Zeon Specialty Materials Inc.

ZSM Prototype Supplying Terms and Conditions

Please read these supplying Terms and Conditions (“Agreement”) carefully. This Agreement governs the supply of Prototypes (defined below) by Zeon Specialty Material Inc. (“ZSM”), on behalf of its Affiliates (defined below) to the customer (“Customer”). ZSM and Customer are each a “Party” and collectively, the “Parties.” Subject to ZSM’s approval, Customer’s Affiliates may also order prototypes under this Agreement, in which event references to “Customer” herein shall also include Customer’s Affiliate(s).

DEFINITIONS

  • “Affiliate” means any entity which now or hereinafter, directly or indirectly, Controls, is Controlled by, or is under common Control with a Party. An entity has “Control” if it possesses more than fifty percent (50%) of the (i) outstanding shares or securities representing the right to vote for the entity’s managing authority or (ii) ownership interest representing the right to (a) make decisions for such entity or (b) vote for, designate, or otherwise select members of the highest governing or decision making, managing or authority body of such entity. An entity is considered to be an Affiliate so long as such ownership or Control exists.
  • “Business Day” means any day except Saturdays, Sundays and public holidays, including year-end/new-year holidays, in the United States or Japan.
  • “Confidential Information” shall mean (a) the existence and all information concerning the Order Forms (including the terms therein), and (b) any other information that is marked “Confidential” or the like or, if delivered verbally, confirmed in writing to be “Confidential” within 30 days of the initial disclosure. Confidential Information does not include information that (i) the receiving Party can prove it already knew at the time of receipt from the disclosing Party; or (ii) has come into the public domain without breach of confidence by the receiving Party; (iii) was received from a third party without restrictions on its use; (iv) the receiving Party can prove it independently developed without use of or reference to the disclosing party's data or information; or (v) the disclosing Party agrees in writing is free of such restrictions.
  • “Infringement Claim(s)” means any claim(s), allegation, complaint(s) or demand(s) arising from or in connection with any actual or claimed infringement or misappropriation of any patent, trademark, service mark, copyright, trade secrets or any other third party intellectual property right.
  • “Order Form” means the document issued by ZSM which may include, but not be limited to, indication of applicable Quotation　Number (defined below) quantity and price of the Prototypes to be provided.
  • “Prototype(s)” means microfluidic chips manufactured by Zeon Corporation (“Zeon”), its Affiliates, and/or its subcontractors for sale to Customer in accordance with the terms of this Agreement.

ORDERING PROCEDURES

  • Ordering Procedures. Customer shall send to ZSM its final drawing of the Prototype(s) it seeks for ZSM to provide a quotation for manufacture (the “Final Prototype Drawings”). After receipt of same, along with requested quantities and timing, along with any accompanying information needed to produce such quotation, ZSM will:
    • provide the Final Prototype Drawing with a drawing number assigned by ZSM (the “Final Prototype Drawing Number”);
    • prepare and provide a quotation for the manufacture of the Prototype in accordance with the Final Prototype Drawings and the other request materials (“Quotation”), with Final Prototype Drawing Number and an assigned quotation number (the “Quotation Number”); and
    • provide ZSM’s Order Form signed by ZSM.
  • Order Acceptance. Once Customer makes a purchase order by signing and submitting the Order Form provided by ZSM in accordance with Section 2.1.3, or Customer make a purchase order by submitting to ZSM its own signed order form and consent letter agreeing to the Agreement, and ZSM notifies Customer its acceptance of the purchase orders, then ZSM shall be obliged to supply Prototypes to Customer, and Customer shall be obliged to pay for such Prototypes, subject to any conditions specified in the Order Form and this Agreement. All purchase orders are non-refundable (except as set forth in Section 4.2), non-cancellable, and non-modifiable (except as set forth in Section 3.1 and 3.2).
  • Operating Procedures. Except as otherwise agreed in writing by the Parties, ZSM will supply Prototypes pursuant to its standard operating procedures as amended from time to time in its sole discretion.
  • Drawings and Prototype Specific Terms. Customer shall bear all responsibility and liability for the Final Prototype Drawings, including all related proposals or suggestions that ZSM makes, since Customer shall approve same prior to implementation.

