{"id":42876,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/supply-agreement-com21-inc-and-universal-scientific-industrial.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"supply-agreement-com21-inc-and-universal-scientific-industrial","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/operations\/supply-agreement-com21-inc-and-universal-scientific-industrial.html","title":{"rendered":"Supply Agreement &#8211; Com21 Inc. and Universal Scientific Industrial Co. Ltd."},"content":{"rendered":"<pre><b><\/b><p align=\"CENTER\">\nCom21, Inc.<bbr>\nUniversal Scientific <bbr>\nIndustrial Co., Ltd.<bbr>\nSupply Agreement<bbr>\nDated Effective<bbr>\nDecember 3, 2001<b><\/b>\n  \n\n<br>\n<br>\n<br>\n<hr width=\"85%\">\n<br>\n<br>\n<br>\n\n\n\n\n\n<b><\/b><p align=\"CENTER\">\nCom21<br>\nUniversal Scientific Industrial Co., Ltd.<br>\n<br>\n <br>\nSupply Agreement<br>\nTABLE OF CONTENTS<\/p>\n\n\n\n\n\n<p align=\"CENTER\">\n<\/p><table cellspacing=\"0\" border=\"0\" cellpadding=\"8\" width=\"650\">\n<tr><td width=\"20%\" valign=\"TOP\">  \n<p>AGREEMENT<\/p><\/td>\n<td width=\"70%\" valign=\"TOP\">  \n<p> <\/p><\/td>\n<td width=\"10%\" valign=\"TOP\">  \n<p>1<\/p><\/td>\n<\/tr>\n\n<tr><td width=\"20%\" valign=\"TOP\">  \n<p>\n1.\n<\/p><\/td>\n<td width=\"70%\" valign=\"TOP\">  \n<p>\n DEFINITIONS\n<\/p><\/td>\n<td width=\"10%\" valign=\"TOP\">  \n<p>\n3\n<\/p><\/td>\n<\/tr>\n\n<tr><td width=\"20%\" valign=\"TOP\">  \n<p>\n2.\n<\/p><\/td>\n<td width=\"70%\" valign=\"TOP\">  \n<p>\n PURCHASE AND SALE OF PRODUCTS\n<\/p><\/td>\n<td width=\"10%\" valign=\"TOP\">  \n<p>\n7\n<\/p><\/td>\n<\/tr>\n\n<tr><td width=\"20%\" valign=\"TOP\">  \n<p>\n3.\n<\/p><\/td>\n<td width=\"70%\" valign=\"TOP\">  \n<p>\nEXCLUSIVITY \n<\/p><\/td>\n<td width=\"10%\" valign=\"TOP\">  \n<p>\n7\n<\/p><\/td>\n<\/tr>\n\n<tr><td width=\"20%\" valign=\"TOP\">  \n<p>\n4.\n<\/p><\/td>\n<td width=\"70%\" valign=\"TOP\">  \n<p>\n  PRODUCTION FILES   \n<\/p><\/td>\n<td width=\"10%\" valign=\"TOP\">  \n<p>\n8\n<\/p><\/td>\n<\/tr>\n\n<tr><td width=\"20%\" valign=\"TOP\">  \n<p>\n5.\n<\/p><\/td>\n<td width=\"70%\" valign=\"TOP\">  \n<p>\n  PRODUCTION CAPABILITY\n<\/p><\/td>\n<td width=\"10%\" valign=\"TOP\">  \n<p>\n9\n<\/p><\/td>\n<\/tr>\n\n<tr><td width=\"20%\" valign=\"TOP\">  \n<p>\n6.\n<\/p><\/td>\n<td width=\"70%\" valign=\"TOP\">  \n<p>\n  PRODUCTION SUPPORT TEAMS\n<\/p><\/td>\n<td width=\"10%\" valign=\"TOP\">  \n<p>\n13\n<\/p><\/td>\n<\/tr>\n\n<tr><td width=\"20%\" valign=\"TOP\">  \n<p>\n7.\n<\/p><\/td>\n<td width=\"70%\" valign=\"TOP\">  \n<p>\n   FORECASTS  \n<\/p><\/td>\n<td width=\"10%\" valign=\"TOP\">  \n<p>\n13\n<\/p><\/td>\n<\/tr>\n\n<tr><td width=\"20%\" valign=\"TOP\">  \n<p>\n8.\n<\/p><\/td>\n<td width=\"70%\" valign=\"TOP\">  \n<p>\n    PURCHASE ORDERS\n<\/p><\/td>\n<td width=\"10%\" valign=\"TOP\">  \n<p>\n13\n<\/p><\/td>\n<\/tr>\n\n<tr><td width=\"20%\" valign=\"TOP\">  \n<p>\n9.\n<\/p><\/td>\n<td width=\"70%\" valign=\"TOP\">  \n<p>\n    DELIVERY\n<\/p><\/td>\n<td width=\"10%\" valign=\"TOP\">  \n<p>\n15\n<\/p><\/td>\n<\/tr>\n\n<tr><td width=\"20%\" valign=\"TOP\">  \n<p>\n10.\n<\/p><\/td>\n<td width=\"70%\" valign=\"TOP\">  \n<p>\n   LABELING AND PACKAGING\n<\/p><\/td>\n<td width=\"10%\" valign=\"TOP\">  \n<p>\n15\n<\/p><\/td>\n<\/tr>\n\n<tr><td width=\"20%\" valign=\"TOP\">  \n<p>\n11.\n<\/p><\/td>\n<td width=\"70%\" valign=\"TOP\">  \n<p>\n  ACCEPTANCE OR REJECTION\n<\/p><\/td>\n<td width=\"10%\" valign=\"TOP\">  \n<p>\n16\n<\/p><\/td>\n<\/tr>\n\n<tr><td width=\"20%\" valign=\"TOP\">  \n<p>\n12.\n<\/p><\/td>\n<td width=\"70%\" valign=\"TOP\">  \n<p>\n  PRICING, PAYMENT, AND COST REDUCTION \n<\/p><\/td>\n<td width=\"10%\" valign=\"TOP\">  \n<p>\n17\n<\/p><\/td>\n<\/tr>\n\n<tr><td width=\"20%\" valign=\"TOP\">  \n<p>\n13.\n<\/p><\/td>\n<td width=\"70%\" valign=\"TOP\">  \n<p>\n    RECORDS, AUDITS AND REPORTS \n<\/p><\/td>\n<td width=\"10%\" valign=\"TOP\">  \n<p>\n18\n<\/p><\/td>\n<\/tr>\n\n<tr><td width=\"20%\" valign=\"TOP\">  \n<p>\n14.\n<\/p><\/td>\n<td width=\"70%\" valign=\"TOP\">  \n<p>\n   PROTOTYPE SERVICES   \n<\/p><\/td>\n<td width=\"10%\" valign=\"TOP\">  \n<p>\n19\n<\/p><\/td>\n<\/tr>\n\n<tr><td width=\"20%\" valign=\"TOP\">  \n<p>\n15.\n<\/p><\/td>\n<td width=\"70%\" valign=\"TOP\">  \n<p>\n   QUALITY ASSURANCE   \n<\/p><\/td>\n<td width=\"10%\" valign=\"TOP\">  \n<p>\n19\n<\/p><\/td>\n<\/tr>\n\n<tr><td width=\"20%\" valign=\"TOP\">  \n<p>\n16.\n<\/p><\/td>\n<td width=\"70%\" valign=\"TOP\">  \n<p>\n   REGULATORY COMPLIANCE \n<\/p><\/td>\n<td width=\"10%\" valign=\"TOP\">  \n<p>\n20\n<\/p><\/td>\n<\/tr>\n\n<tr><td width=\"20%\" valign=\"TOP\">  \n<p>\n17.\n<\/p><\/td>\n<td width=\"70%\" valign=\"TOP\">  \n<p>\n   PRODUCT WARRANTY; EPIDEMIC FAILURE  \n<\/p><\/td>\n<td width=\"10%\" valign=\"TOP\">  \n<p>\n20\n<\/p><\/td>\n<\/tr>\n\n<tr><td width=\"20%\" valign=\"TOP\">  \n<p>\n18.\n<\/p><\/td>\n<td width=\"70%\" valign=\"TOP\">  \n<p>\n  WARRANTY CLAIMS AND REPAIR \n<\/p><\/td>\n<td width=\"10%\" valign=\"TOP\">  \n<p>\n21\n<\/p><\/td>\n<\/tr>\n\n<tr><td width=\"20%\" valign=\"TOP\">  \n<p>\n19.\n<\/p><\/td>\n<td width=\"70%\" valign=\"TOP\">  \n<p>\n    PARTS SUPPLY \n<\/p><\/td>\n<td width=\"10%\" valign=\"TOP\">  \n<p>\n22\n<\/p><\/td>\n<\/tr>\n\n<tr><td width=\"20%\" valign=\"TOP\">  \n<p>\n20.\n<\/p><\/td>\n<td width=\"70%\" valign=\"TOP\">  \n<p>\n  PROPERTY FURNISHED TO MANUFACTURER BY COM21\n<\/p><\/td>\n<td width=\"10%\" valign=\"TOP\">  \n<p>\n24\n<\/p><\/td>\n<\/tr>\n\n<tr><td width=\"20%\" valign=\"TOP\">  \n<p>\n21.\n<\/p><\/td>\n<td width=\"70%\" valign=\"TOP\">  \n<p>\n  INTELLECTUAL PROPERTY OWNERSHIP\n<\/p><\/td>\n<td width=\"10%\" valign=\"TOP\">  \n<p>\n25\n<\/p><\/td>\n<\/tr>\n\n<tr><td width=\"20%\" valign=\"TOP\">  \n<p>\n22.\n<\/p><\/td>\n<td width=\"70%\" valign=\"TOP\">  \n<p>\n   CONFIDENTIALITY\n<\/p><\/td>\n<td width=\"10%\" valign=\"TOP\">  \n<p>\n27\n<\/p><\/td>\n<\/tr>\n\n<tr><td width=\"20%\" valign=\"TOP\">  \n<p>\n23.\n<\/p><\/td>\n<td width=\"70%\" valign=\"TOP\">  \n<p>\n  INTELLECTUAL PROPERTY INDEMNIFICATION \n<\/p><\/td>\n<td width=\"10%\" valign=\"TOP\">  \n<p>\n29\n<\/p><\/td>\n<\/tr>\n\n<tr><td width=\"20%\" valign=\"TOP\">  \n<p>\n24.\n<\/p><\/td>\n<td width=\"70%\" valign=\"TOP\">  \n<p>\n    LIMITATION OF LIABILITY\n<\/p><\/td>\n<td width=\"10%\" valign=\"TOP\">  \n<p>\n30\n<\/p><\/td>\n<\/tr>\n\n<tr><td width=\"20%\" valign=\"TOP\">  \n<p>\n25.\n<\/p><\/td>\n<td width=\"70%\" valign=\"TOP\">  \n<p>\n    INSURANCE \n<\/p><\/td>\n<td width=\"10%\" valign=\"TOP\">  \n<p>\n30\n<\/p><\/td>\n<\/tr>\n\n<tr><td width=\"20%\" valign=\"TOP\">  \n<p>\n26.\n<\/p><\/td>\n<td width=\"70%\" valign=\"TOP\">  \n<p>\n   TERM OF THE AGREEMENT  \n<\/p><\/td>\n<td width=\"10%\" valign=\"TOP\">  \n<p>\n30\n<\/p><\/td>\n<\/tr>\n\n<tr><td width=\"20%\" valign=\"TOP\">  \n<p>\n27.\n<\/p><\/td>\n<td width=\"70%\" valign=\"TOP\">  \n<p>\n   TERMINATION  \n<\/p><\/td>\n<td width=\"10%\" valign=\"TOP\">  \n<p>\n31\n<\/p><\/td>\n<\/tr>\n\n<tr><td width=\"20%\" valign=\"TOP\">  \n<p>\n28.\n<\/p><\/td>\n<td width=\"70%\" valign=\"TOP\">  \n<p>\n   REPRESENTATIONS\n<\/p><\/td>\n<td width=\"10%\" valign=\"TOP\">  \n<p>\n33\n<\/p><\/td>\n<\/tr>\n\n<tr><td width=\"20%\" valign=\"TOP\">  \n<p>\n29.\n<\/p><\/td>\n<td width=\"70%\" valign=\"TOP\">  \n<p>\n    GENERAL\n<\/p><\/td>\n<td width=\"10%\" valign=\"TOP\">  \n<p>\n33\n<\/p><\/td>\n<\/tr>\n\n<tr><td width=\"20%\" valign=\"TOP\">  \n<p>\nExhibits   \n<\/p><\/td>\n<td width=\"70%\" valign=\"TOP\">  \n<p>\n \n<\/p><\/td>\n<td width=\"10%\" valign=\"TOP\">  \n<p>\n     Appended\n<\/p><\/td>\n<\/tr>\n<\/table><\/bbr><\/bbr><\/bbr><\/bbr><\/bbr><\/p>\n\n\n<br>\n<br>\n<br>\n<hr width=\"85%\">\n<br>\n<br>\n<br>\n\n\n  \n<b><\/b><p align=\"CENTER\">\nSUPPLY AGREEMENT\n\n  \n<\/p><p align=\"JUSTIFY\">THIS SUPPLY AGREEMENT is made and entered into effective December 3, \n2001 (\"Effective Date\"), by and between Universal Scientific Industrial Co. Ltd \n(\"Manufacturer\"), a Taiwanese corporation (141, Lane351, Taiping Road, Sec. 1, Tsao \nTuen, Nan-Tou, Taiwan), and Com21, a Delaware corporation (\"Com21\") (each a \"Party\" \nand collectively the \"Parties\").\n\n<b><\/b><\/p><p align=\"CENTER\">\nRECITALS\n\n\n<\/p><p align=\"JUSTIFY\">A. Com21 is and has been engaged in the business, among others, of the \ndevelopment, manufacture, marketing and sale of cable modem products for various \nmarkets worldwide.\n\n<\/p><p align=\"JUSTIFY\">B. Manufacturer is and has been engaged in the business, among others, of \nmanufacturing its customers' products on a contract basis.\n\n<\/p><p align=\"JUSTIFY\">C. The Parties intend by this Agreement to provide for Manufacturer to manufacture \ncertain of Com21's products.\n\n<\/p><p align=\"JUSTIFY\">NOW, THEREFORE, the Parties, intending to be legally bound, agree as follows:\n\n<b><\/b><\/p><p align=\"CENTER\">\nAGREEMENT\n\n\n<b><\/b><\/p><p align=\"JUSTIFY\">1. DEFINITIONS<\/p>\n\n<p align=\"JUSTIFY\">In addition to the definitions appearing elsewhere in this Agreement, the following \nwords and phrases shall have the meanings indicated:\n\n<\/p><dir>\n\n<p align=\"JUSTIFY\">1.1. \"Affiliates\" shall mean any entity directly or indirectly controlling, controlled \nby or under common control with that party where control means the \nownership or control, directly or indirectly, of more than fifty percent (50%) of \nall of the voting powers of the shares (or other securities or rights) entitled to \nvote for the election of directors or other governing authority or otherwise \nhaving power to control such entity's general activities, but only for so long \nas such ownership or control shall continue.\n\n<\/p><p align=\"JUSTIFY\">1.2. \"Ancillary Technology\" shall mean all test programs, tooling, fixtures, and \nother items provided to Manufacturer by Com21 as described on Exhibit  1.2.\n\n\n<\/p><p align=\"JUSTIFY\">1.3. \"Com21 Proprietary Component\" shall mean any component which \nManufacturer cannot license or purchase without Com21's express \nauthorization, including but not limited to, Com21 proprietary software.\n\n<\/p><p align=\"JUSTIFY\">1.4.  \"Com21 Vendor\" shall mean any producer or supplier of all or any portion \nof a Part that has been identified by Com21 on Com21's approved vendor \nlist (or \"AVL\") for such Product as the source of certain Parts to be used \nby Manufacturer in the manufacture of such Product.\n\n<\/p><p align=\"JUSTIFY\">1.5. \"Create\" when used with reference to Proprietary Information means to \nconceive, make, develop, reduce to practice, author, or otherwise \nmaterially and substantially contribute to the existence of such Proprietary \nInformation, such that the Proprietary Information that results can be fairly \nand reasonably attributed in whole or in material part to such contribution. \nOther forms of the word \"Create\" (e.g., Created, Creation, etc.) shall have \nsubstantially the same meaning as required by the context. Proprietary \nInformation that is \"Created Jointly\" shall apply to all Proprietary \nInformation that (i) qualifies for patent protection in any jurisdiction under \nwhich jurisdiction's laws the signature or cooperation or identification of \nmore than one Party or their respective employee(s), agent(s) or \ncontractor(s), as an inventor, is appropriate or required, or must or should \nbe sought or made in connection with any related application, to obtain \nsuch protection, or (ii) was Created in whole or in material part by \nemployee(s), agent(s) or contractor(s) of both Parties acting in concert or \ncooperation.\n\n<\/p><p align=\"JUSTIFY\">1.6. \"Delivery Leadtime\" shall mean the number of days between the date a \npurchase order is delivered by Com21 to Manufacturer and the date the \nrelevant Product is delivered to the appropriate delivery location.\n\n<\/p><p align=\"JUSTIFY\">1.7. \"Derivative\" shall mean (i) for copyrightable or copyrighted material, any \ntranslation, abridgment, revision or other form in which an existing work \nmay be recast, transformed or adapted; (ii) for patentable or patented \nmaterial, any improvement thereon; and (iii) for material which is \nprotected by or is a Trade Secret or is otherwise Proprietary Information, \nany new material derived from such existing Trade Secret material or \nProprietary Information, including but not limited to new material which \nmay be protected by copyright, patent or Trade Secret.\n\n<\/p><p align=\"JUSTIFY\">1.8. \"Design Specification\" shall mean all or any part of a description of a \nProduct's physical, functional or technical elements, attributes, \nrequirements or performance, related to or used in its design, \nmanufacture, testing, operation and repair, whether in human, machine-\nreadable or other form. Without limiting the foregoing, a \"Design \nSpecification\" may include, without limitation, bills of materials; schematic \ndiagrams, approved vendor lists, parts, general and special fabrication \nand assembly drawings and procedures; computer aided design and \nmanufacturing files; unique material specification control drawings; \nmanufacturing materials and chemistry; test procedures, software and \nequipment; component and other source control drawings; quality plans \nincluding source inspection procedures, yield targets and process audit \nplans; mechanical models; standard assemblies; estimated process flows \nand times; assembly fixtures and special tools and drawings.\n\n<\/p><p align=\"JUSTIFY\">1.9. \"Disclose\" shall mean to use, deliver, communicate or provide, or to use \nor benefit in any way or form including, by way of example and without \nlimitation, in writing; electronically; in machine readable form; by \ndemonstration; in tangible form; by access to plans, diagrams or \nequipment; or orally. Other forms of the word \"Disclose\" (e.g., Disclosure, \nDiscloses, etc.) shall have substantially the same meaning as required by \nthe context.\n\n<\/p><p align=\"JUSTIFY\">1.10. \"Disclosing Party\" shall mean a Party hereto that discloses its Proprietary \nInformation to the other Party.\n\n<\/p><p align=\"JUSTIFY\">1.11. \"Dispose\" shall mean to practice, make, have made, use, license, grant \nrights to sublicense, lease, sell, Disclose, assign, encumber, dispose or \notherwise exercise an incident of ownership. Other forms of the word \n\"Dispose\" (e.g., Disposition, Disposal, etc.) shall have substantially the \nsame meaning as required by the context.