Silicon Valley Product Engineering

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CONSULTING AND PRODUCT DEVELOPMENT AGREEMENT

 

ACCEPTANCE BY CLIENT OF ANY PROPOSAL SUBMITTED BY SILICON VALLEY PRODUCT ENGINEERING IS EXPRESSLY LIMITED TO THE TERMS AND CONDITIONS CONTAINED IN THE PROPOSAL AND THIS AGREEMENT. THIS AGREEMENT, ALONG WITH THE SIGNED PROPOSAL, IF ANY, SUPERSEDES ALL PRIOR AGREEMENTS BETWEEN SILICON VALLEY PRODUCT ENGINEERING AND CLIENT. ANY ADDITIONAL OR DIFFERENT TERMS OR CONDITIONS IN ANY PURCHASE ORDER, PRIOR AGREEMENT, OR OTHERWISE ARE DEEMED TO BE A MATERIAL ALTERATION OF THIS AGREEMENT, ARE HEREBY OBJECTED TO, AND SHALL BE INAPPLICABLE UNLESS SPECIFICALLY AGREED TO IN WRITING AND SIGNED BY AUTHORIZED REPRESENTATIVES OF BOTH SILICON VALLEY PRODUCT ENGINEERING AND CLIENT.

 

ANY OF THE FOLLOWING ACTS BY CLIENT SHALL CONSTITUTE CLIENT'S ACCEPTANCE OF THIS AGREEMENT AND ALL OF ITS TERMS AND CONDITIONS: SIGNING AND RETURNING A COPY OF THE PROPOSAL, ISSUANCE OF A PURCHASE ORDER, ACCEPTANCE OF THE SERVICES OR GOODS COVERED BY THE PROPOSAL, INFORMING SVPE IN ANY MANNER TO COMMENCE PERFORMANCE, AND/OR RETURN OF CLIENT'S OWN FORM OF ACKNOWLEDGMENT.

TERMS AND CONDITIONS

 

This Consulting and Product Development Agreement ("Agreement") is entered into between Silicon Valley Product Engineering, LLC. ("SVPE") a California Limited Liability Corporation, and Client as of the signature date ("Effective Date"). Client desires to retain SVPE as an independent contractor to perform research and development services ("Services") for Client. Client agrees that SVPE is engaged as an independent contractor and neither SVPE nor Client is made an agent, employee, joint venturer, partner or legal representative of the other for any purpose. In addition, the parties agree as follows;

1.        SERVICE AND GOODS

 

SVPE shall perform the services and deliver goods as described in the Project Proposal. The terms of this Agreement shall apply to the Project Proposal and any subsequent mutually approved attachments, amendments, change orders, or additional exhibits, collectively referred to as the Exhibits, and any such Exhibits are incorporated by this reference into this Agreement.

2. FEES, COSTS AND PAYMENTS

 

Unless specifically stated otherwise in the Exhibits, the terms of this Agreement are on a Time and Materials basis.

