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EXHIBIT 10.20
ED-30 SUPPLY AGREEMENT
THIS AGREEMENT is made on 1 July 1995, by and between XXXXX MATERIAL
HANDLING COMPANY ("XXXXX" or "CMHC"), a Kentucky, U.S.A. corporation, with its
principal offices at 000 Xxxx Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, X.X.X. and
FUNK MANUFACTURING COMPANY ("FUNK"), a Delaware corporation with its principal
offices at Industrial Park, Highway 169 N., Xxxxxxxxxxx, Xxxxxx 00000.
WHEREAS, XXXXX is engaged in the manufacture, distribution and sale of
various types of industrial trucks and service parts therefor;
WHEREAS, FUNK will, as set forth in its letter of 26 June 1995 from X.
Xxxxx to X. Xxxxx, a copy of which is attached hereto and made a part hereto as
Exhibit A1 to CMHC to provide for the physical facilities and production
capacity to manufacture for XXXXX certain components and service parts for such
industrial trucks on or before December 31, 1995:
WHEREAS, FUNK shall meet, or continue to meet, each and everyone of its
obligations to XXXXX under that certain supply agreement dated 14 December 1994
for the supply of TA-30 transaxles, not withstanding its entering into this ED-
30 supply agreement.
WHEREAS, FUNK desires to sell to XXXXX, and XXXXX desires to purchase
from FUNK, certain of the aforesaid components and service parts therefor; and
WHEREAS, FUNK recognizes and understands the importance XXXXX places on
achieving and sustaining world competitive quality, cost and customer
satisfaction for the components and spare parts it purchases from suppliers;
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, the parties agree as follows:
1. DEFINITIONS.
For the purpose of this Agreement, the following terms shall have the meanings
indicated below:
1.1 "Products" means the products specified on Exhibit 1, attached hereto
and incorporated herein, as amended from time-to-time by written
agreement of the parties, together with such improvements,
modifications and replacements as are approved or authorized from
time-to-time by XXXXX.
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1.2 The terms "Service Parts" and "Spare Parts" have the same meaning and
are defined as follows: Parts accessories manufactured or provided by
FUNK and used in repairing or maintaining Products, as well as complete
units of Products for aftermarket purposes.
1.3 the terms "component" and "components" have the same meaning and are
defined as follows: raw materials, components, subassemblies and other
material purchased, manufactured or provided by Funk and used in the
production, repair or maintenance of the Products.
2. MANUFACTURE AND SALE OF PRODUCTS.
2.1 XXXXX agrees to purchase from FUNK and FUNK agrees to sell and deliver
to XXXXX, in accordance with the terms and conditions contained in this
Agreement, those Products and Spare Parts which are ordered by XXXXX
during the term of this Agreement.
2.2 Funk agrees to provide a final assembly facility reasonably acceptable
to XXXXX at a location agreeable to both parties at least two months
prior to a mutually agreed upon production start-up date for the ED-30
transmission, that is capable of producing a combined annual total of
at least 13,000 ED-30 and TA-30 products. Failure by Funk to provide
the aforementioned facility by the agreed date gives CMHC the right to
extend the terms of payment for the ED -30 product shipments from 60
days to 90 days at no penalty cost to CMHC for a period that is equal
to the number of work days that Funk has failed to provide such final
assembly facility.
2.3 Funk and its assembly subcontractor the Process Equipment Company,
agree to maintain a fully competent and sufficient workforce for
assembling the ED-30 transmission that can be adjusted to meet CMHC's
production requirements in accordance with the lead times specified for
schedule changes in Section 3.2 of this contract
3. ORDERS.
3.1 XXXXX will order Products from FUNK by issuing an annual blanket
purchase order on XXXXX'x standard form. The annual blanket purchase
order will be issued to confirm the agreed to prices and standard terms
of sale. The blanket order will not constitute an order for Products.
The Supplier Planning Schedule ("Schedule") will be the document by
which specific quantities of Products are forecasted. The Schedules
will state the quantities forecasted and the specifications for those
Products established in accordance with this Agreement. The Schedules
may also be used for planning purposes to confirm schedules for
previously ordered Products and to estimate quantities and schedules
for up to a full 12-month period. Schedules will be issued monthly for
the succeeding 12-month period.
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Firm requirements will be transmitted to FUNK by XXXXX on the
Schedules. Upon receipt of the delivery schedule containing firm
requirements by FUNK, FUNK will deliver product to XXXXX in accordance
with this Agreement.
3.2 The quantities of Products scheduled in XXXXX'x Schedules and/or XXXXX
purchase orders are firm commitments for the following time frames:
Period A:
Quantities and dates planned in the latest Schedule become unchangeable eight
(8) weeks prior to the required ship date, with guaranteed on-time deliveries by
FUNK in such quantities and on such dates. In the event XXXXX requires
deliveries in the time frame of six (6) weeks to eight (8) weeks prior to the
required ship date, FUNK shall use its best efforts to meet such delivery dates.
