exv10w3



 





Exhibit 10.3




MANUFACTURING AGREEMENT



This Agreement is made on March 23, 2007, by and between:



(1) Kin Yat Industrial Co. Ltd., a Hong Kong Company, having its place of business at 7/F., Galaxy
Factory Building, 25-27 Luk Hop Street, San Po Kong, Kowloon, Hong Kong (hereinafter referred to as
“Seller”); and



(2) iRobot Corporation, a Delaware corporation having its principal place of business at 63 South
Avenue, Burlington, Massachusetts 01803, U.S.A. (hereinafter referred to as “Buyer”).



Whereas Buyer wishes to have made by Seller and Seller wishes to manufacture for Buyer the Product
in accordance with the Specifications at the price and subject to the terms and conditions of this
Agreement.



Now, therefore, in consideration of the premises and the mutual covenants herein contained, the
parties hereto agree as follows:





	1.	 	DEFINITIONS
	 
	 	 	The following terms, as used in this Agreement with capital initials, shall have the
following meanings:






	 	1.1	 	“Additional Services” means services such as, design for manufacturability,
manufacturing design test support, computer assisted design for manufacturability and
any other related services all as specified and approved by Buyer and agreed to by
Seller.
	 
	 	1.2	 	“Buyer Intellectual Property” means (a) all Intellectual Property provided or
made available to Seller by Buyer including without limitation, the Specifications and
(b) any and all Intellectual Property Rights that claim or cover such Intellectual
Property.
	 
	 	1.3	 	“Commercially Reasonable Efforts” means those efforts that would be deemed
both commercially practicable and reasonably financially prudent after having taken
into account all relevant commercial considerations. “Relevant commercial
considerations” shall be deemed to include, without limitation, (1) all pertinent
facts and circumstances; (2) financial costs; (3) resource availability and impact;
(4) probability of success; and (5) other commercial practicalities.
	 
	 	1.4	 	“Components Supplied by Buyer” means those components or materials that Buyer
provides, directly or indirectly, to Seller to be incorporated into the Product.





Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes omissions.






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	 	1.5	 	“Costs” shall mean the expenses incurred by Seller under this Agreement,
including design engineering services, testing, fixturing and tooling and other
out-of-pocket costs.
	 
	 	1.6	 	“Fee and Price Schedule” shall mean the prices and fees set forth on Schedule
2.
	 
	 	1.7	 	“Intellectual Property” means any discoveries, inventions, invention
disclosures (whether or not patentable), drawings, designs, packaging design, logos,
trade dress, trademarks, schematics, technical information, manuals and other
documentation (including theory of operations documentation), data, tools, dies,
patterns, masks, gauges, test equipment, debug aides, procedures, manufacturing or
other processes, software, firmware, technology, and know-how.
	 
	 	1.8	 	“Intellectual Property Rights” means, collectively, all rights in, to and
under patents, trade secret rights, copyrights, trademarks, service marks, trade dress
and similar rights of any type under the laws of any governmental authority, including
without limitation, all applications and registrations relating to the foregoing.
	 
	 	1.9	 	“Lead-Time” means the mutually agreed upon minimum amount of time in advance
of shipment that Seller must receive a Purchase Order in order to deliver Product by
the requested delivery date. Except as otherwise agreed by the parties, lead time for
the Product shall be [********] from receipt of the Purchase Order by the Seller.
	 
	 	1.10	 	“Long Lead-Time Components” shall have the meaning set forth on Schedule 3.
	 
	 	1.11	 	“Manufacturing Services” means the services performed by Seller hereunder
which shall include but not be limited to manufacturing, testing, configuring,
assembling, packaging and/or shipping of the Product, including any Additional
Services, all in accordance with the Specifications.
	 
	 	1.12	 	“Newly Developed Intellectual Property” means, other than Seller Intellectual
Property, (a) any and all Intellectual Property created, developed or otherwise
resulting from any work provided or services performed by either or both parties,
including but not limited to, the agents, partners or representatives of either party,
under this Agreement and (b) any and all Intellectual Property Rights that claim or
cover such Intellectual Property, all in connection with the Product.
	 
	 	1.13	 	“Packaging and Shipping Specifications” shall mean packaging and shipping
specifications set forth in Schedule 4 and otherwise supplied and/or approved by Buyer
and agreed to by the Seller.





Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes omissions.





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	 	1.14	 	“Product” shall mean the products described, and conforming to, the
Specifications contained in Schedule 1 attached to this Agreement, together with such
amendments which may be mutually agreed upon in writing by the Seller and the Buyer
from time to time.
	 
	 	1.15	 	“Production Schedule” means a manufacturing schedule provided to Seller by
Buyer in writing and in the form set forth in Schedule 5 attached to this Agreement,
which specifies the Product to be manufactured, including, without limitation, the
quantity of each Product.
	 
	 	1.16	 	“Production Schedule Forecast” means the periodic forecast provided to Seller
by Buyer, in writing, of quantity requirements of each Product that Buyer anticipates
requiring during the next three (3) month period.
	 
	 	1.17	 	“Proprietary Information and Technology” means software, firmware, hardware,
technology and know-how and other proprietary information or intellectual property
embodied therein that is known, owned or licensed by and proprietary to either party
and not generally available to the public, including plans, analyses, trade secrets,
patent rights, copyrights, trademarks, inventions, fees and pricing information,
operating procedures, procedure manuals, processes, methods, computer applications,
programs and designs, and any processed or collected data. The failure to label any of
the foregoing as “confidential” or “proprietary” shall not mean it is not Proprietary
Information and Technology.
	 
