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****TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
BY HYPERCOM CORPORATION
UNDER 17 C.F.R. SECTION 200.80(B)(4),
200.83 AND 240.24b-2
 EXHIBIT 10.20
 CONTRACT MANUFACTURING AGREEMENT
 THIS CONTRACT MANUFACTURING AGREEMENT Effective Date Hypercom Manufacturing Resources, Inc. Hypercom Venture Corporation (Singapore) LTD Venture party parties
 WHEREAS
 WHEREAS, PCBA
Agreement
 WHEREAS, Top-level Assembly TLA
 NOW, THEREFORE
 1.
    
    DEFINITIONS
  1.1
    
    Agreement means this contract manufacturing agreement, including all Schedules to this
Agreement, as may be amended in accordance with this Agreement from time to time.1.2
    
    Affiliate means, with respect to either party, any entity controlling, controlled by, or
under common control with, such party, where control (including its correlative meanings,
controlled by, controlling and under common control means with respect to a
corporation, ownership of more than 50% of the shares (attributable to the controlled
corporation) entitled to vote for the election of directors or other managing authority1.3
    
    AVL or Approved Vendor List means the list of Hypercom-approved suppliers for
Components as may be amended from time-to-time in accordance with this Agreement and the
Quality Management Plan.1.4
    
    Basic IP means Intellectual Property developed, licensed to or obtained by a party,
independent of this Agreement, before or after the Effective Date.1.5
    
    Blanket Purchase Order means a non-binding purchase order that does not set forth
a specific delivery
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date, and may cover requirements over an extended period of time. Blanket Purchase Orders are
intended to be used for administrative purposes only in combination with the Rolling Forecast
and Purchase Order or Release.1.6
    
    BOMmeans a Bill of Materials.1.7
    
    Business Daymeans a day, from Monday through Friday, that commences at 12:00am (local
time) and ends on the same day at 11:59pm (local time), and has not been declared as a
national holiday in Malaysia (when referencing an obligation of Venture) or in the United
States (when referencing an obligation of Hypercom).1.8
    
    Calendar Dayshall mean a calendar day that commences at midnight Pacific Time and ends
on the same day at 11:59 pm (Pacific Standard Time).1.9
    
    Component Lead Timemeans the period of time, as provided by a Component supplier,
between the date a Purchase Order is released by Venture and the date Venture shall have the
Component at the Venture location.1.10
    
    Confidential Informationhas the meaning ascribed to it in the Non-Disclosure Agreement.1.11
    
    Delivery Date means in relation to the date the Products must be delivered to the
Delivery Location, as specified on a valid Purchase Order or Release, (as the case may be),
the date on which the Products shall be delivered to the Delivery Location or as otherwise
agreed to by the parties in writing.1.12
    
    Delivery Location means the location to which the Products must be delivered, as
specified in a Purchase Order or Release, or such other locations requested in writing by
Hypercom as agreed to by the parties in writing.1.13
    
    Economic Order Inventory means any Components for which the quantity of such Component
that the Supplier is required to procure in any single order with the relevant third party
vendor is greater than the quantity of such Component required to fulfill (i) any accepted
Purchase Orders or Releases, or (ii) any Forecasts for a Product which requires such
Component, as the case may be, in order to achieve pricing targets (as set out in Section
8.4) for such Components1.14
    
    Effective Date means the date first shown above.1.15
    
    Employee Acknowledgement means that acknowledgement in the form designated by Hypercom,
to be executed by certain employees of Venture that visit any Hypercom facility or that
receive Hypercoms Confidential Information (as defined in the NDA).1.16
    
    ECN or Engineering Changemeans an engineering change notice as defined in Section
12.1.1.1.17
    
    Excess Inventory means those Components, materials and supplies ordered by Venture to
fulfill Hypercoms requirements under this Agreement, but which were not drawn down
completely from Ventures inventory for the manufacture of the Products within a period of
[****] months after such Components, materials and supplies were ordered, or if such
Components, materials and supplies were utilized by Venture in the manufacture of the
Products but Hypercom failed to purchase such Products within a period of [****] months after
such Components, materials and supplies were utilized by Venture in the manufacture of the
Products for which such components were consumed.1.18
    
    Facility means the segregated, locked, walled, restricted access space, which Venture
uses for the manufacture of a Product at Ventures existing manufacturing facility located in
Johor Bahru, Malaysia or such other Venture manufacturing site(s) approved by Hypercom in
writing.1.19
    
    Improvement means Intellectual Property that is developed by, or on behalf of, a party
while performing its obligations under this Agreement that incorporates, exploits, or cannot
be used without employing all or
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any part of either partys Basic IP.1.20
    
    Intellectual Property or IP means all patents, applications for patents, discoveries,
inventions, rights protecting trade secrets, know-how, and confidential information,
copyrights (including without limitation moral rights), works of authorship, including
computer programs and software, industrial design rights, layout designs, registered
designs, design rights, topographies, mask works, trade marks, service marks, database
rights, trade or business names, rights protecting goodwill and reputation similar or
corresponding proprietary rights and all applications for the same, whether presently
existing or created in the future, and other intellectual property rights recognized in any
jurisdiction whether registered or not, and all rights to sue, recover damages and obtain
relief or other remedies for any past, current or future infringement, misappropriation or
violation of any of the foregoing rights. For any definition relating to Hypercoms
Intellectual Property, Intellectual Property shall also include Know-how.1.21
    
    Hypercom Consigned Items means, collectively, the Hypercom Equipment and Hypercom
Material which Hypercom shall provides to Venture on a consignment basis, as listed in the
applicable Product Schedule or as agreed to by the parties in writing. Any Hypercom Equipment
and Hypercom Material provided to Venture and/or its Affiliates shall be subject to the terms
set out in Section 23.1.22
    
    Hypercom Equipment means the tooling, fixtures, appurtenances, test hardware and
software, equipment and any other items provided or to be provided by Hypercom to Venture and
agreed to by the parties in writing.1.23
    
    Hypercom Factory means the Hypercom facility located at, Block 3 Area 2, Xinxing
Industrial Zone, Fuhai Road, Xinhe Village, Fuyong Town, Baoan District, Shenzhen, and
Peoples Republic of China.1.24
    
    Hypercom Material means any Components and other materials used in a Product, or in the
manufacture or testing of a Product, to be provided by Hypercom to Venture as listed in the
applicable Product Schedule.1.25
    