Period B:
Quantities planned in the latest Schedule for the period nine (9) weeks to
twelve (12) weeks prior to the required ship date can be changed by XXXXX within
+/-20%, with guaranteed on-time deliveries by FUNK for such changes.
All other quantities are estimates only and not guaranteed to be followed by
firm orders.
3.3 All contracts of sale will be upon the terms and conditions set forth
in this Agreement and in XXXXX'x blanket purchase order, a copy of
which is attached hereto as Exhibit 2. FUNK may acknowledge each annual
blanket purchase order using FUNK's standard forms, however, no
different or additional terms or conditions set forth in such an
acknowledgment will add to or modify in any way the terms and
conditions of any contract of sale. FUNK will use its best efforts to
comply with requests by XXXXX for changes in delivery schedules and for
orders for Products in excess of forecasted quantities.
4. DELIVERY OF PRODUCTS.
4.1 Within five (5) working days after receipt of XXXXX'x Schedule(s) for
Products, FUNK will respond to the delivery schedule specified by XXXXX
with an acknowledgment. Otherwise, confirmation shall be deemed.
Delivery schedules established herein and/or in Section 3.2 hereof are
firm and may be modified only upon mutual agreement.
4.2 Deliveries will be F.O.B. FUNK's manufacturing facility to the
locations as specified by XXXXX. Prices will be equitably adjusted for
special packing or shipping preparations requested by XXXXX in writing.
FUNK shall
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purchase at least one hundred and TWENTY (120) returnable containers,
with XXXXX bearing the cost of such containers at $235.00 per
container, the cost of which will be amortized over the first 4,000
Product units purchased by XXXXX under this Agreement at $7.05 each. If
the parties agree that additional containers are necessary, the cost of
such additional containers will be amortized over 4,000 Product units,
unless XXXXX elects to purchase such additional containers outright.
FUNK will be the owner of all returnable containers, and shall be
responsible for all maintenance, upkeep and replacement at its sole
cost and expense, except if abused or lost by XXXXX. XXXX shall not use
any of the returnable containers for any purpose other than shipping
Products to XXXXX.
4.3 Deleted
4.4 Funk and Xxxxx agree to establish a finished inventory plan at least
two months prior to the mutually agreed upon production start-up date
for the ED-30 transmission. It is agreed by both parties that this
inventory will be used to offset production interruptions that may
occur at Funk or its suppliers. Meetings to discuss revisions to the
original and subsequent plans shall be held as deemed necessary by
either party and any resulting adjustments along with a schedule for
achieving them shall be agreed upon by both parties.
5. INSPECTION TEST.
5.1 All Products shall be received subject to XXXXX'x inspection and test.
XXXXX shall have the right at any time to reject any Products defective
in material or workmanship or to accept and correct the same at FUNK's
expense. Rejected Products may be returned to FUNK at FUNK's risk and
expense. If it is determined that the part is not defective, then at
Funk's option the part will be returned to XXXXX at XXXXX'x risk and
expense. XXXXX can not debit FUNK for original freight costs.
6. CANCELLATION.
6.1 FUNK agrees that XXXXX may cancel any order without liability if FUNK
is unable to deliver the Products ordered within the time limits as set
forth in Sections 4.1 and 3.2. With respect to such orders as are
canceled pursuant to this Section 6.1, XXXXX agrees that FUNK may
utilize the Products involved to fulfill future orders of XXXXX.
7. PRICES, PAYMENT.
7.1 THE PRICES SHALL BE AS STATED IN EXHIBIT 3 ATTACHED TO THIS AGREEMENT.
THE BILLING PRICES WILL BE ESTABLISHED FOR
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EACH 12 MONTH PERIOD BY MUTUAL AGREEMENT OF CMHC AND FUNK THAT BEST
REPRESENTS THE FORECAST ANNUAL USAGE FOR THAT UPCOMING 12 MONTHS. THE
INITIAL 12 MONTH PERIOD SHALL BE BILLED AT THE 1000-1999 ANNUAL
QUANTITY RATE. ADJUSTMENTS FOR ACTUAL QUANTITIES PURCHASED WILL BE MADE
WITHIN 30 DAYS OF THE END OF EVERY 12 MONTH PERIOD (JULY 1 THROUGH June
30 ) AND WILL BE RETROACTIVE TO ALL QUANTITY PURCHASED IN THAT PERIOD.
7.2 ALL COST REDUCTIONS AND INCREASES SHALL BE SHARED EQUALLY BETWEEN XXXXX
AND FUNK. FUNK AGREES TO PUT FORTH ITS BEST EFFORTS TO CONTAIN ANY AND
ALL INCREASES DURING THE TERM OF THIS AGREEMENT. FUNK SHALL PREPARE AND
SUBMIT ENGINEERING CHANGE PROPOSALS FOR XXXXX REVIEW AND APPROVAL.
