OEM Agreement

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OEM Agreement

SBLAW would like to provide the client the form of OEM Agreement for your kind consideration.

OEM AGREEMENT

This OEM Agreement (hereinafter referred to as “Agreement”), made and entered into between:

1.         PARTY A

Address:

Business Certificate No:

Issued by:

Date of issue:

Legal Representative:

Title:

(Hereinafter referred to as “Party A”)

2.         ……………………….. (CLIENT)

Address:

Business Certificate No:

Issued by:

Date of issue:

Legal Representative:

Title:

(Hereinafter referred to as “Party B”)

Party A and Party B hereinafter jointly referred to as “Parties”.

The Parties agree upon terms and conditions as follows:

1.         GOODS

1.1       SPECIFICATIONS

PARTY B shall sell and PARTY A shall purchase Contract Manufacturing Services for Container Desiccants in accordance with the terms and conditions set forth in this AGREEMENT (“GOODS”) in strict compliance with the specifications as set forth in the Specifications provided by the PARTY A (Exhibit 1), or incorporated herein by reference and forming a part hereof and as amended form time to time in accordance with the Section entitled SPECIFICATION CHANGES (“SPECIFICATIONS”)

1.2       SPECIFICATION CHANGES

1.2.1    GENERAL

From time to time, PARTY A may revise, supplement or otherwise amend the SPECIFICATIONS by written notice to PARTY B. These revised SPECIFICATIONS shall become effective …. Calendar days after PARTY B’s receipt of such notice (“CHANGE DATE”) unless PARTY B provides PARTY A with a written objection prior to the CHANGE DATE (“OBJECTION”). PARTY B shall act in good faith and use commercially reasonable efforts to accept each revised SPECIFICATIONS. If PARTY B provides GOODS against a PURCHASE ORDER requesting GOODS in accordance with the revised SPECIFICATIONS shall replace the prior SPECIFICATIONS for purposes of this AGREEMENT.

1.2.2    OBJECTION

If PARTY B provides an OBJECTION prior to the CHANGE DATE, the PARTIES shall promptly discuss the reason for the OBJECTION and attempt to resolve the same. If the PARTIES can’t solve the OBJECTION within  …. calendar days, then PARTY A shall be entitled to (i) terminate this AGREEMENT at any reasonable time thereafter with immediate effect and without and penalty, liability or further obligation; (ii) purchase the GOODS from other suppliers in which cases the obligations of PARTY A and PARTY B hereunder shall be reduced accordingly; or (iii) continue purchases under this AGREEMENT.

1.3       PRODUCTION PROCESS AND/OR RAW MATERIAL CHANGES

PARTY B shall not make any change to the raw and pack material feedstock, any portion or component of the GOODS, the production process, the production equipment or the production location(s) relating to PARTY B’s performance under this AGREEMENT unless and until PARTY B has obtained PARTY A’s prior written consent. PARTY A shall be entitled to reject any such change, in its sole discretion.

1.4       MATERIAL, PRODUCT OR EQUIPMENT DISPOSAL

PARTY B shall not discard or destroy any material, product or equipment, including, but not limited to, packaging materials, specifications, printing plates, molds, formulations, fragrances and ingredients, that is associated or identified with PARTY A’s marketed or previously marketed products or which incorporates PARTY A’s Intellectual Property Rights (“IP RIGHTS”) that requires disposal (“DISPOSAL ITEM”), without PARTY A’s prior written consent (“SCRAPPING AUTHORIZATION”). In the event that any DISPOSAL ITEM requires disposal while under PARTY B’s ownership or control, PARTY B is responsible for ensuring that such disposal is carried out under PARTY B’s direct control and full supervision in order to ensure that the DISPOSAL ITEM is made entirely unsalvageable. PARTY B shall not contract out such disposal or involve any third parties in this process without the prior written consent of  PARTY A. Upon expiration or termination of this AGREEMENT, PARTY B shall compile an inventory of all DISPOSAL ITEMS for agreement with PARTY A as to which items require disposal in accordance with the procedure described above. PARTY B is responsible for taking all reasonable steps to prevent the counterfeiting of PARTY A’s current or previously marketed products or the infringement of PARTY A’s IP RIGHTS resulting from the use of any DISPOSAL ITEMS. PARTY B shall make the DISPOSAL ITEMS entirely unsalvageable, within … calendar days after receipt of the SCRAPPING AUTHORIZATION.

1.5       SUPPLY OF MATERIALS

At PARTY A’s option, PARTY A may supply, or arrange for supply of certain materials, article(s), chemical or other component(s) or composition(s) forming a part of the GOODS or used in the MANUFACTURING to PARTY B.

1.5.1    QUALIFIED SUPPLIERS

For the PERIOD, PARTY B shall only enter into agreements with suppliers of MATERIALS qualified by PARTY A, at PARTY A’s sole discretion. In no case shall PARTY B engage suppliers of MATERIALS which are not qualified by PARTY A without PARTY A’s prior written consent. Nothing herein shall relieve PARTY B of any of its obligations hereunder or otherwise with respect to the GOODS, all of which shall remain absolute, nor constitute a waiver by PARTY A in any respect.

1.5.2    PARTY A SUPPLIES MATERIALS AT A COST TO PARTY B

PARTY A shall sell and PARTY B shall buy from PARTY A MATERIALS at agreed to prices and terms and conditions in quantities sufficient for the MANUFACTURING of the GOODS in accordance with PARTY A’s requirements; the risk of loss and title shall pass to PARTY B in accordance with such terms and conditions.

1.5.3    PARTY A SUPPLIES MATERIALS AT NO COST TO PARTY B

PARTY A shall procure and PARTY B shall receive form PARTY A MATERIALS at agreed to terms and conditions in quantities sufficient for the MANUFACTURING of the GOODS in accordance with PARTY A’s requirements; the risk of loss for such MATERIALS shall pass in accordance with such terms and conditions and PARTY A shall retain title for such MATERIALS. The PRICE shall be adjusted accordingly.

Any losses or scrap of MATERIALS or GOODS in excess of the agreed percentages shall be borne by PARTY B (Exhibit 2).

Any such losses or scrap of MATERIALS or GOODS shall be calculated on a …….. [monthly, quarterly, yearly]basis.