	 	1.18	 	“Purchase Order” shall mean all orders in writing for Product issued by the
Buyer to Seller and accepted by Seller.
	 
	 	1.19	 	“Seller Created Intellectual Property” means any (a) improvements to the
Seller Manufacturing Process made by Seller and (b) any and all Intellectual Property
Rights that claim or cover such improvements.
	 
	 	1.20	 	“Seller Existing Intellectual Property” means any (a) Intellectual Property
owned or controlled by Seller prior to the execution of this Agreement, including but
not limited to, the Seller Manufacturing Process and (b) any and all Intellectual
Property Rights that claim or cover such Intellectual Property.
	 
	 	1.21	 	“Seller Intellectual Property” shall mean both Seller Created Intellectual
Property and Seller Existing Intellectual Property, collectively.
	 
	 	1.22	 	“Seller Manufacturing Process” means Seller’s process employed to
manufacture, test, configure and assemble Products manufactured for Buyer pursuant to
the terms of this Agreement.
	 
	 	1.23	 	“Specifications” means the specifications set forth in Schedule 1 and
otherwise supplied and/or approved by Buyer. Specifications may be amended from time
to time by amendments pursuant to Section 18.3 of this Agreement.





Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes omissions.





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	 	1.24	 	“Suppliers Designated by Buyer” shall mean suppliers designated, specified
and/or approved by Buyer and set forth on Schedule 6, and may include without
limitation suppliers related to batteries, battery charges, masked IC components,
motors, packaging materials and gears.
	 
	 	1.25	 	“Test Procedures” shall mean testing specifications, standards, procedures
and parameters set forth in Schedule 7 and otherwise supplied and/or approved by
Buyer.






	2.	 	List of Schedules
	 
	 	 	This Agreement includes the following Schedules for each Product to be manufactured
hereunder, which are incorporated herein and made a part of this Agreement:




Schedule 1 — Specifications

Schedule 2 — Fee and Price Schedule

Schedule 3 — Long Lead-Time Components

Schedule 4 — Packaging and Shipping Specifications

Schedule 5 — Production Schedule

Schedule 6 — Suppliers Designated by Buyer

Schedule 7 — Test Procedures

Schedule 8 — Form of Cost Summary

Schedule 9 — Samples





	3.	 	Production Schedule Forecasts
	 
	 	 	Buyer will provide a Production Schedule Forecast to Seller on at least a quarterly basis.
Any Production Schedule Forecast provided by Buyer is for planning purposes only and does
not constitute a commitment by Buyer.






	4.	 	GENERAL






	 	4.1	 	Manufacturing Seller shall manufacture the Product in accordance
with the Specifications set forth in Schedule 1 and Purchase Orders for Product.
	 
	 	4.2	 	Items to be Supplied by Buyer Buyer shall at its own costs and
expenses, supply to Seller, according to the terms and conditions specified herein,
Buyer Proprietary Information and Technology and, if applicable, Components Supplied
by Buyer necessary for Seller to perform the Manufacturing Services and/or the
Additional Services. Buyer may at is own costs and expense also provide to Seller
additional items from time-to-time. Buyer shall be solely responsible for delivery,
defects and enforcement of warranties related to Components Supplied by Buyer and
Buyer Proprietary Information and Technology, and, where applicable, additional items.
Moreover, Buyer will pay all IC masking fees and will consign select ICs as deemed
appropriate by Buyer.





Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes omissions.





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	 	4.3	 	Items to be Supplied By Seller Seller will employ the Seller
Manufacturing Process, any required manufacturing technology, manufacturing capacity,
labor, transportation logistics, systems and facilities necessary for Seller to
perform the Manufacturing Services.
	 
	 	4.4	 	Materials Procurement Seller will use Commercially Reasonable
Efforts to procure components, per Buyer’s approved vendor list containing Suppliers
Designated by Buyer, necessary to fulfill Purchase Orders accepted by Seller. Seller
is responsible for the management of the performance of component suppliers —
including but not limited to purchasing, component inventory control, customs
paperwork and Value Added Tax (VAT) — and is ultimately responsible for the quality
of components provided by any vendor from Buyer’s approved vendor listing. Upon
request, Seller will be required to submit specification sheets for outsourced
components to Buyer for pre-approval. Moreover, Seller will interface with suppliers,
including Suppliers Designated by Buyer, in good faith and follow Just In Time (JIT)
inventory practices. It is noted that Seller shall provide temperature and humidity
controlled storage with respect to certain components including, but not limited to,
batteries.
	 
	 	4.5	 	Cost Summary No less frequently than biweekly, Seller will provide
a detailed cost summary, in a form and manner reasonably satisfactory to Buyer,
including all formulas and assumptions, so that both Seller and Buyer will have full
and complete access and visibility to all component, labor, assembly and mark-up
costs. The cost summary will also include the Seller’s gross margin, which shall
include Seller’s profit, overhead, DFM costs, fixtures and jigs, scrap, overland
shipping, samples, set-up, testing, all engineering and other Seller expenses with
respect to the Manufacturing Services. An initial form for the cost summary is set
forth in on Schedule 8. It is explicitly understood and agreed by Seller that
Seller’s failure to provide updated cost information within two (2) weeks of a
Specification change, will waive Seller’s right to claim a cost increase due to the
Specification change.
	 
	 	4.6	 	Lead-Time and Cost Reduction Plan At its sole discretion, Buyer
shall establish a plan to reduce the costs, prices and Lead-Time associated with work
performed in connection with this Agreement. Seller shall use Commercially Reasonable
Efforts to implement such Lead-Time and cost reduction plans.
	 