XXXXX WILL IN A TIMELY FASHION REVIEW AND GIVE APPROVAL PROVIDED THE
INTEGRITY, INTERCHANGEABILITY, RELIABILITY, AND OVERALL PERFORMANCE OF
THE PRODUCT IS MAINTAINED TO XXXXX'X SATISFACTION AND TECHNICAL
SPECIFICATIONS. ANY AGREED UPON ADJUSTMENTS TO PRICE WILL BE MADE AT
THE START OF EACH CALENDAR QUARTER. THE ADJUSTMENT AT THE START OF THE
QUARTER WILL INCLUDE ALL CHANGES THAT TOOK PLACE IN THE PRIOR QUARTER.
ALL CHANGES THAT OCCURRED IN THE PRIOR QUARTER WILL BE ONE TIME PRICE
ADJUSTED BASED ON ACTUAL SERIAL NUMBER IMPACT, POSITIVE OR NEGATIVE AND
SHARED EQUALLY, THEN PROPERLY REFLECTED IN THE NEW QUARTER PRICE
ADJUSTMENT FOR INVOICING FOR THE NEXT QUARTER. EXCEPT AS PERMITTED BY
THIS SECTION 7.2, PRICES SHALL NOT BE INCREASED FOR ANY REASON DURING
THE TERM OF THIS AGREEMENT.
7.3 DELETED
7.4 Xxxxx will pay all invoices for Products and Spare Parts within sixty
(60) days from date of invoice receipt.
7.5 XXXXX and XXXX will work together to identify the lowest viable
transportation cost and transit time. Unless otherwise directed by
XXXXX, FUNK shall arrange for transportation. Products shall be
suitably packed and protected for overseas and/or domestic shipment or
otherwise prepared for shipment so as to secure the lowest
transportation and insurance rates. FUNK shall be responsible for all
premium freight costs (including air transport costs) due to late
delivery, defects, mis-shipments, or other reasons directly under
FUNK's control.
7.6 Service Parts shall be priced as follows:
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7.6.1 Prices for complete units of Products shall be the same as the price of
Products as stated in Exhibit 3.
7.6.2 The price for component Spare Parts which are used in current
production Products will not exceed 1.15 times the component cost of
such Spare Parts as contained in the unit Product price.
7.6.3 XXXXX retains the right to purchase the Ready-For-Use (RFU) components
directly from the RFU suppliers. Such RFU parts will be identified by
XXXXX 60 days after the proto type units are tested and approved and a
listing provided to FUNK for attachment to this contract.
7.6.4 The lead time for delivery of Spare Parts is one-hundred-twenty (120)
days, excluding initial stocking quantities. XXXXX will be subject to a
5% surcharge and bear responsibility for premium freight costs (if
requested by XXXXX) incurred to satisfy emergency orders due to reasons
directly under XXXXX'x control. FUNK shall be responsible for all
premium freight costs (including air transport costs) for emergency
orders due to late delivery, defects, mis-shipments, or other reasons
under FUNK's control.
7.6.5 FUNK shall provide Spare Parts which are out of production as to XXXXX
but which are being supplied to other FUNK customers, at competitive
prices (but in no event at prices which exceed FUNK's lowest prices for
comparable spare parts to other OEMs) for a minimum period of ten (10)
years after the date of termination or expiration of this Agreement.
Afterward, in the event that FUNK wishes to discontinue supplying Spare
Parts which are out of production as to XXXXX to other FUNK customers,
FUNK and XXXXX will develop a transition plan for out source, without
impairing XXXXX'x commitment to maintain service parts availability to
its customers and dealers. No individual part number shall be obsoleted
without giving XXXXX an option of making a "last time buy" at a special
negotiated price.
7.6.6 FUNK agrees not to sell XXXXX specific parts to anyone other than XXXXX
without the express written permission of XXXXX. In addition, FUNK
agrees to use its best effort to prevent FUNK's suppliers from selling
XXXXX specific parts to anyone other than XXXXX.
8. WARRANTY ON PRODUCTS.
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8.1 FUNK warrants that the Products will conform to the specifications,
drawings, or other descriptions which are provided by XXXXX to XXXX
identified in Exhibit 5, attached and incorporated by reference herein,
and will be of good material and workmanship, and free from defects.
For purposes of this Agreement, any failure of a Product to be as
warranted is referred to as a "Defect." The warranty in this Section 8
extends to the future performance of the Products in XXXXX products
into which the Products are incorporated. XXXXX and XXXX agree that
XXXXX may, at any time hereafter, revise or otherwise modify the
aforesaid specifications identified in Exhibit 5. XXXXX shall be
responsible for all the costs of such modifications.