1.5.4    NO MARKUP, COMPETITIVE PRICES AND EXCLUSIVE USE

PARTY B covenants that PARTY B shall not include any mark up or deductible TAXES charged by third parties to PARTY B on any MATERIALS. PARTY B further covenants that PARTY B shall purchase MATERIAL relating to or arising out of PARTY B performance under this AGREEMENT at the lowest possible price. All MATERIALS obtained by PARTY B in accordance with this Section entitled SUPPLY OF MATERIALS shall be used solely for PARTY B’s performance under this AGREEMENT and in no case for third parties or PARTY B’s affiliates without PARTY A’s prior written consent.

1.5.5    TRACKING AND MATERIALS SPECIFICATIONS

PARTY B shall use PARTY A current numbering system to identify and track all MATERIALS and GOODS, PARTY A current format for creating lot numbers for all MATERIALS and GOODS and specific terms and conditions on how to manage the forecasts, deliveries and PURCHASE ORDERS all as set forth in the site level execution agreement. At PARTY A’s request, PARTY B shall provide PARTY A with copies of all technical data and information available to PARTY B in relation to all MATERIALS obtained by PARTY B under this AGREEMENT.

2.         ACCEPTANCE

2.1       RETURN, REWORK & SCRAPPING

Any GOODS DELIVERED by PARTY B to PARTY A that are not in full compliance with any representation, warranty, covenant or other obligation set forth in this AGREEMENT may, upon mutual agreement between PARTY A and PARTY B within …… calendar days after PARTY A notice to PARTY B, or at PARTY A option any time thereafter, be (i) returned to PARTY B at PARTY B’s expense for credit to PARTY A at the full price plus all costs and expenses associated with such return, including, without limitation, payment or reimbursement for customs duties and freight charges; (ii) scrapped by PARTY A, at PARTY B’s expense, in which case PARTY A shall be relieved of any payment obligations with respect to such GOODS, or (¡ii) reworked by PARTY A or PARTY B, at PARTY B’s expense. The rights and remedies set forth in this Section are not exclusive and nothing herein shall limit the rights and remedies either PARTY may have under this AGREEMENT or at LAW.

2.2       QUALITY CONTROL AND TESTING

2.2.1    TESTING AND CERTIFICATE OF ANALYSIS

Prior to the use of any article(s), chemical or other component(s) or composition(s) in the MANUFACTURING of the GOODS, PARTY B shall, at PARTY B’s expense, test such article(s), chemical or other component(s) or composition(s) for compliance with the SPECIFICATIONS and standards under Law. In no case shall PARTY B use any article(s), chemical or other component(s) or composition(s) not in compliance with the SPECIFICATIONS and standards under Law in the MANUFACTURING of the GOODS. PARTY B shall establish a quality assurance department to perform such testing and shall produce records relating to such testing and certificates of analysis and shall provide PARTY A with such records and certificates of analysis relating to each shipment of GOODS concurrently with the DELIVERY of such GOODS.

2.2.2    THIRD PARTY INQUIRIES

PARTY B shall respond to any Inquiry from any third party regarding PARTY B, the MANUFACTURING of the GOODS or the GOODS and promptly notify PARTY A thereof. To the extent such inquiry relates to the GOODS, PARTY A shall be entitled but not obligated to review and approve any of PARTY B’s response hereto and PARTY B shall without delay, at its own expense, make available to PARTY A any relevant information to the extent relating to PARTY B, the MANUFACTURING of the GOODS or the GOODS.

2.2.3    QUALITY ASSURANCE KEY ELEMENTS

PARTY B represents and warrants that PARTY B shall be at all times in compliance with PARTY A’s quality standards as described in PARTY A’s Quality Assurance Key Elements Assessment (if any) and all future revisions thereto (“QAKE”). PARTY A may periodically audit PARTY B MANUFACTURING facility (“PLANT”) in accordance with QAKE, at PARTY A’s discretion, in a manner not to unreasonably interfere with PARTY B operation at   the PLANT. In case such audit results in a score less than ……, PARTY B shall develop and implement, and PARTY A shall approve       in writing, a detailed plan to improve PARTY B’s quality standards. In case PARTY B fails to implement such plan or the subsequent audit results      in a score less than ….., then PARTY A shall be entitled to (i) terminate this AGREEMENT at any reasonable time thereafter with immediate effect and without any penalty, liability or further obligation; (ii) purchase the GOODS from other suppliers in which case the obligations of PARTY A and PARTY B hereunder shall be reduced accordingly; (¡ii) continue purchases under this AGREEMENT, or (iv) implement at PARTY B’s expense a positive release program. The termination provisions set out in. this Section are not exclusive, and are in addition to, and not in limitation of, PARTY A’s rights set forth in this AGREEMENT.

3.         QUANTITY OF GOODS

PARTY A will purchase from PARTY B with the estimated quantities under the Purchase Orders of PARTY A.

3.1       PURCHASE & SALE OBLIGATIONS

Upon PARTY A’s request during the PERIOD, and in accordance with the-terms and conditions set forth in this AGREEMENT, PARTY B shall sell and PARTY A shall purchase PARTY A to complete quantity. For purposes of clarification, these numbers are estimates and shall not be construed as a minimum purchase commitment or give rise to liability on behalf of PARTY A if PARTY A’s purchases less than these estimates. PARTY A retains the right to inquire alternative supply during the PERIOD, including but not limited to the purchase from other suppliers for qualification purposes.

3.2       PURCHASE ORDERS

From time to time during the PERIOD, PARTY A may request GOODS from PARTY B pursuant to and in accordance with separate PARTY A forms of purchase orders, releases or other related documentation (collectively “PURCHASE ORDERS”). Such PURCHASE ORDERS shall specify quantities of GOODS, shipping instructions, delivery date(s) and detailed instructions for the delivery of GOODS (with release schedules, delivery orders or equivalent notices). Each PURCHASE ORDER shall be binding upon PARTY B and PARTY A, and shall be deemed to constitute a part of this AGREEMENT as if fully set forth herein, and all terms and conditions of this AGREEMENT shall be deemed to apply to the subject matter of such PURCHASE ORDER as if fully set forth therein. In the event of any conflict or inconsistency between the terms of this AGREEMENT and the terms of any PURCHASE ORDER, the terms of this AGREEMENT shall prevail.

