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EXHIBIT 10.2
EXECUTION COPY
COMPONENT SUPPLY AGREEMENT
This Component Supply Agreement ("Agreement") dated as of January 1, 1999 (the
"Effective Date") is entered into by and between DELPHI AUTOMOTIVE SYSTEMS
CORPORATION ("Delphi"), a corporation organized under the laws of the State of
Delaware, and GENERAL MOTORS CORPORATION ("GM"), a corporation organized under
the laws of the State of Delaware.
RECITALS
A. GM and its subsidiaries and affiliates worldwide are engaged in, among
other things, the design, manufacture, and sale of motor vehicles and
motor vehicle related products. Prior to the Effective Date, the
business operations which are owned by Delphi were owned by GM.
B. Delphi and its subsidiaries and affiliates worldwide are engaged in
among other things, the design, manufacture, and sale of motor vehicle
related components and systems.
C. As of the Effective Date, Delphi has separated from GM and become a
separate legal entity.
D. Following the separation of Delphi from GM, Delphi wishes to continue
to supply and to assure that its subsidiaries and affiliates have the
right, under certain circumstances, to continue to supply GM with motor
vehicle related components and systems and GM wishes to continue
acquiring such components and systems from Delphi and its subsidiaries
and affiliates.
NOW, THEREFORE, in consideration of the mutual promises contained in this
Agreement and intending to be legally bound, Delphi and GM agree:
1. EXISTING AGREEMENTS
1.1 Delphi and GM shall continue to honor the terms and conditions of all
existing Purchase Orders and other contractual agreements (e.g., Long Term and
Lifetime Contracts and other formal and verifiable informal agreements) that are
in effect as of the Effective Date ("Existing Agreements") regarding the
purchase and supply of motor vehicle related components and systems
("Components"), including all Components that have been awarded to Delphi,
regardless of whether production for such program has commenced, as if Delphi
and GM were separate legal entities at the time such agreements were made.
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1.2 The terms and conditions of GM's standard Purchase Order (a copy of
which is attached to this Agreement as Attachment-A) are incorporated
herein and in the Existing Agreements by this reference; provided,
however, that in the event the specific agreed upon terms of an
Existing Agreement conflict with the terms of the standard GM Purchase
Order or the parties have agreed to omit all or some of the terms of
the standard GM purchase order, the specific agreed upon terms
(including agreed upon omissions from the standard GM Purchase Order
terms, if any), of the Existing Agreement shall control. Additionally,
the parties agree that in situations where the parties are silent with
respect to the applicability of all of the standard GM Purchase Order
terms and conditions, it shall be presumed that such terms and
conditions apply.
1.3 The unit prices for all Components produced for each program will be
equal to the existing prices already established by Existing
Agreements, including any pre-determined price reductions.
1.4 All Existing Agreements will retain their current status (e.g.,
lifetime, long term or one year purchase order).
1.5 Unless otherwise provided in Existing Agreements, no adjustments will
be made for changes in costs, including increases in Delphi's costs for
labor, material, or overhead; provided, however, both parties agree to
reasonably discuss potential price adjustments associated with
hyper-inflationary economies or economies subject to extreme
devaluation.
1.6 Delphi and GM will continue to honor all nomination letters currently
in place regardless of whether formal purchase orders have been issued.
2. PAYMENT TERMS
2.1 The provisions of Section 1.2 above notwithstanding, except as provided
below, payment terms on all existing contracts, including those related
to General Motors International Operations ("GMIO"), will be modified
to MNS2 effective immediately upon the Effective Date. For purposes of
this Agreement MNS2 shall mean GM's Multilateral Netting System, which
provides, on average, that payment shall be made on the second day of
the second month following, in the case of GM's North American
facilities, the shipment date of the goods or date of services, and for
all of GM's other locations, the receipt date of the goods or date of
services.
(a) Saturn contracts will be modified to MNS2, but shall retain the
consumption methodology currently in place between Saturn and Delphi.
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(b) GMIO contracts related to South America will retain existing
payment terms. SPO will follow the same payment terms as OEM (e.g., buy
in South America for South America).
(c) GMIO contracts related to operations in China, India and Indonesia
will retain existing payment terms.
2.2 Payment terms on all new business will be MNS2, unless otherwise
agreed.
3. RIGHT TO RESOURCE FOR NON-COMPETITIVENESS DURING THE TERM OF A CONTRACT
3.1 GM retains the right to resource any and all Components in the event
Delphi fails to remain competitive in terms of quality, service, design and
technology.
3.2 For purposes of the above provision, competitiveness is defined by
demonstrable product and performance levels available to GM from other
suppliers.
3.3 Following notice by GM, Delphi shall be provided a reasonable period of
time to cure any such non-competitiveness before the Components will be
resourced. In this regard, the parties agree to utilize the following processes
to resolve issues of non-competitiveness:
(a) With respect to non-competitiveness in quality and service, the
parties agree to employ the GM 16 Step Process or the then current
process utilized by GM.
(b) With respect to non-competitiveness in design and technology, the
parties agree to work jointly to mutually identify acceptable
solutions. Components will only be resourced if this endeavor is
unsuccessful and a mutually acceptable solution cannot be developed
within a reasonable period of time.
3.4 Under no circumstances will GM be responsible for any supplemental or
compensatory payments to Delphi in the event that Components are resourced
because of non-competitiveness.