    Hypercom Property means collectively, Hypercom Material, Hypercom Equipment, Hypercom
Intellectual Property, Hypercom Consigned Items or other items delivered by Hypercom to
Venture pursuant hereto as well as all Improvements and New Technology owned by Hypercom.1.26
    
    Hypercom Supplied Items means Hypercom Equipment and Hypercom Material that Venture
purchases from Hypercom, as listed in an applicable Product Schedule, and shall only be used
for the manufacture of Products hereunder.1.27
    
    Initial Inventory means Components purchased prior to Hypercoms Product transition to
Venture and as set out in each Product Schedule.1.28
    
    Know-how means, for any definition relating to Hypercoms know-how, the Manufacturing
Procedures, Product Specifications and any information, including but not limited to,
confidential information, trade secrets, engineering, research, manufacturing and technical
data, designs, drawings, blueprints, specifications, instruction manuals, procedures,
assembly methods, facilities, skills, know-how, prices, catalogues, and lists of ventures
relating to the manufacture, use, testing and sale of a Product, or Hypercom Property, as
disclosed orally, visually, in writing, or otherwise to Venture or Ventures employees by
Hypercom, and as may be developed or acquired by Hypercom through Hypercoms efforts and
transmitted to Venture during the Term. Without limiting the generality of the foregoing,
Know-how includes the information that may be attached to or referenced in the applicable
Product Schedule and which may be updated from time to time by Hypercom.1.29
    
    KPIs shall mean a key performance indicator determined in accordance with this Agreement,
which establishes a critical performance metric and minimum acceptable performance standard
which Venture is required to achieve in performing this Agreement.1.30
    
    Long Lead Time Component means any Component for which the minimum duration necessary for
Venture to procure such Component from the relevant third party vendor, is not less than the
duration identified in the Product Schedule or quarterly Special Inventory declarations.
  3




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1.31
    
    Manufacturing Procedures means those manufacturing, testing and packaging processes,
procedures and specifications relating to each Product as determined from time to time by
Hypercom and agreed to in writing with Venture, which shall not be unreasonably withheld.1.32
    
    Minimum Order Inventory means any Component for which the minimum quantity for such
Component that Venture is required to procure in any single order with the relevant
third-party vendor is greater than the quantity of such Component required to fulfill (i) any
Purchase Order for a Produce which requires such Component or (ii) any Forecast for a Produce
which requires such Component, as the case may be, and shall include Components that are sold
in bulk quantities, multiple-packs, reels or tapes.1.33
    
    Mix Changeshall mean the substitution of a given quantity of Products that appear in one
forecast with an equal quantity of different Products in a subsequent forecast; provided,
however, that the substitute Products are members of the same Product Family as the
originally forecasted Products.1.34
    
    MBOH means material burdened overhead.1.35
    
    NCNR Inventory means any Components for which the quantity of such Component that the
Supplier is required to procure in any single order with the relevant third party vendor is
greater than the quantity of such Component required to (i) fulfill any accepted Purchase
Orders or Releases which requires such Component or (ii) any Forecast for a Product which
requires such Component, as the case may be, which are cannot be cancelled and/or cannot be
returned to the relevant third party vendors1.36
    
    New Process Technology means New Technology other than New Product Technology which
relates to the manufacture and supply of a Product, including without limitation, any
processes, procedures, methods, tooling, fixtures, appurtenances, test hardware, software or
equipment.1.37
    
    New Product Technology means New Technology that relates to a Product, including without
limitation, the design, layout, specifications or component parts or any New Technology that
is solely, uniquely or specifically related to a Product or the manufacture, test or
packaging of a Product.1.38
    
    New Technology means Intellectual Property that is developed solely by, or on behalf of,
a party or jointly by the parties while are developed specifically for Hypercom as part of
performing their obligations under this Agreement and which is not an Improvement.1.39
    
    Non-Disclosure Agreement or NDAmeans the non-disclosure agreement between the parties
either identified in or attached as Schedule A hereto, and hereby incorporated by reference
into this Agreement.1.40
    
    Obsolete Material means all Components, materials, and supplies shall be deemed obsolete
if there have been no purchases for the previous [****] months and for which there is no
forecasted demand for such Components, materials and supplies.1.41
    
    PCBA means Printed Circuit Board Assembly.1.42
    
    Prices means the prices to be charged by Venture to Hypercom for each Product as set
forth in Section 8 and the applicable Pricing Schedules, as may be revised from time-to-time
in accordance with this Agreement, and as may be otherwise agreed to by the parties in
writing from time to time. Pricing may be affected by delivery terms, Product and process
changes, order quantity and otherwise as mutually agreed.1.43
    
    Product means the item listed in a completed Product Schedule executed by the parties.1.44
    
    Product Familyshall mean a related set of all Products either PCBA or whole Products
that incorporate substantially the same Components and or subassemblies.1.45
    
    Product Lead Timemeans the period of time, as may be specified in the applicable Product
Schedule, between the date a Purchase Order or Release is received by Venture and the date
Venture shall have the
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Products at the Delivery Location.1.46
    
    Product Schedule has the meaning assigned in Section 2.1, and includes any amendment to a
Product Schedule made by mutual written agreement of the parties.1.47
    
    Product Specifications means those technical and functional requirements, specifications
and other requirements pertaining to each Product determined and provided in writing by
Hypercom and comprising, in part, any portion of the Know-how.1.48
    
    Project Planshall mean the plan mutually developed and agreed to by Hypercom and Venture
for the purpose of preparing product and process for manufacture by Venture. The Project
Plan shall include a statement of work and milestone schedule, and any other information
required to guide the development activity, such as resource assignments and
responsibilities. Each Project Plan shall be developed on an as needed basis.1.49
    
    Purchase Order means, in the case of Venture, where applicable, the purchase order
submitted by Venture to Hypercom, and accepted by Hypercom to purchase Hypercom Supplied
Items from Hypercom, and, in the case of Hypercom, a written purchase order submitted by
Hypercom to Venture and accepted by Venture in connection with the supply of a specified
quantity of Products to Hypercom in accordance with this Agreement. Purchase Orders shall
describe Products to which the Purchase Order relates, including Hypercoms part number for
the same, their quantity of the Product to which the Purchase Order relates, the Price as set
out in the Product Schedule, and the Delivery Dates on which the Products are to be
delivered.1.50
    
