Manufacturing and Supply Agreement
Manufacturing
and Supply Agreement
This
Manufacturing and Supply Agreement (“Agreement”)
is
entered into as of this 6th
day of
November, 2006 (“Effective
Date”)
by and
between Phantom Entertainment, Inc., a Delaware corporation having a place
of
business at 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxxxx 00000, Xxxxxx
Xxxxxx of America (“Purchaser”),
Itron
Technology Inc., a Taiwanese corporation having its principal place of business
at 0X, Xx.00, Xxx.0, Xxxx Xxx Xx Xxxx, Xxxx Chi city, Xxxxxx Xxxxx 000, Xxxxxx
(“Manufacturer”).
Recitals
Whereas,
the
Manufacturer and Purchaser are parties to a Product Development and
Manufacturing Agreement entered into on April 17, 2006; and
Whereas,
the
parties desire to enter into a non-exclusive agreement whereby Manufacturer
will
manufacture the Products defined in Exhibit A and related parts according to
industry standard manufacturing practices (defined below) and Product
Specifications provided by Purchaser, in quantities ordered by Purchaser and
solely for sale to Purchaser; and
Whereas,
Purchaser desires to purchase the Products and related parts from Manufacturer
in such quantities;
Now,
Therefore,
in
consideration of the foregoing and of the mutual promises contained herein,
the
receipt and sufficiency of which is hereby acknowledged, the parties agree
as
follows:
Agreement
| 1 |
Definitions
|
| 1.1 |
“Agreement”
shall have the meaning set forth in the first paragraph set forth above
and shall include each Exhibit.
|
| 1.2 |
“Approved
Vendor List”
shall have the meaning set forth in Section 3.3.
|
| 1.3 |
“Components”
shall mean any part or assemblies used for manufacturing, processing
and
packaging the Product (as defined below) pursuant to the Specifications
(as defined below).
|
| 1.4 |
“Confidential
Information”
shall mean any and all information and materials disclosed by one party
(“Discloser”)
to the other party (“Recipient”)
(whether in writing or in oral, graphic, electronic or any other form)
that are marked or described as, identified in writing as, or provided
under circumstances indicating that such information and materials
are
confidential or proprietary. The Confidential Information of Purchaser
includes, without limitation, all Technical Information (as defined
below)
and all information and materials provided by Purchaser relating to
Purchaser’s customers.
|
| 1.5 |
“Delivery
Date”
shall mean the date specified in a Purchase Order (as defined below)
on
which Manufacturer is required to deliver a specific quantity of the
Product to the delivery place designated on such Purchase
Order.
|
| 1.6 |
“Effective
Date”
is the calendar date upon which Purchaser and Manufacturer agree to
enter
the Agreement as evidenced by their respective approval signatures.
This
date is set forth in the first paragraph set forth above.
|
| 1.7 |
“Environmental
Claim”
shall mean, with respect to any person or entity, any notice; claim;
administrative, regulatory or judicial action, suit, judgment or demand;
or other written communication applicable to the Project (as defined
below) by any other person or entity (including, without limitation,
any
government authority) alleging or asserting such person’s or entity’s
liability for investigatory costs, cleanup costs, governmental response
costs, damages to natural resources or other property of such person
or
entity, personal injuries or death, losses, fines or penalties arising
out
of, based on or resulting from (a) the presence, Use (as defined
below), Release (as defined below) or threatened Release into the
environment of any Hazardous Material (as defined below) at any location,
whether or not owned by such person or entity, or (b) any fact,
circumstance, condition or occurrence forming the basis of any violation
or alleged violation of any Environmental Law (as defined below).
|
| 1.8 |
“Environmental
Laws”
shall mean any and all Laws (as defined below) applicable to the Project
relating to the indoor or outdoor environment, or to the health or
safety
of natural persons affected by the environment, or to the Release or
threatened Release of Hazardous Materials into the indoor or outdoor
environment, including, without limitation, ambient air, soil, surface
water, groundwater, sea water, wetlands, land or subsurface strata,
or
otherwise relating to the Use of Hazardous Materials, whether now or
hereafter in effect.
|
| 1.9 |
“Hazardous
Material”
shall mean any of the following: any chemicals, materials, substances
or
wastes that are now or hereafter become (a) defined or listed as, or
included in the definition of, “hazardous substances,” “hazardous wastes,”
“hazardous materials,” “extremely hazardous wastes,” “restricted hazardous
wastes,” “toxic substances,” “toxic pollutants,” “contaminants,”
“pollutants” or terms of similar import under any Environmental Law, and
(b) prohibited, limited or regulated under any Environmental Law.
|
| 1.10 |
“Initial
Term”
shall have the meaning set forth in Section 8.1.
|
| 1.11 |
“Inventory”
shall mean the collection of all Components which have been purchased
by
Manufacturer for the purpose of manufacturing Products. Inventory shall
also mean finished Products in the Manufacturers’
possession.
|
| 1.12 |
“Laws”
shall mean any statute, law, regulation, ordinance, rule, judgment,
order,
decree, permit, concession, grant, franchise, license, agreement,
directive, guideline, policy or rule of common law, or any governmental
requirement or other governmental restriction or similar form of decision
or determination, or any interpretation or administration of any of
the
foregoing by any national, state or local government (or any association,
organization or institution of which any of the foregoing is a member,
or
to whose jurisdiction any thereof is subject, or in whose activities
any
thereof is a participant), whether now or hereafter in
effect.
|
| 1.13 |
“Manufacturer
Facility”
shall mean the Manufacturer manufacturing facility located at Sec.
