SMARTIRE SYSTEMS INC. AND GE SENSING INC. AGREEMENT FOR SUPPLY OF RTPM PRESSURE SENSORS (Redacted portions of this agreement are indicated by "+")
Exhibit 10.107
AND
GE
SENSING INC.
AGREEMENT
FOR SUPPLY OF RTPM PRESSURE SENSORS
(Redacted
portions of this agreement are indicated by
"+")
This
Supply Agreement (“Agreement”) is entered into on July 23, 2007 (the
“Effective Date”) by and between SmarTire Systems Inc.
(“SmarTire”), a British Columbia corporation, with its principal place of
business at 000-00000 Xxxxxx Xxxxx, Xxxxxxxx, XX, Xxxxxx X0X 0X0 and GE Sensing
Inc. (“GE”), a United States corporation having its principal office at
0000 Xxxxxxxxxx Xxxx Xxxxx, Xxxxxxxxx, XX, Xxxxxx Xxxxxx of America
01821(together, the “Parties”).
WHEREAS
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GE
is in the business of design and manufacture of electronic sensing
components that are utilized in various industries, including automotive;
and,
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·
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SmarTire
is in the business of providing to its automotive and transportation
industry customers technically-advanced sensing and control systems
that
are assembled from custom-manufactured electronic printed circuit
boards
and/or system level assemblies;
and,
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·
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The
parties desire to establish the terms and conditions that will
apply to
SmarTire’s purchase of RTPM Pressure Sensors designed and manufactured by
GE for inclusion in SmarTire
products.
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In
consideration of the foregoing and the agreements contained herein, SmarTire
and
GE hereby agree as follows:
1. DEFINITIONS
1.1 “Acknowledgement”
is GE’s written confirmation that it has accepted the terms of the Purchase
Order from SmarTire
1.2 “Confidential
Information” shall have the meaning ascribed thereto in Section 22.1
hereof
1.3 “Delivery
Date” shall mean a date for which delivery of a Product is requested in a
SmarTire Purchase Order or is otherwise mutually established by the
Parties.
1.4 “Excess
Inventory” shall mean those items of Inventory ordered by SmarTire which are
in GE’s possession and which quantities exceed SmarTire Purchase Order
requirements on a referenced date and/or termination.
1.5 “Forecast”
shall have the meaning ascribed thereto in Section 5 hereof.
1.6 “Intellectual
Property Rights” shall mean all rights held by each party in its Products
and/or Confidential Information, including, but not limited to each Party’s
patent rights, copyrights, trademark rights, trade secret rights, mask work
rights and other intellectual property and proprietary rights anywhere in
the
world.
1.7 “Purchase
Order” shall mean the SmarTire written authorization to deliver Components
as designated on the Purchase Order such Purchase Order to be accepted by
GE by
its delivery of an Acknowledgment to SmarTire in accordance with the terms
set
forth in Section 6 hereof. The Purchase Order shall stipulate the
Component(s), Specifications, Engineering Change and/or Revision level,
quantity, pricing, and requested Delivery Date(s) and location(s).
1.8 “Specifications”
shall mean the written specifications for the supply of the Component including,
without limitation, the current revision number.
1.9 “Term”
shall have the meaning ascribed thereto in Section 15 hereof.
2. Responsibilities
of GE
During
the Term, GE shall:
2.1 Fabrication
of Components in accordance with the Specifications and Purchase Orders provided
by SmarTire and accepted by GE pursuant to an Acknowledgment, and;
2.2 Use
its
commercially reasonable efforts to ensure 100% on-time delivery in accordance
with the specified and agreed to dates contained in the Purchase Order,
and;
2.3 Maintain
compliance with TS16949 certification and processes during the
Term.
2.4 Utilize
its own equipment to provide the services described herein, and;
2.5 Ship
the
complete Components to the destinations specified in the Purchase
Order.