    QBR means Quarterly Business Review.1.51
    
    Quality Management Planor QMP shall mean all documentation, processes and procedures
necessary to manufacture, inspect and accept Products, deliver and service the Products as
mutually agreed to by the parties. The Quality Management Plan will include: (a) incoming
quality assurance inspection and engineering change order control of material, (b)
manufacturing and process procedures, and (c) manufacturing process control and quality
control systems.1.52
    
    Quality Management Policy means Hypercoms quality management policy attached hereto as
Schedule F, as may be revised by the parties from time to time.1.53
    
    Release means a Hypercom release order requesting and authorizing Venture to deliver a
specified quantity of Products covered by a Blanket Purchase Order, or a Purchase Order, on a
specified Delivery Date to a Hypercom specified Delivery Location.1.54
    
    RMAmeans a Return Materials Authorization number.1.55
    
    SKUshall mean a specific Product that is assigned a unique stock keeping unit number by
Hypercom.1.56
    
    Taxesmeans all property, municipal, gross receipts, gross revenues taxes, sales, use,
value added, goods and services, excise, harmonized and other non-recoverable taxes and other
taxes and similar charges required to be paid to any domestic or foreign jurisdiction and all
interest and penalties thereon.1.57
    
    Term means the initial term and all renewals thereof pursuant to Section 2.4.1.58
    
    $, USDor Dollars means lawful money of the United States.
 2. SCOPE OF AGREEMENT
 Product Schedule. Product Schedule
  5




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2.2
    
    Manufacture and Sale of Products.During the term of this Agreement, Venture shall:
    No Minimum Purchase Requirement .
 Term. Renewal Term
 3.
    
    PRODUCTS AND PRODUCTION3.1
    
    Products.3.1.1
    
    Existing Products. The parties agree and acknowledge that the Existing Products are
deemed to be Products under this Agreement as of the Effective Date. Venture acknowledges
that Hypercom has previously delivered to Venture the documents which include the Product
Specifications, Quality Management Policy, and Bills of Materials for current Hypercom
products (the Existing Products). Hypercom represents and warrants to Venture that the
Product Specifications, Quality Management Policy, and BOMs so provided to Venture are
accurate and correct for the purpose of manufacturing the Existing Products as contemplated by
this Agreement. The list of Existing Products is attached as an appendix to the Product
Schedule.3.1.2
    
    New Products. From time to time, the parties may add other products to be
manufactured and supplied by Venture under this Agreement (each a New Product) by agreeing
upon in writing, and executing and attaching a Product Addendum to the Product Schedule for
each such New Product. Each Product Addendum may set forth the Project Plan, the Product
Introduction Plan, the Product Ramp Plan, the Development Schedule, the Product Milestone
Schedule, the Product Requirements Document, the Process Management Plan, the Quality
Management Plan, the Product Specifications, prices for the New Product, and any other terms
and conditions related to the New Product that the parties may deem appropriate and mutually
agree in writing.3.1.3
    
    Product Discontinuation and EOL Process. Hypercom may discontinue any Product upon
[****] Calendar Days prior written notice to Venture, whereupon the parties shall cooperate
to implement an end-of-life process (EOL Process) for the discontinued Product. The details
of the EOL Process shall be agreed upon by the parties, and, unless otherwise agreed, shall
include a replacement product transition plan, a transition plan for Hypercoms customers,
warranty reserve plan, and last-time-buy and last-time-build plans. Venture may not
discontinue the manufacture of any Product or terminate any associated manufacturing process
without the prior written consent of Hypercom. Any components, subassemblies and raw
materials that were previously purchased by Venture pursuant to Hypercoms authorization but
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were rendered obsolete as a result of Hypercoms discontinuation will be managed in
accordance with Section 5.10.3.1.4
    
    Re-introduction of Discontinued Products. In the event a Product is discontinued
under Section 3.1.3 and Hypercom subsequently wishes to re-introduce or re-manufacture a
Product, the parties will then discuss in good faith the terms upon which Venture shall
recommence the manufacture of such Product (which shall be substantially similar to the terms
governing the manufacture and Supply of Product prior to its discontinuation).3.2
    
    Production.3.2.1
    
    Venture shall manufacture, procure Components for, test, package, and prepare for shipment
all Products that are the subject of a Purchase Order in strict conformity with the applicable
Process Management Plan, Quality Management Plans, and any other applicable Product Addendum
that controls the procurement, manufacture, test, packaging, and shipment preparation of any
Product. The location for such manufacturing and other activities shall be at the Facility
or, for certain Existing Products where agreed between the parties, at Hypercom Factory.
Venture shall also (a) provide all services that are mutually agreed upon by the parties;
(b)provide Hypercom with a [****] rolling shipment forecast on a daily basis
and a recovery plan if there is any production backlog; (c) inspect all Products prior to
shipment to Hypercom to determine whether such Products meet the agreed upon process controls,
test yields, end-of-line audits and out-of-box audits; and (d) provide Hypercom with timely
access to process and quality data.3.2.2
    
    Source Verification. Hypercom or its authorized agent may perform reasonable source
verifications and quality assurance audits at the Facility at a time agreed upon by both
parties. Each party shall bear their respective costs incurred in connection with any such
audit.3.2.3
    
    List of Property. Upon Hypercoms written request, Venture shall provide Hypercom
with a complete and detailed list of all tooling, fixtures, appurtenances, test hardware and
software, equipment and other material obtained by Venture (except for Hypercom Tooling or
Supplier Tooling) related to this Agreement and that are needed for Venture to fulfill its
obligations to Hypercom under this Agreement (the Venture Equipment). [****]3.2.4
    
    Approved Vendors. Where Hypercom has specified that third party material is to be
procured from a particular vendor (Third Party Material), whether in the Product
Specifications or otherwise, Venture shall only procure such Third Party Material from that
specific vendor. Where Venture wishes to procure Third Party Material from a vendor other than
that vendor specified by Hypercom, such change shall be processed as an Engineering Change
pursuant to Section 12. Venture, at Hypercoms prior written request, will source for, and
provide to, Hypercom any third party materials or products (including without limitation Third
Party Materials) for Hypercoms use in research and development activities. Such third party
materials or products will be provided to Hypercom at Ventures purchase price without markup.
 VENTURES GENERAL OBLIGATIONS
 Manufacture and Supply of Products
 Facility
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Business Continuity and Disaster Recovery Plan
 Qualification Process.
 Training .
 NPI and Design Services. NPI
 5.
    