3.3       REDUCTION OR DISCONTINUANCE OF PURCHASES

PARTY B acknowledges and agrees that PARTY A may deem it necessary, from time to time, to reduce or discontinue purchases of the GOODS covered by this AGREEMENT because of (i) product or packaging reformulation; (ii) process change; (ill) changes in technology; (iv) changes In the laws governing the GOODS, the sale or distribution of the GOODS; (v) changes in the sale or distribution of the GOODS; (vi) the discontinuance of the GOODS; (vii) divestiture of the business in which the GOODS reside; (viii) relocation of production to one of PARTY A’s facilities; or (ix) any other similar reasons. In such event PARTY A shall provide PARTY B with reasonable, but not less than …… calendar days, prior written notice of any such reduction or discontinuance, and PARTY A shall be entitled to thereupon reduce or discontinue further purchases of GOODS from PARTY B hereunder without any penalty, liability or further obligation.

3.4       FULFILLING PRODUCTION REQUIREMENTS

Should PARTY B fail (due to causes within PARTY B’S control) to meet PARTY A’s scheduled GOODS requirements, as mutually agreed to by both parties, PARTY B shall take all reasonable steps, including but not limited to, working extra hours, shifts, or days to fulfill PARTY B’s obligations hereunder. All costs for such effort will be at PARTY B’s expense. Further, PARTY B may use alternate shipping methods to expedite delivery to PARTY A to meet schedules to which both parties agree. In such cases, PARTY B must receive PARTY A’S approval prior to the use of any carrier other than those on PARTY A’s approved carrier list. Additional shipping costs resulting from expedited deliveries or use of alternate carriers will be at PARTY B’s expense.

Delays in delivery shall entitle the PARTY A to damages from PARTY B in the estimated amount of damages, if the delay is entirely due to PARTY B’S fault.

4.         PRICE AND TAXES

4.1       PRICE

The price(s) for the GOODS, including TAXES, shall be as set forth in Exhibit 3, (“PRICE”). The PRICE shall include any goods and services necessary to fulfill this AGREEMENT. Additionally, as PARTY B is responsible to obtain all refunds and waivers of taxes and duties that may be obtainable, the PRICE for GOODS shall be calculated net of such refunds and waivers.

4.2       TAXES

4.2.1    PARTY B shall be responsible for and pay all fees, expenses, charges, costs, and taxes payable for the transaction relating to the GOODS thereof imposed by a governmental or regulatory body (including, without limitation, any sales, use, excise, value-added, services, consumption, and other taxes and duties) the taxable incident of which occurs prior to or upon PARTY A’s receipt of title of GOODS (“TAXES”). For the avoidance of doubt, TAXES shall not mean to include any import/export duties, levies or charges or customs related expenses.

4.2.2    PARTY B’s invoices shall separately state the amount of any TAXES that PARTY B is charging PARTY A, to the extent applicable. PARTY B shall provide and make available to PARTY A any resale certificates, information regarding out-of-state or out-of-country sales or use of equipment, materials or services, and other exemption certificates or information reasonably requested by PARTY A.

4.3       MOST FAVORED CUSTOMER

If during the PERIOD, PARTY B sells any materials which are the same as, equivalent to, or substantially similar to the GOODS herein, at a price (excluding freight and duties) to a third party lower than the price (excluding freight and duties) to PARTY A, then PARTY B has an opportunity to price the GOODS purchased hereunder within …… calendar days so that it is the same or lower than the price (excluding freight and duties) of such third party.

If PARTY B fails to do so or cannot legally do so, then PARTY A shall be entitled to (i) terminate this AGREEMENT at any reasonable time thereafter with immediate effect, and without any penalty, liability or further obligation; (ii) purchase the GOODS from’ other suppliers in * which case the obligations of PARTY A and PARTY B hereunder shall be reduced accordingly; (iii) continue purchases under this AGREEMENT; or (iv) exercise any rights as set forth in the Section entitled STEP IN RIGHTS. At PARTY A’s request, PARTY B shall certify in writing to PARTY A that PARTY B is in compliance with this Section and, to the extent legally permissible, shall provide all information that PARTY A reasonably requests ¡n order to verify such compliance.

4.4       PASS THROUGH COST

In the event of increase or decrease of cost of Raw Materials (“PASS THROUGH COST ITEMS”) PARTY B shall be entitled to pass such increase or decrease through to PARTY A; provided, however that PARTY B provides PARTY A with documentary evidence satisfactory to PARTY A supporting such increase or decrease. PARTY B covenants that PARTY B shall not include any mark up or deductible TAXES charged by a third party to PARTY B on any such PASS THROUGH COST ITEMS. PARTY B further covenants that PARTY B shall purchase PASS THROUGH COST ITEMS relating to or arising out of PARTY B’s performance under this AGREEMENT at the lowest possible price.

5.         CONTRACT PERIOD & TERMINATION

5.1       CONTRACT PERIOD

The period of this AGREEMENT (“PERIOD”) shall begin on …………………….. (“EFFECTIVE DATE”) and end on ………………….., unless earlier terminated in accordance with the provisions hereof. PARTY A shall have the option, in its sole discretion, to extend the PERIOD, upon the same terms and conditions as contained herein, for ……………. months (“RENEWAL PERIOD”) by providing written notice to PARTY B at least ……. calendar days prior to the expiration of the PERIOD. The PERIOD and the RENEWAL PERIOD may hereinafter be referred to collectively as the “PERIOD”.

5.2       EARLY TERMINATION

In the event that (i) PARTY B breaches any representation, warranty, covenant or other obligation set forth in this AGREEMENT, and fails to cure such breach as promptly as practicable but in any event within ……. calendar days of notice of such breach by PARTY A, or (ii) PARTY B becomes unable to pay its bills as they become due in the ordinary course, a trustee or receiver of PARTY B’s property is appointed, PARTY B makes an assignment for the benefit of creditors, a petition in bankruptcy is filed by or against PARTY B or PARTY B terminates or liquidates its business, then PARTY A shall, be entitled to (a) terminate this AGREEMENT at any reasonable time thereafter with immediate effect and without any penalty, liability or further obligation; (b) purchase from other suppliers, in which case the obligations of PARTY A and PARTY B hereunder shall be reduced accordingly; or (c) continue purchases under this AGREEMENT. The termination provisions set out in this Section are not exclusive, and are in addition to, and not in limitation of PARTY A’s rights under this AGREEMENT or at LAW.

