EXHIBIT 10.1
MANUFACTURING SERVICES AGREEMENT BETWEEN
JABIL CIRCUIT, INC. AND SKYE INTERNATIONAL, INC.
CONFIDENTIAL
JABIL
CIRCUIT
MANUFACTURING SERVICES AGREEMENT
BETWEEN
JABIL CIRCUIT, INC.
AND
SKYE INTERNATIONAL, INC.
JBL-T-051
CONFIDENTIAL
INDEX
SECTION 1 DEFINITIONS...................................................PAGE 1
SECTION 2 LIST OF SCHEDULES.............................................PAGE 4
SECTION 3 BUILD SCHEDULE FORECASTS......................................PAGE 4
SECTION 4 MANUFACTURING SERVICES........................................PAGE 4
4.1 Testing.
4.2 Packaging and Shipping.
4.3 Items to be Supplied by SKYE.
4.4 Items to be Supplied by Jabil.
4.5 SKYE Inspection.
4.6 Materials Procurement.
4.7 Equitable Adjustment.
SECTION 5 WARRANTY & RMA PROCEDURE......................................PAGE 5
5.1 Jabil Warranty.
5.2 Repair or Replacement of Defective Product.
5.3 Limitation of Warranty.
5.4 ECO Upgrade.
SECTION 6 LIMITATION OF DAMAGES.........................................PAGE 6
SECTION 7 DELIVERY, RISK OF LOSS AND PAYMENT TERMS......................PAGE 7
7.1 Payment.
7.2 Taxes.
SECTION 8 IMPORT AND EXPORT.............................................PAGE 7
8.1 Responsibilities, Licenses, Approvals and Authorizations.
8.2 Export Control Assumptions and Notice.
SECTION 9 DESIGN SERVICES...............................................PAGE 8
SECTION 10 CHANGE ORDERS, RESCHEDULING AND CANCELLATION..................PAGE 8
10.1 Changes to Manufacturing Services, Packaging and
Shipping Specifications and Test Procedures.
10.2 Production Increases.
10.3 Product Configuration Changes and Engineering Changes.
10.4 Treatment of Obsolete/End-of-Life Material.
10.5 Rescheduled Delivery and Cancellation of Orders.
JBL-T-051
CONFIDENTIAL
10.6 Termination Charges.
10.7 Duty to Mitigate Costs.
SECTION 11 TERM.........................................................PAGE 10
SECTION 12 TERMINATION..................................................PAGE 10
12.1 Termination for Convenience.
12.2 Termination for Cause.
12.3 Termination for Bankruptcy/Insolvency.
12.4 Termination Consequences.
SECTION 13 CONFIDENTIALITY..............................................PAGE 11
13.1 Confidentiality Obligations.
13.2 Employees, Agents and Representatives.
13.3 Term and Enforcement.
13.4 Return of Proprietary Information and Technology.
SECTION 14 INTELLECTUAL PROPERTY RIGHTS; ASSIGNMENT.....................PAGE 12
14.1 Jabil Existing Intellectual Property.
14.2 Jabil Created Intellectual Property.
SECTION 15 MANUFACTURING RIGHTS.........................................PAGE 12
SECTION 16 COMPANY WARRANTY AND INDEMNIFICATION.........................PAGE 13
SECTION 17 RELATIONSHIP OF PARTIES......................................PAGE 13
SECTION 18 INSURANCE....................................................PAGE 13
SECTION 19 PUBLICITY....................................................PAGE 13
SECTION 20 FORCE MAJEURE................................................PAGE 13
JBL-T-051
CONFIDENTIAL
SECTION 21 MISCELLANEOUS................................................PAGE 14
21.1 Notices.
21.2 Attorney's Fees and Costs.
21.3 Amendment.
21.4 Partial Invalidity.
21.5 Monies.
21.6 Entire Agreement.
21.7 Binding Effect.
21.8 Waiver.
21.9 Captions.
21.10 Construction.
21.11 Section References.
21.12 Business Day.
21.13 Dispute Resolution.
21.14 Other Documents.
21.15 Counterparts.
21.16 Governing Law and Jurisdiction
21.17 Federal Regulations.
JBL-T-051
CONFIDENTIAL
MANUFACTURING SERVICES AGREEMENT
This Manufacturing Agreement ("Agreement") is entered into by and
between Jabil Circuit, Inc., a Delaware corporation ("Jabil"), having offices at
10560 ▇▇. ▇.▇. ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, on behalf of
Jabil and its Subsidiaries, and Skye International, Inc., a Nevada corporation
("SKYE"), having its principal place of business at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇. Jabil and SKYE are referred to herein as "Party" or
"Parties".
RECITALS
A. Jabil is in the business of designing, developing, manufacturing,
testing, configuring, assembling, packaging and shipping electronic assemblies
and systems.
B. SKYE is in the business of designing, developing, distributing,
marketing and selling products containing electronic and mechanical assemblies
and systems.
C. Whereas, the Parties desire that Jabil manufacture, test, configure,
assemble, package and/or ship certain electronic and mechanical assemblies and
systems pursuant to the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Parties agree as
follows:
TERMS
1 DEFINITIONS. In addition to terms defined elsewhere in this Agreement,
the capitalized terms set forth below shall have the following meaning:
1.1 "ADDITIONAL SERVICES" means services such as, design for
manufacturability, manufacturing design test support, computer assisted design
for manufacturability, test development services, volume production and advanced
packaging technologies all as specified and approved by SKYE and agreed to by
Jabil.
1.2 "AFFILIATE" means with respect to a Person, any other
Person which directly or indirectly controls, or is controlled by, or is under
common control with, the specified Person or an officer, director or 10% or more
shareholder of the specified Person. For purposes of the preceding sentence,
"control" of a Person shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of such
Person, or direct or indirect ownership (beneficially or of record) of, or
direct or indirect power to vote, 5% or more of the outstanding shares of any
class of capital stock of such Person (or in the case of a Person that is not a
corporation, 5% or more of any class of equity interest).
1.3 "APPROVED MANUFACTURERS LIST" OR "AML" shall mean the
manufacturers designated, specified and/or approved by SKYE.
1.4 "BUILD SCHEDULE" means a manufacturing schedule (or order)
provided to Jabil by SKYE in writing which specifies the Product to be
manufactured, including the quantity of each Product, its description and part
number, agreed pricing, shipping instructions and requested delivery date.
JBL-T-0501 Manufacturing Services Agreement
Page 1
CONFIDENTIAL
1.5 "BUILD SCHEDULE FORECAST" means the monthly forecast
provided to Jabil by SKYE, in writing, of quantity requirements of each Product
that SKYE anticipates requiring during the next twelve (12) month period.
1.6 "COMMERCIALLY REASONABLE EFFORTS" means those efforts that
would be deemed both commercially practicable and reasonably financially prudent
after having taken into account all relevant commercial considerations.
"Relevant commercial considerations" shall be deemed to include, without
limitation (1) all pertinent facts and circumstances (2) financial costs (3)
resource availability and impact (4) probability of success; and (5) other
commercial practicalities.
1.7 "COMPONENTS SUPPLIED BY SKYE" means those components or
materials that SKYE provides, directly or indirectly, to Jabil to be
incorporated into the Product.
1.8 "EDI" shall mean electronic data interchange available for
certain communications as determined by Jabil.
1.9 "EFFECTIVE DATE" shall mean the date upon which the terms
and conditions of this Agreement shall become effective by and between the
Parties. The Parties have agreed that the Effective Date of this Agreement shall
be the 30th day of January, 2006.