8.2 If any Defect as defined in Section 8.1 of this Agreement is discovered
in a Product prior to shipment from XXXXX'x location to a dealer or
customer, FUNK, at FUNK's option, will either supply XXXXX with
repaired or replacement Product at no charge or, if the Product can be
repaired by XXXXX, request XXXXX to repair the Product and pay or
reimburse XXXXX for replacement Parts or Products and for labor at an
initial rate of $32 per hour for XXXXX to correct the defect. This rate
is subject to increase by mutual agreement of the parties. For purposes
of warranty claims on Products pursuant to this Section 8, charges for
labor performed in a calendar year will be based on XXXXX'x "Standard
Times Guide" for warranty labor effective as of 1 January of each
calendar year.
8.3 If any Defect as defined in Section 8.1 of this Agreement is discovered
in a Product after it has been delivered as part of an industrial truck
to a dealer within twelve (12) months after the date of delivery to the
first retail purchaser, or in the first 2,000 hours of use, whichever
occurs first, FUNK will pay or reimburse XXXXX for the Spare Parts at
FUNK spare part pricing plus 20% for handling by XXXXX and XXXXX
dealers and labor (including any travel costs at an initial flat rate
of $64.00 per warranty claim) required to correct the defect. This rate
is subject to increase by mutual agreement of the parties. This
obligation will end eighteen (18) months after passing of risk per
Section 4.2 herein.
8.4 If any Defect as defined in Section 8.1 of this Agreement is discovered
in a Product at any time which poses a hazard which may cause personal
injury or property damage, the parties shall meet as soon as possible
to discuss such matter. XXXXX and FUNK shall use good faith efforts to
estimate the total cost of the parts and labor (plus reasonable travel
costs) to correct the defect, the reasonable labor and directly related
overhead expenses to locate and repair any industrial trucks into which
the defective product has been incorporated, and costs to provide
reasonable and proper notice and warnings to customers, owners and
users of such industrial trucks, and allocate responsibility for all
such costs and expenses. FUNK shall pay its share of such costs and
expenses to XXXXX on a monthly basis based
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upon completed Application for Adjustments ("AFA's") and XXXXX'x
documented costs and expenses.
8.5 When a written claim for warranty reimbursement is made, FUNK may,
promptly upon receipt of the claim, take the following actions:
x. XXXX may require XXXXX to return the Spare Parts or Products at FUNK's
expense to FUNK's facility indicated by FUNK.
b. If FUNK determines any such Spare Parts or Products are not defective,
FUNK will provide XXXXX with the data and analysis upon which FUNK's
determination is based. Otherwise, FUNK shall promptly pay or reimburse
XXXXX in accordance with the applicable warranty provision.
Warranty claims have to be submitted to FUNK within one hundred, fifty
(150) days after date of failure or repair. Any warranty claim made by
XXXXX will be considered accepted by FUNK unless FUNK notifies XXXXX of
its denial of the claim with a written report stating the reason for
denial within ninety (90) days after notice that the parts or Products
are received at FUNK's facility. Initial return of warranty items will
be to XXXXX.
8.6 FUNK warrants that Spare Parts sold to XXXXX pursuant to this Agreement
will be free of defects with the specifications provided to FUNK and
will be of good material and workmanship for a period of one hundred,
eighty (180) days after delivery to the first retail purchaser. FUNK
will not be held liable for defects caused by storage or handling
outside of FUNK'S control.
8.7 The warranties provided by this Agreement do not apply to defects in
Products or Spare Parts caused by delivery to XXXXX by parties other
than FUNK or FUNK's representatives and/or subcontractors or to defects
directly attributable to design of the Products or Spare Parts except
to the extent of FUNK's designs of Products or Spare Parts.
8.8 This warranty is in lieu of all other warranties of Product quality,
express or implied, and states FUNK's entire obligations with respect
to defects in Products or Parts. THERE ARE NO IMPLIED WARRANTIES OF
MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE.
9. QUALITY ASSURANCE.
9.1 FUNK warrants that it will establish and maintain a quality assurance
program which conforms to the criteria stated in Exhibit 5 and,
further, warrants that each Product and Spare Part sold by FUNK to
XXXXX
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pursuant to this Agreement will be manufactured (or if certain parts
are purchased, purchased and inspected) subject to and in compliance
with said quality assurance program.
9.2 XXXXX may, at its option, continuously or periodically review and
inspect FUNK's quality assurance program and Product quality at FUNK's
facilities. FUNK will provide XXXXX'x representatives with good faith
cooperation and such access and facilities, including testing and
inspection devices and equipment, as may reasonably be required by
XXXXX'x representatives to conduct such review and inspection. XXXXX
will use its best efforts consistent with accomplishing its review and
inspection to avoid disruption or delay of FUNK's operations.