 5.3      EFFECT OF TERMINATION

Termination or expiration of this AGREEMENT shall not relieve either PARTY of any liability or obligation it may have to the other arising out of, or related to, acts or omissions occurring prior to such termination or expiration. In case of termination or expiration of this AGREEMENT by PARTY A, PARTY B shall make available for PARTY A’s immediate removal any of PARTY A’s property then in the possession of PARTY B or any of its subcontractors, or under PARTY B’s or any of its subcontractors’ controls. PARTY B in no case shall be entitled to any payment, compensation or indemnity for loss of goodwill, anticipated sales or prospective profits, or because of expenditures, investments or other matters. Before PARTY B stops production as a result of official written notice, PARTY B must produce and deliver GOODS according to PARTY A’s requirements until such time that a new supplier is identified and qualified to support ongoing business.

5.4       UNSHIPPED GOODS AND MATERIALS

Upon termination or expiration of this AGREEMENT, at PARTY A’s option, (i) PARTY A may purchase (a) any portion of unshipped GOODS, which are not discontinued by PARTY A, salable in accordance with PARTY A’s policy and in compliance with the terms and condition of this AGREEMENT at the PRICE and/or (b) any portion of article(s), chemical or other component(s) or composition(s) which is not discontinued by PARTY A, usable in accordance with PARTY A’s policy and in compliance with the terms and condition of this AGREEMENT at the lower of market value or PARTY B’s book value as of the date of termination or expiration in which case PARTY B shall arrange for the prompt shipment to PARTY A at the address(es) designated by PARTY A, at PARTY A’s expense; and (ii) PARTY B, at PARTY B’s expense, shall deplete any excess portion of article(s), chemical or other component(s) or composition(s) and any unshipped GOODS in accordance with the Section entitled MATERIAL, PRODUCT OR EQUIPMENT DISPOSAL. PARTY B shall arrange for the prompt shipment to PARTY A at the address(es) designated by PARTY A, at PARTY A’s expense.

6.         SHIPMENT, PAYMENT 8c DELIVERY

6.1       SHIPMENT/DELIVERY

Delivery: ………….

As used in this AGREEMENT, the term “DELIVERY” and its derivatives means delivery as specified in INCOTERM 2010. PARTY B shall retain the risk of loss in accordance with these terms. Title shall pass concurrently with the risk of loss passing from PARTY B to PARTY A.

6.2       PAYMENT

The due date for payment shall be ….. calendar days from the date the accurate invoice is received at the location as designated by PARTY A or the date of DELIVERY of the corresponding GOODS, whichever is later. PARTY A may withhold payment if PARTY B’s invoice is incorrect or does not conform to PARTY A’s invoicing instructions.

7.         REPRESENTATIONS AND WARRANTIES

7.1       GENERAL REPRESENTATIONS AND WARRANTIES

PARTY B represents and warrants that as of DELIVERY of the GOODS to PARTY A, and covenants that, continuously thereafter, the GOODS and any parts thereof (article(s), chemical or other component(s) or composition(s)), shall:

7.1.1    be in strict compliance with all SPECIFICATIONS applicable to such GOODS and any parts thereof, and otherwise in conformity with all documentation for such GOODS;

7.1.2    be safe and otherwise appropriate and fit for PARTY A’s intended        use;

7.1.3    be of merchantable quality and free from defects, whether          latent    or patent; and

7.1.4    be in full compliance with all applicable LAWS.

7.2       TITLE AND LIENS

7.2.1    TITLE

PARTY B represents and warrants that upon DELIVERY of the GOODS that PARTY B shall pass to PARTY A, and PARTY A shall receive, good and marketable title to such GOODS, free and clear of all liens, claims, security interests, pledges, charges, mortgages, deeds of trusts, options, or other encumbrances of any kind (“LIENS”).

7.2.2    LIENS

PARTY B shall at all times keep any of PARTY A’s property in the possession of PARTY B or any of its subcontractors or under PARTY B’s or any of its subcontractors’ control free and clear of any LIENS, and hereby grants PARTY A the right to file such protective financing or similar statements to confirm and record PARTY A’s ownership thereof and to the extent possible, identified as the property of the PARTY A where appropriate and shall segregate PARTY A’s property from other materials and shall store PARTY A’s property in an organized, secure, controlled and monitored inventory environment at PARTY B’S facility.

7.3       INTELLECTUAL PROPERTY RIGHTS

PARTY B represents and warrants that at the time of DELIVERY of the GOODS, the GOODS and any parts thereof and PARTY A’s use, sale, offer to sell and/or importing of such GOODS and any parts thereof, do not infringe any copyrights, design patents, utility patents, trademarks, trade secrets or similar intellectual property rights (collectively “IP RIGHTS”) of any third party; and that at the EFFECTIVE DATE there are no claims currently being asserted and no actions pending or threatened against PARTY B by any third party that the GOODS or any parts thereof allegedly infringe, violate or misappropriate third party IP RIGHTS. PARTY B shall provide PARTY A with immediate notice of such claims or actions as they arise.

7.4       CORPORATE AUTHORITY

The PARTIES represent, warrant and covenant that (i) each PARTY is and shall be at all times a legal entity validly existing under the laws of its jurisdiction with the power to own all of its properties and assets and to carry on its business as it is currently being conducted; (ii) each PARTY has the power to execute and deliver this AGREEMENT and to perform its obligations under this AGREEMENT; (iii) each PARTY’s officer executing this AGREEMENT is duly authorized to execute and deliver this AGREEMENT on its behalf, and no further corporate proceedings are necessary with respect thereto; (iv) each PARTY is not required to obtain the consent of any third party, including the consent of any party to any contract to which it is a party, in connection with execution and delivery of this AGREEMENT and performance of its obligations under this AGREEMENT; and (v) each PARTY’S execution and delivery of this AGREEMENT and performance of its obligations under this AGREEMENT do not (a) violate any provision of its articles of incorporation or by-laws or equivalent corporate provision as currently in effect, or (b) conflict with, result in a breach of, constitute a default under (or an event which, with notice or lapse of time or both, would constitute a default under), accelerate the performance required by, result in the creation of any lien upon any of its properties or assets under, or create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under, any contract to which it is a party or by which any of its properties or assets are bound.

