MANUFACTURING SERVICES AGREEMENT between JABIL CIRCUIT, INC. and PreMD Inc. and PreMD International Inc.
Exhibit
4.16
CONFIDENTIAL
between
JABIL
CIRCUIT, INC.
and
PreMD
Inc. and PreMD International Inc.
CONFIDENTIAL
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 PreMD Inc., a Canadian corporation, and PreMD
International Inc., a Swiss corporation (collectively, the
“Company”), having its principal place of business at ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇. Jabil and Company
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. Company
is in the business of designing, developing, distributing, marketing and selling
medical products, some of which contain electronic assemblies and
systems.
C. The
Parties desire that Jabil manufacture, test, configure, assemble, package and
ship certain electronic 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 Company and agreed
to by
Jabil in writing.
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” means the list of suppliers approved by Company
and included in the Device Master Record.
1.4 “Build
Schedule Forecast” means the monthly forecast provided to Jabil by
Company, in writing, of quantity requirements of each Product that Company
anticipates requiring during the twelve (12) calendar month period mentioned
in
the forecast.
1.5 “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 (1) all
pertinent facts and circumstances; (2) financial costs; (3) resource
availability and impact; (4) probability of success; and (5) other commercial
practicalities.
1.6 “Company
Intellectual Property” means all discoveries, inventions, technical
information, procedures, manufacturing and other processes, software, firmware,
technology, know-how or other intellectual property rights owned or developed
by
the Company both existing and future, including patents and applications
therefor, trademarks and applications therefor, copyrights and applications
therefor, trade secrets and the Company’s Proprietary Information and
Technology.
1.7 “Complaint”
means any written, electronic, or oral communication that alleges deficiencies
related to the identity, quality, durability, reliability, safety,
effectiveness, or performance of a device after it is released for
distribution.
1.8 “Device
Master Record” means a compilation of records provided to Jabil by
Company containing the procedures and specifications for each finished Product,
including Specifications, Test Procedures, Packaging and Shipping
Specifications, Product design drawings, the Approved Manufacturers’ List,
material component descriptions (including approved substitutions) and
manufacturing process requirements, as more particularly defined in the Quality
Agreement. Device Master Record is wholly owned by Company and
Company shall be responsible for the adequacy and sufficiency of the Device
Master Record and any procedures or specifications contained
therein. Jabil is responsible for maintaining the Device Master
Record (Document and Data Control). Any changes to the Device Master
Record must be approved by Company before they are implemented.
1.9 “EDI”
shall mean electronic data interchange.
1.10 “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 first day of
April
2007.
1.11 “FDA”
means U.S. Food and Drug Administration.
1.12 “Fee
and Price Schedule” shall mean the prices and fees set forth Schedule
“C”
1.13 “FOB”
shall refer to the place where the Products are to be delivered to
Company and where possession, title and risk are assumed by the
Company.
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 Subsidiary
of Jabil.
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 relating to its Manufacturing
Services.
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 and owned by Jabil prior to its relationship
with the Company.
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 Company pursuant to the
terms of this Agreement.
1.21 “Loaned
Equipment” includes all equipment, tools and fixtures purchased by
Jabil specifically for Company for the purpose of performing the Manufacturing
Services and that are paid for in full by Company and all equipment, tools
and
fixtures loaned by Company to Jabil for such purpose, including any tools
covered by the Materials Liability Agreement dated June 27, 2006 between the
Parties.
1.22 “Manufacturing
Services” means the services performed by Jabil hereunder which shall
include manufacturing, testing, configuring, assembling, packaging and/or
shipping of the Product, including any Additional Services, all in accordance
with the Quality Agreement and the Device Master Record.
1.23 “Materials
Declaration Requirements” means Directive 2002/95/EC of the European
Parliament and of the Council of 27 January 2003 on
the restriction of the use of certain hazardous substances
in electrical and electronic equipment as amended from time to time
(“RoHS Directive”), Directive 2002/96/EC of the European
Parliament and of the Council of 27 January 2003 on waste electrical and
electronic equipment, as amended from time to time (“WEEE
Directive”), any European Union Member State implementations thereof,
and/or other similar environmental and/or materials declaration laws,
directives, regulations and requirements, including international laws and
treaties regarding such subject matter, as amended from time to
time.
1.24 “NRE
Costs” shall consist of non-recurring expenses incurred by Jabil under
this Agreement, including costs of design engineering services, testing,
fixturing and tooling as defined in the Fee and Price Schedule (Schedule
“C”).
1.25 “Packaging
and Shipping Specifications” means the packaging and shipping
specifications set forth in the Device Master Record and otherwise supplied
and/or approved by Company. Packaging and Shipping Specifications are
the responsibility and proprietary information of the Company.
1.26 “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.
1.27 “Product(s)”
shall mean the finished devices per 21 CFR 820 created through the performance
of the Manufacturing Services on behalf of Company under this Agreement as
more
particularly described in Schedule A and the Quality Agreement.
1.28 “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, 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.
