EX-10
STANDARD MANUFACTURING AGREEMENT
STANDARD MANUFACTURING AGREEMENT
Xxxxx Sports Turf, Inc., whose principal place of business is located
at Minneapolis, Minnesota ("Xxxxx Delaware"); and Xxxxxx Xxxxx, an
individual; and Xxxxx Sports Turf, Inc., a private corporation whose
principal place of business is located at Rome, Georgia ("Xxxxx
Georgia"); in their desire to formulate a strategic business
relationship and to define their expectations regarding this
relationship, hereby agree as follows:
1. RECITALS
1.1 This Agreement is intended by Xxxxx Georgia and Xxxxx Delaware to
operate as a basic set of operating conditions regarding their
respective business relationship. Product specific requirements along
with specific business terms and conditions will be mutually agreed
to and documented by an Addendum to this Agreement ("Product").
1.2 It is the intent of the parties that this Agreement and its
Addendum shall prevail over any agreements previously entered into by
the parties. It is the intent of the parties that this Agreement and
its Addendum shall also prevail over the terms and conditions of any
purchase order, acknowledgment form or other instrument previously
entered into.
1.3 This Agreement may be executed in one or more counterparts, each
of which will be deemed the original, but all of which will
constitute but one and the same document. The parties agree this
Agreement and its Addendum may not be modified except in writing and
signed by all parties.
2. TERM
2.1 This Agreement shall commence on the effective date, May 14th
2003, and shall continue for an initial term of ten (10) years. This
Agreement shall automatically be renewed for successive one (1) year
increments unless either party requests in writing, at least ninety
(90) days prior to the anniversary date, that this Agreement not be
so renewed.
3. PRODUCT FORECAST
3.1 Xxxxx Delaware will provide, if necessary, an annual twelve
(12) month forecast.
4. MATERIAL PROCUREMENT
4.1 Xxxxx Georgia is authorized to purchase materials using
standard purchasing practices in order to meet the forecasted
requirements of Xxxxx Delaware.
Xxxxx Delaware recognizes its financial responsibility for the
material purchased by Xxxxx Georgia on behalf of Xxxxx Delaware.
Xxxxx Delaware is responsible for material to the extent that (i)
material is purchased by Avery Georgia to support the Product
forecast; (ii) Avery Georgia exercises reasonable judgment in
managing suppliers and lead times; (iii) Avery Georgia complies with
Xxxxx Delaware cancellation instructions in a timely manner (cancels
all open orders within one (1) week of receiving instructions).
4.2 Xxxxx Delaware may revise or cancel a purchase order for
Product and may also eliminate a component from a Product. If Xxxxx
Delaware revises or cancels a purchase order ("Order"), or eliminates
a component, or through revised forecast (downside) causes excess
inventory, Xxxxx Georgia shall identify all potential liability of
Xxxxx Delaware for material on order, material on hand, work in
process, and finished goods. Xxxxx Georgia shall undertake
commercially reasonable efforts to cancel all applicable component
purchase orders and reduce component inventory through return for
credit programs or allocate components for alternate programs to
minimize charges to Xxxxx Delaware. Xxxxx Delaware agrees to
compensate Xxxxx Georgia for costs incurred for finished goods
(including profit); work in process (including labor performed);
material on hand which could not be returned or used for other Xxxxx
Delaware products or at other sites of Xxxxx Georgia; material on
order which could not be canceled; applicable material suppliers'
restocking or cancellation fees; and agreed upon Xxxxx Georgia
handling charges.
4.3 Xxxxx Georgia will report its inventory position to Xxxxx
Delaware on a monthly basis, including the following data: quantity
of raw material, work in process and any open orders that cannot be
canceled due to supplier lead time.
5. PURCHASE ORDERS AND PRICE REVIEWS
5.1 Initial order placement will be an Order from Xxxxx Delaware to
Avery Georgia issued electronically with facsimile copy as backup.
Avery Georgia will provide notice to Xxxxx Delaware of Order
acceptance and scheduled shipment date.
5.2 Xxxxx Delaware may issue specific Orders to Avery Georgia,
which will be identified as "high priority" at time of Order
placement. Avery Georgia's on-time delivery performance of "high
priority" Products will be taken into consideration by the parties
during quarterly price reviews.
5.3 In the event Xxxxx Delaware issues Orders in excess of
forecasts, Xxxxx Georgia will use commercially reasonable efforts to
recover and replenish inventory levels. Expediting costs for such
Orders will be agreed upon prior to Order placement. Avery Georgia
will provide Xxxxx Delaware with "what-if" shortages results.