\n\n<\/p><p align=\"JUSTIFY\">1.12. \"Effective Date\" shall mean the date of execution of this Agreement as \nfirst above written.\n\n<\/p><p align=\"JUSTIFY\">1.13. \"Exclusivity Termination Trigger\" shall mean the occurrence of an event \ndescribed in Paragraph 3.2.\n\n<\/p><p align=\"JUSTIFY\">1.14.  \"Flexibility Parameters\" shall have the meaning described in Exhibit 8.2.\n\n<\/p><p align=\"JUSTIFY\">1.15. \"Incorporate\" shall mean include as a constituent part. Other forms of the \nword \"Incorporate\" (e.g., Incorporated, etc.) shall have substantially the \nsame meaning as required by the context.\n\n<\/p><p align=\"JUSTIFY\">1.16 \"Invention\" shall mean any invention, discovery, process, art, method \n(including mathematical algorithms), machine, manufacture, composition \nof matter, or improvement thereof, whether or not patented or patentable, \nto the extent that it is or is qualified to be the subject of an intellectual \nproperty right or intellectual property protection under the laws of any \napplicable jurisdiction under any applicable legal theory, including but not \nlimited to rights or protections under patent, trade secret, or copyright \nlaws or principles.\n\n<\/p><p align=\"JUSTIFY\">1.17 \"LIBOR Rate\" shall mean the rate appearing on the Telerate page 3750 \nor on any successor page as the London Interbank offered rate for \ndeposits in US dollars.\n\n<\/p><p align=\"JUSTIFY\">1.18 \"Made Known\" shall mean made known, received, developed, possessed \nor communicated, at any time before or after the Effective Date. \n\"Rightfully Made Known\" shall mean Made Known without, and \n\"Wrongfully Made Known\" shall mean Made Known with, any violation of \nany legally protectable and\/or enforceable express or implied right, title, \nduty or obligation of the owner of such Proprietary Information or third \nParties from, by or through whom such knowledge passed.\n\n<\/p><p align=\"JUSTIFY\">1.19 \"Manufacturing Specifications\" shall mean COM21's written specifications \nregarding the processes for the manufacture of the Products provided to \nManufacturer.  In cases where the specific processes are not covered by \nthese specifications, industry standard specifications shall apply including \nIPC-A-610-C.\n\n<\/p><p align=\"JUSTIFY\">1.20 \"Manufacturing Standards\" shall mean information that describes the \nprocesses, procedures and requirements specifically related to the \nmanufacture of any Product. Without limiting the foregoing, a \n\"Manufacturing Standard\" may include assembly machine programs; \nreflow profiles; assembly aids; process flows; standard assembly \ninstructions; process control plan; overall process definition; work \ninstructions; process and machine capabilities; design review report; first \narticle inspection reports; personnel qualification requirements, and \nQuality Improvement Plan.\n\n<\/p><p align=\"JUSTIFY\">1.21 \"Owning Party\" shall mean a Party to the extent that such Party has an \nownership interest in any Proprietary Information.\n\n<\/p><p align=\"JUSTIFY\">1.22 \"Part\" shall mean any materials, parts or components used in the \nProducts. \n\n<\/p><p align=\"JUSTIFY\">1.23 \"Product\" shall mean any of those products identified in Exhibit 1.23 \nattached to this Agreement.\n\n<\/p><p align=\"JUSTIFY\">1.24 \"Production File\" shall mean the definitive manufacturing specifications for \neach Product and shall include the most recently effective Design \nSpecification and Manufacturing Standards.\n\n<\/p><p align=\"JUSTIFY\">1.25 \"Proprietary Information\" shall mean information or material relating to the \nexisting or prospective business of Manufacturer, Com21 or third parties \nor to this Agreement, any information contained therein or Created \ntherefrom, and any Derivatives thereof, including, by way of example and \nwithout limitation, technical, and\/or business information such as \nprocesses, methods, techniques, systems, subroutines, source code, \nobject code, documentation, diagrams and flow charts, analyses \n(including computer simulations), results, reports and information of all \nkinds Disclosed in writing by the Disclosing Party to the Receiving Party \nto permit the Parties to perform their obligations under this Agreement. \n\"Proprietary Information\" shall also include Inventions, Works and Trade \nSecrets. Proprietary Information shall not include any information or \nmaterial to the extent that the Receiving Party proves by a preponderance \nof the evidence that such information or material has been or becomes:\n\n<\/p><p align=\"JUSTIFY\">1.25.2 Rightfully Made Known to the Receiving Party without obligation of \nconfidence; or\n\n<\/p><p align=\"JUSTIFY\">1.25.3 Rightfully Made Known to third parties who are neither under obligation of \nconfidence nor who treat such Proprietary Information confidentially.\n\n<\/p><p align=\"JUSTIFY\">1.26 \"Proprietary Rights\" shall mean, in any country, (i) the right to file patent \napplications and any rights under patent applications; (ii) rights under a \ngrant of letters patent or any similar form of statutory protection for \ninventions, such as utility model protection and industrial design \nprotection; (iii) rights under copyright, trade secret, mask work or \ntrademark law; and (iv) any other protectable intellectual property rights.\n\n<\/p><p align=\"JUSTIFY\">1.27 \"Prototype\" shall mean a pre-production or pilot prototype, engineering or \ndesign sample, or production verification prototype.\n\n<\/p><p align=\"JUSTIFY\">1.28 \"Purchase Order\" shall mean a Com21 purchase order issued to \nCompany A pursuant to the provisions of this Agreement.\n\n<\/p><p align=\"JUSTIFY\">1.29 \"Receiving Party\" shall mean a Party hereto that receives Proprietary \nInformation of the other Party hereto.\n\n<\/p><p align=\"JUSTIFY\">1.30 \"Standard Material Cost\" shall mean the unburdened current cost of \ninventory calculated in a similar manner to the formula in Exhibit 1.30.  \nThis should accurately reflect the cost of material to Manufacturer  net of \nany discounts, rebates, favorable payment terms, and the like. \n\n<\/p><p align=\"JUSTIFY\">1.31 \"Term\" shall mean the period of time that begins on the Effective Date \nand ends upon Termination.\n\n<\/p><p align=\"JUSTIFY\">1.32 \"Termination\" means the time at which this Agreement terminates as \nprovided or referenced in Paragraph 26.\n\n<\/p><p align=\"JUSTIFY\">1.33 \"Trade Secret\" shall mean information Made Known to either Party, that is \nmaintained by a Party in reasonable confidence such that it is not \ngenerally known and used in the Party's industry, and which gives or may \ngive the Party a competitive, technical or other business advantage over \nthe other Party, or third parties, who do not possess, know or use it.\n\n<\/p><p align=\"JUSTIFY\">1.34  \"Work\" shall mean a work of authorship protectable under the copyright \nlaws of an applicable jurisdiction, or a mask work protectable under the \nsemiconductor chip protection laws of any applicable jurisdiction.\n\n<\/p><\/dir>\n\n\n<b><\/b><p align=\"JUSTIFY\">2. PURCHASE AND SALE OF PRODUCTS<\/p>\n\n<p align=\"JUSTIFY\">During the Term and subject to the provisions of this Agreement, Manufacturer \nshall manufacture and deliver or provide to Com21, and Com21 shall purchase \nfrom Manufacturer, Products, and such other goods and services as this \nAgreement requires or as the Parties may otherwise mutually agree in writing.\n\n<b><\/b><\/p><p align=\"JUSTIFY\">3. EXCLUSIVITY<\/p>\n\n<p align=\"JUSTIFY\">3.1. Products\n\n<\/p><dir>\n\n<p align=\"JUSTIFY\">During the period commencing on the Effective Date and expiring six (6) \nmonths thereafter (\"Exclusivity Period\"), Com21 shall purchase from \nManufacturer all Com21's requirements for Products except as otherwise \nexpressly provided in this Agreement. After the Exclusivity Period, or after \nan Exclusivity Termination Notice, Com21 shall only be obligated to \npurchase from Manufacturer such of the Products and in such quantities \nas Com21 may determine in its sole discretion. Nothing in this Agreement \nshall be construed or deemed to require Com21 to order any particular \nquantity of any Product, nor constitute any warranty or representation by \nCom21 in that regard.\n\n<\/p><p align=\"JUSTIFY\">Nothing in this Agreement shall require Com21 to purchase any Product \nfrom Manufacturer to the extent such requirement would violate, prevent \nor frustrate the purpose or benefit of any extraordinary Com21 contract or \nbusiness relationship that may arise after the Effective Date, including \nthose requiring local manufacturing, or those which arise in connection \nwith any business acquisition or change of control.\n\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">3.2. Exclusivity Termination Triggers\n\n<\/p><dir>\n\n<p align=\"JUSTIFY\">In addition to any other rights or remedies available to Com21, the \nfollowing events shall constitute Exclusivity Termination Triggers:\n\n<\/p><p align=\"JUSTIFY\">3.2.1. Manufacturer's material breach of this Agreement that is by its \nnature incurable or that remains uncured after notice and \nreasonable opportunity to cure;\n\n<\/p><p align=\"JUSTIFY\">3.2.2. Manufacturer's breach of Paragraph 12.1.4 or 12.1.5;\n\n<\/p><p align=\"JUSTIFY\">3.2.3. Manufacturer's failure to maintain price competitiveness with \nregard to its manufacturing services, or failure to undertake cost \nreductions strategies as herein described. Com21 agrees that as a \nbaseline, the prices agreed between the Parties as of the Effective \nDate are deemed competitive; and\n\n<\/p><p align=\"JUSTIFY\">3.2.4. Manufacturer's failure to ensure the manufacturing and assembly \nof Com21 Products, including all associated data, is wholly \nsegregated and protected from any product built on behalf of any \ncompetitor to Com21.\n\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">3.3. Exclusivity Termination Process\n<\/p><dir>\n<p align=\"JUSTIFY\">In the event of an Exclusivity Termination Trigger, Com21 shall provide \nwritten notice thereof to Manufacturer, and within three (3) business days \nthereafter the Parties' most senior business executives then available \nwho have decisional authority over this Agreement shall meet and confer \nregarding such Exclusivity Termination Trigger and the consequences \nthereof. If within five (5) business days after such notice the Parties have \nnot mutually agreed upon a resolution of the circumstances that constitute \nor relate to the Exclusivity Termination Trigger, Com21 may deliver to \nManufacturer an Exclusivity Termination Notice. Such Exclusivity \nTermination Notice shall have the effect described elsewhere in this \nAgreement.\n<\/p><\/dir>\n\n<b><\/b><p align=\"JUSTIFY\">4. PRODUCTION FILES<\/p>\n\n<p align=\"JUSTIFY\">4.1. Design Specifications\n\n<\/p><dir>\n<p align=\"JUSTIFY\">Within a reasonable time following the Effective Date, Com21 shall \nfurnish to Manufacturer any Design Specifications, Manufacturing \nSpecification and any Manufacturing Standard, in the form historically \nused by Com21 to produce each Product.\n\n<\/p><p align=\"JUSTIFY\">Manufacturer acknowledges that, although Com21 will furnish the Design \nSpecifications, Manufacturing Specification and any Manufacturing \nStandard in the form historically used by Com21 to produce each \nProduct, Com21 makes and has made no representations or warranties \nwith respect to Manufacturer's ability to produce Products or achieve any \nparticular results from its use of such Design Specifications, \nManufacturing Specifications and any Manufacturing Standards furnished \nby Com21.\n\n<\/p><\/dir>\n<b><\/b><p align=\"JUSTIFY\">4.2. Manufacturing Standards<\/p>\n<dir>\n<p align=\"JUSTIFY\">Manufacturer at its expense shall review each Design Specification and \nManufacturing Standard submitted by Com21 promptly upon receipt and, \nconsult with Com21 and its subcontractors as necessary or advisable for \nthe purposes of this Paragraph 4. Promptly thereafter, and from time to \ntime during the Term, Manufacturer shall advise and make \nrecommendations to Com21 regarding all relevant matters that may affect \neach Design Specification and Manufacturing Standard as such matters \nmay relate to Manufacturer's preparation of preliminary or final \nManufacturing Standards, or changes thereto, including but not limited to \nsourcing and qualifying components, cost analysis, and Product \nmodifications for unit cost reduction. Com21 may, at its option, participate \nin all such Manufacturer activities.\n\n<\/p><p align=\"JUSTIFY\">For each Product, Manufacturer shall submit to Com21 preliminary \nManufacturing Standards that comply with the relevant Design \nSpecification and Manufacturing Specifications within a reasonable time \nafter Com21 delivers its Design Specification to Manufacturer. \n\n<\/p><p align=\"JUSTIFY\">As soon as practicable after Manufacturer delivers the preliminary \nmanufacturing procedures to Com21, Com21 and Manufacturer shall \nreview them jointly. Manufacturer shall deliver proposed final \nManufacturing Standards to Com21 within one (1) week after Com21's \napproval of the preliminary Manufacturing Standards and, upon Com21's \napproval of the proposed final Manufacturing Standards, such \nManufacturing Standards shall be deemed established as to the relevant \nProduct.\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">4.3. Production File\n\n<\/p><dir>\n<p align=\"JUSTIFY\">Manufacturer shall maintain, for each Product, a Production File that (i) \nincludes the Design Specifications and final Manufacturing Standards; \nand (ii) complies with all relevant provisions of this Agreement, including \nthe Manufacturing Specifications. Manufacturer shall promptly identify to \nCom21 any Production File information that Manufacturer considers \nManufacturer's Proprietary Information.