1.29 “Quality
Agreement” means the standards set out in Schedule “F”.
1.30 “Significant
Change” has the meaning set out in the Quality Agreement.
1.31 “Specifications”
means the technical specifications for the finished Product and manufacturing
set forth in the Device Master Record and otherwise supplied and/or approved
by
Company. Specifications may be amended from time to time by
amendments in the form of written engineering change orders (ECOs) mutually
agreed to by the Parties. Specifications are wholly owned by
Company.
1.32 “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.
1.33 “Test
Procedures” means the testing specifications, standards, procedures and
parameters set forth in the Device Master Record and otherwise supplied and/or
approved by Company. Test Procedures are the responsibility and the
proprietary information of Company.
2 List
of Schedules. This Agreement includes the following
Schedules for each Product to be manufactured hereunder, which are hereby
incorporated herein and made a part of this Agreement:
Schedule
“A” List
of Products
Schedule
“B” Device
Master Record
Schedule
“C” Fee
and Price Schedule
Schedule
“D” Build
Schedule Forecast Template
Schedule
“E” Currency
Policy
Schedule
“F” Quality
Agreement
3 Build
Schedule Forecasts. Within ten (10)
business days following the execution of this Agreement, Company shall provide
Jabil with a Build Schedule Forecast in the form annexed as Schedule
“D”. The Build Schedule Forecast shall be updated by Company, in
writing, on at least a monthly basis and no later than the 15th day of each
calendar month for the subsequent eleven (11) calendar months. The
Company may modify a Build Schedule Forecast by providing a new Build Schedule
Forecast. Any rescheduling or cancellation of the Products scheduled
for Manufacturing Services of any Build Schedule Forecast shall be
subject to the terms set forth in Section 11.3, 11.4, 11.5, and
11.6.
Each
Build Schedule Forecast covers two time periods totaling twelve (12) calendar
months. The first three calendar months of a Build Schedule Forecast
will be treated as a purchase order, that is to say, as a guaranteed minimum
purchase. The last nine calendar months of a Build Schedule Forecast
are the Company’s bona fide estimate of its requirements for Manufacturing
Services, but do not constitute a binding obligation of Jabil to manufacture
or
of the Company to purchase. Subsequent Build Schedule Forecasts
replace prior Build Schedule Forecasts, resulting in a twelve month rolling
forecast of the Company’s requirements for Manufacturing Services.
4 Manufacturing
Services. Jabil will manufacture the
Product in accordance with this Agreement, the Quality Agreement, the Device
Master Record and the Build Schedule Forecast. Jabil will confirm the
receipt of each proposed Build Schedule Forecast that is submitted in
accordance with the terms of this Agreement by notifying Company within seven
(7) business days of receipt of its acceptance or rejection. If Jabil
does not communicate its rejection in writing within the said seven (7) business
days, it shall be deemed to have accepted the
Build
Schedule Forecast. Subject to force majeure, Jabil may not
subsequently reject an order that complies with the binding portion of an
accepted Build Schedule Forecast. When requested by Company, and
subject to appropriate fee and cost adjustments, Jabil will provide Additional
Services for existing or, if agreed by Jabil, future Products manufactured
by
Jabil. In the event Jabil rejects a proposed Build Schedule Forecast,
Jabil’s notice of rejection will specify the reasonable basis for such
rejection.
4.1 Testing. Jabil
will test the Product in accordance with the Test Procedures.
4.2 Packaging
and Shipping. Jabil will package and ship the Product in
accordance with Packaging and Shipping Specifications.
4.3 Items
to be Supplied by Company. Company
shall supply to Jabil, according to the terms and conditions specified herein,
Company Proprietary Information and the Device Master Record for each Product
to
be manufactured hereunder. Device Master Record is proprietary
information of the Company and Company shall be responsible for the adequacy
and
sufficiency of the Device Master Record and any procedures or specifications
contained therein.
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. Jabil will maintain Loaned Equipment in good
operating condition in the same manner as it maintains its own equipment and
will return same to Company in good operating condition when it is no longer
needed for the Manufacturing Services, reasonable wear and tear excepted, having
due regard to the age and use of the equipment.
4.5 Company
Inspection. Company shall have the
right, upon reasonable advance notice, during normal business hours and at its
expense and either personally or through its agents, to inspect, review, monitor
and oversee the Manufacturing Services and the Loaned Equipment, provided that
such inspection shall not disrupt Jabil’s normal business
operations. Company 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 to the same
extent as is required of Company in this Agreement.