4. NEW TECHNOLOGY
4.1 In the event that GM wishes to introduce a technological change to a
Component which is covered by a then existing contract with Delphi, Delphi will
have a right of last refusal to implement the new technology or equivalent
technology (acceptable to GM) and continue production through the balance of the
existing contract. If Delphi cannot provide such new or equivalent technology on
a competitive basis, GM shall be free to resource the Component without
liability to Delphi.
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4.2 Disputes regarding new technology under this process will be resolved
by the applicable Vehicle Chief Engineer (GM) and the divisional Director of
Engineering for the product involved (Delphi) plus a facilitator mutually
acceptable to both sides.
5. QUALITY
5.1 To insure a robust quality improvement process, Delphi must participate
in all GM quality improvement programs and GM can require Delphi to achieve
reasonable increased quality standards.
5.2 All increased quality standards established by GM must be comparable to
then current industry standards, but allow GM to maintain its position as a
quality leader.
6. RIGHT OF LAST REFUSAL ON REPLACEMENT BUSINESS
6.1 For a period of 3 years following the Effective Date, Delphi shall be
granted a right of last refusal under competitive purchase order terms for the
first replacement cycle of existing product programs (in the United States and
Canada) currently provided by Delphi.
6.2 In order to invoke the right of last refusal, Delphi must be
competitive in terms of design, quality, price, service and technology.
6.3 The right of last refusal described above, is also intended to include
these additional items: (i) production in the United States and Canada of common
global platforms to the extent Delphi can provide or execute designs that comply
with the required form and function specifications, as reasonably determined by
GM; and (ii) product programs in Mexico where the vehicle is assembled in Mexico
and shipped to the U.S. or Canadian markets for sale; provided, however, that in
all cases covered by this Section 6.3, such programs must also meet all of the
other criteria set forth in this Article 6.
6.4 In the event a particular Delphi product/plant is on "New Business
Hold", that Delphi product/plant shall not be eligible to invoke the right of
last refusal. For purposes of this Agreement, the term "New Business Hold" shall
be applied as set forth in GM's Quality Systems Requirements Manual,
specifically GP5 (Jan. `98), and is contained as a performance step of the Level
2 Controlled Shipping Process. This procedure is common for all suppliers and a
requirement included in GM's standard terms and conditions.
6.5 Except as specifically provided above, the right of last refusal does
not apply to, (i) GMIO programs and (ii) programs in Mexico.
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6.6 Mechanics of Right of Last Refusal.
(a) Upon commencement of a product program covered by the Right of
Last Refusal specified in Section 6.1 above (a "ROLR
Product"), GM will submit to prospective suppliers, including
Delphi, a request for quotation in accordance with its
customary procedures including, but not limited to, the
bundling of ROLR Products for any Component with ROLR Products
for other Components; provided, however, that the bundling of
ROLR Products will involve naturally related components,
systems and modules, consistent with normal industry
practices.
(b) When such bundled sourcing packages including two or more ROLR
Products are offered, Delphi will have the right of last
refusal on any such ROLR Product(s) in the bundle. For those
products in the bundle not currently provided by Delphi, the
right of last refusal contemplated in this Article 6. shall
not apply.
(c) If Delphi wishes to exercise the right of last refusal with
regard to a ROLR Product, Delphi must participate in the
sourcing process, including developmental work, the advance
purchasing/engineering process, and the submission of bids,
all on the same basis as other potential suppliers.
(d) In the event GM determines that a proposal submitted by an
entity other than Delphi is the most favorable (the "Favorable
Proposal"), GM will notify Delphi in writing of the material
terms (including price, other financial considerations
(including, without limitation, the economic impact of price
reductions on other current and future products) material
content, investment, timing non-proprietary technology, and
the existence of proprietary technology) of the Favorable
Proposal (the "Terms Notice"), and will request that Delphi
notify GM in writing whether Delphi wishes to supply such ROLR
Product(s) on terms the same as or substantially the same as
(as mutually determined by the parties in their reasonable
discretion) the terms of the Term Notice.
(e) Following receipt by Delphi of the Terms Notice from GM,
Delphi must notify GM in writing of its willingness and
ability to supply such ROLR Products on such terms within
seven (7) business days if no new technology is included in
the Favorable Proposal, or thirty (30) business days if new
technology is included in the Favorable Proposal.
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(f) If Delphi so notifies GM that it is willing and able to
supply such ROLR Product(s) on such terms, then subject to
Section 6.2 and Section 6.4 above, Delphi will be awarded the
sourcing of such ROLR Product(s) for the relevant contract
term.
(g) If Delphi fails to so notify GM or notifies GM that it is
unwilling or unable to supply such ROLR Product(s) on such
terms, GM may source the ROLR Product(s) on terms no less
favorable to GM than those set forth in the Terms Notice.
(h) If for any reason GM determines to source such ROLR Product
(s) on terms less favorable to GM than the terms of the Terms
Notice, then Delphi will again have the right of last refusal
to supply such ROLR Product(s) in the manner described in this
Section 6.6.
(i) Delphi may, at Delphi's sole option and expense, be an advance
development source (on a non-exclusive basis) for ROLR
Products.
6.7 Under no circumstances will GM be responsible for any supplemental or
compensatory payments to Delphi in the event Delphi fails to exercise its right
of last refusal or can not provide the Components on a competitive basis.
7. NEW BUSINESS
7.1 All new business awarded to Delphi will be governed by the specific
terms and conditions under which that business is awarded.
7.2 During the term of this Agreement, Delphi will continue to be included
on WWP's quotation list, with the exception of Delphi product/plants that are on
"New Business Hold."
