Exhibt 10.5
PURCHASE AGREEMENT
This Purchase Agreement ("Agreement"), dated as of the 7th day of February 2000,
is made by and between XXXX CORPORATION, XXXXXX HEAVY AXLE & BRAKE DIVISION,
0000 Xxx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx, 00000 (hereinafter called "DANA"),
and NATIONWIDE PRECISION PRODUCTS CORPORATION, 000 Xxxx Xxxx Xxxxx, Xxxxxxxxx,
Xxx Xxxx 00000 (hereinafter called "NPP").
WHEREAS, DANA is engaged in the design, manufacture and sale of axles, brakes
and other powertrain components for medium and heavy duty trucks; and
WHEREAS, NPP is in the business of performing machining services; and
WHEREAS, DANA desires to use NPP to perform machining services on purchased
components which are incorporated into DANA's axle products;
NOW, THEREFORE, in consideration of the obligations and premises set forth
herein, NPP and DANA agree as follows:
1.0 SERVICES AND TERMS OF PURCHASE
1.1 During the term of this Agreement XXXX agrees to
purchase from NPP and NPP agrees to supply to DANA,
machined parts (collectively referred to hereinafter
as "Parts") to be incorporated into DANA's axle
products.
1.2 The Parts that Nationwide will supply include all
part numbers listed on the attached Exhibit A.
Exhibit A may be revised from time to time to add or
delete Parts as agreed to by both parties.
1.3 The purchased components (such as raw castings,
forgings, bearings, hardware, etc.) which are to be
machined shall be purchased by NPP from suppliers and
at costs designated by XXXX.
1.4 XXXX shall issue a blanket purchase order or orders
to NPP for the Parts based on the agreed prices. XXXX
shall order Parts from NPP by issuing releases
against such purchase orders, designating the mix and
volume of Parts, delivery date and agreed delivery
location.
1.5 Except as otherwise provided in this Agreement,
Dana's standard purchase order items and conditions
("Standard Terms") in effect on the date a release is
issued shall apply to all purchases made by XXXX. The
current Standard Terms are set out in the attached
Exhibit B. XXXX xxx change these Standard Terms from
time to time without prior notice to NPP.
1
2.0 PRICE
2.1 NPP's invoice price for each Part supplied to XXXX
will be the sum (a) the price paid by NPP for the
purchased component, (b) a handling fee equal to 2%
of NPP's price for the purchased component(s), (c)
the price of the machining services performed on the
component.
2.2 The prices for all machining services performed
through December 31, 2001, will be those set out in
Exhibit A. The prices for machining services will be
reduced by 2% in the year 2000 from 2001 pricing. The
2002 prices will remain in effect for the remainder
of the term of this Agreement.
2.3 The machining services prices are based on NPP's
receiving aggregate annual revenue of $7,800,000 for
performing the services, including the 2% handling
fee, in 2001 and $7,650,000 including the 2%
handling fee, thereafter during the term of this
Agreement. These prices will be in effect as long as
NPP received +/- 10% of this value added billing
annually. If the value added xxxxxxxx are outside the
+/- 10%, XXXX and NPP agree to reevaluate the pricing
structure. Parts over-and-above those listed in
Exhibit A may be added to meet revenue targets.
2.4 Charges for inbound freight to NPP from designated
XXXX suppliers and any non-returnable containers will
be billed to XXXX at cost.
2.5 NPP will procure all special gages, special cutting
tools and general gages required to perform the
machining services, at the best available prices, and
XXXX will pay NPP $1,500,000 for the tooling, on or
after January 1, 2001, upon receipt of NPP's itemized
invoice for the tooling and subject to full
Production Part Approval Process ("PPAP") approval of
the machined Parts produced therefrom. The tooling
will be "Special Tooling" under Section 11 of the
Standard Terms. The tooling will belong solely to
XXXX upon payment therefor and NPP will cooperate
with XXXX in the filing of any UCC Form 1 or similar
documents evidencing its title. NPP will also procure
all necessary machine fixtures, at its own expense,
and these fixtures will belong solely to NPP.
3.0 DELIVERY
3.1 Delivery and pricing of the Parts will be F.O.B NPP's
Plant in Rochester, NY.
3.2 XXXX will provide reusable outbound shipping
containers for the Parts.
3.3 XXXX and NPP will mutually develop a packaging
specification satisfactory to both parties.
2
3.4 XXXX will select the freight carriers for inbound
shipments to NPP and outbound shipments from NPP to
XXXX, negotiate the corresponding freight rates, and
reimburse NPP for all freight charges that NPP will
invoice separately.
