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EXHIBIT 10.47
PRIVATE LABEL AND MANUFACTURING AGREEMENT
This Private Label and Manufacturing Agreement (this Agreement) is made and
entered into as of May 11,1998, (the "Effective Date"), by and between
Electronics Accessory Specialists International, Inc. (d/b/a "Mobility
Electronics"), a Delaware corporation ("Mobility"), and Targus Group
International, Inc., a Delaware corporation ("Targus"). For purposes of this
Agreement, "Targus" shall include its subsidiaries; provided, however, that
Targus shall be responsible for the actions and/or inaction's of its
subsidiaries with respect to the performance of this Agreement. Targus and
Mobility are each sometimes referred to herein as a "Party" and collectively as
the "Parties".
1. DEFINITIONS
1.1 "Alternative Product" means a product of a manufacturer other than
Mobility, which possesses characteristics of quality, function, and
performance comparable to a Product.
1.2 "Commercially Reasonable Cost" means no greater than 120% of the cost
of an Alternative Product.
1.3 "Components" means parts, materials, assemblies, subassemblies or
components which Mobility purchases from third parties for
incorporation into the Products prior to delivery.
1.4 "Custom Components" means Components which are unique to and used only
in the Custom Products, which cannot be reasonably incorporated into
other products or sold profitably to third parties. Custom Components
for each Custom Product are identified on Attachments 2 and 3.
1.5 "Custom Products" means products, including unique plastics or other
differentiating features, developed specifically for Targus by
Mobility, which initial products shall be described on Attachments 2
and 3 to this Agreement.
1.6 "Long Lead Components" means the Components for a Custom Product which
are identified on Attachments 2 and 3.
1.7 "PO's" means Targus's purchase orders issued under this Agreement.
1.8 "Products" means, collectively, Custom Products and Standard Products.
1.9 "Standard Products" means the products of Mobility described on
Attachment 1 of this Agreement, other than Custom Products.
2. TERM
2.1 Subject to Section 2.2 below, this Agreement shall commence on the
Effective Date and shall continue for a period of one (1) year
thereafter (the "Initial Term"); provided, however, that the term of
this Agreement shall be renewed on a year-to-year basis thereafter
(each, a "Renewal Term"), unless either Party gives written notice to
the other Party, at least ninety (90) days prior to the end of the
then-current term, of such Party's desire to terminate this Agreement
at the expiration of the then-
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current term. The Initial Term and any Renewal Term(s) are sometimes
collectively referred to herein as the "Term". Notwithstanding the
above, this Agreement shall continue after the expiration of the Term
with respect, and only with respect, to any Products on order pursuant
to "PO's" accepted by Mobility prior to or at the time of such
termination, and with respect to Targus's liabilities for Long Lead
Components and Custom Components as otherwise provided in this
Agreement.
2.2 This Agreement may be terminated by either Party upon the material
breach of this Agreement by the other Party, which breach is not cured
within sixty (60) days after delivery of written notice by the
non-breaching Party to the breaching Party.
2.3 At least thirty (30) days prior to the effective date of termination
of this Agreement, Mobility will submit its final xxxx to Targus for
any Long Lead Components and Custom Components, which final xxxx will
be equal to the amount paid or to be paid by Mobility for Long Lead
Components and Custom Components that have not or will not be utilized
in any outstanding "PO's" at the time.
3. CUSTOM PRODUCT DEVELOPMENT
3.1 Mobility agrees to use commercially reasonable efforts to develop any
Custom Product (including, without limitation, power or docking
station products) requested in writing by Targus, subject to the
remainder of this Section. Any Custom Product shall be developed and
manufactured pursuant to the terms and conditions of this Agreement
(including, without limitation, Section 3.2 below). In addition, prior
to commencing the development of any Custom Product, the Parties shall
have mutually agreed to a development program schedule, NRE and
Tooling Charges, quantity purchase minimum and a PO lead time, which
agreement shall be in writing in the form of Attachment 3 to this
Agreement. Mobility agrees that it will not market or sell any
Custom Product to any person or entity other than Targus.
3.2 Targus agrees that at the time Mobility begins to develop a Custom
Product, Targus will place a separate PO for NRE and Tooling Charges
for such Custom Product, with the terms of such PO being fifty percent
(50%) due and payable upon placement of the PO, and the remaining
fifty percent (50%) due and payable upon approval of first article.
3.3 Targus hereby agrees that Mobility shall be the exclusive manufacturer
and supplier to Targus of the Products, subject to Section 6.1 below.
