequately protected) such
quantities of the FEP Platform and any spare parts
excluding Monobloc/Inverter Assemblies therefore as
Vivid may require to fully execute its rights under
this Agreement.
15.2 In partial consideration of the rights granted to Vivid
under this Part C, Vivid shall pay to Gilardoni a per
unit royalty for each FEP Platform or other device sold
or otherwise disposed of which incorporates any of the
Gilardoni Manufacturing Information or Software
provided to Vivid pursuant to this Part C ("Licensed
Products") at the rate of:
(a) three thousand United States Dollars (US$3,000) for
each of the first one-hundred sixty-seven (167)
systems, said per unit royalty to be credited against
the advance royalty payment described in Section 14.1
above; and
(b) two thousand United States Dollars (US$2,000) for
each of additional system beyond said first one-hundred
sixty-seven systems.
15.2.1 Reports and Payments. Within 60 days after the
conclusion of each calendar quarter, Vivid shall
deliver to Gilardoni a report covering said calendar
quarter, listing the number of Licensed Products sold
or otherwise disposed of, the countries of
installation, and the total royalty payable or credited
against the Advance Royalty described above. All such
reports shall be treated as Proprietary Information and
shall not be disclosed to any third party. If no
royalties are due or creditable for any calendar
quarter, the report so shall state. Concurrent with
said report, Vivid shall remit to Gilardoni any royalty
payment due for the applicable calendar quarter.
Gilardoni shall instruct Vivid as to the method of
payment. All other payments pursuant to this Part C
shall be made within thirty (30) days of invoice. All
payments shall be payable in U.S. Dollars.
15.2.3 Records. Vivid shall maintain complete and
accurate records of Licensed Products and amounts
payable to Gilardoni in relation to Licensed Products
for a period of at least three years after the
conclusion of any calendar quarter. Gilardoni shall
have the right, at its expense, to cause such records
to be audited during normal business hours by an
independent certified public accountant of Gilardoni's
choice for the purpose of verifying any reports and
payments delivered under this agreement. In the event
any audit performed under this section reveals an
underpayment in excess of five percent (5%) in any
calendar quarter, Vivid shall bear the full cost of
such audit. Gilardoni may exercise its rights under
this section once each year with prior reasonable
notice. Payments not paid on or before the date such
payments are due under this Part C, shall bear
interest, to the extent permitted by law under, at 1.5%
above the United States prime rate of interest, as
reported in the Wall Street Journal, and calculated
based on the number of days that payment is delinquent.
17. Vivid Option to Manufacture Monobloc/Inverter Assembly.
17.1 Escrow Agreement. Within thirty (30) days of the date
of this Agreement, Gilardoni agrees to enter into and
maintain an agreement acceptable to Vivid with a
mutually agreed escrow agent in the United States for
the term of this Agreement, under which agreement,
Gilardoni will provide to and maintain with said escrow
agent, current copies of all specifications, plans
vendor information, and other intellectual property
necessary to manufacture Monobloc/Inverter Assemblies
(hereafter "Monobloc Escrow Information"). Said escrow
agent shall be authorized to release said Monobloc
Escrow Information to Vivid upon notice of Vivid's
exercise of its option to manufacture granted pursuant
to this Section 17 In the event of such Vivid
exercise, Vivid shall treat all such Monobloc Escrow
Information in accord with Section 20.2 hereof and
shall use said intellectual property solely for the
purposes permitted by this Section 17. The terms of
Sections 20.3 and 20.4 shall not apply to Monobloc
Escrow Information obtained by Vivid pursuant to this
Section 17.
17.2 Gilardoni hereby grants Vivid an option, exercisable by
Vivid pursuant to the terms of this Section 17, to a
non-exclusive, nontransferable, royalty-free license to
manufacture or have manufactured at a manufacturing
facility in the United States (or such other country as
the parties may agree), for the sole purpose of
manufacturing Monobloc/Inverter Assemblies for use
pursuant to the terms of this Agreement.
17.3 Not withstanding Section 23.2 of this Agreement, in the
event that (a) Gilardoni for any reason (i) fails for
thirty (30) days to deliver to Vivid the quantity of
Monobloc/Inverter Assemblies on the Firm Delivery Dates
specified pursuant to Sections 6.1 and 6.2 hereof, or
(ii) notifies Vivid that it will not deliver to Vivid
the quantity of Monobloc/Inverter Assemblies specified
in Vivid's Rolling Forecast for any future month, or
(iii) fails to comply with Section 6.2A hereof, or (iv)
violates Section 23.5 hereof, or (b) Vivid becomes
entitled to terminate this Agreement pursuant to
Section 21.5, or Section 21.4 hereof, Vivid shall be
entitled, upon written notice, to withdraw from escrow
the Monobloc Escrow Information, and thereafter to
itself manufacture, or to have manufactured, or
purchase all or part of its requirements of
Monobloc/Inverter Assemblies from third parties. Any
Vivid exercise of this right shall not relieve
Gilardoni of its obligations to supply
Monobloc/Inverter Assemblies pursuant to this
Agreement. Except as permitted by this Section, Vivid
shall purchase from Gilardoni all Monobloc/Inverter
Assemblies required for FEP Platforms manufactured
pursuant to Section 15 hereof.
18. No Gilardoni Warranty; Vivid Solely Responsible;
Indemnification & Insurance.
18.1 Gilardoni makes no warranty or representation for any
purpose with respect to Gilardoni Manufacturing
Information or Software licensed hereunder, except that
Gilardoni shall use its best efforts to verify that
such Gilardoni Manufacturing Information and Software
are the same information, data, and software as is used
by Gilardoni and that it has been prepared in
accordance with good industry standards. Gilardoni
makes no warranty that said Gilardoni Manufacturing
Information or Software is complete, accurate, or free
from defects. Consulting assistance shall be provided
in a workmanlike fashion, with no warranty of any
particular result. GILARDONI SPECIFICALLY DISCLAIMS
ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE.
18.2 GILARDONI DISCLAIMS ALL WARRANTIES SET OUT IN SECTION 8
OF THIS AGREEMENT WITH RESPECT TO ANY FEP PLATFORM,
SOFTWARE, OR OTHER PRODUCT, SERVICE OR ASSISTANCE
PROVIDED, MANUFACTURED, SOLD, OR USED PURSUANT TO THIS
PART C.
18.3 Vivid shall be solely responsible for all product
warranties and all liabilities relating to any product
manufactured pursuant to the rights granted by this
Part C. Vivid shall perform and fulfill all terms and
obligations of each such warranty. Gilardoni shall not
have any warranty obligation or liability with respect
to such products to subdistributors or customers of
Vivid.
18.4 Vivid shall indemnify, defend and hold Gilardoni and
its successors, heirs, and assigns (the "Indemnitee"),
against all liability, damage, loss or expense
(including reasonable attorney's fees and expenses of
litigation) incurred or imposed by or upon the
Indemnitee in connection with any claim, suit, action,
demand, or judgment arising out of any theory of
liability (including without limitation actions in the
form of tort, warranty, or strict liability and
regardless of whether the action of has any factual
basis) concerning any product, process or service that
is made, used or sold pursuant to any right or license
granted under this Part C; provided, however, that such
indemnification shall not apply to any liability, loss,
damage or expense to the extent attributable to the
grossly negligent activities or intentional misconduct
of the Indemnitee or (ii) the settlement of a claim,
suit, action or demand by the Indemnitee without prior
written approval of Vivid.
PART D - GENERAL TERMS
19. Ownership of Technology; Improvements and New Products.
19.1 As between Gilardoni and Vivid, each party shall
maintain all of its ownership rights in all patents,
copyrights, trade secrets, trademarks, designs, and
other intellectual property as of the Effective Date
hereof. Each party shall own all improvements to its
own or the other party's products subject to this
Agreement (hereinafter "Improvements") which it may
individually make, and may exploit and utilize said
Improvements for any purpose whatsoever. Each party
shall offer to sell and/or license the other party to
purchase, distribute and utilize Improvements pursuant
to this Agreement at charges and terms to be agreed.
19.1.1 The parties may mutually agree to enter into a
separate agreement to undertake joint development work,
and as to the allocation of any intellectual property
rights resulting therefrom. Except as so agreed,
Improvements which are jointly made shall be jointly
owned. Each party shall have the right, in its sole
discretion to file, prosecute and maintain at its own
expense any application for patent, copyright, or other
legal protection in any country on any jointly made
Improvement. Each party shall give the other all
reasonable assistance in obtaining such patent,
copyright, or other legal protection. Title to any
such patent, copyright, or other legal protection shall
be joint. Each party may exploit and utilize said
jointly made Improvement for any purpose whatsoever,
without any obligation to account, share revenues, or
pay royalties to the other with respect to said
Suggestion.
19.2 For the purpose of clarity, the parties specifically
agree that (a) Vivid shall obtain no license or
ownership rights, and no right to use FEP Products or
Monobloc/Inverter Assemblies or other Gilardoni
products, or Gilardoni improvements to any of the
above, except as specifically provided in this
Agreement; (b) Gilardoni shall obtain no license or
ownership rights, and no right to use the Operator
Console Assembly or other Vivid products, or Vivid
improvements to any of the above, except as
specifically provided in this Agreement; (c) Vivid
shall obtain no license or ownership rights, and no
right to use the Gilardoni Manufacturing Information,
Gilardoni Proprietary Information, or Software,
relating to the FEP Platform or to any other Gilardoni
products except as specifically provided in this
Agreement; and (d) Gilardoni shall obtain no license or
ownership rights, and no right to use the Vivid
Manufacturing Information, Vivid Proprietary
Information, or Software, relating to the Operator
Console Assembly or to any other Vivid products except
as specifically provided in this Agreement.
19A. Intellectual Property Warranty.
19A.1 Gilardoni warrants that as of the Effective Date
of this Agreement, to its best knowledge, that in the
territories assigned to Vivid: (a) the FEP Products and
Monobloc/Inverter Assemblies do not infringe any trade
secret, trademark, patent, copyright or other
intellectual property or proprietary right belonging to
any third party; and (b) no pending patent application
of a third party has claims which cover the FEP
Products; or Monobloc/Inverter Assemblies provided that
Gilardoni does not warrant that FEP Products or
Monobloc/Inverter Assemblies do not infringe (i) United
States Patent No. 4,366,382, dated December 28,1982,
titled "X-Ray Line Scan System For Use In Baggage
Inspection", Andreas F. Kotowski, Inventor, initially
assigned to Scanray Corporation, Harbor City,
California, and purportedly assigned subsequently to
EG&G Astrophysics Research Corporation (hereinafter the
"EGG Patent") or (ii) United States Patent Nos.
4,626688 and 5,138,167 dated December 2, 1986 and
August 11, 1992 respectively, and titled Split Energy
Level Radiation Detection, and Split Energy Radiation
Detection, respectively, Inventor, Gary T. Barnes (and
counterpart patents in other nations), purportedly
assigned to the University of Alabama, and purportedly
licensed subsequently to Lunar Corporation (hereinafter
the "Barnes Patents").
19A.2 Without prejudice to Section 19A.1, Gilardoni and
Vivid represent that as of the Effective Date of this
Agreement, they have no actual knowledge that current
FEP Products or Monobloc/Inverter Assemblies infringe
any patent belonging to any third party, provided that
the parties do not make such representation with
respect to the EGG Patent or the Barnes Patents. The
parties understand and acknowledge that Gilardoni and
Vivid have not conducted any sort of patent search,
product review, or clearance review with respect to the
FEP Products or Monobloc/Inverter Assemblies or any
other Gilardoni product in connection with this
representation or their consideration whether to enter
into this Agreement, and that this representation is
provided solely on the basis of Gilardoni's and Vivid's
general knowledge acquired in connection with their
usual ongoing businesses.
19A.3 Vivid represents and warrants that it has obtained
and shall maintain for the Term of this Agreement, a
license to the EGG Patent permitting Vivid to undertake
all activities permitted to it by this Agreement.
19B. Infringement.
19B.1 Except with respect to the EGG Patent or the
Barnes Patents, in the event that any claim, suit, or
other legal proceeding is threatened or commenced
against Vivid that is founded, in whole or in part, on
an allegation that any FEP Product or FEP Component
infringes any trade secret, trademark, patent,
copyright or other intellectual property rights
belonging to a third party, Vivid will give Gilardoni
prompt written notice thereof and Gilardoni may elect
to assume primary control of the defense to or
settlement of such dispute. Vivid shall cooperate
fully with Gilardoni in any such defense, settlement or
compromise made by Gilardoni. Neither Vivid nor
Gilardoni shall enter into any settlement agreement or
other voluntary resolution of any such claim, suit, or
other legal proceeding without obtaining the other's
prior written consent thereto. If Vivid has complied
fully with the procedures set forth in this Section,
Gilardoni will indemnify and hold Vivid harmless from
and against any loss, cost, damage, or other expenses
incurred by Vivid as a result of such claim, suit, or
legal proceeding. In addition, if a final injunction
is obtained against Vivid's use of the FEP Product, or
if in the opinion of Gilardoni the FEP Product is
likely to become subject of a successful claim of
infringement, Gilardoni may, at its option and expense
(a) procure for Vivid the right to continue
distributing and using the FEP Product; or (b) replace
or modify the FEP Product so that it becomes non-
infringing, or (c) if neither (a) or (b) are reasonably
available, accept return of FEP Product sold hereunder,
grant a credit therefore as depreciated on a five-year
straight-line basis and terminate this Agreement. This
indemnification procedure shall be null and void and
Gilardoni shall have no liability to the extent that
any claim is based on any use of the FEP Product in
combination with any item not supplied or approved in
writing by Gilardoni, or if the FEP Product has been
tampered with, or modified in any way except as
provided in this Agreement without the express written
consent of Gilardoni, or if Vivid or its sub-
distributor, affiliate, or customer has any property
interest in said claim, suit, or legal proceeding, or
any license to any right so asserted.
19B.2 With respect to the EGG Patent, Vivid and
Gilardoni agree that, as between Vivid and Gilardoni,
Vivid shall be solely responsible for all and any
claims, consequences and charges relating to activities
pursuant to this Agreement regarding the EGG Patent in
the Vivid territories described in Section 3.1 hereof.
19B.3 With respect to the Barnes Patents, Vivid and
Gilardoni agree that Vivid will be solely responsible
for obtaining and maintaining rights permitting its
activities pursuant to this Agreement. As between
Vivid and Gilardoni, Vivid shall be solely responsible
for all and any claims, consequences and charges
relating to its activities pursuant to this Agreement
regarding the Barnes Patents.
19C. Software License.
19C.1 Under this Agreement, computer software
("Software") may be delivered in printed or machine
readable form. No software in source code format will
be supplied pursuant to this Agreement. Title to
Software, including all patents, copyrights, and
property rights applicable thereof, shall at all times
remain with Gilardoni. Software is valuable to
Gilardoni and shall be treated as Proprietary
Information subject to Section 20 of this Agreement.
Vivid shall maintain all copyright, proprietary, and
other notices on the Software. Vivid is granted a non-
exclusive license for the Term of this Agreement to
provide perpetual sub-licenses to Software provided
with FEP Product purchased hereunder to its customers
solely for operation or testing of FEP Product
purchased pursuant to this Agreement and on which
Software is first installed, provided that each such
customer first agrees in writing to be bound by terms
and conditions equivalent to those contained in this
Agreement. Vivid shall not decompile, reverse engineer
or reverse assemble, analyze or otherwise examine the
Software, including any hardware or firmware
implementation thereof for the purpose of reverse
engineering. Vivid is permitted to undertake standard
remedial analyses of software necessary to diagnose
problems therewith. NOTE: The parties understand that
no operating Software is provided as part of the FEP
Platform.
