Exhibit 10.59

 

 

***Text Omitted and Filed Separately

 

 

Confidential Treatment Requested

 

 

Under 17 C.F.R. §§ 200.80(b)(4), and 240.24b-2

 

AGREEMENT FOR PRODUCTS AND SERVICES

BETWEEN

INVISION TECHNOLOGIES, INC.

AND

COORSTEK, INC.

 

THIS AGREEMENT FOR PRODUCTS AND SERVICES is made by and between CoorsTek, Inc.,
with offices located at 16000 Table Mountain Parkway, Golden, Colorado 80403
(hereinafter “CoorsTek” or  “Supplier”), and InVision Technologies, Inc., with
offices located at 7151 Gateway Boulevard, Newark, California 94560 (hereinafter
“InVision” or “Customer”).

 

In consideration of the promises, mutual covenants and agreements contained
herein, the receipt and sufficiency of which are hereby acknowledged, Customer
and Supplier agree as follows:

 

1.                                      DEFINITIONS

 

The terms defined in this Section 1 shall have the meanings set forth below
whenever they appear in this Agreement, unless a different definition is
described for a particular Section or provision:

 

1.1.                            “AFFILIATE” MEANS (I) ANY CORPORATION,
SUBSIDIARY, OR BUSINESS ENTITY FORTY PERCENT (40%) OF WHICH IS OWNED DIRECTLY OR
INDIRECTLY BY CUSTOMER, OR (II) ANY CORPORATION WHICH DIRECTLY OR INDIRECTLY
OWNS FORTY PERCENT (40%) OR MORE OF CUSTOMER, OR (III) ANY CORPORATION,
SUBSIDIARY, OR BUSINESS ENTITY UNDER THE DIRECT OR INDIRECT CONTROL OF SUCH
CORPORATION, SUBSIDIARY, OR BUSINESS ENTITY AS DESCRIBED IN (I) OR (II).

 

1.2.                            “AGREEMENT” MEANS THIS WRITTEN CONTRACT BETWEEN
CUSTOMER AND SUPPLIER COVERING THE PURCHASE OF PRODUCTS AND SERVICES TOGETHER
WITH THE STATEMENT OF WORK, ATTACHED EXHIBITS, AND AMENDMENTS TO THIS AGREEMENT
ISSUED IN ACCORDANCE WITH THE SECTION 25 ENTITLED “AMENDMENTS”.

 

1.3.                            “LIABILITIES” MEANS ALL JUDGMENTS, ORDERS,
AWARDS, CLAIMS, DAMAGES, LOSSES, LIABILITIES, COSTS AND EXPENSES, INCLUDING, BUT
NOT LIMITED TO, COURT COSTS AND REASONABLE ATTORNEYS’ FEES.

 

1.4.                            “Change” means a Customer or Supplier proposed
change to the Supplier’s obligations hereunder.

 

1.5.                            “CUSTOMER” MEANS INVISION TECHNOLOGIES, INC. AND
SHALL ALSO INCLUDE ANY AFFILIATE OF INVISION THAT PLACES ANY ORDER(S) OR OBTAINS
ANY PRODUCTS OR SERVICES UNDER THIS AGREEMENT.

 

1.6.                            “Final Acceptance Test” means inspection by the
Federal Aviation Administration (FAA), an entity approved by the FAA, or other
authorized government authority to perform such test of any Products delivered
under this Agreement.

 

1.7.                            “ORDER(S)” MEANS A WRITTEN OR ELECTRONIC OFFER
BY CUSTOMER FOR PRODUCTS OR SERVICES THAT SHALL BE DEEMED TO INCORPORATE ALL
PROVISIONS OF THIS AGREEMENT.

 

1.8.                            “Products” means any deliverables under this
Agreement, including assemblies, components and subassemblies associated with a
System.

 

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1.9.                            “SERVICES” MEANS THE WORK TO BE PERFORMED BY
SUPPLIER UNDER THIS AGREEMENT IN PROVIDING SUPPLY CHAIN MANAGEMENT, ASSEMBLY
SERVICES, OR FIELD SERVICE SUPPORT AND EXCLUDES WORK PERFORMED BY SUPPLIER IN
PROVIDING PRODUCTS.

 

1.10.                 “STATEMENT(S) OF WORK” MEANS THE WRITTEN INSTRUMENTS MADE
PART OF THIS AGREEMENT BY THIS REFERENCE DESCRIBING, AMONG OTHER THINGS, THE
SCOPE OF THE PRODUCTS TO BE DELIVERED OR SERVICES TO BE PERFORMED BY SUPPLIER
HEREUNDER, THE TIME FRAME FOR COMPLETION THEREOF AND THE FEE(S) ASSOCIATED
THEREWITH.

 

1.11.                 “SUPPLIER” MEANS COORSTEK, INC., AND SHALL ALSO INCLUDE
ANY AFFILIATE OF COORSTEK THAT PROVIDES ANY PRODUCTS OR SERVICES UNDER THIS
AGREEMENT.

 

1.12.                 “SYSTEM” MEANS AN INVISION MODEL CTX 2500 OR CTX 5500DS
EXPLOSIVE DETECTION SYSTEM (EDS).

 

2.                                      TERM

 

This Agreement shall commence upon the execution hereof and shall continue for a
period of one year and may be renewed for consecutive one-year term(s) if
Customer provides Supplier with written notice of its intent to renew at least
30 days prior to expiration.

 

3.                                      TERMINATION

 

3.1.                            THE RIGHTS AND OBLIGATIONS CREATED HEREIN SHALL
BE SUBJECT TO TERMINATION ONLY IN ACCORDANCE WITH THE TERMINATION PROVISIONS OF
THIS AGREEMENT.

 

3.2.                            EITHER PARTY TO THIS AGREEMENT SHALL HAVE THE
RIGHT TO TERMINATE A SINGULAR STATEMENT OF WORK   UPON THE FOLLOWING
CONDITIONS.  IN THE EVENT OF A BREACH OF A MATERIAL TERM OF A SINGULAR STATEMENT
OF WORK, THE NON-BREACHING PARTY SHALL GIVE THE BREACHING PARTY WRITTEN NOTICE
OF THE BREACH.  THE BREACHING PARTY WILL HAVE TEN (10) BUSINESS DAYS TO CURE
SUCH BREACH OR WITHIN TEN (10) BUSINESS DAYS OF RECEIVING THE NOTICE, MUST
PROVIDE TO THE NON-BREACHING PARTY AN ACCEPTABLE PLAN TO CURE THE BREACH. 
FAILURE TO CURE THE BREACH OR TO SET FORTH AN ACCEPTABLE PLAN TO CURE THE BREACH
WITHIN THE ALLOTTED TIME FRAME SHALL GIVE THE NON-BREACHING PARTY THE RIGHT TO
IMMEDIATELY TERMINATE THAT SINGULAR STATEMENT OF WORK FOR CAUSE PURSUANT TO THE
WIND DOWN PROVISION CONTAINED IN THE SUBJECT STATEMENT OF WORK.

 

3.3.                            CUSTOMER SHALL HAVE THE RIGHT TO TERMINATE THIS
AGREEMENT IF CUSTOMER’S CONTRACT WITH THE FEDERAL AVIATION ADMINISTRATION AND/OR
TRANSPORTATION SECURITY ADMINISTRATION IS TERMINATED OR SUBSTANTIALLY REDUCED BY
THE GOVERNMENT. UPON WRITTEN NOTICE OF SUCH A TERMINATION, SUPPLIER SHALL CEASE
PERFORMANCE OF ALL SERVICES AND MANUFACTURE OF ALL PRODUCTS, AS PROVIDED IN THE
APPLICABLE STATEMENT OF WORK(S).