PRODUCTION AND DELIVERY PROCEDURES

  • Manufacturing. ZSM will have Zeon manufacture the Prototypes that conform to the Final Prototype Drawings, subject to the following: if ZSM determines, prior to delivery of the Prototypes, that it would be difficult to manufacture the Prototype according to the Final Prototype Drawings due to technical, economic, or other reasons:
    • the Parties will discuss modifications for the Final Prototype Drawings, manufacturing process, and other solutions (“Modifications”);
    • Any Modifications agreed by the Parties shall be specifically approved by Customer, and Customer bears all responsibility and liability therefor;
    • ZSM shall be relieved of its obligations to supply the Prototypes that conform with the Final Prototype Drawings hereunder; and
    • If the Parties are unable to agree upon Modifications, ZSM may terminate this Agreement
  • Rescheduling and Cancellation. Customer may not cancel the whole or a part of its purchase order once placed. However, ZSM may on its sole discretion accept Customer’s request for rescheduling or changing quantity.
  • Subcontracting. ZSM may use subcontractors to perform the services set forth in this Agreement in its discretion, including sharing Confidential Information with such subcontractors, in accordance with Section 8, for the sole purpose of performance of the services. ZSM remains responsible for its subcontractors to the extent of its liability hereunder.
  • Delivery. ZSM will use commercially reasonable efforts to deliver the quantity of Prototypes stipulated in the applicable Order Form.
  • Shipping. Unless otherwise agreed by the Parties or provided otherwise in the Order Form, all deliveries will be made DDP (Customer-specified location) (INCOTERMS 2010). Title and risk will pass to Customer at the delivery point. ZSM will use commercially reasonable efforts to ship Prototypes on the date agreed by the Parties.
  • Packaging. Unless otherwise agreed by the Parties and stated in the Order Form, all Prototypes will be delivered in ZSM’s standard packaging with a packing list.
  • Inspection Upon Delivery. Customer will inspect all Prototype shipments promptly upon receipt. Failure to notify ZSM of any nonconforming shipment (including but not limited to quantity variance, incorrect Prototypes, and visible defects) within two weeks after delivery of the Prototypes (the “Inspection Period”) shall be deemed Customer’s acceptance of such shipment. ZSM shall have no liability for notification after the applicable Inspection Period.
  • Savings. ZSM’s failure to perform its responsibilities under this Agreement shall be excused if and to the extent such nonperformance is caused by the actions or inactions of Customer, its Affiliate, their agents, service recipients, or third party contractors. ZSM shall communicate to Customer reasonably promptly upon becoming aware of such action or inaction and its inability to perform under such circumstances. ZSM will use commercially reasonable efforts to perform notwithstanding such circumstances where reasonable to do so.

