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EXHIBIT 10.20
CONTRACT MANUFACTURING AGREEMENT
This Contract Manufacturing Agreement (this "Agreement") is
made as of January 1, 2000 by and between Mommers Print Service BV, a company
duly incorporated and existing under the laws of the Netherlands ("Mommers"),
and Viasystems Tyneside Limited, a company organized under the laws of England
and Wales ("North Tyneside").
RECITALS:
WHEREAS, Mommers is engaged in the business of designing,
developing, manufacturing, selling and providing product support for complex
multi-layered printed circuit boards and backpanels (the "Products") and selling
to various customers such Products;
WHEREAS, North Tyneside is engaged in the business of
manufacturing printed circuit boards and backpanels, including innerlayers and
has adequate production capacity and is technically capable of manufacturing the
Products;
WHEREAS, Mommers and North Tyneside desire to enter into an
arrangement pursuant to which North Tyneside would provide Manufacturing
Services (as defined) to Mommers on the terms and subject to the conditions set
forth herein; and
WHEREAS, Norrkoping desires to xxxxx Xxxxxxx an option to
purchase certain assets used by it in the manufacturing of the Products.
NOW THEREFORE, the parties hereto agree as follows:
I. MANUFACTURING OBLIGATIONS
1.1. Manufacturing Services. Subject to the terms and
conditions set forth in this Agreement, North Tyneside agrees to provide all
services related to the manufacturing of the Products (the "Manufacturing
Services") and Mommers agrees to accept the Manufacturing Services for Products
meeting Mommers' Specifications (as defined), in such quantities as determined
under Section 1.2 hereof. For purpose of this Agreement the term "Mommers'
Specifications" means and includes any and all designs, drawings, blueprints,
formulations, models, specifications, manufacturing data, techniques, processes,
procedures, performance data, know-how and other technical information relating
to the design, manufacture and/or operation of the Products, which are provided
by Mommers to Norrkoping for the purpose of manufacturing Products pursuant to
this Agreement.
1.2. Required Services Forecast. Ten days prior to the first
date of each calendar month, or as otherwise agree by the parties hereto,
Mommers shall prepare and submit to North Tyneside a forecast of the
Manufacturing Services which
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Mommers reasonably expects will be required during each month (the "Services
Forecast").
1.3. Independent Contractors. The relationship of Mommers and
North Tyneside established by this Agreement is that of independent contractors,
and nothing contained in this Agreement shall be construed to (i) give either
party the power to direct and control the day-to-day activities of the other,
(ii) constitute the parties as partners, joint venturers, co-owners or otherwise
as participants in a joint or common undertaking; (iii) constitute North
Tyneside to be an agent or retailer within the meaning of the applicable law;
(iv) prevent North Tyneside from entering into any other business; or (v) allow
North Tyneside to create or assume obligations on behalf of Mommers except as
provided herein. All financial and other obligations associated with North
Tyneside's business are the sole responsibility of North Tyneside except as
provided herein.
II. PROCESSING AND MANUFACTURE OF PRODUCTS
2.1. Products Specifications. Mommers will provide to North
Tyneside copies of all data and documents embodying Specifications required to
permit North Tyneside to manufacture the Products. Mommers' Specifications will
include any data, know-how and other technical information concerning
manufacturing procedures that have been used by Mommers or its representatives
to manufacture the Products. If Mommers' Specifications are improved, enhanced
or otherwise revised by Mommers during the term of this Agreement, Mommers shall
promptly provide North Tyneside a data package which will include all such
revised Mommers' Specifications. Thereafter, North Tyneside will utilize all
such revised Mommers' Specifications in the manufacture of Products.
2.2. Sourcing of Materials. Mommers shall approve all
materials to be used by North Tyneside to manufacture the Products.