4.6 Materials
Procurement. Jabil will use Commercially
Reasonable Efforts to procure materials, parts and components from suppliers
on
the Company’s Approved Manufacturers’ List, as necessary to fulfill Build
Schedule Forecasts. Materials to support Build Schedule Forecast will
be purchased at suppliers’ lead time plus 3 weeks (manufacturing lead
time). For long lead time materials, Jabil will use Commercially
Reasonable Efforts to reduce such lead times below four months and will in
any
event notify Company at quarterly intervals when orders have been placed for
such materials. Jabil will make Commercially Reasonable Efforts to
suggest alternative sources of supply to add to Company’s Approved Manufacturers
List in order to optimize both cost and delivery time of the
Products. Subject to the foregoing sentence, for long lead time
materials, Jabil may place material orders to support non-binding Company orders
as defined in section 3. In event of cancellation or reschedule of
these non-binding orders by Company, Company agrees to reimburse Jabil according
to section 11.6. Jabil will publish a list of materials used in
Company Products along with the corresponding material lead times and material
non-cancellable/non-returnable status. Company shall be responsible
for the performance of suppliers and quality of the components.
4.7 Materials
Declaration. Company shall notify Jabil
in writing, in reasonable detail, with respect to each Product, certifying
whether or not the Product is exempt from Materials Declaration Requirements
and
specifically identifying the basis for any such exemption. For
Products which have been identified in writing to
Jabil
as subject to Materials Declaration Requirements, Jabil will use Commercially
Reasonable Efforts to identify parts, components and/or materials, as necessary,
that are compliant with Materials Declaration Requirements. Upon
written request by Company, Jabil shall use Commercially Reasonable Efforts
to
collect documentation from suppliers certifying compliance with Materials
Declaration Requirements with respect to its components, parts or materials,
the
form of which has been provided, or approved in writing, by Company
(“Compliance Certification”). Upon written request
of Company, Jabil shall make such Compliance Certification available to
Company. In the event any supplier does not provide such Compliance
Certification, Jabil shall notify Company and cooperate with Company to remove
such Supplier from the Approved Manufacturers’ List or take such other action
which the parties mutually agree upon in writing. In the event that Supplier
fails to provide Compliance Certification and Company still chooses to accept
components or materials from such Supplier, Jabil shall bear no responsibility
or liability for the lack of such Compliance Certification. Company
understands and agrees that:
4.7.1 Company
is responsible for notifying Jabil in writing of the specific Materials
Declaration Requirements and any exemptions thereto that Company determines
to
be applicable to the Product and shall be solely liable for the adequacy and
sufficiency of such determination and information;
4.7.2 Any
information or certification regarding Materials Declaration Requirements of
a
Product as well as components, materials or parts used in the Product shall
come
from the relevant supplier. Jabil does not test, certify or otherwise
warrant component, material or part compliance with Materials Declaration
Requirements;
4.7.3 Company
is ultimately and solely responsible for compliance with, including ensuring
that any components, materials or parts used in the Product, as well as the
Product itself, are compliant with applicable Materials Declaration
Requirements;
4.7.4 In
the event Jabil becomes aware of any Material Declaration Requirements that
may
be applicable to the Product, Jabil will use Commercially Reasonable Efforts
to
notify Company of those Material Declaration Requirements.
Notwithstanding
any other provision set forth in this Agreement, this Section 4.7 sets forth
Jabil’s sole responsibility and liability with respect to Materials Declaration
Requirements and any third party claims against Company related to the Materials
Declaration Requirements. Company’s entire remedy with respect to Materials
Declaration Requirements and any third party claims against Company related
to
the Materials Declaration Requirements are contained within Section 5 of this
Agreement. Absent this provision, Jabil would not enter this
Agreement.
4.8 Release
of Products. Jabil acknowledges that third party
distributors of the Products may be taking delivery of the Products directly
and
that, under such circumstances, Company will not have the opportunity to inspect
the Products before they are delivered. Accordingly, Jabil shall
evaluate the Products, using a reasonable, industry standard statistical
sampling technique, in accordance with the final release test criteria outlined
in the Device Master Record prior to making the Products available for release
to Company’s distributors. Jabil shall provide Company with the
Product Document File, which includes a signed certificate of conformity
(contents outlined in section 4.3 of the Quality Agreement), List of
non-conformances (if applicable) and the ▇▇▇▇ of Lading, within 2 days of
Product release. Subject to Section 5 below and the Company’s
inspection rights, the Product will be deemed to be accepted by Company upon
receipt by Company of a valid Certificate of Conformance for the
Product.
5 Warranty
& RMA Procedure
5.1 Jabil
Warranty. Subject to the limitations set forth in Section 5.5
below, Jabil warrants (i) that it will manufacture the Product in accordance
with the Specifications and all applicable quality and regulatory requirements
including those that are identified in the Quality Agreement, and (ii) that
at
the time of manufacture, the Product will conform, in all material respects,
to
the Device Master Record, and will meet all applicable test
criteria. The above warranty shall remain in effect for a period of
fifteen (15) months from the date any Product is initially delivered to Company
or to Company’s designated carrier (“Warranty
Period”). This warranty is extended to, and may only be
enforced by, Company.
