Common use of PRODUCT DESIGN AND DEVELOPMENT Clause in Contracts

PRODUCT DESIGN AND DEVELOPMENT. 3.1 Supplier shall design and develop the Products in accordance with the Requirements as well as other instructions provided by SOUND UNITED from time to time (such act of designing and developing, the “Development Work”). Supplier shall obtain SOUND UNITED’s written approvals at each milestone required in Schedule II. 3.2 Upon SOUND UNITED’s request from time to time, Supplier shall produce a written report with respect to the progress of the Development Work, in the form separately designated by SOUND UNITED. 3.3 In the event Supplier becomes aware of any factor which adversely affects or may reasonably adverselу affect the progress of the Development Work, Supplier shall notify SOUND UNITED immediately and propose to SOUND UNITED possible alternative course(s) of action reasonably acceptable to SOUND UNITED. Any alternative course of action agreed by the Parties to be taken shall be reduced to writing by Supplier and approved by SOUND UNITED. Compliance with this Section or acceptance by SOUND UNITED of any alternative course of action shall not prejudice SOUND UNITED’s right to claim for damages, losses, demands, costs and expenses, including but not limited to reasonable attorneys’ fees and court costs (collectively, the “Damages”) under this Agreement. 3.4 The Parties acknowledge and agree that performance of the Development Work in accordance with the Schedule is critical in the timely launch of a new Product or a model of a Product and that any delay in the Schedule may cause SOUND UNITED to incur Damages, which may include, without limitation, additional costs and expenses to speed up any processes or to take alternative courses of action relating to the Development Work to make up for the delay in the Schedule (e g, sending of SOUND UNITED staff to Supplier’s facility to assist or give instructions to Supplier’s staff; expedited shipment of the Products (including samples); updating of software in the Products in warehouse; procurement of replacement goods and services from an alternate source; etc.). Accordingly, any delay in the Development Work caused by Supplier or a situation where departure from the Schedule is inevitable due to causes attributable to Supplier will entitle SOUND UNITED to (i) compensation by Supplier for such Damages incurred thereby： and (ii) at SOUND UNITED’s option, cancel the applicable Award and terminate this Agreement Supplier’s compliance with Section 3.3 above will not prejudice SOUND UNITED’s right to claim for Damages under this Section or otherwise. Without limiting any other rights SOUND UNITED may have under this Agreement or otherwise, to the extent the Award Letter specifies any development fees to be payable by SOUND UNITED to Supplier for the Development Work, SOUND UNITED may, at its option set-off such fees by the amount of Damages entitled to SOUND UNITED hereunder.

PRODUCT DESIGN AND DEVELOPMENT. 3.1 Supplier shall design and develop the Products in accordance with the Requirements and the milestone processes specified by SOUND UNITED as set forth in Schedule II, as well as other instructions provided by SOUND UNITED from time to time (such act of designing and developing, the “Development Work”). Supplier shall obtain SOUND UNITED’s written approvals at each milestone required in Schedule II. 3.2 Upon SOUND UNITED’s request from time to time, Supplier shall produce a written report with respect to the progress of the Development Work, in the form separately designated by SOUND UNITED. 3.3 In the event Supplier becomes aware of any factor which adversely affects or may reasonably adverselу adversely affect the progress of the Development Work, Supplier shall notify SOUND UNITED immediately and propose to SOUND UNITED possible alternative course(s) of action reasonably acceptable to SOUND UNITED. Any alternative course of action agreed by the Parties to be taken shall be reduced to writing by Supplier and approved by SOUND UNITED. Compliance with this Section or acceptance by SOUND UNITED of any alternative course of action shall not prejudice SOUND UNITED’s right to claim for damages, losses, demands, costs and expenses, including but not limited to reasonable attorneys’ fees and court costs (collectively, the “Damages”) under this Agreement. 3.4 The Parties acknowledge and agree that performance of the Development Work in accordance with the Schedule is critical in the timely launch of a new Product or a model of a Product and that any delay in the Schedule may cause SOUND UNITED to incur Damages, which may include, without limitation, additional costs and expenses to speed up any processes or to take alternative courses of action relating to the Development Work to make up for the delay in the Schedule (e ge.g., sending of SOUND UNITED staff to Supplier’s facility to assist or give instructions to Supplier’s staff; expedited shipment of the Products (including samples); updating of software in the Products in warehouse; procurement of replacement goods and services from an alternate source; etc.). Accordingly, any delay in the Development Work caused by Supplier or a situation where departure from the Schedule is inevitable due to causes attributable to Supplier will entitle SOUND UNITED to (i) compensation by Supplier for such Damages incurred thereby： ; and (ii) at SOUND UNITED’s option, cancel the applicable Award and terminate this Agreement Agreement. Supplier’s compliance with Section 3.3 above will not prejudice SOUND UNITED’s right to claim for Damages under this Section or otherwise. Without limiting any other rights SOUND UNITED may have under this Agreement or otherwise, to the extent the Award Letter specifies any development fees to be payable by SOUND UNITED to Supplier for the Development Work, SOUND UNITED may, at its option option, set-off such fees by the amount of Damages entitled to SOUND UNITED hereunder.