[LOGO]Enova Systems Contract Number 11072001
Digital Power Management(TM)
CONFIDENTIAL TREATMENT REQESTED
* - Redacted portion has been omitted and filed separately with the SEC
Panther(TM) Drive System Product and Services Agreement
1 Introduction and Purpose. This Product and Services Agreement ("Agreement") is
entered into as of 22 January, 2002 (the "Effective Date") by and between Enova
Systems, Inc., a California corporation ("Enova") with its principal place of
business located at 19850 S. Magellan Drive, Torrance, California 90502, and
Moriah Corporation, a Japanese corporation ("Purchaser") with its principal
place of business located at 505 5F, OCC Bldg. No. 1, 2-chome, Kanda-surugadai,
Chiyoda-ku, Tokyo, Japan 101-0062.
1.1 Enova manufactures and sells certain proprietary vehicle drive
systems, as further described in Appendix 1 (the "Panther Drive Systems").
1.2 Purchaser manufactures and sells certain vehicles listed in Appendix 2
and wishes to incorporate the Panther Drive Systems as an integral drive system
in those vehicles.
1.3 Purchaser wishes to obtain Enova's assistance in the initial
incorporation of the Enova Drive Systems into its vehicles and Enova wishes to
provide joint development assistance to Purchaser.
1.4 Purchaser and Enova wish to address marketing opportunities and
provide for the purchase of Panther Drive Systems for incorporation Purchaser's
vehicles and sale in the event that the joint development efforts are
successful. The Purchaser products listed in Appendix 2 developed and
manufactured under this Agreement incorporating Panther Drive Systems are
referred to herein as the "Products."
1.4 Agreement. This Agreement consists of the body of the Agreement, the
Appendices, and any purchase order issued and accepted pursuant to the
provisions of this Agreement. Section 2 shall only apply if there are
Development Efforts (defined below in Section 2) and Sections 3 through 7 shall
only apply if there is Commercial Production (defined below in Section 3). The
terms, conditions and provisions of this Agreement shall be construed in a
manner that gives effect to the entire agreement to the extent practicable. To
the extent that any provisions conflict, the Agreement and Appendices control
over any inconsistent purchase order terms, Appendix 9 (Additional Terms for
Development Efforts) controls over any inconsistent terms relating to
Development Efforts and Appendix 10 (Additional Terms for Commercial Production
and Additional General Terms) controls over any inconsistent term in the
Agreement other than those relating to the Development Efforts.
2 Joint Technical Development and Grant of Rights
2.1 Intention. Purchaser intends to integrate a Panther Drive System into
a prototype vehicle (the "Prototype"), and as part of such efforts will endeavor
to combine Panther Drive System with products from manufacturers, suppliers, and
developers other than Enova. All efforts by Purchaser to combine the Panther
Drive System with other products or otherwise integrate Panther Drive System
into the Prototype are referred to herein as "Development Efforts." Without
limiting the generality of the foregoing, Development Efforts shall include
those development projects undertaken by Enova in direct response to a
Development Effort.
2.2 Development Effort Scope. The parties shall perform the Development
Efforts described on Appendix 3. Each party shall pay for expenses and make
other payments associated with the Development Efforts as provided in Appendix 3
and Appendix 9. Any legal terms that are applicable only to the Development
Efforts are specified in Appendix 9.
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2.3 Out-of-Scope Efforts. The parties shall endeavor in good faith to
establish their respective rights and duties in any Development Effort that is
not within the Development Effort scope defined in Appendix 3. These rights and
duties may include, but are not limited to, assignment of intellectual property
and payment for additional hardware or services delivered. Unless the parties
agree otherwise in writing, an out-of-scope Development Effort that results in
new technology or improvement to existing technology will be owned as provided
in Attachment 9.
2.4 Prototype Hardware Restrictions. The Prototype shall be considered a
prototype product until such time as both parties mutually agree otherwise in
writing. Enova and Purchaser agree that neither party shall publicly display at
trade shows or otherwise promote, market, or sell any prototype Purchaser
Product without the other party's prior written approval.
2.5 Commercial Production. Promptly following the date (the Acceptance
Date") on which Enova and Purchaser mutually agree that successful completion of
the development and testing of Purchaser Product has occurred as contemplated by
Appendix 3, then Purchaser shall engage in commercial production, sale and
support of Products ("Commercial Production").
3 Purchase and Sale of Products. If Commercial Production commences, Enova
agrees to sell and Purchaser agrees to purchase Panther Drive Systems pursuant
to the terms, conditions and provisions of this Agreement.
3.1 Purpose. Purchaser may purchase the Panther Drive Systems and related
spare and replacement parts for the sole purpose of incorporating them into the
Purchaser products listed in Appendix 2 to create Products and as replacement
parts for the Products. Purchaser may use the resulting Products or sell or
lease them, either directly to purchasers or indirectly through one or more
levels of distribution.
3.2 Nonexclusivity. Enova reserves the right to select and authorize other
businesses to sell and service Enova products and parts, to sell products and
parts directly to direct accounts of Enova, to sell products and parts to other
purchasers or original equipment manufacturers for use as an integral part of
assembled equipment, or to any other customers.
3.3 Trained Sales Staff. Purchaser shall maintain a staff of trained sales
personnel in order to ensure maximum market penetration and fulfillment of sales
potential of the Products.
3.4 Promotion of Products. Following the Acceptance Date, Purchaser shall
develop a market and promote the sale of the Products actively, and advertise
with a program of advertising to create awareness of Enova products and their
associated value proposition. Such promotion and advertising may include, but is
not limited to, participation in trade shows, presentations at seminars or
industry meetings, direct mailings to key customer groups and market segments,
direct sales calls, and other appropriate means. Enova reserves the right to
review and disapprove all advertising that contains Enova's name or products as
to form and substance. Purchaser shall deliver to Enova prior to its use a copy
(translated into English if the original is not in English) of any
advertisement, promotion, trademark listing, or display with respect to Enova
products, and Enova shall have the right to review and approve or disapprove the
form and substance of each.
3.5 Sales Literature. Enova shall provide Purchaser with an adequate
supply of Panther Drive System sales literature ("Promotional Materials") at the
prevailing price. Enova shall have no obligation to provide any Promotional
Materials or other materials or documentation to Purchaser in any language other
than English. Enova grants to Purchaser the right to translate or to have
translated into other languages any materials or documentation received from
Enova and relating to the Enova products (including, but not limited to, the
Promotional Materials). Purchaser may use, reproduce, and/or sell such
translations, but only to the extent necessary to support and market Products.
Enova shall not be responsible or liable for the accuracy of such translations
and Purchaser shall indemnify Enova and hold it harmless from all damages,
expenses and liabilities resulting from any translation inaccuracies.
3.6 Press Releases. The relationship established by this Agreement is one
that the parties hereto will want to announce, either jointly or independently,
in the form of press releases, the contents,
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format, and timing of which will be subject to the prior written approval of
Purchaser and Enova. Such approval will not unreasonably be withheld by either
party. No such prior written approval shall be required for disclosure reports
and filings, which either party is required to make as a matter of law.
3.7 Professional Standards. Purchaser shall ensure that all of its
personnel comply with professional sales standards of conduct typical of a well
run business in order to maintain and promote responsible and ethical conduct on
the part of such personnel and thereby enhance and support the reputation and
goodwill of Enova products.
3.8 Records. Purchaser shall keep records of the incorporation of all
Enova products and parts into Purchaser products.
3.9 Inspection. Enova shall have the right during normal business hours,
at its cost with reasonable prior written notice, to inspect all of Purchaser's
facilities, written policies and procedures, and books and records, which relate
to the fulfillment of Purchaser's duties hereunder. Purchaser shall cooperate,
and cause its personnel to cooperate, with any such inspection.
4 Service and Support.
4.1 Qualified Service Provider Appointment. Enova appoints Purchaser as a
Qualified Service Provider ("QSP") with the rights and responsibilities
described in this Section 4.
4.2 Description of QSP Services. Purchaser shall provide services in any
location in which a Product is maintained, used, leased, or sold by Purchaser.
Services to be provided by Purchaser shall include, but are not limited to:
4.2.1 providing to end users operating and maintenance instructions
and advice with respect to Panther Drive Systems. Upon request, Purchaser shall
provide the location and the use of each unit to Enova. Upon commissioning,
Purchaser shall explain the provisions of Enova's warranty to the end user, and
shall instruct the end user in the proper operation of the Panther Drive System
incorporated into the Product.