B,
Hopewell Industrial City, Sima, Changping Town, Dongguan City, Guangdong
Province, Post code: 523570, P.R.C.
|
| 1.14 |
“Manufacturer”
shall have the meaning set forth in the first paragraph set forth
above.
|
| 1.15 |
“Product
Price”
shall mean the price per each Product at which Manufacturer shall sell
the
Product to Purchaser.
|
| 1.16 |
“Product”
shall mean the Products and related parts as described more fully on
Exhibit A
attached hereto meeting the
Specifications.
|
| 1.17 |
“Project”
shall mean the work conducted and services provided by Manufacturer
pursuant to this Agreement.
|
| 1.18 |
“Proprietary
Rights” shall have the meaning set forth in Section 2.4.3
|
| 1.19 |
“Purchase
Order”
shall have the meaning set forth in Section 3.1
|
| 1.20 |
“Purchaser”
shall have the meaning set forth in the first paragraph set forth
above.
|
| 1.21 |
“Release”
shall mean, with respect to any Hazardous Material, any release, spill,
emission, emanation, leaking, pumping, injection, deposit, disposal,
discharge, dispersal, leaching or migration of such Hazardous Material
into the indoor or outdoor environment, including, without limitation,
the
movement of such Hazardous Material through ambient air, soil, surface
water, groundwater, sea water, wetlands, land or subsurface strata.
|
| 1.22 |
“Specifications”
shall mean the industry
standard Specifications and Purchaser Specifications listed in Exhibit
C
including but not limited to xxxx of materials, fabrication drawings,
assembly drawings, assembly procedures, test procedures and inspection
procedures.
|
| 1.23 |
“Technical
Information”
shall mean all information, materials, knowledge, data, drawings and
other
Specifications involving or relating to the generation, manufacture
and
processing of the Product provided to Manufacturer by Purchaser pursuant
to this Agreement, including, without limitation, the
Specifications.
|
| 1.24 |
“Unusable
Inventory”
shall have the meaning set forth in Section 3.6..
|
| 1.25 |
“Use”
shall mean, with respect to any Hazardous Material and with respect
to any
person or entity, the generation, manufacture, processing, distribution,
handling, use, treatment, recycling, storage or disposal of such Hazardous
Material or transportation to or from the property controlled by such
person or entity of such Hazardous Material.
|
| 1.26 |
“Work
Product” shall have the meaning set forth in Section 2.4.2
|
| 2 |
Technology
Transfer and Ownership
|
| 2.1 |
License
Grant.
Subject to the terms and conditions of this Agreement, Purchaser hereby
grants to Manufacturer for the term of this Agreement a non-exclusive,
non-transferable, non-sublicensable license for Manufacturer to use
the
Technical Information solely to manufacture the Product, solely at
the
Manufacturer Facility and solely for sale to Purchaser.
|
| 2.2 |
Restrictions
and Reservation of Rights.
Manufacturer agrees not to use the Technical Information or make or
sell
the Product except as expressly permitted in Section 2.1.
All intellectual property rights in and to the Product and the Technical
Information are and shall at all times be owned by Purchaser, subject
only
to the license rights expressly granted to Manufacturer in
Section 2.1.
Any and all rights not expressly granted to Manufacturer herein are
reserved by Purchaser.
|
| 2.3 |
Information
Exchange.
Purchaser shall provide to Manufacturer such Technical Information
as it
determines in its sole discretion is advisable to facilitate
Manufacturer’s completion of the Project. At Manufacturer’s request,
Purchaser shall answer reasonable questions with respect to the Technical
Information. All Technical Information shall constitute the Confidential
Information of Purchaser. At Purchaser’s request, Manufacturer shall
provide to Purchaser all information and materials reasonably requested
by
Purchaser with respect to the Project and cooperate with Purchaser
in
obtaining such information and materials, including, without limitation,
any information necessary or useful to allow Purchaser to verify that
deliveries of the Product conform to the
Specifications.
|
| 2.4 |
Manufacturer
shall assign to Purchaser all right, title and interest related to
unique
aspects of manufacturing, assembly and test of specified Products.
|
2.4.1 To
the
extent, if any, Manufacturer retains any right, title or interest in and to
any
Work Product, as defined in Section 2.4.2, Manufacturer (a) unconditionally
and irrevocably waives the enforcement of such rights, and all claims and causes
of action of any kind against Purchaser with respect to such rights;
(b) agrees, at Purchaser’s request and expense, to consent to and join in
any action to enforce such rights; and (c) hereby grants to Purchaser a
perpetual, irrevocable, fully paid-up, royalty-free, transferable,
sub-licensable (through multiple levels of sub-licensees),
exclusive, worldwide
right and license to use, reproduce, distribute, display and perform (whether
publicly or otherwise), prepare derivative works of and otherwise modify, make,
sell, offer to sell, import and otherwise use and exploit (and have others
exercise such rights on behalf of Purchaser) all or any portion of such Work
Product, in any form or media (now known or later developed). The foregoing
license includes, without limitation, the right to make any modifications to
such Work Product regardless of the effect of such modifications on the
integrity of such Work Product, and to identify Manufacturer, or not to identify
Manufacturer, as one or more authors of or contributors to such Work Product
or
any portion thereof, whether or not such Work Product or any portion thereof
have been modified. Manufacturer further irrevocably waives any “moral
rights”
or
other rights with respect to attribution of authorship or integrity of such
Work
Product that Purchaser may have under any applicable law under any legal theory.