7.5       COMPLIANCE WITH LAWS

PARTY B represents, warrants and covenants that PARTY B is, and shall at all times be, in full compliance with all applicable governmental, legal, regulatory and professional requirements, including, without limitation, all applicable laws, codes, regulations, rules, ordinances, judgments, orders and decrees, including, without limitation, those related to IP RIGHTS, fair trade and antitrust, customs, immigration, labor, employment, working conditions, worker health and safety, branding and labeling, adulteration and contamination, board of health and environmental matters and all applicable privacy laws (regulations, rules, opinions or other governmental and/or self-regulatory group requirements or statements of position) (collectively “LAWS”). PARTY B shall promptly notify PARTY A if PARTY B receives any notice, demand, summons or complaint from any governmental or regulatory authority, agency or other body relating to the subject matter of this AGREEMENT or PARTY B’s performance in accordance with this AGREEMENT, and shall take all steps, at PARTY B’S expense, to remedy and resolve any issues raised therein as promptly as practicable.

7.6       APPLICABILITY AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES

PARTY B’s representations, warranties and covenants set forth in the Section entitled GENERAL REPRESENTATIONS AND WARRANTIES shall terminate and expire with respect to each delivery of the GOODS 01 yearafter the date of receipt of the GOODS at PARTY A’s final destination; provided, however, that in the case of a latent defect in the GOODS, such PARTY B’s representations, warranties and covenants shall terminate and expire 01 year after the date on which PARTY A discovered or is notified of such defects, whichever is earlier.

Any other of PARTY B’s representations, warranties, covenants and other obligations set forth in this AGREEMENT shall be subject to all applicable statutes of limitation, similar statutes and other similar defenses provided by law or equity.

8.         INDEMNIFICATION AND INSURANCE

8.1       PARTY B’S INDEMNIFICATION OF PARTY A

PARTY B shall, in addition to PARTY B’s obligation to indemnify PARTY A, its parent, its affiliates and subsidiaries and their respective agents, officers, directors and employees (“PARTY A INDEMNITEE”) by law, in equity or otherwise, at its own expense, at PARTY A’s option defend, indemnify and hold harmless PARTY A INDEMNITEE from and against all claims, including, but not limited to, third-party claims, allegations, demands, liabilities, fines, losses, damages, costs and expenses, product recalls, including, without limitation, reasonable legal fees and expenses and any amounts paid in settlement (collectively “CLAIMS”), arising out of or related to any of the following: (I) PARTY B’s breach of any representation, warranty, covenant or other obligation set forth in this AGREEMENT; (ii) the negligence, gross negligence, bad faith, intentional or willful misconduct of PARTY B or subcontractors (whether or not approved by PARTY A) or their respective employees or other representatives; (iii) PARTY B’s use of any subcontractors (whether or not approved by PARTY A) arising out of or relating to PARTY B’s performance under this AGREEMENT; or (iv) bodily injury, death or damage to personal property arising out of or relating to PARTY B’s or subcontractors’ (whether or not approved by PARTY A) and their respective employees’ or other representatives’ performance under this AGREEMENT.

8.2       INTELLECTUAL PROPERTY INFRINGEMENT INDEMNIFICATION

PARTY B shall, at its own expense, defend, indemnify and hold harmless PARTY A INDEMNITEE from and against all CLAIMS, arising out of or related to any alleged infringement, violation or misappropriation of any third party IP RIGHTS relating to or arising out of the GOODS or any parts thereof.

In addition hereto, PARTY B shall, at its own expense, promptly take the following actions in the listed order of priority if any GOODS or parts thereof becomes, or is likely to become, the subject of an IP RIGHTS infringement, violation or misappropriation CLAIM: (a) secure the right to continue using the GOODS and any parts thereof; (b) replace or modify such GOODS or parts thereof to make it non-infringing, such that the replacement or modification shall not degrade the performance or quality of the affected component of the GOODS; or (c) remove such GOODS or any parts thereof from the GOODS and refund to the PARTY A all fees and charges associated with such GOODS or any parts thereof. In addition hereto, in the event PARTY A INDEMNITEE or PARTY B are served with a warning letter and/or a lawsuit is filed against either of them, alleging that PARTY B’S GOODS or any parts thereof infringe, violate or misappropriate third party IP RIGHTS, then PARTY A, at its sole discretion, shall be entitled to immediately terminate this AGREEMENT without any penalty, liability or further obligation, in addition to its rights hereunder. Notwithstanding the foregoing, PARTY A shall hold PARTY B harmless with respect to liability for infringement of a design patent by reason of PARTY B making or furnishing to PARTY A hereunder, any article or articles the ornamental appearance of which was specified by PARTY A and not offered by PARTY B as an option.

8.3       INDEMNIFICATION PROCEDURES

PARTY A INDEMNITEE shall, within ……. calendar days after receipt of notice of the commencement of any third party legal proceedings against PARTY A INDEMNITEE for which indemnity may be sought, notify PARTY B thereof; provided that the failure to provide such notice shall not relieve PARTY B of its indemnity obligations hereunder. Upon PARTY A INDEMNITEE’S request, PARTY B shall assume, at its own expense, the defense of any such third party CLAIM with reputable counsel reasonably acceptable to PARTY A INDEMNITEE. PARTY B shall be entitled to settle any such third party CLAIM with PARTY A INDEMNITEE’S written consent (which may be granted or withheld in PARTY A INDEMNITEE’S sole discretion). In addition to, and not in limitation of, PARTY A’s rights set forth in this AGREEMENT, PARTY B shall pay any damages assessed against PARTY A INDEMNITEE in such third party CLAIM. PARTY A INDEMNITEE, at PARTY B’s cost, shall reasonably cooperate with PARTY B in the defense of such action as PARTY B may reasonably request.