3. Responsibilities
of SmarTire
During
the Term, SmarTire shall:
3.1
3.2 Provide
GE with a 12 month, rolling Forecast to enable GE to plan the effective purchase
of materials to meet such Forecasts, and;
3.3 Provide
GE with Purchase Orders for the supply of the Components, and;
3.4 Provide
payment to GE for the supply of Components provided under this
Agreement.
4. Forecasting
During
the Term, SmarTire shall deliver to GE in writing, on a rolling monthly basis,
a
twelve (12) month, Forecast, specifying the anticipated number of Components
to
be manufactured in each month (a “Forecast”). SmarTire shall issue
each succeeding month’s Forecast by the 10th calendar day of each month, or the
next business day if the 10th day is a holiday or weekend. This
Forecast shall serve as the authority of GE to plan the purchases of Inventory
required to meet the deliveries specified on the Purchase Orders subject
to the
following:
4.1 GE
shall
work with suppliers of the Inventory components to minimize the cost of these
components based on yearly Forecast volumes, and;
4.2 GE
shall
use commercially reasonable efforts to negotiate favorable terms and delivery
schedules with its suppliers and to minimize the impact of Excess
Inventory.
5. Purchase
Orders
During
the Term, SmarTire shall provide GE with Purchase Orders in accordance with
the
following:
5.1 Purchase
Orders shall be provided to cover SmarTire’s requirements for the Products for
the next four (4) months on a rolling monthly basis, and;
5.2 The
Purchase Orders shall contain the issuer’s required date for receipt of the
Product at the destination stated in the Purchase Order. GE shall
provide an Acknowledgement to SmarTire confirming the acceptance of the Purchase
order and its terms including price and delivery. If GE, despite its
commercially reasonable efforts, does not believe that it can meet the scheduled
delivery it shall negotiate the best delivery times possible, and SmarTire
shall
issue a revised Purchase Order to GE for Acceptance. The Purchase Order shall
be
deemed accepted by GE unless it is rejected in writing within five (5) business
days of submission by SmarTire.
5.3 The
terms
and conditions of this Agreement will prevail over any terms contained in
any
SmarTire Purchase Order, Acknowledgment, invoice or any other document that
is
not clearly an amendment to this Agreement signed by all three
Parties.
5.4 SmarTire
may not cancel any Purchase Orders or re-schedule the quantity of Products
and/or Delivery Date within + (+) calendar days of the scheduled Delivery
Date. SmarTire may delay all or any portions of the scheduled
Component delivery upon written notification to GE on the following
schedule:
(a) From
+
(+) to + (+) calendar days prior to the scheduled Delivery Date, SmarTire
may
reschedule out not more than fifty percent (50%) of the quantity of Components
to be shipped up to + (+) calendar days of the scheduled Delivery
Date. The balance of the rescheduled Components must be shipped
within + (+) days of the rescheduled Delivery Date.
(b) From
+
(+) to + (+) calendar days prior to the scheduled Delivery Date, SmarTire
may
reschedule out up to one hundred percent (100%) of the quantity of Components
to
be shipped up to + (+) calendar days of the scheduled Delivery
Date.
(c) In
the
event that SmarTire desires to increase quantities of Components scheduled
for
delivery beyond thirty (30) calendar days of the scheduled Delivery Date;
GE
will use its commercially reasonable efforts to accommodate the desired
increases. Each of the foregoing may be subject to a Premium Charge
to be determined on a case-by-case basis, and subject to SmarTire’s prior
written approval.
5.5 Cancellation
(a) SmarTire
may cancel any order, more than + (+) calendar days from the scheduled
Delivery Date upon written notification to GE. Upon written notice from
SmarTire, GE shall use its commercially reasonable efforts to cancel GE’s order
for such Inventory. Any inventory which cannot be cancelled or is on hand
to
fulfill the cancelled orders will be the responsibility of the Party canceling
the order.
(b) SmarTire
may cancel delivery of Components with written notice at least + (+) calendar
days prior to the scheduled Delivery Date without cost or penalty.