19D. Design Changes and Product Enhancements.
19D.1 The parties agree to each use their reasonable
commercial efforts to work together to coordinate their
product development efforts with the aim of assuring
that (a) the Operator Console Assemblies and FEP
Platforms distributed by Gilardoni and Vivid are
compatible in form and function, and (b) their
respective product lines are otherwise compatible.
Notwithstanding the foregoing, nothing in this
Agreement shall be interpreted to limit or otherwise
affect either party's right to change or improve any
design, technical specification, or capability of its
products. Provided that before making any change to
the Monobloc/Inverter Assembly, Gilardoni shall: (a)
first provide Vivid with ninety (90) days advance
written notice of any such change and an opportunity to
incorporate such change into its products on terms and
charges to be agreed; (b) upon Vivid's notice that said
design change affects the functioning of its products,
continue to provide the unchanged Monobloc/Inverter
Assembly for a reasonable period of time to be agreed
upon, so that Vivid may modify its products in accord
with its normal design cycle; and (c) continue to
provide spare parts and an upgrade path for customers
provided with products including the old version of the
Monobloc/Inverter Assembly.
19D.2 From time to time either party may develop
enhancements or improvements to its component or the
other party's component of the Joint Product. Said
party shall notify the other of the details of all such
enhancements and improvements and offer to sell or
license said enhancements or improvements to the other,
and to permit the other to manufacture all such
enhancements and improvements pursuant to this
Agreement, for reasonable royalties and fees to be
agreed.
20. License and Confidentiality Agreement.
20.1 Subject to each party's compliance with its obligations
under this Agreement, each party grants to the other a
license to use all patents and copyrights embodied in
its equipment and systems subject to this Agreement,
for purposes of designing, integrating, manufacturing,
and selling the Joint System during the Term, all in
accord with this Agreement.
20.2 Manufacturing Information and other Proprietary
Information will be held in confidence using the same
degree of care as receiving party uses for its own
information of like importance. Receiving party will
disclose said information only to its employees and
agents who need to know said information for the
performance of this Agreement, and who are bound to
protect its confidentiality. At the end of the Term,
or upon request of the disclosing party (whichever is
earlier), the receiving party shall return or destroy
all documents containing such Manufacturing Information
and other Proprietary Information except for
information necessary to activities which continue to
be permitted under this Agreement. In each case,
receiving party's counsel may maintain one set of said
documents under seal for its records.
20.3 Both parties acknowledge that the other party has
substantial experience and expertise in the technical
subject matter of this agreement. Each party may
utilize this experience and expertise, as well as
Proprietary Information and Manufacturing Information
to make improvements and changes to its component of
the Joint Product, the other party's component of the
Joint Product, and its other products. Nothing in this
Agreement shall prevent these activities.
20.4 Notwithstanding the provisions of Section 20.2 hereof,
each party shall be free to use "Residual Information"
for any purpose, including the development,
manufacture, marketing, and maintenance of products and
service. "Residual Information" means Proprietary
Information in non-tangible form (that is, not in
written or documentary form, including magnetic or
electronic form), which may be retained in the minds of
those employees and other personnel who have rightfully
had access to the Proprietary Information under this
Agreement.
20.5 Information which a party believes to be highly
proprietary and to require additional protection, may,
upon mutual agreement, be subject to additional
confidentiality protections. In such case, the
disclosing party shall describe the highly proprietary
information to be disclosed, and propose any additional
protections to be applied to said information.
Receiving party may agree to accept said highly
proprietary information under the terms proposed,
decline to accept it, or propose alternative terms for
disclosing party to accept before receipt of the
information.
21. Term and Termination.
21.1 This Agreement shall become effective on the effective
date hereof, and shall continue for a Term extending
for three (3) years thereafter, unless extended or
earlier terminated pursuant to this Section. Upon
expiration of the Term, this Agreement shall
automatically renew for subsequent one (1) year Terms
under the same terms and conditions, unless terminated
pursuant to the terms of this Section.
21.2 Vivid and Gilardoni may at any time mutually agree in
writing to terminate this Agreement.
21.3 After two (2) years following the Effective Date, and
at any time during any renewal Term of this Agreement,
either party may terminate this Agreement on three-
hundred sixty-five (365) days advance written notice to
the other party for any reason or for no reason.
21.4 Either party may terminate this Agreement for material
default of the other party, effective 30 days following
notice to the defaulting party, unless within said 30
days the party receiving said notice takes all
reasonable steps to remedy the default, and shall fully
remedy said default within 90 days of said notice. If
the receiving party does not so fully remedy said
default within 90 days of said notice, termination
shall become effective without further notice or other
action by the terminating party.
21.5 Either party may terminate this Agreement, effective
immediately upon notice, in the event that: (a)
proceedings are instituted by the other party in
bankruptcy, reorganization, receivership, or
dissolution; or (b) proceedings are instituted against
the other party in bankruptcy, reorganization, or
receivership, or dissolution and such proceedings have
not been dismissed or otherwise terminated within 60
days following the date they were initiated; or (c) if
the other party makes an assignment for the benefit of
creditors.
21.6 Upon termination or expiration of this Agreement for
any reason, neither party shall have any obligation or
liability to the other or to any employee, agent or
representative of the other for any damages,
indemnification, expenditures, loss of profits or
prospective profits of any kind, sustained or alleged
to have been sustained or arising out of such
expiration or termination (not including any claim for
monies due under this Agreement for goods purchased, or
for damages resulting from breach of any term of this
Agreement), both parties hereby irrevocably waiving any
such rights granted by the laws of their respective
countries or of any other jurisdiction. Both parties
hereby covenant and agree that they will bring no
action or proceeding of any nature whatsoever in any
court, before any tribunal, or under any arbitration
proceeding provided for herein, seeking or claiming any
such damages, indemnification, expenditures, loss of
profits or prospective profits. Each party recognizes
and acknowledges that the other party is entering into
this Agreement in reliance upon and in consideration of
the agreements and covenants contained herein. Each
party hereby indemnifies and holds harmless the other
party from and against any claim, cost, damages and
liability whatsoever asserted by either party or any
subdistributor, employee, agent, or representative
thereof under any applicable termination, labor,
franchise, social security, or similar laws or
regulations of any jurisdiction.
22. LIMITATION OF LIABILITY.
22.1 NEITHER PARTY'S LIABILITY TO THE OTHER FOR ANY CAUSE
WHATSOEVER, REGARDLESS OF THE FORM OF ANY CLAIM OR
ACTION, SHALL EXCEED THE AGGREGATE PRICE PAID BY VIVID
UNDER THIS AGREEMENT DURING THE CALENDAR YEAR ENDING ON
THE DATE THE CAUSE OF ACTION ACCRUES, OR ONE MILLION
UNITED STATES DOLLARS (US$1,000,000), WHICHEVER AMOUNT
IS GREATER.
22.2 NEITHER PARTY SHALL IN ANY EVENT BE LIABLE TO THE OTHER
FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES
ARISING OUT OF OR IN CONNECTION WITH THE USE OR
PERFORMANCE OF ANY PRODUCT OR THIS AGREEMENT, INCLUDING
BUT NOT LIMITED TO (a) ANY LOSS OF DATA, PROFITS OR USE
OF ANY PRODUCTS, OR (b) ANY LIABILITY RELATING, IN ANY
WAY, TO ANY ALLEGED OR ACTUAL FAILURE OF ANY PRODUCT OR
SYSTEM TO DETECT ANY ITEM OR ITEMS, SUCH AS ONE OR MORE
WEAPON(S), EXPLOSIVE(S), OR INCENDIARY DEVICE(S),
INCLUDING ANY LIABILITY RELATING, IN ANY WAY, TO DAMAGE
OR INJURY TO ANY AIRCRAFT, TERMINAL FACILITY, OR OTHER
PROPERTY, OR TO ANY PERSON OR PERSONS.
22.3 NEITHER PARTY SHALL BE LIABLE TO THE OTHER'S CUSTOMERS,
SUB-DISTRIBUTORS OR THIRD PARTIES FOR ANY DAMAGES,
INCLUDING BUT NOT LIMITED TO: (a) DAMAGES CAUSED BY
FAILURE TO PERFORM COVENANTS AND RESPONSIBILITIES, BY
REASON OF NEGLIGENCE OR OTHERWISE; (b) DAMAGES CAUSED
BY REPAIRS OR ALTERATIONS DONE WITHOUT THE PARTIES'
JOINT WRITTEN APPROVAL; (c) DAMAGES DUE TO PRODUCT
DETERIORATION DURING PERIODS OF STORAGE; OR (d) ANY
SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING
OUT OF OR IN CONNECTION WITH THE USE OR PERFORMANCE OF
ANY PRODUCT, OR THIS AGREEMENT, INCLUDING BUT NOT
LIMITED TO (a) ANY LOSS OF DATA, PROFITS OR USE OF ANY
PRODUCTS, OR (b) ANY LIABILITY RELATING, IN ANY WAY, TO
ANY ALLEGED OR ACTUAL FAILURE OF ANY PRODUCT OR SYSTEM
TO DETECT ANY ITEM OR ITEMS, SUCH AS ONE OR MORE
WEAPON(S), EXPLOSIVE(S), OR INCENDIARY DEVICE(S),
INCLUDING ANY LIABILITY RELATING, IN ANY WAY, TO DAMAGE
OR INJURY TO ANY AIRCRAFT, TERMINAL FACILITY, OR OTHER
PROPERTY, OR TO ANY PERSON OR PERSONS; EACH PARTY SHALL
INDEMNIFY THE OTHER AGAINST ALL SUCH CLAIMS ASSERTED BY
CUSTOMERS OR SUB-DISTRIBUTORS OR OTHER THIRD PARTIES.
22.4 This Section 22 shall not apply to Sections 19A, 19B,
23.3, and 23.4 of this Agreement.
23. GENERAL
23.1 Survival. Sections 2, 8 - 13, 19, 19A, 19B, 19C, 19D,
20, 21.6, 22, and 23 shall survive termination of this
Agreement. Notwithstanding any termination of this
Agreement, Vivid shall have the right to purchase, and
Gilardoni agrees to sell, replacement Monobloc/Inverter
Assemblies, spare parts for FEP Products, and
replacement parts therefor (including x-ray tubes, P.C.
boards, transformers and all other components therefor
necessary for Vivid to replace or repair failed
components and assemblies at Gilardoni's then-standard,
commercially reasonable prices for a period extending
for ten (10) years from the date of Gilardoni's last
sale to Vivid of an FEP Platform, System or
Monobloc/Inverter Assembly pursuant to this Agreement.
23.2 Force Majeure. Neither party shall be deemed to be in
default pursuant to this Agreement so long as its
failure to perform any of its obligations hereunder is
occasioned solely by fire, labor disturbance, acts of
civil or military authorities, acts of God, or any
similar cause beyond such party's control.
23.3 Export Controls. Notwithstanding anything contained in
this Agreement to the contrary, Vivid agrees that it
will not in any form export, re-export, resell, ship or
divert, or cause to be exported, re-exported, resold,
shipped or diverted, directly or indirectly, any
product or technical data furnished hereunder or the
direct product of any such technical data to any
country for which the United States Government or any
agency thereof at the time of export or re-export
requires an export license or other governmental
approval, without first obtaining such license or
approval. Vivid represents that it is knowledgeable
respecting United States export regulations and
licensing requirements concerning the subject of this
Agreement, and warrants that it shall comply with such
regulations and maintain all necessary licenses and
permissions.
23.4 Compliance with Laws. Each party shall comply with all
laws, rules, regulations, governmental requirements and
industry standards existing with respect to all
products subject to this Agreement and its activities
in the countries in which it operates, as well as all
applicable laws of Italy and the United States,
including the United States Foreign Corrupt Practices
Act and regulations promulgated thereunder.
Notwithstanding Section 22 of this Agreement, each
party shall indemnify and hold harmless the other from
any and all fines, damages, losses, costs and expenses
(including reasonable attorneys' fees) incurred as a
result of the indemnifying party's breach of Sections
23.3 and 23.4 of this Agreement.
23.5 Assignment. With the exception of sub-licensing rights
expressly provided in Section 19D of this Agreement,
neither party may assign any of its rights except
rights to the payment of money or delegate any of its
obligations under this Agreement to any third party
without the express written consent of the other. For
purposes of this Section 23.5, the term "assignment"
shall include the transfer of ownership or management
control of either party to any party then manufacturing
any x-ray based system used to inspect airline hold
baggage or other luggage, mail, parcels, or break bulk
cargo. If either party violates this provision, the
other party may at its option and upon thirty (30) days
notice terminate this Agreement.
23.6 Notices. Notices required or permitted to be given
under this Agreement shall be in writing and mailed,
postage prepaid, by first class registered or certified
mail, return receipt requested, to the address
indicated below:
If to Vivid:
Vivid Technologies, Inc.
10E Commerce Way
Woburn, MA 01801 (USA)
Attention: Mr. Stephen Reber, President & COO
Copy To: Law Department
If to Gilardoni:
Gilardoni S.p.A.
Direzione e Stabilimento
Via Arturo Gilardoni, 1
22054 Mandello del Lario
(Como) ITALIA
Attention: Mr. Richard Bisson
Mr. Andrea Orsini
Mr. Marco Gilardoni
Either party may change its address to be used on
notices by giving notice of such change to the other
party as provided in this paragraph.
23.7 Independent Contractor Status. The parties are
independent contractors, and this Agreement shall not
be deemed to constitute either party the partner, joint
venturer, servant, employee, or agent of the other.
Neither party has the right, power or authority to
obligate the other party under this Agreement to any
contract or other obligation.
23.8 Waiver. The waiver of either party of a default or
breach of any provision of this Agreement by the other
party shall not operate or be construed as a waiver of
any subsequent default or breach.
23.9 Governing Law; Arbitration of Disputes. This Agreement
shall be subject to the laws of the State of New York,
USA (not including its conflict of laws provisions);
and the parties consent to be bound by the provisions
of such laws regardless of the forum in which such laws
are applied. Notwithstanding the above, any dispute
arising out of, or relating to this contract, which the
parties have not been able to settle amicably shall be
finally settled by arbitration, in accordance with the
Rules of Conciliation and Arbitration of the
International Chamber of Commerce. The arbitration
shall be conducted by three (3) arbitrators, consisting
of one arbitrator chosen by Vivid one arbitrator chosen
by the Gilardoni, and one arbitrator chosen by the two
arbitrators so chosen, provided that in the case of any
dispute involving a claim of less than $500,000 United
States Dollars the parties will jointly choose a single
arbitrator, or if they are unable to agree on an
arbitrator, a single arbitrator will be chosen pursuant
to the procedures of the International Chamber of
Commerce. The arbitrators shall render their judgment
within six (6) months of any notice to arbitrate. The
place of arbitration shall be London, England. The
governing law of the contract shall be the laws of the
State of New York. Proceedings shall be conducted in
English. Any arbitrator shall not be entitled to award
punitive damages. Judgment upon any arbitration award
so rendered may be entered in any court having
jurisdiction, or application may be made to any such
court for confirmation of such award or a judicial
acceptance of such award, and for an order of
enforcement or other legal remedy, as the case may be.
23.10 Insurance. Each party (the "Insuring Party")
shall maintain, to the extent commercially available,
for Term of this Agreement and for five years
thereafter, Product Liability insurance covering
aviation and other risks related to products licensed
or sold (a) by the Insuring Party to the other party
pursuant to this Agreement, or (b) otherwise by the
Insuring Party to others, in an amount not less than
fifty million United States dollars (US$50,000,000) for
any occurrences during the period of the policy.
