Sourcing Contract

SOURCING CONTRACT

This Sourcing Contract (the Agreement) is entered into as of Effective Date: by and between Supplier Name: , a organized under the laws of , with principal place of business at (Supplier), and Buyer Name: , a organized under the laws of , with principal place of business at (Buyer). Supplier and Buyer are each a Party and together the Parties.

RECITALS

WHEREAS, Buyer seeks to procure specified goods and/or components and desires that Supplier source, procure, and deliver such goods in accordance with the terms of this Agreement;

WHEREAS, Supplier has represented that it has the experience, skill and capacity to source and supply the goods described in this Agreement in compliance with Buyer’s specifications, applicable law, and commercially reasonable standards;

WHEREAS, the Parties desire to set forth their mutual rights and obligations regarding sourcing, quality control, delivery, payment, confidentiality and intellectual property;

NOW, THEREFORE, in consideration of the mutual covenants set forth below, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. DEFINITIONS

1.1 "Goods" means the products, components and materials described in the Scope of Services and any associated documentation or packaging supplied by Supplier to Buyer under this Agreement. "Specifications" means the written technical and quality requirements provided by Buyer to Supplier.

2. APPOINTMENT; SCOPE OF SERVICES

2.1 Appointment. Buyer appoints Supplier, and Supplier accepts, to source, procure, and deliver the Goods described in the Specifications in accordance with the terms of this Agreement. Supplier shall source Goods only from approved vendors and in a manner consistent with industry standards.

2.2 Specifications and Changes. Supplier shall comply strictly with the Specifications. Any proposed change to the Specifications by Supplier shall be submitted in writing and shall not be binding unless accepted in writing by Buyer. Buyer may, at any time, request reasonable changes to quantity, delivery schedule or Specifications; Supplier shall use commercially reasonable efforts to accommodate such changes and shall notify Buyer promptly of any price or schedule adjustments.

3. TERM AND TERMINATION

3.1 Term. The initial term commences on Commencement Date: and continues for a period of months unless earlier terminated in accordance with this Agreement.

3.2 Termination for Cause. Either Party may terminate this Agreement for material breach by the other Party if such breach remains uncured thirty (30) days after written notice specifying the breach. Termination does not affect accrued rights or obligations.

3.3 Termination for Convenience. Buyer may terminate this Agreement for convenience upon thirty (30) days' prior written notice to Supplier. Upon termination for convenience, Buyer shall pay Supplier for Goods delivered and accepted and reasonable, documented costs properly incurred prior to the termination date, in accordance with Section 4.

4. PRICING, INVOICING AND PAYMENT

4.1 Invoicing. Supplier shall issue itemized invoices referencing Buyer purchase order numbers and delivery receipts. Invoices must include sufficient detail to permit Buyer to verify quantities, unit prices and any approved expenses.

4.2 Late Payments. Late payments shall accrue interest at the lesser of 1.5% per month or the maximum rate permitted by law. Buyer may withhold payment for disputed amounts pending resolution; undisputed amounts shall be paid as provided in Section 4.1.

5. EXPENSES AND PURCHASE ORDERS

5.1 Purchase Orders. Buyer shall issue purchase orders specifying quantities, delivery dates and delivery locations. Supplier shall only incur costs or place orders for subcontractors in reliance on an authorized purchase order or written instruction from Buyer.

6. CONFIDENTIALITY

6.1 Definition. "Confidential Information" means all non-public, proprietary, technical, financial and business information disclosed by one Party to the other whether disclosed orally, visually or in writing, including but not limited to Specifications, pricing, customer lists, forecasts, samples and prototypes.

6.2 Obligations. Each Party shall use Confidential Information only for the performance of this Agreement and shall protect it with at least the same degree of care it uses to protect its own confidential information but in no event less than reasonable care. Receiving Party shall not disclose Confidential Information except to employees, contractors or agents who have a need to know and are bound by confidentiality obligations no less restrictive than those herein.

6.3 Exceptions. Confidential Information does not include information that (a) is or becomes publicly available through no fault of Receiving Party; (b) was rightfully in Receiving Party’s possession without restriction prior to disclosure; (c) is independently developed by Receiving Party without reference to Disclosing Party’s Confidential Information; or (d) is lawfully obtained from a third party.