4.0 INVOICE AND PAYMENT TERMS
4.1 NPP will invoice XXXX when the Parts are shipped.
4.2 The terms of payment for undisputed invoices are net
thirty (30) days from the receipt of the invoice,
with a 1/2% discount off the invoice price for
payments made within ten (10) days.
5.0 TERM AND CANCELLATION
5.1 This Agreement will be in effect from the date first
written above through December 31, 2006, unless
cancelled sooner as provided herein or in the
Standard Terms. If the parties wish to extend this
Agreement beyond the initial term for one-year
renewal terms, they will commence renewal
negotiations by July 1, 2005.
5.2 Section 18 of the Standard Terms (or any equivalent
provision in a subsequent version of the Standard
Terms providing for the termination by XXXX for
convenience) will not apply to this Agreement and
XXXX will not exercise any of its cancellation rights
as long as NPP meets all performance criteria
outlined in this Agreement.
5.3 The notice and cure period provided in Section 19 of
the Standard Terms (or any equivalent provision in a
subsequent version of the Standard Terms) will be
ninety (90) days.
5.4 In the event either NPP or XXXX (1) ceases to
function, (2) liquidates, dissolves, sells
substantially all of its assets, (3) undergoes
significant management realignment or change, (4)
merges or consolidates and is not the surviving
corporation, the other party shall have the right to
cancel this Agreement immediately by giving written
notice.
6.0 OBLIGATIONS OF NPP
In performance of its obligations under this Agreement, NPP
agrees that it will:
6.1 PPAP all Parts prior to November 30, 2000. The PPAP
process will commence no later than July 1, 2000. NPP
is not responsible for the PPAP approval of purchased
components.
3
6.2 Maintain adequate facilities and personnel to meet
its obligations hereunder, including, but not limited
to, development of an inventory control system to
assure proper storage of purchased components and
finished Parts and prompt handling of inquiries,
orders and shipments.
6.3 Perform the machining services according to DANA's
Supplier Quality Manual (11/89 Rev. 2) and Xxxxxx
Heavy Axle & Brake Division's QSR- 109 (October
1999).
6.4 Provide evidence of conformance to DANA's quality
assurance procedures as reasonably requested and
permit XXXX or its designee upon reasonable advance
notice to audit NPP's quality assurance procedures
and review pertinent inspection records.
6.5 Not make modifications to the purchased components
except in accordance with DANA's Parts specifications
and/or written instructions.
6.6 Notify XXXX promptly of all problems relating to the
machining services or NPP's other obligations to be
performed under this Agreement if such problems will
impact delivery or quality of the Parts to be shipped
to XXXX.
6.7 Maintain such records relating to machining services
provided under this Agreement as XXXX xxx reasonably
require.
6.8 Deliver the Parts in accordance with DANA's releases,
subject to the following provisions:
a. NPP is committed to 100% on time delivery,
but in no event will be less than 98% on
time, based on DANA's providing NPP with a
rolling 4 (four) week firm schedule and a 5
(five) month planning forecast.
b. If XXXX permanently cancels its orders for
any Parts, it will reimburse NPP for the
costs of components for those Parts which
NPP purchased within the forecast period and
which are not returnable.
c. DANA will assure that quantities of outbound
packaging are sufficient to meet delivery
schedules.
d. Lack of performance by the freight carrier
or the purchased components supplier without
fault of NPP will not be considered non
performance by NPP.
6.9 Maintain high quality standards that include but are
not limited to the following:
a. Maintain quality systems compliant with
QS-9000.
b. Achieve a 200 parts per million ("PPM")
maximum target.
4
6.10 Maintain an inventory bank of 5 (five) days for high
volume Parts and 10 (ten) days for low volume Parts.
These banks may vary +50%. The high - versus low
volume designations will be mutually agreed upon
prior to January 1, 2001.
6.11 Provide an inventory of the tooling that is owned by
XXXX under Section 2.5.
6.12 Cooperatively work with XXXX on an exit program to
transition this business to another supplier or
DANA's internal operations on the expiration,
termination or cancellation of this Agreement.
7.0 DANA'S OBLIGATIONS
In the performing of its obligations under this Agreement,
XXXX agrees that it will:
7.1 Provide NPP with the most current print revisions
(including all specifications) available for the
Parts at the commencement of this Agreement and from
time to time thereafter as changes are made. In
addition, if there are any revisions to the Part
prints or specifications, XXXX agrees to purchase all
obsolete components and finished Parts in inventory
at NPP, not to exceed a reasonable quantity and mix
consistent with DANA's firm schedules and NPP's
customary lead times for purchased components, prior
to changeover.