2.3. Production. North Tyneside will utilize manufacturing
processes or production methods approved by Mommers. North Tyneside will employ
proper equipment, machinery and production methods to ensure that the Products
will at all times meet Mommers' Specifications. All rights related to any
production method developed by North Tyneside in furtherance of this Agreement
shall be the sole and exclusive property of Mommers.
2.4. Monitoring of Production. Mommers (or its
representatives) shall have the right to (a) examine North Tyneside's purchasing
records to determine whether materials acquired for use in the Products have
been purchased from approved vendors; (b) inspect work in progress to determine
the adequacy of production methods and equipment employed by North Tyneside; and
(c) conduct spot inspections of finished Products to verify that the Products
have been manufactured in accordance with the Product Specifications. All
representatives of Mommers
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conducting such inspections shall comply with all applicable safety and security
rules of North Tyneside.
2.5. Testing. The finished Products will be tested by or on
behalf of Mommers in accordance with procedures established by the parties from
time to time.
III. ORDER PROCEDURE AND SHIPMENT
3.1. Manufacturing Service Orders. All orders for
Manufacturing Services placed by Mommers for the manufacture of Products
hereunder will identify and specify the quantity of Products being ordered and
will contain other detailed instructions including appropriate labeling
instructions and the desired date of delivery. North Tyneside will acknowledge
the receipt of and accept Mommers' Manufacturing Services orders within ten
calendar days of receipt, or as otherwise agreed by the parties hereto. Mommers
acknowledges that North Tyneside is producing Products solely at the order and
direction of Mommers, and that therefore all purchase orders shall be
noncancellable after either acceptance or if not disapproved within 10 calendar
days of receipt, or as otherwise agreed by the parties hereto.
3.2. Delivery Schedule and Inventory. North Tyneside shall
use its best efforts to fill all Manufacturing Services orders of Mommers in
accordance with the delivery schedule contained therein.
3.3. Shipment. North Tyneside will ship the Products in
accordance with Mommers' instructions. All freight and insurance charges and
other costs, expenses, fees, duties, imports, value added taxes and charges of
whatever kind or nature arising from shipment of the Products to the destination
specified by Mommers will be for Mommers' sole account.
IV. PAYMENT OBLIGATION OF MOMMERS
4.1. Manufacturing Services. During the term of this
Agreement, the price for the Manufacturing Services shall be based upon Mommers'
direct cost to manufacture such Product for which such Manufacturing Services
are contracted for at Mommers' Echt facility. During the term of this Agreement,
Mommers shall submit to North Tyneside a complete breakdown of its direct cost
associated with the manufacture of any Product for which Mommers is contracting
for Manufacturing Services. The price of such Manufacturing Services shall be
increased or decreased, as the case may be and from time to time, to reflect
changes in the cost of raw materials, labor rates, utility rates and any other
component of direct manufacturing cost at Mommers' Echt facility.
4.2. Payment Terms. All amounts invoiced and payable under
this Agreement shall be paid in U.S. dollars and all amounts shall be due and
payable by
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wire transfer of immediately available funds in sixty 60 days from the date of
shipment of the Product for which Manufacturing Services have been provided.
Interests shall incur on all past due amounts at the rate of twelve percent
(12%) per annum.
4.3. Reporting. At all times during the term of this
Agreement, North Tyneside will maintain at its principal place of business full,
complete and accurate books of account and records with regard to its activities
under this Agreement. Upon reasonable notice, North Tyneside will xxxxx Xxxxxxx
access during regular business hours to North Tyneside's books and records in
order for Mommers to verify, at its own expense, North Tyneside's compliance
with its obligations under this Agreement.
V. WARRANTIES AND LIABILITIES
5.1. Warranties. North Tyneside expressly warrants to Mommers
and to purchasers of Mommers' Products that the Manufacturing Services and the
Products will conform to the applicable Mommers' Specifications. Norrkoping
shall indemnify and hold Mommers harmless from any and all liability,
consequential or otherwise, incurred by Mommers due to any defective Product
supplied by Norrkoping.
