EXHIBIT 10.1

 

InFocus Corporation

 

And

 

Hon Hai Precision Industry Company Limited

 

 

Manufacturing and Supply Agreement

 

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THIS AGREEMENT, HAVING AN “EFFECTIVE DATE” OF SEPTEMBER 1, 2005 IS MADE AND
ENTERED INTO BY AND BETWEEN:

 

InFocus Corporation, a corporation organized under the laws of Oregon, U.S.A.,
having its principal office at 27700B SW Parkway Avenue, Wilsonville, Oregon
97070, USA (herein “InFocus”); and Hon Hai Precision Industry Co. Ltd., a
corporation organized under the laws of Taiwan, with registered trade name
Foxconn, having its principal office at 2 Tzu Yu St. Tu-Cheng City, Taipei,
Taiwan (herein “Supplier”).

 

Whereas, Supplier manufactures certain product for InFocus, this Agreement sets
forth the terms and conditions under which InFocus will purchase from Supplier
and Supplier will manufacture and sell to InFocus Products, Service Parts and
perform related services.

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in
duplicate by their duly authorized representatives on the dates set forth below,
effective as of the day and year first above written.

 

ACCEPTED AND AGREED:

ACCEPTED AND AGREED:

 

 

Hon Hai Precision Industry Co, Ltd

 

InFocus Corporation

 

 

 

By

 

 

By

 

           (Signature)

 

           (Signature)

 

 

 

Name

 

 

Name

 

              (Type or Print)

 

                 (Type or Print)

 

 

 

Title

 

 

Title

 

 

 

 

 

 

Date

 

 

Date

 

 

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SECTION 1 : DEFINITIONS

 

“Authorized Purchaser” means InFocus, its affiliates or “an entity authorized by
InFocus” in writing to procure Product and Services under this Agreement.
Authorized Purchasers are listed in Exhibit B – Authorized Purchasers

 

“Bill of Materials” or “BOM” means the bill of materials approved by InFocus,
which includes all Materials required to produce particular goods - product ,
commodity or service unit.

 

“InFocus Logistics Center” – refer to Exhibit A.

 

“PO Lead Time” means the amount of time identified in this document between the
placement of a purchase order and the time the Product leaves the factory.

 

“Transit Lead time” means the amount of time identified in this document between
the Product leaving the Supplier factory and arriving at the destination.

 

“Materials” means materials, components and subassemblies for specified Product,
as identified in the BOM, which Supplier or sub tier suppliers provide.

 

“MPS” means the master production schedule, issued by InFocus for the Product.

 

“Product” means any and all goods, devices, or products requested by InFocus for
manufacture by Supplier under the terms of this Agreement.

 

“Quality Requirements” means the quality requirements for the Product specified
in this Agreement or as InFocus otherwise specifies in writing.

 

“Ship Date” means the date specified by InFocus on which Supplier shall ship
Product.

 

“Specifications” means the design requirements for the Product agreed to in
writing by Supplier and InFocus.

 

“Test Equipment” means test fixtures and equipment required to produce Product
and verify that Product meet Specifications and Quality Requirements.

 

“Tooling” means the development and manufacturing tooling and inspection
equipment required to produce Product.

 

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Section 2 : Pre – Production

 

2.0 Disclosure Supplier shall declare the complete details under which it trades
in all regions in the world, including the names of the companies and the
trading addresses.

 

2.1 Confidentiality. Both parties agree to maintain all Confidential Information
and intellectual property provided by either party in confidence and not to
disclose such information to any other person or use such information for any
purpose other than in connection with this Agreement, without either party’s
prior written consent. The parties recognize that Supplier and its personnel
will, in performing this Agreement, necessarily become conversant with certain
trade secrets and other confidential or proprietary information regarding
InFocus and/or the Products (all of such information, trade secrets and other
proprietary information, except for any portion thereof that becomes generally
available to the public other than by reason of disclosure in violation of this
Agreement, is referred to in this Section 2.1 as “Confidential Information”).
Supplier acknowledges and agrees that all Confidential Information is and shall
continue to be the exclusive and permanent property of InFocus, whether or not
prepared in whole or in part by Supplier and whether or not disclosed or
entrusted to Supplier in connection with the performance of its duties
hereunder.

 

Each party shall deal with Confidential Information so as to protect it from
disclosure with a degree of care not less than that used by it in dealing with
its own information intended to remain exclusively within its knowledge and
shall take reasonable steps to minimize the risk of disclosure of Confidential
Information which shall include, without limitation, ensuring that only those
persons who have a bona fide need to know such Confidential Information for
purposes permitted or contemplated by this Agreement shall have access thereto.

 

Within thirty (30) days after the termination of this Agreement, each party
shall (and shall cause its Affiliates’ Representatives and its Affiliates to)
return to the other party or destroy all related documents and tangible items
then in its possession which it has received from the other party or any
affiliate or representative thereof pertaining, referring or relating to the
other party’s Confidential Information.

 

2.2 Quality Verification Audit

Supplier agrees that InFocus can audit the Supplier location and manufacturing
process with ten (10) business days notice on a twice yearly basis. InFocus will
provide results of audit to Supplier within ten (10) business days of the Audit.
InFocus requires that one member of the Supplier quality team participates in
the audit procedures.

 

2.3 Supplier Point of Communication, and Escalation.

InFocus will designate a Supplier manager as a contact point for all
communications related to both Product and the Supplier. Supplier must also
provide a senior Supplier representative as a contact point for InFocus.

 

2.4 Documentation and Change Process.

InFocus requires a complete set of up to date documentation on its system in
support of the manufacture and design of its products, this includes
manufacturing processes, bills of materials, suppliers, technical specifications
etc. InFocus and Supplier shall use a pre-agreed process to communicate changes
it seeks in its processes. InFocus must have final approval on all changes
suggested by Supplier. Supplier must implement all changes requested by InFocus
within 5 days from receipt of the request for change or acknowledge receipt of
the request in writing, and highlight concerns.

 

2.5 Response Times. Relative to product, production and quality issues, Supplier
shall promptly provide InFocus with any requested information and respond to any
notice or request that InFocus may classify as an “emergency” within two (2)
hours, “urgent” within six (6) hours, and “request for information” within
twenty-four (24) hours. Purchase orders must be acknowledged in writing within
24 hours.

 

2.6 Specifications. Supplier shall ensure that InFocus is in receipt of the
latest copies of the Product and component technical specifications.

 

2.7 Certifications. InFocus will provide Supplier with a list of required
Product and or component certifications by ship to destinations. InFocus and
Supplier will agree who is responsible for obtaining each certification and in
what timeline. This agreement will be documented on a product-by-product basis.

 

2.8 Quarterly Business Reviews. Supplier will be provided with a copy of the
InFocus quarterly business review (QBR) format as detailed in Exhibit E – QBR
Reporting. Supplier will prepare data for review and return to InFocus the first
week of each new quarter (InFocus calendar, provided). InFocus will review and
highlight areas of disagreement or concern prior to QBR. InFocus will schedule a
review each quarter. Reviews will alternately be scheduled in Supplier or
InFocus location.

 

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2.9 ISO Certification. Supplier shall ensure that all its sites and
manufacturing facilities used to perform services under this agreement are ISO
9000/ISO 14001 certified and provide certificates of authenticity to InFocus. If
a location designated to provide products under this Agreement is not ISO
certified, Supplier must take steps to obtain certification and provide
documentary evidence of actions to InFocus. Supplier shall communicate a
corrective action plan and implementation dates to InFocus with seven (7) days
from notification that a site or facility has failed an ISO audit or an InFocus
audit.

 

2.10 Product Cost Management. *  From time to time InFocus will provide cost
reduction opportunities to Supplier. Supplier must work with InFocus to
implement this cost reduction opportunities.

 

2.11 Component Packaging. Supplier shall develop the packaging specifications
for all Products and components manufactured by the Supplier. These solutions
must be the most cost-effective packaging and transportation solutions, must be
designed in compliance with all laws and within the safety and engineering
specifications provided by InFocus. Prior to tool development, specifications
must be approved in writing by InFocus.

 

2.12 Suppliers and Component sourcing. Supplier must provide complete BOM
details to InFocus. This must cover component part numbers, authorized
manufacturers and specifications. All amendments to this list through out the
term of this Agreement must be communicated to InFocus. BOM details must be
refreshed at least once a month during Product development.

 

2.13 Design Services. During the design phase of the project, Supplier will
provide InFocus with the following information on a regular basis. Supplier will
also appoint a project manager to cover both product development and new
products introduction (operations). Both will work with InFocus to ensure an on
time ramp.

 

 

REPORT NAME

 

REGULARITY

Ramp schedule (volume and timelines and issues)

 

Weekly

Engineering status

 

Weekly

NRE charges (budget vs actual)

 

Monthly

Product cost (Bom Cost)

 

Monthly

 

InFocus regards the commitment to ramp date as key. Any deviations from the ramp
date must be fully explained and all avenues exhausted to resolve issues as they
arise.

 

2.13.1 If the Design services provided by Supplier include development of new
product lines which are not merely insubstantial modification of the current
Product, the parties agree to enter into a Design Services Agreement. Any
product development under this Agreement, including enhancements and
improvements to the InFocus Products shall be deemed Product Design and such
Product Design and all rights to such Product Design shall be owned by InFocus.

 

2.14 Lead Times. All current material lead times and manufacturing lead times
must be published to InFocus in accordance with the format laid out in Exhibit
J. All updates to lead time information must be communicated and accepted by
InFocus.

 

2.15 NRE Charges. *

 

2.16 Ownership of Tooling. * In the event that InFocus wishes to move tooling
from one location to another, Supplier will actively engage in the transfer.
Supplier will obtain InFocus approval prior to moving any tooling and shall
periodically update all tooling locations.

 

2.17 Subtier Supplier Lead Times. Supplier will provide InFocus with an updated
list of subtier supplier leadtimes on a monthly basis. Changes to terms within
the sub-tier base must be communicated to InFocus.

 

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*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

 

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2.18 Design and Intellectual Property Ownership. InFocus and Supplier agree that
the rights to the Intellectual Property developed and owned by InFocus prior to
the effective date of this Agreement shall remain the Intellectual Property
rights of InFocus and that the Intellectual Property rights to all improvements
or enhancements to the Product Design made by or for Supplier at any time under
this Agreement shall be deemed “works for hire” performed solely for the benefit
of InFocus, and Supplier hereby assigns, transfers and releases to InFocus all
of Supplier’s right, title and interest in such improvements or enhancements and
* . If and to the extent that applicable law does not permit or would limit the
foregoing assignment, transfer and release, Supplier hereby waives irrevocably
and without further payment the assertion of any residual Intellectual Property
claims it may have against InFocus or any of its officers, directors, employees,
agents, affiliates or authorized assignees or licensees. Any and all
intellectual property rights in and to the Product Design shall belong to
InFocus regardless if new or jointly created unless it relates specifically to
Supplier’s manufacturing process.

