Exhibit 10.4
MANUFACTURING AGREEMENT
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THIS AGREEMENT is made on 1997
BETWEEN NESS SECURITY PRODUCTS PTY LIMITED (A.C.N. 069 984 372) of ▇/▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ("Ness")
AND FAI HOME SECURITY PTY LIMITED (A.C.N. ▇▇▇ ▇▇▇ ▇▇▇) of ▇▇▇▇▇ ▇, ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ("FAI")
AND FAI HOME SECURITY HOLDINGS PTY LIMITED (A.C.N. 003 125 264) of ▇▇▇▇▇
▇, ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ("FAIH")
RECITAL
Ness manufactures products known as "SecurityGuard" and "SecurityGuard II". Ness
has agreed to supply certain products to FAI and FAI has agreed to purchase
certain products on the terms and conditions contained in this Agreement.
AGREEMENT
1 DEFINITIONS & INTERPRETATIONS
1.1 Definitions
(a) "ACDC" means Australian Commercial Disputes Centre Limited, a company
incorporated in New South Wales with its registered office at ▇▇▇▇▇ ▇, ▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇.
(▇) "CPI" means the All Groups Consumer Price Index for Sydney published by the
Australian Bureau of Statistics as a general measure of movements in Prices
over time.
(c) "Business Information" means all information present or future which is
confidential to a party and which relates to the Components, construction,
manufacture and supply of the Product whether furnished orally, in writing
or in any electrical, magnetic, visual or physical configuration by the
parties including, without limiting the generality of the foregoing all
technical data, specifications, formulations and diagrams, designs,
specifications and all related financial information.
(d) "Component" means a component of the Product.
(e) "Escrowed Business Information" means any and all Business
Information and other information necessary or desirable for the
manufacture of the Products, including, without limitation, the identity of
the source of any Components together with any knowhow which resides with
Ness.
(f) "Extended Warranty" means the warranty contained in the certificate annexed
to this Agreement and marked "A".
(g) "Original Agreement" means the Manufacturing Agreement between FAI Security
Holdings Pty Limited (now known as FAI Home Security Holdings Pty Limited)
and Westinghouse Brake and Signal Company (Australia) Limited
("Westinghouse") which was constructively assigned by FAI Home Security
Holdings Pty Limited to FAI and formally assigned by Westinghouse to Ness.
(h) "Product Rights" means Ness' Product Rights.
(i) "Related Body Corporate" has the meaning given to it in the Corporations
Law.
(j) "Product" means:
(i) the home security alarm devices which at the date of this Agreement
are manufactured by Ness and called "SecurityGuard" and
"SecurityGuard II";
(ii) any development, modification or improvement of the Product made,
conceived or acquired by or on behalf of Ness from time to time; and
(iii) any product which partially or wholly replaces or incorporates the
Products from time to time.
(k) "Term" means the period determined pursuant to Clause 9.
(l) "Ness' Product Rights" means all rights, including, without limitation, all
intellectual property rights subsisting in and relating to the Product
including all Business Information, any technical and manufacturing
specifications, all present and future copyright in designs, plans and
diagrams of and relating to the Product and/or the Components (not being
stand alone parts or components currently available for purchase from third
parties).
(m) Where any word or phrase is given a defined meaning any other part of
speech or other grammatical form in respect of that word or phrase has a
corresponding meaning.
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1.2 Interpretation
(a) A reference to:
(i) a business day means a day during which banks are open for
general banking business in New South Wales; and
(ii) this Agreement includes the recitals and any schedules, annexures
and exhibits to this Agreement and where amended means this
Agreement as so amended.
(b) Where the context requires, this Agreement must be interpreted as if
a word which denotes:
(i) the singular denotes the plural and vice versa;
(ii) any gender denotes any other relevant gender; and
(iii) a person denotes an individual, a body corporate, a partnership,
an unincorporated association, a joint venture, a government or
a government body.
(c) Unless the context otherwise requires, a reference to:
(i) any legislation includes any regulation or instrument made under
it and where amended re-enacted or replaced means that amended
re-enacted or replacement legislation;
(ii) any other agreement or instrument where amended or replaced
means that agreement or instrument as amended or replaced;
(iii) a Clause, schedule, annexure or exhibit is a reference to a
Clause of, annexure to, schedule to or exhibit to this
Agreement;
(iv) a group of persons includes any one or more of them;
(v) any thing or amount is a reference to the whole and each part of
it; and
(vi) the CPI includes any generally accepted index for measuring
movements in consumer prices which substantially replaces the
CPI and references to the Australian Bureau of Statistics
includes any government agency, department or bureau which
replaces that Bureau.
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1.3 Successors and Assigns
A person includes the trustee, executor, administrator, successor in
title and assignee of that person.
