Production Sample Agreement

PRODUCTION SAMPLE AGREEMENT

Parties

Effective Date: . This Production Sample Agreement (the "Agreement") is entered into between the parties named above for the provision, use and evaluation of production samples as set forth below.

WHEREAS

WHEREAS, Producer has developed or controls certain prototype or production sample items and related documentation that are necessary for evaluation, testing and potential incorporation into Client's products or processes; and

WHEREAS, Client desires to receive specified production samples from Producer for the sole purpose of evaluation, quality verification and limited trial production, subject to the terms and conditions of this Agreement; and

WHEREAS, the parties intend to define the rights, obligations, payment terms and confidentiality protections applicable to the delivery and use of such production samples.

Scope of Work

Producer shall supply production samples and related documentation as described below. Producer will manufacture, inspect and ship the samples in accordance with the specifications agreed by the parties. Client will perform acceptance testing and will notify Producer of any nonconformities in accordance with the Acceptance procedure below.

Delivery and Acceptance

Delivery terms: Producer shall deliver samples to the delivery address provided by Client. Title and risk of loss shall transfer to Client upon delivery unless otherwise agreed in writing. Client shall inspect samples within days of receipt and shall provide written notice of any nonconformity.

Payment Terms

Client shall pay Producer the agreed fees for samples and related services as set forth below. All payments are due in U.S. dollars unless otherwise agreed in writing.

A late fee of per month or the maximum permitted by law, whichever is less, shall apply to unpaid amounts thirty (30) days past the invoice due date. In addition, Client shall reimburse reasonable costs of collection, including attorneys' fees.

Term and Termination

This Agreement commences on the Effective Date and, unless earlier terminated in accordance with this section, continues until .

Either party may terminate this Agreement for convenience upon days' prior written notice to the other party. Either party may terminate immediately for material breach by the other party if such breach remains uncured for thirty (30) days after written notice specifying the breach.

Confidentiality

For the purpose of this Agreement, "Confidential Information" means non-public information disclosed by one party to the other that is designated as confidential or that reasonably should be understood to be confidential given the nature of the information and the circumstances of disclosure. Confidential Information includes technical data, specifications, drawings, business and pricing information, sample composition, supplier lists and test results.

Each receiving party shall (a) hold Confidential Information in strict confidence, (b) not use Confidential Information except to exercise rights and perform obligations under this Agreement, and (c) not disclose Confidential Information to any third party except to its employees, contractors and advisors who have a need to know and who are bound by confidentiality obligations no less restrictive than those herein. The obligations above shall not apply to information that is or becomes generally available to the public through no wrongful act of the receiving party, or that is independently developed by the receiving party without use of the disclosing party's Confidential Information, or that is required to be disclosed by law (provided the receiving party gives prompt notice and cooperates to limit disclosure).

Yes No

Intellectual Property

All intellectual property rights in materials provided by Producer, including sample designs, tooling, specifications and documentation, remain the exclusive property of Producer unless otherwise agreed in writing. No license or assignment of such rights is granted by implication. Client shall not reverse engineer, reproduce or commercialize the samples except pursuant to a separate written agreement that expressly grants such rights.

Warranties; Limitation of Liability

Producer warrants that samples will conform to the written specifications provided to Client as of the Effective Date. Except for the foregoing warranty, Producer disclaims all other warranties, express or implied, including merchantability and fitness for a particular purpose. In no event shall either party be liable for indirect, incidental, special or consequential damages. Producer's aggregate liability for claims arising out of this Agreement shall not exceed the total fees paid by Client for the particular samples giving rise to the claim.

Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the state of , without regard to its conflict of law principles. The parties submit to the exclusive jurisdiction of the state and federal courts located in that state for disputes arising out of this Agreement.

Entire Agreement

This Agreement, together with any exhibits or attachments executed by the parties, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, proposals, negotiations and communications, whether written or oral. No amendment or waiver shall be effective unless in writing and signed by both parties.

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