GSI LUMONICS INC.
- AND -
SUMITOMO HEAVY INDUSTRIES, LTD.
OEM SUPPLY AGREEMENT
DATED AS OF AUGUST 31, 1999
ARTICLE 1 INTERPRETATION
1.1 Definitions
1.2 Headings and Table of Contents
1.3 Number
1.4 Business Days
1.5 Currency and Payment Obligations
1.6 Section and Schedule References
ARTICLE 2 SUPPLY OF STANDARD LASERS
2.1 Agreement to Purchase and Sell
2.2 Restriction on Resale
2.3 Permitted Resales of Standard Lasers
2.4 SHI Referrals
2.5 Sale of SHI Products
2.6 Nature of Relationship
2.7 Competition
2.8 License to Manufacture
2.9 Intellectual Property Rights
ARTICLE 3 PRICES, PAYMENT TERMS AND COMMISSIONS
3.1 General
3.2 Standard Lasers
3.3 Resale Prices
3.4 Payment and Title
ARTICLE 4 PURCHASE ORDERS
4.1 General
4.2 Notice of Acceptance
4.3 Discontinuance of Standard Lasers
-2-
ARTICLE 5 SHIPMENTS
5.1 Time of Shipment
5.2 Test Reports
ARTICLE 6 TECHNICAL AND MARKETING ACTIVITIES
6.1 Technical Assistance
6.2 Publications, Advertising, etc
6.3 Training
ARTICLE 7 PRODUCT WARRANTY AND AFTER-SALES SUPPORT AND SERVICING
7.1 Warranty
7.2 Defects
7.3 Warranty Claims on Standard Lasers Incorporated in SHI Products
7.4 Standard Lasers Warranty Claims
7.5 Exclusion of Warranty
7.6 Pre-Existing Warranty Obligations
7.7 After-Sales Support and Servicing
7.8 Spare Parts
7.9 Intellectual Property and Technology Warranty
ARTICLE 8 COVENANTS
8.1 Confidentiality
8.2 GSLI Covenants
ARTICLE 9 TERM AND TERMINATION
9.1 Term
9.2 Termination
9.3 Return of Documents
9.4 Use of Trademarks
9.5 Survival
-3-
9.6 Existing Liabilities
ARTICLE 10 GENERAL
10.1 Force Majeure
10.2 Assignment
10.3 Entire Agreement
10.4 Amendments
10.5 Governing Law
10.6 Arbitration
10.7 Waiver
10.8 Notices
10.9 Severability
10.10 Counterparts
10.11 Further Assurances
10.12 Government Approval
OEM SUPPLY AGREEMENT
--------------------
This Agreement dated as of August 31, 1999
BETWEEN:
GSI LUMONICS INC., a corporation incorporated under the laws of New
Brunswick (which, together with its subsidiaries, is hereinafter
referred to as "GSLI")
- and -
SUMITOMO HEAVY INDUSTRIES, LTD., a corporation incorporated under the
laws of Japan ("SHI")
RECITALS
A. GSLI is engaged in, among other things, the business of manufacturing,
selling and servicing Standard Lasers (as hereinafter defined).
B. SHI is engaged in, among other things, the business of manufacturing,
selling and servicing SHI Products (as hereinafter defined).
C. GSLI wishes to sell and SHI wishes to purchase certain GSLI Lasers on the
terms and conditions set forth below.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties agree as
follows:
ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS. In this Agreement, the following terms shall have the
meanings set out below.
1
"AFFILIATE" shall have the same meaning as that term is given in the
Ordinance of the Ministry of Finance relative to the Financial
Statement Rule in Japan.
"BUSINESS DAY" means any day except Saturday, Sunday or any day on
which banks are generally not open for business in either Kanata,
Ontartio or Tokyo, Japan.
"INCLUDING" means including without limitation, and "INCLUDES" means
includes without limitation.
"LPKK PURCHASE AGREEMENT" means the agreement dated as of August 31,
1999 between the Parties relating to the sale by SHI to GSI Lumonics
Inc. of all of the shares of Lumonics Pacific Kabushiki Kaisha.
"PARTY" means a party to this Agreement a predecessor to and any
reference to a Party includes its heirs, executors, administrators,
successors and permitted assigns; and "PARTIES" means every Party.