\n<\/p><\/dir>\n\n<b><\/b><p align=\"JUSTIFY\">5. PRODUCTION CAPABILITY<\/p>\n\n<p align=\"JUSTIFY\">5.1. Capacity\n\n<\/p><dir>\n<p align=\"JUSTIFY\">During the Term and as otherwise provided in this Agreement, \nManufacturer shall maintain the labor, materials and facilities necessary \nto produce and deliver to Com21 all Products, services, activities and \nother things required of Manufacturer under this Agreement. The Parties \nwill amend Exhibit 1.23 (\"Products\") to appropriately manage end-of-life, \ninactive or discontinued Products.\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">5.2. Materials\n\n<\/p><dir>\n<p align=\"JUSTIFY\">Manufacturer shall provide or acquire all Parts necessary to perform \nManufacturer's obligations under this Agreement from the applicable \nCom21 Vendor(s). Com21 may instruct Manufacturer to change specific \nParts or procedures for the manufacture or assembly of any Product(s) by \nfollowing the change procedure described in Paragraph 5.4, subject to \nreasonable adjustment of price and delivery schedule equitably \nattributable to such change.\n\n<\/p><p align=\"JUSTIFY\">Com21's liability for such Parts shall be limited to the provisions of Exhibit \n8.2.\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">5.3. Product Manufacture\n\n<\/p><dir>\n<p align=\"JUSTIFY\">Manufacturer shall manufacture, assemble and test each Product in \naccordance with its Production File at a Manufacturer facility that has \nbeen approved by Com21 in writing. Manufacturer will not change the \nlocation of manufacture, including without limitation different facilities or \ndifferent production lines within the same facility, without Com21's prior \nwritten approval.\n\n<\/p><p align=\"JUSTIFY\">Manufacturer shall not subcontract or delegate any portion of the \nmanufacture, assembly or testing of the Products to third parties without \nCom21's express written approval, which may be granted or withheld by \nCom21 in its sole discretion.\n\n<\/p><p align=\"JUSTIFY\">Manufacturer shall not, without Com21's prior written approval, include \nelectronic components in the Products: (i) which have a component \nmanufacturer's date code which is older than eighteen (18) months; OR \n(ii) that were received by the Manufacturer more than 12 months  prior to \nthe planned date of assembly. The Manufacturer may request a waiver \nfor specific parts by demonstrating that the components pass a \nsolderability test per IPC J-STD-002.  The components may be used after \nthe Manufacturer has received written approval from Com21.  \n\n<\/p><p align=\"JUSTIFY\">Manufacturer shall keep documentation sufficient to verify its compliance \nwith this Paragraph 5.3 and shall promptly provide such documentation to \nCom21 upon request.\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">5.4. Production File Changes\n\n<\/p><dir>\n<p align=\"JUSTIFY\">5.4.1. Initiated by Com21\n\n<\/p><p align=\"JUSTIFY\">From time to time during the Term, Com21 may issue a change request \nby giving an Engineering Change Order (\"ECO\") to Manufacturer that \nstates one or more changes to a Production File or the Manufacturing \nSpecifications.\n\n<\/p><p align=\"JUSTIFY\">Com21's ECO shall specify whether Com21's requested change is a \nClass 1 ECO or Class 2 ECO. A \"Class 1 ECO\" is an engineering change \nthat must be implemented within Twenty Four (24) hours after receipt of \nnotice and before additional Products are delivered to Com21. A \"Class 2 \nECO\" is an engineering change that will be implemented at a mutually \nagreeable time.\n\n<\/p><p align=\"JUSTIFY\">Manufacturer shall, without additional charge to Com21 and within the \ntime specified in the ECO but generally not more than two (2) business \ndays from Com21's issuance of the ECO, provide information regarding \nfactors that may affect implementation of the changes described in the \nECO.  This shall include any special costs associated with \nimplementation or special research required to validate the proposed \nchange, and any cost impact on the Product.\n\n<\/p><p align=\"JUSTIFY\">If, after receiving Manufacturer's response, Com21 wishes to implement \nthe changes described in the ECO, Com21 shall issue a Final or \nReleased ECO to Manufacturer.\n\n<\/p><p align=\"JUSTIFY\">5.4.2. Initiated by Manufacturer\n\n<\/p><p align=\"JUSTIFY\">If Manufacturer wishes to initiate a change to a Production File or the \nManufacturing Specifications, Manufacturer shall furnish to Com21 a \nproposed change notice (\"Proposed Change Notice\") together with \ninformation regarding factors that may affect implementation, and cost \nassociated with implementation (one-time and on-going). Manufacturer \nshall supplement the Proposed Change Notice with such additional \ninformation as Com21 may reasonably request at any time \n(\"Supplemental Information\"). Com21 shall not be deemed to have \ncompleted its assessment, and shall be under no obligation to respond to \na Proposed Change Notice, until Com21 has received and analyzed the \nProposed Change Notice, the Supplemental Information, and such other \ninformation regarding the business, financial and technical particulars as \nCom21 may in its sole discretion deem necessary or advisable. Com21 \nmay decline any Proposed Change Notice in Com21's absolute \ndiscretion. If Com21 wishes to implement an engineering change as \ndescribed in Manufacturer's Proposed Change Notice, Com21 shall issue \na Final ECO to Manufacturer.\n\n<\/p><p align=\"JUSTIFY\">For change requests initiated by Manufacturer, Manufacturer will be \nresponsible for all tooling and other costs incurred and will reimburse \nCom21 for all expenses incurred by Com21 to qualify changes to such \nmaterials, locations or processes that are requested by Manufacturer, \nexcept as the Parties may otherwise expressly agree in writing.\n\n<\/p><p align=\"JUSTIFY\">5.4.3. Final ECO\n\n<\/p><p align=\"JUSTIFY\">A Final ECO shall be incorporated into the Production File for the \napplicable Product(s) on the specified implementation date. Manufacturer \nshall not change or modify the processes for the Products as provided in \nthe Production File without a Final ECO from Com21.\n\n<\/p><p align=\"JUSTIFY\">5.4.4. Charges\n\n<\/p><p align=\"JUSTIFY\">For purposes of this Paragraph 5.4, any cost identified by Manufacturer \nas a \"cost associated with implementation\" shall not include, and Com21 \nshall not be liable for, any charges for Manufacturer's review, \nadministration and management of an ECO.\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">5.5. Allocations\n\n<\/p><dir>\n<p align=\"JUSTIFY\">Manufacturer understands that by entering into an exclusive relationship, \nCom21 is relying solely on Manufacturer to provide a supply of Products.  \nTherefore, with respect to any allocations of components, materials, labor \nor production capacity made in connection with orders placed by Com21 \nunder this Agreement; Manufacturer warrants and agrees that during a \nperiod of shortage or unavailability, Com21 will receive from Manufacturer \nallocations that are commensurate with this exclusive relationship and are \nat least as favorable as any allocation provided to any other customer of \nManufacturer.\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">5.6. Manufacturing Support\n\n<\/p><dir>\n<p align=\"JUSTIFY\">Each Party shall perform its manufacturing support services as described \nin Exhibit 5.6.\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">5.7. Manufacturer's Relationship with Com21 Vendors\n\n<\/p><dir>\n<p align=\"JUSTIFY\">Manufacturer shall manage its relationships with Com21 Vendors in a \nmanner that will enhance long-term relationships with such vendors and \nproduce benefits for both Manufacturer and Com21. Manufacturer shall \nuse reasonable efforts to manage relationship with vendors in a manner \nthat will not adversely impact the long-term relationships that Com21 has \ndeveloped with the Com21 Vendors.\n\n<\/p><p align=\"JUSTIFY\">Without limiting the foregoing, Manufacturer shall, at a minimum, comply \nwith the following obligations to ensure good component material \nmanagement for the Products:\n\n<\/p><p align=\"JUSTIFY\">5.7.1. Ensure component level failure analysis is performed by the \nCom21 Vendors,\n\n<\/p><p align=\"JUSTIFY\">5.7.2. Expedite component returns, failure analysis and corrective \nactions regarding defective components with Com21 Vendors and \npromptly communicate this information to Com21,\n\n<\/p><p align=\"JUSTIFY\">5.7.3. Work with Com21 Vendors to reduce leadtimes and Standard \nMaterial Costs,\n\n<\/p><p align=\"JUSTIFY\">5.7.4. Address poor component yields with Com21 Vendors and \npromptly provide analysis and corrective plans regarding same to \nCom21,\n\n<\/p><p align=\"JUSTIFY\">5.7.5. Provide regular performance feedback to Com21 Vendors, with a \ncopy to Com21, \n\n<\/p><p align=\"JUSTIFY\">5.7.6. Provide Com21 with copies of all Com21 Vendors newsletters via \ne-mail, \n\n<\/p><p align=\"JUSTIFY\">5.7.7. Permit Com21 to participate in discussions with Com21 Vendors \nregarding issues related to Parts Standard Material Cost and \navailability, and to Manufacturer's performance of this Agreement,\n\n<\/p><p align=\"JUSTIFY\">5.7.8. Initiate and maintain vendor qualification, performance and \ncorrective action programs with the Com21 Vendors,\n\n<\/p><p align=\"JUSTIFY\">5.7.9. Assist Com21 as Com21 may reasonably request with Com21's \nvendor conference, and \n\n<\/p><p align=\"JUSTIFY\">5.7.10. Provide to Com21 any information relating to Part quality, \ntechnology trends, and such other information that Manufacturer \nmay have and Com21 may reasonably require to maintain a \ncompetitive position in its markets.\n\n<\/p><p align=\"JUSTIFY\">Manufacturer shall provide each of the Com21 Vendors with non-binding, \nforward looking, rolling forecasts for each of the Parts and shall update \nsuch forecasts on a monthly basis, or more frequently as necessary to \nsupport Com21's business needs. Such forecasts shall reflect the share \nof business awards specified by Com21 for each Com21 Vendor. \nManufacturer further agrees that the purchase orders placed by \nManufacturer with such Com21 Vendors shall be in accordance with the \nbusiness awards percentages specified by Com21.\n<\/p><\/dir>\n\n<b><\/b><p align=\"JUSTIFY\">6. PRODUCTION SUPPORT TEAMS<\/p>\n\n<p align=\"JUSTIFY\">On or before the Effective Date each Party shall establish a team of skilled and \nexperienced employees (\"Production Support Team\") which shall be the primary \nProduct and technical interface with the other Party and serve as the focal point \nfor the identification and resolution of any problems that may surface during the \ncourse of this Agreement. Manufacturer shall consult with Com21 and comply \nwith Com21's reasonable requests regarding the personnel that Manufacturer \ndesignates or intends to designate as Manufacturer's Production Support Team, \nincluding the opportunity to interview and reject proposed Production Support \nTeam candidates prior to Manufacturer assigning them to the Production Support \nTeam. Production Support Teams shall not have the authority to amend or \nmodify the terms of this Agreement. The Production Support Teams shall meet \nperiodically, electronically, telephonically or otherwise as reasonably agreed by \nthe Parties, and at least quarterly for a general review of the Parties' \nperformance under the relationship and to establish any corrective action plans \nnecessary to meet performance criteria set forth in this Agreement.\n\n<\/p><p align=\"JUSTIFY\">Manufacturer's Production Support Team shall be responsible for providing \nsupport in the following areas: (i) Com21 Vendor management; (ii) inventory \ncontrol; (iii) engineering services; (iv) master scheduling; (v) document control; \n(vi) quality assurance; and (vii) customized reporting.\nIn addition to the obligations described above, Manufacturer's Production \nSupport Team shall be able to (i) respond to normal inquiries within twenty-four \n(24) hours, (ii) provide an initial response for urgent requests within one (1) hour, \nand (iii) comply with the order acknowledgment and RMA procedures set forth \nelsewhere in this Agreement.\n\n<b><\/b><\/p><p align=\"JUSTIFY\">7. FORECASTS<\/p>\n\n<p align=\"JUSTIFY\">Within three (3) business days after the Effective Date, Com21 shall deliver to \nManufacturer a non-binding, forward looking, six (6) month rolling forecast \n(\"Forecast\") for orders of the Products, and update such Forecast from time to \ntime during the Term, but no less frequently than once each calendar month. \nEach Forecast shall state Com21's anticipated orders for each Product during \nthe Forecast period.\n\n<b><\/b><\/p><p align=\"JUSTIFY\">8. PURCHASE ORDERS<\/p>\n\n<p align=\"JUSTIFY\">8.1. Submission; Content\n\n<\/p><dir>\n<p align=\"JUSTIFY\">From time to time during the Term, Com21 may deliver Purchase Orders \nto Manufacturer in writing, via telefax or electronically, via procedures to \nbe mutually agreed or in the same manner as specified in this Agreement \nfor the delivery of notices. Such Purchase Orders shall include the \nfollowing information (\"Basic Information\"), as and if applicable, and such \nother information as may be relevant to such Purchase Orders:\n\n<\/p><p align=\"JUSTIFY\">8.1.1. Deliverables (which shall include Com21 part number(s));\n\n<\/p><p align=\"JUSTIFY\">8.1.2. Quantities of each deliverable;\n\n<\/p><p align=\"JUSTIFY\">8.1.3. Unit and total prices then in effect;\n\n<\/p><p align=\"JUSTIFY\">8.1.4. Delivery date(s) within the applicable Product Delivery Leadtime;\n\n<\/p><p align=\"JUSTIFY\">8.1.5. Delivery location(s); \n\n<\/p><p align=\"JUSTIFY\">8.1.6. Any special packaging or shipping requirements.\n\n<\/p><p align=\"JUSTIFY\">Any terms, conditions or information appearing on or accompanying any \nof Com21's or Manufacturer's purchase orders or acknowledgments or \nrelated correspondence, other than the Basic Information, shall be of no \neffect unless (i) expressly permitted under this Agreement, or (ii) Com21 \nand Manufacturer expressly agree otherwise in a separate, signed \nwriting.\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">8.2. Delivery Leadtimes\n\n<\/p><dir>\n<p align=\"JUSTIFY\">Delivery Leadtimes for each Product shall be determined by the Product's \napplicable delivery category specified on, and subject to change as \nprovided in, the attached Exhibit 8.2.