 

3.4.                            TERMINATION UNDER THIS SECTION 3 SHALL NOT LIMIT
OR AFFECT EITHER PARTY’S RIGHTS OR OBLIGATIONS ARISING UNDER THIS AGREEMENT
PRIOR TO SUCH TERMINATION.

 

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4.                                      SCOPE OF PRODUCTS AND SERVICES

 

4.1.                            Services - The description of the Services,
together with the time(s) of performance are described in this Agreement and
Attachment 1 the Supply Chain Management Services Statement of Work and
Attachment 2 Assembly Services Statement of Work. The Services shall be
performed upon such terms as set forth in the Statements of Work and this
Agreement.

 

4.2.                            Products – Attachment 3 the Statement of Work
for Components contains a description of the Products to be provided under this
Agreement.  Products shall be manufactured and delivered upon such terms as set
forth in Attachment 3 and this Agreement.

 

4.3.                            Field Service or Spares - Attachment 4, when and
if negotiated by the parties will contain the Statement of Work for Field
Services or Spares to be provided under this Agreement.

 

5.                                      AGREEMENT CHANGE ORDERS

 

5.1.                            During the term of this Agreement, Customer or
Supplier may agree to meet not less frequently than once per calendar quarter to
review Supplier’s performance under this Agreement.  If as a result of these
quarterly meetings, or as otherwise may arise during the term of this Agreement,
Customer proposes a change in Supplier’s obligations hereunder, then all such
Changes shall be implemented pursuant to the procedures set forth in this
Section.

 

5.2.                            If Customer desires to propose a Change, it
shall deliver a written notice to the Supplier describing the Change proposal
and establishing a reasonable period for Supplier to respond.  Supplier shall
respond to such proposal within the time stated in the proposal by preparing and
delivering to the Customer, a written document indicating:

 

5.2.1.                                   the effect of the proposal, if any, on
the amounts payable by Customer under this Agreement;

 

5.2.2.                                   the effect of the proposal, if any, on
Supplier’s performance of its obligations under this Agreement;

 

5.2.3.                                   the anticipated time schedule for
implementing the proposal; and

 

5.2.4.                                   any other information requested in the
proposal or reasonably necessary for Customer to make an informed decision
regarding the proposal.

 

5.3.                            If Customer accepts the change proposal response
by the Supplier, the parties shall amend this Agreement to incorporate such
changes.

 

5.4.                            No change shall be made by the Supplier without
the written consent of Customer.  If Supplier desires to propose a Change, it
shall deliver a written request to Customer, which shall include the information
described in Section 5.2 above.

 

5.5.                            In the event that Customer and Supplier can not
agree on a Change, then Supplier will perform the Change as instructed by
Customer, and Customer will pay a provisional fee in an amount as determined by
Customer.  The actual amount of the fee will be determined in accordance with
the Dispute Resolution clause 20 of this Agreement.

 

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6.                                      FEE(S)

 

As consideration for Supplier’s manufacture of the Products and performance of
the Services, Customer agrees to pay Supplier the Fee(s) set forth in the
applicable Statement of Work.

 

7.                                      INVOICES AND PAYMENTS

 

Payment terms are [...***...] days unless noted otherwise in the applicable
Statement of Work.   A late payment charge of [...***...] % per month (annual
rate of [...***...]%) will be added to past due accounts, unless other
arrangements are made.  All orders are subject to management approval of and
periodic review of credit, export and payment terms, which may be modified by
Supplier on reasonable notice for good cause.  When Wire Remittance is required
or necessary, remittance should be made to:

 

COORSTEK

c/o LaSalle Bank National Association

ABA #: 0071000505

SWIFT #:  [...***...]

ACCT #:  [...***...]

 

When Check Remittance is required or necessary, checks should be sent to:

 

COORSTEK

c/o Bank of America

135 South LaSalle Dept. # 3193

Chicago, Illinois   60674-3193

 

8.                                      WARRANTIES

 

EXCEPT AS SET FORTH IN THE APPLICABLE STATEMENT OF WORK SUPPLIER MAKES NO OTHER
WARRANTY OF ANY KIND WHATEVER, EXPRESS OR IMPLIED.  SUPPLIER EXPRESSLY DISCLAIMS
ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

 

9.                                      CONFIDENTIALITY/PROTECTION OF
PROPRIETARY RIGHTS

 

All of the Customer’s specifications and processes are Confidential Information,
and shall be protected from disclosure as provided in the Non-Disclosure
Agreement between Customer and Supplier dated January 8, 2002, attached to this
Agreement as Attachment 6 and made a part hereof.

 

10.                               INDEPENDENT CONTRACTOR

 

Supplier and Customer hereby declare and agree that they are engaged in
independent businesses and will perform their respective obligations under this
Agreement as independent contractors and not as the agent or employee of the
other party; that the persons performing services hereunder are not agents or
employees of the other party; that each party has and hereby retains the right
to exercise full control of and supervision over the performance of its
obligations hereunder and full control over the employment, direction,
compensation and discharge of all employees assisting in the performance of such
obligations; that each party will be solely responsible for all matters relating
to payment of its employees, including compliance with workers’ compensation,
unemployment, disability insurance, social security withholding, and all other
federal, state and local laws, rules and regulations governing such matters; and
that each party will be responsible for its own acts and those of its agents,
employees and subcontractors

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*Confidential Treatment Requested

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during the performance of its obligations under this Agreement. Each party
agrees that its employees are not entitled to unemployment insurance benefits
from the other party as a result of performing under this Agreement.  Each party
is responsible for and shall pay all assessable federal and state income tax on
amounts paid under this Agreement.

 

11.                               INDEMNITY

 

11.1.                     Customer shall indemnify and hold harmless Supplier,
its owners, parents, Affiliates, subsidiaries, agents, directors and employees
from any Liabilities arising from and in connection with Supplier providing
Services or Products under this Agreement or from Customers’ use of Product(s)
or the acts or omissions of Customer, its agents and employees and others under
its direction or control except to the extent such Liabilities are caused by or
are the result of the negligence or willful misconduct of Supplier.  Such
Liabilities shall include, but not be limited to, those attributable to personal
injury, sickness, disease or death; and/or result from injury to or destruction
of real or personal property including loss of use thereof, theft, misuse or
misappropriation.

 

11.2.                     Supplier shall indemnify and hold harmless Customer,
its owners, parents, Affiliates, subsidiaries, agents, directors and employees
from any Liabilities arising from and in connection with Supplier providing
Services or Products under this Agreement or the acts or omissions of Supplier,
its agents and employees and others under its direction or control except to the
extent such Liabilities are caused by or are the result of the negligence or
willful misconduct of Customer.  Such Liabilities shall include, but not be
limited to, those attributable to personal injury, sickness, disease or death;
and/or result from injury to or destruction of real or personal property
including loss of use thereof, theft, misuse or misappropriation.

 

11.3.                     Customer shall indemnify and hold harmless Supplier,
its owners, parents, Affiliates, subsidiaries, agents, directors and employees
from and against all Liabilities arising out of or resulting from (i) assertions
under workers’ compensation or similar employee benefit acts made by Customer or
any of Customer’s employees, agents, subcontractors, or subcontractors’
employees or agents, or (ii) any other claim which may be asserted by any of
Customer’s employees, customers, agents, subcontractors or subcontractor’s
employees or agents against Supplier, its owners, parents, affiliates,
subsidiaries, agents, directors and employees except to the extent such claim is
the direct result of the gross negligence or willful misconduct of Supplier.

