EXHIBIT 4.5
MANUFACTURING OUTSOURCING AGREEMENT
This Manufacturing Outsourcing Agreement (The "AGREEMENT") is entered into on
January 21st, 2002, by and between Nice Systems Ltd., an Israeli registered
corporation no. 52-0036872 having its place of business at 8 Hapnina Street,
P.O.B 690, Ra'anana 43107, Israel, ("NICE") and Flextronics Israel Ltd., an
Israeli registered corporation no. 51-2933045, having its place of business at 1
Hatasiya Str., Ramat Gabriel Industrial Zone, Migdal Haemek 23108, P.O.Box 867,
Israel (the "CONTRACTOR"). NICE and Contractor are collectively referred to as
the Parties.
RECITALS
WHEREAS NICE issued a request for information ("RFI") version A.2 dated June
17th, 2001 to a number of manufacturers seeking to provide NICE with certain
local Manufacturing Outsourcing Services (as defined hereinafter) for the
production, testing and delivery in world class quality and capability of NICE'
Products, on a turnkey basis, to acquire from NICE inventory related to the
operations to be outsourced, and to contract with certain of the contractors
performing portions of the remainder of work or to accept assignment of such
contracts, all as detailed herein;
WHEREAS the RFI was followed by a request for proposal including a detailed
Statement of Work including Exhibits dated 13.8.01 (the "RFP");
WHEREAS the Contractor submitted a proposal in response to the RFI and RFP
(together the "PROPOSAL" or the "CONTRACTOR'S PROPOSAL");
WHEREAS the bidding process resulted in the selection of Contractor, which
represented that it possessed the necessary skills, staffing, experience,
resources, and capabilities to provide those certain Manufacturing Outsourcing
Services detailed herein in world class quality, capability and manner as set
forth herein;
WHEREAS the Parties have completed the pre-contract due diligence, and now wish
to contract for the provision of the Manufacturing Outsourcing Services;
NOW THEREFORE, FOR AND IN CONSIDERATION OF THE AGREEMENTS OF THE PARTIES SET
FORTH BELOW, NICE AND CONTRACTOR AGREE AS FOLLOWS:
A. DEFINITIONS. The following terms shall have the meanings set forth below:
(i) "RFI" - shall have the meaning ascribed in the preamble above.
(ii) "RFP" - shall have the meaning ascribed in the preamble above.
(iii) "SOW" - Statement of Work document attached to the RFP and forming an
integral part thereof including its Exhibits.
(iv) "CONTRACTOR'S PROPOSAL" or "PROPOSAL" - shall have the meaning
ascribed in the preamble above. It is clarified that for the purpose
of Contractor's Proposal in response to the RFI, Contractor hereby
declares that such Proposal was valid and correct at the date
submitted in all material aspects which are relevant to NICE' decision
to choose Contractor as the Manufacturing Outsourcing Services
supplier.
(v) "PRODUCTS" - Digital recording products as defined in APPENDIX A and
further detailed in the PDM System, and as shall be amended from time
to time by NICE and manufactured by Contractor in accordance herewith.
(vi) "MANUFACTURING OUTSOURCING SERVICES" - Certain turnkey based
purchasing, manufacturing, testing, configuration and delivery
services for the Products all as detailed in the Agreement and its
Appendices and Exhibits, including but not limited to: purchase of the
Product's components which are not supplied by NICE, assembly and
production of the Products subject to supervision, control and
planning by NICE, execution of Measurements and Procedures, response
times, providing infrastructure and resources, allocation of the
required manpower, use of the Non Generic Equipment, execution of
engineering and integration process, Engineering Changes, integration
of NICE Software, implementation of Control and Planning, Engineering
Changes and Change Order procedures, packaging requirements,
dismantling and disassembly of Products procedure, spare part
mechanism, quality control requirements, logistics management
including inventory management, adjusting and meeting forecasts,
components purchasing procedure, supplies and shipment schedules,
issuing orders procedure, preparing export shipments, all of world
class quality and capability and as provided herein, on a turnkey
basis, and acquisition from NICE of certain inventory related to the
operations to be outsourced, and to contract with certain of the
contractors supplying components and/or performing portions of the
remainder of work or to accept assignment of such contracts, all as
detailed herein.
(vii) "NICE SOFTWARE" - Dedicated software developed by NICE and/or for
NICE, in which all Intellectual Property (as defined below) is owned
by NICE.
(viii) "PERSONNEL" - Contractors' employees, subcontractors,
subcontractor's employees and any other person acting on behalf of
Contractor.
(ix) "AFFILIATE" - A corporation, partnership or other business entity
which controls, is controlled by, or is under common control of a
Party. For the purposes hereof, "CONTROL" shall mean the holding of
more than 50% of the voting rights in the entity in question.
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(x) "CUSTOMER/S" - NICE distributors, resellers, VAR's (value added
resellers), OEM's and similar business partners and/or end-users,
which purchase the Products.
(xi) "NICE PROPRIETARY INFORMATION" - Any and all data and information
disclosed by NICE to the Contractor during the term of this Agreement
in any form, whether verbally, in writing or in machine readable form
or in magnetic media, relating to the business, manufacturing,
know-how, Products, NICE Software, any other products, items,
components and affairs of NICE including its Affiliates, and including
without limitation - documents, prototypes, samples and the NICE'
plants and equipment, Products, certain proprietary and confidential
information concerning NICE' past, present and future research,
development and business activities and the results therefrom,
including but not limited to digital recording solutions, applications
and services technology. Proprietary Information may also include
information disclosed to NICE by third parties. Proprietary
Information shall not include data and information which: (i) was or
will be, independently of this Agreement, lawfully in the possession
of the Contractor without breach of obligation of secrecy of
Contractor to NICE, and/or (ii) was or will be, independently of this
Agreement, lawfully in the possession of the Contractor without breach
of obligation of secrecy of a third party to NICE, or (iii) was in the
public domain or was common knowledge at the time of receipt by the
Contractor; or (iv) following its disclosure to the Contractor as the
receiving Party, has, through no fault on the part of the Contractor,
subsequently become part of the public domain or is common knowledge;
or (v) is required to be disclosed by the Contractor to comply with
applicable laws or governmental regulations, provided that the
Contractor provides prior written notice of such disclosure to NICE
and takes reasonable and lawful actions, at NICE' expense, to avoid
and/or minimize the extent of such disclosure.
"CONTRACTOR'S PROPRIETARY INFORMATION" - data and information
disclosed by Contractor to NICE during the term of this Agreement in
any form, whether verbally, in writing or in machine readable form or
in magnetic media, relating to the business, manufacturing methods,
know-how, systems, price lists, suppliers lists and terms of
engagement with suppliers, of Contractor including its Affiliates, and
including without limitation documents, and the Contractor's plants
and equipment, all information disclosed under audits under this
Agreement. Contractor's Proprietary Information may also include
information disclosed to Contractor by third parties. Contractor's
Proprietary Information shall not include data and information which:
(i) was or will be, independently of this Agreement, lawfully in the
possession of NICE
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without breach of obligation of secrecy to Contractor, and/or (ii) was
or will be, independently of this Agreement, lawfully in the
possession of NICE without breach of obligation of secrecy of a third
party to Contractor, or (iii) was in the public domain or was common
knowledge at the time of receipt by NICE; or (iv) following its
disclosure to NICE as the receiving Party, has, through no fault on
the part of NICE, subsequently become part of the public domain or is
common knowledge; or (v) is required to be disclosed by NICE to comply
with applicable laws or governmental regulations, provided that NICE
provides prior written notice of such disclosure to Contractor and
takes reasonable and lawful actions, at Contractor's expense, to avoid
and/or minimize the extent of such disclosure.
(xii) "INTELLECTUAL PROPERTY" - Trademarks, trade names, logos, domain
names, designs, patents, copyrights, inventions, discoveries,
technology, know-how, trade secrets, confidential and proprietary
information and mask works, all registrations and applications for any
and all renewals, reissuances and extensions of, and all goodwill in,
the foregoing.
(xiii) "PURCHASE ORDER/S" or "PO/'S"- A NICE purchase order ordering
manufacture and supply of the Products, issued in accordance herewith.
(xiv) "TOTAL LEAD TIME" - The Purchase Lead Time, Sub Assembly Lead Time
and Production Lead Time together.
(xv) "PURCHASE LEAD TIME" - The maximum agreed time for purchase of
components by Contractor in order to enable production and completion
of a Product until the Due Date, being the total of the time required
for ordering and delivering all relevant components to Contractor from
Contractor's suppliers, subject to the Liability. The initial Purchase
Lead Time for each component (including sub-assembly purchased from
suppliers) will be as detailed in APPENDIX C and shall be reviewed and
updated as necessary by the parties each Quarter during the duration
of this Agreement according to the procedure detailed in this
Agreement. The new Purchase Lead Time shall need to be agreed to by
both parties, and, once agreed, shall be the binding Purchase Lead
Time for the relevant components. The parties will also agree on the
Purchase Lead Time regarding each new component to be included in a
Product.
(xvi) "SUB ASSEMBLY LEAD TIME" - The maximum agreed time for completion of
sub-assemblies in order to enable production and completion of a
Product until the Due Date, beginning at the end of the Purchase Lead
Time for all relevant components and ending on successful completion
of testing of the relevant sub-assemblies. The initial Sub Assembly
Lead Time for each sub-assembly will be as detailed in APPENDIX C and
shall be reviewed and updated as necessary by the parties each Quarter
during the duration of this Agreement according to the procedure
detailed in this Agreement. The new Sub Assembly Lead Time shall need
to be agreed to by both parties, and, once agreed, shall be the
binding Sub Assembly Lead Time for the relevant Sub Assemblies. The
parties will also agree on the Sub Assembly Lead Time regarding each
new Sub Assembly to be included in a Product.
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(xvii) "PRODUCTION LEAD TIME" - The agreed time for completion of a Product
until its Due Date, meaning from commencement of assembly (from
sub-assemblies if applicable) until successful completion of testing,
which shall always be fourteen (14) Days from receipt of the PO.
(xviii) "ENGINEERING CHANGES" - Engineering change in the Product as
detailed in Sections 3.10 and 3.11 to this Agreement.
(xix) "ECR" - Engineering Change Request issued by NICE or by Contractor.
(xx) "ECO" - Engineering Change Order issued by NICE at its discretion
after an ECR, in accordance with Section 3.11 below.
(xxi) "CHANGE ORDERS" - Change or changes or amendments in a specific order
excluding rescheduling of an order/prices and excluding ECO's, as
further detailed in Section 3.5.
(xxii) "WARRANTY PERIOD" - Thirteen (13) months from the Shipment Date of
the Product subject matter of the warranty, unless agreed otherwise by
the parties in writing.
(xxiii) "BACKUP SITE" - Contractor's backup site and/or the third party
site, as detailed in APPENDIX G and in Section 2.9 below, designed to
be operated in the event of force majeure or other event preventing
the performance of the Manufacturing Outsourcing Services at
Contractor's plant and to ensure an alternate facility with equivalent
standards and availability.
(xxiv) "DUE DATE" - The date of completion of the Product after completion
of all quality and integration tests as detailed for each Product
including in APPENDIX J and its classification as "finished goods"
according to the date detailed in the relevant NICE Purchase Order,
issued in accordance with this Agreement.
(xxv) "SHIPMENT DATE" - the date of delivery of Products, properly packed
(i.e. in accordance with this Agreement), including all documents
required for the export of Products, to the NICE designated freight
forwarder at Contractor's Location, which may be any time after the
Due Date as determined by NICE, but not to exceed sixty (60) Days from
the Due Date.
(xxvi) "DAY" or "DAYS" - Calendar days unless specific reference is made to
"Business Days".
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(xxvii) "BUSINESS DAYS" - Sunday to Thursday, excluding holidays. Holiday
eves shall be regarded as half a business day.
(xxviii) "QUARTER" - a calendar quarter.
(xxix) "EFFECTIVE DATE" - January 21st, 2002
(xxx) "LIABILITY " - components and sub-assemblies for which Contractor has
an option of cancellation and/or rescheduling without liability, as
detailed in APPENDIX C regarding each component and sub assembly. The
cancellation window for VMI (Vendor Management Inventory) Components
varies between 0 to 35 Days from ordering by Contractor.
(xxxi) "NON GENERIC EQUIPMENT" - functional testing equipment and any
equipment related thereto.
(xxxii) "PDM SYSTEM" - NICE' engineering system (PDM) to which Contractor
shall be granted access for the purpose of performance of this
Agreement and whose contents shall be binding and constitute an
integral part of this Agreement, subject to Section 17.1. The contents
of the PDM System as at the date hereof which are not governed by
Section 17.1 may only be changed further to an ECO issued in
accordance herewith.
