Exhibit 10.38.30
SUPPLY AGREEMENT
THIS AGREEMENT is made as of January 1, 1999,
BETWEEN:
WOODBRIDGE FOAM CORPORATION 0000
Xxxxxxxxxxxxx Xxxx.,
Xxxxxxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
("Woodbridge")
- and -
UFP TECHNOLOGIES, INC.
000 Xxxx Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx, XXX 00000-0000
("UFP")
WHEREAS Woodbridge intends to issue a purchase order to UFP for the supply
of fabricated and/or thermoformed energy absorbing polyurethane foam roofrails
for the D-186 program;
WHEREAS this is the first of what the parties hope to be several programs
for which UFP will supply to Woodbridge fabricated and/or thermoformed
non-decorative, energy absorbing polyurethane foam, automotive interior
passenger protection parts ("EA Parts");
AND WHEREAS the parties desire that this Agreement will govern the
relationship and apply to all purchase orders issued by Woodbridge to UFP for EA
Parts.
THEREFORE, Woodbridge and UFP agree as follows:
1. EXCLUSIVITY
The parties agree that, during the term of this Agreement:
(a) UFP will exclusively supply EA Parts to Woodbridge and will not supply
EA Parts to, nor for, any other party; and
(b) so long as UFP provides Woodbridge with competitive service, delivery
and quality at the agreed upon prices throughout the term of this Agreement,
Woodbridge will exclusively purchase EA Parts for the D-186 program from UFP.
2. TECHNOLOGY
(a) Woodbridge agrees that any and all inventions, improvements and
discoveries (collectively, "Processing Inventions"), whether or not patentable,
which UFP may conceive or make, in connection with the process of manufacturing,
fabricating or thermoforming the EA Parts manufactured pursuant to this
Agreement shall be the sole and exclusive property of UFP.
(b) In the event that this Agreement is terminated for cause or any portion
of a program is in-sourced by Woodbridge due to UFP's inability to fulfil the
program requirements, UFP agrees to grant to Woodbridge a fully paid-up
non-exclusive licence to use such Processing Inventions in its business for the
life of the respective EA Parts' programs.
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(c) UFP agrees that any and all inventions, improvements and discoveries
(collectively, "Product Inventions"), whether or not patentable, which it may
conceive, contribute to, or make, in connection with the product attributes of
the EA Parts manufactured pursuant to this Agreement shall be the sole and
exclusive property of Woodbridge.
(d) Woodbridge agrees to grant to UFP a fully paid-up non-exclusive licence
to use such Product Inventions solely to supply Woodbridge with such EA Parts.
3. LIABILITY
Woodbridge acknowledges that UFP shall not be responsible for the
suitability of the EA Parts for their intended use.
4. TERM AND TERMINATION
(a) The term of this Agreement shall commence on January 1, 1999 and shall
run for a period of four (4) years and shall automatically be extended for
additional one (1) year periods, unless earlier cancelled or terminated in
accordance with the provisions of this Agreement. Either party may give written
notice to the other party of its intention to terminate this Agreement at least
six (6) months prior to the end of the term or any renewal thereof.
(b) Woodbridge shall have the right to cancel this Agreement and any
purchase order without cause and Woodbridge's liability for cancellation shall
be limited as follows:
(i) in the event Woodbridge cancels any purchase order for the supply of
EA Parts for the D-186 program effective within four years of the date of this
Agreement, Woodbridge's liability will be limited to UFP's actual cost for work
and materials applicable to each blanket purchase order which shall have been
authorized by Woodbridge and actually expended when the notice of cancellation
was received by UFP, plus reimbursement for the custom equipment built or
purchased specifically for the D-186 program as follows:
CANCELLATION DURING: COST REIMBURSED:
Year 1 $300,000
Year 2 $225,000
Year 3 $150,000
Year 4 $ 75,000
(ii) in the event either party shall cease to exist or become
insolvent or the subject of bankruptcy or insolvency proceedings or shall commit
a material breach of this Agreement, the non-breaching party shall have no
liability to other party;
(iii) in the event Woodbridge cancels a purchase order for the
supply of EA Parts for the D-186 program effective after the fourth anniversary
of this Agreement or a purchase order for the supply of any parts for any
program other than the D-186 program at any time, Woodbridge's liability will be
limited to UFP's actual cost for work and materials applicable to each purchase
order which has been authorized by Woodbridge and actually expended when the
notice of cancellation was received by UFP.