 

11.4.                     Supplier shall indemnify and hold harmless Customer,
its owners, parents, Affiliates, subsidiaries, agents, directors and employees
from and against all Liabilities arising out of or resulting from (i) assertions
under workers’ compensation or similar employee benefit acts made by Supplier or
any of Supplier’s employees, agents, subcontractors, or subcontractors’
employees or agents, or (ii) any other claim which may be asserted by any of
Supplier’s employees, suppliers (but not including suppliers under supply chain
management services), agents, subcontractors or subcontractor’s employees or
agents against Customer, its owners, parents, affiliates, subsidiaries, agents,
directors and employees except to the extent such claim is the direct result of
the gross negligence or willful misconduct of Customer.

 

11.5.                     The foregoing indemnification obligations are
conditioned upon the following:

 

11.5.1.           The party claiming a right to be indemnified (“Indemnified
Party”) notifies the other party (“Indemnifying Party”) within ten (10) days of
receipt or notice of any claim or action for which the Indemnified Party will
seek indemnification;

 

11.5.2.           The Indemnifying Party has sole control of the defense and/or
settlement of any claim;

 

11.5.3.           The Indemnified Party shall furnish to the Indemnifying Party,
upon request, information available to the Indemnified Party for such defense;
and

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11.5.4.           The Indemnified Party shall provide the Indemnifying Party
with reasonable assistance in connection with such defense.

 

12.                               INSURANCE

 

12.1.                     Supplier will, at its expense, procure and maintain
insurance on all of its operations, including the policies listed below.
Supplier will furnish certificates of insurance as requested.

 

12.1.1.    Workers’ Compensation Insurance in the statutory amount.

 

12.1.2.    Employer’s Liability Insurance, in the amount of $[...***...] per
occurrence.

 

12.1.3.           Commercial General Liability Insurance, including coverage for
property damage and personal injury, in the amount of $[...***...] per
occurrence.

 

12.1.4.           Products liability coverage, including coverage for property
damage and personal injury, in the amount of $[...***...] per occurrence.

 

12.1.5.           Property Insurance, including coverage for Customer owned
material located on Supplier’s premises and in transit, in the amount of
$[...***...] per occurrence.

 

12.1.6.           Commercial Automobile Liability Insurance with a $[...***...]
combined single limit.

 

12.2.                     Customer will, at its expense, procure and maintain
insurance on all of its operations, including the policies listed below.
Customer will furnish certificates of insurance as requested.

 

12.2.1.           Workers’ Compensation Insurance in the statutory amount.

 

12.2.2.           Employer’s Liability Insurance, in the amount of $[...***...]
per occurrence.

 

12.2.3.           Commercial General Liability Insurance, including coverage for
property damage and personal injury,  in the amount of $[...***...] per
occurrence.

 

12.2.4.           Products liability coverage, including aviation related
products, war risk and terrorism coverage, including coverage for property
damage and personal injury, in the amount of $[...***...] per occurrence.

 

12.2.5.           Commercial Automobile Liability Insurance with a $[...***...]
combined single limit.

 

13.                               PATENT, TRADEMARK, COPYRIGHT OR TRADE SECRET
INDEMNIFICATION

 

13.1.           Customer shall indemnify and hold harmless Supplier, its owners,
parents, Affiliates, subsidiaries, agents, directors and employees from and
against all Liabilities that may result by reason of any infringement or claim
of

 

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*Confidential Treatment Requested

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infringement of any patent, trademark, copyright, trade secret or other
proprietary right relating to the design and/or use of the Systems.  Customer
will defend and/or settle at its own expense any action brought against Supplier
to the extent that it is based on a claim that the System design(s) and/or the
use thereof, infringe any patent, trademark, copyright, trade secret or other
proprietary right.

 

 

13.2.                     IF A PRELIMINARY OR FINAL JUDGMENT SHALL BE OBTAINED
AGAINST SUPPLIER BASED UPON ITS PROVIDING OF SERVICES OR PRODUCT(S) OR ANY PART
THEREOF BY REASON OF ALLEGED INFRINGEMENT, OR IF IN SUPPLIER’S OPINION, SUCH
SYSTEM(S) OR ANY PART THEREOF, AND/OR THE USE THEREOF ARE LIKELY TO BECOME
SUBJECT TO A CLAIM FOR INFRINGEMENT, CUSTOMER SHALL, AT ITS EXPENSE AND OPTION
AND WITHOUT ANY EFFECT OR WAIVER OF ANY RIGHT SUPPLIER MAY POSSESS AT EITHER LAW
OR EQUITY, EITHER: (1) PROCURE FOR SUPPLIER THE RIGHT TO CONTINUE MANUFACTURING
AND USING SUCH SYSTEM(S); OR (2) REPLACE OR MODIFY SYSTEM(S) SO THAT IT BECOMES
NON-INFRINGING BUT ONLY IF THE MODIFICATION OR REPLACEMENT DOES NOT ADVERSELY
AFFECT THE SUPPLIER’S RIGHTS OR ABILITY TO USE SAME AS SPECIFIED HEREIN.

 

13.3.                     SUPPLIER SHALL INDEMNIFY AND HOLD HARMLESS CUSTOMER,
ITS OWNERS, PARENTS, AFFILIATES, SUBSIDIARIES, AGENTS, DIRECTORS AND EMPLOYEES
FROM AND AGAINST ALL LIABILITIES THAT MAY RESULT BY REASON OF ANY INFRINGEMENT
OR CLAIM OF INFRINGEMENT OF ANY PATENT, TRADEMARK, COPYRIGHT, TRADE SECRET OR
OTHER PROPRIETARY RIGHT RELATING TO THE SUPPLIER’S SUPPLY CHAIN MANAGEMENT
AND/OR MANUFACTURING AND ASSEMBLY PROCESSES.  SUPPLIER WILL DEFEND AND/OR SETTLE
AT ITS OWN EXPENSE ANY ACTION BROUGHT AGAINST CUSTOMER TO THE EXTENT THAT IT IS
BASED ON A CLAIM THAT THE SUPPLY CHAIN MANAGEMENT AND/OR MANUFACTURING AND
ASSEMBLY PROCESSES AND/OR THE USE THEREOF, INFRINGE ANY PATENT, TRADEMARK,
COPYRIGHT, TRADE SECRET OR OTHER PROPRIETARY RIGHT.

 

13.4.                     IF A PRELIMINARY OR FINAL JUDGMENT SHALL BE OBTAINED
AGAINST CUSTOMER BASED UPON ITS PROVIDING OF SUPPLY CHAIN MANAGEMENT AND/OR
MANUFACTURING AND ASSEMBLY PROCESSES OR ANY PART THEREOF BY REASON OF ALLEGED
INFRINGEMENT, OR IF IN CUSTOMER’S OPINION, SUCH SUPPLY CHAIN MANAGEMENT AND/OR
MANUFACTURING AND ASSEMBLY PROCESSES OR ANY PART THEREOF, AND/OR THE USE THEREOF
ARE LIKELY TO BECOME SUBJECT TO A CLAIM FOR INFRINGEMENT, SUPPLIER SHALL, AT ITS
EXPENSE AND OPTION AND WITHOUT ANY EFFECT OR WAIVER OF ANY RIGHT CUSTOMER MAY
POSSESS AT EITHER LAW OR EQUITY, EITHER: (1) PROCURE FOR CUSTOMER THE RIGHT TO
CONTINUE USING SUCH SERVICES; OR (2) REPLACE OR MODIFY SERVICES SO THAT THEY
BECOME NON-INFRINGING BUT ONLY IF THE MODIFICATION OR REPLACEMENT DOES NOT
ADVERSELY AFFECT THE CUSTOMER’S RIGHTS OR ABILITY TO USE SAME AS SPECIFIED
HEREIN.