1.10 "E&O INVENTORY" means materials and components and any
work-in-process (WIP) or finished Product incorporating materials and/or
components that fall under the category of either Excess Inventory or Obsolete
Materials (as defined herein) purchased or on order by Jabil based on a Build
Schedule Forecast, Build Schedule, or other written instruction by SKYE to
Jabil.
1.11 "EXCESS INVENTORY" means materials and components in Jabil
inventory that are in excess of current SKYE demand purchased or on order by
Jabil based on a Build Schedule Forecast, Build Schedule, or other written
instruction by SKYE to Jabil.
1.12 "FEE AND PRICE SCHEDULE" shall mean the prices and fees
set forth Schedule 1, or as specified in Jabil quotations to SKYE or as
otherwise agreed in writing between the parties.
1.13 "FOB" shall mean the shipper must at its own expense and
risk transport the goods to the place of destination.
1.14 "INCLUDING" shall be defined to have the meaning "including,
without limitation."
1.15 "IN WRITING" shall mean written documents, EDI with phone
confirmation, verified faxes and successfully transmitted e-mails.
1.16 "JABIL CIRCUIT, INC." AND "JABIL" shall be defined to
include any Jabil Subsidiary.
1.17 "JABIL CREATED INTELLECTUAL PROPERTY" means any discoveries,
inventions, technical information, procedures, manufacturing or other processes,
software, firmware, technology, know-how or other intellectual property rights
created, developed or reduced to practice by or for Jabil in (i) preparing any
Product provided pursuant to this Agreement, or (ii) which is otherwise embodied
within the Manufacturing Services or any other work provided pursuant to this
Agreement.
JBL-T-0501 Manufacturing Services Agreement
Page 2
CONFIDENTIAL
1.18 "JABIL EXISTING INTELLECTUAL PROPERTY" means any
discoveries, inventions, technical information, procedures, manufacturing or
other processes, software, firmware, technology, know-how or other intellectual
property rights owned or developed by Jabil outside of this Agreement or known
by Jabil prior to the execution of this Agreement that are used by Jabil in
creating, or are embodied within, any Product, the Manufacturing Services or
other work performed under this Agreement.
1.19 "JABIL INTELLECTUAL PROPERTY" shall mean both Jabil Created
Intellectual Property and Jabil Existing Intellectual Property, collectively.
1.20 "JABIL MANUFACTURING PROCESS" means Jabil's process employed
to manufacture, test, configure and assemble Product manufactured for SKYE
pursuant to the terms of this Agreement.
1.21 "LEAD-TIME" means the minimum amount of time in advance of
shipment that Jabil must receive a Build Schedule in order to deliver Product by
the requested delivery date.
1.22 "LOANED EQUIPMENT" means capital equipment (including
tools) which is loaned to Jabil by or on behalf of SKYE to be used by Jabil to
perform the Manufacturing Services and includes all equipment, tools and
fixtures purchased specifically for SKYE, by Jabil, to perform the Manufacturing
Services and that are paid for in full by SKYE.
1.23 "MANUFACTURING SERVICES" means the services performed by
Jabil hereunder which shall include but not be limited to manufacturing,
testing, configuring, assembling, packaging and/or shipping of the Product,
including any Additional Services, all in accordance with the Specifications.
1.24 "NRE COSTS" shall consist of expenses incurred by Jabil
under this Agreement, including design engineering services, testing, fixturing
and tooling and other out-of-pocket costs.
1.25 "OBSOLETE MATERIALS" mean materials and components in
Jabil inventory that no longer appear on a SKYE ▇▇▇▇ of materials (BOM), or
which appear on a SKYE BOM of a Product that no longer has demand as indicated
by a Build Schedule, Build Schedule Forecast, or BOM purchased or on order by
Jabil based on a Build Schedule Forecast, Build Schedule, or other written
instruction by SKYE to Jabil.
1.26 "PACKAGING AND SHIPPING SPECIFICATIONS" shall mean
packaging and shipping specifications set forth in Schedule 1 and otherwise
supplied and/or approved by SKYE.
1.27 "PERSON" means any corporation, business entity, natural
person, firm, joint venture, limited or general partnership, limited liability
entity, limited liability partnership, trust, unincorporated organization,
association, government, or any department or agency of any government.
1.28 "PRODUCT(S)" means the product(s) manufactured and
assembled by Jabil on behalf of SKYE under this Agreement as identified in
Schedule 1 (or any subsequent Schedule 1 prepared for any product to be
manufactured hereunder) or in mutually agreed Build Schedules, including any
updates, renewals, modifications or amendments thereto.
1.29 "PROPRIETARY INFORMATION AND TECHNOLOGY" means software,
firmware, hardware, technology and know-how and other proprietary information or
intellectual property embodied therein that is known, owned or licensed by and
proprietary to either Party and not generally available to the public, including
plans, analyses, trade secrets, patent rights, copyrights, trademarks,
inventions, fees and pricing information,
JBL-T-0501 Manufacturing Services Agreement
Page 3
CONFIDENTIAL
operating procedures, procedure manuals, processes, methods, computer
applications, programs and designs, and any processed or collected data. The
failure to label any of the foregoing as "confidential" or "proprietary" shall
not mean it is not Proprietary Information and Technology.
1.30 "PURCHASING STANDARD COST" OR "PSC" means Jabil's internal
purchasing cost breakdown utilized to develop the materials and components
pricing in its enterprise resource planning (ERP).
1.31 "SPECIFICATIONS" means the technical specifications for
manufacturing set forth in Schedule 1 and otherwise supplied and/or approved by
SKYE. Specifications may be amended from time to time by amendments in the form
of written engineering change orders agreed to by the Parties.
1.32 "SOW" shall mean the statement of work for each Product
set forth in any Schedule 1 as amended in writing from time to time upon mutual
agreement of the Parties.
1.33 "SUBSIDIARY(IES)" means any corporation, partnership, joint
venture, limited liability entity, trust, association or other business entity
of which a Party or one or more of its Subsidiaries, owns or controls more than
50% of the voting power for the election of directors, managers, partners,
trustees or similar parties.
1.34 "SUPPLIER PURCHASE REQUIREMENTS" means a minimum order
quantity, lead time or automated pick and place efficiency form factor
requirement imposed on Jabil by a supplier.
1.35 "TEST PROCEDURES" shall mean testing specifications,
standards, procedures and parameters set forth in Schedule 1 and otherwise
supplied and/or approved by SKYE.
1.36 "UNIQUE COMPONENTS" means those non-standard components or
materials procured exclusively for incorporation into the Product.
2 LIST OF SCHEDULE(S). This Agreement includes the following Schedule(s)
for each Product to be manufactured hereunder, which are hereby incorporated
herein and made a part of this Agreement:
Schedule 1 - Statement of Work.
3 BUILD SCHEDULE FORECASTS. Within ten (10) business days following the
execution of this Agreement, SKYE shall provide Jabil with a Build Schedule
Forecast. The Build Schedule Forecast shall be updated by SKYE, in writing, on
at least a monthly basis and will, along with mutually agreed Build Schedules,
form the basis for Jabil's material commitments, subject to any Supplier
Purchase Requirements. Jabil and SKYE may review Supplier Purchase Requirements
and applicable Lead-times during quarterly meetings. Any rescheduling of a Build
Schedule (order) shall be subject to the terms set forth in Section 10.5.
