Master Purchase Agreement - CTI PET Systems Inc. and Hamamatsu Corp.
MASTER PURCHASE AGREEMENT
NO. 990901
This Agreement effective as of this first day of September 1999, by and
between CTI PET SYSTEMS, INC., a Tennessee Corporation with offices at 810
Innovation Drive, Knoxville, TN 37932-2571, USA (hereinafter "Buyer") and
HAMAMATSU, CORPORATION with offices at 360 Foothill Road, Bridgewater, NJ 08807
(hereinafter "Seller").
WITNESSETH:
WHEREAS, Buyer desires to purchase and Seller desires to sell certain products
either distributed by or for Seller or designated or manufactured by or for the
Seller as of the date hereof, or developed for manufacture or sale by or for
Seller in the future, and all supplies and services necessary in relation hereto
as set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements set forth herein, the parties agree as follows:
1. EFFECTIVE DATE AND CONTRACT TERM.
This Agreement shall be effective on the day and year first above written
and shall continue until August 31, 2004.
1.1. SUPERCESSION OF PREVIOUS AGREEMENT.
None.
1.2. PRODUCTS
Subject to the terms and conditions hereof, Buyer from time to
time may purchase and Seller agrees to sell such products as are
identified in Exhibit A attached hereto.
1.3. SPECIFICATIONS FOR PRODUCTS.
All products supplied by Seller here under shall be furnished in
accordance with all terms and conditions of this agreement, as
well as all specifications set forth in Exhibit A attached hereto
or any subsequent engineering change orders relating thereto and
approved by Buyer consistent with the terms and conditions of the
Agreement.
2. PURCHASE OF PRODUCTS.
2.1. EXCLUSIVE METHOD.
No products shall be purchased or sold by virtue of execution of
this Agreement alone, but shall require the issuance of one or
more purchase orders by the Buyer's Purchasing Department. Such
purchase orders shall reference this Agreement and shall make it a
part thereof.
2.2. DELIVERY DATE.
On each purchase order submitted to Seller, Buyer shall specify
one or more delivery dates. The parties shall agree on such
delivery dates in advance of Buyer's issuance of such purchase
orders. Seller agrees to ship all products
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ordered here under, so that such products will be delivered to
Buyer's specified location on the delivery dates specified in
Buyer's purchase orders indicated as PTA (Promised to Arrive Date
- (-5, +2 days)). Delivery shall not be accelerated or delayed by
Seller without the prior written consent of Buyer's Purchasing
Department.
2.2.1 LATE DELIVERY
If more than fifty percent (50%) of PMTs delivered during one
calendar quarter are more than ten (10) business days late in
meeting the scheduled PTA, then Buyer may elect to:
1. cancel, the order(s) experiencing the delay as well as any
other pending order(s),
2. terminate this Agreement for Default,
3. claim for damages suffered.
3. PRICE AND PAYMENT TERMS.
3.1. PRICES
Prices for the products are set forth in Exhibit "B" of this
Agreement.
3.2. NO ADDITIONAL CHARGES
Unless otherwise expressly provided herein, Buyer shall not be
responsible for any additional charges of any kind, unless Buyer's
Purchasing Department specifically agrees in writing and in
advance to incur liability for any such additional charges. Any
changes in the import/export taxes/tariffs will be discussed and
an equitable adjustment will be made to the unit price of
products.
3.3. INVOICING AND PAYMENT
Seller will issue an invoice for each shipment on or after the day
of shipment. Each invoice shall reference the applicable Purchase
Order number. Invoices shall be mailed to: CTI Inc., Accounts
Payable Department, 810 Innovation Drive, Knoxville, TN 37932.
Unless otherwise agreed in writing, all payments due hereunder
shall be due net (30) thirty days from invoice date.
Credits due to rejection of product within 30 days of receipt, or
discrepancies on payment shall be deducted from subsequent
payments.
4. SCHEDULING AND RESCHEDULING OF ORDERS
4.1. PROCEDURE.
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The Buyer will purchase PMTs from the Seller upon qualification of
the product over the period set by this contract (see Exhibit B).
These tubes will be released under separate purchase orders
according to this Master Purchase Agreement. Buyer reserves the
option to reschedule quantities of any products on order. Buyer
shall give Seller sixty (60) days written notice prior to the
Promise to Arrive Date (PTA). The actual revised delivery schedule
will be agreed upon by both parties.