7.2 Own the tooling used by third parties to manufacture
the components that are purchased by NPP hereunder
for machining and be responsible for any and all
design changes, repairs and replacements for such
tooling.
7.3 Provide facility space at no cost to NPP for the
inventory bank described in Section 6.10, should XXXX
and NPP mutually agree to have the bank located
outside NPP's facilities.
7.4 Provide all returnable drainage and packaging
necessary for outbound shipments of Parts from NPP to
XXXX.
7.5 Assist NPP in resolving any quality issues with the
purchased component suppliers should NPP be unable to
resolve them directly and promptly.
7.6 Consider NPP as a preferred source for machining
services and afford NPP the opportunity to quote any
new or replacement business.
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8.0 CONFIDENTIALITY
8.1 The confidentiality provisions of the Standard Terms
attached hereto as Exhibit B will apply mutually to
both parties during the term of this Agreement and
will not be superseded by any subsequent version of
the Standard Terms without both parties' written
consent.
8.2 All materials, including without limitation
documents, drawings, models, apparatus, sketches,
designs and lists, furnished to NPP by XXXX shall
remain the property of XXXX and shall be returned to
XXXX, erased and/or destroyed promptly at DANA's
request, as well as all copies made thereof.
9.0 MISCELLANEOUS
9.1 NOTICES. All notices, requests, consents and other
communications hereunder shall be deemed to have been
duly given hereunder if in writing and, upon receipt
when delivered by hand or sent by courier, facsimile
transmission or telex, or three (3) calendar days
after being mailed by first class mail, postage
prepaid, in each case addressed as follows:
To DANA: To NPP:
Xxxx Corporation Nationwide Precision Products
Xxxxxx Heavy Axle & Brake Div. 000 Xxxx Xxxx Xxxxx
0000 Xxx Xxxxxx Xxxxx Xxxxxxxxx, Xxx Xxxx 00000
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Purchasing Manager Attn: Vice President - Sales
or such address as the addressee party may have
previously designated in writing by notice to the
other party, and such notice or communication shall
be deemed to have been given as of the date so
delivered or mailed.
9.2 SUCCESSORS AND ASSIGNS; OTHER PARTIES. This Agreement
and the parties' respective rights and obligations
hereunder are not assignable by NPP or XXXX without
the prior written consent of the other party.
9.3. ENTIRE AGREEMENT. This Agreement, together with the
Exhibits attached hereto, constitutes the entire
agreement between the parties about the subject
matter hereof and supersedes all prior agreements,
representations, warranties, statements, promises,
information, arrangements and understandings, whether
oral or written, expressed or implied with respect to
this subject. No modification or waiver of this
Agreement shall be binding upon any party unless in
writing and signed by or on behalf of the party
against which the modification or waiver is asserted.
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9.4 SEVERABILITY. Any term or provision of this Agreement
which is held to be invalid or unenforceable shall be
ineffective to the extent of such invalidity or
unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of'
this Agreement.
9.5 WAIVER. Neither the failure nor any delay on the part
of NPP or XXXX to exercise any right, power or
privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of
any such right, power or privilege preclude any other
or further exercise thereof, or the exercise of any
other right, power or privilege available to NPP or
XXXX at law or in equity.
9.6 GOVERNING LAW. This Agreement shall in all respects
be interpreted, construed and governed by and in
accordance with the laws of the State of Ohio,
without recourse to the conflicts of laws provisions
thereof, and any action relating to this Agreement
shall be brought exclusively in a state or federal
court in the State of Ohio.
IN WITNESS WHEREOF, NPP and XXXX have caused this Agreement to be duly executed
as of the date first above written.
