Exhibit 10.1
MANUFACTURING AGREEMENT
This Manufacturing Agreement (the "Agreement") is
made and entered into at
St. Louis County, Missouri as of the 1st day of November, 2002
(the "Effective Date")
by and between XxXxxxx, Inc., a Delaware corporation ("Contractor")
and GE Transportation
Systems Global Signaling, LLC, a Delaware limited liability company ("Client").
WHEREAS, Client has, on the Effective Date, acquired from XxXxxxx-OCS, Inc., a
Delaware corporation and an affiliate of Contractor, certain
assets relating to the railroad
segment of the Network Technologies Group of XxXxxxx-OCS, Inc.
pursuant to an Asset Purchase
Agreement (such assets hereinafter referred to as the "Assets"); and
WHEREAS, a condition to Client's acquisition
of the Assets was the agreement of
Contractor to provide to Client the manufacturing services
called for by this Agreement,
on the terms and subject to the conditions of this Agreement,
and Contractor does so agree.
NOW, THEREFORE, in consideration of the premises,
and for other good and valuable
consideration, the sufficiency of which is hereby acknowledged
by each party hereto, and
intending to be legally bound, the parties covenant and agree as follows:
1. Manufacturing and Repair Services to be Provided by
Contractor. Subject to the
terms and conditions of this Agreement, and subject to reasonable
scheduling to accommodate
the needs and requirements of each party, Client agrees to
order and purchase from Contractor,
and Contractor agrees to manufacture, assemble and sell to Client,
a minimum of two thousand
(2,000) CellularRTU units, plus accessory devices customarily accompanying
the same, all of
which are set forth and described in Exhibit A, attached hereto
("Goods"). This initial purchase
order is hereinafter referred to as the "Initial Unit Purchases."
Contractor shall repair Goods
at prices set forth in Ssection 6.
2. Scope of Manufacturing Services Provided by Contractor. Contractor
represents and warrants to Client that throughout the term of this Agreement
Contractor shall maintain the resources and ability to provide
the manufacturing
and repair services called for by this Agreement.
3. Term. The term of this Agreement shall be for a period of two years
from and after the Effective Date, unless earlier terminated upon proper notice
and upon proper cause, as provided herein. Client shall
have the option to extend
the term of this Agreement for an additional one year by giving notice of the
exercise of such option at least six months prior to
the expiration of the initial
term. Unless otherwise agreed, Contractor shall be
obligated to complete outstanding
purchase orders placed by Client prior to the effective
date of termination of this
Agreement and Client shall be obligated to pay for
any such products delivered after
termination of this Agreement.
4. Termination. With reasonable cause, and after reasonable notice
setting forth such cause, either party may terminate this Agreement.
Reasonable cause shall include (a) a material violation of this Agreement
that cannot be cured without the risk of further damage to a party, (b) any
act exposing the other party to a material liability not contemplated by this
Agreement or (c) an event of default. As used herein, an event of default
shall mean and include the occurrence of any one or more of the
following events of default:
(1) The other party defaults in the performance of
any material requirement or obligation under this Agreement or any
other written agreement between the parties regarding the subject
matter of this Agreement, and such default is not cured or a plan
to cure the default is not submitted by the defaulting party and
accepted by the non-defaulting party within ten (10) days after
written notice of such default is sent to such party;
(2) The other party ceases to do business, makes a
composition or assignment for the benefit of its creditors, makes
a general arrangement with its creditors concerning any extension
or forgiveness of any of its secured debt, becomes bankrupt or
insolvent, suffers or seeks the appointment of a receiver to the
whole or any material part of its business, takes any action to
liquidate or wind up the whole or any material part of its business,
is found subject to any provisions of any bankruptcy code concerning
involuntary bankruptcy or similar proceeding, or suffers a material
adverse change in its financial position such that payments hereunder may
be affected or delayed by a creditor or administrator
of the business of the other party; or
(3) Notwithstanding the foregoing provisions, an event
of default will occur if any party to the Asset Purchase Agreement
executed by Client as Buyer and executed by XxXxxxx-OCS, Inc., as
Seller shall breach any provision of that agreement or the License,
Service, Guaranty, and other agreements executed pursuant to the Asset
Purchase Agreement.