	 	4.7	 	RESERVED.
	 
	 	4.8	 	Restrictions on Sale of Other Products Unless otherwise agreed to
in writing by Buyer, any components containing Buyer Intellectual Property shall not
be sold or transferred by Seller to any person other than Buyer or Buyer’s designee.
Moreover, during the term of this Agreement, and for a period of [********] following
the termination of this Agreement, Seller shall not [********].





Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes omissions.





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	 	4.9	 	Samples Seller shall provide Buyer at no charge the samples of the
Product as set forth on Schedule 9 to this Agreement.






	5.	 	PURCHASING PROCEDURE






	 	5.1	 	Issuance and Acceptance of Purchase Orders Purchase Orders issued
by Buyer to Seller shall reference this Agreement, set forth information including the
required Product, quantities, delivery dates, prices, destination, carrying method,
consignee at destination, shipping instructions, purchase order number and other
details as may be reasonably requested by Seller.
	 
	 	 	 	Purchase Order may be in the form of an e-mail or fax. If any terms or conditions
on the Purchase Order conflict with terms and conditions in this Agreement, this
Agreement shall prevail.
	 
	 	 	 	Purchase Order acknowledgement by Seller shall be made by e-mail or fax (or by
another form of written confirmation mutually agreed to by the parties) within
fourteen (14) business days (excluding Saturdays) from receipt of Purchase Order
(or electronic purchase order, as the case may be) from Buyer and shall be promptly
followed by a hard copy acknowledgement (“Acknowledgement Period”). The Purchase
Order will not constitute a binding obligation on the Seller until and unless
Seller accepts the Purchase order in accordance with this Agreement.
	 
	 	5.2	 	Effects of Purchase Orders The placing by Buyer of a Purchase Order
under and in accordance with this Agreement and subsequent acceptance by Seller shall
create a contract of sale between Seller and Buyer on the terms of such Purchase Order
and of this Agreement. Nothing in this Agreement shall be construed as an obligation
for Buyer to purchase or Seller to manufacture any Product, except as expressly
provided in any Purchase Order issued by Buyer and accepted by Seller.
	 
	 	5.3	 	Prices [********]
	 
	 	5.4	 	Delivery Subject to Sections 5.6 and 9.1, all Product ordered and
accepted under the Purchase Order shall be delivered in accordance with the agreed
Lead-Time. Product shall be deemed delivered when title and risk pass to Buyer on the
basis of Section 5.11.
	 
	 	5.5	 	Certificate of Conformance From time to time, and upon Buyer’s
written request, Seller will provide certificates of conformance evidencing that
Products sold to Buyer or Buyer’s designee meet the applicable Buyer Specifications.
The issuance of such certificate will in no event expand Seller’s liability for breach
of warranty.
	 
	 	5.6	 	Rescheduling With respect to any Purchase Order, Buyer shall have a
right to reschedule the delivery date of any Products ordered by it and/or to change
the destination thereof, provided it shall give written notice of such





Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes omissions.






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	 	 	 	reschedule or change in destination at least [********] prior to the original
delivery date, further provided that the rescheduled delivery date is not more than
[********] after the original delivery date and additionally further provided that
such rescheduling limitation shall not apply in the event that the rescheduling is
due to a proved default or delay of Seller or to force majeure under Section 16.
In the event that Buyer wishes to reschedule more than once, such rescheduling
shall be made in accordance with this Section 5.6, and Seller shall have the right
to claim any expenses due to said rescheduling.
	 
	 	5.7	 	Invoices Invoices for Product shall be submitted, within three (3)
business days of the time of delivery of Product, by Seller to Buyer or Buyer’s
designee as may be directed by Buyer.
	 
	 	5.8	 	Payment Terms Buyer shall pay Seller all monies, not the subject of
a good faith dispute, within [********] from the date of receipt of the invoice.
Seller shall be fully responsible for all Costs, and indemnify and hold Buyer harmless
from liability to Seller suppliers for money owed such suppliers by Seller for
Seller’s purchase of goods and services in relation to the Product.
	 
	 	5.9	 	Inclusions in Price Purchase price shall include the full cost of
ordered items suitably packed and onboard for shipment FOB port of Yantian, PRC,
including all inland shipping, handling, transportation, importation and insurance.
	 
	 	 	 	Seller will make all necessary arrangements for the shipment to Buyer or Buyer’s
designee, including obtaining under its responsibility and its expenses (which are
subject to reimbursement by Buyer) any permit or license to export the Products
from the country of shipment, except obtaining such permit as may be required for
Buyer or its affiliates to import the ordered items into another country.
	 
	 	 	 	Any such costs and expenses prepaid by Seller under this Section 5.9 shall be
invoiced to Buyer (or its Affiliates as the case may be) and paid by Buyer in
accordance with Section 5.8.
	 
	 	5.10	 	Taxes Seller will pay all taxes, duties and fees imposed by the
authorities of any country on its manufacture and sale to Buyer or its designees of
the Products sold under this Agreement and Buyer will pay all taxes, duties and fees
imposed by the authorities of any country arising after the sale of the Product under
this Agreement.
	 
	 	5.11	 	Title Title to any Product(s) will pass to Buyer (or to the Buyer’s
designee invoiced by Seller) upon receipt of full payment for the purchase price by
Seller. Risk of the Products will be passed to Buyer (or to the Buyer’s designee) upon
shipment.





Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes omissions.





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	 	 	 	Seller will use the Commercially Reasonable Effort to pack and ship the Products in
accordance with the Packaging and Shipping Specifications provided that Buyer shall
be solely responsible for the sufficiency and adequacy of the Packaging and
Shipping Specifications and the compliance of the Packaging and Shipping
Specifications with the applicable laws, regulations and rules for importing into
the destination country.
	 
