Exhibit 10.2
PRODUCTION
AGREEMENT
This Production
Agreement is made effective as of March 23, 2005 by and between PC
Products Inc. (“PCPI”), a wholly owned subsidiary of
Com-Guard, Inc., 26Zone, Inc. (“26Zone”), a California
corporation, and Wintergreen Systems, a division of Market
Development Specialists, Inc., an Indiana corporation. Com-Guard is
the Parent Company and as it pertains to law, is a party to this
Agreement.
Wintergreen
currently is a manufacturer of finished computer goods, such as
desktop computers, notebook computers, and servers. PCPI wishes to
engage Wintergreen to assemble computer hardware for PCPI, using
parts that PCPI either supplies to Wintergreen or parts for which
PCPI finances for purchase by Wintergreen. In order to assist PCPI,
Wintergreen will also transfer certain inventory to PCPI, and also
certain general intangibles to PCPI, as provided in this Agreement.
In addition, Wintergreen will transfer certain of its sales
accounts to PCPI, for PCPI to act as the Seller, under the terms of
a Sales and Marketing Agreement dated the same date as this
Agreement (“Sales and Marketing Agreement”). Finally,
Wintergreen will also contract with PCPI for technical support and
warranty coverage for computer hardware sold pursuant to this
Agreement (the “Support and Service Agreement”). This
Agreement, the Sales and Marketing Agreement and the Support and
Service Agreement (collectively, the “Transaction
Agreements”) are each inter-related, and the execution and
ongoing performance of each is a portion of the consideration for
Wintergreen to enter into each other of the Transaction
Agreements.
In
consideration of the mutual promises and covenants herein, and also
in consideration of the Sales and Marketing Agreement and the
Support and Service Agreement, PCPI and Wintergreen hereby agree as
follows:
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1.
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Services Covered by
Agreement . This
Agreement concerns certain assembly and support services to be
provided by Wintergreen to PCPI.
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2.
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Purchase and Sale of
Services . Wintergreen will assemble one hundred percent
(100%) of the product (Computer Systems) to be sold to Accounts (as
defined in the Sales and Marketing Agreement). The timing of
production and delivery of Computer Systems shall be acceptable to
Wintergreen and PCPI according to the purchase orders from the
transferred accounts. In addition, if PCPI contracts for the sale
of computer hardware, which sale is not made by Wintergreen or one
of its agents, representatives or affiliates (an “Outside
Sale”), then Wintergreen shall have a right of first refusal
to assemble and/or manufacture the products for the Outside Sale.
The right of first refusal shall be defined as PCPI notifying
Wintergreen in writing, of a prospective Outside Sale, including
all of the terms and conditions for such production, including
quantity, pricing, and delivery information. Wintergreen shall then
have ten business days from the receipt of the notice from PCPI in
which to accept the production of the computer hardware for the
Outside Sale (the “Option Period”). If Wintergreen
accepts the terms and conditions of the Outside Sale, then
Wintergreen shall produce all of the products sold under that
Outside Sale. If Wintergreen fails to notify PCPI within the Option
Period, or if Wintergreen notifies PCPI that it rejects the terms
and conditions, then PCPI shall be entitled to have another company
provide the computer hardware for the Outside Sale, on the same
terms and conditions as included in the notice to Wintergreen.
Wintergreen shall have a right of first refusal on all Outside
Sales, even if an Outside Sale is an increase in quantity from a
prior Outside Sale.
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3.
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Service Prices
. Fees charged by Wintergreen to PCPI for the
services provided under this Agreement will be as shown in Exhibit
A (“Production Fees”). PCPI shall pay Wintergreen the
Production Fees within ten days of the receipt by PCPI of the
payment for the Computer Systems, except as specifically referenced
in Exhibit “A”.
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4.
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Term . The
initial term of this Agreement shall be five (5) years from the
signing of the Transaction Agreements. This Agreement may be
terminated only as provided in Section 10.
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5.
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Computerized Tracking of
Product . Wintergreen agrees that it shall provide a plan,
no later than 45 days from the signing of this agreement, the
ability to electronically track the status of any product produced
under this Agreement. To the extent that Wintergreen is required to
invest in new equipment or software for such tracking ability, PCPI
shall reimburse Wintergreen for such expenses within ten days of
notice from Wintergreen, which notice shall itemize all
reimbursable expenses. PCPI and Wintergreen will mutually agree on
the amount and time frame for the monies to be spent.
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6.
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Proprietary Rights
. PCPI undertakes and agrees to defend at
PCPI’s own expense actions or proceedings brought against
Wintergreen, and any of Wintergreen’s representatives,
agents, dealers or customers (each a “Person”) for
actual or alleged infringement of any existing United States
copyright, industrial design right, trade secret, patent, or other
proprietary rights from the Proprietary Software which was supplied
by PCPI from Com-Guard Inc. as provided herein. PCPI further agrees
to pay and discharge any and all judgments or decrees which may be
rendered in any such suit, action or proceeding against any
Person.
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Neither party
shall disclose, provide or otherwise make available any
confidential information concerning the products, operations,
methods, processes, data, specifications, or any other
confidential, financial or business information which it learns
from the other during the course of its performance of this
Agreement. Any such information shall be subject to the same degree
of security, protection and confidentiality as the receiving party
uses to preserve information of a similar nature. No
confidentiality obligations will apply to information which the
recipient can establish is in the public domain, is previously
known to recipient without an obligation of confidentiality, is
independently developed, or is obtained from a third party that
does not have an obligation to keep the information confidential.
Provisions of this confidentiality section shall survive
termination or expiration of this Agreement and continue for a
period of five (5) years, as to all of information, as such
information remains confidential information.
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