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5. BUSINESS PROCEDURES
The parties agree that they will conduct business with one another in the
following manner:
(a) MARKETING. Woodbridge will be responsible for all marketing and sales
activity related to the EA Parts. Any and all communication with Tier 1 and OEM
customers ("Customers") will be the sole responsibility of Woodbridge. In this
regard, UFP agrees that it will not communicate with, nor solicit any EA Parts
business from Customers, without the express written consent of Woodbridge.
(b) FOAM PRODUCTION. UFP agrees to purchase all of the slab energy
absorbing polyurethane foam required to manufacture the EA Parts (the "Foam")
exclusively from Woodbridge. However, at Woodbridge's sole option, Woodbridge
may from time to time provide UFP with its written consent to allow UFP to
purchase Foam from another manufacturer upon terms approved by Woodbridge.
(c) PURCHASE AND SALE. During the term of this agreement, UFP agrees to
supply EA Parts to Woodbridge on the terms and in the manner set forth in this
agreement, which includes the Standard Terms and Conditions (the "Standard
Terms") attached as Appendix A and The Woodbridge Group Supplier Requirements
Addendum to the QS-9000, as amended from time to time (the "QS-9000 Addendum")
(collectively, this "Agreement"). The general terms set forth in this Agreement
(which include the Standard Terms and the QS-9000 Addendum, as amended from time
to time) shall govern and shall be applicable to any purchase order between UFP
and Woodbridge and shall supersede and take priority over any contrary or
inconsistent terms set forth in any other document, acknowledgement, ASN, or
confirmation whether oral, pre-printed, typed or hand-written. The only manner
in which any provision of this Agreement may be superseded or overridden is by a
typewritten document signed by both UFP and Woodbridge specifically identifying
and referring to this Agreement and the particular provisions to be superseded
or overridden. In the event of any conflict between the terms of a purchase
order and the various documents which constitute this Agreement, the governing
provision shall be that which is found in the first of the following documents
which are listed in descending order of priority: the face of the purchase
order, this agreement, the Standard Terms and the XX-0000 Xxxxxxxx.
(d) PURCHASE ORDERS. Woodbridge or its affiliates may issue purchase orders
to UFP from time to time for EA Parts which incorporate the Foam. Upon
acceptance of a purchase order that sets out specific quantities of EA Parts to
be supplied (i.e. a spot buy), UFP shall supply such EA Parts in accordance with
the specific terms contained in the purchase order and the general terms
contained in this Agreement. However, upon acceptance of a purchase order which
does not set out particular quantities of EA Parts to be supplied ("Blanket
Purchase Orders"), UFP shall be deemed to agree to supply, at Woodbridge's sole
option, all of Woodbridge's requirements for such EA Parts during the life of
the program. Pursuant to such Blanket Purchase Orders, Woodbridge or its
affiliates may periodically issue product release orders to UFP for deliveries
of quantities of EA Parts as required and UFP shall deliver such quantities of
EA Parts to Woodbridge in accordance with the specific terms of the release, the
Blanket Purchase Order and the general terms of this Agreement.
(e) QS-9000. UFP agrees to adhere to the intent of QS-9000 and to comply
with
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Woodbridge's QS-9000 Addendum. Woodbridge agrees to provide reasonable
assistance to UFP in UFP's efforts to upgrade their current ISO9000
certification to a QS-9000 certification.
(f) PRICE REDUCTIONS. Price reduction goals established by Customers (i.e.
pursuant to Long Term Agreements or otherwise) will be shared by Woodbridge and
UFP in proportion to their respective value added to the EA Parts sold to
Customers. In this regard, UFP agrees to reduce its price for EA Parts in
amounts necessary to meet its proportionate share of Customer's price reduction
goals on a timely basis. Any additional savings will be proportionally shared
between Woodbridge and UFP.