Manufacturer hereby waives and quitclaims to Purchaser any and all claims,
of
any nature whatsoever, which Purchaser now or may hereafter have for
infringement of any Work Product or proprietary rights assigned and/or licensed
hereunder to Purchaser. Manufacturer covenants that it will not directly or
indirectly promote, sell or deliver any visibly or functionally similar product
to the Products
2.4.2 As
used
in this Agreement, the term “Work
Product”
shall
include, without limitation, all engineering specifications, discoveries, ideas,
inventions, concepts, developments, know-how, trade secrets, works of
authorship, materials, software (source and object code), HTML, writings,
drawings, designs, processes, techniques, formulas, data, specifications,
technology, patent applications (and contributions thereto), and other creations
(and any related improvements or modifications to the foregoing or to any
Confidential Information of Purchaser), whether or not patentable, relating
to
any activities of Purchaser that are created or otherwise developed by
Manufacturer (alone or with others).
2.4.3 Manufacturer
agrees to disclose promptly in writing to Purchaser all Work Product. ,
Manufacturer further agrees that any and all Work Product created or developed
by Manufacturer pursuant to this Agreement shall be the sole and exclusive
property and Confidential Information of Purchaser. Manufacturer hereby
irrevocably assigns and agrees to assign to Purchaser all right, title and
interest worldwide in and to the Work Product, including, without limitation,
all copyrights, trademarks, trade secrets, patents, industrial rights and all
other intellectual and proprietary rights related thereto (the “Proprietary
Rights”),
effective immediately upon the inception, conception, creation or development
thereof. The Proprietary Rights shall include, without limitation, all rights,
whether existing now or in the future, whether statutory or common law, in
any
jurisdiction in the world, related to the Work Product, together with all
national, foreign and state registrations, applications for registration and
all
renewals and extensions thereof (including, without limitation, any
continuations, continuations-in-part, divisional, reissues, substitutions and
reexaminations); all goodwill associated therewith; and all benefits,
privileges, causes of action and remedies relating to any of the foregoing,
whether before or hereafter accrued (including, without limitation, the
exclusive rights to apply for and maintain all such registrations, renewals
and
extensions; to xxx for all past, present and future infringements or other
violations of any rights relating thereto; and to settle and retain proceeds
from any such actions). Except as may be set forth in the applicable exhibits,
as amended, or otherwise agreed in writing by the parties, Manufacturer retains
no rights to use the Work Product and agrees not to challenge the validity
of
Purchaser’s ownership in the Work Product.
| 3 |
Ordering,
Processing and Packaging
|
| 3.1 |
Orders.
To purchase Product hereunder, Purchaser shall issue Purchase Orders
which
shall specify the Purchase Order number, Product part number, quantity
of
Product ordered, Product Price, method of shipment, FOB point, and
Delivery Date(s). Purchaser shall place each Purchase Order with
Manufacturer at least sixty (60) days in advance of the Delivery
Date.
Manufacturer will acknowledge in writing (i) receipt of Purchaser’s
Purchase Order, (ii) confirmation of the Delivery Date and (iii)
confirmation that all information specified on the Purchase Order is
accepted by the Manufacturer. This written notice conveys the
Manufacturers ability, intent and commitment to deliver all Products
specified on the Purchase Order within the parameters specified therein.
|
| 3.2 |
Components.
Manufacturer shall procure and supply, using standard purchasing
practices, all materials necessary to manufacture, process, pack and
deliver the Product according to the Specifications. Manufacturer
agrees to inspect Components prior to use in Products manufactured
for
Purchaser. Manufacturer will utilize industry standard practices to
perform inspection of Components.
|
| 3.3 |
Approved
Vendor List.
Manufacturer will provide Purchaser with a list of all Components used
in
the Product and the names of the approved sources where these Components
will be purchased (Approved Vendor List). Purchaser will provide
Manufacturer written approval of the Approved Vendor List. Thereafter
any
changes, additions or deletions to the sources identified on this list
must be approved by Purchaser. Purchaser will also identify in writing
those Components which don’t require source approval by the Purchaser.
Manufacturer will maintain the Approved Vendor List throughout the
life of
the Agreement and make the most current version available to Purchaser
at
all times.
|
| 3.4 |
Packaging.
Product supplied by Manufacturer shall be delivered in packaging in
accordance with the Specifications.
|
| 3.5 |
Engineering
Changes.
Purchaser may at any time request, in writing, that Manufacturer
incorporate engineering changes into the Product. Such requests shall
include a description of the proposed engineering change sufficient
to
permit Manufacturer to evaluate its feasibility and cost. Manufacturer’s
evaluation shall be delivered to Purchaser in writing and shall state
the
increase or decrease in Manufacturer’s actual costs, if any, expected to
result from such engineering change and the amount of time, if any,
required to implement such engineering change. Manufacturer shall not
proceed with the engineering change unless and until it receives prior
written instructions to do so from Purchaser, in which case the Product
Price shall be adjusted in the amount of such increase or decrease
in
Manufacturer’s costs (including, without limitation, the cost of Unusable
Inventory due to such engineering change, as calculated in accordance
with
Section 3.6)),
the delivery schedule for the Product shall be amended to reflect such
additional implementation time and the Specifications for the Product
shall be amended to reflect the engineering change. Manufacturer shall
not
refuse to implement any engineering change requested by Purchaser unless
Manufacturer reasonably determines that such engineering change is
technically unworkable.
|
| 3.6 |
Rescheduling
and Cancellations.
