1
EXHIBIT 10.19
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 Sweden AB, a company organized under the laws of Sweden
("Norrkoping").
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, Norrkoping 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 Norrkoping desire to enter into an
arrangement pursuant to which Norrkoping 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, Norrkoping 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 Norrkoping a forecast of the Manufacturing
Services which
2
Mommers reasonably expects will be required during each month (the "Services
Forecast").
1.3. Independent Contractors. The relationship of Mommers and
Norrkoping 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 Norrkoping to be
an agent or retailer within the meaning of the applicable law; (iv) prevent
Norrkoping from entering into any other business; or (v) allow Norrkoping to
create or assume obligations on behalf of Mommers except as provided herein. All
financial and other obligations associated with Norrkoping's business are the
sole responsibility of Norrkoping except as provided herein.
II. PROCESSING AND MANUFACTURE OF PRODUCTS
2.1. Products Specifications. Mommers will provide to
Norrkoping copies of all data and documents embodying Specifications required to
permit Norrkoping 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 Norrkoping a data package which will include all such revised
Mommers' Specifications. Thereafter, Norrkoping 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 Norrkoping to manufacture the Products.
2.3. Production. Norrkoping will utilize manufacturing
processes or production methods approved by Mommers. Norrkoping 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 Norrkoping 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 Norrkoping'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 Norrkoping; 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
2
3
conducting such inspections shall comply with all applicable safety and security
rules of Norrkoping.
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. Norrkoping 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 Norrkoping 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. Norrkoping shall use its
best efforts to fill all Manufacturing Services orders of Mommers in accordance
with the delivery schedule contained therein.
3.3. Shipment. Norrkoping 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 Norrkoping 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 wire transfer of immediately available funds in sixty 60 days from
the date of shipment
3
4
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, Norrkoping 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, Norrkoping will xxxxx Xxxxxxx
access during regular business hours to Norrkoping's books and records in order
for Mommers to verify, at its own expense, Norrkoping's compliance with its
obligations under this Agreement.
V. WARRANTIES AND LIABILITIES
5.1. Warranties. Norrkoping 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 Norrkoping. Norrkoping 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. Norrkoping shall use
its best efforts to procure a waiver of subrogation in each policy of insurance
obtained by Norrkoping 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, Norrkoping
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 Norrkoping 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 Norrkoping's duties
will be the property of Mommers. Norrkoping 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.
(b) Norrkoping will not incorporate anything in the
Manufacturing Services which involves the use of a trade secret, patent,
copyright or other intellectual
4
5
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
Norrkoping from and against any and all claims, demands, suits or proceedings
made or brought against Norrkoping, and shall reimburse Norrkoping for any and
all liabilities, judgments, damages, costs or expenses payable by Norrkoping 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 Norrkoping 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 Norrkoping 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 Norrkoping may,
at its option and expense either (i) procure for Norrkoping 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 Norrkoping process or other
technology if the claim would not have occurred but for such combination of
process or other technology.
(d) Norrkoping will require any subcontractor who provides
personnel or services to agree to the same rights and protection for Mommers
that Norrkoping is required to provide herein.
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
5
6
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, Norrkoping
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 Norrkoping for a period of two years after termination of
employment with Norrkoping. 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. Norrkoping hereby grants to Mommers the
right and option (the "Option") to purchase all of the right, title and interest
of Norrkoping, its successors and assigns, in and to the assets utilized by
Norrkoping in the manufacture of the Products (the "Norrkoping Assets") at a
purchase price equal to the book value of Norrkoping 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 Norrkoping written notice of exercise
of such Option. Upon the exercise of such Option, Norrkoping 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 relating to the Norrkoping Assets in form and substance
mutually agreeable to the parties and consummate the purchase and sale of the
Norrkoping 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.
6
7
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, Norrkoping 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 Norrkoping'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, Norrkoping shall immediately terminate
production of the Products and all use of Mommers' Specifications and the
Intellectual Property Rights.
10.2. Confidential Information. Upon the termination of this
Agreement for any reason, Norrkoping 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 Norrkoping) which Norrkoping 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
Norrkoping or
7
8
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.
Norrkoping hereby waives all right to compensation which Norrkoping 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 Norrkoping upon expiration or termination of this Agreement,
Norrkoping shall be fully liable for all such compensation required to be paid.
Norrkoping 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 Norrkoping.
10.5. General Effects. Notwithstanding the termination of this
Agreement, Norrkoping 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, registrations and qualifications from all
applicable governmental departments and agencies to the extent necessary to
perform its obligations hereunder.
11.2. Publicity Release. Norrkoping 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 Norrkoping 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 Norrkoping in pursuance of this Agreement
shall become the sole property of Mommers and may be used by Mommers without
accounting therefore to Norrkoping. If requested, Norrkoping will provide one
copy of design calculations for the Manufacturing Services.
8
9
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.
Norrkoping 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. Norrkoping 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. Norrkoping will be
responsible for timely filing of this Agreement with any Netherlands government
commissions or agencies.
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
9
10
(b) if to Norrkoping 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.
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,
10
11
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 Norrkoping, 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.
[The remainder of this page is intentionally left blank.]
11
12
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
------------------------------------
Name: Xxxxx X. Xxxxxxx
----------------------------------
Title: Senior Vice President
---------------------------------
VIASYSTEMS SWEDEN AB
By: /s/ XXXXX X. XXXXXXX
------------------------------------
Name: Xxxxx X. Xxxxxxx
----------------------------------
Title: Senior Vice President
---------------------------------
12