 

13.5.                     The foregoing indemnification obligations are
conditioned upon the following:

 

13.5.1.         The party claiming a right to be indemnified (“Indemnified
Party”) notifies the other party (“Indemnifying Party”) within ten (10) days of
receipt or notice of any claim or action for which the Indemnified Party will
seek indemnification;

 

13.5.2.           The Indemnifying Party has sole control of the defense and/or
settlement of any claim;

 

13.5.3.           The Indemnified Party shall furnish to the Indemnifying Party,
upon request, information available to the Indemnified Party for such defense;
and

 

13.5.4.           The Indemnified Party shall provide the Indemnifying Party
with reasonable assistance in connection with such defense.

 

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14.                               ADVERTISING; PUBLICITY

 

Customer and Supplier grant to each other permission to reference the other in
advertising, promotional efforts and publicity so long as the party originating
the advertisement, promotional effort or publicity provides the other party
prior notice.   Nothing in this section shall prohibit either party from making
any disclosure ordered by a court or agency of competent jurisdiction or
otherwise required by law.

 

15.                               PLANT AND WORK RULES

 

Supplier and Customer, while on the premises of the other shall comply with all
plant rules and regulations including, where required by governmental
regulation, submission of satisfactory clearance from the appropriate
governmental authorities.

 

16.                               FORCE MAJEURE

 

Neither party shall be liable for failure to perform when such failure is caused
by unforeseeable force majeure circumstances.  If such circumstances occur, the
party injured by the other’s inability to perform may elect to (1) terminate
that portion of this Agreement adversely impacted by the failure to perform and
as specified in Section 3 of this Agreement; and/or (2) suspend that portion of
this Agreement adversely impacted by the failure to perform for the duration of
the force majeure circumstances, and then resume performance under this
Agreement.  The party experiencing the force majeure circumstances shall
cooperate with and assist the injured party in all reasonable ways to minimize
the impact of such circumstances on the injured party, including assisting in
locating and arranging for substitute Products or Services.

 

17.          SUPPLIER’S RIGHT FOR FIRST OPPORTUNITY TO SUBMIT OFFER

 

CUSTOMER SHALL GIVE SUPPLIER THE FIRST OPPORTUNITY TO SUBMIT AN OFFER TO PROVIDE
SUPPLY CHAIN MANAGEMENT SERVICES RELATED TO ANY NEW PRODUCTS OUTSOURCED BY
CUSTOMER.

 

18.                               RESERVATION OF RIGHTS

 

Neither party’s delay or failure in enforcing any right or remedy afforded
hereunder or by law shall prejudice or operate to waive that right or remedy or
any other right or remedy which it shall have available; nor shall any such
failure or delay operate to waive either party’s rights to any remedies due to a
future breach of this Agreement, whether of a like or different character.

 

19.                               SEVERABILITY

 

In the event that a court or a governmental or regulatory agency with proper
jurisdiction determines that this Agreement or a provision of this Agreement is
unlawful respectively, this Agreement, or that provision of this Agreement, to
the extent it is unlawful, shall terminate.  If a provision of this Agreement is
terminated but the parties can continue legally, commercially and practicably
without the terminated provision, the remainder of this Agreement shall continue
in effect.  No additional liability shall attach to either party as a result of
any such termination.

 

20.                               DISPUTE RESOLUTION

 

ANY CONTROVERSY, CLAIM, OR DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT,
OR THE BREACH THEREOF, SHALL BE SETTLED THROUGH GOOD FAITH NEGOTIATION BETWEEN
THE PARTIES.  IN THE EVENT THAT SAID NEGOTIATIONS ARE NOT SUCCESSFUL, THE
CONTROVERSY, CLAIM, OR DISPUTE SHALL BE RESOLVED THROUGH ARBITRATION.  SUCH
ARBITRATION SHALL TAKE PLACE IN SAN FRANCISCO, CALIFORNIA AND SHALL PROCEED IN
ACCORDANCE WITH COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION
ASSOCIATION AND THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO THE
PROVISIONS THEREOF CONCERNING CONFLICT OF

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LAWS.  ALL COSTS AND EXPENSES OF THE ARBITRATION (INCLUDING FEES OF THE
ARBITRATORS) SHALL BE SPLIT EQUALLY BETWEEN THE PARTIES.  THE NON-PREVAILING
PARTY SHALL PAY THE PREVAILING PARTIES ATTORNEY FEES IN ANY SUCH ARBITRATION.

 

21.                               NONEXCLUSIVE AGREEMENT

 

Except as set forth in section 17 above, it is expressly understood and agreed
that this Agreement does not grant to Customer or Supplier any exclusive
privileges or rights and Supplier and/or Customer may contract with other
Customers and/or Suppliers to provide comparable services.

 

22.                               ASSIGNMENT

 

Neither party may assign this Agreement without the express written permission
of the other party.  Provided, however, that a change in control of a party, by
merger, acquisition or other change in stock ownership, shall not be deemed to
be an assignment.

 

23.                               SETOFF

 

All claims for money due or to become due from one party shall be subject to
deduction or setoff by the other party by reason of any counterclaim arising out
of this or any other transaction with that party.

 

24.                               REMEDIES CUMULATIVE

 

The remedies provided herein shall be cumulative and in addition to any other
remedies provided by law or equity.

 

25.                               AMENDMENTS

 

No change or modifications of any terms or conditions herein shall be valid or
binding on either party unless made in writing and signed by Customer and an
authorized representative of Supplier.

 

26.                               NOTICES

 

Any notice required to be given hereunder shall be in writing and shall be
addressed to the parties at their respective address set forth below.  All
notices shall be deemed given five (5) days after mailing by certified mail,
return receipt requested, and one (1) day after sending by a nationally
recognized overnight courier service which provides a delivery receipt.

 

Customer:

 

Supplier:

InVision Technologies

 

CoorsTek, Inc.

7151 Gateway Boulevard

 

Legal Services Office

Newark, California 94560

 

16000 Table Mountain Parkway

 

 

Golden, Colorado 80403

 

27.                               WAIVER

 

Either party’s failure to insist on performance of any of the terms or
conditions herein or to exercise any right or privilege, or either party’s
waiver of any breach hereunder shall not be construed to be a waiver, or waive
any other terms, conditions, or privileges, whether of the same or similar type.

 

28.          GOVERNING LAW

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This Agreement and all transactions hereunder shall be governed by and construed
in accordance with the laws of the State of California, without regard to any
provisions regarding conflict of laws.

 

29.          INTELLECTUAL PROPERTY

 

All intellectual property rights in Supplier’s supply chain management and
manufacturing and assembly processes, including without limitation utility
patent, design patent, trademark and copyright, are the sole property of
Supplier.  All intellectual property rights in the Product, including without
limitation utility patent, design patent, trademark and copyright, all Customer
specifications, and all methods of manufacturing the Products as provided by
Customer, are the sole property of Customer.  If Supplier makes an improvement
to the Products, the specifications or the method of manufacturing the Products,
then Supplier hereby grants Customer a perpetual, irrevocable, exclusive and
royalty-free license to use such improvements.  Notwithstanding the foregoing,
if Supplier makes an improvement to a method of manufacturing the Products that
can be applied to products that do not compete with Customer’s Products, then
Supplier’s grant of license shall be non-exclusive and Supplier shall not grant
a license to any party that competes, directly or indirectly, with Customer.

 

30.                               LIMITATION OF LIABILITIES

 

Notwithstanding any other provision of this Agreement, neither party shall be
liable to the other for special, indirect, consequential or incidental losses or
damages of any kind or nature whatsoever, including but not limited to lost
profits, lost records or data, lost savings, loss of use of facility or
equipment, loss by reason of facility shut-down or non-operations or increased
expense of operations, or other costs, charges, penalties, or liquidated
damages, regardless of whether arising from breach of contract, warranty, tort,
strict liability or otherwise, even if advised of the possibility of such loss
or damage or if such loss or damage could have been reasonably foreseen.