1.4 Headings
Headings must be ignored in the interpretation of this Agreement.
1.5 References to and Calculations of Time
(a) (i) a time of day means that time of day in New South Wales;
(ii) a day means a period of time commencing at midnight and
ending 24 hours later; and
(iii) a month means a calendar month which is a period
commencing at the beginning of one of the 12 months of the
year and ending immediately before the beginning of the
first day of the next month.
(b) Where a period of time is specified and dates from a given day
or the day of an act or event it must be calculated exclusive of
that day.
(c) Where something is done or received after 5.00 pm on any day it
will be deemed to have been done on the following day.
(d) A provision of this Agreement which has the effect of requiring
anything to be done on or by a date which is not a business day
must unless the context otherwise requires be interpreted as if
it required it to be done on or by the immediately preceding
business day.
2 ORIGINAL AGREEMENT
Ness, FAIH and FAI agree that the Original Agreement does not apply to
them. FAIH, FAI and Ness acknowledge that FAIH has no subsisting rights or
obligations under the Original Agreement.
3 MANUFACTURE
3.1 Manufacture and Supply
(a) During the Term and on the terms and conditions contained in this
Agreement, Ness shall manufacture and supply the Product:
(i) exclusively to FAI throughout the world except the United
States of America; and
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(ii) non-exclusively to FAI in the United States of America.
(b) Subject to the limitations set out in clauses 3.1(a) and (c),
Ness shall, by imposing a condition of sale on each purchaser of
the Product and by all other practical means, use all reasonable
endeavours to ensure that the Product is not sold to any person
who sells or intends to sell the Product in a country where FAI
has exclusive rights. At the request of ▇▇▇ ▇▇▇▇ must take all
reasonable action requested to enforce such a condition of sale
including prosecution of any Purchaser who breaches the condition
of sale described in this clause and pay to FAI any compensation
or damages (including an accounting of profit) recovered by Ness
from the purchaser as a result of such action less any costs
incurred by Ness in connection with that prosecution. FAI will
indemnify Ness for 50% of any liability, loss, cost or expense
incurred by Ness in such prosecution which is not recovered by
Ness.
(c) Ness may market and sell the Product within FAI's exclusive
Territory if FAI has given its written consent. FAI may impose
conditions which Ness must satisfy as part of FAI's consent. A
breach by Ness of any conditions upon which consent is granted
will be deemed to be a breach of this Agreement by Ness. FAI will
not withhold its consent or impose conditions if it would be
unreasonable for FAI to do so having regard to the parties
intention that Ness should be permitted to supply and sell
products in places where FAI does not intend to market the
Product or has ceased to market the Product for a period of six
months.
(d) FAI will consent to Ness supplying Product in a country (the
"Relevant Country") under clause 3.1(c) if:
(i) Ness notifies FAI in writing that Ness intends to supply
Product in the Relevant Country (the "Exclusivity Notice");
(ii) FAI does not commence marketing the Product in the Relevant
Country within 6 months of the date of the Exclusivity
Notice or within 6 months of the date that all
authorisations are obtained to sell the Product in the
Relevant Country, whichever is the later (the "Commencement
Period"); and
(iii) Ness starts supplying Product in the Relevant Country
within 3 months of the date the Commencement Period ends.
(e) Ness' right to supply Product in a Relevant Country will cease
if, at any time:
(i) Ness does not supply Product to bonafide Purchasers in the
Relevant Country during any consecutive six month period;
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and/or;
(ii) Ness supplies and sells or sells to purchasers who sell
Product in the Relevant Country using a marketing method or
strategy which is adopted, or is similar in nature to that
used, by FAI
(f) If Ness breaches this clause 3.1 in any way, Ness must:
(i) recall any products delivered to any country due to a breach
of Ness' obligations; and
(ii) account to FAI for any profits derived by Ness from the
sale of any Product into a country in breach of Ness'
obligations.
(g) If Ness sells Product to anyone other than FAI, it must not
charge a price which is less than the price being charged to FAI
nor offer terms of trade or warranties more favourable than those
offered to FAI for an equivalent or lesser volume.
3.2 Product Warranties
(a) Ness shall ensure and warrants to FAI that each Product
manufactured:
(i) is fully functional;
(ii) does not contain any latent or patent defects;
(iii) is properly and professionally finished;
(iv) is of merchantable quality;
(v) is reasonably fit for use as a security alarm device;
(vi) is thoroughly tested by Ness to ensure compliance with each
characteristic described in paragraphs (i) to (v) above.
(vii) is packaged in single colour external packaging of
sufficient strength to provide adequate protection during
transportation from the point of manufacture to the point
of installation at the end user's premises or such other
manner as FAI approves in writing (FAI acknowledges that
the packaging used by Ness at the date of this Agreement
satisfies this condition).
