Sample Business Contracts

Supply Agreement - Transgenomic Inc. and Hitachi Instruments Inc.

                                SUPPLY AGREEMENT

         THIS AGREEMENT (this "Agreement") is entered into as of March 10, 2000
by and between TRANSGENOMIC, INC., a Delaware corporation ("Transgenomic"), and
HITACHI INSTRUMENTS, INC., a California corporation ("HII"). (TRANSGENOMIC and
HII are hereinafter referred to jointly as the "Parties" and individually as a

         Section 1. SCOPE AND PURPOSE.

         (a)      HII agrees to sell to Transgenomic on a non-exclusive basis
                  certain equipment and related accessories as more fully set
                  forth in Exhibit A hereto ("Equipment") in accordance with the
                  terms and conditions of this Agreement. Exhibit A may be
                  amended from time to time by the addition, substitution or
                  modification of Equipment or the specifications relating
                  thereto as agreed to by the Parties.

         (b)      Transgenomic agrees to purchase from HII Transgenomic's
                  requirements for Equipment; provided that HII is able to
                  supply Equipment to Transgenomic meeting all agreed to
                  specifications set forth in Exhibit A hereto including, but
                  not limited to, those relating to performance and quality of
                  the Equipment, and is able to deliver Equipment to
                  Transgenomic in such quantities and at such times as is
                  required by Transgenomic.

         (c)      HII acknowledges that Transgenomic will incorporate Equipment
                  into one or more products manufactured by Transgenomic,
                  including its WAVE-Registered Trademark- products for the
                  separation of nucleic acids (the "Transgenomic Products").
                  Transgenomic reserves all rights to market Transgenomic
                  Products incorporating Equipment on a worldwide basis either
                  directly or through other third parties. Transgenomic shall
                  have the right to modify the Equipment in order to configure
                  the Equipment for a variety of uses in connection with its

         (d)      HII agrees to assist and support Transgenomic in modifications
                  of source code of the software HSM 3.0-20 as required for
                  implementation of Transgenomic applications. If such support
                  is deemed to be of significant expense to HII, then a mutually
                  agreed to fee will be paid by Transgenomic.

         Section 2. PURCHASING PROCEDURES.

         (a)      All purchases of Equipment by Transgenomic shall be made by
                  written purchase order issued to HII (a "Purchase Order") in a
                  form agreed to by the parties. Each Purchase Order shall
                  include, among other things, a description of Equipment to be
                  purchased, the quantity to be purchased, routing instructions,
                  delivery schedule, destination and confirmation of price. HII
                  agrees to accept telegraphic or telecopied (fax) Purchase
                  Orders. HII will deliver confirmation of the receipt of each
                  Purchase Order to Transgenomic within five (5) business days
                  of receipt by email or fax.


          (b)     Except for the specific items set forth in Section 2(a),
                  special instructions or different or additional terms which
                  appear either on Transgenomic's Purchase Order or on HII's
                  confirmation form shall not apply unless mutually agreed to in
                  writing by duly authorized officers of each of the Parties.

          (c)     HII shall only accept blanket Purchase Orders that originate
                  from the following Transgenomic facility or other locations
                  designated by Transgenomic:

                             Transgenomic, Inc.
                             [Purchasing Department]
                             5600 South 42 Street
                             Omaha, NE  68107

          (d)     Under no circumstances is HII to proceed with the manufacture
                  or delivery of Equipment for Transgenomic under this Agreement
                  or otherwise without the receipt and confirmation of a
                  Purchase Order relating thereto. HII acknowledges and agrees
                  that Transgenomic will not be responsible for any costs or
                  expenses incurred by HII for materials, supplies, labor or
                  other commitments relating to the manufacture or delivery of
                  Equipment other than as authorized by Purchase Order duly
                  delivered to HII.


         (a)      PRICES. The price of Equipment and other terms and conditions
                  of sale are as stated in Exhibit B. Either Party may request a
                  renegotiation of the price together with the date on which
                  such price change will become effective. In the event the
                  Parties agree to a change in the specifications of Equipment,
                  such change will not become effective until the Parties have
                  agreed on a revised price and the conditions of sale for the
                  newly specified Equipment. Changes in specifications may only
                  be initiated by the following named individuals on behalf of
                  HII and Transgenomic:

                  Changes may be accepted only by Mark McDonald or his designee
                  on behalf of HII.