Any material changes to any Custom Products will require the written
consent of both Parties pursuant to an amendment to Attachment 2 or
3 (as applicable). Mobility agrees to use all commercially reasonable
efforts to incorporate into the Products any changes reasonably
requested by Targus, which changes shall be incorporated as soon as
practicable after an amendment to Attachment 2 or 3 (as applicable)
has been executed by the Parties setting forth such change, as well as
the affect, if any, on the purchase price of such Product.
4. ORDERING AND DELIVERY
4.1 Targus will provide to Mobility on a calendar monthly basis a
six-month rolling forecast of anticipated purchases of Products by
Targus for the following six-month period. Based on such forecast,
Mobility intends to purchase the minimum required
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Long Lead Components and Custom Components for such anticipated Custom
Products (taking into account the expected lead-time for delivery of
such Components).
4.2 Targus will order Products by issuing PO's. Mobility will use all
commercially reasonable efforts to fill any PO's within the lead-time
for such Products as set forth in Attachment 4. As part of this
agreement, Targus agrees to issue the PO attached as Attachment 5
hereto.
4.3 Mobility agrees to use all commercially reasonable efforts to deliver
the Products to Targus in a timely manner, as provided in the PO's; it
being acknowledged and agreed that Mobility will manufacture to PO's
provided by Targus and, at Mobility's sole discretion, will not
manufacture or inventory Products in excess of PO quantities, except
as provided in Section 4.1 above.
4.4 All deliveries of Products will be made F.O.B. Scottsdale, Arizona,
United States of America. Mobility will accommodate other delivery
requests made by Targus for an additional charge.
4.5 Each Product shall have affixed thereto an non-prominent label titled
"Manufactured by Mobility Electronics for ________" (i.e. Port or
Targus), which label shall be in form, and located on the Product in a
place, mutually agreeable to the parties. If the Parties in good faith
cannot mutually agree to such a label, then similar text will be
included in the packaging or manual for the Product.
5. MOBILITY WARRANTIES
5.1 Mobility shall manufacture the Standard Products in accordance with
the product specifications, which specifications may be changed from
time to time by Mobility upon thirty (30) days prior written notice to
Targus. Mobility shall manufacture Custom Products in accordance with
the specifications for such Custom Products (as set forth in
Attachment 2 or 3 (as applicable) for each of such Custom Product).
Mobility shall not make any material change in the Custom Products
without prior written approval of Targus. For each Custom Product,
Mobility will provide Targus with a "First Article" from its initial
production run for quality verification and approval.
5.2 Mobility warrants that all Products shall comply with all applicable
governmental laws and regulations, and be free from defects in design,
material, workmanship and performance for the period set forth in the
product specification. Targus will provide written notice of any
warranted defect promptly upon its discovery. Upon receipt of such
notice, Mobility shall arrange for the repair or replacement, at
Mobility's sole discretion, of the Product and shall bear all costs
necessary to complete such repair or replacement Targus shall not be
required to return failed Products to Mobility, unless specifically
requested by Mobility. At the request of Mobility, Targus shall use
its best efforts to deliver to Mobility, at Mobility's cost and
expense, any failed Products. Any Products returned shall be subject
to reasonable inspection by, and the concurrence of, Mobility.
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5.3 Mobility warrants that it has the unrestricted worldwide right to
manufacture, sell and deliver the Products to Targus and that it has
in place proper authorizations and licenses from all parties as may be
necessary to deliver the Products to Targus.
5.4 Mobility warrants that no Products will infringe any patent,
copyright, trademark, trade secret or other proprietary or
intellectual property right of any third party. Mobility shall
indemnify, defend and hold harmless Targus, its parent, subsidiaries,
affiliates and Targus (each an "Indemnitee" and collectively, the
"Indemnities") from any damage, expense, liability, cost (including
attorney's fees and expenses) arising out of any suit, claim, action
or proceeding alleging any such infringement. Targus agrees to provide
prompt written notice to Mobility upon receipt by any Indemnitee of
any suit, claim, action or proceeding alleging such infringement, and
Mobility shall have the right to defend such suit, claim, action or
proceeding at its own expense. Such Indemnitee may participate in such
defense at its own expense and will reasonably cooperate with Mobility
in the defense there of, and such Indemnitee agrees that it will not
unreasonably withhold its consent to any settlement or compromise
thereof.
5.5 THE ABOVE WARRANTIES ARE IN LIEU OF ANY OTHER WARRANTY, WHETHER
EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WHICH WARRANTIES
ARE SPECIFICALLY DENIED.