5.2. Insurance of North Tyneside. North Tyneside will obtain
and maintain during the term of this Agreement, in addition to insurance in such
amounts as is customary for companies in the same or similar business located in
the same or similar area, a policy of general liability insurance for companies
and entrepreneurs in an amount of at least U.S. $2,500,000. North Tyneside shall
use its best efforts to procure a waiver of subrogation in each policy of
insurance obtained by North Tyneside in favor of Mommers, its affiliates, joint
venture participants, and their respective officers and directors, and shall
provide Mommers with ten days prior written notice of material changes,
cancellations or renewals. Subject to the other provisions of this Agreement,
North Tyneside covenants that during the term of this Agreement, it will at all
times by properly insured in accordance with applicable law.
VI. INTELLECTUAL PROPERTY
6.1. Intellectual Property. (a) All trademarks, know-how and
other property (whether tangible or intangible) made available to North Tyneside
by or on behalf of Mommers during the term of this Agreement, is and will at all
times remain the property of Mommers and will be returned to Mommers immediately
upon termination of this Agreement or upon the earlier request of Mommers. All
intellectual property which has arisen in the exercise of North Tyneside's
duties will be the property of Mommers. North Tyneside is bound by subscription
to render to the official conveyance of any intellectual property to Mommers if
indispensable, also after termination of this Agreement. The essential costs are
for the account of Mommers.
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(b) North Tyneside will not incorporate anything in the
Manufacturing Services which involves the use of a trade secret, patent,
copyright or other intellectual property right of a third party under which
Mommers has no license rights or any other right of use.
6.2. Intellectual Property Indemnification. (a) Except as
provided in this Section 6.2, Mommers shall defend, indemnify and hold harmless
North Tyneside from and against any and all claims, demands, suits or
proceedings made or brought against North Tyneside, and shall reimburse North
Tyneside for any and all liabilities, judgments, damages, costs or expenses
payable by North Tyneside to the party bringing such action together with
reasonable attorneys' fees relating thereto, as a result of any infringement of
any third party patent by the Products, unless these claims, demands, suits or
proceedings are caused by gross negligence or willful misconduct.
(b) Mommers will be relieved of its obligations under Section
6.2.(a) unless North Tyneside notifies Mommers promptly in writing of and gives
Mommers the exclusive authority to defend or settle such claim, demand, suit or
proceeding, and gives Mommers proper and full information and assistance to
settle or defend any such claim, demand, suit or proceeding. If the Products, or
any part thereof, are, or in the opinion of North Tyneside become, the subject
of any claim, demand, suit or proceeding for infringement of any third party
patent or copyright, or if it is adjudicatively determined that the Products, or
any part thereof, infringes any third party patent or copyright then North
Tyneside may, at its option and expense either (i) procure for North Tyneside
the right under such third party patent or copyright to sell or use, as
appropriate, the products; or (ii) replace or modify the Products or parts
thereof, with other suitable and reasonable equivalent technology or parts so
that the Products become non-infringing.
(c) Notwithstanding the provisions of Sections 6.2.(a) and
6.2.(b) hereof, Mommers assumes no liability for any claim arising from the use
of the Products in combination with other equipment or technology not provided
by Mommers, or any claim arising from the use of any North Tyneside process or
other technology if the claim would not have occurred but for such combination
of process or other technology.
(d) North Tyneside will require any subcontractor who provides
personnel or services to agree to the same rights and protection for Mommers
that North Tyneside is required to provide herein.