                  Changes may be accepted only by Collin J. D'Silva or his
                  designee on behalf of Transgenomic.

                  New Equipment types will be added to Exhibit A upon the mutual
                  agreement of both Parties. New Equipment added to Exhibit A
                  shall be accompanied by an amendment to Exhibit B which will
                  specify price and other terms and conditions.

         (b)      TAXES. The amount of any present, retroactive or future sales,
                  use, excise or similar tax applicable to Transgenomic's
                  purchase of Equipment shall be added to the HII invoice and
                  paid by Transgenomic unless Transgenomic provides HII with tax
                  exemption certificates acceptable to the appropriate taxing


         (c)      PAYMENT. HII may invoice Transgenomic for Equipment sold
                  hereunder immediately upon delivery and Transgenomic shall pay
                  the full invoiced amount within forty five (45) days after the
                  date of HII's invoice.

         Section 4a. FORECASTS. Transgenomic will provide HII with a rolling
forecast of Transgenomic's estimated requirements for Equipment ("Forecast").
Each Forecast will relate to a four month period and will be delivered in
writing to HII at the address specified in Section 15 hereof no later than five
(5) business days after the first day of each month. In addition, no Forecast
shall be construed as a purchase order for Equipment. Transgenomic agrees to
place orders for a minimum of 75% of its Forecast for a given period. An initial
Forecast form is set forth in Exhibit C.

         Section 4b. DELIVERY. All deliveries shall be made FOB HII's San Jose
facilities, and title and risk of loss shall pass to Transgenomic at such
delivery point. HII will use reasonable efforts to deliver Equipment to a
carrier at such delivery point on the estimated shipment date for transportation
to the location(s) specified in Transgenomic's Purchase Order. Shipments shall
be in quantities specified in Purchase Orders. Shipping dates shall be the later
of five (5) days within receipt of the Purchase Order, or a date as specified on
the order, provided that if the quantity of Equipment which Transgenomic orders
for delivery in a month exceeds the quantity forecast for that month by more
than 25%, HII may exceed the five (5) day delivery requirement for a reasonable
period for that quantity that exceeds the Forecast. In the event HII is unable
to deliver to Transgenomic quantities as specified in Transgenomic's Purchase
Orders, Transgenomic reserves the right to cancel those Purchase Orders and
purchase from alternate sources. When HII is able to satisfy the production
requirements of Transgenomic, Transgenomic will resume purchasing from HII.

         Section 5. INSPECTION AND ACCEPTANCE. Transgenomic will inspect any
shipment of Equipment received from HII and will notify HII of any defects
within five (5) days after Transgenomic has discovered such defects. If
Transgenomic fails to notify HII of any such defects within such period, the
shipment shall be deemed accepted. Transgenomic will allow HII to inspect any
defective Equipment at Transgenomic's site. At the request of HII, Transgenomic
will ship to HII Equipment that Transgenomic believes is defective, provided HII
pays for the freight charges. HII agrees to replace all defective Equipment
rejected by Transgenomic or, at HII's option, to reimburse Transgenomic for the
full purchase price thereof, including any related shipping costs and taxes.


         (a)      HII warrants the Equipment to be free from defects in material
                  and manufacture and to conform to specifications set forth in
                  Exhibit A at the time of shipment. If any Equipment fails to
                  conform to the specifications or any defect in material or
                  manufacture appears within 24 months from the date of
                  shipment, HII's entire liability, and Transgenomic's exclusive
                  remedy, shall be, at HII's option, either to repair or replace
                  such defective Equipment within a reasonable time after
                  written notification thereof and return of the defective
                  Equipment to HII in San Jose, California.




                  This limitation applies regardless of whether such damages are
                  sought based on breach of contract, negligence, strict
                  liability in tort or any other legal theory.

         (b)      Any action for breach of warranty or any other obligation
                  under this Agreement must be commenced within one year after
                  the breach occurs.

         (c)      Each limitation on liability or limited or exclusive remedy
                  set forth in this Agreement is independent of any other
                  limitation or remedy and if any such limitation or remedy
                  fails of its essential purpose or is otherwise held to be
                  unenforceable, that shall not affect the validity of any other
                  such limitation or remedy.