9.         MISCELLANEOUS PROVISIONS

9.1       CONFIDENTIALITY

Prior to the EFFECTIVE DATE and during the PERIOD, PARTY B, its subcontractors and/or their employees may become privy to certain proprietary information of PARTY A, its parents, its affiliates and/or its subsidiaries (collectively “DISCLOSER”) and proprietary information furnished to PARTY A, its parents, its affiliates and subsidiaries by a third party on a confidential basis, including, but not limited to technical and/or business information, materials (including, but not limited to, devices, prototypes, and/or samples), general or specific interests in materials and/or areas of business, drawings, plans, SPECIFICATIONS, know-how, discoveries, production methods, plant size, crew shifts, number of lines, product shipments, new product development testing, and/or any intended use or sale of any of Discloser’s goods or services (collectively “CONFIDENTIAL INFORMATION”). PARTY B, its subcontractors and/or their employees may become privy of such CONFIDENTIAL INFORMATION in writing, oral or any other form, and is not required to be marked as confidential, restricted, proprietary or other similar designation to be subject to the confidentiality obligations herein. All CONFIDENTIAL INFORMATION is the valuable property of DISCLOSER and shall be and remain the sole property of the DISCLOSER, and PARTY B shall not have or obtain any rights therein. PARTY B shall and shall cause its employees, subcontractors and their employees to (i) hold the CONFIDENTIAL INFORMATION in confidence, (ii) neither analyze, disassemble for reverse engineering, nor otherwise attempt to identify the intrinsic nature of CONFIDENTIAL INFORMATION, (¡ii) nor use, (iv) nor disclose to any third party, other than for PARTY B’S performance under this AGREEMENT. PARTY B shall limit disclosure of CONFIDENTIAL INFORMATION to such employees that need to know the CONFIDENTIAL INFORMATION for purposes of PARTY B’s performance under this AGREEMENT. The commitments set forth in this Section shall not extend to any portion of CONFIDENTIAL INFORMATION which, as established by relevant documentary evidence satisfactory to PARTY A, (a) is already in PARTY B’s lawful possession at the time of disclosure by the PARTY A; (b) is through no act on the part of the PARTY B, generally available to the public; (c) corresponds to that furnished by the PARTY A to any third party on a non-confidential basis; (d) corresponds in substance to that furnished to PARTY B by a third party having no obligation of confidentiality to the PARTY A; (e) or is required to be disclosed by law or government regulation, provided that PARTY B provides reasonable prior notice of such required disclosure to the PARTY A. PARTY B shall use the same degree of care to prevent the disclosure of CONFIDENTIAL INFORMATION to third parties, as it uses in protecting and preserving its own confidential information of like kind, but in no event less than a reasonable degree of care; including, without limitation, prohibiting visitors during production of PARTY A’s goods or services. PARTY B shall, at PARTY A’s option, return, delete or destroy all CONFIDENTIAL INFORMATION promptly upon the earlier of termination or expiration of this AGREEMENT. Upon PARTY A’s request PARTY B shall furnish PARTY A with a certificate of destruction executed by an authorized representative of PARTY B. PARTY A shall be entitled to specific performance and injunctive relief as remedies for any breach or threatened breach of any provision of this Section, without the necessity of posting bond or proving actual damages, which remedies shall not be deemed to be exclusive remedies for such breach or threatened breach by PARTY B, but shall be in addition to all other available remedies. The rights and obligations as set forth in this provision shall survive the termination or expiration of this AGREEMENT.

In the event that PARTY B becomes legally compelled to disclose any CONFIDENTIAL INFORMATION, PARTY B will provide PARTY A with prompt advance notice in writing so that PARTY A may, at its discretion, defend against such legal obligation, seek a protective order, or pursue other appropriate remedy. In the event that such protective order or other relief is not obtained, PARTY B will furnish only that portion of such CONFIDENTIAL INFORMATION which, on the advice of PARTY B’s legal counsel, is legally required, and PARTY B will exercise its best efforts to obtain reliable assurance that confidential treatment will be accorded such CONFIDENTIAL INFORMATION.

9.2       FORCE MAJEURE

Acts of God, fires, floods, weather, or other catastrophes, epidemics or quarantine restrictions, or other cause(s) beyond the reasonable control of a PARTY, not reasonably foreseeable, not caused by acts or omissions of the PARTY affected and that could not have been avoided through a work-around plan, which prevent PARTY B from providing or procuring the GOODS, PARTY A from receiving or using GOODS or either PARTY from performing hereunder (“FORCE MAJEURE EVENT”), shall suspend such affected PARTY’s obligation to perform hereunder during the period required to remove such FORCE MAJEURE EVENT. Such affected PARTY shall promptly notify the other PARTY of the FORCE MAJEURE EVENT and the cause of such FORCE MAJEURE EVENT. If such affected PARTY is PARTY B and the period of such FORCE MAJEURE EVENT lasts longer than …… calendar days then PARTY A shall be entitled, at any time thereafter, while such FORCE MAJEURE EVENT continues, to terminate this AGREEMENT without any penalty, liability or further obligation therefore, immediately upon notice of such termination to the PARTY B, or purchase the GOODS from other suppliers in which case the obligations, of PARTY A and PARTY B hereunder shall be reduced accordingly.

If such affected PARTY is PARTY B, then PARTY B shall allocate its supply of the GOODS, component raw materials and related manufacturing facilities so that the percentage reduction in PARTY B’s supply of GOODS, component raw materials and related manufacturing facilities to PARTY A is no greater than the overall percentage reduction in total quantity of the GOODS, component raw materials and related manufacturing facilities PARTY B has suffered as a result of the FORCE MAJEURE EVENT.

Upon PARTY A’s request and upon timings requested by PARTY A, PARTY B shall develop, test and then submit to PARTY A for PARTY A’s approval a supply assurance plan.

9.3       ASSIGNMENT

PARTY B shall not transfer or assign this AGREEMENT or any of its rights or obligations hereunder, whether in whole or in part, by delegation, subcontracting, operation of law or otherwise, without the prior written consent of PARTY A. Any such transfer or assignment without PARTY A’s prior written consent shall be null and void. PARTY A may, without restriction, transfer or assign this AGREEMENT in whole or in part or any of its rights or obligations hereunder, by delegation, operation of law or otherwise, without the prior written consent of PARTY B.

9.4       CHANGE IN PARTY B’S OWNERSHIP AND/OR CHANGE IN CONTROL

9.4.1    To the extent legally permissible, PARTY B shall notify PARTY A in writing at least ……… calendar days prior to (i) any change in ownership of PARTY B; or (ii) PARTY B selling, transferring or otherwise disposing all or substantially all of its assets used in any way to perform its obligations set forth in this AGREEMENT (collectively “CHANGE IN CONTROL”).

9.4.2    If a CHANGE IN CONTROL involves an acquirer not affiliated with PARTY B, PARTY B herewith grants PARTY A a right of first refusal to match a bona fide offer from such party on the same terms and conditions.

9.4.3    In case of a CHANGE IN CONTROL as set forth in 10.4.1 (ii) PARTY B, at PARTY A’S sole discretion and direction, shall assign this AGREEMENT in whole to the acquirer and cause such acquirer to assume this AGREEMENT in writing.