"PERSON" is to be broadly interpreted and includes an individual, a
corporation, a partnership, a trust, an unincorporated organization,
the government of a country or any political subdivision thereof, or
any agency or department of any such government, and the executors,
administrators or other legal representatives of an individual in such
capacity.
"SHI PRODUCTS" means lasers, laser-based products, laser systems and
related components manufactured or developed by SHI from time to time.
"STANDARD LASERS" means the lasers listed in Schedule A manufactured
by GSLI or Affiliates of GSLI, and any upgrades or new generations of
such lasers that may be added to Schedule A by agreement of the
Parties from time to time during the term of this Agreement and any
spare or replacement parts for any Standard Lasers.
"TERMINATION AND RELEASE AGREEMENT" means the agreement dated August
31, 1999 between, among others, the Parties relating to the
termination of certain agreements and understandings between the
Parties (or their predecessors or Affiliates) relating to laser
products manufactured or developed by GSLI and Affiliates of GSLI and
the release of all obligations thereunder.
"TRANSFER PRICE" means, for any Standard Laser, the most recent price
for which the Standard Laser was sold by GSLI to SHI prior to the
effective date of this Agreement.
"PRIOR AGREEMENTS" means, collectively, the six sales distribution
agreements between Lumonics Inc. (subsequently renamed GSLI), or a
subsidiary of Lumonics Inc., on the one hand, and SHI, on the other
hand, each dated January 1, 1990, as amended, and any other agreements
or understandings between the
2
Parties prior to the date hereof relating to the purchase and sale of
lasers and laser-related products.
"TERRITORY" means all countries, regions and markets worldwide,
including Japan.
1.2 HEADINGS AND TABLE OF CONTENTS. The division of this Agreement into
Articles and Sections, the insertion of headings and the provision of any table
of contents are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement.
1.3 NUMBER. Unless the context requires otherwise, words importing the
singular include the plural and vice versa.
1.4 BUSINESS DAYS. If any payment is required to be made or other action is
required to be taken pursuant to this Agreement on a day which is not a Business
Day, then such payment or action shall be made or taken on the next Business
Day.
1.5 CURRENCY AND PAYMENT OBLIGATIONS. Any payment contemplated by this
Agreement shall be made by cash, certified cheque or any other method that
provides immediately available funds and in United Stated dollars unless
otherwise agreed in writing between the Parties.
1.6 SECTION AND SCHEDULE REFERENCES. Unless the context requires otherwise,
references in this Agreement to Articles, Sections or Schedules are to Articles,
Sections or Schedules of this Agreement.
ARTICLE 2
SUPPLY OF STANDARD LASERS
2.1 AGREEMENT TO PURCHASE AND SELL. During the term of this Agreement, SHI
shall from time to time purchase from GSLI, and GSLI shall sell to SHI, Standard
Lasers on the terms and conditions contained in this Agreement. SHI shall have
no minimum purchase obligations for Standard Lasers or any other products of
GSLI.
2.2 RESTRICTION ON RESALE. SHI shall not sell Standard Lasers in the form
received from GSLI ("as is") to any other Person without the prior written
consent of GSLI.
2.3 PERMITTED RESALES OF STANDARD LASERS. Despite Section 2.2, SHI, without
the prior consent of GSLI, may:
(a) incorporate any Standard Lasers into any SHI Products for sale or use by
any Person in the Territory and/or modify a Standard Laser if it is
incorporated into an
3
SHI Product to comply with a customer specification or local standards or
criteria applicable to such customer;
(b) sell Standard Lasers to any Person in the Territory if the Standard Lasers
are to be used by such Person as spare products or replacement products for
Standard Lasers purchased from SHI and owned or used by such Person;
(c) sell Standard Lasers to any Person in the Territory who specifically
requests SHI to supply the Standard Laser even after having been referred
to GSLI pursuant to Section 2.4, provided that in any such case SHI must
have (i) in good faith referred such Person to GSLI, (ii) negotiated with
GSLI in good faith as to which Party should supply such Person, and (iii)
after completing (i) and (ii), have concluded that the Person refuses to
deal directly with GSLI and will purchase Standard Lasers only from SHI;
and
(d) sell Standard Lasers to Affiliates of SHI, but only if the Affiliate agrees
to be bound by the terms of this Agreement.
