Exhibit 10.2
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
UTStarcom JRC
Sales Agreement
between
JAPAN RADIO CO.
and
UTSTARCOM
TABLE OF CONTENTS
1. Definitions .........................................................5
2. General .............................................................5
3. Marketing arrangement ...............................................6
4. Forecasts ...........................................................6
5. Deliveries ..........................................................7
6. TERMS OF PAYMENT ....................................................8
7. INSPECTION AND ACCEPTANCE ...........................................9
8. SAFETY STANDARDS AND REGULATIONS ....................................9
9. PRODUCT SPECIFICATIONS .............................................10
10. Support ............................................................11
11. SPARE PARTS ........................................................11
12. WARRANTY ...........................................................12
13. TRADEMARKS .........................................................14
14. PATENTS ETC ........................................................14
15. DURATION OF THE AGREEMENT ..........................................15
16. TERMINATION OF THE AGREEMENT .......................................15
17. COMPENSATION FOR DAMAGES ...........................................17
18. DISCLOSURE OF INFORMATION ..........................................17
19. PUBLICITY ..........................................................18
20. ASSIGNMENT .........................................................18
21. NOTICES.............................................................19
22. EXCEPTIONS .........................................................19
23. ENTIRE AGREEMENT ...................................................20
24. ARBITRATION ........................................................20
25. GOVERNING LAW AND TRADE TERMS ......................................20
26. MISCELLANEOUS ......................................................21
Exhibit A Product Specifications ............................................23
Exhibit B Delivery order rescheduling and cancellation ......................29
Exhibit C PRICE LIST and NRE ................................................31
Exhibit D Support ...........................................................33
Exhibit E Manufacturing Support .............................................35
Exhibit F Schedule ..........................................................37
Exhibit G Inspection standard and procedures ................................39
AGREEMENT
This Agreement is made and entered into as of this 16th day of MARCH,
2000, by and between Japan Radio Company, Ltd., a corporation organized under
the laws of Japan, with its principal place of business at Xxxxxxx Xxxx Xxxxx,
00-00, Xxxxxxx 2 chome, Xxxxxx-xx, Xxxxx 000-0000, Xxxxx ("JRC" or "THE
COMPANY") and UTStarcom (Hangzhou) Co., Ltd., a China registered corporation
having its principal place of business at 3 Yile Industry Park, No. 129, Wenyi
Road, Hangzhou 310012, Peoples Republic of China ("UTStarcom" or "THE BUYER").
The BUYER desires to purchase from the COMPANY, and the COMPANY is
willing to sell to the BUYER, certain products manufactured by the COMPANY under
the UTStarcom brand and described in Exhibit A attached hereto (the "PRODUCT"),
for resale in certain territories, on the terms and conditions contained in this
Agreement.
In consideration of the foregoing and of the mutual agreements and
covenants contained below, the parties agree as follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms have the following
respective meanings:
1.1 "DOCUMENTATION" means the explanatory material commonly
distributed by the COMPANY with the PRODUCT and any
modifications, translations or updates thereto.
1.2 "PRODUCTS" means the [*] corresponding SO writer and accompanying
software, and products described in Exhibit A and any
enhancements, updates or all future generations of product
offerings thereto.
1.3 "TERRITORY" means [*].
2. GENERAL
2.1 The parties hereto agree to implement the initial phase of this
Agreement as specified in Exhibit F attached hereto and made an
integral part hereof in respect to the date of delivery and
quantity of prototypes, preproduction samples, first production
units and exchange of documentation, and other matters relating
to the performance of the initial phase of this Agreement.
2.2 The BUYER shall at its own expense direct its vigorous activities
for the sale of the PRODUCTS under the BUYER's name and
trademarks. The BUYER will send to the COMPANY as much market
information as possible useful for the
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
development and manufacture of the PRODUCTS. The COMPANY will
make every effort within its power to meet the BUYER's
requirements in respect of quantities and delivery dates of the
PRODUCTS to be purchased by the BUYER hereunder. Both parties
shall cooperate with each other in good faith to establish a
mutually close and prosperous relationship. If problems should be
encountered with respect to any aspect of marketing or technical
matters concerning the PRODUCTS for any reason whatsoever or if
the parties should encounter any problems not covered by this
Agreement, the COMPANY and the BUYER shall discuss them in a
cooperative and sincere spirit and attempt to arrive at a mutual
understanding in the spirit of building a close collaborative
relationship.
3. MARKETING ARRANGEMENT
3.1 The BUYER shall have the right to sell and distribute the
PRODUCTS only within the TERRITORY. Should the BUYER in the
future desire to market the PRODUCTS outside the TERRITORY, the
BUYER shall so notify the COMPANY for mutual discussion about
such outside marketing. The BUYER shall be responsible for all
losses, damages, expenses or other liabilities incurred or
sustained by the COMPANY arising out of resale or reexport of the
PRODUCTS made directly or indirectly by the BUYER or its
distributors in or to any place outside the TERRITORY in breach
of this Agreement or any applicable laws or regulations.
3.2 The BUYER agrees not to sell, or knowingly allow the resale of
the PRODUCT to military organizations.
3.3 It is expressly understood and agreed that the COMPANY may freely
sell any PRODUCTS, whether identical with or similar to the
PRODUCTS, under any trademarks other than those of the BUYER to
any third party or parties in any country in the world.