NATIONWIDE PRECISION XXXX CORPORATION,
PRODUCTS CORPORATION XXXXXX HEAVY AXLE & BRAKE DIVISION
By: /S/ XXXXXX X. XXXXXXX By: /S/ XXXX XXXXXXXX
-------------------------------- ---------------------------------
Xxxxxx X. Xxxxxxx Xxxx Xxxxxxxx
President & CEO VP & General Manager
Date: 02/08/00 Date: 02/09/00
-------------------------------- ---------------------------------
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EXHIBIT A
NATIONWIDE PRECISION PRODUCTS
------------------------------------------------------------------------------
2001 PART MACHINING
FORECAST NUMBER DESCRIPTION PRICE NOTES
------------------------------------------------------------------------------
10524 ADJUSTER 1.23
31,734 21637 ADJUSTER 1.23
171 27842 ADJUSTER 1.23
6,612 31562 ADJUSTER 0.98
15,401 39448 ADJUSTER 1.23
10,232 82451 ADJUSTER 1.23
13,572 110243 ADJUSTER 0.98
217 111022 ADJUSTER 1.23
7,461 113884 ADJUSTER 1.23
8,037 113885 ADJUSTER 1.23
118776 ADJUSTER 1.23
304 119683 ADJUSTER 1.23
7,142 128616 ADJUSTER 0.79
128965 ADJUSTER 1.23
239,050 129128 ADJUSTER 0.79
231,473 129130 ADJUSTER 0.79
3,114 210108 ADJUSTER 1.23
4,216 210179 ADJUSTER 1.23
5,738 210286 ADJUSTER 1.23
3,087 210389 ADJUSTER 1.23
37744 BEARING CAP 3.69
12,350 39914 BEARING CAP 2.95
5,700 67809 BEARING CAP 1.97
5,016 67810 BEARING CAP 1.97
475 68841 BEARING CAP 2.95
26,125 08642 BEARING CAP 1.97
11,662 78928 BEARING CAP 1.97
5,073 113818 BEARING CAP 2.46
4,081 113819 BEARING CAP 2.46
1,500 126807 BEARING CAP 8.09
40,608 127471 BEARING CAP 1.62
51,151 127473 BEARING CAP 1.62
7,125 128603 BEARING CAP 2.21
210030 BEARING CAP 1.97
901 210311 BEARING CAP 2.21
210382 BEARING CAP 1.97
19 210459 BEARING CAP 1.97
1,520 210460 BEARING CAP 2.21
4,256 210502 BEARING CAP 2.21
4,013 210503 BEARING CAP 1.97
211027 BEARING CAP 1.97
190 79898 BRG ADJ & CUP 9.83
204 106694 BRG ADJ & CUP 9.83
380 119685 BRG ADJ & CUP 9.83
380 75108 CAGE & CUP ASSY 7.87
Page 1
EXHIBIT A
NATIONWIDE PRECISION PRODUCTS
------------------------------------------------------------------------------
2001 PART MACHINING
FORECAST NUMBER DESCRIPTION PRICE NOTES
------------------------------------------------------------------------------
75967 CAGE & CUP ASSY 9.83
198 76689 CAGE & CUP ASSY 8.85
479 76897 CAGE & CUP ASSY 8.85
13,780 78914 CAGE & CUP ASSY 9.83
684 79246 CAGE & CUP ASSY 11.80
86812 CAGE & CUP ASSY 10.82
190 98381 CAGE & CUP ASSY 11.80
103534 CAGE & CUP ASSY 10.82
76 104471 CAGE & CUP ASSY 10.82
107322 CAGE & CUP ASSY 8.85
152 107324 CAGE & CUP ASSY 9.83
1,847 107496 CAGE & CUP ASSY 8.85
1.642 110731 CAGE & CUP ASSY 7.87
1,915 110733 CAGE & CUP ASSY 6.88
12,312 111692 CAGE & CUP ASSY 8.85
3,694 119820 CAGE & CUP ASSY 9.83
119827 CAGE & CUP ASSY 8.85
119840 CAGE & CUP ASSY 10.82
6,479 126290 CAGE & CUP ASSY 11.80
126694 CAGE & CUP ASSY 11.80
410 126825 CAGE & CUP ASSY 10.82
127039 CAGE & CUP ASSY 11.80
117,012 127600 CAGE & CUP ASSY 5.90 Service with AL PDU
85,287 127601 CAGE & CUP ASSY 5.90 Now 129575
1,907 127602 CAGE & CUP ASSY 4.96
5,035 127843 CAGE & CUP ASSY 8.85
1,667 128372 CAGE & CUP ASSY 7.87
2,052 128373 CAGE & CUP ASSY 7.87
11,799 128976 CAGE & CUP ASSY 9.83
205 129172 CAGE & CUP ASSY 11.80
129174 CAGE & CUP ASSY 8.85
570 129364 CAGE & CUP ASSY 8.85
95,152 129575 CAGE & CUP ASSY 5.58
1,597 129767 CAGE & CUP ASSY 6.99
1,554 129768 CAGE & CUP ASSY 6.99
171 210011 CAGE & CUP ASSY 7.87
616 210189 CAGE & CUP ASSY 8.85
1,231 210340 CAGE & CUP ASSY 8.85
210511 CAGE & CUP ASSY 10.82
3,591 210592 CAGE & CUP ASSY 9.83
210720 CAGE & CUP ASSY 11.80