6. Delivery
6.1 GE
shall
use its commercially reasonable efforts to meet the shipping dates provided
in
the accepted Purchase Orders. Delivery of Components that do not meet
the acknowledged Delivery Dates or Specifications due to GE’s efforts will
require a written corrective action to SmarTire outlining a plan for correction
and the elimination of recurrence. On-time shipment is defined as 7
days early to 0 days late.
6.2 If
delays
in component delivery are caused by SmarTire, then the Purchase Order shall
be
amended with a revised agreed to Delivery Date and there will be no penalty
exercised against GE under the SmarTire supplier rating system.
6.3 Delivery
of Components shall be to the destination provided on the Purchase
Order. The FOB point shall be GE or GE contracted plant of
manufacture. In the event that the destination is to a different end
location, SmarTire and GE shall agree on appropriate shipping insurance,
custom
charges, duties, taxes or other expenses relating to transportation and
delivery, all of which shall be for the account of SmarTire.
6.4 Title
to
all Components shall pass to SmarTire, upon Delivery to the destination
specified in the Purchase Order.
7. Acceptance
All
Components supplied by GE under this Agreement shall conform to the
Specifications. Notwithstanding any prior inspection or payment by
SmarTire, SmarTire may reject any portion of any shipment of Components that
do
not conform to the mutually agreed upon Specifications as determined by SmarTire
or its manufacturing partner, acting reasonably, or as otherwise found to
be
defective. Any Components so returned to GE shall, at GE’s option and
expense, be credited, or replaced within ten (10) business days of receipt
by GE
of the rejected Component; provided that (i) SmarTire obtain a Return Material
Authorization (“RMA”) from GE prior to returning the Components, GE shall
provide SmarTire with a RMA promptly upon request, (ii) the Components are
returned within ninety (90) calendar days of the date the Component was
delivered to SmarTire or its manufacturing partner by GE, and (iii) the failure
analysis conducted by SmarTire shall accompany the returned Component(s),
and
(iv) GE analysis confirms that Components do not conform to the Specifications,
GE shall perform such analysis in a reasonable manner consistent with industry
practice.
8. Inspection
by SmarTire
Upon
request by SmarTire, from time to time, and with at least five (5) business
days’ notice and during normal business hours, GE will grant access to its
manufacturing facilities and records to SmarTire inspectors as provided
herein. GE shall allow such inspectors to inspect the manufacturing
and quality control, testing operations, compliance procedures and records
relating to the Components, as well as Inventory levels to ensure that GE
can
meet SmarTire’s future orders for Components, and is otherwise satisfying its
obligations under this Agreement. GE shall promptly implement
corrective action to remedy deficiencies identified by SmarTire during such
inspections or in order to comply with the Specifications and this
Agreement.
9. Price
Price
for
the Components shall be as set forth in Schedule A of this Agreement, which
may
change by mutual agreement in writing of the Parties hereto, provided that
SmarTire are provided with sixty 60 days’ minimum notice.
10. Cost
Reduction
GE
will
use commercially reasonable efforts to implement a cost reduction strategy
to
reduce component price by + year on year.
Meetings
will be held at least twice per year to discuss recommendations to reduce
costs
and improvements to supply agreements.
11. Payment
The
terms
of payment are NET 30 from the date of the invoice sent to SmarTire at their
principal place of business.
12. GE
Warranty.
Please
refer to the Warranty Agreement set forth in Schedule B of this
agreement.
13. Return
of Products Under Warranty
Please
refer to the Warranty Agreement set forth in Schedule B of this
agreement.
14. Term
Unless
terminated pursuant to Section 16 or this Section 15, this Agreement shall
commence upon the Effective Date and shall continue for a period of thirty-six
(36) months (the “Term”). The Term may be terminated by a
Party upon providing the other Party with one hundred and twenty (120) calendar
days’ written notice of termination, with or without cause.