2.4 SHI REFERRALS. If a Person other than an SHI or an Affiliate of SHI
requests Standard Lasers from SHI, SHI shall refer such request to GSLI and, if
GSLI ultimately sells Standard Lasers to such Person such that paragraph 2.3(c)
does not apply, GSLI shall pay a sales commission to SHI to be agreed between
the Parties, such commission to be not less than 5% of the net sale price of the
Standard Lasers sold to such Person. No sales commission shall be payable to
SHI for sales of Standard Lasers pursuant to paragraph 2.3(c). For purposes of
this section, "net sale price" is the price received by GSLI for a Standard
Laser net of distributor or representative commissions (other than the
commission payable to SHI under this section), freight, duty charges and any
other applicable taxes (other than income taxes).
2.5 SALE OF SHI PRODUCTS.
(a) If a Person in the Territory requests GSLI or an Affiliate of GSLI to
supply SHI Products to such Person, GSLI shall notify SHI in writing
forthwith, following which GSLI and SHI shall discuss with each other
appropriate ways to deal with the request.
(b) If a Person in the Territory requests SHI or an Affiliate of SHI to supply
SHI Products to such Person through GSLI or an Affiliate of GSLI, SHI and
GSLI shall discuss with each other appropriate ways to deal with the
request.
2.6 NATURE OF RELATIONSHIP. The relationship between GSLI and SHI created
hereby is that of vendor and purchaser only, and nothing contained herein shall
be deemed or construed as constituting either Party as an agent of the other for
any purpose whatsoever, and neither Party has any right or authority to assume
or create any obligation or responsibility, express or implied, orally or in
writing, on behalf of or in the name of the other Party or to bind the other
Party in any manner whatsoever.
4
2.7 COMPETITION. SHI agrees that during the term of this Agreement, it will
not develop or purchase from a Person other than GSLI lasers that are
competitive with Standard Lasers or cooperate with other Persons for the purpose
of developing such lasers, provided however that:
(a) despite the foregoing, after notification to the other Party and a good
faith attempt to discuss the matter with each other, either Party can make
contacts with other Persons (including entering into confidentiality
agreements) to enable such Party to procure from, supply to or enter into
alliance, collaboration or joint venture agreements with, such other
Persons in the Territory with respect to lasers that are competitive with
Standard Lasers;
(b) SHI may proceed to develop a laser technology based on Standard Lasers, or
to cause another Person to develop such technology, if specifications or
performance requirements for the new laser technology have been proposed to
GSLI and GSLI has not provided a proposal to develop such technology to SHI
to satisfaction of SHI, acting reasonably, within 30 days of receipt of
request from SHI; and
(c) neither Party shall be required to disclose any information to the other
Party concerning any matters in paragraphs (a) or (b), above to the extent
such disclosure is prohibited (i) by law or (ii) by a confidentiality
agreement with another Person that has been entered into after compliance
by the relevant Party with paragraph (a), above.
2.8 LICENSE TO MANUFACTURE. Without limiting the provisions of section 2.7,
either Party may from time to time propose to the other Party an arrangement
whereby one Party shall be granted the right to manufacture products of the
other Party.
2.9 INTELLECTUAL PROPERTY RIGHTS. The Parties agree that:
(a) GSLI shall own all intellectual property rights relating to inventions,
works, designs, semiconductor topographies and trade secrets developed by
or for GSLI in connection with the Standard Lasers, except to the extent
the Standard Lasers incorporate the intellectual property rights of other
Persons;
(b) SHI shall own all intellectual property rights relating to inventions,
works, designs, semiconductor topographies and trade secrets developed by
or for SHI in connection with the SHI Products, except to the extent that
SHI Products incorporate Standard Lasers or the intellectual property
rights of other Persons;
(c) SHI and GSLI shall jointly own all intellectual property rights relating to
inventions, works, designs, semiconductor topographies and trade secrets
developed by or for GSLI and SHI jointly in connection with the Standard
Lasers and modifications to any Standard Lasers that are made in accordance
with this Agreement, except to the extent the Standard Lasers incorporate
the intellectual property rights of other Persons; and
5
(d) Neither Party shall violate or attack the intellectual property rights of
the other Party in connection with the Standard Lasers and the
modifications to the Standard Lasers made in accordance with this
Agreement.