23.11 Amendment. This Agreement may not be changed or
amended unless in a writing specifically referencing
and purporting to amend this Agreement, and signed by
both parties.
23.12 Entire Agreement. This Agreement contains the
entire Agreement of the parties, and except for the
Agreement for Gilardoni Distribution, Manufacture,
License and Purchase of Vivid Products (Operator
Console & Systems), supersedes all prior agreements,
understandings, representations, conditions,
warranties, and covenants, whether oral or written,
between the parties. The prior Agreement is agreed to
be terminated and to be of no further effect.
IN WITNESS WHEREOF, the parties have hereunto set their
hands and seals as of the date first above-written.
GILARDONI, S.p.A. VIVID TECHNOLOGIES, INC.
By: /s/ Richard Bisson By: /s/ Stephen Reber
Printed Name: Richard Bisson Printed Name: Stephen Reber
Title: Managing Director Title: President & COO
EXHIBIT A
GILARDONI TRADEMARKS
1. FEP ME 640
2. FEP ME 975
3. FEP TDS 640
4. GRAPHIC OF GILARDONI LOGO
Security Technology
5. GRAPHIC OF GILARDONI LOGO
EXHIBIT B
GILARDONI PRODUCTS AND PRICES
FEP PLATFORMS FOR DEVELOPMENT PURPOSES
8 units at US$32,000 each (ex-works Mandello - Incoterms 1990,
packed for air shipment (cost: US$450 each unit) as follows:
April 10, 1997 2 units
Product Specifications and Acceptance Criteria to
be agreed by April 10, 1997
Acceptance Testing to be complete by June 10, 1997
May 30, 1997 3 units
June 15, 1997 3 units
FEP PLATFORMS FOR PRODUCTION PURPOSES
PRICE: "Cost Plus" a US$3000 profit, not to
exceed a total price of US$29,500.
MONOBLOC/INVERTER ASSEMBLIES
PRICE: US$6,250 for first 100 units
US$5,250 for all subsequent purchases
GILARDONI SYSTEMS (AND NEW PRODUCTS AND IMPROVEMENTS)
PRICE: to be agreed
PRODUCT INTEGRATION SERVICES
PRICE: "Cost Plus" a negotiated profit, not to
exceed 15% of said Cost Plus number.
PACKING FOR AIR SHIPMENT
PRICE: "Cost Plus" a negotiated profit, not to
exceed 15% of said Cost Plus number, or
US$450 per FEP Platform or Gilardoni
System.
Packing for Monobloc/Inverter
Assemblies Included In Above Price.
SPARE PARTS PER SECTION 23.1
PRICE: "Cost Plus" a negotiated profit, not to
exceed 50% of said Cost Plus number,
with the total price not to exceed
Gilardoni's then-standard commercially
reasonable prices.
GILARDONI MANUFACTURING INFORMATION
All information necessary to manufacture, test, install, service
and use the FEP Platform and all subassemblies thereof (not
including information needed to manufacture the Monobloc/Inverter
Assembly), including but not limited to a bill of materials, and
all technical and engineering information, know how, trade
secrets, proprietary information, and data relating thereto, as
specified hereafter:
1. Part Specifications: For each item referenced in the Bill
of Material that is a standard purchased part, the following
information will be provided: description, measurement unit,
specification of the part, vendor part number, name and
address of the vendor.
2. Fabrication Drawings: For each item referenced in the Bill
of Material that is not a standard purchased part and
therefore should be fabricated, a detailed dimensional
drawing depicting how the individual parts are fabricated by
Gilardoni will be supplied. The drawings include the
necessary information for an independent fabricator to
manufacture the parts, including materials used, finish (if
any), type of paint and color (if any), tolerance
requirements, etc. Any part which cannot be defined or
purchased per a Part Specification will have a Fabrication
or detail drawing. This includes any parts which are
purchased as standard parts, and altered or modified to meet
additional requirements for the product.
3. Assembly Drawings: Drawings depicting individual parts and
how they are integrated by Gilardoni into a complete
assembly or sub-assembly. This includes Printed Circuit
Boards, with any specific notes or details which may be
required to assemble the boards.
4. Assembly Procedures: Instructions on how Gilardoni
assembles a particular assembly or sub-assembly to be used
in conjunction with assembly drawings and Parts Lists to
manufacture individual or final assemblies. The document
will list the necessary tools required, any prerequisite
setups required, precautionary or clarification notes, and
step by step instructions listed in the order to be
performed.
5. Test Procedures: Instructions on how Gilardoni tests
individual items, Printed Circuit Boards, sub-assemblies,
and final product. The document will list all that is used
by Gilardoni: the necessary tools and test equipment, step
by step instructions for testing the item, pass/fail
criteria limits.
6. Bill of Materials (BOM's): Also known as Part List.
Complete list of parts used in a particular assembly or sub-
assembly. The BOM (or list of Parts) will be made up from
parts either defined by a Part Specification, a Fabrication
Drawing, or another Assembly. The Assembly Drawings,
Assembly Procedures, Test Procedures, Unique or Special
Tools (defined via Part Spec), Test Fixtures (if
applicable), Schematic Drawings (for PCB's), Programmed
devices and their associated Firmware Files (if applicable),
Configuration Drawings (if applicable), and User
Documentation (for top level BOM) can be included in the BOM
or their relationship with the parts listed on the BOM can
be established by means of a specific list..
7. Configuration Drawings: Drawings or instructions which
provide, where applicable, instructions for setting up a
particular configuration. i.e. switch or jumper settings on
Boards.
8. Text Fixtures: Assemblies and individual items, not being
standard purchased parts, used for the purpose of testing
assemblies or individual parts will have supporting
documentation necessary to reproduce them, i.e. there will
be, where applicable, Part Specifications, Fabrication
Drawings (if required), Bills of Materials listing all parts
used, Assembly Drawings, Assembly Procedures, Calibration
Procedures, Software (if required), etc. provided that these
do not disclose, without written authorization, third party
reserved information.
9. Printed Circuit Board Schematics: Drawings depicting the
functional and electrical representation of Printed Circuit
Boards including source files for programmed devices. Test
vectors and libraries are not included.
10. Printed Circuit Board Artwork Files: Drawings and files
required to reproduce the raw unpopulated Printed Circuit
Boards, Gerber Files, Drill Files, Tool Files. Films are
not included.
11. PLD or PROM Devices: Files used to program Programmable
Logical Devices (PLD's) or Programmable Read Only Devices
(PROM's), including Test Vector Files.
12. User Documentation: Manual providing user information on
how to operate the system in the same Gilardoni format as
already received by Vivid.
13. Technical Documentation: Manual providing customer support
personnel with the necessary information needed to install
and service the product. i.e. installation guidelines,
replacement procedures, alignment and calibration
procedures, etc. in the same format already received by
Vivid and according to Gilardoni's standards.
14. Additional Documentation: Technical and process information
already available in Gilardoni and not included in the above
list, relative to the FEP Platform (excluding
Monobloc/Inverter Assembly), that could be required for this
specific project.
As much as the above documentation as possible should be provided
in electronic form, along with paper form; all Fabrication and
Assembly drawings will be provided in paper form. Further, paper
form will be provided if electronic form of proper format is not
available or if by itself it is not adequate. The following are
the preferred formats for the electronic source files.
1. Part Lists or BOM's: DOS compatible plain text files, or
Windows 3.1 Microsoft Excel 5.0c format files.
2. Schematic Drawings: Cadence Concept, rev.1.3 for Risc 3000
Workstations running AIX w.3.2, available on DOS 6.0 formatted
floppy discs.
3. Printed Circuit Board Fabrication Drawings: Cadence
ValidPackager, rev.5.0 for Risc 6000 Workstations running AIX
w.3.2, available on DOS 6.0 formatted floppy discs. For net
Lists: ASCI TXT files for DOS 5.0, File Gerber, w.2.4 of the
Gerber standard, with measure units expressed in inches.
4. Procedures and User Documentation: Word for Windows version
6.0c. or DOS compatible plain text files or Pagemaker 4.0 for
Macintosh.
NOTE: Modifications, conversions, and enhancements of either
party's Manufacturing Information by the other party shall be
treated as an enhancement pursuant to Section 19D.2 of this
Agreement.
FEP PLATFORM SPECIFICATIONS
(INCLUDING MONOBLOC/INVERTER ASSEMBLY)
FEP PLATFORM SPECIFICATIONS - CODE 05141031
The product is composed by the following subsystems:
Code 10248900, Monobloc n.1
Code 10291000, FEP ME 640 unit n.1
Code 10291100, Diode array n.1
Code 10292900, Curtains, 0.5 mm lead equiv. n.2
Code 20015031, transfer board n.1
Code 20015793, Monobloc power supply n.1
Code 20015819, Interface board n.1
Code 20015849, metalflex cable, mt. 6 n.1
Design and know how information will not be supplied for Monobloc
and Monobloc Power Supply.
PRODUCT SPECIFICATIONS
1. Regulatory Specification
1.1. General Product Safety Compliance 92/59/CEE
1.2. 89/392/CEE
1.3. DPR 547 on 27/04/1955
1.4. DPR 185 on 13/02/1964
1.5. DL 230 on 17/03/1995
1.6. Machine Safety EN 292-1
1.7. Machine Safety EN 292-2
1.8. Machine Safety EN 60204-1 (IEC 204-1, CEI EN 60204-1)
1.9. EMC, 89/336/CEE
1.10. Low Voltage", 73/23/CEE
1.11. Basic norm on EMC En 55011/CEI 110-6
1.12. Generic norm on EMC emittance En 50081/CEI 110-7
1.13. Generic norm on EMC immunity En 55082/CEI 110-8
1.14. UL 187
1.15. ICRP recommendations on radiological protection
2. Size, Weight, Layout Specifications
2.1. Size of tunnel opening is 0.6 m. wide, 0.4 m. height
2.2. Maximum packaged weight, 900 Kg.
2.3. Standard cable length (maximum allowable tunnel - console
distance) is 6 meters; 20 and 30 (maximum allowed) meters
optional;
3. Functional Specifications
3.1. Belt:
3.1.1. Speed 0.25 m./sec. @ 60Hz, 0.20 m./sec. @ 50 Hz
within 10% error
3.1.2. Length: 2570 mm.
3.1.3. Height from ground: 625 mm.
3.2. Monobloc:
3.2.1. Positioned below the belt
3.2.2. High frequency 30 kHz Generator
3.2.3. Voltage to the Tube 140 Kvcc
3.2.4. Current to the tube 0.5 mA
3.2.5. Dose to the baggage less than or equal to 1.4
Sv/Inspection
3.3. Detectors:
3.3.1. L shaped detector arrays positioned above the belt
3.3.2. Number of detectors: 576 for High Energy, 576 for
Low Energy.
3.3.3. Horizontal/Vertical layout: 384 diodes horizontal,
192 vertical
3.3.4. Low Energy Scintillator: GdOS Screens
3.3.5. High Energy Scintillator: CdW04 Scintillating
Crystals
3.4. Interface Board
3.4.1. ISA standard PC bus IEEE - P996 Draft D2 interface
3.4.2. Shared memory mapping
3.4.3. 14 pin connector daughter board interface
3.4.4. Programmable Acquisition Mode
3.4.5. Four eight bits I/O Ports
3.4.6. 8 Kbytes non volatile RAM
3.5. Transfer Board
3.5.1. ISA standard PC bus IEEE - P996 Draft D2 interface
3.5.2. Shared memory mapping
3.5.3. Transfer Rate 13824 Kbits/sec.
4. Operational Specifications
4.1. Operating Temperature 0 degrees to +40 degrees Celsius
4.2. Storage Temperature -20 degrees to +60 degrees Celsius
4.3. Humidity 95% non-condensing
4.4. Power Supply 220 V, 50 or 60 Hz, 1500 VA, Single Phase
4.5. Baggage forward movement for inspection with image
acquisition; backward movement without image acquisition
allowed for 13 sec. For luggage repositioning.
4.6. 100% Duty cycle
4.7. Protection from abrasion of metal parts subject to scraping
assured by Stainless Steel parts.
5. Documentation Specifications
5.1. Operating Instructions
5.2. The Technical Manual, not supplied with each equipment,
includes:
5.2.1. Introduction
5.2.2. Installation Instructions
5.2.3. Maintenance Instructions
5.2.4. Spare parts List
5.2.5. Troubleshooting
5.2.6. Wiring Diagram Collection
6. Safety Specifications
6.1. Average dose to the luggage less than or equal to 1.4
Sv/Inspection or 0.14 mR/inspection
6.2. Maximum leakage radiation less than 1.0Sv/hr. or 0.1
mRem/hr. within 10 cm. From the skin
6.3. Film Safety Equal to or greater than 1600 ASA film speed
6.4. Two Emergency E-stop push-buttons front/back to power off
the Monobloc and the Belt motor
6.5. Protection against leakage radiation resulting from cover
removal with Interlock Switches to power off the Monobloc
and the Belt motor
6.6. X-ray emission warning 2 yellow lamp front/back must light
when X-ray are on
6.7. Warning label "x-ray radiation danger" label on both the
tunnel openings of the equipment
6.8. Protection against scattered radiation from the front/back
opening 0.5 mm. Lead equivalent lead curtains must be used.
6.9. Protection against insertion of the hands on the output side
of the tunnel by means of Plexiglas protection 0.3 meters long.
NOTE: This is a top level description which simply makes sections 2.2 and
2.3.1 more specific
EXHIBIT E
VIVID TECHNOLOGIES'
OPERATOR CONSOLE ASSEMBLY SPECIFICATIONS
NOTE: This is a top level description which simply makes section
2.5 more specific.
The Operator Console is an electro-mechanical assembly attached
to a Pentium based PC operating at a minimum of 133 Mz with 32
Meg of RAM (to be supplied by Gilardoni), which is attached to
the FEP platform to operate and control the joint system.
The Operator Console Assembly is ergonomically designed to allow
the operator to maintain their attention on the bag images
without having to look down from the display. All imaging
functions are represented by icons on the display and controlled
through the touch pad. The console is designed to minimize
operator fatigue and the stresses usually associated with
prolonged screening. (A lockable console storage compartment,
computer enclosure, and display table are optional accessories
available at for purchase at additional cost.)
Operator Console software causes threat information to be
displayed in color over a single high resolution, gray-scale
image with two selectable preset options targeting either
explosives or narcotics.
Advanced computer-based image processing provides real-time
automated threat detection and image analysis, for simultaneous
detection of commerccial and military bulk and sheet explosives,
as well as conventional imaging modes (all in operator assist
mode). . To accomplish this, the system uses a single program
with adjustable sensitivity levels for controlling the
relationship between Detection rate (Pd), Alarm rate (Pfa) and
threat material thickness.
For purposes of this Agreement, "real time" means that the "
threat overlays" appear on the screen coincident with the "normal
image" of the bag. To accomplish this the "composite image" of
the bag (threat overlays plus normal image) appear on the screen
after some latency. This latency is defined as the time between
when the bag first intercepts the X-ray beam (begin item) and
when the bag actually begins to be displayed on the video
monitor. The maximum latency is 120 lines. The latency is
transparent to the operator because the composite bag image
appears on the screen before the bag exits the inspection tunnel.