15. Termination
This
Agreement may be immediately terminated by any Party for cause, by written
notice, upon the occurrence of any of the following events:
15.1 If
the
other party ceases to do business, or otherwise terminates its business
operations; or
15.2 If
the
other party substantially breaches any material provision of this Agreement
and
fails to make reasonable efforts to cure such breach within sixty (60) calendar
days of written notice describing the breach. The repetitive failure
of GE to meet on-time Deliveries with no demonstrated reasonable efforts
in
corrective action to eliminate future occurrences will be considered a material
breech of this Agreement and provide grounds for termination by SmarTire;
or
15.3 If
the
other party becomes insolvent or seeks protection under any bankruptcy,
receivership, trust deed, creditors arrangement, composition or comparable
proceeding, or if any such proceeding is instituted against the other
parties.
16. Effect
of Termination
Upon
termination of this Agreement, the obligations of any of the Parties that
exist
pursuant to Sections 5.4, 5.5, 9, 11 to 13 inclusive, 17 to 21 inclusive,
23,
and 29 will survive in accordance with their terms. Notwithstanding
the foregoing, GE shall continue to fulfill, subject to the terms of this
Agreement, all Purchase Orders accepted by it prior to the effective date
of
termination. Remedies for all breaches hereunder shall also survive
termination of this Agreement.
17. Liability
Limitation
17.1 As
the
sole remedy and liability for any breach of the representations and warranties
by SmarTire in Section 12, SmarTire agrees to indemnify GE and hold GE harmless
from and against any and all claims, losses, liabilities, damages, expenses
and
costs (including reasonable attorney’s fees and court costs) awarded against GE,
that result from a breach of any of these representations and warranties
or
incurred in the settlement or avoidance of any such claim. This
indemnity shall not apply if (i) GE fails to give SmarTire reasonable notice
of
any such claim or threatened claim and such failure materially prejudices
SmarTire, or (ii) SmarTire is not given the opportunity to participate in
the
defense or settlement or (iii) GE does not provide reasonable assistance
to
SmarTire for the defense and settlement of the claim. Furthermore, if
SmarTire assumes such control, the legal fees and litigation expenses of
the
attorneys it designates to assume control of the litigation shall be for
the
sole account of SmarTire.
17.2 The
total
liability of each party, on all claims of any kind, whether in contract,
warranty, tort (including negligence), strict liability, or otherwise, arising
out of the performance or breach of the Contract or use of any Products or
Services shall not exceed the price of the specific product or service which
gives rise to the claim. All liability under the Contract shall
terminate upon the expiration of the applicable warranty period, provided
that
the party attempting to enforce the claim may enforce a claim of such liability
accruing during the applicable warranty period by an action timely commenced
in
accordance with the applicable statute of limitations and/or statute of repose,
but in no event greater than one (1) year after the expiration of such warranty
period.
17.3 In
no
event, whether as a result of breach of contract, warranty, tort (including
negligence), strict liability, indemnity, or otherwise, shall any party be
liable for loss of profit or revenues, loss of use of Products or Services
or
any associated equipment, interruption of business, cost of capital, cost
of
substitute equipment, facilities, services or replacement power, downtime
costs,
or for any special, consequential, incidental, indirect or exemplary
damages.
17.4 If
SmarTire cannot obtain for GE from any subsequent purchaser(s) the protections
specified in this Section 17, SmarTire shall indemnify, defend and hold GE
harmless from and against any and all claims made by any subsequent purchasers
of Products or Services against GE for loss or damage arising out of the
performance or non-performance of Products or Services provided under the
Contract.
17.5 If
GE
furnishes SmarTire with advice or assistance that is not required under the
Contract, the furnishing of such advice or assistance will not subject GE
to any
liability, whether in contract, indemnity, warranty, tort (including
negligence), strict liability or otherwise.
17.6 The
provisions of this Section 17 shall prevail over any conflicting or inconsistent
provisions contained in any of the documents comprising the Contract, except
to
the extent that such provisions further restrict GE’s liability.
18. Relationship
of Parties
GE
and
SmarTire shall be deemed to be independent contractors, and this Agreement
does
not create a general agency, joint venture, partnership, employment
relationship, or franchise between GE and SmarTire. Each Party
assumes full responsibility for the actions and negligence of its employees,
agents or other personnel assigned to perform work pursuant to this Agreement
regardless of their place of work, and shall be solely responsible for payment
of salary, including withholding of federal and state income taxes, social
security, workers’ compensation and the like.