NONCONFORMANCE / WARRANTY

  • Return Procedures. If, during the Inspection Period, Customer believes a Prototype does not comply with the Final Prototype Drawings, Customer should notify ZSM to initiate a Returned Materials Authorization (“RMA”). As part of the RMA process, Customer shall notify ZSM in writing (email to suffice) of the quantity and type of Prototype it would like to return and the reason and underlying data that supports the return. At ZSM’s request Customer will return the Prototypes (or a sample amount as requested by ZSM) freight prepaid to a location designated by ZSM.
  • Remanufacture/Refunds. To the extent ZSM verifies that such Prototypes contain defects which are not due to any event caused by (a) Customer, or any third party not authorized by ZSM, including but not limited to accident, misuse, neglect, improper installation, handling or packing, repair or alteration; or (b) improper testing or usage contrary to any instructions issued by ZSM; or (c) a problem with the design or need for a Modification (as described in Section 3.1) of the Final Prototype Drawings, then ZSM will notify Customer that it authorizes such return and will have Zeon remanufacture or refund the purchase price of (at ZSM’s election) such Prototypes. If ZSM elects to have Zeon remanufacture such Prototypes, delivery of the remanufactured Prototypes to Customer will be the sole responsibility of ZSM. All Prototypes validated for return by ZSM shall be returned to a location designated by ZSM by Customer (to the extent not already done so) or destroyed (as evidenced by a scrap certificate to be provided by Customer) as directed by ZSM. THIS SECTION 4.2 STATES ZSM’S ENTIRE LIABILITY, AND CUSTOMER’S ENTIRE REMEDY, WITH RESPECT TO BREACH OF ITS PERFORMANCE OBLIGATIONS OR THE QUALITY OF THE PROTOTYPES. If ZSM does not identify any defects with the applicable Prototypes, ZSM will arrange for the re-delivery of such Prototypes to Customer, such delivery to be at Customer’s sole cost.
  • Non-infringement Warranty. Customer represents and warrants that the Customer Information as defined in Section 7.2 below will not infringe, misappropriate, or otherwise violate any rights of a third party, including intellectual property rights, and that manufacture and supply of the Prototype, by Zeon and ZSM respectively, based on Customer Information will not infringe, misappropriate, or otherwise violate any rights of a third party, including intellectual property rights.
  • Warranty Disclaimer. EXCEPT AS SPECIFICALLY PROVIDED IN THIS AGREEMENT, AND TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, ZSM EXPRESSLY DISCLAIMS ALL WARRANTIES AND CONDITIONS OF ANY KIND, WHETHER EXPRESS, IMPLIED OR STATUTORY, ARISING FROM COURSE OF DEALING OR USAGE IN TRADE REGARDING ANY PRODUCTS OR SERVICES, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT. WITHOUT LIMITING THE FOREGOING, ZSM MAKES NO WARRANTY WHATSOEVER WITH RESPECT TO ANY PRODUCTS USED IN CONTRAVENTION OF SECTION 7.1 (UNAUTHORIZED USE).

PRICING AND PAYMENT TERMS

  • Pricing. Subject to Section 5.3, ZSM will invoice and Customer will pay the prices for the Prototypes as set forth in the Order Form. Each shipment is considered a separate and independent transaction. ZSM may provide a separate invoice for each shipment at any time on or after the date of actual shipment of the Prototype by ZSM.
  • Payment Terms. Customer will pay all invoices in United States dollars within thirty (30) days from the date of a shipping. Any late payment will be subject to interest charges payable by Customer of one-and-a-half percent (1.5%) per month or the maximum rate allowable by law, whichever is less, on any unpaid and undisputed balance calculated from the due date of payment up to and including the date of actual payment. In its discretion, ZSM may establish, modify or revoke credit terms for Customer or any of its Affiliates pursuant to ZSM’s prevailing credit practices. In the event of any dispute over the amount invoiced, Customer will first make timely payment of any undisputed portion pending resolution between the Parties of the disputed amount.
  • Pricing Adjustments. If Customer requests any Modification(s) with respect to any Prototype, ZSM may adjust the pricing for such Prototypes, notwithstanding any previously quoted prices.

TERMINATION

  • Termination. This Agreement may also be terminated as follows:
    • By written agreement of the Parties;
    • By ZSM, in any of the following events: i) the other Party is insolvent, or is generally unable to pay its debts as they become due, or admits in writing its inability to pay its debts as they become due, or makes a general assignment for the benefit of its creditors, or (ii) the other Party is the subject of a bankruptcy, insolvency, reorganization, liquidation or similar proceeding, or a receiver, trustee, conservator, intervenor or sequestrator or the like has been appointed for such Party, or such Party has taken any action in furtherance of or indicating its consent to or acquiescence in any such proceeding or appointment.
  • Surviving Provisions. The following provisions shall survive any termination of this Agreement: 1 (Definitions); 4 (Nonconformance/Warranty); 5 (Pricing and Payment Terms); 6.2 (Surviving Provisions); 7 (Restrictions, Indemnification and Limitation of Liability), 8 (Confidentiality), and 9 (General Provisions).