8,550 127214 CARRIER & CAP ASSY 31.47
3,000 127221 CARRIER & CAP ASSY 31.47
3,116 45481 CARRIER COVER 16.72
536 102606 CARRIER COVER 16.72
13,437 103526 CARRIER COVER 16.72
Page 2
EXHIBIT A
NATIONWIDE PRECISION PRODUCTS
---------------------------------------------------------------------------------------------
2001 PART MACHINING
FORECAST NUMBER DESCRIPTION PRICE NOTES
---------------------------------------------------------------------------------------------
1.279 127605 CARRIER COVER 11.36 Now 129572
179 129459 CARRIER COVER 15.98
129489 CARRIER COVER 12.41
1.368 129490 CARRIER COVER 12.41
129572 CARRIER COVER 12.95 100% OF VOLUME
73.967 129572 CARRIER COVER 15.00 70% OF VOLUME
570 86776 CASE FH 23.40
3.768 86786 CASE FH 23.40
6.270 88501 CASE FH 23.40
456 88677 CASE FH 23.45
10.260 103865 CASE FH 23.40
9 104519 CASE FH 23.40
1.140 113851 CASE FH 23.40
1.140 113862 CASE FH 23.40
3.420 113863 CASE FH 23.40
95 118736 CASE FH 23.40
62 118775 CASE FH 23.40
51 120091 CASE FH 23.40
304 120092 CASE FH 23.40
752 126035 CASE FH 23.40
1.619 126036 CASE FH 23.40
364 126037 CASE FH 23.40
126191 CASE FH 23.40
215 128192 CASE FH 23.40
8.550 126234 CASE FH 23.40
285 127823 CASE FH 23.40
79 210390 CASE FH 23.40
276 210391 CASE FH 23.40
228 210392 CASE FH 23.40
448 210504 CASE FH 23.40
2.480 210505 CASE FH 23.40
1.469 210506 CASE FH 23.40
210677 CASE FH 23.40
210678 CASE FH 23.40
26.657 86777 CASE PH 15.74
95 104518 CASE PH 15.74
6.270 113864 CASE PH 15.74
118735 CASE PH 15.74
118774 CASE PH 15.74
72 119870 CASE PH 15.74
357 119871 CASE PH 15.74
137 126014 CASE PH 14.75
2.145 126996 CASE PH 15.74
85.500 127498 CASE PH 7.98 MINIMUM OF 50%
6.521 210017 CASE PH 14.75
3,848 210507 CASE PH 15.74
Page 3
EXHIBIT A
NATIONWIDE PRECISION PRODUCTS
---------------------------------------------------------------------------------------------
2001 PART MACHINING
FORECAST NUMBER DESCRIPTION PRICE NOTES
---------------------------------------------------------------------------------------------
210676 CASE PH 14.75
1,003 110807 COVER & CUP ASSY 7.87
3,010 110825 COVER & CUP ASSY 6.88
1,708 129766 COVER & CUP ASSY 6.67
126303 DIFF CASE 4 LEG 24.35
108140 DIFF CASE PH 2 SPD 14.80
2,453 103190 GEAR SUPPORT CS 14.27
174 111029 GEAR SUPPORT CS 37.71
77751 HSG COVER 18.29
171 78923 HSG COVER 16.39
80269 HSG COVER 16.39
80277 HSG COVER 16.62
82693 HSG COVER 16.39
342 84546 HSG COVER 16.39
570 98276 HSG COVER 16.39
126997 HSG COVER 16.39
127487 HSG COVER 12.29
684 127781 HSG COVER 16.37
127873 HSG COVER 16.39
128285 HSG COVER 16.39
114 128266 HSG COVER 16.39
11,548 128287 HSG COVER 16.39
246 88029 IAD 5.20
179 102621 IAD 5.20
1,140 104513 IAD 5.15
24,919 126151 IAD 5.10
16,422 127784 IAD 5.10
221 32326 SHIFT FORK 6.30
3,990 32613 SHIFT FORK 5.57
319 32679 SHIFT FORK 6.22
43242 SHIFT FORK 6.50
12,546 84508 SHIFT FORK 6.22
Page 4
EXHIBIT B
PURCHASE ORDER FOR MATERIALS AND COMPONENTS
TERMS AND CONDITIONS
1. CONTRACT, ACCEPTANCE. This Order and the documents incorporated or referred
to herein constitute the entire contract between the parties for the Goods
ordered and supersede any prior written or oral agreements between the parties
therefor. Seller's written acknowledgment of this Order or Seller's delivery of
any Goods hereunder will constitute Seller's acceptance of these terms and
conditions. Any reference herein to Seller's quotation is for informational
purposes only and does not constitute Buyer's acceptance of any terms and
conditions contrary or supplemental to those set out herein.