7.3 Other than business awarded pursuant to Delphi's exercise of its right
of last refusal, new business awarded to Delphi, if any, will be at GM's sole
discretion.
8. TOOLING AND DUNNAGE
8.1 Each of GM and Delphi will own the tooling which is reflected on that
party's balance sheet as of the Effective Date.
8.2 Delphi shall not use tooling owned by GM to compete against SPO in the
aftermarket.
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8.3 Delphi shall not use tooling to produce products for other customers if
such tooling is used to produce products for GM; provided, however,
that Delphi shall be allowed to continue the use of such tooling to the
extent necessary to satisfy already awarded contracts or extensions of
such contracts, where Delphi has, previously used such tooling to
produce such products. Delphi will have the burden of establishing,
upon GM's reasonable request, the existence of a binding contract with
other customer(s) and prior use of particular tooling for those
specific customer(s) prior to the Effective Date. If Delphi is unable
to establish such facts with respect to particular tooling, Delphi will
not have the right to use the applicable tooling. Moreover, Delphi
agrees that it will not expand the use of any tooling described in this
Section to new products, new customers or new contracts, other than for
or with GM.
8.4 In the event that (i) any Force Majeure Event prevents Delphi from
producing or delivering products, or (ii) GM resources products to
another supplier as permitted under this Agreement or any underlying
agreement, Delphi will permit GM to take possession of all tooling
which is used to produce parts for GM; provided, however, that in the
event such tooling is being used by Delphi to produce products for
other customers (as permitted pursuant to Section 8.3 above, it being
understood and agreed that Delphi shall have the burden of proving such
eligibility), GM will to the extent practicable, allow the new supplier
to use such tooling to produce products for sale to Delphi to permit
Delphi to satisfy Delphi's pre-existing contractual commitments to
other customers. For purposes of this Article 8, a Force Majeure Event
shall be defined as those events specified in Paragraph 8 of GM's
standard Purchase Order terms and conditions, a copy of which is
attached as Attachment-A.
8.5 In the case of a Force Majeure Event involving tooling which was paid
for partially by GM and partially by one or more other customers of
Delphi, GM and Delphi will discuss the situation with the other
customer(s) and enter into an agreement incorporating a mutually
acceptable plan to equally protect each party's respective need to
continue to obtain products produced by such tooling.
8.6 GM agrees to return to Delphi all tooling of which GM obtains
possession as a result of a Force Majeure Event as promptly as
commercially reasonable under the circumstances, following the
cessation of that force majeure event; provided, however, that GM shall
not be required to return any such tooling to Delphi until after GM has
satisfied any contractual commitments that GM may have made to other
suppliers regarding products produced from such tooling.
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8.7 Ownership of containers and dunnage existing at the time of the
split-off shall be determined as follows:
(a) Containers and dunnage related to the transportation of
products from Delphi to GM facilities or Tier 1 suppliers
(other than Delphi) will be owned by GM.
(b) Containers and dunnage related to the transportation of
products inside Delphi facilities will be owned by Delphi.
(c) Containers and dunnage related to the transportation of
products between Delphi and its suppliers will be owned by
Delphi.
9. INTELLECTUAL PROPERTY & TECHNICAL INFORMATION
9.1 The provisions related to Intellectual Property and Technical
Information as set forth in GM's standard Purchase Order terms and
conditions (which is attached hereto as Attachment-A) shall control
existing contracts.
9.2 GM and Delphi will each cooperate with the other to create, maintain,
update and share technical information, about the products being
supplied by Delphi and their manufacture without restriction, as
needed, and in compliance with GM's drafting and math data standards.
10. PROCESS FOR DELPHI TO EXIT CERTAIN BUSINESSES
10.1 Exit of a business through closure:
(a) In the event of an extension of production of an existing product
(which is covered by a contract with a fixed term) beyond the term of
the original program life, GM shall have the right to require Delphi to
continue production and sale of that product for a reasonable extension
period, at reasonable commercial terms to be negotiated by the parties.
(b) In the event of a proposed plant closure or elimination of a
product line, Delphi will agree to keep GM timely appraised of its
decision process, review all plans with GM, in good faith reasonably
consider GM's input and concerns, and in good faith reasonably consider
modifying its plans to accommodate GM's timing requirements to resource
the business.
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10.2 Exit of a business through sale:
(a) In the event of a proposed divestiture of a business, Delphi will
keep GM timely appraised of its decision process and in good faith
reasonably consider GM's input and concerns.
(b) Delphi will select a qualified buyer.
(c) Assignment of existing contracts requires GM's prior written
consent which will not be unreasonably withheld.
(d) GM will negotiate a supply agreement with the buyer that will be
intended to mirror the then existing agreements between GM and Delphi
that relate to the business being sold. Any changes to existing
agreements, including price, will be mutually agreed between Delphi and
GM.
10.3 During the term of the assigned contract, Delphi and GM shall dedicate
resources and efforts necessary to assure that GM receives a comparable level of
quality, service, delivery, price and technology; provided, however, that
nothing in this provision shall be deemed a financial guarantee by either party.
11. WARRANTY
11.1 Existing Contracts:
(a) Delphi's warranty responsibility for products supplied under
Existing Agreements will be governed by the terms and conditions of
those Existing Agreements, including Paragraph 9 of GM's standard
Purchase Order terms and conditions (a copy of which is attached hereto
as Attachment-A).
(b) Delphi and GM will continue to work together in good faith to
reduce warranty costs including participation in the Risk/Reward
Warranty Policy and other related programs, where mutually agreed.
