GID DEVELOPMENT CORPORATIONS (GID) will enter into this agreement only under the following terms:
The contract will be deemed accepted by you and binding upon GID upon receipt of a signed copy of a letter of agreement (contract) by a representative authorized to bind you, and receipt of certified funds paying the first payment specified above, or successful negotiation of a non-certified check by our bank. Acceptance of the offer, and, hence, formation of the contract will be deemed made in Riverside, Riverside County, California.
b. The parties agree that this contract will be governed by the internal laws of the State of California, including California’s commercial code. Venue for any dispute, whether in law or equity, lies only in the County of Riverside, State of California.
Drawings, sketches, renderings, and related technical information will be provided in electronic data file format to the Client’s designated contact throughout each stage.
The client shall be responsible for all costs related to the purchase, manufacture, and shipping/handling of the following, provided the client has approved such costs in advance in writing:
Prototypes/Models of the product, required to validate the structural concept design and for proof of function and fit.
Pre-Production Functional Prototypes.
Prototypes/Models required for design validations (e.g. Alpha Prototypes) will have lowest degree of finish to keep cost low as possible.
Prototypes/Models required for market validation (e.g. Beta Prototypes) will have high degree of finish.
Product packaging and print collateral materials.
All payments for items and services sourced from China are due in advance upon submittal of appropriate invoices.
Additional travel expenses, prior to and/or after Stage #5, for meeting(s) in China if required for this project. Effort will be made to combine trip with other client’s product review to reduce this cost on a shared basis. Estimated shared cost per trip per client is $1,500. Client approval required before China trip is scheduled.
The client shall be responsible for obtaining approvals as may be required for this product from any agency in the intended market countries. (Examples: FDA, UL for U.S.A., CSA for Canada. CE for European Union, etc.)
The client shall retain all proprietary and intellectual property rights for all design and development efforts generated for this project by GID, including without limitation all drawings, sketches, renderings and related technical information.
The client shall retain ownership and rights to developmental Alpha and Beta prototypes as well as computer generated designs.
Consistent with the Non-Disclosure Agreement executed by both parties on September 17, 2013, GID shall maintain confidentiality regarding ongoing developments unless authorized by the client to disclose any information to third parties.
New Technology: Any design products or processes previously owned and used by GID shall be and remain the property of GID, subject to a royalty free license to Client for all time for the product(s) developed in this project. Client acknowledges and understands that GID has contractual agreements with others, under the terms of which, GID has neither the right nor the power to transfer, assign or otherwise endow Client with the product of design efforts.
Client understands and agrees that GID’s pricing for this project is significantly below market for similar design services, so that GID can participate in long range manufacturing returns. Notwithstanding the foregoing, it is agreed and understood that Client shall own all rights, title and interest in the design, products or processes developed by GID for Client pursuant to this Agreement or any subsequent agreement entered into between the parties.
The Stages #1 through #3 design fees are based on our submittal and client acceptance of the deliverables for these stages. For required design changes to better position product’s functionality and/or marketability after submittal and client approval of the Conceptual Design or after submittal of the Model/Prototype, the design fee may be renegotiated in accordance with the extent of the required changes.
After client approval of the design stages #1 through #3, GID will submit a firm proposal if different from above estimates for completion of stage #4 and remaining design and support efforts. After conclusion of design stage #4, GID will be better prepared to provide close to actual tooling, and manufacturing costs.
Proposed design/engineering fees for each stage are discounted with the understanding that GID will be responsible for the manufacture and delivery of the finished product. In the event the client elects to have others provide manufacturing and delivery of finished goods, GID is to receive payment of an amount equal to the 20% of all design and engineering fees prior to releasing CATIA V5 design and engineering electronic data files and related documents.