 

2.19 Intellectual Property shall mean any invention, discovery, concept,
expression or work, whether or not patented or patentable, including, without
limitation, discoveries, compositions, know-how, procedures, technical
information, processes, methods, devices, formulas, protocols, techniques,
designs and drawings, any physical embodiment thereof, and any patent (and
applications therefore), copyrights (and applications therefore), trademarks,
industrial designs and utility models, trade secret or other intellectual
property right related thereto, including each party’s Confidential Information
and trade secrets.

 

2.20 Initial Inventory Purchase. InFocus will direct Supplier to purchase
certain work-in-progress and materials specified by InFocus on or before the
date of Supplier’s production start. This purchase includes without limitation,
excess finished raw materials at past suppliers’ locations and long lead-time
materials. Supplier will also assume from past suppliers certain open purchase
orders for materials matching the BOM as specified by InFocus.

 

SECTION 3: PRODUCTION

 

3.0 Product Lead Time. From a standing start, Product lead time will be 8 weeks

 

3.1 Forecasts, Planning and Flexibility. InFocus will provide a 12 month rolling
MPS plan to Supplier on Monday each week. The first three months of the forecast
will be broken down by week. The last nine months will be in monthly buckets.
The forecast is a shipment plan from the factory and therefore must be offset by
manufacturing/material lead time in order to ensure materials and production
take place in time to meet the shipment deadlines. All lead times used must be
those published to InFocus.

 

A confirmation of receipt must be provided immediately against each MPS provided
on a Tuesday. Within 3 days from receipt of each MPS a response plan must be
provided to InFocus, no later than 5:00 p.m. Thursday.

 

Supplier will place purchase orders for components to lead-time to cover the MPS
needs. Where component shortages are revealed, the Supplier will drive materials
to the MPS.

 

3.2 Contract Purchase Order. *

 

ADJUSTMENTS PERIOD

 

ALLOWABLE INCREASE/DECREASE

 

 

 

Weeks 1 & 2

 

*

Weeks 3 & 4

 

*

Weeks 5 through 8

 

*

8 weeks +

 

*

 

*

 

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*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

 

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*

 

*

 

3.2A Call-off Purchase Order. InFocus may use a call-off purchase order for each
individual shipment shipped from the point of manufacture to specific
destination. These purchase orders will be X-referenced to the contract purchase
orders detailed above.

 

3.3 Cancellations and Liability. *

 

3.4 On-Time Shipments. Supplier will make Products available to InFocus’ freight
forwarder by shipment date specified by InFocus. If Supplier is unable to meet
the specified ship date, Supplier will promptly notify InFocus and propose a
revised ship date. If shipment is delayed more than 1 day, InFocus may require
Supplier to pay any incremental freight charges required to ship the delayed
Products using priority airfreight delivery.

 

3.5 Integration with Freight Forwarder. Supplier will work with an appointed
InFocus freight forwarder. All arrangements for pick up and freight space must
be made between freight forwarder and Supplier. Supplier will work only with
freight forwarders approved or appointed by InFocus. All freight quotes must be
approved by InFocus. In the case of any disputes arising between a freight
forwarder and Supplier during the course of performing InFocus business, InFocus
should be notified.

 

InFocus may or may not decide to settle the freight bill directly with the
forwarder and will communicate the requirements at the time of PO placement.

 

3.6 Terms of Sale.

*

 

3.7 Terms of Payment. The standard term of payment will be * days from receipt
of Product by InFocus at the ILC. InFocus reserves the right to withhold
payment, if invoice is not presented in pre-agreed format. InFocus shall not
withhold payment in whole or in part for items which are not in dispute.

 

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*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

 

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3.8 Quality Standards. InFocus shall provide field failure information to
Supplier. In addition, proposed test processes for the InFocus Products must be
supplied to InFocus for review. InFocus and Supplier must agree upon the
following:

 

a)              if the tests coverage is acceptable, if not, what incremental
tests must be put in place.

b)             Acceptable threshold of results for each test within a
manufacturing period.

c)              Format of notification, if results dip below this threshold

d)             Coordination of decision on corrective action, implementation
timeline, and time to bring results back to threshold

e)              Hold shipment/ release process.

 

Test processes defined and agreed must include customer audit, in-process,
burn-in tests, and rolling reliability tests. InFocus will provide a Quality
Acceptance Plan.

 

Agreements for all of the above should be detailed in the Exhibits section of
the document.

 

3.9 Product Warranty & Service Support – Agreed to as set forth in Exhibit H

 

3.10 Reporting Needs. Supplier will provide the following reports on a routine
basis.

 

Reports will be placed on an FTP site (location to be provided by InFocus).

 

Report name

 

Frequency

 

Owner

 

Weekly MPS

 

weekly

 

InFocus

 

Weekly MPS Response

 

weekly

 

InFocus

 

Production plan v actuals

 

Daily

 

Supplier

 

Shipment plan v actuals

 

Daily

 

Supplier

 

In process Quality Results

 

Daily

 

Supplier

 

RFA receipts/implementations

 

Weekly (fri)

 

Supplier

 

Open (FG) Purchase order report

 

Monthly

 

Supplier

 

Clear to build report

 

Weekly (Thu)

 

Supplier

 

Daily yield reporting

 

Daily

 

Supplier

 

PO Exposure reporting

 

Monthly(L fri)

 

Supplier

 

 

Failure to provide the information as required by 5pm on the due day, will be
regarded as a non compliance, and will be recorded as such in the QBR reporting.

 

3.11 IT Integration. Supplier will need to participate in the development of
some electronic data interfaces for the purposes of transmitting accurate and up
to date data to and from the Supplier. The implementation of this solution can
be time-phased.

 

3.12 Domestic Sales

Supplier must have a Business license to sell products to InFocus internally in
China.

 

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Section 4: General Terms

 

4.1.         Term and Termination

 

The term of this Agreement shall be for a period of three (3) years from the
Effective Date, unless sooner terminated or further extended as provided herein.
The issuance of any Purchase Order from InFocus or any Related Party after
expiration or termination of this Agreement shall not operate as a renewal of
this Agreement or as a waiver of such expiration or termination. The parties may
extend the term of this Agreement by written agreement at least one hundred and
eighty (180) days prior to the expiration date of the initial term or any
subsequent renewal term.

 

Termination without Cause. Either party may terminate Agreement without cause
with 6 months written notice.

 

Termination with Cause. Either party may upon written notice terminate the
agreement immediately for a) material breach not cured within 20 days from date
of written notification, b) breach of non-disclosure obligations, c) the other
party becomes insolvent, fails to pay its debtors or fails to perform
obligations that arise from the normal course of business.

 

This Agreement may be terminated by InFocus if Supplier relocates any of its
manufacturing locations without prior official written approval from InFocus.

 

Effect of Partial or Complete Termination. Upon termination by either party of
this Agreement, in whole or in part, as provided under this Section 4.1:

 

Except as expressly provided in this Agreement and the relevant termination
notice from the party who terminates this Agreement, the parties’ respective
obligations and rights shall terminate;

Any and all sums owed by one party to the other party shall become immediately
due and payable and such termination shall not affect or reduce the obligations
of either party to make such payments;

Subject to Supplier’s breach of this Agreement, InFocus may cancel any Purchase
Orders previously placed with Supplier for Products that have not been shipped
to InFocus as of the effective date of termination;

Subject to InFocus’ breach of this Agreement, Supplier may, at its discretion,
cancel any Purchase Orders previously placed with Supplier for Products that
have not been shipped to InFocus as of the effective date of termination and ask
InFocus for the cancellation charge as specified in Section 3.3;

Supplier shall immediately discontinue all use of the InFocus Trademarks, and
any other marks or names so resembling the InFocus Trademarks as to be likely to
cause confusion or mistake; and

Either party shall immediately return the other party’s Confidential Information
and all other information and materials relating to the Products. However,
Supplier may retain and continue its use of the Design Documentation and/or
Manufacturing Documentation to manufacture and sell Products to Third Parties if
and to the extent that InFocus and Supplier have executed separate Third Party
Sales Licensing
Agreement(s) explicitly licensing Supplier to sell Products to Third Parties and
only during the term of such Third Party License(s).

 

Supplier will furnish InFocus with the latest copies of all relevant
specifications. Supplier will continue to ship all remaining outstanding amounts
on a Purchase Order to agreed quality standards. Supplier will ship — upon
instruction from InFocus – all tooling and test equipment owned by InFocus to a
pre-defined location. InFocus sole obligation in the event of termination is
payment of outstanding Product invoices (unless in dispute) and any reasonable
costs associated with packing, shipping and disposition of InFocus tooling, test
equipment and materials. Supplier will work with the InFocus nominated
replacement supplier on a project basis –to timelines outlined by Supplier and
will use reasonable efforts to transfer all component purchase orders to new
Supplier.

 

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No Compensation upon Termination. Except as expressly provided in this
Agreement, neither party shall be liable to the other party as a result of a
termination of this Agreement, in whole or in part, for any compensation,
reimbursement, loss, damages or liability suffered by the other party because of
such termination, including, without limitation, any loss of prospective profits
or anticipated sales, loss of goodwill, expenditures, investments, commitments,
or any other disadvantage incurred or suffered by the terminated party.

 

4.2              *

 

4.3       Indemnification.

 

Supplier shall assume any and all liability and responsibility for the loss or
damage to property or the injury or death of a person arising out of or
resulting from Product manufactured by Supplier, or arising out of or connected
with any act, omission or performance of Supplier under this Agreement,
including but not limited to any Supplier noncompliance with or violation of law
or regulation. Supplier shall defend, indemnify and hold harmless InFocus, its
officers, directors, employees, agents, affiliates, successors and assigns,
licensees and customers, from any and all actual or threatened claim, demand,
suit or action, whether in contract or tort, investigation, liability, damage,
loss, cost or expense, including but not limited to reasonable attorney’s fees,
expert witnesses fees, and all litigation costs or expenses. Supplier’s
indemnification obligations shall survive the termination of this Agreement.

 

The foregoing indemnity will not apply to any liability, claim, loss, damage,
cost or expense to the extent otherwise attributable to: any negligent act or
omission on the part of InFocus in its subsequent resale of a Product; any
InFocus or third party performed modification to the Product once received from
Supplier; any claim caused by InFocus’ or end user’s Product abuse, misuse,
neglect, improper installation, operation, testing, maintenance, repair, or
alteration; or unusual deterioration or degradation of a Product or parts
thereof due to physical environment beyond the requirements of Product
specifications.

 

The indemnity obligations of Supplier contained in the preceding paragraphs is
conditioned upon InFocus giving Supplier: i) prompt notice in writing of any
such indemnification obligation; ii) full authority to conduct the defense
thereof; iii) authority to settle upon prior approval of InFocus, which shall
not be unreasonably withheld; and iv) at Supplier’s option and expense,
reasonably necessary assistance and cooperation in said defense.