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 or replace, in its sole
discretion and cost, any Product that does not conform to the warranty set
out
in Section 5.1 provided that the Product is received within thirty (30) days
following the end of any applicable Warranty Period (“RMA
Product”) . If Company desires to return a Product based on a claim of
breach of the warranty set forth in this Section 5, Company or its agent shall
request an RMA number from Jabil. Company 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 fifteen (15) 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
Company 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, at Jabil’s own expense to Company’s designated
destination. If no such Defect is found, Company shall reimburse
Jabil for all fees, costs and expenses incurred to analyze and, if requested
by
Company, repair or replace the alleged RMA Product and Company shall bear
responsibility for all transportation costs to and from Jabil’s designated
repair facility.
5.3 Rework
and non-warranty repair. Jabil agrees to perform rework
and non-warranty repair on mutually agreed to items. Rework and non-warranty
repair items may consist of: Products set forth on Schedule A, assemblies
produced by another supplier, or assemblies produced by
Company. Rework and non-warranty repair cost shall be established and
mutually agreed to by both Parties. All items for rework or
non-warranty repair will be handled in accordance with the RMA procedure set
forth in section 5.2.
5.4 Refurbished
Product. Jabil agrees to refurbish previously used
Product incorporated into mutually agreed to items. Refurbished items
may consist of: Products set forth on Schedule A, assemblies produced by another
supplier, or assemblies produced by Company. Refurbished Product cost
shall be established and mutually agreed to by both Parties. All
items for refurbishment will be handled in accordance with the RMA procedure
set
forth in Section 5.2
5.5 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
IN SECTION 5. 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, MERCHANTABLE
QUALITY, OR FITNESS FOR A PARTICULAR PURPOSE OR INFRINGEMENT OR MISAPPROPRIATION
OF ANY RIGHT, TITLE OR INTEREST OF COMPANY OR ANY THIRD PARTY OR COMPLIANCE
WITH
MATERIALS DECLARATION REQUIREMENTS. COMPANY UNDERSTANDS AND AGREES
THAT IT SHALL HAVE FULL AND EXCLUSIVE LIABILITY WITH RESPECT TO ANY PRODUCT
FOR
PRODUCT DESIGN LIABILITY, PRODUCT LIABILITY, DAMAGE TO PERSON OR PROPERTY AND/OR
INFRINGEMENT OR MISAPPROPRIATION OF THIRD PARTY RIGHTS BY THE
PRODUCT. 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 IN SECTION 5 SHALL NOT APPLY TO ANY PRODUCT JABIL DETERMINES TO HAVE
BEEN SUBJECTED TO TESTING FOR OTHER THAN SPECIFIED ELECTRICAL CHARACTERISTICS
OR
TO STORAGE, SHIPPING, 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 each engineering change order and provide a per unit upgrade cost
and expected completion and delivery date and if the Parties are in agreement,
the proposed ECO will become final. Company is responsible for
determining whether any ECO upgrades require FDA clearance or approval or
otherwise must be reported to FDA.
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 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. 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,
Risk of Loss and Payment Terms. For purposes of this Agreement
delivery shall be FOB Jabil’s facility and deemed to have occurred, and all risk
of loss shall be transferred to Company, when Products (or any other items)
are
tendered to the carrier approved by Company. The ▇▇▇▇ of Lading will
be prepared by Jabil for each shipment, a copy of which will be provided to
Company. The Fee and Price Schedule (Schedule ”C”) will be reviewed
by the Parties annually and will be revised consistent with increases or
decreases in materials, components, equipment and other costs and expenses
applicable to the manufacture of the Products.
7.1 Payment.
Company shall pay Jabil all monies when due, including all NRE Costs associated
with this Agreement. 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. In the event any
amounts are invoiced or paid in a different currency, the process in the
Currency Policy (Schedule “E”) will apply. Any equipment, tooling,
component, material or other goods or property which are purchased by Jabil
in
order to perform its obligations under this Agreement, shall become the property
of Company once Jabil is reimbursed for the NRE Costs thereof. Jabil
shall invoice Company for actual outstanding NRE Costs and other monies due,
as
per the Fee
and
Price Schedule (Schedule “C”), at monthly intervals (or such other intervals as
the Parties deem appropriate) during the term of this Agreement and upon
cancellation, termination or expiration of this Agreement. Jabil
agrees to request advance written approval from Company should resource
requirements, and thereby NRE Costs, increase relative to estimated NRE Costs
initially agreed by the Parties as indicated in the Fee and Price Schedule
(Schedule “C”). Jabil shall provide to Company reasonably detailed
supporting documentation and/or descriptions of the increased NRE Costs for
which Jabil seeks payment from Company prior to incurring any such expenses.
7.2 Taxes. Company
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. Company shall be responsible for obtaining any required
import or export licenses necessary for Jabil to ship Product, including
certificates of origin, manufacturers’ affidavits, and U.S. Federal
Communications Commission’s identifier, if applicable and any other licenses
required under US or foreign law and Company shall be the importer of
record. Company 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. Company 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. Company 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.
9 Design
Services. In the event that the Parties agree that Jabil
will provide design services for Company, 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 Maintenance
of Product Records.
