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EXHIBIT 10.45
SUPPLY AGREEMENT
The purpose of this document is to define
the activities and expectations
related to Acterna's procurement of various
assemblies and sub-assemblies from
Dictaphone's Electronic Manufacturing
Services Division. Clearly defining these
expectations and working together to
achieve them will for a mutually beneficial
partnership between the two companies.
The Supply Agreement (Agreement) is entered into as of the 25th day
of
July, 2002 by and between Acterna Cable Networks Division, 6620
Network
Way, Indianapolis, IN 46278 (Acterna) and Dictaphone's
Electronic
Manufacturing Services Division, 3900-W. Sarno Rd., Melbourne, FL
32934
(Supplier) as supplier, desire to enter into Supply Agreement
under
which various assemblies will be supplied by the Supplier to
Acterna.
ARTICLE 1: DURATION AND SCOPE
1.1 DURATION: This Agreement will take
effect upon the first date written above
and will be valid for
a period of one year. Thereafter, the Agreement will
be extended for a
period of a year and may be terminated by either party
with 90 days prior
written notice.
1.2 SCOPE: During the term of this
Agreement, Acterna intends to purchase
various assemblies as
listed on Exhibit A. This Agreement does not
constitute a purchase
order and Acterna is under no obligation to purchase
any products from
supplier or purchase and minimum quantities.
ARTICLE 2: PRICING
2.1 Unit pricing will be defined in
Attachment "A" and will remain fixed for one
year except as
provided for in Article 2.2 through 2.8. The unit pricing
shall include
packaging for delivery. The pricing is F.O. B. Supplier's
Florida Factory.
2.2 From time to time, Acterna may
introduce new products or issue engineering
change orders to
existing products. In such cases, the parties will work in
good faith to
establish new pricing for the new or modified products and
such changes shall be
reflected in Attachment A.
2.3 Pricing for each Assembly will include
cost of assembly labor, test labor,
standard material
costs, overhead, and profit. Supplier will supply a
complete cost
breakdown on each assembly including costed Bill of Materials.
2.4 In the case of any Engineering change
orders both parties agree to adjust
pricing on a
case-by-case basis. Supplier will provide a cost impact
analysis to be
approved in writing by Acterna.
2.5 Supplier agrees to actively pursue
process and/or component cost
improvements, which
will be passed along to Acterna on a quarterly basis per
2.8.
2.6 Both parties agree to take into account
material cost that is the best quote
received by either
party from suppliers. Both parties will provide proof of
the applicable price
of such specific quote on such components of the same
quantities.
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2.7 Price increases mandated by
allocations, product demand, etc. will be
granted only after
documented competitive quoting activity has been
presented to Acterna,
and written agreement is provided by Acterna. Such
requests will be
considered on a quarterly basis.
2.8 100% of any Acterna-driven cost savings
will be reflected as lower prices
for the assemblies
affected by such cost savings. For the first year 50% of
any Dictaphone-driven
cost savings will be reflected as lower prices for the
assemblies affected by
such cost savings. For the second and subsequent
years of the savings,
100% of the said Dictaphone-driven cost savings will
be reflected.
2.9 If parties cannot agree on new pricing,
then either party shall have the
right to terminate
this Agreement without penalty, with six (6) months prior
notice.
ARTICLE 3: PAYMENTS TERMS
3.1 Acterna will pay valid invoices on a
Net 45 day basis after receipt of
material. No payment
will be made on invalid invoices.
3.2 Supplier reserves the right to stop
shipments and /or reduce terms should
valid invoices become
past due. Supplier to resume shipments once invoice
payments become
current.
3.3 Supplier reserves the right to stop
shipments and/or reduce terms (up to
potentially Cash in
Advance) in the event that Acterna enters into
bankruptcy
protection.
3.4 Acterna agrees to pay any collection
fees in the event that the account must
be turned over to a
collection agency.
ARTICLE 4: MATERIAL MANAGEMENT
4.1 Supplier shall, within 30 days of
Supplier's manufacture start date,
purchase from
Acterna's current Contract Manufacturer any material or
components usable in
the manufacture of current forecasted assemblies up to
$400K, as directed by
Acterna. Supplier to increase the total dollar amount
of excess material
they will purchase from Acterna's current Contract
Manufacturer by the
total dollar amount of any material Acterna, or current
Contract Manufacturer
purchases from Supplier prior to completely exiting
from current Contract
Manufacturer, but no longer than three (3) months form
the date of t this
agreement. Purchase price to be at, or below, costs shown
in the costed BOMs
provided thus far to Acterna by the Supplier. Material
must meet all Acterna
requirements (drawing, AVL specification, etc.) and be
in acceptable
condition. Dictaphone assumes no responsibility relative to
the quality of this
material and it's potential impact on the finished
product. In the event
that Acterna fails to purchase sufficient quantities
of finished product
within 6 months, Acterna shall be responsible for any
material bought from
the current Contract Manufacturer that has not be
consumed. Should the
current contract manufacturer not have sufficient
inventory, Supplier is
free to purchase material from any other source,
including Acterna.
4.2 Supplier agrees to purchase Acterna
excess material per Attachment "B"
starting no later than
6 months from the Suppliers manufacturing start date
as required to support
Acterna's forecast. Acterna will supply an updated
excess material report
each month.
4.3 Acterna will issue a rolling six-month
forecast twice per month. However,
Acterna is under
no
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obligation to purchase
the forecasted finished product quantities.
4.4 In the event Acterna terminated this
Agreement or cancels a purchase order
issued under this
agreement, Acterna shall be responsible for (i) all
non-cancelable/non
returnable (NC/NR) or (ii) custom components purchased by
supplier for the
applicable cancelled order or forecast provided that, in
either case, such
component was purchased from the manufacturer within the
applicable lead-time
for that component at the time of purchase (plus an
additional four weeks)
and was identified by Supplier in the monthly
Inventory Report. The
list of NC/NR/custom components, their cost and
lead-t