 

4.4       Customer Data

 

The following provisions shall apply to any Customer Data (“Data”) to which
Supplier may be required or have occasion to access, as well as any reports or
other documentation created by Supplier from such Data, regardless of the
documentation’s format:

 

Supplier shall hold any such Data it receives in compliance with all laws
regarding the use and access of such Data. Supplier further agrees that the
Supplier as well as its employees, agents and contractors of any legal status,
including but not limited to individuals, partnerships and corporations
(hereafter referred to as “Agents”) will not use Data for any purpose other than
the fulfillment of the terms and conditions of this Agreement. Supplier shall
not disseminate Data to any third party or transfer such Data in or outside the
US without the written approval of InFocus unless expressly provided for in this

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*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

 

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Agreement. If Data relates to individuals from the European Union, or countries
with similar privacy legislation, Supplier agrees for itself and its Agents to
comply with the relevant Safe Harbor Principles or the relevant country laws or
regulations. For the transfer or dissemination by Supplier of European Data to
countries deemed by the European Union not to have adequate protection, Supplier
agrees to and shall comply with the unaltered provisions of the European
Commission’s Model Contract clauses as contained in commission decision
2001/497/EC dated June 15, 2001.

 

Supplier shall maintain appropriate technical, organizational and security
measures (including but not limited to compliance with InFocus Information
Technology security protocols and procedures to the extent they are provide to
Supplier for review) to protect the confidentiality of the Data and shall, with
appropriate notice from InFocus, permit InFocus to conduct audits to determine
compliance with these Data provisions. Supplier shall, when directed by InFocus,
destroy specified Data and provide written confirmation to InFocus of such
destruction. Supplier shall, when directed by InFocus, return to InFocus all or
any of the Data together with any copies that may have been made. If Supplier
determines that the destruction or return of Data is not feasible, Supplier
shall provide InFocus with notifications of the conditions that make return or
destruction of such Data infeasible. The parties agree that any further use of
the Data that is not destroyed or returned by Supplier or its Agents shall be
limited to that purpose which renders the return or destruction of such Data
infeasible for so long as such Data is maintained by Supplier or its Agents.
Once the purpose rendering the destruction or return of the Data infeasible no
longer exists, such Data shall be destroyed or returned to InFocus as initially
directed.

 

Supplier agrees to:  immediately report to InFocus any use or disclosure of Data
that violates the terms of this Agreement; mitigate, to the extent practicable,
any harmful effects of such violation that is known to Supplier or its Agents;
cooperate with InFocus in providing any notices regarding such disclosures which
InFocus deems appropriate.

 

Supplier shall ensure that:  any Agents who have access to Data pursuant to this
Agreement are advised of and shall comply with these terms and conditions; and
Supplier’s Agents who are individuals and have access to Data are trained
regarding their handling of such Data. Supplier shall be responsible for any
failure of its Agents to comply with these terms and conditions regarding Data.

 

4.5       Liability

 

MUTUAL LIMITATION OF LIABILITY. EXCEPT AS EXPLICITLY PROVIDED IN THIS AGREEMENT,
NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY OR SUCH OTHER PARTY’S CUSTOMERS
OR END USERS, AS THE CASE MAY BE, FOR ANY PUNITIVE OR EXEMPLARY DAMAGES OR ANY
CONSEQUENTIAL, INCIDENTAL, INDIRECT, OR SPECIAL DAMAGES (INCLUDING WITHOUT
LIMITATION DAMAGES FOR LOSS OF USE, PROFITS, REVENUE OR BUSINESS) ARISING FROM,
OR IN ANY WAY RELATED TO THIS AGREEMENT OR ITS TERMINATION OR THE MANUFACTURE,
SALE, SERVICE, USE OF (OR THE INABILITY TO MANUFACTURE, SELL, SERVICE OR USE)
ANY PRODUCTS OR THIRD PARTY PRODUCTS, NOTWITHSTANDING ANY FAILURE OF ESSENTIAL
PURPOSE OF ANY LIMITED REMEDY HEREIN. THIS SECTION SHALL APPLY REGARDLESS OF
WHETHER SUCH DAMAGES ARE SOUGHT BASED ON BREACH OF CONTRACT, BREACH OR WARRANTY,
NEGLIGENCE, STRICT LIABILITY IN TORT, OR ANY OTHER LEGAL OR EQUITABLE THEORY.

 

4.6       Intellectual Property

 

4.6.1 Trademarks

Intellectual Property. Supplier acknowledges that no right, interest, ownership
or privilege of use of InFocus’ trade name or trademarks is granted or conveyed
to Supplier by reason of entry into this Agreement or performance under this
Agreement except as follows: InFocus hereby authorizes and grants Supplier the
right to place the InFocus trade name or trademarks on Product, including
packaging, to be delivered to InFocus pursuant to this Agreement.

 

Unless InFocus otherwise gives its express written consent, Supplier will not
use or authorize others to use InFocus’ trade name or any of its trademarks,
trade dress, copyrighted matter or designs in advertising or promoting any of
Supplier’s activities, products or services.

 

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Supplier acknowledges that InFocus’ trade names and trademarks are the property
of InFocus. Supplier will not in any way impair the rights of InFocus in and to
its trade name and trademarks. Supplier agrees to execute undertaking/s or such
other documents as InFocus may deem appropriate in this respect. Except as
expressly authorized in writing by InFocus, Supplier agrees to sell the Product
bearing InFocus’ trade name and trademarks only to InFocus and not to any other
party and not to commercialize the InFocus-named or InFocus-branded Product in
any other manner. Supplier agrees that Product not meeting the quality standards
for Product prescribed in this Agreement will not be labeled with or used or
offered for sale under any trademark, trade name or trade dress of InFocus.

 

Upon notice to Supplier by InFocus or upon termination of this Agreement,
Supplier will promptly deliver to InFocus or destroy all packaging materials,
labels and all promotional and other materials in Supplier’s possession relating
to the Product. All artwork, plates and other aids used by Supplier uniquely for
the Product are to become InFocus’ property and are to be returned to InFocus or
disposed of by Supplier in accordance with InFocus’ instructions.

 

InFocus warrants and represents that InFocus is the sole and exclusive owner of
InFocus’ trade name or trademarks as applied to Product including packaging and
that the use of InFocus’ trade name or trademarks does not constitute any known
infringement of any rights of any third party.

 

InFocus agrees to defend Supplier against any claim of trade name and trademark
infringement by reason of use of InFocus trade name and trademarks on Product
including packaging and/or on printed material in connection therewith. InFocus
shall indemnify and hold harmless Supplier against any loss, damage and cost
reasonably incurred by Supplier in any such claim to the extent attributable to
such claim. InFocus’ obligations with respect to such claim are expressly
conditioned upon Supplier giving InFocus prompt notice of such claim and
granting InFocus in writing exclusive control over its defense or settlement and
cooperating with InFocus at InFocus’ expense.

 

Supplier agrees to defend InFocus against any claim of trade name and trademark
infringement by reason of use of Supplier trade name and trademarks on Supplier
Software including packaging and/or on printed material in connection therewith.
Supplier shall indemnify and hold harmless InFocus against any loss, damage and
cost reasonably incurred by InFocus in any such claim to the extent attributable
to such claim. Supplier’s obligations with respect to such claim are expressly
conditioned upon InFocus giving Supplier prompt notice of such claim and
granting Supplier in writing exclusive control over its defense or settlement
and cooperating with Supplier at Supplier’s expense.

 

Product Industrial Design (ID), and any other items designed specifically for
use on InFocus branded products to be purchased under this Agreement are
considered to have been designed and developed exclusively for use with the
InFocus brand. As such, Supplier shall not use or sell the same product ID. All
tooling related to the development and manufacture of the ID, are the property
of InFocus.

 

4.6.2 Product Design.

 

*

 

Design.  *

 

4.6.3 Cooperation.

 

Supplier agrees to cooperate and provide all reasonably necessary assistance to
InFocus in securing intellectual property rights, including upon InFocus request
applying for patents or otherwise perfecting and

 

--------------------------------------------------------------------------------

*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

 

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protecting InFocus’ interest in the Product Design, including, but not limited
to, executing documents and assignments as needed. Supplier further agrees in
regards to any Design Services provided under section 2.13 to supply to InFocus
at regular reporting intervals any and all specifications, designs, discoveries,
inventions, modifications, computer programs ( in binary and source form),
technical information, procedures, improvements, developments, drawings, notes,
documents, information, manufacturing methods and materials, in any form, that
Supplier develops during such Design services.

 

4.6.4         Escrow Agreement

 

Escrow. Within ninety (90) Days after the Effective Date, upon InFocus request,
the Parties shall enter into an agreement (the “Escrow Agreement”) with a third
party escrow agent, at InFocus’ expense. Supplier shall provide to such escrow
agent all specifications, designs, discoveries, inventions, modifications,
computer programs (in binary and source form), technical information,
procedures, improvements, developments, drawings, notes, documents, information,
manufacturing methods and materials, in any form, that Supplier then currently
uses to manufacture Products purchased hereunder by InFocus. Supplier shall
provide updates to Manufacturing Packages as necessary. The Manufacturing
Packages shall be provided in such form and media as may be implemented using
InFocus’ then existing systems, to the extent Supplier is reasonably able to do
so. The Escrow Agreement shall provide that the escrow agent shall deliver to
InFocus the Manufacturing Packages immediately upon election to exercise by
InFocus. Supplier shall reasonably assist InFocus with the installation and
implementation of such Manufacturing Packages. The Parties shall equally share
the costs of such implementation. InFocus shall not use any Software source code
for any purpose other making bug fixes to the Software that are necessary to
enable InFocus to ship product. Supplier shall own all right, title and interest
in to such bug fixes.

 

4.6.5 Intellectual Property Warranty. Supplier warrants that it has secured all
necessary Intellectual Property Licenses for parts and components included in
the Product. Supplier shall identify all such Intellectual Property Licenses to
InFocus in writing within 90 days of execution of this agreement.

 

4.6.6         Infringement

 

The term “Infringement Claim” shall mean and represent any claim that any
Product or component thereof designed by Supplier or for Supplier by third
parties other than InFocus infringe any third party’s intellectual property
rights, including any patent, trade secret, copyright or other intellectual
property right.

 

Supplier, at its own expense, shall resolve or defend any Infringement Claim
made against InFocus, its Subsidiaries, or their direct or indirect customers,
and shall indemnify them and hold them harmless against any loss, damage, or
cost reasonably incurred by them as a result of any action or suit based on an
Infringement Claim. The indemnity obligation of Supplier contained in the
proceeding sentence is conditioned upon InFocus giving Supplier: prompt notice
in writing of any such Infringement Claim, full authority to settle or to
conduct the defense thereof, and at Supplier’s option and expense, reasonably
necessary assistance and cooperation in said defense.