Purchaser
may cancel or reschedule Products ordered on a Purchase Order using
the
guidelines detailed in Exhibit B. To the extent that any unused Inventory
procured by Manufacturer prior to the cancelled Purchase Order or portion
thereof cannot be used by Manufacturer in the manufacture, testing
or
assembly of other products for Purchaser or any of Manufacturer’s other
customers products (“Unusable
Inventory”),
Manufacturer shall use its best efforts to (a) cancel any pending
orders for such Unusable Inventory, and (b) return any such Unusable
Inventory in Manufacturer’s possession to the applicable suppliers or (c)
redirect this Unsable Inventory to other products which utilize the
same
Components. If Manufacturer is unable to return any Unusable Inventory
in
its possession to the applicable suppliers or redirect to another product,
Manufacturer shall notify Purchaser of such Unusable Inventory and,
at
Purchaser’s instruction, Manufacturer shall either deliver such Unusable
Inventory to Purchaser or use its best efforts to resell such Unusable
Inventory. After such efforts have been completed, Purchaser shall
pay
Manufacturer for Products and Unusable Inventory affected by the
cancellation as follows: (i) one hundred percent (100%) of the contract
price for all finished Products in Manufacturer’s possession that are
delivered to Purchaser and accepted by Purchaser in accordance with
the
testing and inspection procedures set forth in Section 5, (ii) one
hundred
percent (100%) of the cost of Unusable Inventory delivered to Purchaser,
(iii) one hundred percent (100%) of the difference between the cost
of all
Unusable Inventory that was resold by Manufacturer at less than cost
and
the proceeds from such resale, (iv) one hundred percent (100%) of the
difference between the cost of all Unusable Inventory that could not
be
resold by Manufacturer and the salvage value thereof, and (v) one hundred
percent (100%) of any vendor cancellation charges incurred with respect
to
the Unusable Inventory accepted for cancellation or return by the vendor.
Notwithstanding any of the foregoing, Manufacturer shall use all
reasonable commercial efforts to mitigate the amounts payable by Purchaser
under this Section in connection with any cancellations.
|
| 4 |
Shipment
and Inspection
|
| 4.1 |
Shipping
and Delivery.
Manufacturer shall notify Purchaser at the time of shipment as to the
quantity of Product shipped and the specific shipping information.
Shipping quantities may not vary from those established by the Purchase
Order unless otherwise mutually agreed upon in writing by the parties.
Manufacturer shall ship the Product to the delivery address(es) set
forth
in the applicable Purchase Order. Purchaser may, from time to time,
instruct Manufacturer to deliver all or a portion of Product ordered
pursuant to a Purchase Order to non-Purchaser locations, this is covered
under “Rescheduling” and “Insurance” sections. Manufacturer shall deliver
the Product by the applicable Delivery Date, provided that Manufacturer
may not deliver the Product more than five (5) calendar days prior
to the
Delivery Date without prior written consent of Purchaser. In the event
that Manufacturer ships Product more than five (5) calendar prior to
Delivery Date specified on the Purchase Order, Manufacturer will reduce
the purchase price of all units shipped by three (3) percent unless
the
Purchaser authorizes the early shipment in writing. In the event that
Manufacturer ships Product more than ten (10) days after the Delivery
Date
specified on the Purchase Order, Manufacturer will reduce the purchase
price of all affected Product by three (3) percent. For each subsequent
week of delay Manufacturer will reduce the purchase price of all affected
Product by an additional three (3) percent unless the Purchaser authorizes
the late shipment in writing. These price reductions will only be required
in the event that early or late shipments are caused by the Manufacturer.
The percentage of price reduction resulted from Manufacturer’s late
shipment is limited to 10% of purchase price. The specific cause of
any
early or late delivery will be solely determined by the
Purchaser.
|
| 4.2 |
Title
and Risk of Loss.
Manufacturer shall deliver the Product to the Purchasers designated
carrier. at the mutually agreed upon FOB location. Title to and risk
of
loss of the Product shall pass from Manufacturer to Purchaser only
upon
Manufacturer’s delivery of the Product to the designated carrier for
shipment.
|
| 4.3 |
Inspection.
During
normal business hours, upon reasonable notice to Manufacturer, Purchaser
shall have the right, but not the obligation, to (a) inspect the work
conducted and services provided by Manufacturer under this Agreement;
(b) inspect and test, at Purchaser’s own expense, the Manufacturer
Facility and any vehicles, containers or other equipment used in such
work
or services, including, without limitation, any areas where Components
or
Product are stored, handled, packaged, or manufactured; and
(c) inspect and obtain copies of licenses, authorizations, approvals
or written communications from any governmental entity or agency
applicable or related to such work or
services.
|
| 4.4 |
Source
Inspection.
Manufacturer shall give Purchaser written notice of and reasonable
access
to completed Product batches so that Purchaser may perform source
inspections of such Product batches prior to shipment by Manufacturer.
Such source inspection shall be conducted by Purchaser within ten (10)
days of receipt of Manufacturer’s notice of completion of such Product
batches. If Product is found to be defective in material or workmanship,
or if Product does not conform to the Specifications, Purchaser has
the
right to reject such Product. Purchaser waives right to Source Inspection
if not completed within the allocated period for source inspection.
Rejected Product shall be replaced with conforming Product. Purchaser
shall have the right to perform source inspections of such replacement
Product prior to shipment by
Manufacturer.
|
| 4.5 |
Inspection
Upon Delivery.
Upon receipt of any Product delivery, Purchaser shall have fifteen
(15)
days to inspect and test such Product. If the Product is found to be
defective in material or workmanship, or if the Product does not conform
to the Specifications, Purchaser has the right to reject such Product
during such -fifteen (15) day period. Product not rejected during such
period shall be deemed accepted. Rejected Product shall be replaced
with
conforming Product within ten (10) days after Purchaser’s notice of
rejection. Purchaser shall have the right to inspect and test such
replacement Product within fifteen (15) days of
delivery.
|
| 5 |
Price
and Payment
|
| 5.1 |
Price.