4 MANUFACTURING SERVICES. Jabil will manufacture the Product in
accordance with the Specifications and any applicable Build Schedules. Jabil
will reply to each proposed Build Schedule that is submitted in accordance with
the terms of this Agreement by notifying SKYE of its acceptance or rejection
within three (3) business days of receipt of any proposed Build Schedule. In the
event of Jabil's rejection of a proposed Build Schedule, Jabil's notice of
rejection will specify the basis for such rejection. When requested by SKYE, and
subject to appropriate fee and cost adjustments, Jabil will provide Additional
Services for existing or future Product manufactured by Jabil.
4.1 TESTING. Jabil will test the Product in accordance with the
Test Procedures provided by SKYE.
JBL-T-0501 Manufacturing Services Agreement
Page 4
CONFIDENTIAL
4.2 PACKAGING AND SHIPPING. Jabil will package and ship the
Product in accordance with Packaging and Shipping Specifications provided by
SKYE.
4.3 ITEMS TO BE SUPPLIED BY SKYE. SKYE shall supply to Jabil,
according to the terms and conditions specified herein, SKYE Proprietary
Information and Technology and, if applicable, the Loaned Equipment, Components
Supplied by SKYE and Unique Components necessary for Jabil to perform the
Manufacturing Services. SKYE will also provide to Jabil all Specifications, Test
Procedures, Packaging and Shipping Specifications, Product design drawings,
approved vendor listings, material component descriptions (including approved
substitutions), manufacturing process requirements, and any other specifications
necessary for Jabil to perform the Manufacturing Services. SKYE shall be solely
responsible for the sufficiency and adequacy of the Specifications, Packaging
and Shipping Specifications and Test Procedures, and shall hold Jabil harmless
for any claims arising therefrom. SKYE shall be solely responsible for delay in
delivery, defects and enforcement of warranties related to the Loaned Equipment,
Components Supplied by SKYE and Unique Components and shall hold Jabil harmless
for any claim arising therefrom.
4.4 ITEMS TO BE SUPPLIED BY JABIL. Jabil will employ the Jabil
Manufacturing Process, any required manufacturing technology, manufacturing
capacity, labor, transportation logistics, systems and facilities necessary for
Jabil to perform the Manufacturing Services.
4.5 SKYE INSPECTION. SKYE shall have the right, upon reasonable
advance notice, during normal business hours and at its expense to inspect,
review, monitor and oversee the Manufacturing Services, provided that such
inspection shall not disrupt Jabil's normal business operations. SKYE shall
cause each of its employees, agents and representatives who have access to
Jabil's facilities, to maintain, preserve and protect all Proprietary
Information and Technology of Jabil and the confidential or proprietary
information and technology of Jabil's other customers.
4.6 MATERIALS PROCUREMENT. Jabil will use Commercially
Reasonable Efforts to procure components, per the Approved Manufacturers List
provided by SKYE necessary to fulfill mutually agreed upon Build Schedules. SKYE
shall be responsible for the performance of such manufacturers.
4.7 EQUITABLE ADJUSTMENT. In the event Jabil's cost of
performance significantly changes due to causes beyond its reasonable control,
Jabil shall be entitled to an equitable adjustment to price and/or schedule on
any open Build Schedules. Jabil shall be entitled to suspend performance until
such adjustments are negotiated by the parties in good faith and implemented
through written change orders. Upon request, Jabil shall provide to SKYE
reasonably detailed supporting documentation for the equitable adjustment it
seeks.
5 WARRANTY & RMA PROCEDURE.
5.1 JABIL WARRANTY. Jabil warrants (i) that it will manufacture
the Product in accordance with IPC-A-610 Class 2 workmanship standard, and (ii)
that at the time of manufacture, the Product will conform, in all material
respects, to the Specifications. The above warranty shall remain in effect for a
period of one year from the date any Product is initially delivered to SKYE or
to SKYE's designated carrier ("Warranty Period"). This warranty is extended to,
and may only be enforced by, SKYE.
5.2 REPAIR OR REPLACEMENT OF DEFECTIVE PRODUCT. In accordance
with Jabil's standard return material authorization process and procedure
("RMA"), Jabil will either repair, replace or issue credit, in its sole
discretion, any Product that contains a defect caused by a breach of the
warranty set forth in this Section 5 provided that the Product is received
within ninety (90) days following the end of any applicable Warranty Period
("RMA
JBL-T-0501 Manufacturing Services Agreement
Page 5
CONFIDENTIAL
Product"). If SKYE desires to return a Product based on a claim of breach of the
warranty set forth in this Section 5, SKYE shall request an RMA number from
Jabil. SKYE shall then consign the alleged defective Product, FOB Jabil's
designated repair facility, and specify the Jabil assigned RMA number. Jabil
will analyze any such RMA Product and, if a breach of warranty is found
("Defect"), then Jabil will repair or replace the RMA Product within twenty (20)
business days of receipt by Jabil of the RMA Product and all required associated
documentation. In the event a Defect is found, Jabil will reimburse SKYE for the
reasonable cost of transporting the RMA Product to Jabil's designated repair
facility and Jabil will deliver the repaired RMA Product or its replacement, FOB
SKYE's designated destination. If no such Defect is found, SKYE shall reimburse
Jabil for all fees, costs and expenses incurred to analyze and, if requested by
SKYE, repair or replace the non-Defective RMA Product and SKYE shall bear
responsibility for all transportation costs to and from Jabil's designated
repair facility.
5.3 LIMITATION OF WARRANTY. THE REMEDY SET FORTH IN SECTION 5.2
SHALL CONSTITUTE COMPANY'S SOLE AND EXCLUSIVE REMEDY FOR A BREACH OF THE
WARRANTY MADE BY JABIL HEREIN OR ANY OTHER OBLIGATION OF JABIL HEREUNDER. THE
WARRANTY SET FORTH IN THIS SECTION 5 IS IN LIEU OF, AND JABIL EXPRESSLY
DISCLAIMS, AND COMPANY EXPRESSLY WAIVES, ALL OTHER WARRANTIES AND
REPRESENTATIONS OF ANY KIND WHATSOEVER WHETHER EXPRESS, IMPLIED, STATUTORY,
ARISING BY COURSE OF DEALING OR PERFORMANCE, CUSTOM, USAGE IN THE TRADE OR
OTHERWISE, INCLUDING ANY WARRANTY OF MERCHANTABILITY, OR FITNESS FOR A
PARTICULAR PURPOSE OR INFRINGEMENT OR MISAPPROPRIATION OF ANY RIGHT, TITLE OR
INTEREST OF COMPANY OR ANY THIRD PARTY. COMPANY UNDERSTANDS AND AGREES THAT IT
SHALL HAVE FULL AND EXCLUSIVE LIABILITY WITH RESPECT TO ANY PRODUCT, WHETHER FOR
PRODUCT DESIGN LIABILITY, PRODUCT LIABILITY, DAMAGE TO PERSON OR PROPERTY AND/OR
INFRINGEMENT OR MISAPPROPRIATION OF THIRD PARTY RIGHTS. NO ORAL OR WRITTEN
STATEMENT OR REPRESENTATION BY JABIL, ITS AGENTS OR EMPLOYEES SHALL CONSTITUTE
OR CREATE A WARRANTY OR EXPAND THE SCOPE OF ANY WARRANTY HEREUNDER.