5.4 Avery Georgia and Xxxxx Delaware will meet every three (3)
months during the term of this Agreement to review safety stock
levels, pricing and to determine whether any price adjustment is required.
5.5 If volumes fall below production rate, Xxxxx Georgia and Xxxxx
Delaware agree to review the causes. If the volumes have dropped due
to the end of Product life, Xxxxx Georgia and Xxxxx Delaware agree to
develop their end-of-life support strategy. If the low volumes are
only temporary, Avery Georgia and Xxxxx Delaware will discuss what,
if any, fixed program costs are required to maintain the production.
6. DELIVERY
6.1 Avery Georgia will target on-time delivery, defined as shipment
of Product by Avery Georgia within a window except as provided above.
Each configuration order received from Xxxxx Delaware will include
the date on which the Product is to be delivered to either Xxxxx
Delaware or their designated Xxxxx Delaware location.
6.2 The FOB point is Rome, Georgia.
6.3 Xxxxx Georgia and Xxxxx Delaware shall agree to delivery schedule
flexibility requirements specific to the Product as documented in the
Addendum.
6.4 Upon learning of any potential delivery delays, Avery Georgia
will notify Xxxxx Delaware as to the cause and extent of such delay.
6.5 If Avery Georgia fails to make deliveries at the specified time
and such failure is caused by Xxxxx Georgia, Xxxxx Georgia will, at
no additional cost to Xxxxx Delaware, employ accelerated measures
such as material expediting fees, premium transportation costs, or
labor overtime required to meet the specified delivery schedule or
minimize the lateness of deliveries.
6.6 Should Avery Delaware require Xxxxx Georgia to undertake export
activity on behalf of Xxxxx Delaware, Xxxxx Delaware agrees to submit
requested export information to Avery Georgia pursuant to Xxxxx
Guidelines for Xxxxx Delaware-Driven Export Shipments as provided in
the Addendum.
7. PAYMENT TERMS
7.1 Avery Georgia and Xxxxx Delaware agree to payment terms of
payment upon Order.
7.2 Currency will be in U.S. dollars unless specifically negotiated
and reflected in the Addendum.
7.3 Until the purchase price and all other charges payable to Xxxxx
Georgia have been received in full, Xxxxx Georgia retains and Xxxxx
Delaware grants to Avery Georgia a security interest in the Products
delivered to Xxxxx Delaware and any proceeds there from.
8. QUALITY
Omitted.
9. ENGINEERING CHANGES
9.1 Xxxxx Delaware may, upon advance written notice to Xxxxx, submit
engineering changes for incorporation into the Product. It is
important that this notification include documentation of the change
to effectively support an investigation of the impact of the
engineering change. Xxxxx Georgia will make a reasonable effort to
review the engineering change and report to Xxxxx Delaware. If any
such change affects the price, delivery, or quality performance of
said Product, an equitable adjustment will be negotiated between
Avery Georgia and Xxxxx Delaware prior to implementation of the change.
9.2 Avery Georgia agrees not to undertake significant process
changes, design changes, or process step discontinuance affecting
electrical performance and/or mechanical form and fit without prior
written notification and concurrence of Xxxxx Delaware.
10. INVENTORY MANAGEMENT
10.1 Xxxxx Georgia agrees to purchase components according to Xxxxx
Delaware approved vendor list (AVL) including any sourcing plans as
provided by the Addendum.
10.2 All Xxxxx Delaware tooling/equipment furnished to Xxxxx Xxxxxx
or paid for by Xxxxx Delaware in connection with this Agreement shall:
a) Be clearly marked and remain the property of Xxxxx Delaware.
b) Be kept free of liens and encumbrances.
c) Unless otherwise agreed, Xxxxx Delaware is responsible for the
general maintenance of Avery Delaware tooling/equipment.
Xxxxx Georgia shall hold Xxxxx Delaware property at its own risk and
shall not modify the property without the written permission of Xxxxx
Delaware. Insurance will be bound to protect the property of Xxxxx
Delaware and its product held by Xxxxx Georgia. Upon Xxxxx Delaware's
request, Xxxxx Georgia shall return the property to Xxxxx Delaware in
the same condition as originally received by Avery Georgia with the
exception of reasonable wear and tear. In the event the property is
lost, damaged or destroyed, Avery Georgia's liability for the
property is limited to the book value of the property.