19. Dispute
Resolution
19.1 Binding
Arbitration
Except
as
to any claims arising under Section 20 (Confidentiality) as to which equitable
relief would be the appropriate remedy, any controversy or claim between
the
Parties hereto arising out of this Agreement shall be settled by binding
arbitration in accordance with the rules of the British Columbia International
Commercial Arbitration (BCICAC) in effect as of the Effective Date, or
alternatively, any other mutually acceptable method of alternative dispute
resolution. The arbitration shall be conducted in Vancouver, British
Columbia, before an arbitrator from the BCICAC or such other arbitration
service
as the Parties may, by mutual agreement, select. In the event of a
disagreement as to the selection of an arbitrator, the BCICAC or such other
arbitration service as the Parties have, by mutual agreement, selected shall
select the arbitrator. The arbitration award will be final and
binding and may be enforced in any court of competent
jurisdiction. Each Party shall pay one-half (1/2) of the cost of
arbitration.
19.2 Attorney’s
Fees.
The
substantially prevailing Party in any legal action or proceeding to enforce
this
Agreement shall be entitled to reasonable attorneys’ fees, costs and expenses
except that, as provided in 18, each Party shall pay one-half (1/2) the cost
of
arbitration incurred in connection with such proceeding or the enforcement
of
the Agreement, in addition to any other relief to which such prevailing Party
may be entitled.
20. Confidentiality
20.1 GE
and
SmarTire (The Parties) Confidential Information.
Information
of each of The Parties including, but not limited to, trade secrets, know-how,
inventions (whether patentable or not), ideas, improvements, materials, data,
specifications, drawings, processes, results, and formulae and all other
business, technical and financial information (“Confidential Information”) shall
be the confidential information of such Parties. Each of the Parties
shall, at all times, both during the Term and for a period of two (2) years
after any termination of this Agreement, keep in confidence as a fiduciary
all
of the other Parties Confidential Information received by it. Each of the
Parties shall not use the Confidential Information other than as expressly
permitted under the terms of this Agreement or by a separate written
agreement. Each of the Parties shall take reasonable steps to prevent
unauthorized disclosure or use of Confidential Information and to prevent
it
from falling into the public domain or into the possession of unauthorized
persons. Each of the Parties shall not disclose Confidential
Information to any person or entity other than its officers, employees,
consultants and subsidiaries who need access to such Confidential Information
in
order to perform its obligations under this Agreement and who have entered
into
written confidentiality agreements which protect the Confidential
Information.
20.2 Exception
to Confidential Information
Information
that is in or (through no improper action or inaction of each of the Parties
or
any affiliate, agent or employee) enters the public domain shall not be
Confidential Information hereunder. Without granting any right or
license, The Parties agree that the obligations set forth in Section 21.1
above,
shall not apply to the extent that Confidential Information includes information
which (i) was rightfully in its possession or known by it prior to receipt
from
the disclosing Party, or (ii) was rightfully disclosed to it by another person
without restriction, or (iii) developed independently by either Party without
use of the other Party’s Confidential Information, or (iv) is disclosed pursuant
to the requirement of a court, or other governmental body, provided the
receiving Party provides notice of such court order to the disclosing Party
to
enable the disclosing Party to seek a protective order or otherwise prevent
or
restrict such disclosure.
21. Equitable
Relief
All
Parties acknowledge and agree that due to the unique nature of the Confidential
Information, there can be no adequate remedy at law for any breach of the
obligations under Section 20 and that such breach may allow a Party to unfairly
compete with one or both of the other Parties resulting in irreparable
harm. Therefore, upon any such breach or threat of breach, the harmed
Party shall be entitled to appropriate equitable relief in addition to whatever
remedies it has at law. Notification of any breach shall be in
writing immediately upon learning of any unauthorized release or breach of
its
obligation of nondisclosure hereunder.
