EXHIBIT 10.12
Portions of this document indicated by an ++ have been
omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for
confidential treatment of such information.
OEM CONTRACT
BY AND BETWEEN
TURBOCHEF TECHNOLOGIES, INC.
AND
SHANDONG XIAOYA GROUP COMPANY LIMITED
_________ _________
Xiaoya TurboChef
_________ _________
Date Date
1
SHANDONG XIAOYA GROUP COMPANY LIMITED, (hereinafter Xiaoya), and TURBOCHEF
TECHNOLOGIES, INC., (hereinafter TurboChef) have entered into this Contract as
of May 19, 2000, whereby Xiaoya becomes a Contract Manufacturer of the TurboChef
Series C3-1 ovens (hereinafter TC3-1 ovens) in the PRC.
ARTICLE I
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Parties To the Contract
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Section 1.01.
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Xiaoya: Shandong Xiaoya Group Company Limited, a company
organized under the laws of the PRC and approved
with the authorization to deal in international
economic activities with its legal address at 51
Gong Ye Nan (South Industrial Road) Jinan,
Shandong, China. Its legal representative is Wang
Shidun who is Chairman and whose nationality is
Chinese.
Section 1.02.
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TurboChef: TurboChef Technologies, Inc., a company organized
under the laws of the State of Delaware, United
States of America, with its legal address at 10500
Metric Drive, Suite 128, Dallas, Texas 75243,
United States of America. Its legal representative
is Richard Caron who is Chief Executive Officer and
whose nationality is
_________ _________
Xiaoya TurboChef
_________ _________
Date Date
2
American.
ARTICLE II
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Definitions
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In this Contract, the meanings and definitions of the following terms
shall be:
Section 2.01. "Date of Contract Execution" shall mean the date by
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which both Parties shall have signed this Contract.
Section 2.02. "Effective Date" shall mean the date by which all
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required governmental approvals/business licenses have been issued for this
Contract following the Date of Contract Execution.
Section 2.03. "TC3-1 ovens" shall mean commercial-scale rapid cooking
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ovens combining conventional oven heating technology with microwave technology
which are specified as TurboChef series C3-1 ovens or Blodgett C-70 ovens.
Successor models or product revisions during the contract period will be
considered equivalent to the TC3-1 ovens.
Section 2.04. "Significant problems" refers to performance problems
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identified from accelerated lifecycle, door closure and microwave energy
leakage, radio frequency emissions testing, agency reviews, cooking performance
and food quality that prevents the ovens from meeting EC government approvals or
prevents the oven from being labeled with the following designations CE, UL,
cUL, JQA, MITI, NSF, or FDA or meeting requirements of the agencies, as per
Schedules D and E.
Section 2.05. "TC3-1 project" refers to Xiaoya's project to
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manufacture TC3-1 ovens, as the Contract requires.
_________ _________
Xiaoya TurboChef
_________ _________
Date Date
3
Section 2.06. "PRC" refers to the People's Republic of China.
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Section 2.07. "Drawing tolerance" refers to the dimensional tolerance
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requirements of the individual part drawing.
Section 2.08. "Drawing package" refers to the compiled set of drawings
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of individual parts and components.
ARTICLE III
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Obligations
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Section 3.01. Xiaoya becomes the exclusive Contract Manufacturer of
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the TC3-1 oven and Xiaoya agrees to work exclusively with TurboChef to
manufacture the TC3-1 and other rapid cooking ovens (sometimes referred to
herein as "units") in China.
Section 3.02. Xiaoya is responsible for manufacturing engineering,
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procurement of components, materials, outgoing quality and manufacture of the
ovens for sale exclusively to TurboChef or its designees.
Section 3.03. TurboChef or its designee shall be responsible for the
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distribution of the TC3-1 ovens manufactured by Xiaoya for Europe or other
regions.
Section 3.04. Xiaoya will establish a subsidiary company to
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manufacture the TC3-1 ovens, which shall be established at the Xiaoya Water
Heater Plant, located in Jinan.
Section 3.05. Xiaoya will be responsible for establishing a
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manufacturing and engineering team dedicated to this TC3-1 project. The team
must include at least one full time engineer who is communicative in English and
_________ _________
Xiaoya TurboChef
_________ _________
Date Date
4
Mandarin Chinese.
Section 3.06. Xiaoya agrees to appoint a dedicated program manager to
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the TC3-1 project by May 20, 2000.
Section 3.07. TurboChef is responsible for applying for CE
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certification and all the associated costs of that application.
ARTICLE IV
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Schedule Of Manufacture
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Section 4.01. Component Procurement and Pre-Production Units
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a) Xiaoya will demonstrate its ability to manufacture the TC3-1
ovens by manufacturing one TC3-1 oven prototype no later than one
month after receipt of all components as specified in Schedule B
and the complete drawing package, provided by TurboChef.
b) Six weeks after receipt of all component specifications and/or
samples, Xiaoya will supply to TurboChef up to 5 sets of Chinese
listed components from up to 3 suppliers (except
specialized/tooled components for which Xiaoya will advise
TurboChef as to availability dates, but no later than August 20,
2000). Xiaoya will confirm any purchase commitments in writing
with TurboChef before placing an order. TurboChef will pay for
all components not paid for by the supplier. Xiaoya will exercise
_________ _________
Xiaoya TurboChef
_________ _________
Date Date
5
its best efforts to obtain the components at the supplier's
expense.
c) Upon receipt of the first prototype, TurboChef will approve or
specify in detail non-conformance issues in a written report to
Xiaoya within one week. TurboChef will conduct the inspection of
the prototype oven at the Xiaoya factory in Jinan. The inspection
will include conformance to drawing tolerances and testing
protocols as defined in Schedule D.
d) Upon TurboChef's acceptance of the first prototype, Xiaoya agrees
to provide to TurboChef a total of seven (7) pre-production units
one month after receipt of approval as specified in Section
4.01(c), which incorporate revisions, if any and the parts
supplied by TurboChef. These units will be provided to TurboChef
at cost. TurboChef will pay Xiaoya 50% of the cost up-front.
TurboChef will pay the remainder after acceptance of the ovens.
Section 4.02. Pre-Production Testing
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a) Xiaoya, as required per section 4.01(d), will provide the seven-
(7) units, for engineering testing as defined by TurboChef in
Schedule D as follows:
i) 2 - for door tests at Xiaoya factory in Jinan;
ii) 1 - for accelerated life testing at Xiaoya factory in Jinan;
iii) 2 - for accelerated life testing at TurboChef;
_________ _________
Xiaoya TurboChef
_________ _________
Date Date
6
iv) 2 - for extended engineering evaluation at TurboChef
b) Upon receipt of the seven (7) test pre-production units,
TurboChef will detail non-conformance issues in a written report
to Xiaoya within thirty (30) days of receipt of the same. The
inspection will include conformance to drawing tolerances and
testing protocols as defined in Schedule D.
c) Xiaoya will provide additional 12 pre-production units to
TurboChef at cost one month after receipt of approval and the
parts specified in Schedule B. TurboChef will pay Xiaoya 50% of
the cost up-front. These units will be inspected (as defined in
Schedule D) at Xiaoya, Jinan. If the units do not pass quality
inspection, Xiaoya will have to rebuild or repair such units at
Xiaoya's cost. TurboChef will only pay the balance if the ovens
pass quality inspection by TurboChef.
d) TurboChef will use these units for engineering testing and agency
testing as follows:
i) 2 - for door tests at Xiaoya factory in Jinan;
ii) 4 - for accelerated life testing at Xiaoya factory in Jinan;
iii) 3 - for accelerated life testing at TurboChef in the USA
iv) 1 - for agency RF testing in the USA
v) 2 - for cook testing at TurboChef in the USA or UK.
e) Xiaoya will provide an additional four (4) pre-production units
for worker training to TurboChef, provided the units pass quality
inspection by TurboChef. TurboChef will pay Xiaoya 50% of the
_________ _________
Xiaoya TurboChef
_________ _________
Date Date
7
cost up-front. If the units do not pass quality inspection, as
defined in Schedule D, Xiaoya will have to rebuild or repair such
units. Once the units pass inspection, TurboChef will pay the
balance.
f) Upon TurboChef's acceptance of all of the pre-production units,
TurboChef will authorize Xiaoya to proceed with production as
outlined in Article VI.
Section 4.03. TurboChef shall supply to Xiaoya all testing equipment
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as defined in Schedule D not available in China needed for oven manufacturing,
once Xiaoya passes pre-production tests and production of TC3-1 ovens is
approved. TurboChef will reimburse Xiaoya for test equipment Xiaoya purchases in
China. Xiaoya shall be responsible for the maintenance of such testing
equipment. When the performance of this Contract is completed, or if this
Contract is sooner terminated, such testing equipment shall be forthwith
returned to TurboChef.
ARTICLE V
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Pricing
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Section 5.01. Xiaoya will establish a standard cost as defined in
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Schedule B for the TC3-1 ovens on the basis of a calculation of materials,
components, parts, direct labor, overhead, margin, and taxes (on the basis of
annual
_________ _________
Xiaoya TurboChef
_________ _________
Date Date
8
production volume of 2000 units within 12 months) to establish a selling price
to TurboChef. The price will be updated and agreed upon by both parties during
quarterly pricing review meetings based on volume, manufacturing efficiency,
design changes and material cost changes. Minutes of these meetings will be
provided to both TurboChef and Xiaoya management.
Section 5.02. Xiaoya's target unit selling price to TurboChef for the
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first five hundred (500) units will be ++ (excluding the components supplied by
TurboChef as defined in Schedule B) based on a total target unit cost to
TurboChef of ++ on the basis of 2000 unit annual production. On May 19, 2000,
the cost defined in Schedule B is ++. Both TurboChef and Xiaoya agree to work
together to reduce Schedule B cost from ++ to ++. When the purchase order for
the first one hundred production ovens is received, both Parties will agree to
the oven cost in Schedule B at that time. Upon the issuance of subsequent
purchase orders, both Parties agree to use the current Schedule B costs at the
time the purchase order is issued.
Section 5.03. Upon production start or in the future, if the price is
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not acceptable to TurboChef, or if the cost of freight, export duties, import
duties, and/or Chinese taxes are excessive or become excessive which makes the
oven non-competitive in the World marketplace, then TurboChef may terminate this
Contact. Xiaoya will work with TurboChef to reduce the costs for taxes, duties,
freight, components, subassemblies and complete assembly of the ovens.