4.2.2 providing services at such times following installation of
Panther Drive Systems as may be necessary to ensure proper and efficient
operation thereof, including but not limited to commissioning the Panther Drive
System, making installation inspections and necessary adjustments, and
performing all other services reasonably necessary at the time of delivery
thereof.
4.2.3 providing warranty services with respect to Panther Drive
Systems consistent with Enova's Warranty Policy and Procedures.
4.2.4 providing adequate service facilities and vehicles and
providing an adequate staff of trained service personnel in order to provide
service for those Enova products in a professional and timely manner.
4.3 Service Certification. Purchaser shall cause a sufficient number of
its qualified employees to obtain and maintain QSP certification to provide the
services described above. Purchaser shall send such employees, at reasonable
intervals, to Enova's QSP certification seminars in Torrance, California.
Thereafter, Purchaser shall send all such employees to periodic refresher and
new Enova certification seminars so that such employees may maintain their Enova
QSP Certifications. Enova shall bear the cost of preparing such courses and
Purchaser shall bear all travel, lodging, and related costs for sending such
employees to attend such seminars, including a fee to Enova for each course
attended. At Purchaser's request, Enova shall, subject to availability and at
such time upon which the Parties mutually agree, send Enova personnel to present
training seminars for Purchaser's employees at a location to be specified by
Purchaser, provided that Purchaser shall pay all documented travel, lodging, and
related costs, plus a fee to Enova for each course taught.
4.4 Service Parts. Purchaser shall purchase and maintain a sufficient
inventory of service parts as prescribed by Enova according to Enova's uniform
parts inventory stocking guidelines in effect
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from time to time and based on the field population of Products to be serviced
by Purchaser, so as to be able to fulfill its service responsibilities in a
timely and professional manner. Purchaser may sell or deliver Enova parts only
to end users who purchased Products from Purchaser or to another Enova QSP.
Under no circumstances shall Purchaser sell, lease, distribute, deliver, or
transfer Enova parts unless done in connection with a specific Panther Drive
System warranty repair or replacement.
4.4.1 Parts. In providing services on Enova products, Purchaser
shall use only authorized Enova parts, unless Enova agrees otherwise in writing.
4.4.2 Service Part Discount. The discount from list price for all
service parts will be <REDACTED>*
4.4.3 Service Facilities, Prices. All services billable to end users
or submitted as a warranty claim to Enova shall be provided at the same rates.
Service parts prices charged by Purchaser shall not exceed the Enova list price,
plus applicable freight or taxes in the location of service.
4.5 Purchaser's Basic Warranty Service Obligation. Purchaser's primary
warranty service duty as a QSP is to identify and replace malfunctioning parts
under warranty promptly and efficiently in accordance with Enova's technical
service policies and parts stocking guide in effect from time to time. Purchaser
shall make reasonable efforts to determine whether the end user has a valid
warranty claim. Purchaser shall not recondition or retrofit any product or part
and shall keep in a central location for Enova's inspection all defective Enova
products and parts. At Enova's direction and expense, Purchaser shall return
promptly to Enova all such defective products and parts. Purchaser shall not
instruct an end user to return any Enova product or part directly to Enova.
4.6 Compensation for Warranty Repairs. Enova shall compensate Purchaser
for services associated with warranty repairs upon receipt and approval of a
valid warranty claim form pursuant to Enova's Warranty Procedure. As part of the
warranty claim procedure, Purchaser comply with Enova's warranty acceptance
criteria, as set forth in Appendix 4 and submit to Enova the information
required by Enova to demonstrate compliance with the warranty acceptance
criteria. <REDACTED>* Enova shall pay Purchaser for its labor on the Enova flat
rate schedule attached as Appendix 5 for removal and replacement of serviceable
components. Enova shall reimburse Purchaser for the price of service parts owned
and used by Purchaser to provide warranty service at the rate of <REDACTED>*.
Enova reserves the right to verify any claims that a Panther Drive System
requires warranty service under the product warranty. If Enova determines that
any Panther Drive System is free from defects or otherwise conforms to Enova's
obligations and warranties under this Agreement, <REDACTED>* shall pay all
reasonable costs of such determination, including any labor, travel,
transportation and shipping expenses. In the event that Enova determines that
the service or repair is not covered under the terms of the warranty, Enova
shall not be required to reimburse Purchaser for labor, parts, or other costs
incurred in such service or repair.
4.7 System Upgrades. Enova may change the design of the Panther Drive
System from time to time and, at its sole discretion, provide upgraded parts,
including without limitation hardware, firmware and software, for the Panther
Drive Systems (collectively, "Upgrades") shipped to Purchaser but which have not
yet been incorporated in Products and shipped to an end user. In the event Enova
decides to provide such an Upgrade, Enova will notify Purchaser of the Upgrade,
and Enova and Purchaser will mutually agree upon a time for the Upgrade to be
installed and the party or parties who will do the installation.
4.8 Availability of Parts. During the term of this Agreement and for a
period of <REDACTED>* thereafter, Enova shall maintain the capability to
manufacture or otherwise provide to Purchaser spare parts for the Panther Drive
Systems that it purchases hereunder, <REDACTED>*; provided that in response to a
request by Purchaser to supply such spare parts during this period, Enova may,
at its option, instead provide to Purchaser all necessary information to enable
Purchaser to acquire each spare part from component suppliers. At any time that
Enova is still manufacturing or otherwise providing spare parts to Purchaser
under this Agreement, Enova may, at its option, make substitutions in the spare
parts it provides so long as the substitute part has equivalent or better form,
fit and function.
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4.9 Support Documentation. Enova will make available for purchase by
Purchaser comprehensive training, repair, and service manuals for use in
maintaining and servicing the Panther Drive Systems.
4.10 Manufacturer Support.
4.10.1 Scope of Support. Enova will use reasonable commercial
efforts to make its technical personnel available as reasonably necessary to
provide after-sale assistance to Purchaser technical and service personnel to
resolve technical support issues. Such support shall consist principally of
making appropriate Enova technical personnel available to <REDACTED>*. Enova
will endeavor to respond to Purchaser inquiries within <REDACTED>* after receipt
and will endeavor to assist Purchaser in resolving technical support issues as
soon as practicable through the exercise of diligent efforts. Enova will provide
such support to Purchaser personnel only and shall have no obligation to provide
any support whatsoever directly to any Purchaser customer.
4.10.2 Fees and Expenses. Enova will provide <REDACTED>*. Hours in
excess of that amount shall be billed at Enova's standard consulting rate as in
effect at the time services are rendered. Except for on-site visits, if any,
that Enova personnel make in connection with the performance of warranty
services, Purchaser shall reimburse Enova for expenses that its personnel incur
in performing on-site support and shall, in addition, pay Enova's standard
consulting rate for such personnel as in effect at the time services are
rendered.
5 Order, Delivery and Payment.
5.1 Prices. The prices of all Enova goods and services to be delivered
hereunder for Development Efforts shall be as set forth on Appendix 3. The
prices of all Enova goods and services to be delivered hereunder for Commercial
Production purposes shall be as set forth on Appendix 7. In addition, and except
to the extent that Purchaser may provide proper exemption certificates,
Purchaser shall reimburse Enova in the amount of any federal, state or local
excise, sales, use and other taxes, duties, tariffs or other governmental fees
withheld and/or payable with respect to the manufacture, transportation, use, or
sale of each Panther Drive System or component that Purchaser purchases, whether
such taxes are imposed on Purchaser or required to be collected by Enova, or
imposed on Enova products, Enova, or Purchaser in connection with the sale of
Enova products, and whether such taxes are on receipts and gross income or are
occupation or excise taxes; provided, however, that Purchaser shall not be
responsible for taxes upon the income that Enova receives for its sale of Enova
products, parts and services to Purchaser hereunder. Whenever possible, such tax
or taxes shall be added to the invoice for the applicable Enova products as a
separate charge or invoiced separately.
5.2 Rolling Forecast. With respect to Panther Drive Systems and related
spare parts, Purchaser shall deliver to Enova, <REDACTED>*. Forecasts shall
reflect Purchaser's good faith expectations of end user demand, and Purchaser
shall act in a commercially reasonable manner to avoid creating production
capacity problems for Enova.