    FORECASTS AND ORDERS5.1
    
    Forecast.5.1.1
    
    Forecasting. On a [****] basis Hypercom shall deliver to Venture a rolling forecast
(a Forecast) of Hypercom estimated needs for Products during the period that begins in the
following [****] and continues for [****] immediately thereafter (the Forecasted Period).
The estimated Product requirements during the [****] of the Forecasted Period shall be
detailed on a [****] basis. The estimated Product requirements for the remainder of the
Forecasted Period shall be detailed on at least a [****] basis.5.1.2
    
    Effect of Forecast. All commitments for purchases of Products hereunder are only
upon Hypercoms issuance of a Purchase Order pursuant to Section 5.3. [****]5.2
    
    Committed Period and Flexibility.5.2.1
    
    Committed Period. The [****] of the Forecasted Period shall be referred to as the
Committed Period Hypercom shall issue binding Purchase Orders for Products for the [****] of
the Committed Period. Except as set forth below in Section 5.2.2, Hypercom may not change the
volumes or mixes of forecasted Products during the [****] of the Committed Period in any
subsequent Forecast.5.2.2
    
    Flexibility. The Parties agree that save as permitted in this Section 5.2.2,
Hypercom shall not vary the volumes or mixes of any forecasted Products:
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5.3
    
    Purchase Orders.5.3.1
    
    [****] Purchase Orders. Hypercom shall issue binding Purchase Orders for the [****]
of the Committed Period. Venture shall, within [****] of receipt of the Purchase Order,
acknowledge and honor any such Purchase Order to the extent that the Purchase Order reflects
the mixes and volumes in the current Forecast, subject to the Section 5.2.1.5.3.2
    
    Advance Purchase Orders. From time to time, Hypercom may also issue Purchase Orders
that require delivery of Product quantities after the first three weeks of the current
Forecasted Period. Venture shall use commercially reasonable efforts to honor these Purchase
Orders. If Venture desires that Hypercom bear any expediting cost for accommodating such
Purchase Order, Venture is to seek Hypercoms prior approval for such expediting costs. Where
Hypercom approves such costs, Hypercom shall pay Venture the same. If Hypercom does not
approve such costs, Venture shall not be obligated to accommodate such Purchase Order.5.3.3
    
    Rescheduling of Purchase Orders.Hypercom may reschedule up to [****]% of the
total aggregate Purchase Order volume for up to [****] after the original Delivery Date
without charge or penalty.
 Cancellation .
 (a)
    
    With notice greater than [****] prior to scheduled delivery, without any cost,
charge or liability to Hypercom;(b)
    
    With notice less than [****] prior to scheduled delivery, subject to payment of
Ventures actual costs incurred, excluding profit, prior to receipt of the cancellation
notice, and solely in relation to the applicable Purchase Order or Release for finished
Products, or work in process or raw materials, provided that:
 (i)
    
    [****];(ii)
    
    [****];
 (iii)
    
    Venture shall immediately cease all work on the Purchase Order or Release
subject to the cancellation notice, and shall use commercially reasonable efforts to
minimize all costs associated with cancellation, including (without limitation)
re-using parts, material and work-in-process in other Venture products, reworking
Products in a manner that is acceptable to Hypercom, to make them saleable to other
Venture customers, and/or returning material to Ventures suppliers. Venture shall
provide Hypercom with supporting evidence of all such reasonable costs actually
incurred and claimed by Venture under this Section 5.4. Payment of any costs that are
not substantiated by adequate documentation may be denied by Hypercom acting in its
sole discretion;(iv)
    
    Upon Hypercoms request Venture shall promptly deliver to Hypercom the
Products, or any part thereof, in any state of manufacturing whatsoever, that was the
subject of the cancelled Purchase Order or Release, together with all such work in
progress and raw materials, or part thereof, [****]; and(v)
    
    Any cancellation charges hereunder represent Hypercoms sole and exclusive
obligation and Ventures sole and exclusive remedy in the event of any cancellation of
a Purchase Order or Release by Hypercom pursuant to this Section 5.4.
 
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Allocation.
 Installed Equipment Capacity.
 Safety Stock Program .
 5.8
    
    Intentionally Blank.5.9
    
    Special Inventory.5.9.1
    
    Subject to Hypercoms rights under Section 5.6 and Ventures duties hereunder, Hypercom
authorizes Venture to purchase certain components, materials and supplies (Components) for
the manufacturing of Products. Long Lead Time Components, Economic Order Inventory, Minimum
Order Inventory, Initial Inventory, and NCNR Inventory are collectively designated herein as
Special Inventory. All Special Inventory Components shall be identified and specified in
writing initially as part of the Product Schedule and subsequently in updates together with
quarterly Pricing.5.9.2
    
    Special Inventory on Ventures premises for more than [****] is subject to a [****]% per
month inventory carrying cost. Special Inventory on Ventures premises more than [****] will
be purchased, or subject to the payment by Hypercom to Venture of carrying charges equal to
[****]% per month, at Hypercoms option. Written requests and authorizations to purchase
Economic Order Inventory and Minimum Order Inventory shall be provided in writing by Hypercom
to Venture. Venture will invoice Hypercom on a [****] basis for any amounts due, and Hypercom
shall pay such amounts within [****] Calendar Days after receipt of invoice.  Notwithstanding
any other provision in this Section 5.9, Hypercom shall not be responsible for unauthorized
procurement of any Special Inventory.5.10
    
    Excess and Obsolete Material.5.10.1
    
    Obsolete Material. Subject to mutual agreement, Hypercom will issue a Purchase
Order for all Obsolete Material prior to the end of the [****] the material is declared
obsolete. The amount of the Purchase Order shall include the [****].5.10.2
    
    Excess Inventory. Hypercom will issue a Purchase Order for all Excess Inventory to
be determined using Ventures best estimate of future demand at the time, based upon
information available and utilizing the
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following analysis and action, for which there are no Rolling Forecasts, Purchase Orders or
Releases for [****]:
    5.10.3
    
    Mitigation. Venture shall immediately use its best efforts to mitigate by (1)
canceling any outstanding orders for Excess and Obsolete Components (to the extent it is
allowed to do so by the supplier without the payment of substantial penalties); (2)
re-allocating, if possible, all Excess and Obsolete Components for use by other Venture
customers in other manufacturing facilities, (3) returning Excess and Obsolete Components to
the supplier (to the extent it is allowed to do so by the supplier without the payment of
substantial penalties), or (4) selling Excess and Obsolete Components to a third party. If,
after taking all of the foregoing mitigation measures, Venture is unable to recover its
materials cost for the Excess and Obsolete Components (which shall for the avoidance of doubt
include any penalties payable by Venture to the suppliers), Hypercom shall reimburse Venture
such [****].5.10.4
    
    Hold.  Without prejudice to Section 5.10.2 and 5.10.3, Hypercom may at any time
direct Venture to hold inventory in which case the terms of 5.9 shall apply.6.
    