Disclaimer: GID does not guarantee the efficacy of the client’s product idea – no one can honestly do so. GID promises to utilize its best efforts to design and develop the client’s product. On the other hand, the client must understand and accept the risks associated with new product development in that any given new product idea might not be achievable in a final form, or the final form may turn out to be too costly to succeed in the market. Time lines are provided as estimates only and are not a guarantee of the real time it may take to complete a project stage or completion of the project. The client understands and accepts that the design fees charged are discounted with the expectation that GID will profit from this project when the client profits from volume sales with GID as the manufacturer and supplier of the finished product. GID discounts its design and development fees, thus sharing in the risk, because it anticipates sharing in the eventual profits, and therefore includ es the restrictio ns placed upon unilateral termination of this agreement by the client.
Client shall be liable for and agrees to pay the following expenses to the extent they are associated with Products and to the extent the incurrence of such expenses have been approved in writing by Client: property taxes; storage and warehousing expenses; product liability insurance and other types of insurance usually carried by persons engaged in the design, manufacture, distribution and sales of product(s) to the extent necessary to cover any risks which may be reasonably foreseen; advertising and similar types of marketing expenses. Client agrees to the above allocation of costs and obligation as to product liability insurance in particular, agrees to indemnify and hold Consultant harmless as to all risks pertinent thereto.
In the event of inactivity; i.e. lack of communications or business transactions, on the part of the client regarding this project for a period of 6 consecutive calendar months, GID will consider the project abandoned and relieved of any liabilities if written disposition of assets; e.g. tooling, parts, finished goods, design files, et al is not received from the client within 30 calendar days of the 6-month inactivity period.
This Agreement shall be governed by the laws of the State of California applicable to contracts made and any to be wholly performed in the State of California (without regard to choice of law). Any claim, dispute or disagreement in respect to this Agreement may be brought only in Riverside County California either in the courts of the State of California or the federal courts located in Riverside County, which courts shall have exclusive jurisdiction thereof.
In the event of any dispute or claim arising between or among the parties to this Agreement, whether an alleged breach of this Agreement, dispute regarding the interpretation of this Agreement, or otherwise (the “Dispute”), before resorting to arbitration or court action, the parties agree that they will attempt in good faith to resolve any Dispute by informal negotiation without instituting formal legal action. If they cannot reach agreement within ten (10) days after such Dispute, they shall endeavor to resolve any Dispute by mediation. Such mediation shall be nonbinding and conducted before a single mediator mutually selected, who shall not be a retired judge. Mediation fees, if any, shall be divided equally among the parties involved in the Dispute. If any party commences an action based on a Dispute without first attempting to resolve the matter through mediation, then that party shall not be entitled to recover attorneys’ fees. If a matter subject to mediation is not resolved by mediation wit hin thirty (30) days of good faith attempts to do so by the parties, it shall be submitted to binding arbitration before the American Arbitration Association, whose rules applicable to commercial disputes shall apply except as modified by this Section. The arbitration hearing shall take place in Riverside, California, before one arbitrator, who shall be a retired judge except as hereinafter provided. The arbitrator shall comply with the provisions of Section 12 unless the parties to the arbitration consent in writing otherwise. The arbitrator may award attorney and expert witness fees and costs to the successful party and may award exemplary or punitive damages as well. The arbitrator shall submit a written finding of facts and conclusions of law. The arbitrator shall have authority only to interpret and apply provisions of this Agreement and shall have no authority to add to, subtract from or modify terms of this Agreement. The judgment of the arbitrator shall be binding and may be entered as a final judgment by any court having jurisdiction over the parties hereto. No party shall initiate or prosecute any lawsuit in any way related to any dispute or claim covered by this Agreement. THE PARTIES UNDERSTAND AND ACKNOWLEDGE THAT UNDER THIS SECTION EACH WAIVES THE RIGHT TO TRIAL BY JURY IN CONNECTION WITH ANY ARBITRABLE CONTROVERSY OR CLAIM.
Discounted design and engineering fees are determined on a project basis not by an hourly rate to provide GID clients with the lowest possible pre manufacturing cost. However, client cancellation of project prior to the completion of a given stage will be assessed at the rate of $200.00/hour against payment received for that design stage.
Exceptions or modification to these terms must be submitted in writing and approved by GID.