         (a)      HII agrees to provide all available technical support and
                  literature, including information on the use of the Equipment
                  being supplied to Transgenomic to facilitate its use in
                  Transgenomic Products.

         (b)      HII shall make available for purchase all necessary
                  consumables, accessories and spare parts for the operation,
                  repair and proper servicing of each unit of Equipment to
                  Transgenomic and to Transgenomic's customers for a period of
                  seven years following the date of the delivery of the
                  Equipment. This provision shall survive termination of this

         (c)      HII shall provide, free of charge, Transgenomic with all
                  necessary copies (maximum of three copies) of all manuals,
                  brochures and part price lists concerning the servicing of
                  each unit of Equipment. Hitachi will make no provision to
                  re-label or otherwise modify such manuals, brochures and part
                  price lists without a prior written agreement.


         Section 9. PRODUCT IDENTIFICATION AND LABELING. All Transgenomic
Products shall carry the Transgenomic name (or other name designated by
Transgenomic) and will not use the HII brand name except as mutually agreed to
by the Parties. There shall be no obligation on the part of Transgenomic to
purchase or acquire any right to use the HII name or any other trademark,
tradename or other symbol or designation used by HII or to make any reference to
HII on any Equipment or Transgenomic Products incorporating Equipment.


         (a)      "Confidential Information" shall mean all such confidential
                  and proprietary information of any kind, whether or not fixed
                  in a tangible medium, including, without limitation, systems
                  concepts, drawings, models, software embodiments,
                  specifications, plans, designs, marketing plans, identity of
                  customers, trade secrets and technical data, as either of the
                  Parties (the disclosing Party) may designate as confidential
                  upon disclosure to the other (the receiving Party). For the
                  purposes of this Agreement, appropriate words of designation
                  include, without limitation, the words "Confidential" or
                  "Proprietary." Any information disclosed orally by either
                  Party shall not be considered "Confidential Information"
                  unless clearly identified as confidential or proprietary at
                  the time of such oral disclosure and summarized by the
                  disclosing Party in a writing which is clearly marked
                  "confidential" or "proprietary" and sent to the recipient
                  Party within 30 days after the initial oral disclosure.
                  Confidential Information includes the existence and terms of
                  this Supply Agreement.

         (b)      Confidential Information shall not include any information
                  that the receiving Party reasonably establishes:

                  (i)      was in the public domain at the time the receiving
                           Party learns of it, or later becomes publicly known
                           through no wrongful act of the receiving Party;

                  (ii)     was known to the receiving Party prior to the date of
                           their Agreement, as shown by written records of the
                           receiving Party, and was not subject to prior
                           confidentiality obligations with the disclosing

                  (iii)    was received by the receiving Party from a third
                           party who had a lawful right to disclose it to the
                           receiving Party and no obligation to maintain the
                           confidentiality of such information;

                  (iv)     was independently developed by the receiving Party
                           without the use of or reference to the Confidential
                           Information of the disclosing Party; provided,
                           however, that such information as is not included
                           within Confidential Information because it meets the
                           conditions of subsection (b)(i), (iii), or (iv) or of
                           this Section 10 shall be deemed to be Confidential
                           Information until the date it becomes public
                           knowledge, is independently developed, is received
                           from a third party or is approved for release, as the
                           case may be.

         (c)      All Confidential Information received under this Agreement
                  shall be treated by the recipient Party with reasonable care
                  to assure that the confidentiality of such


                  Confidential Information is maintained, and that such
                  Confidential Information is not distributed, disclosed or
                  disseminated in any way to anyone except employees of the
                  recipient Party who are involved in the work related to this
                  Agreement and who have a need to know such information.

         (d)      All rights the disclosing Party may have in Confidential
                  Information prior to disclosure, including, without
                  limitation, rights of patent, copyright and trade secret,
                  shall remain exclusively with the disclosing Party, and
                  nothing in this Agreement shall be construed as granting any
                  license, waiver or other right to the receiving Party with
                  respect to Confidential Information.

         (e)      Each of the Parties shall have the right to refuse to receive
                  any information under this Agreement and nothing in this
                  Agreement shall obligate either Party to disclose to the other
                  any information whatsoever.