\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">8.3. Confirmation.\n\n<\/p><dir>\n<p align=\"JUSTIFY\">For all Products, Manufacturer shall notify Com21 of receipt of a \nPurchase Order by telephone or facsimile (and promptly confirm in \nwriting) within two (2) business days after receipt of Com21's Purchase \nOrder.\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">8.4. Order Acceptance.\n\n<\/p><dir>\n<p align=\"JUSTIFY\">A Purchase Order in the form described in Paragraph 8 above, which \ncomplies with the terms of this Agreement, (a \"Complying Order\") shall be \ndeemed accepted by Manufacturer upon receipt regardless of whether or \nnot confirmed or acknowledged by Manufacturer as provided in \nParagraph 8.3. Manufacturer shall not be obligated to accept a purchase \norder that is not a Complying Order, nor shall Manufacturer be obligated \nto accept a purchase order which states quantities in excess of those \nForecast and Flexibility Parameters (any of the foregoing a \"Non-Complying\nOrder\"), and such a Non-Complying Order shall not be \ndeemed accepted by Manufacturer unless Manufacturer expressly \naccepts it in writing. If Manufacturer determines that any purchase order \nis a Non-Complying Order, Manufacturer shall notify Com21 as described \nin Paragraph 8.3 above, and the Parties shall use their mutual reasonably \ndiligent efforts to cause the Purchase Order to be a Complying Order, at \nwhich time it shall be deemed accepted by Manufacturer and \nManufacturer shall so confirm to Com21 in writing.\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">8.5. Purchase Order Changes\n\n<\/p><dir>\n<p align=\"JUSTIFY\">8.5.1. Com21 shall be entitled to cancel any Purchase Order in whole or \nin part, or change all or any part of the Basic Information \napplicable to any Purchase Order, by delivering notice thereof to \nManufacturer in the same manner as a Purchase Order may be \ndelivered, and Manufacturer shall comply with any such change or \ncancellation. Any such change or cancellation shall be without \nliability to Com21 if it is within the Flexibility Parameters and, if it is \nnot, such change or cancellation shall be subject to any relevant \nliability as described in Exhibit 8.2.\n\n<\/p><p align=\"JUSTIFY\">8.5.2. For increases or decreases in quantities ordered which fall outside \nof the parameters set forth in Exhibit 8.2, Manufacturer agrees to \nuse best efforts to accommodate Com21's requested changes.\n8.6. Manufacturer and Com21 agree to discuss at a mutually agreeable date \nthe terms and conditions, if any, under which the Parties may agree to \nimplement a kanban or demand-pull form of delivery system for the \nProducts.\n<\/p><\/dir>\n\n<b><\/b><p align=\"JUSTIFY\">9. DELIVERY.<\/p>\n\n<p align=\"JUSTIFY\">9.1. For purposes of this Agreement, a Product shall be deemed delivered \"on \ntime\" if it conforms to the relevant warranty and acceptance criteria, was \nproduced in conformity with the applicable Production File, and is \ndelivered to the required delivery location or common carrier, as \napplicable, on or not more than three (3) days before the delivery date \nspecified in the applicable Purchase Order. \n\n<\/p><p align=\"JUSTIFY\">9.2. If a delivery is not on time, or if Manufacturer reasonably expects to make \na delivery that is not on time, Manufacturer shall promptly notify Com21, \nand unless the delay is caused by Com21, shall at no additional cost to \nCom21 employ accelerated measures such as material expediting fees, \npremium transportation costs, or labor diversion or overtime required to \nmeet the specified delivery date or minimize the lateness of deliveries.\n\n<\/p><p align=\"JUSTIFY\">9.3. For deliveries to Com21, Manufacturer shall deliver Products F.O.B. \nManufacturer's shipping dock to carrier(s) and freight forwarder(s) of \nCom21's choosing addressed to the delivery location specified in the \nrelevant order, and shall insure against normal transportation risks. The \ncost of shipment and insurance shall be added to the amount payable by \nCom21. \n\n<\/p><p align=\"JUSTIFY\">9.4. Title and risk of loss to all Products shall pass to Com21 upon delivery to \nthe common carrier at Manufacturer's shipping dock.\n\n<b><\/b><\/p><p align=\"JUSTIFY\">10. LABELING AND PACKAGING<\/p>\n\n<p align=\"JUSTIFY\">10.1. Com21 shall provide to Manufacturer all necessary specifications, \nidentification and artwork for the labeling of the Products and packaging \nunder the applicable label.\n\n<\/p><p align=\"JUSTIFY\">10.2. Manufacturer shall package and label all Products as specified by Com21 \nin the Design Specification, without additional cost to Com21. Where \nCom21 does not specify packaging and shipping requirements in the \nDesign Specification, Manufacturer shall package and ship Products to \nCom21 in a manner which (i) follows Com21's written instructions, (ii) \nfollows good commercial practice, (iii) is acceptable to common carriers \nfor shipment, and (iv) is adequate to ensure safe arrival. Manufacturer \nshall mark the outside of each shipment container with the applicable \nCom21 part numbers and necessary handling and lifting information. \nEach shipment shall be accompanied by a packing slip and source \ninspection acceptance report which will include Com21's part numbers, \npurchase order and the quantity shipped. Manufacturer further agrees to \nlabel the Products consistent for United States custom requirements for \ncountry of manufacture as well as to provide revision code and \nmanufacturing date code labeling for the Products in the location and \nformat specified by Com21.\n\n<\/p><p align=\"JUSTIFY\">10.3. If Com21 requests additional marking or labeling information on, or \npackaging for, the Products which is not specified in the Design \nSpecifications and which results in a change in the cost of materials or \nproduction, Com21 and Manufacturer shall negotiate an equitable price \nadjustment in good faith.\n\n<\/p><p align=\"JUSTIFY\">10.4. Manufacturer shall not pack different Products or different configurations \nof the same Products in the same shipment container.\n\n<b><\/b><\/p><p align=\"JUSTIFY\">11. ACCEPTANCE OR REJECTION<\/p>\n\n<p align=\"JUSTIFY\">11.1. Source Inspections.\n\n<\/p><dir>\n<p align=\"JUSTIFY\">Upon prior notice to Manufacturer, Com21 or its authorized \nrepresentative(s) may conduct source inspections of the Products at \nManufacturer's facility at which Products are being manufactured, during \nManufacturer's normal business hours. Such inspections shall be based \nupon IPC-A-610 Class 2; MIL STD. 105, .65 AQL, Normal Inspection, \nLevel II; and such other standards as Com21 may reasonably elect. \n(Note: Com21 may require a more stringent standard (IPC-A-610 Class 3) \nfor specific products.  In that event, Com21 and Manufacturer will discuss \nand agree on additional charges if any.  For those products, inspections \nshall be based on IPC-A-610 Class 3.)  The Parties shall mutually agree \nupon the timing of such inspections, which shall be conducted in a \nmanner that does not interfere with Manufacturer's operations. \n\n<\/p><p align=\"JUSTIFY\">Manufacturer shall provide sufficient facilities for persons conducting such \nsource inspections. If any Product fails the test procedure set forth in the \nManufacturing Standards, Com21 may reject the entire lot of any such \nProducts, and Manufacturer shall promptly take all steps necessary to \ncorrect such failures.\n\n<\/p><p align=\"JUSTIFY\">Immediately upon any rejection resulting from a source inspection, \nManufacturer shall identify the cause of the failure and shall promptly take \nall reasonable steps to correct any such failure as described in the \nManufacturing Specifications.\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">11.2. Incoming Inspections.\n\n<\/p><dir>\n<p align=\"JUSTIFY\">Com21 or its customers may inspect all Products within forty-five (45) \ndays after its receipt of such Product (\"Rejection Period\") and may reject \nany Product that fails to meet the Design Specifications or Manufacturing \nStandards.\n\n<\/p><p align=\"JUSTIFY\">Com21 or its customers may also reject any quantity of goods shipped by \nManufacturer in excess of those ordered, or which are delivered more \nthan three (3) days before the scheduled delivery date. However, such \novershipments or early shipments, to the extent accepted, shall be \nsubject to all of the terms and provisions contained in this Agreement. \nIf Com21 rejects any Products, Com21 shall notify Manufacturer in writing \nor follow the RMA procedure described in Paragraph 18.3 within the \nRejection Period. Manufacturer shall promptly credit Com21's account for \nall Products rejected by Com21 and returned to Manufacturer.\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">11.3. General.\n\n<\/p><dir>\n<p align=\"JUSTIFY\">Manufacturer shall (i) provide Corrective Action Reports as specified in \nExhibit 15.1 unless otherwise specified by Com21 in the Design \nSpecifications or Quality Plan for the applicable Products, and (ii) record \ndate codes, serial numbers, electronic serial numbers (\"ESN numbers\") \nand corrective action for all Products rejected by Com21.\nNotwithstanding anything to the contrary contained in this Agreement, \ninspection or failure to inspect the Products upon Delivery shall not affect \nCom21's rights under the warranty provisions of this Agreement.\n<\/p><\/dir>\n\n<b><\/b><p align=\"JUSTIFY\">12. PRICING, PAYMENT, AND COST REDUCTION<\/p>\n\n<p align=\"JUSTIFY\">12.1. Prices\n\n<\/p><dir>\n<p align=\"JUSTIFY\">12.1.1. The initial unit prices to be paid by Com21 for Product(s) are set \nforth in Exhibit 1.23 attached to this Agreement.\n\n<\/p><p align=\"JUSTIFY\">12.1.2. During the term of this Agreement, adjustments to the unit prices \nfor the Products will be made on an ongoing basis in accordance \nwith the provisions of Exhibit 12.1.\n\n<\/p><p align=\"JUSTIFY\">12.1.3. Except as otherwise provided in this Agreement, unit price \nincludes all charges for the Product(s), any related deliverable \nitems and services, and packaging.\n\n<\/p><p align=\"JUSTIFY\">12.1.4. The Standard Material Cost stated by Manufacturer to Com21 \nduring the Term for any Part supplied or to be supplied by \nManufacturer to Com21 (i) fairly and accurately represents the \nprice paid by Manufacturer for such Part, and (ii) is determined \nunder the Method stated in Exhibit 1.30.  Manufacturer warrants \nthat prices quoted to date reflect fair and accurate prices from \nsuppliers on  Com21's AVL .\n\n<\/p><p align=\"JUSTIFY\">12.1.5. Manufacturer's Method of calculating the Standard Material Cost \nof any Part (i) is the method regularly and consistently employed \nby Manufacturer for internal financial reporting purposes, and (ii) \nincludes all elements, and does not omit elements, necessary to \nmake any statement of Standard Material Cost accurate and not \nmisleading.\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">12.2. Payment\n\n<\/p><dir>\n<p align=\"JUSTIFY\">Payment shall be made net forty-five (45) days from the later of the date \nof shipment or the date of the invoice.  Exhibit 12.2 contains additional \nprovisions that take precedence over this paragraph.  Payments shall be \nmade in U.S. dollars unless otherwise agreed upon between the Parties.  \n\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">12.3. Taxes\n\n<\/p><dir>\n<p align=\"JUSTIFY\">Where the law permits, Manufacturer shall treat Com21 as exempt from \napplicable state and\/or local sales tax for Product(s) purchased pursuant \nto this Agreement. Where required by state or local law, Com21 shall \nprovide Manufacturer with a valid reseller's exemption certificate for each \ntaxing jurisdiction to which Manufacturer ships Product(s). When Com21 \npurchases Products for internal use pursuant to this Agreement, Com21 \nshall notify Manufacturer and shall pay any applicable sales tax to \nManufacturer.\n<\/p><\/dir>\n\n<b><\/b><p align=\"JUSTIFY\">13. RECORDS, AUDITS AND REPORTS<\/p>\n\n<p align=\"JUSTIFY\">13.1. Manufacturer shall keep complete, correct and accurate books of account \ncontaining all records that are required according to Manufacturer's \nbusiness processes and policies or as required to verify performance \nunder this agreement.   Records shall be maintained for a minimum of \ntwo (2)  years.  \n\n<\/p><p align=\"JUSTIFY\">Manufacturer shall within three (3) business days after Com21's request \nmade at any time and from time to time provide to Com21:\n13.1.1. A report that identifies, by part number, quantity and such other \nattributes as are relevant, all finished goods, work in progress, \nParts and other items held or ordered by Manufacturer (i) for which \nCom21 is or may become liable to pay Manufacturer under any \nprovision of this Agreement, and (ii) in addition to the foregoing, \nthose that Manufacturer intends to use in producing Products.\n\n<\/p><p align=\"JUSTIFY\">13.1.2. Access to the following types of information with respect to \nManufacturer's performance of its obligations under this \nAgreement: component Standard Material Costs; component \nbusiness awards where such awards are specified by Com21; \nlabor time standards; yield data at board test and final test; rework \nand scrap rates; corrective action reports (CARs), internal audit \nresults, supplier performance ratings; lot tracking\/status \ninformation; factory cycle-time; component lead times; freight \ncosts; inventory visibility; ECO tracking and effectiveness; and \nsummaries of shipments and billings.\n\n<\/p><p align=\"JUSTIFY\">13.1.3. For the verification of component pricing, Manufacturer shall \nprovide Com21 Standard Material Cost data for components, at \nthe Com21 part number level. Com21, at its request, may verify \nManufacturer's process for calculating the Standard Material Cost \nby reviewing data relating to receipt and disbursement of a \nreasonably representative sample of Parts. All Standard Material \nCost information disclosed between the Parties shall be deemed \nConfidential Information. Com21 shall not reveal Standard Material \nCost data to component suppliers, distributors, other contract \nmanufacturers, or any other third parties, either directly or \nindirectly. \n\n<\/p><p align=\"JUSTIFY\">13.1.4. The most current Production File for the Product(s).