  1. It is agreed that Client shall pay SVPE a Consulting Fee for the Services performed hereunder as outlined in the Exhibits. The parties have agreed that this is an estimate of the total effort to be incurred. SVPE will make all reasonable efforts to observe dates agreed upon and proposed budgets, however SVPE will not be liable in any way because of any delay in performance due to unforeseen circumstances or to causes beyond SVPE's reasonable control. SVPE shall seek written consent for any changes that may result in charges exceeding $1,000 of submitted Consulting Fee estimates.
  2. Other Expenses including, but not limited to, materials, conference calls, freight, certain contracted services, equipment rentals and/or leases, lab fees, tools and equipment, documentation costs, and travel incurred by SVPE for Client's benefit, if authorized by Client, shall be paid by Client upon submission of invoices by SVPE. SVPE shall seek written consent for any changes that result in charges exceeding $1,000 of submitted Expense estimates. All Expenses are invoiced at cost plus a 15% administration and handling charge. California sales tax will be added where applicable.
  3. SVPE shall submit invoices to Client for payment of the Consulting Fees and Expenses. Terms of payment are NET 20 days from the date of the invoice. An interest fee of 1.5% per month will be applied to accounts unpaid 20 days from date of invoice. Rights to use and ownership of SVPE developed deliverables does not transfer to Client until all accounts are paid in full. SVPE reserves the right to suspend work and withhold deliverables on delinquent accounts. Client is responsible for all costs and attorney fees incurred in order for SVPE to collect any delinquent amounts.
  4. Unless otherwise stated, it is agreed that the true object of the work performed under this Agreement is research and development and any prototypes that might be included in this Agreement are for evaluation and test only, the transfer of such prototypes is incidental to the research and development covered by this Agreement, and therefore the billings for these items are not taxable. Therefore, unless otherwise stated, services performed under this Agreement will not include delivery of tangible personal property and thus are classified as "nontaxable labor". All work performed under this scope is considered to be "transfer of information" and "design services" and therefore is non-taxable under California State Board of Equalization regulations as they presently exist. Should all or any portion of the services performed by SVPE under this Agreement be deemed by the California State Board of Equalization to be taxable, Client agrees to pay for such taxes.
  5. Client shall notify SVPE in writing if any materials to be purchased by SVPE are for resale or are otherwise exempt from taxes and supply SVPE with Client's Resale Number or Tax Exemption number.
  6. Client agrees that for any Services or Goods SVPE provides on a Fixed Bid or Fixed Fee basis, if SVPE's actual expenses exceed the Fixed Bid or Fixed Fee by 15%, SVPE shall have the right to either a) request additional funding from Client to cover these additional costs, or b) discontinue providing further Services or Goods and terminate this Agreement per the terms set forth in section 3 of this Agreement.
  7. Any deposits requested from Client in the attached Exhibits are used by SVPE to establish and maintain credit with Client. Deposit payments are required prior to work starting and are held by SVPE until conclusion of the work in the Exhibits or termination of this Agreement. Deposit moneys will be applied to the final invoice(s) when this Agreement's termination conditions have been met.
  8. Credit terms are subject to review and credit investigations by SVPE based on references and Financial Statements provided by Client. Over the term of this Agreement, a periodic review of granted credit terms will be performed by SVPE and Client may be requested to submit additional financial information. SVPE retains the right to modify the deposit and credit terms at its discretion.

3. TERM

  1. This Agreement is effective as of the Effective Date and will terminate upon completion of Services as set  forth herein, together with any extensions as agreed by the parties, unless terminated earlier as set forth below.
  2. Either party may terminate this Agreement at any time upon thirty (30) days written notice to the other party.
  3. Upon termination of this Agreement and payment in full of all invoices and fees, SVPE shall return to Client all equipment, documents or materials, including all copies thereof, which SVPE received from Client for the purposes of this Agreement. SVPE shall also deliver to Client all deliverable items which it has completed prior to the date of termination and any work in progress up to the date of termination. The foregoing shall be SVPE's sole obligation upon termination of this Agreement. SVPE shall have the option to retain electronic archives of work developed by SVPE for Client as well as maintain physical archives of Client hardware developed by SVPE subject to paragraphs 5 and 6.
  4. Upon termination of this Agreement, Client agrees to pay SVPE for all outstanding invoices and for reasonable wrapping-up charges for this project. Wrapping-up charges can include, but are not limited to, expenses already incurred for labor and material, labor and material costs associated with final project wrapping-up, and for any commitments made by SVPE on Client's behalf. SVPE shall have the option to withhold delivery of items stated in paragraph 3(c) above pending payment of all amounts to which SVPE is entitled. Upon final delivery of all items by SVPE to Client, Client agrees to respond within 10 business days should there be any discrepancies in the quantity or completeness of the deliverables after which said deliverables are deemed satisfactory.
  5. Client agrees that SVPE may use Client's name, Client's logo artwork, and the name and / or model number of any product that results from the services covered by this Agreement in SVPE's advertising, press, promotion and similar public disclosures. This provision will survive the termination and or completion of this Agreement subject to paragraphs 5 and 6.