11.2 With respect to new business, Delphi's warranty responsibility for
products supplied under new contracts will be governed by the terms and
conditions of those new contracts, including participation in the Risk/Reward
Warranty Policy and related programs, where required.
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12. RAW MATERIALS AND PURCHASED COMPONENTS
To the extent practical and consistent with all applicable laws and regulations,
Delphi and GM shall continue to cooperate and participate in existing programs
related to the acquisition of raw materials and purchased components, consistent
with GM's normal practices and procedures.
13. TERM AND TERMINATION
13.1 The term of this Agreement shall commence on the Effective Date and
continue as long as any Existing Agreement is in effect, including any
extensions of any Existing Agreement.
13.2 Either GM or Delphi may terminate this Agreement in any of the
following events:
(a) the other party materially breaches this Agreement;
(b) the other party becomes insolvent or enters bankruptcy,
receivership, liquidation, composition of creditors, dissolution or
similar proceeding; or
(c) a significant portion of the assets of the other party necessary
for the performance of this Agreement becomes subject to attachment,
embargo or expropriation.
In addition, GM may terminate this Agreement in the following events: (i)
thirty-five percent ( 35 %) or more of the voting shares of Delphi become owned
or controlled, directly or indirectly, by a competitor of GM in the business of
manufacturing motor vehicles; or (ii) all of the Existing Agreements become
subject to termination or cancellation pursuant to their terms.
13.3 A party intending to terminate this Agreement shall first notify the
other party of the grounds for the intended termination. If the other party
fails to remedy such grounds for termination within sixty (60) days after such
notice (or any longer period of time as mutually agreed by the parties), then
the terminating party may terminate this Agreement effective upon notice to the
other party without the need for any judicial action.
13.4 The provisions of this Article 13 are without prejudice to any other
rights or remedies either party may have by reason of the default of the other
party.
13.5 In the event a competitor of GM in the business of manufacturing motor
vehicles acquires a significant interest in Delphi (directly or indirectly)
Delphi will provide GM
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with reasonable assurances that Delphi will utilize its best efforts to preserve
the confidentiality of all information related to products produced for GM and
GM product programs.
14. SERVICE PARTS
14.1 Unless otherwise provided in Existing Agreements, the unit pricing on
service parts that currently are not past model will continue at OEM prices, for
a minimum of three (3) years after such service parts go past model. Thereafter,
unit prices for such service parts will be as agreed between the parties.
14.2 GM and Delphi's respective obligations and responsibilities with regard
to Components sold to AC Delco warehouse distributors and other distribution
channels are set forth in the Aftermarket Agreement between GM and Delphi dated
January 1, 1999.
15. GENERAL PROVISIONS
15.1 No Agency. This Agreement does not constitute either party the agent or
legal representative of the other party. Neither party is authorized to create
any obligation on behalf of the other party.
15.2 Notices. Any notice under this Agreement must be in writing (letter,
facsimile or telegram) and will be effective when received by the addressee at
its address indicated below.
(a) Notice sent to Delphi will be addressed as follows:
Delphi Automotive Systems Corporation:
Treasurer
Delphi Automotive Systems Corporation
0000 Xxxxxx Xxxxx
Xxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
with a copy to:
General Counsel
Delphi Automotive Systems Corporation
0000 Xxxxxx Xxxxx
Xxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
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(b) Notice sent to GM will be addressed as follows:
GM: Vice President and Group Executive
Worldwide Purchasing and NAO Production
Control and Logistics
NAO Headquarters
GM Technical Center
00000 Xxxxx Xxxx
Xxxxxx, XX 00000
Facsimile: 000-000-0000
with a copy to:
Xxxxxxxxxxx X. Xxxxx
Group Counsel - Worldwide Purchasing and NAO
Production Control and Logistics
NAO Headquarters
GM Technical Center
00000 Xxxxx Xxxx
Xxxxxx, XX 00000
Facsimile: 000-000-0000
(c) The parties by notice hereunder may designate other addresses
to which notices will be sent.
15.3 Subsidiaries and Affiliates. GM and Delphi each acknowledge and
understand that their respective subsidiaries and affiliates are not parties to
this Agreement and may not be legally bound by the provisions herein unless and
until they agree to be so bound. In this regard, Delphi and GM agree to utilize
their reasonable best efforts to recommend and encourage their respective
subsidiaries and affiliates to agree to be bound by the provisions of this
Agreement. Until such time, both GM and Delphi agree to utilize their reasonable
best efforts to cause their respective subsidiaries and affiliates, to the
extent appropriate and in compliance with applicable laws, to honor and perform
the obligations set forth in this Agreement, as if they were parties hereto.
15.4 Amendments. No amendment to this Agreement will be binding upon either
party unless it is in writing and is signed by a duly authorized representative
of each party. This Agreement supersedes any prior agreements between the
parties concerning the subject matter herein.
15.5 Assignments. This Agreement shall be binding upon and inure to the
benefit of the parties, and their respective successors and permitted assigns,
but no rights, interests
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or obligations of either party herein may be assigned without the prior written
consent of the other, except to Affiliates and as permitted under Section 10.2
of this Agreement.
15.6 Severability. If any provision of this Agreement, or portion thereof,
is invalid or unenforceable under any statute, regulation, ordinance, executive
order or other rule of law, such provision, or portion thereof, shall be deemed
reformed or deleted, but only to the extent necessary to comply with such
statute, regulation, ordinance, order or rule, and the remaining provisions of
this Agreement shall remain in full force and effect.