5.3 Calculation of Annual Volume Pricing. <REDACTED>* following the
Effective Date during the term of this Agreement, Enova shall sell products to
Purchaser at <REDACTED>* as set forth in Appendix 7. <REDACTED>* of the
Effective Date, the parties will confer and mutually agree upon production
volumes for the following year. At the end of <REDACTED>* in which Purchaser
does not release for shipment the forecasted amounts, Enova will invoice
Purchaser <REDACTED>*
5.4 Purchase Orders and Shipment Terms. Purchaser shall order and release
Enova products and services for delivery by delivering to Enova a purchase order
("Purchase Order"). This Agreement will apply to every Purchase Order for Enova
products issued to Enova by Purchaser unless the parties expressly agree in
writing that this Agreement does not apply. Subject to the following sentence,
each Purchase Order accepted by Enova, together with this Agreement, shall
constitute the entire agreement between Purchaser and Enova with respect to the
purchase, sale and delivery of the Enova products described in such Purchase
Order. Any terms or conditions stated in any Purchase Order, acknowledgment or
invoice (except for details of price, quantity, delivery schedule and other
details of delivery which are not inconsistent with the terms of this Agreement)
shall be of no force and
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effect, and no course of dealing, usage of trade, or course of performance shall
be relevant to explain or modify any term expressed in the Agreement.
5.5 Procedures. From time to time during the term of this Agreement,
Purchaser may order quantities of Enova products from Enova by submitting to
Enova, at least the number of days in advance of the requested delivery dates
specified in Appendix 7 hereto as the required "Lead Time," a written Purchase
Order stating the items and quantities of Enova products which Purchaser wishes
to purchase from Enova and the requested delivery dates for such items. As
permitted below, Purchaser may also request adjustments to the delivery dates in
a previously accepted Purchase Order by submitting a new Purchase Order (a
"Modified Purchase Order") specifying the requested changes. Enova shall accept
any Purchase Order issued by Purchaser within the scope of the most recent
forecast submitted to Enova pursuant to Section 5.2 above and in conformance
with the terms of this Agreement, including the provision of adequate Lead
Times. Lead Times are estimates and are subject to change, except with respect
to any Purchase Order previously accepted by Enova. Unless canceled or deferred
as permitted below (via a Modified Purchase Order), Purchaser shall be obligated
to purchase the quantities of Enova products on the schedule specified in any
Purchase Order accepted by Enova. Enova shall acknowledge in writing each
Purchase Order within <REDACTED>* of receipt, and such Purchase Order shall be
deemed accepted by Enova unless, within ten (10) days of receipt of such
Purchase Order, Enova submits to Purchaser, in writing, an objection to the
Purchase Order based upon the failure of Purchaser to comply with this Agreement
in submitting the Purchase Order (including, without limitation, the obligation
to submit monthly rolling forecasts in accordance with Section 5.2 above). If
Enova so objects to any Purchase Order, such Purchase Order shall not be binding
on either party until a compliant Purchase Order is submitted by Purchaser to
Enova. A Purchase Order becomes a part of this Agreement in accordance with this
Section 5 only after it is accepted in writing by Enova or is deemed accepted in
accordance with the above provisions.
5.6 Reschedule/Cancellation. Purchaser and Enova acknowledge that
substantial lead-times are involved in the manufacture and delivery of the Enova
products and that Enova would likely suffer significant loss in the event that
Purchaser seeks to cancel an order for Enova products within such lead-times. In
recognition of these factors, any initial Purchase Order accepted by Enova shall
be subject to the terms regarding cancellation or deferral of delivery of Enova
products by Purchaser set forth in Appendix 7.
5.7 Delivery. All deliveries of Enova products shall be made <REDACTED>*,
California facility or such other facility as Enova may designate ("FOB Point").
In the absence of written shipping instructions from Purchaser, Enova will
select the carrier and use best ground transportation and ensure that the Enova
products are adequately insured. In the event Enova pays any shipping, freight,
or insurance charges on behalf of Purchaser, Purchaser shall promptly reimburse
Enova for all such shipping, freight or insurance charges incurred on behalf of
Purchaser. If shipment of any Enova products is delayed at Purchaser's request,
Purchaser shall bear <REDACTED>* of holding such Product, and Enova may invoice
Purchaser for such Enova products on the date when Enova is prepared to make
shipment.
5.8 Title And Risk Of Loss. <REDACTED>*
5.9 Inspection; Acceptance. Purchaser shall inspect and may reject all
Enova products that are defective <REDACTED>* after the date of Purchaser's
receipt thereof. If Purchaser fails to effectively reject any Enova products in
a written document delivered to Enova within <REDACTED>* (other than those
described in the following sentence must thereafter be remedied through the
product warranty in Appendix 6). This provision shall in no way impair
Purchaser's rights with respect to latent or other defects which would not have
been readily ascertainable upon inspection of the Enova products within
<REDACTED>*.
5.10 Payment Terms. Enova will invoice Purchaser for Enova products
purchased upon delivery of such products to the FOB Point, and Purchaser shall
pay all such invoices by check or wire transfer within <REDACTED>* after the
invoice date. Enova reserves the right to require reasonable assurances of
payment by Purchaser (for example, the issuance of a letter of credit from a
reputable bank provided by Purchaser to Enova not later <REDACTED>* prior to the
scheduled delivery date).
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Enova may, from time to time, evaluate Purchaser's credit standing and, on that
basis, establish a credit limit to accommodate Purchaser's issuance of Purchase
Orders as herein provided. Purchaser shall provide any reasonable assistance
requested by Enova to make such evaluation.
5.11 Late Payments. Regardless of what payment terms apply to any Purchase
Order, Purchaser shall pay to Enova <REDACTED>* or part thereof or the maximum
amount permitted by law, whichever is less. Purchaser hereby agrees to make all
payments when due for the purchase of any and all Products accepted by Purchaser
regardless of any offset or claim which Purchaser might otherwise be entitled to
assert. Such agreement shall be without prejudice to Purchaser's right to pursue
any claim or remedy except as an offset against any payment owed by Purchaser
under this Agreement.
5.12 Changes. Enova expects to be able to provide Purchaser with advance
notice regarding changes in the design of any Enova products. Enova shall have
the right, however, to change the design of Enova products at the same time that
Enova provides notice to Purchaser and shall have the right at any time to make
changes in materials and to improve Enova products, provided that the resulting
modified product meets or exceeds any applicable specifications under this
Agreement for such product and the modifications do not materially affect the
form, fit, or function of such products.
6 Warranties to End Users.
6.1 Enova's End User Product Warranty. Purchaser shall include Enova's End
User Product Warranty in each agreement for sale or lease of the products and
parts entered into by Purchaser with end users and Purchaser shall furnish a
copy of such End User Product Warranty to the end user upon delivery of each
product. Enova's End User Product Warranty in effect on the Effective Date is
attached as Appendix 6. Enova reserves the right to modify, change or revise the
product warranty at any time upon notice to Purchaser, with such modifications,
changes or revisions applicable for any products or parts that are ordered after
the revision date. If any such modification substantially changes any of the
discussions or agreements Purchaser may have had with its then current or
prospective customers, Enova and Purchaser will discuss and determine how to
resolve such modifications.
6.2 Any Additional Purchaser Warranties. Enova shall have no obligation
with respect to, and Purchaser shall be solely responsible for and shall
indemnify and hold harmless Enova with respect to, any warranties beyond Enova's
End User License and Warranty that Purchaser may provide with respect to any
product or part.
7 Trademarks and Branding.
7.1 License to Use Enova Trademarks. Purchaser acknowledges that Enova is
the owner of all right, title, and interest in and to Enova trademarks. Enova
hereby grants to Purchaser a license, for so long as this Agreement remains in
effect, to use Enova trademarks, provided that Purchaser uses the Enova
trademarks solely in marketing, distributing, and selling Panther Drive Systems
as integrated in Products under the terms and conditions of this Agreement and
in accordance with the specifications as to style, color, and typeface for the
Enova trademarks. Upon termination of this Agreement, Purchaser shall take all
action necessary to transfer and assign to Enova or Enova's nominee any right,
title, or interest in or to any Enova trademarks that Purchaser may have
acquired in any manner as a result of the marketing, distribution, sale, or
resale of any Enova product, and Purchaser shall cease using any Enova
trademarks.
7.2 Branding. Purchaser shall prominently display on the Products, as well
as on all promotional and other collateral materials relating to, and all
packaging for Products, such trademarks, trade names, service marks,
designations that Enova may adopt to identify it or any Enova products, or any
patent, patent application, or other proprietary markings in the size and manner
that Enova designates from time to time. Under no circumstances shall Purchaser
remove any such proprietary notice or marking affixed to any Enova product,
parts, or related materials.