Imaging Capability (with 17" Display, high resolution SVGA, 60 Hz
refresh rate 1024 x 768, 256 colors; 0.25 mm dot pitch; and above
described computer)
Resolution: 38 AWG (0.1 mm Cu) guaranteed
Penetration: Minimum 22 mm steel
Advanced Image Enhancements Standard Image Enhancements
Semiautomatic Threat Alert 2X and 4X Zoom
Contrast Window Enhancement Tri-material
Density Alert Pseudo Color
Contrast Adjustment
Edge Enhancement
Reverse Video
Home Key
EXHIBIT F
GILARDONI'S CURRENT RETURN MATERIAL AUTHORIZATION PROCEDURE
Summary
1. SCOPE
2. PROCEDURE
3. RECORDS
REFERENCES
- - PMI 007: Gestione resi (Return material management)
- - PMI 012: Gestione ordini dei clienti (Customer order management)
1. SCOPE
Scope of the procedure is to define how Gilardoni's Customer
Service executes the return of materials from Customer location
to Gilardoni's facility.
2. PROCEDURE
1. Customer contacts Gilardoni Customer Service to review
claim.
2. Customer Service determines validity of claim and completes
the attached RMA Form `A'. The following information will be
requested from the customer.
2.1. Refer to RMA Form `A'.
3. Customer Service verifies warranty status, receives
authorized signature and contacts customer for options and
decision. Customer Service may request that the customer scrap
the defective part.
3.1. Under Product Warranty
3.1.1. The customer will be issued an RMA number. Customer
will be instructed on the proper packaging. The RMA number
must be clearly displayed on the outside packaging of the
returned item. All the associated shipping costs of
returns are the customer's responsibility.
3.1.2. Customer Service requests a zero dollar revenue Sale
Order (see PMI 012 and PMI 007) and delivers the replacements
part.
3.1.3. Customer Service files the RMA form in the filing
system.
3.1.4. The customer will contact the shipping company to
ensure that the return part complies with all Customs
Regulations. The defective part must be received by Gilardoni
within 30 days or an invoice may be issued for the full amount.
3.2. Out of Product Warranty
3.2.1. Customer Service provides a quote to the customer for
replacing the defective part. The quote may follow the terms and
conditions established by a Maintenance/Service Contract, an
amendment to the standard warranty, or the standard out of
warranty policy. Customer will be instructed on the proper
packaging. All the associated shipping costs of returns are the
customer's responsibility.
3.2.2. Customer Service requests a Sales Order (see PMI 012
and PMI 007) and delivers the replacement part.
3.2.3. The customer will contact the shipping company to
ensure that the return part complies with all Customs
Regulations. The defective part must be received by Gilardoni
within 30 days or an invoice may be issued for the full amount.
NOTE:
Any parts returned whether they are under warranty coverage or
not, that exhibit a `NO PROBLEM FOUND' (NPF) condition after
testing at Gilardoni's facility, may incur a cost to cover
the expense of testing and associated shipping charges,
which may be invoiced to the sender.
3.3. Product Upgrade
3.3.1. Customer Service provides a quote to the customer for
upgrading the product. The quote may follow the terms and
conditions established by a Maintenance/Service Contract, an
amendment to the standard warranty, or the standard out of
warranty policy. Customer will be instructed on the proper
packaging. All the associated shipping costs of returns are the
customer's responsibility.
3.3.2. Customer Service requests a Sale Order to sales office
(see PMI 012 and PMI 007).
3.3.3. The customer will contact the shipping company to
ensure that the return part complies with all Customs
Regulations. The customer will ship the product to Gilardoni.
3.3.4. The product will be shipped, in accordance with the
quote/order, to the customer once the upgrade has been
completed.
3. RECORDS
A copy of RMA forms will be maintained in and by Customer Service
for a minimum of three years.
TODAY'S DATE: ___________
CUSTOMER: _______________________________
PRODUCT+MODEL #: _______________________ INVOICE #: ________________
PART NAME + #: __________________________ DELIVERY DATE: __________
PART SERIAL #: ___________________________ CLAIM DATE: ______________
CLAIM DESCRIPTION AND REQUEST
Description:
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
Request:
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
GILARDONI'S REPLY
Warranty: yes RMA number: __________
no
Repairable: yes no
Return: yes no
Other: Scrap item Free of charge replacement Product upgrade
Notes:
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
Authorization Signature: _____________________
M. Gilardoni
or E. Poletti
Exhibit 10.07
AGREEMENT FOR
GILARDONI DISTRIBUTION, MANUFACTURE, LICENSE AND PURCHASE OF
VIVID PRODUCTS (OPERATOR CONSOLE & SYSTEMS)
Agreement effective August 27, 1997 (Effective Date) between
Vivid Technologies, Inc., a Massachusetts corporation having a
principal place of business at 10E Commerce Way, Woburn, MA
01801 (USA) and its subsidiaries (hereinafter referred to as
"Vivid"), and Gilardoni S.p.A., having a principal place of
business at Mandello del Lario (Como), Italy (hereinafter
referred to as "Gilardoni").
PART A - INTRODUCTORY MATTERS
1. Facts.
Gilardoni is a developer, manufacturer and distributor of a
line of FEP brand conventional x-ray-based systems and
components, which are used to inspect luggage, mail,
parcels, and break bulk cargo, which it distributes in Italy
and other countries.
Vivid is a developer and manufacturer of advanced x-ray
inspection systems which are used to inspect airline hold
baggage and other luggage, mail, parcels, and break bulk
cargo, as well as advanced x-ray inspection technology which
offers improved image quality, a proprietary operator
interface and automated processing capabilities. Vivid has
included this technology in its products, specifically its
Operator Console Assembly, and pursuant to a prior agreement
titled Distribution and Development Agreement (the "Prior
Agreement"), integrated said Operator Console Assembly for
use with the data acquisition modules of Gilardoni's FEP ME
640 (the "FEP Platform" as defined below) to develop a
"Joint System", as defined herein. Said Prior Agreement is
hereby agreed to be terminated, superseded by this
Agreement, and of no further effect as of the Effective
Date.
Under this Agreement, Gilardoni will market and sell the
Joint System in certain countries and Vivid Systems in
Italy, obtain the right to manufacture the Operator Console
Assembly in support thereof, including certain parts to be
purchased from Vivid, and will be evaluated by Vivid to
become a second source to Vivid for x-ray tubes and
monoblocs for its whole product range.
Under a separate agreement of even date herewith, Vivid will
distribute Gilardoni's systems in certain other countries of
the world, market and sell the Joint System in certain
countries, and obtain the right to manufacture the FEP
Platform in support thereof, including certain parts to be
purchased from Gilardoni, (hereinafter the "Associated
Agreement").
2. Definitions.
2.1 "Gilardoni System" means the current Gilardoni FEP line
of x-ray-based inspection systems, comprising its FEP
ME 640 and FEP ME 975 products, used to inspect
luggage, mail, parcels, and break bulk cargo, and spare
parts therefor.
2.2 "FEP Platform" means those modules of the Gilardoni FEP
ME 640 used for data acquisition and/or system control,
as described in more detail in Exhibit D hereto, and
spare parts therefor.
2.3 "FEP Products" means the Gilardoni System, and the FEP
Platform, including spare parts therefor.
2.3.1 "Monobloc/Inverter Assembly" means those
components of the FEP Platform described as such in
Exhibit D hereto, most particularly the "monobloc" and
"inverter board set" together with associated cables
and parts, to be purchased by Vivid from Gilardoni in
connection with its manufacture of FEP Platforms, Joint
Systems, and derivative products.
2.4 "Vivid System" means the current Vivid line of advanced
x-ray-based inspection systems, and future
developments, used to inspect airline hold baggage, as
well as other luggage, mail, parcels, and break bulk
cargo; except that the term Vivid Systems shall not
include products and technology purchased or licensed
from third-parties to the extent that Vivid's agreement
with said third-party precludes or prevents Vivid from
licensing or selling said product or technology to or
through Gilardoni; and spare parts therefor.
2.5 "Operator Console Assembly" means the Vivid display
console and associated software and hardware technology
together with associated cables and parts, as described
in Exhibit E hereto; and spare parts therefor.
2.6 "Joint System" means an x-ray-based inspection system
used to inspect luggage, mail, parcels, and/or break
bulk cargo, consisting of the Gilardoni FEP Platform
and the Operator Console Assembly, and spare parts
therefor.
2.7 "Vivid Product" means the Vivid System, and the
Operator Console Assembly (but only as incorporated
into the Joint System, or as sold as an upgrade for the
Gilardoni System), and spare parts therefor.
2.8 "Proprietary Information" means all confidential or
trade secret information so designated by a disclosing
party in writing. If Proprietary Information is
disclosed in one or more documents, the disclosing
party shall identify said document in writing as
containing proprietary or confidential information,
either by providing a proprietary or confidential or
similar legend on such document, or by providing, with
the document, a separate writing which identifies the
documents as containing proprietary or confidential
information. If Proprietary Information is only
disclosed orally or made available by inspection, the
disclosing party shall, within thirty (30) days after
such disclosure, deliver to the receiving party a
written description of such Proprietary Information
identifying where appropriate the place and time of
such oral disclosure, and the names of representatives
of the receiving party to whom such disclosures were
made. Proprietary Information shall not include
information which: (a) is or becomes in the public
domain through no action of the receiving party; or (b)
is generally disclosed to third parties by disclosing
party without restriction on such third parties; or (c)
is independently developed by the receiving party
without reference to disclosing party's Proprietary
Information; or (d) is received by the receiving party
from a third party which has the right to disclose such
information and without violation of this Agreement; or
(e) is approved for release by written authorization of
disclosing party; or (f) is disclosed pursuant to an
order of a court or governmental agency, providing that
the receiving party notifies disclosing party and
affords it an opportunity to oppose such order.
2.9 "Manufacturing Information" means all Proprietary
Information and other information necessary to
manufacture, test, install, service and use the item in
question and all subassemblies thereof, including a
bill of materials, and all technical and engineering
information, know how, trade secrets, proprietary
information, and data relating thereto, and the
documentation listed in Exhibit C hereto.
2.10 "Cost Plus" means direct costs of direct materials and
labor, and indirect manufacturing labor, plus an
allocation of 35% of said amount to cover overhead.
PART B - GILARDONI'S DISTRIBUTION RIGHTS
3. Appointment and Territory.
3.1 For the Term of this Agreement Vivid hereby appoints
Gilardoni as:
(a)(i) the exclusive distributor of Vivid Systems for
installation in Italy.
(a)(ii) the exclusive distributor of Vivid's Operator
Console Assembly but only as incorporated into the
Joint System, or as an upgrade for the Gilardoni
System, in Italy, Cyprus, Bulgaria, Tunisia, Brazil,
Argentina, and Romania, as well as Libya and Iran at
such time as the United States Government permits
export of these products and U.S.-source technology
thereto (and subject to Section 23.3 hereof).
(b) rights for the country of Greece shall be allocated
among the parties at a later time
Gilardoni agrees not to solicit any order for
installation of any Vivid Product outside of its
respective territories therefor, or except as permitted
by this Agreement without Vivid's advance written
consent. Gilardoni is not prohibited from accepting
orders for Vivid Products from customers in the
European Union, for installation in the European Union
but outside the Gilardoni territories described above,
provided that it first demonstrates by documentary
evidence that (1) the customer initiated the
transaction, and (2) it took no action to solicit the
order.
3.2 During the Term of this Agreement without the advance
written consent of the other party:
(a) Neither Gilardoni nor Vivid shall market or sell
for installation any x-ray-based system from any
manufacturer other than Gilardoni or Vivid to inspect
luggage, mail, parcels, or break bulk cargo; and
(b) Vivid will not itself market or sell Vivid Products
or any other x-ray based system to inspect luggage,
mail, parcels, or break bulk cargo for installation in
the territories assigned exclusively to Gilardoni, and
will not appoint any other reseller or distributor with
any right to market or sell Vivid Products in the
territories assigned exclusively to Gilardoni.
4. Marketing and Promotion.
4.1 Gilardoni will be solely responsible for all marketing
and sales of Vivid Products purchased pursuant to this
Agreement. Gilardoni and Vivid will work together to
develop appropriate marketing plans as reasonable and
necessary to promote the Vivid Product and the Joint
System.
4.2 Vivid hereby grants Gilardoni a non-exclusive, non-
transferable license to represents itself as an
"Authorized Distributor" of Vivid Systems and the
Operator Console Assembly in its respective territories
therefor, and to use the Vivid trademarks identified in
Exhibit A hereto in connection therewith. To the
extent that Gilardoni so represents itself with respect
to any item manufactured by Gilardoni as permitted by
this Agreement, Gilardoni will cause all such equipment
to be manufactured to product and quality
specifications at least equal to those utilized by
Vivid. Vivid may monitor Gilardoni's compliance with
this requirement.
4.3 Gilardoni may also distribute Vivid Systems and the
Joint System in its respective territories therefor
under its sole trademark, either by itself, or in
conjunction with Vivid's trademarks.
4.4 Gilardoni shall not register any Vivid trademarks in
any jurisdiction, but may request that Vivid register
or obtain appropriate legal protection for the Vivid
trademarks identified in Exhibit A hereto in the
Gilardoni Territory. Any such registration shall be
owned by Vivid. Payment of any registration or other
fees required in connection therewith shall be agreed
on a case-by-case basis.
PART C - PURCHASE TERMS
5. Purchase prices, payment and taxes.
5.1 Vivid agrees to sell and Gilardoni agrees to purchase
Vivid Systems, services and Operator Console Assemblies
listed on Exhibit B hereto in accord with the terms of
this Agreement. Prices are quoted in U.S. Dollars as
set forth in Exhibit B hereto, provided that: (i) lower
prices to meet individual customer situations may be
negotiated on a case-by-case basis; and (ii) if Vivid
offers to any other non-end user party lower prices
and/or more advantageous terms for any of the products,
components or services offered pursuant to this
Agreement to Gilardoni, it shall offer the same prices
and/or terms to Gilardoni.
5.2 Except as levied by the Government of the United States
or its constituent jurisdictions, Gilardoni will pay or
reimburse Vivid for any taxes, VAT, import duties or
other government charges however designated, arising
from or based upon Vivid's sale of the FEP Products or
Monobloc/Inverter Assemblies to Gilardoni ("Taxes"),
but not including any income or corporate excise tax
assessed against, or levied on, Vivid. If applicable,
Gilardoni shall furnish Vivid with whatever
certificates or other instruments may be necessary or
appropriate to evidence that Vivid's sales of the FEP
Products or Monobloc/Inverter Assemblies to Gilardoni
are not subject to Taxes under applicable law.
5.3 Payment for all Vivid Products ordered under this
Agreement (unless otherwise agreed in writing in
advance with respect to a specific order) shall be due
thirty (30) days after Delivery). Payment terms are
subject to change upon mutual agreement between
Gilardoni and Vivid.
5.4 All payments pursuant to this Agreement shall be made
by bank transfer in U.S. dollars available at Vivid's
bank.
6. Forecasts, Purchase Orders, Product Integration, and
Shipping.
6.1 Forecast of Demand. Within thirty (30) days from the
date of last signature of this Agreement, Gilardoni
shall deliver to Vivid an initial forecast specifying
the quantities of Vivid Systems and Operator Console
Assemblies to be purchased by Gilardoni and supplied by
Vivid during each month of the following two quarters
(the "Initial Forecast"). Thereafter, within ten days
of the start of each calendar month, Gilardoni shall
deliver to Vivid a "rolling" forecast specifying the
quantities of Vivid Systems and Operator Console
Assemblies to be purchased by Gilardoni and supplied by
Vivid during each month of the following two quarters
(the "Rolling Forecast"). The Initial Forecast and
each Rolling Forecast shall be considered a firm
purchase order committing both parties with respect to
the purchase and sale of Vivid Systems and Operator
Console Assemblies over the first three months thereof
in accordance with Section 6.2, provided that
Gilardoni's maximum forecast of Vivid Systems and
Operator Console Assemblies over the first three months
forecasted shall be ten (10) units of each. As part of
the Initial Forecast, Gilardoni shall specify firm
dates for delivery of product to be delivered in each
of the first three months of said Initial Forecast
("Firm Delivery Dates"). As part of each subsequent
Rolling Forecast, Gilardoni shall specify Firm Delivery
Dates for the third month thereof. Forecasts of
quantities to be purchased in the subsequent quarter,
in the Initial Forecast and Rolling Forecast, shall be
used by Vivid for purposes of planning and manufacture
of Vivid Systems and Operator Console Assemblies for
inventory purposes, but Gilardoni shall not be bound by
said subsequent quarter forecast, nor shall Gilardoni
be liable to Vivid with respect to any changes thereto.