4. FORECASTS
4.1 The BUYER agrees to purchase and the COMPANY agrees to sell the
PRODUCTS in the quantities and at the prices set forth in Exhibit
C attached hereto and made an integral part hereof.
4.2 The COMPANY will promptly effect shipment of the PRODUCTS after
the manufacture thereof shall have been completed in each month
of production as agreed. Delivery terms shall be on the basis of
FOB Japan (or country of manufacture).
4.3 The BUYER's good faith forecast for its expected purchases of
PRODUCTS for the twelve month period beginning from April 1, 2000
is [*] Beginning [*] after the first delivery order, the BUYER
shall then deliver to
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
the COMPANY a revised forecast at least once per [*] on a rolling
[*] basis.
4.4 Forecasts provided under the paragraph (4.3) above are for
planning purposes only and do not constitute an order commitment
or obligation on the part of the BUYER or the COMPANY. To the
extent reasonably possible, however, the BUYER agrees to place
orders consistent with such forecasts. The volume ordered by the
BUYER in any given month may be increased or decreased from the
volume included in the forecast and there shall be no fee
associated with such variance. If the BUYER submits any forecast
or places any order in which the quantity of PRODUCTS forecasted
or ordered for any month deviates by more than [*] from the
forecasted quantity of PRODUCTS for such [*] contained in the
most recent prior forecast submitted to the COMPANY, then the
parties shall negotiate in good faith to determine a mutually
agreeable delivery schedule, taking into account BUYER's delivery
requirements and the required lead time for any modifications to
the COMPANY's procurement, manufacturing and testing processes.
4.5 In addition to the formal procedures set forth above, the parties
agree that they will promptly inform each other of any material
change in their expectations or capabilities relating to the
manufacturing, ordering or delivery of PRODUCTS hereunder, such
as altered requirements and difficulties in productions.
5. DELIVERIES.
5.1 Delivery terms are FOB Japan or country of manufacture in
accordance with INCOTERMS 2000. Title and the risk of loss of the
PRODUCTS shall pass to the BUYER when delivered by the COMPANY at
FOB point.
5.2 Lead time for delivery of the first lot of the PRODUCTS is as
specified in Exhibit F. Lead time for deliveries of the second
lot onwards of the PRODUCTS shall not exceed [*] from the
acknowledgement by the COMPANY of the delivery orders of the
BUYER.
5.3 The BUYER shall before the [*] provide the COMPANY with delivery
orders showing the number of the PRODUCT which shall be delivered
in accordance with the delivery lead time as specified in article
5.2, including the PSIDs, country code and operator ID to be
programmed in said PRODUCTS to be delivered, the color or option
configuration of the PRODUCTS and also including whether the
PRODUCT shall be shipped [*] form. The COMPANY shall acknowledge
or reject the delivery orders placed by the BUYER within [*]
after the receipt thereof.
5.4 The BUYER shall have the right to change or terminate delivery
orders within the limits defined in Exhibit B.
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
5.5 When the COMPANY has acknowledged the delivery orders, the
COMPANY will send to the BUYER an individual sales contract to
the PRODUCTS (hereinafter called the "Sales Contract"). The BUYER
shall immediately upon receipt of the Sales Contract sign and
return the duplicate copy of it but failure of the BUYER to do so
shall not affect the validity of such Sales Contract. It is
specifically agreed, however, that if any export license or
permission is required for the export of the PRODUCTS the Sales
Contract shall come into effect and the delivery of the PRODUCTS
shall be made only when such export license or permission (if
conditional upon conditions reasonably satisfactory to the
COMPANY) shall have been obtained by the COMPANY. The BUYER
agrees that if due to delays in obtaining such license or
permission the shipping date of PRODUCTS as set forth in the
Sales Contract is delayed, such delay shall not constitute a
breach by the COMPANY of the Sales Contract; provided however
that the COMPANY shall promptly notify the BUYER of such delay
and will ship the PRODUCTS as soon as practicable after obtaining
such license or permission.
5.6 Any terms or conditions printed on the face or the reverse side
of the delivery order sheet and/or the Sales Contract shall not
be part of this Agreement unless both parties expressly agree in
writing otherwise.
6. TERMS OF PAYMENT
6.1 The BUYER [*] establish with a reputable bank satisfactory to the
COMPANY an irrevocable and, if so requested by the COMPANY,
confirmed letter of credit (not restricted, unless otherwise
agreed upon) in the full amount of the purchase price as stated
in the COMPANY's pro forma invoice, in Japanese currency, under
the Sales Contract in favor of the COMPANY available against the
COMPANY's sight draft to de drawn on the said establishing bank,
to reach the COMPANY at least [*] before the last day of the
month of production as set forth in the Sales Contract. The
letter of credit shall be payable to COMPANY [*] after the
Shipment Date and must allow TT reimbursement. A confirming bank
shall be a leading and first class international bank acceptable
to the COMPANY and, unless otherwise agreed upon, be a bank other
than the establishing bank of the letter of credit. Such letter
of credit shall provide for partial shipments and shall remain
valid for not less than [*] after the last day specified for
shipment. In the event that the letter of credit is to be advised
by facsimile, the BUYER shall cause a written confirmation
thereof to be air-mailed to the COMPANY via the advising bank.