(b) The warranties given by Ness under this agreement are provided on
the basis the installation, adjustment and operation of the
Products are in accordance with Ness's instructions. Warranty
coverage does not
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include any defect or performance deficiency (including failure
to conform to product descriptions or specifications) which
results in whole or in part from:
(i) improper storage or handling of the products by FAI, its
employees, agents or contractors;
(ii) any design, specification or instruction furnished by FAI
or its employees, agents or contractors;
(iii) any alteration of the Products by persons other than Ness
or its authorised agents;
(iv) combining Ness' products with any another product furnished
by third parties;
(v) improper or extraordinary use of the Product, improper
maintenance of the Products or failure to comply with any
applicable instructions or recommendations of Ness.
(c) Ness' liability for a breach of the warranty given pursuant to
Clause 3.2(a) shall:
(i) Subject to clause 3.2(c)(ii) be limited to repair and/or
replacement of faulty components of the Product at
workshops nominated by Ness and each Product returned for
warranty repair shall be appropriately packaged by the
sending party in a manner suitable for the protection of
the Product from physical damage during the normal course
of transportation and be accompanied with the appropriate
documentation as to identify the nature of the fault. Any
work carried out at any time on any returned Product which
proves to be faulty due to abuse, misuse, improper
installation, setting to operation, or which is not faulty
will be charged to FAI at the hourly rate charged by Ness
for warranty work at that time;
(ii) Nothing in clause 3.2(c)(i) limits any liability Ness may
have at law or under any other term of the Agreement.
(iii) endure for a period of twelve months from the date the
Product is delivered by Ness, (the "Warranty Period") other
than Ness' liability for a breach of warranty under clause
3.2(c)(ii) which will be ongoing;
(iv) be in addition to the Extended Warranty described in Clause
12.
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(d) Product returned for service both during and after the Warranty
Period shall be forwarded to Ness freight pre-paid and returned
freight chargeable to FAI. Where a genuine fault is identified
and the Warranty applies Ness will reimburse FAI for freight
costs both ways.
(e) Ness agrees to supply to FAI Products to be used by FAI as
service exchange units of the Product so that, at all times, FAI
has thirty Products available to exchange for Products being
serviced. These Products are to be supplied by Ness at no cost to
FAI to optimise the supply of service stock to FAI's
dealers/franchisees. Ness may use any Product repaired under any
warranty contained in this Agreement to satisfy its obligations
under this Clause.
3.3 Sale and Purchase
Ness shall sell and FAI shall purchase the Product on the following
terms:
(a) subject to this Clause 3.3 and to Clause 3.4 the initial price
for each Product will be the price agreed from time to time in
writing by Ness and FAI;
(b) if the cost to Ness of any Component increases by more than 10
per cent, Ness may by written notice to FAI notify FAI of the
amount of the increase and within 28 days of such notice FAI
shall either:
(i) agree to the price of each Product being increased by the
amount by which the cost to Ness of the Component has
increased, or
(ii) arrange supply of the Component to Ness at a price which is
not greater than an amount equal to the price of the
Component immediately prior to the proposed price increase
plus 10 per cent.
(c) if the cost to Ness of any Component decreases more than 10 per
cent, Ness shall advise FAI of the amount of such decrease and
the price of each Product shall be reduced by deducting the
decrease in the component cost from the price of each Product.
(d) Ness shall only be required to accept the Component supplied
pursuant to Clause 3.3(b)(ii) if such Component is in the opinion
of Ness (not acting capriciously) of no lesser quality than the
Component previously sourced by Ness.
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(e) On 1st January in each year during the Term, Ness may increase
the price charged by Ness for the Product to a price not
exceeding the price first applicable in the preceding 12 month
period multiplied by a fraction the numerator of which is the CPI
Index at the date of the price increase (the "increase date") and
the denominator of which is the CPI Index at the date which is
twelve months prior to the increase date.
3.4 Delivery
(a) On or about the last day of each calendar month after the date of
this agreement FAI will submit to Ness an estimate (the "FAI
Estimate") of the quantity of the Product which FAI expects to
purchase during the following six month period.
(b) In each calender month during the Term Ness must supply to FAI
up to one fifth of FAI's Estimate (current at that time) in
accordance with FAI's orders no later than 7 days from the date
of placement of each order.
(c) If, in any calender month, FAI orders more than one fifth but
less than one third of the FAI Estimate (current at that time),
Ness must supply to FAI the quantity of Product which exceeds one
fifth but is less than one third of the FAI Estimate within
thirty (30) days of the placement of the order.
