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PPRCHASING AGREEMENTPURCHASING AGREEMENTThis Manufacturing and Sales Agreement (”Agreement”) is made and entered into Feb. , 2004 (the “Effective Date”) by and between XX Technology Sdn. Bhd., a Malaysia corporation with its principal place of business located at B-6-12, Block B, Plaza MontKiara, 2, Jalan Kiara, MontKiara, 50480 Kuala Lumpur, Malaysia (XX) and XXX Europe S. A., a Switzerland corporation with its principal place of business at Moulin du Chou D, CH-1122, ROMANEL-SUR-MORGES, Switzerland. (“XXX”).RECITALSA. Whereas XX desires to manufacture and sell, and XXX desires to purchase certain products, OM2(Sensor Module) under the terms and conditions of this Agreement;B. Whereas XXX agreed to purchase of the agreed parts in the agreed price and quantity level at least 1 years from the start of manufacturing of the first phase, unless the XX fails to meet the quality level requirement of XXX; andC. Whereas XXX and XX agreed to cooperate together for mutual interest and will strive to honor the terms and conditions of this Agreement.Therefore, XXX and XX agree as follows:AGREEMENTS1. Definitions; Interpretation. 1.1. Definitions. In this Agreement, including the Schedules and Exhibits hereto, the following terms have the following meanings:(a) “Affiliate” means any entity, which is controlled by, controls or is under common control of a party to this Agreement. For this purpose, the word control means the direct or indirect ownership of more than fifty (50%) percent of the voting equity of such entity (or, in the case of an entity that is not a corporation, for the election of the corresponding managing authority). (b) “Intellectual Property Rights” means all inventions, patents and patent applications (including reissues, divisions, continuations, continuations-in-part), trade secrets, know-how, drawings, copyrights, mask-work and other intellectual property rights, whether or not filed, perfected, registered or recorded, and whether now or hereafter existing, filed issued or acquired.(c) “XXX” means XXX Europe S. A. together with, where the context requires, its Affiliates.(d) “Parts” means the products described in the attached Exhibit A. Such Exhibit may be amended in writing from to time by mutual agreement of the parties, and any other parts added to such Exhibit shall be included in the definition of “Parts”.1.2. Terms Elsewhere Defined; Plurals. Terms defined elsewhere In this Agreement shall have the meaning ascribed thereto. Terms denoting the plural shall include the singular, and vice versa.1.3. Schedules. The following schedules and exhibits attached hereto form part of this Agreement:Schedule or ExhibitTitleSchedule ATERMS AND CONDITIONS OF SALESchedule BQuality Requirements :Quality AgreementExhibit AQuotation (Including P/N, U/P, payment term & Delivery term) & Specifications.2. Manufacturing; Exclusive Rights. 2.1. Manufacturing. XX agrees to manufacture, test, and sell the Parts to XXX or its Affiliates or designates.2.2. Other Products. If XX develops or distributes any other parts and parts features, excluding those developed using the proprietary information of its other customers, that could compete with any Parts, XX shall offer such parts and parts features to XXX on terms and conditions at least as favorable as the terms and conditions upon which such parts and parts features are offered to others.2.3. Exclusive Rights. In the event that the Parts are developed or designed only for XXX, XX agrees that XXX shall have exclusive rights to sell the Parts, and XX agrees not to manufacture or sell Parts or products substantially similar to Parts for or to any person other than XXX or its Affiliates or designate without the prior written consent and approval of XXX. 3. Terms of Sale. Parts will be sold at the prices and according to TERMS AND CONDITIONS OF SALE set out in Schedule A, which incorporates Exhibit A.4. Quality. Each Parts shall be manufactured to conform to the warranties stated in Section 10 and the Quality Requirements set out in Schedule B, as such Schedule may be amended in writing from time to time by XXX with reasonable prior notice to XX.5. Engineering Services. If requested by XXX, XX will provide engineering and development services to XXX, at rates and according to development schedules to be determined on agreement of the parties. All technology resulting from such services shall be subject to Section 8 of this Agreement. 6. Audit and Access Rights. 6.1. Audit. XX shall retain for a period of at least three (3) years after the expiration of this Agreement all books and records reasonably required for the computation or verification of compliance with this Agreement. Not more than twice per calendar year during normal business hours and upon thirty (30) days notice, an independent auditor appointed by XXX may inspect the books and records of XX related to the performance of its obligations under this Agreement.6.2. Access to Facilities. In connection with any of XXXs rights and XX s obligations under this Agreement, XX shall provide XXX with reasonable access to XXs and its subcontractors manufacturing and business facilities, business documents, records, information, inventory, and personnel upon XXXs request. If XX fails to promptly provide such access XXX may terminate this Agreement without liability. In addition, XXX shall have the review and inspection rights set out in the Schedules and Exhibits hereto.7. Intellectual Property and Licenses.7.1. Ownership. XXX and XX shall respectively retain ownership of all Intellectual Property Rights with respect to the Parts based on their own development. To the extent, if any, that XX owns Intellectual Property Rights that are or will be incorporated in the Parts, XX hereby grants to XXX an unrestricted, non-exclusive, royalty-free, perpetual, transferable license to make, have made, use, sell, offer