The Product Price shall include all costs including, but not limited
to,
the cost of materials, labor, overhead and profit. The cost of materials,
labor and overhead shall be passed through directly to the Purchaser
without any additional charge. The Manufacturer shall provide detailed
breakdown of all costs. The Manufacturers only profit will be specified
as
such. Manufacturer
will review materials costs with Purchaser quarterly and all incremental
or decremental costs will be reflected in Product Price. Overhead,
labor
and profit costs will be reviewed on six (6) month intervals and
incremental or decremental costs will also be reflected in Product
Price.
Manufacturer agrees to reasonably pursue Product cost reductions through
material sourcing, process enhancements, labor and overhead reductions,
and engineering changes.
|
| 5.2 |
Payment
Terms.
Unless otherwise provided, Purchaser shall provide Manufactuer with
a
secured Letter of Credit (LOC) for each Purchase Order submitted, on
terms
approved by Manufacturer , for the Purchase Order amount for the benefit
of Manufacturer. This LOC must be executed within five (5) days of
Purchase Order confirmation from the Manufacturer. The LOC requires
the
Manufacturer to deliver the Product in new condition to the FOB point
designated on the Purchase Order. The Manufacturer shall invoice Purchaser
for all amounts due and such invoices shall reference the Purchase
Order
number and be sent to the “Xxxx to” address specified on the Purchase
Order. Manufacturer’s packing list must reference the Purchase Order
number and be sent to the applicable “Ship to” address on the Purchase
Order. Manufacturer will provide Purchaser a copy of the Xxxx of Lading
issued at the FOB point.
|
| 5.3 |
Secured
Inventory.
Subsequent to Purchase Orders for the Pilot and the first order, Purchaser
agrees to provide Manufacturer with a deposit to secure raw materials
used
in production of Products. The amount of this deposit will be negotiated
and agreed upon by both Purchaser and Manufacturer. The Manufacturer
will
hold the deposit as security for goods purchased to support Purchasers
current and future Purchase Orders. Manufacturer will provide Purchaser
with a receipt of the initial deposit and a quarterly accounting of
deposit funds. Manufacturer may use deposit funds to reimburse materials
costs incurred due to Purchasers failure to fulfill Purchase Order
requirements as specified in this Agreement. Manufacturer agrees to
return
all deposits which are unused upon written demand from Purchaser or
at the
termination of this Agreement.
|
| 5.4 |
Taxes.
All applicable taxes, including, without limitation, sales or use taxes,
transaction privilege taxes, gross receipts taxes and other charges
such
as duties, customs, tariffs, imposts and government-imposed surcharges
shall be stated separately on Manufacturer’s invoice. Manufacturer shall
remit all such charges to the appropriate tax authority unless Purchaser
provides sufficient proof of tax exemption. When property is delivered
and/or services are provided or the benefit of services occurs within
jurisdictions in which Manufacturer’s collection and remittance of taxes
is required by Law, Manufacturer shall have sole responsibility for
payment of such taxes to the appropriate tax authorities. In the event
Manufacturer does not collect tax from Purchaser, and is subsequently
audited by any tax authority, liability of Purchaser shall be limited
to
the tax assessment, with no reimbursement for penalty or interest charges.
Each party is responsible for its own respective income taxes or taxes
based upon gross revenues, including, without limitation, business
and
occupation taxes.
|
| 6 |
Representations,
Warranties and Additional
Covenants
|
| 6.1 |
Manufacturer
shall provide copies of all Specifications and data related to
Manufacturing including but not limited to xxxx of materials, approved
vendor lists, test procedures, and assembly procedures. Manufacturer
will
provide semi-monthly (twice per month) periodic product quality reports
describing Product defects and associated corrective actions. Manufacturer
shall maintain a Manufacturing Configuration Record of all Products
delivered to Purchaser.
|
| 6.2 |
Products
and Services.
Manufacturer represents, warrants and covenants that: (a) the
services performed and Products furnished hereunder shall meet the
quality, operating conditions and performance requirements described
in
the Specifications and any applicable Purchase Order; (b) any
services furnished hereunder shall be performed in a professional and
competent manner; (c) the Products, including the Components, are
merchantable, shall be free from defects in workmanship and material,
and
shall be new, fit and sufficient for the particular purpose of Purchaser
and Purchaser’s customers if known to Manufacturer; and
(d) Manufacturer has good and marketable title to the Products to be
furnished hereunder and there are no liens, claims or encumbrances
of any
kind whatsoever against the same. The warranties herein contained are
not
to be deemed exclusive, and Purchaser shall be entitled to all other
warranties and remedies available to it at Law or in
equity.
|
| 6.3 |
Manufacturer
further represents and warrants all Products delivered to Purchaser
for a
period of 15 months from the date the carrier for shipment receives
shipment of Product from the Manufacturer. This warranty covers Product
failures caused by Components and/or processes utilized by the
Manufacturer in the production of Products. Components and processes
utilized by the Manufacturer includes but is not limited to; the complete
Component and subassembly supply chain, all internal and external
manufacturing processes, all existing and new Components, and all existing
and new suppliers.
|
| 6.4 |
Manufacturer
further represents and warrants that all Products comply with the
regulatory requirements specified in the Exhibit C. These regulatory
requirements include but are not limited to radio frequency immunity,
radio frequency emissions, safety and
environmental.
|
| 6.5 |
Manufacturer
further represents and warrants he will maintain a list of Product
serial
numbers and the associated ship date. This data will be accessible
to the
Purchaser at all times. New Product shipments will be added to the
list
within seven (7) days of shipment from the Manufacturer. Purchaser
will
use this data to determine warranty status of all returned
Products.
|
| 6.6 |
Manufacturer
further represents and warrants to take all reasonable actions to assist
Purchaser in determining root cause and remedy of common failure modes
found in returned Products.
|
| 6.7 |
Manufacturer
agrees to compensate Purchaser for Product warranty failures as defined
in
section 6.3.