(d) FAI shall pay (in Australian dollars) for each Product delivered
and invoiced to FAI within 14 days of delivery or within 42 days
of the date of order, whichever is the later.
(e) If, at any time, Ness fails to deliver Product in accordance with
this Clause 3.4, FAI may, in addition to any other remedy,
require Ness to obtain the Product or a product approved by FAI
from a third party introduced by FAI and/or Ness by serving a
written notice (the "Procurement Notice") to that effect on Ness.
(f) If Ness fails to deliver all outstanding requirements of the
Product and all other orders of the Product to FAI in accordance
with this clause 3.4 at any time after the expiry of thirty (30)
days from the date on which a Procurement Notice is served, FAI
may, in addition to any other remedy, deliver the Escrowed
Business Information to a person for the purpose of enabling that
person to manufacture the Product for FAI.
(g) If Clause 3.4(f) applies:
(i) FAI will not be bound by Clause 5.2;
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(ii) Ness will provide any assistance FAI requires to enable the
Products or the product referred to in clause 3.4(f) to be
sourced by someone other than Ness; and
(iii) Ness will not be entitled to any compensation for the use
of the Escrowed Business Information.
(iv) FAI's rights under this clause 3.4(g) will cease when Ness
resumes deliveries in accordance of the terms of this
clause 3.4.
(v) FAI will only be entitled to disclose the Escrowed Business
Information to a third party for the purposes of this
clause. FAI will ensure that prior to such disclosure that
third party will covenant in a deed that it will keep that
information confidential and not disclose that information
except as necessary in order to manufacture the Product
pursuant to this clause and that third party will return
the Escrowed Business Information and cease to use it as
soon as FAI's rights cease under this clause in accordance
with subclause (iv) above.
At the request of Ness, FAI must take all reasonable action
requested to enforce confidentiality of the Escrowed
Business Information in compliance with this clause
including prosecution of any party who breaches
confidentiality and pay to Ness any compensation or damages
recovered by FAI from the breaching party as a result of
such action less any costs incurred by FAI in connection
with that prosecution.
(h) FAI cannot exercise its rights under Clause 3.4(f) if FAI is in
breach of a material obligation imposed on FAI under this
Agreement.
3.5 Force Majeure
Neither party may exercise their rights and remedies upon the default
of the other party if that default is caused by an act or event that
is beyond the reasonable control of the other party such as an act of
God, act of civil or military authorities, fire, flood, strike, war,
riot, or other cause beyond the reasonable control of the relevant
party.
3.6 Price Exclusive
The price of each Product sold to FAI by Ness shall be exclusive of
all freight charges, insurance, customs duty, sales tax or any other
duty tax or fee payable in relation to the sale, export, installation
or maintenance (other than warranty claims) of the Product all of
which are payable by FAI.
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3.7 Index Numbers
If at any time during the Term the index numbers for the CPI have not
been issued by the Australian Bureau of Statistics as required to
calculate the amount by which the price for the Product shall be
increased Ness shall apply to the officer in charge of the Sydney
office of the Australian Bureau of Statistics to determine an index
issued by the Australian Bureau of Statistics to be used in
substitution for such index numbers.
3.8 FAI Estimate
FAI will, at the end of each calender month, inform Ness if FAI
expects there to be a difference between the FAI Estimate current at
that time and the actual quantity of Products which FAI expects to
order in the unexpired period to which the FAI Estimate relates.
3.9 Risk and Title Retentions
(a) Risk of loss or damage to any Product shall pass to FAI upon
FAI's designated carrier obtaining possession of the Product.
Until the Product has been paid for in full, FAI must take out
adequate property insurance.
(b) Title in any Product supplied to FAI shall not pass to FAI until
FAI has paid to Ness the purchase price for such Product and,
until such time, the Product shall be stored by FAI and by any
person who distributes Product for FAI in such a manner that they
are readily identifiable as belonging to Ness. FAI acknowledges
that it possesses the Product as bailee of Ness and that any
right FAI may have to sell the Product in the ordinary course of
its business shall cease forthwith upon the occurrence to FAI of
any event affecting FAI referred to in Clause 8.2 or upon receipt
of written notice from Ness.
3.10 Nominee of FAI
(a) If requested by FAI, Ness shall supply the Product to a Related
Body Corporate of FAI on the same terms and conditions as set
out in this Agreement and such other conditions as Ness
reasonably requires to secure the payment for any Product having
regard to the financial position of any such Related Body
Corporate.
(b) If requested by FAI, Ness will supply the Product to a nominee
of FAI (other than a Related Body Corporate of FAI) on such
conditions as Ness requires.
(c) The terms of any agreement made with such a nominee shall not
extend beyond the expiry date of this Agreement unless otherwise
agreed by Ness.