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8 Term and Termination
8.1 Term: This Agreement shall commence on the Effective Date and continue
in full force and effect for a period of <REDACTED>*. Thereafter, this Agreement
automatically shall renew for subsequent terms of <REDACTED>*, unless either
party provides the other party with notice of its intention not to renew this
Agreement no fewer <REDACTED>* prior to the end of the then-current term.
8.2 Termination by Either Party: Each party may terminate this Agreement
immediately by delivering to the other party written notice of such termination
in the event of any of the following:
8.2.1 failure of the Prototype or the Panther Drive System provided
as part of the Development Efforts to pass acceptance test criteria as outlined
in Appendix 3;
8.2.2 a material breach of this Agreement by the other party that
continues uncured for thirty (30) calendar days following written notice thereof
from the non-breaching party;
8.2.3 a material breach of confidentiality or nondisclosure
agreements by the other party, including, without limitation, Section 9 below;
8.2.4 the other party's failure to pay when due any indebtedness owed by
Purchaser to Enova for Enova products or parts;
8.2.5 the execution by the other party of an assignment for the
benefit of creditors, or the commencement by or against the other party of
voluntary or involuntary proceedings (which are not dismissed within 60 calendar
days) under any bankruptcy, reorganization, or similar laws of any jurisdiction,
or if any order shall be made or any resolution passed for the winding up,
liquidation or dissolution of the other party, if a receiver be appointed for it
for all or substantially all of its assets, or if a substantial portion of its
goods or properties shall be taken in execution; or
8.2.6 the other party ceases to do business or otherwise terminates
its business operations relevant to this Agreement.
8.3 Termination by Enova. In addition to the grounds for termination set
forth in Section 8.2, Enova may terminate this Agreement upon
8.3.1 Any attempted or actual transfer or assignment of this
Agreement or any right or obligation hereunder by Purchaser, whether by
operation of law, change of control or otherwise, without the prior written
approval of Enova; or if
8.3.2 Purchaser merges into any entity, or the Sale of a Controlling
Stock Interest in Purchaser occurs, in each case other than in a transaction in
which the person or persons controlling the surviving, continuing or acquiring
person after the transaction is or are substantially identical to the person or
persons controlling Purchaser before the transaction; provided that, "Sale of a
Controlling Stock Interest" of Purchaser means the acquisition by any "person"
or "group," as such terms are defined under the Securities Exchange Act of 1934,
of 50% or more of the voting securities of Purchaser.
8.4 Termination of Purchase Orders. Either party may terminate a Purchase
Order under this Agreement under the same circumstances as would give rise to a
right to terminate this Agreement.
8.5 Payment. Any termination of this Agreement shall not release Purchaser
or Enova from paying any amount that it may then owe to the other party. In the
event of termination of this Agreement, all of Purchaser's debt to Enova and all
of Enova's obligations to Purchaser pursuant to this Agreement shall become
immediately due and payable on the date of termination. Termination does not
relieve Purchaser of the obligation to pay for Enova products or parts ordered
but not shipped prior to termination.
8.6 Survival of Obligations. In addition to any provisions that survive
the termination of this Agreement by their express terms and any provisions that
would be necessary or useful to the parties in
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enforcing their respective rights under the Agreement, the following provisions
shall survive the termination of this Agreement: 3.8, 3.9, 4.8 (for a period of
five years), 5.10, 5.11, 6, 8.5, 8.6, 9, 10-15, and Sections 4.0 and 5.0 in
Appendix 3.
9 Confidential Information and Intellectual Property.
9.1 Confidential Information. Confidential information shall be governed
by the standard Enova Nondisclosure Agreement, pursuant to Appendix 8, the terms
and provisions of which are incorporated herein by this reference and binding
upon the parties hereto.
9.2 Intellectual Property. The sale of Enova products to Purchaser does
not convey to Purchaser any intellectual property rights in such Enova products,
including but not limited to any rights under any patent, trademark, copyright,
or trade secret. Except as expressly provided in Section 9.3 of this Agreement,
Purchaser may not use or sell any Enova product, alone or in combination with
other products, without a separate license from Enova under all applicable
patents, copyrights and trademarks. Purchaser's use and sale of any Enova
products shall be solely in accordance with the terms and conditions of this
Agreement. Neither the sale of any Enova Product nor any provision of this
Agreement shall be construed to grant to Purchaser, either expressly, by
implication or by way of estoppel, any license under any patents or other
intellectual property rights of Enova covering or relating to any other product
or invention or any combination of Enova products with any other product.
Purchaser shall use the Enova products furnished by Enova solely in accordance
with the terms of this Agreement, and Purchaser shall not, directly or
indirectly, disassemble, decompile, reverse engineer, or analyze the physical
construction of any of the Enova products for any purpose.
9.3 License Grant. Enova hereby grants to Purchaser <REDACTED>* under
Enova's intellectual property rights to use the Panther Drive Systems and any
hardware, firmware, and software embodied therein, in combination with Purchaser
products and/or the technology of a third person for the specific purpose of
providing primary propulsion power in Products as listed in Appendix 2.
10 Legal Compliance.
10.1 Compliance with Applicable Law. Purchaser shall ensure that all Enova
products and parts, and Purchaser's services with respect to them, including
without limitation the sale, leasing, rental, installation, commissioning and
warranty service, comply with all applicable laws, rules, regulations and
standards within the sales territory. Purchaser shall obtain and maintain, at
its sole expense, any and all certifications, licenses, other authorizations,
ratings and approvals required or advisable under the laws of the sales
territory and elsewhere in connection with Purchaser's integration,
distribution, sales, and provision of services for Enova products and parts.
Without limiting the generality of the foregoing, Purchaser shall (a) supply and
fit all signs and safety notices to the Enova units and provide all manuals and
instructions so that they comply with all applicable laws and regulations, and
(b) obtain all necessary governmental approvals and licenses. Enova shall assist
Purchaser where possible in obtaining such approvals and compliance.
10.2 Improper Payments. Purchaser and Enova represent and warrant that
they have not made, or promised to make, any payment to any public official in
violation of the United States Foreign Corrupt Practices Act or other applicable
laws. Purchaser and Enova represent and warrant that they are aware of the
applicable United States regulations governing bribery, agency, and government
purchases and any other relevant regulations and that they shall comply with
such rules and regulations. Each party hereto agrees to hold the other harmless
from and against the consequences of a violation by it of this provision.
10.3 Export Regulations. Purchaser represents and warrants that it has and
will comply in all material respects with all provisions of United States export
regulations and laws. Purchaser acknowledges that it has read and is familiar
with these regulations and laws and shall, for a period of at least two (2)
years after the expiration or earlier termination of this Agreement, fully
comply with all provisions of these regulations and shall permit Enova's
representatives and/or representatives of the United States government to
inspect all such records as may be required. Purchaser represents and warrants
that it shall provide Enova, upon Enova's request, with copies of bills of
lading and other
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Enova Panther(TM) Propulsion System Product and Services Agreement
shipping documentation in order to demonstrate Purchaser's compliance with the
foregoing. Purchaser represents and warrants that it shall obtain written
assurance from end users of the Panther Drive Systems that they are not intended
to be used for any purposes prohibited by United States export laws and
regulations and shall provide Enova with such information and documentation as
Enova reasonably requests in order to verify that Purchaser's export of the
Panther Drive Systems complies with applicable United States export regulations
and laws.
11 DISCLAIMER. EXCEPT FOR THE LIMITED WARRANTY GIVEN ONLY TO END USERS PURSUANT
TO ENOVA'S END USER LICENSE AND WARRANTY, ENOVA GIVES NO WARRANTIES REGARDING
ENOVA AND THIRD-PARTY PRODUCTS, PARTS, AND SERVICES THAT ENOVA PROVIDES
HEREUNDER AND, TO THE EXTENT PERMITTED BY LAW, DISCLAIMS ALL EXPRESS, IMPLIED
AND STATUTORY WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NONINFRINGEMENT.
SPECIFICALLY, BUT WITHOUT LIMITING THE APPLICATION OF THE FOREGOING DISCLAIMER,
THE PARTIES RECOGNIZE AND AGREE THAT THE ENOVA PRODUCTS AND PARTS MAY ENCOUNTER
OPERATIONAL DIFFICULTIES. ENOVA DOES NOT WARRANT <REDACTED>*. EXCEPT FOR ACTIONS
FOR NONPAYMENT OR BREACH OF CONFIDENTIALITY OR IP RIGHTS, ANY ACTION FOR AN
ALLEGED BREACH OF ANY CONTRACT OF SALE OR OF WARRANTY MUST BE COMMENCED WITHIN
<REDACTED>* AFTER THE DATE ON WHICH THE CAUSE OF ACTION ACCRUES.