9.4.4    In case of a CHANGE IN CONTROL, PARTY A shall be entitled to terminate this AGREEMENT, in whole or in part, without any penalty, liability or further obligation with ……… calendar days’ prior written notice to PARTY B, and PARTY B shall provide reasonable transition services to PARTY A.

9.5       INDEPENDENT CONTRACTOR STATUS

The PARTIES are and shall remain independent contractors with respect to each other, and nothing in this AGREEMENT shall be construed to place the PARTIES in the relationship of partners, joint ventures, fiduciaries or agents. Neither PARTY is granted any right nor any authority to assume or to create an obligation, or responsibility, express or implied, on behalf of or in the name of the other, nor bind the other in any manner whatsoever.

PARTY B shall maintain sufficient personnel to perform hereunder. PARTY B agrees that no authority has been conferred upon it by the PARTY A to hire any person or persons on behalf of the PARTY A, and PARTY A undertakes no obligations of any sort to PARTY B’S employees and to select, engage, manage, supervise and discharge its employees, agents and servant and otherwise direct and control their services. The PARTY B is the sole employer of all employees performing hereunder and is responsible for all matters concerning such employees. In no case shall PARTY B, the employees, workers, laborers, agents or subcontractors of PARTY B be deemed employees of PARTY A.

9.6       MODIFICATION AND WAIVER

No waiver of any provision of this AGREEMENT shall be valid or binding unless in writing and executed by the PARTY against whom enforcement is sought. No waiver by either PARTY of any breach, or the failure of either PARTY to enforce any of the terms and conditions of this AGREEMENT, shall      affect, limit or waive that PARTY’s right to enforce and compel compliance with all terms and conditions of this AGREEMENT, or to terminate this AGREEMENT according to its terms. No modification or amendment of any provision of this AGREEMENT shall be valid or binding unless (i) it is executed and delivered by both PARTIES hereto in writing subsequent to the date hereof, (ii) it specifically refers to this AGREEMENT, and (iii) it specifically states that it is intended to, and shall take precedence over, this AGREEMENT. Any other modification, amendment or waiver of any provision of this AGREEMENT shall be null and void.

9.7       ENTIRETY

This AGREEMENT, which includes the schedules, exhibits, attachments and annexes attached hereto or incorporated by reference and made part of this AGREEMENT or subsequently incorporated in this AGREEMENT, constitutes the entire understanding and agreement between the PARTIES regarding the subject matter of this AGREEMENT, and supersedes all prior or contemporaneous agreements, oral or written, made between the PARTIES relating to such subject matter.

9.8       AGREEMENT PRECEDENCE

For their convenience, the PARTIES may use, from time to time, their standard purchase orders, site level execution agreements, sales releases, delivery schedules, acknowledgments, invoices and other similar preprinted forms. In the event of a conflict between this AGREEMENT and any of these documents that purport to govern the same matters set forth herein, this AGREEMENT shall prevail, except as otherwise set forth in the Section entitled MODIFICATION AND WAIVER.

9.9       SEVERABILITY

In the event any provision of this AGREEMENT is declared to be void, invalid or unlawful by any court or tribunal of competent jurisdiction, such provision shall be deemed severed from the remainder of this AGREEMENT and the balance shall remain in full force and effect. The PARTIES shall undertake to replace the invalid, ineffective, or unenforceable provisions with valid, effective, and enforceable provisions, which, in their commercial effect, approximate as closely as possible the intentions of the PARTIES as expressed in the invalid, ineffective, or unenforceable provisions.

9.10     NOTICES

All notices given hereunder shall be in writing and shall be deemed to have been duly given if addressed or sent to the PARTIES at the following addresses and facsimile numbers or to such other additional address or facsimile number as any PARTY shall hereafter specify by notice to the other PARTY and the PARTIES’ receipt of such notice:

PARTY B:

Full name:

Address:

Email:

Phone:                                                Fax:

PARTY A:

Full name:

Address:

Email:

Phone:                                                Fax:

9.11     HEADINGS

Section headings hereof reference and are for convenience only and shall not affect the interpretation hereof.

9.12     COUNTERPARTS

The PARTIES may execute any number of counterparts to this AGREEMENT, each of which shall be an original instrument, but all of which taken together shall constitute one and the same AGREEMENT. Signed facsimile copies or electronic copies of this AGREEMENT shall bind the PARTIES to the same extent as original documents.

9.13     GOVERNING LAW, CONSTRUCTION AND LANGUAGE

This AGREEMENT shall be governed by and interpreted for any and all purposes in accordance with the laws of ….. [country of PARTY A]. The courts sitting in, or having principal jurisdiction over …….[country of PARTY A]shall have exclusive jurisdiction of all disputes hereunder and the PARTIES hereby agree that any such court shall be a proper forum for the determination of any dispute arising hereunder. The PARTIES irrevocably agree that service of process upon it by certified mail-return receipt requested, addressed to it at its address set forth on the Section entitled NOTICES, shall constitute good and effective service for all purposes.

The PARTIES understand the English language and are fully aware of all terms and conditions contained herein. If any translation of this AGREEMENT is made, the English language version shall always continue to govern.

The PARTIES agree that (i) the United Nations Convention on International Sale of Goods shall have no force or effect on transactions under or relating to this AGREEMENT; (ii) no trade usage shall be used to explain or supplement this AGREEMENT even if either or both PARTIES were aware or should have been aware of such trade usage; and (¡ii) this AGREEMENT prevails over any general terms and conditions of trade.

9.14     SURVIVAL PROVISIONS

Neither the expiration nor termination of this AGREEMENT shall affect such of the provisions of this AGREEMENT that expressly provide that they shall operate after any such expiration or termination or which of necessity must continue to have effect after such expiration or termination, notwithstanding that the clauses themselves do not expressly provide for this.

9.15     PUBLIC DISCLOSURES

Except as required by law or with PARTY A’s prior written consent, PARTY B shall neither (i) disclose the existence, or the terms and conditions, or the subject matter of this AGREEMENT to any party, (ii) issue press releases or any other publication regarding the existence, the terms and conditions, or the subject matter of this AGREEMENT, (iii) issue statements as to the existence of a relationship between the PARTIES, nor (iv) use PARTY A’s, its parents’, its affiliates’ or subsidiaries’ corporate names or trademarks.