 

31.                               EXPORT AND IMPORT CONTROL

 

31.1.                     The Product is subject to the Export Control
regulations of the United States Department of State and/or the United States
Department of Commerce.  Customer agrees to provide Supplier with all necessary
information to comply with the all export laws, controls and regulations of the
United States Government.  Customer will be the United States Principal Party of
Interest and accordingly, Customer shall be responsible and liable for all
aspects of export compliance.

 

31.2.                     Customer will be the Importer of Record and
accordingly shall be responsible and liable for all aspects of import compliance
necessary to obtain System components.

 

32.                               GOVERNMENT SUBCONTRACT

 

This Agreement is a subcontract under Customer’s contract with the Federal
Aviation Administration, Contract No. DTFA01-02-C-00023.  Supplier shall comply
with the contract clauses listed below.  Supplier may obtain the full text of
these clauses via Internet at: http://fast.faa.gov (on this web page, select
“toolsets”, then “procurement toolbox”).

 

3.6.2-9

 

Equal Opportunity

 

August 1998

3.6.2-12

 

Affirmative Action for Special Disabled and Vietnam Era Veterans

 

January 1998

3.6.2-13

 

Affirmative Action for Workers with Disabilities

 

April 2000

3.2.2.3-8

 

Audit and Records

 

April 1996

 

10

--------------------------------------------------------------------------------

 

33.                               DEFENSE PRIORITY

 

This Agreement is subject to a Defense Priority and Allocation System (DPAS)
Rating of DO-H8.  Supplier shall fill this order in compliance with the DPAS
regulations, 15 CFR Part 700.

 

34.          SURVIVAL

 

The following Sections of this Agreement shall survive any termination thereof,
1, 3, 4, 6, 7, 8, 9, 11, 13, 17, 18, 19, 20, 26, 27, 28, 29, 30, 31, 35, 36 and
37.

 

35.                               HEADINGS

 

Headings are intended solely as a convenience and shall not control the meaning
or interpretation of any provision of this Agreement.

 

36.                               CONSTRUCTION

 

The parties acknowledge that they and their respective counsel have reviewed
this Agreement in its entirety and have had a full and fair opportunity to
negotiate its terms.  Each party therefore waives all applicable rules of
construction that any provision of this Agreement should be construed against
its drafter, and agrees that all provisions of the Agreement shall be construed
as a whole, according to the fair meaning of the language used.

 

37.                               ENTIRE AGREEMENT

 

This Agreement constitutes the entire agreement between the parties hereto and
supersedes any previous agreements or understandings whether oral or written. 
The printed terms and conditions contained in purchase orders, invoices or other
documents issued by Customer with respect to this Agreement, whether previously
or in the future, shall be of no effect and shall be superseded by this
Agreement.  In the event of any conflict between or among any documents which
are part of this Agreement, precedence shall be given first to the text of this
Agreement and second to its Attachments, and third to its Exhibits. Any term or
condition, other than delivery date, quantity or price terms, on an Order,
acknowledgment form, or other forms or documents will not apply and are objected
to, unless such term is approved in writing by an authorized representative of
each party.

 

IN WITNESS WHEREOF the parties have caused this Agreement to be executed by
their duly authorized representatives as of the last date of signature written
here below.

 

CoorsTek, Inc.:

InVision Technologies:

 

 

 

 

By:

/s/ Derek Johnson

 

By:

/s/ Donald Mattson

 

 

 

Name: DEREK JOHNSON

Name: DON MATTSON

 

 

Title: COO

Title: COO

 

 

Date:

6/10/2002

 

Date:

May 31, 2002

 

 

 

11

--------------------------------------------------------------------------------

 

 

ATTACHMENT 1

SUPPLY CHAIN MANAGEMENT SERVICES

STATEMENT OF WORK

TO

AGREEMENT FOR SERVICES

 

This Statement of Work is attached to and made a part of that certain Agreement
for Services (“Agreement”), by and between CoorsTek, Inc., (“Supplier”) and
InVision Technologies (“Customer”).

 

1.              Services Description

 

a.               Overall:  Supplier shall receive instructions from Customer to
carry out Supply Chain Management (SCM) Services in the performance of this
Agreement including procurement, for Customer related to the assembly of the
Systems.  Supplier will be responsible for managing (on behalf of Customer) an
estimated 350 component suppliers.  Supplier will provide a facility for the
receipt and inspection of all components purchased from suppliers.

 

b.               Procurement Planning and Execution:  Based solely on Customer’s
released Master Production Schedule and Customer-controlled Bills of Materials,
Supplier will generate Materials Resource Planning (MRP) to determine order
requirements; Supplier will negotiate price, lead time, and delivery on behalf
of Customer; Supplier, on behalf of Customer using forms provided by or approved
by Customer will use both traditional (discrete Purchase Orders (PO)) and more
advanced (Vendor Managed Inventory, Just-in-Time/Kanbans) purchasing mechanisms
to bring the required inventory into the physical and logical system; it is the
Customer’s intent that the Supplier execute the procurement activities to meet
all firm-planned orders reflected in the Master Production Schedule and to plan
procurement activities to meet the forecasted demand; all changes to Customer’s
Approved Vendor List / Approved Parts List need the Customer’s approval and must
pass through the Change Notification process described in Section 5 of the
Agreement, to cut-in the approved change; Supplier will ensure fair and
equitable treatment of all multiple-source suppliers given equal performance in
terms of cost, schedule, and quality.

 

c.               Receiving, Receiving Inspection, and Receiving Test:  Based on
Customer’s designations for receiving inspection and component-level testing,
Supplier, either directly or through suppliers authorized by Customer will
evaluate incoming materials to ensure conformance to standards; known “good”
product will be accepted and stored by the Supplier; non-conforming material
will be immediately returned to the vendor by the Supplier.

 

d.               Accounts Payable Administration:  Based on confirmed “good”
product (see section above) and accepted receipts, Supplier will supply Customer
with weekly check run requirements along with auditable records (POs, shipping
documents, receiving documents); Supplier will transfer to Customer’s system
(ROI*) the following information by cost category (standard cost, PPV, freight,
tooling, NRE, expedite charges).

 

e.               Inventory Management and Control:  Supplier will physically
store and control Customer’s inventory at several locations (Central Warehouse,
three WIP Warehouses, and a single Material Review Board (MRB) Warehouse);
logically, the detailed inventory records and transactions will reside in the
Supplier’s Enterprise Resource (ERP) system; Supplier will provide on-site
support to ensure accurate transactions at the three manufacturing sites
(Supplier’s, Customer’s, additional Contract Manufacturer (CDS)); Supplier will
conduct on-going cycle count activities as well and will review all adjustments
with Customer – Customer retains the responsibility to approve adjustments;
Customer-defined reports and audits will be used to verify the accuracy of the
Supplier’s inventory control system.

 

--------------------------------------------------------------------------------

 

 

f.                 Material Handling:  Supplier will provide material handlers
who will be responsible for the line-side supply using Kanbans and Demand Flow
techniques; Supplier’s material handlers will move known “good” material to the
line to prevent stock-outs and will rapidly remove/disposition defective
material; additionally, Supplier will actively manage the shortage list –
expediting material as required to ensure continuity of supply to all three
production sites; Supplier will measure delivery performance to each site and
will regularly review performance with Customer.

 

g.              Material Review Board (MRB) for Discrepant Items:  Supplier will
maintain a physical MRB at all assembly sites and one logical MRB in its ERP
system; Supplier will clear MRB on a daily basis working with Customer and any
other Contract Manufacturer; Customer retains responsibility for dispositioning
material for continued use or re-work; Supplier retains responsibility for
returning material to vendor when it cannot be used in the production process;
Supplier will collect and report quality statistics based on the MRB activity;
Supplier will regularly measure and report performance to Customer and will
drive continuous improvement of the supply base.