6.2 Within ten (10) days following its receipt of the
Initial Forecast, and each Rolling Forecast, Vivid (a)
may modify the Firm Delivery Dates for product to be
delivered in the third month of said Rolling Forecast
(each month in connection with the Initial Forecast) if
the quantities of Products so ordered makes this
necessary to fit its production capabilities, provided
always that said modified Firm Delivery Dates shall be
within thirty (30) days of the initial Gilardoni-
requested Delivery Date; (b) shall otherwise confirm
Firm Delivery Dates requested for each of the first
three (3) months thereof and its general capability to
provide the numbers forecasted for delivery during the
subsequent quarter.
6.3 In the event that Vivid does not meet Gilardoni's
demand for all or any part of the Vivid Systems or
Operator Console Assemblies ordered pursuant to Section
6.1 for any week for any reason and not withstanding
Section 23.2 of this Agreement, Gilardoni's purchase
price therefor shall be reduced by two percent (2%) for
each week of delay in Delivery with a maximum price
reduction of eight percent (8%). Except as otherwise
provided in this Agreement or agreed in writing between
the parties with respect to a specific order, this
reduction shall be in lieu of any other right to claim
damages for delay in Delivery of the subject products.
6.4 Unless otherwise agreed with respect to a specific
order of Vivid Systems or Operator Console Assemblies,
all prices pursuant to this Agreement are quoted, and
product delivery (Delivery) will be ex-works (Incoterms
1990), packed for air shipment in accord with Vivid's
standard procedures. Upon Gilardoni request, Vivid
will arrange for drop shipment of Vivid Product (and
Joint Systems) to Gilardoni customers, or other
packaging, in accord with Gilardoni's instructions,
provided that Gilardoni shall be responsible for all
associated risk and shipping, customs, taxes,
insurance, and whatever other charges are payable with
respect thereto. Provided that Gilardoni first
establishes credit terms reasonably acceptable to
Vivid, Vivid shall advance and invoice said amounts to
Gilardoni, said invoices to be due and payable as
agreed.
6.5 Gilardoni shall stock spare parts to meet anticipated
demand. However, from time to time Gilardoni may be
required to order spare parts on an expedited basis.
Vivid shall use its best commercial efforts to ship
such expedited purchase orders within 24 hours
following receipt. Spare parts invoices are due and
payable thirty (30) days after receipt.
6.6 Upon request and in connection with Gilardoni sales of
the Joint System, Vivid will provide the service of
integrating FEP Platforms with Operator Console
Assemblies, and or manufacture thereof, and testing the
resulting Joint Systems, using Gilardoni qualified
assembly and test procedures, on a schedule and at the
Cost Plus Formula set out in Exhibit B hereto.
7. Installation and Acceptance.
7.1 Gilardoni shall be solely responsible for installation,
on-site testing, and commissioning of all Vivid Product
sold hereunder, as well as for customer training,
support, warranty, and service. Vivid shall provide to
Gilardoni at Vivid's facilities, free of charge, a
reasonable training period of up to one (1) week
respecting such matters for Vivid Systems and the
Operator Console Assembly. Gilardoni shall be
responsible for and shall pay all travel and living
expenses associated with such training. Gilardoni
shall supply such service to customers at the times and
for the fees that are normal and customary in the trade
and appropriate for the product. Except as
specifically provided for in this Agreement, Vivid
shall have no obligation or liability for these
matters. If Gilardoni fails to offer such service to a
customer or abandons a customer contract, Vivid may
offer said services directly to said customer, at its
sole risk, responsibility, and expense, provided that
Vivid informs Gilardoni in advance in writing of its
intent to contact said customer, provides Gilardoni
with five (5) business days to respond or object, and
does not initiate any contact with said customer before
expiration of said period and resolution of any
Gilardoni response or objection. Notwithstanding any
other Section of this Agreement, each party (the
"Indemnifying Party") shall indemnify the other (the
"Indemnified Party") for any loss, damages, costs or
other expenses incurred by the Indemnified Party
arising out of any action undertaken by the
Indemnifying Party pursuant to this Section 7.1.
7.2 Upon request, Vivid will provide installation, on-site
testing, commissioning, customer training, support,
warranty, and service for product at rates to be
negotiated.
8. Product Warranty.
8.1 Vivid warrants that Vivid Products and Operator Console
Assemblies delivered by Vivid hereunder shall be free
from defects in workmanship and material, and shall
perform in accordance with their then-current published
functional specifications under normal use and proper
operating conditions. This warranty will extend for a
period of 12 months from the date of customer
acceptance, or 16 months from the date of Delivery,
whichever is earlier. Vivid agrees to provide
extensions to this warranty under reasonable terms to
be negotiated with Gilardoni for specific customer
situations.
8.2 In the event that warranted products are deemed
defective or otherwise in breach of the warranty set
out in Section 8.1. above, Gilardoni shall identify,
remove, and return to Vivid the defective product,
component, or sub-assembly, and Vivid shall repair or
replace, in a timely manner, at its discretion, any
such defective product, component or sub-assembly.
Warranty claims shall be initiated by contacting Vivid
by telephone or facsimile, obtaining a return material
authorization number, and shipping items returned under
warranty to Vivid's designated facility, freight
prepaid by Gilardoni, all in accord with Vivid's then-
current returned material authorization procedure,
Vivid's current returned material authorization
procedure is attached as Exhibit F hereto. Vivid shall
return items replaced or repaired under warranty as
designated by Gilardoni, on a DDP basis (Incoterms
1990). Items returned shall become Vivid property.
8.3 Vivid provides the Additional Warranty that Vivid
Products and Operator Console Assemblies provided by
Vivid pursuant to this Agreement shall be free of major
safety hazards, and for a period of five years from
date of customer acceptance will be free of epidemic or
systemic failure. A major safety hazard is defined as
a defect which prevents the safe operation of the
product at its place of installation, such as an
electric shock, personal radiation exposure, or fire
risk (and not including risks to aircraft, passengers,
or operators associated with failure to detect
contraband material). A systemic or epidemic failure
shall exist when defects of the same root cause occur
in any non-expendable parts in ten percent (10%) or
greater of Vivid Products or Operator Console
Assemblies delivered pursuant to this Agreement within
any 24 month period, or the actual Mean Time Between
Failure (hereafter "MTBF") of any part of said Vivid
Products as delivered is lower than 95% of Vivid's
published MTBF figure for said part(s). In such event,
Gilardoni and Vivid shall immediately devise a
corrective action plan, under which Vivid shall provide
all parts, materials and technical assistance, and
Gilardoni shall supply all labor, reasonably needed to
replace all affected parts in Vivid Products and
Operator Console Assemblies purchased and resold
pursuant to this Agreement. In the event the expenses
of one party associated with said corrective action are
more than fifty percent (50%) greater than the expenses
of the other party, then Gilardoni and Vivid shall
share the cost of such corrective action on an equal
basis. Not covered by this Section 8.3 is a change in
regulatory requirements.
8.4 The parties may agree that Vivid Products or Operator
Console Assemblies supplied in connection with any
individual situation shall meet such other
specifications as may be agreed between Vivid and
Gilardoni.
10. Exclusive Warranty.
10.1 THE WARRANTIES SET OUT IN SECTIONS 8 AND 19A HEREOF ARE
EXCLUSIVE, AND NO OTHER WARRANTY, WHETHER EXPRESS OR
IMPLIED, WRITTEN OR ORAL, SHALL APPLY TO THE SUBJECT OF
THIS AGREEMENT. VIVID SPECIFICALLY DISCLAIMS ANY
IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
PART C - MANUFACTURING RIGHTS
14. Vivid Manufacturing Information and Software.
14.1 Within thirty (30) days of the Effective Date, Vivid
will furnish to Gilardoni, on a non-exclusive basis,
all Vivid Manufacturing Information related to Operator
Console Assembly and will provide pursuant to the
Software License set out in Section 19C hereof, such
Software as may be needed to test, install, service and
use said Operator Console Assembly ("Vivid Software"),
all as specified in Exhibit C and Exhibit E hereof.
Vivid will not supply Source Code for any Software.
Except as expressly provided in Section 19C hereof,
Gilardoni shall not modify Software without Vivid's
advance written consent. Vivid Manufacturing
Information will be prepared by Vivid in English, and
shall be in accord with technical standards used by
Vivid at the time of preparation thereof. Gilardoni
will treat all Vivid Manufacturing Information,
amendments, updates and revisions thereto, Software,
and consulting assistance disclosed or provided
pursuant to this Agreement as Proprietary Information
and in accord with the provisions of Section 20 hereof.
14.2 In order to assist Gilardoni in understanding the Vivid
Manufacturing Information, and to assist Gilardoni in
the manufacture of Operator Console Assembly, Vivid
shall upon the request of Gilardoni, provide reasonable
consulting assistance by telephone without charge to
technically qualified personnel of Gilardoni, subject
to the availability of qualified personnel within the
employ of Vivid (together with up to one week of on-
site consulting assistance without charge, and such
additional time as may be reasonably necessary at
Vivid's daily rates). Gilardoni shall be responsible
for and shall pay all travel and living expenses
associated with such assistance.
15. Manufacturing Rights and Royalties
15.1 Subject to the terms of this Agreement, Gilardoni may
manufacture and have manufactured, in Italy or such
other countries of Gilardoni's exclusive territory as
may be agreed where such manufacturing is reasonably
commercially necessary in connection with Gilardoni's
sales and marketing efforts therein (Vivid's agreement
thereto shall not be unreasonably withheld, provided
that Vivid's intellectual property rights are
adequately protected) such quantities of the Operator
Console Assemblies and any spare parts therefore as
Gilardoni may require to fully execute its rights under
this Agreement.
15.2 In partial consideration of the rights granted to
Gilardoni under this Part C, Gilardoni shall pay to
Vivid a per unit royalty for each Operator Console
Assembly or other device sold or otherwise disposed of
(a) which incorporates any of the Manufacturing
Information (and utilizes Gilardoni's imaging software
marketed as of the date of this Agreement but no Vivid
Software) provided to Gilardoni pursuant to this
Section C at the rate of twelve hundred fifty United
States Dollars (US$1,250) for each such device, or (b)
which incorporates any Vivid Software (and such
Manufacturing Information as Gilardoni shall determine)
at the rate of three thousand United States Dollars
(US$3,000) for each such device. Except as permitted by
this Section, Gilardoni shall for the term of this
Agreement, (i) not sell any Operator Console Assembly,
or other device which incorporates any of the
Manufacturing Information, with any imaging or threat
detection software other than Vivid Software or
Gilardoni's imaging software marketed as of the date of
this Agreement, and (ii) license from Vivid all threat
detection and advanced imaging software used in
connection with any Operator Console Assembly or other
device which incorporates any of the Manufacturing
Information.
15.2.1 Reports and Payments. Within 60 days after the
conclusion of each calendar quarter, Gilardoni shall
deliver to Vivid a report covering said calendar
quarter, listing the number of Licensed Products sold
or otherwise disposed of, the countries of installation
and the total royalty payable or credited against the
Advance Royalty described above. All such reports
shall be treated as Proprietary Information and shall
not be disclosed to any third party. If no royalties
are due or creditable for any calendar quarter, the
report so shall state. Concurrent with said report,
Gilardoni shall remit to Vivid any royalty payment due
for the applicable calendar quarter. Vivid shall
instruct Gilardoni as to the method of payment. All
other payments pursuant to this Part C shall be made
within thirty (30) days of invoice. All payments shall
be payable in U.S. dollars.
15.2.3 Records. Gilardoni shall maintain complete and
accurate records of Licensed Products and amounts
payable to Vivid in relation to Licensed Products for a
period of at least three years after the conclusion of
any calendar quarter. Vivid shall have the right, at
its expense, to cause such records to be audited during
normal business hours by an independent certified
public accountant of Vivid's choice for the purpose of
verifying any reports and payments delivered under this
agreement. In the event any audit performed under this
section reveals an underpayment in excess of five
percent (5%) in any calendar quarter, Gilardoni shall
bear the full cost of such audit. Vivid may exercise
its rights under this section once each year with prior
reasonable notice. Payments not paid on or before the
date such payments are due under this Part C, shall
bear interest, to the extent permitted by law under, at
1.5% above the United States prime rate of interest, as
reported in the Wall Street Journal, and calculated
based on the number of days that payment is delinquent.
16. Second Source for Vivid components.
16.1 Vivid shall evaluate Gilardoni as an alternate supplier
of monoblocs, x-ray tubes and generators for its other
Vivid products in accord with the following criteria:
Within ninety (90) days following the Effective Date,
the parties shall agree upon a plan pursuant to which
Vivid shall consider establishing a second source for
monoblocs, x-ray tubes and generators for some or all
of its products, with appropriate milestone dates, such
that Vivid shall use reasonable commercial efforts to
complete its evaluation of Gilardoni as a second source
for such components within one year of the Effective
Date.
18. No Vivid Product Warranty; Gilardoni Solely Responsible;
Indemnification & Insurance.
18.1 Vivid makes no warranty or representation for any
purpose with respect to Vivid Manufacturing Information
or Software licensed hereunder, except that Vivid shall
use its best efforts to verify that such Vivid
Manufacturing Information and Software are the same
information, data, and software as is used by Vivid and
that it has been prepared in accordance with good
industry standards. Vivid makes no warranty that said
Vivid Manufacturing Information or Software is
complete, accurate, or free from defects. Consulting
assistance shall be provided in a workmanlike fashion,
with no warranty of any particular result. VIVID
SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
18.2 VIVID DISCLAIMS ALL WARRANTIES SET OUT IN SECTION 8 OF
THIS AGREEMENT WITH RESPECT TO ANY OPERATOR CONSOLE
ASSEMBLIES, SOFTWARE, OR OTHER PRODUCT, SERVICE OR
ASSISTANCE PROVIDED, MANUFACTURED, SOLD, OR USED
PURSUANT TO THIS PART C.
18.3 Gilardoni shall be solely responsible for all product
warranties and all liabilities relating to any product
manufactured pursuant to the rights granted by this
Part C. Gilardoni shall perform and fulfill all terms
and obligations of each such warranty. Vivid shall not
have any warranty obligation or liability with respect
to such products to subdistributors or customers of
Gilardoni.
18.4 Notwithstanding Section 22 hereof, Gilardoni shall
indemnify, defend and hold Vivid and its successors,
heirs, and assigns (the "Indemnitee"), against all
liability, damage, loss or expense (including
reasonable attorney's fees and expenses of litigation)
incurred or imposed by or upon the Indemnitee in
connection with any claim, suit, action, demand, or
judgment arising out of any theory of liability
(including without limitation actions in the form of
tort, warranty, or strict liability and regardless of
whether the action of has any factual basis) concerning
any product, process or service that is made, used or
sold pursuant to any right or license granted under
this Part C; provided, however, that such
indemnification shall not apply to any liability, loss,
damage or expense to the extent attributable to the
grossly negligent activities or intentional misconduct
of the Indemnitee or (ii) the settlement of a claim,
suit, action or demand by the Indemnitee without prior
written approval of Gilardoni.