JABIL'S WARRANTY SHALL NOT APPLY TO ANY PRODUCT JABIL DETERMINES TO HAVE BEEN
SUBJECTED TO TESTING FOR OTHER THAN SPECIFIED ELECTRICAL CHARACTERISTICS OR TO
OPERATING AND/OR ENVIRONMENTAL CONDITIONS IN EXCESS OF THE MAXIMUM VALUES
ESTABLISHED IN APPLICABLE SPECIFICATIONS, OR TO HAVE BEEN THE SUBJECT OF
MISHANDLING, ACCIDENT, MISUSE, NEGLECT, IMPROPER TESTING, IMPROPER OR
UNAUTHORIZED REPAIR, ALTERATION, DAMAGE, ASSEMBLY, PROCESSING OR ANY OTHER
INAPPROPRIATE OR UNAUTHORIZED ACTION OR INACTION THAT ALTERS PHYSICAL OR
ELECTRICAL PROPERTIES. THIS WARRANTY SHALL NOT APPLY TO ANY DEFECT IN THE
PRODUCT ARISING FROM ANY DRAWING, DESIGN, SPECIFICATION, PROCESS, TESTING OR
OTHER PROCEDURE, ADJUSTMENT OR MODIFICATION SUPPLIED AND/OR APPROVED BY COMPANY.
5.4 ECO UPGRADE. RMAs for engineering change order (ECO)
upgrades will also be subject to the RMA process. Jabil will analyze the ECO and
provide a per unit upgrade cost and expected completion and delivery date.
6 LIMITATION OF DAMAGES
EXCEPT WITH REGARD TO ANY INDEMNITIES SET FORTH HEREIN, UNDER NO CIRCUMSTANCES
SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR TO ANY OTHER PERSON OR ENTITY
UNDER ANY CONTRACT, TORT, STRICT LIABILITY, NEGLIGENCE, OR OTHER LEGAL OR
EQUITABLE CLAIM OR THEORY FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL, OR
INDIRECT
JBL-T-0501 Manufacturing Services Agreement
Page 6
CONFIDENTIAL
DAMAGES, LOSS OF GOODWILL OR BUSINESS PROFITS, LOST REVENUE, WORK STOPPAGE, DATA
LOSS, COMPUTER FAILURE OR MALFUNCTION, OR FOR ANY AND ALL OTHER DAMAGES, LOSS,
OR EXEMPLARY OR PUNITIVE DAMAGES WHETHER SUCH PARTY WAS INFORMED OR WAS AWARE OF
THE POSSIBILITY OF SUCH LOSS OR DAMAGE. IN NO EVENT SHALL JABIL'S TOTAL
LIABILITY IN DAMAGES OR OTHERWISE TO COMPANY AND ITS AFFILIATES EXCEED PAYMENTS
RECEIVED BY JABIL FOR THE UNIT OF PRODUCT GIVING RISE TO COMPANY'S CLAIM. THE
FOREGOING SHALL NOT EXCLUDE OR LIMIT EITHER PARTY'S LIABILITY FOR DEATH OR
PERSONAL INJURY RESULTING FROM ITS NEGLIGENCE TO THE EXTENT THAT SUCH LIABILITY
CANNOT BY LAW BE LIMITED OR EXCLUDED.
7 DELIVERY, TITLE AND RISK OF LOSS. For purposes of this Agreement
delivery shall be FOB Jabil's facility and deemed to have occurred, and all risk
of loss and title shall be transferred to SKYE, when Product (or any other
items) are tendered to the carrier approved by SKYE.
7.1 PRICING TERMS AND PAYMENT. SKYE may provide one or more
requests for quotes (RFQs) for Products as the basis for Jabil's quotations.
Jabil may include in its quotations or otherwise provide the Purchasing Standard
Cost (PSC) as well as figures used by Jabil for assembly and test labor. The
price per unit of Product shall be as stated on Jabil's quotation or as
otherwise mutually agreed in writing. SKYE shall pay Jabil all monies when due,
including all NRE Costs associated with this Agreement and E&O Inventory
invoiced pursuant to Section 10.4. Payment of all invoices shall be net thirty
(30) days from date of invoice. Payment to Jabil shall be in U.S. dollars and in
immediately available funds. Any equipment, tooling, component, material or
other goods or property, which is purchased by Jabil in order to perform its
obligations under this Agreement, shall become the property of SKYE once Jabil
is reimbursed for all NRE Costs. Jabil shall invoice SKYE for NRE Costs as it is
incurred (or at other intervals agreed to by Jabil) during the term of this
Agreement and upon cancellation, termination or expiration of this Agreement.
Jabil agrees to request advance written approval from SKYE should resource
requirements, and thereby NRE Costs, increase materially relative to estimated
NRE Costs initially agreed by the Parties. Upon such request, Jabil shall
provide to SKYE reasonably detailed supporting documentation and/or descriptions
of the NRE Costs for which Jabil seeks reimbursement.
7.2 TAXES. SKYE shall be responsible for all federal, foreign,
state and local sales, use, excise and other taxes (except taxes based on
Jabil's income), all delivery, shipping, and transportation charges and all
foreign agent or brokerage fees, document fees, custom charges and duties.
8 IMPORT AND EXPORT.
8.1 RESPONSIBILITIES, LICENSES, APPROVALS AND AUTHORIZATIONS.
SKYE shall be responsible for obtaining any required import or export licenses
necessary for Jabil to ship Product, including certificates of origin,
manufacturer's affidavits, and U.S. Federal Communications Commission's
identifier, if applicable and any other licenses required under US or foreign
law. SKYE agrees that it shall not export, re-export, resell or transfer, or
otherwise require Jabil to ship or deliver any Product, assembly, component or
any technical data or software which violate any export controls or limitations
imposed by the United States or any other governmental authority, or to any
country for which an export license or other governmental approval is required
at the time of export without first obtaining all necessary licenses and
approvals and paying all duties and fees. SKYE shall provide Jabil with all
licenses, certifications, approvals and authorizations in order to permit Jabil
to comply with all import and export laws, rules and regulations for the
shipment and delivery of the Product. SKYE shall also be responsible for
complying with any legislation or regulations governing the importation of the
Product into the country of destination and for payment of any duties thereon.
JBL-T-0501 Manufacturing Services Agreement
Page 7
CONFIDENTIAL
8.2 EXPORT CONTROL ASSUMPTIONS AND NOTICE. Jabil is registered
under Section 122 of the International Traffic in Arms Regulations (ITAR).
Jabil's acceptance of technical data or hardware subject to ITAR or other export
controls ("Controlled Material") is predicated on the following conditions: (1)
Jabil must receive specific, advance written notice that the project to which an
order or the quote relates is subject to ITAR or other export controls and a
description of such controls; (2) all Controlled Material shall bear prominent
and appropriate markings or legends identifying it as such; (3) Controlled
Material shall be disclosed only to authorized persons designated by Jabil; (4)
Controlled Material in electronic form shall not be transmitted to Jabil by
e-mail, but rather by File Transfer Protocol (FTP) to Jabil's designated secure
site. Jabil will assume that any technical data or hardware received other than
as set forth above is not subject to ITAR, but rather is classified under the
Export Administration Regulations as ECCN EAR99.
9 DESIGN SERVICES. In the event that the Parties agree that Jabil will
provide design services for SKYE, the terms and conditions of such services
shall be set forth in a mutually agreed upon design services agreement prior to
the commencement of any design services.