2. SELLER'S STATUS, ASSIGNMENT. Seller is an independent contractor and not an
employee or agent of Buyer. Seller may not assign or subcontract this Order or
any of its rights or obligations hereunder without Buyer's prior written
consent.
3. CHANGES TO ORDER. Buyer may change this Order in any respect at any time on
written notice to Seller. If any change made by Buyer materially affects
Seller's costs of producing the Goods, the purchase price of the affected Goods
will be equitably adjusted and this Order amended accordingly.
4. PACKING AND SHIPMENT. Seller will pack and ship the Goods in accordance with
Buyer's instructions, without charge for packaging or handling unless otherwise
specified. All Goods will be packed to comply with applicable common carrier
requirements and so as to secure the best available freight rates. All U.S.
shipments will be accompanied by a fully completed xxxx of lading in the form
prescribed by the National Motor Freight Classification and by a packing list
showing the number and description of items contained therein. Buyer's name and
Order number will be plainly marked on all Terms and Conditions packages, bills
of lading, packing slips, and other shipping documents and on Seller's invoices.
Buyer's count or weight will be final and conclusive for all shipments.
5. DELIVERIES. Seller will deliver all Goods in accordance with Buyer's
instructions. Buyer may reject any or all Goods shipped in excess of quantities
ordered or in advance of schedule and may either return the same to Seller at
Seller's expense or retain the same and invoice Seller for Buyer's incidental
costs of handling and/or storage. Buyer will not process invoices for Goods
shipped in advance of the schedule until the scheduled delivery date. Buyer may
change scheduled deliveries at any time and will reimburse Seller for Seller's
reasonable, documented incremental costs due to such changes.
6. INSPECTIONS, DEFECTS AND NONCONFORMITIES. Buyer may inspect and/or test the
Goods at reasonable times and places and in reasonable quantities, at its own
expense; provided that Seller will, at no charge, make its premises available
for such purposes and will provide all necessary assistance to make such
inspections and/or tests safe and convenient. No inspections and/or tests by
Buyer hereunder will relieve Seller of its obligation to make full and adequate
inspections and/or tests of the Goods. If any Goods are found to be defective or
not in conformity with Buyer's specifications or requirements, Buyer may reject
them, in whole or in part, or require Seller to repair or
1
replace them at Seller's sole expense. If Buyer returns any rejected Goods,
Seller will reimburse Buyer for the purchase price and all freight, handling,
insurance and other incidental costs incurred by Buyer. If Seller fails to
promptly repair or replace any defective or nonconforming Goods as requested by
Buyer, Buyer may repair or replace the same and invoice Seller for Buyers costs
of repair or replacement and any incidental costs.
7. QUALITY. In performing this Order, Seller will comply with the quality
compliance and quality assurance standards and procedures set out in the Quality
System Manual and the OS-9000 standards published by the International
Organization for Standardization.
8. CONFIDENTIAL INFORMATION. Except as required by law, as reasonably necessary
to perform this Order, or with Buyer's prior written consent. Seller will keep
confidential, at all times, all information, drawings, specifications and data
furnished by Buyer and/or derived or developed by Seller in connection with the
performance of this Order. Seller will not divulge such confidential information
or use it (directly or indirectly) for its own benefit or for the benefit or any
other party or make copies of such confidential information or permit copies to
be made. The foregoing confidentiality obligations do not apply to information
known by Seller at the time it is disclosed by Buyer, to information lawfully
obtained by Seller from a third party entitled to disclose it, and to
information which is or later becomes public knowledge other than through
disclosure by Seller.
9. INTELLECTUAL PROPERTY RIGHTS, PATENT WARRANTY. If Buyer furnishes the design
for the Goods or reimburses Seller for the cost of designing the Goods, Buyer
will own all intellectual property rights relating to that design. Conversely,
if Seller furnishes the design for the Goods or bears the sole cost of designing
the Goods, Seller will own all intellectual property rights relating to the
design. In either case, the owner of the intellectual property rights warrants
to the other party that the design of the Goods will not infringe upon or
contribute to the infringement of any U.S. or foreign patent or patent right.