12 Intellectual Property Infringement Protection. Enova shall have the liability
expressed in this paragraph with respect to a claim that an Enova product or
part infringes any intellectual property right of any third party, provided
that: <REDACTED>* necessary to perform Enova's duties under this paragraph. In
no event shall Enova be liable for any claim of infringement based on the use of
any Enova product altered in whole or in part by Purchaser and/or its end user
or used in connection with absolutely any equipment, process, software or
technology other than that necessary for use of the Enova product in the Product
pursuant to specifications expressly approved by Enova. If an Enova product or
part is held, or believed by Enova, to infringe, Enova shall have the sole
option in its sole discretion and at its sole expense to <REDACTED>*. Enova
shall have the right to refuse to supply additional Enova products or parts
subject to a claim or threatened claim of infringement. THE FOREGOING STATES THE
SOLE AND EXCLUSIVE LIABLITY OF ENOVA FOR INFRINGEMENT OF INTELLECTUAL PROPERTY
RIGHTS UNDER THIS AGREEMENT, AND IS IN LIEU OF ALL WARRANTIES, EXPRESS, IMPLIED
OR STATUTORY IN REGARD TO THOSE ITEMS, INCLUDING WITHOUT LIMITATION THE WARRANTY
AGAINST INFRINGEMENT SPECIFIED IN THE UNIFORM COMMERCIAL CODE.
13 Limitation of Liability In General. Independent of, severable from, and to be
enforced independently of any other enforceable or unenforceable provision of
this Agreement, <REDACTED>*, WHETHER SUCH CLAIM IS BASED ON THEORIES OF
CONTRACT, NEGLIGENCE, TORT (INCLUDING STRICT LIABILITY) OR OTHERWISE - AS A
RESULT OF BREACH OF ANY WARRANTY OR OTHER TERM OF THIS AGREEMENT, REGARDLESS OF
WHETHER ENOVA WAS ADVISED, HAD OTHER REASON TO KNOW, OR IN FACT KNEW OF THE
POSSIBILITY OF SUCH DAMAGES. Purchaser shall indemnify, defend, and hold
harmless Enova and its directors, shareholders, officers, agents, employees,
successors, and assigns from and against any and all claims arising from, in
connection with, or related in any way, directly or indirectly, to Purchaser's
or end user's improper use or operation of the Panther Drive Systems or any
other products provided hereunder, including without limitation, all damages
resulting from any products liability claim.
14 Dispute Resolution: All disputes, controversies, claims for temporary or
permanent redress or relief arising out of or with reference to this Agreement
and relating to the ownership, licensing, use, sublicensing, violation,
infringement or performance hereunder with respect to intellectual property
rights shall be brought by either party <REDACTED>* or other court of competent
jurisdiction. All other disputes, controversies, claims for temporary or
permanent redress or relief arising out of or with reference to this Agreement
shall be settled by arbitration by a panel of three arbitrators under the
commercial arbitration rules of the American Arbitration Association, Endispute
or the Judicial Arbitration and Mediation Service. The location of the
arbitration shall be <REDACTED>*. Such arbitration shall be conducted by three
arbitrators, one chosen by Enova, one chosen by Purchaser and a third, neutral
arbitrator, selected by the first two. The award of the arbitrators shall be
final and binding and the parties
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Enova Panther(TM) Propulsion System Product and Services Agreement
consent to the exclusive jurisdiction of any <REDACTED>* for purposes of
enforcing any decision of the arbitration panel. By this Agreement, the parties
do not intend to deprive any court of its jurisdiction to issue a prearbitral
injunction, prearbitral attachment or other order in aid of arbitration
proceedings and enforcement of the award, including without limitation,
injunctive relief for the protection of intellectual property rights.
15 Miscellaneous:
15.1 Governing Law. This Agreement will be governed in all respects by the
laws of the State of <REDACTED>* as such laws are applied to contracts between
<REDACTED>* residents entered into and to be performed entirely within the State
of <REDACTED>*. The parties agree to exclude entirely the application of the
United Nations Convention on Contracts for the International Sale of Goods from
this Agreement and from any agreement or transaction that may be executed or
carried out pursuant to this Agreement.
15.2 Entire and Sole Agreement. This document, together with the attached
exhibits specifically referenced in this document, constitutes the complete and
exclusive statement of the mutual understanding of the parties with respect to
its subject matter. This Agreement supersedes any and all prior or
contemporaneous understandings, representations, or other communication between
the parties of any sort, whether written or oral, with respect to its subject
matter. The terms of this Agreement shall supersede any inconsistent terms and
conditions of any Purchase Order, regardless of form, issued by Purchaser to
Enova. In any proceeding brought to enforce or interpret the terms of this
Agreement, the nonprevailing party shall pay to the prevailing party the
prevailing party's attorneys' fees and costs incurred.
15.3 Assignment. Neither party shall assign this Agreement or any right or
interest under this Agreement or delegate any obligation to be performed under
this Agreement without the other party's prior written consent, which consent
shall not be unreasonably withheld, and any attempt to do so shall be void.
15.4 Force Majeure. Each party's performance under this Agreement (i)
shall be suspended (other than the obligation to pay monies already due to
either party or becoming due as a result of filling orders placed and accepted)
for so long as such performance is hindered or prevented by events or
occurrences beyond its reasonable control ("Force Majeure"), such as, but not
limited to, riots, labor disputes of a general nature, national or civil wars
(declared or undeclared), insurrections, rebellions, terrorist acts, embargoes,
civil disturbances, dispositions or orders of governmental authority (whether
such authority be actual or assumed), acts of civil or military authority,
fires, strikes, delays in transportation, inability to obtain necessary labor,
manufacturing facilities or materials from usual sources and acts of God and
(ii) any delays resulting from any such cause shall extend the time for
performance correspondingly. If a failure to perform results from a governmental
law, rule, regulation, disposition or order and the affected party is unable to
perform, after making reasonable efforts to comply with such law, rule,
regulation, disposition or order, the matter shall be deemed a Force Majeure. IN
NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR GENERAL, CONSEQUENTIAL,
INDIRECT OR SPECIAL DAMAGES DUE TO ANY FORCE MAJEURE.
15.5 Counterparts. This Agreement may be executed and delivered in one or
more counterparts and by facsimile transmission, each of which shall be deemed
an original, but all of which together shall constitute one and the same
instrument.
15.6 Severability. In the event any provision of this Agreement is held to
be invalid or unenforceable, the remaining provisions shall remain in full force
and effect.
15.7 Relationship of the Parties. Purchaser shall conduct its business in
the purchase, distribution, marketing, sale, installation, commissioning and
provision of services with respect to Enova products hereunder as a principal,
for its own account and at its own expense and risk. Nothing contained in this
Agreement shall be construed as creating a joint venture, partnership, agency,
or employment relationship between the parties hereto nor shall either party
have the right, power, or authority to create any obligation or duty, express or
implied, on behalf of the other party. Purchaser shall
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not act or represent itself, either directly or by implication, as an agent for
Enova and will not attempt to create any obligation, or make any representation,
warranty, or covenant that Enova has not specifically authorized in working on
behalf, or in the name, of Enova.
15.8 No Third Party Beneficiaries. Unless otherwise expressly provided, no
provisions of this Agreement are intended or shall be construed to confer upon
or give to any person or entity other than Enova or Purchaser, any rights,
remedies or other benefits under or by reason of this Agreement.
15.9 Notices. All notices or other communications that shall or may be
given pursuant to this Agreement, shall be in writing, shall be sent by
certified or registered air mail with postage prepaid, return receipt requested,
by facsimile, e-mail, reputable overnight or other rapid courier with tracking
capabilities, or by hand delivery; provided, however, that if a notice or other
communication is sent via facsimile or e-mail, such notice or communication
shall also sent by one of the other means of transmittal (with the exception of
facsimile or e-mail, as the case may be). Such communications shall be deemed
given and received upon delivery if sent by overnight courier or hand delivered,
within three business days of mailing, if sent by certified or registered mail,
and within the time period set forth above for such method other than facsimile
or e-mail if sent by facsimile or e-mail, and shall be addressed to the Parties
as set forth in the preamble to this Agreement or such other addresses as the
Parties may designate and provide notice of in writing from time to time in
accordance with this Section.
15.10 Waiver. No waiver of any provision of this Agreement or of any
rights or obligations of either party hereunder shall be effective unless in
writing and signed by the party waiving compliance, and any such waiver shall be
effective only in the specific instance and for the specific purpose stated in
such writing.