Purchaser will report failures to Manufacturer on a monthly basis.
Manufacturer will refund the purchase price of each failing unit to
the
Purchaser within thirty (30) days of confirmation of such failure by
Manufacturer..
|
| 6.8 |
Section
6
does not extend a warranty by Manufacturer for failures caused by end-user
neglect or misuse nor does it apply to damage from shipping and handling
after ownership of the Product has transferred to the Purchaser. Purchaser
will solely determine the cause of all Product
failures.
|
| 6.9 |
Compliance
with Law Generally.
Manufacturer represents, warrants and covenants that (a) Manufacturer
shall comply with all Laws applicable to its performance pursuant to
this
Agreement, including, without limitation, the Project and the provision
of
Products hereunder; (b) all Products comply with the regulatory
requirements specified in the Exhibit C and the these regulatory
requirements include but are not limited to radio frequency immunity,
radio frequency emissions, safety and environmental, and (c) Manufacturer
shall at all times perform any work required under this Agreement safely
and in a manner which shall present no threat of bodily injury or property
damage, and shall enforce compliance with the highest standards of
safety
and accident prevention found in applicable
Laws.
|
| 6.10 |
Environmental
Compliance.
|
| 6.10.1 |
Compliance
with Environmental Laws.
Manufacturer shall ensure that the Project complies with all applicable
Environmental Laws. Manufacturer shall obtain and maintain all licenses,
authorizations, certifications and approvals required under any applicable
Environmental Law in connection with the
Project.
|
| 6.10.2 |
Investigation
of Hazardous Materials.
Manufacturer shall not permit the Release of any Hazardous Material
into
the environment and, in the event of any such Release, shall promptly
perform any investigation, study, sampling, testing, cleanup, removal
and
remedial or other action necessary to remove and clean up any such
Hazardous Materials in accordance with the requirements of all applicable
Environmental Laws.
|
| 6.10.3 |
Environmental
Reports.
Manufacturer shall advise Purchaser of any hazard or toxic substance
which
is present in or may be encountered by Purchaser and its agents and
employees in using or possessing the articles or materials furnished
hereunder, and Manufacturer shall use its best efforts to minimize
the
hazard or toxicity thereof. Subject to confidentiality or similar
non-disclosure requirements, Manufacturer shall promptly provide to
Purchaser, upon request, copies of all environmental reports or surveys
received or developed by Manufacturer pertaining to Manufacturer’s
compliance with applicable Environmental Laws as such Environmental
Laws
apply to the Project.
|
| 6.10.4 |
Environmental
Notices.
Manufacturer shall deliver the following notices to Purchaser:
(i) promptly upon obtaining knowledge of (x) any fact,
circumstance, condition or occurrence that could form the basis of
an
Environmental Claim arising with respect to the Project against the
Project or any party or (y) any pending or threatened Environmental
Claim arising with respect to the Project against the Project or any
party, a notice thereof describing the same in reasonable detail and,
together with such notice or as soon thereafter as possible, a description
of the action that such person or entity has taken or proposes to take
with respect thereto and, thereafter, from time to time such detailed
reports with respect thereto as Purchaser may reasonably request; and
(ii) promptly upon their becoming available, copies of all written
communications with any government authority relating to any Environmental
Law or Environmental Claim arising out of the
Project.
|
| 7 |
Indemnification
|
Manufacturer
agrees to indemnify, defend and hold harmless Purchaser, its affiliates,
customers, employees, successors and assigns (all referred to in this
Section 77
as
“Purchaser”) from and against any losses, liabilities, costs, damages, claims,
fines, penalties and expenses (including, without limitation, costs of defense
or settlement and reasonable attorneys’, consultants’ and experts’ fees) that
arise out of or result from: (a) injuries or death to persons or damage to
property, including theft, in any way arising out of or caused or alleged to
have been caused by the work or services performed by, or Product provided
by,
Manufacturer; (b) assertions under Workers’ Compensation or similar acts
made by persons furnished by Manufacturer; (c) any breach of any
representation or warranty by Manufacturer or failure of Manufacturer to perform
its obligations under this Agreement; (d) violation of any Law, including,
without limitation, any Environmental Law, in any way arising out of or caused
or alleged to have been caused by Manufacturer’s work or services under this
Agreement or by the Product provided by Manufacturer; (e) any actual or
alleged Environmental Claim, or any contamination, damage or adverse effect
on
the environment or natural resources (including, without limitation, the cost
of
any investigation or remediation related thereto) in any way arising out of
or
caused or alleged to have been caused by Manufacturer’s work or services under
this Agreement or by any Product provided by Manufacturer; or (f) a claim that
the Work Product infringes any third party rights.
| 8 |
Term
and Termination
|
| 8.1 |
Term.
The term of this Agreement shall commence on the Effective Date and
shall
continue for one (1) year thereafter (“Initial
Term”)
unless earlier terminated as provided in Section 8.2.
After expiration of the Initial Term, this Agreement shall be
automatically renewed for successive one (1) year terms unless either
party provides notice of non-renewal at least ninety (90) days prior
to
the end of the Initial Term or any renewal
term.
|
| 8.2 |
Termination.