22. Force
Majeure
None
of
the Parties shall be liable for its failure to perform any obligations under
this Agreement if such performance is prevented or delayed due to fires,
floods,
earthquakes, wars, military or police actions, Acts of God, governmental
laws or
regulations or any other similar circumstance beyond the control of the
Parties.
23. Governing
Law
This
Agreement shall in all respects be governed by and constructed in accordance
with the laws of the Province of British Columbia, Canada. The
remedies set forth in this Agreement are cumulative and not exclusive and
are in
addition to any other rights and remedies in law or equity which might be
available to the Parties.
24. Assignability
GE
shall
not assign its rights or delegate its obligations under this Agreement, in
whole
or in part, including by operation of law, without SmarTire’s prior written
consent.
25. Amendment
and Waiver
Except
as
otherwise expressly provided herein, any provision of this Agreement may
be
amended and the observance of any provision of this Agreement may be waived
(either generally or in any particular instance and either retroactively
or
prospectively) only with the written consent of an officer of all
Parties. However, it is the intention of the Parties that this
Agreement be controlling over additional or different terms of any Purchase
Order, confirmation, invoice or similar document, even if accepted in writing
by
both Parties.
26. Notice
Notices
under this Agreement shall be sufficient only if personally delivered by
a major
rapid delivery courier service or mailed by certified or registered mail,
return
receipt requested to a Party at its address first set forth herein or as
amended
by notice pursuant to this subsection. If not received sooner, notice
by mail shall be deemed received ten (10) days after deposit in the Canadian
or
Royal mail.
27. No
Waiver
No
waiver
of any term or condition of this Agreement will be valid or binding on any
of
the Parties unless the same will have been mutually assented to in writing
by an
officer of all Parties. The failure of any of the Parties to enforce
at any time any of the provisions of the Agreement, or the failure to require
at
any time performance by the other Parties of any of the provisions of this
Agreement, will in no way be construed to be a present or future waiver of
such
provisions, nor in any way affect the ability of any of the Parties to enforce
each and every such provision thereafter.
28. Severability
If
any
provision of this Agreement is held to be illegal or unenforceable, that
provision shall be limited or eliminated to the minimum necessary so that
this
Agreement shall otherwise remain in full force and effect and
enforceable.
29. Entire
Agreement
THIS
AGREEMENT, INCLUDING THE EXHIBITS, SETS FORTH THE ENTIRE AGREEMENT AND
UNDERSTANDING OF THE PARTIES RELATING TO THE SUBJECT MATTER HEREIN AND
SUPERSEDES ALL PRIOR DISCUSSIONS BETWEEN THEM.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
|
By:
/s/Xxxxx
Xxxxxxxxx
Xxxxx
Xxxxxxxxx
President
and
CEO
July
31,
2007
|
GE
SENSING INC.
