Exhibit 10.7
DECEMBER 2000 AMENDMENT TO OEM AGREEMENT DATED APRIL 19, 1999
This Amendment to OEM Agreement (the "Amendment") is entered into as of
December 21, 2000 by and between Sonic Innovations, Inc., a Delaware corporation
("Sonic"), and ▇▇▇▇▇▇▇ Laboratories, Inc., a Minnesota corporation ("▇▇▇▇▇▇▇").
RECITALS
WHEREAS, Sonic and ▇▇▇▇▇▇▇ are party to an OEM Agreement dated April 19,
1999, which has been amended from time to time (the "Original Agreement" and,
together with any and all subsequent amendments, the "Agreement"); and
WHEREAS, the parties wish to amend the Agreement as more fully described
herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, Sonic and ▇▇▇▇▇▇▇ agree as follows:
1. Restatement of Framework. The following describes in its entirety the
Agreement between Sonic and ▇▇▇▇▇▇▇ with respect to the framework governing
current and future purchase orders made under the Agreement:
a. Provisions in Force. The following Sections of the Original
Agreement are hereby incorporated by reference in their entirety:
Sections 1, 2, 3.2(a), 3.2(c) (except that the reference to
"Section 3.2(b)" shall be replaced by "the applicable purchase
order"), 4.4, 4.5, 4.6, 5, 6, 7, 8, 9, 10, 12, 13, 14, 15. All
other provisions of the Original Agreement, as amended, not
specifically referenced are hereby terminated.
b. Amendment of Certain Definitions. Sections 1.2 and 1.5 of the
Original Agreement, are hereby amended as follows:
(i) Section 1.2. Section 1.2 shall be amended to read in its
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entirety: "'Hybrid' shall mean Sonic's proprietary
integrated circuit for digital signal processing known as
the 'Strata' product as previously shipped to ▇▇▇▇▇▇▇."
(ii) Section 1.5. Section 1.5 shall be amended to read in its
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entirety: "'Specifications' shall mean the specifications
for the use and operation of the 'Strata' product as
previously shipped to ▇▇▇▇▇▇▇."
2. Current Obligations. Notwithstanding the provisions of paragraph 1
above, but without in any way waiving the application of paragraph 1 to future
purchase orders, the following sets forth the current obligations of the
parties:
a. Payment of $3,485,180.50 due by December 28, 2000 for previous
shipments of components.
b. Payments due January 7, 2001 - March 28, 2001, as set forth on
the schedule attached as Exhibit A.
c. Purchase order # 151919-0 dated September 11, 2000 (see paragraph
3 below).
3. Amendment of Purchase Order # 151919-0. The parties agree that ▇▇▇▇▇▇▇'▇
purchase order # 151919-0,
which originally reflected an order of 26,667 OEM NR Hybrids ("NR Hybrids"), is
superceded by the two purchase orders listed below for an aggregate of 26,000
Strata Hybrids ("Strata Hybrids"). Sonic has previously shipped, and ▇▇▇▇▇▇▇ has
received and accepted, 667 NR Hybrids under ▇▇▇▇▇▇▇ purchase order # 151919-0,
which completed that purchase order as modified. Contingent on ▇▇▇▇▇▇▇'▇ timely
performance of the obligations set forth in this Amendment (particularly the
payment of $3,485,180.50 by December 28, 2000 referenced in paragraph 2(a)
above), Sonic will fill the following orders:
a. Purchase Order # 154742-0: 13,000 Strata Hybrids on or before
December 31, 2000. ▇▇▇▇▇▇▇ shall pay Sonic $1,950,000 for these
Strata Hybrids net 90 days after the date of shipment of the
Strata Hybrids by Sonic to ▇▇▇▇▇▇▇.
b. Purchase Order # 154743-0: 13,000 Strata Hybrids on or before
March 16, 2001. ▇▇▇▇▇▇▇ shall pay Sonic $1,950,000 for these
Strata Hybrids net 90 days after the date of shipment of the
Strata Hybrids by Sonic to ▇▇▇▇▇▇▇.
4. Further Agreements. The parties further agree as follows:
a. Hybrid Exchange. Sonic will exchange 11,600 Strata Hybrids for
15,000 unused IC-1 Hybrids ("IC-1 Hybrids") that ▇▇▇▇▇▇▇ has in
inventory. ▇▇▇▇▇▇▇ must deliver the 15,000 IC-1 Hybrids to Sonic
no later than December 22, 2000, and Sonic will ship the 11,600
Strata Hybrids to ▇▇▇▇▇▇▇ no later than December 31, 2000. If
▇▇▇▇▇▇▇ returns fewer than 15,000 IC-1 Hybrids, the number of
Strata Hybrids shipped in exchange will be proportionately
reduced. This provision supercedes all previous agreements
regarding exchanges. Sonic and ▇▇▇▇▇▇▇ agree that there will be
no further returns of IC-1 Hybrids for any reason.
b. Correction of Record. As reflected in the joint press release
that accompanies this Amendment as Exhibit B, which is initialed
by ▇▇▇▇ ▇▇▇▇▇▇ to certify its accuracy, ▇▇. ▇▇▇▇▇▇ agrees to
correct the record concerning previous statements in which ▇▇.
▇▇▇▇▇▇ was misquoted in the Bloomberg News.
c. Good Standing. Sonic and ▇▇▇▇▇▇▇ agree that this Amendment sets
forth the entirety of current obligations between the parties and
that each party has faithfully and fully performed all other
contractual obligations toward the other party, including but not
limited to all quality requirements otherwise owed to date.
d. Future Business. Future business between the parties shall be on
a purchase order basis. Unless otherwise provided in a writing
signed by both parties, such purchase orders will be governed by
the framework set forth in paragraph 1 above. Payment and
delivery terms shall be established at the time of each order.
▇▇▇▇▇▇▇ may place orders solely in its discretion. Sonic may
accept orders solely in its discretion. There shall be no stated
minimum order requirements.
5. Time of the Essence. The parties agree that time is of the essence,
particularly with regard to paragraphs 2, 3 and 4(a).
6. Entire Agreement. This Amendment, including the Exhibits attached
hereto, constitutes the entire agreement of the parties with respect to the
subject matter hereof, and supercedes all prior and contemporaneous
understandings or agreements, whether written or oral, between Sonic and ▇▇▇▇▇▇▇
with respect to such subject matter. In the event of any conflict between the
terms of any purchase order, confirmation or invoice and the terms of this
Amendment, this Amendment shall govern. No amendment or modification hereof
shall be valid or binding upon the parties unless made in writing and signed by
the duly authorized representatives of both parties. Purchase orders shall not
be deemed amendments.
7. Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties has executed this Amendment as of
the day and year set forth above.
SONIC INNOVATIONS, INC. ▇▇▇▇▇▇▇ LABORATORIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
VP International & OEM President