	 	5.12	 	Tooling  Seller recognizes that all specific tooling made or
procured by Seller and paid for by Buyer for the purpose of this Agreement, shall be
property of Buyer.
	 
	 	 	 	Seller shall be responsible for maintaining the tooling and carrying out repairs
based on reasonable wear and use. At the request of Buyer, Seller shall at the
expenses and costs of Buyer insure the tool(s) while under Seller’s possession and
control. Such insurance shall be based on the original tooling cost to Buyer and
shall name Buyer as loss payee.
	 
	 	 	 	Seller shall be entitled to manufacture, have manufactured and use such tooling
only and solely for the Product to be sold to Buyer under this Agreement. Seller
shall at the expenses of Buyer deliver to Buyer any of the above mentioned tooling
within fifteen (15) business days upon Buyer’s written request and, in any case,
upon the expiration or termination of this Agreement.






	6.	 	INSPECTION AND ACCEPTANCE






	 	6.1	 	Testing Seller will test the Product in accordance with the Test
Procedures set forth on Schedule 7 to this Agreement, as may be supplemented by Buyer
from time-to-time. Buyer shall be solely responsible for the sufficiency and adequacy
of the Test Procedures.
	 
	 	6.2	 	Product Acceptance Buyer shall evaluate each Product to determine
if it conforms, in all material respects, to the Specifications. Buyer shall give
Seller written notice of any rejection of a Product within ten (10) business days
following Buyer’s receipt of such Product (“Acceptance Period”). Such written notice
of rejection of a Product for failure to materially conform to the Specifications
shall include a reasonably detailed and complete description of Buyer’s basis for
asserting that the Product does not materially conform to the Specifications
(“Specification Notice”). If Buyer fails to provide such Specification Notice to
Seller within the Acceptance Period, such Product shall be deemed accepted by Buyer.
If Seller disputes the basis for rejection set forth in a Specification Notice, it
shall provide written notice of the same to Buyer within ten (10) business days
following receipt of the Specification Notice (“Notice of Disputed Defect”). Any such
dispute shall be resolved by the parties in accordance with the provisions of Section
17. Notwithstanding the issue of Specification Notice or Notice of Disputed Defect,
the Products shall be deemed to be delivered on time if the Products were first
delivered within





Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes omissions.





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	 	 	 	the delivery date as stated in the Purchase Order. If Seller does not dispute the
basis for rejection set forth in a Specification Notice, Seller shall follow its
standard repair or replace procedure as set forth in Section 7.2 herein. The
acceptance procedures set forth in this Section 6.2 shall apply to any redelivered
Product.
	 
	 	6.3	 	Inspection Buyer may, at any reasonable time and with reasonable
prior written notice, inspect Seller’s test facilities used in the performance of this
Agreement, as well as the materials used to manufacture the Product, without
interrupting the normal plan of work in Seller’s plant.
	 
	 	 	 	Seller shall furnish, or cause to be furnished, without charge to Buyer, all
reasonable facilities and assistance for the safety and convenience of the
inspectors. All inspections shall be performed in such a way as not to delay the
work.
	 
	 	6.4	 	Attendance at Seller’s Plant Buyer reserves the right to place at
any time one or more employees of Buyer or any of its affiliates in Seller’s plant to
carry out the inspection and acceptance tests referred to in Section 6.1 6.2 and/or
6.3. Seller will provide strictly confidential, lockable and secure on-site
facilities for Buyer’s on-site team.
	 
	 	 	 	[********]. Seller agrees to furnish said employee(s) with reasonable working
facilities as necessary for their job. Seller will make suitable arrangements so
that said employee(s) will have access to the areas where Product are manufactured
and tested. Such employee(s) shall be empowered to reject the Product to be
delivered to Buyer in the event that such Product fails the acceptance tests agreed
to in accordance with Section 6.1, provided always the reasons for said rejection
have been provided to Seller and acknowledged by Seller.






	7.	 	WARRANTY






	 	7.1	 	Warranty Description Subject to Section 7.4, Seller warrants, with
respect to each Product supplied by Seller to Buyer, together with all retail
packaging, labeling and other material furnished by Seller, that:
	 
	 	 	 	(a) the title of the Products when conveyed to Buyer or its affiliates shall be
good and its transfer rightful, and the Products shall be delivered free from any
security interest or other lien or encumbrance except as otherwise agreed upon in
writing;
	 
	 	 	 	(b) the Products shall conform to the Specifications in effect at the time the
relevant Purchase Order is made and to any representation or description contained
in this Agreement relating to such Products;
	 
	 	 	 	(c) the Products conform in all respects to all applicable international, federal,
state, and local laws, orders and regulations including, without limitation, those
concerning the marking of the country of origin (as





Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes omissions.





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	 	 	 	merchandise not in compliance and not properly marked is subject to penalty which
may include forfeiture of the non-conforming shipment); and
	 
	 	 	 	(d) the Products do not knowingly infringe or encroach upon any third party’s
personal, contractual, or proprietary rights, including, but not limited to,
patents, trademarks, trade names, trade dress, copyright, right of privacy or trade
secrets.
	 
	 	7.2	 	Repair or Replacement of Defective Product Seller will either
	 
	 	 	 	(a) repair or replace, in its sole discretion, any Product that contains a defect
caused by a breach of the warranty set forth in this Section 7; or
	 
	 	 	 	(b) credit Buyer the in-country cost of goods sold of that Product towards future
production.
	 