11. CONFIDENTIAL INFORMATION
11.1 Avery Georgia and Xxxxx Delaware agree to execute, as part of
this Agreement, a Nondisclosure Agreement for the reciprocal
protection of confidential information.
11.2 Subject to the terms of the Nondisclosure Agreement and the
proprietary rights of the parties, Xxxxx Georgia and Xxxxx Delaware
agree to exchange, at least semi-annually, relevant process
development information and business plans to include market trends,
process technologies, product requirements, new product developments,
available capacity and other information to support technology
advancements by both Xxxxx Georgia and Xxxxx Delaware.
12. WARRANTY
12.1 The yarn manufacture will for a period of five (5) years from
the date of manufacture of the Product, that (i) the Product will
conform to the specifications applicable to such Product at the time
of its manufacture from date of installation, which are furnished in
writing by Xxxxx Delaware and accepted by Avery Georgia; (ii) such
Product will be of good material (supplied by Avery Georgia) and
workmanship and free from defects for which Avery Georgia is
responsible (specifications) in the manufacture; (iii) such Product
will be free and clear of all liens and encumbrances and that Xxxxx
Georgia will convey good and marketable title to such Product. In the
event that any Product manufactured shall not be in conformity with
the foregoing warranties, Xxxxx Georgia shall, at its own option,
either credit Xxxxx Delaware for any such nonconformity (not to
exceed the purchase price paid by Xxxxx Delaware for such Product),
or, at Avery Georgia's expense, replace, repair or correct such
Product. Avery Georgia agrees to manufacture to specifications agreed
on for each product for pile height, stitch rate, yarn weight and
gauge upon delivery. The standard yarn warranties state that that
there should be no more than a 50% yarn loss for the warranty period.
The foregoing constitutes Xxxxx Delaware's sole remedies against
Avery Georgia for breach of warranty claims.
12.2 Avery Georgia shall have no responsibility or obligation to
Xxxxx Delaware under warranty claims with respect to Products that
have been subjected to abuse, misuse, accident, alteration, neglect
or unauthorized repair.
THE WARRANTIES CONTAINED IN THIS SECTION ARE IN LIEU OF, AND XXXXX
EXPRESSLY DISCLAIMS AND XXXXX DELAWARE WAIVES ALL OTHER
REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR
ARISING BY COURSE OF DEALING OR PERFORMANCE, CUSTOM, USAGE IN THE
TRADE OR OTHERWISE, INCLUDING WITHOUT LIMITATION THE IMPLIED
WARRANTIES OF MERCHANTABILITY, TITLE AND FITNESS FOR A PARTICULAR USE.
13. TERMINATION
13.1 If either party fails to meet any one or more of the terms
and conditions as stated in either this Agreement or the Addendum,
Xxxxx Georgia and Xxxxx Delaware agree to negotiate in good faith to
resolve such default. If the defaulting party fails to cure such
default or submit an acceptable written plan to resolve such default
within thirty (30) days following notice of default, the non-
defaulting party shall have the right to terminate this Agreement by
furnishing the defaulting party with thirty (30) days
written notice of termination.
13.2 This Agreement shall immediately terminate should either
party; (i) become insolvent; (ii) enter into or file a petition,
arraignment or proceeding seeking an order for relief under the
bankruptcy laws of its respective jurisdiction; (iii) enter into a
receivership of any of its assets or; (iv) enter into a dissolution
of liquidation of its assets or an assignment for the benefit of its
creditors.
13.3 Either Xxxxx Georgia or Xxxxx Delaware may terminate this
Agreement without cause by giving ninety (90) days advance written
notice to the other party.
14. DISPUTE RESOLUTION
14.1 In the spirit of continued cooperation, the parties hereby
establish the following dispute resolution procedure to be utilized
in the unlikely event any controversy should arise out of or
concerning the performance of this Agreement.
14.2 It is the intent of the parties that any dispute be
resolved informally and promptly through good faith negotiation
between Xxxxx Georgia and Xxxxx Delaware. Either party may initiate
negotiation proceedings by written notice to the other party setting
forth the particulars of the dispute. The parties agree to meet in
good faith to jointly define the scope and a method to remedy the
dispute. If these proceedings are not productive of a resolution,
then senior management of Xxxxx Georgia and Xxxxx Delaware are
authorized to and will meet personally to confer in a bona fide
attempt to resolve the matter.