15.7 Governing Law. This Agreement will be construed and enforced in
accordance with the laws of the State of Michigan, excluding its conflict of
laws rules. Each party consents, for purposes of enforcing this Agreement, to
personal jurisdiction, service of process and venue in any state or federal
court within the State of Michigan having jurisdiction over the subject matter.
The parties exclude the application of the 1980 United Nations Convention on
Contracts for the International Sale of Goods, if otherwise applicable.
15.8 Dispute Resolution. The parties acknowledge and agree that all disputes
or other matters related to this Agreement shall be exempt from the dispute
resolution process established in Section 8.08 of the Master Separation
Agreement or in any other agreement related to the transaction(s) contemplated
therein.
15.9 Counterparts. This Agreement may be executed by the parties in separate
counterparts, each of which when so executed and delivered will be an original,
but all such counterparts will together constitute one and the same instrument.
IN WITNESS WHEREOF, GM and Delphi have caused this Agreement to be executed in
multiple counterparts by their duly authorized representatives.
DELPHI AUTOMOTIVE SYSTEMS CORPORATION GENERAL MOTORS CORPORATION
By: /s/ Xxxx X. Xxxxx By: /s/ X.X. Xxxxxx 12/17/98
-------------------------- ------------------------------
Name: Xxxx X. Xxxxx Name: X.X. Xxxxxx
-------------------------- ------------------------------
Title: Chief Financial Officer Title: Vice President & Group
-------------------------- Executive Worldwide Purchasing
and NAO Production Control and
Logistics
------------------------------
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ATTACHMENT - A
PURCHASE ORDER TERMS AND CONDITIONS
1. ACCEPTANCE: Seller has read and understands this order and agrees that
Seller's written acceptance or commencement of any work or service under this
order shall constitute Seller's acceptance of these terms and conditions only.
All terms and conditions proposed by Seller which are different from or in
addition to this order are unacceptable to Buyer, are expressly rejected by
Buyer, and shall not become a part of this order. Any modifications to this
order shall be made in accordance with Paragraph 31.
2. SHIPPING, BILLING AND FLSA CERTIFICATION: Seller agrees: (a) to
properly xxxx, xxxx and ship goods in accordance with the requirements of Buyer
and involved carriers in a manner to secure lowest transportation cost; (b) to
route shipments in accordance with instructions from Buyer's Traffic Department;
(c) to make no charge for handling, packaging, storage, transportation or
drayage of goods unless otherwise stated in this order; (d) to provide with each
shipment packing slips with Buyer's order number marked thereon; (e) to properly
xxxx each package with this order number, the factory, plant and dock number,
and where multiple packages comprise a single shipment, to consecutively number
each package; and (f) to promptly forward the original xxxx of lading or other
shipping receipt for each shipment in accordance with Buyer's instructions.
Seller will include on bills of lading or other shipping receipts correct
classification identification of the goods shipped in accordance with Buyer's
instructions and carrier's requirements. The marks on each package and
identification of the goods on packing slips, bills of lading and invoices shall
be sufficient to enable Buyer to easily identify the goods purchased. Seller
further agrees: (a) to promptly render, after delivery of goods or performance
of services, correct and complete invoices to Buyer; and (b) to accept payment
by check or, at Buyer's discretion, other cash equivalent (including electronic
transfer of funds). Seller's invoice must include a certification that all goods
were produced in compliance with the applicable requirements of sections 6, 7,
and 12 of the Fair Labor Standards Act, as amended, and of regulations and
orders of the United States Department of Labor issued in connection therewith.
The payment date is set forth on the face side of this order, or if not stated,
shall be on the 25th day of the month following Buyer's receipt of a proper
invoice (except as may otherwise be agreed upon by Buyer and Seller in
connection with a program providing for electronic funds transfer). Time for
payment shall not begin until correct and complete invoices are received, and
Seller's cash discount privileges to Buyer shall be extended until such time as
payment is due. Buyer may withhold payment pending receipt of evidence, in such
form and detail as Buyer may direct, of the absence of any liens, encumbrances
and claims on the goods or services under this order.
3. DELIVERY SCHEDULES: Deliveries shall be made both in quantities and at
times specified in Buyer's schedules. Buyer shall not be required to make
payment for goods delivered to Buyer which are in excess of quantities specified
in Buyer's delivery schedules. Buyer may change the rate of scheduled shipments
or direct temporary suspension of scheduled shipments, neither of which shall
entitle Seller to a modification of the price for goods or services covered by
this order. For orders of goods where quantities and/or delivery schedules are
not specified, Seller shall deliver goods in such quantities and times as Buyer
may direct in subsequent releases.
4. PREMIUM SHIPMENTS: If Seller's acts or omissions result in Seller's
failure to meet Buyer's delivery requirements and Buyer requires a more
expeditious method of transportation for the goods than the transportation
method originally specified by Buyer, Seller shall, at Buyer's option, (i)
promptly reimburse Buyer the difference in cost between the more expeditious
method and the original method, (ii) allow Buyer to reduce its payment of
Seller's invoices by such difference, or (iii) ship the goods as expeditiously
as possible at Seller's expense and invoice Buyer for the amount which Buyer
would have paid for normal shipment.
5. CHANGES: Buyer reserves the right at any time to direct changes, or
cause Seller to make changes, to drawings and specifications of the goods or to
otherwise change the scope of the work covered by this order, including work
with respect to such matters as inspection, testing or quality control, and
Seller agrees to promptly make such changes; any difference in price or time for
performance resulting from such changes shall be equitably adjusted by Buyer
after receipt of documentation in such form and detail as Buyer may direct. Any
changes to this order shall be made in accordance with Paragraph 31.