4. TECHNICAL DIRECTION

  1. Within the scope of this Agreement, SVPE shall take technical direction from an individual named by Client as the Project Technical Officer. The Project Technical Officer will be Client's recipient of all SVPE deliverables and shall provide SVPE final direction on all technical aspects of the Services described in the Exhibits.
  2. Additionally, Client will name an individual to be the Contract Officer within the scope of this Agreement. The Contract Officer will be responsible for all financial and contractual aspects of this Agreement and the Exhibits.
  3. If SVPE receives technical or other direction from Client, or any of Client's personnel, which in the opinion of SVPE may result in an extension of the term of this Agreement, a change in the fees as provided in any Exhibit, or in any other material alteration of the terms and conditions of this Agreement, SVPE shall immediately notify the Contract Officer, stating the anticipated impact of such direction.
  4. SVPE shall not proceed with any work which may result in the conditions enumerated in paragraph 4(c) above without written direction to do so from the Contract Officer, who is the only person authorized to change any terms and conditions of this Agreement on behalf of Client.
  5. Client agrees to notify SVPE in writing should there be a change to the named Project Technical Officer or Contract Officer. It is agreed that said notification shall be included in this Agreement as an amendment.
  6. Client agrees to make Client's Contract Officer and Technical Officer available for periodic meetings with SVPE to review the status of this Agreement and Exhibits.

5. CONFIDENTIALITY

  1. During the term of this Agreement, Client may provide to SVPE certain proprietary or confidential information ("Confidential Information"). Confidential Information includes information that has commercial and other value to Client or to third parties who have entrusted information to Client, and is confidential in nature, and may be oral, visual, electronic or written form, including, but not limited to, formulas, computer programs, databases, mask works, technical drawings, algorithms, trade secrets, patents, patent applications, technology, circuits, layouts, names and expertise of employees and consultants, know-how, designs, interfaces, materials, formulas, processes, ideas, inventions (whether patentable or not), schematics and other technical, business, financial, customer and product development plans, supplier information, forecasts, strategies and information.
  2. SVPE agrees to treat all such Confidential Information as confidential, whether or not so identified. SVPE shall only disclose such Confidential Information to it's own employees or to contractually bound corporate affiliates and third parties ("SVPE Associates") with similar confidentiality agreements in place with SVPE and who have a need to know. SVPE and SVPE Associates shall treat Client's Confidential Information with at least the same degree of care as they accord to their own Confidential Information and SVPE represents that it and SVPE Associates exercise reasonable care to protect their own Confidential Information. SVPE shall use and circulate such information only to the extent necessary to perform the Services.
  3. The obligations of this paragraph 5 shall not apply to any Confidential Information that: (i) Has been disclosed in publicly available sources of information, (ii) is, through no fault of SVPE, disclosed in a publicly available source of information, (iii) is now in possession of SVPE without obligation of confidentiality, (iv) is required to be disclosed under operation of law, (v) has been or is rightfully disclosed to SVPE by a third party, or (vi) was provided by Client to SVPE and has been in SVPE's possession for more than 3 years.
  4. SVPE shall comply with all legal obligations it may now or hereafter have respecting the information or other property of any other person or entity.
  5. Subject to the obligations of this paragraph 5, SVPE may enter into agreements with any other person or entity, whether during the term of this Agreement, before, or after.
  6. Both parties agree that the fee structure, financial arrangement, and the specific terms of the business relationship between the parties shall be considered Confidential Information. However, to the extent necessary to collect unpaid fees or costs hereunder, SVPE may disclose sufficient information to substantiate its claims for such fees and costs to an arbitrator or other trier of fact without violation of this section. In such event, SVPE shall, whenever possible, disclose information only under seal or subject to a confidentiality stipulation or order to protect Confidential Information from inadvertent disclosure.