6.2 The COMPANY reserves the right to demand compensation from the
BUYER for all losses and damages incurred by the COMPANY if such
losses or damages have been caused by the failure of the BUYER to
establish the letter of credit by the time specified hereinabove.
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
7. INSPECTION AND ACCEPTANCE
7.1 The BUYER shall have the right to conduct [*] an incoming
inspection of the PRODUCTS at the destination specified in the
xxxx of lading in accordance with the inspection standards and
procedures set forth in Exhibit G attached hereto and made an
integral part hereof. The BUYER shall notify the COMPANY of a
result of inspection judgment (acceptance or rejection) in
accordance with the said inspection standards and procedures by
facsimile or email within [*] after the date of arrival of the
PRODUCTS at the said destination. Should the BUYER fail to so
notify the COMPANY within said [*] period, the BUYER's right of
rejection of the PRODUCTS shall then lapse and the said PRODUCTS
shall be deemed to have been accepted by the BUYER.
7.2 If any PRODUCTS are rejected by the BUYER in the said incoming
inspection and such fact is clearly confirmed by the COMPANY,
then the procedure mentioned below shall follow:
The COMPANY will [*]
i) rework the rejected PRODUCTS, or
ii) replace same with the acceptable PRODUCTS, or
iii) request the BUYER to rework the PRODUCTS. In this case, the
COMPANY will furnish to the BUYER repair or replacement
parts necessary for the rework of the rejected PRODUCTS
performed by the BUYER. In case the BUYER conducts a 100%
inspection of the lot in which the rejected PRODUCTS are
included, the COMPANY agrees to pay the BUYER the labor
charge at the rate separately agreed upon between the
parties hereto. There are no other or additional expenses or
liabilities the COMPANY is to assume in connection
therewith.
8. SAFETY STANDARDS AND REGULATIONS
8.1 Upon the BUYER's request, the COMPANY shall, [*] take all
necessary steps so that the PRODUCTS shall pass the safety
standard or regulations in the TERRITORY or part of the TERRITORY
and effective as of the date of this Agreement, in which the
BUYER agrees to render to the COMPANY every possible assistance.
Otherwise, the BUYER shall, [*] take all necessary steps so that
the PRODUCTS shall pass the safety standards or regulations in
the TERRITORY or part of the TERRITORY and effective as of the
date of this Agreement, in which the COMPANY agrees to render to
the BUYER every possible assistance. The standards or regulations
set forth in this paragraph shall be hereinafter collectively
called the "STANDARDS".
8.2 In the event that after the date of this Agreement any of the
STANDARDS should be changed or modified or any other safety
standards applicable to the
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
PRODUCTS under any laws, regulations or official directive having
the force of law in the TERRITORY or any other standards or
requirements applicable to the PRODUCTS which have not the force
of law but the observance of which is in accordance with the
reasonable practice of the industry in the TERRITORY shall be
established (such other safety standards, standards and
requirements being hereinafter collectively called the "OTHER
STANDARDS"), the BUYER shall be responsible to furnish to the
COMPANY such information well in advance and the BUYER agrees to
bear [*] incurred in connection with or arising out of
modifications of the specifications of the PRODUCTS or reworking
the PRODUCTS as well as [*] arising out of or relating to
clearance of or passing such modified STANDARDS or OTHER
STANDARDS or listing the PRODUCTS by a competent organization or
authority under such modified STANDARDS or OTHER STANDARDS.
8.3 If the COMPANY suffers damages due to the delay in the COMPANY's
shipment of the PRODUCTS caused by the PRODUCTS failure to pass
the STANDARDS, modified STANDARDS or OTHER STANDARDS for a cause
attributable to the BUYER, the BUYER shall indemnify the COMPANY
from such damages; however, the parties specifically agree that
such damages shall not exceed [*].
8.4 No PRODUCTS shall be shipped unless and until the PRODUCTS have
cleared or passed the STANDARDS, modified STANDARDS or OTHER
STANDARDS or have been listed by a competent organization or
authority thereunder; provided, however, that the COMPANY shall
be entitled to ship, if the BUYER so directs or gives consent,
any portion of the PRODUCTS, without incurring any liability on
the part of the COMPANY, before such clearance or listing is
final.
9. PRODUCT SPECIFICATIONS
9.1 All PRODUCTS supplied to the BUYER by the COMPANY shall be
manufactured in conformance to the specifications described in
Exhibit A. If either party requests the other for a change of the
specification or standards or for special specifications of the
PRODUCTS, such matters shall be determined upon mutual
discussions of the parties. If any such change or special
specifications result, in the reasonable judgment of the COMPANY,
in an increase in the cost of the PRODUCTS or in the length of
time required for the manufacture or shipment to the BUYER, then
a price increase of the PRODUCTS due to said cost increase shall
be accordingly charged to the BUYER and an extension of the time
for shipment agreed. Similarly, if any such change or special
specifications result, in the reasonable judgment of the BUYER
after consultation with the COMPANY, in a decrease in the cost of
the PRODUCTS or in the length of time required for the
manufacture or shipment to the BUYER, then a price decrease of
the PRODUCTS due to said cost decrease shall be accordingly
applied to the BUYER and a reduction of the time for shipment
agreed.