\n\n<\/p><p align=\"JUSTIFY\">13.2. Manufacturer shall, on or before the fifth (5th) day of each calendar month \nduring the Term, deliver to Com21 a Monthly Report as described in the \nattached Exhibit 13.2\n\n<\/p><p align=\"JUSTIFY\">13.3. Manufacturer shall permit Com21's customers reasonable inspection and \naccess to data regarding quality, yield data at board test and final test, \nrework and scrap rates, lot tracking\/status information, summaries of \nshipments, and such other non-financial manufacturing information as \nCom21's customers may reasonably require to confirm Com21's \ncompliance with such customers' reasonable manufacturing \nrequirements.\n\n<b><\/b><\/p><p align=\"JUSTIFY\">14. PROTOTYPE SERVICES<\/p>\n\n<p align=\"JUSTIFY\">From time to time during the Term, Com21 may desire Manufacturer's help in \nbuilding Prototypes. In these instances, Com21 shall notify Manufacturer of its \ndesire, shall furnish to Manufacturer preliminary design information and the \nParties shall cooperate as described in Exhibit 14.\n\n<b><\/b><\/p><p align=\"JUSTIFY\">15. QUALITY ASSURANCE<\/p>\n\n<p align=\"JUSTIFY\">15.1. Quality Improvement Plan\n\n<\/p><dir>\n<p align=\"JUSTIFY\">In addition to the Quality Plans that are part of each Production File, \nManufacturer shall establish, maintain and manage a Quality \nImprovement Plan for each Product that is consistent with (i) the \nprovisions of Exhibit 15.1, and (ii) standard industry practices, to ensure \nthat the overall reliability, quality and performance objectives stated in the \nrelevant Production File is achieved.\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">15.2. ISO9000 Certification\n\n<\/p><dir>\n<p align=\"JUSTIFY\">Manufacturer shall manufacture the Product(s) at a facility that maintains \nISO 9000 certification. \n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">15.3. Other Requirements\n\n<\/p><dir>\n<p align=\"JUSTIFY\">From time to time during the Term, Com21 may request that \nManufacturer obtain such other certifications and meet such other \nmanufacturing, security, facility and other requirements as Com21 may \nspecify. \n<\/p><\/dir>\n\n<b><\/b><p align=\"JUSTIFY\">16. REGULATORY COMPLIANCE<\/p>\n\n<p align=\"JUSTIFY\">Manufacturer represents and warrants that its manufacturing facilities will \ncomply, its manufacturing processes will be conducted in accordance, and its \nperformance under this Agreement shall comply, with all applicable federal, state \nand local statutes, laws and regulations. \n\n<b><\/b><\/p><p align=\"JUSTIFY\">17. PRODUCT WARRANTY; EPIDEMIC FAILURE<\/p>\n\n<p align=\"JUSTIFY\">17.1. Performance Warranty.\n\n<\/p><dir>\n<p align=\"JUSTIFY\">Manufacturer warrants to Com21 that Product(s) furnished by \nManufacturer to Com21 under this Agreement, and their production, (a) \nshall conform to the Production File, (b) shall conform to the \nManufacturing Specifications, and (c) shall be free from defects in \nmaterial and workmanship furnished by or through Manufacturer under \nnormal use and operation for a period of twenty-four (24) months from the \ndate of delivery by Manufacturer to Com21 or its Customer.\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">17.2. Epidemic Failure\n\n<\/p><dir>\n<p align=\"JUSTIFY\">Except as may otherwise be provided in a Production File, in the event \nthat, at any time within two (2) years after Delivery, more than one \npercent (1%) (Note: the Parties will review the failure data and may revise \nthis percentage up or down after the first six months of production) of any \ngiven Product sold and delivered to Com21 within any six (6) month \nperiod fails to operate properly due to a similar defect then an Epidemic \nFailure shall be deemed to have occurred.  The defect may result from \nproblems with materials, workmanship, manufacturing processes, and\/or \ndesign to the extent that Manufacturer was responsible  for design. Upon \nnotice by Com21 to Manufacturer of any Epidemic Failure, Manufacturer \nshall promptly develop a plan to eliminate the problem in all continuing \nproduction and to correct the problem in all affected units of Product \npreviously sold and delivered to Com21 during said two (2) year time \nperiod. Manufacturer shall submit such plan to Com21 for Com21's \nacceptance. Upon receiving Com21's approval of such plan, \n\n<\/p><p align=\"JUSTIFY\">Manufacturer shall implement the corrective action at its expense. If such \nplan is not acceptable to Com21, then Com21 can require Manufacturer \nto repair or replace, at Com21's option, the affected Product at \nManufacturer's cost. The parties agree to use reasonable efforts to \ncomplete the repair or replacement of the affected Product within twenty \n(20) days after written notice of such Epidemic Failure is provided to \nManufacturer. For epidemic failures that are affecting current production, \nManufacturer shall identify the problem and develop a plan to solve it \nwithin twenty four (24) hours of Com21's notice.\n\n<\/p><p align=\"JUSTIFY\">In the event of an epidemic failure due to a common cause which is \nneither (A) otherwise covered by the previous Paragraph; nor (B) due to \n(i) a Com21 Product design, (ii) Com21-supplied test design, or (iii) a \nCom21 Proprietary Component; the Parties will use reasonable efforts to \ndetermine, address and resolve such failure and its consequences. \n17.3. Manufacturer may from time to time express concerns that a component \nsupplier on Com21's AVL may not be able to meet quality expectations \nbased on data the Manufacturer has about historical performance.  The \nManufacturer should submit these concerns to Com21 in writing and \nprovide sufficient information to allow Com21 to understand the concerns.  \nWhere possible, the Manufacturer should also provide alternate suppliers \nthat can meet the quality expectations.  Based on the input, Com21 may \nchoose to have the Manufacturer shift the business to one of the alternate \nsuppliers.   In the event that Com21 does not move the business, or does \nnot work with the Manufacturer and the component supplier to correct the \nquality deficiencies, then the Manufacturer will be released from \nobligations of Paragraph 17.2 for a failure of that specific component from \nthat specific supplier, for any product produced after the date of \nnotification to Com21. \n\n<b><\/b><\/p><p align=\"CENTER\">\nWarranty Exclusions\n\n\n<\/p><p align=\"JUSTIFY\">The warranties set forth in this article shall not apply to any claims, \nproblems or defects which are the result of designs specified in the \nDesign Specifications, normal wear and tear, mishandling, misuse, \nneglect or improper testing or repair by other than Manufacturer or its \nauthorized representative. These warranties shall survive inspection, \nacceptance and payment.\n\n<\/p><p align=\"JUSTIFY\">THE WARRANTIES CONTAINED IN THIS ARTICLE ARE IN LIEU OF, \nAND MANUFACTURER EXPRESSLY DISCLAIMS AND COM21 \nWAIVES ALL OTHER REPRESENTATIONS AND WARRANTIES, \nEXPRESS, IMPLIED, STATUTORY OR ARISING BY COURSE OF \nDEALING OR PERFORMANCE, CUSTOM, USAGE IN THE TRADE OR \nOTHERWISE, INCLUDING WITHOUT LIMITATION THE IMPLIED \nWARRANTIES OF MERCHANTABILITY, TITLE AND FITNESS FOR A \nPARTICULAR USE.\n<\/p><\/dir>\n\n<b><\/b><p align=\"JUSTIFY\">18. WARRANTY CLAIMS AND REPAIR<\/p>\n\n<p align=\"JUSTIFY\">18.1. Com21 shall promptly notify Manufacturer of any breach or alleged \nbreach of the warranties contained in Paragraph 17. Manufacturer and \nCom21 or Com21's customers shall follow the RMA procedure described \nin Paragraph 18.3 below to return to Manufacturer Product(s) that are \ndefective or that need repair or replacement. Manufacturer, at \nManufacturer's expense and at Com21's option, shall either replace or \nrepair Products which are or become defective during the warranty period \nand Deliver the Products to the location designated by Com21 within five \n(5) days after Manufacturer's receipt of the rejected Product(s). \n\n<\/p><p align=\"JUSTIFY\">18.2. In connection with warranty repair or replacement, Manufacturer shall:\n\n<\/p><p align=\"JUSTIFY\">18.2.1. Use repair\/rework processes that are part of the Production File or \notherwise approved by Com21 in writing;\n\n<\/p><p align=\"JUSTIFY\">18.2.2. Record and report to Com21, in writing, date codes, serial \nnumbers, and corrective action for all Product(s) returned for repair \nor replacement; \n\n<\/p><p align=\"JUSTIFY\">18.2.3. Furnish Corrective Action Reports as required by Exhibit 15.1;\n\n18.2.4. Update Product(s) to the latest engineering change level;\n\n<\/p><p align=\"JUSTIFY\">18.2.5. Pay all shipping costs associated with Products returned for \nrepairs during the warranty period; \n\n<\/p><p align=\"JUSTIFY\">18.2.6. Repair or rework any given Product not more than two (2) times;\n\n<\/p><p align=\"JUSTIFY\">18.2.7. Retest Products as specified in the Manufacturing Standards prior \nto a redelivery;\n\n<\/p><p align=\"JUSTIFY\">18.2.8. Return repaired, reworked or replacement Products in separate \nshipments from Com21's scheduled Product orders; and\n\n<\/p><p align=\"JUSTIFY\">18.2.9. Provide statistics to Com21 on no problem found (or \"NPF\") \nreturns on a quarterly basis. \n\n<\/p><p align=\"JUSTIFY\">18.3. RMA Procedure\n\n<\/p><dir>\n<p align=\"JUSTIFY\">To return a Product to Manufacturer as provided by Paragraphs 11 and \n18, Com21 shall, request a Return Material Authorization (\"RMA\") number \nfrom Manufacturer. Manufacturer shall provide the RMA number in writing \nto Com21 within two (2) business hours after receipt of any request. \nAfter receipt of the written RMA number, Com21 shall return to \nManufacturer the rejected or defective Product, freight collect and \nproperly insured, in its original shipping carton (if available) with the RMA \nnumber displayed on the outside of the carton. \nManufacturer shall, at Com21's request, provide Com21 with pre-issued \nRMA numbers.\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">18.4. In-Field Warranty Repair\n\n<\/p><dir>\n<p align=\"JUSTIFY\">Com21 in the exercise of its sound business judgment may from time to \ntime determine that warranty repair of certain Products or for certain \ncustomers should be undertaken at or near the customer's place of \nbusiness. In such event, Com21 shall notify Manufacturer of such \ndetermination and the Parties shall thereupon immediately cooperate with \neach other to (i) determine whether the affected Product's condition \nconstitutes a breach of any Manufacturer warranty and (ii) undertake such \nrepair. If the affected Product's condition constitutes a breach of any \nManufacturer warranty, Manufacturer shall either undertake such repair, \nor reimburse Com21 for its reasonable cost of such repair.\n<\/p><\/dir>\n\n<b><\/b><p align=\"JUSTIFY\">19. PARTS SUPPLY<\/p>\n\n<p align=\"JUSTIFY\">19.1. By Manufacturer\n\n<\/p><dir>\n<p align=\"JUSTIFY\">Manufacturer shall, upon Com21's request made at any time and from \ntime to time, sell to Com21 or its subcontractors:\n\n<\/p><p align=\"JUSTIFY\">19.1.1. During the Term of this Agreement, all finished goods, work in \nprogress, Parts and other items held or ordered by Manufacturer \n(i) for which Com21 is or may become liable to pay Manufacturer \nunder any provision of this Agreement; and (ii) in addition to the \nforegoing, those that Manufacturer intends to use in producing \nProducts. The prices for any items shall not exceed what Com21's \nliability would have been for the items as described in Exhibit 8.2 if \nCom21 had canceled its orders for Products.\n\n<\/p><p align=\"JUSTIFY\">19.1.2. During the Term of this Agreement, Parts Com21 may reasonably \nrequire for all Products purchased by Com21 from Manufacturer. \nPrices for the Products shall not exceed Manufacturer's Standard \nMaterial Cost for procuring the Parts plus the material markup \nspecified in Exhibit 1.23. Com21 acknowledges that prices for \nParts shall be subject to adjustment for increased costs in \nprocurement of materials and manufacturing after cessation of \nproduction of the Product for which such Parts are supplied.\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">19.2. Discontinued Parts.\n\n<\/p><dir>\n<p align=\"JUSTIFY\">In addition to its obligations under Paragraph 19.1 above, Manufacturer \nshall: (i) inform Com21 of all last-time buy notifications for Parts promptly \n(typically within 48 hours) upon Manufacturer's receipt of such \nnotifications; (ii) advise Com21 if a last-time buy is the most economical \nprocurement strategy for such Parts as to which such a notification is \nreceived (especially custom Parts which may require tool maintenance \nand set-up charges that far outweigh piece part Standard Material Costs); \nand (iii) assist Com21 as reasonably requested to negotiate supply of any \nParts subject to a last-time buy. Com21 may then buy, and Manufacturer \nwill supply, such quantities as Com21 deems necessary to fulfill the \nremainder of its Product support requirements (i.e., \"last-time buy.\") If \nCom21 determines that a final buy is not financially favorable due to the \nlength of the remaining support period for the Part(s), Manufacturer will \nassist Com21 in finding a third party supplier that can continue to support \nthe Part(s) through manufacturing. \n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">19.3. Restricted Materials and Last Time Buys.\n\n<\/p><dir>\n<p align=\"JUSTIFY\">Any Parts ordered or obtained by Manufacturer from or for Com21 that \nare subject to restricted, limited or otherwise problematic availability, \nincluding those that are subject to last-time buy or limited allocation, shall \nbe held and used by Manufacturer exclusively to perform its obligations \nunder this Agreement.\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">19.4. By Com21\n\n<\/p><dir>\n<p align=\"JUSTIFY\">Manufacturer shall purchase, and assist Com21 to Dispose of, Parts from \nCom21's inventory before purchasing such Parts from other sources.  All \npurchases will be priced at the Standard Material Cost used to establish \nproduct pricing or at a price that the Parties shall mutually agree.  