PART D - GENERAL TERMS
19. Ownership of Technology; Improvements and New Products.
19.1 As between Vivid and Gilardoni, each party shall
maintain all of its ownership rights in all patents,
copyrights, trade secrets, trademarks, designs, and
other intellectual property as of the Effective Date
hereof. Each party shall own all improvements to its
own or the other party's products subject to this
Agreement (hereinafter "Improvements") which it may
individually make, and may exploit and utilize said
Improvements for any purpose whatsoever. Each party
shall offer to sell and/or license the other party to
purchase, distribute and utilize Improvements pursuant
to this Agreement at charges and terms to be agreed.
19.1.1 The parties may mutually agree to enter into a
separate agreement to undertake joint development work,
and as to the allocation of any intellectual property
rights resulting therefrom. Except as so agreed,
Improvements which are jointly made shall be jointly
owned. Each party shall have the right, in its sole
discretion to file, prosecute and maintain at its own
expense any application for patent, copyright, or other
legal protection in any country on any jointly made
Improvement. Each party shall give the other all
reasonable assistance in obtaining such patent,
copyright, or other legal protection. Title to any
such patent, copyright, or other legal protection shall
be joint. Each party may exploit and utilize said
jointly made Improvement for any purpose whatsoever,
without any obligation to account, share revenues, or
pay royalties to the other with respect to said
Suggestion.
19.2 For the purpose of clarity, the parties specifically
agree that (a) Vivid shall obtain no license or
ownership rights, and no right to use FEP Products,
Monobloc/Inverter Assemblies, or other Gilardoni
products, or Gilardoni improvements to any of the
above, except as specifically provided in this
Agreement; (b) Gilardoni shall obtain no license or
ownership rights, and no right to use the Operator
Console Assembly or other Vivid products, or Vivid
improvements to any of the above, except as
specifically provided in this Agreement; (c) Vivid
shall obtain no license or ownership rights, and no
right to use the Gilardoni Manufacturing Information,
Gilardoni Proprietary Information, or Software,
relating to the FEP Platform or to any other Gilardoni
products except as specifically provided in this
Agreement; and (d) Gilardoni shall obtain no license or
ownership rights, and no right to use the Vivid
Manufacturing Information, Vivid Proprietary
Information, or Software, relating to the Operator
Console Assembly or to any other Vivid products except
as specifically provided in this Agreement.
19A. Intellectual Property Warranty.
19A.1 Vivid warrants that as of the Effective Date of
this Agreement, to its best knowledge, that in the
territories assigned to Gilardoni: (a) the Vivid
Products and Operator Console Assemblies do not
infringe any trade secret, trademark, patent, copyright
or other intellectual property or proprietary belonging
to any third party; and (b) no pending patent
application of a third party has claims which cover the
Vivid Products, or Operator Console Assemblies.
19A.2 Without prejudice to Section 19A.1, Vivid and
Gilardoni represent that as of the Effective Date of
this Agreement, they have no actual knowledge that
current Vivid Products or Operator Console Assemblies
infringe any patent belonging to any third party,
provided that the parties do not represent that Vivid
Products and Operator Console Assemblies do not
infringe United States Patent No. 4,366,382, dated
December 28,1982, titled "X-Ray Line Scan System For
Use In Baggage Inspection", Andreas F. Kotowski,
Inventor, initially assigned to Scanray Corporation,
Harbor City, California, and purportedly assigned
subsequently to EG&G Astrophysics Research Corporation
(hereinafter the "EGG Patent"). The parties understand
and acknowledge that Vivid and Gilardoni have not
conducted any sort of patent search, product review, or
clearance review with respect to the Vivid Products or
any other Vivid product in connection with this
representation or their consideration whether to enter
into this Agreement, and that this representation is
provided solely on the basis of the parties' general
knowledge acquired in connection with their usual
ongoing businesses.
19B. Infringement.
19B.1 In the event that any claim, suit, or other legal
proceeding is threatened or commenced against Gilardoni
that is founded, in whole or in part, on an allegation
that any Vivid Product infringes any trade secret,
trademark, patent, copyright or other intellectual
property rights belonging to a third party, Gilardoni
will give Vivid prompt written notice thereof and Vivid
may elect to assume primary control of the defense to
or settlement of such dispute. Gilardoni shall
cooperate fully with Vivid in any such defense,
settlement or compromise made by Vivid. Neither
Gilardoni nor Vivid shall enter into any settlement
agreement or other voluntary resolution of any such
claim, suit, or other legal proceeding without
obtaining the other's prior written consent thereto.
If Gilardoni has complied fully with the procedures set
forth in this Section, Vivid will indemnify and hold
Gilardoni harmless from and against any loss, cost,
damage, or other expenses incurred by Gilardoni as a
result of such claim, suit, or legal proceeding. In
addition, if a final injunction is obtained against
Gilardoni's use of the Vivid Product, or if in the
opinion of Vivid the Vivid Product is likely to become
subject of a successful claim of infringement, Vivid
may, at its option and expense (a) procure for
Gilardoni the right to continue distributing and using
the Vivid Product, or (b) replace or modify said
product so that it becomes non-infringing, or (c) if
neither (a) or (b) are reasonably available, accept
return of Vivid Product sold hereunder, grant a credit
therefore as depreciated on a five-year straight-line
basis and terminate this Agreement. This
indemnification procedure shall be null and void and
Vivid shall have no liability to the extent that any
claim is based on any use of the Vivid Product in
combination with any item not supplied or approved in
writing by Vivid, or if the Vivid Product has been
tampered with, or modified in any way except as
provided in this Agreement without the express written
consent of Vivid, or if Gilardoni or its sub-
distributor, affiliate, or customer has any property
interest in said claim, suit, or legal proceeding, or
any license to any right so asserted.
19C. Software License.
19C.1 Under this Agreement, computer software
("Software") may be delivered in printed or machine
readable form. No Software in source code format will
be supplied pursuant to this Agreement. Title to
Software, including all patents, copyrights, and
property rights applicable thereof, shall at all times
remain with Vivid. Software is valuable to Vivid and
shall be treated as Proprietary Information subject to
Section 20 of this Agreement. Gilardoni shall maintain
all copyright, proprietary, and other notices on the
Software. Gilardoni is granted a non-exclusive license
for the Term of this Agreement to provide perpetual sub-
licenses to Software provided with Vivid Product
purchased hereunder to its customers solely for
operation, or testing, of Vivid Product (and Joint
Systems) purchased pursuant to this Agreement and on
which Software is first installed, provided that each
such customer first agrees in writing to be bound by
terms and conditions equivalent to those contained in
this Agreement. On condition that Vivid shall upon
request, provide information in compliance with EC
Council Directive of 14th May 1991 sufficient to create
interfaces to other computer programs, Gilardoni shall
not decompile, reverse engineer or reverse assemble,
analyze or otherwise examine the Software, including
any hardware or firmware implementation thereof for the
purpose of reverse engineering. Gilardoni is permitted
to undertake standard remedial analyses of Software
necessary to diagnose problems therewith.
19D. Design Changes and Product Enhancements.
19D.1 The parties agree to each use their reasonable
commercial efforts to work together to coordinate their
product development efforts with the aim of assuring
that (a) the Operator Console Assemblies and FEP
Platforms distributed by Vivid and Gilardoni are
compatible in form and function, and (b) their
respective product lines are otherwise compatible.
Notwithstanding the foregoing, nothing in this
Agreement shall be interpreted to limit or otherwise
affect either party's right to change or improve any
design, technical specification, or capability of its
products provided that before making any change to the
Operator Console Assembly, Vivid shall: (a) first
provide Gilardoni with ninety (90) days advance written
notice of any such change and an opportunity to
incorporate such change into its products on terms and
charges to be agreed; (b) upon Gilardoni's notice that
said design change affects the functioning of its
products, continue to provide the unchanged Operator
Console Assembly for a reasonable period of time to be
agreed upon, so that Gilardoni may modify its products
in accord with its normal design cycle; and (c)
continue to provide spare parts and an upgrade path for
customers provided with the old version of the Vivid
Product.
19D.2 From time to time either party may develop
enhancements or improvements to its component or the
other party's component of the Joint Product. Said
party shall notify the other of the details of all such
enhancements and improvements and offer to sell or
license said enhancement or improvements to the other,
and to permit the other to manufacture all such
enhancements and improvements pursuant to this
Agreement, for reasonable royalties and fees to be
agreed.
20. License and Confidentiality Agreement.
20.1 Subject to each party's compliance with its obligations
under this Agreement, each party grants to the other a
license to use all patents and copyrights embodied in
its equipment and systems subject to this Agreement,
for purposes of designing, integrating, manufacturing,
and selling the Joint System during the Term, all in
accord with this Agreement.
20.2 Manufacturing Information and other Proprietary
Information will be held in confidence using the same
degree of care as receiving party uses for its own
information of like importance. Receiving party will
disclose said information only to its employees and
agents who need to know said information for the
performance of this Agreement, and who are bound to
protect its confidentiality. At the end of the Term,
or upon request of the disclosing party (whichever is
earlier), the receiving party shall return or destroy
all documents containing such Manufacturing Information
and other Proprietary Information except for
information necessary to activities which continue to
be permitted under this Agreement. In each case,
receiving party's counsel may maintain one set of said
documents under seal for its records.
20.3 Both parties acknowledge that the other party has
substantial experience and expertise in the technical
subject matter of this agreement. Each party may
utilize this experience and expertise, as well as
Proprietary Information and Manufacturing Information
to make improvements and changes to its component of
the Joint Product, the other party's component of the
Joint Product, and its other products. Nothing in this
Agreement shall prevent these activities.
20.4 Notwithstanding the provisions of Section 20.2 hereof,
each party shall be free to use "Residual Information"
for any purpose, including the development,
manufacture, marketing, and maintenance of products and
service. "Residual Information" means Proprietary
Information in non-tangible form (that is, not in
written or documentary form, including magnetic or
electronic form), which may be retained in the minds of
those employees and other personnel who have rightfully
had access to the Proprietary Information under this
Agreement.
20.5 Information which a party believes to be highly
proprietary and to require additional protection, may,
upon mutual agreement, be subject to additional
confidentiality protections. In such case, the
disclosing party shall describe the highly proprietary
information to be disclosed, and propose any additional
protections to be applied to said information.
Receiving party may agree to accept said highly
proprietary information under the terms proposed,
decline to accept it, or propose alternative terms for
disclosing party to accept before receipt of the
information.
21. Term and Termination.
21.1 This Agreement shall become effective on the effective
date hereof, and shall continue for a Term extending
for three (3) years thereafter, unless extended or
earlier terminated pursuant to this Section. Upon
expiration of the Term, this Agreement shall
automatically renew for subsequent one (1) year Terms
under the same terms and conditions, unless terminated
pursuant to the terms of this Section.
21.2 Gilardoni and Vivid may at any time mutually agree in
writing to terminate this Agreement.
21.3 After two (2) years following the Effective Date, and
at any time during any renewal Term of this Agreement,
either party may terminate this Agreement on three-
hundred sixty-five (365) days advance written notice to
the other party for any reason or for no reason.
21.4 Either party may terminate this Agreement for material
default of the other party, effective 30 days following
notice to the defaulting party, unless within said 30
days the party receiving said notice takes all
reasonable steps to remedy the default, and shall fully
remedy said default within 90 days of said notice. If
the receiving party does not so fully remedy said
default within 90 days of said notice, termination
shall become effective without further notice or other
action by the terminating party.
21.5 Either party may terminate this Agreement, effective
immediately upon notice, in the event that: (a)
proceedings are instituted by the other party in
bankruptcy, reorganization, receivership, or
dissolution; or (b) proceedings are instituted against
the other party in bankruptcy, reorganization, or
receivership, or dissolution and such proceedings have
not been dismissed or otherwise terminated within 60
days following the date they were initiated; or (c) if
the other party makes an assignment for the benefit of
creditors.
21.6 Upon termination or expiration of this Agreement for
any reason, neither party shall have any obligation or
liability to the other or to any employee, agent or
representative of the other for any damages,
indemnification, expenditures, loss of profits or
prospective profits of any kind, sustained or alleged
to have been sustained or arising out of such
expiration or termination (not including any claim for
monies due under this Agreement for goods purchased, or
for damages resulting from breach of any term of this
Agreement), both parties hereby irrevocably waiving any
such rights granted by the laws of their respective
countries or of any other jurisdiction. Both parties
hereby covenant and agree that they will bring no
action or proceeding of any nature whatsoever in any
court, before any tribunal, or under any arbitration
proceeding provided for herein, seeking or claiming any
such damages, indemnification, expenditures, loss of
profits or prospective profits. Each party recognizes
and acknowledges that the other party is entering into
this Agreement in reliance upon and in consideration of
the agreements and covenants contained herein. Each
party hereby indemnifies and holds harmless the other
party from and against any claim, cost, damages and
liability whatsoever asserted by either party or any
subdistributor, employee, agent, or representative
thereof under any applicable termination, labor,
franchise, social security, or similar laws or
regulations of any jurisdiction.
22. LIMITATION OF LIABILITY.
22.1 NEITHER PARTY'S LIABILITY TO THE OTHER FOR ANY CAUSE
WHATSOEVER, REGARDLESS OF THE FORM OF ANY CLAIM OR
ACTION, SHALL EXCEED THE AGGREGATE PRICE PAYABLE BY
GILARDONI UNDER THIS AGREEMENT DURING THE CALENDAR YEAR
ENDING ON THE DATE THE CAUSE OF ACTION ACCRUES, OR ONE
MILLION UNITED STATES DOLLARS (US$1,000,000), WHICHEVER
AMOUNT IS GREATER.
22.2 NEITHER PARTY SHALL IN ANY EVENT BE LIABLE TO THE OTHER
FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES
ARISING OUT OF OR IN CONNECTION WITH THE USE OR
PERFORMANCE OF ANY PRODUCT OR THIS AGREEMENT, INCLUDING
BUT NOT LIMITED TO (a) ANY LOSS OF DATA, PROFITS OR USE
OF ANY PRODUCTS, OR (b) ANY LIABILITY RELATING, IN ANY
WAY, TO ANY ALLEGED OR ACTUAL FAILURE OF ANY PRODUCT OR
SYSTEM TO DETECT ANY ITEM OR ITEMS, SUCH AS ONE OR MORE
WEAPON(S), EXPLOSIVE(S), OR INCENDIARY DEVICE(S),
INCLUDING ANY LIABILITY RELATING, IN ANY WAY, TO DAMAGE
OR INJURY TO ANY AIRCRAFT, TERMINAL FACILITY, OR OTHER
PROPERTY, OR TO ANY PERSON OR PERSONS.