Inspection or review of FUNK's quality assurance program or Products at
FUNK's facilities will not constitute acceptance of any Products and
will not relieve FUNK of responsibility for any defects in any Product.
9.3 FUNK further warrants that if FUNK at any time has reason to believe
that any defect in design or manufacture may be present in any Products
or Spare Parts sold or to be sold pursuant to this Agreement, FUNK will
immediately advise XXXXX and will cooperate with XXXXX to determine
whether the defect is present and, if so, will cooperate with XXXXX in
good faith to correct it.
9.4 Provided the Product components supplied to XXXXX hereunder meet or
exceed in all respects all XXXXX specifications and requirements,
including but not limited to those contained in Exhibit 5, FUNK shall
have the right to determine suppliers for Product components. FUNK
shall promptly notify XXXXX, in writing, of any changes in suppliers
and the effective date of the changes.
10. INSURANCE AND INDEMNIFICATION.
10.1 FUNK shall obtain and keep in effect (i) product liability insurance in
the amount of $5,000,000 per occurrence and $10,000,000 aggregate,
which shall provide protection to XXXXX against claims or suits for
personal injury, death or property damage caused by (or alleged to have
been caused by) a defect in material or workmanship of the Products and
Spare Parts or portion thereof supplied by FUNK under this Agreement;
and (ii) contractual liability coverage in the amount of $5,000,000 per
occurrence and $10,000,000 aggregate for the hold harmless clause set
forth in this section.
10.2 (i) Independent from the existence of product liability insurance,
FUNK agrees to defend, hold harmless and indemnify XXXXX
against any liability, loss, injury, claim, damage, suit or
proceeding and all expenses incident thereto (including
reasonable attorney fees and
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litigation costs) resulting from claims or lawsuits commenced
against XXXXX by parties seeking monetary damages for bodily
injury (including death) or property damage caused by (or
alleged to have been caused by) arising from or connected with
a defect in manufacture, assembly or workmanship of the
Products and Spare Parts or portion thereof.
(ii) FUNK's liability to XXXXX under this section shall be limited
solely to claims arising in connection with any Product and
Spare Part or portion thereof supplied by FUNK pursuant to
this Agreement.
10.3 FUNK's obligations regarding indemnification shall survive the
termination or expiration of this Agreement for seven (7) years. FUNK
intends to keep in force product liability insurance for the same
period.
10.4 FUNK will furnish CLARK with a certificate from FUNK's insurance
carrier. FUNK will provide notice thirty (30) days prior to changes in
insurance coverage or cancellation by the insurance carrier.
11. PATENTS.
11.1 XXXXX represents and warrants that the Products and Spare Parts ordered
pursuant to this Agreement and their sale or use, alone or in
combination, according to XXXXX'x specifications or recommendations, if
any, will not infringe any U.S. or foreign patents, and XXXXX agrees to
defend, indemnify, hold harmless and protect FUNK, and any company
affiliated with FUNK, its successors, assigns, customers and users of
the Products and Parts, against all suits and from all damages
resulting from such alleged infringements, and XXXXX agrees that XXXXX
will, upon request, defend or assist in the defense at XXXXX'x expense
of any such suit.
12. TRADEMARKS ADVERTISING.
12.1 Each Product sold to XXXXX pursuant to this Agreement will have affixed
a nameplate and one (1) or more of the trademarks specified by XXXXX in
the distinctive form specified by XXXXX in a suitable place to be
designated by XXXXX. XXXXX may also upon request specify that all or
some of the Spare Parts to be sold to XXXXX by FUNK pursuant to this
Agreement will have such trademarks affixed in a suitable place to be
designated by XXXXX. XXXX will not acquire rights of any kind under any
of XXXXX'x trademarks, except the right to use them in the manner
permitted by this section, and will in no event sell, distribute, or
otherwise dispose of any Products or Spare Parts bearing any of XXXXX'x
trademarks to any person, firm or corporation other than XXXXX without
first removing the trademarks and obtaining XXXXX'x express written
consent.
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12.2 All publicity and advertising concerning the sale of Products and Parts
bearing XXXXX'x trademarks shall be prepared under XXXXX'x sole
direction and control. FUNK will not disclose the existence of this
Agreement, or any of its terms and conditions to any other person, firm
or corporation, or advertise or release any publicity concerning this
Agreement or the performance by either party without XXXXX'x written
consent in each instance, except as otherwise required by law.
13. REQUIRED ASSISTANCE.
13.1 XXXXX will provide reasonable technical support to assist FUNK in
understanding engineering design issues as they may relate to
manufacturing start-up problems that FUNK incurs and to assist in
explaining design changes or product modifications that impact FUNK's
manufacturing process.
13.2 XXXXX will attempt to resolve engineering problems by written or
telephone communications with FUNK's liaison, however, when and as
reasonably requested, FUNK will provide qualified representatives to
review and resolve problems at XXXXX'x location or at the location of
the Products. Each party will be responsible for its own expenses with
respect to such calls.