_________ _________
Xiaoya TurboChef
_________ _________
Date Date
[++ represents confidential treatment request]
9
Section 5.04. TurboChef and Xiaoya contemplate that cost
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reduction efforts by both parties will result in decreases in the manufacturing
costs of the TC3-1 ovens. Therefore, the prices in Schedule B reflect the agreed
upon costs and prices for the first five hundred ovens. TurboChef reserves the
right to modify the design of the TC3-1 oven and to revise the bill of materials
(Schedule B) and the standard cost sheet (Schedule B). Prices for additional
releases will be based upon the following:
a) The change in costs of purchased components, steel, subcontracted
manufacturing, direct labor, overhead, taxes and profit will be
evaluated as design changes occur. If TurboChef requires the
addition of parts or the increase in complexity of a part,
TurboChef will pay for this added cost. If TurboChef requires the
deletion of a part or simplification of a part, the cost of the
oven to TurboChef will be reduced accordingly.
b) TurboChef will advise Xiaoya of pending design changes. The
design will be locked in lots of 100 units. In the event of part
or component obsolescence, TurboChef will purchase those parts
from Xiaoya at cost up to 100 oven equivalents and only if this
obsolescence is reported to TurboChef during the design review.
c) All labor savings (defined in terms of man hours multiplied by
pay rate) from the agreed labor in Schedule B, as determined from
_________ _________
Xiaoya TurboChef
_________ _________
Date Date
10
appropriate time studies and engineering assessments, will be
shared equally by the parties. These savings will be negotiated to
reduce the oven cost, after the completion of the first five
hundred ovens. At this time, the Parties will renegotiate the labor
and overhead to reflect the lower labor requirements.
d) If capital investment is used to reduce manpower, the depreciation
of the capital investment may be added to the cost, however, it is
expected that the overall cost of manufacturing the oven or its
components will be reduced even with the addition of new capital
investment
ARTICLE VI
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Purchase Commitment of TurboChef
--------------------------------
Section 6.01. TurboChef anticipates a minimum requirement for 500
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TC3-1 ovens during the first six months of production which begins once CE
certification is received and will enter into an initial commitment for TC3-1
ovens a rate of twenty-five (25) per week upon satisfactory testing of
pre-production units. Purchase orders will be issued by the 15th day of each
month by TurboChef in lots of one hundred until sales projection and orders are
firm. TurboChef will provide Xiaoya eight weeks lead time for shipment of the
order.
Section 6.02. TurboChef will supply to Xiaoya an oven demand
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_________ _________
Xiaoya TurboChef
_________ _________
Date Date
11
forecast on a rolling three-month (3) month basis by the 15th day of each month
and authorize continued production provided that all of the following conditions
are met:
a) Xiaoya demonstrates that it is and continues to be capable of
manufacturing the TC3-1 ovens in accordance with standard
manufacturing practices, including the facilities approval by the
UL inspectors to allow the lawful application of the "UL", the
European Community "CE" and the Japanese "JAQ and MITI" marks;
b) Xiaoya agrees to manufacture in accordance with specifications to
include all drawings and unit test procedures supplied by
TurboChef as defined in Schedule D;
c) Xiaoya will initiate production at a rate of 3 units per week by
August 20, 2000 if no Significant Problems are identified.
d) Xiaoya will increase production to a rate of 5 units per week by
September 20, 2000 if no Significant Problems are identified.
e) Xiaoya will increase production to a rate of 25 units per week by
November 20, 2000 if no Significant Problems are identified and
CE certification is received.
f) However, total production will be limited to fifty (50) units
until CE certification is received for the ovens manufactured at
Xiaoya.
Section 6.03. TurboChef will purchase units at the Contract price
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provided the units pass the TurboChef quality requirements as defined in
Schedule D.
_________ _________
Xiaoya TurboChef
_________ _________
Date Date
12
Section 6.04. TurboChef will provide Xiaoya with a sales forecast for
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2001 in writing by December 1, 2000.
ARTICLE VII
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Supply Responsibilities
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Section 7.01. TurboChef will be responsible for providing to Xiaoya,
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at cost plus freight and duty, the components defined in Schedule B and as may
be revised from time to time. Xiaoya will be responsible for the procurement and
quality of all other components.
Section 7.02. The sources, specifications and models of all components
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must be approved by TurboChef in advance of any commitments to purchase for use
in a TC3-1 oven by Xiaoya. TurboChef will be responsible for all fees related to
component testing.
Section 7.03. In the event of a change in a component, Xiaoya shall
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provide TurboChef two samples at least sixty (60) days before incorporation into
the TC3-1 ovens. Xiaoya is responsible for reporting the reason for the change.
It will be TurboChef's sole right to approve the component change
Section 7.04. In the event that a component or design change would
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require a re-certification of the TC3-1 ovens, it will be done under the
direction of a designated TurboChef engineer or approved representative.
Section 7.05. All components will be required to meet TuboChef's
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reliability requirements. In addition, both Parties will use their best efforts
to ensure that suppliers provide components having UL and/or CE certification.
Section 7.06. Xiaoya will establish a system to bond imported parts to
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_________ _________
Xiaoya TurboChef
_________ _________
Date Date
13
avoid attracting customs taxes, duties and value added taxes (VAT).
ARTICLE VIII
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Technical Support
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Section 8.01. TurboChef will supply technical support to Xiaoya during
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the first prototype and pre-production phases, as determined by TurboChef, to
ensure design consistency, quality, reliability and maintenance of certification
of the TC3-1 oven.
Section 8.02. TurboChef will at its own costs, supply a start up team
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to Xiaoya to support training of Xiaoya managers and associates during the
startup of the production, after (or before) production commences. The team will
support Xiaoya on an as-needed basis from April to December 2000. The detailed
requirement will be developed during the first month of the TC3-1 project. In no
case will TurboChef supply more than 180 person-days of support during the
start-up phase.
Section 8.03. TurboChef will provide Xiaoya the CE standards after the
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Effective Date.
ARTICLE IX
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Quality Control
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Section 9.01. All TC3-1 ovens manufactured by or for Xiaoya, in
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accordance with the specification provided by TurboChef, shall conform to the
quality requirements set by TurboChef as defined in the drawing package and
_________ _________
Xiaoya TurboChef
_________ _________
Date Date
14
Schedule D. TurboChef and its agents, attorneys and representatives may at any
reasonable time during normal working hours, inspect the physical manufacturing
and storage facilities used by Xiaoya or under its direction in order to
ascertain whether such products conform to TurboChef's quality requirement.
Repeated failure on the part of Xiaoya to meet TurboChef's quality requirement,
or to correct improper manufacturing techniques, shall be grounds for TurboChef
to terminate this Contract by giving written notice of termination in accordance
with Article XXVI.
Section 9.02. TurboChef may, at its discretion and cost, audit
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manufacturing either at the Xiaoya factories or subcontractors factories prior
to acceptance of ovens manufactured to ensure adherence to design specifications
and product quality provided by TurboChef. The results of these audits will be
provided to Xiaoya in writing within seven (7) days of completion of the audit.
Section 9.03. Xiaoya shall allow TurboChef free access to its
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manufacturing facilities in order to perform such inspections and provide its
manufacturing quality control process in writing for TurboChef's approval.
Section 9.04. TurboChef will supply the approved quality control
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procedures to Xiaoya by April 15, 2000. TurboChef reserves the right to modify
the procedures during the term of the Contract. TurboChef will notify Xiaoya in
writing of changes in the procedures. All ovens must pass the quality
requirement as set forth in Schedule D and drawing tolerances.
Section 9.05. Each completed oven shall be accompanied with an
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approved inspection report (as defined as the Unit Test Procedure in Schedule D)
prepared by Xiaoya in English in either hard copy or placed in an electronic
database accessible to TurboChef. TurboChef will only pay for units that meet
_________ _________
Xiaoya TurboChef
_________ _________
Date Date
15
TurboChef's quality requirement. Both Parties will work jointly to improve
overall product quality to ensure that all ovens leaving Xiaoya meet TurboChef's
quality requirement during 2000. In December 2000 both Parties will evaluate the
quality program and decide jointly on a plan for future quality assurance. To
assure product quality, TurboChef will conduct random quality testing of ovens
at Xiaoya to confirm shipment acceptance.
Section 9.06. Any oven in Xiaoya's factory not meeting the quality
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requirement (defined in Schedule D) resulting from manufacturing defects in
components purchased by Xiaoya will, at Xiaoya's discretion, either be repaired
at Xiaoya's expense or rejected. Any components supplied by TurboChef, not
meeting the quality standard will at TurboChef's discretion, either be replaced
or repaired at TurboChef's expense.
Section 9.07. All components selected for the TC3-1 ovens shall pass a
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series of performance tests conducted for or by TurboChef in accordance with
Schedule D and accreditation requirements then current of the country of
destination of the particular unit. In the event a component is changed due to
availability, design change or cost reduction opportunity; TurboChef must
approve the change in writing before the component is included in an oven.
Without the written approval, any change in components will be considered a
breach of quality and the oven shall be rejected. In the event that a component
becomes un-available, TurboChef will work with Xiaoya to notify the required
accreditation agencies and to conduct testing and derivation of a replacement.
Section 9.08. TurboChef and Xiaoya will establish a team to be
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constituted as shall hereinafter be agreed upon by the parties to define design
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Xiaoya TurboChef
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Date Date
16
improvements and cost reduction options for the TC3-1 ovens. The team will be
responsible for reducing the overall manufacturing costs for the oven and for
maintaining oven accreditation and quality.
Section 9.09. All TC3-1 ovens manufactured by Xiaoya may have affixed
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thereto only the logo of "TurboChef" or as otherwise agreed to by the parties.
ARTICLE X
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Delivery
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Section 10.01. Delivery of TC3-1 ovens from Xiaoya to TurboChef will
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be F.C.A. (INCO TERM 2000), Jinan. TurboChef will pay for inland freight and
Xiaoya will pay customs handling fees.
Section 10.02. The TC3-1 ovens will be loaded at the place of
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manufacture by Xiaoya personnel into shipping containers supplied by TurboChef.
TurboChef will be responsible for arranging for all shipments internationally.
Shipments will be on a full container lot basis unless specified in writing by
TurboChef.
Section 10.03. The ovens will be loaded by Xiaoya personnel into the
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shipping container within twenty-four (24) hours of arrival of the container at
the place of manufacture.
Section 10.04. The TC3-1 ovens will be shipped only in packaging
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approved in advance by TurboChef. No deviation from this packaging, without the
written consent of TurboChef, will be permitted.
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Xiaoya TurboChef
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Date Date
17
ARTICLE XI
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Changes
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Section 11.01. All changes to the terms of this Contract must be
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authorized in writing by both parties. It is the responsibility of both parties
to ensure such compliance.
Section 11.02. Purchase order changes will be handled with a written
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Purchase Order Revision.