 

In the event that any Infringement Claim presents, in either party’s reasonable
opinion, an unacceptable risk of an adverse judgment or results in such a
judgment, Supplier shall, at its option and expense, either: Procure for InFocus
and InFocus’ direct and indirect customers the right to continue the use of the
Products; or Modify the Products, Service Parts or components thereof so that
they become non-infringing while remaining equivalent in form, fit, function and
quality. If neither of those alternatives is reasonably available to Supplier,
either party may terminate upon thirty (30) days advance written notice this
Agreement and any purchase order hereunder without liability for such
termination, and Supplier shall accept the return of Products remaining in the
possession of InFocus or its Subsidiaries subject to or likely to be subject to
the Infringement Claim and Supplier shall refund to InFocus the price paid for
such Products reflecting any discounts, it being understood that payment of such
refund by Supplier for Products returned by InFocus shall not relieve Supplier
of its other indemnification obligations under this Agreement.

 

In the event of modification or return of Products, Supplier and InFocus shall
mutually agree upon the implementation process for making such modification or
return. InFocus shall not unreasonably withhold approval of such modification or
return.

 

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4.6.7    Limited License to Supply InFocus

 

To the extent reasonably necessary to enable Supplier to perform its obligations
hereunder, InFocus hereby grants to Supplier, and Supplier hereby accepts from
InFocus, a limited, non-exclusive, terminable, worldwide, paid-up,
non-transferable license in and to any Intellectual Property Rights for such
Products solely to manufacture and supply the Products for use by InFocus or its
Related Parties or their respective resellers, distributors and other agents
(“InFocus License”). This InFocus License may be sublicensed to subcontractors
upon the request of Supplier and the prior written approval of InFocus, which
approval shall not be unreasonably delayed or withheld, provided, each such
subcontractor shall be subject to substantially the same limitations and
restrictions as are imposed on Supplier hereunder.

 

4.6.8   Sales Convey No Licenses

 

 Nothing in this Agreement shall be construed as granting by implication,
estoppel or otherwise, any license or rights under any trademarks, service
marks, trade names, patents, inventions, copyrights, know-how, trade secrets or
other proprietary rights of either party except for those licenses expressly
granted herein.

 

4.7    Press Release and Publicity

Release of Information. Neither party shall publicly announce the terms of this
Agreement or advertise or release any publicity in regards to this Agreement
without securing the prior written consent of the other party, which shall not
be unreasonably withheld.

 

4.8            Export Compliance. Supplier warrants that all Product is freely
exportable to all countries other than those which are generally subject to US
embargo.

 

4.8.1                     Duty Preference

Upon request from InFocus, Supplier shall immediately furnish all Duty
Preference Claim documentation in accordance with the rules of but not limited
to NAFTA, Sin-US FTA, and GSP.

 

4.8.2                     Documentation Archival. Supplier shall maintain, and
reproduce upon demand, all documentation relating to the international transport
of Products for a period of not less than six (6) calendar years from the date
of each shipment. All such record keeping systems will comport with the legal
requirements of the U.S. and other nations including requirements set out in
Parts 762 and 772, U.S. Department of Commerce, Export Administration
Regulations and the U.S. Customs Record-Keeping Regulations, 19 C.F.R. 163.
Supplier will provide immediate notice to InFocus (via such Parties’ appointed
representatives) in the event of an action by the U.S. or other national
government customs/export authorities that relates specifically to Products or
Services provided to InFocus. Supplier will afford InFocus and their duly
appointed agents reasonable access to the Supplier facilities for trade
compliance audits purposes and further agrees to respond in a timely manner to
an InFocus request for production of trade control records and to comply with
all remedial or corrective actions that InFocus may specify.

 

4.9       Employee Relationships/Independent Parties

Independent Parties. Neither this Agreement, nor the licenses granted herein to
either party, shall create any implied relations or agreements whatsoever.
Nothing herein shall be construed (a) to constitute either party a
representative or agent of the other party for any purpose whatsoever; (b) to
constitute the parties as partners, joint venturers, co-owners or otherwise as
participants in a joint or common undertaking; or (c) to allow either party to
create or assume any obligation on behalf of the other party for any purpose
whatsoever.

 

Use of Other Party’s Name. Except as necessary to perform their obligations
under this Agreement, neither party may make any reference to the other party,
its trademarks or trade names in advertising, public announcements, or
promotional materials without express written permission from the other party.
The fact that InFocus is a customer of Supplier shall be treated as confidential
information and Supplier shall not identify InFocus as one of its customers
unless InFocus gives its written permission.

 

4.10                                   Compliance with Laws

Supplier at its own expense, shall comply with all applicable laws, rules and
regulations, including without limitation those within the Territory dealing
with the design, development, manufacture, sale, support and environmental
compliance of the Products, and shall be responsible for the filing of all
reports and notices and the payment of all taxes, custom duties, and other
assessments required thereby. Failure to so comply shall constitute a breach and
give rise to InFocus’ right to terminate.

 

Supplier shall take reasonable and acceptable measures as needed to secure that
the Product moving under the Suppliers care are protected in such a way that
misappropriation, theft, unobserved replacement, addition of unfamiliar product
or any other unauthorized access to the Product will be prevented to the extent
possible.

 

14

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Supplier shall be committed to be actively involved in continuous Supply Chain
Security Programs in accordance with the rules of C-TPAT.

 

4.10.1  Certification of Products, Safety and EMC

 

Certification of Product - Supplier shall provide Product that meets the
appropriate Safety and EMC standards listed in Engineering Requirement
Specification or Safety & EMC Requirement document.

 

Safety compliance shall be accomplished by Underwriters Laboratories Listing for
the product and completed with an IECEE CB Scheme Test Report (CB Report) and
Certificate issued by an Agency in good standing with the CB Scheme.  InFocus
shall review the Safety and EMC report(s) for adequate coverage and reserves the
right to request clarification and re-testing if appropriate (i.e. touch
temperature, Lamp Rupture test).

 

EMC compliance shall be accomplished by testing with completed test reports
issued by an ISO 17025 accredited facility recognized by NACLA. The product
shall have a 3dB margin to the appropriate test limits, to be deemed minimally
acceptable to InFocus.

 

Supplier shall cover EMC and Safety type testing and approval fees. Supplier
shall permit InFocus to act as an Agent for Regulatory issues pertinent to the
Product.

 

Supplier shall make available to InFocus documents including but not limited
to:  schematics of power supply, other secondary circuitry schematics, full
factory inspection reports (summary page report is not acceptable), plastic
specifications for all plastic parts, and certificates and specifications for AC
mains primary parts.

 

Supplier shall provide InFocus English language electronic versions of service
guides, and user guides for the Product as available substantially at or before
the initial production/delivery of Supplier’s version of the Product. Supplier
shall be responsible for publishing service guides for the Product. Supplier
grants to InFocus a royalty-free right to publish InFocus’ service guides based
on the description of the Product from Supplier for internal use and to
distribute them to authorized service providers under confidentiality terms
where appropriate.

 

Supplier shall provide InFocus with electronic copies of user guides for
InFocus’ modification and return to Supplier. Supplier shall produce the
modified user guides and pack such guides with the PRODUCT without charge so
long as the guides are not substantially changed by InFocus.

 

4.10.2  Product or Component Recall

 

If either party becomes aware that any Product or component thereof may become
harmful to persons or property during normal operation (a “Safety Defect”), the
party who becomes aware of the Safety Defect shall immediately give notice
thereof to the other party, together with all information relevant to its
determination that a Safety Defect may exist.

 

At InFocus’ request, Supplier and InFocus shall jointly set up a recall program
with respect to any investigation or testing either or both parties deem
necessary with respect to a Safety Defect, including without limitation
assisting InFocus in determining whether other products supplied to InFocus by
Supplier are affected by a similar Safety Defect. Supplier shall provide such
cooperation and assistance whether such Safety Defect was identified by Supplier
or by InFocus, or otherwise.

 

Supplier shall promptly identify root causes for the Safety Defect identified
through investigation or testing.

 

Should either InFocus, or Supplier with InFocus’ permission, either voluntarily
or involuntarily, recall any Product as a result of a Safety Defect (a
“Recall”), Supplier shall assist and cooperate with InFocus in all respects with
regard to the preparation for and execution of such Recall. Supplier shall
provide such cooperation and assistance whether such Safety Defect was
identified by Supplier or by InFocus, or otherwise.

 

Except where a Safety Defect is caused solely by either (a) a defect in a
Product design supplied by InFocus or (b) a part or component supplied by
InFocus, Supplier agrees to reimburse InFocus for all costs incurred in
connection with such Recall including, without limitation, the cost of: 
investigation, evaluation and testing; legal and other consulting fees;
notification to InFocus customers and Product end users; transportation of

 

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affected Product or replacement units therefore; testing and repair of affected
units; disposal or return of affected units to Supplier; replacement units or
price reimbursement for recalled units whether or not the recalled units are
within the warranty period; and  fines, levies or other costs imposed by any
regulatory agency or governmental body in connection with such Safety Defect.

 

4.10.3              Country of Origin

Upon request from InFocus, Supplier shall immediately produce affidavits stating
the country of manufacture in accordance with the rules of origin of the
destination country.

 

United States law requires every article of foreign origin imported into the
United States, or its immediate container , and the outer package in which such
article is imported, to be marked, branded, or labeled, legibly in English
words, in a conspicuous place, in such manner as to indicate the country of
origin (manufacture) of such article. Shipments of materials of foreign
manufacture into the United States must also indicated country of origin and
labeling must comply with the above paragraph. Further work or material added to
an article in a country must effect a substantial transformation in order to
render such country the “Country of Origin”. United States Customs’ Law makes
compliance to the regulation mandatory. Failure to comply may result in
impoundment of your shipment. Any and all fines, penalties, storage costs, etc.,
by United States Customs are the responsibility of the exporter.

 

4.10.4              Restriction on Hazardous Subtances (“ROHS”)

 

Upon request from InFocus, Supplier shall immediately furnish all documentation
in accordance with the rules of RoHS EU Directive 2002/95/EC on the restriction
of the use of certain hazardous substances in electrical and electronic
equipment. All Supplier acts shall be in accordance with Exhibit F Government
Compliance.

 

4.10.4.1    Exhibit G : InFocus Restricted Material and Substances List

 

4.10.4.2    Notwithstanding the foregoing, Supplier shall not be responsible for
RoHS non-compliance to the extent any components, systems, materials, and/or
parts identified in writing by the Parties and provided by InFocus assigned or
appointed vendors, nor shall Supplier be held responsible to the extent any
components, systems, materials, and/or parts identified in writing by the
Parties and provided by InFocus under either a consignment or a buy-sell
arrangement with Supplier.

 

4.10.5  Foreign Corrupt Practices Act

 

Foreign Corrupt Practices Act; Anti-Boycott Regulations. Supplier shall not make
any payment or perform any act that would constitute a violation of the U.S.
Foreign Corrupt Practices Act, if applicable, or furnish any information or
perform any act that would constitute any violation of any US anti-boycott laws,
rules and regulations, if applicable.