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4 NEW MODEL
Ness will not replace the Product with a new product nor substantially
modify the Product without FAI's prior written approval.
5 EXCLUSIVITY
5.1 Ness
To the extent permitted by law during the Term Ness shall not as
principal agent or otherwise (and shall procure that its Related
Bodies Corporate do not) directly or indirectly sell anywhere in the
world, with the exception of the United States of America, any
security alarm product which is substantially similar to the Product
except to the extent that Ness is permitted to do so pursuant to this
Agreement.
5.2 FAI
To the extent permitted by law during the Term FAI shall not as
principal agent or otherwise (and shall procure that its Related
Bodies Corporate do not) directly or indirectly purchase any security
alarm product which is substantially similar to the Product except to
the extent that FAI is permitted to do so pursuant to this Agreement.
5.3 ACCC Notification
Clause 5.2 only applies if Ness notifies the Australian Competition
and Consumer Commission ("ACCC") of the existence and terms of clause
5.2 pursuant to Section 93 of the Trade Practices Act.
5.4 ACCC Notification
Clause 5.1 only applies if FAI notifies the Australian Competition and
Consumer Commission ("ACCC") of the existence and terms of clause 5.1
pursuant to Section 93 of the Trade Practices Act.
5.5 Severance
Clause 5.1 or Clause 5.2 will cease to apply and will be severed from
this Agreement if the ACCC makes any claim that Clause 5.1 or Clause
5.2 (as the case may be) offends Sections 45 or 46 of the Trade
Practices Act. The balance of this Agreement will continue in full
force despite the severance of Clause 5.1 or Clause 5.2 or both.
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6 CONFIDENTIALITY
6.1 Secrecy
The parties agree that any Business Information concerning the
manufacture of the Product and the development of the new models shall
be kept as a trade secret and that harm may be caused to FAI and Ness
by the unauthorised disclosure of information relating to the Product
(including other Business Information). The parties must hold in
strictest confidence all such information and shall not divulge,
provide or otherwise make available or allow or permit any of their
respective employees, agents or representatives (including any person
appointed to manufacture the Product under clause 3.4) to divulge,
provide or otherwise make available information constituting or
relating to the Product Rights or the Business Information in whole or
in part in any form whatsoever other than to their respective
employees, agents, representatives and distributors for the specific
purpose of performing their obligations pursuant to this Agreement.
6.2 Protection of Secrets
Ness and FAI shall each do all things and take all steps reasonably
necessary to prevent the unauthorised use and/or copying of
information relating to or constituting Product Rights and/or Business
Information.
6.3 Permitted Disclosure
FAI and Ness agree that nothing in Clauses 6.1 or 6.2 prohibits the
disclosure of information relating to or constituting Product Rights
and/or Business Information:
(a) to any person acting for or advising upon such rights or
interests providing such person is bound to keep such information
confidential;
(b) with the prior written consent of the other party;
(c) by operation of law provided that all practicable legal steps
have been taken to prevent such disclosure;
(d) by Ness to its licenced manufacturers and/or related companies
provided such recipients agree to keep such information secret
and to Ness' licenced distributors in countries where FAI does
not have exclusive rights in relation to the Product;
(e) by FAI in relation to published marketing material in the
ordinary course of marketing the Product;
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(f) by Ness in the ordinary course and for the purpose of
manufacturing Products for FAI;
(g) which is in the public domain through no fault of the party
receiving the information, and
(h) pursuant to Clause 3.4(f).
(i) to the extent that such disclosure is required for regulatory
approvals.
6.4 Notice of Infringements
Each party shall immediately notify the other should it become aware
of any actual or threatened unauthorised use of any Product Rights or
Business Information by any third party or of any actual or threatened
allegations that the Product infringes any intellectual property
rights of any person.
6.5 Assistance
FAI shall at the expense of Ness provide all necessary support and
assistance reasonably requested by Ness, including becoming a party in
any legal proceedings if requested by Ness to facilitate or assist in
the protection of Ness' Product Rights.
6.6 Escrowed Business Information
Ness must at the request of FAI from time to time deliver the Escrowed
Business Information to FAI and FAI must not:
(a) copy the Escrowed Business Information; or
(b) use or divulge the Escrowed Business information in any way
unless it is entitled to exercise its rights under Clause 3.4(f)
7 WARRANTIES
7.1 From Ness
Ness hereby warrants to FAI that:
(a) it has full title and authority to enter into this Agreement;
(b) it shall use its best endeavours through the currency of this
Agreement to fulfil all the purposes and objectives herein
contained;
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(c) it shall not be a party or be related in any way to any business,
act, matter or thing whereby FAI's rights under this Agreement
may be prejudicially affected.