 

h.              Return Material Authorization (RMA) and Return to Vendor (RTV)
for Components/Sub-systems:  When Supplier finds defective materials, it will
request RMAs from the vendors and the manage the returns process; Supplier will
manage its MRP to compensate for the discrepant material and will work with the
vendors to prevent any stock-outs; Supplier will generate credits to Customer
based on the returns.

 

2.              Fee

 

a.                                       Non-Recurring Expenses (“NRE”). 
Customer shall reimburse Supplier’s NRE not to exceed $[…***…].  Supplier will
bill Customer monthly for NRE incurred during the month.  NRE is intended to
cover production set-up expenses including extraction, testing areas, assembly
fixtures, tooling fixtures, electrical accommodations, etc.

 

b.             Fee.  Supplier shall issue an invoice to Customer every
[...***...] weeks based upon number of unit starts as determined by gantries
placed at assembly station 1 as illustrated in Attachment 6 Business Structure
and Materials Management Overview.  Pricing will be determined by the number of
unit starts estimated for the quarter, or the prorated number for periods less
than one quarter, per the SCM Management Fee Schedule in the Table below at
quarter start. Adjustments to the pricing due to a change in volume will be
reconciled during the last billing cycle of the quarter.   Payment terms are Net
[...***...] days. The addition of material management services for related
products such as field support is possible and the rate structure will be
adjusted by mutual consent of the Supplier and Customer to accommodate changes
in quantity/volume that may result.

 

Quantity (Machines per Quarter)

 

[…***…]

 

[…***…]

 

[…***…]

 

[…***…]

 

[…***…]

 

[…***…]

 

[…***…]

 

Mgmt Fee (% of Material Managed per Machine)

 

$

[…***…]

Fixed per
Quarter

 

[…***…]

 

[…***…]

 

[…***…]

 

[…***…]

 

[…***…]

 

[…***…]

 

 

--------------------------------------------------------------------------------

* - In the event of sustained volumes less than […***…] per quarter Customer and
Supplier will review resource requirements and determine if a restructuring of
the SCM plan is necessary to further reduce costs.

 

 

3.              Inspection and Acceptance

a.               Inspection - Customer may inspect Services performed by
Supplier and/or its subcontractors in progress or completed at any time.

b.               Acceptance shall be deemed to occur no later than when Customer
issues payment for SCM Services in accordance with Section 2 of this SOW

--------------------------------------------------------------------------------

*Confidential Treatment Requested

 

 

Attachment 1, Page 2

--------------------------------------------------------------------------------

 

4.              Warranty

 

For the Services provided under this Statement of Work, Supplier warrants that
the Services shall be performed in accordance with a reasonable standard of care
and to the reasonable satisfaction of Customer.

 

5.              Schedule

 

Supplier shall begin satisfactory implementation of supply chain management
services no later than May 1, 2002.

 

6.              Wind down of Supply Chain Management Services

 

a.               Termination for Cause Procedure - Upon termination for cause of
the SCM Services required under this SOW by either party the following shall
occur:

i.                 Supplier will cease all work being performed under this SOW.

ii.             Supplier will deliver to Customer all finished Product, work in
process, and raw materials and take all reasonable measures to protect
Customer’s property in Supplier’s possession.

iii.         Each party shall retain rights to intellectual property such party
brought to this Agreement and each party shall be bound by all confidentiality,
intellectual property, warranty and indemnity obligations in accordance with the
terms and conditions of this Agreement.

iv.            Customer will pay Supplier for SCM Services performed and for all
SCM Services performed in accordance with this SOW and for reasonable and
necessary expenses which have accrued to the date of termination less any
amounts previously paid.

b.               Termination Procedure at End of Agreement Term- Upon
termination of this SOW other than for cause the following shall occur:

i.                 No later than 30 days from the effective date of the
termination Customer shall provide Supplier with a Notice of Termination
including:

1.              The effective termination date.

2.              A transition plan including but not limited to details of  (1)
the transfer of all finished Product, work in process, raw materials, records,
data and other information owned by Customer and used by Supplier in providing
SCM Services and (2) for all other activities required by Customer related to
the termination of this SOW.  The transition plan shall also include a
reasonable schedule for these activities.

ii.             According to the schedule in the transition plan, Supplier will
cease all work being performed under this SOW.

iii.         Supplier will take all reasonable measures to protect Customer’s
property in Supplier’s possession.

iv.            Each party shall retain rights to intellectual property such
party used in conjunction SCM Services and each party shall be bound by all
confidentiality, intellectual property, warranty and indemnity obligations in
accordance with the terms and conditions of this Agreement.

v.                Supplier will have no obligation to train a third party to
provide SCM Services to Customer.

vi.            Customer will pay Supplier for SCM Services performed and for all
SCM Services performed in accordance with this SOW, for reasonable and necessary
expenses which have accrued to the date of termination, less any amounts
previously paid, plus any costs incurred by Supplier’s in implementation of the
transition plan.

 

c.             Termination for Convenience Procedure- Upon termination of this
SOW for the convenience of the TSA, the following shall occur:

i.         The  Customer shall provide Supplier with a Notice of Termination
including:

1.              The effective termination date.

 

 

Attachment 1, Page 3

--------------------------------------------------------------------------------

 

 

2.              A transition plan including but not limited to details of  (1)
the transfer of all finished Product, work in process, raw materials, records,
data and other information owned by Customer and used by Supplier in providing
Assembly Services and (2) for all other activities required by Customer related
to the termination of this SOW.  The transition plan shall also include a
reasonable schedule for these activities.

ii.             Supplier will immediately cease all work being performed under
this SOW, except for work specified in the transition plan required by Customer
to terminate this SOW.

iii.             Supplier will take all reasonable measures to protect
Customer’s property in Supplier’s possession.

iv.              Each party shall retain rights to intellectual property such
party used in conjunction Assembly Services and each party shall be bound by all
confidentiality, intellectual property, warranty and indemnity obligations in
accordance with the terms and conditions of this Agreement.

v.              Supplier will have no obligation to train a third party to
provide Assembly Services to Customer.

vi.            Customer will pay Supplier for Assembly Services performed and
for all Assembly Services performed in accordance with this SOW, for reasonable
and necessary expenses which have accrued to the date of termination, less any
amounts previously paid, plus any costs incurred by Supplier’s in implementation
of the transition plan

 

 

Attachment 1, Page 4

--------------------------------------------------------------------------------

 

 

ATTACHMENT 2

ASSEMBLY AND INTEGRATION SERVICES

STATEMENT OF WORK

TO

AGREEMENT FOR SERVICES

 

This Statement of Work is attached to and made a part of that certain Agreement
for Services (“Agreement”), by and between CoorsTek, Inc., (“Supplier”) and
InVision Technologies (“Customer”).

 

1.              Services Description

 

a.               Overall:  Supplier shall receive instructions from Customer to
carry out Assembly and Integration Services in the performance of this Agreement
including: Supplier as one of three assemblers of Customer’s Systems will
provide all necessary labor, facilities and infrastructure required to perform
the assembly services.  This service does not include Customer’s Quality
Assurance and Factory Acceptance Testing.

 

b.              Assembly:  Supplier will build sub-assemblies and complete
mechanical/electrical assembly to Customer’s specifications.

 

c.               Bay Test:  Supplier will manage the “powering on” of the
System, align the X-Ray Tube, Collimeter, and Detectors per specification, and
prepare the system for integration; system-level rework to bring the System into
specification will be conducted by the Supplier as part of this effort.

 

d.              Integration:  Supplier will integrate the System’s hardware and
software using Customer-provided instructions, work sequences, and
specifications; system-level rework to bring the System into specification will
be conducted by the Supplier as part of this effort.