10 CHANGE ORDERS, RESCHEDULING AND CANCELLATION.
10.1 CHANGES TO MANUFACTURING SERVICES, PACKAGING AND SHIPPING
SPECIFICATIONS AND TEST PROCEDURES. SKYE may, in writing, request a change to
the Manufacturing Services, Packaging and Shipping Specifications and Test
Procedures at any time. Jabil will analyze the requested change and provide SKYE
with an assessment of the effect that the requested change will have on cost,
manufacturing, scheduling, delivery and implementation. SKYE will be responsible
for all costs associated with any accepted changes. Any such change shall be
documented in a written change order and shall become effective only upon mutual
written agreement of both Parties to the terms and conditions of such change
order, including changes in time required for performance, cost and applicable
delivery schedules.
10.2 PRODUCTION INCREASES. SKYE may, in writing, request
increases in production volume of Product for an outstanding Build Schedule at
any time. Jabil will analyze the request and determine if it can meet the
requested increase within the required Lead-time. If Jabil can satisfy the
requested increase it will provide SKYE with a new Build Schedule setting forth
the expected delivery date of the changed order. If Jabil is unable to satisfy
or comply with SKYE's requested increase in production volume within the
requested time frame for delivery, Jabil will provide the reasons preventing
Jabil from satisfying the requested increase within five (5) business days after
receipt of SKYE's request. Any such change shall be documented in writing and
shall become effective only upon mutual written agreement of both Parties to the
terms and conditions of such change, including changes in time required for
performance, cost and applicable delivery schedules. Any such change shall be
documented in a written change order and shall become effective only upon mutual
written agreement of both Parties to the terms and conditions of such change
order, including changes in time required for performance, cost and applicable
delivery schedules.
10.3 PRODUCT CONFIGURATION CHANGES AND ENGINEERING CHANGES. SKYE
may request configuration or engineering changes to Product in writing at any
time. Jabil will analyze the request and determine if it can meet the requested
changes within the required Lead-time. If Jabil can satisfy the requested change
it will provide SKYE within five (5) business days after receipt of the
configuration or engineering request notice, a notice of acceptance of the
requested changes along with any additional costs and expected changes to
delivery schedules. If Jabil is unable to satisfy or comply with SKYE's
requested changes within the requested time frame for delivery, Jabil will
provide the reasons preventing Jabil from satisfying the requested increase
within five (5) business days after receipt of SKYE's request. Any such change
shall be documented in writing and shall become effective only upon mutual
written agreement of both Parties of the terms and conditions of such change,
including changes in time
JBL-T-0501 Manufacturing Services Agreement
Page 8
CONFIDENTIAL
required for performance, cost and applicable delivery schedules.
10.4 TREATMENT OF OBSOLETE/END-OF-LIFE MATERIAL AND EXCESS
INVENTORY. Upon receiving notice from SKYE that any Product, component or
assembly has become obsolete or has reached end-of-life Jabil will, within a
reasonable period after receiving such notice, provide SKYE with an analysis of
SKYE's liability to Jabil for components and materials acquired or scheduled to
be acquired to manufacture such Product. SKYE shall be liable for E&O Inventory
at Jabil's Purchasing Standard Cost plus twenty percent (20%) to be billed
following the event which results in E&O Inventory (e.g., agreed-to order
rescheduling, change order, order cancellation), or each calendar quarter if not
invoiced following such event. Jabil will use Commercially Reasonable Efforts to
assist SKYE in minimizing SKYE's liability by taking the following steps:
o As soon as is commercially practical reduce or cancel component
and material orders to the extent contractually permitted.
o Return all components and materials to the extent contractually
permitted.
o Make all Commercially Reasonable Efforts to sell components and
materials to third parties.
o Assist SKYE to determine whether current work in progress should be
completed, scrapped or shipped "as is" (completed work shall be
billed at the finished Product price; scrapped or "as-is" shipments
to be billed subject to Jabil's quote for same).
10.5 RESCHEDULED DELIVERY OF ORDERS. SKYE may request Jabil to
reschedule the delivery date for Product(s) identified in pending orders in
accordance with this Section 10.5. The charges to SKYE for deferring or
accelerating delivery of an order (rescheduled) are outlined below. In addition,
SKYE shall be responsible for payment of any expedited shipping charges imposed
on Jabil by a supplier for accelerated deliveries.
DAYS PRIOR TO RESCHEDULE
DELIVERY DATE TERMS
0-30 days SKYE may not reschedule an order within 30 days of
the delivery date without payment in full for the
order.
31-60 days from SKYE may reschedule the delivery of up to 25% of an
original delivery order without additional liability provided that
date such rescheduled order is rescheduled to be
delivered within thirty (30) days of the original
delivery date.
61-90 days from SKYE may reschedule delivery of up to 50% of an
original delivery date order without additional liability provided that
such rescheduled order is rescheduled to be
delivered within thirty (60) days of the original
delivery date.
90 days and beyond SKYE may reschedule 75% of an order without
from original delivery additional liability provided that such rescheduled
date order is rescheduled to be delivered within sixty
(90) days of the original delivery date.
No Build Schedule (order) may be cancelled in whole or in part without Jabil's
prior written consent, which consent may be given by Jabil in its sole
discretion. In the event of an order cancellation agreed to in writing by Jabil,
SKYE shall be liable for cancellation charges quoted by Jabil, which may include
without limitation, charges for E&O Inventory as provided herein,
work-in-process, and supplier-imposed charges, such as cancellation and
JBL-T-0501 Manufacturing Services Agreement
Page 9
CONFIDENTIAL
transportation charges to obtain and return the materials or components.
Reschedules in excess of the maximum deferred quantity or period (set forth
above) will be considered cancellations and subject to the foregoing applicable
cancellation charges. Reschedules and cancellations may result in revised
product pricing.
10.6 TERMINATION CHARGES. Upon termination, expiration or
cancellation of this Agreement for any reason, Jabil shall submit to SKYE
Jabil's invoices for termination/cancellation charges within (a) 60 days from
the effective date of such termination, expiration or cancellation. Jabil's
invoice for such charges shall be based upon costs incurred by Jabil up to the
date of termination, expiration or cancellation ("Termination Effective Date")
and shall also include costs accrued after the Termination Effective Date but
resulting from such termination, expiration or cancellation as further provided
below. Jabil will provide to SKYE all information reasonably necessary to
confirm the costs and expenses sustained by Jabil due to termination, expiration
or cancellation. To the extent that Jabil cannot mitigate its costs as set forth
in Section 10.7 below, upon cancellation, expiration or termination for any
reason, SKYE's obligation shall be to pay the charges claimed by Jabil as
follows:
10.6.1 The applicable price for the Product of which
Jabil has completed manufacture prior to the Termination Effective Date pursuant
to an issued Build Schedule for which payment has not been made;
10.6.2 Reimbursements for material acquisition costs,
components, subassemblies and work-in-process at the time of Termination
Effective Date which were purchased or ordered pursuant to issued Build
Schedules or Build Schedule Forecasts, and E&O Inventory at PSC plus twenty
percent (20%);
10.6.3 Jabil's reasonable cancellation costs incurred
for components, materials and subcontracted items that Jabil had on order on
behalf of SKYE on the Termination Effective Date pursuant to issued Build
Schedules or Build Schedule Forecasts; and
10.6.4 Jabil's cost of equipment or tooling purchased by
Jabil specifically for the manufacture, test, design, or packaging of Product
and any other services rendered or costs incurred by Jabil under this Agreement.
All goods for which SKYE shall have paid 100% of Jabil's incurred cost or more
shall be held by Jabil for SKYE's account and SKYE may arrange for its
acquisition of them on AS-IS, WHERE-IS basis.