    PACKAGING, SHIPPING, DELIVERY, RISK AND TITLE, DISTRIBUTION
 Packaging.
 Delivery and Shipping Requirements
 6.3 Delivery Date
 Title and Risk .
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Late Delivery. Accelerated Measures
 6.6
    
    Delivery Default.6.6.1
    
    Where the Product has not been delivered by the accepted Delivery Date as a consequence of
Ventures errors or omissions, [****]6.6.2
    
    If during any quarter more than [****]% of Products are delivered late, a default of a
material obligation under this Agreement for purposes of Section 22 hereunder shall be deemed
to have occurred. For purposes of this subsection, late delivery is measured by reference to
the accepted Delivery Date specified in the applicable Purchase Order and by reference to the
provisions of Section 5.  Additionally, for purposes of calculating the percentage of Product
delivered late in a quarter, all Product delivered late in a given quarter shall be divided by
all Product delivered in a given quarter.6.6.3
    
    Notwithstanding the foregoing, the provisions of this Section 6.6 shall not apply to the
extent that any delay is caused by a Force Majeure Event or is caused by Hypercoms breach of
its obligations under this Agreement.
 Drop Shipments .
 6.7.1
    
    Confidential Information.The information provided by Hypercom to Venture in
relation to drop shipping is Confidential Information. With the exception of the disclosure of
the drop ship information provided by Hypercom for inclusion with each drop ship order to its
designated third party recipient, Venture may not disclose any information related to the
Hypercom drop ship program to any other party without the prior written consent of Hypercom.6.7.2
    
    Drop Ship Process.Venture shall comply with the administrative and technical
processes set out by Hypercoms drop ship program documentation, as modified from time to time
by Hypercom with reasonable notice to Venture, including any and all confidentiality
requirements of Hypercom or third parties. Such documentation shall be deemed to be
incorporated by reference into this Agreement.6.7.3
    
    Shipping Terms.Venture agrees that the shipping terms for drop shipped Products may
vary according to the designated Delivery Location and shall be agreed upon in each Purchase
Order. In all cases, title to the Products shall pass from Venture when the Products are
delivered to the Delivery Location, and Prices are exclusive of Taxes.6.7.4
    
    Communication with Hypercom Customers.Venture shall include all documentation
designated by Hypercom for inclusion with the relevant drop ship order, and shall not alter
such documentation without the prior written consent of Hypercom. Venture acknowledges that
most recipients of drop shipped Products are Hypercom customers. [****]
  12




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##### 



6.7.5
    
    Drop Ship Program Costs.Any costs or expenses related to Ventures access,
implementation, training or other expenses relating to the Hypercom drop ship program shall be
as mutually agreed.7.
    
    INSPECTION AND REJECTION OF PRODUCTS
 Inspection and Rejection. AQL Rejected Products
 Product Returns.
 8.
    
    PRICES, INVOICING AND PAYMENT TERMS8.1
    
    Basic Pricing Formula.
       No Taxes.
 Cost Reduction.
   13




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##### 



Targets.
   8.5
    
    Price Reviews.8.5.1
    
    During [****] of each Pricing Quarter, the parties shall discuss and negotiate reductions to
price based on agreed price reduction targets and current market conditions (the Price
Review). [****]8.5.2
    
    At each such Price Review, Venture shall inform Hypercom of the efforts made during the
previous Pricing Quarter to meet the cost reduction targets set forth in Section 8.3, provide
to Hypercom information documenting its past efforts, and shall discuss its plans to achieve
future cost reductions. [****] Hypercom shall have the right to audit supporting documentation
for BOM pricing pursuant to Section 8.6.8.5.3
    
    In the Price Review the parties shall also set cost reduction targets for each of the next
[****] based on forecasted volumes including product lifecycle and other factors8.5.4
    
    During [****] of each Pricing Quarter during the Term, the parties shall discuss and confirm
the conclusions of the prior Price Review and finalize pricing for the next Pricing Quarter
(the Pricing Confirmation Review).
 Audit Rights
 Invoicing and Payment.
 9.
    
    RELATIONSHIP MANAGEMENT
 Program Managers Program Manager
  14




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##### 



Resident Employees. Resident Employees
 QBR TQRDC
 KPIs CAP
 Service Level Agreement.
 IT Systems Support
 Transition of the Hypercom Factory .
 Data Security .
 10. INTELLECTUAL PROPERTY OWNERSHIP
 :
  15




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##### 



Improvements
    
    
    
    
    
    
    
    NewHypercom
    
    to Hypercom
    
    Venture
    
    Improvements to
    
    New Product
    
    ProcessBasic IP
    
    Basic IP
    
    Basic IP
    
    Venture Basic IP
    
    Technology
    
    TechnologyDeveloped solely by 
Hypercom
    
    Owned by Hypercom
    
    Owned by Hypercom
    
    Not applicable
    
    Owned by Hypercom
    
    Owned by Hypercom
    
    Owned by HypercomDeveloped jointly 
by the parties
    
    Not applicable
    
    Owned by Hypercom
    
    Not applicable
    
    Owned by Venture
and licensed to
Hypercom
    
    Owned by Hypercom
    
    Owned by Venture
and licensed to
HypercomDeveloped solely by 
Venture
    
    Not applicable
    
    Owned by Hypercom
    
    Owned by Venture
    
    Owned by
Venture with a
limited license to
Hypercom
    
    Owned by Hypercom
    
    Owned by Venture
with a limited
license to Hypercom
 Basic IP .
 10.2
    
    Improvements.10.2.1
    
    Hypercom Owned Improvements. Hypercom shall own: (a) all Improvements to Hypercoms
Basic IP developed by either Hypercom or Venture, or jointly by Hypercom and Venture; and (b)
all Improvements to Ventures Basic IP developed solely by Hypercom; and (c) all IP or
Improvements to either Hypercom or Venture basic IP paid for by Hypercom either directly as
part of a development project or indirectly amortized into the product cost. Notwithstanding
any other provision in this Agreement, Hypercom Owned Improvements will include any Venture
ideas, suggestions or recommendations to Hypercom regarding Hypercom IP (Feedback), Hypercom
is free to use and incorporate such Feedback in Hypercoms products, without payment of
royalties or other consideration to Venture.10.2.2
    