	 	7.3	 	No Waiver Buyer’s acceptance of any Products shall not relieve
Seller of its warranty obligations, unless agreed to by Buyer in writing. Waiver
hereunder shall not be deemed to be a waiver of subsequent enforcement of this Section
7.3.
	 
	 	7.4	 	Limitation of Warranty SELLER’S WARRANTY SHALL NOT APPLY TO (a) ANY
MATERIAL CONSIGNED OR SUPPLIED BY BUYER TO SELLER INCLUDING BUT NOT LIMITED TO BUYER
INTELLECTUAL PROPERTY, BUYER’S PROPRIETARY INFORMATION AND TECHNOLOGY AND BUYER’S
TOOLING, OR (b) ANY DEFECT IN THE PRODUCT ARISING FROM ANY DESIGN OR SPECIFICATION
(AND/OR TEST PROCEDURES) OF THE PRODUCT SUPPLIED AND/OR APPROVED BY BUYER, OR (c) THE
PACKAGING AND SHIPPING SPECIFICATIONS PROVIDED BY BUYER.






	8.	 	EPIDEMICS
	 
	 	 	In the event that in the Products supplied by Seller to Buyer hereunder there should
develop an epidemic of failures or any non-conformance to the applicable Specifications due
to the default of Seller, Seller and Buyer shall discuss the steps that Seller will take at
Seller’s expense to remedy such problem.
	 
	 	 	If the epidemic fault directly results from any default, such as faulty design in the
Product, of Buyer or by any third party for Buyer, then Buyer will work at its expense with
Seller to cure the problem.
	 
	 	 	In the event of such an epidemic under this Section 8, issuance of new Purchase Orders and
delivery of unfilled Purchase Orders of the Products shall be postponed as mutually agreed
to by Buyer and Seller, pending the correction of the cause of the epidemic.
	 
	 	 	An epidemic fault shall be defined as [********].





Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes omissions.





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	9.	 	CANCELLATION OF ORDERS






	 	9.1	 	Cancellation In addition to Buyer’s right to reschedule, Buyer may
upon [********] written notice of the delivery date specified by Buyer in the Purchase
Order cancel in whole or in part such Purchase Order.
	 
	 	 	 	Buyer’s liability to Seller with respect to any terminated Purchase Order shall be
limited to any Long Lead-Time Components procured by Seller on the specific written
instructions of Buyer and other materials specifically procured by Seller for Buyer
pursuant to an accepted Purchase Order.
	 
	 	9.2	 	Notification of Amount Within fifteen (15) days after Seller
receives notice of cancellation from Buyer, Seller will issue to Buyer an invoice
detailing the cancellation charge. This invoice should include a detailed listing of
each Long Lead-Time Component and other materials specifically procured by Seller for
Buyer pursuant to an accepted Purchase Order.
	 
	 	9.3	 	Payment Payment by Buyer of any cancellation charge should be made
within thirty (30) days after receipt by Buyer of Seller’s invoice. Upon receipt of
full payment Seller shall make available to Buyer any or all of the parts (at Buyer’s
option).






	10.	 	CHANGES






	 	10.1	 	Changes to Manufacturing Services, Packaging and Shipping Specifications
and Test Procedures Seller will make no changes to the Products that affect the
form, fit, or function of the Products including associated spare parts, which are
deviated from the Specifications without the obtaining the prior written consent of
Buyer. Buyer may, in writing, request a change to the Manufacturing Services,
Packaging and Shipping Specifications and Test Procedures at any time. Within fourteen
(14) business days after receipt of Buyer’s written request, Seller will analyze the
requested change and provide Buyer with an assessment of the effect that the requested
change will have on cost, manufacturing, scheduling, delivery and implementation and
the extent of change acceptable to Seller. Buyer will be responsible for all costs
and expenses associated with any changes accepted by Seller.






	11.	 	PRESS RELEASES, TRADEMARKS, DISCLOSURE OF INFORMATION






	 	11.1	 	Press Releases and Publicity Prior written approval of press releases
and any other publicity regarding this Agreement or the Product shall be obtained by
the releasing party from the other party in all cases, except as to where such
disclosure is otherwise required by law (including federal and state securities laws)
or by the rules and regulations of the National Association of Securities Dealers
(NASD), or rules or regulations of any





Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes omissions.




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	 	 	 	stock exchange or similar entity to which such party is subject, in which the
publicity makes reference to said other party or this Agreement.
	 
	 	11.2	 	Trademarks The exterior of any Product (including the packing) as
supplied by Seller to Buyer shall not bear any trademark or other identifying name or
symbol of Seller or any contraction, abbreviation or simulation thereof. Buyer shall
have the right to affix to the Product any trademarks as Buyer may decide at its
discretion. If so requested by Buyer, Seller agrees, at no additional cost to Buyer,
to mount on each of the Product (or to imprint on the packages) any said trademarks,
in the form and location as instructed by Buyer.
	 
	 	 	 	In said case Buyer will furnish Seller with such trademark display for mounting of
said Product or the artwork for the imprint on the packaging of the Product.
Nothing contained in this Agreement shall be construed as conferring to either
party any right or imposing any obligation to use in advertising, publicity or
otherwise any trademark, name or symbol of the other party, or any trademark, name
or symbol of the other party, or any contraction abbreviation or simulation
thereof, except as expressly provided for in this Agreement.






