Exhibit 10.4
Confidential Treatment is requested.
Confidential Portions indicated by "[***]" have been omitted and filed
separately with the Securities and Exchange Commission.
PURCHASE AGREEMENT
Between
Seiko Instruments ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇, D-63263 ▇▇▇-▇▇▇▇▇▇▇▇,
- hereinafter referred to as "SIG"-
and
RCM LTD, 7 ▇▇▇▇▇ Street, Petach Tikva, Israel,
- hereinafter referred to as "RCM"-
and
▇▇▇▇▇▇ Electronic Engineering Ltd., 11 Ha'amal Street, Park Afek,
Rosh Ha'ayin, Israel,
- hereinafter referred to as "▇▇▇▇▇▇"-.
PREAMBLE:
▇▇▇▇▇▇ requires for its production Thermal Printer Modules, produced by the
group of SIG and delivered to ▇▇▇▇▇▇ by RCM, the representative of SIG in
Israel. SIG and ▇▇▇▇▇▇ wish to build up the contractual basis for a global
cooperation and seek to establish a strategic partnership that is of benefit for
both of them. Therefore, the parties agree on the following:
▇▇▇▇▇▇ Purchase Agreement
I.
PREFERRED SUPPLIER
▇▇▇▇▇▇ hereby commits, that for all its existing and future products that
require Thermal Printer ("TP"), it will use exclusively Seiko Instruments Inc.
("SII") TP, provided RCM is in a position to deliver the required quantities and
modifications. SIG undertakes to make its best efforts to provide these
quantities to RCM.
II.
MOST FAVOURED CUSTOMER
SIG and RCM will treat ▇▇▇▇▇▇ as a "most favoured customer", and will ▇▇▇▇▇
▇▇▇▇▇▇ "best possible prices" for TP based on ▇▇▇▇▇▇'▇ yearly forecast for each
TP model (attached hereto as ANNEX 1).
III.
FORECAST, "BEST POSSIBLE PRICE", PRICE REVIEW
"Best possible price" in the meaning of this Agreement cannot be understood as
the absolute lowest market price but as the lowest price granted related to the
quantities ordered by ▇▇▇▇▇▇ through RCM in the respective year based on the
annual estimate (ANNEX 1). The forecast is binding on SIG after written
agreement of SIG that it is actually in a position to deliver the requested
quantities. Such a written consent shall be issued by SIG within 15 days after
receiving the forecasted quantities from ▇▇▇▇▇▇. SIG is obliged to confirm the
forecast and the orders based on it, if sufficient production capacities with
SII are available.
▇▇▇▇▇▇ undertakes to purchase the forecasted quantities of a four month forecast
within an 8 months period.
▇▇▇▇▇▇ Purchase Agreement 2
At the end of each calendar year, the parties to the Agreement will review the
prices based on the forecast for the coming year and the actual quantities
delivered in the foregoing year. The actual valid buying prices of ▇▇▇▇▇▇ for
each mass production product are mentioned in ANNEX 2. ANNEX 1 & 2 shall be
amended periodically.
IV.
TERMINATION
Each party to this Agreement shall have the right to terminate this Agreement at
the end of each calendar year by prior written notice of at least three months
but not before end of 2005. Upon termination of this Agreement for any reason,
▇▇▇▇▇▇ will be obligated to accept and pay for all the quantities of TP that
have been forecasted for the remaining duration of the Agreement (year end). SIG
is obligated to supply those quantities during the same period to RCM. RCM
undertakes to supply these quantities to ▇▇▇▇▇▇. If no notice of termination has
been made, the Agreement will automatically extend for another year.
V.
MISCELLANEOUS
Any agreements made between two of the parties are not affected provided the
regulations of these agreements are not in contradiction to this Agreement.
This Agreement shall be governed by the Laws of Switzerland, Canton Zurich.
▇▇▇▇▇▇ Purchase Agreement 3
IN WITNESS THEREOF, the parties have executed the agreement by their duly
authorised representatives, effected as of June 1, 2003.
Seiko Instruments GmbH RCM LTD.
/s/ ▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-------------------------- ---------------------------
Authorised Signature Authorised Signature
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-------------------------- ---------------------------
Printed Name Printed Name
Managing Director President
-------------------------- ---------------------------
Title Title
▇▇▇▇▇▇ Electronic Engineering Ltd.
/s/ ▇▇▇ ▇▇▇▇▇▇
--------------------------
Authorised Signature
▇▇▇ ▇▇▇▇▇▇
--------------------------
Printed Name
Executive Vice President
--------------------------
Title
▇▇▇▇▇▇ Purchase Agreement 4
ANNEX 1
As of 1st of July 2003 until 31st December 2003
▇▇▇▇▇▇'▇ ROLLING FORECAST
See attached example of ▇▇▇▇▇▇'▇ weekly updated rolling forecast.
▇▇▇▇▇▇ shall provide regular rolling forecast information on each TP model being
used in mass production. Forecasted period shall cover at least 6 months and it
shall be revised on a weekly basis. The first 3 weeks are considered to be firm
order.
Additionally ▇▇▇▇▇▇ will provide an annual estimated quantity for each TP model.
Appendix ▇▇▇▇▇▇ Purchase Agreement
ANNEX 2
As of 1st of July 2003 until 31st December 2003
The prices to ▇▇▇▇▇▇ under this Agreement for each TP model will be as follows;
PRODUCT PRICE
------- -----
LTP1245R-C384 [***]USD
LTP1245R (longer cable) [***]USD
LTPA245E-384 [***]USD
LTPA245E (longer cable) [***]USD
Above prices are valid after existing orders have been fully executed.
Appendix ▇▇▇▇▇▇ Purchase Agreement