13.3 XXXXX RETAINS DESIGN CONTROL OF THE PRODUCT. FUNK SHALL SUBMIT ANY AND
ALL PROPOSALS FOR DESIGN CHANGES TO XXXXX FOR REVIEW AND POSSIBLE
APPROVAL. XXXXX WILL PROVIDE AN ENGINEERING REPRESENTATIVE AS A LIAISON
TO REVIEW MODIFICATIONS THAT ARE SUGGESTED FOR PROSPECTIVE SALES OF
PRODUCTS AND FOR MODIFICATION OF PRODUCTS IN THE FIELD SO LONG AS THE
REQUESTS MEET ALL XXXXX'X CRITERIA FOR SUCH A CHANGE. SHOULD XXXXX
AUTHORIZE AND APPROVE ANY SUCH CHANGE IT WILL DO SO BY WRITTEN
AUTHORIZATION TO FUNK FOR ANY APPROPRIATE CHANGES TO THE PRODUCT WHICH
MAY BE REQUIRED.
14. TOOLING AND TEST STAND.
14.1 FUNK will obtain, install and pay for all tooling and holding fixtures
necessary for the manufacture, assembly and testing of Products within
FUNK.
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14.2 All tooling and fixtures obtained by FUNK and exclusively used for the
manufacture or assembly of Products shall not be used in the
production, manufacture, assembly or design of any other products
except with the expressed written consent of XXXXX. Ownership rights to
Product tooling not used exclusively in the manufacture, assembly of
Products shall remain with the providing party.
FUNK agrees to maintain all such tooling and fixtures in good
condition, at its own expense.
FUNK also agrees to supply all perishable tooling required for its own
machine tools and manufacturing systems.
14.3 The parties agree that the tooling and fixture costs incurred by FUNK
in connection with its manufacture and assembly, of Products and Spare
Parts to XXXXX under this Agreement is $228,120. XXXXX shall pay for
such cost as follows:
The $228,120 tooling cost shall be charged at $57.03 per Product sold
to XXXXX. At such time as XXXXX has purchased 4,000 Products, the
$228,120 tooling cost shall have been paid for by XXXXX in full, and
the Product price shall at that time be reduced by $57.03 per Product.
In connection with the $225,120 tooling cost, in the event that XXXXX
has failed to purchase 4,000 Products during the term of this
Agreement, following the expiration date of this Agreement, XXXXX shall
be liable for unamortized tooling costs of $57.03 per Product for each
Product less than 4,000 purchased by XXXXX.
14.4 The parties agree that the test stand required for the ED 30 ,which is
also useable for the TA 30, shall be paid for by Funk at a cost of
$150,000. Funk agrees to cost reimbursement from CMHC AS PER the TA 30
agreement of 6 April 1995. CMHC agrees to pay for the modification of
the test stand a total amount of $13,000 to be amortized over the first
4000 units at $3.25 per unit.
14.5 Upon the purchase of XXXXX of the number of Products set forth above to
fully amortize the cost of tooling and test stand modification or upon
payment by XXXXX of the unamortized tooling cost and test stand
modification, ownership of all such tooling, fixtures and test stand
shall revert to XXXXX. XXXX agrees to execute any and all documents
requested by XXXXX in order to effect such transfer of ownership.
15. TERM AND TERMINATION.
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15.1 The term of this Agreement shall expire 30 JUNE 2000, UNLESS AN
EXTENSION IS MUTUALLY AGREED TO AT LEAST 18 MONTHS PRIOR TO EXPIRATION.
15.2 Either party may terminate this Agreement for failure by the other
party to perform or adhere to any material promises or obligations
undertaken pursuant to this Agreement by giving the other party sixty
(60) days' written notice within which to cure such default. If such
default is not cured within the sixty (60) day period, the party which
gave the notice may terminate this Agreement at any time thereafter
upon written notice to the other party.
15.3 Either party may terminate this Agreement immediately by written notice
to the other party if any of the following events occur:
1. Any attempted transfer or assignment of this Agreement or any
right or obligation hereunder by the other party unless the
assignment is otherwise permitted by this Agreement.
2. The tiling of a voluntary petition in bankruptcy by the other
party.
3. The filing of a petition in bankruptcy by the other party.
4. The appointment of a receiver or trustee for the other party,
provided such appointment is not vacated within thirty (30)
days from the date of such appointment.
15.4 The termination of this Agreement will not affect or impair the rights,
liabilities and obligations of either party under any order issued
prior to the termination, will not relieve either party of any
obligation or liability accrued under this Agreement or pursuant to any
order issued prior to the termination, and will not relieve either
party of the continuing obligations pursuant to Section 8, Warranty on
Products, Section 9, Quality Assurance, Section 10, Indemnity, Section
11, Patents, Section 7.6.5, Spare Parts, and Section 16,
Confidentiality, which obligations will survive any termination of this
Agreement.