6. PROPRIETARY RIGHTS AND NON DISCLOSURE OF INFORMATION

  1. SVPE agrees it will not breach any obligation to keep in confidence proprietary or confidential information or material acquired by SVPE under obligation of confidence or trust within this Agreement or within an agreement with other party. SVPE agrees to not disclose to Client, or induce Client to use, any proprietary or confidential information or material belonging to any other company, acquired by SVPE in confidence or in trust from such other party.
  2. SVPE will, however, utilize its own proprietary materials and processes ("SVPE Proprietary Material") in the performance of Services. Such SVPE Proprietary Material includes, but is not limited to, SVPE's part number system, tool chains, test beds, software, firmware, FPGA code, reference designs, and product development processes. Client agrees that SVPE retains all rights in, and to, such SVPE Proprietary Material, and to any improvements or developments to such SVPE Proprietary Material which may occur.
  3. With the exception of SVPE Proprietary Material, SVPE agrees to irrevocably assign and transfer to Client the entire right, title and interest of SVPE, SVPE's Associates, and SVPE's employees in and to all copyrights, trademarks, trade secrets, patents, inventions, ideas, designs, improvements, discoveries, products, procedures, developments, programs, formulas, analyses, drawings, notes, documents, information, materials and product made by SVPE during the term of this Agreement, solely or jointly with others, which are made with Client's equipment, supplies, facilities, trade secrets, or time, or which relate to Client's actual or anticipated research or development, or which result from the Services performed by SVPE ("Client Proprietary Material"), upon full payment of all invoices. SVPE agrees to promptly and fully inform and disclose to Client all such Client Proprietary Material. However, any discoveries, documentation, inventions, innovations, or other work product developed by SVPE outside the scope of this Agreement, including all SVPE Proprietary Material, shall be and remain the property of SVPE. SVPE will notify Client that such SVPE Proprietary Material has been delivered to Client or included in Client deliverables and may grant Client a nonexclusive, nontransferable, royalty-free, irrevocable, perpetual, worldwide license to make, use, sell, offer for sale, or import such SVPE Proprietary Material under the restrictions that Client maintains SVPE's copyrights with such information or materials and does not use such information or materials beyond the lifetime of the product or project for which it was furnished. Said license will become effective when Client has accepted the final deliverable and paid all amounts to which SVPE is entitled pursuant to this Agreement.
  4. SVPE agrees that it will not knowingly incorporate any proprietary material, ideas, techniques, processes, software, or inventions of any other parties into any products, software, or other services provided to Client without prior written consent from Client.
  5. SVPE agrees to cooperate with Client to execute such documents, review such materials, provide such testimony, perform such actions, and otherwise do all other things that Client considers necessary to allow Client to fully prosecute, obtain, register, perfect, protect, maintain, enforce, license and otherwise fully exploit any and all intellectual property rights in and to Client Proprietary Material and all derivatives thereof, and to delivered or incorporated SVPE Proprietary Material.

7. WARRANTY, DAMAGES, LIMITATION OF LIABILITY

  1. In performing Services for Client, SVPE warrants that it has the right to use and where applicable assign to Client SVPE Proprietary Materials and covenants that it will not knowingly infringe the intellectual property or other proprietary rights of any third party. However, due to the complexity of laws and regulations governing such rights and the expense and impracticality of searching trademarks, patents and designs worldwide, SVPE does not warrant non-infringement and will not defend or indemnify Client from an infringement claims. Client is responsible for determining whether and how to protect Client's intellectual property rights and SVPE will cooperate with Client to secure such rights.
  2. SVPE shall not be liable for any amount for any losses or damage, direct or indirect, arising out of any failure by SVPE to perform any of its obligations under this Agreement, any failure of the products or services supplied by SVPE to satisfy Client's requirements, or any infringement by any software or hardware of the rights of any other party. SVPE does not warrant that the software or hardware will work in combination with any other hardware or software utilized by Client except as specifically set forth in attached Exhibits. Further, although SVPE performs its services with care in an effort to make them error free, errors may exist in software or hardware applications, and Client expressly assumes any risk of injury to any persons, property or business resulting from Client's use of any product supplied by SVPE or as to which SVPE has performed services. Client assumes full responsiblity for testing and certifying fitness of use of any deliverables made by SVPE. As such, Client agrees to indemnify and hold SVPE harmless from any liabilities in circumstance where a third party alleges that it has been damaged by a defect in Client's product or that the product infringes upon its intellectual property rights.
  3. Except as specifically set forth above, to the maximum extent permitted by applicable law, SVPE disclaims all warranties of any kind, expressed, implied or statutory, including but not limited to all warranties of merchantability, fitness for a particular purpose, and all other warranties. Any liability whatsoever for any damages incurred directly or indirectly by Client in connection with the products or services supplied by SVPE, including without limitation, special, incidental or consequential damages or loss of profits, are expressly disclaimed and waived by Client.
  4. Except for the duty of indemnification as identified in this paragraph 7 and for the duty of timely payment of SVPE invoices, neither party will be liable to the other for any delay, error, omission, or nonperformance if caused by the failure of the other party to properly and timely perform any of its obligations in connection with this Agreement.