10.1 Product
Clearance. Company will be responsible for obtaining and
maintaining appropriate clearances or approvals required by the Federal Food,
Drug and Cosmetic Act and implementing regulations with respect to all Products
regulated as finished devices by FDA. Prior to Jabil’s development
and conduct of manufacturing and production processes and controls for a
Product, Company will provide to Jabil: (a) a device master record (“DMR”) for
the Product that includes the information required in 21 CFR 820.181, and that
has been prepared and approved by Company in accordance with 21 CFR 820.181;
and
(b) a design history file (“DHF”) for the Product containing the records
necessary to demonstrate that the device design was developed in accordance
with
the approved design plan the requirements of 21 CFR 820.30.
10.2
Manufacturing and
Quality System Records. Except as provided below, Jabil
will be responsible for establishing and maintaining all manufacturing records
required by ▇▇ ▇▇▇ ▇▇▇, the FDA’s Quality System Regulation, and similar
provisions for Canada and Europe, applicable to the operations it performs
as a
manufacturer of the Product as specified in Section 4 of this Agreement and
set
forth in the Quality Agreement.
Company
will designate an individual to review for adequacy and approve prior to
issuance all procedures, work instructions, or other documents, and any
amendments thereto, established by Jabil acting reasonably applicable to Jabil’s
provision of manufacturing services under the Agreement.
Manufacturing
Services Agreement
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CONFIDENTIAL
Jabil
will retain all such records for a period of time equivalent to the design
and
expected life of the device plus 2 years, as designated in writing by Company,
but in no case less than two years from the date of release for commercial
distribution by Jabil.
Company
will be responsible for establishing the DMR and DHF in accordance with 21
CFR
820.130 and 820.181 for the Product as cleared or approved by the
FDA. Company has the right to propose or introduce changes to the
Product, the DHF, or the DMR. From time to time, Jabil may propose
changes to the DHF or DMR. Upon the request of Company and upon
agreement by Jabil, Jabil will provide design services and/or testing in support
of such changes. The terms and conditions of such design related
services shall be set forth in a mutually agreed upon Design Services
Agreement. Upon written approval by Company, and at Company’s
expense, Jabil shall amend the DHF or DMR in accordance with the terms of the
agreed upon Design Services Agreement. Company at all times will be
responsible for determining whether any such change requires FDA clearance
or
approval, and for obtaining such clearance or approval prior to implementation
of the change. Company will be responsible for the adequacy and
sufficiency of all contents of the DMR at all times. Company will
consider and approve or disapprove all modifications to the DMR and be solely
responsible for the changes it requires Jabil to make. Jabil will
administratively maintain and update the Company DMR as an additional billable
service but in no way is responsible for the adequacy and sufficiency of the
DMR, but covenants to make the changes therein required by the
Company. Company will be solely responsible for establishing and
maintaining Complaint files in accordance with 21 CFR 820.198.
Company
will be solely responsible for initial receipt and handling of potential
Complaints Jabil or Company receives related to the Product. Upon
receipt of such Complaint information, the party receiving same shall record
the
identity of complainant, including name, address, and telephone number, a
description of the nature of the Complaint, and take all reasonable efforts
to
obtain all other available information associated with the
Complaint and promptly provide same to the other party in
writing. To the extent Company requires additional information to
enable it to perform the Complaint investigation, Company shall notify Jabil
and
Jabil shall cooperate fully in assisting with the conduct of the
investigation.
Company
will be solely responsible for establishing and maintaining all records required
under FDA law and regulations applicable to any and all of the operations it
performs as a manufacturer, distributor, and marketer of the Product, including
(a) handling, storage, distribution, and installation of finished devices
received from Jabil, in accordance with 21 CFR 820; (b) establishment
registration and device listing in accordance with 21 CFR 807; (c) records
and
reports concerning corrections and removal actions taken under 21 CFR 806;
(d)
medical device reports and related records concerning adverse events associated
with the Product under 21 CFR 803.
Company
shall be entitled to perform on site quality control audits of records, at
Company’s expense, at reasonable times and upon reasonable notice to
Jabil. Jabil agrees to furnish, at Company’s sole
expense, quality system records and assistance reasonably needed to facilitate
any such audit and to ensure the safety and convenience of each
inspection.
11 Change
Orders, Rescheduling and Cancellation.
11.1 Changes
to Product Configuration, Manufacturing Services, Packaging and Shipping
Specifications, and Test Procedures. Company may, in
writing, request a change to the Product Configuration, Manufacturing Services,
Packaging and Shipping Specifications and Test Procedures, as outlined in the
Device Master Record, at any time. Jabil will analyze the requested
change according to the Quality Agreement and if Jabil can satisfy the requested
change it will provide Company within five (5) business days after receipt
of
the request, a notice of acceptance of the requested changes along with a
statement of any additional costs and expected changes to delivery schedules.
Jabil will review with Company all planned Significant Changes and will be
responsible for revalidation according to the Quality Agreement. Any such change
shall be documented in writing
Manufacturing
Services Agreement
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CONFIDENTIAL
and
shall become effective only upon mutual written agreement of both Parties of
the
terms and conditions of such change, including changes in time required for
performance, cost and applicable delivery schedules. Company will be responsible
for all costs associated with any accepted changes. If Jabil is
unable to satisfy or comply with Company’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 Company’s request.