Either party may terminate this Agreement in the event that (a) the
other party breaches any material provision of this Agreement and such
breach continues for a period of thirty (30) calendar days following
the
receipt by the defaulting party of notice of such breach, or (b) the
other party becomes insolvent, is adjudicated bankrupt, voluntarily
or
involuntarily files a petition for bankruptcy, makes an assignment
for the
benefit of creditors, seeks any other similar relief under any bankruptcy
Law or related statues or otherwise becomes financially incapable of
performing its obligations in accordance with the terms of this Agreement,
and such judgment, assignment or incapacity is not revoked within sixty
(60) calendar days.
|
| 8.3 |
Effect
of Termination.
Any
provisions of this Agreement, which are intended, by their specific
terms
or by necessary implication, to survive the expiration or termination
of
this Agreement shall so survive.
|
| 9 |
Confidentiality
|
| 9.1 |
Restrictions
on Disclosure and use of Confidential Information.
Recipient shall not use the Confidential Information of Discloser except
for the purpose of performing its obligations and exercising its rights
under this Agreement. Recipient shall maintain the Confidential
Information of Discloser with at least the same degree of care it uses
to
protect its own proprietary information of a similar nature or
sensitivity, but no less than reasonable care under the circumstances.
Unless Discloser grants specific, written, advance permission to do
so,
Recipient shall not disclose any Confidential Information to any third
party except as provided for in Section 9.29.2.
Recipient shall limit access to the Confidential Information of Discloser
to those employees of Recipient who have a need to know such information
in order to perform its obligations and exercise its rights under this
Agreement and who are bound by confidentiality and non-use obligations
to
Recipient at least equivalent to Recipient’s obligations to Discloser
under this Agreement. Should Recipient determine that it needs to disclose
Confidential Information of Discloser to any non-employee (including
consultants and contractors) in order to perform its obligations or
exercise its rights under this Agreement, Recipient shall not do so
without the prior written permission of Discloser. Upon receiving such
permission, Recipient may proceed, but only after binding any such
non-employee to confidentiality and non-use obligations to Recipient
at
least equivalent to Recipient’s obligations to Discloser under this
Agreement. Recipient shall be responsible to Discloser for the acts
and
omissions of any such non-employee with respect to such confidentiality
and non-use obligations.
|
| 9.2 |
Exceptions.
The
foregoing restrictions shall not apply with respect to Confidential
Information to the extent such information or materials can be shown
to
have been: (a) available to the public prior to the date of
Discloser’s disclosure to Recipient or to have become available to the
public thereafter without any unauthorized act or omission by Recipient;
(b) rightfully in Recipient’s possession prior to the date of
Discloser’s disclosure to Recipient and not otherwise restricted as to
disclosure; or (c) disclosed to Recipient without restriction by a
third party who had a right to disclose and was not otherwise under
an
obligation of confidence. Information or materials shall not be deemed
to
be “available to the public” or to be “in Recipient’s possession” merely
if such information or materials can be reconstructed, combined or
pieced
together from multiple sources that are available to the public or
Recipient if no one of those sources actually leads one to the entire
combination, together with its meaning and importance. Further, Recipient
may disclose Confidential Information of Discloser to the extent required
by Law or order of a court of competent jurisdiction, provided that,
in
such event, Recipient shall provide Discloser prompt, advance notice
of
such requirement to allow intervention (and shall cooperate with
Discloser) to contest or minimize the scope of the disclosure (including
through application for a protective
order).
|
| 9.3 |
Return
of Confidential Information.
Upon any expiration or termination of this Agreement or upon the request
of Discloser, Recipient shall return or destroy, at Discloser’s option,
all Confidential Information of Discloser and any copies thereof. In
addition, Recipient shall promptly destroy any electronic or otherwise
non-returnable embodiments of the Confidential
Information.
|
| 10 |
Limitations
on Liability
|
EXCEPT
FOR ANY BREACH OF SECTION 9
(“CONFIDENTIALITY”) OR SECTION 6.10(“ENVIRONMENTAL
COMPLIANCE”), AND EXCEPT FOR ANY OBLIGATIONS UNDER SECTION 7
(“INDEMNIFICATION”), IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR SPECIAL,
INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES OF ANY KIND, OR FOR ANY LOSS
OF
PROFITS, LOSS OF REVENUE, LOSS RESULTING FROM INTERRUPTION OF BUSINESS OR LOSS
OF USE OR DATA, WHETHER OR NOT ADVISED OF THE POSSIBILITY OF SUCH
LOSS.
| 11 |
Miscellaneous
|
| 11.1 |
Remedies.
The parties agree that any breach of Section 9
shall cause irreparable harm and significant injury to the non-breaching
party which may be difficult to ascertain. Accordingly, the parties
agree
that each party shall have the right, in addition to any other remedies
available to it, to obtain an immediate injunction, without necessity
of
posting a bond, enjoining any breach by the other party of
Section 9.
Notwithstanding anything in this Agreement to the contrary, Purchaser
shall be entitled under this Agreement to all of the rights and remedies
available to a contracting party under the Uniform Commercial
Code.
|
| 11.2 |
Insurance.
Manufacturer shall maintain in effect at all times the following
insurance: (a) Comprehensive General Liability Insurance (including
Owned and Non-Owned Automobile, Contractor’s Protective, Contractual and
Completed Operation coverage) with policy limits of at least $100,000
per
person, $100,000 per occurrence for Bodily Injury Liability, and $100,000
per occurrence for Property Damage Liability and (b) any other insurance
necessary ensure the full replacement cost for any loss of the Product
prior to delivery to Purchaser . Such Comprehensive General Liability
Insurance shall remain in force for the term of the Agreement and
Manufacturer shall furnish a Certificate of Insurance prior to the
commencement of the work naming Purchaser as an additional insured
thereunder. Certificates of Insurance evidencing such coverage shall
provide that Purchaser shall be given ten (10) days written notice
before
cancellation or reduction of any of the insurance coverage. Certificates
should be mailed to Purchaser at the address set forth on the first
page
of this Agreement. .
|
| 11.3 |
US
Dollars.