Section 11.03. Engineering changes will be handled with written
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Engineering Change Notifications. Xiaoya must notify TurboChef in writing within
sixty (60) calendar days of any associated cost impact. Should this time period
be insufficient, Xiaoya must, before a change is made, request an extension of
time from TurboChef in writing.
Section 11.04. All change notifications shall be in writing and shall
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be made directly to the Vice President of Manufacturing of TurboChef or his/her
representative authorized and appointed by him/her in writing.
ARTICLE XII
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Warranty
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Section 12.01. Xiaoya will provide a warranty for one (1) year on all
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parts associated with the TC3-1 ovens with the exception of parts supplied to
Xiaoya by TurboChef. The warranty will be to supply replacement parts due to
manufacturing defects.
ARTICLE XIII
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Xiaoya TurboChef
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Date Date
18
Term
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Section 13.01. The term of this Contract shall be for a period of four
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(4) years from the Effective Date. Thereafter this contract will automatically
renew on an annual basis unless either Party provides written notice to the
other Party to terminate at least 120 days in advance of the expiration date of
the contract.
Section 13.02. Except as provided for in Article XXVI, this Contract
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may only be terminated for breach with notice and time to cure of 30 days.
ARTICLE XIV
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Confidentiality
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Section 14.01. Xiaoya shall, during the term of this Contract and
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after its termination or expiration, keep confidential and not make use of, or
disclose to any other person, firm or corporation including affiliated or
subsidiary companies, any information related to the TC3-1 ovens which shall
include but not be limited to, patents, trademarks, tradenames, trade dress,
trade secrets, proprietary information, know-how oven designs and components,
unless otherwise required by applicable laws or regulations or by an order of a
court having competent jurisdiction. Xiaoya shall employ all necessary
precautions to prevent any other party from gaining access to materials and
information provided by TurboChef except to the extent necessary for the
performance of this Contract, and only in accordance with Sections 14.02.
Section 14.02. During the term of this Contract, Xiaoya may, for the
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Xiaoya TurboChef
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Date Date
19
purpose of manufacture, of the TC3-1 ovens, disclose the relevant
confidential information to its employees or sub-contractors, but only as
necessary for the performance of this Contract. Xiaoya shall ensure that such
employees and subcontractors will sign a confidentiality contract in the form
set out in Schedule C, and shall immediately provide TurboChef with copies of
all signed Confidentiality Contracts.
Section 14.03. Xiaoya shall only provide to TurboChef copies of all
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releases to subcontractors, the subcontractor contact, address and telephone
number.
Section 14.04. Upon termination of this Contract, all written
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specifications relating to engineering and manufacturing, in connection with the
TC3-1 ovens will be returned to TurboChef by Xiaoya and Xiaoya covenants that it
will not thereafter use any of the information relating to the design or
manufacturing techniques or know-how obtained from TurboChef prior to
termination.
Section 14.05. Xiaoya will not sell TurboChef TC3-1 ovens to any party
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other than TurboChef without TurboChef's written approval.
Section 14.06. Xiaoya under no circumstances will release control
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cards, software or source code to any third party without TurboChef's written
permission.
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Xiaoya TurboChef
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Date Date
20
ARTICLE XV
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Intellectual Property Rights
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Section 15.01. Xiaoya will develop systems to protect the intellectual
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property of TurboChef. These systems will include document control, document
security, limited release of documents on a need-to-know basis, limited release
of documents and drawings to qualified vendors, staff access restrictions and
immediate report of technical improvements to TurboChef.
Section 15.02. Under the terms of this Contract, neither party is
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granted rights to patents, trade secrets, trademarks, copyrights or other rights
with respect to the other party's pre-existing intellectual property except as
set forth in Schedule A.
Section 15.03. New inventions, improvements, modifications or other
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enhancements developed independently or jointly by the parties regarding TC3-1
ovens or rapid cook ovens in general shall be owned exclusively and without
encumbrance and obligation by TurboChef. Both parties agree that all
intellectual property thereof, including patent claims shall inure to the
benefit of TurboChef.
Section 15.04. TurboChef reserves any and all proprietary rights to
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any trade name, trademark or copyright and Xiaoya agrees not to claim any
proprietary interest in such rights except as provided under license by
TurboChef, and then only during the life of the Contract with the nature and use
of such rights subject to the control of TurboChef.
Section 15.05. TurboChef agrees to indemnify and hold harmless Xiaoya
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in case of administrative or court action arising from claims against
TurboChef's intellectual property rights during the manufacture of the TC3-1
ovens.
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Xiaoya TurboChef
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Date Date
21
ARTICLE XVI
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Infringement by Third Parties
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Section 16.01. Xiaoya shall, insofar as possible, report immediately
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in writing to TurboChef any and all actual or suspended patent, trademark,
tradename, trade dress or trade secret infringements and any attempt on the part
of any third party to register, copy, infringe upon or imitate the patents,
trademarks, tradename or trade dress of TurboChef or any design features of the
TC3-1 ovens.
Section 16.02. Only upon written request and authorization of
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TurboChef, Xiaoya will support TurboChef in taking legal action to prevent
infringements, imitation or illegal use of the patents, trademarks, tradename,
trade dress or trade secrets of TurboChef in China. However, Xiaoya shall, upon
the request of TurboChef render to TurboChef all assistance possible in legal
actions against such offenses and at TurboChef's expense, make available to
TurboChef all witnesses, records, files and other information pertaining to the
TC3-1 ovens including the purchase, manufacturing, sale, distribution and
advertising of the TC3-1 ovens and the use of any related IP rights.
Section 16.03. TurboChef may take such steps and institute such legal
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proceedings as shall be reasonably necessary to protect the IP rights and the
right and Contract of Xiaoya pursuant to the terms of this Contract. However,
TurboChef shall not be obliged to initiate any proceedings in relation to the
infringement of any of the Licensed Trademarks if it decides not to do so.
Section 16.04. TurboChef shall be entitled to all compensation (after
-------------
reimbursement of expenses incurred by Xiaoya) which may be recovered.
--------- -----------
Xiaoya TurboChef
--------- -----------
Date Date
22
ARTICLE XVII
------------
Accounting
----------
Section 17.01. Xiaoya shall, in accordance with its own factory
-------------
accounting system, keep complete, accurate and proper records and books of
account showing the quantity and description of the TC3-1 ovens manufactured,
packaged and sold by it pursuant to this Contract, including accounting receipts
and monthly and quarterly accounting statements in accordance with the relevant
regulations of the PRC.
Section 17.02. Within thirty (30) days of the last day of each quarter
-------------
of each year, Xiaoya shall render to TurboChef a just and true account in
writing specifying:
(a) the number of the TC3-1 ovens manufactured by Xiaoya in the
preceding quarter;
(b) the number of such TC3-1 ovens shipped or sold in the said
quarter;
(c) the sales prices of all such TC3-1 ovens; and
(d) the breakdown of detailed factory costs by materials, labor and
overhead.
Section 17.03. TurboChef, its agents, attorneys and accountants
-------------
appointed in writing shall have the right at any reasonable time to audit and
investigate the relevant books and accounts pertaining to the manufacture, sale
or distribution of the TC3-1 ovens under this Contract, and other accounting
receipts
--------- -----------
Xiaoya TurboChef
--------- -----------
Date Date
23
showing or reflecting the business connected with the TC3-1 ovens. In case of
any dispute concerning the relevant books and accounts by TurboChef, Xiaoya
shall correct such books and accounts or provide reasonable explanations to the
satisfaction of TurboChef.
Section 17.04. TurboChef will provide Xiaoya copies of purchase orders
-------------
and invoices for components TurboChef supplies to Xiaoya within 30 days of the
last day of each quarter of each year.
ARTICLE XVIII
-------------
Payments
--------
Section 18.01. TurboChef shall pay Xiaoya for TC3-1 ovens and spare
-------------
parts purchased by irrevocable letter of credit at sight to be drawn upon
shipment from Jinan. TurboChef shall have the right of offset for money owed by
Xiaoya to TurboChef and the offset shall be agreed by Xiaoya.
Section 18.02. TurboChef shall only be required to pay for TC3-1 ovens
-------------
that meet TurboChef's quality requirements in accordance with Section 9 of this
Contract.
ARTICLE XIX
-----------
Indemnification
----------------
Section 19.01. Upon the Date of Contract Execution, Xiaoya shall at
-------------
its own expense obtain and maintain in force for the duration of its manufacture
of
--------- -----------
Xiaoya TurboChef
--------- -----------
Date Date
24
TC3-1 ovens product liability insurance in the amount of $ Two (2) Million.
TurboChef shall indemnify Xiaoya, and will hold Xiaoya harmless against all
warranty claims and liability, loss, expense and costs with respect to claims of
injury to customer and users, or damage to their property as a result of the
design, performance specifications, formulas, processes or components supplied
by TurboChef and to the extent not covered by any such applicable insurance that
Xiaoya may have.
Section 19.02. Xiaoya shall indemnify TurboChef, and will hold
-------------
TurboChef harmless against all warranty claims and liability, loss, expense and
costs with respect to claims of injury to customer and users, or damage to their
property as a result of the manufacturing practice, manufacturing defect,
defects in components supplied by Xiaoya and to the extent not covered by any
such applicable insurance that TurboChef may have.
Section 19.03. Xiaoya's liability for loss, expense and costs with
-------------
respect to claims of injury to customer and users, or damage to their property
as a result of the manufacturing practice, manufacturing defect, defects in
components supplied by Xiaoya shall cease seven years after the oven manufacture
date.
ARTICLE XX
----------
Filing and Renewal of Registration
----------------------------------
Section 20.01. Within thirty (30) days after the Date of Contract
-------------
Execution, Xiaoya shall file a copy of this Contract with the appropriate
Chinese
--------- -----------
Xiaoya TurboChef
--------- -----------
Date Date
25
government office for approval, or recordal, if required by the law. Xiaoya
shall pay the necessary filing fees and shall bear the relevant costs.
ARTICLE XXI
-----------
Fair Practices and Assignments
------------------------------
Section 21.01. Xiaoya covenants and agrees that it will not
-------------
during the term of this Contract or thereafter encourage, induce or assist any
third party in doing any act or thing which, if it were done by itself, would be
contrary to the provisions of this Contract.
Section 21.02. This Contract shall be binding upon and inure
-------------
to the benefit of both Xiaoya and TurboChef and their respective legal
representatives, successors and assignees, and neither this Contract nor any
interest herein shall be assignable by Xiaoya (whether by assignment,
sub-license, operation of law or otherwise) without the prior written consent of
TurboChef.