 

e.               Manufacturing Support through Quality Assurance (QA) and
Factory Acceptance Testing (FAT):  When Supplier notifies Customer that the
System is ready for QA or FAT, Customer expects a fully capable and compliant
System; if the System fails to meet the QA or FAT specifications during testing,
Customer will notify Supplier of the discrepancy and the Supplier will rework
the System and resubmit it for testing; Supplier maintains responsibility for
the System until it ships complete from the site.

 

f.                 In-process Rework (to meet product specification or based on
Customer-approved MRB dispositions):  Supplier to manage internal rework
required to bring the System into specification and to pass QA/FAT tests for
first-run products.

 

2.              Fee

 

a.               Non-Recurring Expenses (“NRE”).  Customer shall reimburse
Supplier’s NRE not to exceed $[…***…].  Supplier will bill Customer [...***...]
for NRE incurred during the [...***...].  NRE is intended to cover production
set-up expenses including extraction, testing areas, assembly fixtures, tooling
fixtures, electrical accommodations, etc.

b.               [Reserved]

c.               Customer expects to see declining costs associated with
assembly of the Systems over time based on the high volumes and expected
learning

d.               An assembly fee for the CTX 2500 of $[…***…] per unit will be
incurred for the second quarter of 2002 based on Customer’s acceptance of the
work by Supplier

e.               An assembly fee for the CTX 5500 of $[…***…] per unit will be
incurred for the second quarter of 2002 based on Customer’s acceptance of the
work by Supplier

f.                 On a quarterly basis, Supplier will review its actual hourly
content required to build the Systems and Customer and Supplier will negotiate a
revised price equal to or less than the previous quarter’s price.  The revised
price will be based on a fee equal to (1) $ […***…] per man hour

 

--------------------------------------------------------------------------------

*Confidential Treatment Requested

 

--------------------------------------------------------------------------------

 

(verification of actual amount to be confirmed after completion of the first
control build) plus (2) a burden rate of […***…]% of the material cost charged
to InVision by its suppliers plus (3) […***…]% of the total of (1) and (2). For
clarity the current period assembly fees were  calculated as follows for items
(1) (2) and (3):

 

Model CTX 2500 requires […***…]-man hours and materials cost of $[…***…].

Calculation Example:

(1)

 ($[…***…] x […***…]) =

 

$[…***…]

plus

(2)

 ([…***…] x $[…***…]) =

 

$[…***…]

plus

(3)

 […***…] x ([…***…]+[…***…]) =

 

$[…***…]

 

 

 

 

$[…***…]

 

 

Model CTX 5500 requires […***…]-man hours and materials cost of $[…***…].

Calculation Example:

(1)

 ($[…***…] x […***…]) =

 

$[…***…]

plus

(2)

 ([…***…] x $[…***…]) =

 

$[…***…]

plus

(3)

 […***…] x ([…***…]+[…***…]) =

 

$[…***…]

 

 

 

 

$[…***…]

 

 

e.               In the event that Customer and Supplier can not agree on a fee
for a subsequent quarter, then Supplier will continue to perform all Services
under this Statement of Work, and Customer will pay a provisional fee in an
amount as determined by Customer, and the actual amount of the fee will be
determined in accordance with the Dispute Resolution clause 20 of this
Agreement.

 

3.              Inspection and Acceptance

 

a.               Inspection - Customer may inspect Services performed by
Supplier and/or its subcontractors in progress or completed at any time.

b.               Acceptance - Customer will conduct a Final Acceptance Test on
each System. Assembly Services shall be deemed accepted upon satisfactory
completion of Final Acceptance Test.

 

4.              Warranty

 

a.               For the Services supplied under this Statement of Work,
Supplier warrants that the Services will be performed so as to assure
conformance to specifications and drawings, be of first class workmanship and
free from defects in workmanship for twelve (12) months from the date of
delivery (“Warranty”).

If the Services are not supplied as warranted, Supplier will repair the
Products, and if repair is not successful, replace the Products.

In any event, Customers’ exclusive remedy hereunder is limited to the furnishing
of replacement Products on an exchange basis, or, at Supplier’s option, to the
repair or replacement of defective Products, but in either case only so long as
an examination within the period of warranty reveals the parts to be defective. 
In addition, and notwithstanding anything herein to the contrary, Supplier shall
not incur any obligation hereunder with respect to Services or Products which
are modified in any way by Customer or a third party without Supplier’s prior
written consent, provided, however, that Supplier shall be deemed to have given
prior written consent to Customer’s final integration, test and delivery of the
Products.   In no event shall Supplier incur any obligation to repair or replace
Products which are determined by Supplier, in its sole discretion, to be
defective due to Customer or third party misuse, use of unauthorized repair
parts or unauthorized third-party service, or because of a use not in accordance
with specific Supplier operation and maintenance instructions.

 

--------------------------------------------------------------------------------

* Confidential Treatment Requested

 

Attachment 2, Page 2

--------------------------------------------------------------------------------

 

 

 

5.              Schedule

 

Supplier shall manufacture and assemble the Systems pursuant to the Customer’s
approved MPS.  Customer will provide updated schedules to Supplier from time to
time.  Schedule changes made with less than four (4) weeks notice may result in
additional charges.

 

6.              Wind down of Assembly Services

 

a.             Termination for Cause Procedure - Upon termination for cause of
the Assembly Services required under this SOW by either party the following
shall occur:

i.                 Supplier will cease all work being performed under this SOW.

ii.             Supplier will deliver to Customer all finished Product, work in
process, and raw materials and take all reasonable measures to protect
Customer’s property in Supplier’s possession.

iii.         Each party shall retain rights to intellectual property such party
brought to this Agreement and each party shall be bound by all confidentiality,
intellectual property, warranty and indemnity obligations in accordance with the
terms and conditions of this Agreement.

iv.            Customer will pay Supplier for Assembly Services performed and
for all Assembly Services performed in accordance with this SOW and for
reasonable and necessary expenses which have accrued to the date of termination
less any amounts previously paid.

b.             Termination Procedure at End of Agreement Term- Upon termination
of this SOW other than for cause the following shall occur:

i.               No later than 30 days from the effective date of the
termination Customer shall provide Supplier with a Notice of Termination
including:

1.              The effective termination date.

2.              A transition plan including but not limited to details of  (1)
the transfer of all finished Product, work in process, raw materials, records,
data and other information owned by Customer and used by Supplier in providing
Assembly Services and (2) for all other activities required by Customer related
to the termination of this SOW.  The transition plan shall also include a
reasonable schedule for these activities.

ii.             According to the schedule in the transition plan, Supplier will
cease all work being performed under this SOW.

iii.       Supplier will take all reasonable measures to protect Customer’s
property in Supplier’s possession.

iv.            Each party shall retain rights to intellectual property such
party used in conjunction Assembly Services and each party shall be bound by all
confidentiality, intellectual property, warranty and indemnity obligations in
accordance with the terms and conditions of this Agreement.

v.                Supplier will have no obligation to train a third party to
provide Assembly Services to Customer.

vi.            Customer will pay Supplier for Assembly Services performed and
for all Assembly Services performed in accordance with this SOW, for reasonable
and necessary expenses which have accrued to the date of termination, less any
amounts previously paid, plus any costs incurred by Supplier’s in implementation
of the transition plan.

c.             Termination for Convenience Procedure- Upon termination of this
SOW for the convenience of the TSA, the following shall occur:

 

Attachment 2, Page 3

--------------------------------------------------------------------------------

 

 

i.                 The  Customer shall provide Supplier with a Notice of
Termination including:

1.              The effective termination date.

2.              A transition plan including but not limited to details of  (1)
the transfer of all finished Product, work in process, raw materials, records,
data and other information owned by Customer and used by Supplier in providing
Assembly Services and (2) for all other activities required by Customer related
to the termination of this SOW.  The transition plan shall also include a
reasonable schedule for these activities.

ii.             Supplier will immediately cease all work being performed under
this SOW, except for work specified in the transition plan required by Customer
to terminate this SOW.

iii.         Supplier will take all reasonable measures to protect Customer’s
property in Supplier’s possession.

iv.            Each party shall retain rights to intellectual property such
party used in conjunction Assembly Services and each party shall be bound by all
confidentiality, intellectual property, warranty and indemnity obligations in
accordance with the terms and conditions of this Agreement.

v.                Supplier will have no obligation to train a third party to
provide Assembly Services to Customer.

vi.            Customer will pay Supplier for Assembly Services performed and
for all Assembly Services performed in accordance with this SOW, for reasonable
and necessary expenses which have accrued to the date of termination, less any
amounts previously paid, plus any costs incurred by Supplier’s in implementation
of the transition plan.

