EXHIBIT
10.3
LETTER OF AGREEMENT FOR
DESIGN SERVICES
between
CELESTICA IRELAND
LIMITED
And
MORE ENERGY
LIMITED
dated 6 th May
2005 (the “Effective Date”).
This Letter of
Agreement for Design Services (“Agreement”) confirms
that Celestica Ireland Limited (AMS Division), whose registered
office is at Parkmore Business Park West, Ballybrit, Galway,
Ireland (“Celestica”) and More Energy Limited with its
principal place of business at 4 Yodfat, Global Park, Lod
Israel (“Customer”) have entered into a relationship
whereby Celestica or its affiliates will provide the design
services and Deliverables to Customer as requested by Customer and
agreed to by Celestica, and Customer agrees to purchase such design
services and Deliverables.
At the time of
signing of this Agreement, it is envisaged that the services to be
provided by Celestica or its affiliates may include: design
services, testing and prototype development, deliverables as well
as other services requested by the Customer and agreed to by
Celestica (“Services”), as further outlined in the
written quotation provided by Celestica (“Quotation”).
The Customer understands and acknowledges that a written purchase
order (“Order”) is required by Celestica prior to
commencement of any Services or provision of any Deliverables.
Celestica will acknowledge receipt of Orders as soon as reasonably
practicable and notify the Customer of acceptance or non-acceptance
of Orders within five business (5) days of receipt. However,
Celestica shall be under no obligation to accept Orders.
1.
PROFESSIONAL SERVICES
1.1
It is the intent of the parties that
Services will be performed and the Deliverables will be provided in
accordance with the statement of work, as mutually agreed to in
writing by the parties (“Statement of Work”), which
shall form part of this Agreement and be deemed incorporated herein
by reference. The Statement of Work represents both parties’
good faith estimates of the schedules, scope of work and level of
effort required to be expended on the Services. Both parties
acknowledge, however, that the performance of the Services and
provision of the Deliverables cannot be accurately determined at
the outset of the Services and depend on many factors, such as
co-operation of the Customer, accuracy of Specifications or
Customer Information, completion of certain Customer tasks or
adherence to Customer schedules within the Customer’s or a
third party’s control. Accordingly, Celestica and Customer
shall report to each other at agreed to regular intervals as to the
progress being made by each of them in relation to meeting the
schedules, any delays or anticipated delays or other issues that
are being encountered that may affect the Statement of Work.
Consequently, the Quotation and/or Statement of Work may requite
adjustments or changes, which may result in additional charges and
schedule updates.
1.2
Celestica shall use commercially
reasonable efforts to meet the schedules and time of performance of
the Services as set forth in the Statement of Work or as otherwise
agreed to in writing. Customer agrees to co-operate in good faith
to allow Celestica to achieve completion of the Services in a
timely and professional manner. Celestica shall not be responsible
for delays in the provision of Services or any portion thereof
caused by the Customer’s failure to complete a
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Customer task
or adhere to a Customer schedule. Celestica will provide such
resources and utilize such employees, sub-contractors and/or design
consultants as it deems necessary to perform the Services, subject
to the Customer first having provided Celestica with all applicable
input as necessary for the provision of the Services including, but
not limited to, drawings, documentation, data, software, firmware,
information and know-how (“Customer Information”). The
customer’s specifications will be set out in the Statement of
Work or otherwise agreed to in writing
(“Specifications”). The accuracy and completeness of
the Customer Information and the Specifications provided by the
Customer are the Customer’s responsibility. Celestica will
perform the Services upon its receipt and acceptance of an Order
from the Customer during the term of this Agreement. The manner and
means used by Celestica to perform the Services desired by the
Customer are in the sole discretion and control of Celestica. All
work will be performed at Celestica’s various global
facilities unless otherwise agreed by the parties.
1.3
From time to time during the
performance of the Services, Celestica may provide certain
information, recommendations or recommend to Customer certain
materials, technology or other elements for use in the development
of the Deliverables. While Celestica uses its reasonable efforts to
determine the accuracy of any information provided or
recommendations made Celestica makes no warranties or
representations as to their accuracy. Customer understands that the
availability or suitability of any information, recommendations or
recommended items are dependent on numerous factors that are not
under Celestica’s control (such as, but not limited to, a
supplier’s adherence to product roadmaps or general market
conditions). Customer understands that any reliance on any
information provided or any recommendation made or use of any
recommended items is solely at Customer’s discretion.
Consequently, Celestica will not be liable under this Agreement or
otherwise for any decision made by Customer based on any
information provided, recommendations made or any recommended items
or for any impact on the Services or Deliverables due to any such
information, recommendations or recommended items.
2.
DELIVERY
2.1
In performing the Services,
Celestica shall design, develop and/or make for the Customer any
tangible output resulting from the performance of the Services
including any data, designs, specifications, or like material and
any training, sample, or prototype product
(“Deliverables”) as set forth in the Quotation and/or
Statement of Work. Any prototypes provided to Customer as part of
the Deliverables are for non-commercial use. Except as agreed
otherwise, Deliverables sold to the Customer are delivered Ex Works
(Incoterms 2000) at Celestica’s premises with Customer
accepting responsibility for freight, insurance and customs fees.
Title and risk of loss shall pass to Customer upon delivery. Except
in accordance with Clause 3 below, refusal to accept a
delivery will be treated as a cancellation in accordance with
Section 11 herein.