B. INTERPRETATIONS
As used in this Agreement:
(i) The terms and expressions set out in Section "A" shall have the
meanings ascribed therein.
(ii) The preamble and Appendices and Schedules form an integral part of
this Agreement.
(iii) The masculine includes the neuter and the feminine; and the singular
includes and plural and vice versa.
(iv) A reference to any statute, enactment, order, regulation or other
similar instrument shall be construed as a reference to the statute,
enactment, order, regulation or instrument as amended by any
subsequent statute, enactment, order, regulation or instrument or as
contained in any subsequent re-enactment thereof.
(v) Headings are included in this Agreement for ease of reference only and
shall not affect the interpretation or construction of this Agreement.
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(vi) References to Sections, Schedules, Appendices and Exhibits are, unless
otherwise provided, references to sections, schedules, appendices and
exhibits to this Agreement.
(vii) In the event certain provisions incorporated in the Agreement are
contradictory VIS-A-VIS other provisions incorporated in the
Appendices and Schedules, the Agreement shall prevail.
(viii) In the event certain provisions incorporated in the Appendices and
Schedules are contradictory VIS-A-VIS other provisions incorporated
therein, the specific provisions shall take precedence over the
general provisions.
C. APPENDICES AND SCHEDULES
(i) Appendix A - Products;
(ii) Appendix B - The Proposal;
(iii) Appendix C - Prices, Purchase and Sub-Assembly Lead Time,
cancellation windows, rescheduling period, minimum order, package
quantity, labor costs, disassembly fees, Product prices, cancellation
fees, ECR and ECO administrative costs [a new version to be completed
within a month of signature of the Agreement and thereafter updated in
accordance with this Agreement];
(iv) Appendix D - Insurance Certificate;
(v) Appendix E - Non Disclosure Undertaking;
(vi) Appendix F - NICE Inventory purchased by Contractor for the first
Quarter (NICE Inventory purchased by Contractor for the second Quarter
will be added as an addition to Appendix F at a later date);
(vii) Appendix G - Back Up Site;
(viii) Appendix H - Safety, Security & IT Requirements;
(ix) Appendix I - Spare Parts / Upgrade;
(x) Appendix J - Quality Assurance Requirements;
(xi) Appendix K - NICE Products release policy;
(xiv) Appendix N - RMA Process.
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1. MANUFACTURING OUTSOURCING SERVICES
1.1. SCOPE OF WORK. During the term of and subject to this Agreement,
Contractor shall perform the Manufacturing Outsourcing Services
including purchase, assemble, manufacture, configure, test and deliver
to NICE' freight forwarder in Contractor's facility, under the terms
set forth below, and NICE shall purchase from Contractor, and
Contractor shall sell to NICE, such quantities of units of the
Products according to NICE' Purchase Orders, from time-to-time as
detailed below, at the quoted prices set forth in Appendix C. This
Agreement or any provision thereof shall not be interpreted as
granting Contractor any exclusive rights in respect of the
Manufacturing Outsourcing Services or any similar services outsourced
by NICE, and shall not prevent NICE, at its sole discretion, from
contracting with any third party for such services, subject to the
provisions of this Agreement. Notwithstanding anything to the contrary
in the Agreement or elsewhere, including NICE' confidentiality
obligations towards Contractor, but without derogating from NICE'
obligations hereunder, this Agreement shall in no way be construed as
preventing NICE from performing the Manufacturing Outsourcing Services
or part thereof by itself and/or through others, whether during the
term of this Agreement or thereafter.
1.2. Contractor's obligations to execute the Manufacturing Outsourcing
Services pursuant to this Agreement shall commence on the Effective
Date, subject to the following provisions:
1.2.1. OUTSOURCING TRANSITION - NICE intends to outsource part of its
manufacturing activities to the Contractor, in 3 phases: (1) Training
and Authorization, (2) Relocation and (3) Manufacturing Outsourcing
Services, as described in this Agreement.
1.2.2. INFRASTRUCTURE. For the execution of this Agreement and
the Manufacturing Outsourcing Services, Contractor will set
up and establish specific infrastructure including an
exclusive area in its production facility as detailed
herein. Contractor shall assemble its own workstations using
its generic equipment and the Non Generic Equipment to be
provided by NICE in good working order. The maintenance of
the Non Generic Equipment and keeping it in good working
order, except normal wear and tear, shall be Contractor's
responsibility, at Contractor's expense. NICE shall have the
right to object on reasonable grounds to any material change
of the manufacturing facility for any Product.
1.2.3. RELOCATION- Contractor will complete the Relocation
process including preparation of production lines
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that will be able to ensure the production capacity
according to NICE' forecasts as detailed herein. The
completion of the Relocation stage shall be on time in order
to enable compliance with the Forecast submitted to
Contractor prior to signature of this Agreement and shall be
subject to the Control of NICE, without relieving Contractor
from its responsibilities hereunder. Upon NICE' approval
that the Relocation stage has been completed to its
satisfaction, which approval shall not be unreasonably
withheld, the Contractor shall commence the Manufacturing
Outsourcing Services.
1.2.4. RESOURCES, PERSONNEL, PROJECT MANAGER. Contractor will be
responsible for the required resources in order to comply
with its undertakings hereunder and to deliver the
Manufacturing Outsourcing Services as detailed hereunder.
Contractor will perform the Manufacturing Outsourcing
Services using only skilled, qualified and experienced
personnel to the extent required for the purpose of
performing its undertakings pursuant to this Agreement, to
be trained and authorized, according to NICE' requirements.
Contractor shall not replace at its initiative key Personnel
during the duration of this Agreement, to the extent such
replacement shall materially impair its ability to perform
in compliance herewith and any such replacement shall take
place only after consultation with NICE. It is agreed for
the purpose hereof, that frequent replacement of key
personnel shall be deemed as materially impairing
Contractor's ability to perform hereunder. NICE may reject
on reasonable grounds any such key personnel employed by
Contractor in the performance of its obligations hereunder,
and they shall be replaced by Contractor promptly following
NICE' first reasoned request. Such personnel shall abide by
all of NICE' security, data protection and safety
requirements and policies as indicated from time to time by
NICE in writing according to Section 17.1.
TheContractor will appoint a dedicated Project Manager who
will coordinate with NICE' representative and serve as a
single point of contact for NICE in all aspects pertaining
to this Agreement. The project manager will not be replaced
at Contractor's initiative during the duration of this
Agreement to the extent such replacement shall
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materially impair Contractors ability to perform in
compliance herewith and any such replacement shall take
place only after consultation with NICE. It is agreed for
the purpose hereof, that frequent replacement of
Contractor's Project Manager shall be deemed as materially
impairing Contractor's ability to perform hereunder. The
project manager will meet with NICE' representative on a
regular basis.
1.2.5. CONTROL AND PLANNING. Without derogating from the
aforesaid, Contractor will provide NICE with control
capability of the production. NICE shall be entitled to be
involved in the planning and establishment of the working
environment for all Product lines at the Contractor's
premises. Contractor will provide NICE with reports on a
daily/ weekly/ monthly basis, as follows: the reports will
present all relevant details regarding the production
orders, time between phases, disassembled Products,
schedules, logistics reports, etc. The reports provided will
present all said data in a clear manner and will include
graphic presentations. The reports will enable NICE to
verify that all systems are matched and to verify the
improvement that is achieved by Contractor. All said reports
shall need to be agreed in advance by both Parties.
1.2.6. SUPERVISION AND MONITORING. NICE shall be entitled but not
obligated, to supervise and monitor the execution of this
Agreement from time to time as set forth herein. NICE shall
be entitled, upon prior coordination, to visit any place
where the Manufacturing Outsourcing Services are being
performed including Contractor's plant/s and to review
samples of components and Products. As a result of such
supervision, NICE may propose improvements and increase in
efficiency in the Manufacturing Outsourcing Services and the
Parties will discuss such proposals and their affect on this
Agreement. Without derogating from the generality of the
aforementioned, any supervision and monitoring rights
granted to NICE hereunder are merely intended to secure
performance of this Agreement according to its terms and
shall not relieve Contractor from its responsibilities
hereunder according to this Agreement or impose any
responsibility or liability upon NICE which is not
explicitly detailed in this Agreement.
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1.2.7. MEASUREMENTS AND PROCEDURES. Contractor will execute all
the production stages required for a Product according to
NICE' Production File for the particular Product, included
in the PDM System.
1.2.8. QUALITY ASSURANCE REQUIREMENTS. The Manufacturing
Outsourcing Services performed by Contractor shall be
executed according to and comply with all quality control
requirements and specifications described in APPENDIX J.
Without derogating from Contractor's responsibility as
aforementioned, NICE reserves the right to execute quality
assurance inspection on Contractor's premises, all as
described in APPENDIX J and according to the terms hereof.
1.2.9. BACK-UP SITE. Contractor will ensure the availability of
the Back-up Site according to the terms of this Agreement.
Attached as APPENDIX G to this Agreement is the undertaking
of Flextronics, Inc., North Carolina for a Back Up Site in
North Carolina, USA and a transition plan for its operation.
1.2.10. STEERING COMMITTEE. The Parties will appoint a steering
committee which shall monitor the execution of this
Agreement, comprised of Contractor's project manager, NICE'
representative, and relevant personnel of the Parties.
2. COMPONENTS PURCHASING, NICE COMPONENTS AND INVENTORY.
2.1. COMPONENTS PURCHASING. Upon transition to the third phase -
Production, the Contractor will be responsible for all purchasing
of components and getting equipped with all the materials
necessary for the assembly of the Products (except the Non
Generic Equipment). At NICE' request, and without derogating from
any other provisions of this Agreement, Contractor shall promptly
notify NICE, in writing, who are the suppliers of any specific
components and under what agreements purchase is effected.
2.2. CONTRACTOR PURCHASE AGREEMENTS. Without derogating from the
aforementioned, NICE may, at its sole discretion, decide to be
involved and to actively or inactively, participate in
negotiations and purchasing agreements of Contractor for
components designated for production hereunder. In such event,
Contractor will comply with NICE' requirements and instructions
and contract accordingly, without imposing any liability on NICE,
provided such instructions
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are in accordance with common purchasing practice and in
accordance with this Agreement. NICE may, at its election,
instruct Contractor not to purchase a relevant component from a
specific supplier, provided an alternative supplier exists.
APPENDIX C shall be updated accordingly. At NICE' request,
Contractor shall notify any relevant supplier that it is
purchasing components for NICE Products and shall further furnish
the supplier with information requested by such supplier. In any
event, Contractor shall report to NICE on its purchasing
negotiations and achievements and shall supply NICE, at NICE'
request, with a copy of all relevant existing documentation.
2.3. FLEXTRONICS, INC. GLOBAL PURCHASE AGREEMENTS. Nevertheless, in
the event that the purchase agreement is signed by Flextronics,
Inc. as a global purchase agreement for the Flextronics group,
and not as a local agreement of Contractor or as an agreement
applying to NICE required components only, then NICE will not
participate in the negotiations and will not be entitled to
receive copies of such agreement/s. The details relevant to the
components purchased under an agreement as above will be included
in APPENDIX C and Contractor hereby declares and undertakes that
the details included in APPENDIX C (as amended from time to time
according to the provisions of this Agreement) shall be the
accurate details from the Flextronics, Inc. global purchase
agreements and components and sub assembly prices in APPENDIX C
shall be net purchase prices of Contractor without any overhead
or uplift. NICE shall be entitled, at its sole discretion, to
object in advance to Contractor using any Flextronics, Inc.
global purchase agreement and in such event, Contractor shall
purchase the components separately, the provisions of Section
2.2. shall apply and APPENDIX C shall be updated accordingly.
Contractor undertakes to comply with NICE' instructions and the
manufacturer license terms regarding the use and duplication of
Microsoft and other third party software supplied by NICE and not
to use such software products for any purpose other than in the
assembly of the Products. Contractor will copy from the master CD
of those software products only the exact number of licenses
designated by NICE in writing and for which a license has been
issued by NICE.
2.4. NICE DESIGNATED COMPONENTS. NICE may request Contractor to
purchase specific components from specific suppliers, provided
that the terms of such suppliers are in accordance with common
purchasing practices and APPENDIX C shall be updated accordingly.
When purchasing components for Contractor's other customers,
Contractor may not represent itself to the suppliers as a NICE
outsourcer for the purposes of such purchase.
2.5. NICE SUPPLIED COMPONENTS. NICE may, at its election, supply to
Contractor software licenses and software or the like for which
NICE has an existing royalty agreement with a third party (except
electrical and mechanical components unless agreed otherwise), in
lieu of Contractor purchasing same ("NICE COMPONENTS"). All
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such components will be delivered to Contractor in a mutually
agreed package type, and in an agreed upon time and in agreed
upon quantities. The parties will agree on the inventory level
required by Contractor for each NICE Component and NICE' sole
responsibility shall be to renew the inventory upon request.