Other \nterms and conditions will be consistent with Manufacturer's sale of \nProduct to Com21.  Manufacturer will continue to buy these Parts from \nCom21 until the supply is exhausted or until no forecasted requirements \nexists for the Parts.  In the event that Manufacturer does not purchase \nCom21 inventory in accordance with the foregoing, (i) Com21 shall be \ndeemed to have sold inventory on such Parts to Manufacturer and  shall \nimmediately take a credit against invoices due Manufacturer; and (ii) in no \nevent shall such Parts be, or be deemed to be, Excess Inventory or \nObsolete Inventory.\n<\/p><\/dir>\n\n<b><\/b><p align=\"JUSTIFY\">20. PROPERTY FURNISHED TO Manufacturer BY Com21<\/p>\n\n<p align=\"JUSTIFY\">20.1. Com21 Property\n\n<\/p><dir>\n<p align=\"JUSTIFY\">Unless otherwise agreed in writing by Com21, and notwithstanding the \nprovisions of Paragraph 21, all designs, specifications, drawings, special \ndies, molds, patterns, jigs, fixtures and any other property furnished to \nManufacturer by Com21, or specifically paid for by Com21, for use in the \nperformance of this Agreement shall be and remain the sole property of \nCom21, shall be marked as Com21 directs to evidence its ownership \nthereof, shall be subject to return to Com21 or other disposition at any \ntime upon Com21's instruction, shall be used exclusively in the furnishing \nfor Com21 of goods and\/or providing of services for Com21 and shall, in \nthe case of tangible property, be insured by Manufacturer, at \nManufacturer's expense, while in its custody or control in an amount \nequal to the replacement cost thereof, with loss payable to Com21. \n\n<\/p><p align=\"JUSTIFY\">Manufacturer shall furnish to Com21 a copy of the policy or certificate of \nsuch insurance upon demand. Manufacturer shall execute and deliver to \nCom21 such other or further agreements relative to property furnished by \nCom21 to Manufacturer as may be requested by Com21. With respect to \nsuch property, Manufacturer at its expense shall (i) obtain any \nconsumable material required for its operation, (ii) perform all routine \nmaintenance, and (iii) perform all repairs necessitated by accident, \nmisuse, abuse or neglect. Com21 shall be responsible to perform or pay \nfor repairs due to reasonable wear and tear, provided that Manufacturer \nfirst notifies Com21 of the need for such repairs and cooperates with \nCom21 regarding the nature and source of such repairs. Manufacturer \nshall, upon Com21's request, furnish to Com21 a written report listing the \nCom21 property in Manufacturer's possession.\n\n<\/p><p align=\"JUSTIFY\">As of the Effective Date, the property Com21 is furnishing to \nManufacturer under this Paragraph 20.1 is listed on Exhibit 20.1 attached \nhereto.\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">20.2. Technology License\n\n<\/p><dir>\n<p align=\"JUSTIFY\">Com21 grants to Manufacturer a revocable, non-exclusive, non-\ntransferable, non-sublicenseable, royalty-free license to (i) possess, use \nand have used the Ancillary Technology exclusively for Com21's benefit; \nand (ii) purchase or license from Com21 such of the Com21 Proprietary \nComponents as is reasonably necessary for Manufacturer to produce \nProducts exclusively for purchase by Com21 under this Agreement.\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">20.3. Com21 Trademark License\n\n<\/p><dir>\n<p align=\"JUSTIFY\">Subject to the terms and conditions of this Agreement, Com21 hereby \ngrants to Manufacturer a personal, non-exclusive, non-sublicensable, \nnon-transferable, royalty-free, license to use during the Term such \nCom21 trademarks as may reasonably relate to the Products (\"Com21 \nMarks\"), to the extent reasonably required to perform Manufacturer's \nobligations under this Agreement.\n\n<\/p><p align=\"JUSTIFY\">Manufacturer hereby acknowledges and recognizes Com21's exclusive \nworldwide ownership of the Com21 Marks and agrees not to take any \naction inconsistent with such ownership. Manufacturer acknowledges that \nits use of the Com21 Marks pursuant to this Agreement and any goodwill \nestablished thereby shall inure to the sole benefit of Com21.\nManufacturer shall support Com21 in policing the use of the Com21 \nMarks and shall cooperate with Com21 in protecting the Com21 Marks, \nincluding cooperating in becoming a registered user of such Com21 \nMarks. Such cooperation by Manufacturer shall be at the sole expense of \nCom21. Manufacturer shall promptly notify Com21 of any infringement of \nthe Com21 Marks that comes to Manufacturer's attention.\nManufacturer shall not attempt to register with any trademark office, \nanywhere in the world, any trademark or other mark that is confusingly \nsimilar to any of the Com21 Marks or that otherwise infringes or dilutes \nany of the Com21 Marks.\n\n<\/p><p align=\"JUSTIFY\">Manufacturer shall not modify any Product bearing a Com21 Mark in such \na manner as to detract from the favorable reputation enjoyed by the \nCom21 Marks. Manufacturer shall not take or permit to be taken any \nactions which would detract from the goodwill or favorable reputation \nassociated with the Com21 Marks.\n<\/p><\/dir>\n\n<b><\/b><p align=\"JUSTIFY\">21. INTELLECTUAL PROPERTY OWNERSHIP<\/p>\n\n<p align=\"JUSTIFY\">Except as expressly agreed by the Parties in this Agreement, or in a formal \nwritten amendment to this Agreement signed by duly authorized officers of each \nParty:\n\n<\/p><p align=\"JUSTIFY\">21.1. Ownership of Proprietary Information that is Created solely by one Party. \nThe \"Owning Party\" for purposes of this Agreement of all Proprietary \nInformation owned by a Party or Created solely by a Party, whether \nbefore or after the Effective Date, shall be determined as follows:\n\n<\/p><p align=\"JUSTIFY\">21.1.1. All Proprietary Information which is not a Derivative of any \nProprietary Information of the other Party shall be the sole and \nexclusive property of, and be deemed the Proprietary Information \nof, the Party who owned or Created the Proprietary Information.\n\n<\/p><p align=\"JUSTIFY\">21.1.2. All Proprietary Information which is a Derivative of any Proprietary \nInformation of the other Party but which is not a Derivative of any \nProprietary Information of the Party who so Creates, shall be \nDisclosed in writing to the other Party by the Party who so \nCreated, and shall be deemed the Proprietary Information of the \nother Party.\n\n<\/p><p align=\"JUSTIFY\">21.1.3. All Proprietary Information which is a Derivative of any Proprietary \nInformation of the other Party, and which is also a Derivative of \nany Proprietary Information of the Party who so Creates, shall be \nDisclosed in writing to the other Party by the Party who so \nCreated, and shall be the Parties' joint property.\n\n<\/p><p align=\"JUSTIFY\">21.2. Ownership of Proprietary Information that is Created Jointly by the \nParties. \n\n<\/p><p align=\"JUSTIFY\">The \"Owning Party\" for purposes of this Agreement of all Proprietary \nInformation Created Jointly by the Parties, whether before or after the \nEffective Date, shall be determined as follows:\n\n<\/p><p align=\"JUSTIFY\">21.2.1. All Proprietary Information Created Jointly by the Parties which is a \nDerivative of any Proprietary Information of one Party who so \nCreates, and which is not a Derivative of any Proprietary \nInformation of the other Party who so Creates, shall be Disclosed \nin writing to the Party from whose Proprietary Information it is a \nDerivative or whose Proprietary Information it incorporates, and \nshall be deemed the Proprietary Information of such Party.\n\n<\/p><p align=\"JUSTIFY\">21.2.2. All Proprietary Information Created Jointly by the Parties which is a \nDerivative of any Proprietary Information of one Party who so \nCreates, and which is also a Derivative of any Proprietary \nInformation of the other Party who so Creates, shall be Disclosed \nin writing by each Party to the other, and shall be the Parties' joint \nproperty.\n\n<\/p><p align=\"JUSTIFY\">21.2.3. All Proprietary Information Created Jointly by the Parties which is \nnot a Derivative of Proprietary Information of either such Party, \nshall be Disclosed in writing by each Party to the other, and shall \nbe the Parties' joint property.\n\n<\/p><p align=\"JUSTIFY\">21.3. Ownership of any other Proprietary Information. \n\n<\/p><p align=\"JUSTIFY\">21.3.1. Ownership, whether solely by any Party or jointly by the Parties, \nand all related rights in, to and of, all Proprietary Information that is \nCreated under circumstances not specified in Paragraph 21.1 or \n\n<\/p><p align=\"JUSTIFY\">21.2 above shall be agreed upon by the Parties in good faith and, \nfailing such agreement, shall be submitted to arbitration. \n\n<\/p><p align=\"JUSTIFY\">21.4. Effect of Joint Ownership on Disposition of Proprietary Information. \nExcept as provided herein, either Party shall be free to Dispose of any \nProprietary Information that is such Party's joint property, as determined \nunder this Agreement, independently of and without accounting to any \nother Party therefor, subject always to the other Party's equal and \nconcurrent right to likewise so Dispose of such joint property, provided \nalways, that neither Party may Dispose of such joint property to the extent \nthat such Disposition would result in or require Disclosure of the other \nParty's Proprietary Information of which the joint property was a \nDerivative or which is Incorporated in the joint property, if any.\n\n<\/p><p align=\"JUSTIFY\">21.5. Effect of Joint Ownership on Patent and Copyright Prosecution and \nEnforcement.\n\n<\/p><p align=\"JUSTIFY\">21.5.1. Either Party who jointly owns any Proprietary Information, as \ndetermined under this Agreement, shall cooperate with any other \nParty who jointly owns such Proprietary Information (i) in filing and \nprosecuting applications for patent and copyright protection of any \njointly owned Proprietary Information that is reasonably subject to \nsuch protection in any jurisdiction any such Party deems \nappropriate, and (ii) in enforcing patent rights and copyrights in \nsuch Proprietary Information against others in any jurisdiction the \nrequesting Party deems appropriate.\n\n<\/p><p align=\"JUSTIFY\">21.5.2. Notwithstanding Paragraph above, neither Party may file or \nprosecute nor require any other Party to cooperate in the filing or \nprosecution of an application for patent protection or copyright, \nand neither Party may enforce or require any other Party to \ncooperate in enforcing patent rights and copyrights for patent \nprotection or copyright, to the extent that such filing, prosecution, \ncooperation or enforcement would result in or require public or \notherwise damaging Disclosure of any the other Party's \nProprietary Information of which the joint property is a Derivative or \nwhich is Incorporated in the joint property, if any.\n\n<\/p><p align=\"JUSTIFY\">21.5.3. Any Party requesting cooperation under Paragraph 21.5.1 or \nParagraph 21.5.2 above shall bear all expenses associated \ntherewith, except that the Parties who jointly own any Proprietary \nInformation, as determined under this Agreement, shall equally \nbear the expense of filing and prosecuting applications for patent \nprotection in the United States of America of such jointly owned \nProprietary Information.\n\n<\/p><p align=\"JUSTIFY\">21.6. Limitation on Transfer of Proprietary Information. Except as expressly \nprovided herein, nothing in this Agreement shall operate to create or \ntransfer an ownership, license or other proprietary interest in any \nProprietary Information, nor require the Disclosure by an Owning Party of \nany of its Proprietary Information, nor restrict, inhibit or encumber any \nOwning Party's right or ability to Dispose of, use, distribute, Disclose or \ndisseminate in any way its own Proprietary Information or to release or \nmodify by further agreement the obligations of the other Party or Others \nwith respect to such Owning Party's Proprietary Information.\n\n<b><\/b><\/p><p align=\"JUSTIFY\">22. CONFIDENTIALITY<\/p>\n\n<p align=\"JUSTIFY\">22.1. A Receiving Party shall, with respect to an Owning Party's Proprietary \nInformation:\n\n<\/p><p align=\"JUSTIFY\">22.1.1. Restrict access thereto to such of its employees and consultants \nwho need to know it in order for the Receiving Party to perform its \nobligations under this Agreement and who agree to be bound by \nan obligation of confidence no less protective of the Disclosing \nParty's Proprietary Information than the provisions of this \nAgreement;\n\n<\/p><p align=\"JUSTIFY\">22.1.2. Not use Proprietary Information disclosed to it pursuant to this \nAgreement for any purposes other than those expressly permitted \nby this Agreement; and\n\n<\/p><p align=\"JUSTIFY\">22.1.3. Not disclose Proprietary Information disclosed to it pursuant to this \nAgreement to any third Party.\n\n<\/p><p align=\"JUSTIFY\">22.2. Each Receiving Party shall protect the Disclosing Party's Proprietary \nInformation using at least the same degree of care it employs to avoid \ndisclosure of its own Proprietary Information of a similar nature, provided \nsuch degree of care is not less than reasonable under the circumstances. \nThe obligations and restrictions provided in this Paragraph 22 shall \nsurvive expiration or termination of this Agreement. \n\n<\/p><p align=\"JUSTIFY\">22.3. A Disclosing Party's Proprietary Information and any tangible or electronic \nmedium on or by which it is or has been Disclosed to, possessed, or \nreproduced by the Receiving Party, shall at all times be the Disclosing \nParty's sole and exclusive property. The Disclosing Party may at any \ntime, by written notice, revoke in whole or in part any permission given to \nthe Receiving Party under this Paragraph 22 to use, possess or Disclose \nits Proprietary Information. Upon such revocation, or upon any written \nrequest, the Receiving Party shall immediately and unconditionally deliver \nto the Disclosing Party all of the Disclosing Party's Proprietary Information \nand any tangible or electronic medium on or by which it is or has been \nDisclosed to, possessed, or reproduced by the Receiving Party.