EXHIBIT 4.10
GENERAL BUSINESS AGREEMENT
Between the companies Xxxxxx Technik Ltd,
Suite Xx. 000, Xxxxx 0, Xxxxxxxx Xxxxx, 00
Xxxx Xxx Xxxxxx Xxxxxx Xxxx, X. X.
Xxxx Xxxx
Xxxxx
(hereinafter referred to as XXXXXX)
and and XXXXXX XXXX GmbH & Co. KG
Xxxxxxxxx Xxx. 0
00000 Xxxx
Xxxxxxx
(hereinafter referred to as XXXXXX)
for the production and supply of technical, customer-specific components / products
Contents
Preamble
ss.1 Subject of General Business Agreement
ss.2 Execution
ss.3 Delivery instructions / delivery times
ss.4 Delivery conditions
ss.5 Guaranty
ss.6 Tools / Special equipment
ss.7 Availability
ss.8 Prices
ss.9 Payment
ss.10 Quality
ss.11 Competition
ss.12 Initial Sampling
ss.13 Product liability
ss.14 Secrecy / Prohibition of competition
ss.15 General Business Agreement period
ss.16 Final clauses
PREAMBLE
XXXXXX is a manufacturer of technical products in various different
technologies, such as stamping, plastic injection, winding, final assembly, etc.
XXXXXX has many years experience in the manufacture of these
technologies and is fully up-to-date in terms of personnel and production
technology.
XXXXXX has established a production line in Long Cheng Industrial
Estate Long Hua, Bao An 518109 Shenzhen, China.
All the following agreements refer exclusively to the abovementioned
manufacturing location.
Any changes in manufacturing location shall be advised by XXXXXX to
XXXXXX within a three-month-notice. In case of changing the manufacturing
location XXXXXX gets the right to. order an additional safety stock, to be
manufactured at the current location, in order to avoid any quality problems
eventually caused by qualifying the new manufacturing location.
XXXXXX is a manufacturer of motors and electronics in the MOTION
company section of the Xxxxxxxxx Electric company group.
XXXXXX requires different technical components and products for brand
labeling and / or in its own production lines in different qualities and
quantities in its business fields.
XXXXXX is interested in producing these components and products
economically for XXXXXX and in supplying XXXXXX with these products in the
agreed quality over the long-term.
The parties hereto, XXXXXX and XXXXXX, covenant as follows:
ss.1
SUBJECT OF GENERAL BUSINESS AGREEMENT
The subject of this agreement is the production and supply to XXXXXX
of the components and / or products mentioned in Appendix I by XXXXXX in
accordance with the terms of quality and delivery of XXXXXX according to
Appendix II. Both parties are in agreement that Appendix I is to be successively
extended in the course of the business co-operation. Additional products shall
become part of this General Business Agreement on ordering by XXXXXX and
confirmation / delivery by XXXXXX, even if they are not explicitly recorded in
Appendix I.
ss.2
EXECUTION
XXXXXX is responsible for the production and delivery of the
components / products required by XXXXXX at the conditions agreed in this
General Business Agreement,
XXXXXX assures and undertakes that they are at all times capable of
producing and delivering the items under the General Business Agreement at
"state of the art", both technically and commercially.
XXXXXX shall transmit to XXXXXX all data necessary for the correct
manufacture of the components / products required. Data transmission may be
effected both by post or by electronic means.
XXXXXX immediately confirms, by the fastest means, the correct
receipt of all data required for the manufacture of the components / products in
perfect quality. XXXXXX shall immediately inform XXXXXX in writing by the
fastest means of any missing information in order that no delay in commencement
of production should occur due to missing, incomplete and / or detective data,
if XXXXXX is able to detect it.
All documents (drawings, specifications, provisions etc.) handed over
by XXXXXX to XXXXXX shall fall under the rules of this General Business
Agreement,
2
ss.3
DELIVERY INSTRUCTIONS / DELIVERY TIMES
XXXXXX shall place "quantity contracts" for all parts / components to
be manufactured by XXXXXX.
Quantity contracts shall contain materials and production releases
according to the "Standard Agreement Quantity contract" (Appendix III).
XXXXXX is technically and commercially capable of manufacturing all
components / products listed in Appendix I ordered or to be ordered by XXXXXX in
the normal manufacturing process within a maximum of 60 working days after the
placement of a quantity contract.
A delivery period of 10 working days shall deem to be agreed for
call-off orders on existing quantity contracts after the initial period of max.
60 days after placement of the quantity contract.
If, due to unexpected and short-term increases in the demand of goods
, the buffer stock agreed in Appendix II should prove to be insufficient to
cover demand, XXXXXX assures to deliver to XXXXXX additional stock within 10
working days at the most, such deliveries to be made by air freight. Any
additional airfreight charges shall be paid by XXXXXX.