ARTICLE XXII
------------
Notices
-------
Section 22.01. All notices required to be given or given
-------------
hereunder shall be sent to the legal addresses of the Parties provided in
Article I of this Contract, unless another address for either party is
substituted by prior written notice. Notices shall be deemed to have been
received on the date such notices are sent by telex, cable or facsimile, and
notices so received shall be confirmed by
_____ _________
Xiaoya TurboChef
_____ _________
Date Date
26
certified mail with receipt enclosed.
ARTICLE XXIII
-------------
Operation Have and Compliance with Law
---------------------------------------
Section 23.01. If any provision of this Contract shall be in
-------------
violation of the present or future laws of the PRC or of any other relevant
jurisdiction, in such a way that it is invalid, void or voidable, the validity
of the remaining provisions shall not be affected thereby unless such invalidity
is of an essential and material part of this Contract, in which event either
party shall have the right to report to the relevant government authority for
termination of this Contract if required, pursuant to relevant provisions
hereunder, and this Contract shall then be terminated forthwith upon approval
being given.
Section 23.02. Xiaoya shall observe and comply with all laws,
-------------
rules and regulations applicable to the manufacture, packaging, storing and
handling of the TC3-1 ovens. Xiaoya shall, at its own cost and expense, secure
and maintain all necessary governmental permits, licenses and approvals, and
will fulfil all other requirements and undertakings related to this Contract
which are or may become necessary under any law or regulation, now or hereafter
existing in the PRC, to enable the Parties to exercise, enforce and enjoy all of
the rights and obligations contained in this Contract, including but not limited
to, approvals required from any relevant government authority, and any approvals
necessary to enable the payment and remittance of the fee to TurboChef in
accordance with this Contract.
______ _________
Xiaoya TurboChef
______ _________
Date Date
27
ARTICLE XXIV
------------
Arbitration and Governing Law
-----------------------------
Section 24.01. Where any dispute (including a failure or
-------------
refusal by any party to pay to the other party any amount due, or alleged to be
due, to it by the terms of this Contract) arises in relation to the existence,
construction, interpretation, validity, termination or implementation of this
Contract, the Parties shall attempt to resolve such dispute through friendly
consultation or conciliation between representatives of the Parties appointed
for the purpose. If the Parties are unable to resolve any dispute in the manner
within sixty (60) days from the date one party gives written notice of such
dispute to the other party, then either party may submit the dispute for
arbitration upon notice given to the other party.
Section 24.02. All disputes between the Parties arising out of
-------------
this Contract shall be settled by arbitration utilizing a single arbitrator and
conducted in accordance with the rules of Conciliation and Arbitration ("ICC
Rules") of the International Chamber of Commerce, Paris, France ("the ICC"). The
arbitration proceedings shall be held in Sydney, Australia. The decision of the
arbitrator shall be final and binding upon the Parties hereto. All of the costs
and expenses (including reasonable attorneys' fees) incurred by the prevailing
party in connection with any matters submitted to arbitration pursuant to this
Section shall be borne by the other party if so decided by the arbitrator.
Section 24.03. Any arbitral award resulting from such
-------------
proceedings shall be final and binding on the Parties, and shall not be subject
to appeal to any court and shall be fully enforceable in any country should the
losing party fail to perform the award. The costs of any arbitration proceedings
shall be borne by the
_______ ________
Xiaoya TurboChef
_______ ________
Date Date
28
losing party unless otherwise determined by the arbitration award.
Section 24.04. When any dispute occurs and when any dispute is
-------------
under arbitration, except for the matters under dispute, the Parties shall
continue to fulfil their respective obligations and shall be entitled to
exercise their rights under this Contract.
Section 24.05. All disputes, which occur during or after
-------------
termination of this Contract, will be arbitrated under Australian law.
Section 24.05. All intellectual property infringement disputes
-------------
will be governed under the laws of the country in which the infringement
occurred.
ARTICLE XXV
-----------
Force Majeure
-------------
Section 25.01. The obligations of either party under this
--------------
Contract shall be suspended without penalty during the period and to the extent
that such party is prevented or hindered from complying therewith by events of
force majeure including strikes, act of God, war, riot, civil commotion,
malicious damage, governmental order, rule or regulation that affects directly
and unfavorably the implementation of this Contract, accident, or other
circumstances preventing the supply of goods or of raw materials therefor.
Section 25.02. If either party is hindered or prevented from
-------------
complying with its obligations pursuant to the preceding section, it shall
promptly give notice to the other party stating the date and extent of such
suspension and shall provide
______ _________
Xiaoya TurboChef
______ _______
Date Date
29
appropriate evidence of the cause thereof. The omission to give such notice
shall forfeit the rights of such party to claim suspension of its obligations.
Any party whose obligations have been suspended as aforesaid shall resume the
performance of such obligation as soon as reasonably possible after the removal
of the cause and shall so notify the other party.
Section 25.03. If any event of force majeure occurs, the
-------------
parties shall meet within fifteen (15) calendar days to determine what actions
should be taken to reduce the effects to the parties as a result of the
occurrence of such event.
ARTICLE XXVI
------------
Termination
-----------
Section 26.01. In addition to any other provisions contained
-------------
herein for the termination of this Contract, this Contract may be terminated in
the following circumstances:
a) by either party giving written notice to the other party,
if at any time during the term of this Contract, the other
party shall be unable to pay its debts when due, or shall
become insolvent, or there shall be filed by or against it
in any court a petition for bankruptcy or insolvency, or
for reorganization or for the appointment of a receiver or
trustee for all or a portion of its property, or if it
makes an assignment for the benefit of creditors.
Termination shall be effective forthwith if the event
justifying the termination is a
______ _________
Xiaoya Turbo Chef
______ ________
Date Date
30
voluntary act of the party itself. Otherwise, termination shall be
effective upon the adjudication that the other party is in fact
bankrupt or insolvent, or upon a court taking and retaining
jurisdiction over the other party and its assets for a period of
sixty (60) days.
b) by TurboChef giving thirty (30) days written notice to Xiaoya in
the event there shall be any change in the corporate identity of
Xiaoya or TurboChef by way of merger, sale or reorganization.
c) by either party giving sixty (60) days written notice to the other
party in the event of any action on the part of the government of
the PRC or the government of the United States of America
effectively abrogating the intent of this Contract or making its
implementation economically impossible, which action is maintained
or not substantially ameliorated within one (1) year from the date
of the action.
d) by TurboChef giving thirty (30) days written notice to Xiaoya in
the event that Xiaoya becomes affiliated, directly or indirectly,
with any competitor of TurboChef.
e) by TurboChef giving written notice to Xiaoya if, for whatever
reason, Xiaoya does not commence production of any of the TC3-1
ovens
______ __________
Xioya TurboChef
______ __________
Date Date
31
within thirty (30) days following the notice of award of the CE
Certification and Purchase Orders from TurboChef.
f) by either party giving written notice to the other party in the
event that an event of force majeure continues for a period of
thirty (30) consecutive days that causes Xiaoya to cease production
of the TC3-1 ovens and the Parties have been unable to find an
equitable solution.
g) by TurboChef giving written notice to Xiaoya if Xiaoya fails
repeatedly to meet TurboChef's quality standards or to correct
improper manufacturing techniques as requested to do so by
TurboChef pursuant to this Contract.
h) If for any reason, within or without Xiaoya's control, the cost of
the ovens is no longer economically viable as determined by
TurboChef, and TurboChef gives Xiaoya thirty (30) days notice to
discontinue manufacturing the ovens.
Section 26.02. Upon termination of this Contract, TurboChef will
-------------
purchase manufactured TC3-1 ovens in stock, subject to quality approval by
TurboChef, within thirty (30) days. Both Parties afterwards shall negotiate the
disposition of any remaining stocks of TC3-1 ovens, materials, and components.
______ __________
Xioya TurboChef
______ __________
Date Date
32
Section 26.03. If this Contract is terminated by Xiaoya for breach by
-------------
TurboChef, and/or terminated for terms 26.01 a), b), g), and/or h), the
equipment, tools, and production line used for the manufacture of the TC3-1
ovens by Xiaoya shall be paid to Xiaoya by TurboChef less depreciation. Upon
payment, TurboChef may at its own expense and with Xiaoya's cooperation, take
possession of the equipment, tools and production line. These items and
depreciation rates are in Schedule F. TurboChef will also pay Xiaoya employee
severance of $750 per employee assigned to the TurboChef TC3-1 oven production.
ARTICLE XXVII
-------------
Relinquishment of Licensed Matter
---------------------------------
Section 27.01. Xiaoya agrees that, after termination of this Contract,
-------------
it will immediately cease and discontinue all use of any distinctive features of
design of theTC3-1 ovens that may have been used by Xiaoya in performing this
Contract.
Section 27.02. Upon termination of this Contract for any reason,
-------------
Xiaoya shall return any and all material furnished by TurboChef as such material
remains the property of TurboChef. Xiaoya shall also return all testing
equipment TurboChef provides to Xiaoya for testing the TC3-1 ovens.
______ __________
Xioya TurboChef
______ __________
Date Date
33
ARTICLE XXVIII
--------------
Miscellaneous Provisions
------------------------
Section 28.01. No variation of this Contract and its Schedules shall
-------------
be valid unless it is in writing and signed by the parties, and approved by the
governmental authorities which originally approved the Contract if such
required.
Section 28.02. This Contract has been prepared in quadruplicate, in
-------------
both the English and the Chinese languages. Xiaoya and TurboChef shall each hold
one copy in each language and the other copies in each language shall be
submitted to the Examination and Approval Authority for approval and/or
recording and the Customs Authority if required.
Section 28.03. Failure of either party to exercise any right or option
-------------
to terminate this Contract shall not constitute a waiver of such right or any
other right.
Section 28.04. This Contract supersedes all prior agreements,
-------------
contracts and understandings between the parties, whether written or otherwise,
as may pertain to the subject matter of this Contract.
XIAOYA GROUP COMPANY LIMITED TURBOCHEF TECHNOLOGIES, INC.
By:__________________________ By:____________________________
Position:____________________ Position:______________________
Date:________________________ Date:__________________________
(With Company Seal Affixed) (With Company Seal Affixed)
______ __________
Xioya TurboChef
______ __________
Date Date
34
LIST OF SCHEDULES
Schedule A List of IP Rights of Each Party
TurboChef Patent Portfolio
Schedule B Component Supply Responsibility
Standard Cost Sheet for TC3-1 Oven
Bill of Materials for TC3-1 Oven
Schedule C Confidentiality Contract
Schedule D Quality Requirements and Testing Protocol
Schedule E List of Appropriate Standards for Domestic and European Ovens
Schedule F Xiaoya Planned Equipment List and Depreciation Schedules
______ __________
Xioya TurboChef
______ __________
Date Date
35
Schedule A: Intellectual Property Rights of Each Party
Section A.01: Position of Trust: During the course and scope of the TC3-1 oven
- --------------------------------
development and OEM relationship Xiaoya has been and/or will be in a position of
trust and has been and/or will be exposed to valuable confidential information,
including trade secrets, which are the property of TurboChef. Additionally,
during the course and scope of the TC3-1 oven development and product
production, TurboChef has or may generate or produce valuable information which
has or will be communicated to TurboChef, and which must be treated as
confidential by Xiaoya and which shall be considered the property of TurboChef.