10.7 DUTY TO MITIGATE COSTS. Both Parties shall, in good faith,
undertake Commercially Reasonable Efforts to mitigate the costs of termination,
expiration or cancellation. Jabil shall make Commercially Reasonable Efforts to
cancel all applicable component and material purchase orders and reduce
component inventory through return for credit programs or allocate such
components and materials for alternate SKYE programs if applicable, or other
customer orders provided the same can be used within thirty (30) days of the
termination date.
11 TERM. The term of this Agreement shall begin on the Effective Date and
shall end upon final payment to Jabil of all monies due to Jabil under this
Agreement. Notwithstanding the foregoing, Sections 4.1, 4.2, 4.3, 4.6, 5, 6, 7,
8, 10.4, 10.5, 10.6, 10.7, 11, 12.4, 13, 14, 15, 16, 17, 19 and 21 herein shall
survive the expiration, cancellation or termination of this Agreement.
12 TERMINATION. This Agreement may be terminated as follows:
12.1 TERMINATION FOR CONVENIENCE. This Agreement may be
terminated at any time upon the mutual written consent of the Parties or upon
the date for termination set forth in a written notice given by one Party to the
other not less than ninety (90) days prior to such date.
JBL-T-0501 Manufacturing Services Agreement
Page 10
CONFIDENTIAL
12.2 TERMINATION FOR CAUSE. Either Party may terminate this
Agreement based on the material breach by the other Party of the terms of this
Agreement, provided that the Party alleged to be in material breach receives
written notice setting forth the nature of the breach at least thirty (30) days
prior to the intended termination date. During such time the Party in material
breach may cure the alleged breach and if such breach is cured within such
thirty (30) day period, no termination will occur and this Agreement will
continue in accordance with its terms. If such breach shall not have been cured,
termination shall occur upon the termination date set forth in such notice.
12.3 TERMINATION FOR BANKRUPTCY/INSOLVENCY. Upon the happening
of any of the following events with respect to a Party, this Agreement may be
terminated immediately:
12.3.1 The appointment of a receiver or custodian to
take possession of any or all of the assets of a Party, or should a Party make
an assignment for the benefit of creditors, or should there be an attachment,
execution, or other judicial seizure of all or a substantial portion of a
Party's assets, and such attachment, execution or seizure is not discharged
within thirty (30) days.
12.3.2 A Party becomes a debtor, either voluntarily
or involuntarily, under Title 11 of the United States Code or any other similar
law and, in the case of an involuntary proceeding, such proceeding is not
dismissed within thirty (30) days of the date of filing.
12.3.3 The dissolution or termination of the existence
of a Party whether voluntarily, by operation of law or otherwise.
12.4 TERMINATION CONSEQUENCES. If this Agreement is terminated
for any reason, SKYE shall not be excused from performing its obligations under
this Agreement with respect to payment for all monies due Jabil hereunder
including fees, costs and expenses incurred by Jabil up to and including the
Termination Effective Date.
13 CONFIDENTIALITY.
13.1. CONFIDENTIALITY OBLIGATIONS. In order to protect both
Parties' Proprietary Information and Technology the Parties agree that each
Party shall use the same degree of care, but no less than a reasonable degree of
care, as such Party uses with respect to its own similar information to protect
the Proprietary Information and Technology of the other Party and to prevent any
use of Proprietary Information and Technology other than for the purposes of
this Agreement. This Section 13 imposes no obligation upon a Party with respect
to Proprietary Information and Technology which (a) was known to such Party
before receipt from the disclosing Party; (b) is or becomes publicly available
through no fault of the receiving Party; (c) is rightfully received by the
receiving Party from a third party without a duty of confidentiality; (d) is
disclosed by the disclosing Party to a third party without imposing a duty of
confidentiality on the third party; (e) is independently developed by the
receiving Party without a breach of this Agreement; or (f) is disclosed by the
receiving Party with the disclosing Party's prior written approval. If a Party
is required by a government body or court of law to disclose Proprietary
Information and Technology, this Agreement or any portion hereof, then such
Party agrees to give the other Party reasonable advance notice so that the other
Party may seek a protective order or otherwise contest the disclosure.
13.2. EMPLOYEES, AGENTS AND REPRESENTATIVES. Each Party represents
and warrants to the other that it has adopted policies and procedures with
respect to the receipt and disclosure of confidential or proprietary
information, such as the Proprietary Information and Technology with its
employees, agents
JBL-T-0501 Manufacturing Services Agreement
Page 11
CONFIDENTIAL
and representatives. Each Party represents and warrants to the other Party that
it will cause each of its employees, agents and representatives to maintain and
protect the confidentiality of the other Party's Proprietary Information and
Technology.
13.3. TERM AND ENFORCEMENT. The confidentiality obligation set
forth in this Agreement shall be observed during the term of the Agreement and
for a period of two (2) years following the termination of this Agreement. Each
Party acknowledges that a breach of any of the terms of this Section 13 may
cause the non-breaching Party irreparable damage, for which the award of damages
would not be adequate compensation. Consequently, the non-breaching Party may
institute an action to enjoin the breaching Party from any and all acts in
violation of those provisions, which remedy shall be cumulative and not
exclusive, and shall be in addition to any other relief to which the
non-breaching Party may be entitled at law or in equity. Such remedy shall not
be subject to the arbitration provisions set forth in Section 21.13.
13.4. RETURN OF PROPRIETARY INFORMATION AND TECHNOLOGY. Upon the
termination, cancellation or expiration of this Agreement all Proprietary
Information and Technology shall, upon written request, be returned to the
respective Party, or at the respective Party's discretion, destroyed by the
receiving Party.
14 INTELLECTUAL PROPERTY RIGHTS; ASSIGNMENT.
14.1 JABIL EXISTING INTELLECTUAL PROPERTY. Jabil shall retain all
right, title and ownership to any Jabil Existing Intellectual Property that is
incorporated into any Product that is prepared as part of the Manufacturing
Services or as part of any other work provided pursuant to this Agreement or any
other related agreement executed by the Parties.
Upon full payment of all monies due and owing under this Agreement and all other
monies due and owing to Jabil pursuant to any other related agreement executed
by the Parties, Jabil will grant to SKYE a worldwide, non-exclusive, fully
paid-up, royalty free right and license to the Jabil Existing Intellectual
Property only insofar as is required for SKYE to use, sell or distribute the
Product provided as part of the Manufacturing Services performed by Jabil
pursuant to this Agreement; provided however, that no license to manufacturing
processes and/or manufacturing process improvements shall be granted hereunder.
14.2 JABIL CREATED INTELLECTUAL PROPERTY. Jabil shall retain all
right, title and ownership to any Jabil Created Intellectual Property that is
incorporated into any Product that is prepared as part of the Manufacturing
Services or into any other work provided pursuant to this Agreement or any other
related agreement executed by the Parties.
Upon full payment of all monies due and owing under this Agreement and all other
monies due and owing to Jabil pursuant to any other related agreement executed
by the Parties, Jabil will assign to SKYE all right, title and interest in and
to the Jabil Created Intellectual Property. SKYE hereby grants to Jabil a
worldwide, non-exclusive, fully paid-up, royalty-free right and license in and
to the Product and the Jabil Created Intellectual Property.