5. LIMITATIONS OF LIABILITY.
5.1.a. SELLER WILL NOT UNDER ANY CIRCUMSTANCES, WHETHER AS A RESULT OF
BREACH OF CONTRACT, BREACH OF WARRANTY, TORT OR OTHERWISE BE LIABLE FOR
CONSEQUENTIAL, INCIDENTAL, SPECIAL, OR EXEMPLARY DAMAGES INCLUDED, BUT
NOT LIMITED TO, LOSS OF PROFITS OR REVENUES, LOSS OF USE OR DAMAGE TO ANY
ASSOCIATED EQUIPMENT, COST OF CAPITAL, COST OF SUBSTITUTE PRODUCTS,
FACILITIES OR SERVICES, DOWNTIME COSTS, OR CLAIMS OF BUYER'S CUSTOMERS.
5.1.b. SELLER'S LIABILITY ON ANY CLAIM OF ANY KIND FOR ANY LOSS OR DAMAGE
ARISING OUT OF, RESULTING FROM, OR CONCERNING ANY ASPECT OF THIS
AGREEMENT OR FROM THE GOODS OR SERVICES FURNISHED TO BUYER SHALL NOT
EXCEED THE PRICE OF THE SPECIFIC PRODUCT WHICH GIVES RISE TO THE CLAIM.
5.1.c. SELLER WILL NOT BE SUBJECTED TO ANY LIABILITY, WHETHER IN
CONTRACT, WARRANTY, TORT OR OTHERWISE, ON ANY CLAIM FOR LOSS OR DAMAGE
CONCERNING PRODUCTS, PARTS, ADVICE, ASSISTANCE OR SERVICE WHICH SELLER
FURNISHED TO BUYER AS A BUSINESS COURTESY, BUT ARE NOT REQUIRED HERE
UNDER.
5.1.d. THE WARRANTIES AND REMEDIES SET FORTH HEREIN DO NOT APPLY TO GOODS
WHICH HAVE BEEN MISUSED, INADEQUATELY MAINTAINED OR STORED, OR
INCORRECTLY OR NEGLIGENTLY INSTALLED OR SERVICED.
5.2. IN NO EVENT SHALL BUYER BE LIABLE FOR ANTICIPATED PROFITS INDIRECT,
SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES. BUYERS LIABILITY ON ANY
CLAIM OF ANY KIND FOR ANY LOSS OR DAMAGE ARISING OUT OF THIS AGREEMENT OR
ANY PERFORMANCE HERE UNDER, SHALL IN NO CASE EXCEED THE PRICE ALLOCABLE
TO THE GOODS OR SERVICES OR UNIT THEREOF WHICH GIVES RISE TO THE CLAIM.
6. CHANGES
6.1. BUYER CHANGES.
Upon written notice to Seller, Buyer from time to time may direct
changes in design specifications relating to any order for
product(s) placed thereunder. Within 30 days of receipt of Buyer's
change notice, Seller shall deliver to Buyer a quotation (or a
request for an extension beyond 30 days) detailing the impact of
such change, if any, on price, lead-times, and ability to
manufacture
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the product(s). Buyer retains the right to accept or reject any
such quotation. Rejection of any such quotation shall have the
effect of suspending Buyer's change notice. All quotations
required of Seller under this paragraph 6.1 shall include only
those net price increases made necessary because of Buyer's
changes. All price savings resulting from buyer's changes shall be
shared equally by Buyer and Seller for 12 months. After 12 months
all price savings resulting from Buyer's changes will be passed on
to the Buyer.
6.2. SELLER CHANGES.
Seller hereby represents and warrants that it shall not change the
design of the product(s) affecting form, fit, function, spares,
specifications, or manufacturing processes specified with respect
to the manufacture of any product(s), which changes shall or may
have an adverse impact on the manufacturing or performance
specifications for the product(s), without the prior written
consent of the Purchasing Department of Buyer.
6.3 NEW PRODUCTS
If Seller starts marketing new generation products which are to
replace products hereunder, Buyer shall have the right to either
replace products by such new products or add such new products to
this Agreement.
7. SHIPPING
All prices are DDP CTI PET Systems. Seller shall ensure product is
shipped on a timely basis to meet all Promise to Arrive
commitments. Should Seller fail to ship on said basis, Seller
shall bear the cost of all premium freight required to meet
Buyer's immediate delivery requirements.