ARTICLE 3
PRICES, PAYMENT TERMS AND COMMISSIONS
3.1 GENERAL. The prices for all Standard Lasers sold by GSLI to SHI shall be
F.O.B. place of shipment by GSLI (as the term F.O.B. is defined by INCOTERMS
1953, as amended).
3.2 STANDARD LASERS. The price of a Standard Laser shall be the Transfer Price
for such Standard Laser. At any time after 180 days from the date of this
Agreement, GSLI may revise its pricing of Standard Lasers on not less than 90
days notice to SHI. For greater certainty, GSLI may send a notice of price
change prior to the expiry of the 180 day period as long as the effective date
of the notice is on or after the 180th day.
3.3 RESALE PRICES. SHI shall have the right to determine the prices for all
Standard Lasers sold by it pursuant to Section 2.3.
3.4 PAYMENT AND TITLE. Payments for Standard Lasers sold by GSLI to SHI shall
be made within 50 days of the date of their shipment from GSLI. Title to all
Standard Lasers or parts shall remain the property of GSLI until payment for the
Standard Lasers or parts by SHI has been made in full provided that risk of loss
of any Standard Laser shall pass to SHI upon delivery thereof by GSLI in
accordance with the terms of the applicable purchase order and acceptance.
Payment terms shall be reviewed in good faith by the Parties at the time of any
change in prices under Section 3.2.
ARTICLE 4
PURCHASE ORDERS
4.1 GENERAL. Purchase orders from SHI for Standard Lasers shall be in writing
and shall not be binding upon GSLI until accepted by GSLI as provided in Section
4.2.
4.2 NOTICE OF ACCEPTANCE. Promptly after GSLI receives a purchase order from
SHI, GSLI shall notify SHI whether or not GSLI has accepted the purchase order.
GSLI shall accept all purchase orders for Standard Lasers, provided that GSLI
may elect to refuse purchase orders for Standard Lasers the specifications for
which have been modified, improved or replaced or that are no longer
manufactured by GSLI, in each case after the expiry of the notice period
referred to in Section 4.3.
6
4.3 DISCONTINUANCE OF STANDARD LASERS. GSLI shall have the right to modify,
improve, replace or discontinue the manufacture of any Standard Lasers upon not
less than 180 days' notice to SHI. Upon receipt of such notice, SHI shall have
the opportunity to order any number of the relevant Standard Lasers or parts
therefor. GSLI shall deliver such Standard Lasers and parts in accordance with
the agreed upon delivery date.
ARTICLE 5
SHIPMENTS
5.1 TIME OF SHIPMENT. GSLI shall ship all Standard Lasers after a purchase
order therefor has been accepted by GSLI under section 4.2 in accordance with
the delivery date quoted by GSLI in its acceptance.
5.2 TEST REPORTS. GSLI shall send to SHI the final test report, if any, for
each Standard Laser sold to SHI at the same time as the Standard Laser is
shipped.
ARTICLE 6
TECHNICAL AND MARKETING ACTIVITIES
6.1 TECHNICAL ASSISTANCE. GSLI, upon request by SHI, shall render all
reasonable technical services necessary in conjunction with the use by SHI of
the Standard Lasers as contemplated in this Agreement. Such services shall be
provided at a fee based on GSLI's standard engineering rates. In addition, SHI
shall reimburse GSLI for all reasonable travel, living and other expenses
incurred by GSLI in providing the services. GSLI shall provide SHI with all
reasonable and customary technical information relating to the Standard Lasers
free of charge.
6.2 PUBLICATIONS, ADVERTISING, ETC. GSLI shall make available and deliver,
upon request by SHI, to SHI, free of charge, all advertising materials, product
information bulletins, technical literature and other documentation relating to
Standard Lasers.
6.3 TRAINING. SHI agrees that one or more employees of SHI shall participate
in training sessions conducted by GSLI from time to time and at its facilities
with respect to the installation, technical support and general servicing of
Standard Lasers. GSLI shall provide such training at no charge. SHI shall pay
all out-of-pocket travel and living expenses incurred by its employees.