RESTRICTIONS, INDEMNIFICATION AND LIMITATION OF LIABILITY

  • Unauthorized Use. Unless the Parties agree otherwise in a signed writing, Customer hereby agrees that Prototypes are not authorized for use as, and will not be used as, Critical Components, defined below, in (a) any medical, life saving or life support device or system, (b) any safety device or system in any automotive application and mechanism including, but not limited to, automotive brake or airbag systems, (c) any nuclear facilities, (d) any air traffic control device, application or system, (e) any weapons device, application or system, to specifically include any nuclear weapons or weapons of mass destruction, or (f) any other device, application or system where it is reasonably foreseeable that failure of the Prototype(s) as used in such device, application or system would lead to death, bodily injury or catastrophic property damage (an “Unauthorized Use”). Medical, life saving or life support devices or systems are those which are intended for surgical implant into the human body, or to support or sustain life, and whose malfunction or failure to perform may result in significant injury or death to the user.
    • A “Critical Component” is one whose malfunction or failure to perform may cause the failure of a device or system, or may affect the effectiveness of such device or system. ZSM will not be liable to Customer or any third party for any losses, damages, liabilities, costs or expenses incurred or arising or resulting from the use of any Prototype in contravention of this Section 7.1 or any other unauthorized use of Prototype(s).
    • Indemnity. Customer will indemnify, hold harmless and defend Zeon, ZSM, its Affiliates, officers, directors, employees and subcontractors (each a “Zeon Indemnified Party”) from and against any claim, suit, demand or action (including all losses, liabilities, damages, settlements and attorneys’ fees and expenses) which arises out of, involves or relates to an Unauthorized Use, or any breach of Section 7.1.3.
    • Unauthorized Use by Third Parties. In the event Customer sells to any third party (a “Sub-Buyer”) any Prototypes, whether in the form in which they were purchased by Customer or ZSM or incorporated into any device, system or application or in any other form, Customer hereby undertakes that such sale to the Sub-Buyer will be on terms that the use of the Prototypes will be subject to the restrictions set out in Section 7.1 and that the Prototypes are not authorized for any of the uses referred to in Section 7.1.
  • Customer Indemnification. Customer will, defend each Zeon Indemnified Party against any (a) claims regarding Customer’s failure to comply with applicable law, including import and export control laws, and (b) Infringement Claims arising from or in connection with designs, processing methods, Prototypes, the Final Prototype Drawings, Modifications, instructions, information or other materials provided or approved by Customer pursuant to this Agreement (“Customer Information”) and will indemnify and hold each Zeon Indemnified Party harmless from and against any damages, costs, judgment(s), litigation expenses (including attorneys’ fees) and settlement(s) arising therefrom. Customer’s indemnification obligations herein are subject to: (i) ZSM providing Customer with prompt notification and tender of the Infringement Claim; and (ii) Customer having sole control of the defense and all related settlement negotiations for the Infringement Claim, except that Customer may not enter into any final settlement that would adversely affect ZSM’s interests (including without limitation any admission of liability or requirement of payment by ZSM) without ZSM’s prior written approval. ZSM shall provide reasonable cooperation, assistance and information with respect to the Infringement Claim.
  • Release. Customer hereby releases each Zeon Indemnified Party from claims, demands, any and all losses, damages, rights, and actions of any kind, including personal injuries, death, and property damage, that is either directly or indirectly related to or arises from its or its customers’ use of Prototype, including arising in connection with or as a result of the Agreement. If Customer is a California entity, it hereby waives California Civil Code Section 1542, which states, “A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.” The foregoing release does not apply to any claims, demands, or any losses, damages, rights and actions of any kind, including personal injuries, death or property damage for any unconscionable commercial practice by ZSM or for such Party’s fraud, deception, false, promise, misrepresentation or concealment, suppression or omission of any material fact in connection with the Services provided hereunder.
  • Limitation of Liability. TO THE EXTENT THAT ZSM MAY BE HELD LEGALLY LIABLE BY A COURT OF COMPETENT JURISDICTION UNDER CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE ARISING OUT OF THE PERFORMANCE OR BREACH OF ITS OBLIGATIONS IN THIS AGREEMENT, ZSM’S MAXIMUM AGGREGATE LIABILITY FOR ALL CLAIMS OF ANY KIND WILL NOT EXCEED AMOUNTS PAID UNDER THE APPLICABLE ORDER. CUSTOMER AND ZSM ACKNOWLEDGE THAT THESE LIMITATIONS ON POTENTIAL LIABILITIES WERE AN ESSENTIAL ELEMENT IN SETTING CONSIDERATION HEREIN.
  • Limitations on Damages. THE REMEDIES PROVIDED HEREIN ARE CUSTOMER’S SOLE AND EXCLUSIVE REMEDIES. EXCEPT AS OTHERWISE MAY BE EXPRESSLY PROVIDED HEREIN AND EXCEPT FOR DAMAGES FOR BODILY INJURY, ZSM IS NOT LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, PUNITIVE, OR EXEMPLARY DAMAGES (INCLUDING BUT NOT LIMITED TO ANY INCREASED MANUFACTURING OR REWORK COSTS, DAMAGES RELATING TO PROCUREMENT OF SUBSTITUTE PRODUCT (i.e. “COST OF COVER”), LOSS OF PROFITS, REVENUES OR GOODWILL), WHETHER BASED ON CONTRACT, TORT OR ANY OTHER LEGAL THEORY, AND WHETHER OR NOT ZSM HAS BEEN INFORMED OF THE POSSIBILITY OF SUCH DAMAGES, AND NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY.