If samples are required for new projects, XXXXXX agrees to deliver
said samples to XXXXXX free of charge and within 10 working days, ex works, at
the most, as far as materials and production facilities are available at XXXXXX.
Any freight charges shall be paid by XXXXXX.
Sample-quantities shall not exceed 50 pcs. per part/ component.
3
ss.4
DELIVERY CONDITIONS
All deliveries from XXXXXX to XXXXXX are to be made "DDU-Lahr".
In the beginning of the relationship and for an undefined period of
time XXXXXX shall supply XXXXXX directly DDU-Lahr.
XXXXXX shall also define a European / German representative in Europe
/ Germany that has to supply XXXXXX with the components / products of this
General Business Agreement after both parties have agreed to do so. It is the
target to use the logistic-services of an European / German representative
within a period of ! 2 to 18 months after signature of the General Business
Agreement.
XXXXXX is free to nominate a partner to do this logistics on his
behalf, XXXXXX shall nominate his representative in writing within one year
after signature of this Agreement Any changes of the nominated logistic partner
in Europe / Germany has to be announced to XXXXXX in writing by a
6-month-notice.
Minimum stock-quantities at the European representative are to be
defined per component / product in Appendix I to this General Business
Agreement.
XXXXXX and XXXXXX mutually will define the packaging require six
weeks in advance of first series deliveries.
The costs of transport insurance shall be met by XXXXXX.
ss.5
GUARANTY
XXXXXX guaranties that the components / products to be delivered
shall be free of defects and workmanship in accordance with XXXXXX
specifications / drawings / quality regulations.
The warranty period for all components / products to be delivered
shall be 24 months after delivery of the parts from XXXXXX to XXXXXX.
ss.6
TOOLS / SPECIAL EQUIPMENT
The tools required for the manufacture of Xxxxxx-specific components
/ products arc to be procured in principle by XXXXXX on the account of XXXXXX.
In individual cases and varying from this, the procurement of toots / special
equipment by XXXXXX and the acceptance by XXXXXX of the costs arising from this
may be agreed in writing. In such cases the tools / special equipment shall be
authorized in writing by XXXXXX, Payment on tools / special equipment from
XXXXXX to XXXXXX shall be due as follows: 50 % on order-placement; 50 %
following successful initial sampling. Ownership of tools / special equipment
shall pass to XXXXXX on payment.
4
ss.7
AVAILABILITY
XXXXXX guaranties the availability of the General Business Agreement
components / products at the conditions agreed upon in this General Business
Agreement for the entire working life of the XXXXXX products in which the
General Business Agreement components / products are incorporated, at least for
6 years after the first shipment m series-quantities. In the event of
discontinuation of the product after that time, XXXXXX shall have the
"opportunity of "last buy" at maximum one-year's XXXXXX-demand at the conditions
of the previously XXXXXX valid / current quantity contract.
ss.8
PRICES
The prices valid for the individual components / products shall be
negotiated yearly and are to be recorded in writing for a duration of at least 1
year in the corresponding quantity contract. The prices recorded m the quantity
contracts shall apply to all deliveries up to a period of one year after
delivery of first series-quantities. The prices stated in the very first
quantity contract to each particular part / component are maximum prices. Price
increases for deliveries after this period are not permissible. A price
reduction of >= 5 % per annum shall be the target for XXXXXX.
Special regulations on raw materials:
la case of price-deviations on materials of >= + - 10 % prices on
components / products are to be adjusted at the share of materials, max. four
times per year.
Prices on raw materials have to be fixed at time of Erst
series-order.
Market prices in the Asian market shall apply.
For verification an open-book-agreement on purchasing-prices is
agreed.
XXXXXX has the right to verify Asian market-prices by analysis of
Xxxxxxxxx Electric IPO (International Purchasing-Office).
ss.9
PAYMENT
If using the logistics towards the European / German representative
(ref. ss. 4) payment of the invoices of XXXXXX by XXXXXX shall be made net by
bank transfer or crossed check within 14 days after receipt of invoice and
components / products. In this case adders on agreed prices for
logistic-services are to be negotiated.
5
In case of direct shipments from XXXXXX to XXXXXX payment shall be
done by "payment with telegraphic transfer by shipment from Harbour ".
ss. 10
QUALITY
In terms of engineering and personnel, XXXXXX is economically capable
of supplying all components / products, required by XXXXXX in the long-term and
in the quality based on the specifications available at XXXXXX at the date of
quotation or confirmed reviews. The guaranty of product quality during and at
the end of manufacture is to be carried out in accordance with ISO 9002 quality
standard in close consultation with XXXXXX Quality- Assurance. The attached
Quality Assurance Agreement is a component of this General Business Agreement.
