Manufacturing And Supply Agreement

EXHIBIT 10.1


Manufacturing and Supply Agreement


This Manufacturing and Supply Agreement ("Agreement") is dated as of March 28, 2001 and is between Amerigon Incorporated, a California corporation, with offices located at 5462 Irwindale Avenue, Irwindale, California 91760 ("Amerigon") and FerrotecCorporation, with offices located at Sumitomo Bldg. #6, 5-24-8 Higashi Ueno, Taito-ku, Tokyo 110, Japan ("Ferrotec").


I. Recitals
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WHEREAS, Amerigon and Ferrotec desire to enter into this Agreement to set forth certain binding obligations of Amerigon and Ferrotec with respect to, and the general terms and conditions of, an exclusive supplier arrangement pursuant to which Amerigon receives a fee of US$ 2,000,000 and enters into a Common Stock Subscription Agreement with Ferrotec (the "Subscription Agreement"), as set forth in Section 11.2 of this Agreement, and Ferrotec receives the exclusive rights for the Term (as defined in Section 10.1 of this Agreement) to manufacture in the countries and geographic territories described in Exhibit A to this Agreement (the "Territory") Amerigon Climate Control Seat System units ("CCS Units") for distribution by Amerigon to automotive parts manufacturing facilities located in the Territory with the understanding that the parties shall negotiate to enter into a joint venture for the marketing, sales and distribution of CCS Units in the Territory.


NOW THEREFORE, in consideration of the mutual promises contained in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, Amerigon and Ferrotec agree as follows:


II. Statement of Work
----------------- 2.1 Manufacturing:


(a) Ferrotec shall manufacture in the Territory and shall supply to
Amerigon all of the CCS Units required to be distributed by Amerigon
to automotive parts manufacturing facilities located in the Territory,
as set forth in the Production Schedule defined in Article IV of this
Agreement (the "Production Schedule") or in purchase orders generated
from time to time by Amerigon.


(b) Ferrotec shall purchase any and all parts necessary to manufacture and
supply the CCS Units in accordance with the Production Schedule.


(c) Ferrotec shall provide to Amerigon CCS Units that are technologically
equal to or better than any competitive product that can be
substituted for the CCS Unit. Ferrotec shall manufacture and supply to
Amerigon CCS Units that meet, at all times, the acceptance
requirements and quality


standards specified by Amerigon from time to time with respect to CCS
Units. Amerigon may, at its sole discretion and without breaching this
Agreement, periodically conduct tests of CCS Units manufactured by
Ferrotec and perform other studies to ensure that the technology,
price and quality of the CCS Units manufactured by Ferrotec remain
competitive.


(d) Ferrotec shall deliver CCS Units in a timely manner at the time
specified in purchase orders generated from time to time by Amerigon
or at the time specified in the Production Schedule.


(e) Ferrotec shall establish and adhere to local production capability
requirements that are either required by law, regulation, or other
government action or are otherwise necessary to avoid adverse economic
impacts such as import or other tariffs.


(f) Ferrotec shall pay Amerigon the costs incurred by Amerigon associated
with the purchase, delivery and installation and break-in at
Ferrotec's facilities of the production equipment (the "Production
Equipment") and related engineering and training services necessary
for Ferrotec to commence production of CCS Units.


(g) Ferrotec shall obtain the prior written approval of Amerigon before
changing any processes or specifications used in connection with the
manufacture of CCS Units.


(h) Ferrotec shall not, under any circumstances or for any reason, sell,
or in any other manner dispose of, any of the CCS Units or other
machinery or equipment provided by Amerigon related to the manufacture
of the CCS Units, or any parts or components thereof, in any manner
other than to Amerigon, without Amerigon's written consent.


(i) If Ferrotec knows or has reason to believe that Ferrotec will not be
able to supply all of the CCS Units required to be distributed by
Amerigon in the Territory in any period, Ferrotec shall provide notice
to Amerigon as soon as possible and in any event sufficiently in
advance of such period to allow Amerigon to locate another source of
CCS Units for such period.


(j) Ferrotec shall pay Amerigon any costs incurred by Amerigon caused by
Ferrotec's inability to supply all of the CCS Units required to be
distributed by Amerigon in the Territory in any period. Specifically,
Ferrotec shall pay Amerigon:


(1) the difference between (i) the aggregate price paid by Amerigon
to third parties for the manufacture and supply to Amerigon of
(or the costs to Amerigon, including allocated overhead, to
produce) CCS Units manufactured by third parties to replace the
CCS Units not


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supplied by Ferrotec (the "Substitute Units") and (ii) the
aggregate price payable by Amerigon of the CCS Units not supplied
by Ferrotec;


(2) any additional shipping charges and applicable duties and tariffs
paid by Amerigon with respect to Substitute Units;


(3) all brokerage fees or agents' commissions paid by Amerigon with
respect to Substitute Units.


Notwithstanding any other provision of this Agreement to the contrary, Ferrotec shall not delegate or attempt to delegate any of its obligations pursuant to this Section 2.1 to a third party without Amerigon's prior written consent. Amerigon's consent to such delegation may be conditioned on receipt by Amerigon of evidence reasonably satisfactory to it that (i) such third party shall abide by all of the restrictions imposed on Ferrotec by this Agreement, and (ii) the ability of such third party to perform the delegated duties is at least equivalent to the ability of Ferrotec to perform the delegated duties. To the extent Ferrotec is unable to identify a third party acceptable to Amerigon, Ferrotec shall be responsible for the manufacturing the CCS Units at its own principal manufacturing facility.