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
9.2 No changes shall be made by the COMPANY in the form, fit, or
function of the PRODUCT to be purchased hereunder without BUYER's
prior written approval. The BUYER will in good faith attempt to
respond to the COMPANY's proposed change within [*] of notice of
such proposed change. No changes shall be deemed approved by
BUYER unless and until the COMPANY receives written notice of
BUYER's acceptance thereof. If no response is given by BUYER
within [*] of notice of the change then the change will be deemed
accepted.
10. SUPPORT
10.1 TECHNICAL SUPPORT. The COMPANY agrees to provide reasonable
technical support as defined in Exhibit D. The COMPANY represents
that it presently has adequately trained technical personnel to
provide the support set forth in Exhibit D.
10.2 DEVELOPMENT SUPPORT. The COMPANY shall provide the BUYER with
technical specifications, hardware interface documentation and
other technical assistance concerning the PRODUCTS as reasonably
required by the BUYER.
10.3 PRODUCT PACKAGING. The COMPANY will ship tangible items of
PRODUCT to the BUYER in bulk packaging consistent with industry
standards and sufficient to avoid damage to the Product during
shipment. The COMPANY will supply labeling information of bulk
packaging to the BUYER.
10.4 MANUFACTURING SUPPORT DOCUMENTATION, The COMPANY will provide to
the BUYER manufacturing support documentation as described in
Exhibit E.
11. SPARE PARTS
11.1 In lieu of spare parts, the COMPANY shall include at no
additional cost to the BUYER an extra [*] of units for each
delivery order, rounded down to the next lowest unit quantity.
11.2 The BUYER's subsidiary shall be entitled to place an order with
the COMPANY for spare parts in conformity with the provisions of
this Agreement. The BUYER's subsidiary, as used in this Agreement
shall mean the company or entity 50% or more of the shares or
equity of which is owned or controlled by the BUYER.
11.3 The COMPANY shall be prepared to supply to the BUYER the
following parts for the PRODUCTS for the following period from
the time of the last production or of discontinuance of
production, of each model of the PRODUCTS:
i) [*] for appearance or cosmetic parts
ii) [*] for mechanical parts
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
iii) [*] for electrical parts
In this connection, the BUYER shall place the last order with the
COMPANY for any spare parts required by the BUYER for the future
at least [*] before the expiration of each period stated above.
If such requirements have been shipped out, the COMPANY may
thereafter cease to supply any spare parts for the relevant
PRODUCTS. However, if the supply of repair parts becomes
infeasible for the COMPANY for some inevitable reason during
aforementioned period, the period may be altered subject to prior
notice of at least [*] to the effect by the COMPANY to the BUYER.
12. WARRANTY
12.1 The COMPANY warrants that title to the PRODUCTS when conveyed to
the BUYER on an FOB basis is good, that the transfer is lawful
and that the PRODUCTS are delivered free from any security
interest or encumbrance except as otherwise agreed upon between
the parties in writing.
12.2 The COMPANY further warrants that the PRODUCTS do not have any
software or hardware components that incorrectly process date
and/or time data or calculations after 31 December 1999.
12.3 The warranty of the PRODUCTS to be given under this Agreement
shall be the following:
If, within a period of [*] after shipment by the
COMPANY of the PRODUCTS, any of the PRODUCTS or component parts
thereof exhibit defects of the same kind and nature at the same
place in the PRODUCTS and at an unusual frequency of not less
than [*] of the total quantity of the PRODUCTS sold by the BUYER
in the TERRITORY and such defects are the result of faulty
workmanship on the part of the COMPANY or defects in materials
arising from any cause for which the COMPANY is responsible, then
the COMPANY agrees to give compensation, and render assistance,
to the BUYER to such extent as is specified below,
i) Free supply (freight prepaid) by the COMPANY of replacement
component parts for the component parts found to be
defective [*] of the COMPANY's verification of such defect,
to be done in [*] upon written notice to the COMPANY by the
BUYER of such defect, and
ii) Rendition of technical assistance or advice to the BUYER in
repairing such defective PRODUCTS or component parts thereof
as may be decided by the COMPANY from time to time within
[*] of the COMPANY's verification of such defect to be done
in [*] upon written notice to the COMPANY by the BUYER of
such defect.
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
12.4 The foregoing warranty shall apply to PRODUCTS repaired or replaced under
paragraph 12.3 for the longer of (i) [*] from the date of repair or
replacement, or (ii) [*] applicable to the PRODUCT being repaired or
replaced.
12.5 Provided, however, that the foregoing BUYER's remedy shall only be
available subject always to the following conditions being met, and in the
event of failure of the BUYER to so meet, the BUYER's right to claim remedy
as provided in subparagraphs i) and ii) of paragraph 12.3 above shall
lapse:
i) any particulars as to the PRODUCTS or the component parts thereof
alleged or found to be defective shall be furnished to the COMPANY in
writing within [*] of discovery by the BUYER of such defect.
ii) the contents of defects stated in i) above shall be subject to the
COMPANY's verification
iii) no PRODUCTS or component parts alleged or found to be defective shall
be disposed of by the BUYER until it receives the COMPANY's
directions, and
iv) such defective PRODUCTS or component parts shall forthwith be returned
to the COMPANY by the BUYER, freight payable at destination, if the
COMPANY so requests.