15.11 Amendments. This Agreement shall not be modified, amended, or in any
way altered except by an instrument in writing signed by the parties hereto.
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Enova Panther(TM) Propulsion System Product and Services Agreement
IN WITNESS WHEREOF, the parties have entered into this Agreement as of the
Effective Date.
ENOVA SYSTEMS, INC. PURCHASER
By: ______________________________ By: __________________________
Name: Carl Dean Perry Name: Isao Yamamoto
Title: President & CEO Title: President & CEO
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Enova Panther(TM) Propulsion System Product and Services Agreement
List of Appendixes
16.1 Appendix 1. Panther Drive System Products covered by this agreement.
16.2 Appendix 2. Purchaser Products covered by this agreement.
16.3 Appendix 3. Development Program Responsibilities, Acceptance Criteria,
and Payments and Expenses
16.4 Appendix 4. Warranty Acceptance Criteria for Purchaser Product
16.5 Appendix 5. Warranty Labor Flat Rate Schedule
16.6 Appendix 6. End User Product Warranty
16.7 Appendix 7. Prices and Other Commercial Terms
16.8 Appendix 8. Non-Disclosure Agreement
16.9 Appendix 9. Additional Terms for Development Efforts.
16.10 Appendix 10. Additional Terms for Commercial Production and Additional
General Terms.
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Enova Panther(TM) Propulsion System Product and Services Agreement
Appendix 1
Panther Drive System Products
<REDACTED>*
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Enova Panther(TM) Propulsion System Product and Services Agreement
Appendix 2
Purchaser Products
Rail Bus and 30-Foot Street Bus with GVWR less than 35,000 pounds. First
Prototype vehicle will be a Mitsubishi ROSA microbus.
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Enova Panther(TM) Propulsion System Product and Services Agreement
Appendix 3
Development Program Responsibilities, Acceptance Criteria, Special Terms, and
Payments and Expenses
1.0 Development Program Responsibilities.
1.1 Joint Responsibilities. In addition to the joint responsibilities
described in Appendix 9, the parties shall have the following joint
responsibilities in performing the Development Efforts;
1.1.1 None.
1.2 Enova Responsibilities. Enova shall, in addition to the
responsibilities described in Section 1.1 to Appendix 3, do the following:
1.2.1 Panther Drive System and Other Purchased Deliverables. Enova
Shall be responsible for providing to Purchaser material and services as
outlined Attachment 1 to Appendix 3 to support the development program and
prototype vehicle build.
Personnel and Equipment. Make available at the Purchaser facility in Toyama,
Kanagawa and Shizuoka Prefectures, Japan, the following personnel and equipment
to support the assembly and testing of the Prototype:
Engineering and Technical personnel to support vehicle
integration and drive system tuning, including appropriate
diagnostic tools.
1.2.2 Consulting Services. Advise Purchaser on the components to be
used by Purchaser in the Prototype and incorporate these into the Panther Drive
System control system where applicable, and provide support and guidance in the
total integration of the Panther Drive System into the Prototype, as needed.
1.2.3 Training. Provide the following training services to the
number of Purchaser personnel at the times and locations specified below:
<REDACTED>*
1.2.4 Documentation. Develop and provide to Purchaser in connection
with the sale of Panther Drive Systems training, service and repair manuals for
the Panther Drive Systems as follows:
<REDACTED>*
1.3 Purchaser Responsibilities. Purchaser shall, in addition to the
responsibilities described in Section 1.1 to Appendix 3, be responsible for the
design of the Prototype and the procurement and assembly of all components for
the Prototype, as further specified on Attachment 2 to Appendix 3.
2.0 Deliverables Schedule. Each party will use reasonable commercial efforts to
deliver the products and materials and to perform the services and other
obligations within the period specified below:
2.1 Enova will ship the 120kW drive system for the prototype vehicle
within <REDACTED>* of signing this agreement.
2.2 Purchaser will complete prototype vehicle build, complete drive system
integration, and begin field trials within <REDACTED>* of receipt of the Enova
Drive System.
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Enova Panther(TM) Propulsion System Product and Services Agreement
3.0 Acceptance Criteria.
1. Enova and Purchaser will work together to complete the acceptance criteria
table below. Drive system performance will not be required to exceed product
specifications.
Parameter Target Responsible
Acceleration 0 - 30mph __________ Enova
Top Speed __________ Enova
Drive System Efficiency kWhr/mile __________ Enova
Battery Peak Power __________ Enova
Gen Set Peak Power 28kW______ Enova
Vehicle GVWR 5,800 kg Purchaser
Rear Axle Ratio 4.444 Purchaser
Tire Size 205/85R16-111/109LT Purchaser
Drag Coefficient __________ Purchaser
2. Enova and Purchaser will complete the acceptance criteria table within
<REDACTED>* of execution of this contract.
4.0 Special Terms. Special terms that apply to the Development Efforts are set
forth in Appendix 9.
None
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Enova Panther(TM) Propulsion System Product and Services Agreement
Attachment 1 to Appendix 3
Panther Drive System and Other Purchased Deliverables
In support of the Development Program
<REDACTED> *
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Enova Panther(TM) Propulsion System Product and Services Agreement
Attachment 2 to Appendix 3
Prototype Components to be Supplied by Purchaser
Vehicle for prototype build, batteries, wire harnessing, and other similar
mechanical and electrical system interconnections.
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Enova Panther(TM) Propulsion System Product and Services Agreement
Appendix 4
Warranty Acceptance Criteria for Purchaser Product
1 Vehicle Application
1.1 The Purchaser will submit a technical paper to Enova describing the
application. The document shall include:
1.1.1 Overall description of the product.
1.1.2 Panther Drive System load profile and drive cycle, including
maximum grade, maximum speed, and average power.
1.1.3 General description of the Panther Drive System installation,
including:
<REDACTED>*
1.1.4 Product regulatory requirements
1.1.5 Product safety features and options
1.1.6 Product monitoring and/or diagnostics
1.2 Enova review of the technical paper and written approval from Enova
will complete this step.
2 Prototype Installation
2.1 The Purchaser will submit engineering drawings. The drawings will
detail:
<REDACTED>*
2.2 The Purchaser will submit a specification for the control system and
system interface to the Panther Drive System. The specification will include:
2.2.1 <REDACTED>*
2.3 Enova review of the drawings and specification and written approval
from Enova will complete this step.
3 Installation Approval Inspection
3.1 At its discretion, Enova will arrange to visit the purchaser and
physically inspect the completed installation to ensure that it meets the
descriptions and specifications provided above.
3.2 Written approval of the installation from Enova will complete this
step.
4 Beginning of warranty coverage.
4.1 When the three steps above are completed, the Purchaser's installation
is approved and the Enova End User Product Warranty is applicable. Material
changes in the installation of Purchaser's installation will require
re-approval.
4.2 Enova will provide written confirmation that the warranty is in
effect.
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Appendix 5
Warranty Labor Flat Rate Schedule
The following schedule covers the maximum allowed reimbursable labor expenses
under warranty for The Panther Drive System and components.
---------------------------------------------------
<REDACTED>* <REDACTED>*
---------------------------------------------------
<REDACTED>* <REDACTED>*
---------------------------------------------------
<REDACTED>* <REDACTED>*
---------------------------------------------------
<REDACTED>* <REDACTED>*
---------------------------------------------------
<REDACTED>* <REDACTED>*
---------------------------------------------------
<REDACTED>* <REDACTED>*
---------------------------------------------------
<REDACTED>* <REDACTED>*
---------------------------------------------------
The labor rate will be <REDACTED>*. To calculate the reimbursable labor expense,
multiply the replacement time by the labor rate.
This labor rate and replacement time list is valid for orders placed by December
31, 2002. A new labor rate and replacement time list will be provided no later
than December 15th of each year for the following year.
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Enova Panther(TM) Propulsion System Product and Services Agreement
Appendix 6
End User Product Warranty
Enova Panther(TM) Propulsion System Warranty
Terms of Coverage:
1. Users. Enova Systems, Inc. ("Enova") provides the following warranty
for the Panther(TM)Propulsion Systems and for the optional parts and
systems available for the Panther(TM)Propulsion Systems,
<REDACTED>*. This warranty applies to the first user only during the
warranty period and is not transferable.
2. Coverage. Enova warrants that any standard part of the Panther(TM)
Propulsion System and any optional part or system (as defined
below), that is properly installed and operated per the
specifications provided by Enova, and found by Enova under normal
use and service to malfunction during the warranty period, solely as
a result of defects in materials or workmanship, will be repaired or
replaced, at Enova's option. This coverage includes <REDACTED>*.