         (f)      The receiving Party shall promptly return all Confidential
                  Information to the disclosing Party upon termination of this
                  Agreement or at any time upon request and shall certify,
                  represent and warrant that all such Confidential Information
                  and copies and extracts thereof have been returned or
                  destroyed, provided that the recipient Party may retain one
                  copy of the Confidential Information for archival purposes in
                  the event of a dispute as to the Confidential Information

         (g)      The Parties agree that the production processes used by HII to
                  manufacture Equipment covered by this Agreement are
                  confidential and will be treated as Confidential Information
                  under this Agreement and are proprietary to HII. In addition,
                  the Parties agree that the specifications of Equipment covered
                  by this Agreement as supplied by Transgenomic are Confidential
                  Information and proprietary to HII and will be treated as
                  Confidential Information under this Agreement. The Parties
                  agree that the production processes used by Transgenomic to
                  manufacture Transgenomic Products are confidential and will be
                  treated as Confidential Information under this Agreement and
                  are proprietary to Transgenomic. In addition, the Parties
                  agree that the specifications of Transgenomic Products are
                  Confidential Information and proprietary to Transgenomic and
                  will be treated as Confidential Information under this
                  Agreement. All such treatment shall be effective without
                  regard to whether the subject information is specifically
                  designated as confidential under Section 10(a).

         Section 11.  INDEMNIFICATION.

         (a)      HII will indemnify, defend and hold harmless Transgenomic and
                  its directors, officers, agents and employees from any loss,
                  claim, liability and expense (including reasonable attorneys'
                  fees and other expenses of litigation) with respect to:

                  (i)      workers' compensation benefits payable on account of
                           sickness, injury or death of any HII employee, or to
                           any employee of HII's subcontractors, agents or
                           delegates, where the sickness, injury or death arises
                           out of or is in


                           any way related to the work performed or to be
                           performed under this Agreement; and

                  (ii)     claims for sickness, bodily injury, personal injury,
                           death, property damage or loss as asserted by third
                           parties (including employees of HII or by HII's
                           subcontractors, agents or delegates, or by any other
                           person at HII's plant), where the claim is based in
                           whole or in any part on, or is in any way related to,
                           any act or omission attributable to HII, its agents,
                           employees or subcontractors, or in any way related to
                           the work performed or to be performed or the
                           Equipment supplied under this Agreement, except to
                           the extent that such claims are due solely and
                           directly to the negligence of Transgenomic.

         (b)      HII agrees that the indemnities stated in subsection 11(a)
                  should be construed and applied in favor of indemnification.
                  To the extent permitted by law, the stated indemnities apply
                  (i) regardless of any strict liability or negligence
                  attributable to Transgenomic (excluding sole negligence) and
                  (ii) regardless of the extent to which the underlying harm is
                  attributable to the negligent or otherwise wrongful act or
                  omission (including breach of contract) of HII, its
                  subcontractors, agents or employees. HII also agrees that if
                  applicable law limits or precludes any aspect of the stated
                  indemnities, then the indemnities will be considered limited
                  only to the extent necessary to comply with that applicable
                  law. The stated indemnities continue until all applicable
                  statutes of limitations have run.

         Section 12.  TERM AND TERMINATION.

         (a)      TERM. The term of this Agreement begins on the date first
                  above written and continues until terminated by either Party
                  as provided herein.

         (b)      TERMINATION WITH CAUSE. Either Party may terminate this
                  Agreement during the term of this Agreement, upon written
                  notice, sent registered or certified mail, return receipt
                  requested, in the event the other Party fails to perform a
                  material obligation under this Agreement or otherwise is in
                  breach of any of its material obligations hereunder. Failure
                  to perform or breach of a material obligation includes,
                  without limitation, (i) failure to deliver Equipment as agreed
                  to by the Parties or (ii) failure of the Equipment delivered
                  to Transgenomic to conform to the specifications. The Party
                  receiving such notice shall have 30 days from the date of
                  receipt thereof to cure the failure or breach. If the Party
                  receiving such notice does not cure the failure or breach
                  within such cure period, the Party claiming breach may
                  terminate this Agreement by sending written notice of
                  termination, by certified mail, return receipt requested. The
                  issuance of a Blanket Purchase Order Release during the 30-day
                  cure period does not waive the notice of breach. If HII has
                  the right to terminate this Agreement pursuant to this Section
                  12(b), or has demanded cure of a Transgenomic default pursuant
                  hereto which has not yet been cured, HII may also suspend its
                  performance under this Agreement and any individual sales
                  contracts concluded pursuant hereto and, by written demand to
                  Transgenomic, cause all amounts owed to it by Transgenomic
                  which are not yet due to become immediately due and payable.