By: /s/Xxxxx
Xxx Xxxxx
Xxxxx
Xxx Xxxxx
OM
Sales-Americas
August
3, 2007
|
SCHEDULE
A
Component
Price List
|
Part
Number
|
Part
Description
|
Rel/Rev
|
Qty*
|
Price**,***
|
|
NPX-CO1782
(214.0010)
|
700
KPA
|
1-0
|
10K
– 25K
|
[+]
|
|
NPX-CO1782
(214.0010)
|
700
KPA
|
1-0
|
25K
– 50K
|
[+]
|
|
NPX-CO1782
(214.0010)
|
700
KPA
|
1-0
|
50K
– 100K
|
[+]
|
|
NPX-CO1782
(214.0010)
|
700
KPA
|
1-0
|
100K
– 250K
|
[+]
|
|
NPX-CO1782
(214.0010)
|
700
KPA
|
1-0
|
250K
– 500K
|
[+]
|
|
NPX-CO1783
(214.0011)
|
1400
KPA
|
1-0
|
10K
– 25K
|
[+]
|
|
NPX-CO1783
(214.0011)
|
1400
KPA
|
1-0
|
25K
– 50K
|
[+]
|
|
NPX-CO1783
(214.0011)
|
1400
KPA
|
1-0
|
50K
– 100K
|
[+]
|
|
NPX-CO1783
(214.0011)
|
1400
KPA
|
1-0
|
100K
– 250K
|
[+]
|
|
NPX-CO1783
(214.0011)
|
1400
KPA
|
1-0
|
250K
– 500K
|
[+]
|
|
NPX-CO1799
(214.0009)
|
700
KPA
|
1-0
|
10K
– 25K
|
[+]
|
|
NPX-CO1799
(214.0009)
|
700
KPA
|
1-0
|
25K
– 50K
|
[+]
|
|
NPX-CO1799
(214.0009)
|
700
KPA
|
1-0
|
50K
– 100K
|
[+]
|
|
NPX-CO1799
(214.0009)
|
700
KPA
|
1-0
|
100K
– 250K
|
[+]
|
|
NPX-CO1799
(214.0009)
|
700
KPA
|
1-0
|
250K
– 500K
|
[+]
|
*Quantities
stated are annual cumulative quantities (from SmarTire) for
each
Component commencing on January, 1, 2007, and each anniversary date
thereafter.
**
Minimum Order Quantities (MOQ) are 3400, for each Component Type listed above
with a reel size of 850 and a maximum of 2 lots per reel.
***
Prices are in United States Dollars (USD)
Blank
spaces contained confidential information that has been filed separately
with
the Securities and Exchange Commission pursuant to Rule 406 under the Securities
Act of 1933, as amended, and 17 C.F.R. 200.80 (b) (4), and in accordance
with
the Staff Legal Bulletin No. 1 (with Addendum) dated February 28, 1977 (Addendum
dated July 11, 2001) of the Commission’s Division of Corporate
Finance.
SCHEDULE
B
Warranty
Statement
Subject
to the conditions stated herein, GE warrants to SmarTire against defects
in
materials and workmanship for the GE manufactured Components listed in Schedule
A.
Subject
to the conditions stated herein, GE warrants to SmarTire that the Components
manufactured by GE will be free from defects in materials and workmanship,
for
the applicable warranty period as described in the Warranty Period section
of
this statement.
Warranty
Period
The
term
of GE’s warranty to SmarTire shall be for + (+) years or + miles of vehicle use,
whichever comes sooner.
Warranty
coverage for Component furnished shall commence on the date of shipment of
Component from GE.
Remedy
The
only
remedy for a claim on warranty is the credit or replacement, at GE’s discretion,
of the defective Component in accordance with the terms of this Schedule
“B”.
GE’s
obligation to satisfy a warranty claim is subject to the following
conditions:
|
(a)
|
All
such claims must be submitted to GE no later than ninety (90) days
from
the date of the failure occurrence and shall be supported by satisfactory
evidence in respect of the conditions stated
herein;
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(b)
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If
requested by GE, the Component involved shall be returned, freight
collect, to GE for examination; and
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(c)
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GE’s
examination of the Component must disclose to its sole satisfaction
that
the warranty claim is due to material and workmanship
defects. In all cases, GE shall make the final determination,
in its sole discretion, as to the warrantability of the Component;
and
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(d)
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In
the event a field campaign is required to repair or replace a defective
Component Part, a mutually acceptable agreement shall be established
between the Parties before the campaign takes place. The agreement
shall
identify which Party is responsible for Component Parts costs,
labor
costs, shipping cost, travel time, loaner machines, and all other
items
associated with the field campaign.
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Claims
Procedure
Warranty
claims may be made to GE through the following process:
Claims
submitted must:
(a) be
for verifiable defects in design, materials and workmanship;
(b) be
submitted within ninety (90) days from the date on which the failure occurred;
and
(c) provide
the following information on or with the OEM claim:
(i) Model
and part number of failed component;
(ii) Itemized
SmarTire part numbers;
(iii) Description
of failure;
(iv) Date
of failure
In
the
event SmarTire rejects Component or makes a claim under this warranty, GE
may
request the return of the Component and will issue SmarTire a return material
authorization (RMA) number.