(Appendix III).
ss.11
COMPETITION
In order to respond to the ever-growing price pressure in the market,
it is vital that XXXXXX and XXXXXX suppliers permanently search for
opportunities to improve engineering / commercial activities.
XXXXXX endeavors to search for opportunities to improve costs and to
pass on rationalization effects to XXXXXX. XXXXXX reserves the right to examine
the competitiveness of XXXXXX from time to time and, in the event that better
competitive offers are available, to negotiate with XXXXXX about the possibility
of price adjustments. In the case that negotiations fail to produce a result,
XXXXXX shall be given the opportunity of creating the necessary conditions for
the desired price adjustments within 6 months. If this deadline expires without
result, XXXXXX shall be entitled to deduct individual components / products from
XXXXXX or to cancel the General Business Agreement. In case of deduction of
individual components / parts the validity of this General Business Agreement
shall remain unaffected thereby.
The components / products then stored by XXXXXX shall be purchased
within the framework of the purchase commitments of this General Business
Agreement at the current conditions.
ss.12
INITIAL SAMPLING
In principle Xxxxxx'x general terms of purchase provide for initial
sampling for new phase-ins / changes of supplier in accordance with VDA for
proof of quality of the supplier.
XXXXXX is prepared and capable of providing XXXXXX, free of charge,
proof of quality by means of initial sampling including initial sampling
reports. The XXXXXX Initial Sampling Conditions shall apply (Appendix IV).
6
ss.13
PRODUCT LIABILITY
XXXXXX shall include Xxxxxx'x products into her existing product
liability insurance, which covers at least 2 Million Euro in particular case.
ss.14
SECRECY / PROHIBITION OF COMPETITION
XXXXXX shall treat all written and oral information and experience
received from XXXXXX within the framework of their cooperation - in so far as
these are not common knowledge - as strictly confidential and shall not make
them available to third parties, nor use them to the benefit of third parties
and hand over all documents received from XXXXXX at XXXXXX'x request. During the
validity of this General Business Agreement and for a further 5 years after its
expiry, XXXXXX shall not sell or supply any of the General Business Agreement's
products to any third party.
ss.15
GENERAL BUSINESS AGREEMENT PERIOD
Both partners agree that long-term business cooperation is to be the
objective.
This General Business Agreement takes effect as of the date of
signing and is concluded for an indefinite period of time.
The right of termination of this General Business Agreement with a 12
month notice period is granted to each of the two General Business Agreement
partners; however from 2010-12-31 at the earliest.
The right of notice to terminate with cause with a notice period of 3
months is given under the following circumstances:
for XXXXXX in the event of
- Xxxxxx'x relocation
- Xxxxxx'x inability to pay
- application for bankruptcy on the assets of XXXXXX
for XXXXXX in the event of
- persistent quality problems of the supplied components /
products
- persistent schedule delays in delivery
- proven lack of competitiveness within the terms ofss.11 of
this agreement (for all or certain parts)
7
- cessation of demand due to changes in market conditions and /
or changes in (manufacturing) technologies
- relocation XXXXXX
- application for bankruptcy on the assets of XXXXXX
xx.16
FINAL CLAUSES
Any alterations or supplements to this General Business Agreement and
any declarations within the framework of the execution of the General Business
Agreement must be made in writing. Deviations must be made in writing.
Should one or more provision(s) of this General Business Agreement be
or become invalid the validity of the remaining provisions shall remain
unaffected. The invalid provision shall be replaced under mutual agreement by a
provision complying most closely with the original spirit of the agreement.
Provisions of this General Business Agreement shall not apply to both
parties in case of and for the duration of forces majeure, such as wars,
political hazards, natural disasters, strikes.
Place of performance is Lahr. Place of jurisdiction is Mannheim.
German Law applies.
The general terms of purchase of XXXXXX apply in all other cases.
Lahr, 2004-04-29
XXXXXX XXXX GmbH & Co. KG Xxxxxx Technik Ltd.
Xxxxxxxxx Xxx. 0 Xxxxx Xx. 000, Xxxxx 0, Landmark North, 39
77933 Lahr Lung Xxx Xxxxxx Xxxxxx Xxxx, X.X.
Xxxx Xxxx
Xxxxxxx China
ppa. i.V.
------------------- ------------------------ -------------------------------------------
Xxxxxxx Xxxxxx Xxxx Xxxxx Xxxxxxx Xxxxxx Will
Enclosures
Appendix I (list of components / products)
Appendix II (Quality Assurance Agreement)
Appendix III (Standard Agreement Quantity Contract)
Appendix IV (Initial Sampling Conditions)
8