6. PRODUCT PRICING AND PAYMENT
6.1 In the event Targus believes that the cost of a Product is in excess
of a Commercially Reasonable Cost, Targus shall notify Mobility in
writing of such circumstance, and Mobility shall have thirty days to
provide a mutually acceptable written explanation as to how Mobility
plans to cure the situation. If Mobility fails to cure the situation
within ninety days thereafter, as to the Product in question, Targus
may purchase and sell an Alternative Product.
6.2 Each Product shall have a purchase price as provided in Attachment 4
to this Agreement and Mobility shall use its best efforts to meet the
Commercially Reasonable Cost requirements of Targus; provided,
however, Mobility shall have the final right to establish its purchase
prices. Mobility may change the purchase price of any Product upon
seventy-five (75) days prior written notice to Targus. Mobility shall
offer each Product to Targus at a purchase price that is not more than
the purchase price offered to any other customer of Mobility, given
similar volumes and timing of purchases and payment terms.
6.3 Deleted.
6.4 Mobility shall invoice Targus upon shipment. Payment for Product
invoices shall be subject to a credit limit as determined from time to
time in the sole discretion of Mobility, net twenty (20) days from
date of invoice.
6.5 Except as provided in the next sentence, Mobility will not invoice
Targus separately for Long Lead Components or Custom Components, as
such Components will be included in Custom Products which shall be
invoiced as provided in Section 6.4 above. However, in the event
Targus does not purchase Custom Products in the
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amounts set forth in the monthly forecast provided to Mobility, then
Mobility shall have the option, in its sole discretion, to invoice
Targus at any time thereafter for such Long Lead Components and/or
Custom Components. If so invoiced, the payment for such Long Lead
Components and Custom Components shall be due and payable net thirty
(30) days from date of invoice.
6.6 All amounts payable by Targus to Mobility under this Agreement and
under the PO's shall be paid in United States dollars.
7. CONFIDENTIAL INFORMATION AND COVENANT NOT-TO-COMPETE
7.1 All copies of any confidential information delivered by any Party to
the other Party pursuant to or as a result of this Agreement shall,
upon the written request of the Party delivering the same, be promptly
returned by the Party receiving the same, and each receiving Party
agrees that it will hold in confidence such confidential information
delivered from the other Party and shall use such confidential
information only in furtherance of and in connection with this
Agreement and its performance hereunder and not for any other purpose.
For purposes of the preceding sentence, "confidential information"
shall not include information which: (i) is or becomes generally
available to the public other than as a result of disclosure which is
in violation of this Section; (ii) was known by the receiving Party on
a non-confidential basis prior to the disclosure thereof; or (iii) is
acquired by the receiving Party from a third party who has not
confidential commitment to the delivering Party with respect to the
same.
7.2 During the Term, Targus will not acquire, manufacture, sell, or offer
to sell any product which is competitive with the Products, except as
provided for in section 6.1, unless there are extenuating
circumstances. Extenuating circumstances can include significant
technological, regulatory, performance, function, quality and other
differences between the Products and competitive products which
Mobility is unable or unwilling to address. If Targus believes that
extenuating circumstances exist, then Targus will notify Mobility in
writing of such circumstances and Targus will work in good faith with
Mobility for a period of four months to address such circumstances.
8. MARKETING PRODUCTS
8.1 Targus agrees to make a good faith effort to market and sell the
Products on a non-exclusive basis (exclusive basis for Custom
Products), world-wide through all of its distribution channels. Good
faith effort means that Targus will market and sell the Products
subject to local market conditions, the presence or absence of
competition, and product pricing.
9. PO CHANGES
9.1 Targus may, upon written notice, modify any PO, other than the Xxxxxx
XX and Individual POs as described in Attachment 5, within the
following parameters:
1 PO's for Products to be delivered within thirty (30) days from
the date of any such notice are non-cancellable and may not be
rescheduled.
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2. PO's for Products to be delivered between thirty one (31) days
and sixty (60) days from the date of any such notice are not
cancellable, but can be rescheduled for a maximum of thirty (30)
days from the original delivery date.
PO's for Products to be delivered more than sixty (60) days from the
date of any such notice may be rescheduled or canceled prior to the
commencement of such sixty (60) day period and may be rescheduled
during such sixty (60) day period as provided in (2) above. PO's for
NRE and Tooling Charges are non-cancellable and cannot be rescheduled.
10. DISPUTES
10.1 The Parties will attempt to resolve disputes through ascending levels
of management. Disputes which cannot be resolved by negotiation
between the Parties may be referred to arbitration by an international
arbitration body acceptable to both Parties, provided no arbitrator
shall have authority to award any indirect or speculative damages
(including, without limitation, consequential, incidental, special or
punitive damages).