	12.	 	CONFIDENTIAL INFORMATION






	 	12.1	 	Confidential Information In performing the obligations and
permitted activities under this Agreement, each party shall come in contact with
certain confidential and proprietary information of the other party. For purposes of
this Agreement, “Confidential Information” means, subject to the exceptions set forth
in Section 12.3 hereof, any information or data, regardless of whether it is in
tangible form, disclosed by either party (the “Disclosing Party”) that the Disclosing
Party has either marked as confidential or proprietary, or has identified in writing
as confidential or proprietary within thirty (30) days of disclosure to the other
party (the “Receiving Party”); provided, however, that reports and/or
information related to or regarding a Disclosing Party’s business plans, strategies,
technology and research and development shall be deemed Confidential Information of
the Disclosing Party even if not so marked or identified.
	 
	 	12.2	 	Use and Disclosure of Confidential Information  Subject to Section
12.3, the Receiving Party agrees that it will not (i) use any Confidential Information
in any way, for its own account or the account of any third party, except for the
exercise of its rights and performance of its obligations under this Agreement, or
(ii) disclose any Confidential Information to any party, other than furnishing such
Confidential Information to (a) its employees and consultants who are reasonably
required to have access to the Confidential Information in connection with the
exercise of its rights and performance of its obligations under this Agreement and (b)
investors, prospective acquirers and professional advisers; provided that such
employees, consultants, investors, prospective acquirers and professional





Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes omissions.





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	 	 	 	advisers are bound by written agreements or, in the case of professional advisers,
ethical duties, respecting such Confidential Information in accordance with the
terms of this Section 12. The Receiving Party agrees that it will not allow any
unauthorized person access to Disclosing Party’s Confidential Information, and that
Receiving Party will take all action reasonably necessary to protect the
confidentiality of such Confidential Information, including implementing and
enforcing procedures to minimize the possibility of unauthorized use or copying of
such Confidential Information. In the event that the Receiving Party is required
by law to make any disclosure of any of Disclosing Party’s Confidential
Information, by subpoena, judicial or administrative order or otherwise, the
Receiving Party shall first give written notice of such requirement to the
Disclosing Party, and shall permit the Disclosing Party to intervene in any
relevant proceedings to protect its interests in the Confidential Information, and
provide full cooperation and assistance to the Disclosing Party in seeking to
obtain such protection.
	 
	 	12.3	 	Exceptions  The confidentiality obligations set forth in Section
12.2 shall not apply if and to the extent that such information: (a) is known to the
Receiving Party prior to receipt from the Disclosing Party directly or indirectly from
a source other than one having an obligation of confidentiality to the Disclosing
Party; (b) becomes known (independently of disclosure by the Disclosing Party) to the
Receiving Party directly or indirectly from a source other than one having an
obligation of confidentiality to the Disclosing Party; or (c) becomes publicly known
or otherwise ceases to be secret or confidential, except through a breach of this
Agreement by the receiving party.
	 
	 	12.4	 	Effects of Termination  Upon expiration or termination of this
Agreement, each party shall return to the other party all Confidential Information
received from the other party, including all copies thereof, to the other party or,
with such other party’s written consent, destroy all such Confidential Information.
All use of such Confidential Information by a party shall cease on such termination or
request for return. At the disclosing party’s option, receiving party shall also
provide written certification of its compliance with this Section 12.4.






	13.	 	INTELLECTUAL PROPERTY RIGHTS






	 	13.1	 	Buyer Intellectual Property Buyer owns the entire right, title and
interest to any Buyer Intellectual Property, and to any portion(s) of the Products(s)
and associated documentation that have been developed by Seller for Buyer. Buyer
obtains no rights or licenses to Seller Intellectual Property, except to the extent
required to sell, modify or otherwise use Products purchased from Seller pursuant to
this Agreement.
	 
	 	13.2	 	Seller Intellectual Property Seller shall retain all right, title
and ownership to any Seller Intellectual Property that is prepared as part of the





Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes omissions.





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	 	 	 	Manufacturing Services or as part of any other work provided pursuant to this
Agreement.
	 
	 	13.3	 	Newly Developed Intellectual Property The Newly Developed
Intellectual Property constitutes “works made for hire” for Buyer, and Buyer will be
considered the author and will be the owner of the Newly Developed Intellectual
Property and all Intellectual Property Rights embodied therein or related thereto. If
any Newly Developed Intellectual Property does not qualify for treatment as “works
made for hire”, or if Seller retains any interest in any Newly Developed Intellectual
Property for any other reason, Seller hereby grants, assigns and transfers, and will
grant, assign and transfer, to Buyer all ownership and interest in such Newly
Developed Intellectual Property. Seller acknowledges that all personnel performing
Manufacturing Services for Buyer under this Agreement have executed appropriate
agreements with Seller so that Seller may fulfill Seller’s obligations under this
Section 13. Seller agrees to execute any documents of assignment or registration
requested by Buyer relating to any and all Newly Developed Intellectual Property.
Seller agrees to cooperate fully with Buyer, both during and after the engagement,
with respect to the procurement, maintenance and enforcement of Intellectual Property
Rights in or related to Newly Developed Intellectual Property.
	 
	 	13.4	 	Grant of License to Buyer Intellectual Property Buyer hereby grants
to Seller a limited, non-exclusive, non-transferable, non-assignable and
non-sublicensable right and license to use the Buyer Intellectual Property,
Proprietary Information and Technology and specifications solely for the purpose of
performing its obligations under this Agreement, including manufacturing Products
pursuant to this Agreement and supplying such Products only to Buyer. Such limited
right and license shall extend to no other materials or for any other purpose and
shall terminate automatically upon expiration or termination of the relevant Purchase
Order or this Agreement for any reason.