11.2 Production
Increases. Deliberately removed.
11.3 Treatment
of Obsolete/End-of-Life Material. Upon receiving notice from
Company of an engineering change or 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 Company with an analysis of
Company's liability to Jabil for components and materials acquired or scheduled
to be acquired to manufacture such Product. Company's liability shall
include the price of finished Product and Jabil’s costs (including cancellation
fees and charges), plus applicable margin, of work in progress, safety stock
components and materials and components and materials on hand or on order within
applicable Lead-times. Jabil will use Commercially Reasonable Efforts
to assist Company in minimizing Company's liability by taking the following
steps:
|
|
•
|
As
soon as is commercially practical reduce or cancel component and
material
orders to the extent contractually
permitted.
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•
Return all components and materials to the extent contractually
permitted.
•
Make all Commercially Reasonable Efforts to sell components and materials to
third parties.
|
|
•
|
Assist
Company to determine whether current work
in progress should be completed, scrapped or shipped
"as is".
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11.4 Rescheduled
Delivery and Cancellation of Orders. Company may not
reschedule or cancel orders within 60 days of delivery. Company shall
be responsible for all inventory costs resulting from a reschedule or
cancellation of Manufacturing Services in the binding period of the Build
Schedule Forecast, i.e. the first three (3) calendar months
thereof. If Jabil, acting reasonably, demonstrates to Company that
the reschedule or cancellation will result in increased production costs, Jabil
and Company will agree on a new price and the Fee & Price Schedule will be
revised accordingly to allow Jabil to recover such increased production
costs. Such inventory costs shall be billed on a monthly basis plus
an interest rate calculated as follows: two percent (2%) per annum plus the
prime rate, as announced in The Wall Street Journal as of the date of reschedule
(said interest rate shall be adjusted on the first business day of each calendar
month thereafter for as long as the rescheduled order is maintained in
inventory) and shall be applied to the inventory applicable to the rescheduled
or cancelled order. Orders may be rescheduled up to a maximum of 90
days in total (considering multiple reschedules) from the original order
delivery date unless excess inventory generated by order reschedule is purchased
by Company within 90 days of the original order delivery date. In
addition to the charges and costs set forth above, Company shall also be liable
for the depreciation (determined in accordance with U.S. Generally Accepted
Accounting Principles) for the period of time any piece of equipment (except
Loaned Equipment) is idle as a result of the reschedule or cancellation for
up
to six months from the date of termination or cancellation.
11.5 Termination
Charges. Upon termination, expiration
or cancellation of this Agreement for any reason, Jabil shall submit to Company
Jabil’s invoices for termination/cancellation charges pertaining to the binding
portion of the Build Schedule Forecast and for depreciation expense on idle
equipment, as follows. Jabil’s invoice for such charges shall be
equal to the unrecovered costs pertaining to the binding portion of the
Build
Manufacturing
Services Agreement
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CONFIDENTIAL
Schedule
Forecast incurred by Jabil up to the date of termination, expiration or
cancellation (“Termination Effective Date”) together with (i)
costs incurred after the Termination Effective Date but resulting directly
and
solely from such termination, expiration or cancellation; (ii) a margin of
7.4
percent of all such costs; (iii) the cost of long lead time materials that
are
on order and non-cancellable and (iv) the depreciation expense (except in the
event of termination due to Jabil’s default hereunder) on all equipment used to
manufacture Product (except Loaned Equipment) that remains idle due to such
termination, expiration or cancellation for up to three months from the date
of
the Termination Effective Date in accordance with U.S. Generally Accepted
Accounting Principles. Jabil will provide to Company all information
reasonably necessary to confirm the costs, expenses, and depreciation expenses
on idle equipment sustained by Jabil due to termination, expiration or
cancellation. To the extent that Jabil cannot mitigate its costs,
upon cancellation, expiration or termination for any reason, Company’s
obligation shall be to pay the charges claimed by Jabil as follows:
11.5.1 The
applicable price for the Product of which Jabil has completed manufacture prior
to the Termination Effective Date pursuant to the binding portion of the most
recent Build Schedule Forecast for which payment has not been made;
11.5.2 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 the most recent Build Schedule Forecast plus the applicable margin set out
in
Section 11.4(b)(ii);
11.5.3 Jabil’s
reasonable cancellation costs incurred for components, materials and
subcontracted items that Jabil had on order on behalf of Company on the
Termination Effective Date pursuant to the most recent Build Schedule Forecast
plus applicable margin;
11.5.4 Except
in the event of termination due to Jabil’s default hereunder, depreciation on
equipment idle up to six months after the Termination Effective Date;
and
11.5.5 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, for which Company has
not fully paid. All goods for which Company shall have paid 100% of Jabil’s
incurred cost or more shall be held by Jabil for Company’s account and the
Parties will arrange for its delivery to Company in good working condition
subject to reasonable wear and tear.