16. CONFIDENTIALITY.
16.1 Any and all confidential information including, without limitation,
specifications, formulas, designs, drawings, trade secrets, patents,
manufacturing data, design data, engineering data, cost data and other
commercial or technical information, which one party discloses to the
other party hereunder shall be kept secret and strictly confidential by
the other
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party and the other party agrees not to utilize any such information
for its own benefit or the benefit of any third party whatsoever, nor
to disclose it to any third party except with the express and prior
written consent of the disclosing party during the term of this
Agreement and for five (5) years thereafter.
16.2 All information and materials identified in Section 16.1, including all
copies thereof, shall promptly be returned by the other party to the
disclosing party upon the expiration or termination of this Agreement,
or at any time upon request of the disclosing party.
16.3 The ownership rights to the design of Products and tooling shall remain
exclusively with XXXXX.
17. FORCE MAJEURE.
17.1 Should an event of force majeure prevent or delay the total or partial
performance of the obligations resulting from this Agreement, the party
claiming force majeure is obligated to inform the other affected party
within fifteen (15) days from such occurrence at the beginning, as well
as at the end, of the respective force majeure. The term "force
majeure" as used in this Section 17 is understood to mean any
unforeseen event or occurrence beyond the control of the party
affected, or if foreseen, unavoidable and arising after the effective
date hereof, preventing or delaying the performance of obligations set
forth herein, including, by way of example and not by way of
limitation, actions by any wars, acts of God, accidents, lockouts,
strikes, or other work stoppages. No liability shall exist for failure
or delay of performance of obligations during the period of force
majeure. In the event FUNK declares force majeure, XXXXX shall be free
to resource any and all Products and components used in Products from
other sources, and FUNK shall provide all reasonable assistance in
connection therewith.
17.2 If FUNK is unable to deliver Products in accordance with XXXXX'x
schedules or releases by reason of force majeure for a period in excess
of six (6) months, then XXXXX may terminate this Agreement without
liability to FUNK.
18. PROTO TYPE DEVELOPMENT
18.1 PROJECT PLANNING - FUNK AGREES THAT WITHIN 2 WEEKS OF THE EFFECT DATE
OF THIS CONTRACT THAT IT WILL PROVIDE TO XXXXX A DETAILED MILESTONE
SCHEDULE LISTING ALL ACTIVITIES REQUIRED TO SUCCESSFULLY PERFORM THE
MANUFACTURE OF 8 PROTO TYPE UNITS. THE APPROXIMATE LEAD TIME FOR THE
ENTIRE DEVELOPMENT AND MANUFACTURE OF THESE UNITS IS 20
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WEEKS. THE ACTUAL PROJECT LEAD TIME WILL BE CONFIRMED IN THE FIRST
MILESTONE REPORT 2 WEEKS AFTER ORDER ENTRY.
18.1.1 FUNK AGREES TO PREPARE MONTHLY PRE PRODUCTION REPORTS TO
REPORT ON THE STATUS OF THE PREPARATION FOR THE PRODUCTION OF
THE UNITS AFTER THE PROTO TYPES HAVE BEEN DELIVERED TO XXXXX
FOR FINAL TEST AND ACCEPTANCE.
18.2 THE PRICING FOR THE PROTOTYPES AND TOOLING ASSOCIATED WITH THEM IS FIRM
FIXED PRICE PER EXHIBIT 3 ATTACHED. THE PAYMENT OF THE UNITS AND TOTAL
PROTO TYPE TOOLING WILL BE 60 DAYS FROM SHIPMENT FROM FUNK.
18.3 FUNK WILL PROVIDE EVERY FRIDAY VIA FAX A WEEKLY WRITTEN STATUS REPORT
TO XXXXX THAT INCLUDES, BUT IS NOT LIMITED TO, EXACT LINE BY LINE
REPORTING OF STATUS TO THE DETAIL SCHEDULE, CONTINGENCIES PLANNING,
RECOVERY PLANS, CAUSE AND CORRECTIVE ACTION FOR ANY SCHEDULE SLIPS AND
AN OVERALL PREVIEW OF THE NEXT WEEKS ACTIVITY.
18.4 FUNK AGREES TO ASSIGN A FULL TIME DEVELOPMENTAL PROJECT MANAGER TO THE
ED 30 PROJECT. IT WILL BE THE RESPONSIBILITY OF THIS MANAGER TO INSURE
THAT ALL SCHEDULES ARE MET AND THAT THE PROJECT IS PROPERLY RESOURCED
FROM FUNKS STAFF.