8. WARRANTY.
Seller's Standard Warranty applies. See Exhibit C.
8.1. TERMS OF WARRANTY.
The warranty period for newly manufactured items shall extend
fifteen (15) months from the actual date of delivery or twelve
(12) months from the date of installation at Buyer's customer,
whichever is earlier. All warranty periods identified in this
Paragraph 8.1 shall be suspended in the event of downtime caused
by or relating to defects in the products or component parts
thereof and such warranty periods shall resume only upon repair or
replacement of such products or component parts thereof.
Suspension of the warranty period will only become effective upon
return of the defective item to Seller.
8.2. INVENTORY.
Seller agrees to maintain a target minimum finished goods
inventory (FGI) of 5 weeks for the product identified in Exhibit A
based on the forecasted delivery rate at that time. Such material
may be used to temporarily replace defective product or to support
accelerated production requirements. The amount so quoted is a
target, which Seller will use reasonable efforts to meet. Failure
to meet these targets during any period of the contract shall not
constitute a basis for termination of contract. Seller will manage
the FGI such that at the
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end of the contract, the level of FGI is at or near zero. In the
event that a PO is cancelled, any FGI up to the target level will
be purchased by the Buyer.
9. PATENT AND OTHER PROPRIETARY RIGHTS INDEMNIFICATION.
Seller will defend, indemnify and hold Buyer and its customers
harmless against all liability and expenses arising from actual or
claimed infringement of any domestic or foreign patent, trademark
copyright or other rights, misappropriation of trade secrets or
breach of confidential relationship with respect to the goods or
services covered by this Agreement. If use of product sold here
under is enjoined as a result of any claimed infringement, Seller
will, without in any way limiting the foregoing, and at its
expense,
(a) procure for Buyer the right to continue using the product;
or,
(b) replace or modify the product so that it becomes
non-infringing; or
(c) remove the product and refund the Buyer all monies paid
therefore and release Buyer from any further liability under
this Agreement.
To the extent that the items ordered are manufactured to designs,
drawings and specifications or instructions furnished by Buyer,
Buyer agrees to indemnify and hold the Seller harmless from any
expense, loss, cost, damage or liability of any kind which may be
incurred because of any infringement or alleged infringement of
domestic and foreign patent rights with respect to such items of
the use of such items in combination with other items and to
defend, as its own cost and expense, any action or claim in which
such infringement is alleged. Buyer shall promptly notify Seller
of any such action and shall provide Seller an opportunity, at
Seller's option, to participate in any defense of such action or
claim at Seller's own expense. The terms of this section shall
survive the termination of this Agreement for a period of ten (10)
years.
10. INDEMNITIES.
10.1. INDEMNITY. (Products and Completed Operations).
Seller agrees to indemnify, hold harmless and defend Buyer, its
successors and assigns for all losses, claims, and defense costs
for injury, death, or property damage to the extent caused by the
negligence or strict liability of Seller in the manufacture or
design of products supplied to Buyer's selling chain. The terms of
this paragraph shall survive the expiration or termination of this
Agreement.
10.2. INDEMNITY. (Products and Completed Operations).
Buyer agrees to indemnify, hold harmless and defend Seller, its
successors and assigns for all losses, claims, and defense costs
for injury, death, or property damage to the extent caused by the
negligence or strict liability of Buyer in the manufacture or
design of products supplied to Buyer's selling chain. The terms of
this paragraph shall survive the expiration or termination of this
Agreement.
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11. TERMINATION.
Each of the following events shall constitute a default hereunder
and either party may terminate this Agreement if the other Party
defaults in any obligation hereunder for a period of 30 days
following written notice and failure to correct that default;
1.) Files a voluntary petition in bankruptcy, which is not
discharged within 90 days;
2.) Is adjudged bankrupt;
3.) Has a court assume jurisdiction of its assets under a
Federal Reorganization Act;
4.) Has a trustee or receiver appointed by court for all or a
substantial portion of its assets;
5.) Becomes insolvent or suspends business; or
6.) Makes an assignment of its assets for the benefit of its
creditors.
Buyer may by 90 days written notice of default to Seller
terminate this Agreement, or any purchase order placed here
under, if Seller:
1.) consistently fails to deliver in accordance with the
delivery dates specified in any order placed hereunder, or
2.) consistently fails to replace or correct defective or
non-conforming product in accordance with the terms and
requirements of this Agreement, or
3.) consistently fails to perform any of the other significant
obligations of this Agreement, and does not correct such failure
within a commercially reasonable time after receipt of written
notice from Buyer specifying such failure. Said notice shall
include a reasonably detailed description of any such failures.