7
ARTICLE 7
PRODUCT WARRANTY AND AFTER-SALES SUPPORT AND SERVICING
7.1 WARRANTY. GSLI warrants to SHI that the Standard Lasers sold hereunder
shall conform to any and all specifications, descriptions, drawings, data,
samples or models furnished by or to SHI (collectively, the "Specifications")
and shall be merchantable, new and of first-class quality. In particular,
unless otherwise explicitly agreed to by the Parties with respect to any
particular order or orders, GSLI warrants that for a warranty period commencing
from GSLI's shipment of the Standard Lasers to SHI and ending 12 months from the
date of acceptance by SHI or 15 months from the date of shipment, whichever
comes first, the Standard Lasers shall be free from defects in materials and
workmanship and shall be capable of the standard of performance specified in the
relevant specifications.
7.2 DEFECTS. If during the warranty period provided for in Section 7.1 a
Standard Laser is found to be defective or otherwise does not meet the standard
set out in Section 7.1, GSLI shall, within 45 days after receipt of notice of
the defect from SHI, expeditiously repair or replace, at GSLI's sole option, the
defective Standard Laser, free of charge. Defects discovered after the warranty
period will be remedied by GSLI in the same manner but at the expense of SHI
based on GSLI's then current service and other applicable charges.
7.3 WARRANTY CLAIMS ON STANDARD LASERS INCORPORATED IN SHI PRODUCTS. SHI shall
service the Standard Lasers that it incorporates into SHI Products pursuant to
paragraph 2.3(a) but shall refer all matters giving rise to possible warranty
claims relating to such Standard Lasers to GSLI. SHI shall be responsible for
all warranty claims on all portions of SHI Products except Standard Lasers
incorporated therein.
7.4 STANDARD LASERS WARRANTY CLAIMS. When repairs under warranty are effected
on Standard Lasers, SHI and GSLI agree that:
(a) GSLI shall ship replacement Standard Lasers or parts thereof to SHI
free of charge FOB the GSLI factory;
(b) defective parts shall be returned to GSLI by SHI at GSLI's expense, if
required by GSLI;
(c) subject to paragraph (e) below, each of GSLI and SHI shall be
responsible for their respective labour costs incurred in connection
with warranty claims;
(d) if requested by SHI and agreed to by GSLI, GSLI shall assist SHI in
carrying out repairs at GSLI's expense; and
(e) if the warranty period for Standard Lasers has expired and
after-warranty servicing is requested by SHI, GSLI shall provide the
servicing at its standard service rates plus all reasonable travel and
living expenses of its personnel.
8
7.5 EXCLUSION OF WARRANTY. GSLI shall have no warranty obligations in respect
of Standard Lasers that have been modified by SHI pursuant to paragraph 2.3(a)
except as may be agreed between the Parties on a case-by-case basis.
7.6 PRE-EXISTING WARRANTY OBLIGATIONS. Nothing in this Agreement shall affect
warranty obligations existing immediately prior to the date of this Agreement in
respect of Standard Lasers and other GSLI products sold prior to such date under
the Prior Agreements, which obligations shall continue in effect in accordance
with their terms.
7.7 AFTER-SALES SUPPORT AND SERVICING. The Parties agree that:
(a) GSLI shall be responsible for all after-sales support and servicing of
customers who purchased Standard Lasers and other GSLI products from
GSLI or SHI on "as is" basis prior to the date of this Agreement or
who, on or after the date of this Agreement, purchase Standard Lasers
from GSLI;
(b) SHI shall be responsible for all after-sales support and servicing of
customers of SHI who have purchased any Standard Lasers and other
products from SHI, except Standard Lasers referred to in section
7.7(a) and Standard Lasers sold by SHI in the circumstances provided
in Section 2.3;
(c) despite paragraphs (a) and (b), if one party wishes after-sales
support and servicing from the other, the Parties shall in good faith
accommodate such wish; and
(d) the after-sales support and servicing obligations described in
paragraphs (a), (b) and (c), above, are distinct from, and do not
apply to, warranty obligations of the Parties for SHI Products and
Standard Lasers.