If
requested by GE, the Component shall be returned for examination by GE, freight
collect.
Note:
Warranty returns may be directed to an alternate GE location when the RMA
# is
issued.
GE’s
determination of warranty coverage shall be final in all cases.
GE
reserves the right to reject a warranty claim for any or all of the following
reasons:
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(a)
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Original
claim was filed after ninety (90) days from the date of
failure;
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(b)
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Failure
occurred beyond applicable warranty
period;
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(c)
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Claim
information is insufficient;
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(d)
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Component
was not returned for inspection as requested;
or
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(e)
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Component
inspection does not substantiate claim or indicate a
failure
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Warranty
Disclaimer
GE’S
EXPRESS WARRANTY AND SMARTIRE’S REMEDIES UNDER THIS AGREEMENT ARE EXCLUSIVE AND
GIVEN IN LIEU OF (a) ALL OTHER WARRANTIES, EXPRESS, IMPLIED OR STATUTORY,
WHETHER WRITTEN OR ORAL, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR PARTICULAR PURPOSE, OR IMPLIED WARRANTY ARISING
FROM PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE, AND (b) ALL OTHER
OBLIGATIONS, LIABILITIES, RIGHTS, CLAIMS OR REMEDIES, INCLUDING ANY RIGHT
IN
CONTRACT, NEGLIGENCE, TORT, EXTRA-CONTRACTUALLY, STRICT LIABILITY OR ANY
RIGHT
ARISING FROM GE’S NEGLIGENCE, ACTUAL OR IMPUTED.
Limitation
of Liability
GE’S
OBLIGATIONS AND SMARTIRE’S REMEDIES UNDER GE’S EXPRESS WARRANTY ARE LIMITED TO
GE’s CHOICE OF CREDIT OR REPLACEMENT AND EXCLUDE LIABILITY FOR INCIDENTAL,
SPECIAL, CONSEQUENTIAL OR ANY OTHER DAMAGES, INCLUDING, WITHOUT LIMITATION,
ECONOMIC LOSS, LOST REVENUE, LOST PROFITS, OR LOSS OF USE, COST OF CAPITAL
OR
DAMAGE OR LOSS OF OTHER PROPERTY. IN NO CASE, SHALL GE’S LIABILITY
EXCEED THE PRICE TO SMARTIRE OF THE SPECIFIC PRODUCTS SUPPLIED BY GE GIVING
RISE
TO THE CAUSE OF ACTION. IN NO EVENT SHALL GE BE OBLIGATED TO
INDEMNIFY SMARTIRE OR ANY ULTIMATE USER OF THE PRODUCTS IN ANY MANNER WHATSOEVER
NOR SHALL GE BE LIABLE FOR PROPERTY DAMAGE AND/OR THIRD PARTY CLAIMS HOWSOEVER
CAUSED.
Effective
Date
This
warranty shall become effective July 21, 2006, and applies to Components
sold to
SmarTire as referenced in Schedule A. This warranty supersedes all past
warranties granted by GE and may not be changed, altered or modified in any
way
except in writing by GE.
Component
Return Requirements
Be
sure
the components are properly identified.
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(a)
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Clearly
print the RMA number on the xxxx of lading and shipping
container.
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(b)
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When
shipping components for several different claims together, do not
mix the
components in the same container, box, etc. This could cause confusion
in
performing a failure analysis, a delay in claim processing, and
possible
rejection of the claim.
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(c)
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Package
the components carefully to avoid shipping damage, which could
distort or
mask the true cause of the failure.
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(d)
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Return
all components collect, per GE approved carrier and to the correct
designated location. Failure to return requested components to
designated
GE location may result in rejection of the
claim.
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(e)
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Components
lost from broken boxes, damaged shipping containers, negligence
in
packaging, or returned without proper claim identification, may
result in
no reimbursement for the components not received and shall be the
responsibility of SmarTire.
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