Warranty coverage will only become effective upon completion of a
Warranty Acceptance Criteria Checklist covering the specific
application.
3. Panther(TM)Propulsion System Parts. Parts covered by this warranty
include <REDACTED>*, and any optional parts or systems manufactured
or supplied by Enova. Without limitation of the foregoing, excluded
are any optional parts or accessories or interface controls
manufactured or purchased by others to meet customer installation
requirements.
4. Warranty Period. The "Warranty Period" begins on the date the parts
are shipped to the customer and <REDACTED>*, whichever comes first.
5. Panther(TM) Propulsion System Replacement Part Warranty Period.
Panther(TM) Propulsion System parts supplied by Enova under this
warranty for replacement or repair of any workmanship or material
defect will carry a Warranty Period that is equal to the remaining
Warranty Period and Coverage of the Original Panther Drive System
parts.
6. Repairs Under Warranty. All repairs under this warranty must be
conducted by <REDACTED>*. During the warranty period, any use of or
substitution of parts other than Panther(TM) Propulsion System parts
supplied or approved by Enova will void the warranty. All claims
under this warranty must be made to the <REDACTED>* of the
malfunction of the Panther Drive System. All parts replaced under
this warranty shall become the property of Enova.
7. Exclusions to Warranty.
a. Internal Combustion Engines used as part of internal
combustion hybrid systems. Enova will make reasonable efforts
to arrange a pass through of the original manufacturers
warranty terms and conditions.
b. Turbine Generator sets used as part of turbine hybrid
propulsion systems. Enova will make reasonable efforts to
arrange a pass through of the original manufacturers warranty
terms and conditions.
c. Fuel Cell Power Systems used as part of fuel cell hybrid
propulsion systems. Enova will make reasonable efforts to
arrange a pass through of the original manufacturers warranty
terms and conditions.
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Enova Panther(TM) Propulsion System Product and Services Agreement
d. Traction Batteries used in pure electric and hybrid electric
propulsion systems. Enova will make reasonable efforts to
arrange a pass through of the original manufacturers warranty
terms and conditions.
e. Connectors and Receptacles used to complete the vehicle to
charger connection for Rapid Charging systems (power levels in
excess of 6.6kW). Enova will make reasonable efforts to
arrange a pass through of the original manufacturers warranty
terms and conditions.
f. Firmware and software used for operation and maintenance
reporting. Notwithstanding the foregoing, Enova will make
reasonable efforts to resolve firmware or software problems.
g. Parts and labor for repairs that are due to shipping damage,
vandalism, accidents, misuse, misapplication, storage damage,
acts of God or nature, negligence, or modification to products
that are not authorized in writing by Enova.
h. Parts and labor for repairs to parts or components that are
not manufactured <REDACTED>*.
i. Parts and labor for routinely scheduled maintenance or repairs
that result from <REDACTED>*.
j. Parts and labor and any costs to investigate problems and/or
repair products that are caused by any operation of the
product outside the operating specifications defined by Enova.
Without limitation of the foregoing, specifically excluded is
damage caused by power quality disturbances (sags, surges and
harmonics) in grid connected operation, and operation of the
Gas Compression System outside the pressure and temperature
specifications provided by Enova.
k. Any incidental or consequential damages or expenses that the
owner or user may incur as a result of a malfunction or
failure covered by this warranty.
8. Other Exclusions. Parts and labor reimbursement by Enova is the only
remedy to owners and users under this warranty. Enova does not
authorize any person or party to assume or create for it any other
obligation or liability in connection with the products or any part
of the products. Enova's warranties shall not be enlarged by, nor
shall any obligation or liability of Enova arise due to, Enova
providing technical advice, facilities, or service in connection
with any Product or Contract.
9. THIS WARRANTY IS THE EXCLUSIVE AND ONLY WARRANTY FOR ENOVA PANTHER
PROPULSION SYSTEMS. ENOVA SYSTEMS MAKES NO OTHER WARRANTIES, EXPRESS
OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR
NONINFRINGEMENT. ENOVA SYSTEMS SHALL NOT BE LIABLE FOR ANY
INCIDENTAL OR CONSEQUENTIAL DAMAGES.
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Contract Number 11072001
Appendix 7
Prices and Other Commercial Terms
1. Prices.
<REDACTED>*
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Enova Panther(TM) Propulsion System Product and Services Agreement
<REDACTED>*
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Contract Number 11072001
2. LEAD TIME
The lead-time for delivery of Panther Drive Systems under a Purchase Order shall
be <REDACTED>* from the date of Purchase Order submission.
3. RESCHEDULE AND CANCELLATION TERMS
Orders scheduled for delivery at or within <REDACTED>* of the committed date may
not be rescheduled. A charge of <REDACTED>* of the purchase price may be made to
Purchaser for non-acceptance of delivery.
Orders scheduled for delivery between <REDACTED>* and <REDACTED>* may be
<REDACTED>*, but not beyond <REDACTED>* of the originally scheduled ship date.
Orders scheduled for delivery at or within<REDACTED>* of the request may not be
canceled. A charge of <REDACTED>* of the purchase price may be made to Purchaser
for non-acceptance of delivery.
Orders scheduled for delivery between <REDACTED>* may be canceled at a charge to
Purchaser based upon <REDACTED>*, and any cancellation charges assessed to Enova
by its vendors.
Purchaser must notify Enova in writing with the cancellation request.
Orders scheduled for delivery beyond <REDACTED>* may be canceled or rescheduled
as requested.
This price list is valid for orders placed by December 31, 2002. A new price
list will be provided no later than December 15th of each year for the following
year.
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Enova Panther(TM) Propulsion System Product and Services Agreement
Appendix 8
Non-Disclosure Agreement
Enova Systems, a corporation organized under the laws of California and Moriah
Corporation. a Japanese Corporation, desire to explore certain possible business
transactions and in facilitating that, it is understood and agreed that certain
business and trade information which the parties deem confidential may be
provided or disclosed by one to the other:
In consideration of the receiving party being granted access or continued access
to such information, it is agreed as follows:
1. "INFORMATION" shall mean any information, technical data or know-how
relating to the business, services or products of the disclosing party or a
third party, including without limitation any research, products, services,
developments, inventions, processes, techniques, designs, components, parts,
documents, drawings, electronic files, data sketches, plans, programs,
specifications, software, and/or distribution, engineering, marketing,
financial, merchandising, sales, and salary information and/or other materials
(hereinafter collectively referred to as "INFORMATION") which is disclosed by
such party or on its behalf, before or after the date hereof, to the other party
or its employees or agents, directly or indirectly, in writing, orally,
electronically, or by drawings or inspection. "INFORMATION" does not include
information, technical data or know-how which the receiving party establishes:
(i) is already published or available to the public other than by a breach of
this Agreement or any confidentiality obligation owed to the disclosing party;
(ii) is rightfully received from a third party without, and not in breach of,
any obligation of confidentiality; (iii) is independently developed by personnel
or agents of the receiving party without access to the INFORMATION of the other;
(iv) is known to the receiving party at the time of disclosure without an
obligation of confidentiality; or (v) is produced in compliance with applicable
law or a court order, provided that the receiving party first gives the
disclosing party reasonable notice of such law or order and gives the disclosing
party opportunity to oppose and/or attempt to limit such production.
2. The receiving party shall hold in trust and confidence, and not
disclose to others, by any means, any and all INFORMATION disclosed under this
Agreement. INFORMATION may be used by the receiving party only for the purpose
of considering or pursuing a business relationship or business transaction with
the disclosing party. The receiving party may disclose INFORMATION received
under this Agreement to persons within its organization who have a need to know
such information and only if such persons are bound in writing (pursuant, for
example to a general employee non-disclosure agreement protecting third party
confidential information as well as the employer's confidential information) to
protect the confidentiality of such INFORMATION. The receiving party further
agrees it shall take the same measures, but no less than reasonable security
measures, and use the same care, but no less than a reasonable degree of care,
to preserve and protect the secrecy of, and to avoid disclosure or unauthorized
use of, the disclosing party's INFORMATION as it uses with its own information
of similar importance. With respect to tangible materials constituting
INFORMATION the receiving party agrees not to analyze any such materials for
composition or structure.