\n\n<\/p><p align=\"JUSTIFY\">22.4. Except as otherwise provided in this Agreement, the Disclosure of \nProprietary Information shall not be construed as granting the Receiving \nParty any rights with respect to the other Party's Proprietary Information \nor any license under any patents, patent applications, copyrights and\/or \nother intellectual property rights to which the Disclosing Party may then or \nthereafter own or hold licensing rights.\n\n<\/p><p align=\"JUSTIFY\">22.5. Disclosure of any Proprietary Information by a Receiving Party hereunder \nshall not be precluded if such Disclosure is (a) in response to a valid and \nlegally-enforceable order of a court or other government body or any \npolitical subdivision thereof; or (b) otherwise required by law, provided, \nhowever, that the Receiving Party before making such Disclosure must \nfirst (i) immediately upon receipt of such order notify the Disclosing Party \nof such order; and (ii) make and cooperate with the Disclosing Party in \nmaking, if available under applicable law, a good faith effort to obtain a \nprotective order or other appropriate determination against or limiting \ndisclosure or use of the Proprietary Information.\n\n<\/p><p align=\"JUSTIFY\">22.6. Each Disclosing Party shall endeavor to affix or incorporate in any \ntangible Proprietary Information it Discloses to the Receiving Party an \nappropriate statement identifying the information as the Disclosing Party's \nProprietary Information, such as \"[Disclosing Party] Proprietary \nInformation\", or \"[Disclosing Party] Confidential Information\", or words of \nlike meaning, clearly expressed. The Disclosing Party shall, after \nDisclosing Proprietary Information other than in tangible form, endeavor \nto: (i) promptly confirm the Disclosure, (ii) reduce the Proprietary \nInformation to writing and (iii) identify the information as the Disclosing \nParty's Proprietary Information in the manner described above. However, \nthe Disclosing Party's failure to so affix or incorporate or confirm shall not \naffect such information's or material's character as the Disclosing Party's \nProprietary Information under this Agreement.\n\n<b><\/b><\/p><p align=\"JUSTIFY\">23. INTELLECTUAL PROPERTY INDEMNIFICATION<\/p>\n\n<p align=\"JUSTIFY\">23.1. By Manufacturer\n\n<\/p><dir>\n<p align=\"JUSTIFY\">Manufacturer shall defend, indemnify and hold harmless Com21, its \nAffiliates and its and their customers from and against any costs, \nexpenses, damages, judgments and liabilities of any kind, including \nreasonable attorneys' fees and costs, arising from or related to any claim, \nsuit or other action against Com21, any of its Affiliates or its or their \ncustomers to the extent such claim, suit or action is based upon an \nassertion that (i) the Manufacturing Standards, Manufacturer's Proprietary \nInformation or any portion thereof, or (ii) the Product(s) where such claim, \nsuit or action relates to the Manufacturing Standards or Manufacturer's \nProprietary Information; infringe any third party's copyright, trade secrets, \npatent, trademark and\/or trade name, and Manufacturer shall pay the \namount of the settlement or the costs, damages and attorneys' fees and \ncosts finally awarded by a court in any such suit or action, provided that \nCom21:\n\n<\/p><p align=\"JUSTIFY\">23.1.1. promptly gives Manufacturer notice of any such claim or \nthreatened or actual suit or action;\n\n<\/p><p align=\"JUSTIFY\">23.1.2. gives Manufacturer sole control of the defense and settlement of \nsuch claim, suit or action and related settlement negotiations; and\n\n<\/p><p align=\"JUSTIFY\">23.1.3. cooperates in the defense of such claim, suit or action.\nIn the event that in any such suit or action an injunction is entered \nprohibiting the purchase or sales of any Product(s) by Com21, any of its \nAffiliates or its or their customers, Manufacturer, at its expense, shall (i) \nprocure for Com21, its Affiliates and its and their customers the right to \ncontinue to purchase, sell, market, use and have others sell, market and \nuse the Manufacturing Standards, Manufacturer's Proprietary Information \nand\/or the Product(s); or (ii) replace or modify the Manufacturing \nStandards or Manufacturer's Proprietary Information such that \nManufacturer or Com21 may manufacture or have manufactured \nProduct(s) that are non-infringing while still conforming to the applicable \nProduction File(s).\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">23.2. By Com21.\n\n<\/p><dir>\n<p align=\"JUSTIFY\">Com21 shall defend, indemnify and hold harmless Manufacturer and its \nAffiliates from and against any costs, expenses, damages, judgments and \nliabilities of any kind, including reasonable attorneys' fees and costs, \narising from or related to any claim, suit or other action against \nManufacturer or any of its Affiliates to the extent such suit or claim is \nbased upon an assertion that the Product(s), Com21's Proprietary \nInformation or any portion thereof infringe any third party's copyright, \ntrade secrets, patent, trademark and\/or trade name, and Com21 shall pay \nthe amount of settlement or the costs, damages and attorneys' fees and \ncosts finally awarded by a court in any such suit or action, provided that \nManufacturer:\n\n<\/p><p align=\"JUSTIFY\">23.2.1. gives Com21 notice of any such claim or threatened or actual suit \nor action;\n\n<\/p><p align=\"JUSTIFY\">23.2.2. gives Com21 sole control of the defense and settlement of such \nsuit, claim or action and related settlement negotiations; and\n\n<\/p><p align=\"JUSTIFY\">23.2.3. cooperates in the defense and settlement negotiation of such suit, \nclaim or action.\n\n<\/p><p align=\"JUSTIFY\">Notwithstanding the preceding sentence, Com21 shall have no obligation \nto Manufacturer regarding any such claim, suit or action to the extent that \nsuch claim, suit or action is caused by, arises from or is attributable to (i) \nany unauthorized modification of the Com21 Proprietary Information by \nManufacturer; (ii) or Manufacturer's unauthorized modifications to the \nProduct(s).\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">23.3. General.\n\n<\/p><dir>\n<p align=\"JUSTIFY\">In performing its obligations under this Agreement, each Party agrees that \nit will not knowingly infringe any patent, copyright, mask work right or \ntrade secret of any third party.\n\n<\/p><p align=\"JUSTIFY\">This Paragraph 23 shall survive the expiration or termination of this \nAgreement in any manner whatsoever. This Paragraph 23 specifies the \nexclusive remedies of the parties for any alleged infringement or \nmisappropriation of any intellectual property rights of any third party by \nthe Manufacturing Standards or Manufacturer Proprietary Information \nprovided by Manufacturer to pursuant to this Agreement and by the \nDesign Specification, Products, Com21 Proprietary Information or Com21 \nComponents provided by Com21 pursuant to this Agreement.\n<\/p><\/dir>\n\n<b><\/b><p align=\"JUSTIFY\">24. LIMITATION OF LIABILITY<\/p>\n\n<p align=\"JUSTIFY\">EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, NEITHER \nPARTY SHALL BE LIABLE TO THE OTHER, WHETHER IN CONTRACT OR IN \nTORT, FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL \nDAMAGES OF ANY KIND, INCLUDING, WITHOUT LIMITATION, CLAIMS FOR \nLOST PROFITS OR LOSS OF GOODWILL, EVEN IF THAT PARTY HAS BEEN \nADVISED OF THE POSSIBILITY OF SUCH DAMAGES, BY REASON OF ANY \nBREACH OR DEFAULT UNDER THIS AGREEMENT. Regardless of the \nforegoing, this Paragraph shall not apply to either Party's breach of the following \nParagraphs 16, , 20.2, 20.3, 21, 22, and 23.\n\n<b><\/b><\/p><p align=\"JUSTIFY\">25. INSURANCE<\/p>\n\n<p align=\"JUSTIFY\">Manufacturer shall, at its own expense, maintain comprehensive general liability \ninsurance (including product liability and broad form contractual liability) for not \nless than $5,000,000 per occurrence, during the term of this Agreement and for \nfive (5) years thereafter. Such insurance shall (i) be in a form and with a carrier or \ncarriers reasonably acceptable to Com21, (ii) list Com21 as an additional named \ninsured, and (iii) provide that such insurance may not be canceled or altered so \nas to affect the interest of any of the foregoing without at least thirty (30) days' \nprior written notice to Com21. Promptly following execution of this Agreement, \nManufacturer shall deliver to Com21 satisfactory evidence of such insurance \ncoverage, or an equivalent self-insurance program.\n\n<b><\/b><\/p><p align=\"JUSTIFY\">26. TERM OF THE AGREEMENT<\/p>\n\n<p align=\"JUSTIFY\">This Agreement shall be effective for a period of one (1) year commencing on the \nEffective Date, unless earlier terminated in accordance with its terms.  Thereafter, \nthis Agreement shall be automatically renewed on its anniversary dates for \nsuccessive one (1) year terms subject to a Party providing written notice to the \nother Party no later than sixty (60) days prior to any such anniversary date of such \nParty's intent not to renew in which event this Agreement shall terminate at the end \nof the then current term.  \n\n<b><\/b><\/p><p align=\"JUSTIFY\">27. TERMINATION<\/p>\n\n<dir>\n<p align=\"JUSTIFY\">27.1. This Agreement may be terminated:\n\n<\/p><p align=\"JUSTIFY\">27.1.1. For Cause.\n\n<\/p><p align=\"JUSTIFY\">27.1.1.1. By Com21, in the event of Manufacturer's material \nbreach of this Agreement, which within thirty (30) days of \nCom21's written notice thereof is neither (i) cured, nor (ii) \nthe subject of a mutually agreed plan to cure, provided, \nhowever, that if a material breach is not capable of being \ncured, Com21 may terminate with immediate effect.\n\n<\/p><p align=\"JUSTIFY\">27.1.1.2. By Manufacturer, in the event of Com21's material \nbreach of this Agreement, which within thirty (30) days of \nManufacturer's written notice thereof is neither (i) cured, \nnor (ii) the subject of a mutually agreed plan to cure, \nprovided, however, that if a material breach is not capable \nof being cured, Manufacturer may terminate with \nimmediate effect.\n\n<\/p><p align=\"JUSTIFY\">27.1.2. For Com21's Convenience, without cause, upon not less than \nninety (90) days advance written notice to Manufacturer effective \nat or after the end of the Exclusivity Period, notwithstanding \nParagraph 26..\n\n<\/p><p align=\"JUSTIFY\">27.2. Contents of Notice of Termination\n\n<\/p><p align=\"JUSTIFY\">When a Party is permitted or required to give written notice of termination \nunder Paragraph 27.2.1 above, such notice shall state with reasonable \nparticularity the nature of the breach, the steps required to cure if such \nbreach is by its nature curable, and either (i) the Party's intent to \nterminate this Agreement if a curable breach is not cured, or (ii) the \nParty's election to immediately terminate the Agreement if the breach is \nnot curable.\n\n<\/p><p align=\"JUSTIFY\">27.3. Effect of Termination and Notice of Termination\n\n<\/p><p align=\"JUSTIFY\">27.3.1. Neither the expiration nor Termination of this Agreement shall \nrelieve either Party of any obligation previously accrued, nor any \nobligation accruing or arising thereafter under the following \nParagraphs of this Agreement and any other paragraphs that by \ntheir terms so provide: 1 (\"Definitions\"), 13 (\"Records, Audits and \nReports\"), 17 (\"Product Warranty; Epidemic Failure\"), 18 \n(\"Warranty Claims and Repair\"), 19 (\"Parts Supply\"), 21 \n(\"Intellectual Property Ownership\"), 22 (\"Confidentiality\"), 23 \n(\"Intellectual Property Indemnity\"), 27 (\"Termination\"), and 29 \n(\"General\").\n\n<\/p><p align=\"JUSTIFY\">27.3.2. Upon any notice of termination given by either Party for any \nreason, the exclusivity provided in Paragraph 3 of this Agreement \nwith respect to the manufacture of Products by Manufacturer for \nCom21 shall immediately terminate.\n\n<\/p><p align=\"JUSTIFY\">27.3.3. Upon Manufacturer's termination of this Agreement as provided in \nParagraph 27.1.1.2, Manufacturer at Com21's request shall \ncontinue to supply the Products to Com21, subject to commercially \nreasonable terms and conditions of sale, for a period of twelve (12) \nmonths following such termination.\n\n<\/p><p align=\"JUSTIFY\">27.3.4. Upon or after any notice of termination, any Termination, or any \nExclusivity Termination Notice, (i) Manufacturer will identify to \nCom21 any Products, Parts, finished goods, work in progress, \ncomponents or other material for which Com21 is or may become \nliable under the terms of this Agreement to pay Manufacturer, and \n(ii) Manufacturer at Com21's request will sell and deliver to Com21 \nthose Parts and assemblies as required under Exhibit 8.2 and \nsuch other items as Com21 may elect to purchase, at the price \ndetermined under this Agreement. \n\n<\/p><p align=\"JUSTIFY\">27.3.5. Upon any Termination, Manufacturer shall complete the production \nof any Products for which Manufacturer has accepted a purchase \norder as of the effective date of such Termination and deliver such \ncompleted Products to Com21 within twenty (20) days of the \neffective date of such Termination provided, however, that if this \nAgreement was terminated by Com21 for Manufacturer's default \nunder Paragraph 27.1.1.1, Com21 may direct Manufacturer to \nrefrain from completing such production and in such event Com21 \nshall be under no obligation, under this Paragraph 27.3.5 or \notherwise under this Agreement, to pay Manufacturer for any such \nitems or any portions or components thereof. With respect to \npurchase orders for components that will not be utilized to \nmanufacture Products as set forth above in this Paragraph 27.3.5, \nManufacturer shall not cancel any purchase order accepted by its \nsuppliers for the purchase of Parts, without Com21's prior written \nauthorization.\n\n<\/p><p align=\"JUSTIFY\">27.3.6. Upon any Termination or Exclusivity Termination Notice, Com21 \nshall have a perpetual, non-exclusive, royalty-free license to use \nand have used the Production Files for Product-related purposes \nto the extent such use is not otherwise permitted under the terms \nof this Agreement. Regardless of the foregoing, in no event will \nCom21 have a license to use or disclose any Manufacturer \nInventions or Trade Secrets.