         (c)      TERMINATION WITHOUT CAUSE. Transgenomic or HII may terminate
                  this Agreement at any time without having to state,
                  demonstrate or possess cause by giving written notice of
                  termination to the other party at least 180 days prior to the
                  effective date of termination.

         (d)      ORDER AFTER TERMINATION. Any order placed by Transgenomic and
                  accepted by HII after the termination of this Agreement is
                  governed by the provisions of this Agreement. The placing or
                  acceptance of post-termination or shipment of post-termination
                  orders does not otherwise extend the term of this Agreement.
                  Notwithstanding the foregoing, if terminated by HII pursuant
                  to Section 12(c), Transgenomic shall have the option to
                  purchase during the six month period after termination, the
                  quantity of Equipment equivalent to three times its previous
                  six-month's purchases and such purchases shall be governed by
                  this Agreement, and if terminated by Transgenomic pursuant to
                  Section 12(c), Transgenomic shall have the obligation to
                  purchase the quantity of Equipment equal to its current four
                  month Forecast or the prior four month period if no forecast
                  has been provided, and such purchases shall be governed by
                  this Agreement.

         (e)      EFFECT OF TERMINATION OR NONRENEWAL. The termination of this
                  Agreement shall not release either Party from the obligation
                  to pay any sum that may be owing (whether then or thereafter
                  due) or operate to discharge any liability that had been
                  incurred by either Party prior to any such termination. The
                  provisions of Sections 3(b), 3(c), 6, 7, 10, 11, 12(d), 12(e),
                  and 13 through 21, shall survive any termination of this

         Section 13. EXCUSED PERFORMANCE. No Party shall be liable for or be
deemed to be in default on account of any failure to perform (except payment of
HII's invoices) if due to any cause or condition beyond reasonable control of
the nonperforming Party.

         Section 14. RELATIONSHIP OF THE PARTIES. The relationship established
between HII and Transgenomic by this Agreement is that of a vendor to its
vendee. No Party is an agent of another Party and no Party has authority to bind
another Party, transact any business in another Party's name or on its behalf in
any manner or make any promises or representations on behalf of another Party.

         Section 15. NOTICES. All notices and other communications shall be in
writing and shall be deemed to have been given when received. Any notice to be
given to Transgenomic shall be addressed to:

                            Transgenomic, Inc.
                            5600 South 42 Street
                            Omaha, NE  68107
                            Attention:  Collin J. D'Silva
                            Telephone:  (402) 738-5480
                            Telecopier:  (402) 733-1264


Any notice to HII shall be addressed to:

                            Hitachi Instruments, Inc.
                            3100 North First Street
                            San Jose, CA 95134
                            Attention:  Mark McDonald
                            Telephone: (408) 955-7001
                            Telecopier: (408) 432-8258

Any change in address shall be promptly communicated by either Party to the
other Party.

         Section 16. NO ASSIGNMENT. No Party shall assign its rights or delegate
its duties under this Agreement without written consent of the other Party. Any
assignment, delegation or transfer of this Agreement or any interest herein is
void and cause for termination of this Agreement.

         Section 17. WAIVER. Any failure or delay by any Party in exercising any
right or remedy in one or many instances will not prohibit a Party from
exercising it at a later time or from exercising any other right or remedy.

         Section 18. MODIFICATION. No part of this Agreement may be waived,
modified or supplemented in any manner whatsoever (including a course of dealing
or of performance or usage of trade) except by a written document signed by
authorized officers of the Parties.

         Section 19. GOVERNING LAW. This Agreement and any questions, claims,
disputes or litigation concerning or arising from this Agreement shall be
governed by the laws of California, United States of America without giving
effect to the conflicts of law doctrines of any state, provided that the Federal
Arbitration Act shall apply in place of and instead of the California
Arbitration Act and the California International Arbitration Act.