This Contract sets forth terms and conditions that relate to such confidential
information which are binding upon Xiaoya.
Section A.02: Inventions: During the course and scope of the TC3-1 oven
- -------------------------
development and OEM relationship Xiaoya has or may make inventions which are the
property of TurboChef. This Contract sets forth terms and conditions that relate
to such inventions which are binding upon Xiaoya.
Section A.03: Competition with TurboChef: This Contract also includes terms and
- -----------------------------------------
conditions which determine and limit the ability of Xiaoya to engage in
competition with TurboChef, or assist or supply others with product which is
competitive with TurboChef, during the term of the TC3-1 oven development and
_________ _________
LITTLE DUCK TURBOCHEF
_________ _________
Date Date
-1-
OEM relationship and after any termination of the TC3-1 oven development and OEM
relationship.
Section A.04: Purpose: TurboChef and Xiaoya enter into this Agreement in order
- ----------------------
to memorialize the current understanding and/or to determine the ownership of
rights in and to the work product of this Agreement and related intellectual
property. An additional purpose of this Contract is to establish a qualified
primary OEM relationship between TurboChef and Xiaoya, with respect to the
manufacture of the TC3-1 oven and the relationship will be referred to as the
"TC3-1 OEM relationship" in this Contract. The parties will also agree upon
quality and price standards for the product which will be manufactured by Xiaoya
for TurboChef during the OEM relationship.
Section A.05: Consideration: In consideration of the TC3-1 oven development and
- ----------------------------
OEM relationship and the economic benefit derived from such TC3-1 oven
development and OEM relationship, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged by Xiaoya and TurboChef,
the parties agree to the following terms and conditions.
Section A.06: Trade Secrets Revealed: In consideration of the terms and
- -------------------------------------
conditions of this Contract, TurboChef hereby agrees that it has or will reveal
confidential information to Xiaoya which will be utilized by Xiaoya in the
course and scope of the TC3-1 oven development and OEM relationship, but only in
strict compliance with the terms and conditions of this Contract.
_________ _________
LITTLE DUCK TURBOCHEF
_________ _________
Date Date
-2-
Section A.07: Definitions:
- --------------------------
PRODUCT INFORMATION: For purposes of this Agreement, the term "product
information" shall mean any and all information, without limitation, relating in
and to the TC3-1 which have been and will be developed by Xiaoya for use by
TurboChef, or any of its affiliates, in its products. This information shall
include:
(1) all ingredients and components utilized in the TC3-1;
(2) all procedures;
(3) all preparation steps including, without limitation, all testing,
quality control, quality assurance, and safety measurements and/or procedures
utilized;
(4) the identity of and/or source for all components;
(5) the identity of and/or source of all services performed by third
parties in preprocessing, processing, or post-processing activities related to
the TC3-1;
(6) all price information relating to the ingredients and/or services
utilized;
(7) all changes (past or future) to any PRODUCT INFORMATION;
(8) all versions of the PRODUCT INFORMATION;
(9) all improvements to the PRODUCT INFORMATION.
Section A.08: Confidentiality: Xiaoya understands that it has and will receive
- ------------------------------
and generate "Confidential Information" which is defined as information:
(a) which is not known by the competitors of TurboChef or which is not
known generally; and
_________ _________
LITTLE DUCK TURBOCHEF
_________ _________
Date Date
-3-
(b) which has or may have actual or potential economic value for
TurboChef.
EXCLUSIONS: For purposes of the Contract, the "Confidential Information" will
not include:
(a) information already known to Xiaoya before the commencement of the
TC3-1 oven development and OEM relationship; and/or
(b) information independently developed by Xiaoya before the commencement
of the TC3-1 oven development and OEM relationship.
Section A.09: Acknowledgement of Secrecy Measures: During the course and scope
- --------------------------------------------------
of the TC3-1 oven development and OEM relationship, Xiaoya will exercise
diligence in preserving the integrity of confidential information, and in
particular will observe and implement the secrecy measures which are required by
TurboChef.
Section A.10: Nondisclosure: Xiaoya hereby agrees to keep secret all
- ----------------------------
confidential information to anyone outside of Xiaoya or TurboChef during the
TC3-1 oven development and OEM relationship and after any termination of the
TC3-1 oven development and OEM relationship, other than at the direction of
TurboChef.
NONUSE: After any termination of the TC3-1 oven development and OEM
relationship with TurboChef, Xiaoya will not directly or indirectly use, or
assist others in such use, of any confidential information of TurboChef.
_________ _________
LITTLE DUCK TURBOCHEF
_________ _________
Date Date
-4-
NONCIRCUMVENTION: Xiaoya hereby agrees that it will not engage in conduct
which circumvents the purpose of this Contract, and hereby stipulates that this
Contract shall be interpreted, construed, and enforced broadly to protect the
following specific purposes:
. to protect the confidential information of TurboChef;
. to protect the potential or actual economic advantage obtained by
TurboChef through the relative secrecy of such confidential
information; and
. to protect the potential or actual economic advantage obtained by
TurboChef through the inclusion of the PRODUCT in TurboChef's TC3-1.
Section A.11:Access: Concurrent with the effective date of this Contract,
- --------------------
TurboChef shall have all access to all information within the possession,
custody, control of Xiaoya and/or the OEMs, suppliers, independent contractors
associated with Xiaoya which relates or pertain to the TC3-1 and PRODUCT
INFORMATION.
DOCUMENTATION: Xiaoya will prepare and deliver to TurboChef a documentation
package listing all PRODUCT INFORMATION no later than 30 days after Contract
Effective Date. Xiaoya shall supplement and correct the documentation, as is
necessary to keep the information accurate and complete,
_________ _________
LITTLE DUCK TURBOCHEF
_________ _________
Date Date
-5-
each calendar quarter. Xiaoya shall deliver the supplementation to TurboChef
within thirty (30) calendar days after the end of each calendar quarter.
Section A.12: Assignment of Inventions: Xiaoya understands that any invention
- --------------------------------------
made or conceived by it or its employees during the course and scope of the
TC3-1 oven development and OEM relationship for the TC3-1 belongs to TurboChef
and Xiaoya hereby assigns all right, title, interest in and to such inventions
to TurboChef and will take all measures with respect to its employees to secure
title in and to TurboChef.
RECORDATION AND DISCLOSURE OF INVENTIONS: Xiaoya hereby agrees to
promptly disclose to TurboChef any invention which occurs during the course and
scope of the TC3-1 oven development and OEM relationship for the TC3-1. Xiaoya
further agrees to promptly provide to TurboChef a written description of such
invention.
ASSIGNMENT OF FUTURE RELATED INVENTIONS: In the event that any
invention for the TC3-1 is described in a patent application, or disclosed in an
invention disclosure to any third party by Xiaoya or the employees of Xiaoya or
the independent contractors of Xiaoya within one year of any termination of the
TC3-1 oven development and OEM relationship with TurboChef, it is to be presumed
that such invention was conceived or made during the period of TC3-1 oven
development and production for TurboChef, and thus will belong to TurboChef;
-6-
___________ _________
LITTLE DUCK TURBOCHEF
___________ _________
Date Date
provided that the invention is largely related to work performed for TurboChef
or is related in any manner to the TC3-1 (whether commercial or experimental) of
TurboChef. In the event that Xiaoya or its employees can refute such presumption
by showing that such invention was conceived or made after any termination of
the TC3-1 oven development and OEM relationship with TurboChef, such invention
shall not belong to TurboChef.
AGREEMENT TO ASSIST IN OBTAINING AND ENFORCING PATENTS: Xiaoya hereby
agrees to execute all papers necessary for filing and/or obtaining US or foreign
patents related to any invention belonging to TurboChef under the terms of this
Contract. Xiaoya further agrees to give testimony, in depositions, hearings, or
trials, in support of inventorship, provided that such assistance is provided at
the sole expense of TurboChef.
ASSIGNMENT OF COPYRIGHTS: Xiaoya hereby assigns to TurboChef all right,
title, and interest in and to any copyrightable subject matter which is
developed during the course and scope of the TC3-1 oven development and OEM
relationship with TurboChef.
ASSIGNMENT OF PRODUCT INFORMATION: Xiaoya hereby assigns to TurboChef
all right, title, and interest in and to the product information, including all
trade secret rights, patent rights, or other intellectual property rights in and
to all of the TC3-1, including all TC3-1 created to date, all TC3-1S to be
created in the future, and all work in progress.
-7-
___________ _________
LITTLE DUCK TURBOCHEF
___________ _________
Date Date
INVENTIONS BY INDEPENDENT CONTRACTORS: Any inventions by independent contractors
that are specific enhancements to the technology shall become the exclusive
property of TurboChef. Any inventions done on TurboChef's behalf shall become
TurboChef's exclusive property. Any inventions or enhancements of standard parts
shall be excluded. Xiaoya will support TurboChef in obtaining ownership of
inventions created by independent contractors.
EMPLOYEE INCENTIVES: TurboChef and Xiaoya will establish a review committee to
develop incentive programs to encourage employee inventions and cost reduction
programs. TurboChef agrees to provide incentives to Xiaoya employees for awarded
patents and accepted and demonstrated cost reduction programs following the
established Xiaoya incentive programs.
Section A.13: Business Competition and Conflicts of Interest: Xiaoya hereby
- ------------------------------------------------------------
agrees that it will not knowingly or intentionally engage in any activity on its
own behalf, or on the behalf of any other entity, in any business which is in
any way competitive with the business of TurboChef, during the TC3-1 oven
development and OEM relationship. Xiaoya further agrees that during the term of
the TC3-1 oven development and OEM relationship it will not undertake any
planning for or organization of any business entity competitive with the
business of TurboChef. Xiaoya further agrees that it will not combine or
conspire with others for the purpose of organizing any competitive business
activity.
-8-
___________ _________
LITTLE DUCK TURBOCHEF
___________ _________
Date Date
NONCOMPETITION POST DEVELOPMENT: Xiaoya hereby agrees that for a period
of two (2) years after any termination of the TC3-1 oven development and OEM
relationship with TurboChef, which is established by this Contract, it shall not
participate directly or indirectly or engage directly or indirectly in any
business which is directly competitive with the business operations of
TurboChef.