All references to pricing, including, but not limited to Product Pricing,
are reflected in US Dollars and no other currency.
|
| 11.4 |
Subcontractors.
If subcontractors are employed, Manufacturer shall be fully responsible
for their acts and omissions and the acts and omissions of their
employees. There shall be no contractual relationship between any
subcontractor and Purchaser. Manufacturer shall indemnify, defend and
hold
harmless Purchaser from and against any and all liability for payment
of
Manufacturer’s subcontractors and suppliers, including without limitation,
mechanic’s liens.
|
| 11.5 |
Assignment.
Manufacturer shall not assign, sell, transfer, delegate or otherwise
dispose of, whether voluntarily or involuntarily, by operation of Law
or
otherwise, any rights or obligations under this Agreement without the
prior written consent of Purchaser. Except as provided herein, any
purported assignment, transfer or delegation by Manufacturer shall
be null
and void. Subject to the foregoing, this Agreement shall be binding
upon
and shall inure to the benefit of the parties and their respective
successors and permitted assigns.
|
| 11.6 |
Governing
Law.
This Agreement shall be governed by and construed pursuant to the Laws
of
the State of California, without regard to conflict of Laws provisions
thereof. Venue of any action arising out of this Agreement shall be
had in
the state or federal courts in San Francisco, California, and each
party
hereto irrevocably submits to the exclusive jurisdiction and venue
of any
such court in any such suit, action or
proceeding.
|
| 11.7 |
Non-Waiver.
Failure by either party to insist upon strict performance of any of
the
terms and conditions hereof, or delay in exercising any rights or remedies
provided herein, shall not release the other party from any of the
obligations of this Agreement and shall not be deemed a waiver of any
rights of such other party to insist upon strict performance
thereof.
|
| 11.8 |
Attorney’s
Fees.
In the event either party brings legal action to enforce any provision
herein, the prevailing party shall be entitled to collect from the
losing
party reasonable attorneys’ fees and costs
incurred.
|
| 11.9 |
Entire
Agreement and Modification.
No agreement or understanding in any way modifying these terms and
conditions, either before or after the execution hereof, shall be binding
upon either party unless in writing and signed by both parties. This
Agreement, together with any Specifications, Exhibits and documents
attached hereto and incorporated by reference, constitutes the entire
agreement between the parties as to the manufacturing of the Products.
In
the event of any conflict between the terms and conditions of this
Agreement and those of any Purchase Order or any other document, the
terms
and conditions of this Agreement shall control; in the event of any
conflict between the terms and conditions of any Purchase Order and
any
other document, the terms and conditions of the Purchase Order shall
control.
|
| 11.10 |
Status
of the Parties.
Manufacturer hereby represents and warrants that Manufacturer is engaged
in an independent business and shall perform its obligations under
this
Agreement as an independent contractor and not as an agent or employee
of
or a joint venturer with Purchaser; that the persons performing the
services hereunder are not agents or employees of Purchaser; that
Manufacturer has and hereby retains, except as set forth herein, the
right
to exercise full control with respect to the means of its performance
hereunder and full control over the employment, direction, compensation
and discharge of all employees, agents and subcontractors assisting
in
such performance; that Manufacturer shall be solely responsible for
all
matters relating to payment of such employees, including compliance
with
worker’s compensation, unemployment and disability insurance, social
security withholding, and all such matters; and that Manufacturer shall
be
responsible for the acts of Manufacturer and the acts of all agents,
employees and contractors employed by Manufacturer during Manufacturer’s
performance under this Agreement.
|
| 11.11 |
Severability.
If any one or more of the provisions contained in this Agreement shall,
for any reason, be held to be invalid, illegal or unenforceable in
any
respect, such invalidity, illegality or unenforceability shall not
affect
any other provision hereof, and this Agreement shall be construed as
if
such invalid, illegal or unenforceable provision had never been contained
herein.
|
| 11.12 |
Notice.
All notices required hereunder shall be in writing and shall be sent
by
(a) internationally recognized courier service (e.g., DHL, Federal
Express), with all postage or delivery charges prepaid, or
(b) facsimile, subject to email confirmation , and shall be addressed
to the parties at their addresses set forth in the first paragraph
of this
Agreement or to such other address(es) as may be furnished by written
notice in the manner set forth herein.
|
| 11.13 |
Headings.
The headings of the Sections in this Agreement are for convenience
only
and shall not be deemed to affect, qualify, simplify, add to or subtract
from the contents of the clauses which they
reference.
|
| 11.14 |
Language.
The
parties agree that this Agreement shall be executed in English, which
shall be the official language for all questions and interpretations
hereunder.
|
| 11.15 |
Counterparts.
This
Agreement may be executed in counterparts, by manual or facsimile
signature, each of which shall be deemed to be an original and both
together shall be deemed to be one and the same agreement.
|
In
Witness Whereof,
the
parties hereto have caused this Agreement to be duly executed by their
authorized representative as of the Effective Date.
|
Itron
Technology Inc.
|
||
|
By:
/s/ Xxxxxxx
Xxxxx
|
By:
/s/ Xxxxxxx
Xxxx
|
|
|
Name:
Xxxxxxx
Xxxxx
|
Name:
Xxxxxxx
Xxxx
|
|
|
Title:
Chief Executive
Officer
|
Title:
Chief Executive
Officer
|