\n\n<\/p><p align=\"JUSTIFY\">27.3.7. Within fifteen (15) days after a notice of termination is given by \neither Party to the other, or at least thirty (30) days before any \nexpiration of this Agreement, Manufacturer shall provide Com21 \nwith all relevant information concerning its outstanding purchase \norders for Parts. Com21 may, on or before the effective date of \nsuch termination or expiration, elect, at Com21's sole discretion \nand in addition to any other rights Com21 may have under this \nAgreement, none, any one, or a combination of the following \noptions:\n\n<\/p><p align=\"JUSTIFY\">27.3.7.1. To purchase from Manufacturer some or all Parts.\n\n<\/p><p align=\"JUSTIFY\">27.3.7.2. Direct Manufacturer to cancel, to the extent \npossible, some or all of the outstanding purchase orders \nfor Parts; or\n\n<\/p><p align=\"JUSTIFY\"><\/p><p align=\"JUSTIFY\">27.3.7.3. Obtain from Manufacturer an assignment of \nManufacturer's rights and obligations under the \noutstanding purchase orders Parts.\n\n<\/p><p align=\"JUSTIFY\">If Com21 instructs Manufacturer to cancel any Manufacturer \npurchase order for Parts under Paragraph 27.3.7.2, (i) \nManufacturer agrees to use reasonable efforts to cancel such \npurchase order; (ii) Manufacturer shall use reasonable efforts to \nnegotiate an equitable settlement with its suppliers concerning \nManufacturer's financial liability due to the cancellation of such \npurchase order for Parts; and (iii) if Manufacturer is unable to \ncancel any outstanding purchase order for Parts, Com21 shall be \nliable for Manufacturer's direct financial liability for such purchase \norders and\/or their cancellation as provided in Exhibit 8.2.\n<\/p><\/dir>\n\n<b><\/b><p align=\"JUSTIFY\">28. REPRESENTATIONS<\/p>\n\n<p align=\"JUSTIFY\">28.1. Each Party represents to the other that: (i) it has all requisite power and \nauthority to enter into this Agreement and to carry out the transactions \ncontemplated hereby; (ii) it has the rights, licenses, permits and power to \nperform all obligations incurred by it under this Agreement; (iii) the \nexecution, delivery and performance of this Agreement are duly \nauthorized; (iv) this Agreement has been duly executed and delivered by \nit and is a valid and binding obligation of it; and (v) the execution, delivery \nand performance of this Agreement and the consummation of the \ntransactions contemplated hereby do not conflict with or violate its charter \nand by-laws, any other contract or agreement to which it is a party, any \napplicable law or any order or judgment of any court or governmental \nauthority. Manufacturer represents that all Product(s) purchased and sold \npursuant to this Agreement shall be (i) free from any liens or \nencumbrances and (ii) manufactured, labeled, packaged, sold and \nDelivered in accordance with all applicable United States federal, state \nand local laws, orders, regulations, codes and standards (whether or not \nspecifically referenced elsewhere in this Agreement).\n\n<\/p><p align=\"JUSTIFY\">28.2. Com21 represents and warrants to Manufacturer that Com21 and its \nAffiliates have the right to manufacture and have manufactured the \nProducts.\n\n<b><\/b><\/p><p align=\"JUSTIFY\">29. GENERAL<\/p>\n\n<p align=\"JUSTIFY\">29.1. Force Majeure.\n\n<\/p><dir>\n<p align=\"JUSTIFY\">Neither Party shall be liable to the other Party if the performance of any of \nits obligations under this Agreement is prevented or delayed because of \ncauses beyond its reasonable control including, without limitation, fire, \nstrike, war, insurrection, act of God, law, regulation and embargo of \ngovernment agency, riot, severe weather, restriction on the use of power \nor any other cause beyond its reasonable control and not due to such \nParty's own fault or negligence (an \"Excusable Delay\"). A Party shall be \nexcused from its performance to the extent caused by such Excusable \nDelay; provided that such Party (i) gives notice of the Excusable Delay to \nthe other Party promptly after its occurrence, (ii) uses its reasonable \nefforts (including executing any disaster plan) to overcome, mitigate and \nremove the cause of the event preventing or delaying performance, (iii) \ncontinues the performance of all its obligations under this Agreement that \nare not prevented or delayed and (iv) upon cessation of the Excusable \nDelay, promptly performs or completes performance of the obligations \nwhich were prevented or delayed. Notwithstanding the foregoing, if \nManufacturer's performance is delayed for more than five (5) days due to \nExcusable Delay, Com21 shall have the right to temporarily and \nreasonably procure from any other supplier Product(s) which \nManufacturer is unable to supply.\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">29.2. Assignment; Binding Effect.\n\n<\/p><dir>\n<p align=\"JUSTIFY\">Neither Party shall assign or transfer this Agreement or any rights and \nobligations hereunder without the other Party's prior written consent, \nwhich consent may be refused in such Party's absolute discretion. This \nAgreement and the transactions and other instruments provided for \nherein shall be binding upon and inure to the benefit of the parties, their \nlegal representatives, successors, and permitted assignees. \n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">29.3. Governing Law and Legal Actions.\n\n<\/p><dir>\n<p align=\"JUSTIFY\">This Agreement shall be governed by and construed under the laws of the \nState of California and the United States of America without regard to \nconflicts of laws provisions thereof and without regard to the United Nations \nConvention on Contracts for the International Sale of Goods.  The sole \njurisdiction and venue for actions related to the subject matter hereof shall \nbe the courts having within their jurisdiction the location of Com21's principal \nplace of business.  Both parties hereby consent and waive any venue \nobjections to the jurisdiction of such courts.  The parties agree that process \nmay be served in the manner provided herein for giving of notices or \notherwise as allowed by California or federal law.\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">29.4. No Waiver.\n\n<\/p><dir>\n<p align=\"JUSTIFY\">Either Party's (i) waiver of any performance by the other, (ii) waiver of any \ncondition of this Agreement, or (iii) consent to any breach of this \nAgreement by the other, shall (a) be effective only if expressly set forth in \na writing signed by the Party alleged to have waived or consented, and \n(b) not constitute or require an ongoing waiver of such performance or \ncondition, or consent to any previous, different or subsequent breach, \nregardless of whether such performance, condition or breach is similar, \nidentical or related, and regardless of the course of dealing which \ndevelops or has developed between the Parties.\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">29.5. Compliance with U.S. Government Export Controls.\n\n<\/p><dir>\n<p align=\"JUSTIFY\">If either Party exports any Product or any Proprietary Information, such \nParty shall comply with the United States Export Administration Act as \namended from time to time, with the Export Administration Regulations \npromulgated from time to time thereunder, all other export laws and \nregulations of the United States and all amendments, modifications or \nadditions thereto, including all laws and regulations relating to re-export. \n<\/p><\/dir>\n\n\n<p align=\"JUSTIFY\">29.6. Notices.\n\n<\/p><dir>\n<p align=\"JUSTIFY\">All notices, requests and other communications permitted or required to \nbe given pursuant to this Agreement shall be in writing and shall be \npersonally delivered, or sent by recognized delivery service or certified or \nregistered mail with return receipt requested and with all postage prepaid, \nto the recipient Party at its address set forth below:\n\n\n<\/p><p align=\"JUSTIFY\">Com21:<br>\nCom21 <br>\nAttention: CFO<br>\n750 Tasman Drive<br>\nMilpitas, CA 95035<br>\n\n<\/p><p align=\"JUSTIFY\">With Copy To:<br>\nCom21 <br>\nAttention: Corporate Counsel<br>\n750 Tasman Drive<br>\nMilpitas, CA 95035\n\n\n<\/p><p align=\"JUSTIFY\">Manufacturer:<br>\nUniversal Scientific Industrial Co.,Ltd<br>\nAttention: Senior Manager, Business <br>\nDevelopment, SPCM <br>\n141, Lane 351, Taiping Road, Sec. 1, <br>\nTsao Tuen, <br>\nNan Tou, Taiwan R.O.C.<br>\n\n<\/p><p align=\"JUSTIFY\">With Copy To:<br>\n\n\n\n\n\n<\/p><p align=\"JUSTIFY\">Each such notice shall be effective upon delivery or when delivery is \nrefused. Either Party may, by notice given in compliance with the \nprovisions of this Paragraph 29.6, designate another address for receipt \nof notice.\n<\/p><\/dir>\n\n\n<p align=\"JUSTIFY\">29.7. Entire Agreement.\n\n<\/p><dir>\n<p align=\"JUSTIFY\">This Agreement, together with its exhibits, constitutes the entire \nagreement of the Parties respecting its subject matter. It supersedes all \nprior and contemporaneous communications and understandings and \nagreements, written or oral, between the parties relative to its subject \nmatter and merges all discussions between them. This Agreement may \nonly be amended by subsequent written agreement which is duly \nexecuted by the parties. \n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">29.8. Severability\n\n<\/p><dir>\n<p align=\"JUSTIFY\">If any provision of this Agreement is determined by any court of \ncompetent jurisdiction or arbitrator to be invalid, illegal, or unenforceable \nto any extent, that provision shall, if possible, be construed as though \nmore narrowly drawn, if a narrower construction would avoid such \ninvalidity, illegality, or unenforceability or, if that is not possible, such \nprovision shall, to the extent of such invalidity, illegality, or \nunenforceability, be severed, and the remaining provisions of this \nAgreement shall remain in effect provided, however, that the court shall \nhave authority and jurisdiction to add to this Agreement a provision as \nsimilar in terms and intended effect to such severed provision as may be \npossible and be legal, valid, and enforceable. If, as a result of the \nforegoing, a party's material benefits under this Agreement that would \nhave existed but for the operation of the preceding sentence are \nmaterially impaired, such party may at such party's election thereafter \nterminate this Agreement on not less than three (3) months advance \nwritten notice to the other party.\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">29.9. Effect of Title and Headings.\n\n<\/p><dir>\n<p align=\"JUSTIFY\">The title of this Agreement and the headings of its articles are included \nsolely for convenience and shall not govern, limit or aid in the \ninterpretation of any terms or provision of this Agreement.\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">29.10. Construction\n\n<\/p><dir>\n<p align=\"JUSTIFY\">The Parties acknowledge and agree that both Parties have participated in \nthe drafting and negotiation of all provisions of this Agreement, and each \nParty hereby waives and agrees not to assert that any ambiguity should \nbe construed for or against either Party. Except as otherwise specified, \nreferences in this Agreement to Paragraphs and Exhibits are to \nParagraphs of, and Exhibits attached to, this Agreement. Except where \nthe context clearly requires to the contrary, \"including\" shall mean \n\"including, without limitation\".\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">29.11.  Nature of Relationship\n\n<\/p><dir>\n<p align=\"JUSTIFY\">For the purposes of this Agreement, the Parties are deemed to be \nindependent contractors. It is expressly agreed that this Agreement and \nthe relationship between the parties hereby established do not constitute \na partnership, joint venture, agency or contract of employment. Neither \nParty shall have the authority to make any statements, representations or \ncommitments of any kind, or to take any action, which shall be binding on \nthe other, except as authorized in writing by the Party to be bound. \nNeither Party shall bind nor attempt to bind the other to any contract or to \nthe performance of any obligation, nor represent to third parties that it has \nany right to enter into any obligation on the other's behalf.\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">29.12. Publicity.\n\n<\/p><dir>\n<p align=\"JUSTIFY\">Neither Party shall make or issue any publicity, news release, public \nannouncement or communication of any sort with the media, direct or \nindirect, written or oral, concerning this Agreement or the transactions \ncontemplated by this Agreement without the prior written consent of the \nother Party, not to be unreasonably withheld.\n<\/p><\/dir>\n\n<p align=\"JUSTIFY\">WITH INTENT TO BE BOUND, Com21 and Manufacturer have executed this \nAgreement on the dates indicated below.\n\n<\/p><p align=\"JUSTIFY\">Com21:\n\n<\/p><p align=\"JUSTIFY\">Com21 \n\n<\/p><p align=\"JUSTIFY\">By:__________________\n\n<\/p><p align=\"JUSTIFY\">Printed Name:  Jeff Jarvis\n\n<\/p><p align=\"JUSTIFY\">Title:  Senior VP and GM of Network <br>\nSystems Division, Com21\n\n<\/p><p align=\"JUSTIFY\">Dated: ____________________\n\n<\/p><p align=\"JUSTIFY\"> \n\n<\/p><p align=\"JUSTIFY\">Manufacturer:\n\n<\/p><p align=\"JUSTIFY\">Manufacturer \n\n<\/p><p align=\"JUSTIFY\">By:__________________\n\n<\/p><p align=\"JUSTIFY\">Printed Name: Chen-Yen Wei\n\n<\/p><p align=\"JUSTIFY\">Title: Senior VP SPCM Business Group, USI\n<\/p><p align=\"JUSTIFY\">Dated: ____________________\n\n\n\n\n\n\n<\/p><\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7151],"corporate_contracts_industries":[9510],"corporate_contracts_types":[9613,9619],"class_list":["post-42876","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-com21-inc","corporate_contracts_industries-technology__programming","corporate_contracts_types-operations","corporate_contracts_types-operations__sales"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/42876","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=42876"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42876"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42876"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42876"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}