Upon termination of this Agreement, Contractor shall
promptly return to Client any and all items of Client's property
in Contractor's possession. Contractor shall immediately discontinue
the use of any of Client's property upon the effective date of any
termination of this Agreement. In the event that such items raw materials,
work in process, and finished Goods inventories that were purchased or
produced by Contractor to complete orders placed by Client but subsequently
canceled by Client as a result of the termination without cause of this
Agreement cannot otherwise be used or sold at similar
economic benefit to Contractor,
Client agrees to purchase items other than finished Goods from Contractor, at
Contractor's cost plus 10% and to purchase the finished Goods at the prices set
forth in this Agreement. plus a reasonable profit, the amount of raw materials,
work in process, and finished goods inventories that were purchased or produced
by Contractor to complete orders placed by Client but subsequently canceled by
Client as a result of the termination of this Agreement.
5. Independent Contractor. The parties agree that the relationship
of Contractor to Client is that of an independent contractor, and that
neither Contractor nor any of Contractor's directors, officers, employees,
agents or representatives is an employee, servant,
agent, partner or joint venturer
of Client. Contractor shall utilize employees of Contractor to provide and
perform the services hereunder, shall direct those employees in the performance
of those services, and shall be solely responsible for paying those employees
and any and all withholding taxes and benefits due those employees.
Client is not authorized to direct or control any of Contractor's employees
in the performance of those services. Client shall request Contractor
to perform the services provided for in this Agreement, and Contractor
shall determine the manner in which such services shall be performed.
Contractor shall, however, perform such services in a reasonable and
competent manner. Contractor is not authorized to enter into contracts
or agreements on behalf of Client.
6. Initial Units Purchases; Price; Terms and Conditions. The
price for each of the CellularRTU units and accessory devicesGoods
that are ordered during the Initial Units Purchases shall be the price
set forth in Exhibit B. Upon completion of the Initial Units Purchases,
Client covenants and agrees to order from Contractor such additional
amount of cellular RTU units and accessory devicesGoods as determined
by Client at prices to be mutually agreed upon by the parties. Client
may request price reviews of the prices set forth in Exhibit B, as aggregate
costs of Contractor may change over the period of this Agreement. Cost
reviews are to be undertaken periodically to review the material and labor
portion of pricing. Contractor will provide for such
cost reviews detailed
documentation showing Contractor's cost structure. Contractor shall extend
its best efforts to minimize component, material and labor costs so as to
realize the lowest cost structure obtainable while maintaining the required
quality of the cellular RTU units and accessory devices. All such orders shall
be governed by the terms and conditions set forth in this Agreement, and any
additional terms and conditions of purchase that may be set forth in any
purchase order (excepting only quantity, price, delivery dates and description
of Goods ordered) shall have no force or effect. Contractor shall repair or
replace at no cost to Client Goods manufactured prior to the Effective Date
that are still under the manufacturer's warranty but
have been returned to Client.
Contractor shall repair or replace Goods that are out of
warranty at Contractor's
fully burdened time and material costs plus 10%;
however, for any Good for which
the estimated repair or replacement cost is more than
$300, Contractor shall first
obtain permission to repair or replace from Client. In no
event shall Contractor
ever be required to provide to Client, nor shall Client
ever be entitled to enforce
against Contractor, any terms and conditions of purchase and sale that are less
favorable to Contractor thanThe parties further agree to the following:
a. Delivery of Goods shall be FOB Contractor's designated
plant or facility; drop
shipments to Client or Client's customers at Client's
direction and expense; title
and risk of loss pass at delivery to Client or carrier;
b. Warranties that Goods sold are free from defects in materials
furnished by Contractor and free from defects in workmanship for the earlier
of twelve (12) months from the date of installation or fifteen (15) months
from date of shipment, and that Contractor is conveying good marketable
title to such Goods;
c. All other warranties (including warranties of fitness for a
particular purpose) are excluded;
d. Remedies for breach of contract or warranties shall be limited
to refund of purchase price of Goods, or repair or replacement of
Goods; Contractor not liable for any consequential, incidental
or exemplary damages
e. Payment - net due within 60 days after receipt of invoice by
Client
7. Intellectual Property Rights; Confidentiality. Each party
shall retain all right, title and interest in and to any and all
intellectual property rights owned by that party. No use or disclosure
of such information involving the other party shall operate as a waiver
or forfeiture of any such rights. Client acknowledges and agrees that
Client is licensing to Contractor certain rights to intellectual property
of Client as set forth in a Licensing Agreement attached hereto as Exhibit C,
and that such rights and information may be utilized by Contractor in the
performance of this Agreement. Each party covenants and agrees to maintain in
confidence, and not disclose to third parties or use in any improper manner,
any and all confidential, proprietary and trade secret
information of or belonging
to the other during the Term of this Agreement and for a period of two years
thereafter during the Term of this Agreement and for a
period of two years thereafter.