3. Title to all property received by the receiving party from the
disclosing party, including all INFORMATION, shall remain at all times the sole
property of the disclosing party, and this Agreement shall not be construed to
grant to receiving party any licenses or similar rights to such property or
INFORMATION (including all intellectual property) disclosed to the receiving
party hereunder. Nothing in this Agreement shall limit or restrict the rights of
the disclosing party to assert infringement or other intellectual property
claims against the receiving party or to impose on either party any obligation
to disclose any INFORMATION or to purchase or sell any products.
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4. The receiving party shall, upon request of the disclosing party: (i)
return to the disclosing party all documents, drawings, equipment and other
tangible materials, including all INFORMATION and all manifestations thereof,
delivered to the receiving party under this Agreement, and all copies and
reproductions thereof; and (ii) certify to the disclosing party that all such
INFORMATION has been returned.
5. The receiving party's duties under Section 2 of this Agreement expire
with respect to any particular item of INFORMATION five years after the date of
disclosure hereunder to the receiving party, or three years after the expiration
or termination of the relationship between the parties to this Agreement,
whichever is later.
6. The parties further agree to the following terms and conditions:
(a) Neither party shall without the prior written consent of the
other party disclose to a third party any aspect of the commercial relationship
between the parties including, but not limited to, pricing, items or quantities
offered or sold, payment terms, production methods or schedules, delivery
locations and means and suppliers. Each party agrees not to issue any press
release or make any statement on the Internet, America on Line, CompuServe,
Prodigy or any other public electronic network, or to any analysts or reporters
concerning the other party or its products or services, without the other
party's prior written authorization.
(b) Receiving party shall adhere to the U.S. Export Administration
Laws and Regulations and shall not export or re-export any technical data or
products received from the disclosure or the direct product of such technical
data to any proscribed countries.
(c) Any breach by the receiving party of its obligations under this
Agreement will result in irreparable injury to the disclosing party for which
damages and other legal remedies will be inadequate. In seeking enforcement of
any of these obligations, the disclosing party will be entitled (in addition to
other remedies) to preliminary and permanent injunctive and other equitable
relief.
(d) If any provision of this Agreement is invalid or unenforceable,
then such provision shall be construed and limited to the extent necessary, or
severed if necessary, in order to eliminate such invalidity or unenforceability,
and the other provisions of this Agreement shall not be affected thereby.
(e) No delay or omission by either party in exercising any right
under this Agreement will operate as a waiver of that or any other right. A
waiver or consent given by either party on any one occasion is effective only in
that instance and will not be construed as a bar to or waiver of any right on
any other occasion.
(f) This Agreement shall be binding upon and will inure to the
benefit of the parties hereto, and their respective successors and assigns.
(g) This Agreement is governed by and will be construed in
accordance with the laws of the State of California, and the state and federal
courts of California shall be the exclusive forum.
(h) This Agreement supersedes all prior agreements, written or oral,
between the disclosing party and receiving party (or their respective
predecessors in interest) relating to the subject matter of this Agreement. This
Agreement may not be amended except by an agreement in writing signed by both
parties that specifically refers to this Agreement.
Moriah Corporation ENOVA SYSTEMS
By:_______________________________ By:_______________________________
Isao Yamamoto Carl Dean Perry
Date:_____________________________ Date:_____________________________
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Appendix 9
Additional Terms for Development Efforts
The following provisions pertain solely to the Development Efforts and supersede
any different or inconsistent provisions elsewhere in the Agreement, including
those in Appendix 10.
1.0 Development Program Responsibilities.
1.1 Joint Responsibilities. In performing the Development Efforts, each
party shall
1.1.1 Cooperate and collaborate fully with the other and use their
commercially reasonable efforts to develop the Prototype;
1.1.2 Devote such amount of materials, number of personnel and other
physical and available financial resources as shall reasonably be required to
complete the development of the Prototype within the time-frame specified in
this Agreement;
1.1.3 Keep the other party timely informed of (i) the progress of
the development of Prototype or part thereof that such party is separately
undertaking, and (ii) immediately communicate to the other party all material
matters relating to or arising from the development of Prototype or part
thereof; including but not limited arranging and attending quarterly business
and technical review meetings;
1.1.4 Conduct collaboration and review meetings on a regular basis
and upon the reasonable request of the other party; and
1.1.5 Upon the reasonable request of the other party, disclose,
pursuant, and subject, to this Agreement, such information as shall reasonably
be required by each party to complete the development of the Prototype.
1.1.6 Perform such other joint responsibilities as may be described
in Appendix 3.
2.0 Warranty Disclaimer. EACH PARTY ACKNOWLEDGES TO THE OTHER THAT THE
DEVELOPMENT EFFORTS ARE EXPERIMENTAL IN NATURE AND THAT NO WARRANTY IS PROVIDED
FOR THE SERVICES OR THE PRODUCTS AND MATERIALS PROVIDED HEREUNDER. WITHOUT
LIMITATION, EACH PARTY DISCLAIMS, TO THE EXTENT PERMITTED BY LAW, ALL
WARRANTIES, WHETHER EXPRESS, IMPLIED, OR STATUTORY, INCLUDING, BUT NOT LIMITED
TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
AND NONINFRINGEMENT.
3.0 Intellectual Property Rights and Work Product Ownership.
3.1 Intellectual Property Rights Defined. For purposes of this Agreement,
"Intellectual Property Rights" means a party's intellectual property and
proprietary rights, however characterized, including, but not limited to ideas,
processes, techniques, inventions, formulas, technologies, know-how, data,
discoveries, works of authorship, copyrightable works, patent rights, trade
secret rights, copyright rights, trademark rights, service mark rights, and any
enhancements, improvements, derivative works, and other derivations thereof
(whether now in existence or hereafter developed, invented or otherwise
derived).
3.2 Ownership of Intellectual Property Rights. Each party shall retain
ownership of all its pre-existing Intellectual Property Rights notwithstanding
their disclosure and use hereunder. To the extent that Development Efforts
result in the creation of new Intellectual Property Rights, Purchaser shall own
all new Intellectual Property Rights relating to the Prototype (excluding those
relating to the Panther Drive System but including the unique data, if any,
concerning the interface of the drive system to the
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Prototype) and Enova shall own all new Intellectual Property Rights relating to
electric and hybrid drive systems, including, without limitation, the Panther
Drive Systems. To the extent that a new Intellectual Property Right is created
that cannot be described by the foregoing sentence, it shall be jointly owned
with no obligation to account to the other party therefor.
3.3 Materials and Work Product. Except for items described in Section 5.0
to Appendix 3, which Purchaser is to purchase in connection with the Development
Efforts and which shall become the property of Purchaser upon payment therefor,
all materials and equipment that a party uses in connection with the Development
Efforts and all work product produced a party during the course of the
Development Efforts shall remain the sole and exclusive property of that party.
4.0 Payments and Expenses.
4.1 Expenses. Except as otherwise specified below or in Appendix 3,
Purchaser shall be responsible for all expenses incurred by it in connection
with the Development Efforts, including, without limitation, the travel,
lodging, and living expenses of Purchaser personnel traveling to Enova
facilities, and Enova shall be responsible for all expenses incurred by it in
connection with the Development Efforts, including, without limitation, the
travel, lodging, and living expenses of Enova personnel traveling to Purchaser
facilities.
4.1.1 Panther Drive System. Purchaser will pay the amount specified
in Appendix 3 for any Panther Drive System, parts, or equipment to be purchased
at the prices set forth in Appendix 3.
4.1.2 Training and Technical Materials. Purchaser will pay Enova's
cost, plus ten percent (10%) for training and technical materials that Enova
delivers to Purchaser for use by Purchaser personnel in connection with the
Development Efforts.
4.2 Freight and Taxes. The foregoing price is inclusive of shipping and
insurance to Purchaser's designated facility, but does not include any taxes,
fees, duties or assessments incurred by either party in connection with the
purchase, shipment and delivery of the Panther Drive System, all of which shall
be paid by Purchaser (except for those imposed on Enova for the income received
in the sale).
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Enova Panther(TM) Propulsion System Product and Services Agreement
Appendix 10
Additional Terms for Commercial Production
and
Additional General Terms
The following provisions amend and modify the provisions of the Agreement except
for those relating to the Development Efforts and supersede any inconsistent
provisions therein.
Appendix 5, Warranty Labor Flat Rate Schedule - Enova will reimburse Purchaser,
at our standard rate, for service technician time spent traveling to-from job
site in order to carry out an authorized warranty repair that resulted from a
failure of an Enova component.
Purchaser may change from time to time the selection of the parts and components
for each drive system. Each drive system order will, as a minimum, include a
Motor Controller and a Motor.
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