8. NONINTERFERENCE WITH BUSINESS

 

During the term of this Agreement, and for a period of 18 months immediately following its termination, Client and SVPE agree not to interfere with the business of the other in any manner and will not solicit any personnel employed by the other. This shall include direct, temporary and consulting personnel employed by each party. By way of example and not of limitation, Client and SVPE agree not to solicit or induce any direct, temporary or consulting personnel employed by the other to terminate or breach an employment, contractual, confidential or other relationship with the other. Client and SVPE further agree that during the term of this Agreement, neither SVPE nor Client or any of their representatives will attempt to make direct contact outside of the business environment or outside of business hours with any personnel employed by SVPE or by Client or their families without their expressed consent.

9. APPLICABLE LAW AND JURISDICTION

 

This Agreement shall be governed by and construed in accordance with the laws of the State of California. If, at any time during the term of this Agreement, any dispute shall arise upon or in respect to the Agreement, in the meaning, construction, or performance thereof, such dispute shall be referred to binding arbitration by a single arbitrator selected by the parties, said arbitration to be conducted in accordance with the commercial rules of the American Arbitration Association, and judgment upon the award entered by the arbitrator may be entered in any court having jurisdiction thereof. The prevailing party in any such proceeding shall be entitled to recover its costs and reasonable attorneys' fees.

10. MISCELLANEOUS

  1. The provisions of paragraphs 2, 3(c-e), and 5 through 10 shall survive the termination and or completion of this Agreement.
  2. All notices to be given or served hereunder shall be given or served in writing either in person, by certified U.S. mail postage prepaid, or by FAX, followed by a mail confirmation. All such notices shall be effective upon receipt and addressed as follows:
     
    Contracts Administration
    Silicon Valley Product Engineering, LLC.
    1955 Hayes Lane
    San Martin, California  95046
    Phone: 408.810-2948
    FAX: 408.705-1970
     
  3. Both parties agree that neither may assign its obligations under this Agreement without the written consent of the other party except that SVPE may assign its right to receive payment hereunder upon giving Client 30 days written notice hereof.
  4. If any section or part of these terms and conditions were to be adjudicated as not valid, or not binding or null and void, the remaining sections and parts would remain in full effect and would continue to be valid and binding upon the parties hereto.
  5. The failure of either party to enforce at any time any of the provisions of this Agreement, or to exercise any election or option provided therein, or to require at any time performance by the other of any of the provisions thereof, shall in no way be construed to be a waiver of such provisions.
  6. This Agreement may be amended or supplemented only in writing that is signed by duly authorized representatives of both parties.

11. ENTIRE AGREEMENT

 

This Agreement supersedes all prior discussions and writings and constitutes the entire agreement between the parties with respect to the subject matter hereof. In case of conflict between the provisions of this Agreement and those of any other documents, such as Client's purchase order or consulting agreement, the terms and conditions of this Agreement shall prevail. Client's purchase order, if any, shall be used for accounting purposes only. This Agreement may be executed simultaneously in two or more counterparts, each of which will be considered an original, but all of which together will constitute one and the same instrument.

 

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