 

No Export. For each instance in which InFocus is the discloser, recipient
certifies that no Confidential Information, or any portion thereof, will be
exported to any country in violation of the United States Export Administration
Act and regulations thereunder.

 

4.11     Force Majeure

 

Force Majeure. If performance other than payment for this Agreement by Supplier
or InFocus is prevented or delayed by reason of any cause, in whole or in part,
either directly or indirectly, by act of God, fire, war, riot, civil
insurrection, accident, embargo, strike or other labor unrest, or decree or
order of any court or government, or any other occurrence, act, cause or thing
beyond the reasonable control of, and without the fault of, the party affected,
and which cannot be overcome by reasonable diligence, the party affected shall
be excused from such performance to the extent that it is necessarily prevented
or delayed thereby, during the period of any such cause, and this Agreement
shall be deemed suspended for such period. However, after ninety (90)
consecutive days of such suspension on the part of one party, the other party
may terminate without liability for its obligations under this Agreement. In
order to obtain a suspension, the party invoking Force Majeure shall send
written notice thereof to the other within a reasonable time after the invoking
party knew or should have known that performance would be delayed or prevented
due to the Force Majeure.

 

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4.12  No Waiver

 

Binding Effect; Waiver. This Agreement shall be binding on and inure to the
benefit of the parties and their heirs, personal representatives, successors,
and assigns. No waiver of any breach of this Agreement shall constitute a waiver
of any other breach of the same or other provisions of this Agreement. No waiver
shall be effective unless made in writing.

 

4.13  Severability

 

Severability. If any provision of this Agreement is held to be illegal, invalid
or unenforceable under present or future laws effective while this Agreement
remains in effect, the legality, validity and enforceability of the remaining
provisions shall not be affected thereby, and in lieu of each such illegal,
invalid or unenforceable provision the parties shall negotiate in good faith to
add a provision similar in terms to such illegal, invalid or unenforceable
provision as may be possible.

 

4.14  Precedence/Conflicts of Documents

 

Conflicts In Documentation. In case of any conflicts on the same subject between
this Agreement and any prior agreements, purchase orders, acceptances,
correspondence and other documents forming part of any order for Product placed
by or for InFocus and accepted by Supplier during the term of this Agreement,
this Agreement shall govern and prevail, and the conflicting terms and
conditions of any such documents shall be deemed deleted and shall not be
binding upon either party insofar as they relate to this Agreement. The United
Nations Convention on Contracts for the International Sale of Goods shall not
apply. Revised UCC Article 2 Section 207 shall not apply. In the event of a
conflict, the following order of precedence shall govern:  Amendments; this
Agreement; Appendices; and Purchase Orders accepted under this Agreement.

 

4.15  Entire Agreement. This Agreement, including all Appendices annexed hereto,
constitutes the entire agreement and understanding between Supplier and InFocus
relative to the subject matter hereof and supersedes any previous agreements or
understandings whether oral or written. This Agreement may not be amended,
except in writing, signed by authorized representatives of both parties.

 

4.16  Applicable law

 

Governing Law. This Agreement has been executed and entered into in Wilsonville,
Oregon, U.S.A. and shall be construed, performed and enforced in accordance with
the laws of the State of Oregon, U.S.A., excluding its conflict of law
principles and the United Nations Convention on Contracts for the International
Sale of Goods.

 

Dispute Resolution; Attorneys’ Fees. For disputes regarding the Confidential
Information or other Intellectual Property Rights of InFocus or any of its
Related Parties, the sole and exclusive forum shall be the U.S. District Court
for the District of Oregon, Portland, Oregon, USA, which both parties
acknowledge to be a reasonable and convenient forum. Except for the foregoing,
any other disputes arising out of or resulting from this Agreement (including,
without limitation, its termination, in whole or in part) shall be finally and
solely settled under the International Arbitration Rules of American Arbitration
Association (“AAA”) by neutral arbitrators. If such dispute involves less than
US$100,000 in controversy, there shall be one (1) arbitrator, and if such
dispute involves US$100,000 or more in controversy, there shall be three (3)
arbitrators. The arbitrator(s) shall be selected by mutual agreement of the
parties or, in the absence of such agreement within thirty (30) days of the
first written request for arbitration from the party initiating such
arbitration, the arbitrator(s) shall be selected in accordance with such AAA
rules. Such arbitration shall be instituted and held in Portland, Oregon, USA
and shall be conducted in the English language. Any award rendered in such
arbitration shall be final and binding and may be entered and enforced as a
judgment with any court of competent jurisdiction. Any damages awarded by the
court or by the arbitrators, as the case may be, shall be in U.S. dollars. The
prevailing party in such legal proceeding or arbitration shall be entitled to
receive, in addition to any other relief provided, reimbursement of its actual
and reasonable attorneys’ fees and costs thereby incurred.

 

4.17  Exhibits

 

Exhibits; Headings; Counterparts; Versions.  All exhibits attached to this
Agreement are an integral part hereof and shall be incorporated herein as though
set forth in full.  If there is any material conflict between an exhibit and the
text of this Agreement, this Agreement shall prevail.  The headings used herein
are solely for convenience of reference and shall not to be considered in
construing or interpreting this Agreement.  This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, and all of
which together shall constitute one and the same instrument.   The English
language version of this

 

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Agreement, regardless of concurrent or later translation into any other
language, shall be controlling for all purposes.

 

4.18                                   Insurance.

 

Coverage Requirements. Without limiting any of the obligations or liabilities of
InFocus and Supplier, Supplier and each other supplier and its subcontractors
will maintain, at its own expense, until the Support Life for all Products has
terminated, insurance policies of the kind and limits listed below:

 

a)              General Liability:  Supplier will carry either Comprehensive or
Commercial General Liability Insurance with coverage to include Premises and
Operations, Products and Completed Operations, Contractual Liability, Property
Damage (including completed operations), and Personal Injury with combined
single limits of $* per occurrence.

b)             Umbrella: Supplier will be covered by an Umbrella coverage that
follows form over the General Liability and Automobile Liability with a minimum
limit of $* per occurrence, $* aggregate.  

c)              Directors and Officers:  Supplier will be covered as needed by a
Directors and Officers policy with a minimum limit of $* per occurrence, $*
aggregate.

d)             Cargo Coverage: Supplier will be covered by Cargo Coverage.

e)              Property / Warehouse Liability:  Supplier will carry Property or
Warehouse Liability insurance in amounts adequate to cover risks of damage or
loss to Assured Property in its care, custody and control, as assumed under the
terms of this Agreement. Any such insurance will name Assured as Loss Payee.

 

Claims Made Coverage. If any policies have “claims made” coverage, Supplier and
each other supplier and its subcontractors will maintain such coverage with
InFocus, its officers, Subsidiaries, directors and employees named as an
additional insured for a minimum of five (5) years after the permitted date of
termination specified above.  Any such coverage must have a retroactive date no
later than the date upon which work commenced under this Agreement or any other
Transaction Document.

 

Additional Requirements.  All deductibles on policies providing coverage will be
paid by Supplier or another supplier and its subcontractors. If Supplier or any
other supplier is self insured for any matter, such entity agrees to respond to
any claims or losses made against or incurred by InFocus in the same fashion as
if insurance had been purchased with the same or broader coverage terms as what
is generally available to similar entities in the same line of business. In no
event will the coverage or limits of any insurance required under this section,
or the lack of availability of any other insurance, be deemed to limit or
diminish in any way any Supplier’s obligations or liability to InFocus under
this Agreement or any other Transaction Document.

 

All insurance policies will be written by a company authorized to do business in
the territory and jurisdiction relevant to the particular coverage. All
insurance polices will be written with appropriately licensed and financially
responsible insurers.

 

Certificate of Insurance.  The applicable Supplier will furnish Certificates of
Insurance acceptable to InFocus before any Products are produced or Services
performed under any Transaction Document by the Supplier.  The Certificate of
Insurance will provide that there will be no cancellation or reduction of
coverage without thirty (30) days’ prior written notice to InFocus.

 

4.18.1              Disaster Recovery Plan

 

Business Recovery Plan.  Supplier shall maintain and upon request, submit to
InFocus for review/comment, an InFocus-specific business recovery plan for
InFocus which shall include all reasonable procedures needed to facilitate the
recovery and restoration of InFocus’ business at the current monthly shipping
rates, including use of an alternate Supplier facility or subcontractor facility
if production is delayed for more than fourteen (14) days.  InFocus shall
cooperate with such Supplier business recovery plan.  In the event that such
Supplier delay continues for more than fourteen (14) days, InFocus may, at its
sole option, either (a) terminate this Agreement, (b) suspend its obligations
under this Agreement during the period of delay and cancel outstanding
delinquent purchase orders without liability, and/or (c) invoke InFocus’
manufacturing rights as outlined under Section 3 Production and Supplier agrees
to cooperate in same.

 

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*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

 

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4.18.2              Product Liability Insurance

 

Product Liability Insurance. During the Term and for five (5) years after
expiration or termination of this Agreement, Supplier will carry product
liability insurance covering the Products in an amount not less than ten million
United States dollars (U.S. $*) per accident and in annual aggregate, naming
InFocus as Additional Insured. In addition, for any Consigned Parts, Supplier
will carry full property insurance and name InFocus as an Additional Insured on
that policy. Upon written request by InFocus, Supplier will provide InFocus
appropriate insurance certificates. Nothing in this provision will serve to
limit Supplier’s legal liability to InFocus for products liability.

 

In the event Supplier cancels its product liability or property insurance,
Supplier will provide InFocus with thirty (30) days written notice of
cancellation. In the event that such insurance is canceled, but not by Supplier,
Supplier will notify InFocus within forty-eight (48) hours of receipt of such
notice of cancellation.

 

4.19        Notices

 

Any notices required or permitted to be given under this Agreement will be in
writing and deemed valid and sufficient if delivered in person, by express
courier service or by facsimile transmission (provided a confirmation of
transmission is received) to the addresses set forth below or any other
subsequent address of which a party provides notice.

 

HON HAI PRECISION INDUSTRY CO, LTD

 

 

NO.2 2ND DONG HUAN RD, 10TH

 

INFOCUS CORPORATION

YOUSONG INDUSTRIAL DISTRICT

 

27700B SW PARKWAY AVE

LONGHUA STREET, BAO’AN

 

WILSONVILLE, OREGON 97070

SHENZHEN 518109, GUANDONG, CHINA

 

 

 

4.20        Survival

 

Those provisions which, by their nature, continue beyond expiration or
termination on a particular date, shall be deemed to survive expiration or
termination of this Agreement.