 

 

Attachment 2, Page 4

--------------------------------------------------------------------------------

 

ATTACHMENT 3

COMPONENTS SUPPLIER

STATEMENT OF WORK

TO

AGREEMENT FOR SERVICES

 

This Statement of Work attached hereto is made a part of that certain Agreement
for Services (“Agreement”), by and between CoorsTek, Inc., (“Supplier”) and
InVision Technologies (“Customer”).

 

1.  Terms and Conditions of Sale for Components (Exhibit A to Attachment 3).

 

--------------------------------------------------------------------------------

 

ATTACHMENT 4

SPARES SUPPLIER

STATEMENT OF WORK

TO

AGREEMENT FOR SERVICES

 

Intentionally left blank

 

--------------------------------------------------------------------------------

 

ATTACHMENT 5

NONDISCLOSURE AGREEMENT

 

--------------------------------------------------------------------------------

 

NONDISCLOSURE AGREEMENT

 

THIS AGREEMENT, made effective as of the 8TH day of January, 2002 by and between
InVision Technologies, Inc., a Delaware corporation, (hereinafter the “Company”)
and  CoorsTek  (hereinafter the “Receiving Party”), to assure the protection and
preservation of the confidential and proprietary information made available by
the Company to the Receiving Party.

 

WHEREAS, the parties desire to assure the confidential status of the information
which may be disclosed by the Company to the Receiving Party;

 

NOW THEREFORE, in reliance upon and in consideration of the following
undertaking, the parties agree as follows:

 

1.             Subject to the limitations set forth in Paragraph 2, all
information disclosed by the Company to the Receiving Party shall be deemed to
be “Proprietary Information”. In particular, Proprietary Information shall be
deemed to include any information, process, technique, algorithm, program,
design, drawing, formula or test data relating to any research project, work in
process, future development, engineering, manufacturing, marketing, servicing,
financing or personnel matter relating to the Company, its present or future
products, sales, suppliers, customers, employees, investors, or business,
whether or oral, written, graphic or electronic form.

 

2.             The term “Proprietary Information” shall not be deemed to include
information which the Receiving Party can demonstrate by competent written
proof: (i) is now, or hereafter becomes, through no act or failure to act on the
part of the Receiving Party, generally known or available; (ii) is known by the
Receiving Party at the time of receiving such information as evidenced by its
records: (iii) is hereafter furnished to the Receiving Party by a third party,
as a matter of right and without restriction on disclosure; or (iv) is the
subject of a written permission to disclose provided by the Company.

 

3.             The Receiving Party shall maintain in trust and confidence and
not disclose to any third party or use for any unauthorized purpose any
Proprietary Information received from the Company. The Receiving Party may use
such Proprietary Information only to the extent  required to accomplish the
purposes of this Agreement. The Receiving Party shall not use Proprietary
Information for any purpose or in any manner which would constitute a violation
of any laws or regulations, including without limitation the export control laws
of the United States. No other rights of licenses to trademarks, inventions,
copyrights, or patents are implied or granted under this Agreement.

 

4.             Proprietary Information supplied shall not be reproduced in any
form except as required to accomplish the intent of this Agreement.

 

--------------------------------------------------------------------------------

 

5.             The Receiving Party represents and warrants that it shall protect
the Proprietary Information received with at least the same degree of care used
to protect its own Proprietary Information from unauthorized use or disclosure.
The Receiving Party shall advise its employees

 

or agents who might have access to such Proprietary Information of the
confidential nature thereof and shall obtain from each of such employees and
agents an agreement to abide by the terms of this Agreement. The Receiving Party
shall not disclose any Proprietary Information to any officer, employee or agent
who does not have a need for such information.

 

6.             All Proprietary Information (including all copies thereof) shall
remain the property of the Company, and shall be returned to the Company after
Receiving Party’s need for it has expired, or upon request of the Company, and
in any event, upon completion or termination of this Agreement.

 

7.             Notwithstanding any other provision of this Agreement, disclosure
of Proprietary Information shall not be precluded if such disclosure:

 

(a)  is in response to a valid order of a court or other governmental body of
the United States or any political subdivision thereof; provided, however, that
the responding party shall first have given notice to the other party hereto and
shall have made a reasonable effort to obtain a protective order requiring that
the Proprietary Information so disclosed be used only for the purpose for which
the order was issued;

 

(b)  is otherwise required by law; or

 

(c)  is otherwise necessary to establish rights or enforce obligations under
this Agreement, but only to the extent that any such disclosure is necessary.

 

8.             This Agreement shall continue in full force and effect for so
long as the Receiving Party continues to receive Proprietary Information. This
Agreement may be terminated at any time upon thirty (30) days written notice to
the other party. The termination of the Agreement shall not relieve the
Receiving Party of the obligations imposed by Paragraphs 3, 4, 5 and 12 of this
Agreement with respect to Proprietary Information disclosed prior to the
effective date of such termination and the provisions of these Paragraphs shall
survive the termination of this Agreement for a period of five (5) years from
the date of such termination.

 

9.             The Receiving Party agrees to indemnify the Company for any loss
or damage suffered as a result of any, breach by the Receiving Party of the
terms of this Agreement, including any reasonable fees incurred by the Company
in the collection of such indemnity.

 

10.          This Agreement shall be governed by the laws of the State of
California as those laws are applied to contracts entered into and to be
performed entirely in California by California residents.

 

11.          This Agreement contains the final, complete and exclusive agreement
of the parties relative to the subject matter hereof and may not be changed,
modified, amended or supplemented except by a written instrument signed by both
parties.

 

Attachment 5, Page 2

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12.          Each party hereby acknowledges and agrees that in the event of any
breach of this Agreement by the Receiving Party, including, without limitation,
an actual or threatened disclosure of Proprietary Information without the prior
express written consent of the Company, the Company will suffer an irreparable
injury, such that no remedy at law will afford it adequate protection against,
or appropriate compensation for, such injury. Accordingly, each party hereby

 

agrees that the Company shall be entitled to specific performance of the
Receiving Party’s obligations under this Agreement, as well as such further
injunctive relief as may be granted by a court of competent jurisdiction.

 

AGREED TO:

 

AGREED TO:

 

 

 

InVision Technologies

 

CoorsTek

7151 Gateway Blvd.

 

16000 Table Mountain Pkwy.

Newark, CA  94560

 

Golden, CO.

 

 

 

By:

/s/ ERIC HURST

 

By:

/s/ JOHN GHINAZNI

 

 

 

 

 

Name:

ERIC HURST

 

Name:

John Ghinazni

 

 

 

 

 

Title:

Program Manager

 

Title:

Director

 

Attachment 5, Page 3

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ATTACHMENT 6

BUSINESS STRUCTURE AND MATERIALS MANAGEMENT OVERVIEW

 

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[...***...]

 

 

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*Confidential Treatment Requested

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