CONFIDENTIALITY

  • General. Each Party shall refrain from using any and all Confidential Information of the disclosing Party for any purposes or activities other than those specifically authorized in this Agreement. Except as otherwise specifically permitted herein or pursuant to written permission of the Party to this Agreement owning the Confidential Information, no Party shall disclose or facilitate disclosure of Confidential Information of the disclosing Party to anyone without the prior written consent of the disclosing Party, except to its employees, subcontractors, consultants, agents, and Affiliates who need to know such information for carrying out the activities contemplated by this Agreement and who agree in writing to be bound by substantially similar requirements to those of this Section.
  • Exception. Notwithstanding the foregoing, the receiving Party may disclose Confidential Information of the disclosing Party pursuant to a subpoena or other court process only (i) after having given the disclosing Party prompt notice of the receiving Party’s receipt of such subpoena or other process and (ii) after the receiving Party has given the disclosing party a reasonable opportunity to oppose such subpoena or other process or to obtain a protective order.

GENERAL PROVISIONS

  • Force Majeure. Neither Party will be liable for any failure to perform any actions, other than payment obligations, due to unforeseen circumstances or causes beyond the Party’s reasonable control, including, without limitation, acts of God, flood, earthquake, fire, explosion, interruption or defect in the supply of electricity or water, acts of government, war, civil commotion, terrorism, insurrection, embargo, riots, lockouts, inability to obtain raw materials, or labor disputes (“Force Majeure”). Upon the occurrence of a Force Majeure event, the Party’s obligation to perform will be extended for a period equal to the duration of the delay caused thereby. If a Force Majeure event continues for more than six (6) consecutive months, the other Party may terminate this Agreement immediately upon written notice.
  • No License. ZSM reserves all right, title and interest in and to the intellectual property utilized to manufacture the Prototypes and nothing herein grants or conveys to Customer any right or license under any trademark, copyright, patent, or other intellectual property of ZSM, by implication, estoppel or otherwise.
  • Severability. If any provision or part of this Agreement is rendered void, illegal or unenforceable in any respect under any enactment or rule of law, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby.
  • Legal Compliance. Each Party shall, in the performance of this Agreement, comply with all laws, rules and regulations issued by governmental authorities applicable to such Party. Without limiting the foregoing, Customer shall adhere to all applicable import and export laws regarding the Prototype and Technology (defined below), including but not limited to the U.S. Export Administration Regulations ("EAR") and the European Export Regulation (EG) Nr.428/2009. Pursuant to the EAR, certain controlled technology may be exported under an EAR license exception referred to as “TSR,” if the exporter obtains a written assurance. See 15 CFR 740.6. In accordance with the TSR requirements, for technology that is exported to Customer pursuant to the TSR license exception, Customer hereby certifies that, except pursuant to a license granted by the U.S. Department of Commerce Bureau of Industry and Security or as otherwise permitted pursuant to a License Exception under the EAR, Customer will not: (1) export, re-export or release to a national of a country in Country Groups D:1 or E any restricted technology, software, or source code it receives from ZSM, or (2) export to Country Groups D:1 or E the direct product of such technology or software, if such foreign produced direct product is subject to national security controls as identified on the Commerce Control List (Supplement 1 to Part 774 of the EAR). Additionally, when Customer seeks to export a Prototype that is a regulated product in Japan, Customer may be required to obtain permission to export from the Minister of Economy, Trade and Industry of Japan. Customer represents and warrants that it shall not use any products, software and/or technology relating thereto provided by ZSM to Customer under the applicable Order Form and any other products, software, and/or technology manufactured or developed by