6. INSPECTION: Seller agrees that Buyer shall have the right to enter
Seller's facility at reasonable times to inspect the facility, goods, materials
and any property of Buyer covered by this order. Buyer's inspection of the
goods, whether during manufacture, prior to delivery or within a reasonable time
after delivery, shall not constitute acceptance of any work-in-process or
finished goods.
7. NONCONFORMING GOODS: To the extent Buyer rejects goods as
nonconforming, the quantities under this order will automatically be reduced
unless Buyer otherwise notifies Seller. Seller will not replace quantities so
reduced without a new order or schedule from Buyer. Nonconforming goods will be
held by Buyer for disposition in accordance with Seller's instructions at
Seller's
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risk. Seller's failure to provide written instructions within ten (10) days, or
such shorter period as may be commercially reasonable under the circumstances,
after notice of nonconformity shall entitle Buyer, at Buyer's option, to charge
Seller for storage and handling, or to dispose of the goods, without liability
to Seller. Payment for nonconforming goods shall not constitute an acceptance
thereof, limit or impair Buyer's right to assert any legal or equitable remedy,
or relieve Seller's responsibility for latent defects.
8. FORCE MAJEURE: Any delay or failure of either party to perform its
obligations hereunder shall be excused if, and to the extent that it is caused
by an event or occurrence beyond the reasonable control of the party and without
its fault or negligence, such as, by way of example and not by way of
limitation, acts of God, actions by any governmental authority (whether valid or
invalid), fires, floods, windstorms, explosions, riots, natural disasters, wars,
sabotage, labor problems (including lockouts, strikes and slowdowns), inability
to obtain power, material, labor, equipment or transportation, or court
injunction or order; provided that written notice of such delay (including the
anticipated duration of the delay) shall be given by the affected party to the
other party within ten (10) days. During the period of such delay or failure to
perform by Seller, Buyer, at its option, may purchase goods from other sources
and reduce its schedules to Seller by such quantities, without liability to
Seller, or have Seller provide the goods from other sources in quantities and at
times requested by Buyer, and at the price set forth in this order. If requested
by the Buyer Seller shall, within ten (10) days of such request, provide
adequate assurances that the delay shall not exceed thirty (30) days. If the
delay lasts more than thirty (30) days or Seller does not provide adequate
assurance that the delay will cease within thirty (30) days, Buyer may
immediately cancel the order without liability.
9. WARRANTY: Seller expressly warrants that all goods or services covered
by this order will conform to the specifications, drawings, samples, or
descriptions furnished to or by Buyer, and will be merchantable, of good
material and workmanship and free from defect. In addition, Seller acknowledges
that Seller knows of Buyer's intended use and expressly warrants that all goods
covered by this order which have been selected, designed, manufactured, or
assembled by Seller based upon Buyer's stated use, will be fit and sufficient
for the particular purposes intended by Buyer.
10. INGREDIENTS DISCLOSURE AND SPECIAL WARNINGS AND INSTRUCTIONS: If
requested by Buyer, Seller shall promptly furnish to Buyer in such form and
detail as Buyer may direct: (a) a list of all ingredients in the goods purchased
hereunder; (b) the amount of one or more ingredients; and (c) information
concerning any changes in or additions to such ingredients. Prior to and with
the shipment of the goods purchased hereunder, Seller agrees to furnish to Buyer
sufficient warning and notice in writing (including appropriate labels on goods,
containers and packing) of any hazardous material which is an ingredient or a
part of any of the goods, together with such special handling instructions as
may be necessary to advise carriers, Buyer, and their respective employees of
how to exercise that measure of care and precaution which will best prevent
bodily injury or property damage in the handling, transportation, processing,
use, or disposal of the goods, containers and packing shipped to Buyer.
11. INSOLVENCY: Buyer may immediately cancel this order without liability
to Seller in the event of the happening of any of the following or any other
comparable event: (a) insolvency of the Seller; (b) filing of a voluntary
petition in bankruptcy by Seller; (c) filing of any involuntary petition in
bankruptcy against Seller; (d) appointment of a receiver or trustee for Seller;
(e) or execution of an assignment for the benefit of creditors by Seller,
provided that such petition, appointment, or assignment is not vacated or
nullified within fifteen (15) days of such event.
l2. CANCELLATION FOR BREACH: Buyer reserves the right to cancel all or any
part of this order, without liability to Seller, if Seller: (a) repudiates or
breaches any of the terms of this order, including Seller's warranties; (b)
fails to perform services or deliver goods as specified by Buyer; or (c) fails
to make progress so as to endanger timely and proper completion of services or
delivery of goods; and does not correct such failure or breach within ten (10)
days (or such shorter period of time if commercially reasonable under the
circumstances) after receipt of written notice from Buyer specifying such
failure or breach.
13. TERMINATION: In addition to any other rights of Buyer to cancel or
terminate this order, Buyer may at its option immediately terminate all or any
part of this order, at any time and for any reason, by giving written notice to
Seller. Upon such termination, Buyer shall pay to Seller the following amounts
without duplication: (a) the order price for all goods or services which have
been completed in accordance with this order and not previously paid for; and
(b) the actual costs of work-in-process and raw materials incurred by Seller in
furnishing the goods or services under this order to the extent such costs are
reasonable in amount and are properly allocable or apportionable under generally
accepted accounting principles to the terminated portion of this order; less,
however the reasonable value or cost (whichever is higher) of any goods or
materials used or sold by Seller with Buyer's
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written consent, and the cost of any damaged or destroyed goods or material.