15 MANUFACTURING RIGHTS. In consideration of the transfer by Jabil of the
rights to the Jabil Intellectual Property, SKYE grants Jabil exclusive
manufacturing rights for one hundred percent (100%) of SKYE's products that
contain any Jabil Intellectual Property and/or any SKYE product containing a
"derivative" of the Jabil Intellectual Property. For the purposes of this
Agreement, a derivative is defined as "a design that is based in full or in part
on the Jabil Intellectual Property". These manufacturing rights shall remain
exclusive for the life of any SKYE product unless the Parties mutually agree
that the term of manufacturing exclusivity shall be for a shorter period as
specifically set forth in any other related agreement executed by the Parties.
In the event that manufacturing is subsequently transferred to a third party,
SKYE and Jabil shall mutually agree upon the terms and
JBL-T-0501 Manufacturing Services Agreement
Page 12
CONFIDENTIAL
conditions of, and shall use Commercially Reasonable Efforts to facilitate, such
transfer. In such event, SKYE shall, at a minimum, be liable for all monies due
Jabil as set forth herein and any other monies due Jabil as set forth in any
other related agreement executed by the Parties.
16 SKYE WARRANTY AND INDEMNIFICATION. SKYE represents and warrants that it
has conducted, and will conduct, all patent, trademark and copyright searches
necessary to identify and evaluate any potential infringement claims with
respect to the Product. SKYE agrees to indemnify, defend and hold Jabil and its
employees, Subsidiaries, Affiliates, successors and assigns harmless from and
against all claims, damages, losses, costs and expenses, including attorneys'
fees, arising from any third party claims asserted against Jabil and its
employees, Subsidiaries, Affiliates, successors and assigns, that are based in
part or in whole on any of the following: (a) Specifications, SKYE Proprietary
Information and Technology, any Product, or any information, technology and
processes supplied and/or approved by SKYE or otherwise required by SKYE of
Jabil; and (b) that any item in subsection (a) infringes or violates any patent,
copyright or other intellectual property right of a third party, and (c) design
or product liability alleging that any item in subsection (a) has caused or will
in the future cause damages of any kind. Jabil may employ counsel, at its own
expense to assist Jabil with respect to any such claims, provided that if such
counsel is necessary because of a conflict of interest with SKYE or its counsel
or because SKYE does not assume control of the defense of a claim for which SKYE
is obligated to indemnify Jabil hereunder, SKYE shall bear such expense. SKYE
shall not enter into any settlement that affects Jabil's rights or interests
without Jabil's prior written approval, which shall not be unreasonably
withheld. Jabil will provide such assistance and cooperation as is reasonably
requested by SKYE or its counsel in connection with such indemnified claims.
17 RELATIONSHIP OF PARTIES. Jabil shall perform its obligations hereunder
as an independent contractor. Nothing contained herein shall be construed to
imply a partnership or joint venture relationship between the Parties. The
Parties shall not be entitled to create any obligations on behalf of the other
Party, except as expressly contemplated by this Agreement. The Parties will not
enter into any contracts with third parties in the name of the other Party
without the prior written consent of the other Party.
18 INSURANCE. Each Party will keep its business and properties insured
at all times against such risks for which insurance is usually maintained by
reasonably prudent Persons engaged in a similar business (including insurance
for hazards and insurance against liability on account of damage to Persons or
property and insurance under all applicable worker's compensation laws). The
insurance maintained shall be in such monies and with such limits and
deductibles usually carried by Persons engaged in the same or a similar
business.
19 PUBLICITY. Without the consent of the other Party, neither Party shall
refer to this Agreement in any publicity or advertising or disclose to any third
party any of the terms of this Agreement. Notwithstanding the foregoing, neither
Party will be prevented from, at any time, furnishing any information to any
governmental or regulatory authority, including the United States Securities and
Exchange Commission or any other foreign stock exchange regulatory authority,
that it is by law, regulation, rule or other legal process obligated to
disclose, so long as the other Party is given advance written notice of such
disclosure pursuant to Section 13.1. A Party may disclose the existence of this
Agreement and its terms to its attorneys and accountants, suppliers, customers
and others only to the extent necessary to perform its obligations and enforce
its rights hereunder.
20 FORCE MAJEURE. Neither Party will be liable for any delay in performing,
or for failing to perform, its obligations under this Agreement (other than the
payment of money) resulting from any cause beyond its reasonable control
including, acts of God; blackouts; power failures; inclement weather; fire;
explosions; floods; hurricanes; typhoons; tornadoes; earthquakes; epidemics;
strikes; work stoppages; labor, component or material shortages; slow-downs;
industrial disputes; sabotage; accidents; destruction of production facilities;
riots or civil disturbances; acts of government or governmental agencies,
including changes in law or regulations that materially and adversely
JBL-T-0501 Manufacturing Services Agreement
Page 13
CONFIDENTIAL
impact the Party, and U.S. Government priority orders or contracts; provided
that the Party affected by such event promptly notifies (in no event more than
ten (10) business days of discovery of the event) the other Party of the event.
If the delays caused by the force majeure conditions are not cured within sixty
(60) days of the force majeure event, then either Party may immediately
terminate this Agreement. Termination of this Agreement pursuant to this Section
20 shall not affect SKYE's obligation to pay Jabil, as set forth herein.
21 MISCELLANEOUS.
21.1 NOTICES. All notices, demands and other communications made
hereunder shall be in writing and shall be given either by personal delivery, by
nationally recognized overnight courier (with charges prepaid), by facsimile or
EDI (with telephone confirmation) addressed to the respective Parties at the
following addresses:
NOTICE TO JABIL: Jabil Circuit, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇. ▇▇▇▇▇▇ ▇▇▇▇
WITH A COPY TO: Jabil Circuit, Inc.
10560 ▇▇. ▇.▇. ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: General Counsel
NOTICE TO SKYE: SKYE international, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: General Counsel
WITH A COPY TO: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, #▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-
21.2 ATTORNEYS' FEES AND COSTS. In the event that attorneys'
fees or other costs are incurred to enforce payment or performance of any
obligation, agreement or covenant between the Parties or to establish damages
for the breach of any obligation, agreement or covenant under this Agreement, or
to obtain any other appropriate relief under this Agreement, whether by way of
prosecution or defense, the prevailing Party shall be entitled to recover from
the other Party its reasonable attorneys' fees and costs, including any
appellate fees and the costs, fees and expenses incurred to enforce or collect
such judgment or award and any other relief granted.
21.3 AMENDMENT. No course of dealing between the Parties hereto
shall be effective to amend, modify, or change any provision of this Agreement.
This Agreement may not be amended, modified, or changed in any respect except by
an agreement in writing signed by the Party against whom such change is to be
enforced. The Parties may, subject to the provisions of this Section 21.3, from
time to time, enter into supplemental
JBL-T-0501 Manufacturing Services Agreement
Page 14
CONFIDENTIAL
written agreements for the purpose of adding any provisions to this Agreement or
changing in any manner the rights and obligations of the Parties under this
Agreement or any Schedule hereto. Any such supplemental written agreement
executed by the Parties shall be binding upon the Parties.
21.4 PARTIAL INVALIDITY. Whenever possible, each provision of
this Agreement shall be interpreted in such a way as to be effective and valid
under applicable law. If a provision is prohibited by or invalid under
applicable law, it shall be ineffective only to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
21.5 MONIES. All references to monies in this Agreement shall be
deemed to mean lawful monies of the United States of America.