22.3 NEITHER PARTY SHALL BE LIABLE TO THE OTHER'S CUSTOMERS,
SUB-DISTRIBUTORS OR THIRD PARTIES FOR ANY DAMAGES,
INCLUDING BUT NOT LIMITED TO: (a) DAMAGES CAUSED BY
FAILURE TO PERFORM COVENANTS AND RESPONSIBILITIES, BY
REASON OF NEGLIGENCE OR OTHERWISE; (b) DAMAGES CAUSED
BY REPAIRS OR ALTERATIONS DONE WITHOUT THE PARTIES'
JOINT WRITTEN APPROVAL; (c) DAMAGES DUE TO PRODUCT
DETERIORATION DURING PERIODS OF STORAGE; OR (d) ANY
SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING
OUT OF OR IN CONNECTION WITH THE USE OR PERFORMANCE OF
ANY PRODUCT, OR THIS AGREEMENT, INCLUDING BUT NOT
LIMITED TO (a) ANY LOSS OF DATA, PROFITS OR USE OF ANY
PRODUCTS, OR (b) ANY LIABILITY RELATING, IN ANY WAY, TO
ANY ALLEGED OR ACTUAL FAILURE OF ANY PRODUCT OR SYSTEM
TO DETECT ANY ITEM OR ITEMS, SUCH AS ONE OR MORE
WEAPON(S), EXPLOSIVE(S), OR INCENDIARY DEVICE(S),
INCLUDING ANY LIABILITY RELATING, IN ANY WAY, TO DAMAGE
OR INJURY TO ANY AIRCRAFT, TERMINAL FACILITY, OR OTHER
PROPERTY, OR TO ANY PERSON OR PERSONS; EACH PARTY SHALL
INDEMNIFY THE OTHER AGAINST ALL SUCH CLAIMS ASSERTED BY
CUSTOMERS OR SUB-DISTRIBUTORS OR OTHER THIRD PARTIES.
22.4 This Section 22 shall not apply to Sections 19A, 19B,
23.3 and 23.4 of this Agreement.
23. GENERAL
23.1 Survival. Sections 2, 8, 10, 18, 19, 19A, 19B, 19C,
20, 21.6, 22, and 23 shall survive termination of this
Agreement. Notwithstanding any termination of this
Agreement, Gilardoni shall have the right to purchase,
and Vivid agrees to sell, replacement parts for Vivid
Products sold pursuant to this Agreement at Vivid's
then-standard, commercially reasonable prices for a
period extending for ten (10) years from the date of
Vivid's last sale to Gilardoni of an Operator Console
Assembly, or System pursuant to this Agreement.
23.2 Force Majeure. Neither party shall be deemed to be in
default pursuant to this Agreement so long as its
failure to perform any of its obligations hereunder is
occasioned solely by fire, labor disturbance, acts of
civil or military authorities, acts of God, or any
similar cause beyond such party's control.
23.3 Export Controls. Notwithstanding anything contained in
this Agreement to the contrary, each party agrees that
it will not in any form export, re-export, resell, ship
or divert, or cause to be exported, re-exported,
resold, shipped or diverted, directly or indirectly,
any product or technical data furnished hereunder or
the direct product of any such technical data to any
country for which the United States Government or any
agency thereof at the time of export or re-export
requires an export license or other governmental
approval, without first obtaining such license or
approval. Each party represents that it is
knowledgeable respecting United States export
regulations and licensing requirements concerning the
subject of this Agreement, and warrants that it shall
comply with such regulations and maintain all necessary
licenses and permissions. Gilardoni acknowledges
receipt of a letter dated 20 May 1997 from James J.
Aldo, Vice President, Marketing & Sales for Vivid to
Richard Bisson of Gilardoni describing certain of these
restrictions as of that date.
23.4 Compliance with Laws. Each party shall comply with all
laws, rules, regulations, governmental requirements and
industry standards existing with respect to all
products subject to this Agreement and its activities
in the countries in which it operates, as well as all
applicable laws of Italy and the United States,
including the United States Foreign Corrupt Practices
Act and regulations promulgated thereunder.
Notwithstanding Section 22 of this Agreement, each
party shall indemnify and hold harmless the other from
any and all fines, damages, losses, costs and expenses
(including reasonable attorneys' fees) incurred as a
result of the indemnifying party's breach of Sections
23.3 and 23.4 of this Agreement.
23.5 Assignment. With the exception of sub-licensing rights
expressly provided in Section 19D of this Agreement,
neither party may assign any of its rights except
rights to the payment of money or delegate any of its
obligations under this Agreement to any third party
without the express written consent of the other. For
purposes of this Section 23.5, the term "assignment"
shall include the transfer of ownership or management
control of either party to any party then manufacturing
any x-ray based system used to inspect airline hold
baggage or other luggage, mail, parcels, or break bulk
cargo. If either party violates this provision, the
other party may at its option and upon thirty (30) days
notice terminate this Agreement.
23.6 Notices. Notices required or permitted to be given
under this Agreement shall be in writing and mailed,
postage prepaid, by first class registered or certified
mail, return receipt requested, to the address
indicated below:
If to Vivid:
Vivid Technologies, Inc.
10E Commerce Way
Woburn, MA 01801 (USA)
Attention: Mr. Stephen Reber, President & COO
Copy To: Law Department
If to Gilardoni:
Gilardoni S.p.A.
Direzione e Stabilimento
Via Arturo Gilardoni, 1
22054 Mandello del Lario
(Como) ITALIA
Attention: Mr. Richard Bisson
Mr. Andrea Orsini
Mr. Marco Gilardoni
Either party may change its address to be used on
notices by giving notice of such change to the other
party as provided in this paragraph.
23.7 Independent Contractor Status. The parties are
independent contractors, and this Agreement shall not
be deemed to constitute either party the partner, joint
venturer, servant, employee, or agent of the other.
Neither party has the right, power or authority to
obligate the other party under this Agreement to any
contract or other obligation.
23.8 Waiver. The waiver of either party of a default or
breach of any provision of this Agreement by the other
party shall not operate or be construed as a waiver of
any subsequent default or breach.
23.9 Governing Law; Arbitration of Disputes. This
Agreement shall be subject to the laws of the State of
New York, USA (not including its conflict of laws
provisions); and the parties consent to be bound by the
provisions of such laws regardless of the forum in
which such laws are applied. Notwithstanding the
above, any dispute arising out of, or relating to this
contract, which the parties have not been able to
settle amicably shall be finally settled by
arbitration, in accordance with the Rules of
Conciliation and Arbitration of the International
Chamber of Commerce. The arbitration shall be
conducted by three (3) arbitrators, consisting of one
arbitrator chosen by Gilardoni, one arbitrator chosen
by Vivid, and one arbitrator chosen by the two
arbitrators so chosen, provided that in the case of any
dispute involving a claim of less than five hundred
thousand United States Dollars (US$500,000) the parties
will jointly choose a single arbitrator, or if they are
unable to agree on an arbitrator, an arbitrator will be
chosen pursuant to the procedures of the International
Chamber of Commerce. The arbitrators shall render
their judgment within six (6) months of any notice to
arbitrate. The place of arbitration shall be London,
England. The governing law of the contract shall be
the laws of the State of New York. Proceedings shall
be conducted in English. Any arbitrator shall not be
entitled to award punitive damages. Judgment upon any
arbitration award so rendered may be entered in any
court having jurisdiction, or application may be made
to any such court for confirmation of such award or a
judicial acceptance of such award, and for an order of
enforcement or other legal remedy, as the case may be.
23.10 Insurance. Each party shall maintain, to the
extent commercially available, for Term of this
Agreement and for five (5) years thereafter, Product
Liability insurance covering aviation and other risks
related to products purchased or sold pursuant to this
Agreement in an amount not less than fifty million
United States dollars (US$50,000,000) for any
occurrences during the period of the policy.
23.11 Amendment. This Agreement may not be changed or
amended unless in a writing specifically referencing
and purporting to amend this Agreement, and signed by
both parties.
23.12 Entire Agreement. This Agreement contains the
entire Agreement of the parties, and except for the
Agreement for Vivid Distribution, Manufacture and
Purchase of Gilardoni Products (Systems & FEP
Platform), supersedes all prior agreements,
understandings, representations, conditions,
warranties, and covenants, whether oral or written,
between the parties. The prior Agreement is agreed to
be terminated and to be of no further effect.
IN WITNESS WHEREOF, the parties have hereunto set their
hands and seals as of the date first above-written.
GILARDONI, S.p.A. VIVID TECHNOLOGIES, INC.
By: /s/ Richard Bisson By: /s/ Stephen Reber
Printed Name: Richard Bisson Printed Name: Stephen Reber
Title: Managing Director Title: President & COO
EXHIBIT A
VIVID TRADEMARKS
Vivid Technologies, Incorporated (LOGO)
APS
H-1
SDE
VIS
VIS-M
VIS-W
VDS-II
VDS-III
Rapid Detection System
EXHIBIT B
VIVID PRODUCTS AND PRICES
OPERATOR CONSOLE ASSEMBLIES
PRICE: "Cost Plus" a negotiated profit, not to
exceed a total price of US$6,100.
VIVID SYSTEMS (AND NEW PRODUCTS AND IMPROVEMENTS)
PRICE: Ten percent (10%) discount from Vivid
list prices. Vivid to consider but have
no obligation to grant to Gilardoni a
discount from Vivid list prices of up to
thirty percent (30%) on a case by case
basis, where heavy discounting to the
end-user customer so requires.
PRODUCT INTEGRATION SERVICES
PRICE: "Cost Plus" a negotiated profit not to
exceed 15% of said Cost Plus number.
PACKING FOR AIR SHIPMENT
PRICE: "Cost Plus" a negotiated profit, not to
exceed 15% of said Cost Plus number.
SPARE PARTS PER SECTION 23.1
PRICE: "Cost Plus" a negotiated profit, not to
exceed 50% of said Cost Plus number,
with the total price not to exceed
Vivid's then-standard commercially
reasonable prices.
EXHIBIT C
VIVID MANUFACTURING INFORMATION
All information necessary to manufacture, test, install, service
and use the Operator Console Assembly and all subassemblies
thereof (not including source code for Software associated
therewith), including but not limited to a bill of materials, and
all technical and engineering information, know how, trade
secrets, proprietary information, and data relating thereto, as
specified hereafter:
TITLE DOCUMENTATION #
Assembly, Advanced Console 1000-10211-02 Rev.A0
(Handcarry/II)
Parts List 1000-10211-02 Rev.A0
Assembly, ISA Console Transition Board 1100-10080-00 Rev.B0
Parts List 1100-10080-00 Rev.B0
Assembly, Advanced Console Interface 1100-10081-00 Rev.B0
Board
Parts List 1100-10081-00 Rev.B0
Cable Assembly, Trans. Board LPT1 to 1200-10315-00 Rev.A0
Bulkhead
Parts List 1200-10315-00 Rev.A0
Cable Assembly, Trans. Board COM1 to 1200-10316-00 Rev.B0
Bulkhead
Parts List 1200-10316-00 Rev.B0
Assembly, Procedure for Advanced Console 8000-10211-AP Rev.B0
Models: Workstation (1000-10211-01)
Handcarry/VDS II (1000-10211-02)
Assembly, Procedure for Advanced Console 8000-10216-AP Rev. A0
Storage Compartment
AVAILABLE COMPONENTS FOR A "COMPLETE"
OPERATOR CONSOLE WORKSTATION ASSEMBLY
Assembly, Advanced Console Pushbutton 1000-10212-00 Rev.A0
Switch
Parts List 1000-10212-00 Rev.A0
Assembly, Advanced Console Estop Switch 1000-10213-00 Rev.A0
Parts List 1000-10213-00 Rev.A0
Assembly, Advanced Console Keyswitch 1000-10214-00 Rev.A0
Parts List 1000-10214-00 Rev.A0
Assembly, Advanced Console Speaker 1000-10215-00 Rev.A0
Parts List 1000-10215-00 Rev.A0
Assembly, Storage Compartment Advanced 1000-10216-00 Rev.A0
Console
Parts List 1000-10216-00 Rev.A0
Assembly, Cable Bracket Advanced Console 1000-10218-00 Rev.A1
LPT1 & COM1
Parts List 1000-10218-00 Rev.A1
Assembly, Advanced Console Touch Pad 1000-10220-00 Rev.A1
Parts List 1000-10220-00 Rev.A1
Assembly, Computer Enclosure 1000-10225-00 Rev.05
Parts List 1000-10225-00 Rev.05
Cable Assembly, Speaker Extension 1200-10314-00 Rev.A0
Parts List 1200-10314-00 Rev.A0
Modified Socket Wrench, 16MM 2000-10060-00 Rev.A0
Housing, Advanced Console 3000-10303-00 Rev.CO
Plate, Mounting, Advanced Console 3000-10310-00 Rev.A0
Plate, Bottom, Advanced Console 3000-10311-00 Rev.A0
Gasket, Sponge Advanced Console 3000-10312-00 Rev.A0
Backing, Sponge, Advanced Console 3000-10313-00 Rev.A1
Door, Storage Compartment Advanced 3000-10316-00 Rev.A0
Console
Support Storage Compartment Advanced 3000-10319-xx Rev.A0
Console
Cover, Storage Compartment Advanced 3000-10318-00 Rev.A0
Console
Base Plate, Storage Compartment Advanced 3000-10319-00 Rev.A0
Console
Rod, Storage Compartment Advanced Console 3000-10320-00 Rev.A0
Housing, Computer Enclosure 3000-10326-00 Rev.O2
Door, Computer Enclosure 3000-10327-00 Rev.O2
Panel, Computer Enclosure 3000-10328-00 Rev.O2
Gasket, Sponge, Computer Enclosure, Left 3000-10329-01 Rev.O1
Gasket, Sponge, Computer Enclosure, Right 3000-10329-02 Rev.O1
Gasket, Sponge, Computer Enclosure, 3000-10329-03 Rev.01
Bottom
Foam, Packing, Computer Enclosure 3000-10330-00 Rev.O1
PCB, ISA Console Transition Board 3000-10080-00 Rev.B0
PCB, Advanced Console Interface Board 4000-10081-00 Rev.B0
Label, Advanced Console Keypad, 6000-10072-00 Rev.A0
Handcarry/II
Label, Vivid Logo 6000-10073-00 Rev.A0
Label, Vivid Icon Logo Transfer 6000-10074-00 Rev.O1
PARTS SPECIFICATIONS LISTS
FOR THE FOLLOWING PRODUCTS
600 VA Uninterruptable Power Supply for 0110-10004-00 Rev. A0
230 VAC 50 Hz Applications
Uncased SMT3 Controller for the 0120-10066-00 Rev. A0
ClearTrekT Capacitive Glass Sensor
ClearTrekT Safety Laminated Capacitive 0120-10067-00 Rev.A0
Glass Sensor, 5.75" x 7.65" x 0.125"
200 MHz Pentium Based Tower Computer 0120-10069-02 Rev.C0
System for the APS System
ATI Technologies, "Pro Turbo" Video 0120-10079-00 Rev.A0
Graphics Accelerator for 4Mb PCI Bus
Systems
Desk 34W x 28D x 30H, Rubbermaid, Black 0125-10003-01 Rev.A0
1.0 Meter IEC-320 Jumper Cord Set with 0180-10020-01 Rev.C0
Male/Female Terminations
2.5 Meter IEC-320 Jumper Cord Set with 0180-10020-02 Rev.B0
Male/Female Terminations
24 Inch MicroTouch RS232 Controller Cable 0180-10036-00 Rev.A0
Cable D-Sub 9 Male, Female 1 to 1 0180-10041-02 Rev.A0
WiringThumb Screws 2.5 ft.
Cable D-Sub 25 Male, Female 1 to 1 0180-10042-15 Rev.A0
wiring, with Thumb Screws 15 ft.