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VII. CONFIDENTIAL INFORMATION
7.1. Confidential Information. Each party and its affiliates,
employees, officers and directors will treat as confidential all Confidential
Information (as defined) of the other party, will not use such Confidential
Information except as expressly set forth herein or otherwise authorized in
writing, will implement reasonable procedures to prohibit the disclosure,
unauthorized duplication, misuse or removal of the other party's Confidential
Information and will not disclose such Confidential Information to any third
party except as may be necessary and required in connection with the rights and
obligations of such party under this Agreement, and subject to confidentiality
obligations at least as protective as those set forth herein. Without limiting
the foregoing, each of the parties will use at least the same procedures and
degree of care which it uses to prevent the disclosure of its own confidential
information of like importance to prevent the disclosure of Confidential
Information disclosed to it by the other party under this Agreement, but in no
event less than reasonable care. Furthermore, North Tyneside shall use its best
efforts to prohibit its employees, officers and directors from using any
Confidential Information or other know-how developed during their employment
with North Tyneside for a period of two years after termination of employment
with North Tyneside. As used in this Agreement, the term "Confidential
Information" shall mean any information disclosed by one party to the other
pursuant to this Agreement, which is in written, graphic, machine readable or
other tangible form and is marked "Confidential", "Proprietary" or in some other
manner to indicate its confidential nature. Confidential Information may also
include oral information disclosed by one party to the other pursuant to this
Agreement, provided that such information is designated as confidential at the
time of disclosure and reduced to a written summary by the disclosing party,
within thirty days after its oral disclosure, which is marked in a manner to
indicate its confidential nature and delivered to the receiving party.
VII. GRANT OF OPTION
8.1 Option Grant. North Tyneside hereby grants to Mommers the
right and option (the "Option") to purchase all of the right, title and interest
of North Tyneside, its successors and assigns, in and to the assets utilized by
North Tyneside in the manufacture of the Products (the "North Tyneside Assets")
at a purchase price equal to the book value of North Tyneside Assets on the date
of exercise as they would appear on the balance sheet of Norrkoping prepared in
accordance with generally accepted accounting principles.
8.2 Time and Manner of Exercise of Option. The Option may be
exercised by Mommers at any time following the date of this Agreement and on or
prior to the second anniversary of the date of this Agreement. The Option shall
be exercised by Mommers by delivering to North Tyneside written notice of
exercise of such Option. Upon the exercise of such Option, North Tyneside and
Mommers shall, as soon as practicable but in no event no later than 10 business
days following written notice of such exercise, enter into an asset purchase
agreement or other transfer documents
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relating to the North Tyneside Assets in form and substance mutually agreeable
to the parties and consummate the purchase and sale of the North Tyneside Assets
as soon as practicable thereafter.
IX. TERM AND TERMINATION
9.1. Term. This Agreement is a three year contract and
commences on the date hereof.
9.2. Termination. During the term of this Agreement, either
party may terminate this Agreement at any time, without cause, upon two (2)
week's written notice. Either party may terminate this Agreement at any time
without notice and with immediate effect in the event (a) of bankruptcy of the
other party hereto, in case of official moratorium or liquidation of the other
party, and in case of attachment maintained for at least one month in respect of
substantial debts of the other party; (b) the other party hereto becomes
insolvent or unable to pay its debts as they mature or case to pay its debts as
they mature in the ordinary course of business or makes an assignment for the
benefit of its creditors; (c) a receiver is appointed for the other party hereto
or its property; and (d) the other party hereto fails to perform any material
obligations.
9.3. Obligations on Termination. If this Agreement is
terminated as provided in Section 9.2, North Tyneside shall (a) deliver all
Products in its storage or possession, to any location designated by Mommers;
(b) deliver to Mommers all records, reports and materials pertaining to North
Tyneside's performance of its obligations under this Agreement; (c) execute all
documents necessary to enable Mommers to carry out its obligations to customers
and shall cooperate fully in making the necessary transitions; (d) cooperate
with Mommers in the preparation of a final accounting, and the balance thereof
will be paid within 60 days by the appropriate party; and (e) cease using
Mommers' trademark or trade names and shall change the registration thereof in
any other trademarks or trade names not confusing similar those of Mommers.
9.4. Survival Provisions. Notwithstanding anything in this
Agreement to the contrary, the provisions of Articles 6, 7 and 8 shall survive
the termination of this Agreement for any reason.