7.2 From FAI
FAI hereby warrants to Ness that:
(a) it has full title and authority to enter into this Agreement;
(b) it shall use its best endeavours through the currency of this
Agreement to fulfil all the purposes and objectives herein
contained;
(c) it shall not be a party or be related in any way to any business,
act, matter or thing whereby Ness' rights under this Agreement
may be prejudicially affected.
7.3 Insurance
Ness shall obtain and maintain all reasonably necessary insurances
including product liability insurance to a value of not less than $10
million for each and every claim in relation to the Product. Ness must
upon request by FAI supply to FAI copies of relevant Insurance
Policies and Certificates of Currency. FAI may, if Ness fails to do
so, pay the cost of renewing any relevant Insurance Policy and Ness
indemnifies FAI against any such costs.
8 TERMINATION AND EXPIRY
8.1 Expiry
This Agreement shall expire on the expiry of the Term or earlier
termination pursuant to this Clause.
8.2 Grounds of Termination
This Agreement may be terminated forthwith by notice in writing by the
party not in default to the other party if an event of default occurs
in relation to that other party. An "event of default" will occur upon
the happening of any one or more of the following events:
(a) if, subject to clause 3.4(d), FAI does not pay any correct
invoice for the purchase price of any Product within 14 days of
the date upon which FAI receives written notice from Ness
requiring it to do so;
(b) if a party defaults in observing any of its obligations under
the Agreement and such default, being capable of remedy remains
unremedied for a Period of 21 days (or 14 days in the case of an
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obligation to pay money) after written notice from the other
party requiring that such default be remedied;
(c) (i) the appointment of a liquidator or provisional liquidator
in respect of a party because it is or may become
insolvent;
(ii) the winding up of a party, at the instigation of a party's
creditors or any class of its creditors;
(iii) the appointment of an Administrator in respect of a party;
(iv) the entry by a party into a scheme of arrangement or
composition with or assignment for the benefit of all or
any class of its creditors, or a moratorium involving any
of them;
(v) a party being or stating that it is unable to pay its debts
when they fall due;
(vi) the appointment of a receiver or receiver and manager in
respect of any property of a party;
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(vii) an application being made which is not dismissed within
5 business days for an order, a resolution being passed or
proposed, a meeting being convened or any other action
being taken in relation to a party to cause anything
described in this Clause 8.2(c), or
(viii) anything analogous to or similar in effect happening to
any party to cause anything described in Clause 8.2(c)
under the law of any relevant jurisdiction,
The party affected by an event described in Clause 8.2(c) will be
regarded as the party in default and no notice of breach will be
required in those circumstances.
8.3 Special Ground of Termination
Unless otherwise agreed in writing by FAI, this Agreement may be
terminated by FAI with immediate effect by notice in writing to Ness
if the application of Clause 3.3(b) or clause 3.3(e) has the effect of
increasing the price of each Product by more than 20 per cent of the
price applying on the date which is 12 months before the date of the
increase or if FAI becomes entitled to exercise its rights under
Clause 3.4(f).
8.4 Effect of Termination or Expiration
(a) Any termination or expiration of this Agreement shall:
(i) be without prejudice to any other remedies which either
party may have against the other arising out of such breach
or default of the Agreement;
(ii) not affect any rights or obligations of either party,
arising under this Agreement prior to termination or any
obligations of confidentiality under clause 3.4 and clause
6; and
(iii) in the event of termination due to a breach by Ness, bind
Ness not to sell any products similar in design or
construction to the Product or which might reasonably be
regarded as a competitor of or substitute for the Product
outside the United States of America or other countries
specified by both parties in writing for a period of six
months from the date of such Termination or Expiration.
-17-
(b) Upon termination or expiration of this Agreement, for any reason,
FAI shall purchase all Product ordered and forecast for purchase
by FAI provided that the Product are delivered by Ness in
accordance with this Agreement. All warranties given by Ness will
subsist in relation to Products delivered after the termination
or expiry of this Agreement.
9 TERM
This Agreement will commence on the date it is executed by the parties and
will continue until one party gives the other at least twelve months prior
written notice that, at the end of that period of notice (which must not be
earlier than the tenth anniversary of the execution date), the Agreement
will terminate.
10 GOVERNING LAW & JURISDICTION
Subject to Clause 11:
(a) this Agreement is governed by and shall be construed in accordance
with the laws of New South Wales;
(b) the parties irrevocably and unconditionally submit to the
non-exclusive jurisdiction of the Courts of New South Wales and any
Courts which have jurisdiction to hear appeals from any of those
Courts and the parties waive any right to object to any proceedings
being brought in those Courts because the venue is inconvenient, the
Courts lack jurisdiction or any other reason; and
(c) any process or other document relating to proceedings relating to this
Agreement may be served by any method contemplated by Clause 13.5.