 

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*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

 

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SECTION 5 : EXHIBITS

 

EXHIBIT A: LOCATIONS OF INFOCUS LOGISTICS CENTERS

 

1)   USL - USA

 

UPS LOGISTICS CTR-LOUISVILLE, KY

InFocus Corporation

c/o UPS-SCS

Door 33-37

2200 OUTER LOOP, BUILDING 1

LOUISVILLE, KENTUCKY

40219-3565

UNITED STATES OF AMERICA

*

*

 

2)   EUL – Europe/Middle East & Africa

 

UPS LOGISTICS GROUP BV

RINGWEG 6

ROERMOND THE NETHERKANDS

6045JL

HOLLAND

*

*

 

3)   APL – Asia Pacific

 

INFOCUS INTERNATIONAL BV

C/O INFOCUS SYSTEM ASIS P/L

FINAL DES. : BAX GLOBAL PTE LTD

NO.17 CHANGI SOUTH ST. 2

SINGAPORE 486129

SINGAPORE

*

*

 

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*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

 

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EXHIBIT B: AUTHORIZED PURCHASERS

 

1) InFocus Corporation

27700B SW Parkway Avenue

Wilsonville, Oregon 97070-9215

United States of America.

Tel : 503-685-8888

Fax : 503-685-8845

 

2) InFocus Systems Asia Pte Ltd

238A Thomson Road, #18-01/04

Novena Square

Singapore 307684

Tel : 65-334-9005

Fax : 65-6565-1080

 

3)*

 

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*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

 

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EXHIBIT C: INFOCUS QUALITY AGREEMENT

 

ARTICLE 1 – PURPOSE

 

The purpose of this Agreement is to set forth the terms and conditions under
which the Parties shall elaborate and implement common quality targets and
guarantees regarding the Products. This agreement is attached to and made part
of the Warranty section
(Section 6.0).

 

ARTICLE 2 – QUALITY TARGETS

 

2.1. QUALITY TARGET DEFINITION

 

The parties agree to minimum quality targets as follows:

 

Volume Milestone

 

PPM Level

 

Sigma Level

Pilot Build

 

*

 

*

 

 

 

 

 

After 25,000 units

 

*

 

*

 

 

 

 

 

After 50,000 units

 

*

 

*

 

2.1.1 Co-developer will use best faith efforts to work towards a * sigma quality
target for the product.

 

2.1.2 Quality and Reliability failure rates in the field shall not exceed *%
annually.

 

2.2. PROBATION STATUS

If Supplier cannot initially meet the Quality Target (based on validated failure
data), then Supplier will be placed on Probationary Status. Supplier shall
develop and implement a Continuous Quality Improvement Plan for the Product
which will achieve the Quality Target in no more than a six  (6) month period of
time. If Supplier fails to meet the Quality Target during such period, InFocus
shall have the right (but not the obligation) to cancel the Agreement and
outstanding Purchase Orders shall remain in place with Supplier providing
targeted screening of Products (pipeline inventory and/or other sites as
designated by InFocus) delivered to InFocus so that InFocus will have no
liability for specific Products which do not meet the Quality Target.Epidemic
and Catastrophic failures are as defined in Exhibit H.

 

ARTICLE 3 – WORK GROUP DEFINITION

 

In order to facilitate the communication between the Parties, each Party shall
make known the appropriate geographical and/or worldwide representatives to form
a “Working Group”.

 

The Working Group’s functions are:

 

•                  To improve communication between the parties in the quality
field

•                  To lead evolution towards a “zero defect” total quality for
Products.

•                  To improve communication and co-operation in order to
increase mutual confidence.

•                  To update on an agreed upon schedule, the list of Products,
quality targets, and procedures covered by this Quality Agreement.

•                  To implement a weekly data summary, SPC, and issues list
report.

 

Meetings of the working group are organized on a regular basis, at locations to
be defined.

The main objective of these meetings is to review the performance history to the
Quality Targets, to define and supervise corrective actions, to ensure the
dialogue between the two Parties.

 

In case of a major issue, an exceptional meeting may be organized.

 

ARTICLE 4– QUALITY ASSURANCE

 

Supplier shall maintain a quality management system which meets the mutually
agreed upon objectives stipulated in ARTICLE 2 of this Quality Agreement.
Supplier shall manufacture and test the Products in accordance with a quality
management system put into place by Supplier to meet such requirements, and
which is reasonably acceptable to InFocus.

 

If Supplier receives production or test equipment, software, services, materials
or other supplies from third parties for the manufacture or quality assurance of
the Products, Supplier shall ensure that these are in compliance with said
quality management system, whether it be by contract with those parties or
through carrying out itself such tests as are necessary to assure compliance
with the quality management system.

 

These procedures shall be used for manufacturing of the Products.

 

The Supplier will pay for all costs related to any event of a major quality
event that needs direct InFocus involvement at the Suppliers or other
facilities.

 

ARTICLE 5 -  VISITS OF SUPPLIER FACILITIES BY INFOCUS

 

InFocus may request to visit Supplier’s or sub-contractors facilities including
selected manufacturing lines. Supplier agrees to allow access to its procedures,
manufacturing and quality control sites. InFocus will be required to sign a
separate Confidentiality Agreement for access to Supplier’s highly valuable
confidential processes.InFocus will endeavour to inform Supplier at least (1)
one week before the visit. In case of a major issue, exceptional meetings may be
organized for anytime during normal business hours, as agreed between the
Parties. Supplier will provide office space, Internet and telephone
connections/access.

 

--------------------------------------------------------------------------------

*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

 

22

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ARTICLE 6 – CONDITIONS TO INTRODUCE / CHANGE PRODUCTS

 

6.1. INTRODUCTION OF PRODUCTS

Before any introduction of Products into any of InFocus’ applications, an
appropriate validation shall be executed by the Parties.

 

The Product must be qualified according to Supplier’s qualification procedures,
which will be provided upon InFocus’ request.

 

Supplier shall issue a qualification report for each Product and this report
shall be given to InFocus for review and approval.

 

In addition, Supplier will validate the Products according to InFocus process
defined in the Quality Plan as provided in advance by InFocus and as agreed by
Supplier. Supplier will identify non-conformities to the Product’s
Specifications, and will take action to remedy such non-conformities.

 

The Parties may agree to run additional qualification steps or tests.

 

If any of the above requirements are not achieved, InFocus shall be informed and
corrective action steps initiated with a defined schedule. Supplier’s
qualification procedure shall be agreed to in writing by InFocus and Supplier.

 

In the absence of a InFocus Specification, Supplier name ‘s final Specifications
will be used as reference after validation by InFocus.

 

As necessary, InFocus reserves the right to have any qualification data
validated at InFocus’s cost by an authorized lab selected by InFocus.

 

6.2  CHANGE IN PRODUCTS MANUFACTURING

Any major change in production process or any change that will result in change
to fit, form, or function of the Product shall be transmitted to InFocus in
writing prior to any action and shall include documented information about any
modification, even temporary, of raw materials, manufacturing process,
manufacturing site, packaging and product configuration affecting any Products.

 

Any Product, manufacturing or packaging changes affecting fit, form, or function
of the Products shall also be part of the agenda at the regular meetings by the
Work Group’s Representatives.

 

In case of any change affecting fit, form, or function, Supplier shall wait for
the written agreement from InFocus before delivery.

 

As necessary, InFocus reserves the right to have any modifications, described in
a change notice, validated at InFocus cost by an authorized lab selected by
InFocus.

 

In case of temporary change affecting fit, form, or function, a request for
deviation shall be issued by Supplier and is subject to approval by InFocus.

 

ARTICLE 7 – PROCEDURE IN CASE OF DEFECT

 

7.1 PROCEDURE FOR DEFECTIVE PRODUCTS

 

Supplier shall not deliver any Products that do not meet the Specifications or
are otherwise not manufactured in accordance with the agreed-upon quality
management system (“Defective Products”).

 

In the event InFocus receives any Defective Products, InFocus shall have the
right to return such Defective Products to Supplier based on an RMA process with
the RMA issued by Supplier. The defect will be re-confirmed either by Supplier’s
internal laboratory or if necessary, by an authorized laboratory acceptable to
both parties, In the event such defects are confirmed by the laboratory,
Supplier will bear testing, transportation, and other associated costs. In the
event such defects cannot be confirmed, then InFocus shall bear such costs.

 

In case of a major issue, an exceptional meeting can be set up and
representative samples may be sent, along with a Supplier Corrective Action
Request, to Supplier for analysis.

Supplier will agree to respond within 24 hours of receipt of major defect issue
with preliminary analysis information of the Defective Product if feasible given
the defective component, following within 5 days with detailed root cause
analysis. Root cause analysis times will be negotiated in good faith by the
parties when the analysis must be conducted with Product part supplier or the
analysis capabilities of Supplier and/or external lab are not sufficient to
perform the needed analysis. Major defects shall be limited to:

1) Defects that would create a safety hazard to assembly staff integrating the
Product into the InFocus television chassis.

2) Defects that would create a safety hazard for the end customer.

3) Product that is found to be D.O.A.

4) Product that is found to produce a picture that is unacceptable/distorted
beyond use.

 

7.2  COST OF DEFECTIVE PRODUCTS

When Supplier’s responsibility for the Defective Product has been determined by
joint agreement by the parties, Supplier shall take responsibility for
correcting the defect by repair, replacement, or credit, at Suppliers’ option.
Prior to electing such option, Supplier shall consult with InFocus and use its
best efforts to take InFocus’s preference, if any, into consideration.

 

7.3 PROBATION STATUS

In the event that Supplier’s Product consistently does not meet the Quality
Level or Specification agreed to by the parties, InFocus reserves the right to
place Supplier on Probationary Status for a period of 3 months. During this
Probationary Status time, Supplier is required to demonstrate continuous Product
Quality Improvement.

Failure to accomplish this improvement may result in termination of the
Agreement and /or Purchase Orders, with no liability for specific Products which
do not meet the Quality Target or Specification.

 

23

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EXHIBIT D: Product Regulatory Compliance

 

Co-development

 

*:

 

•                  *

•                  InFocus Product Safety and EMC personnel will conduct final
compliance tests with Agencies;

•                  InFocus compliance personnel shall participate in design
reviews at important project milestones (prior to tool release, prototype
complete etc.);

•                  InFocus compliance personnel will negotiate all regulatory
engineering judgments;

•                  Supplier will supply prototype samples to support Agency
testing;

•                  Agency Certificates, Licenses and Inspection procedures shall
be held by InFocus.

•                  Supplier may be allowed to act on InFocus’s behalf for Agency
file updates depending on the complexity of the update.

 

As the Co-development relationship matures, InFocus may choose to lower its
involvement level and delegate some regulatory tasks to the Supplier if it shows
the capability to handle the task.

 

Contract Manufacturing

 

•                  *

•                  Supplier shall ensure factory is in good standing by
providing a copy of the complete inspection report from regulatory agency.

•                  Supplier shall inform InFocus as soon as a non compliance is
issued during inspection and provide a plan of corrective action.

•                  Supplier shall maintain records of manufacturing testing
(i.e. hipot, ground continuity) for a period of at least 7 years.