Fully Threaded Metric Socket Cap Screw, 0201-10002-06 Rev.A0
M3 x 6mm
Fully Threaded Metric Socket Cap Screw, 0201-10002-12 Rev.A0
M3 x 12mm
Fully Threaded Metric Socket Cap Screw, 0201-10003-05 Rev.A0
M4 x 5mm
Screw, Flat Head, BN 363, M3 x 8mm 0201-10010-08 Rev.A0
Locknut, Nylon Insert 4-40 0215-10134-00 Rev.A0
Nut, Hex M4 BN109 0216-10005-00 Rev.A0
Nut, Hex M3 BN109 0216-10006-00 Rev.A0
Nut, Hex, Cap (DIN 917) M5, ZN 0216-10007-00 Rev.A0
Washer, Flat 1/4" SS 0220-10006-00 Rev.A0
Grommet Edging, 1/16" x 1/8" 0235-10001-02 Rev.A0
Spacer, 8MM OD x 4MM ID x 16MM L, SS 0235-10068-00 Rev.A0
Label, 1" x 2.2" Blank 0281-10001-00 Rev.A0
Label, 1.9" x 3.2" Blank Adhesive Back 0281-10002-00 Rev.A0
Compact TO-220 Heat Sink for Limited 0290-10031-00 Rev.A0
Space
PC Input/Output Card Bracket for a 9 Way 0290-10037-00 Rev.A0
and a 25 Way "D" Type Connector
2.5 inch Diameter, 200mW (Maximum) 0290-10039-00 Rev.A0
Speaker
Push Lock, Keylock 0295-10022-00 Rev.A0
Rubber Button Bumper for a 5/16 Hole in 0295-10095-00 Rev.A0
0.078 Material
Foot, Bumper, Self Lock, .305 Hole 0295-10095-01 Rev.A0
Lock, Cam, .75 DIA x .625 L 0295-10101-00 Rev.A0
Bumper, Rubber Button, 1.88 DIA 0295-10102-00 Rev.A0
Hinge, Concealed, 1.5" x .5" 0295-10104-00 Rev.A0
9 Socket D-Subminiature Open Cover 0300-10006-09 Rev.B0
Insulation Displacement Connector with
Strain Relief and 4-40 Mounting Inserts
2 Pin Locking, Polarizing Straight Header 0300-10010-02 Rev.B0
4 Pin Locking, Polarizing Straight Header 0300-10010-04 Rev.B0
6 Pin Locking, Polarizing Straight Header 0300-10010-06 Rev.B0
0.1" Centers 2 Position Crimp Receptacle 0300-10011-02 Rev.B0
0.1" Centers 3 Position Crimp Receptacle 0300-10011-03 Rev.B0
0.1" Centers 4 Position Crimp Receptacle 0300-10011-04 Rev.B0
Straight, 4 Wall, High Temp, Low Profile 0300-10012-10 Rev.B0
Header
Connector 26 Pin PCB Header Low Profile 0300-10012-26 Rev.A0
Straight, 4 Wall
10 Contact 0.100 inch by 0.100 inch 0300-10015-10 Rev.B0
Wiremount Connector
26 Contact 0.100 inch by 0.100 inch 0300-10015-26 Rev.B0
Wiremount Connector
Conn. Dsub 25 Pos Socket Rt Angle PC 0300-10068-25 Rev.A0
MT w/thr inserts
9-Position HD-20 Front Metal-Shell Right- 0300-10127-09 Rev.A0
Angle Posted Connector
Two Pin Right Angle PCB Mount Header 0300-10128-02 Rev.A0
DB-25 Series 318 Right Angle Printed 0300-10135-25 Rev.A0
Circuit Board Mount Connector with
Mounting inserts
Connector D-Sub 25 male IDC ribbon 0300-10136-25 Rev.A0
Contact Pin for 0.1" (Centers) Receptacle 0305-10001-00 Rev.B0
Mounting Hardware, Short Jack Socket 0306-10005-00 Rev.A0
Long Jack Socket (4-40 x 0.5") with 0306-10006-00 Rev.B0
mounting hardware
Fuse, 1A Sub-mini PC MT 0312-10100-03 Rev.A0
Power Strip, 10A 0315-10001-00 Rev.A0
Sealed General Purpose SPDT Printed 0360-10015-01 Rev.B0
Circuit Board Mount Relay with 5 Amp
Contacts and 12 VDC Coil
3.9" x .10" Nylon Cable Tie 0380-10001-00 Rev.B0
Nylon Cable Tie, 0.1 inches Wide by 8 0380-10001-01 Rev.B0
inches Long
Clamp, Cable #8 Mounting Hole 0380-10007-31 Rev.A0
74LS244 Low Power Schottky Octal 0401-10244-00 Rev.B0
Buffer/Line Driver with 3-State Outputs
Octal D-Type Flip Flop with Clear 0401-10273-00 Rev.A0
Voltage Regulator, 3 Terminal, 5V/1.5A 0431-17805-00 Rev.B0
NPN Silicon Darlington Transistor, VCE - 0435-16426-00 Rev.A0
40 Volts (Min), ic=0.5 Amps (Max), Gain =
10,000 (Min)
Diode, Rectifier IN400I 50V 0436-14001-00 Rev.A0
4.7 Volt 500 Milliwatt Hermetically 0436-15230-00 Rev.A0
Sealed Glass Silicon Zener Diode
Undervoltage Sensing Circuit 0438-13464-00 Rev.A0
0.Inf/50 DC Ceramic Capacitor, Axial Lead 0441-10104-00 Rev.A0
Cap. IMF 35V Tant Axial 0445-10105-00 Rev.A0
Capacitor 10 UF 25V Tant Radial Dipped 0445-10106-01 Rev.A0
.1005P
33 uf/25 VDC Solid Tantalum Resin Dipped 0445-10336-00 Rev.C0
Capacitor
Metal Film Resistor, 1.00 Kohm, 1/4 Watt, 0450-11001-00 Rev.D0
+- 1%, +-100 ppm/oC (maximum)
Metal Film Resistor, 10.0 Kohm, 1/4Watt, 0450-11002-00 Rev.D0
+-1%, +-100 ppm/o C (maximum)
Metal Film Resistor, 2.21 Kohm, 1/4Watt, 0450-12211-00 Rev.B0
+-1%,+-100 ppm/oC (maximum)
Metal Film Resistor, 499 Ohm, 1/4Watt, +- 0450-14990-00 Rev.C0
1%, +-100 ppm/oC (maximum)
1.0 Kohm DIP Resistor Network 0452-10102-00 Rev.A0
Double Pole (Maintained) Panel Switch 0465-10003-01 Rev.A1
with Red Mushroom Cap
Switch, 4POS DIP SPST Rocker 0465-10016-04 Rev.A0
Three Position Ultra Miniature SPDP 0465-10024-00 Rev.A1
Printed Circuit Board Toggle Switch with
Center Off
SPDT Panel Mounted Pushbutton Switch with 0465-10040-00 Rev.A0
White Cap and Black Enclosure
SPDT Panel Mounted Pushbutton Switch with 0465-10040-01 Rev.A0
White Round Cap and Black Enclosure
DPDT Panel Mount Two Position Kay Switch 0465-10041-00 Rev.A0
(Remove key left; Retain key right)
DPDT Panel Mount Two Position Key Switch 0465-10041-01 Rev.A0
(Remove key left; Retain key right)
Locking Washer, Anti-Rotation 0465-10043-00 Rev.A0
LED Package (4) Right Angle per mount Red 0485-10006-02 Rev.A0
W Red Lens
Super Bright Green T-1 3/4 Light Emitting 0485-10019-15 Rev.B0
Diode (LED) with a Water Clear Lens
#22 AWG UL1430 Black PVC Insulated 0530-10004-00 Rev.B0
Stranded Copper Wire
#22 AWG UL1430 Red PVC Insulated Stranded 0530-10004-02 Rev.B0
Copper Wire
#22 AWG UL1430 White PVC Insulated 0530-10004-09 Rev.B0
Stranded Copper Wire
25 Conductor 28 AWG .50" Centers Flat 0535-10030-25 Rev.B0
Cable
Cable 9 conductor ribbon 28 AWG 0535-10041-09 Rev.A0
Loctite Instant Adhesive #403 0540-10048-00 Rev.A0
Tool Socket Wrench Tschudin & Heid ESTOP 0700-10012-00 Rev.A0
Switch 16mm Diameter
Tool Socket Wrench NKK Push Button Switch 0700-10013-00 Rev.A0
25mm Diameter
NOTE: Modifications, conversions, and enhancements of either
party's Manufacturing Information by the other party shall be
treated as an enhancement pursuant to Section 19D.2 of this
Agreement.
EXHIBIT D
FEP PLATFORM SPECIFICATIONS
(INCLUDING MONOBLOC/INVERTER ASSEMBLY)
FEP PLATFORM SPECIFICATIONS - CODE 05141031
The product is composed by the following subsystems:
Code 10248900, Monobloc n.1
Code 10291000, FEP ME 640 unit n.1
Code 10291100, Diode array n.1
Code 10292900, Curtains, 0.5 mm lead equiv. n.2
Code 20015031, transfer board n.1
Code 20015793, Monobloc power supply n.1
Code 20015819, Interface board n.1
Code 20015849, metalflex cable, mt. 6 n.1
Design and know how information will not be supplied for Monobloc
and Monobloc Power Supply.
PRODUCT SPECIFICATIONS
1. Regulatory Specification
1.1. General Product Safety Compliance 92/59/CEE
1.2. 89/392/CEE
1.3. DPR 547 on 27/04/1955
1.4. DPR 185 on 13/02/1964
1.5. DL 230 on 17/03/1995
1.6. Machine Safety EN 292-1
1.7. Machine Safety EN 292-2
1.8. Machine Safety EN 60204-1 (IEC 204-1, CEI EN 60204-1)
1.9. EMC, 89/336/CEE
1.10. "Low Voltage", 73/23/CEE
1.11. Basic norm on EMC En 55011/CEI 110-6
1.12. Generic norm on EMC emittance En 50081/CEI 110-7
1.13. Generic norm on EMC immunity En 55082/CEI 110-8
1.14. UL 187
1.15. ICRP recommendations on radiological protection
2. Size, Weight, Layout Specifications
2.1. Size of tunnel opening is 0.6 m. wide, 0.4 m. height
2.2. Maximum packaged weight, 900 Kg.
2.3. Standard cable length (maximum allowable tunnel - console
distance) is 6 meters; 20 and 30 (maximum allowed) meters
optional;
3. Functional Specifications
3.1. Belt:
3.1.1. Speed 0.25 m./sec. @ 60Hz, 0.20 m./sec. @ 50 Hz within
10% error
3.1.2. Length: 2570 mm.
3.1.3. Height from ground: 625 mm.
3.2. Monobloc:
3.2.1. Positioned below the belt
3.2.2. High frequency 30 kHz Generator
3.2.3. Voltage to the Tube 140 Kvcc
3.2.4. Current to the tube 0.5 mA
3.2.5. Dose to the baggage less than or equal to 1.4
Sv/Inspection
3.3. Detectors:
3.3.1. L shaped detector arrays positioned above the belt
3.3.2. Number of detectors: 576 for High Energy, 576 for Low
Energy.
3.3.3. Horizontal/Vertical layout: 384 diodes horizontal, 192
vertical
3.3.4. Low Energy Scintillator: GdOS Screens
3.3.5. High Energy Scintillator: CdW04 Scintillating Crystals
3.4. Interface Board
3.4.1. ISA standard PC bus IEEE - P996 Draft D2 interface
3.4.2. Shared memory mapping
3.4.3. 14 pin connector daughter board interface
3.4.4. Programmable Acquisition Mode
3.4.5. Four eight bits I/O Ports
3.4.6. 8 Kbytes non volatile RAM
3.5. Transfer Board
3.5.1. ISA standard PC bus IEEE - P996 Draft D2 interface
3.5.2. Shared memory mapping
3.5.3. Transfer Rate 13824 Kbits/sec.
4. Operational Specifications
4.1. Operating Temperature 0 degrees to +40 degrees Celsius
4.2. Storage Temperature -20 degrees to +60 degrees Celsius
4.3. Humidity 95% non-condensing
4.4. Power Supply 220 V, 50 or 60 Hz, 1500 VA, Single Phase
4.5. Baggage forward movement for inspection with image
acquisition; backward movement without image acquisition
allowed for 13 sec. For luggage repositioning.
4.6. 100% Duty cycle
4.7. Protection from abrasion of metal parts subject to scraping
assured by Stainless Steel parts.
5. Documentation Specifications
5.1. Operating Instructions
5.2. The Technical Manual, not supplied with each equipment,
includes:
5.2.1. Introduction
5.2.2. Installation Instructions
5.2.3. Maintenance Instructions
5.2.4. Spare parts List
5.2.5. Troubleshooting
5.2.6. Wiring Diagram Collection
6. Safety Specifications
6.1. Average dose to the luggage less than or equal to 1.4
Sv/Inspection or 0.14 mR/inspection
6.2. Maximum leakage radiation less than 1.0Sv/hr. or 0.1
mRem/hr. within 10 cm. From the skin
6.3. Film Safety Equal to or greater than 1600 ASA film speed
6.4. Two Emergency E-stop push-buttons front/back to power off
the Monobloc and the Belt motor
6.5. Protection against leakage radiation resulting from cover
removal with Interlock Switches to power off the Monobloc
and the Belt motor
6.6. X-ray emission warning 2 yellow lamp front/back must light
when X-ray are on
6.7. Warning label "x-ray radiation danger" label on both the
tunnel openings of the equipment
6.8. Protection against scattered radiation from the front/back
opening 0.5 mm. Lead equivalent lead curtains must be used.
6.9. Protection against insertion of the hands on the output side
of the tunnel by means of Plexiglas protection 0.3 meters
long.
NOTE: This is a top level description which simply makes sections
2.2 and 2.3.1 more specific
EXHIBIT E
VIVID TECHNOLOGIES'
OPERATOR CONSOLE ASSEMBLY SPECIFICATIONS
NOTE: This is a top level description which simply makes section
2.5 more specific.
The Operator Console is an electro-mechanical assembly attached
to a Pentium based PC operating at a minimum of 133 Mz with 32
Meg of RAM (to be supplied by Gilardoni), which is attached to
the FEP platform to operate and control the joint system.
The Operator Console Assembly is ergonomically designed to allow
the operator to maintain their attention on the bag images
without having to look down from the display. All imaging
functions are represented by icons on the display and controlled
through the touch pad. The console is designed to minimize
operator fatigue and the stresses usually associated with
prolonged screening. (A lockable console storage compartment,
computer enclosure, and display table are optional accessories
available at for purchase at additional cost.)
Operator Console software causes threat information to be
displayed in color over a single high resolution, gray-scale
image with two selectable preset options targeting either
explosives or narcotics.
Advanced computer-based image processing provides real-time
automated threat detection and image analysis, for simultaneous
detection of commerccial and military bulk and sheet explosives,
as well as conventional imaging modes (all in operator assist
mode). . To accomplish this, the system uses a single program
with adjustable sensitivity levels for controlling the
relationship between Detection rate (Pd), Alarm rate (Pfa) and
threat material thickness.
For purposes of this Agreement, "real time" means that the "
threat overlays" appear on the screen coincident with the "normal
image" of the bag. To accomplish this the "composite image" of
the bag (threat overlays plus normal image) appear on the screen
after some latency. This latency is defined as the time between
when the bag first intercepts the X-ray beam (begin item) and
when the bag actually begins to be displayed on the video
monitor. The maximum latency is 120 lines. The latency is
transparent to the operator because the composite bag image
appears on the screen before the bag exits the inspection tunnel.
Imaging Capability (with 17" Display, high resolution SVGA, 60 Hz
refresh rate
1024 x 768, 256 colors; 0.25 mm dot pitch; and above described
computer)
Resolution: 38 AWG (0.1 mm Cu) guaranteed
Penetration: Minimum 22 mm steel
Advanced Image Enhancements Standard Image Enhancements
Semiautomatic Threat Alert 2X and 4X Zoom
Contrast Window Enhancement Tri-material
Density Alert Pseudo Color
Contrast Adjustment
Edge Enhancement
Reverse Video
Home Key
EXHIBIT F
VIVID TECHNOLOGIES' CURRENT
RETURN MATERIAL AUTHORIZATION PROCEDURE