X. CONSEQUENCES OF TERMINATION
10.1. Termination of Product Manufacturing. Upon termination
of this Agreement for any reason, North Tyneside shall immediately terminate
production of the Products and all use of Mommers' Specifications and the
Intellectual Property Rights.
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10.2. Confidential Information. Upon the termination of this
Agreement for any reason, North Tyneside shall, at the request of Mommers,
promptly return to Mommers or its designated representatives or otherwise
dispose of as Mommers may instruct all materials that contain Confidential
Information in written, recorded or other tangible form (other than
correspondence between Mommers and North Tyneside) which North Tyneside may have
in its possession, custody or under its direct or indirect control.
10.3. Outstanding Payments. The termination of this Agreement
shall not release Mommers from its obligation to pay any sums then owing to
North Tyneside or from the obligation to perform any other duty or to discharge
any other liability that has been incurred prior thereto. Subject to the
foregoing, however neither party shall by reason of the expiration or
termination of this Agreement be liable to the other for compensation or damages
on account of the loss of present or prospective profits on sales or anticipated
sales, or expenditures, investments or commitments made in connection therewith.
North Tyneside hereby waives all right to compensation which North Tyneside
might otherwise be entitled to receive under applicable law upon expiration or
termination of this Agreement.
10.4. Employment Contracts. In the event that compensation,
damages, or other award is granted under applicable law to the employees or
other personnel of North Tyneside upon expiration or termination of this
Agreement, North Tyneside shall be fully liable for all such compensation
required to be paid. North Tyneside shall give immediate notice to Mommers of
any proceedings in connection with such claims and shall comply with all
reasonable instructions issued by Mommers in connection therewith.
Notwithstanding the foregoing, Mommers shall not be liable to make contribution
to the payment of any compensation required to be paid as a result of any
termination of this Agreement which is attributable to North Tyneside.
10.5. General Effects. Notwithstanding the termination of this
Agreement, North Tyneside shall continue to abide by the terms of its
obligations under Articles 6, 7, 8, 9 and 10 herein.
XI. GENERAL PROVISIONS
11.1. General Compliance. Each party will at all times and at
its own expense (a) strictly comply with all applicable laws, rules, regulations
and governmental orders, now or hereafter in effect, relating to its performance
of this Agreement; (b) pay all fees and other charges required by such laws,
rules, regulations and orders; and (c) maintain in full force and effect all
licenses, permits, authorizations,
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registrations and qualifications from all applicable governmental departments
and agencies to the extent necessary to perform its obligations hereunder.
11.2. Publicity Release. North Tyneside will not use the name
of Mommers or any subsidiary or division thereof, in advertising or promotion
material or publicity releases relating to the Manufacturing Services to be
performed by North Tyneside or the results thereof without the prior written
consent of Mommers.
11.3. Title. All documents, drawings, specifications and other
such pertinent papers prepared by North Tyneside in pursuance of this Agreement
shall become the sole property of Mommers and may be used by Mommers without
accounting therefore to North Tyneside. If requested, North Tyneside will
provide one copy of design calculations for the Manufacturing Services.
11.4. Governing Law. This Agreement and the legal relations
among the parties hereto will be governed by and construed in accordance with
the laws of the Netherlands.
11.5. Force Majeure. Neither party shall be liable to the
other for its failure to perform any of its obligations hereunder during any
period in which such performance is delayed by circumstances beyond its
reasonable control including, but not limited to, fire, flood, war, embargo,
strike, riot, inability to secure materials and transportation facilities, or
the intervention of any governmental authority. If such delaying cause shall
continue for more than 60 calendar days, the party injured by the inability of
the other to perform shall have the right upon written notice to terminate this
Agreement pursuant to Section 9.2.