7.8 SPARE PARTS. In connection with laser products which were sold to SHI
prior to the date of this Agreement but which are not Standard Lasers, the
Parties agree that GSLI shall sell spare parts for such products to SHI on the
following basis:
(a) payment conditions for parts shall be on the same terms as provided in
section 3.4;
(b) the warranty provisions in Sections 7.1, 7.2, 7.3 and 7.4 shall apply;
and
(c) GSLI shall continue to supply spare parts for seven years after
termination of this Agreement.
7.9 INTELLECTUAL PROPERTY AND TECHNOLOGY WARRANTY. GSLI represents, warrants
and covenants to SHI that:
(a) to its knowledge, the Standard Lasers:
9
(i) do not violate the intellectual property rights of any other Person,
and may be manufactured, advertised, offered for sale, sold and
repaired in the Territory;
(ii) are not subject to any export or import restrictions or prohibitions
in Canada or any other country in the Territory; and
(iii) conform to all industry and technical standards in the Territory.
(b) GSLI will not, during the term of this Agreement, sell any Standard Lasers
to SHI if, at the time of sale, to do so would breach paragraph (a) of this
section; and
(c) if any Person claims that any Standard Laser sold to SHI violates the
intellectual property rights of such Person or otherwise constitutes a
breach of paragraph (a) of this section, then GSLI shall, at its expense,
assume the defence of such claim on behalf of SHI and either,
(i) obtain a licence or permit from such Party permitting SHI to use the
Standard Laser; or
(ii) provide a substitute product that meets the same technical standards
as the Standard Laser in question and that does not violate the
intellectual property rights of such Person; or
(iii) failing a good faith attempt to achieve (i) and/or (ii), refund the
purchase price paid by SHI for the Standard Laser.
Without limiting the foregoing, GSLI shall indemnify SHI and hold SHI harmless
from and against all damages and related expenses, including any award of an
"accounting of profits" to a Person other than SHI and including legal expenses,
("Loss") incurred by SHI in respect of or arising from any breach of the
foregoing representations, warranties and covenants; provided that this
indemnity does not extend to (i) a Loss incurred by SHI to the extent that such
Loss results from the use to which a Standard Laser is put, or (ii)
consequential damages (including lost profits) incurred by SHI. For greater
certainty, the foregoing indemnity will apply to a Loss relating to a Standard
Laser that is included in an SHI Product except to the extent that such Loss is
based on a claim by a Person based on the use of the Standard Laser.
ARTICLE 8
COVENANTS
8.1 CONFIDENTIALITY. Each Party covenants that during the term of this
Agreement, it shall observe strict confidentiality in respect of confidential
information received from the other Party and not use or divulge, other than in
accordance with this Agreement, any confidential
10
information or technical data regarding the other Party, the Standard Lasers or
SHI Products, as the case may be, except (i) as to the disclosure of any
confidential information or technical data where such disclosure is required by
applicable law or regulatory authority, (ii) disclosure that is necessary in
connection with the marketing, sales and servicing rights and obligations of the
Parties hereunder, or (iii) disclosure of information or data that is or becomes
generally available to the public other than as a result of non-authorized
disclosure by the first Party.
8.2 GSLI COVENANTS. GSLI covenants that during the term of this Agreement, it
shall:
(a) permit SHI to use GSLI's service marks, trade-marks, trade names and
logo types in accordance with GSLI's policies in effect from
time-to-time with respect to stationary, business cards, advertising,
merchandise, signs and literature; and
(b) provide SHI with all reasonable and customary assistance, guidance and
advice as required by SHI with respect to the Standard Lasers.
ARTICLE 9
TERM AND TERMINATION
9.1 TERM. This Agreement shall become effective on the date first above
written and shall continue in effect until terminated by either Party under
Section 9.2.