9.16     SETOFF RIGHTS

To the extent legally permissible, all claims for money due or to become due from PARTY A shall be subject to deduction or setoff by PARTY A by reason of any counterclaim arising out Of this AGREEMENT.

9.17     REPORTING REQUIREMENTS

PARTY B shall provide to PARTY A information and reports, in a format and on a frequency requested by PARTY A, at no cost to PARTY A. If PARTY B fails to meet information or reporting requirements on a recurring basis, then PARTY A shall be entitled to (i) terminate this AGREEMENT at any reasonable time thereafter with immediate effect and without any penalty, liability or further obligation; (i) purchase the GOODS from other suppliers in which case the obligations, of PARTY A and PARTY B hereunder shall be reduced accordingly; or (iii) continue purchases under this AGREEMENT and to withhold payment. The termination provisions set out in this Section are not exclusive, and are in addition to, and not in limitation of, PARTY A’S rights set forth in this AGREEMENT.

9.18 OWNERSHIP OF INTELLECTUAL PROPERTY

PARTY A shall own all IP RIGHTS, including, but not limited to, ideas, discoveries, inventions, documents, designs, drawings, electronic media, calculations and descriptions which PARTY B, prior to or after the EFFECTIVE DATE, develops, invents or creates or causes to be developed, invented or created, specifically relating to the GOODS or parts thereof, their intended use or relating to PARTY B’s performance in accordance with this AGREEMENT (“PARTY A’s IP RIGHTS”). Nothing herein shall limit PARTY B’s rights to IP RIGHTS owned by PARTY B to the extent not developed, invented or created, specifically relating to the GOODS or parts thereof, their intended use or relating to PARTY B’s performance in accordance with this AGREEMENT (“PARTY B’s IP RIGHTS”); provided, however, that any work of PARTY B’s authorship relating to the GOODS or parts thereof hereunder is “work made for hire” for PARTY A within the meaning of the U.S. Copyright act. PARTY B, upon PARTY A’s request, shall execute any documents, which PARTY A deems necessary to document PARTY A’S respective copyright ownership. In the event that the work is not considered “work made for hire” PARTY B hereby irrevocably assigns to PARTY A all rights in perpetuity, worldwide, royalty free and freely assignable in all media now known and thereafter developed, including but not limited to the copyright, trademarks and goodwill associated herewith.

PARTY B shall not use PARTY A’s IP RIGHTS for any other purpose than PARTY B’s performance under this AGREEMENT.

Concurrently with the DELIVERY of the GOODS, PARTY B shall (i) transfer PARTY A’s IP RIGHTS to PARTY A and shall execute any documents, which PARTY A deems necessary to document PARTY A’s ownership and their physical incorporation in any form and fashion and (ii) shall grant to PARTY A a perpetual, non-exclusive, worldwide, royalty free and freely assignable license with the right to sub license to PARTY B’s IP RIGHTS to make, have made, use, sell, offer for sale, and import in conjunction with the GOODS or parts thereof, in particular but not limited to maintenance, spare parts and improvements of the GOODS or parts thereof and shall provide their physical incorporation in any form and fashion to PARTY A.

PARTY B shall cause its employees to agree to assign to PARTY B such PARTY A’s IP RIGHTS as may be made by such employees in connection with their employment by PARTY B.

9.19     INSPECTION AND AUDIT RIGHTS OF THE PARTY A

To the extent legally permissible, upon reasonable notice by PARTY A, PARTY B shall permit PARTY A’s representative(s) access to any area of PARTY B’s facilities, computer systems and books and records relating to PARTY B’s performance under this AGREEMENT to determine and ensure PARTY B’s compliance with the terms and conditions of this AGREEMENT.

9.20     STEP IN RIGHTS

9.20.1 In case of PARTY B’s breach of any representation, warranty, covenant or other obligation set forth in this AGREEMENT, PARTY A, at PARTY A’s option, has the right to enter, at PARTY B’s cost, PARTY B’s manufacturing facility for the sole purpose of assuring PARTY A’s continued supply up and until such PARTY B’s breach of any representation, warranty, covenant or other obligation set forth in this AGREEMENT has been cured by PARTY B. PARTY B agrees to cooperate with PARTY A in making personnel, equipment, facilities and production capability available to PARTY A to perform PARTY B’s obligations under this AGREEMENT; and/or to sub-lease up to all portions of PARTY B’s manufacturing facility used to perform PARTY B’s obligations under this AGREEMENT and to lease any and all equipment at no cost, and PARTY B shall further place employees at no cost on loan to PARTY A, all to the extent necessary to perform PARTY B’s obligations under this AGREEMENT. PARTY B shall promptly prepare and produce all documents reasonably necessary to carry out such sub-leases.

10.20.2 The PARTIES agree that this Section entitled STEP IN RIGHTS is reasonable and that valid consideration has been received therefore. It is acknowledged and agreed by the PARTIES that (i) PARTY A INDEMNITEE would incur significant and irreparable damages if PARTY B violates any provision of this Section entitled STEP IN RIGHTS, in particular but not limited to PARTY B preventing PARTY A from exercising its options as set forth in this Section entitled STEP IN RIGHTS; (ii) a monetary remedy for breach as set forth in this Section entitled STEP IN RIGHTS shall be inadequate; and (in) in addition to any other rights and remedies available to PARTY A (including damages), PARTY A is entitled to judicial temporary and permanent injunctive relief for breaches of this Section entitled STEP IN RIGHTS without the necessity of proving actual damages or posting a bond. The PARTIES agree that the covenants contained in this Section entitled STEP IN RIGHTS are reasonable and necessary for the protection of PARTY A INDEMNITEE. The provisions of this Section entitled STEP IN RIGHTS are separate and distinct commitments independent of each of the other provisions of this AGREEMENT. It is the intention of the PARTIES that the provisions of this Section entitled STEP IN RIGHTS be enforceable to the maximum extent permitted by LAW and, to that end, PARTY B and PARTY A agree that such provisions may be modified by a court (or arbitrator), acting in law or in equity, to ensure the enforceability thereof.

PARTY A and PARTY B have caused their respective duly authorized representatives to execute this AGREEMENT, acting as agent(s) as set forth herein.

PARTY A

 

 

 

Representative:

Title:

Date:

PARTY B

………………

 

 

 

Representative:

Title:

Date: