Visual Communications Company, LLC Purchase Order Terms and Conditions

This Agreement together with the VCC Purchase Order and any schedules, documents, drawings constitutes the complete agreement of the parties (the “Agreement”) and shall constitute the entire and exclusive agreement between Visual Communications Company, LLC, a California limited liability company (“VCC”), and the supplier identified herein (“Supplier”) with respect to the Products and/or Services (each as set forth in the Agreement) to be provided to VCC by Supplier hereunder.  VCC objects to any additional or different terms in Supplier’s subsequent documents and such terms shall not be binding.  The Agreement shall be considered accepted by Supplier unless notification of rejection is received in writing and acknowledged and accepted by VCC.
In consideration of their respective promises contained herein, the Parties agree as follows

1. Manufacture and Purchase of Products

In accordance with the terms of this Agreement, Supplier agrees to manufacture, sell and provide the products listed on VCC’s Purchase Order attached hereto (the “Product(s)”) pursuant to specifications provided by VCC and to provide related services to VCC at the prices listed for such Products on VCC’s Purchase Order.  All purchases of Products by VCC shall be pursuant to written purchase orders provided by VCC to Supplier, which VCC Purchase Orders shall specify the quantity of Products to be purchased by VCC.

2. Purchase Orders

2.1 A VCC Purchase Order shall be valid only if submitted by an authorized representative of VCC.  VCC shall not be liable for Product or for additional quantities of Product that are not included on authorized VCC Purchase Orders.

2.2 In the event of a conflict between the provisions of this Agreement and a VCC Purchase Order(s), the provisions of this Agreement shall prevail.  Any terms and conditions not in this Agreement, including but not limited to standard printed terms and conditions appearing on Supplier’s order acknowledgment form or any other document issued by Supplier, shall be wholly inapplicable to purchases under this Agreement.

2.3 This Agreement shall prevail over any terms or conditions contained in any other documentation, quotations, and materials and expressly exclude any of Supplier’s general terms and conditions of sale or any other document issued by Supplier in connection with this Agreement, which are hereby rejected and considered null and void.

2.4 Time is of the essence of this Agreement.  VCC may terminate the whole, or any part of this Agreement at any time for any reason.

3. Payment and Delivery

3.1 Unless otherwise agreed hereto, payment terms will be net thirty (30) calendar days from date of Supplier’s invoice.  Invoices will be issued by Supplier to VCC upon shipment of the Products to VCC.  All invoices will be issued in US dollars, in strict compliance with the pricing on the VCC Purchase Order.

3.2 In the event of a disputed invoice, VCC may withhold payment of only the amount of dispute and then only until the dispute is resolved.  Payment for Products will not constitute acceptance of non-conforming Products, nor will it limit or affect any rights or remedies of VCC.  Supplier will provide all information and certificates required by Supplier under applicable law (including, if applicable, NAFTA Certificates of Origin).

3.3 The delivery of Products specified on each VCC Purchase Order issued under this Agreement shall be made by Supplier on or before the delivery dates specified on each Purchase Order; however, in no event shall Supplier deliver Product under this Agreement more than five (5) days early without prior written authorization from VCC.  At the option of VCC, Product received more than five (5) days ahead of the established delivery schedule will be returned to Supplier at Supplier’s expense, or held at the VCC facility and received in accordance with the delivery schedule contained on the relevant VCC Purchase Order.  If material is held at the VCC facility due to early delivery, payment of corresponding invoices will be net thirty (30) calendar days from the original delivery schedule stated on the relevant Purchase Order.  VCC shall not be responsible or liable for Product held at Supplier’s location without prior written authorization from VCC.

3.4 Time, place and rate of delivery are of the essence for Product purchased under this Agreement.  If delivery cannot be made at the specified time and place, Supplier shall promptly notify VCC of the earliest possible date for conforming delivery.  If Supplier fails to notify VCC in advance that Product(s) ordered under a particular VCC Purchase Order will not be delivered on or before the mutually agreed upon delivery date, VCC may cancel any late or remaining deliveries under the respective VCC Purchase Order without incurring liability to Supplier.  VCC’s receipt or acceptance of all or part of a nonconforming delivery shall not constitute a waiver of any claim, right or remedy VCC has under this Agreement or under applicable law.

3.5 Unless otherwise stated in this Agreement or on a VCC Purchase Order, the Product price includes all applicable federal, state, provincial, and local taxes other than sales, value added, or similar turnover taxes or charges.  The Products purchased from Supplier are for resale which is exempt from all sales, use, value added or similar taxes.  Supplier will not separately charge sales, use, value added or similar taxes on its invoices to VCC, provided that VCC has provided Supplier a valid resale certificate for Supplier’s records.  Each Party shall be responsible for its own property, income, or employment-related taxes.

3.6 Deliveries are to be made both in quantities and at the time specified in the VCC Purchase Order.  VCC will have no liability for payment of Product, which are in excess of or less than quantities specified in the VCC Purchase Order.  An itemized packing list, showing; (i) VCC’s Purchase Order number, (ii) the respective prices of each item purchased, and (iii) all other necessary and relevant documents must accompany all shipments.

3.7 VCC may reschedule any and all deliveries without cost or liability with at least ten (10) days’ prior written notice to Supplier.  VCC shall use its best commercial efforts not to reschedule within ten (10) business days of a scheduled delivery date, but if it must do so Supplier shall use reasonable efforts to support VCC requirements.  Reasonable efforts shall not require Supplier to incur any added costs.

4. Specifications and Warranty

4.1 In addition to any other express warranties set forth in this Agreement, Supplier represents and warrants that:

(i) Supplier has the authority, right and ability to enter into this Agreement and to perform the obligations;
 (ii) the Products will be free and clear of any and all liens and encumbrances of any nature arising by or through Supplier and that title to Products will vest in VCC following delivery;
 (iii) the Products will be new and made with new materials;
 (iv) the Products will comply with all specifications, descriptions, drawings or samples provided by VCC, and Supplier shall provide VCC with appropriate documentation (Certificate of Compliance) showing such compliance; 
 (v) Supplier will conform to all applicable Laws of the United States;
 (vi) Supplier will perform all of its obligations under this Agreement in a professional and workmanlike manner, consistent with good manufacturing processes and in accordance with all of the terms of this Agreement and all VCC Purchase Orders; and
 (vii) Supplier shall use qualified personnel with suitable training, education, experience and skill to perform the services in accordance with timing and other requirements of this Agreement.

4.2 These warranties shall survive any delivery, inspection, acceptance, payment or resale of the Products for a period of twelve (12) months.  These warranties shall be construed as conditions as well as warranties and are in addition to any other warranties made by Supplier, express or implied, including warranties of merchantability.

5. Testing, Inspection and Acceptance

5.1 All Products shall be received subject to VCC inspection, testing, approval and acceptance at VCC premises, notwithstanding any inspection or testing at Supplier’s premises or any prior payment for such Products.

5.2 VCC may conduct, at its own expense, incoming acceptance tests to confirm that each Product ordered under this Agreement complies with the requirements of this Agreement and/or the VCC Purchase Order.  VCC agrees to conduct such tests within thirty (30) calendar days after receipt of each Product.  The Product shall be deemed accepted unless notice of failure to pass such acceptance test is given to Supplier within forty five (45) days after receipt of each Product.

5.3 Should VCC reject any non-conforming Products, Supplier may, at its option, repair or replace the non-conforming Products. Further, VCC shall allow Supplier to select carrier and/or method of transportation for any non-conforming product to be returned for replacement.

6. Molds, Tools, and Equipment

Supplier agrees and acknowledges that all tools, dies, molds, patterns, jigs, masks, test specifications, adapting and interconnecting mechanisms and other equipment and materials furnished by VCC to Supplier or paid for by VCC, directly or indirectly, whether or not any of the foregoing are deemed personal property or became a fixture, and any replacements to the foregoing (collectively, the “VCC Property”), shall remain the property of VCC.  Supplier shall safely store and maintain the VCC Property, shall plainly identify such property as the property of VCC, and shall not use the VCC Property except in performing this Agreement.  All VCC Property shall be held at Supplier’s risk, and shall be insured by Supplier at its expense for an amount equal to its replacement cost and with VCC named as loss payee.

The VCC Property shall be returned promptly to VCC or the VCC designee, at VCC’s expense, at any time upon VCC’s request.  Supplier shall, at its own expense, perform normal preventative maintenance in a commercially reasonable manner unless otherwise specified.  For any other maintenance or repairs, including repair expense for any extraordinary tooling or equipment damage caused at no fault of Supplier, Supplier and VCC shall mutually agree on the expense and payment prior to Supplier incurring the repair or extraordinary maintenance.

7. Packing and Shipping Instructions

All Products shall be packaged, marked and otherwise prepared for shipment by Supplier in suitable containers in accordance with VCC’s packaging specifications previously provided to Supplier.  Supplier shall mark on containers all necessary handling, loading and shipping instructions including VCC’s Purchase Order number.  An itemized packing list shall be included with each shipment.  Supplier shall pay all costs of packaging unless otherwise expressly specified on the VCC Purchase Order.

8. Intellectual Property and Confidentiality

8.1 All information, including but not limited to, data, know-how, specifications, drawings, diagrams, schematics, sketches, models, samples, designs, technical information, VCC equipment, marketing information or forecasts or data, written, oral or otherwise, furnished to Supplier by or on the behalf of VCC, are and shall remain the sole and exclusive property of VCC, and shall be returned promptly to VCC or its designee (together with all copies) upon the termination of this Agreement.  All such property shall be treated as confidential, and shall not be used or disclosed by Supplier except as required in the course of performing Supplier’s obligations under this Agreement or as required by applicable law.  Supplier agrees to maintain the confidentiality of this Agreement, both its existence and conditions, unless disclosure is required by law; provided that Supplier may disclose this Agreement to its attorneys, accountants, directors, officers and to those of its employees who have a need to know.

8.2 The provisions of any previously executed Confidentiality Agreement between Supplier and VCC shall remain in force and are specifically incorporated into this Agreement.

8.3 Supplier shall have no right to use any of the VCC trademarks, service marks, logos, or similar likeness without express prior written permission from VCC.  Supplier agrees not to directly or indirectly reverse engineer, disassemble, or modify any of the VCC Property, without express written consent by VCC.  Supplier agrees not to remove, obscure, or alter any notice of copyright, trademark, trade secret, or other proprietary right related to the Products.  VCC shall have no right to use any of the Supplier trademarks, service marks, logos, or similar likeness without express prior written permission from Supplier.

8.4 With respect to inventions made by Supplier in the performance of this Agreement, Supplier hereby grants to VCC a permanent, paid up, and irrevocable non-exclusive license, to make, have made, use and sell devices or material incorporating or made through use of such inventions.  If, however, such inventions result from research and development work performed by Supplier for which work VCC pays Supplier, either directly or indirectly, such inventions shall be deemed to be “work for hire” and Supplier hereby assigns to VCC all right, title and interest in and to such inventions and will assist VCC, at VCC’s expense, in securing United States and foreign patents with respect thereto, including the execution of all necessary documents.  With respect to any improvements to Supplier’s products resulting from VCC’s efforts or inclusion of any VCC technology into any of Supplier’s products, such resulting improved Supplier product shall be jointly owned by VCC and Supplier.

9. Indemnification of Claims

9.1 Indemnification by Supplier.  Supplier agrees to indemnify, defend and hold harmless VCC, its affiliates, distributors, agents, shareholders, directors, officers and employees, and their respective successors and assigns (collectively “VCC Indemnified Parties”), from and against any claim against an VCC Indemnified Party, of whatsoever nature or kind, that is raised in connection with or as a result of (a) Supplier’s breach of Supplier’s representations, warranties or obligations under this Agreement, or (b) Supplier’s (or Supplier’s employees’ or agents’) negligent or intentionally wrongful acts or omissions.  The VCC Indemnified Parties shall give Supplier prompt written notice of any claim for which they intend to seek recovery from Supplier under this Agreement.  The VCC Indemnified Parties may not settle, defend or litigate any claim for which they seek or will seek indemnification from Supplier without the prior written consent of Supplier, and Supplier will not be liable for any settlement or claim established against, or cost or expense incurred by, the VCC Indemnified Parties without that prior written consent.

9.2 Indemnification by VCC.  VCC agrees to indemnify, defend and hold harmless Supplier, its affiliates, suppliers, agents, shareholders, directors, officers, and employees, and their respective successors and assigns (collectively “Supplier Indemnified Parties”), from and against any claim against a Supplier Indemnified Party, of whatsoever nature or kind, that is raised in connection with or as a result of (a) VCC’s breach of its representations, warranties or obligations under this Agreement, (b) VCC’s (or VCC’s employees’ or agents’) negligent or intentionally wrongful acts or omissions, or (c) any claims that the Product specifications provided by VCC infringe any patents or other intellectual property rights of third parties.  Supplier Indemnified Parties shall give VCC prompt written notice of any claim for which they intend to seek recovery from VCC under this Agreement.  Supplier Indemnified Parties may not settle, defend or litigate any claim for which they seek or will seek indemnification from VCC without the prior written consent of VCC, and VCC will not be liable for any settlement or claim established against, or cost or expense incurred by, Supplier Indemnified Parties without that prior written consent.

9.3 If either Party is obligated to indemnify under this Section 10, then the other Party may at its option participate in the defense of any claim with its own counsel at its own expense.

9.4 In addition to the limitations of liability set forth in Section 13, neither Party shall be obligated to indemnify, defend or hold harmless any person or entity from or against any claim to the extent the claim arises out of the gross negligence or willful misconduct of the other Party or any person seeking indemnification by or through the other Party (including the VCC Indemnified Parties, with respect to VCC, and the Supplier Indemnified Parties, with respect to Supplier.

10. Termination

10.1 Termination for Default and Cure Period.  If a Party Defaults (as defined below) on this Agreement and does not cure such Default within forty-five (45) days (or such other time period expressly stated herein) after written notice from the other Party, the non-defaulting Party may terminate this Agreement upon written notice (“Notice of Termination”).

10.2 Events of Default.  Subject to the cure period provided in Section 11.1, either VCC or Supplier will be in “Default” under this Agreement if it:  (a) fails to perform or breaches any material obligation under the Agreement; (b) repudiates or threatens to breach any of the material terms of the Agreement; (c) makes an assignment for the benefit of creditors in violation of the Agreement, or proceedings in bankruptcy or insolvency are instituted by or against it; (d) becomes a debtor in a bankruptcy, insolvency, receivership, or similar proceeding commenced by a third party that is not dismissed within thirty (30) days after commencement; (e) fails to provide adequate assurance of performance under the Agreement within three (3) business days after written demand by the other Party, or (f) at any time in the reasonable judgment of VCC or Supplier that the other’s financial or other condition or progress on the Agreement will be such as to endanger timely performance.

10.3 Obligations Following Termination.  Upon termination of this Agreement, Supplier shall provide reasonable transition of any VCC Property to VCC.

11. Force Majeure

If performance of any part of this Agreement by Supplier or VCC is prevented or delayed by reason of any cause or causes beyond the reasonable control of the Party affected (including, without limitation, acts of God, acts of civil or military authority including governmental priorities, fires, floods, epidemics, terrorist attacks, wars and riots), the Party affected shall be temporarily excused from such performance to the extent that it is necessarily prevented or delayed thereby during the continuance of any such happening or event and such performance obligation shall be deemed suspended so long as and to the extent that any such cause prevents or delays its performance; provided, however, that after sixty (60) cumulative days of such suspension on the part of one Party, the other Party may at its discretion terminate without liability its obligations under this Agreement to the extent that the affected Party’s performance has been prevented or delayed.  In order to obtain a suspension under this Section 12, the Party delayed shall send written notice of the delay and the reason therefor to the other Party as soon as practicable.

12. Limitation of Liability

IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANTICIPATED PROFITS, INTEREST, PENALTIES OR INCIDENTAL, CONSEQUENTIAL, PUNITIVE, MULTIPLE, OR EXEMPLARY DAMAGES OR LIABILITIES IN CONNECTION WITH THE AGREEMENT, WHETHER FOR BREACH OF AGREEMENT, LATE PAYMENT, PROPERTY DAMAGE, PERSONAL INJURY, ILLNESS, OR DEATH OR OTHERWISE.  IN ADDITION AND WITHOUT LIMITING ANY OF THE FOREGOING, EXCEPT AS SET FORTH HERIN, VCC WILL HAVE NO OBLIGATION FOR AND WILL NOT BE REQUIRED TO PAY SUPPLIER, DIRECTLY OR INDIRECTLY, FOR LOSS OF ANTICIPATED PROFIT, FAILURE TO REALIZE ANTICIPATED PRODUCTION VOLUMES, REVENUES OR SAVINGS, UNABSORBED OVERHEAD, INTEREST ON CLAIMS, PRODUCT DEVELOPMENT AND ENGINEERING COSTS, TOOLING, FACILITIES AND EQUIPMENT REARRANGEMENT COSTS OR RENTAL, UNAMORTIZED CAPITAL OR DEPRECIATION COSTS, OR GENERAL ADMINISTRATIVE BURDEN CHARGES FROM TERMINATION OF THE AGREEMENT.

13. General Provisions

13.1 Governing Law.  This Agreement will be governed in accordance with the laws of the State of California, U.S.A., without reference to its conflict of laws principles.

13.2 Assignment.  Without prior written consent of the other Party, neither Party may assign this Agreement or subcontract or delegate the performance of its duties hereunder, and any attempt to do so shall be void.  Notwithstanding the foregoing, either Party may assign this Agreement without the consent of the other Party to any successor to its business.  No assignment will relieve either Party of any of its obligations under this Agreement, except for an assignment by Supplier permitted by the previous sentence.

13.3 Export.  This Agreement may involve Products and/or technical data that may be controlled under the U.S. Export Administration Regulations and may be subject to the approval of the United States Department of Commerce prior to export.  Any export or re-export by either Party, directly or indirectly in contravention of the U.S. Export Administration Regulations, is prohibited.

13.4 Compliance with Laws.  In performing their respective obligations under this Agreement, Supplier and VCC will comply with all applicable laws, rules and regulations of the United States and any other applicable countries (collectively “Laws”), including all applicable safety, employment, tax, export control and environmental laws and regulations.  The foregoing obligation includes, but is not limited to, all requirements of applicable Laws relating to money laundering, anti-terrorism, trade embargos and economic sanctions, now or hereafter in effect.  Supplier will provide VCC with accurate material safety data sheets regarding the Products and, upon VCC’s request, will provide VCC with all other information reasonably required in order to comply with applicable laws.

13.5 Insurance.  At all times throughout the Term, Supplier shall procure and maintain, at its sole cost and expense, the following insurance:

(i) A policy or policies of commercial general liability insurance with minimum coverage of at least One Million Dollars ($1,000,000) combined single limit per occurrence for bodily injury and/or property damage, as well as contractual liability coverage and naming VCC as an additional insured.
  (ii) A policy or policies of employer’s liability insurance with minimum coverage of at least One Million Dollars ($1,000,000).  Supplier shall also comply with all applicable workers’ compensation and/or other laws that may accrue in favor of any Supplier personnel in all locales where Supplier personnel perform(s) under this Agreement hereunder.
  (iii) A policy or policies of automobile liability insurance on all owned, non-owned and/or hired vehicles with minimum coverage of at least One Million Dollars ($1,000,000) combined single limit per occurrence for bodily injury and/or property damage, and physical damage insurance for the actual cash value of each such vehicle.
  (iv) Property insurance covering the full replacement value of VCC Property while in Supplier’s care, custody, or control and naming VCC as loss payee. Insurance coverage shall include, but not be limited to, loss or damage resulting from fire (including extended coverage), accident, earthquake, malicious mischief and vandalism.

Supplier shall furnish to VCC (upon request) a certificate evidencing each policy set forth above.  Supplier shall notify VCC within twenty (20) business days after any reduction, denial or termination of insurance coverage or claim against such policies.

13.6 Survival.  The termination of the Agreement shall not affect Supplier’s or VCC’s rights, obligations or representations and warranties under the Agreement with respect to Products delivered or ordered prior to such termination in accordance with the terms of this Agreement.  Without limiting the foregoing, Sections 4, 5, 6, 7, 9, 10, 11, 12, 13, and shall survive termination of the Agreement.

13.7 Waivers.  Failure of either Party to insist in any instance upon strict performance by the other Party of any provision of this Agreement shall not be construed or deemed to be a permanent or subsequent waiver in whole or in part of such or any other provision of this Agreement.

13.8 Headings.  Headings and subheadings used in this Agreement are for convenience only and shall not be used in interpreting or construing the substantive terms of this Agreement.

13.9 Entire Agreement.  This Agreement (together with any VCC Purchase Order or other documents specifically referenced herein) is the complete and exclusive statement of the agreement between the Parties as to the subject matter hereof, and supersedes all prior oral and written communications, agreements, representations, statements, negotiations and undertakings between the Parties relating to the subject matter hereof.  No modification, termination, extension, renewal or waiver of any provision of this Agreement shall be binding upon either Party unless made in writing and signed by an Authorized Representative of each Party.