 

--------------------------------------------------------------------------------

* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

 

--------------------------------------------------------------------------------

 

EXHIBIT E: QBR Reporting

 

25

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EXHIBIT F: Government Compliance

 

1.               Environmental Requirements. Without limiting the generality of
any other provision of this Agreement, Supplier warrants and agrees that:

 

Product Content. All Products and their packaging will comply with all
applicable laws, and for purposes of this Agreement, such specifications are
part of the Requirements and Specifications for each Product.

Shipment. All Products will be shipped in conformance with all applicable and
international transportation regulations including, where applicable,
regulations regarding chemicals and hazardous materials, dangerous goods, or
fumigation and aeration. All packaging materials, including pallets, will be
free of pests and comply with national and international regulations regarding
Solid Wood Packing Materials (SWPM) where applicable.

Chemical Substances. Each chemical substance contained in a Product is on the
inventory of chemical substances compiled and published by the United States
Environmental Protection Agency under the Toxic Substances Control Act.

MSDS. Supplier will provide complete and accurate Material Safety Data Sheets
(MSDS) for Products to InFocus prior to shipment.

Environmental Information. Supplier will furnish InFocus any information
reasonably requested by them to confirm compliance with applicable laws or to
determine the environmental effects of materials included in the Products or in
their packaging.

Disposition of Excess Materials. Supplier will recycle or dispose of any excess
or waste Products (including damaged or Noncomplying Products returned to such
Supplier) in compliance with the provisions of this Agreement, applicable laws
and any specific instructions received from InFocus.

Take Back. Supplier will accept back, free of charge, and dispose of in an
environmentally sound manner in compliance with applicable law, any Products,
material included in the Products, or their packaging returned fright prepaid by
InFocus from any country that legally requires Product be taken back from the
user at the end of Product life.

Ozone Depleting Substances. Supplier hereby certifies that no Product nor any
component:

 

a.               Contains any “Class I Substances” or “Class II Substances” as
those terms are defined in 42 U.S.C Section 7671 and implementing regulations of
the United States Environmental Protection Agency at 40 C.F.R Part 82, as now in
existence or hereafter amended; or

b.              Has been “manufactured with” a process that uses any “Class I or
Class II Substances” (as those terms are defined above).

 

Continuous Improvement. Supplier will continuously implement and maintain
processes and policies designed to protect the environment at each Facility.

Supplier. Supplier will require that each of its component suppliers and each of
its subcontractors comply with each of the foregoing as regards each such
entity’s activities relating to any Product or component.

 

2.               Social and Environmental Responsibility. Supplier warrants that
in all countries in which such Supplier and, to its knowledge, information and
belief, its subcontractors do business, its and their operations comply with all
applicable laws and regulations governing protection of environment, employee
health safety, and labor and employment practices, including but not limited to,
laws and regulations relating to working hours, working conditions, wages,
benefits, child labor, forced labor, freedom of association and equal employment
opportunity.

 

3.               Accessibility Requirements. Supplier will, and will cause each
of its component suppliers  and each of its subcontractors to, comply with all
federal, state, local and foreign laws, rules, and regulations applicable to
accessibility of information technology for people with disabilities. Upon
request, Supplier will provide InFocus information regarding accessibility
features of Supplier and Supplier’s or subcontractor’s products and services.

 

4.               Procurement Regulations. InFocus is a commercial corporation
that is also a contractor and subcontractor for the U.S. government. All of the
Products to be purchased from Supplier by InFocus pursuant to a
subcontract/purchase order in the United States, its territories, possessions,
the District of Columbia and Commonwealth of Puerto Rico are deemed to be
“Commercial Items” as defined in Federal Acquisition Regulation (“FAR”) 2. 10 1,
Part 12 and 52.202.1 (c). The clauses identified in FAR 52.244-6 are hereby
deemed incorporated into this Agreement with respect to all Commercial Items. In
addition, in accordance with determinations made as a result of U.S. government

 

26

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audits of InFocus, Supplier hereby agrees to comply with, and to flow down to
each of its subcontractors and components suppliers, FAR 52.219-9, Small
Business Subcontracting Plan. Furthermore, pursuant to FAR 52.212-5(e) and/or
FAR 44.402(b), Supplier agrees to comply with, and to flow down to each of its
applicable subcontractors and components suppliers, the following FAR clauses,
which are hereby incorporated by reference into this Agreement, with the same
force and effect as if they were presented in full:

FAR 52.222-26, Equal Opportunity (February 1999)

FAR 52.219-8, Utilization of Small Business Concerns (October 2000)

 

APPICABLE IF THE SUBCONTRACTOR/PRUCHASE ORDER  EXCEEDS $2,500: FAR 52.222-41,
Service

Contract Act of 1965, as Amended (May 1989) if the purchase order is principally
for the furnishing of services through the use of service employees.

 

APPICABLE IF THE SUBCONTRACT/PURCHASE ORDER IS FOR $10,000 OR MORE:

FAR 52.222-35, Affirmative Action for Disabled Veterans and Veterans of the
Vietnam Era (April 1998)

FAR 52.222-36, Affirmative Action for Workers with Disabilities (June 1998)

 

5.               Equal Employment Opportunity and Non-Discrimination. In
addition to the foregoing, each Supplier warrants that its United States
operations comply with the requirements of Executive Order 11246, the Vocational
Rehabilitation Act and the Vietnam Era Veterans’ Readjustment Assistance Act.

 

6.               Anti-Terrorism Security Measures. Supplier agrees to comply,
and to cause each of its subcontractors to comply, with all applicable laws
relating to anti-terrorism security, as well as any additional anti-terrorism
security requirements specified in writing by InFocus. Supplier will be liable
for all fines and penalties imposed on InFocus and other damages incurred by
InFocus, relating to Supplier’s, or any of its subcontractors’, non compliance
with any such anti-terrorism security laws or requirements. Supplier will, upon
request, provide to InFocus written descriptions of such anti-terrorism security
measures.

 

7.              Trade Regulations

 

(a) Generally. Supplier acknowledges that it is knowledgeable about such laws,
regulations, and related InFocus requirements, and agrees to comply with the
same.

 

(b) Country of Origin. Supplier, at each of its Facilities, is responsible for
determining the appropriate country of origin for the Products and for marking
the Products in accordance with the requirements and laws. Further, Supplier
will cooperate fully with InFocus in supplying data to facilitate their origin
reporting requirements and qualification for preferential origin programs,
including all requested origin analysis, certificates of origin, manufacturer’s
affidavits, data (e.g. EDI) transmissions, and special reporting.

 

(c) Invoice Requirements. The following trade data elements must be able to be
printed out or be capable of being transferred electronically on each commercial
invoice prior to shipment of the related Products and must be sent to InFocus
via the standard electronic/EDI shipping confirmation signal:

(i)      Country of Origin (line item level);

(ii)     Import Country HTS Classification (line item level);

(iii)    ECCN (line item level);

(iv)    License (line item level);

(v)     Destination Control Statement:

(vi)    InFocus Part Number; and

(vii)   Appropriate shipping term.

 

27

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(d) Document Retention and Audit. Further, Supplier must maintain, and reproduce
upon demand, all documentation relating to the international transport of
Products for a period of not less than six (6) calendar years from the date of
each shipment. All such record keeping systems will comport with the legal
requirements of the U.S. and other nations including requirements set out in
Parts 762 and 772, U.S. Department of Commerce, Export Administration
Regulations and the U.S. Customs Record-Keeping Regulations, 19 C.F.R. 163. The
affected Supplier will proved immediate notice to InFocus (via such Parties’
appointed representatives) in the event of an action by the U.S. or other
national government customs/export authorities that relates specifically to
Products or Services provided to InFocus. Suppler will afford InFocus and their
duly appointed agents reasonable access to the Facilities for trade compliance
audits purpose and further agrees to respond in a timely manner to an InFocus
request for production of trade control records and to comply with all remedial
or corrective actions that InFocus may specify.

 

(e) Importer of Record. For each transaction where InFocus is to be the importer
of record, Supplier is responsible for ensuring that the related commercial
documentation accurately reflects the actual price paid or payable between
InFocus and Supplier. It is Supplier’s responsibility to reconcile its financial
records against commercial documentation in order to validate InFocus use of
transaction value, whenever possible, for declarations to customs. When
transaction value cannot be applied, the affected Supplier will apply
sequentially the World Trade Organization valuation rules for InFocus
transactions. Supplier acknowledges that it is knowledgeable about the
requirements for transaction value declarations and agrees to comply with the
same.

 

(f) Duty Drawback. Unless otherwise requested, Supplier will allow InFocus to be
the importer of record for all Product shipments. If InFocus is not the importer
of record and Supplier obtains duty drawback rights to Products, Supplier will,
upon InFocus’ request, provide it with documents required by the customs
authorities of the country of receipt to prove importation and to transfer duty
drawback rights to InFocus if it has paid or arranged deposit of the subject
duties.

 

(g) Product Classification.

 

(1) Product Export and Import. InFocus will provide the Export Control Commodity
Numbers (“ECCN”) and Harmonized Tariff Code Schedule Numbers, as published by
the U.S. Office of Tariff Affairs and Trade Agreements (“HTS”) for its Products.
Supplier will comply with applicable laws governing the import or export of
Products and will be solely responsible for obtaining all requisite licenses and
other authorizations.

 

(2) Country of Origin Marking. Except as provided in the applicable Agreement
Amendment, Supplier will mark the Product containers, in English, as well as all
Product units with its country of origin, in compliance with Section 304 of the
United States Tariff Act. If the Product itself cannot be marked legibly due to
size, then its immediate container must be marked with a signed certificate
stating Country of Origin (manufacture) by quantity and part number (InFocus and
Supplier’s).

 

(h) Government Compliance. Supplier will comply, and will cause each of its
component suppliers and each of its subcontractors to comply, with all federal,
state, local and foreign laws, rules and regulations applicable to the
performance of such Supplier’s Transaction Documents and its Products and
Service. Such compliance will include obtaining any approvals necessary to allow
InFocus to sell, and its customers to use, the Products and Services.

 

(i) Changes to Governmental Product Standards. Supplier will immediately give
notice to InFocus if any upgrade, substitution, or other change (even those that
are not defined as Engineering Changes) to a Product provided by Supplier is
required to make that Product meet applicable safety standards, statutes, or
other governmental orders or regulations. Supplier will bear all costs
associated with upgrading its manufacturing process to meet such safety
standards, statutes, or other governmental orders or regulations. All Products
affected by such changes and already purchased by InFocus may, at InFocus’
election, be made subject to a Product Recall under Section 4.10.2  (Product
Recalls).

 

28

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EXHIBIT G: InFocus Restricted Material & Substances List

 

InFocus Restricted Materials and Substances

Equipment Listing of Restricted Materials and/or Substances Requiring
Declaration Restricted Materials and Substances Lists A and B. Lists A and B are
consistent with the Material Composition Declaration Guide for Electronic
Products (formerly Joint Industry Guide).