Except as provided in this article, THERE IS NO WARRANTY THAT THE PRODUCTS SOLD
HEREUNDER SHALL BE MERCHANTABLE OR FIT FOR ANY PARTICULAR PURPOSE. NOR IS THERE
ANY OTHER WARRANTY, EXPRESS OR IMPLIED, CONCERNING THE PRODUCTS. NEITHER PARTY'S
RESPONSIBILITY FOR LOSSES OR LIABILITIES ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE PRODUCTS SOLD AND SOFTWARE LICENSED HEREUNDER SHALL EXCEED 1.0
TIMES THE AGGREGATE PURCHASE PRICE PAID BY THE BUYER FOR THE PRODUCTS. IN NO
EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL
OR PUNITIVE DAMAGES, LOST PROFITS, REVENUES OR COSTS OF CAPITAL, ARISING OUT OF
OR RELATING IN ANY WAY TO THIS AGREEMENT, REGARDLESS OF WHETHER THE OTHER PARTY
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSSES. NOTWITHSTANDING ANYTHING TO
THE CONTRARY CONTAINED HEREIN OR ELSEWHERE, INCLUDING THE CAP ON LIABILITY SET
FORTH ABOVE, EACH PARTY WILL BE RESPONSIBLE FOR ALL DAMAGES INCURRED BY THE
OTHER PARTY AS A RESULT OF ANY DAMAGE OR INJURY CAUSED BY OR RESULTING FROM THE
FRAUD, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE OTHER PARTY.
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
13. TRADEMARKS
13.1 The products shall in accordance with instructions of the BUYER bear
the trade name of "UTStarcom" owned by the BUYER which shall be a
registered trademark in Japan or other countries where the products
are offered for sale. The BUYER agrees that any disputes or troubles
filed by any third party with respect to the said trademark or other
trademarks directed by the BUYER for use onto the PRODUCTS shall be
settled at the BUYER's sole responsibility and expense. Where it is
required by any laws or regulations in the TERRITORY to manifest the
name of the manufacturers of PRODUCTS, the COMPANY may place the name
or symbol of the COMPANY or any contraction, abbreviation or
simulation thereof or other necessary marks onto the PRODUCTS in such
a manner as determined after consultation with the BUYER.
14. PATENTS ETC.
14.1 The COMPANY warrants that the importation, sale or distribution, or
use of the PRODUCTS will not infringe on any patent rights, utility
model rights, design rights, copyrights or any other intellectual
property rights of whatever kind (hereinafter referred to as the
"Intellectual Property Rights") of any third party. The COMPANY shall
be responsible and liable to the BUYER in respect to any such claim of
infringement and the COMPANY agrees to defend, indemnify and hold
harmless the BUYER, its successors, assigns, officers, employees and
agents from (X) any and all such claims, provided the COMPANY is given
authority and such reasonable assistance and information from the
BUYER as the COMPANY requests in writing for the defense of such
claims and from (Y) reasonable costs and expenses incurred by the
BUYER in defense of such claims, if the COMPANY does not undertake the
defense thereof.
14.2 Notwithstanding the foregoing, the COMPANY will not be liable for any
damages or costs resulting from any claim or suit that arises from:
(A) the COMPANY's compliance with the detailed designs dictated by the
BUYER; (B) use of any Software in combination with products not
supplied by the COMPANY, to the extent the infringement is caused by
such combination; or (C) a manufacturing or other process carried out
by or through the BUYER and using any Software, to the extent the
infringement is caused by such manufacturing or other process, (such
claims being collectively referred to herein as "OTHER CLAIMS"). The
BUYER agrees to defend, indemnify and hold harmless the COMPANY, its
successors, assigns, officers, employees and agents from (X) any and
all such OTHER CLAIMS, provided the BUYER is given authority and such
reasonable assistance and information from the COMPANY as the BUYER
requests in writing for the defense of such OTHER CLAIMS and from (Y)
reasonable costs and expenses incurred by the COMPANY in defense of
such OTHER CLAIMS, if the BUYER does not undertake the defense
thereof.
14.3 The BUYER shall promptly notify the COMPANY of any and all
infringements, imitations or illegal use of the COMPANY's Intellectual
Property Rights, and of any statements or actions made or done by any
third party disputing or impairing the COMPANY's interest in and title
to any of the above rights. Whenever in the opinion of the COMPANY,
any action is necessary or advisable to insure the protection or
prevention against such infringements, imitations or illegal use of
any of the COMPANY's Intellectual Property Rights, the COMPANY may
take such action in the courts, administrative agencies or otherwise,
but shall not be obligated to take any such action and shall have no
liability to the BUYER for failure to do so. The BUYER shall only upon
the request of the COMPANY and subject to the COMPANY's agreement to
reimburse the BUYER for any expense to be incurred by the BUYER, take
whatever action is deemed necessary by the COMPANY to insure such
protection or prevention.
15. DURATION OF THE AGREEMENT
15.1 This agreement shall be deemed to come into force on the effective
date and unless earlier terminated in accordance with the provisions
of this Agreement shall continue in force and effect for [*]. This
Agreement shall be automatically renewed for [*] and thereafter from
year to year unless either of the parties hereto gives the other party
at least [*] prior written notice to terminate this Agreement before
the expiration of the initial or any renewed term of this Agreement.