    Venture Owned Improvements. Venture shall own all Improvements to Ventures Basic
IP developed solely by Venture or jointly by Hypercom and Venture, provided that such
improvements are not paid for by Hypercom or developed pursuant to a Hypercom request or
Hypercom specifications.
 New Product Technology .
 New Process Technology
 Report .
  16




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##### 



Confidentiality .
 Assignment.
 11.
    
    LICENSE GRANTS11.1
    
    License to Hypercom Basic IP/Improvements/New Technology.11.1.1
    
    Hypercoms Basic IP. Hypercom grants to Venture, for the Term, a non-assignable,
non sub-licensable, non-exclusive, royalty-free license to use the Basic IP in existence as of
the Effective Date of this Agreement solely to perform its obligations hereunder.11.1.2
    
    Additional Basic IP/Improvements/New Technology. Hypercom may, at its option,
subject to Section 12 and only for the Term, grant to Venture a non-exclusive, non-assignable,
non-sub-licensable, royalty-free license to use Basic IP created after the Effective Date,
Improvements and New Technology owned by Hypercom solely to perform its obligations hereunder,
provided that, prior to such use, the parties have mutually agreed to the terms of
implementation of a Engineering Change (as defined below).
 License to Venture Basic IP/Improvements/New Technology .
 11.2.1
    
    Venture Basic IP/Improvements/New Technology: To the extent necessary to
commercially make, use, reproduce or sell each Product, subject to Section 11.2.2, and under
terms which shall be as mutually agreed, Venture hereby grants a an irrevocable, perpetual,
world-wide, non-exclusive, paid-up, royalty free license to Hypercom, with the right for
Hypercom to grant sublicenses, to make, use, reproduce any Improvements owned by Venture and,
to the extent required to use such Improvements, the same grant of a license for Ventures
Basic IP, and any New Technology owned by Venture and the right to make, use and sell any
products made by using such Basic IP, Improvements and New Technology. Notwithstanding the
foregoing, the terms provided in this Section 11.2.1 do not apply to any Venture manufacturing
process IP; any such license grant related to Venture manufacturing process IP shall be
mutually agreed to by the parties under commercially reasonable terms and conditions.11.2.2
    
    Jointly Developed Venture Technology: Venture hereby grants to Hypercom, an
irrevocable, perpetual, world-wide, non-exclusive, paid-up, royalty free license, with the
right for Hypercom to grant sublicenses, to make, use, reproduce: (a) any jointly developed
Improvements owned by Venture and, to the extent required to use such Improvements, Ventures
Basic IP; and (b) any jointly developed New Technology owned by Venture. Such rights include
the right to make, use and sell any products made by using such Basic IP, Improvements or New
Technology.11.3
    
    License Restrictions.11.3.1
    
    Apart from the limited licenses granted above, neither party obtains any interest in the
other partys Basic IP, Improvements or New Technology. All documents, materials and copies
relating to the foregoing, in whole or in part and in any material form, shall remain the
property of the owner.11.3.2
    
    A party shall not alter, remove or destroy any proprietary markings or confidentiality
legends or notices placed upon or contained within, or attempt to reverse engineer directly or
indirectly any of the other partys Basic IP, Improvements or New Technology.11.3.3
    
    In any action or proceeding relating to a partys Basic IP, Improvements or New Technology,
the other
  17




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##### 



party shall not, nor will it assist others to, contest the owners title to or the
validity of the owners Basic IP,
Improvements or New Technology.11.3.4
    
    A party shall take such reasonable steps as the other may require from time to time, to
protect the others Basic IP, Improvements and New Technology.12.
    
    ENGINEERING AND SITE CHANGES12.1
    
    Venture Proposed Changes.12.1.1
    
    General Restriction. Subject to the terms of this Section, Venture may, with
Hypercoms written consent: (a) relocate any part of the Facility; (b) make any change to the
Manufacturing Procedures, the Product Specifications, quality assurance processes; or (c)
change any other Hypercom requirements as set out in this Agreement related to a Product,
including without limitation the manufacturing or supply of a Product (collectively, (a), (b)
and (c) are an Engineering Change or an ECN).12.1.2
    
    Change Procedure. Where Venture wishes to make an Engineering Change, Venture shall
issue an ECN, which shall include, without limitation, sufficient details regarding the nature
of the proposed change, the reason for the proposed change, details regarding its
implementation, the impact of the change (including but not limited to scheduling and Prices)
on any Purchase Orders or Releases, and the proposed implementation date of the Engineering
Change. Promptly after issuing the foregoing ECN, Venture shall, at a mutually agreed upon
cost, provide Hypercom with sufficient evaluation samples of the affected Product (after
having incorporated the Engineering Change) and other information requested by Hypercom to
enable Hypercom to evaluate the Engineering Change. Hypercom may, acting in its sole and
absolute discretion, reject any Engineering Change and shall notify Venture in writing of such
rejection within a reasonable period of time from its receipt of such Product samples and
other information. While Hypercom is considering an Engineering Change or if Hypercom rejects
an Engineering Change, Venture shall continue to manufacture and supply a Product, in
accordance with the terms of this Agreement, without the Engineering Change. Where Hypercom
provides its written approval of the Engineering Change, Venture shall implement the change on
a mutually agreed upon schedule.12.2
    
    Hypercom Requested Changes. Hypercom may, at Hypercoms cost, amend Hypercom drawings
or designs, or the Specifications, through an ECN at any time prior to the manufacture of the
affected Products, provided Hypercom pays to Venture any reasonable non-recurring charges, if
any, and/or revised Prices for such Products. Subject to agreement in the charges and expenses
and/or revised Prices, Venture shall implement such amendment within a period of time as
mutually agreed by the parties. Where the ECN is required to bring Products into compliance
with applicable laws, statutes, regulations, codes, standards or other requirements, Venture
shall, at Hypercoms cost and using commercially reasonable efforts, implement the amendment
as soon as possible.13.
    