for sale such Intellectual Property Rights.7.2. No Other Grants. Except as expressly provided in this Agreement, no other licenses, or transfer of technology, express or implied, are granted by either party to the other party. Either party shall not reverse engineer, decompile, disassemble, or create unauthorized derivative works of the other partys property or that of its Affiliates or licensors. Except as expressly provided herein, nothing in this Agreement confers upon XX any right to use XXXs trademarks, trade names, or service marks or those of its Affiliates in connection with any Parts, service, promotion or publication.8. Warranties; Out of Warranty Repair.8.1. Manufacturing. XX represents and warrants that for the period beginning on the date of delivery to XXX or its Affiliates or designate and ending on the expiry date of the warranty XXX extends to its end-users for the particular Parts (the “Warranty Period”), each Parts shall (a) conform to the specifications and the Quality Requirements in the attached Schedule B, as amended in writing from time to time by XXX, (b) be free from defects in workmanship, manufacturing, and materials. The warranty for replaced or reworked Parts shall be the longer of the remainder of the Warranty Period and ninety (90) days from the date replacement Part is delivered to XXX or its Affiliates or designate.8.2. Remedy. Any Parts which do not meet the warranty under Section 9.1 (“Defective Parts”) will, at the election of XXX, (a) be replaced by XX with Parts which are not defective, (b) be repaired or reworked by XX, or (c) be rejected by XXX, with the applicable purchase amount to be promptly, at XXXs option, either refunded or credited to XXX by XX. XX shall bear all risk and costs such as labor, material inspection and shipping to and from XXXs facilities associated with Defective Parts. In addition, XXX shall have the remedies set out in Schedule B for Defective Parts, including Defective Parts that constitute an Epidemic Condition (as defined in such Schedule).8.3. Limited Remedy; Exception. XXs liability for Defective Parts shall be limited to XXXs remedies under Section 9.2, except in cases where (a) the Defective Parts have either been placed on the market for sale to end-users or (b) sold to a third party for incorporation into another Parts. In such cases, XX shall also be liable for consequential damages to XXX.8.4. Intellectual Property. XX further represents and warrants that XX either has ownership of, or has sufficient rights in, any technology to be provided by it and incorporated into the Parts to enter into and perform this Agreement, and that such technology does not infringe the Intellectual Property Rights of any third party, and XX is not aware of and has not received any notice of any claim by a third party that any such technology infringes the Intellectual Property Rights of any third party.8.5. Compliance with Laws. XX represents and warrants that XX and all its subcontractors and agents involved in the manufacturing and/or delivery of all Parts strictly adhere, and shall continue throughout the term of this Agreement to strictly adhere, to all applicable labor, employment, and workplace safety laws and regulations of the Peoples Republic of China, Republic of China and Switzerland, including those laws and regulations governing the working conditions, wages, hours, and minimum age of the work force. Upon written request of XXX, XX shall provide XXX with a certificate of compliance with the requirements of this Section 9.5 in such form as XXX may reasonably request.8.6. Out of Warranty Repair. For a period of two (2) years after the expiration of the Warranty Period, XX will offer XXX replacement Parts at the then current price of such replacement Parts. For a period of three (3) years after the termination of this Agreement XX will provide post-warranty repairs, at XXXs request, on a reasonable time and materials basis.8.7. Parts Availability. XX shall maintain a reasonable quantity of replacement Parts for the Parts for a period of three (3) years after XX ships the last part of Parts to XXX under this Agreement.9. Indemnification. XX shall at its own expense defend indemnify, defend and hold harmless XXX, its Affiliates and their customers from and against any and all losses, liabilities, claims, obligations, costs, and expenses (including reasonable attorneysfees), which result from, arise in connection with or are related in any way to any allegation of (i) XX s negligence, errors or omission, (ii) infringement of any patent, copyright, trade secret or other third party intellectual property right anywhere in the world, which arises from or is related to the Part, or (iii) personal injury or property damage that arises from is related to defects in manufacture or design of the Part. XX shall not be obligated to indemnify XXX, its Affiliates, or their customers for any third party claims that arise solely from the written specifications supplied by XXX. 10. Limitation of Liability. In no event shall XXX be liable for any lost profits, special, incidental, consequential or indirect damages arising out of or in connection with this Agreement, whether or not it has been advised of such liability. The essential purpose of this provision is to limit XXXs potential liability arising out of this Agreement.11. Term and Termination. 11.1. Term. Unless earlier terminated in accordance with Section 13.3, this Agreement shall take effect on the Effective Date and shall be for a term of two (2) years. 