If such prior written notice is made by either party then this
Agreement shall terminate on the initial or, as the case may be, duly
renewed expiry date hereof.
16. TERMINATION OF THE AGREEMENT
16.1 In the event of the occurrence of any of the following events to
either party, the other party may forthwith terminate, wholly or
partly, this Agreement and/or Sales Contract and/or any other contract
concluded under or in connection with this Agreement by forthwith
sending a written notice to the first party by registered airmail:
i) if either party hereto continues in default of any material
obligation imposed on it herein and/or therein for more than [*]
after written notice has been dispatched by registered airmail by
the other party requesting the party in default to remedy such
default;
ii) if either party hereto is subjected to compulsory execution,
public auction, coercive collection for its arrearage of taxes or
public imposts, or suspension of business by public authorities,
or appointment of any receiver or trustee of itself or any
substantial portion of its property, or if an application or
petition is submitted for bankruptcy, corporate arrangement or
commencement of corporate reorganization, or if either
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party hereto files voluntarily against it an application or
petition for bankruptcy, corporate arrangement or commencement of
corporate reorganization or composition, or if either party
hereto adopts a resolution for discontinuance of its business or
transfer to another company of all or important parts of its
assets or business or for a substantial decrease of its capital
or for dissolution or merger into another company, or makes
general assignment for the benefit of creditors or if either
party hereto becomes unable to pay debts, or if either party is
declared in default of any material contract between it and any
third party and such contract is canceled or its payment
obligation under such contract is accelerated;
iii) if, in the reasonable judgment of the COMPANY, there exists or is
any ground to suspect the existence of obstacles to effectively
continue this Agreement in any aspect of technological
development, manufacture, sales or marketing of the PRODUCTS
including but not limited to failure by the BUYER to achieve any
agreed upon minimum requirement or targeted volume or the case
where such failure is expected in the reasonable judgment of the
COMPANY; or
iv) if there is any other material cause justifying either party to
terminate this Agreement, such as material and irreparable injury
to goodwill or reputation of the other party, commission by the
other party of a fraud on or betrayal of confidence in or
criminal act against the first party or disclosure or divulgence
by the other party of the first party's confidential information.
16.2 In the event of termination or cancellation of this Agreement for any
reason whatsoever:
i) The COMPANY may at its sole discretion cancel any Sales Contract
for the PRODUCTS which have not been shipped at the date of such
termination or cancellation. If any Sales Contract is canceled
for any reason whatsoever, the COMPANY may sell or otherwise
dispose, of the PRODUCTS covered under the Sales Contract so
canceled elsewhere in any manner by removing, at the COMPANY's
costs and expenses, all of the BUYER's signs, marks and labels
from the PRODUCTS. If the COMPANY is unable to sell or otherwise
dispose of the PRODUCTS, the BUYER shall pay that portion of the
purchase price within the limits defined in Exhibit B.2, and
ii) Each party hereto shall promptly return to the other party any
materials or property in its possession or custody supplied by
and belonging to the other party in connection with this
Agreement.
16.3 Except as otherwise clearly provided herein, any termination of this
Agreement shall be without prejudice to any rights which shall have
accrued to either party hereunder prior to such termination.
16.4 The parties shall enter into a separate agreement where the COMPANY
grants to the BUYER to use complete and current design and
manufacturing information for the products upon the COMPANY's
inability to deliver PRODUCTS to the BUYER due to the COMPANY's
acquisition, break-up or bankruptcy.
17. COMPENSATION FOR DAMAGES
17.1 Any defaulting or breaching party hereto or a party terminated
pursuant to the provisions of Article 16 (termination) hereof shall
pay all reasonable compensation for losses and damages incurred by the
other party as a result of default of its obligations or termination
of this Agreement. In any event, neither party shall be liable for any
incidental, consequential or punitive damages as a result of default
on its obligation or termination of this Agreement.
17.2 Any defaulting or breaching party hereto shall defend, indemnify and
hold harmless the other party from and against any and all actions,
claims, demands, suits, losses, damages, costs, expenses and judgments
(including attorney's fees) by whomever made, brought or prosecuted
and in any manner based upon, arising out of, related to, occasioned
by or attributable to any breach by any defaulting or breaching party
of any provisions of this Agreement or any negligence or fault on the
part of any defaulting or breaching party, its employees or agents in
the performance thereof.
17.3 In the event of any delay by the BUYER in taking delivery of the
PRODUCTS, the BUYER agrees to pay to the COMPANY, i) interest on any
overdue payment of the purchase price of the relevant PRODUCTS at the
rate of twelve (12) percent per annum for the period of such delay,
ii) the additional storage charges of the relevant PRODUCTS in Japan
or any other country where such PRODUCTS are stored for the period of
such delay and iii) any other expenses and damages sustained by the
COMPANY due to such delay. The foregoing provisions of this article
shall not prejudice the right of the COMPANY to terminate this
agreement and/or Sales Contract on account of breach by the BUYER of
its obligation to take delivery of the relevant PRODUCTS as agreed and
any other rights and remedies of the COMPANY contained herein or in
the Sales Contract.