14.3 Should any disputes remain between the parties after
completion of the two-step resolution process set forth above, then
the parties shall promptly submit any dispute to mediation with an
independent mediator. In the event mediation is not successful in
resolving the dispute, the parties agree to submit the dispute to
binding arbitration as provided by their respective jurisdiction.
15. LIMITATION OF LIABILITY
IN NO EVENT, WHETHER AS A RESULT OF BREACH OF CONTRACT, WARRANTY, OR
TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, PRODUCT LIABILITY, OR
OTHERWISE, SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL,
INCIDENTAL, CONSEQUENTIAL, EXEMPLARY DAMAGES OF ANY KIND WHETHER OR
NOT EITHER PARTY WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
16. PATENTS, COPYRIGHT AND TRADEMARK INDEMNITY
Each party (the "indemnifying party") shall defend, indemnify, and
hold harmless the other party from any claims by a third party of
infringement of intellectual properties resulting from the acts of
the indemnifying party pursuant to this Agreement, provided that the
other party (i) gives the indemnifying party prompt notice of any
such claims, (ii) renders reasonable assistance to the indemnifying
party thereon, and (iii) permits the indemnifying party to direct the
defense of the settlement of such claims.
17. GENERAL
17.1 Each party to this Agreement will maintain insurance to
protect itself from claims (i) by the party's employees, agents and
subcontractors under Worker's Compensation and Disability Acts, (ii)
for damages because of injury to or destruction of tangible property
resulting out of any negligent act, omission or willful misconduct of
the party or the party's employees or subcontractors, (iii) for
damages because of bodily injury, sickness, disease or death of its
employees or any other person arising out of any negligent act,
omission, or willful misconduct of the party or the party's
employees, agents or subcontractors.
17.2 Neither party shall delegate assign or transfer its rights or
obligations under this Agreement, whether in whole or part, without
the written consent of the other party.
17.3 Neither party shall be liable for any failure or delay in its
performance under this Agreement due to acts of God, acts of civil or
military authority, fires, floods, earthquakes, riots, wars or any
other cause beyond the reasonable control of the delayed party
provided that the delayed party: (i) gives the other party written
notice of such cause within fifteen (15) days of the discovery of the
event; and (ii) uses its reasonable efforts to remedy such delay in
its performance.
17.4 This Agreement shall be governed by, and construed in
accordance with the laws of the State of Delaware, excluding its
conflict of laws provisions. In any action to enforce this Agreement,
the prevailing party shall be awarded all court costs and reasonable
attorney fees incurred.
Agreed to: May 14th 2003
Xxxxx Sports Turf, Inc., a Georgia corporation
By: /s/ Xxxxxx Xxxxx
Name: Xxxxxx Xxxxx, President
Xxxxxx Xxxxx, individually
By: /s/ Xxxxxx Xxxxx
Name: Xxxxxx Xxxxx
Xxxxx Sports Turf, Inc., a Delaware corporation
By: /s/ Xxxx Xxxxxxxx
Name: Xxxx Xxxxxxxx, President
XXXXX ADDENDUM TO STANDARD MANUFACTURING AGREEMENT
This Addendum and the Standard Manufacturing Agreement ("SMA") set
forth the terms and conditions under which Xxxxx-Georgia agrees to
manufacture and support the Xxxxx Sports Turf product based on the
specifications provided by Avery Sports Turf ("Avery Delaware").
Xxxxx Georgia agrees to perform such manufacturing, and to ship to
Xxxxx Delaware in return for payment. This Addendum is hereby
incorporated by reference into the SMA. Except as set forth herein,
the Addendum is subject to each and every provision of the SMA.
Capitalized terms not otherwise defined here shall have the meanings
ascribed to such terms in the SMA.
Xxxxx Georgia agrees to provide exclusively product referred to as,
"Polylon Turf." Polylon Turf is a synthetic turf that is 2 1/2
inches, 55-ounce playground, day care and landscaping product. If
Product cannot be provided timely and additional Product is needed to
meet the requirements of Xxxxx Delaware, Xxxxxx Xxxxx/Xxxxx Georgia
will allow Xxxxx Delaware to purchase product from Crystal of Dalton,
Georgia.
This Addendum describes changes and additions to the SMA. It follows
the numbering scheme of the SMA. If a specific item was NOT changed
or modified, that item number will NOT be seen in the Addendum.
Signatures:
/s/ Xxxx Xxxxxxxx
/s/ Xxxxxx Xxxxx
Xxxx Xxxxxxxx
XXXXXX XXXXX
President/CEO
President/CEO
Avery-Delaware
Xxxxx-Georgia