11.2. Renewal. This Agreement and all of its terms and conditions shall be renewed for successive terms of one (1) year from the last day of the previous term, unless this Agreement is terminated in accordance with Section 13.3.11.3. Termination. XXX may terminate this Agreement with or without cause on written notice to XX, such termination to be effective on the sixtieth (60th) day after dispatch of such notice. XX may terminate this Agreement if XXX breaches any material term of this Agreement and has not cured or begun to cure such breach within sixty (60) days after written notice thereof. Either party may terminate this Agreement if the other party is adjudicated bankrupt or makes an assignment for the benefit of creditors, or if a receiver, liquidator or trustee is appointed for the other partys affairs.11.4. Effect of Termination. Upon termination of this Agreement, XXX shall be relieved of all obligations under this Agreement, except (a) XXXs obligation to pay XX according to the terms of the applicable purchase order(s) for Parts which have been delivered to and accepted by XXX, for which payment has not yet been made and (b) XXX may in its sole discretion elect to reaffirm a purchase order or orders in effect prior to the termination, in which case XXX shall be obligated to pay XX according to the terms of the applicable purchase order for the Parts manufactured and delivered in accordance with such purchase order. In addition, in the event XXX elects to reaffirm a purchase order or orders in effect prior to the termination, XX shall be obligated to manufacture and deliver the ordered Parts in accordance with this Agreement, including the Schedules and Exhibits hereto. Any credits owed to XX under this Agreement or otherwise which are unpaid on the date of termination shall be paid in cash within thirty (30) days of the date of termination. In addition, in the event of termination of this Agreement the terms of Section 3 of Schedule A of this Agreement shall apply.11.5. Survival. The provisions of this Agreement which by their nature extend beyond the expiration or termination of this Agreement will survive and remain in effect until all obligations are satisfied.12. Confidentiality Obligations. 12.1. Confidential Information. During the course of this Agreement, either party will receive confidential and proprietary information of the other party, including but not limited to information regarding the Products, or any part, component or portion thereof, concepts, techniques, drawings, specifications, processes, computer programs, designs and systems, manufacturing and marketing information (together, Confidential Information). Receiving party agrees it will not, during the term of the Agreement or thereafter, disclose any Confidential Information, directly or indirectly, to any person or entity, other than its own employees and subcontractors who have a “need to know” such information in order for receiving party and/or such subcontractors to perform their obligations under this Agreement. Both parties further agree it will not, during the term of the Agreement or thereafter, directly or indirectly, copy or make any commercial or other use whatsoever of any Confidential Information, except as may be necessary to perform its obligations under this Agreement.12.2. Return, Employees. Disclosing party shall deliver all copies of the Confidential Information to receiving party on receiving partys request, or, at disclosing partys option, receiving party shall destroy such copies and certify to disclosing party in writing that such copies have been destroyed. Receiving party shall inform all its employees and subcontractors who receive Confidential Information of the confidential nature of such Confidential Information and of their obligation to keep same confidential and not to use it other than as permitted hereunder. Receiving party shall be responsible for any acts of its employees and subcontractors in conflict with this Section 14.12.3. Exceptions. The obligations of confidentiality imposed by Section 14.1 shall not apply, or shall cease to apply, to any Confidential Information that (a) was already known to receiving party prior to its dealings with disclosing party, as evidenced by documentation bearing a date prior to the commencement of the parties dealings, (b) is publicly available or becomes so without breach of the Agreement by receiving party, (c) is approved for release to the public by disclosing party, or (d) is received by receiving party from a third party without receiving partys breach of the Agreement and without the third partys breach of any obligation of confidentiality.12.4. Time. Confidential Information, disclosed in furtherance of this Agreement, shall be kept confidential for five (2) years from the date of its original disclosure.12.5. Injunctive Relief. Receiving party acknowledges that the Confidential Information is special and unique to disclosing party, and that any breach of the terms and covenants of this Section 14 will result in irreparable and continuing harm to disclosing party. Receiving party therefore agrees that in the event it breaches any of its obligations under this Section 14, Disclosing party shall be entitled to immediate issuance of a court order enforcing the Agreement, without the necessity of proof of actual damages and without posting bond for such relief, in addition to any and all other remedies provided by applicable law.13. General Provisions.13.1. Entire Agreement. This Agreement, together with its Schedules and Exhibits, constitutes the complete agreement of the parties and supersedes any other agreements, written or oral concerning the subject matter hereof.13.2. Conflict. In the event of any conflict between any term or provision of this Agreement and any term or provision of any purchase order, order confirmation or the like, the terms of this Agreement shall be controlling.13.3. Succession and Assignment. Neither party may assign this Agreement or delegate its duties hereunder without the written consent of the other party. 13.4. Right to Setoff. XXX may deduct from XXs invoices any amounts equal to an amount owed by XX to XXX upon prior notification to XX.13.5. Notices. All notices r
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