10. PRODUCT WARRANTY. Seller warrants to Buyer, its customers and end users,
that Seller has good title to the Goods, free and clear of all liens; that the
Goods are free from defects in material and workmanship; that the Goods are
merchantable; conform fully with all specifications, drawings and/or samples
furnished by Buyer (or furnished by Seller and accepted by Buyer); that the
Goods are fit and sufficient for their intended uses; and that the Goods conform
to all applicable Federal Motor Vehicle Safety Standards issued under the
National Traffic and Motor Vehicle Safety Act of 1966, as amended.
11. SPECIAL TOOLING. "Special Tooling" means all special dies, jigs, fixtures,
drawings, molds, patterns, templates and gages acquired or manufactured by
Seller under this Order for use in manufacturing or assembling Goods which are
proprietary to Buyer, excluding any standard or perishable tooling or gages.
Special tooling separately itemized in this Order will be Buyer's property upon
Buyer's full payment of the purchase price for same; provided, however, that
Buyer will have no payment obligation until it has accepted such tooling or the
first run of Goods manufactured or assembled therewith. Seller will furnish
Buyer with an itemized list of such tooling and will maintain adequate cost
records for the same, which records will be available for review or audit
2
by Buyer. If Seller fails to maintain such cost records, Buyer will be obligated
to pay Seller solely the fair market value of the special tooling, regardless of
the purchase price stated herein. Seller will be responsible for all loss or
damage to such tooling and for all taxes, assessments, and similar charges
levied with respect to or upon such tooling while in Seller's possession. Seller
will xxxx and number such tooling with Buyer's name and the number of the part
made therewith to permit accurate identification of same at all times and will
segregate the same from other tooling in its possession to the extent feasible.
Seller will repair, maintain and keep such tooling in good working condition and
replace the same at its own expense as necessary. Seller will use such tooling
exclusively for the production of Goods for Buyer and for no other use. Upon
completion, cancellation, or termination of this Order, Seller will hold such
tooling and any operation sheets or process data necessary to show the use
thereof, at no charge, pending Buyer's instructions with respect to removal or
disposition at Buyer's expense.
12. LEGAL COMPLIANCE. Seller warrants that it will comply with all applicable
federal, state and local laws, regulations, ordinances, and executive, judicial
or administrative orders in the performance of this order. Seller will furnish
Buyer with certificates of compliance in such form as Buyer may request, from
time to time, and will promptly furnish to the proper person or entity any
reports which are properly required of Seller by law, regulation, ordinance, or
order.
13. HAZARDOUS MATERIALS. Seller will property classify, describe, package, xxxx,
label and provide Material Safety Data Sheets (MSDS) for all Goods to be shipped
hereunder. Seller will prepare all such Goods for transportation in accordance
with any applicable state or federal laws or regulations. Seller will indemnify
and hold harmless Buyer from any claims penalties or damages incurred by Buyer
as a result of any Goods received from Seller not in accordance therewith.
14. COUNTRY OF ORIGIN INFORMATION. Upon request, Seller agrees to provide Buyer
with documentation that establishes the country of origin of the Goods,
including where applicable, affidavits of manufacture, NAFTA certificates of
origin or other documentation that Buyer may reasonably require.
15. INDEMNIFICATION. Seller will defend and indemnity Buyer and its customers
and end users from and against all claims, suits, damages, losses and expenses
arising from (a) any personal injury, death or property loss or damage caused by
Seller's negligent or willful acts or omissions in performing this Order, (b)
Seller's breach of any warranty contained herein, or (c) Seller's breach of or
default under this Order.
16. INSURANCE. While performing this Order, Seller will maintain insurance
coverage at its own cost in amounts and with insurers satisfactory to Buyer for
workers' compensation (unless self-insured), public liability (including
contractual liability and products liability) and automobile liability. At
buyer's request, Seller will furnish certificates of insurance evidencing such
coverage (which certificates will name Buyer as an additional insured and
provide that the coverage will not be cancelable or subject to limit reductions
without 15 day's written notice to Buyer) and/or evidence of self-
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insurance for workers' compensation. Seller's compliance with these insurance
requirements will not relieve Seller of its defense and indemnification
obligations under Paragraph 15.
17. ALLOCATION. In the event of a partial failure of Seller's ability to supply
the entire quantity of Goods purchased hereunder, Seller will first meet all of
Buyer's requirements hereunder prior to any allocation among customers under
12-615 of the Uniform Commercial Code.