11. GOVERNING LAW
11.1 This Agreement, and PO's issued hereunder, shall be governed by and
interpreted in accordance with the substantive and procedural laws of
the State of Arizona, United States of America, and each Party hereby
submits to the jurisdiction and venue of the courts of the State of
Arizona county of Maricopa.
11.2 The United Nations Convention on the international Sale of Goods shall
not apply to this Agreement or any PO issued thereunder.
12. LIMITATION OF LIABILITY
12.1 Each Party hereby waives any right to recover any indirect or
speculative damages (including, without limitation, consequential,
incidental, special or punitive damages) from the other Party.
13. GENERAL PROVISIONS
13.1 The Parties agree that Mobility shall bear the loss for the
destruction of any completed or partially completed Products which may
occur prior to delivery thereof ("delivery" being defined as F.O.B.
point of shipment), and that Targus shall bear the loss from the
destruction or breakage of any Products after delivery thereof.
13.2 This Agreement is subject to strikes and lockouts or refusal of
employees to work, or the inability of Mobility to be able to cause
Products manufactured for Mobility outside of the United States of
America to be delivered into the United States of America, and for
such cause that portion of this Agreement affected thereby may be
suspended during the continuance thereof. Impossibility of performance
by reason of any legislative, executive or judicial act of any
government or state any other similar or dissimilar cause which cannot
be presented by either Party or by the
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exercise of proper diligence, shall excuse performance of this
Agreement. Bankruptcy of either Party shall allow the other Party, at
its sole discretion, to terminate this Agreement. The Parties agree
that the Party who is unable to perform its obligations hereunder
because of any of the reasons set forth in this Section 12.2 shall
give prompt written notice to the other Party of such inability to
perform.
13.3 This Agreement and all terms, covenants and conditions contained
herein shall inure to the benefit of and shall be binding upon the
undersigned Parties and their respective heirs' executors,
administrators, trustees, successors and assigns. Neither Party may
assign or transfer any of its rights or obligations hereunder without
prior written consent of the other Party, which consent shall not be
unreasonably withheld.
13.4 All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been delivered on the
date on which it is hand-delivered or delivered by facsimile, or on
the third business day following the date on which it is mailed,
first-class, postage prepaid, and registered or certified with return
receipt requested. For purposes of notice, the addresses of the
parties shall be:
If to Targus: Targus, Inc.
0000 Xxxxxx Xxxx
Xxxxx Xxxx, XX 00000
Ph: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxx Xxxxxxxxxx
Port, Inc.
00 Xxxx Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Ph: (203) 852-1102
Fax: (000) 000-0000
Attn: Xxxx X'Xxxxxx
If to Mobility: Mobility Electronics
0000 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Ph: (602) 596-0061
Fax: (000) 000-0000
Attn: Xxxxxxx Xxxxxx
Any Party may change its address for notice by written notice given
to the other Party in accordance with this Section.
13.5 Any debts, obligations, covenants or liabilities accrued hereunder
between the Parties hereto shall survive the expiration or termination
of this Agreement for whatever reason.
13.6 This Agreement (including the Attachments hereto) constitutes the
entire agreement between the Parties regarding the subject matter
hereof and supersedes all prior agreements and understandings, both
written and oral, between the Parties with
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respect to the subject matter hereof. Each of the Parties agrees to
take such actions as may be necessary or desirable to implement and
retain the intent and spirit of this Agreement, and omit to take such
actions which could hinder the furtherance of such intent and spirit.
13.7 If any provision of this Agreement is held to be illegal, invalid or
unenforceable under present or future laws effective during the term,
such provision shall be fully severable and this Agreement shall be
construed and enforced as if such illegal invalid or unenforceable
provision never comprised a part hereof, and the remaining provisions
hereof shall remain in full force and effect and shall not be affected
by the illegal, invalid or unenforceable provision or by its severance
here from. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as part of
this Agreement a provision as similar in its terms to such illegal,
invalid or unenforceable provision as may be possible and be legal,
valid and enforceable.
13.8 The headings in the Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning of this Agreement.
13.9 This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original and all of this shall constitute one
and the same instrument by only one of which need be produced.
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EXECUTED as of the date first above written.
TARGUS GROUP INTERNATIONAL, INC.
By: /s/ XXXX XXXXXXXXXX
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Its: President
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PORT, INCORPORATED
By: /s/ XXXX X'XXXXXX
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Its: CEO
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ELECTRONICS ACCESSORY
SPECIALISTS INTERNATIONAL, INC.
By: /s/ XXXXXXX XXXXXX
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Its: President
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Targus/Mobility Agreement May 13,1998 Page 9