Contractor shall be responsible for ordering additional NICE
Components if required above the inventory level and for ensuring
that appropriate physical controls of such components are in
place and properly administered. Contractor will not charge NICE
any charges or overhead for such NICE Components. In the event
Contractor has difficulty in purchasing any components which NICE
can obtain and NICE has granted its consent to supply such
component to Contractor in lieu of Contractor purchasing same,
Contractor will not charge NICE any charges or overhead for such
Components.
2.6. INVENTORY MANAGEMENT AND USE OF EXISTING INVENTORY. All
purchasing of inventory, use of inventory, and management of
inventory shall be performed by Contractor according to this
Agreement, and APPENDIX C.
2.7. EXISTING NICE INVENTORY. Furthermore, Contractor will purchase
from NICE its existing inventory of components available for use
in Products for up to six (6) months on a rolling basis, as
detailed in APPENDIX F, all of which will be transferred to
Contractor's facility on the purchase date, all as detailed
hereunder: On the Effective Date Contractor will purchase the
inventory included in part I of APPENDIX F. Regarding the
remainder of the inventory included in part II of APPENDIX F the
following will apply: at the beginning of the first production
Quarter hereunder Contractor will purchase the components
required under the Forecast issued by NICE for that Quarter
regardless of the Total Lead Time for such components; at the
beginning of the second production Quarter hereunder Contractor
will purchase the components required under the Forecast issued
by NICE for that Quarter regardless of the Total Lead Time for
such components; Contractor will purchase any components
remaining in APPENDIX F after two Quarters as aforementioned, on
a current basis as required under the Forecast issued by NICE for
the following Quarters but in compliance with the Total Lead Time
for such components. Contractor will use said NICE' inventory for
the production of the Products rather than purchase such
components from third parties, until full use of all NICE
inventory. Contractor shall pay NICE the purchase price of such
components, as set forth in APPENDIX C hereto, and under payment
terms as set forth in Section 8.4. When sold to NICE as part of
aProduct, the component prices paid by NICE to Contractor
hereunder will be calculated with a reduced overhead of 2%. NICE
will and does hereby provide Contractor with all such warranties
with respect to the components sold thereby as is required from
Contractor under this Agreement with respect to the same
components. Furthermore, without derogating from NICE'
undertakings hereunder, Contractor will use its international
supply chain in order to assist NICE in selling its dead
inventory, which is not included in APPENDIX F, and the proceeds
from such sales will be shared as follows: 10% Contractor, 90%
NICE. Contractor will report to NICE regularly, on such sales.
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2.8. COMPONENT END OF LIFE. Contractor shall take all necessary
measures in order to receive immediate updates from its suppliers
regarding end of life of any component (i.e types of components
which shall no longer be manufactured). Contractor shall notify
NICE immediately upon becoming aware of the event of end of life
of a component. In such event, NICE shall designate and approve
the replacement components to be used instead and the Parties
will mutually agree on the required changes in APPENDIX C.
2.9. COMPONENTS FOR NICE INTERNAL REQUIREMENTS. Contractor will
occasionally provide services in order to help NICE to obtain
components for NICE' internal requirements. Contractor will allow
NICE to purchase reasonable quantities from its available
inventory at a price agreed in advance, and will help NICE to
obtain components from manufacturers/suppliers at the lowest
available price (in the case where the components in question are
not in the Contractor's inventory).
2.10. It is clarified that nothing in this Agreement shall prevent
NICE from contracting directly with Contractor's suppliers and
vendors in any agreement, or from purchasing identical
components, whether during this Agreement or following its
termination or expiration.
3. ORDERING AND OTHER MATTERS
3.1. FORECASTS. NICE shall give Contractor a written forecast of the
Products, by type, quantity and expected Due Date (the
"FORECAST") as follows: A Forecast shall be a rolling forecast
for the current Quarter and the two (2) consecutive Quarters,
detailed by week. Upon the Effective Date, NICE shall deliver a
Forecast for the period commencing on the expected completion of
the Relocation Phase for the first Product, for the current
Quarter and for the next coming two Quarters and so on thereafter
during the term of this Agreement. The Forecast may be updated by
NICE on a weekly basis, or more frequently (at NICE' discretion).
A Forecast will not be deemed to constitute a binding purchase
order with respect to Products (as opposed to components and
sub-assemblies, as set forth in Sections 3.4, 16 and 17.5 of this
Agreement). Contractor will manufacture the quantities of
Products only according to specific orders and the Production
Lead Time. The
14
Parties' responsibilities and undertakings arising from NICE'
Forecast shall be according to APPENDIX C as amended from time to
time according to the provisions of this Agreement. Liability
reports will be submitted by Contractor on the 1st of each
calendar month and will need to be approved by NICE. It is
clarified for the avoidance of doubt, that in any event, any and
all purchase obligations of NICE with respect to Products (as
opposed to components and sub-assemblies) are limited in any
given time during the term of this Agreement, to the PO's only.
Contractor (with NICE' participation) will implement, at its own
expense, a full process of Demand Flow Technology, including: (I)
Product Synchronization; (II) Sequence of Events; (III) Mix
Model; (IV) Demand of Capacity & Take Time; (V) Operations
grouping; (VI) Line Design & Balancing. This process will help to
determine the Sub Assembly Lead Time and the Production Lead
Time. It is clarified that any change in the Production Lead Time
detailed in this Agreement shall require NICE' prior written
approval; any change in the Sub Assembly Lead Time detailed in
this Agreement as a result of which the maximum Sub Assembly Lead
Time for the relevant sub-assembly exceeds 30 Days, shall require
NICE' prior written approval.
3.2. PURCHASE ORDERS AND ISSUING ORDERS. NICE shall, from
time-to-time, issue to Contractor a Purchase Order, according to
the Forecast, for Products, by type, quantity and Due Date, as
and when it desires to order Products. PO's will be issued at
least two (2) weeks prior to the designated Due Date. Each and
every order will be entered in NICE' logistic system as a Sales
Order. Every Product shall be manufactured according to the
Production Lead Time. Commencement of assembly shall be based on
Production Lead Times (as per Section A (xvii)) and calculated to
meet NICE' delivery requirements. It is clarified that delivery
and shipment of Products and NICE' obligation to pay for Products
shall only be according to a PO.
Purchase Orders for Products (and Forecasts for Products) may be
delivered to Contractor by any reasonable means, including but
not limited to e-mail, computerized systems, etc., postal
delivery, courier delivery, facsimile transmission, as shall be
notified by NICE in writing and in advance of any relevant PO.
For the removal of doubt, a PO shall not be binding upon
Contractor until Contractor has confirmed in writing receipt of
the PO. Contractor shall, within two Business Days of its receipt
of a Purchase Order, accept or reject such Purchase Order in
writing; provided, however, that Contractor shall be obligated to
accept all Purchase Orders issued in accordance with the terms
hereof for Products with respect to which a price per the
quantity ordered has been mutually agreed by the parties.
Contractor undertakes that in the event of increase in Product
requirements VIS-A-VIS the Forecast (i.e. issuance of PO's
exceeding
15
the relevant Forecast), Contractor's manufacturing capacity can
be increased, at any time, by thirty percent (30%) beyond the
then current Forecast. In addition, in as much as purchase of
components and purchase of sub assemblies are concerned, NICE may
order Products, which are not included in the Forecast, and
Contractor will make its best reasonable commercial efforts to
accommodate such order in accordance with NICE' request. It is
clarified that in any event Contractor will accept all PO's
exceeding the Forecast, subject to updating the Due Date based
upon the Total Lead Time for obtaining the required components,
which are not available in Contractor's inventory. The Due Date
for such PO's will be determined according to the time of
obtaining the components. For components/Products the prices for
which are not previously agreed under APPENDIX C, the price will
be agreed in writing prior to acceptance of the PO.
3.3. FORECAST REVIEW. The parties shall hold weekly meetings, in
person, at NICE' facility or by conference phone call, for the
purpose of discussing NICE' existing and contemplated Forecasts
and order requirements and updating the Forecast; provided,
however, only written Forecasts and Purchase Orders, or written
modifications thereto, shall bind NICE and Contractor pursuant to
the terms of this Agreement or otherwise. The parties, as
business requirements dictate, may mutually agree upon the use of
blanket purchase orders for specific sub-assemblies or components
(exceeding the requirements under Forecasts), subject to the
terms of this Agreement and such sub-assemblies or components
purchased shall be deemed Permitted Components.
3.4. PERMITTED COMPONENTS. Contractor may make purchase commitments to
suppliers and assemble components to sub-assemblies based upon
the Forecasts received from NICE but subject always to the Total
Lead Time, Liability and ABC policies of Contractor (which NICE
will be entitled to review and comment on in advance of the
relevant purchase). Contractor shall maintain inventory of
Permitted Components (as defined below) for use during the
Production Lead Time. NICE shall only be obligated to Contractor
for components and sub-assemblies ordered and assembled by
Contractor, in accordance with the Forecast and in compliance
always with the Total Lead Time as detailed in APPENDIX C (as
amended from time to time according to this Agreement) or
otherwise for inventory of components purchased from NICE under
Sections 2.7 or 3.4(A), or purchased in accordance with POs,
ECO's or Change Orders ("PERMITTED Components"), as detailed
hereunder. It is clarified that any Forecast updated following
the purchase of Permitted Components will not affect their
definition as Permitted Components, and NICE' obligations with
respect thereto, subject to the Liability.
3.4(A) PURCHASE OF INVENTORY BY NICE.
16
NICE will purchase from Contractor inventory of Permitted
Components not required (in whole or in part) according to
the Forecast for the Quarter immediately following the time
at which such inventory is reviewed as detailed below
(hereinafter: the "FIRST QUARTER") as detailed below. The
following terms shall have the definitions ascribed thereto:
(i) DEAD INVENTORY - Permitted Components, the entire
quantity of which is not required for assembly of
Products in accordance with the Forecast.
(ii) SLOW MOVING INVENTORY - Permitted Components, which are
required for assembly of Products for the two
consecutive Quarters commencing immediately after the
First Quarter, in accordance with the Forecast.
(iii) EXCESS INVENTORY - Permitted Components, which are
required for assembly of Products only during the third
Quarter after the First Quarter or thereafter, in
accordance with the Forecast.
Three (3) days before the beginning of every Quarter,
Contractor will issue a report of Dead, Slow Moving and
Excess Inventory, and shall detail the price of each
Permitted Component included in the report as specified in
APPENDIX C, which report will need to be verified by NICE
within 2-3 days. Inthe event that in any Quarter, the Dead
Inventory, Excess Inventory and Slow Moving Inventory
together exceed 15% of the Monthly Consideration (as defined
below), NICE will purchase such inventory exceeding 15% from
Contractor one day before the beginning of the First
Quarter, by payment of the price detailed in APPENDIX C
including a surcharge of 4%. In calculating and determining
the inventory falling within the said 15% (which shall not
be purchased by NICE) the following priority shall apply:
first - all Slow Moving Inventory, second (if not all 15%
were covered) - all Excess Inventory, third (if not all 15%
were covered) - Dead Inventory. The "MONTHLY CONSIDERATION"
for the purpose hereof shall mean the total actual price due
to Contractor from NICE hereunder for all Products during
the preceding Quarter, divided by three (3).
The foregoing shall apply only as of Q3 2002 - July 1st 2002
(the first report of inventory as above shall be issued at
the end of June 2002), and thereafter on a regular basis.
In the event NICE has purchased any Permitted Component from
Contractor as detailed above, Contractor is obligated to
repurchase such Permitted Component for production of the
next Forecast which requires such Permitted Component in
accordance with the relevant procedure of Section 2.7 above
(Nice Existing Inventory), at the price sold to NICE by
Contractor excluding the surcharge of 4%.
No other compensation or components protection will be provided
by NICE except as explicitly detailed above or in Sections 16.7,
16.8 and 17.5 of this Agreement. Upon
17
payment of the aforementioned compensation for Permitted
Components, such items shall become the property of NICE, and
will be promptly delivered to NICE' facility in Israel, and, at
NICE' election and expense, shall be delivered to another
location in Israel identified to Contractor by NICE or, at NICE'
direction, disposed of by Contractor (in any manner selected by
Contractor). In any event, Contractor will make best reasonable
commercial efforts to decrease levels of inventory of Permitted
Components, by agreeing with its suppliers to decrease Purchase
Lead Times to 1 - 2 weeks at the most.