    QUALITY ASSURANCE
 Quality System
 Inspection
 Quality Issues
  18




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##### 



Venture Corrective Action. SCAR
 SCAR responsiveness.
 14. PLANT AUDITS AND INSPECTIONS
 Audits and Inspections.
 15.
    
    WARRANTIES15.1
    
    Warranties.Venture warrants to Hypercom the following:15.1.1
    
    Product Warranties.For [****] from the date Products are shipped to the Delivery
Location (Warranty Period) that the Products: (a) have been manufactured in accordance with
Hypercoms applicable Manufacturing Procedures and the Product Specifications; (b) will meet
mutually agreed Hypercom performance requirements confirmed by mutually agreed written testing
procedures; (c) shall be free from defects in workmanship, (d) shall be free from defects in
material supplied by Venture to the extent such material supplied defects should, or would,
have been detected through compliance the Quality Management Plan and Process Management Plan;
(e) comply with applicable laws for the country of origin; and (f) any services provided by
Venture hereunder shall be performed consistent with accepted industry standards and practice.
In the event that during any [****] Calendar Day period of the Term, the percentage of
Products that fail to meet the above warranty is equal to or in excess of the Product
Warranty Failure Percentage set forth in the Product Schedule Hypercom may immediately
terminate this Agreement with respect to the relevant Product. If no Product Warranty Failure
Percentage is provided in a Product Schedule or no Product Schedule applies, the default
Product Warranty Failure Percentage is [****]%. In addition, the warranties provided for in
Section 15 are the sole and exclusive warranties provided by the Venture in relation to the
Products and all implied or statutory warranties and all other warranties implied by law as to
merchantability, quality or fitness for a particular purpose, or otherwise arising from course
of dealing or usage of trade or any other express or implied warranties or
  19




---



##### 



representations are
excluded.15.1.2
    
    Title. Venture has the right, title, and interest to convey the Products, and that
the Products are free of all liens, charges, encumbrances, or claims. If at any time Venture
shall incur any indebtedness that has become a lien upon the Products or any part thereof or
which may become a claim against Hypercom, or in the event a claim is asserted against
Hypercom alleging that the Products or Services are infringing, Venture shall immediately pay
such claim or indebtedness or cause such lien to be released and discharged by posting a bond
or otherwise at its expense and indemnify Hypercom against any damages or expenses.15.1.3
    
    Non-infringement. Excluding any content provided by Hypercom the Products nor any
other deliverables, nor any part, product or software sold, distributed, licensed or supplied
by Hypercom in connection with the Services, Products or other deliverables, do or will
infringe any patent, copyright, trademark or other proprietary right or misappropriate a trade
secret of any third party.15.1.4
    
    Litigation. There is no litigation or proceeding whatsoever, actual or threatened,
against Venture, or breach, default, or alleged breach or default of any agreement, order, or
award binding upon it, in each case, which would materially affect Ventures ability to
perform any of its obligations under this Agreement.
 Warranty Remedy . Defective Product
 15.3
    
    Epidemic Failure Warranty.15.3.1
    
    If at any time prior to [****] after the Product Delivery Date by Venture, [****] field
returns rate of a common Product family should fail for any cause as set forth under Section
15.1.1 (an Epidemic Failure), Hypercom will promptly inform Venture of the nature of such
failure, provide the known technical details, and Hypercom and Venture agree to diligently
work together in good faith to promptly resolve these issues.  This warranty shall survive any
inspection, delivery, or acceptance of the Products or any payment for the Products by
Hypercom.15.3.2
    
    In the event of an Epidemic Failure, Venture will use its best efforts to remedy the
situation and minimize adverse impact to Hypercom customers. The parties will immediately work
together on a recovery plan that addresses the repair or replacement of the affected Product
within a commercially reasonable time frame and shall be implemented at Ventures expense.15.3.3
    
    Any limitations contained in this Section 15.3 will not serve to limit Ventures legal
liability to Hypercom for product liability.
 Exclusions .
 Assignment of Warranties.
  20




---



##### 



16. SUPPORT SERVICES
 Support . Support Services
 Failure Analysis .
 Service Parts.
 17 INDEMNITIES AND LIMITATION OF LIABILITY
 Third Party Claims . Hypercom Indemnified Parties
 Infringement.
  21




---



##### 



Consequential Damages
 CONFIDENTIALITY
  RESTRICTIONS
 Use of Hypercom Property.
 Competing Products
 Acknowledgement.
 Subcontracting .
  22




---



##### 



20. INSURANCE
   Venture Equipment Hypercom Property
  21. COMPLIANCE WITH LAWS
 21.1 Compliance . Improper Payments
 22. TERMINATION
 Termination by Either Party
  23




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##### 



22.2
    
    Intentionally Blank.22.3
    
    Consequences of Termination.22.3.1
    
    Outstanding Orders. All Purchase Orders or Releases issued prior to the expiration,
non-renewal or termination of this Agreement shall be terminated as of the effective date of
termination cancelled and Section 5.4 shall apply, unless Hypercom notifies Venture in writing
to fulfill any such Purchase Orders or Releases, in whole or in part, in which case Venture
shall fulfill such Purchase Orders or Releases in accordance with the terms of this Agreement.
Upon expiry, non-renewal or termination of this Agreement, Hypercom shall purchase all Special
Inventory from Venture, and any sums payable to Venture by Hypercom shall become immediately
due and payable. In addition, Hypercom shall be responsible for either assuming Ventures
obligation for the purchase of Components under Section 5.1.2 or shall compensate Venture for
all costs related to the cancellation of these Component purchase obligations.22.3.2
    
    Purchase/Return of Equipment/Material.If upon expiration or termination of this
Agreement outstanding Purchase Orders or Releases are terminated in accordance with this
Agreement, then Hypercom shall, purchase from Venture all of the Hypercom Supplied Items then
in the possession of Venture at net book value calculated as of such expiration or termination
date.22.3.3
    