7. INTELLECTUAL PROPERTY

7.1 Ownership. Buyer retains all right, title and interest in its Specifications, designs and Marks. Supplier shall retain ownership of Supplier’s pre-existing intellectual property. All Goods, tooling, molds or drawings created specifically for Buyer hereunder shall be the exclusive property of Buyer upon payment, except where otherwise agreed in writing.

7.2 License. To the extent Supplier incorporates Supplier IP into Goods, Supplier grants Buyer a non-exclusive, royalty-free, worldwide license to use such Supplier IP solely to exploit the Goods purchased under this Agreement.

8. REPRESENTATIONS AND WARRANTIES

8.1 Mutual Representations. Each Party represents that it has the corporate power and authority to enter into this Agreement and perform its obligations hereunder.

8.2 Supplier Warranties. Supplier warrants that all Goods delivered shall conform to the Specifications, be free from material defects in workmanship and materials, be merchantable and fit for the purpose specified by Buyer, and comply with all applicable laws and regulations. Supplier shall, at its expense, promptly repair or replace nonconforming Goods upon notice from Buyer.

9. INDEMNIFICATION

9.1 Supplier Indemnity. Supplier shall indemnify, defend and hold Buyer and its officers, directors, employees and agents harmless from and against any third-party claims, liabilities, losses, damages, costs and expenses (including reasonable attorneys' fees) arising out of Supplier’s breach of this Agreement, Supplier’s negligence or willful misconduct, or infringement of third-party intellectual property rights by the Goods.

10. LIMITATION OF LIABILITY

10.1 EXCEPT FOR LIABILITY ARISING FROM (A) GROSS NEGLIGENCE, WILLFUL MISCONDUCT, OR FRAUD; (B) BREACH OF CONFIDENTIALITY; OR (C) VIOLATION OF THIRD-PARTY INTELLECTUAL PROPERTY RIGHTS, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES. THE AGGREGATE LIABILITY OF EITHER PARTY FOR ANY AND ALL CLAIMS ARISING UNDER THIS AGREEMENT SHALL NOT EXCEED THE AMOUNTS PAID OR PAYABLE BY BUYER TO SUPPLIER UNDER THIS AGREEMENT DURING THE TWELVE (12) MONTHS PRECEDING THE EVENT GIVING RISE TO THE CLAIM.

11. COMPLIANCE WITH LAWS; ETHICS

11.1 Supplier shall comply with all applicable laws, rules and regulations, including export controls, trade sanctions and anti-corruption laws. Supplier shall maintain labor standards and environmental practices consistent with applicable law and industry standards. Supplier shall not, in connection with this Agreement, offer or accept bribes or improper payments.

12. INSURANCE

12.1 Supplier shall maintain insurance coverage sufficient to meet its obligations hereunder and shall provide certificates of insurance upon Buyer’s request.

13. NOTICES

13.1 All notices, requests, consents, claims, demands and other communications hereunder must be in writing and addressed to the Parties at their respective addresses set forth below or at such other address for a Party as designated by that Party in a written notice to the other Party.

14. AMENDMENTS

14.1 This Agreement may be amended or modified only by a written instrument signed by authorized representatives of both Parties. No course of dealing, failure or delay in exercising any right, or any waiver will be effective unless in writing.

15. WAIVER

15.1 No waiver of any provision of this Agreement shall be effective unless in writing and signed by the Party against whom enforcement of the waiver is sought. No waiver of any breach or default shall constitute a waiver of any other or subsequent breach or default.

16. GOVERNING LAW

16.1 This Agreement shall be governed by and construed in accordance with the laws of the jurisdiction of without regard to its conflict of laws principles.

17. ENTIRE AGREEMENT

17.1 This Agreement, including all exhibits, purchase orders and Specifications expressly incorporated herein, constitutes the entire understanding between the Parties with respect to the subject matter and supersedes all prior and contemporaneous agreements, representations and understandings, whether oral or written.

18. SEVERABILITY

18.1 If any provision of this Agreement is held invalid or unenforceable by a court of competent jurisdiction, the remaining provisions will remain in full force and effect and shall be construed to effectuate the Parties’ intent to the greatest extent possible.

19. COUNTERPARTS

19.1 This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Signatures transmitted electronically shall be binding.

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