4.) Failure by Seller to meet required ISO 9001 practices may
constitute cause for default if Seller does not implement
mutually agreed upon and verified corrective action within a
reasonable amount of time (30 days unless otherwise agreed to
by the parties).
11.1. BUYER'S LIABILITY UPON TERMINATION/ORDER CANCELLATION
If Buyer terminates this Agreement or any firm order for default,
Buyer shall be liable for cancellation charges including the costs
of raw materials, work in process and finished goods purchased and
manufactured for firm orders. Seller shall make all reasonable
efforts to limit this cost by attempting to return Products or
components thereof to suppliers.
If Buyer terminates this Agreement or any firm order for its
convenience, or if Seller terminates for default, Buyer shall be
liable for cancellation charges including the costs of raw
materials, non-cancelable orders with suppliers, work in process
and finished goods purchased and manufactured for firm orders plus
a 20% mark up.
12. SPARE AND REPLACEMENT PARTS.
12.1. AVAILABILITY OF PARTS.
For a period of two (2) years from the date of the last delivery
of products under this Agreement, Seller shall maintain in
inventory a sufficient stock of spare and replacement parts and
accessories to permit complete, prompt,
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competent and efficient repair and maintenance of the products. In
the event Seller or its suppliers, or both, should stop doing
business or should terminate the manufacture or distribution of
such components, subassemblies, spare parts, or replacement parts,
Seller will notify Buyer with 12 months notice of termination or
obsolescence of the product and offer the Buyer the right to make
a reasonable all-time final purchase.
12.2. DELIVERY OF SPARE AND REPLACEMENT PARTS.
Seller shall fill Buyer's orders for spare and replacement parts
and shall ship the same to Buyer within ten (10) working days of
receiving Buyer's order. In the event Seller is unable to ship ten
(10) working days, both parties shall mutually agree to negotiate
new ship dates.
12.3. MAINTENANCE AND REPAIR.
Repairs and replacements provided by Seller are to be completed by
Seller and returned to Buyer within forty (40) working days of
receipt of product by Seller.
12.4. REPAIRS/REVISION LEVEL.
All Seller repairs will be completed to the revision level
currently on order unless that revision level makes the part
incompatible with lower revision. Any questions associated with
revisions will be addressed in writing to the Buyer's
representative as shown in section 17.
13. QUALITY ASSURANCE
It is understood and agreed that the quality of all items to be
delivered under Buyer's Purchase Orders shall be in conformance
with the standards set forth in Buyer's product specifications.
Seller is responsible, and will ensure that all Products conform
to such quality standards. Buyer retains the right to inspect
items to be purchased hereunder to assure conformance with such
Product specification.
Seller shall have and maintain ISO 9001 certification and agrees
to notify Buyer promptly (within 15 calendar days) and in writing
in the event of any change in Seller's status as it relates to
quality assurance such as, but not limited to, ISO certification,
Government audit, or items of a similar nature.
All work performed in conjunction with this Agreement shall be in
compliance with the most current and relevant ISO 9001 as it
pertains to suppliers. Specifically that (a) Seller documents and
is able to verify that it follows its own manufacturing, test, and
inspection processes; (b) that any discrepancies to these
processes are identified, corrected, and verified; (c) that all
required manufacturing test and inspection records, complaints,
RMAs, corrective actions, and variance reports are retained for a
minimum of 10 years and made readily available to Buyer for review
during that period; (d) that all manufacturing test and inspection
equipment is maintained properly and calibrated as required; and
(e) that the manufacturing, test, and inspection processes are
adequate to ensure that all product specifications provided by
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Buyer are met. Seller's Quality Assurance shall maintain
compliance of final production through vigilant monitoring of all
phases of production.
During Seller's performance of any Purchase Order or contract
which incorporates this Agreement, Seller agrees to allow and to
cooperate with Buyer to periodically review, verify, and perform
analysis of Seller's quality control and assurance systems and
manufacturing processes for the purpose of confirming compliance
to the ISO 9001.
Workmanship standards, in order of precedence, shall be: (1) Buyer
product specifications and purchase order; (2) Seller
specifications, (3) Seller workmanship standards.