21.6 ENTIRE AGREEMENT. This Agreement, the Schedules and any
addenda attached hereto or referenced herein, constitute the complete and
exclusive statement of the agreement of the Parties with respect to the subject
matter of this Agreement, and replace and supersede all prior agreements and
negotiations by and between the Parties. Each Party acknowledges and agrees that
no agreements, representations, warranties or collateral promises or inducements
have been made by any Party to this Agreement except as expressly set forth
herein or in the Schedules and any addenda attached hereto or referenced herein,
and that it has not relied upon any other agreement or document, or any verbal
statement or act in executing this Agreement. These acknowledgments and
agreements are contractual and not mere recitals. In the event of any
inconsistency between the provisions of this Agreement and any Schedule and any
addenda attached hereto or referenced herein, the provisions of this Agreement
shall prevail unless expressly stipulated otherwise, in writing executed by the
Parties. Pre-printed language on each Party's forms, including purchase orders,
shall not constitute part of this Agreement and shall be deemed unenforceable.
21.7 BINDING EFFECT. This Agreement shall be binding on the
Parties and their successors and assigns; provided, however, that neither Party
shall assign, delegate or transfer, in whole or in part, this Agreement or any
of its rights or obligations arising hereunder without the prior written consent
of the other Party. Any purported assignment without such consent shall be null
and void. Notwithstanding the foregoing, Jabil shall have the right to assign
its rights to receive monies hereunder without the prior written consent of
SKYE. Notwithstanding anything to the contrary, Jabil may subcontract certain
fabricated components and material, such as without limitation, sheet metal,
printed circuit boards (PCBs), plastics, cables, and harnesses without obtaining
SKYE's consent.
21.8 WAIVER. Waiver by either Party of any breach of any
provision of this Agreement shall not be considered as or constitute a
continuing waiver or a waiver of any other breach of the same or any other
provision of this Agreement.
21.9 CAPTIONS. The captions contained in this Agreement are
inserted only as a matter of convenience or reference and in no way define,
limit, extend or describe the scope of this Agreement or the intent of any of
its provisions.
21.10 CONSTRUCTION. Since both Parties have engaged in the
drafting of this Agreement, no presumption of construction against any Party
shall apply.
21.11 SECTION REFERENCES. All references to Sections or Schedules
shall be deemed to be references to Sections of this Agreement and Schedules
attached to this Agreement, except to the extent that any such reference
specifically refers to another document. All references to Sections shall be
deemed to also refer to all
JBL-T-0501 Manufacturing Services Agreement
Page 15
CONFIDENTIAL
subsections of such Sections, if any.
21.12 BUSINESS DAY. If any time period set forth in this Agreement
expires upon a Saturday, Sunday or U.S. national, legal or bank holiday, such
period shall be extended to and through the next succeeding business day.
21.13 DISPUTE RESOLUTION
21.13.1 The Parties shall use good faith efforts to
resolve disputes, within twenty (20) business days of notice of such dispute.
Such efforts shall include escalation of such dispute to the corporate officer
level of each Party.
21.13.2 If the Parties cannot resolve any such dispute
within said twenty (20) business day period, the matter shall be submitted to
arbitration for resolution. Arbitration will be initiated by filing a demand at
the Tampa, Florida regional office of the American Arbitration Association
("AAA").
21.13.3 Disputes will be heard and determined by a panel
of three arbitrators. Each Party will appoint one arbitrator to serve on the
panel. A neutral arbitrator will be appointed by the AAA. All arbitrators must
have significant experience in resolving disputes involving electronic
manufacturing and design services.
21.13.4 Within fifteen (15) business days following
the selection of the arbitrator, the Parties shall present their claims to the
arbitrator for determination. Within ten (10) business days of the presentation
of the claims of the Parties to the arbitrator, the arbitrator shall issue a
written opinion. To the extent the matters in dispute are provided for in whole
or in part in this Agreement, the arbitrator shall be bound to follow such
provisions to the extent applicable. In the absence of fraud, gross misconduct
or an error in law appearing on the face of the determination, order or award
issued by the arbitrator, the written decision of the arbitrator shall be final
and binding upon the Parties. The prevailing Party in the arbitration proceeding
shall be entitled to recover its reasonable attorneys' fees, costs and expenses
including reasonable travel-related expenses.
21.14 OTHER DOCUMENTS. The Parties shall take all such actions
and execute all such documents that may be necessary to carry out the purposes
of this Agreement, whether or not specifically provided for in this Agreement.
21.15 COUNTERPARTS. This Agreement may be executed by facsimile
and delivered in one or more counterparts, each of which shall be deemed to be
an original and all of which, taken together, shall be deemed to be one
agreement.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
JBL-T-0501 Manufacturing Services Agreement
Page 16
CONFIDENTIAL
21.16 GOVERNING LAW AND JURISDICTION. This Agreement and the
interpretation of its terms shall be governed by the laws of the State of
Arizona, without application of conflicts of law principles. The provisions of
the United Nations Convention on Contracts for the International Sale of Goods
shall not apply to this Agreement. The Parties hereby agree that the State and
Federal Courts with jurisdiction over disputes arising in Pinellas County,
Florida shall have exclusive jurisdiction over any litigation hereunder.
21.17 FEDERAL REGULATIONS. The parties agree that the Products
Jabil is to provide to SKYE hereunder are "commercial items" as defined by FAR
2.101. Consequently, Jabil's performance is subject, when applicable, only to
such FAR provisions or clauses as are specified in FAR 52.244-6 and such
additional clauses as are mandatory flowdowns for suppliers of commercial items
at Jabil's tier and which have been specifically accepted by Jabil in writing
with respect to a particular Build Schedule (order). Because Jabil's business is
commercial, Jabil may be unwilling or unable to meet certain U.S. Government
contract requirements, and no Build Schedule shall be subject to any such
requirements. In no event shall U.S. Government Cost Accounting (CAS) or the
Truth in Negotiations Act (▇▇▇▇) apply, and in no event shall Jabil be required
to provide or certify cost or pricing data.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their duly authorized representatives.
SKYE INTERNATIONAL, INC. JABIL CIRCUIT, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
--------------------------- -------------------------------
Signature Signature
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇
--------------------------- -------------------------------
(Print) (Print)
Title: PRESIDENT & CEO Title: SR. OP. DIRECTOR, AMERICAS
--------------------------- -------------------------------
ate: JANUARY 27, 2006 Date: 2-15-06
--------------------------- -------------------------------
JBL-T-0501 Manufacturing Services Agreement
Page 17
CONFIDENTIAL
SCHEDULE 1
TO MANUFACTURING SERVICES AGREEMENT
BETWEEN JABIL AND COMPANY
STATEMENT OF WORK
o PRODUCT DESCRIPTION: to be identified by SKYE in its request for quote
(RFQ), Build Schedule Forecast and/or Build Schedule.
o SPECIFICATIONS: to be provided to Jabil in writing by SKYE in advance for
the applicable Build Schedule.
o NRE COSTS: to be charged pursuant to Jabil's quote(s) to SKYE for same.
o COMPONENTS AND MATERIALS REQUIREMENTS (BOM): to be procured pursuant to
SKYE Build Schedule Forecasts, Build Schedules and other written
instructions by SKYE to Jabil, subject to Supplier Purchase Requirements.
o TEST PROCEDURES: to be provided to Jabil in writing by SKYE or approved
by SKYE in advance for the applicable Build Schedule.
o PACKAGING AND SHIPPING SPECIFICATIONS: to be provided to Jabil in writing
by SKYE or approved by SKYE in advance for the applicable Build Schedule.
o APPROVED MANUFACTURERS LIST (AML): to be provided to Jabil in writing by
SKYE or approved by SKYE.
JBL-T-0501 Manufacturing Services Agreement
Page 18