using them (“Technology”) for the purposes of disturbing international peace and security, including the design, development, production, stockpiling or any use of weapons of mass destruction such as nuclear, chemical or biological weapons or missiles to deliver any such weapons, or any use supporting these weapons activities (the “Prohibited Activities”). Customer also represents and warrants that it shall not sell, export, dispose of, license, rent, transfer, disclose, or otherwise provide the Technology to any third party whether directly or indirectly with knowledge or reason to know that the third party or any other party will engage in the Prohibited Activities. Customer shall obtain these same representations and warranties from any third party to whom it sells, exports, disposes of, licenses, rents, transfers, discloses or otherwise provides the Technology.
  • Notices. Any notices required or permitted under this Agreement may be given by physical mail or e-mail. Where ZSM requires that Customer provide an e-mail address, Customer is responsible for providing ZSM with Customer’s most current e-mail address. E-mail notice will be deemed to have been given when received. In the event that the last e-mail address Customer provided to ZSM is not valid, or for any reason is not capable of delivering to Customer any notices required/ permitted by the Agreement, ZSM’s dispatch of the e-mail containing such notice will nonetheless constitute effective notice. Customer may give notice to ZSM via physical mail at the following address: 25 Metro Drive, Suite 238, San Jose, California 95110 USA. Such notice shall be deemed given when received by ZSM by letter delivered by nationally recognized overnight delivery service or first class postage prepaid mail at the above address.
  • Assignment. Customer may not assign or otherwise transfer its rights or delegate its duties under this Agreement without the prior written consent of ZSM. Any attempt to assign or transfer without such consent is void. This Agreement is binding and inures to the benefit of the Parties and their successors and permitted assigns. Customer shall be responsible for the acts or omissions of its Affiliates who order Prototypes under this Agreement.
  • Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of California, except that the application of the United Nations Convention on Contracts for the International Sale of Goods is expressly excluded.
  • Arbitration. The Parties agree that any disputes which may arise out of or in connection with: (i) the creation, validity, effect, interpretation, performance or non-performance of, or the legal relationships established by, this Agreement; and (ii) any non-contractual obligations arising out of or in connection with this Agreement, or the breach thereof, shall be determined by arbitration administered by the International Centre for Dispute Resolution (ICDR) in accordance with its International Arbitration Rules. Each such arbitration shall be conducted by one arbitrator. Any such arbitration shall be held in San Jose, California. The language of the arbitration shall be English. Each of the Parties irrevocably waives any objection which it may have to the jurisdiction of the ICDR. An award issued by the tribunal shall be conclusive and binding upon the Parties and may be enforced in the courts of any jurisdiction.
  • Entire Agreement. This Agreement, including the NDA and any Appendices, (i) embodies the entire understanding between the Parties and supersedes all previous verbal or written agreements and undertakings with respect to the subject matter of this Agreement; and (ii) supersedes any conflicting, additional terms contained on Customer’s purchase order and other documents issued by Customer. This Agreement may only be amended by a writing signed by the authorized representatives of both Parties.
  • Electronic Communications. The communications between Customer and ZSM may take place via electronic means, whether Customer sends ZSM e-mails, or whether ZSM posts notices on the Website or communicates with Customer via e-mail. For contractual purposes, Customer (a) consents to receive communications from ZSM in an electronic form; and (b) agrees that all terms and conditions, agreements, notices, disclosures, and other communications that ZSM provides to Customer electronically satisfy any legal requirement that such communications would satisfy if it were to be in writing. The foregoing does not affect Customer’s statutory rights.