3.5. CHANGE ORDERS. Throughout all the assembly phases of a Product
during the Production Lead Time and any time before the Due Date,
NICE may issue Contractor with a Change Order. The issuance of
such Change Order and the execution by Contractor of such Change
Order, shall be in accordance with the provisions hereunder. Upon
issuance of a Change Order, Contractor will immediately execute
it and the Product price shall change in accordance with APPENDIX
C. The sole implication of a Change Order will be payment for
additional direct labor costs as detailed in APPENDIX C. Replaced
components and sub-assemblies will be returned to Contractor's
inventory at no charge to NICE (without derogating from the
specific provisions of this Agreement under which NICE is
obligated to purchase Permitted Components). The Product price
will be as after the implementation of the Change Order. For
Change Orders issued prior to commencement of the Production Lead
Time for any Product no charge will be incurred by NICE. Without
derogating from the aforementioned, Contractor will not charge
NICE for Change Orders during the first three (3) months of
production.
3.6. RESCHEDULING OF RELEASED ORDERS. NICE may, at its discretion,
reschedule delivery of units of Products for which a PO has
already been issued, by shortening the Due Date, without any
implication. In this respect, Contractor is aware that by the
last three weeks of every calendar Quarter, a high level of
flexibility is required to meet NICE' end of Quarter
requirements. Contractor will perform its best reasonable
commercial efforts to complete such rescheduled Products at the
new requested Due Date. All such rescheduling shall be performed
by sending Contractor a written request for rescheduling.
3.7. ORDERS ON HOLD. Prior to the Due Date, NICE may, at its
discretion, place Products manufactured according to PO's on hold
for a period not to exceed thirty (30) Days from the Due Date,
without any implications, by giving a written notice to
Contractor. Upon termination of such 30 Day period or earlier if
requested by NICE in writing, the Products on hold will be deemed
as cancelled and the provisions of Section 3.8 below shall apply.
3.8. CANCELLATION OF PURCHASE ORDERS. NICE may at its discretion, at
any time, cancel, in whole or in part, PO's of Products issued
18
pursuant to this Agreement subject to the delivery of prior
written notice, before the respective Due Date. Contractor, upon
receipt of such written notice of cancellation, shall stop work
on such units of Products if work has already commenced. Without
derogating from any liability to pay for Permitted Components as
set forth elsewhere in specific provisions this Agreement, NICE
shall have no liability for cancellation of a PO prior to the
Production Lead Time of the Product. For cancellation of a PO
during the Production Lead Time and until the Due Date, NICE'
liability for cancellation shall be limited to the following:
3.8.1. Payment of a fixed cancellation charge for all cancelled
units of Products as specified in APPENDIX C. The fixed
cancellation charge will be recalculated at the end of the
first Quarter, based on the actual average time to
disassemble a Product, as determined by Contractor and
agreed to by NICE;
3.8.2. All the components/sub-assemblies will be returned to
Contractor's inventory at no charge to NICE subject to and
in accordance with the terms of this Agreement.
3.8.3. NICE shall not be responsible and shall not pay, in whole
or in part, for Products manufactured outside the agreed
Production Lead Time and/or without a written NICE Purchase
Order.
3.9. Contractor shall use its best reasonable commercial efforts to
minimize Change Order charges and cancellation charges by
returning components for credit (with NICE' approval), canceling
components on order and applying components to other Contractor
projects (when possible, at the sole discretion of Contractor)
and minimizing all work-in-process.
3.10. ENGINEERING CHANGE REQUESTS (ECR'S). NICE shall be entitled, at
its sole discretion, from time to time to request any Engineering
Change Requests for any Product and Contractor is obligated to
propose ECR's to NICE when applicable at Contractor's opinion.
Contractor will respond to all Engineering Change Requests
initiated by NICE, according to the terms hereof. Contractor will
give NICE written notice, within three (3) Business Days of
receiving written notice of such ECR, of the date by which, and
at what cost, such ECR could be implemented based on the pricing
formula in APPENDIX C, and how the ECR effects existing PO's.
Contractor will charge NICE for ECR's in accordance with APPENDIX
C (an administrative cost of $25 per ECR of whatever size).
3.11. ENGINEERING CHANGE ORDERS (ECO'S). NICE may, at its discretion,
issue ECO's based on Contractor's response to the ECR's or based
on negotiated changes to Contractor's response. The
administrative cost for an ECO shall be $50 per ECO. Engineering
Change Orders effective dates (the date for completion of
implementation
19
of the ECO) shall be as agreed to by the parties and shall effect
the relevant Lead Times and dates accordingly, as detailed in the
ECO. Contractor shall approve every ECO issued as above within 2
Business Days. An ECO shall become binding on Contractor upon
written confirmation of receipt thereby. Contractor shall not
make any design changes or any other changes in the Products
without the prior written consent of NICE as reflected in an ECO.
The new Product price due to an Engineering Change Order, shall
be determined in accordance with APPENDIX C. Contractor shall
make all reasonable commercial efforts to minimize costs due to
ECO's. Notwithstanding the aforementioned in Sections 3.10. and
3.11., NICE shall not be charged for the first $1,000 due to
Contractor in any one month for ECR's and ECO's.
3.12. DISASSEMBLY OF PRODUCTS. From time to time, NICE may order
Contractor to disassemble Products after the Due Date. Upon such
request issued to Contractor, it shall promptly comply with the
request. Dismantled components will be consigned to Contractor's
inventory and stored in a special warehouse at Contractor's
facility, at no charge to NICE (the "RETURNED COMPONENTS"). NICE
will pay Contractor the original Product price and also a fixed
fee for dismantling as detailed in APPENDIX C. Thereafter,
Contractor will use the Returned Components first in the assembly
of any Products until no inventory of Returned Components
remains. Contractor will not charge NICE for any surcharge or
overhead for use of Returned Components in a Product.
3.13. SPARE PART MECHANISM. In addition to producing Products
hereunder, and in addition to Contractor's responsibilities under
its warranty obligation hereunder which are included in the
Product price as provided herein, Contractor will supply Spare
Parts to Customers upon request, as detailed in APPENDIX I
according to the applicable Production Lead Time. The price for
spare parts shall be in accordance with APPENDIX C and shall be
paid by NICE in accordance herewith.
4. SCOPE; NEW PRODUCTS
4.1. The scope of this Agreement refers to the Products currently
detailed in APPENDIX A subject to the provisions of APPENDIX K.
The Manufacturing Outsourcing Services will be performed by
Contractor on a gradual basis as detailed hereinabove, and until
full performance of the Manufacturing Outsourcing Services by
Contractor for all Products.
4.2. Quotations by Contractor for new Products will be developed by
NICE in coordination with Contractor subject to the mutually
agreed upon pricing model set forth in APPENDIX C hereto. Other
terms applicable to new Products shall be identical to those
applicable to the current Products. Each such quotation requested
by NICE shall be provided to NICE on an expeditious basis.
Contractor shall develop a mutually agreeable quality program for
each new Product. The provisions of APPENDIX K - NICE Systems
Products Release Policy will apply to such new Products subject
to the terms hereof.
5. DUE DATE
20
5.1. Contractor shall target 100% on time delivery in compliance with
the Due Date. Contractor's performance regarding the Due Date
shall constitute a material obligation, and is an essential
element in this Agreement.
5.2. DELAYS. Immediately upon learning of any possible delays,
Contractor will notify NICE as to the cause and extent of such
delay. Contractor shall at once, exercise its best reasonable
commercial measures to minimize the possible delay, at no
additional cost to NICE. Such measures may include, inter alia,
acceleration of payments to Contractor's vendors if necessary.
5.3. LIQUIDATED DAMAGES. Any delay from the Due Date of a certain
Product in a certain Quarter, not due to a specific written
request by NICE or otherwise deriving from a breach of NICE'
undertakings hereunder and only to the extent deriving from such
breach by NICE, or caused by an event of Force Majeure, and
subject to the terms hereof, shall be considered a material
breach of Contractor's obligations under this Agreement and shall
entitle NICE to the following liquidated damages in addition to
any remedy available to NICE under this Agreement or by law:
5.3.1. One percent (1%) of the Product Price for a delay of 3 to
5 Days.
5.3.2. Three percent (3%) of the Product Price for a delay of up
to 10 Days.
5.3.3. Five percent (5%) of the Product Price for a delay of 11
Days or more.
5.3.4. For the removal of doubt, when determining the liquidated
damages due, the applicable sub-section 5.3.1, 5.3.2 OR
5.3.3 will apply. In any event, the total liquidated damages
as per this Section shall not exceed 5% of the Product
Price.
5.3.5 The "PRODUCT PRICE" for the purpose of this Section 5.3.
shall mean the total consideration which is due to
Contractor for the Products being delayed at the relevant
time.
5.3.6. In the event that following the delay, Contractor is in
compliance with the Due Dates for two immediately
consecutive Quarters and there is no delay whatsoever,
Contractor will be reimbursed by NICE for liquidated damages
already paid for delay in the previous Quarter (before the
said 2 Quarters), if paid, without derogating from the
previous delay being regarded as a breach hereunder.
5.3.7 NO RESPONSIBILITY FOR DUE DATE. Notwithstanding the
aforementioned, Contractor shall be relived from its
responsibility for the Due Date of any specific Product if
all the following terms are met:
(1) Contractor notifies Nice promptly in writing of the
delay and the detailed reasons for the delay;
(2) Contractor proves that such delay was caused by a
worldwide event of component allocation or a worldwide
event of Force Majeure (as defined in this Agreement)
applying to a manufacturer of necessary components
required for assembly of the Product and such
components can not be purchased from another
manufacturer, since the manufacturer with which
Contractor has contracted (directly or through
suppliers) is a single source manufacturer worldwide
or, if there is more than one source - the above
applies to all of them;
21
(3) Contractor proves, that it has employed all necessary
measures, both upon contracting with the supplier
(including but not limited to - contracting other
suppliers) and after becoming aware of the delay, in
order to ensure proper timely delivery by such supplier
and in accordance with the agreed Purchase Lead Time in
this Agreement;
(4) Contractor takes all required actions in order to
minimize the effects of such occurrence and solve it.
6. SHIPMENT DATE, PACKING AND SHIPPING
6.1. PACKING. Contractor shall package each unit of Product according
to the standard NICE packing procedure and specifications in
accordance with the PDM System, or, if not specified by NICE,
according to good commercial standards. Every shipment to a NICE
Customer must include a Packing List issued by the Contractor,
attached to the packed Product. The Packing List is derived from
the Purchase Order and includes all the packed items in the
carton and all software licenses associated with the Product.
6.2. PREPARATION OF EXPORT SHIPMENTS. Contractor will be responsible
for preparing the shipment of the final Product to the Customer
by arranging the pallets and packing them according to NICE'
instructions as set forth in the PDM System.
6.3. DELIVERY. Unless agreed otherwise in the future, Contractor will
deliver finished Products to NICE' designated freight forwarder,
at Contractor's premises.
6.4. SHIPMENT DATES. The following Shipment dates shall apply:
Shipment plans that Contractor receives until 13:00, will be
ready until the end of the same Day (except that on weekend days
prior coordination will be required); Shipment plans that
Contractor receives after 13:00, will be ready until the end of
the next Day (except that on weekend days prior coordination will
be required).
Contractor's performance regarding the Shipment Date shall
constitute a material obligation, and is an essential element in
this Agreement.
6.5. INSPECTION. Products will be subject to inspection by NICE, or by
certified NICE' distributors according to the following
provisions, both prior to the Shipment Date while they are in the
finished goods warehouse and after the Shipment Date. During the
inspection, NICE may open cartons and boxes and unpack the
contents for inspection. An inspection will be coordinated if
possible. NICE may inform the Contractor if there is any mismatch
in Product quantities or if any damage was caused to the shipment
prior to delivery to NICE' freight forwarder in Contractor's
facility. In case of a quantity mismatch between the quantity
recorded on the packing documents and the actual quantity
received, NICE will notify Contractor
22
of the mismatch, and, subject to verification by Contractor,
Contractor will complete the missing quantity. In case where a
shipment is found damaged prior to delivery to NICE' freight
forwarder at Contractor's facility, the Contractor will replace
or repair the Product and deliver it back to such NICE' freight
forwarder at Contractor's facility, at Contractor's expense. If
there was no mismatch in quantities or no damage to the shipment
(as applicable), NICE will bear all risk and costs associated
with the delivery of shipment to Contractor and back.
7. [DELETED]
8. PAYMENTS
8.1. Initial prices as proposed in the Proposal are set out in
APPENDIX C. Within one month from signature of this Agreement,
the parties will amend the initial APPENDIX C according to
components purchase prices and supplier agreements obtained by
Contractor, but in no event will the relevant data exceed the
data included in the initial APPENDIX C, except with respect to
components sold to Contractor by NICE according to APPENDIX F and
Section 2.7, or further to changes in APPENDIX C made pursuant to
NICE' instructions under Sections 2.2, 2.3 or 2.4 of this
Agreement. Contractor will use reasonable commercial efforts to
improve the particulars in APPENDIX C and, amongst others,
shorten Liability. In the event of lack of agreement on the
amended APPENDIX C within one month from the signature date, the
initial Appendix C shall continue to apply until agreed
otherwise. It is clarified that labor prices in APPENDIX C will
not be amended as aforementioned regarding components. Contractor
hereby declares and undertakes that the details included in
APPENDIX C(as amended from time to time according to the
provisions of this Agreement) shall be the accurate details from
all of the relevant purchase agreements of Contractor with its
suppliers and components and sub assembly prices in APPENDIX C
shall be net purchase prices by Contractor without any overhead
or uplift. Thereafter, prices may be decreased or increased
according to the formula and at the timetables detailed herein
below.