9.2 TERMINATION. Anything contained herein to the contrary notwithstanding,
either Party may terminate this Agreement, by giving written notice to the other
Party, as follows:
(a) either Party may terminate this Agreement forthwith if any of the
following should occur:
(i) a court order is made or an effective resolution passed by the
other Party for the winding up, liquidation or dissolution of the
other Party;
(ii) the other Party becomes bankrupt or insolvent, takes action to
become a voluntary bankrupt, or consents to the filing of a
bankruptcy proceeding against it, or files a petition or other
proceeding seeking reorganization, readjustment, arrangement,
composition or similar relief under any bankruptcy law or
insolvency law, or consents to the filing of any such petition or
other proceeding, or consents to the appointment of a receiver,
liquidator, trustee or assignee in bankruptcy or insolvency of
all or any part of the other Party's assets or makes an
assignment for the benefit of creditors;
(iii) proceedings are instituted in any court of competent
jurisdiction by any Person other than the other Party for the
winding up, liquidation or
11
dissolution of the other Party, or for any reorganization,
readjustment, arrangement, composition or similar relief with
respect to the other Party under any bankruptcy law or any other
applicable insolvency law, or for the appointment of a receiver,
liquidator trustee or assignee in bankruptcy or insolvency of all
or part of the other Party's assets and such proceedings are not
discontinued or terminated within a period of 30 days; and
(iv) a receiver or receiver-manager or agent or other official having
similar functions is appointed over all or part of the other
Party's assets, or an encumbrancer takes possession of all or
part of the other Party's assets or a distress or execution or
similar process is levied or enforced against all or part of the
other Party's assets; and (b) either Party may terminate this
Agreement at any time for any reason upon six month's prior
written notice to the other Party.
9.3 RETURN OF DOCUMENTS. Any documentation, price lists, advertising material
or other sales promotional material supplied by GSLI to SHI shall be returned to
GSLI if requested by GSLI, at SHI's cost, in the event that this Agreement is
terminated, except to the extent necessary for SHI to perform after-sales
support and servicing.
9.4 USE OF TRADEMARKS. If this Agreement is terminated, SHI shall cease
to make further use of GSLI's name, association or trademarks and all rights or
claims that SHI has in such items will cease except to the extent such rights
are required in connection with the sale of Standard Lasers previously ordered
by SHI.
9.5 SURVIVAL. The provisions of Article 7 shall survive any expiry or
termination of this Agreement.
9.6 EXISTING LIABILITIES. The termination of this Agreement shall not
affect the liability of one Party to the other existing at the time of
termination and settlement of all outstanding business shall be upon the same
terms as if this Agreement had not been terminated. In particular, upon
termination of this Agreement, (i) all unfilled orders of SHI acknowledged and
accepted by GSLI before such termination shall be fulfilled and paid for in
accordance with the terms of this Agreement; and (ii) GSLI shall continue to
supply spare parts (at GSLI's standard OEM supplier prices) for Standard Lasers
sold by SHI or incorporated in SHI Products pursuant to sections 2.3, such
obligation to continue for a period of seven years after the termination date.
12
ARTICLE 10
GENERAL
10.1 FORCE MAJEURE. Neither Party shall be liable in any manner for failure to
fulfil or delay in fulfilling all or any part of this Agreement or of any
individual purchase order entered into pursuant to Article 4 which is, directly
or indirectly, due to any cause of circumstance beyond the control of such
Party, including, but not limited to, acts of God, governmental orders,
regulations or restrictions, war (whether declared or not), threat of war,
warlike conditions, hostilities, sanctions, mobilization, blockade, embargo,
detention, revolution, riot, looting, strike, lockout, plague or other
epidemics, fire or flood.
10.2 ASSIGNMENT. Neither Party shall assign its right or delegate its duties
hereunder without the prior written consent of the other Party, provided that
SHI acknowledges that subsidiaries of GSI Lumonics Inc. may perform the
obligations of GSLI hereunder on the basis that GSLI Lumonics Inc. shall
guarantee the obligations of any such subsidiary. Subject to the foregoing, any
attempted assignment or delegation without such consent shall be null and void.
10.3 ENTIRE AGREEMENT. This Agreement, the LPKK Purchase Agreement and the
Termination and Release Agreement together constitute the entire agreement
between the Parties with respect to the subject matter hereof and wholly cancel,
terminate and supersede all previous negotiations, agreements, understandings
and commitments, whether formal or informal, oral or written, with respect to
the subject matter hereof.
10.4 AMENDMENTS. No change, modification or amendment of this Agreement
shall be binding upon either Party unless made in writing and signed by a duly
authorized representative of the Party against whom enforcement is sought.