Buyer will make no payments for finished goods, work-in-process or raw materials
fabricated or procured by Seller in amounts in excess of those authorized in
delivery releases nor for any undelivered goods which are in Seller's standard
stock or which are readily marketable. Payments made under this Paragraph shall
not exceed the aggregate price payable by Buyer for finished goods which would
be produced by Seller under delivery or release schedules outstanding at the
date of termination. Except as provided in this Paragraph, Buyer shall not be
liable for and shall not be required to make payments to Seller, directly or on
account of claims by Seller's subcontractors, for loss of anticipated profit,
unabsorbed overhead, interest on claims, product development and engineering
costs, facilities and equipment rearrangement costs or rental, unamortized
depreciation costs, and general and administrative burden charges from
termination of this order. Within sixty (60) days from the effective date of
termination, Seller shall submit a comprehensive termination claim to Buyer,
with sufficient supporting data to permit Buyer's audit, and shall thereafter
promptly furnish such supplemental and supporting information as Buyer shall
request. Buyer or its agents, shall have the right to audit and examine all
books, records, facilities, work, material, inventories, and other items
relating to any termination claim of Seller.
14. INTELLECTUAL PROPERTY: Seller agrees: (a) to defend, hold harmless and
indemnify Buyer, its successors and customers against all claims, demands,
losses, suits, damages, liability and expenses (including reasonable attorney
fees) arising out of any suit, claim or action for actual or alleged direct or
contributory infringement of, or inducement to infringe, any United States or
foreign patent, trademark, copyright or mask work right by reason of the
manufacture, use or sale of the goods or services ordered, including
infringement arising out of compliance with specifications furnished by Buyer,
or for actual or alleged misuse or misappropriation of a trade secret resulting
directly or indirectly from Seller's actions; (b) to waive any claim against
Buyer under the Uniform Commercial Code or otherwise, including any hold
harmless or similar claim, in any way related to a claim asserted against Seller
or Buyer for patent, trademark, copyright or mask work right infringement or the
like, including claims arising out of compliance with specifications furnished
by Buyer; and (c) to grant to Buyer a worldwide, nonexclusive, royalty-free,
irrevocable license to repair and have repaired, to reconstruct and have
reconstructed the goods ordered hereunder. Seller assigns to Buyer all right,
title and interest in and to all trademarks, copyrights and mask work rights in
any material created for Buyer under this order.
15. TECHNICAL INFORMATION DISCLOSED TO BUYER: Seller agrees not to assert
any claim (other than a claim for patent infringement) with respect to any
technical information which Seller shall have disclosed or may hereafter
disclose to Buyer in connection with the goods or services covered by this
order.
16. INDEMNIFICATION: If Seller performs any work on Buyer's premises or
utilizes the property of Buyer, whether on or off Buyer's premises, Seller shall
indemnify and hold Buyer harmless from and against any liability, claims,
demands or expenses (including reasonable attorney fees) for damages to the
property of or injuries (including death) to Buyer, its employees or any other
person arising from or in connection with Seller's performance of work or use of
Buyer's property, except for such liability, claim, or demand arising out of the
sole negligence of Buyer.
17. INSURANCE: Seller shall maintain insurance coverage in amounts not less
than the following: (a) Workers' Compensation - Statutory Limits for the state
or states in which this order is to be performed (or evidence of authority to
self-insure); (b) Employer's Liability- $250,000; (c) Comprehensive General
Liability (including Products/Completed Operations and Blanket Contractual
Liability) - $1,000,000 per person, $1,000,000 per occurrence Personal Injury,
and $1,000,000 per occurrence Property Damage, or $1,000,000 per occurrence
Personal Injury and Property Damage combined single limit; and (d) Automobile
Liability (including owned, non-owned and hired vehicles) - $1,000,000 per
person, $1,000,000 per occurrence Personal Injury and $1,000,000 per occurrence
Property Damage, or $1,000,000 per occurrence Personal Injury and Property
Damage combined single limit. At Buyer's request, Seller shall furnish to Buyer
certificates of insurance setting forth the amount(s) of coverage, policy
number(s) and date(s) of expiration for insurance maintained by Seller and, if
further requested by Buyer, such certificates will provide that Buyer shall
receive thirty (30) days' prior written notification from the insurer of any
termination or reduction in the amount or scope of coverages. Seller's purchase
of appropriate insurance coverage or the furnishing of certificates of insurance
shall not release Seller of its obligations or liabilities under this order. In
the event of Seller's breach of this provision, Buyer shall have the right to
cancel the undelivered portion of any goods or services covered by this order
and shall not be required to make further payments except for conforming goods
delivered or services rendered prior to cancellation.
18. TOOLS: Unless otherwise agreed to by Buyer, Seller at its own expense
shall furnish, keep in good condition, and replace when necessary all tools,
jigs, dies, gauges, fixtures, molds and patterns ("Tools") necessary for the
production of the goods. The cost of changes to the Tools necessary to make
design and specification changes authorized by Buyer shall be paid for by Buyer.
Seller shall insure the Tools with full fire and extended coverage insurance for
the replacement value thereof. Seller grants Buyer
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an irrevocable option to take possession of and title to the Tools that are
special for the production of the goods upon payment to Seller of the book value
thereof less any amounts which Buyer has previously paid to Seller for the cost
of such Tools; provided, however, that this option shall not apply if such Tools
are used to produce goods that are the standard stock of Seller or if a
substantial quantity of like goods are being sold by Seller to others.