    Return of Hypercom Property.Subject to Subsection 22.3.2, and except to the extent
reasonably necessary for Venture to perform its post-termination obligations under this
Agreement, within [****] Calendar Days of termination of this Agreement, Venture shall return
to Hypercom all tangible Hypercom Property, other than documents in electronic, magnetic or
other media. Venture shall return to Hypercom one copy of all hard copy documents in its
possession, shall destroy all other copies of documents as well as all electronic versions of
the documents, and shall deliver to Hypercom a certificate signed by an authorized senior
officer of Venture certifying that all such material has been returned or destroyed and that,
subject to Subsection 22.3.2, all other Hypercom Property has been returned to Hypercom. The
treatment of any Hypercom Consigned Items in Ventures possession at termination shall be in
accordance with Section 23.22.3.4
    
    Transitional Services. In the event of the termination of this Agreement for any
reason, Venture acknowledges that Hypercom may need to transition the manufacturing services
related to the Products from Venture to Hypercom or to a third party, and agrees to provide
Hypercom with Transitional Services (defined below) in accordance with this Section. Following
the termination of this Agreement for any reason, Hypercom shall advise Venture of its
intentions with respect to the transitioning of Product manufacturing to Hypercom or to a
third party. Venture agrees to work professionally, diligently and in good faith with Hypercom
and/or the third party to implement the transition plan through the provision of the
Transitional Services requested by Hypercom. Without limitation, the Transitional Services
may include:
 (a)
    
    Providing Hypercom with a last time buy opportunity for the
Products at the Prices in effect as of the termination date during the [****]
transitional period;(b)
    
    Providing assistance to Hypercom to exercise its ownership
and/or license rights set forth in Section 10 and Section 11;
  24




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##### 



(c)
    
    Provide latest manufacturing know how related to Hypercoms
products including but not limited to documentation, drawings, metrics,
processes, procedures, assembly techniques, test specifications, and anything
that would be helpful to Hypercom or Hypercoms manufacturing partner.(d)
    
    Delivering Hypercom Consigned Items, Hypercom Equipment or
Hypercom Property in Ventures possession to Hypercom or (upon instruction from
Hypercom) to a third party;(e)
    
    Providing the names and addresses of Ventures sources for
parts or components used by Venture in the manufacture of the Products that are
not provided by Hypercom or manufactured by Venture, and reasonable assistance
to enable the purchase of all such parts or components directly from these
vendors;(f)
    
    Implementing any other reasonable measures required by Hypercom
to reduce any disruption to Hypercom and/or its end customers resulting from
the transition of manufacturing services.
  23. HYPERCOM EQUIPMENT AND HYPERCOM MATERIAL
 Provision of Hypercom Material and Hypercom Equipment
 Tooling Hypercom Tooling Supplier Tooling
  25




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##### 



Storage
 Tracking.
 Delivery of Hypercom Supplied Items and Consigned Items
 23.6
    
    Hypercom Supplied Items.23.6.1
    
    Orders for Hypercom Supplied Items. After execution of this Agreement, Venture may
order, take delivery of and pay for, by way of a Purchase Order, those Hypercom Supplied
Items, if any, required to manufacture the Products ordered by Hypercom. All Purchase Orders
submitted to Hypercom by Venture shall include a description of the required Hypercom Supplied
Items, the quantities ordered, the prices thereof, the proposed delivery date, and such other
information as the parties may agree from time to time. Purchase Orders may be issued in
writing, by mail, facsimile or by electronic means as the parties may from time to time agree.23.6.2
    
    Title to Hypercom Supplied Items.Title to Hypercom Supplied Items shall pass from
Hypercom to Venture only upon payment in full by Venture to Hypercom for the Hypercom Supplied
Items.23.6.3
    
    Hypercom Prices.During the Term, Venture shall pay to Hypercom, on account of the
ordered Hypercom Supplied Items, the prices set out in the applicable Product Schedule, or
such other prices as set by Hypercom from time to time for the Hypercom Supplied Items. Prices
are FCA Origin (Incoterms 2000).23.6.4
    
    Hypercom Invoice. Hypercom shall invoice on or as soon as reasonably practicable
after, the delivery of Hypercom Supplied Items to Venture. Venture shall pay Hypercom the
amount specified in the invoice within 45 Calendar Days from date of invoice.23.6.5
    
    Hypercom Consigned Items. Hypercom shall supply to Venture, on a no-charge
consignment basis, Hypercom Consigned Items, if any, to enable Venture to exclusively
manufacture and supply the Products to Hypercom pursuant to the terms of this Agreement.24
    
    Dispute Resolution.
 Escalation Disputes
  26




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##### 



Executives Mediator
 Arbitration.
 Limitations on Dispute Resolution .
 25. Miscellaneous
 Assignment.
 Conflicts or Inconsistencies.
 Entire Agreement.
  27




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##### 



Force Majeure. Force Majeure
 Governing Law and Forum.
 Headings .
 No Publicity
 Notice
 For Venture:
    
    For Hypercom:Attention:
    
    Attention: [****]Legal notices only, copied to:
    
    Legal notices only, copied to:Venture Corporation Limited
    
    Hypercom CorporationAttention: Legal Department
    
    Attention: Legal Department
  Relationship/Subcontractors.
  28




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##### 



Successors.
 Survival.
 Time of the Essence.
 Reduction and Severability.
 Waiver.
 Further Assurances .
 Hypercom Customer Requirements
 Counterparts/Facsimile Signatures
  29




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##### 



Hypercom Manufacturing Resources, Inc.
    
    Venture Corporation LimitedBy:
    
    /s/ Thomas Liguori
    
    By:
    
    /s/ Wong Ngit LeongName:
    
    Thomas Liguori
    
    Name:
    
    Wong Ngit LeongTitle:
    
    SVP, Chief Financial Officer
    
    Title:
    
    Chief Executive Officer
  30




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LIST OF SCHEDULES AS OF THE EFFECTIVE DATE
 SCHEDULE A
    
    Non-Disclosure AgreementSCHEDULE B
    
    Product ScheduleSCHEDULE C
    
    Pricing Model TemplateSCHEDULE D
    
    Intentionally BlankSCHEDULE E
    
    Service Level Agreement and ScorecardSCHEDULE F
    
    Quality Management PolicySCHEDULE G
    
    IT InfrastructureSCHEDULE H
    
    Intentionally BlankSCHEDULE I
    
    Business Continuity and Disaster Recovery PlanSCHEDULE J
    
    PCBA Agreement
  31