Seller agrees to notify Buyer promptly and in writing if Seller
determines or has any reason to believe it has delivered a
defective product to Buyer and to identify that product to the
maximum practical extent.
In case of a serial defect in PMTs, Seller shall, at Buyer's
option, be obliged either to supply new PMTs free of such serial
defect or refund the full purchase price paid for such defective
PMTs. A serial defect shall be presumed if more than five percent
(5%) of the PMTs supplied under a single purchase order show the
same defect. In this case, the Buyer may elect to return the
entire lot to Seller for evaluation and appropriate action(s).
Notwithstanding the foregoing, if Seller is unable to timely
remedy the serial defect, by supplying PMTs free of such defect,
Buyer may terminate this Agreement as per Section 11.
Seller is expected to deliver products with acceptance rates of
99% or better. It is understood that there will be a learning
curve on new products; however, higher reject rates will not be
tolerated in the long term.
Seller shall conduct inspection and testing of the completed
product to assure compliance with all Buyer specifications. Seller
shall maintain inspection and test data for a minimum period of 10
years.
Seller shall provide a Certificate of Conformance (C of C) with
each delivery, which includes the serial number of each product in
the shipment. The C of C shall warrant that the product was
produced in accordance with Seller's ISO 9001 Quality System, and
that all Purchase Order requirements and Product Specifications
have been met. The C of C shall be signed by appropriate
individuals and dated.
At some point the Buyer may choose to "validate" the Seller for a
particular product. This internal process consists of having the
Seller submit a certain quantity of certified product and
verifying that all specifications have been met and all
documentation is in order. Once a product/supplier is validated,
that product is received directly into Buyer's production with no
incoming inspection required. It is imperative that all incoming
products and documentation are 100% correct for every shipment.
Buyer's decision not to inspect or test product at incoming does
not release the Seller of its responsibilities to deliver
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conforming product. Seller is responsible for nonconforming
product found in process, at point of consumption, or at higher
levels of product completion.
14. FORCE MAJEURE.
Force Majeure shall mean act of God, acts, regulation or decrees
of any Government (de facto or de jure), natural phenomena such as
earthquake, floods, fires, riots, wars, shipwrecks, strikes,
freight embargoes, lockouts, and other causes similar to the
foregoing which are beyond the reasonable control of the parties
and which prevent either or both parties from performing their
respective obligations under this Agreement in whole or in part.
In the event of force majeure, the party affected shall notify the
other within seven (7) days thereof, specifying the event and the
probable consequences thereof. In the event that performance of
substantially all obligations herein, cannot be restored within a
mutually agreeable time frame, then this Agreement may be
terminated by ten (10) days notice without further liability of
either party for damages on account of such termination. In the
event this Agreement is not terminated under this Paragraph 16.2,
the parties will cooperate with each other to restore as promptly
as possible full and complete performance here under and all
rights and obligations of the parties shall remain in force and
enforceable, with reasonable revisions to delivery schedules as
may be mutually agreed.
15. PROPRIETARY INFORMATION
Buyer and Seller agree to keep in confidence and not disclose to
others all knowledge, information and data furnished to it by the
other and claimed by either to be proprietary, provided such
proprietary information is given in writing and such writing is
marked to indicate the confidential nature of the information and
the disclosing party's claim of ownership. Buyer and Seller agree
that neither shall use or reproduce for use in any way any
proprietary information of the other except in furtherance of the
relationship set forth in this Agreement. Buyer and Seller agree
to protect the proprietary information with the same standard of
care and procedures which each uses to protect its own proprietary
information. This paragraph shall not be applicable and shall
impose no obligation on either party with respect to any portion
of proprietary information which:
A.) Was at the time received or which thereafter becomes, through
no act or failure on the part of either party, generally known or
available to the public;
B.) Is known to either party at the time of receiving such
information as evidenced by documentation then rightfully in the
possession of either party;
C.) Is furnished by either party to a third party without
restriction by that third party on disclosure;
D.) Is thereafter rightfully furnished to either party by third
party without restriction by that third party on disclosure; or
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E.) Is released from restrictions imposed hereunder by written
release given by the owner of the information.