11.6 Duty
to Mitigate Costs and Liability. Both
Parties shall, in good faith, undertake Commercially Reasonable Efforts to
mitigate the costs of termination, expiration or cancellation. In the
event that termination, order cancellation, reschedule, or an engineering change
to the design results in unused components Jabil will use Commercially
Reasonable Efforts to assist Company in minimizing Company’s liability by taking
the following steps:
11.6.1 As
soon as is commercially practical, reduce or cancel component and material
orders to the extent contractually permitted.
11.6.2 Return
all components and materials to the extent contractually permitted.
11.6.3 Use
Commercially Reasonable Efforts to sell components and materials to third
parties.
11.6.4 Assist
Company to determine whether current work in progress should be completed,
scrapped or shipped “as is”.
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Services Agreement
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CONFIDENTIAL
11.6.5 Allocate
such components and materials for alternate Company programs if applicable,
or
other customer orders provided the same can be used within thirty (30) days
of
the termination date.
Jabil
will monitor the material list and report to the Company when necessary in
writing, listing the dates when any Products, components or assemblies will
become obsolete or reach end-of-life.
If
components cannot be returned because they are non-cancellable, non-returnable,
excess components, custom component tooling and custom raw material, or residual
inventory driven by component order increment, Company will reimburse Jabil
for
its third party costs plus a 7.4% ▇▇▇▇-up on these unused components to cover
inventory and procurement costs. Jabil will invoice these obsolete or
excess components at their actual purchased unit price multiplied by the
quantity to be sold to Company plus the 7.4% ▇▇▇▇-up.
12 Term. The
term of this Agreement shall begin on the Effective Date and will continue
for a
period of five years. This agreement will be extended
automatically on a year-to-year basis unless at least ninety (90) days prior
to
the expiration of the initial term or any succeeding one (1) year extension,
one
of the parties notifies the other party in writing that it does not wish to
extend the Agreement, and in such case, the Agreement will expire at the end
of
the term or extension term in question. Notwithstanding the foregoing, Sections
4.1, 4.2, 4.3, 4.6, 5, 6, 7, 8, 11.3, 11.4, 11.6, 11.7, 12, 13.4, 14, 15, 16,
17, 18, 20 and 22 herein shall survive the expiration, cancellation or
termination of this Agreement.
13 Termination.
This Agreement may be terminated as follows:
13.1 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 12 months prior to such date.
13.2 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 sixty (60) 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 sixty (60)
day
period, or a period mutually agreed upon by both Parties, 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.
13.3 Termination
for Bankruptcy/Insolvency. Upon the happening of any of the
following events with respect to a Party, this Agreement may be terminated
immediately:
13.3.1 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.
13.3.2 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.
13.3.3 The
dissolution or termination of the existence of a Party whether voluntarily,
by
operation of law or otherwise.
Manufacturing
Services Agreement
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CONFIDENTIAL
13.4 Termination
Consequences. If this Agreement is terminated for any
reason, neither party shall be excused after the effective date of termination
from performing its obligations under this Agreement that are intended to
survive such termination, and Company shall continue after termination to be
responsible for all monies due to Jabil hereunder including fees, costs and
expenses incurred by Jabil up to and including the Termination Effective
Date.
14 Confidentiality.
14.1 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 14 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. This Section 14 is not intended to cancel,
but is rather intended to supplement, the existing Confidential Disclosure
Agreement between the Parties dated December 5, 2005.
14.2 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 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.
14.3 Term
and Enforcement. The confidentiality obligation set forth in this
Agreement shall be observed both during the term of the Agreement and for a
period of four years following the termination of this agreement. Each Party
acknowledges that a breach of any of the terms of this Section 14 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 22.13.
14.4 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.
Manufacturing
Services Agreement
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CONFIDENTIAL
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15
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Intellectual
Property Rights
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15.1 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 the Quality 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 Company a
worldwide, non-exclusive, fully paid-up, royalty free right and license to
the
Jabil Existing Intellectual Property only insofar as is required for Company
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.
15.2 Jabil
Created Intellectual Property. Jabil
shall retain all right, title and ownership to any Jabil Created Intellectual
Property until such time as (i) this Agreement expires or is terminated for
any
reason other than breach by the Company and (ii) the Company has paid to Jabil
all monies due to Jabil under this Agreement and all other monies due and owing
to Jabil pursuant to any other related agreement executed by the
Parties. Upon the occurrence of (i) and (ii) above, Jabil will assign
to Company all right, title and interest in and to the Jabil Created
Intellectual Property subject to the reservation of a non-exclusive, worldwide,
fully paid up, royalty-free right and license in Jabil to use the Jabil Created
Intellectual Property anywhere in the world to carry on its own
business.
15.3
Company Intellectual Property. Company shall
retain all right, title and ownership to any Company Intellectual Property
and
no provision of this Agreement including the Quality Agreement shall be deemed
to transfer any Company Intellectual Property to Jabil, provided that the
provision of the Manufacturing Services shall not be deemed to be a breach
of
this Section 15.3.