2.2
Customer authorizes Celestica to
procure such materials to fulfil Services and/or Orders, including,
but not limited to long lead-time items, materials subject to
minimum order quantities, unique materials, non-cancellable and
non-returnable items and Customer agrees to be responsible for all
costs incurred by Celestica to procure all such materials, which
Celestica is unable to mitigate. Customer also agrees to be
responsible for the cost of all finished goods and work in progress
for prototype products or other Deliverables or products
manufactured in accordance with Customer’s requirements.
Notwithstanding the foregoing, all amounts incurred
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by Celestica
under this provision shall be reasonable in the context of the
Statement of Work package and agreed price for same
hereunder.
3.
ACCEPTANCE/EC CONTROL MANAGEMENT
3.1
Celestica shall provide to the
Customer the Services and Deliverables and other items as detailed
in the Statement of Work and in conformance with the
Specifications. The Customer may review such Deliverables for a
period no greater than ten (10) business days from delivery and
shall provide written notice of its acceptance or rejection within
such ten (10) business day period. If the Customer rejects the
Deliverables, Customer shall provide written details as to the
reason(s) for which the Deliverables are not in conformance with
the Specifications. If the Customer does not provide written
notification of acceptance or rejection within such ten (10)
business day period, the Deliverables and Services will be deemed
accepted by the Customer.
3.2
Where Celestica, in its reasonable
determination, agrees that the Deliverables are not in conformance
with the Specifications, Celestica shall, as soon as commercially
reasonably practicable, correct the Deliverables and resubmit such
Deliverables for Customer approval. The same process as described
in this Clause 3 will apply to the acceptance of the reworked
Deliverables. Celestica will use its commercially reasonable
efforts to correct such reworked Deliverables, however if the
reworked Deliverables are continuously rejected and Celestica
determines that such reworked Deliverables cannot be corrected the
parties shall mutually work towards an agreeable solution for such
reworked Deliverables. Should the parties not be able to find a
solution, Celestica shall be entitled to provide a full refund of
all the payments made for such Deliverables to Customer. Customer
agrees and acknowledges that this shall constitute Customer’s
sole remedy for such Deliverables hereunder or otherwise at law or
in equity.
3.3
Upon acceptance of the Deliverables
and with the exception of Celestica’s warranty obligations
set forth in Clause 7 below, Celestica will have no further
responsibility for the correctness or completeness of the
Deliverables or Services. Following Customer’s acceptance,
Celestica shall proceed to develop the next milestone of the
Statement of Work.
3.4
Except for corrections required due
to non-conformance to the Specification or warranty issues, all
other changes will be addressed through a formal engineering change
control process as outlined below or other documented process as
agreed to by the parties.
3.5
Either party may at any time propose
changes to the relevant Services or Deliverables by a written
Engineering Change Notice (“ECN”) to the other party.
Any modifications to the Deliverables as recommended by Celestica
or as requested by the Customer will be priced and pre-approved by
the Customer prior to implementation.
3.6
The recipient of an ECN will use all
reasonable efforts to provide a detailed response within fourteen
(14) Days of receipt. Celestica will advise Customer of the likely
impact of an ECN, including but not limited to, time of
implementation and fees.
3.7
In the case of an ECN requested by
Customer, Celestica will not unreasonably withhold or delay
agreement to an ECN and the parties will endeavor to agree and
implement the ECNs as soon as practicable. Customer at its
discretion may reject an ECN proposed by Celestica.
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3.8
Until an ECN and any associated
impact and costs have been agreed to in writing, the parties will
continue to perform their obligations without taking account of
that ECN.
3.9
All costs of implementing ECNs,
including without limitation, costs of materials, handling charges,
process and tooling charges, administrative charges, engineering
charges and evaluation and testing costs will be the responsibility
of Customer.
4.
PRICES AND PAYMENT
4.1
The charges for the Services and
Deliverables shall be indicated in Statement of Work Annexes signed
by both Parties and attached to this Agreement from time to time
(“Charges”). Celestica shall invoice the Customer for
Charges in accordance with the agreed to milestones as set forth in
the Statement of Work or otherwise upon completion of the Services.
Customer agrees and acknowledges that the Charges are estimated and
may be subject to change during the course of performing the
Services if the scope of work of such Services changes. Any changes
to the Charges will be agreed to in writing by the parties and will
amend the Charges in the applicable Statement of Work. In the case
of expenses, Celestica shall invoice on the last business day of
the month of expenditure.
4.2
Customer shall reimburse Celestica
for actual and reasonable travel and accommodation expenses. Prior
to incurring any such expenses, Celestica will obtain the approval
of Customer’s representative.
4.3
Payment is due, without any set-off
or deduction, thirty (30) days from date of invoice. Except for any
income-related taxes for which Celestica is directly liable, the
Customer will be solely responsible for and will pay all taxes,
including value-added taxes, duties or other governmental or
regulatory charges, unless evidence of exempted status is provided.
All payments by Customer to Celestica under this Agreement shall be
in the currency quoted by Celestica in the relevant Quotation. If
the Customer fails to make any payment by the due date Celestica
may, in addition to its other rights and remedies, charge interest
on any overdue amounts at a rate of annual LIBOR plus four percent
(4.0%) paid on a pro rata monthly basis or the maximum interest
rate permitted by law (whichever is the lower) together with any
legal fee incurred by Celestica in collecting the overdue payment.
Celestica may also elect not to perform any further obligations
until payment is received.
5.
INTELLECTUAL PROPERTY RIGHTS
5.1
Except as otherwise set forth
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