All technical data, hardware, and intellectual property including,
but not limited to, designs, engineering and manufacturing
drawings, specifications, standards, process information, manuals,
technical reports, computer software and related information,
tooling, fixtures, test equipment and other hardware purchased
and/or furnished by Buyer and bills of material first produced
and/or uniquely resulting from the performance of this Agreement
shall be the sole property of Buyer. Seller shall not use any such
items for any purpose other than the performance of this Agreement
without express written permission of Buyer.
16. GENERAL
A) This Agreement may be amended upon the mutual written consent
of the parties hereto. No modification, termination, extension,
renewal or waiver of any provision of this Agreement shall be
binding upon either party unless made in writing and signed by an
authorized officer of both parties.
B) This Agreement supersedes all proposals, oral or written, and
all negotiations, conversations or discussions heretofore had
between the parties hereto as to the subject matter hereof.
C) This Agreement shall govern all Purchase Orders, which contain
a reference to this Agreement, and the terms, and conditions
herein shall take precedence over any conflicting terms of any
such Purchase Order. Any conflicts which might exist between this
Agreement and Purchase Order terms and conditions referencing this
Agreement shall be resolved in this order: 1) this Agreement; 2)
front side of Purchase Order; 3) back side of Purchase Order; 4)
Seller's proposal.
D) If any clause, term or provision of this Agreement shall be
judged invalid by any court or administrative agency having
jurisdiction over performance of the Agreement, such invalidity
shall not affect the validity or operation of any other clause,
term or provision; and such invalid clause, item or provision
shall be deemed to have been deleted from this Agreement.
E) This Agreement and its performance shall be governed by,
subject to, and construed in accordance with the laws of the State
of Tennessee, U.S.A.
F) If a dispute arises out of or relates to this Agreement or the
breach thereof, the Parties agree that in the first instance they
shall enter into good faith negotiations to resolve such dispute
by mutual agreement.
G) This Agreement is intended for the benefit of the parties
hereto and their permitted assigns, and no other person shall be
entitled to rely upon this Agreement or be entitled to any
benefits under this Agreement. This
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Agreement shall not be assignable by either Party without the
prior written consent of the other Party hereto.
H) Each party agrees that information to be furnished to the other
hereunder will, to the best of its knowledge and belief, be
correct. Each party agrees to notify the other promptly in the
event that information provided by the supplying party contains an
error or omission at such time that the furnishing party modifies
such information in any respect.
I) Neither party shall, for any purpose, be deemed to be an agent
of the other party and the relationship between the parties shall
only be that of independent contractors.
J) Any tool or special equipment furnished by the Buyer to Seller
or acquired by Seller exclusively for use in connection here with
shall remain the property of the Buyer. All other tooling remains
the property of the Seller. Seller agrees to use such tools and
equipment only in the manufacture, testing, or installation of the
products for Buyer or for Buyer's customers or end users, and
Seller agrees to return such tools and equipment to Buyer at
Buyer's expense immediately upon any request by Buyer to do so. If
Buyer provides tooling, the Buyer will mark it as their property.
K) For this Agreement, "in writing" shall mean written either on
paper and faxed or mailed, or written electronically and sent via
e-mail.
L) The headlines contained in this Agreement are for the
convenience of reference only and shall not be considered in
construing this Agreement.
M) Seller shall not, and shall require that its subcontractors and
suppliers of any tier shall not cause or permit to be released any
publicity, advertisement, news release, public announcement, or
denial or confirmation of same, in whatever form, regarding any
aspect of this Agreement or the products or program to which they
pertain without Buyer's prior written approval.
N) Any notice in connection with this Agreement must be made in
writing and if by mail, by certified mail, return receipt
requested, and shall be deemed to be given and received on the
date of actual receipt by the addressee at the address listed
below:
O) The failure of any party hereto at any time to require
performance by the other party of any of its obligations hereunder
shall not in any way affect the full right to require such
performance at any time thereafter. The waiver by either party of
any remedy with respect to any breach of any particular
provision(s) does not constitute a waiver of any other breach of
other provisions.
17. NOTICES.
Any notice or other communication required or permitted to be
given hereunder shall be effective only when received and shall be
directed to the following parties:
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a. If to Buyer: b: If to Seller:
CTI PET Systems, Inc. Hamamatsu Corporation
810 Innovation Drive 360 Foothill Road
Knoxville, TN 37932-2571 Bridgewater, NJ 08807
USA USA
Attn: Mr. Juel Hensley Attn: Dr. David Leinwand
Purchasing Manager Vice President of Operations
18. AUTHORITY TO EXECUTE AGREEMENT
In executing this Agreement, the undersigned hereby represents that they
have read carefully, the foregoing terms of this Agreement on behalf of
their respective interests, that they have the authority to execute this
Agreement and that they have signed the same as their own respective free
acts and with the expressed authority to do so on behalf of their
respective interests.