(g) QUALITY REPORTS. Woodbridge will provide to UFP out-turn quality
reports related to Foam upon request. Woodbridge and UFP will share open quality
books with one another and with Customers, if necessary.
6. CONFIDENTIALITY
Both parties recognize the importance of confidentiality with respect to
this Agreement and the contents of the purchase orders. Each party therefore
undertakes not to disclose the terms and conditions under this Agreement or any
purchase order to any third party without the prior written consent of the other
party unless it was required to be disclosed pursuant to law, regulation or
mandatory order of judicial or governmental or local authority or either party
reasonably requires it to be disclosed for legal or tax purposes.
The parties hereto also recognize and agree that all information made
available by one party to the other shall be and remain the property of the
submitting party and shall be kept strictly confidential by the receiving party
when designated as confidential in tangible form, unless written permission to
the disclosure has been given prior to the disclosure, or the information (i)
was in the receiving party's possession prior to the receipt from the submitting
party, or (ii) became a matter of general public knowledge through no fault of
the receiving party, or (iii) was rightfully received by the receiving party
from a third party without an obligation of confidence, or (iv) was
independently developed by the receiving party, or (v) was required to be
disclosed pursuant to law, regulation or mandatory order of judicial or
governmental or local authority.
7. NOTICES
Any notice or other communications required by this Agreement shall be in
writing and shall be deemed given when delivered in person or received by the
addressee at the above address.
IN WITNESS WHEREOF, the parties hereto cause this Agreement to be executed
in duplicate by their duly authorized representatives, respectively.
WOODBRIDGE FOAM CORPORATION UFP TECHNOLOGIES, INC.
By: Xxxxx Xxxxxx By: /s/ R. XXXXXXX XXXXXX
--------------------------- ---------------------------
Name: V.P. R&P, Purch. Name: R. Xxxxxxx Xxxxxx
------------------------ ------------------------
Title: Xxxxx Xxxxxx Title: President
----------------------- ------------------------
Date: April 26/99 Date: 4/15/99
------------------------- -------------------------
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By: /s/ XXXXX XXXXXX
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Name: Xxxxx Xxxxxx
-------------------------
Title: VP Technology
-----------------------
Date: April 30/99
-------------------------
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APPENDIX A
STANDARD TERMS AND CONDITIONS
References to "Purchase Orders" in these Standard Terms shall include
purchase orders, releases and tooling purchase orders, as applicable.
1. GOVERNING PROVISION
THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE PROVINCE OF ONTARIO. THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL NOT BE GOVERNED BY THE PROVISIONS OF THE 1980
U.N. CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS.
2. CHANGES IN PURCHASE ORDER
Woodbridge reserves the right at any time to change specifications,
methods of shipment or packing, or place or time of delivery. If any such
change causes an increase or decrease in the cost of or the time required
for performance of UFP's obligations under a Purchase Order, an equitable
adjustment shall be made in the contract price or delivery schedule, or
both, or Woodbridge may at its option, cancel a Purchase Order if
agreement on an equitable adjustment cannot be reached. Any claim by UFP
for adjustment under this Article shall be deemed waived unless asserted
in writing within thirty (30) days from receipt by UFP of the change
order. Price increases or extensions of time for delivery shall not be
binding on Woodbridge unless evidenced by a Purchase Order change notice
issued by Woodbridge. No substitutions, changes or modifications of the
ordered item shall be made except upon Woodbridge's written authority.
3. DELIVERY AND DELAY
UFP shall deliver the EA Parts in the quantities and within the time,
which is of the essence, in accordance with the specifications, drawings
or approved samples, and at the prices specified in a Purchase Order.
Failure of UFP to comply with such requirements shall entitle Woodbridge,
in addition to any other rights or remedies afforded Woodbridge by law or
contract, to cancel the Purchase Order and be relieved of all liability
for any undelivered portion. If shipment is delayed for any cause, UFP
must report the same to Woodbridge promptly. Failure of Woodbridge to
insist upon strict performance shall not constitute a waiver of any of
the provisions of the Purchase Order or waiver or any default. Any
failure by Woodbridge to exercise its remedies with respect to any
instalment shall not be deemed to constitute a waiver with respect to
subsequent instalments.