2.2 Purchasing:


(a) Amerigon shall purchase from Ferrotec all of the CCS Units required to
be distributed by Amerigon to automotive parts manufacturing
facilities located in the Territory, provided such CCS Units are
delivered in a timely manner and meet Amerigon's acceptance
requirements and quality standards.


(b) Amerigon shall purchase the CCS Units for an initial price per CCS
Unit agreed upon by Amerigon and Ferrotec, with mutually agreed upon
price reductions to be determined during the Term. Ferrotec's prices
for CCS Units shall, during the Term, be competitive, in the good
faith determination of Amerigon, with any product offered by other
suppliers offering features similar to those of the CCS Units.


(c) Without limiting any other right or remedy available to Amerigon
pursuant to this Article II, if Ferrotec fails to supply sufficient
CCS Units of the quality set forth in this Agreement and in the manner
and at the time set forth in purchase orders or the Production
Schedule, Amerigon shall have the absolute right to purchase or
otherwise acquire from third parties or to manufacture for its own
account, alternative products to use by it in lieu of the CCS Units
that were to be supplied by Ferrotec.


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III. Cost
----


Ferrotec shall pay Amerigon US$ 2,000,000 (the "Royalty") by wire transfer in immediately available funds to an account designated by Amerigon. Ferrotec shall also enter the Subscription Agreement.


IV. Production Schedule; Commencement of Manufacturing
--------------------------------------------------


Every six months, Amerigon and Ferrotec shall prepare a mutually acceptable detailed twelve month production schedule (the "Production Schedule") for the manufacture of the CCS Units. Ferrotec shall not commence the manufacture of any CCS Units until Ferrotec receives written authorization permitting Ferrotec to manufacture such CCS Units from Amerigon and/or the automobile manufacturers and/or automotive parts manufacturers that will be the ultimate purchasers of such CCS Units.


V. Product Warranty
----------------


Ferrotec warrants that CCS Units manufactured pursuant to Section 2.1 of this Agreement shall, under reasonably anticipated use and conditions, meet all of the specifications and other requirements developed and accepted by Amerigon and Ferrotec and delivered to the other party pursuant to Article II of this Agreement. Ferrotec further warrants that each CCS Unit shall be free from defects in material and workmanship. With respect to parts and materials manufactured by third parties and incorporated by Ferrotec in the CCS Units, such parts and materials shall be covered only by the warranty of the manufacturer thereof and Ferrotec shall assign to Amerigon any such warranty.


VI. Grant of Licenses
-----------------


6.1 Definitions. For purposes of this Agreement, the following definitions
shall apply:


"Amerigon's Technology" shall mean that portion of Amerigon's
Intellectual Property Rights, together with the tangible and intangible
property to which such Intellectual Property Rights relate, used in or in
connection with the manufacture of the CCS Units.


"Ferrotec's Technology" shall mean that portion of Ferrotec's
Intellectual Property Rights, together with the tangible and intangible
property to which such Intellectual Property Rights relate that is not
Amerigon's Technology and is used in or in connection with the
manufacturing of the CCS Units.


"Intellectual Property Rights" shall mean (a) those patents, design
patents and other industrial property rights (excluding trademarks)
relating to the manufacture of the CCS Units, which are owned by the
licensing party or under which the licensing party is entitled to grant
license to the other party; and (b) trade secrets, technical information,
know how, data, formula and knowledge relating to the manufacture of the
CCS Units


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(except as set forth in clause (a) of this definition), including but not
limited to designs, drawings, standards, specifications, technical records,
material lists, process manuals and direction maps, all solely to the
extent relating to the manufacture of the CCS Units, which are owned by the
licensing party or under which the licensing party is entitled to grant
license or permission to use to the other party.


6.2 The Amerigon License


Subject to the terms of this Agreement and only during the Term,
Amerigon grants to Ferrotec an indivisible, terminable, non-transferable
license, without the right to export or grant sublicenses (the "License")
to use, and under, that portion, and only that portion, of Amerigon's
Technology which is necessary to perform Ferrotec's obligations under this
Agreement, solely and exclusively for the purpose of manufacturing in the
Territory of the CCS Units required to be distributed by Amerigon to
automotive parts manufacturing facilities located in the Territory.


6.3 Limitations on Grant of the Amerigon License


All grants of rights by Amerigon to Ferrotec to use Amerigon's
Technology intended to be accomplished by this Agreement are specifically
stated in this Agreement and no additional rights are granted or may be
inferred or created by implication. Without limiting the generality of the
foregoing, Ferrotec acknowledges and agrees that it does not have any right
to, and that it shall not:


(a) sublicense, grant any other rights in or with respect to, or take
any actions which could result in the encumbrance of or damage to
Amerigon's Technology;


(b) use or disclose Amerigon's Technology for any use other than that
specified in Section 6.1 hereof;


(c) make any modifications to, or derivatives from, Amerigon's
Technology;


(d) make any copies of Amerigon's Technology; or


(e) attempt to reverse engineer, disassemble, reverse translate,
decompile or in any other manner decode Amerigon's Technology used
or contained in the CCS Units in order to derive the source code
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