8. Indemnities and Insurance. Each party covenants and agrees to indemnify
and hold the other party completely harmless from
and against any and all claims,
actions, demands, suits or actions arising out of the gross negligence or
intentional other misconduct of the indemnifying party and that arise out of
the performance of this Agreement. Contractor represents
and warrants to Client
that Contractor is covered by insurance coverage as set forth in Exhibit D,
attached hereto, and that Contractor shall maintain such coverage during the
Term of this Agreement and provide certificates of such coverage to Client upon
reasonable request.
9. Quality. Contractor shall manufacture and test the Goods set forth in
Exhibit A in a manner consistent with Contractor's past practices and standards.
In the event that Client requests any change in such practices and standards,
Contractor shall be entitled to negotiate with Client regarding
modifications to the pricing of the Goods, and shall be entitled to
reject any requested change in practice or standards if the parties
have not reached an agreement regarding a modification to pricing.
10. Process Control/Changes. Contractor shall retain all rights
in and to Contractor's manufacturing processes. Any and allContractor
shall make no changes to such processes shall remain the property of
Contractorwithout Client's consent.
11. Further Representations and Warranties of Contractor. Contractor
represents and warrants to Client each of the following: a) during the
Term of this Agreement, Contractor shall conduct its operations in compliance
with all rules, laws and regulations applicable to such operations, including
OSHA and other work safety and employment laws; and b) to the knowledge of
Contractor's officers, the manufacturing operations of Contractor that are
contemplated by this Agreement do not require any license, permit, device
or procedure that has not been previously disclosed to Client in order to
conduct those operations as previously conducted by Contractor, and such
operations have not resulted in any material claims arising under worker's
compensation or similar laws.
12. Notice. Any notice given in connection with this Agreement shall
be given in writing and shall be delivered by facsimile or by overnight
delivery system addressed to the following:
XxXxxxx, Inc. GE Transportation Services Global Signaling LLC
0000X Xxxxxxx Xxxx 0000 X. Xxxxxxxxxx Xxxx
Xx. Xxxxx, XX 00000 Xxxxx Xxxxxx, XX 00000
Att'n: Xxxxxx Xxxxxxxxxx Att'n: Xxxxxx X. HammoorService Business Leader
314/000-0000 fax 816/000-0000 fax
13. Assignment. Neither party may assign this Agreement,
in whole or in part, without the prior written consent of the other party.
14. Choice of Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of Missouri.
15. Entire Agreement. This Agreement is the entire agreement
of the parties with respect to the subject matter set forth herein,
and there are no promises, understandings or agreements respecting
that subject that are not fully set forth herein.
16. Amendments; Good Faith Negotiations Regarding Same. This
Agreement may be amended, modified or revised only in a writing duly
executed by authorized representatives of the parties. The parties
will negotiate in good faith regarding any proposed amendments,
modifications or revisions to this Agreement, including any proposed
increase or reduction in services hereunder.
[signatures appear on next page]
IN WITNESS WHEREOF, each party has executed this Agreement by its
duly authorized representative, intending this Agreement to be
effective as of the Effective Date set forth above.
XXXXXXX, INC.
By:/s/Xxxxx X. XxXxxxx
Xxxxx X. XxXxxxx, President and
Chief Executive Officer
GE TRANSPORTATION SYSTEMS GLOBAL SIGNALING, LLC
By /s/Xxxxxx X. Xxxxxxx
Name Xxxxxx X. Xxxxxxx
Title Manager and President