11.6. Assignment. Neither party may assign or delegate this
Agreement or any of its licenses, rights or duties under this Agreement without
the prior written consent of the other except either party may assign this
Agreement to a person or entity into which it has merged or which has otherwise
succeeded to all or substantially all of its business and assets, and which has
assumed in writing or by operation of law its obligations under this Agreement.
North Tyneside shall be entitled to subcontract Manufacturing Services to
parties approved by Mommers.
11.7. Approvals and Authority. Each party represents that all
corporate action necessary for the authorization, execution and delivery of this
Agreement by such party and their performance of its obligations hereunder has
been taken. North Tyneside represents and warrants that no consent or approval
of any governmental authority in the Netherlands is required in connection with
the valid execution and performance of this Agreement. North Tyneside will be
responsible for timely filing of this Agreement with any Netherlands government
commissions or agencies.
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11.8. Notices. All notices and other communications required
or permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by hand, messenger or by
telecommunication to the address specified below:
(a) if to Mommers to:
c/o Viasystems Group, Inc.
000 Xxxxx Xxxxxx Xxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxxx
(b) if to North Tyneside to:
c/o European PCB Group (Cayman Islands) Ltd.
000 Xxxxx Xxxxxx Xxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx
or to such other address or addresses as any such party may from time to time
designate as to itself by like notice.
11.9. Partial Invalidity. If any paragraph, provision, or
clause thereof in this Agreement shall be found or be held to be invalid or
unenforceable in any jurisdiction in which this Agreement is being performed,
the remainder of this Agreement shall be valid and enforceable and the parties
shall negotiate, in good faith, a substitute, valid and enforceable provision
which most nearly effects the parties' intent in entering into this Agreement.
11.10. Counterparts. The Agreement may be executed in two or
more counterparts, all of which, taken together, shall be regarded as one and
the same instrument.
11.11. Modification. No alteration, amendment, waiver,
cancellation or any other change in any term or condition of this Agreement
shall be valid or binding on either party unless the same shall have been agreed
to in writing by both parties.
11.12. Waiver. The failure of either party to enforce at any
time the provisions of this Agreement, or the failure to require at any time
performance by the other party of any of the provisions of this Agreement, shall
in no way be constituted to be a present or future waiver of such provisions,
nor in any way affect the validity of either party to enforce each and every
such provision.
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11.13. Severability of Covenants. Any covenant, term,
agreement, provision or condition of this Agreement, which in any way contravene
the applicable laws, rules or regulations of any jurisdiction in which the
parties to this Agreement are located, shall be deemed severable and of no force
or effect and shall not affect the validity of any other covenant, term,
agreement, proviso or condition of this Agreement.
11.14. Headings. Titles and headings to Sections herein are
inserted for convenience of reference only, and are not intended to be part of
or to affect the meaning or interpretation of this Agreement.
11.15. Entirety of Agreement. The preceding Articles contain
the entire understanding of the parties hereto. All previous proposals and
communications relative to the Manufacturing Services, whether oral or written,
are hereby superseded, except to the extent they have been expressly
incorporated into this Agreement. No contrary or additional terms or conditions
shall apply notwithstanding any oral or written statement by North Tyneside,
including any invoice, statement, sales order or other document describing the
delivery of Manufacturing Services, unless agreed to by Mommers in writing.
11.16. Further Assurances. From time to time, as and when
requested by either party hereto, the other party will execute and deliver, or
cause to be executed and delivered all such documents and instruments as may be
reasonably necessary to consummate the transactions contemplated by this
Agreement.
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IN WITNESS WHEREOF, the parties have hereunto executed this
Agreement on the date first hereinbefore written.
MOMMERS PRINT SERVICE BV
By: /s/ XXXXX X. XXXXXXX
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Name: XXXXX X. XXXXXXX
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Title: Senior Vice President
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VIASYSTEMS TYNESIDE LIMITED
By: /s/ XXXXX X. XXXXXXX
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Name: XXXXX X. XXXXXXX
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Title: Senior Vice President
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