4. NOTICE OF SHIPPING, PACKING AND RISK OF LOSS
All EA Parts shall be suitably packed, marked with Woodbridge's Purchase
Order Number and shipped in accordance with shipping instructions
specified in the Purchase Order and the QS-9000 Addendum and otherwise in
accordance with the requirements of common carriers so as to obtain the
lowest transportation cost. UFP shall be liable to Woodbridge for any
loss or damage resulting from UFP's failure to provide adequate
protection during shipment. Additional expenses, charges or claims
incurred as a result of deviation from the specified route,
non-compliance with other shipping instructions, or improper description
of the shipment in shipping documents shall be assumed by UFP. Risk that
the ordered EA Parts may be lost, damaged or delayed in transit shall be
upon UFP until conforming EA Parts have been actually received, inspected
and accepted by Woodbridge.
5. WARRANTIES, REMEDIES
UFP warrants that EA Parts to be furnished hereunder shall, during the
warranty period specified below, (a) be free and clear of all liens and
encumbrances, good and merchantable title thereto being in UFP; (b) be
free from any defects in material or workmanship (latent or otherwise)
and of good and merchantable quality; (c) conform to Woodbridge's
specifications and drawings and with representations with respect thereto
previously made by UFP and (d) comply and have been produced, processed,
packaged, labelled, delivered and sold in conformity with all applicable
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federal, provincial, state or other laws, administrative regulations and
orders, including but not limited to the Occupational Safety and Health
Act of 1971 (U.S.) as amended from time to time. The warranty period will
continue for the same period as the warranty period offered by
Woodbridge, its Customer, whichever is longer. The foregoing warranties
shall survive inspection, delivery and payment and shall run in favour of
Woodbridge, its successors and assigns and its customers, whether direct
or indirect.
If any such EA Parts shall be found to be unsatisfactory, defective or
inferior in quality, or not to conform to Woodbridge's specifications or
any other requirements thereof (including UFP's warranties), Woodbridge
may, at its option return such EA Parts to UFP for replacement, credit or
refund, as Woodbridge shall direct. Woodbridge shall also have the right
to cancel any unshipped portions of any Purchase Order. Woodbridge shall
be reimbursed by UFP for all of the costs and expenses in connection with
the storage, handling, packing and/or transporting of any such defective
or otherwise non-conforming EA Parts, and UFP shall assume all risk of
loss or damage in transit to EA Parts returned by Woodbridge.
Furthermore, UFP shall indemnify Woodbridge for a sorting and labour
costs incurred by Woodbridge or its customer with respect to any such
defective or otherwise non-conforming EA Parts. Woodbridge's remedies for
breach of the warranties set out in this Section are hereby expressly
limited to the foregoing.
6. INDEMNIFICATION BY UFP
UFP shall indemnify Woodbridge, its successors and assigns against any
and all losses, damages and expenses (including attorneys' fees and other
costs of defending any action) which they or any of them, may sustain or
incur as a result of any claim for property damage, personal injury or
death arising out of negligence, strict liability in tort or based on any
other theory of law in connection with the EA Parts furnished by UFP, or
as a result of any claim that the EA Parts furnished by UFP fail to
conform to or comply with any federal, provincial, state or local laws,
regulations or standards, save and except as any claim relates to the
Foam material manufactured by Woodbridge and supplied to UFP or any claim
based on negligent design of EA Parts.
7. INSURANCE
UFP shall procure and maintain during the entire term of this Agreement
product liability insurance. The insurance shall be with limits and with
a carrier or carriers reasonably satisfactory to Woodbridge. UFP shall
furnish Woodbridge with certificates of such insurance before commencing
such work. The insurance shall provide that the policy shall not be
cancelled or reduced in coverage until ten (10) days after written notice
shall have been given to Woodbridge of cancellation or reduction in
coverage. All insurance shall name Woodbridge as an additional insured.
8. WOODBRIDGE'S DAMAGES
Subject to the limitation set out in Section 5, UFP shall be responsible
for any and all losses, liabilities, damages and expenses and including
but not limited to attorneys fees and other costs of prosecuting an
action for breach, which Woodbridge may sustain or incur as a result of
any breach of this Agreement.