         Section 20. ENTIRE AGREEMENT. This Agreement and the Exhibits referred
to in this Agreement, which Exhibits are incorporated and made a part of this
Agreement by this reference, supersede and terminate any and all prior
agreements, if any, whether written or oral, between the Parties with respect to
the subject matter contained herein. Each Party agrees that it has not relied on
any representation, warranty or provision not explicitly stated in this
Agreement and that no oral statement has been made to either Party that in any
way tends to waive any of the terms or conditions of this Agreement. This
Agreement constitutes the final written expression of all terms of the
Agreement, and it is a complete and exclusive statement of those terms.

         Section 21. DISPUTE RESOLUTION. The parties agree that all disputes
arising in connection with this Agreement shall be finally settled by binding
arbitration under the Commercial Arbitration Rules of the American Arbitration
Association by one or more arbitrators appointed in accordance with said rules
and taking place in San Jose, California USA. If a party commences any action or
proceeding against the other party to enforce this Agreement or any rights
related thereto, the prevailing party in such action or proceeding shall be
entitled to recover from the other party the reasonable attorneys' fees and
other costs and expenses incurred


by that prevailing party in connection with such action or proceeding and in
connection with enforcing any judgment, award or order thereby obtained.

         IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.

                                TRANSGENOMIC, INC.

                                By  /s/ COLLIN J. D'SILVA
                                   Collin J. D'Silva, Chief Executive Officer

                                HITACHI INSTRUMENTS, INC.

                                By /s/ MARK MCDONALD
                                Mark McDonald, President


                                    EXHIBIT A


The nucleic acid analysis unit shall contain at a minimum the following

ITEM P/N          DESCRIPTION                  QPA
<S>               <C>                          <C>



Changes in specifications may be initialized only by authorized individuals on
behalf of HII and Transgenomic.


                                    EXHIBIT B

                           EQUIPMENT PRICES AND TERMS

The instrument as specified in Exhibit A will be $** per system with no
minimum purchase order requirement, or for individual components, prices will be
as follows:

ITEM  P/N           DESCRIPTION                     QPA    UNIT PRICE   EXTENSION
<S>   <C>           <C>                              <C>       <C>       <C>







         I.     The following terms apply to all purchase orders. These terms
                supersede the terms that may be printed on the purchase order.

                A. FOB Point is "San Jose, CA".
                B. Shipments will not be insured unless they are in excess of
                   $400,000. If a shipment is in excess of $400,000, HII will
                   insure the shipment at Transgenomic's expense.
                C. Shipment charges will be prepaid by HII and added to invoice.
                D. For orders in excess of $75,000, payment will be due 45
                   days from date of shipment with payment secured by Bank
                   Draft for an additional charge of $120. For orders of
                   $75,000 or less, payment will be due 30 days from date of

         II.    All Orders are subject to credit review. Current Bank Draft
                Credit Limit is $1,000,000 and the open line of credit is
                $120,000. Credit limits are subject to periodic review.

         III.   HII will not accept unsigned purchase orders or unsigned
                releases against a signed purchase order.

         IV.    For purchase orders where the shipping method is either
                unspecified or specified as "Best Way", shipment will be (3-5
                day ground service) determined by HII.


         I.     The accompanying pricing schedule may be voided, at HII's
                discretion, if a system component supplied by HII is removed
                from the system configuration by Transgenomic. The only
                exception to this condition is AN0-0371, the modified L-7300
                column oven.

         II.    Pricing is effective immediately upon execution of this
                document by both parties.

         III.   This agreement does not provide for modifications to any
                existing purchase order. Such modifications, cancellations,
                substitutions, or otherwise, to purchase orders that have
                already been received by HII, are expressly forbidden.


                                    EXHIBIT C

                                INITIAL FORECAST

Pursuant to Section 4(a), Transgenomic forecasts the following items of
Equipment for delivery in each of the initial four months of this Agreement:

MONTH                                EQUIPMENT
<S>                                  <C>

April 2000

May 200

June 2000

July 2000

** Certain confidential portions of this Exhibit were omitted by means of
redacting a portion of the text indicated by two double-stricken through
asterisks "**". This Exhibit has been filed separately with the Secretary of the
Commission without the ** pursuant to the Registrant's Application Requesting
Confidential Treatment under Rule 406 of the Securities Act.