	14.	 	INDEMNIFICATION






	 	14.1	 	Buyer’s Indemnity Obligation Buyer shall indemnify, defend and hold
Seller and its employees, subsidiaries, affiliates, successors and assigns harmless
from and against any and all claims, demands, actions, suits, litigation, proceedings
and the like by a third party (“Claims”) alleging either (1) that the making, using or
selling of the Product or the use of the Specifications, the Buyer Intellectual
Property Right, the Buyers’ Proprietary Information and Technology and/or the
Packaging and Shipping Specifications infringe upon or misappropriate any third
party’s Intellectual Property Rights or the subject matter of such third party’s
Intellectual Property Rights; or (2) design or product liability alleging that any
Product has caused damages of any kind (including but not limited to damage to
property or injury or death); provided that the indemnity under





Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes omissions.





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	 	 	 	this Section 14.1 shall not apply if any Claim is caused by (1) Seller’s
Manufacturing Process, or (2) the gross negligence or willful misconduct of the
Seller.
	 
	 	14.2	 	Seller’s Indemnity Obligation Seller shall indemnify, defend and
hold Buyer and its employees, subsidiaries, affiliates, successors and assigns
harmless from and against any Claims (1) alleging that Seller Intellectual Property or
the use thereof (including without limitation the manufacture of Product using the
Seller Intellectual Property) infringes upon or misappropriates any third party’s
Intellectual Property Rights or the subject matter of such third party’s Intellectual
Property Rights or (2) for damage to property or injury or death occurring to any
third party arising out of possession or use by such third party of a Product provided
that the indemnity under this Section 14.2 shall not apply if any Claim is caused by
(1) Seller’s use of materials, trademarks and symbols supplied by Buyer, Seller’s
reliance upon the Specifications, Buyer Intellectual Property Right, Buyers’
Proprietary Information and Technology and/or the Packaging and Shipping
Specifications in accordance with the terms of this Agreement, or (2) defects in
design or product liability caused by Buyer or its agents, or (3) the gross negligence
or willful misconduct of the Buyer.
	 
	 	14.3	 	Indemnification Procedure For all indemnification obligations under
this Agreement, the party subject to the indemnity obligation (the “Indemnifying
Party”) will defend the claim utilizing counsel selected by the Indemnifying Party and
not objected to by the other Party prior to commencement of the defense (the
“Indemnified Party”). Any such objection shall not be unreasonably made; provided,
that the Indemnifying Party is promptly notified by the Indemnified Party of such
claim and provided that the Indemnified Party at its own expenses provides such
assistance in assessing, defending and settling such claim (at the Indemnifying
Party’s expense) as the Indemnifying Party may reasonably request. The Indemnifying
Party will not settle any claim without the written consent of the Indemnified Party,
which will not be unreasonably withheld. If a party does not agree that a claim or
suit is fully covered by its indemnity hereunder, then the parties agree to negotiate
in good faith an equitable arrangement regarding the defense of the claim or suit and
any settlement thereof consistent with the Indemnifying Party’s obligations hereunder.
The Indemnified Party may employ counsel, at its own expense, to assist it with
respect to any such claim, provided that if such counsel is necessary because the
Indemnifying Party does not assume control of the defense as required under this
Agreement, the Indemnifying Party shall bear such expense.
	 
	 	14.4	 	Injunctions If, during the course of any intellectual property
Claim, as to which Seller is required to indemnify Buyer hereunder, the use or sale of
a Product is finally enjoined, Seller shall, at Seller’s expense, (i) procure for
Buyer the right to use or sell, as applicable, the Product, (ii) replace the Product
with equivalent non-infringing technology, (iii) modify the Product





Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes omissions.





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	 	 	 	to make it non-infringing but equivalent, or (iv) if none of the foregoing options
is reasonably available, refund to Buyer an amount equal to the price paid by Buyer
for said Product.
	 
	 	14.5	 	Limitation THE INDEMNITY CONTAINED IN THIS SECTION 14 STATES THE
ENTIRE LIABILITY OF EITHER PARTY TO THE OTHER WITH RESPECT TO ANY AND ALL
MISAPPROPRIATION OR INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS OF ANY THIRD
PARTY AND IS EXPRESSLY IN LIEU OF ALL WARRANTIES OR REPRESENTATIONS, EXPRESS, IMPLIED,
STATUTORY OR OTHERWISE, IN REGARD THERETO.






	15.	 	TERM AND TERMINATION






	 	15.1	 	This Agreement shall become effective as of the date of execution and, unless
extended by written agreement of the parties or earlier terminated under the provision
of this Section 15, it shall expire three (3) years from the date of execution.
	 
	 	15.2	 	This Agreement may be terminated by either party by written notice to the
other party in the event such other party:
	 
	 	 	 	(a) files a petition of bankruptcy, or is adjudicated bankrupt, or makes a general
assignment for the otherwise unable to meet its financial and business obligations
in a reasonable manner after they become due, or
	 
	 	 	 	(b) fails to perform any of its material obligations under this Agreement, and such
failure is not remedied within sixty (60) days after a notification of default by
the non-defaulting party.
	 
	 	15.3	 	Upon expiration or termination of this Agreement for any cause, the rights
and obligations of the parties under this Agreement shall terminate, except for such
rights and obligations which are expressly provided herein to survive the expiration
or termination of this Agreement and except for any payment obligation on account of
the proper performance prior to such expiration or termination.
	 
	 	15.4	 	The termination of this Agreement under the provisions of this Section 15
shall not extend its effect on the portion of the Agreement previously implemented.
	 
	 	15.5	 	The provisions for termination of this Agreement and their exercise shall not
constitute a waiver by either party, or a substitute for, any relief or remedy which
is otherwise available to it.
	 