The following materials are restricted in equipment products or components
supplied to or purchased by InFocus. Some uses may be allowable and will be
evaluated by InFocus. Complete the form entitled “Material Composition
Declaration.” (MCD) form and e-mail to ross.kruse@infocus.com.

 

Material/Substance

 

Typical Uses

 

Requirements and Exceptions
or Maximum Concentration Value (MCV)

List A (MCDG)*

 

 

 

 

Asbestos

 

Heat insulation

 

No intentional addition

Azo Colorants

 

Wire coating material (inks, coatings, pigments and dyes)

 

No intentional addition of dyes and pigments based on the restricted amines
listed (except if breakdown products are less than 30 ppm)

Cadmium/Cadmium Compounds

 

Thick film inks on circuit boards, solid state relays, batteries, (inks,
pigments, dyes, coatings, plastics), certain glass filters, cadmium plating in
high voltage applications, plugs, commutators, fuses, PVC sheathed wires,
photocouplers, photodetectors, solder, electrical contacts, resistors, pole
plates

 

No intentional addition except for uses in electrical safety applications. No
contaminant levels > 100 ppm. Cadmium used as a stabilizer in PVC wire
insulation is acceptable at levels below 100 ppm.

Hexavalent Chromium/Hexavalent Chromium Compounds (Cr+6)

 

Chromate conversion coatings for metal corrosion protection, EMI plating, (inks,
pigments, dyes, coatings, plastics), vermiculite contaminant, fasteners, screws,
nuts, shafts, etching of anodized aluminum, passivation of stainless steel

 

No intentional addition and no contaminant levels > 1000 ppm

 

29

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Lead/Lead Compounds

 

Solder, weights, lubricants, glass lenses, light bulbs/tubes, paints, coatings,
(inks, pigments, dyes, coatings, plastics, PVC sheathed wires, vulcanized rubber
molding, ceramics, electrodes, resistor component, semiconductors, zinc plating,
die-bond material, sensor component material, humidity sensors, X-Ray shielding
plastic plates, rubber

 

No intentional addition (except for use in glass of Cathode Ray Tubes,
fluorescent tubes, optical lenses; as an alloying element in steel containing up
to 0.35% by weight, lead in aluminum containing up to 0.4% lead by weight, and
as a copper alloy containing up to 4.0% lead by weight; lead in high melting
temperature type solders *85% lead); lead in solders for servers, storage and
storage array systems (until 2010); lead in solders for network infrastructure
equipment for switching, signaling, transmission, as well as in network
management systems for telecommunication; lead in electronic ceramic parts, e.g.
piezoelectronic devices; lead in shielding for radiographic applications; lead
in UPS transformers for medical devices). No contaminant levels > 1000 ppm. Lead
used as a plasticizer in PVC wire insulation at levels < 1000 ppm is allowed,
but in the case of external cables, external cords, power and interconnect
cables, lead must be below 300 ppm.

Mercury/Mercury Compounds

 

Electrical relays/switches, lamps, batteries, inks, pigments, dyes, coatings,
plastics, scanners, LCD, mercury electrodes, dry cells, mercury cells,
electrical contacts, sensors, rubber, resins

 

No intentional addition (except for use in specialty lamps and backlit LCD
lamps) No contaminant levels > 1000 ppm

Ozone Depleting Substances (ODS)

 

Cleaning agents, lubricants, adhesives, cooling agents, foaming plastics,
halogen lamps, fire extinguishers

 

No intentional addition or no use in manufacturing, of Class I ODS Class II
cannot be present at levels > 1000 ppm

Polybrominated biphenyls (PBB) , and Polybrominated diphenyl ethers (PBDE)

 

Flame retardants, plastics, circuit boards, foams, wire insulation

 

No intentional addition and no contaminant levels > 1000 ppm

Polychlorinated Biphenyls (PCBs)

 

Electrical transformers and heat exchangers

 

No intentional addition

Polychlorinated Naphthalenes (more than 3 chlorine atoms)

 

Elastic rubber, elastomer belts, oil seals, mechanical seals, insulating oil in
capacitors, plastic parts

 

No intentional addition

Radioactive Substances

 

Optical lenses

 

No intentional addition

Short Chained Chlorinated Paraffins

 

Thermoplastic PVC parts, substrate conductor and wire, sheathing of electrical
wires

 

No intentional addition

 

30

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Tributyl Tin (TBT) and Triphenyl Tin (TPT)

 

Silicone bonding agents, rubber catalyst, SAW filters Note: Tin-Lead solder does
not contain organic tin

 

No intentional addition

Tributyl Tin Oxide (TBTO)

 

Printing inks, flameproof plastics, rubber elastomers

 

No intentional addition

List B (MCDG)*

 

 

 

 

Antimony/Antimony Compounds

 

Optical lenses, solder, printing inks, wire coating material, semiconductor
devices, resistor component, transformers, insulating tapes, rubber, DC
converters, printed circuit boards, resin material

 

Report at levels > 1000 ppm

Arsenic/Arsenic Compounds

 

Glass, metal bonding agents, coatings, LED’s, semiconductors, photocouplers,
fiberglass, insulating tapes, printed circuit boards, optical lenses

 

Report at levels > 1000 ppm

Beryllium/Beryllium Compounds

 

Beryllium-copper electrical contacts, EMI gaskets, flat springs, relays,
switches, jacks, sockets, wires

 

Report at levels > 1000 ppm

Bismuth/Bismuth Compounds

 

Electrical solder, copper circuits, lead alloys, piezoelectric elements,
electrodes

 

Report at levels > 1000 ppm

Brominated Flame Retardants (other than PBB or PBDE)

 

Plastics additive, vulcanized rubber molding, semiconductors, LCD, TV chassis

 

Report at levels > 1000 ppm

Nickel (external applications only)

 

Batteries, optical reflection coatings, lead frame, thick film conductors,
semiconductors, decorative plating, electroplating for corrosion protection,
ceramic capacitors, magnetic recording media

 

Report at levels > 1000 ppm

Phthalate esters e.g. di n-butyl phthalate (DBP), di-ethylhexyl phthalate
(DEHP), Bis(2-methoxyethyl) phthalate (DMEP)

 

Equipment, plastics, paint accelerants, safety glass, adhesives, lubricants

 

Report at levels > 1000 ppm

Polyvinyl Chloride (PVC)

 

Wire insulation, plastics, tubing, conduit, packaging (blisters, shrink bands,
flexible packaging)

 

Report at levels > 1000 ppm

 

31

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Selenium/Selenium Compounds

 

Semiconductors, photocells, printing inks, photocouplers

 

Report at levels > 1000 ppm

 

--------------------------------------------------------------------------------

* InFocus’ Listing of Restricted Materials and Chemicals correlates with the
Material Composition Declaration Guide, Lists A and B, recognized by industry
associations, for Electronic and Electrical Products. The list of compounds and
their CAS numbers are provided in this work sheet.

 

Maximum concentration value such as 1000 ppm shall apply at the homogeneous
material level. Homogeneous material means a material that cannot be
mechanically disjointed into different materials or materials of uniform
composition throughout. Mechanically disjointed means materials that can be
separated by mechanical means such as unscrewing, crushing, grinding, and
desoldering. A semiconductor component would have several homogeneous materials,
i.e., the plastic housing, lead frame, tin plating of the lead frame wires, lead
frame alloy, etc. An electric cable would have three materials, i.e., the
internal conductor wire, the conductor wire insulation, and the outside cable
jacket.

 

32

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EXHIBIT H : PRODUCT WARRANTY & SERVICE SUPPORT.

 

1.1 SCOPE.

*

 

1.2 PRODUCT QUALITY.

*

 

1.3 WARRANTY.

*

•

Warranty Cost *

 

--------------------------------------------------------------------------------

*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

 

33

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1.4 CATASTROPHIC FAILURE

*

 

1.5 NO WAIVER

*

 

1.6 SERVICE AND SUPPORT

 

*

•

 

1.7 SERVICE SPARES:

 

*

 

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 *Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

 

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*

 

1.8 TERMS OF SALE - SERVICE PARTS:

*

 

1.9 REPAIR, OUTSIDE PRODUCT WARRANTY PERIOD, INSIDE PRODUCT EOL DATE.

*

 

1.10 REPAIR FROM PRODUCT EOL DATE TO PRODUCT EOSL DATE.

*

 

1.11 REPAIR BILLING.

*

 

1.12 NO PROBLEM FOUND (NPF).

*

 

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*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

 

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1.13 DOA RETURNS.

*

 

1.14 REJECT MATERIALS AUTHORIZATION (RMA) PROCEDURE.

*

 

1.15 Key Component Warranty table

 

Platform

 

Commodity

 

Supplier

 

Warranty

 

Gecko

 

Ballast

 

*

 

* Months

 

Gecko

 

Lamp

 

*

 

* Months

 

Gecko

 

DMD

 

*

 

* Months

 

Gecko

 

Power Supply

 

*

 

* Months

 

Gecko

 

COA

 

*

 

* Months

 

Gecko

 

Lens

 

*

 

* Months

 

Gecko

 

Colorwheel

 

*

 

* Months

 

Gecko

 

Remote

 

*

 

* Months

 

Gecko

 

Fan

 

*

 

* Months

 

Gecko

 

Keypad

 

*

 

* Months

 

 

 

 

 

 

 

 

 

Nacho

 

Lamp

 

*

 

* Months

 

Nacho

 

DMD

 

*

 

* Months

 

Nacho

 

Power Supply

 

*

 

* Months

 

Nacho

 

Lens

 

*

 

* Months

 

Nacho

 

Semi-coa

 

*

 

* Months

 

Nacho

 

Colorwheel

 

*

 

* Months

 

Nacho

 

Remote

 

*

 

* Months

 

Nacho

 

Fan

 

*

 

* Months

 

 

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*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

 

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Nacho

 

Keypad

 

*

 

* Months

 

1.16 Pricing table

 

 

Description

 

TAT

 

Cost

 

Title

 

Terms

 

2

In Warranty repair (Cust)

 

*

 

*

 

Supplier

 

*

 

3

In Warranty repair (InFocus)

 

*

 

*

 

Supplier

 

*

 

4

In warranty repair at ASP (cust)

 

*

 

*

 

IFC

 

*

 

5

Out of warranty repair at ASP (InFocus)

 

*

 

*

 

IFC

 

*

 

6

Out of warranty repair (Cust)

 

*

 

*

 

Supplier

 

*

 

7

Out of warranty repair (InFocus)- Refurb

 

*

 

*

 

Supplier

 

*

 

8

“Fluff and Buff” (InFocus)

 

*

 

*

 

Supplier

 

*

 

 

 

 

 

 

 

 

 

 

 

 

9

Out of warranty component repair

 

*

 

*

 

Supplier

 

*

 

10

In warranty component repair

 

*

 

*

 

Supplier

 

*

 

 

Note :  *

 

*

 

*

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*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

 

37

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SECTION 6: PRODUCT COSTS

 

38

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