18. TERMINATION FOR CONVENIENCE. Buyer may terminate this Order for convenience
at any time on written notice to Seller. Upon termination, Buyer will be liable
to Seller solely for (a) unpaid invoices for Goods shipped, and (b) Seller's
reasonable, documented costs for raw materials, work-in-process and finished
Goods (subject to the volumes specified in this Order or any firm releases
hereunder) that cannot be canceled without penalty or sold in the general trade;
provided that Seller has delivered the same to Buyer.
19. CANCELLATION FOR CAUSE. To the extent permitted by law, Buyer may cancel
this Order without liability to Seller at any time on written notice to Seller
in the event of Seller's insolvency, Seller's filing of a voluntary petition in
bankruptcy, the appointment of a receiver or trustee for Seller, Seller's
execution of an assignment for the benefit of creditors, or other comparable
event. In addition, Buyer may cancel this Order without liability to Seller at
any time on 30 days' written notice to Seller if Seller breaches any provision
of this Order (or Buyer anticipates such breach); provided, that the
cancellation will be void if Seller cures the breach (or provides adequate
assurances of performance) within the 30-day notice period.
20. BINDING EFFECT. The obligations of the parties hereunder will be binding on
their respective directors, officers, employees, agents, subcontractors, and
duly authorized successors and assigns (if any).
21. CUMULATIVE REMEDIES, WAIVER. Buyer's remedies herein are cumulative and in
addition to any other or further remedies available at law or equity. Buyer's
waiver of any right herein will not constitute a subsequent waiver of the same
right or any other right provided herein.
22. GOVERNING LAW. This Order will be interpreted and enforced under the laws of
the state of Ohio (including, without limitation, the provisions of the Uniform
Commercial Code as adopted by the State of Ohio), without recourse to the
conflicts of laws provisions thereof. In no event will the provisions of the
U.N. Convention on the Sale of Goods apply to this order.
23. DISPUTE RESOLUTION. Any dispute arising connection with the interpretation,
performance or non-performance, or enforceability of this Order will be resolved
by prompt good faith negotiation between the parties. If the parties are unable
to resolve any such dispute, either party may request that it be resolved
through binding arbitration conducted under the Commercial Rules of the American
Arbitration Association in Toledo, Ohio, U.S.A. or elsewhere as the parties may
mutually agree; provided, that neither party may institute an arbitration
proceeding hereunder unless it has given written notice 30 days prior thereto to
the other party, stating its intent to do so and specifying the basis therefor
in reasonable detail. Any award, order or judgment made or issued pursuant to
arbitration hereunder will be deemed final and may be entered and enforced in
any court of competent jurisdiction. The parties hereby agree to submit to the
jurisdiction of such
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court for purposes of enforcement of such award, order or judgment. In any
arbitration proceeding hereunder, the arbitrator(s) are authorized (but not
obligated) to award reasonable attorneys' fees and other arbitration-related
costs to the prevailing party. Any arbitration proceeding hereunder will be
conducted on a confidential basis. Except by mutual written agreement, no
arbitration arising out of or related to this Order will include by
consolidation, joinder, or any other means, any person or entity not a party
hereto.
24. YEAR 2000 COMPLIANCE. Seller warrants that all software and hardware
furnished under this Agreement (including all enhancements, upgrades,
customizations, modifications and maintenance) will be Year 2000 compliant.
Seller agrees to defend and indemnify Xxxx from and against all claims, losses,
damages, and costs arising from Seller's Breach of this warranty, regardless of
any limitations of remedies contained elsewhere in this agreement or in any
other agreement between the parties.
EXEMPTION CERTIFICATION
(PURCHASE FOR FURTHER MANUFACTURE UNDER THE INTERNAL REVENUE CODE)
Xxxx Corporation hereby certifies that it is a manufacturer or producer of
entries taxable under the Internal Revenue Code and holds certificate of
Registry #34-43-8104-0 issued by the District Director of Internal Revenue at
Cleveland, Ohio, and that the article or articles specified in the accompanying
order will be used by him as materials in the manufacture of production of, or
as a component part of, an article or articles enumerated in the code, to be
manufactured or produced by him.
It is understood that for all the purposes of such taxes, the Buyer will be
considered the manufacturer or producer of the articles purchased hereunder, and
(except as specifically provided by law) must pay tax on resale or use,
otherwise than as specified above, of the articles purchased hereunder. It is
further understood that the fraudulent use of this Certificate no secure
exemption will subject the Buyer and all guilty parties to revocation of the
privilege of purchasing tax free and to a fine of not more than $10,000 or to
Imprisonment for not more than five years or both together with costs of
prosecution.
February 1, 2000
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