	 	15.6	 	Notwithstanding the termination of this Agreement, tendering of Invoice by
Seller to Buyer shall be deemed as a demand for payment and would be recoverable as a
debt due and owing in the event of Buyer’s bankruptcy under Clause 15.2 (a).





Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes omissions.





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	16.	 	FORCE MAJEURE
	 
	 	 	Neither party shall be liable for delays in or failure of performance due to causes beyond
such party’s reasonable control, including but not limited to, acts of God, acts of civil
or military authority, legal restrictions, fires, explosion, embargo, mobilization, riots,
epidemics, and to the extent the following are on a national basis, strikes, industrial
disturbances, shortage of material, electricity, oil or transport, or restriction in the
use of power.
	 
	 	 	In the event of any such delay or failure the affected party shall send written electronic
notice of the same and the reason thereof to the other party within seven (7) calendar days
from the time the affected party knew, or should have known, of the force majeure in
question. The performance of the affected party shall be deemed suspended so long as, and
to the extent that, any such force majeure continues; provided however, that after sixty
(60) calendar days of such suspension on the part of either party, the other party may
terminate without liability its obligations hereunder to the extent that the affected
party’s performance has been prevented or delayed.






	17.	 	GOVERNING LAW AND DISPUTE RESOLUTION
	 
	 	 	This Agreement is to be governed by, and construed in accordance with, the laws of the
State of New York. All disputes or claims arising out of or relating to this Agreement
that are not resolved by mutual agreement shall be resolved by binding arbitration to be
conducted under the commercial arbitration rules of the American Arbitration Association
(1) in Boston, Massachusetts, USA if such arbitration is sought by Seller or (2) in Hong
Kong if such arbitration is sought by Buyer.






	18.	 	MISCELLANEOUS PROVISIONS






	 	18.1	 	The rights and obligations of either party under this Agreement cannot be
transferred or assigned to a third party without the prior written consent of the
other party.
	 
	 	18.2	 	Subject to the provisions of Section 15.3, this Agreement shall be binding
upon the parties hereto and their respective successors and assigns, notwithstanding
any merger of a party hereto into, or acquisition of a party hereto by, another entity
or any other change or control of such party.
	 
	 	18.3	 	The Agreement shall not be considered modified, altered, changed or amended
in any respect unless in writing by a legal representative of each of the parties
hereto. No manager, employee or Authorized Representative (as defined in Section
18.5) of either party, unless empowered in writing by a legal representative of the
respective party, has any authority to waive, alter or enlarge this Agreement or to
make any new or substitute or different contract, representation or warranty.





Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes omissions.





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	 	18.4	 	All notices, demand and other communications made hereunder shall be in
writing and shall be given either by fax or email addressed to the respective
Authorized Representatives at the following addresses:





	 	 	 	 
	 	Notice to Seller:

	 	7/F Galaxy Factory Building

25-27 Luk Hop Street, San Po King

Kowloon, Hong Kong

Facsimile: (852) 2995 9038

Attn: Mr. Vincent Fung
	 	 
	 	 
	 	Notice to Buyer:

	 	iRobot Corporation

63 South Avenue

Burlington, MA 01803

Facsimile: (781) 345-0201

Attn: Mr. Glen D. Weinstein
	 	 
	 	 
	 	with a copy to:

	 	iRobot Far East

12/F, China Hong Kong Centre

122-126 Canton Road, T.S.T. Kowloon

Facsimile: (852) 3014 0754

Attn: Mr. Herman Pang







	 	18.5	 	Mr. Vincent Fung is designated to act as the Authorized Representative of
Seller regarding the implementation of this Agreement. Mr. Glen D. Weinstein of
iRobot Corporation is designated to act as the Authorized Representative of Buyer
regarding the implementation of this Agreement. Any change of the Authorized
Representative by either party shall be notified in writing to the other party.
	 
	 	18.6	 	Subject to as required by applicable laws, rules and regulations and
competent regulators, prior written approval of public announcements, press releases
and other publicity regarding this Agreement shall be obtained by the releasing party
from the other party in all events in which such announcement, press release or other
publicity makes reference to this Agreement or said other party.
	 
	 	18.7	 	This Agreement and all schedules referred to in this Agreement, which are an
integral party thereof, constitute the entire understanding between the parties and
supersede any previous understanding regarding the subject matter hereof.
	 
	 	18.8	 	Any failure by the other party to enforce any provision of this Agreement
shall in no way constitute a waiver or affect its right to require the performance
thereof by the other party nor affect the validity of any other provision, except when
this Agreement expressly provides otherwise.





Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes omissions.





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	 	18.9	 	Unless otherwise stated herein, each party shall bear its own costs,
expenses, duties and taxes in connection with the preparation, execution and
performance of the Agreement.
	 
	 	18.9	 	Each party warrants and represents to the other party that it has the
capacity to enter into and perform its obligations under this Agreement, and that
this Agreement, upon execution, will be a valid and binding agreement on it.






	19.	 	INTERPRETATION
	 
	 	 	All headings are inserted for convenience only and shall be ignored in the interpretation
of this Agreement.





[Signature Page Follows]




Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes omissions.





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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly
empowered representatives as follows:




	 	 	 	 	 
	 	For and on behalf of Buyer



iROBOT CORPORATION

 	 
	 	/s/ Glen D. Weinstein
 	 
	 	Glen D. Weinstein 	 
	 	SVP & General Counsel

Date: March 23, 2007 	 
	 



	 	 	 	 	 
	 	For and on behalf of Seller



KIN YAT INDUSTRIAL CO. LTD.

 	 
	 	/s/ Vincent Fung
 	 
	 	Vincent Fung 	 
	 	Executive Director

Date: March 23, 2007 	 
	 



Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes omissions.





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