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Services Agreement
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CONFIDENTIAL
16 Company
Warranty and Indemnification. Company represents and warrants that
it has used Reasonable Commercial Efforts to conduct patent, trademark and
copyright searches for the purpose of identifying and evaluating any potential
infringement claims with respect to the Product. Company 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 recall,
replacement or impoundment or seizure of any Product and 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, Company Proprietary Information and Technology, any Product,
or
any information, technology and processes supplied and/or approved by Company
or
otherwise required by Company of Jabil; (b) actual or alleged non-compliance
with Materials Declaration Requirements; (c) an allegation that any item in
subsection (a) infringes or violates any patent, copyright or other intellectual
property right of a third party, and (d) 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 Company with respect to any such claims, provided that if
such counsel is necessary because Company does not assume control of the defense
of a claim for which Company is obligated to indemnify Jabil hereunder, Company
shall bear such expense. Neither Party shall enter into any settlement that
affects the other Party’s rights or interests without the other Party’s prior
written approval, which shall not be unreasonably withheld. Each
Party will provide such assistance and cooperation as is reasonably requested
by
the other Party or its counsel in connection with such indemnified
claims. Company further agrees to indemnify, defend and hold Jabil
and its Affiliates and their respective officers, directors, employees,
successors and assigns harmless from and against all claims, penalties, fines,
judgments, obligations, damages, losses, costs and expenses (including
reasonable attorneys’ fees) incurred or imposed on Jabil by any governmental
authority, including in connection with any investigation or proceeding, to
the
extent arising from the Products, Product Specifications, Company’s
non-compliance with applicable laws or regulations, Company Confidential
Information, Company Proprietary Rights incorporated into Products, or any
information, technology and processes required or supplied by Company to Jabil
to perform its obligations under this Agreement. The Company shall
have no obligation to indemnify Jabil to the extent that any such claim,
damages, losses, costs or expenses arise from Jabil’s Proprietary Information
and Technology, the Jabil Intellectual Property or the Jabil Manufacturing
Process.
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 workers’ 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, or otherwise publishing any notice of this Agreement
required by applicable laws and regulations, 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 14.1. 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.
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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; 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 impact the Party; 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 thirty (30) 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
Company’s obligation to pay Jabil, as set forth herein. Jabil
represents that it maintains an industry standard business continuity plan
but
does not guarantee that such plan will prevent events of force majeure from
affecting the Company.
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:
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Notice
to Jabil:
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Jabil
Circuit, Inc.
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10560
▇▇. ▇.▇. ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
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Attn:
General Counsel
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with
a copy to:
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Jabil
Circuit, Inc.
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10560
▇▇. ▇.▇. ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Attn:
General Counsel
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Notice
to Company:
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▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
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▇▇▇▇▇▇▇,
▇▇, ▇▇▇▇▇▇
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▇▇▇▇▇▇
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Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
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Attn:
Chief Financial Officer
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with
a copy to:
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▇▇▇▇
& Berlis LLP
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▇▇▇▇-▇▇▇
▇▇▇ ▇▇▇▇▇▇
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▇▇▇
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▇▇▇▇▇▇▇,
▇▇▇▇▇▇
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▇▇▇
▇▇▇
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Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
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Attn:
▇▇▇ ▇▇▇▇▇▇
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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.
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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 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. The Parties
agree that Company has the option to add other Products to this Agreement,
including Products that are considered finished medical devices by the FDA,
which will be added to Schedule 1. Company will notify Jabil in
writing in advance of any finished medical device that Company desires to add
to
Schedule 1. The Parties shall mutually agree in writing on any
amendments or supplemental terms and conditions for the manufacture and supply
of such finished medical device that are necessary to this
Agreement. Upon such agreement by the Parties, this Agreement will be
amended in writing to add such terms and conditions as well as modify any other
provisions as appropriate for each finished medical device when it is added
to
this Agreement (e.g., inter alia, warranties, medical device reporting
procedures, compliance with applicable regulations and ISO standards,
appropriate terms on liability, etc.). Company has no obligation to
add any finished medical devices to this Agreement and Jabil has no obligation
to accept the addition of any such finished medical devices.
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 Quality 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 Company.
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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 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. or Canadian 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
New York, New York regional office of the American Arbitration Association
(“AAA”). The arbitration will be held in Buffalo,
New York, or Albany, New York, at the option of the party filing the
demand.
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 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.
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21.16 Governing
Law and Jurisdiction. This Agreement and the interpretation of its
terms shall be governed by the laws of the State of New York, 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. Subject to Section 21.13, the Parties hereby agree that the
Courts sitting in Buffalo, New York, USA shall have exclusive jurisdiction
over
any litigation hereunder.
IN
WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their duly authorized representatives.
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JABIL
CIRCUIT, INC.
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Signature
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Signature
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Name:
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Date:
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PreMD
INTERNATIONAL INC.
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By:
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Signature
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Name:
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(Print)
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