CTI PET Systems, Inc. Hamamatsu Corporation
/s/ Ronald Nutt /s/ David Leinwand
------------------------------------ ---------------------------------
By: Dr. Ronald Nutt By: Dr. David Leinwand
Executive Vice President Vice President of Operations
Date: 11/1/99 Date: 1/16/99
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EXHIBIT A:
----------
HAMAMATSU CTI
PART # PART # REVISION DESCRIPTION
--------- ---------------- -------- -----------
R1450-12 5410008-00 B 19mm round PMT
R7899-01 To Be Determined 25mm round PMT
R7515 To Be Determined 2" square assembly
For Pricing, see Exhibit B and Purchase Orders which reference this Agreement.
Rejection Criteria:
o PMT which fails to meet Buyer's or Seller's specifications.
o Failure or intermittent failure due to internal shorts
o PMTs which are unfit for use due to failure to meet workmanship standards
of Seller. (e.g., tinned leads which snap off at the bulb as a result of
normal handling at Buyer during the course of mounting bleeder networks.)
o Failure to meet Buyer standard stability monitoring criteria
PMTs which are rejected by Buyer shall be processed as follows:
o Buyer purchasing will notify Seller of the quantity and cause of
rejection and request return authorization.
o Seller will issue a return authorization number to Buyer
o Buyer will return rejected PMTs to Seller at Seller's expense
o Seller will evaluate rejected PMTs, prepare a disposition and send report
along with corrective action as appropriate to Buyer's representative
within 30 days (see section 17) and issue appropriate credit
o Seller will replace PMTs on the appropriate purchase order and line and
re-invoice
o Any dispute regarding rejected PMTs will be resolved between Buyer
purchasing and the Sellers designated representative.
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EXHIBIT B
---------
PRICING FOR PHOTOMULTIPLIER TUBES
Pricing will be as shown below for the time period September 1, 1999 through
August 31, 2001. Pricing for the three years beginning September 1, 2001 will be
the price from the previous year adjusted *.
*
$ *
PRICING:
R1450-12 (19MM) 5410008-00 * *
* *
* *
* *
R7899-01 (1") TBD * *
* *
* *
* *
R7515 (2") TBD * *
* *
* *
* *
* *
Pricing will be based on forecasted requirements. If the actual volume delivered
is less that the forecasted volume for a given year such that the unit price
would have been higher for the actual volume, an equitable adjustment will be
made for the products delivered at the higher price.
*Note: Prices shown are for * pieces but are offered for lower volumes for
qualification purposes only.
14/14
* Omitted information is the subject of a request for confidential treatment
pursuant to Rule 406 under the Securities Act of 1933 and has been filed
separately with the Securities and Exchange Commission.
<PAGE>
Exhibit C
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Warranty for Photomultiplier Tubes
Unless otherwise agreed the Seller (HAMAMATSU) guarantees to the original
Buyer to refund the price paid for, or at the Seller's discretion, to
repair or replace, those tubes which proved to the Seller's reasonable
satisfaction not to conform to the published specifications at the time of
receipt of materials by the Buyer or to have failed by reason of faulty design
or workmanship during a period of fifteen months.
This guarantee is subject to the following provisions:
1. Claims for damage in transit will be considered only if the Buyer promptly
notifies the Seller upon receipt of the tubes.
2. The guarantee shall not extend to failures by reason of defects which ought
reasonably to have been discovered by the Buyer upon inspection and testing
of the tubes and were not reported to the Seller within thirty days.
3. The Buyer informs the Seller promptly on discovery of any alleged defect
and, if and when requested, returns the tubes, (cost of shipping to be born
by the Seller), as the Seller directs with a full written report of the
defect.
4. The tubes have been stored, installed, maintained, and used properly, having
regard in particular to the applicable specifications and instructions for
use as published by the Seller.
5. The Seller's liability in the case of tubes or components not of the
seller's manufacture shall in non circumstances extend beyond any
corresponding liability to the Seller of the manufacturer of such tubes
or components.
All expressed and implied conditions, warranties and other liabilities arising
under common law or statue are expressly excluded.