9. PRICES
Woodbridge shall not be billed at prices higher than those stated on a
Purchase Order, and no additional charges of any kind shall be imposed,
unless authorized by a Purchase Order change notice issued by Woodbridge.
UFP represents that the price charged for the EA Parts comply with
applicable government regulations in effect at time of quotation, sale or
delivery.
10. PATENTS, TRADEMARKS AND COPYRIGHTS
Except for EA Parts ordered in accordance with Woodbridge's design, UFP
warrants that the sale or use of EA Parts furnished hereunder will not
infringe or contribute to infringement of any patent, copyright,
trademark, trade secret or other proprietary right or subject Woodbridge
or its customers (direct or indirect) to royalties in Canada, the United
States or elsewhere, and shall indemnify and
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save harmless Woodbridge, its successors and assigns and its customers
(whether direct or indirect), against any and all losses, damages and
expenses (including attorneys' fees and other costs of defending any
infringement action) which they, or any of them, may sustain or incur as
the result of a breach of its warranty.
11. FAIR LABOUR STANDARDS CERTIFICATE
UFP hereby certifies that all EA Parts furnished hereunder shall have
been produced in accordance with all applicable provincial, state and
federal laws governing general conditions for labour employed in the
production of such EA Parts.
12. NON-ASSIGNABILITY
UFP shall not assign or sublet the work to be done hereunder without the
prior written consent of Woodbridge, but this provision shall not
restrict UFP in the procurement of component parts or materials. UFP will
ensure that any and all third parties to whom UFP subcontracts any of the
work hereunder are bound by all of the terms and conditions contained in
this Agreement.
13. FORCE MAJEURE
Woodbridge shall not be liable for any damage as a result of any delay or
failure to accept delivery due to any act of God, act of UFP, embargo or
other governmental act, regulation or request, fire, accident, strike,
slowdown or other labour difficulties, war, riot, delay in
transportation, defaults of common carriers, inability to obtain
necessary labour, materials, or manufacturing facilities or, without
limiting the foregoing, any other delays beyond the Woodbridge's control
which shall affect the Woodbridge's ability to receive and use the EA
Parts or services in the event of such delay, the date of delivery shall
be extended for a period equal to the time lost because of the delay.
UFP's exclusive remedy for other delays and for Woodbridge's inability to
accept delivery for any reason shall be rescission of the Purchase Order.
14. GOVERNMENT CONTRACT NON-DISCRIMINATION IN EMPLOYMENT PROVISION
If any Purchase Order is in furtherance of a government contract or
subcontract or is otherwise subject to any legislation governing such
contracts, the contract provisions required therein are hereby
incorporated by reference.
15. AUDIT RIGHTS
Woodbridge will have the right at any reasonable time to send its
authorized representatives to UFP's offices, warehouses and production
facilities to examine UFP's processes and quality systems and all
pertinent documents, data and materials in the possession or under the
control of UFP relating to any of UFP's obligations under a Purchase
Order or this Agreement or to verify any aspects of UFP's responses to
Woodbridge's self-assessment survey. Woodbridge will also have the right
to interview any of UFP's current and former employees. Seller shall
maintain all pertinent books and records relating to a Purchase Order for
a period of six (6) years after completion of services or delivery of EA
Parts.
16. ARBITRATION
If either party initiates litigation on contractual issues, the other
party shall have the right to institute mediation and binding arbitration
in the Province of Ontario in accordance with the laws of that province.
Each party will bear equally the costs of the mediation and arbitration.
17. YEAR 2000
UFP represents and warrants that all of its Systems are Year 2000
compliant and that there will be no interruption of supply to Woodbridge
and no increase in cost to Woodbridge. For the purposes of this section,
"Systems" shall mean all information and computer systems, equipment and
devices used in any of UFP's operations, including but not limited to
material forecasting and logistics, EDI, computer hardware and software,
financial and procurement systems, lot traceability and quality data,
manufacturing processes, diagnostics, inspection equipment and bar code
scanning
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equipment.
18. SURVIVAL OF TERMS
The provisions of Articles 5, 6, 7, 8, 10 and 18 will survive the
termination of this Agreement.