8.2. COST ADJUSTMENTS. Product pricing shall remain firm for Products
for each Quarter, except as follows or as set forth in Sections,
2.2, 2.3, 2.4, 3.5, 3.8, 3.11, 8.1, 8.3, and hereunder in the
various subsections of Section 8.2:
8.2.1. The quoted cost of all components and sub-assemblies in
each Product subject to this Agreement is or will be set
forth in APPENDIX C or an agreed written amendment thereto.
8.2.2. NICE and Contractor shall continually work to introduce
new cost reduction methods.
23
Contractor shall make its best reasonable commercial efforts
to reduce the cost of manufacturing Products, by methods
such as elimination of components, obtaining alternate
sources of materials, redefinition of specifications, and
improved assembly or test methods, subject to NICE' written
approval. Upon implementation of such methods initiated by
Contractor, Contractor will enjoy one hundred percent (100%)
of the cost reduction during the first Quarter and
thereafter will reduce the price accordingly so that NICE
will enjoy one hundred percent (100%) of the cost reduction.
NICE will immediately enjoy one hundred percent (100%) of
the cost reduction upon implementation of such methods
initiated by NICE.
8.2.3. In the event there is a decrease in the cost of a
component or sub-assembly purchased by Contractor for the
purposes hereof, which affects the purchase price of such
Product, Contractor shall document such decrease in costs
and provide such information to NICE in writing, in
reasonable detail, within three (3) Business Days of
Contractor becoming aware of such decrease.
8.2.4. In case of a decrease as aforementioned, the purchase
prices in APPENDIX C for units of the affected Product shall
be adjusted accordingly.
8.2.5. In the event there is an increase in the cost of a
Permitted Component purchased/to be purchased by Contractor
for the purposes hereof, which affects the purchase price of
such Product, Contractor shall provide NICE with copies of
letters as elaborated below, together with a request for a
"price increase" within one (1) Business Days of Contractor
becoming aware of such increase. Contractor shall not
purchase any such component until NICE approves it in
writing. NICE shall approve/disapprove on the same Business
Day it was notified by Contractor provided notice was
received by 12:00. However, NICE may only reject a price
increase if it can show that the Permitted Component is
available at the a lower price. There are two permitted
types of price increases:
(i) TEMPORARY PRICE INCREASE designated to meet the
requested Due Date, in the event of receiving a
Purchase Order/Forecast for which the Purchase Lead
Time is shorter than the normal Purchase Lead Time of
the relevant components detailed in APPENDIX C or due
to an Engineering Change Order which affects the Due
Date. Contractor shall provide NICE with copies of
letters of approach to at least 3 suppliers that are
known in the market and accepted commonly (if 3
suppliers exist for such component) and their response.
In such event, NICE will pay Contractor the difference
between the original price and the actual price for
those components purchased after the increase.
24
(ii) CONSTANT PRICE INCREASE caused by a change in the
market trend. Market trend increase requests will be
explained by providing NICE with copies of letters of
approach to at least 3 suppliers that are known in the
market and accepted commonly (if 3 suppliers exist),
and their response. NICE will pay Contractor the
difference between the original price and the actual
price for those components purchased after the increase
within the Quarter, and thereafter APPENDIX C shall be
updated accordingly.
8.3. COST REVIEW. During each calendar Quarter, no later than the
third week of the Quarter, the parties will jointly review the
costs, costs reduction, volume performance of Contractor and
NICE, respectively, and other performance parameters to be
mutually agreed upon by the parties. The pricing and other
details referenced in APPENDIX C shall be jointly reviewed by the
parties at an agreed upon frequency and may be modified with the
mutual written agreement of the parties.
8.4. PAYMENT TERMS.
8.4.1. Payment by NICE is due current thirty (30) Days from the
date of receipt of the invoice, on the 2nd or 16th of the
month, whichever is following the invoice date and may be
made by check or wire transfer. Purchase Orders, invoices
and payments will be presented and effected in US dollars.
8.4.2. Dates of issuance of invoices by Contractor: 1. for
Products - upon the actual Due Date of Products. 2. for
inventory of Permitted Components - one day before the
beginning of the First Quarter as defined in Section 3.4(A).
3. for amounts outstanding upon termination according to the
relevant provisions of this Agreement - upon termination. 4.
for other amounts - upon the date on which the payment
becomes due under this Agreement.
8.4.3. Payment by Contractor is due current thirty (30) Days from
the date of receipt of the invoice, except as set forth in
Section 8.4.4(2) below, and may be made by check or wire
transfer. Invoices and payments will be presented and
effected in US dollars.
25
8.4.4. Dates of issuance of invoices by NICE: 1. for inventory of
Permitted Components repurchased - at the end of the month
in which such components were repurchased by Contractor. 2.
for NICE existing inventory purchased by Contractor
according to Section 2.7 - upon commencement of the first
production Quarter with respect to inventory to be purchased
on such date, upon the commencement of the second production
Quarter with respect to inventory to be purchased on such
date, and the remainder upon the relevant Purchase Lead
Times for each component. The payment of said invoices will
be made on a current thirty basis from the date of use of
such inventory by Contractor based on the most updated
Forecast. 3. For Permitted Components purchased from
Contractor according to Section 3.4.(A) - upon the relevant
Purchase Lead Times for each component. 4. For other amounts
- upon the date on which the payment becomes due under this
Agreement.
8.5. TAXES. Each party shall deduct such taxes from the payments due
to the other party hereunder as required by law including
withholding taxes (unless an exemption is provided), and shall
promptly furnish such other party with appropriate tax receipts.
Each party will be solely responsible for any and all taxes
imposed thereon, including, without limitation, all income taxes,
sales taxes, goods and services taxes. Israel value added tax
shall be added, if applicable, to all amounts payable hereunder
and will be paid against submission of appropriate tax invoices.
8.6. The consideration detailed in the Agreement is the full and
entire consideration due to Contractor for the services
stipulated hereunder and Contractor shall not be entitled to any
other payment or reimbursement of expenses of any kind with
respect thereto.
9. REPRESENTATIONS AND WARRANTIES
9.1. Contractor hereby warrants to NICE that it has the full corporate
power and authority to enter into this Agreement and to perform
its obligations hereunder; that no impediment exists to
Contractor entering into this Agreement, and no other agreement
has been or will be made with any third party which will have a
detrimental effect on Contractor's ability to fulfill its
obligations under this Agreement.
9.2. Contractor hereby warrants to NICE that it has ascertained the
nature of the Manufacturing Outsourcing Services and its own
ability to perform such Manufacturing Outsourcing Services, and
that all Manufacturing Outsourcing Services provided by
Contractor hereunder will be performed in a professional and
workmanlike manner by a sufficient number of individuals with
appropriate skills and training for the applicable task using
systems and processes which are sufficient to accomplish the
Contractor performance
26
obligations under this Agreement. In addition, without derogating
from any undertaking, warranty or representation of NICE included
in the Agreement, Contractor acknowledges and agrees that prior
to the entering into this Agreement it has had the ability to
perform a due diligence investigation into the manufacturing,
production, testing and delivery as performed by NICE up to and
including the date hereof, that it has in fact performed such an
investigation and that based upon the outcome thereof, it
believes that it has the professional and other capabilities to
perform the Manufacturing Outsourcing Services as set forth
herein in a professional and workmanlike manner.
9.3. Contractor further warrants that it is duly licensed, authorized,
or qualified to do business and in good standing in every
jurisdiction in which a license, authorization, or qualification
is required for the ownership or leasing of its assets, of the
transactions of business of the character transacted by it except
where the failure to be so licensed, authorized, or qualified
would not have a material adverse effect on Contractor's ability
to fulfill is obligations under this Agreement.
9.4. PRODUCT WARRANTY. Contractor warrants to NICE that each of the
Products manufactured, configured or tested by Contractor will
have been manufactured, configured and tested in conformance with
the Specifications therefor as provided by NICE and be free from
defects in workmanship or material for the Warranty Period. It is
clarified for the avoidance of doubt, that the aforesaid warranty
of Contractor for the Products applies to the entire Product,
including components and workmanship, except when the defect or
malfunction results from the design, NICE Software or the Nice
Components supplied by NICE under this Agreement if Contractor
cannot obtain warranty service for same from the supplier (and
Contractor shall notify NICE accordingly), for which NICE shall
be responsible.
9.5. Contractor shall be responsible for procurement of components as
set forth herein, inspection of components, and safe handling of
the components while in-house at Contractor's premises.
9.6. RMA. Should a Product fail to be in conformity with the above
warranties during the Warranty Period, NICE shall deliver the
Product to Contractor at its expense, Contractor shall repair or
replace the Product at no charge (as set forth in Section 9.7
below), and will cover all shipment and delivery costs of
therepaired or replaced Product from Contractor's facility to
NICE' Customer location (whether in Israel or abroad). In the
case that the determination according to Section 9.9 below, is
that Contractor's warranty hereunder does not apply, NICE will
bare all shipment and delivery costs of the Product/s and their
return, and of any repair/replacement costs if requested by NICE,
according to APPENDIX C. Detailed procedures to be executed by
Contractor concerning the repair of defective/malfunctioning
Products subject to the warranty hereunder are included in
APPENDIX N - Return Material Authorization ("RMA").
27
9.7. WARRANTY SERVICE. Contractor shall replace any such Product with
a new Product except when the defect is in the NICE proprietary
boards, in which case Contractor may repair the Product.
Contractor will deliver the repaired or replacement unit to NICE,
within seven (7) Days of Contractor's receipt of such Product or
parts thereof. NICE may require a shorter repair and replacement
time for up to ten percent (10%) of the returned Products for
warranty service, and Contractor shall use its best reasonable
commercial efforts to accommodate same.
NICE shall provide Contractor a spares forecast for warranty
requirements for the period up and until July 1, 2002. If during
such period, the spare parts required for warranty service alone
exceed the spares forecast provided by NICE, NICE shall sell
Contractor the missing spares at the prices specified in APPENDIX
C. Nevertheless, NICE shall have no liability in the event the
spares forecast exceeds the actual spares used during that
period. As of July 1, 2002 purchasing of spares in order to
comply with the warranty obligations shall be the sole
responsibility of Contractor and no forecast shall be provided.
On or about July 1, 2002 the parties will review the said 7 days
timetable, and any changes in such timetable shall need to be
agreed in advance in writing, both Parties acting reasonably and
in good faith. Nothing contained in the foregoing shall obligate
NICE to change such warranty timetable since its Customer
obligations are dependent on it.
The units of Products for which action may be required under this
warranty shall be returned to Contractor's manufacturing
facility, at NICE' expense, with an accompanying Contractor
supplied RMA and correction / replacement time shall commence
upon return of the defective Product to Contractor's facility.
The RMA will include a packing slip only and will not include an
invoice.
9.8. ADVANCED RMA. From time to time, NICE may request that the
Contractor supply RMA to NICE Customers prior to receipt by
Contractor of the failed Products. In such event, replacement
time shall be 7 Days of receipt of the RMA and NICE will be
responsible for the return of the failed Product or parts
thereof, respectively, to the Contractor within sixty (60) Days
from the delivery of the said RMA. If the failed Product is not
returned within same period, Contractor shall invoice NICE for
the replaced Product supplied.
9.9. DETERMINING DEFECT SOURCE. NICE and Contractor will use their
best commercial efforts to determine whether a defect in a unit
of Product exists and the reason for such defect. In the event of
dispute
28
whether the source of a defect is subject to Contractor's
warranty as detailed in Section 9.4, the parties will assign a
joint MRB (Material Review Board) team to determine the source of
defect, whose decisions must be mutually agreed to by both
parties. NICE shall perform any investigation/examination
reasonably requested by Contractor. In the event that the joint
MRB team can not reach a mutually agreed decision, Contractor
shall be deemed responsible for the warranty repair or
replacement, unless Contractor proves otherwise, and NICE shall
supply Contractor with all necessary information to assist in
such determination. It is clarified that in the event of a
dispute as aforementioned regarding the source of a defect,
Contractor shall, nevertheless, continue its warranty obligations
in a timely manner and will not withhold delivery of repaired and
replaced Products, but may demand further investigation by the
MRB team as above.