18. DISCLOSURE OF INFORMATION
18.1 All information, suggestions or ideas transmitted by either party to
the other party in connection with this Agreement or the performance
hereunder and designated by the transmitting party as secret or
confidential shall be treated as secret or confidential by the
receiving party and shall not be divulged or disclosed to any third
party, person, firm or agency, governmental or private, without the
prior written consent of the disclosing party except to the extent
that such information
is: (a) known at the time of its receipt as documented in written
records; (b) properly in the public domain; (c) subsequently disclosed
to the receiving party, without any obligation to keep such
information confidential, by a third party that may lawfully do so;
(d) required to be disclosed by law, including but not limited to any
requirements imposed by either United States Securities and Exchange
Commission or any other security and exchange commission on BUYER; or
(e) disclosed to potential financing or insurance sources, as long as
any such third parties agree to be bound by the provisions of this
section.
18.2 "Confidential Information" may include: business or marketing plans,
strategies, concepts, and data (including costs and pricing); research
and development activities; products, product plans, technical
specifications, technology, hardware, software, systems, and designs;
trade secrets, formulas, copyrighted materials, packaging, and
trademarks; manufacturing processes and methods (including line
speeds, xxxxxxx requirements and layout); existing or potential
customers, suppliers, methods, and techniques; and other accumulated
technical knowledge or information, which is disclosed by one party to
the other and is identified as confidential when disclosed. It is
specifically agreed that any technical know-how and marketing
information (such as price and other sales conditions) shall be hereby
regarded as secret and confidential PER SE without making such
designation.
19. PUBLICITY
19.1 The COMPANY and the BUYER will jointly discuss and agree, on the
release of any statement to the public regarding the execution and the
subject matter of this Agreement, subject in each case to disclosure
otherwise required by law or regulation. The parties will work
together on a joint statement announcing their relationship and the
execution and subject matter of this Agreement as soon as practicable
following the execution hereof. Either party may disclose the
execution of this Agreement to any third parties that are subject to a
confidentiality and non-disclosure agreement with such disclosing
party that is at least as restrictive as the provisions in Article 18.
20. ASSIGNMENT
20.1 Neither party shall assign, transfer or otherwise dispose of this
Agreement in whole or in part or any right hereunder to any third
party without the prior written consent of the other party.
21. NOTICES
21.1 Except as otherwise provided herein all notices to be given or made
under this Agreement shall be in writing and hand-delivered in person
or sent by facsimile followed by mail or courier services and
addressed to the principal office of the parties as indicated above in
this Agreement or to such other address as either party may hereafter
furnish to the other party in writing.
21.2 All notices shall be deemed to have been given (a) when delivered
personally, (b) upon confirmation of receipt if sent via telecopy or
electronic mail, (c) 3 days after being deposited in the United States
mail or Japanese mail, registered or certified with return receipt
postage prepaid, or (d) 1 day after being sent by courier or overnight
delivery service requiring proof of receipt.
22. EXCEPTIONS
22.1 FORCE MAJEURE The COMPANY shall not be liable for any delay in
shipment or delivery, non-delivery, or destruction or deterioration,
of all or any part of the PRODUCTS, or for any other default in
performance of this Agreement or Sales Contract or any other contract
concluded under or in connection with this Agreement, which arises
from any lockout, strike, labor trouble or other industrial
disturbance, inevitable accident, export cartel by governmental
authorities or industry or trade associations of whatever nature to
limit its export of the PRODUCTS, fire, explosion, transportation
difficulty, or from any cause beyond the control of the COMPANY,
including without limitation, war, blockade, embargo, governmental,
administrative or public direction or guidance or order of any country
including any reasonably anticipated direction or guidance or order
thereof, legal restriction imposed in any country, including any
reasonably anticipated restriction thereof, riot, civil commotion,
warlike condition, prolonged failure or shortage of electric power,
gas or oil, epidemic, earthquake, flood, typhoon or other Act of God.
22.2 In the event of any delay or failure due to the cause or causes given
in the preceding paragraph 22.1, the COMPANY shall send by fax, email
or otherwise a written notice stating the reason therefor to the BUYER
as promptly as possible. The performance of the COMPANY shall be
deemed suspended as long as and to the extent that any such cause(s)
continue, but with this Agreement and/or Sales Contract and/or any
other contract concluded under or in connection with this Agreement
then executory shall not be regarded as terminated, frustrated or
canceled simply as a result of such delay or failure and the parties
hereto shall continue once more with its performance when the cause or
causes of such delay or failure have ceased or have been eliminated,
provided, however, that if such delay or failure extends or is
reasonably anticipated to extend for a period of more than 3 months,
the COMPANY may without any liability on its part terminate or cancel
this Agreement and/or the said Sales Contract and/or any other
contracts
concluded under or in connection with this Agreement by sending a
written notice to the BUYER to the extent that the COMPANY's
performance has been prevented or delayed.
22.3 It is specifically understood and agreed that if the COMPANY cancels
any Sales Contract pursuant to paragraph 22.2 above, the COMPANY may
sell the PRODUCTS elsewhere and in any manner by removing, at the
COMPANY's cost and expense, all of the BUYER's signs, marks and labels
on the PRODUCTS destined for the BUYER. In such event, the COMPANY
shall bear all the expenses and costs incurred by the COMPANY in
connection with changing or remodeling the PRODUCTS as the COMPANY
deems fit for the purpose of sale elsewhere, as well as the costs for
signs, marks, labels, packages and other printing materials having
then already been prepared in accordance with the BUYER's directions.