11 ARBITRATION
If at any time during or after the term of this Agreement a party to this
Agreement delivers a written notice to the other party requesting that a
dispute, controversy or claim arising out of or relating to this Agreement
be referred to arbitration, unless the party receiving such notice informs
the other party in writing within seven days of such notice that it does
not wish to arbitrate such dispute, controversy or claim it shall be
referred to arbitration administered by the ACDC. The arbitrator shall be
agreed between the parties from a panel suggested by ACDC or, failing
agreement, an arbitrator appointed by the Secretary-General of ACDC and
shall be conducted in accordance and subject to the terms of the Commercial
Arbitration ▇▇▇ ▇▇▇▇. Nothing in this clause 11 will prevent a party from
seeking interlocutory relief in a Court of Law.
-18-
12 EXTENDED WARRANTY
12.1 Appointment
Ness irrevocably appoints and authorises FAI as its agent to offer
the Extended Warranty in relation to the Product for a period which
extends up to 2 years past the Term of this agreement.
12.2 Undertaking
FAI undertakes to Ness that:
(a) FAI will comply with the requirements of any law relating to the
Extended Warranty and/or the way in which it is offered;
(b) FAI will, on behalf of Ness, perform all of the obligations on
the part of Ness to be performed under the Extended Warranty;
(c) FAI must provide to Ness any information concerning the Extended
Warranty and Ness' potential liability under the Extended
Warranty requested by Ness.
12.3 Indemnity
FAI hereby indemnifies Ness at all times against all costs (including
legal costs on a full indemnity basis) losses, liabilities, damages,
actions, suits, proceedings, claims, demands and expenses of whatever
kind and nature directly or indirectly arising by reason of or in
connection with:
(a) any breach of the undertakings contained in Clause 12.2;
(b) the Extended Warranty;
(c) any failure by FAI to perform, on behalf of Ness, any of the
obligations contained in the Extended Warranty.
12.4 Insurance
Ness' obligations under this Clause 12 are subject to and conditional
upon Ness using its best endeavours to obtain confirmation from the
Insurance and Superannuation Commission that the Extended Warranty is
not a contract of insurance.
-19-
12.5 Other Liabilities
The Indemnity contained in clause 12.3 does not limit any liability
Ness may have at law or under any other term of this Agreement,
including any liability in tort contract or otherwise for any
special, indirect, incidental or consequential damages suffered as a
result of any breach of Warranty by Ness or a claim by a third party.
13 GENERAL
13.1 Assignment
(a) Ness will not transfer or assign the benefit of this Agreement
or the rights and obligations hereby conferred without the prior
written consent of FAI.
(b) FAI will not transfer or assign the benefit of this Agreement or
the rights and obligations hereby conferred without the prior
written consent of Ness.
13.2 Entire Agreement
This Agreement constitutes the entire Agreement between the parties
and this Agreement may be amended only in writing signed by the
parties or their duly authorised representatives.
13.3 Severance
If any provision of this Agreement is unlawful or unenforceable, such
provisions shall be deemed severable and all other provisions hereof
shall remain in force.
13.4 Counterparts
This Agreement may consist of a number of counterparts and the
counterparts taken together constitute one and the same instrument.
13.5 Notice
(a) Any notice, demand, certification or other communication under
this Agreement shall be given in writing and in the English
language and may be given by an authorised officer of the
sender.
(b) In addition to any means authorised by law, any communication
may be given by:
(i) being left at the party's current address for service;
-20-
(ii) being sent to the party's current address for service by
pre-paid airmail; or
(iii) by facsimile to the party's current number for service.
(c) The addresses and numbers for service are initially:
FAI Home Security Pty Limited & FAI Home Security
Holdings Pty Limited
Address: ▇▇▇▇▇ ▇, ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax: ▇▇▇▇ ▇▇▇▇
Phone: ▇▇▇▇ ▇▇▇▇
Ness Pty Limited
Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇
Fax: ▇▇▇▇ ▇▇▇▇
Phone: ▇▇▇▇ ▇▇▇▇
(d) A communication given by post shall be deemed received on the
fifth Business Day after posting.
(e) A communication sent by facsimile shall be deemed received when
the sender's facsimile machine produces a transmission report
stating that the facsimile was sent to the addressee's facsimile
number.
(f) Communications sent by facsimile shall be deemed given in the
form transmitted unless the message is not fully received in a
legible form and the addressee immediately notifies the sender
of that fact.
(g) If a communication is received by either party after 4.00 pm or
on a day which is not a Business Day it will be deemed to have
been received on the next Business Day.
