Exhibit 10.2
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN PORTIONS OF
THIS DOCUMENT. CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
SUPPLY AGREEMENT
This Agreement made this 18th day of September, 2000 ("Effective Date") by
and between Toray Composites (America) Inc., a Washington corporation, with
offices located at 00000 00xx Xxxxxx Xxxx, Xxxxxx Xxxxxxxxxx ("Seller") and Q
Power, Inc., a Delaware corporation, with offices located at 000 Xxxxxxxx Xxxxx,
Xxxx Xxxxxxxxxx ("Buyer") collectively known as the ("Parties").
WITNESSETH THAT:
WHEREAS, Seller is in the business inter alia of designing, manufacturing
and selling composite flywheel rims; and
WHEREAS, Buyer requires a composite rim supplier having the technical
capability of and willingness to manufacture composite rims for Buyer's flywheel
systems and
WHEREAS, Seller has the technical capability and facilities for producing
[**] (the Product) for Buyer;
WHEREAS, Seller and Buyer desire that Seller will supply only the Buyer
with the Product, and Seller desires that Buyer will procure the Product only
from Seller on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants, agreements, and
representations herein contained, the Parties agree as follows:
1. Qualification of Product.
Buyer and Seller shall cooperate in the performance of certain
qualification tests to demonstrate the capability of Seller's composite rims to
meet Buyer's performance requirements as set forth in a performance
specification yet to be written. Buyer shall be responsible for all costs of
testing and approval, under terms to be mutually agreed and defined in a
purchase order from Buyer.
2. Exclusive Purchase of Buyer's Requirements.
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Buyer agrees to purchase the Product only from Seller, and that Buyer will
not purchase the Product for use in Buyer's flywheel systems except from Seller
as long as the exclusive supply arrangement in Article 3 remains in effect.
3. Exclusive Supply of Buyer's Requirements.
Seller agrees to sell the Product exclusively to Buyer, and that Seller
will not sell the Product during the term of this Agreement, or as extended,
except to Buyer.
4. Manufacture by Buyer.
a) Seller shall be the exclusive manufacturer of the Product purchased by
Buyer as set forth above. However, Buyer shall have the right to
manufacture the Product or have others manufacture the Product for
Buyer in the event that
i) Seller dissolves, or terminates its operations, or
ii) Seller is unable to supply the Product meeting performance
requirements, on time and of acceptable quality per mutually
agreed quality assurance standards;
iii) Seller is unable to sell [**] as specified [**]
b) If Seller fails to supply the Product as set forth in paragraph a)
above, Buyer will notify Seller in writing of the failure and Seller
will have 10 working days to define a mutually acceptable cure. Should
Seller be unable to cure, or unwilling to supply the Product, Buyer
shall have the right to make, have made, modify and sell the Product,
as original and replacement elements of Buyer's flywheel systems.
5. Notices.
All notices, requests, demands and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if delivered personally, given by prepaid telegram or mailed first class,
postage prepaid, by registered, certified or express mail, or other express
delivery service as follows:
If to Seller:
Xxxxxxxxx Xxxxx, Director
Composites Development Center
Toray Composites (America) Inc.
00000 00xx Xxxxxx Xxxx
Xxxxxx, XX 00000
If to Buyer:
Xx. Xxxxxxxxxxx X. Xxxxxx, President
Q Power, Inc.
[**] = Confidential treatment requested for redacted portion.
000 Xxxxxxxx Xxxxx
Xxxx, XX 00000
6. Limitations of Liability.
In no event shall either Party be liable to the other for special
incidental, punitive or consequential damages arising out of or related to this
Agreement, its termination or expiration, or the manufacture, sale, delivery,
resale, or use of the Product covered by this Agreement. This limitation applies
regardless of whether the damages or other relief are sought based on breach of
warranty, breach of contract, negligence, strict liability in tort, or any other
legal or equitable theory. This limitation does not apply to direct damages
caused by breach of a material obligation under this Agreement or to claims for
personal injury by a third Party.
7. Governing Law.
The rights and obligations of the Parties under this Agreement shall be
governed by and construed in accordance with the substantive law in force in the
State of Washington without recourse to other laws or conflicts of laws.
8. Enforceability.
In the event any part or parts of this Agreement are found to be invalid,
illegal or unenforceable in any respect, the remaining provisions shall
nevertheless be binding and shall in no way be affected or impaired.
9. Sole Understanding.
This Agreement is the entire and sole understanding of the Parties with
respect to the subject matter hereof and supersedes all other prior agreements,
understandings, discussions and other communications, whether oral or written.
10. Term of Agreement.
This Agreement shall remain in force, unless altered or cancelled in
writing by mutual consent of both Parties or as otherwise provided herein, until
the second (2nd) year anniversary of the Effective Date. This agreement can be
extended by consent of both Parties.
11. Assignment.
Neither Party shall assign, transfer or convey, this Agreement or any
rights or obligations hereunder or attempt to do any of the foregoing, without
the express prior written consent of the other, except as otherwise provided
herein.
12. Successors and Assigns.
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This Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their permitted successors and assigns.
13. Understanding and Support.
Seller understands that Buyer intends to sell flywheel systems and agrees
this is outside of the business interests of Seller. Buyer agrees to not
manufacture composite flywheel rims for its own use or the use of others, except
as otherwise provided herein. Seller agrees to support Buyer in its efforts to
commercialize flywheel systems by supplying the Product and will not make any
financial or other demands of Buyer in its efforts to exploit the flywheel
energy storage business. Buyer will likewise not make any financial or other
demands of seller.
14. Rights to Other Technologies.
Rights to technologies developed by Buyer apart from this agreement [**]
for benefit of Buyer's flywheel systems are the sole property of Buyer. Seller
releases all claims to said technologies. Buyer shall not make any claims upon
Seller regarding any filament winding technologies developed by Seller in the
course of this agreement, or outside this agreement.
15. Entities.
Buyer and Seller are completely independent entities. Neither Party is in
any way operating under the control of, or for the benefit of the other.
IN WITNESS WHEREOF, the duly authorized representatives of the Parties have
executed this Agreement.
Q Power, Inc. Toray Composites (America) Inc.
By: /s/ Xxxxxxxxxxx X Xxxxxx By: /s/ Xxx Xxxxxxxxx
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Name Typed: Xxxxx Xxxxxx Name Typed: Xxx Xxxxxxxxx
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Title: President Title: President
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Date: September 18, 2000 Date: September 18, 2000
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[**] = Confidential treatment requested for redacted portion.