9.10. WARRANTIES PROVIDED BY THIRD PARTIES. If and to the extent
warranties provided by third parties for components or
sub-assemblies (forming an integral part of the defective Product
sold to NICE hereunder) that Contractor/anyone on its behalf
purchases under this Agreement, exceed the Warranty Period
hereunder, Contractor shall ensure that NICE will benefit from
such warranties included in agreements with suppliers as detailed
in Section 2.2 above and use its best reasonable commercial
efforts so that NICE may benefit from such warranties included in
agreements with suppliers as detailed in Section 2 above, at
Contractors' expense. Contractor will cooperate with NICE in its
efforts to exercise its rights under such warranties for their
entire duration. The aforementioned shall apply both during and
after the term of this Agreement.
9.11 POST-WARRANTY RMA. Contractor shall provide post-Warranty RMA
services to NICE in accordance with the procedures in APPENDIX N
and the prices in APPENDIX C.
9A. NICE REPRESENTATIONS AND WARRANTIES
9A.1. NICE hereby warrants to Contractor that it has the full corporate
power and authority to enter into this Agreement and to perform its
obligations hereunder; that no impediment exists to NICE entering into
this Agreement, and no other agreement has been or will be made with
any third party which will have a detrimental effect on NICE' ability
to fulfill its obligations under this Agreement.
9A.2 NICE hereby warrants to Contractor that it has the financial ability
to perform its obligations under this Agreement.
29
10. AUDIT AND ACCESS
10.1. REPORTS. Contractor shall provide to NICE periodical reports in the
format acceptable by NICE and agreed by Contractor, which shall be
submitted each week, unless agreed otherwise in writing. In addition,
NICE may request other reports pertaining to the Outsourcing
Manufacturing Services and Contractor will promptly comply with such
requests, to the extent reasonable.
10.2. GENERAL. NICE shall have the rights to conduct audits of the
Manufacturing Outsourcing Services and related facilities, systems,
and records as set forth in this Section 10 for the purpose of
auditing Contractor's compliance with the provisions of this
Agreement, all subject to the limitations below. The audits shall
include the physical equipment designated for the Manufacturing
Outsourcing Services provided hereunder, the facility at Contractors'
premises designated for the Manufacturing Outsourcing Services
including the finished goods warehouse, the inventory designated for
the Manufacturing Outsourcing Services provided hereunder and any
records, supporting documentation, equipment and information
pertaining solely to NICE and this Agreement, provided that with
regard to records pertaining to inventory/components, in addition to
the particulars detailed in Sections 2.2 and 2.3, NICE will have
access to the ERP system at Contractor's facility only (including for
the avoidance of doubt, the modules of the ERP system dealing with
invoices and invoicing). No documents or data of any kind, or any
copies, may be removed from Contractor's facility and all audits shall
be performed within such facility only.
10.3. Such audits are expected to occur frequently given the significant
security and business practices concerns inherent in the Manufacturing
Outsourcing Services and NICE shall have the sole discretion, not to
be unreasonably applied, to determine the frequency. NICE agrees to
conduct the audits in a reasonable manner so as not to cause undue
disruption to Contractor's provision of the Manufacturing Outsourcing
Services and such audits shall be conducted during business hours, and
shall be coordinated with Contractor. In the course of such audits
Contractor shall provide, and shall cause its Permitted Subcontractors
to provide, such auditors any reasonable assistance that they may
require. Such reasonable assistance shall be provided as part of the
Manufacturing Outsourcing Services.
10.4. If any audit by an auditor designated by NICE results in Contractor
being notified that it or its Permitted Subcontractors are not in
compliance with any law or regulation, Contractor shall, and shall
cause its Permitted Subcontractors to, take actions to comply with
such law or regulation, at Contractor's or its Permitted
Subcontractor's expense.
30
10.5. RESULTS OF AUDITS. If, as a result of an audit, NICE determines that
Contractor has undercharged or overcharged NICE, NICE shall notify
Contractor in writing of the amount of such undercharge or overcharge,
and shall specify the relevant data and the reasoning for its
determination. If Contractor agrees in writing, an appropriate
adjustment shall promptly be paid to NICE or Contractor. In the event
Contractor believes that it has complied with the relevant law,
regulation or this Agreement, and has not overcharged or undercharged
NICE, it shall so notify NICE in writing upon receipt of NICE' audit
results shall specify the relevant data and the reasoning for its
determination and the parties will attempt to determine the issue in
mutual consent.
10.6. CONTRACTOR RECORD RETENTION AND ACCESS. As part of the Manufacturing
Outsourcing Services, Contractor shall (1) retain records and
supporting documentation detailed in Section 10.2 above if and to the
extent such record retention is required by tax or similar
authorities, and/or exists in the ERP system, and/or is common
practice in the industry, including but not limited to - production
files for the following periods: 7 years for records required by tax
or similar authorities and ERP data, 3 years for production files,
otherwise as required by law or as is the common practice, and (2)
upon notice of no less than five (5) Days from NICE, provide NICE and
its designees with reasonable access to such records and documentation
for the purpose of conducting NICE' business and reporting. Such
access shall only be provided to audit personnel who have signed
towards Contractor a non-disclosure undertaking incorporating terms
which are substantially the same as those in APPENDIX E.
10.7 All audits of all kind by NICE shall be subject to the confidentiality
obligations of NICE to Contractor detailed in this Agreement.
11. SAFETY AND SECURITY, FACILITIES, NON-GENERIC EQUIPMENT
11.1. SAFETY AND SECURITY. Contractor shall maintain and observe, at its
premises, all the safety and security requirements detailed in
APPENDIX H and ascribed by law.
11.2. SECURITY SERVICES. Contractor shall institute, maintain, and monitor
security services for all Manufacturing Outsourcing Services in
accordance with APPENDIX H.
Contractor's security procedures shall be subject to audit as set
forth in Section 10.
11.3. FACILITY. Contractor's facility at which the Manufacturing
Outsourcing Services will be performed shall comply, at a minimum,
with the requirements set forth in APPENDIX H.
31
11.4. APPROVAL OF LOCATION. NICE shall have the right to approve or
disqualify each location at which Contractor is providing any of its
services hereunder. Contractor agrees that the Manufacturing
Outsourcing Services will be performed in a dedicated space in
Contractor's facility in which no production of competing products
will be conducted. Access to the NICE production lines will be limited
only to Contractor's employees performing the Manufacturing
Outsourcing Services and NICE representatives.
11.5. NON GENERIC EQUIPMENT. During the term of this Agreement, the Non
Generic Equipment shall be furnished to Contractor (without charge)
and used in Contractor's premises for purposes of performing its
various obligations under this Agreement, according to the terms
hereof. Such Non Generic Equipment shall:
(1) Be clearly marked and identified as NICE' property.
(2) Be safely stored, adequately maintained and insured against loss
or damage under Contractor's existing policies detailed in
APPENDIX D. In the event such Non Generic Equipment is damaged,
lost or destroyed, Contractor shall be liable towards NICE to
repair or replace such equipment (at Contractor's choice).
(3) Remain the sole property of NICE, and therefore shall be kept
free of liens and encumbrances imposed on Contractor's property.
(4) Be returned to NICE upon request, or upon termination of this
Agreement, at the same condition as originally furnished to
Contractor except for normal wear and tear. Notwithstanding
anything to contrary, if NICE requests to have the Non Generic
Equipment returned thereto prior to the termination of the
relevant services hereunder, Contractor shall have no liability
or obligation for the performance of any obligations hereunder
for which such Non Generic Equipment is reasonably required.
Contractor shall notify NICE in writing in detail of the
aforementioned, promptly upon NICE' request to receive the Non
Generic Equipment.
(5) Be used according to NICE' written instructions and information
concerning such Non Generic Equipment.
(6) Shall not be used by Contractor for any other purpose except for
NICE' needs and shall be dedicated for performance of this
Agreement.
(7) Nevertheless, NICE may request Contractor to purchase some Non
Generic Equipment by itself and in such event Contractor shall
invoice NICE for the purchase price. Such equipment shall be
deemed for all purposes as part of the "Non Generic Equipment"
and shall be sold to NICE upon termination of this Agreement for
any reason, at a total sale price of 1$.
32
12. CONFIDENTIAL INFORMATION, INTELLECTUAL PROPERTY AND INTELLECTUAL PROPERTY
INDEMNIFICATION, PUBLICITY
12.1 OWNERSHIP AND LICENSE RIGHTS. NICE or its customers, partners,
suppliers, and contractors shall be the sole owner of all NICE
Proprietary Information and NICEIntellectual Property (as defined
below) to which Contractor has access in the performance of the
Manufacturing Outsourcing Services including but not limited to - in
connection with the Products. Except for the licenses granted herein,
Contractor or anyone on its behalf shall not acquire any right, title,
or interest to the NICE Proprietary Information and/or NICE
Intellectual Property. Especially, but without limitation, NICE shall
remain the owner of all NICE Proprietary Information and NICE
Intellectual Property in connection with the design of the Products
and the NICE Software. For the purposes hereof, "NICE INTELLECTUAL
PROPERTY" shall mean Intellectual Property conceived, created, reduced
to practice or developed by NICE and/or for NICE by a third party,
and/or for NICE by Contractor (including anyone on its behalf) in
accordance with this Agreement, for the purpose of performing the
Manufacturing Outsourcing Services.
12.2. CONFIDENTIALITY BY CONTRACTOR. Contractor will provide the
Manufacturing Outsourcing Services in a manner that complies with the
Confidentiality requirements of APPENDIX E. Contractor shall not:
transfer to others, copy or duplicate, sub-license, sell, publish,
display or otherwise make available in any form or disclose, the NICE
Proprietary Information and/or the NICE Software and/or the NICE
Intellectual Property, to any third party, except to
suppliers/manufacturers of components and/or sub assemblies that
require specifications for their supply, in which case they shall be
required by Contractor to execute a Confidentiality Agreement in the
form of APPENDIX E VIS-A-VIS NICE. Contractor shall use the same
degree of care with respect to NICE Proprietary Information as it uses
in protecting its own proprietary information and trade secrets.
Without derogating from the aforementioned, Contractor shall not, in
any way or manner, directly or indirectly, engineer, reverse engineer,
compile, decompile or reverse assemble the NICE Software, or analyze
or otherwise examine the NICE Software for the purpose of reverse
engineering.
12.3. In addition, Contractor shall not disclose the NICE Proprietary
Information to any Personnel, except on a need to know basis as
required in order to implement this Agreement. Contractor undertakes
to procure that its Personnel and Permitted Subcontractors engaged in
performance of this Agreement (except subcontractor's employees who do
not have access to the NICE production lines at Contractor's
premises), and reasonably designated by NICE in advance in writing,
have signed a non-disclosure agreement in the form of APPENDIX E,
prior to receipt of any NICE Proprietary Information.
33
12.3A Notwithstanding anything to the contrary, Contractor shall have
no liability with respect to disclosure of NICE Proprietary
Information if such information came into the possession of the
Contractor independently of this Agreement, through a breach of
obligation of secrecy of a third party to NICE, of which
Contractor was not aware and should not have been aware if
Contractor had exercised due care.
12.4. CONFIDENTIALITY BY NICE. NICE shall not: transfer to others, copy or
duplicate, sub-license sell, publish, display or otherwise make
available in any form or disclose, the Contractor's Proprietary
Information, to any third party, except for the purpose of performing
this Agreement. NICE shall use the same degree of care with respect to
such Contractor's Proprietary Information as it uses in protecting its
own proprietary information and trade secrets. All rights in
Contractor's Proprietary Information, shall remain solely with
Contractor. Notwithstanding the aforesaid, it is agreed that any
manufacturing methods applied by Contractor, which are Contractor's
Proprietary Information, may be used by NICE itself (including its
Affiliates) (but may not be transferred/disclosed to any third party)
and by signing this Agreement Contractor hereby grants NICE a
personal, non exclusive, non transferable, perpetual license to use
such manufacturing methods.
12.4A Notwithstanding anything to the contrary, NICE shall have no
liability with respect to disclosure of Contractor Proprietary
Information if such information came into the possession of NICE
independently of this Agreement, through a breach of obligation
of secrecy of a third party to Contractor, of which NICE was not
aware and should not have been aware if NICE had exercised due
care.
12.5. LEGAL OBLIGATION TO DISCLOSE. In the event a party is required to
disclose Proprietary Information of the other party, by applicable law
or by any government in the exercise of its lawful authority, the
party so required shall (i) promptly notify the other party in
writing, and, at the other party's expense: (ii) use reasonable and
lawful efforts to resist making any disclosure of Proprietary
Information not approved by the other party, (iii) use reasonable and
lawful efforts to limit the amount of Proprietary Information to be
disclosed pursuant to any such disclosure, and (iv) cooperate with the
other party to obtain a protective order or other appropriate relief
to minimize the further dissemination of any Proprietary Information
to be disclosed pursuant to any such disclosure.