DIVERSION OF BUSINESS: Xiaoya hereby agrees that for a period of two
(2) years from the date of any final termination of the TC3-1 oven development
and OEM relationship with TurboChef, it will not influence or attempt to
influence previously existing customers or otherwise directly or indirectly
divert or attempt to divert from TurboChef any business TurboChef has enjoyed or
solicited during the past year.
-9-
Schedule B
Component Supply Responsibility, Standard Cost and Bill of Materials
BML MFG UNIT EXT T/C PARTS
NEW OR DELETE QTY DESCRIPTION ASSBLY DWG COST COST COST 0R DWG'S
XIAOYA XIAOYA USD $ TBD
RMB RMB
4 LEG 4" A60-1653 ++ ++
NEW 2 10 AMP FUSES ++ ++ X
NEW 2 FUSE HOLDERS ++ ++ X
TAPE, FOAM, CLOSED
1 CELL ++ ++ spec
CORD SET 40 AMP
NEW 1 250V 2P 3 WIRE INC TO359 ++ ++
DELETE 1 SWITCH, PRESSURE C6065F1175 ++ ++
1 POWER SUPPLY, 24 VDC S-150-24 ++ ++ ++
1 AXIAL FAN MT24B3 ++ ++
THERMOSTAT, HIGH
TBD 1 LIMIT 56.10566.500 ++ ++
LABEL, CAUTION
NEW 1 MICROWAVES ++ ++
MOTOR, FLANGE
1 MOUNT, 1 HP W1859-3 ++ ++
1 CAP, BLOWER ++ ++
HEATER ELEMENT,
1 240V OR 208V ++ ++
1 CATALYTIC CONVERTER 402 ++ ++ ++
1 HEATER GASKET ++ ++ X
VACUUM FLUORESCENT
1 DISPLAY ++ ++ ++ X
1 COVER, DOOR ++ ++
2.3 INSULATION KIT #8 ++ ++
1 MAGNETRON BLOWER 367 ++ ++
1 PLATTER, CERAMIC ++ ++
1 KEYPAD, DECAL ++ ++
1 SMT CONTROL 81303 ++ ++ ++
HANDLE, COOK
1 CHAMBER DOOR ++ ++
1 RELAY G2R-2-S-DC24 ++ ++
RELAY & HEATSINK
2 ASSEMBLY HBL-242 ++ ++ NO H SINK
SPROCKET, MODIFIED,
1 STIRRER SHAFT 396 ++ ++
SPROCKET, MODIFIED,
1 MOTOR 396 ++ ++
Page 1 [++ Represents confidential treatment request]
Schedule B
Component Supply Responsibility, Standard Cost and Bill of Materials
BELT, TIMING, 0.80
1 PITCH 396 ++ ++
3 EMI FILTER ++ ++ X
1 SHAFT, STIRRER 396 ++ ++
1 HUB, STIRRER 396 ++ ++
2 HINGE, DOOR ++ ++
INT DEL HEATER ELEMENT, 208V ++ ++
4 SPACER, BLOWER MOUNT ++ ++
TBD 4 SOCKET P2RF-08-E ++ ++
INSULATION, BTU
BLOCK, 4X6X.44
1 THICK(DOOR) ++ ++
1 FAN GUARD 551199 ++ ++
CIRCUIT BREAKER,
1 35A DP W/ TRIP AS168X-CB2G350A5 ++ ++
1 RUBBER GASKET ZX-10130 ++ ++
TBD 1 SEAL, ENVIRONMENTAL ++ ++
TERMINAL BLOCK,
TBD 1 ASSEMBLY, 3 POSITION T7030055 ++ ++
TERMINAL BLOCK,
DELETE 1 ASSEMBLY, 6 POSITION T7030056 ++ ++
R BY 453 3 SWITCH, DOOR V-15G2-1C25-K ++ ++
5 BALL STUD IF116-421-8-495 ++ ++
FITTING,
2 THERMOCOUPLE TH-2747-N-125 ++ ++
SPACER, PHENOLIC
(JUST FOR BLODGETT
2 HANDLE) P47-X001 ++ ++ SAMPLE
4 STANDOFF, #6X.437 ++ ++
1 STRAIN RELIEF motor CL124051 ++ ++
1 INSULATION, DOOR ++ ++ X
NEW 3 24 VOLT COIL @ 240 V ++ ++ x
NEW 2 HINGE, DOOR ++ ++ ok in TO291
TERMINAL BLOCK, 2
NEW 1 POSITION ++ ++
NEW 1 LOW VOLTAGE HARNESS INC TO359 ++ ++
NEW 1 BLOWER MOTOR HARNESS ++ ++
WIRE KIT -HIGH
NEW 1 VOLTAGE ++ ++
NEW 1 26 PIN CONNECTOR INC TO359 ++ ++
Page 2 [++ Represents confidential treatment request]
Schedule B
Component Supply Responsibility, Standard Cost and Bill of Materials
9 PIN FLAT
NEW 1 CABLE/CHEF COM RS232 INC TO359 ++ ++ X
CABLE ASS VFD
NEW 1 POWER SUPPLY INCULDED IN WH ??? ++ ++
DELETE 1 NEW DOOR SWITCH ++ ++
T/C
1 SCHEMATIC DIAGRAM ++ ++ PROVIDES 500
1 PLATE RATING ++ ++ ok
DATA RATING PLATE &
1 SERIAL ++ ++
NEW 1 LABEL, FUSE WARNING ++ ++
NEW 1 INSULATION LAYOUT ++ ++
NEW 3 DOOR SWITCH ++ ++
DOOR HINGE ASS,
NEW .25" BEARING ++ ++ ok in to291
CAPACITOR, DUAL,
1.05uF, 1.15,
1 2500VAC MD252125KE-1 ++ ++ ++
RF SENSOR /
CONNECTOR,
RECEPTACLE,
1 ELECTRICAL 2052-1352-02 ++ ++
CONTROLLER, MOTOR
1 SP200 SP200A ++ ++
1 DIODE HVCA JH676 ++ ++
1 INSULATOR, KLIXON 62-10-1010-1674 ++ ++
KEY, WOODRUFF, SS,
1 #605 #605 ++ ++
1 MAGNETRON 367 ++ ++ ++
MOTOR, STIRRER, 6
1 RPM 396 ++ ++
1 SPRING, COMPRESSION LC-082M-1CRES ++ ++
THERMOCOUPLE, TYPE
2 K, 1/16" TC-K-1000205 ++ ++
TYPE 60T21,
1 THERMOSTAT, KLIXON 313703, L212-18F ++ ++
THERMOSTAT, 120 F,
1 CLOSE ON RISE CA1FVA120F30 ++ ++
TRANSFORMER,
1 FILAMENT, H.V 8130F44-93 ++ ++
TRANSFORMER, H.V
1 820MW4 820MW4 ++ ++
WAVESPRING WASHER,
2 9" 16688-01 ++ ++ ++
BLOWER WHEEL (HEAT
1 SLINGER) 3 1/2 HT.625Y ++ ++
LABEL, WARNING (DO
2 NOT REMOVE) ++ ++
Page 3 [++ Represents confidential treatment request]
Schedule B
Component Supply Responsibility, Standard Cost and Bill of Materials
DELETE 1 LABEL, UL LISTING ++ ++
1 LABEL, CIRCUIT ++ ++
1 LABEL, HIGH VOLTAGE ++ ++
LABEL, SERVICE
1 CAUTION ++ ++
1 LABEL, UL LISTING ++ ++
PLATE, MOTOR
DELETE 1 INTERFACE ++ ++
1 SHIM, SHAFT SEAL ++ ++
LABEL, DANGER,
NEW 1 EXPOSED FAN ++ ++
CERAMIC, WAVEGUIDE
1 CAP ++ ++
1 HUB, FAN, SMALL ++ ++
LABEL, PREVENTIVE
DELETE 1 MAINTENANCE ++ ++
1 CABLE ASSEMBLY, RF ++ ++ X REV
1 LABEL, PATENT ++ ++
BLOCK, BEARING,
1 BLOWER SEAL ++ ++
PLUG, WAVEGUIDE,
1 QUARTZ ++ ++ ++
LABEL, CAUTION "HOT
1 SURFACES" ++ ++
WIRE STOP,
WAVEGUIDE SEAL(PART
DELETE 1 OF 700-1339) ++ ++
1 SEAL PLUG, TEFLON ++ ++ ++
ASSY, WAVEGUIDE
1 CLAMP ++ ++
LABEL, FCC/FDA
1 NOTICE ++ ++
DELETE 1 SERIAL PLATE ++ ++ X
LIQUID TIGHT THREAD
1 LOCKER ++ ++
1 STRAIN RELIEF ++ ++
25 NYLON CABLE TIES ++ ++
8 CABLE TIE CLAMP ++ ++
Frt & duty on T/C
parts ++ ++ ++
TOTAL BOUGHT PARTS: ++ ++ ++
1 LINE VOLTAGE HARNESS ++ ++
Page 4 [++ Represents confidential treatment request]
Schedule B
Component Supply Responsibility, Standard Cost and Bill of Materials
1 BLADE, STIRRER 396 ++ ++
5 BALL STUD SPEED CLIP 340 ++ ++
1 BLADE, FAN ++ ++
1 RING, BLOWER ++ ++
CLAMP, BEARING
1 SPRING ++ ++
CLAMP, LARGE
1 CAPACITOR ++ ++
1 SEAL RING, WAVEGUIDE ++ ++ X
BOTTOM, MICROWAVE
1 LAUNCHER ++ ++
1 SIDE, WAVEGUIDE TUBE ++ ++
ENDCAP, WAVEGUIDE
1 TUBE ++ ++
1 TOP, WAVEGUIDE TUBE ++ ++
TUBE, LOWER,
1 MICROWAVE LAUNCHER ++ ++
1 SIDE, BLOWER HOUSING ++ ++
1 SIDE, BLOWER MOUNT ++ ++
RING, VENTURI,
1 TAPERED ++ ++
SCROLL, BLOWER
1 HOUSING FORMED ++ ++
PLATE, MOTOR
1 INTERFACE ++ ++
1 PLENUM, UPPER AIR ++ ++
DELETE 1 SHUNT SUPPORT, DOOR ++ ++
1 SHUNT, DOOR ++ ++
DELETE 1 OUTER FRAME, DOOR ++ ++
DELETE 1 ARM, SUPPORT ++ ++
1 OUTER, SKIN, DOOR ++ ++
1 LINER, TOP & SIDES ++ ++
1 LINER, BOTTOM ++ ++
1 BAFFLE, HEATER 402 ++ ++
5 FILLER, COVE CORNER ++ ++
SCREEN, DEBRIS
DELETE 1 CATCHER ++ ++
Page 5 [++ Represents confidential treatment request]
Schedule B