10.5 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of Province of Ontario, Canada therein. The uniform
laws on international sales shall not apply.
10.6 ARBITRATION. All disputes, controversies or differences which may arise
between the Parties or in relation to or in connection with this Agreement or
any individual purchase order entered into pursuant hereto, or for the breach
hereof or thereof, other than disputes, controversies or differences relating
solely to the payment of monies due hereunder or thereunder, which cannot be
resolved amicably by the Parties shall be finally settled by arbitration in
accordance with the then existing Rules of Conciliation and Arbitration of the
International Chamber of Commerce by three (3) arbitrators to be selected in
accordance with said rules. The award rendered therein shall be final and
binding upon both Parties
10.7 WAIVER. No failure or delay by either Party to exercise any right, power
or privilege precludes any further exercise thereof of any other power and
privilege which such Party may have hereunder. The rights and remedies provided
herein are cumulative and not exclusive of any rights and remedies provided by
law, in equity or otherwise.
13
10.8 NOTICES.
(1) Any notice or other communication required or permitted to be given by this
Agreement shall be in writing and shall be effectively given and made if
(i) delivered personally; or (ii) sent by prepaid courier service; or (iii)
sent by registered mail; or (iv) sent prepaid by fax or other similar means
of electronic communication, in each case to the applicable address set out
below:
(a) if to GSLI, to:
GSI Lumonics Inc.
105 Schneider Road
Kanata, Ontario, Canada K2K 1Y3
Attention: Chief Financial Officer
Fax: 613-592-7549
(b) if to SHI, to:
Sumitomo Heavy Industries, Ltd.
9-11, Kitashinagawa 5-chome
Shinagawa, Tokyo 141
Japan
Attention: Senior Executive Vice President
Fax: 011-81-3-5488-8032
(2) Any notice or other communication so given shall be deemed to have been
given and received on the day of delivery if delivered, or on the day of
faxing or sending by other means of recorded electronic communication,
provided that such day is a Business Day and such notice or other
communication is so delivered, faxed or sent prior to 4:30 p.m. on such
day. Otherwise, such notice or communication shall be deemed to have been
given and received on the next following Business Day. Any notice or other
communication sent by registered mail shall be deemed to have been given
and received on the tenth Business Day following the mailing thereof;
provided however that no such notice or other communication shall be mailed
during any actual or apprehended disruption of postal services. Any such
notice or other communication given in any other manner shall be deemed to
have been given and received only upon actual receipt.
(3) Any Party may from time to time change its address under this section by
notice to the other Party given in the manner provided by this section.
10.9 SEVERABILITY. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such prohibition or unenforceability and shall be severed from
the balance of this Agreement, all
14
without affecting the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
10.10 COUNTERPARTS. This Agreement may be executed in two counterparts, each
of which shall be deemed to be an original and both of which taken together
shall be deemed to constitute one and the same instrument. Counterparts may be
executed either in original or faxed form and the Parties adopt any signatures
received by a receiving fax machine as original signatures of the Parties.
10.11 FURTHER ASSURANCES. Each Party shall promptly do, execute, deliver or
cause to be done, executed and delivered all further acts, documents and things
in connection with this Agreement that the other Party may require for the
purposes of giving effect to this Agreement.
10.12 GOVERNMENT APPROVAL. Other than the permits or licenses contemplated by
section 7.8(b), GSLI shall, as considered appropriate by SHI, register or obtain
any necessary government approval in any relevant countries within the
Territory.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their respective duly authorized representatives as of the day and
year first above written.
GSI LUMONICS INC.
By: /s/ Warren Scott Nix
------------------------------------
Authorized Officer
By: /s/ Desmond J. Bradley
------------------------------------
Authorized Officer
SUMITOMO HEAVY INDUSTRIES, LTD.
By: /s/ H. Taniguchi
------------------------------------
H. Taniguchi
Senior Executive Vice President
15
SCHEDULE A
STANDARD LASERS
GSLI LASERS
(1) Mid and high power range YAG JK family and AM & MultiWave family of lasers
(Excluding low power range (lower than 100W mean power) YAG LuxStar family
of lasers).
(2) Excimer lasers (including industrial excimer lasers) below 100W mean power.
(3) Impact family of lasers.
16