Exhibit 10.25
MANUFACTURING AGREEMENT
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This MANUFACTURING AGREEMENT is made and entered into as of the 1st day of
August, 1995, by and between XXXXXXXX, INC., a corporation established and
existing under the laws of the State of Minnesota having its principal place of
business at 0000 Xxxxxxxx Xxxx, Xxxxxxxxxx, XX 00000-0000, X.X.X. ("SHELDAHL"),
and JIUJIANG FLEX CO., LTD., a corporation established and existing under the
laws of China having its principal place of business at 0 Xxxxxxx Xxxx (X),
Xxxxxxxx Xxxxxxx Xxxxx 000000 ("SNW").
BACKGROUND:
X. XXXXXXXX is actively engaged in the business of developing,
manufacturing and marketing flexible copperclad laminates and associated
coverfilm tapes (coverlay) throughout the world.
B. SNW has been established in Jiujiang, Jiangxi China to manufacture
flexible copperclad laminates and associated coverfilm tapes.
C. Both parties desire to establish a long-term business relationship
through technical assistance, sales of copperclad laminates and associated
coverfilm tapes and investment by XXXXXXXX and others in the SNW and are
entering into or have entered into the following agreements (the "Additional
Agreements") in addition to this Agreement: (i) Agreement Relating to Joint
Venture; (ii) Marketing and License Agreement and (iii) Agreement Relating to
Payments.
NOW, THEREFORE, in consideration of the mutual covenants and premises
contained herein, the parties agree as follows:
1. Definitions.
Terms used in this Agreement which are not defined in this Agreement shall
have the meanings given such terms in the Marketing and License Agreement.
2. Manufacture of Licensed Products.
2.1 SNW agrees to manufacture and sell to XXXXXXXX, and XXXXXXXX agrees to
purchase from SNW, 120,000 square meters of Licensed Products which are flexible
copperclad laminates each year for three (3) consecutive years beginning the
fourth month after the Licensed Products manufactured at the SNW Plant meet the
performance and quality standards of such products manufactured by XXXXXXXX. In
the event XXXXXXXX grants a license during such three-year period as provided in
Section 2.2 of the Marketing and License Agreement, XXXXXXXX'x 120,000 square
meter
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commitment shall be replaced by the commitment provided in that agreement.
2.2 In addition to the Licensed Products sold by the SNW to XXXXXXXX under
Section 2.1 above, the SNW shall manufacture and sell to XXXXXXXX up to 200,000
square meters of Licensed Products each year during the term of this Agreement
beginning the month XXXXXXXX'x minimum purchases start under Section 2.1 above.
XXXXXXXX shall give SNW six (6) months' advance notice of its intended purchases
and the Board of Directors of the SNW must approve such purchases, which
approval shall not be unreasonably withheld.
2.3 During the three-year period in which XXXXXXXX is required to purchase
Licensed Products under Section 2.1 of this Agreement, or until such earlier
time, if any, as a license is granted by XXXXXXXX to a third party as provided
in Section 2.2 of the Marketing and License Agreement, XXXXXXXX agrees to
purchase from the SNW all of XXXXXXXX'x requirements for Licensed Products in
Asia to the extent the SNW can timely deliver Licensed Products to XXXXXXXX
which meet the performance and quality standards of such products manufactured
by XXXXXXXX. After the three-year period in which XXXXXXXX is required to
purchase Licensed Products under Section 2.1 above, until such time, if any, as
a license is granted by XXXXXXXX as provided in Section 2.2 of the Marketing and
License Agreement, XXXXXXXX shall present its estimate of the demand for
Licensed Products in Asia and agrees that SNW shall be XXXXXXXX'x primary
supplier of such products in Asia provided SNW can timely deliver Licensed
Products to XXXXXXXX which meet the performance and quality standards of such
products manufactured by XXXXXXXX.
2.4 After the Licensed Products meet the performance and quality standards
of such products manufactured by XXXXXXXX, SNW shall not change the Licensed
Products or the manufacturing process for the Licensed Products without the
written consent of XXXXXXXX.
3. Price and Terms.
3.1 The price of each of the Licensed Products shall be equal to 80% of
the price of such products to the world high volume market as agreed to annually
by XXXXXXXX and the Board of Directors of the SNW based on information available
to the parties. All payments shall be made in United States dollars.
3.2 The terms of payment for the Licensed Products purchased by XXXXXXXX
under this Agreement shall be net 30 days from invoice date unless the parties
agree to other payment terms prior to product shipment.
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3.3 SNW shall deliver the Licensed Products F.O.B. point of destination as
designated in XXXXXXXX'x purchase order. The purchaser of the Licensed Products
shall be responsible for shipping charges.
3.4 Each of the Licensed Products sold to XXXXXXXX shall conform with the
performance and quality specifications for such product. Replacement of
defective Licensed Products will be made without charge by SNW within thirty
(30) days of receipt by SNW of notice that the Licensed Products are defective.