23. ENTIRE AGREEMENT
23.1 This Agreement constitutes the entire and only agreement between the
parties hereto and supersedes all previous understandings, commitments
and agreements, whether oral or written, relating to the subject
matter hereof, and no modification, amendment supplement of this
Agreement shall be binding upon the parties hereto except by mutual
express written consent of subsequent date signed by an authorized
representative or officer of each of the parties hereto.
24. ARBITRATION
24.1 Any dispute arising from the execution of or in connection with this
Agreement shall be settled through friendly consultation between the
parties. If the dispute cannot be settled within 60 days from the
first date of consultation, the dispute shall be settled by consulting
of 3 arbitrators, Arbitration shall be held in San Francisco,
California under the International Arbitration Rules of the American
Arbitration Association if initiated by the COMPANY, and shall be held
in Tokyo, Japan under the Commercial Arbitration Rules of the Japan
Commercial Arbitration Association if initiated by the BUYER. The
award rendered by the arbitration shall be final and binding upon the
parties and may be entered by any court having jurisdiction.
25. GOVERNING LAW AND TRADE TERMS
25.1 It is mutually agreed that, except as otherwise required by mandatory
provisions of applicable laws of the TERRITORY, the terms of this
Agreement and the performance hereunder shall in all respects be
governed and interpreted by and
under the laws of the State of California, USA, excluding its
provisions regarding conflict of laws.
25.2 If applicable, the trade terms used in this Agreement shall have the
meaning given to such terms in the Incoterms 2000.
26. MISCELLANEOUS
26.1 AMENDMENTS: This Agreement may only be amended or modified by an
instrument in writing executed by both parties.
26.2 WAIVER: a waiver by a party hereto of any particular provision hereof
shall not be deemed to constitute a waiver in the future of the same
or any other provision of this Agreement.
26.3 SEPARABILITY: The parties hereto agree that, in the event of one or
more of the provisions hereof being subsequently declared invalid or
unenforceable by court or administrative decision, such invalidity or
unenforceability of any of the provisions shall not in any way affect
the validity or enforceability of any other provisions hereof except
those invalidated or unenforceable provisions which comprise an
integral part of or are otherwise clearly inseparable from such other
provisions.
26.4 APPLICABLE LANGUAGE: This Agreement has been executed by the parties
hereto in the English language and no translated version of this
Agreement into any other language shall be controlling and binding
upon any of the parties hereto.
26.5 TITLES: The Article titles in this Agreement have been inserted for
convenience only and shall in no way be used in the interpretation
hereof.
26.6 EXPENSES: Unless otherwise expressly agreed herein or otherwise in
writing by the parties hereto, each party shall bear all expenses and
disbursements incurred or made by itself or any other investment made
by itself in connection with or in pursuance of this Agreement, and
neither party shall be entitled to compensation from the other party
for said expenses, disbursements or investment whether on termination
of this Agreement for any reason whatsoever or otherwise unless
otherwise expressly agreed upon in writing by the other party.
26.7 PARTIES INDEPENDENT: In making and performing this Agreement, the
parties are acting and shall act as independent contractors, and
nothing contained in this Agreement shall be construed or implied to
create any agency, partnership or employer and employee relationship
between the COMPANY and the BUYER.
26.8 CAPACITY TO ENTER INTO AGREEMENT: Both parties represent and warrant
that, irrespective of any other contractual commitment of any kind to
any
other third party, the parties hereto possess the capacity and right
to enter into this Agreement, and to substantially perform the
material obligations contained within the terms of this Agreement. If
any other contractual commitments to any other third party cause
either of the parties to fail to substantially perform their material
obligations pursuant to this Agreement (as determined in the
reasonable judgment of the aggrieved party), the aggrieved party shall
be indemnified for and held harmless against any third-party claims,
actions or lawsuits pursuant to Section 17.1 and 17.2 of this
Agreement, in addition to any other remedies provided for in this
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
by their respective representatives or officers duly authorized thereunto as of
the date first above written,
Japan Radio Company, Ltd. UTStarcom (Hangzhou) Co., Ltd.
Authorized Signature Authorized Signature
By: /s/ XXXXXX XXXXXXXX By: /s/ illegible
---------------------------------- ---------------------------
Name printed: XXXXXX XXXXXXXX Name printed: illegible
------------------------ -----------------
Title: DIVISION EXECUTIVE
COMMUNICATIONS EQUIPMENT DIV. Title: CHAIRMAN
------------------------------ ------------------------
Date: MARCH 16, 2000 Date: 8 FEB 2000
---------------------------------- --------------------------
EXHIBIT A PRODUCT SPECIFICATIONS
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EXHIBIT B DELIVERY ORDER RESCHEDULING AND CANCELLATION
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EXHIBIT C PRICE LIST AND NRE
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EXHIBIT D SUPPORT
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EXHIBIT E MANUFACTURING SUPPORT
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EXHIBIT F SCHEDULE
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EXHIBIT G INSPECTION STANDARD AND PROCEDURES
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