19. BAILED PROPERTY: All supplies, materials, tools, jigs, dies, gauges,
fixtures, molds, patterns, equipment and other items furnished by Buyer, either
directly or indirectly, to Seller to perform this order, or for which Seller has
been reimbursed by Buyer, shall be and remain the property of Buyer. Seller
shall bear the risk of loss of and damage to Buyer's property. Buyer's property
shall at all times be properly housed and maintained by Seller; shall not be
used by Seller for any purpose other than the performance of this order; shall
be deemed to be personalty; shall be conspicuously marked "Property of General
Motors Corporation" by Seller; shall not be commingled with the property of
Seller or with that of a third person; and shall not be moved from Seller's
premises without Buyer's prior written approval. Upon the request of Buyer, such
property shall be immediately released to Buyer or delivered to Buyer by Seller,
either (i) F.O.B. transport equipment at Seller's plant, properly packed and
marked in accordance with the requirements of the carrier selected by Buyer to
transport such property, or (ii) to any location designated by Buyer, in which
event Buyer shall pay to Seller the reasonable cost of delivering such property
to such location. Buyer shall have the right to enter onto Seller's premises at
all reasonable times to inspect such property and Seller's records with respect
thereto.
20. REMEDIES: The rights and remedies reserved to Buyer in this order shall
be cumulative, and additional to all other or further remedies provided in law
or equity.
21. DUTY DRAWBACK RIGHTS: This order includes all related customs duty and
import drawback rights, if any, (including rights developed by substitution and
rights which may be acquired from Seller's suppliers) which Seller can transfer
to Buyer. Seller agrees to inform Buyer of the existence of any such rights and
upon request to supply such documents as may be required to obtain such
drawback.
22. SETOFF: In addition to any right of setoff provided by law, all amounts
due Seller shall be considered net of indebtedness of Seller to General Motors
Corporation and its subsidiaries; and General Motors Corporation may deduct any
amounts due or to become due from Seller to General Motors Corporation and its
subsidiaries from any sums due or to become due from General Motors Corporation
to Seller.
23. ADVERTISING: Seller shall not, without first obtaining the written
consent of Buyer, in any manner advertise or publish the fact that Seller has
contracted to furnish Buyer the goods or services herein ordered, or use any
trademarks or tradenames of Buyer in Seller's advertising or promotional
materials. In the event of Seller's breach of this provision, Buyer shall have
the right to cancel the undelivered portion of any goods or services covered by
this order and shall not be required to make further payments except for
conforming goods delivered or services rendered prior to cancellation.
24. GOVERNMENT COMPLIANCE: Seller agrees to comply with all federal, state
and local laws, Executive Orders, rules, regulations and ordinances which may be
applicable to Seller's performance of its obligations under this order.
25. EQUAL OPPORTUNITY AND AFFIRMATIVE ACTION: This order incorporates by
reference: (a) all provisions of 41 C.F.R. 60-1.4, as amended, pertaining to the
equal opportunity clause in government contracts; (b) all provisions of 41
C.F.R. 60-250, as amended, pertaining to affirmative action for disabled
veterans of the Vietnam Era; and (c) all provisions of 41 C.F.R. 60-741, as
amended, pertaining to affirmative action for handicapped workers. Seller
certifies that it is in compliance with all applicable provisions of 41 C.F.R.
60-1, including but not limited to: (a) developing and presently having in full
force and effect a written affirmative action compliance program for each of its
establishments as required by 41 C.F.R. 60-1.40, as amended; (b) filing EE0-1
Reports as required by 41 C.F.R. 60-1.7, as amended; and (c) neither maintaining
segregated facilities nor permitting its employees to perform services at
segregated facilities as prohibited by 41 C.F.R. 60-1.8, as amended. Buyer
requests that Seller adopt and implement a policy to extend employment
opportunities to qualified applicants and employees on an equal basis regardless
of an individual's age, race, color, sex, religion or national origin.
26. NO IMPLIED WAIVER: The failure of either party at any time to require
performance by the other party of any provision of this order shall in no way
affect the right to require such performance at any time thereafter, nor shall
the waiver of either party of a breach of any provision of this order constitute
a waiver of any succeeding breach of the same or any other provision.
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27. NON-ASSIGNMENT: Seller may not assign or delegate its obligations under
this order without Buyer's prior written consent.
28. RELATIONSHIP OF PARTIES: Seller and Buyer are independent
contracting parties and nothing in this order shall make either party the agent
or legal representative of the other for any purpose whatsoever, nor does it
grant either party any authority to assume or to create any obligation on behalf
of or in the name of the other.
29. GOVERNING LAW: This order is to be construed according to the laws of
the state from which this order issues as shown by the address of Buyer on the
face side of this order.
30. SEVERABILITY: If any term of this order is invalid or unenforceable
under any statute, regulation, ordinance, executive order or other rule of law,
such term shall be deemed reformed or deleted, but only to the extent necessary
to comply with such statute, regulation, ordinance, order or rule, and the
remaining provisions of this order shall remain in full force and effect.
31. ENTIRE AGREEMENT: This order, together with the attachments, exhibits,
or supplements, specifically referenced in this order, constitutes the entire
agreement between Seller and Buyer with respect to the matter contained herein
and supersedes all prior oral or written representations and agreements. This
order may only be modified by a purchase order amendment/alteration issued by
Buyer.
May 1986