12.6. INTELLECTUAL PROPERTY INDEMNIFICATION BY CONTRACTOR. Contractor shall
indemnify, hold harmless and defend NICE from and against any and all
damages (including all damages awarded to a third party and payable by
NICE), costs, losses, and expenses (including settlement awards and
reasonable attorney's fees) arising from any claim or suit made
against NICE or a third party which NICE is obligated to indemnify, by
a third party based on the allegation that the Products infringe or
violate any Intellectual Property right due to the components and/or
sub assemblies supplied by Contractor hereunder and/or the
manufacturing processes and methods as performed by Contractor
hereunder. Contractor shall include in all its agreements with
suppliers/ manufacturers provisions regarding Intellectual Property
indemnification substantially similar to those included in this
Agreement, providing inter alia that they are freely assignable to
NICE without any modification or consent.
34
Nevertheless, in the event NICE designates specific components to be
purchased by Contractor hereunder and the manufacturer/supplier of
such NICE designated components refuses to grant Contractor
indemnification for infringement of Intellectual Property rights,
despite Contractor performing its best reasonable commercial efforts
to obtain such indemnification (which Contractor shall prove to NICE
by submission of copies of its correspondence with the manufacturer
including the manufacturer's response), then if NICE approves purchase
of such components, Contractor shall not be responsible for
Intellectual Property indemnification due to those specific
components.
For the removal of doubt, Contractor shall not be liable for any
infringement of an Intellectual Property right due to any NICE
Proprietary Information, NICE Intellectual Property, NICE Software,
Non Generic Equipment (if used in accordance with the instructions
provided by NICE), and due to performance as is of NICE written
instructions including specifications and design.
Contractor's indemnification as provided under this Section shall
apply only if: Contractor is notified promptly in writing of any
notice of a claim or of a threatened or actual suit; and is given
control of the defense thereof and all related settlement
negotiations; and, NICE provides, at Contractor's request and
expense, all reasonable cooperation and assistance for the
defense and negotiations of the claim. Nevertheless, in the event
the claim or suit is based on the allegation that the Products
infringe or violate any Intellectual Property right due to the
components and/or sub assemblies supplied by Contractor hereunder
which were designated by Nice as aforementioned, and the supplier
/ manufacturer of the infringing component has an indemnity
undertaking as above towards Contractor; (i) which is assignable
to NICE and Contractor promptly assigns to NICE such
indemnification undertaking from its supplier / manufacturer;
(ii) which is unassignable to NICE but Contractor notifies NICE
promptly in writing of any notice of the claim or of a threatened
or actual suit; and gives NICE on behalf of Contractor and NICE'
chosen counsel control of the defense thereof and all related
settlement negotiations; then in both such instances Contractor
shall not be responsible for Intellectual Property
indemnification with respect thereto. In all other events,
Contractor shall conduct the litigation as aforementioned.
12.7. Following establishment of infringement of Intellectual Property by a
competent authority including at interlocutory proceedings, whether
Contractor is responsible therefor or not, NICE may issue an ECR and
Contractor will handle such ECR and the corresponding ECO promptly in
accordance with Sections 3.10, 3.11.
12.8. INTELLECTUAL PROPERTY INDEMNIFICATION BY NICE. NICE shall indemnify,
35
hold harmless and defend Contractor from and against any and all
damages (including all damages awarded to a third party and payable by
Contractor), costs, losses, and expenses (including settlement awards
and reasonable attorney's fees) arising from or in connection with any
claim or suit made against Contractor or a third party which
Contractor is obligated to indemnify, by a third party based on an
allegation that the Products and/or the NICE Software infringe or
violate any Intellectual Property right, including due to the use of
any NICE Proprietary Information, NICE Intellectual Property, NICE
Software, Non Generic Equipment (if used in accordance with the
instructions provided by NICE), or due to performance as is of any
NICE written instructions including specifications and design, but
excluding any allegation that the Products infringe or violate any
Intellectual Property right due to the components and/or sub
assemblies supplied by Contractor hereunder and/or the manufacturing
processes and methods as performed by Contractor hereunder for which
Contractor is liable as per Section 12.6. above.
NICE' indemnification as provided under this Agreement shall apply
only if: NICE is notified promptly in writing of any notice of a claim
or of a threatened or actual suit; and is given control of the defense
thereof and all related settlement negotiations; and, Contractor
provides, at NICE' request and expense, all reasonable cooperation and
assistance for the defense and negotiations of the claim.
12.9. EMPLOYEE AND CONTRACTOR INDEMNIFICATION. Each of the parties agrees
that it will indemnify the other party against any and all claims
hereafter brought or asserted by any person against the other party
relating to any alleged or actual action or omission to act by the
indemnifying party arising from, or in connection with, such person's
status as an employee or independent Contractor of the indemnifying
person or the termination of such status.
12.10. PUBLICITY. Except with the express written consent of NICE,
Contractor shall not make any press announcement or publicize this
Agreement or any matters relating to any of the transactions
contemplated hereby or use NICE' name or trademark in any way
whatsoever, except to the extent required to comply with applicable
laws or governmental regulations, provided that Contractor acts
according to Section 12.5.
13. INSURANCE
13.1. Contractor shall be liable for the total or partial loss of or damage
to the components and/or the Products in so far as such loss or damage
has occurred while in Contractor's possession and until delivery of
the Products to NICE' freight forwarder at Contractor's facility.
36
13.2. Without limiting any of the obligations or liabilities of Contractor,
whether under this Agreement or by law, subject to any limitations
hereunder, Contractor shall maintain, and shall cause any
subcontractors engaged by Contractor to provide services under this
Agreement to maintain, at Contractor's own expense, as long as this
Agreement is in effect, insurance policies of the kind and limits as
set forth in APPENDIX D to this Agreement. The expense of such
insurance shall be borne by Contractor. The Contractor shall keep in
force the policies specified in sections 1 and 3 to the Insurance
Certificate valid as long as Contractor's legal liability EXISTS IN
CONNECTION WITH OPERATIONS ACCORDING TO THE AGREEMENT.
It is Contractor's responsibility to ensure that the insurance
requirements set forth in APPENDIX D to this Agreement remain in
effect for the term of this Agreement.
13.3. Within ten (10) Days of the execution of this Agreement, Contractor
shall furnish to NICE certificates of insurance evidencing full
compliance with the insurance requirements as set forth in APPENDIX D
to this Agreement. Certificates of Insurance shall be kept current
throughout the entire term of this Agreement.
13.4. The carrying of any insurance required hereunder shall not be
interpreted as relieving Contractor of any responsibility and/or
undertaking to NICE according to the provisions of this Agreement or
by law. Contractor shall give prompt notice of all losses or claims of
which Contractor has knowledge which may be in any way related to this
Agreement and Contractor shall assist and cooperate with any insurance
company in the adjustment or litigation of all claims arising under
this Agreement or by law and indemnifiable by Contractor under this
Agreement or by law.
13.5. NICE shall include in its property policies a waiver of subrogation
clause against the Contractor, its directors and any one on its
behalf, provided that such waiver will not be valid towards a person
which caused malicious damage.
14. [Deleted]
15. FUNDAMENTAL BREACH AND REMEDIES
15.1. Except as provided in Sections 15.2 and 15.3, any breach by any Party
of this Agreement which was not remedied within forty-five (45) Days
from the date of notice, shall be regarded as a fundamental breach.
15.2. Notwithstanding the aforementioned in Section 15.1, any delay in the
Due Date and/or Shipment Date, which was not remedied within thirty
(30) Days from the date of notice for the first delay, and any
subsequent delay upon notice (i.e. any second delay, even if the first
one was less then 30 days) shall be regarded as a fundamental breach.
37
15.3. Notwithstanding the aforementioned in Section 15.1, unjust delay in
payment by NICE exceeding sixty (60) Days from the date of notice for
the first delay, exceeding seven (7) Days from the date of notice for
the second delay (i.e. any second delay, even if the first one was
less then 60 days) and exceeding the date of notice for any subsequent
delay (i.e. any subsequent delay, even if the second one was less then
7 days) , shall be regarded as a fundamental breach. Notwithstanding,
any delay in any payment by NICE shall bear a default interest, as of
the first Day of delay, to be compounded daily, at the rate applicable
at Bank Hapoalim B.M. at the relevant time for unauthorized overdrawn
current accounts.
15.4. Notwithstanding anything to the contrary contained herein or
otherwise, Contractor's liability to NICE for any indirect, special,
incidental, exemplary or consequential damages as a result of any
claim arising under this Agreement or in connection therewith,
regardless of whether Contractor has been advised of the possibility
of such damages, shall not exceed five million US dollars ($5,000,000)
in the aggregate for all claims, except for infringement of
Intellectual Property rights for which Contractor is liable under
Section 12.6. This Section shall not be construed or used in the
construction of this Agreement as imposing on Contractor any liability
for which it is not otherwise liable. Further, this Section shall not
be construed as derogating from any applicable law which cannot be
changed or waived by contract.
15.5. Notwithstanding anything to the contrary contained herein, NICE'
liability to Contractor for any indirect, special, incidental,
exemplary or consequential damages as a result of any claim arising
under this Agreement or in connection therewith, regardless of whether
NICE has been advised of the possibility of such damages, shall not
exceed five million US dollars ($5,000,000) in the aggregate for all
claims, except for infringement of Intellectual Property rights for
which NICE is liable under Section 12.8. This Section shall not be
construed or used in the construction of this Agreement as imposing on
NICE any liability for which it is not otherwise liable. Further, this
Section shall not be construed as derogating from any applicable law
which cannot be changed or waived by contract.
16. TERM AND TERMINATION
16.1. TERM AND TERMINATION. The initial term of this Agreement shall
commence on the Effective Date and extend for three (3) years
thereafter ("INITIAL TERM"), with an automatic renewal for an
indefinite period of time ("EXTENDED TERM"), unless terminated by the
parties according to Sections 16.2. or 16.3. herein.
16.2. Notwithstanding the aforesaid in Section 16.1. and any possible
implication to the contrary herein or as a result of the course of
conduct of the parties, NICEshall be entitled, at its sole discretion,
to terminate this Agreement, in whole or in part, at any time during
the Initial Term or the Extended Term, with or without cause, upon a
prior written notice of termination to Contractor of not less than
forty-five (45) Days.
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16.3. Notwithstanding the aforesaid in Section 16.1. and any possible
implication to the contrary herein or as a result of the course of
conduct of the parties, Contractor shall be entitled, at its sole
discretion, to terminate this Agreement only during the Extended Term,
with or without cause, upon a prior written notice of termination to
NICE of not less than six (6) months.
16.4. Either party shall be entitled to terminate this Agreement, following
a fundamental breach of this Agreement by the other party.
16.5. Either party shall be entitled to terminate this Agreement upon the
other party seeking an order for relief under the bankruptcy laws of
the State of Israel or similar laws of any other jurisdiction, a
composition with or assignment for the benefit of creditors, or
dissolution or liquidation. NICE shall be entitled to terminate this
Agreement upon the merger or acquisition of all or substantially all
the business or assets of Contractor (except if within the
Flextronix's group and provided Contractor remains an Israeli entity).
16.6. EFFECT OF TERMINATION.
16.6.1. Upon notice of termination of this Agreement for any reason
whatsoever, the parties shall execute rapidly and efficiently the
procedure for termination of the Manufacturing Outsourcing
Services by Contractor and the transfer of production to NICE as
set forth hereunder and agreed between the parties, provided that
Contractor will not be required to incur additional costs for the
purpose of assisting NICE in the case of termination. During the
notice period, Contractor will continue performance of the
Manufacturing Outsourcing Services regarding all PO's received
according to the Forecast and will, simultaneously, assist NICE
and cooperate with it in the transfer of the Manufacturing
Outsourcing Services to NICE or anyone designated by NICE and
NICE will continue in performing all its obligations hereunder.
16.6.2. Upon termination of this Agreement for any reason whatsoever,
without derogating from the generality of the aforesaid, NICE
shall be entitled to receive from Contractor, at no charge,
subject to the confidentiality obligations hereunder and
Contractor's Proprietary Information, all information, know-how,
samples, documentation and data, in any form or medium, in
connection with the Manufacturing Outsourcing Services, whether
prepared by NICE or by Contractor, and all NICE Proprietary
Information which is in the possession of Contractor or anyone on
its behalf, including its Permitted Subcontractors. Upon
termination of this Agreement, Contractor shall return any such
information to NICE notwithstanding the provisions of Section
10.6. above.
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16.6.3. Upon termination of this Agreement for any reason whatsoever,
all Non Generic Equipment and NICE Returned Components as
detailed in Section 3.12. above, will be immediately returned to
NICE.