Component Supply Responsibility, Standard Cost and Bill of Materials
MOUNTING FLANGE,
DELETE 1 DEBRIS CATCHER ++ ++
FRONT PLATE/DOOR
1 FLANGE ++ ++
DELETE 2 SUPPORT, PLATTER ++ ++
DELETE 3 SUPPORT, PLATTER ++ ++
1 GREASE TRAY ++ ++
2 FILLER, CAVITY FRONT ++ ++
GREASE TRAY
2 SUPPORT, LH ++ ++
GREASE TRAY
DELETE 1 SUPPORT,RH ++ ++
DELETE 1 TOP FRAME HALF ++ ++
2 TOP FRAME HALF ++ ++
FRAME VERTICAL
3 SUPPORT ++ ++
FRAME VERTICAL
1 SUPPORT ++ ++
1 FRAME BOTTOM ++ ++
1 BOTTOM PLUG 340 ++ ++
2 BRACKET, HINGE ++ ++
DELETE 1 CLIP, DOOR ++ ++
1 TOP PLUG ++ ++
1 PANEL, CONTROL 352 ++ ++
1 BODY TOP ++ ++
1 TUBE, GREASE DRAIN ++ ++
1 CAP, GREASE DRAIN ++ ++
RETURN AIR DUCT
1 FLOOR ++ ++
1 TOP, RETURN AIR DUCT ++ ++
1 BODY SIDE, LH ++ ++
1 BODY SIDE, RH ++ ++
1 BODY BACK ++ ++
1 FILLER, LEFT FRONT 421 ++ ++
FILLER PIECE,
1 RETURN AIR DUCT ++ ++
FILLER COVER, LEFT
DELETE 1 FRONT ++ ++
FILLER ASSEMBLY,
DELETE 1 LEFT FRONT ++ ++
COVER, RETURN AIR
1 DUCT 421 ++ ++
1 TRIM, FRONT PLATE ++ ++
BRACKET, CATALYTIC
2 CONVERTER INNER ++ ++
Page 6 [++ Represents confidential treatment request]
Schedule B
Component Supply Responsibility, Standard Cost and Bill of Materials
BRACKET, CATALYTIC
1 CONVERTER, OUTER ++ ++
2 STIFFENER, FLOOR ++ ++
1 TUBE, VENT ++ ++
MOUNTING ANGLE,
1 CONTROL ++ ++
PLATE, ELECTRICAL
1 MOUNTING ++ ++
2 GUSSET, FRAME ++ ++
1 RAIL, DIN, 5.9" ++ ++
1 RAIL, DIN, 8.6" ++ ++
1 SUPPORT, REAR OVEN ++ ++
2 BRACKET, OVEN BOTTOM ++ ++
1 DUCT, MAGNETRON TOP ++ ++
DUCT, MAGNETRON
1 BOTTOM ++ ++
DUCT, MAGNETRON
1 LEFT SIDE ++ ++
DUCT, MAGNETRON
1 RIGHT SIDE ++ ++
UPPER TUBE,
1 MICROWAVE LAUNCHER ++ ++
APERATURE RING,
1 MICROWAVE LAUNCHER ++ ++
1 TRAY, HIGH VOLTAGE ++ ++
BRACKET,
1 TRANSFORMER MOUNTING ++ ++
1 PLATE, DUCT 425 ++ ++
DELETE 1 DUCT TOP, MAG FAN ++ ++
PLENUM, MAGNETRON
1 DUCT 425 ++ ++
FOOT, REAR OVEN
1 SUPPORT ++ ++
DUCT TRANSITION,
DELETE 1 MAG FAN ++ ++
DELETE 1 TAB, DUCT ++ ++ X
Page 7 [++ Represents confidential treatment request]
Schedule B
Component Supply Responsibility, Standard Cost and Bill of Materials
1 FLOOR, COOK CHAMBER ++ ++
1 BASKET, FLOOR ++ ++
1 BRACKET, DUCT RS ++ ++
1 BRACKET, DUCT LS 425 ++ ++
1 EXHAUST COVER ASSY ++ ++
GASKET, COVER,
1 RETURN AIR DUCT ++ ++ X
1 COVER, VENT TUBE ++ ++
1 STRIP, DRIP ++ ++
NEW 1 FINAL TEST PROCEDURE ++ ++
DELETE 2 SHIM, DOOR ++ ++
T/C PROVIDE
NEW 1 MANNUAL-OWNER'S C-70 ++ ++ 500
1 STACKING RAIL ++ ++
NEW 1 DUCT TOP, MAG FAN 361 ++ ++
DUCT TRANSITION,
NEW 1 MAG FAN 361 ++ ++
CHANNEL INSULATION
NEW 3 TOP PANEL ++ ++
SHIELD, HEATER
NEW 1 TERMINAL 402 ++ ++
FILLER PIECE ,
RETURN AIR DUCT
NEW 1 (11GA) ++ ++
BRACKET, OPERATOR
NEW 1 PANEL ++ ++
SWITCH ASSY. MOUNT
NEW 1 BRACKET 369 ++ ++
NEW 1 SWITCH ACTUATOR 407, 369 ++ ++
NEW 1 CONTROL MOUNT PLATE ++ ++
MOUNT BRACKET
NEW 2 OPERATOR CONTROL 352 ++ ++
BRACKET FOR DOOR
NEW 2 HINGE ++ ++
NEW 1 RUBBER GASKET SHIM ++ ++
FRAME VERTICAL
NEW 1 SUPPORT ++ ++
DUCT, COOLING
NEW 1 INTAKE AIR ++ ++
SHIELD. DOOR HINGE
DELETE INULATION ++ ++
NEW 1 SPEC SHEET-MARKETING ++ ++
Page 8 [++ Represents confidential treatment request]
Schedule B
Component Supply Responsibility, Standard Cost and Bill of Materials
MOUNT BRACKET
NEW 1 TERMINALS ++ ++
MOUNT PLATE STIRRER
NEW 1 MOTOR 396 ++ ++
BRACKET TRANSFORMER
NEW 1 MOUNTING ++ ++
NEW 1 BARRIER WIRE TEST ++ ++
FINGER GUARD, FRONT
NEW 1 PLAE ++ ++
SWITCH ASSEM DOOR
NEW 1 SINGLE LHS? ASSEM ++ ++
BRACKET,
NEW 1 INSULATION SHIELD ++ ++
BRACKET DOOR SWITCH
NEW 1 LHS ++ ++
NEW 1 EXHAUST COVER ++ ++
FRONT TRIM ASSY.
NEW 1 WELDED ++ ++
NEW 1 SHUNT SUPPOR DOOR ++ ++
NEW 1 SHUNT SUPPORT SHIM ++ ++
MOUNTING PLATE DOOR
NEW 2 SWITCH 438, 439 ++ ++
ACTUATOR BRACKET
NEW 1 DOOR SWITCH LH 439 ++ ++
ACTUATOR BRACKET
NEW 1 DOOR SWITCH RH 438 ++ ++
MOUNTING BRACKET
NEW 2 DOOR SWITCH 438, 439 ++ ++
NEW 1 SWITCH ASSY DOOR RH ++ ++
NEW 1 SWITCH ASSY DOOR LH ++ ++
CHANNEL INSULATION
NEW 1 TOP PANEL ++ ++
SWITH ASSEMBLY
NEW 2 MOUNT BRACKET L.H 407 ++ ++
1 ASSY, WAVEGUIDE ++ ++
DELETE 1 Assembly Blower ++ ++
BLOWER ASSEMBLY,
1 WELDED ++ ++
1 CAVITY, WELDMENT ++ ++
Page 9 [++ Represents confidential treatment request]
Schedule B
Component Supply Responsibility, Standard Cost and Bill of Materials
MAIN CAVITY ASSY,
DELETE 1 WELDED ++ ++
1 DOOR ASSY ++ ++
DEBRIS CATCHER
DELETE 1 ASSEMBLY ++ ++
1 FRAME ASSY ++ ++
PANEL, RETURN AIR
NEW 1 DUCT ASSEMBLY ++ ++
RETURN AIR DUCT
NEW 1 ASSEMBLY, WELDED ++ ++
Bracket CC Inner
1 Assembly ++ ++
CONTROL COMPONENT
1 ASSEMBLY ++ ++
FRAME, BOTTOM
1 ASSEMBLY ++ ++
1 ASSY, BLOWER MOTOR ++ ++
1 DUCT, MAGNETRON 367 ++ ++
1 HIGH VOLTAGE ASSY ++ ++
DELETE 1 DUCT ASSY, MAG FAN ++ ++
FLOOR ASSY, COOK
CHAMBER CHANGE TO
1 T/C PART # ++ ++
1 BOTTOM PLUG ASSY 340 ++ ++
DELETE 1 ASSY, BLOWER MOTOR ++ ++
DELETE 1 STIR MOTOR ASSEMBLY ++ ++
1 ASSY, CONTROL PANEL 352 ++ ++ X
DUCT ASS MAGNETRON
NEW 1 FAN 367 ++ ++
COOLING ASSY
NEW 1 Magnetron 367 ++ ++
CONTROL PANEL
NEW 1 SUB-ASSEMB 352 ++ ++
NEW 1 SWITCH ASSY DOOR 369 ++ ++
NEW 1 ASSY STIRRER 396 ++ ++
ASSY CATALYTIC
NEW 1 CONVERTER ++ ++
208V RETURN AIR
NEW 1 DUCT ASS ++ ++ X
NEW 1 CAVITY TOP WELDMENT ++ ++ X
NEW 1 CAVITY BOTTOM ++ ++ X
WELDMENT FINAL
NEW 1 CAVITY ++ ++ X
Page 10 [++ Represents confidential treatment request]
Schedule B
Component Supply Responsibility, Standard Cost and Bill of Materials
WELDMENT PLENUM
NEW 1 ASSY MAGNETRON 425 ++ ++
INSTALLATION
INSTRUCTIONS FOR
NEW 1 WAVE GUIDE SEAL ++ ++
TOTAL SHEET METAL &
ASSEMBLY ++ ++
ASSEMBLY COST ++ ++
SCREW MACH4-40 PAN
NEW HD ++
NEW SCREW ++
NEW WASHER,FENDER ++
NEW SCREW ++
NEW NUT-HEX ++
DELETE NUT 5/16"-24 UNF SST ++
8 SCREW, TAP #10 X 3/8
2 BOLT, 1/4-20
8 NUT, HEX #6-32
4 NUT, HEX #6-32
CONNECTOR,
1 ELECTRICAL
SCREW, MACHINE 6-32
5 UNC 3/8 PAN HEAD
SCREW, MACHINE 4-40
2 UNC 5/8 PAN HEAD
2 NUT, HEX #4
2 NUT, HEX #8
SCREW, 1/4-20 X 3/4
4 S/S FLAT HEAD
4 NUT, WELD 10-24
2 SPEED NUT
3 NUT, WELD 6-32
4 NUT, WELD 6-32
8 NUT, WELD 6-32
2 6-32 WELD NUT
4 WASHER, FLAT #8
2 10A FUSE
2 SCREW, #8-32 X 2
4 NUT, WELD 8-32
2 NUT, WELD #8-32
10 8-32 WELD NUT
4 NUT, WELD 8-32
Page 11 [++ Represents confidential treatment request]