-21-
EXECUTED AS AN AGREEMENT
The Common Seal of )
NESS SECURITY PRODUCTS PTY )
LIMITED was hereunto affixed by )
authority of its Board of Directors )
.................................... ...............................
Dr ▇▇▇▇ ▇▇▇▇▇▇▇▇ - Director ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ - Director
The COMMON SEAL of )
FAI HOME SECURITY PTY LIMITED )
was hereunto affixed by authority of )
its Board of Directors in the presence )
of: )
.................................... ...............................
Director Director/Secretary
.................................... ...............................
Name of authorised person Name of authorised person
(Block letters) (Block letters)
The COMMON SEAL of )
FAI HOME SECURITY HOLDINGS )
PTY LIMITED was hereunto affixed )
by authority of its Board of Directors )
in the presence of: )
.................................... ...............................
Director Director/Secretary
.................................... ...............................
Name of authorised person Name of authorised person
(Block letters) (Block letters)
-22-
1 DEFINITIONS & INTERPRETATIONS...........................................- 1 -
1.1 Definitions....................................................- 1 -
1.2 Interpretation.................................................- 3 -
1.3 Successors and Assigns.........................................- 4 -
1.4 Headings.......................................................- 4 -
1.5 References to and Calculations of Time.........................- 4 -
2 ORIGINAL AGREEMENT......................................................- 4 -
3 MANUFACTURE.............................................................- 4 -
3.1 Manufacture and Supply.........................................- 4 -
3.2 Product Warranties.............................................- 5 -
3.3 Sale and Purchase..............................................- 7 -
3.4 Delivery.......................................................- 8 -
3.5 Force Majeure..................................................- 9 -
3.6 Price Exclusive................................................- 9 -
3.7 Index Numbers..................................................- 9 -
3.8 FAI Estimate...................................................- 9 -
3.9 Risk and Title Retentions......................................- 9 -
3.10 Nominee of FAI................................................- 10 -
4 NEW MODEL..............................................................- 10 -
5 EXCLUSIVITY............................................................- 10 -
5.1 Ness..........................................................- 10 -
5.2 FAI...........................................................- 10 -
5.3 ACCC Notification.............................................- 10 -
5.4 ACCC Notification.............................................- 11 -
5.5 Severance.....................................................- 11 -
6 CONFIDENTIALITY........................................................- 11 -
6.1 Secrecy.......................................................- 11 -
6.2 Protection of Secrets.........................................- 11 -
6.3 Permitted Disclosure..........................................- 11 -
6.4 Notice of Infringements.......................................- 12 -
6.5 Assistance....................................................- 12 -
6.6 Escrowed Business Information.................................- 12 -
7 WARRANTIES.............................................................- 12 -
7.1 From Ness.....................................................- 12 -
7.2 From FAI......................................................- 13 -
7.3 Insurance.....................................................- 13 -
8 TERMINATION AND EXPIRY.................................................- 13 -
8.1 Expiry........................................................- 13 -
8.2 Grounds of Termination........................................- 13 -
8.3 Special Ground of Termination.................................- 14 -
8.4 Effect of Termination or Expiration...........................- ▇▇ -
-▇▇-
▇ ▇▇▇▇.................................................- ▇▇ -
▇▇ GOVERNING LAW & JURISDICTION.........................- 15 -
11 ARBITRATION..........................................- 15 -
12 EXTENDED WARRANTY....................................- 15 -
12.1 Appointment...............................- 15 -
12.2 Undertaking...............................- 16 -
12.3 Indemnity.................................- 16 -
12.4 Insurance.................................- 16 -
12.5 Other Liabilities.........................- 16 -
13 GENERAL..............................................- 16 -
13.1 Assignment................................- 16 -
13.2 Entire Agreement..........................- 17 -
13.3 Severance.................................- 17 -
13.4 Counterparts..............................- 17 -
13.5 Notice....................................- 17 -
-24-
EXHIBIT 10.4
DATED day of 1997
NESS SECURITY PRODUCTS PTY. LIMITED
(A.C.N. 069 984 372)
FAI HOME SECURITY PTY LIMITED
(A.C.N. ▇▇▇ ▇▇▇ ▇▇▇)
FAI HOME SECURITY HOLDINGS PTY LIMITED
(A.C.N. 003 125 264)
MANUFACTURING
AGREEMENT
DIBBS ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
Attorneys and Solicitors
▇▇▇▇▇ ▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇.▇.▇. ▇▇▇▇
▇▇▇▇▇▇▇▇▇
DX ▇▇▇ ▇▇▇▇▇▇
Tel: (▇▇) ▇▇▇▇ ▇▇▇▇
Fax: (▇▇) ▇▇▇▇ ▇▇▇▇
Ref: JPL:960763