16.6.4. It is clarified that upon termination, for any reason
whatsoever, Contractor shall still be obligated to supply
warranty services according to this Agreement to all Products
supplied, this for the duration of the Warranty Period for each
Product and the relevant provisions of this Agreement applying to
warranty shall survive termination.
16.7. EFFECT OF TERMINATION. Upon termination of this Agreement, except in
the event of termination by NICE due to breach by Contractor, NICE
shall pay Contractor as follows: (i) 100% of the contract price for
all finished Products in Contractor's possession or which have been
delivered/being delivered to NICE, which are subject to a Purchase
Order in accordance with the terms of this Agreement; (ii) 104% of the
cost in APPENDIX C of all inventory of Permitted Components in
Contractor's possession, which are not returnable to the vendor /
supplier according to APPENDIX C or usable for other customers (as
determined by Contractor in its sole discretion), whether in raw form
or work in process; (iii) 104% of the cost in APPENDIX C of all
inventory and inventory on order of Permitted Components which is not
cancelable according to APPENDIX C; (iv) any vendor cancellation
charges incurred with respect to inventory of Permitted Components
accepted for cancellation or return by the vendor, and (v) disassembly
charges and payments as per Section 3.8 (Cancellation of PO) resulting
from the cancellation of PO's due to termination, and (vi) 100% of any
other costs and payments payable by NICE hereunder at the time of
termination under the specific provisions of this Agreement.
Contractor will use reasonable commercial efforts to return unused
inventory and to cancel pending orders for such inventory, and to
otherwise mitigate the amounts payable by NICE hereunder.
16.8. Upon termination of this Agreement by NICE due to breach by
Contractor, NICE shall be obligated to pay Contractor as follows: (i)
100% of the contract price for all finished Products in Contractor's
possession for which the Due Date has occurred and which have been
supplied to NICE' freight forwarder, which are subject to a Purchase
Order in accordance with the terms of this Agreement; (ii) 100% of the
cost in APPENDIX C of all inventory of Permitted Components in
Contractor's possession, which are not returnable to the vendor /
supplier according to APPENDIX C or usable for other customers (as
determined by Contractor in its sole discretion); provided however
that in the event Contractor fails to supply the Products and/or
Permitted Components to NICE, for any reason whatsoever, within 14
days after receipt of NICE' request, NICE shall be released from the
obligation to pay for the Products and /or Permitted Components as
provided for above. (iii) 100% of the cost in Appendix C of all
inventory and inventory on order of Permitted Components, which is not
cancelable according to Appendix C. Contractor will use reasonable
commercial efforts to return unused inventory and to cancel pending
orders for such inventory, and to otherwise mitigate the amounts
payable by NICE hereunder.
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16.9. Neither party shall have any other liability, including payment
obligations, resulting from the termination for convenience of this
Agreement.
17. MISCELLANEOUS.
17.1. ENTIRE AGREEMENT. This Agreement, Schedules, Exhibits and Appendices
constitute the entire agreement between the parties in connection with
its subject matter and supersede all prior communications and
agreements between the parties relating to its subject matter.
Notwithstanding anything to the contrary, no documents, procedures,
methods or policies shall bind the Parties unless they are in writing
and signed by both parties, except that all the technical
documentation included in the PDM System may be changed as provided in
Section A (xxxii). Any change in NICE' procedures or policies, shall
bind Contractor after it is notified of same, unless the change is
material, in which case Contractor can object to the change on
reasonable grounds detailed in writing.
17.2. AMENDMENT. This Agreement may only be amended, varied or modified by
the prior agreement in writing of NICE and Contractor. Any such
amendment, variation or modification shall be binding upon the parties
and upon their successors and assigns. Work procedures and technical
documents may be signed by any representative on behalf of each of the
parties and need not be signed by authorized signatories of the
parties.
17.3. ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and permitted
assigns. Neither party shall in any way sell, transfer, assign,
sub-contract or otherwise dispose of any of the rights, privileges,
duties and obligations granted or imposed upon it under this
Agreement. However, NICE may, at its discretion, transfer and/or
assign any of its rights, privileges, duties and obligations granted
or imposed upon it under this Agreement to any NICE Affiliate,
provided that NICE remains responsible towards Contractor, jointly and
severally with the Affiliate, for all of its obligations hereunder so
assigned, and provided further that the assignee signs this Agreement.
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It is further clarified that NICE may choose, by written notice to
Contractor, to enable any NICE Affiliate to act on NICE' behalf and in
its name under this Agreement directly VIS-A-VIS Contractor, without
relieving NICE as the sole contractual party from responsibility for
performance of the Agreement. Notwithstanding the foregoing, Upon
NICE' prior written approval and upon the terms and limitations of
such approval, Contractor may sub-contract some of its obligations
("PERMITTED SUBCONTRACTORS"), provided, however, that Contractor shall
remain obligated under this Agreement. Contractor shall provide to
NICE material qualifications and identification details of such
Permitted Subcontractors. Contractor shall at all times remain fully
responsible for the performance of all obligations of Contractor
hereunder, jointly and severally with the Permitted Subcontractors. In
selecting subcontractors to assist Contractor in the performance of
this Agreement, Contractor shall comply with all reasonable NICE
vendor screening requirements which are provided to it, and Contractor
shall also comply with its own vendor screening requirements.
17.4. SEVERABILITY. If any provision of this Agreement is held invalid,
illegal or unenforceable for any reason by any court of competent
jurisdiction, such provision shall be separable from the remainder of
the provisions hereof which shall continue in full force and effect as
if this Agreement had been executed with the invalid provisions
eliminated.
17.5. FORCE MAJEURE.
17.5.1. Neither party shall be liable to the other for any delay in
performance or failure to perform, in whole or in part, due to
war or act of war (whether an actual declaration is made or not),
riot, civil commotion, act of public enemy, fire, flood, or other
act of God, act of any governmental authority, or similar causes
beyond the reasonable control of such party which could not have
been foreseen or prevented. If any event of force majeure occurs,
the Party affected by such event shall promptly notify the other
Party of such event in writing and take all reasonable actions to
avoid the effect of such event.
17.5.2. Nevertheless, if any event of force majeure occurs for a
consecutive period of fourteen (14) Days preventing Contractor
from performing the Manufacturing Outsourcing Services, and
Contractor has not managed to set up the Manufacturing
Outsourcing Services at the Backup Site, NICE may, at its
discretion, elect to perform the Manufacturing Outsourcing
Services or any part thereof by itself and/or through others,
without derogating from its other rights and remedies, if
applicable. In such event: (a) Contractor shall assist NICE by
putting at its use, at NICE' request, Contractor Personnel who
are involved in the performance of this Agreement, to the extent
possible, at a charge to be agreed based on the labor rates in
APPENDIX C; (b) without derogating from any other obligations of
NICE hereunder as at such date to purchase Permitted Components,
NICE shall purchase from Contractor the additional Permitted
Components in Contractor's inventory, which are required, at
NICE' discretion, for manufacturing during the force majeure
period. The price and payment terms for purchase of such
Permitted Components shall be according to the provisions of
Section 3.4(A) above, which shall apply mutatis mutandis.
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17.5.3. If the event of force majeure exists for more than 90 days,
each party shall have the right to terminate this Agreement and
the provisions of Sections 16.2. and 16.3. regarding the notice
period required shall apply mutatis mutandis, and thereafter
Section 16 regarding effects of termination shall apply.
17.6. RELATIONSHIP. NICE and Contractor acknowledge and agree that this
Agreement shall not constitute, create or give effect to a joint
venture, pooling arrangement, principal/agency relationship,
partnership relationship or formal business organization of any kind
and neither Contractor and/or NICE shall have the right to bind the
other without the other's express prior written consent. Contractor
will render the Manufacturing Outsourcing Services as an independent
contractor and no employee - employer relationship shall exist between
Contractor and/or the Personnel and/or anyone on its behalf and NICE.
17.7. MANAGEMENT CHANGES. Contractor shall notify NICE immediately upon the
occurrence of any material change in the conduct of business of
Contractor or in the composition of its management, which has a
material adverse affect on Contractor's ability to perform this
Agreement.
17.8. WAIVER. The failure of either party to insist upon strict performance
of any provision of this Agreement, or the failure of either party to
exercise any right or remedy to which it is entitled hereunder, shall
not constitute a waiver thereof and shall not cause a diminution of
the obligations established by this Agreement. A waiver of any default
shall not constitute a waiver of any subsequent default. No waiver of
any of the provisions of this Agreement shall be effective unless it
is expressly stated to be a waiver and communicated to the other party
in writing in accordance with the provisions of this Agreement.
17.9. DISPUTE RESOLUTION. Any dispute arising out of or relating to this
Agreement or the breach, termination or validity thereof shall be
settled in accordance with one of the following procedures. Contractor
and NICE shall use the procedures in the following order of priority.
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17.9.1. In the event of any dispute, controversy or claim of any kind
or nature arising under or in connection with this Agreement
(including but not limited to disputes as to the creation,
validity, interpretation, breach or termination of this
Agreement) (a "DISPUTE"), then upon the written notice of either
Party, the Dispute will be submitted to the project manager on
behalf of each party to be escalated, in case the parties are
unable to resolve such Dispute, to the parties C.E.O.'s
17.9.2. Any dispute that the parties are unable to resolve pursuant to
Section 17.9.1. within 30 Days, will be submitted exclusively to
the competent courts in the Tel-Aviv-Jaffa District in Israel.
17.9.3. Without derogating from rights of termination as detailed in
this Agreement, it is clarified that Contractor will continue to
provide the Manufacturing Outsourcing Services and NICE shall
continue to perform its obligations hereunder during any
litigation, mediation or legal proceedings commenced pursuant to
this Section 17.9. above and the existence of a Dispute shall not
enable Contractor to stop work or services or otherwise not
timely perform its obligations or enable NICE to stop payments or
otherwise not timely perform its obligations.
17.9.4. The foregoing shall not affect the right of the parties to
seek injunctions before the competent Court.
17.10. Wherever in this Agreement it is provided that the Parties agree to
negotiate/review/change any term hereof (including prices), the
parties will usetheir best commercial efforts and negotiate in good
faith in order to reach such agreement. If the parties fail to agree,
no change will be made to the last agreed terms and they shall
continue to apply, except as otherwise specifically and explicitly
provided herein, and except that the provisions of Section 8.2. and
all its subsections will apply with regard to details included in
APPENDIX C.
17.11. LAW AND JURISDICTION. This Agreement shall be governed by and
construed in accordance with the laws of the state of Israel, without
giving effect to choice of law rules.
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17.12. SCHEDULES AND APPENDICES. Each Schedule and Appendix hereto is
incorporated herein by this reference. The parties may amend any
Schedule and Appendix from time-to-time by entering into a separate
written agreement, referencing such Schedule and Appendix and
specifying the amendment thereto, signed by an authorized
representative of each of the parties.
17.13. SET-OFF. NICE shall only be entitled to setoff any amount due to
Contractor against any amount due from Contractor to NICE, if the
setoff amount is: (i) due according to this Agreement and is subject
to an invoice lawfully issued hereunder; or (ii) liquidated damages
according to this Agreement. In the event of setoff, Contractor shall
receive, at the same time, a written notice signed by vice president
operations of NICE detailing the setoff. Contractor shall not be
entitled to setoff any amount due to NICE from Contractor hereunder
against any amount due from NICE to Contractor according to this
Agreement. The setoff provisions in this Agreement are in lieu of any
setoff rights under any applicable law but shall not be construed as
derogating from any other right or remedy.
17.14. LIEN. Each party hereby waives any right of lien it may have under
applicable law.
17.15. COMMUNICATION AND NOTICES. Except as otherwise expressly provided in
this Agreement, no communication from one party to the other shall
have any validity under this Agreement unless made in writing by or on
behalf of an authorized official of Contractor or, as the case may be,
by or on behalf of an authorized official of NICE. Each party shall,
from time to time, provide the other with a list of personnel
designated as "authorized officials" for the purposes of this Section
17.15. Any notice or other communication which either party hereto is
required or authorized by this Agreement to give or make to the other
shall be given or made either by registered mail, or by courier or by
facsimile transmission confirmed by electronic confirmation, addressed
to the other party to the address referred to in the preamble. Notices
shall be deemed delivered within seven (7) Days of dispatch of the
notice by registered mail, or upon delivery by courier, or one
Business Day after sent if sent by facsimile transmission.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first above written:
/s/ /s/
- ------------------------ ------------------------
NICE SYSTEMS LTD. FLEXTRONICS ISRAEL LTD.
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NICE SYSTEMS LTD. FLEXTRONICS ISRAEL LTD.
(Nice-Nice Flex Master Manufacturing Outsourcing Agreement Final)
46