3.5 XXXXXXXX may, upon reasonable notice, visit the SNW Plant and review
its production and quality control procedures. SNW shall deliver to XXXXXXXX
test samples of the Licensed Products produced by it on reasonable notice by
XXXXXXXX. XXXXXXXX shall pay for the testing of the product samples requested
by XXXXXXXX from the SNW.
3.6 SNW shall indemnify and hold XXXXXXXX harmless for all liabilities
incurred by XXXXXXXX related to products manufactured by the SNW and sold by
XXXXXXXX.
3.7 XXXXXXXX shall order Licensed Products by submitting written purchase
orders to SNW at least 30 days prior to shipment and shall specify the quantity,
price, delivery date, method of shipment and product specifications, however,
XXXXXXXX shall provide SNW a six-month rolling forecast of estimated purchases
and shall provide SNW with a monthly update of such forecast. In the event
XXXXXXXX'x actual purchases materially exceed its forecast, the parties shall
work together to resolve the difference.
4. Confidentiality.
The confidentiality provisions contained in Section 11 of the Marketing and
License Agreement shall apply to any Technical Information and other
confidential information acquired from the other party under this Agreement.
5. Term and Termination.
5.1 The initial term of this Agreement shall be for a period of ten (10)
years from the date the government of China approves this Agreement and the
Additional Agreements; provided that if a written notice of termination shall
not be received by either party from the other party at least six months prior
to the expiration of the initial term or any renewal term, the term of this
agreement shall be automatically renewed for successive two year terms beyond
the initial term until such written notice of termination is timely received.
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5.2 If either party defaults on or breaches a material provision of this
Agreement or any Additional Agreement, the party not in default or breach shall
have the right to cancel this Agreement upon sixty (60) days' written notice;
provided, however, that if the defaulting party corrects the default or breach
within the sixty (60) day period, this Agreement shall continue in full force
and effect.
5.3 Either party may terminate this Agreement in the event that
proceedings for reorganization, liquidation, bankruptcy or receivership are
filed or instituted against or by the other party.
5.4 This Agreement shall terminate in the event the Agreement Relating to
Joint Venture is terminated under Section 15.2(e) or the Closing under that
agreement does not occur.
6. Force Majeure.
Both parties to this Agreement shall be excused from the performance of
their obligations hereunder, other than obligations to pay for goods sold and
delivered under this Agreement, and shall be excused for so long as such
condition continues, if such performance is prevented by conditions beyond the
control of the parties, such as acts of God, voluntary or involuntary compliance
with any regulation, law or order of any government, war, civil commotion,
strike, epidemic, failure or default of public utilities or common carriers,
destruction of production facilities or materials by fire, earthquake, storm or
like catastrophe. If such event occurs, XXXXXXXX'x annual minimum purchase
obligations in Section 2.1 shall be reduced proportionately for the time during
the year in which such condition continues.
7. Arbitration.
Any dispute between the parties arising out of or concerning the subject
matter of, or the respective rights and obligations of the parties under, this
Agreement shall be submitted to arbitration if it cannot be resolved by the
parties. If arbitration is requested by XXXXXXXX, the arbitration proceeding
shall be conducted in Jiujiang, Jiangxi China in accordance with the rules of
the Commercial Arbitration Association then in effect in China; if arbitration
is requested by SNW, the arbitration proceeding shall be conducted in
Minneapolis, Minnesota, U.S.A. in accordance with the rules of the American
Arbitration Association then in effect.
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8. Governing Law.
This Agreement and the rights and obligations of the parties hereunder
shall be construed and interpreted in accordance with the laws of China.
9. Assignment.
Neither this Agreement nor any rights or obligations hereunder may be
assigned by either party without the prior written consent of the other party.
Notwithstanding the foregoing, XXXXXXXX may assign all of its rights and
obligations under this Agreement to any entity which acquires XXXXXXXX by
merger, consolidation or purchase of substantially all of the assets or business
of XXXXXXXX related to the Licensed Products.
10. Entire Agreement.
This Agreement and the Additional Agreements shall constitute the entire
agreement of the parties with respect to the subject matter of this Agreement
and this Agreement shall be attached to the Joint Venture Contract and Articles
of Association.
11. Translation.
The parties acknowledge that a Chinese translation of this Agreement is
being executed by the parties on the date hereof. In interpreting this
Agreement, the English version and Chinese version shall be given equal weight.
There shall be signed four (4) copies of this Agreement in Chinese and four (4)
copies in English. Each party to the Agreement Relating to Joint Venture
including SNW shall receive one copy in English and one copy in Chinese.
12. Government Approval.
This Agreement shall be effective only upon approval by the Chinese
Government Agency of the terms of this Agreement and the Additional Agreements,
to the extent such approval is required.
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IN WITNESS WHEREOF, the parties have caused their respective
representatives to sign and execute this Agreement in counterpart and each party
holds one copy.
JIUJIANG FLEX CO., LTD.
By /s/ Xxxxxx Xxxxxxxxx
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Its Vice Chairman
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By /s/ Xxxx-Xxxxx Xxx
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By /s/ Xxxxxxx C.H. Ma
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XXXXXXXX, INC.
By /s/ Xxxxxx Xxxxxxxxx
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Its V.P./Sales & Marketing
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