Schedule B
Component Supply Responsibility, Standard Cost and Bill of Materials
1 SCREW, 4-40 X 7/8
SCREW, TAPPING 8-32
26 X 3/8
2 PRESS NUT, 4-40
GASKET, SILICONE
1' TAPE
NUT, HEX 1/4-20 X
1 .437
10 RIVET, SHORT 1/8DIA.
6 SCREW, #10-24 X 3/8
SCREW, MACHINE
4 10-24 X .375
2 SCREW, 10-24 X 3/8
WASHER, LOCK, 1/4
8 SPLIT
LOCK WASHER, 1/4
2 SPLIT
8 WASHER, LOCK SPLIT
SCREW, MACHINE
4 1/4-20 X 3/8 HEX
SCREW, 8-32 X .375
18 SST, HEX
SCREW, MACHINE 8-32
16 X3/8
1 NUT, HEX 6-32
4 NUT, HEX 6-32
8 WASHER,LOCK #6
WASHER, LOCK #6
5 SPLIT
8 WASHER, FLAT #6
4 WASHER, FLAT #6
6 WASHER, #10 FLAT
8 WASHER, FLAT #10
4 3/8-16 WELD NUT
1 LABEL, FUSE
2 WASHER, FLAT #10
WASHER, FLAT #10 X
4 9/16 DIA.
2 FLAT WASHER, 1/4
STUD, WELD 10-24 X
2 3/8
2 END STOP, TERMINAL
2 NUT, WELD #10
12 NUT, WELD #8-32
6 NUT, WELD #8-32
Page 12
Schedule B
Component Supply Responsibility, Standard Cost and Bill of Materials
SCREW, WLED 1/4-20
1 X 7/8 LONG
PRESS STUD, 1/4-20
6 X 7/8" FLUSH HEAD X
STUD, PRESS 1/4-20
12 X 7/8
STANDOFF, 6-32 X
4 1.25 LG, M/F
4 WASHER, TEFLON #10
1 RELAY, 240V
SCREW, SLOTTED HEAD
2 SHOULDER
SCREW, 4-40 X 1.5
2 PAN HEAD
2 NUT, LOCK S/S, 10-32
4 SCREW 6-32 X .25
4 SCREW, #6-32 X1/2
SCREW, PPH 22 TYPE
2 F #5X
SCREW 8-32 X 1/4
2 SHCS S/S
SCREW, BUTTON HD
11 8-32 X .375 SST
SCREW, BUTTON HD
11 8-32 X .375 SST
SCREW, BUTTON HEAD
4 S/S 8-32 UNC X .38
SCREW, SOCKET HD
4 S/S 1/4-20 UNC X .75
SCREW, SOCKET HEAD
1 CAP, 6-32 X 1/2
4 WASHER, #6 FLAT
2 FLAT WASHER, #6 S/S
LOCK WASHER, #8
4 INTERNAL TOOTH S/S
WASHER, #10 SPLIT
6 LOCK
2 WASHER, LOCK #4 S/S
WASHER, #6 SPLIT
4 LOCK
2 LOCK WASHER, #6 S/S
WASHER, LOCK, #8
18 SPLIT
WASHER, LOCK, #8
11 SPLIT
Page 13
Schedule B
Component Supply Responsibility, Standard Cost and Bill of Materials
WASHER, LOCK, #8
11 SPLIT
WAVE SPRING WASHER,
2 9"
FASTNERS TOTAL ++
PACKING MATERIAL ++
O'HEAD & LABOUR ++
GRAND TOTAL RMB ++
TARGET COST RMB ++
T/C BUY ITEMS
DELETED PARTS
Page 14 [++ Represents confidential treatment request]
Schedule C: Confidentiality Contract
I, _____________(name), ______________(position) of Shandong Xiaoya Group
Company, Limited "Company"[or name of subcontractor] hereby represent, warrant
and agree to keep confidential any information in relation to the information
regarding intellectual property of manufacture of the TC3-1 ovens disclosed to
me for the benefit of the Company as follows:
1. During the term of my employment by the Company [or name of subcontractor]
and after the termination hereof, I shall not disclose, unless expressly
required by law or a court enterprise, corporation or government agency or
organization in or of the People's Republic of China or any other country,
any information, whether in oral, written, pictorial, graphic or recorded
form, concerning the design, manufacture, application, inspection, testing,
maintenance, packaging, marketing or sale of the TC3-1 ovens or any other
relevant information in relation to the TC3-1 ovens which may come to my
knowledge or possession or be disclosed to me by the Company [or name of
subcontractor] (hereinafter collectively referred to as the "Confidential
Information").
2. Without limiting in any way the foregoing agreement and obligation, I
hereby agree that all printed, written, recorded or other materials
containing or relating to the Confidential Information, prepared by me or
which comes in my possession or knowledge during my employment with the
Company[or name of subcontractor], are and shall remain the property of the
Company and, if requested by the Company or upon the termination of my
employment with the Company [or name of subcontractor], all such materials,
including all prints, copies or duplicates thereof, shall be either
disposed of or returned to the Company in accordance with the Company's
instruction.
------ ---------
Xiaoya TurboChef
------ ---------
Date Date
3. In consideration of the disclosure to me of the Confidential Information, I
further agree that I will not, following termination of my employment with
the Company [or name of subcontractor], directly or indirectly engage in
manufacture of the TC3-1 ovens by making use of the Confidential
Information.
4. I enter into this Contract with the express purpose and intent that the
Company derives benefits therefrom, and I further understand and
acknowledge that the Company [or name of subcontractor], shall have the
right to enforce this Contract against me should I be deemed to have
violated this Contract in any manner.
Terms defined in the OEM Contract dated May 15,2000 between Shandong Xiaoya
Group Company, Limited and TurboChef technologies, Inc. shall have the same
meanings when used in this Contract.
Signed this ______ day of ______, 2000.
Name:________________________
Position: ___________________
------ ---------
Xiaoya TurboChef
------ ---------
Date Date
Schedule D: Quality Requirements and Testing Protocol
Includes:
Accellis Oven Testing Requirements
Unit Test Procedure
Accelerated Life Testing Procdures
Air temperature measurement procedure
Velocity and Vector Measurement
Microwave Power measurement and distribution measurement
------ ---------
Xiaoya TurboChef
------ ---------
Date Date
Confidential
Schedule E: Appropriate standards for US, Canadian and European Community use
US requirements
. UL Specifications
UL923 Microwave Cooking Appliances.
(UL 197 concerning vent hoods only).
. FDA Standards:
DHHS Federal Performance Standard 21 CFR 1030.10
. Sanitation Standard: NSF STD NO. 4-1992 - Maintained by UL- File
E151488.
. FCC Specifications: FCC Part 18.
Canadian requirements
. CAN/CSA-C22.2 No. 150-M89
European Community requirements (CE)
. low voltage directive requirements
1. IEC 335-1, Safety of household and similar electrical appliances.
2. IEC 335-2-25, Microwave ovens.
3. IEC 335-2-36, Commercial electric cooking ranges, ovens, hobs and hob
elements.
4. IEC 335-2-42, Commercial electric forced convection ovens.
. EMI directive requirements
1. EN 55011, Limits and methods of measurement of radio disturbance
characteristics of industrial, scientific and medical (ISM) radio-frequency
equipment.
2. EN50082-1, Electromagnetic compatibility- generic immunity standard --
Part1: Residential, commercial and light industry.
------ ---------
Xiaoya TurboChef
------ ---------
Date Date
SCHEDULE F: LIST OF EQUIPMENTS USED FOR PRODUCTION OF C3-1 OVEN
- --------------------------------------------------------------------------------
NO. DESCRIPTION QTY. NOTE
- --------------------------------------------------------------------------------
1 ASSEMBLING VEHICLE 15
- --------------------------------------------------------------------------------
CROSS-HEAD SCREW-DRIVER 15
--------------------------------------------------------
FLAT-HEAD SCREW-DRIVER 15
--------------------------------------------------------
SOCKET WRENCH 15
--------------------------------------------------------
ADJUSTABLE WRENCH 15
--------------------------------------------------------
HEX WRENCH 15
2 ASSY. --------------------------------------------------------
TOOLS WIRE-STRIPPING PINCERS 3
--------------------------------------------------------
ACUTILINGUAL PINCERS 15
--------------------------------------------------------
PLASTIC HAMMER 15
--------------------------------------------------------
WIRE -CUTTING PINCERS 3
--------------------------------------------------------
CRIMP 3
- --------------------------------------------------------------------------------
DIGITAL MULTI-METER 3
--------------------------------------------------------
AC CURRENT METER 3
--------------------------------------------------------
SURVEY METER 3 *TUR
--------------------------------------------------------
THERMOMETER 3
--------------------------------------------------------
STOP WATCH 3
--------------------------------------------------------
HIGH POT TESTER 3
--------------------------------------------------------
RECEPTACLE, SHORTING 3
3 TEST --------------------------------------------------------
EQUIPMENT MICRO-WAVE DISH(1.75L) 3
--------------------------------------------------------
GRADUATED BEAKER(Min 1000L) 3
--------------------------------------------------------
300mm CALLIPER 3
--------------------------------------------------------
150mm CALLIPER 3
--------------------------------------------------------
2m METER 3
--------------------------------------------------------
VOLTAGE TESTER 3
- --------------------------------------------------------------------------------
DOOR LIFE TESTING MACHINE 1 *TUR
4 TEST --------------------------------------------------------
FACILITY KITCHEN-SIMULATING LAB 1 *TUR
- --------------------------------------------------------------------------------
5 PACKING PACKING MACHINE 1
- --------------------------------------------------------------------------------
6 LIFTING SIMPLE LIFTING MACHINE 1
- --------------------------------------------------------------------------------
NOTE: THE QUANTITY OF THE ABOVE IS BASED ON THE PRODUCTION 2000 UNITS PER YEAR.
------ ---------
Xiaoya TurboChef
------ ---------
Date Date