18.5 DELETED
18.6 FUNK ESTIMATES THAT THE LEAD TIME FOR THE PRE PRODUCTION UNITS IS 6 TO
8 MONTHS AFTER APPROVAL OF THE PROTOTYPES. FUNK AGREES TO USE ITS BEST
EFFORTS TO IMPROVE THIS LEAD TIME AND WORK WITH XXXXX TO MEET ITS
TARGETED SCHEDULE FOR IMPLEMENTATION.
18.7 FUNK AGREES TO PROVIDE ENGINEERING AND TECHNICIAN SUPPORT AT XXXXX AS
TEST SUPPORT ON A 24 HOUR CALL BASIS WHILE THE PROTO TYPE UNITS ARE IN
BENCH AND C COURSE TEST.
18.8 FUNK AGREES THAT THE PROTO TYPE UNITS WILL BE CONTROLLED, MANAGED,
PROCURED, ASSEMBLED AND TESTED AT FUNK'S COFFEYVILLE, KS R & D FACILITY
AND HAVE THE FULL RESOURCES OF THE FUNK R & D STAFF IN SUPPORT.
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19. GENERAL.
19.1 Notices to be given by either party will be in writing and may be
delivered by either telegram or prepaid certified mail to the following
addresses:
FUNK: FUNK MANUFACTURING COMPANY
Industrial Park, Xxxxxxx 000 X.
Xxxxxxxxxxx, Xxxxxx 00000
Attention: Director of Sales
XXXXX: XXXXX MATERIAL HANDLING COMPANY
000 Xxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Director of Purchasing
With a copy to: XXXXX Material Handling Company
000 Xxxx Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Either party may change its address by written notice to the other
party.
19.2 This Agreement will not be assigned by either party without the written
consent of the other party, except when the assignment is made to any
subsidiary or affiliate of the parties or to a successor to all or a
substantial part of the business of either of the parties. Unless
otherwise agreed, no assignment will relieve the assigning party of any
duty to perform or any liability for breach.
19.3 This Agreement encompasses the entire agreement between the parties
respecting the sale and purchase of the Products and Parts covered by
this Agreement and supersedes any and all previous agreements,
memoranda, negotiations or other understandings of the parties with
respect thereto. The supply agreement between the parties stated 14
December 1994 relative to the TA-30 shall continue to be in full force
and effect and except as expressly referenced in this agreement shall
not be affected by this agreement.
19.4 Any failure by either party hereto to enforce, at any time, any term or
condition of this Agreement will not constitute, nor will it be
construed as, a waiver of that party's right thereafter to enforce each
and every term and condition of this Agreement.
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19.5 If for any reason any provision of this Agreement is invalid, illegal,
or unenforceable, then such provision will be deemed severable from the
other provisions of this Agreement, all of which remain in full force
and effect and binding on the parties to this Agreement.
19.6 This Agreement and all purchase orders issued pursuant to this
Agreement in the United States will be governed by and construed in
accordance with the laws of the State of Kentucky, U.S.A. Any
provisions in XXXXX'x standard purchase order terms specifying warranty
on Products or Parts or requiring arbitration of claims arising out of
any purchase order are deleted and will be void and have no force and
effect.
19.7 Any controversy or claim which arises out of or relating to this
Agreement, and any amendments thereto or any breach thereof, shall be
maintained only in the federal or state courts of Kentucky, and both
parties submit themselves to the jurisdiction of such courts for all
purposes necessary or appropriate to enforce the provisions of this
Agreement. However, any such controversy or claim shall be referred as
promptly as possible to mediation before the Mediation Center of
Kentucky, Inc. before, and as a condition precedent to, the initiation
of any adjudicative action or proceeding.
19.8 The statement herein of a right, power, privilege or remedy of either
of the parties shall be cumulative and shall not preclude any other
right, power, privilege or remedy to which either party would otherwise
be entitled under applicable law.
19.9 Under various U.S. Customs laws and regulations, XXXXX may be liable
for substantial penalties and/or damages in the event false or
incomplete information is submitted to the U.S. Customs Service with
respect to merchandise imported for the account of or by XXXXX. In the
event XXXXX is subjected to any action for any such penalties and/or
damages based on information originating from FUNK, it is understood
and agreed by FUNK that FUNK will pay or otherwise reimburse XXXXX for
the full costs of defending against such actions, as well as pay or
otherwise reimburse XXXXX for any and all actual duty and penalty
payments which may be required as the result of such actions.
19.10 XXXXX hereby certifies that the tangible personal property described
herein is purchased for resale or other non-taxable use and not for a
taxable use or consumption unless otherwise indicated on the purchase
order.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in duplicate originals by their duly authorized representatives as of.the day
and year first written above.
XXXXX MATERIAL HANDLING COMPANY FUNK MANUFACTURING COMPANY
By: /s/ Xxxxxx X. Xxxxx By:
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Name: Xxxxxx X. Xxxxx Name:
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Title: President and Chief Executive Officer Title:
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Date: 7/19/95 Date:
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