Exhibit 10.5
GENERATOR SUPPLY AGREEMENT
THIS SUPPLY AGREEMENT (the "Agreement") is made and entered into on the
9th day of July, 1998, by and between GENERAC CORPORATION, a Wisconsin
corporation with its principal office and place of business in Waukesha,
Wisconsin ("Seller") and GENERAC PORTABLE PRODUCTS, INC. (F/K/A GPPC, INC.), a
Delaware corporation ("Buyer"). This Agreement shall be binding as of the date
written above but for purposes of computing time periods and anniversary dates,
the effective date shall be considered to be July 9, 1998.
RECITALS
A. As a result of its purchase from Seller of Seller's portable
products division, Buyer desires to engage in the marketing and sale of
air-cooled, home stand-by generator systems of the type manufactured by the
industrial division of Seller at time of signing the Agreement (the
"Generators").
B. In connection with Buyer's purchase of Seller's portable products
division, Buyer desires that Seller manufacture the Generators requested by
Buyer from time to time according to Seller's established specifications for the
Generators (the "Specifications") and Seller has adequate facilities, expertise
and personnel to manufacture the Generators according to the Specifications.
C. Buyer desires to purchase the Generators from Seller, and Seller
desires to manufacture and sell the Generators to Buyer on the terms and subject
to the conditions set forth below.
AGREEMENTS
In consideration of the above recitals and the mutual covenants and
valuable consideration contained herein, the parties agree as follows:
1. SALE AND PURCHASE OF GENERATORS. Seller shall manufacture, according
to the Specifications or such other specifications as the parties may from time
to time agree, and sell to Buyer and Buyer shall purchase from Seller the
Generators during the term of this Agreement pursuant to the terms and
conditions set forth herein.
2. TERM OF AGREEMENT. Subject to the provisions for termination set
forth elsewhere in this Agreement, this Agreement shall commence on the date
first written above and continue for one year (the "Initial Term"). After
completion of the
Initial Term, this Agreement shall automatically renew for consecutive one year
periods ("Renewal Term") unless either party gives written notice of its intent
to terminate this Agreement to the other party at least 6 months prior to the
expiration of the Initial Term or any Renewal Term.
3. PRODUCT ORDERS.
(a) PURCHASE ORDERS. Purchase orders will be issued by Buyer on the
first business day of each month specifying Buyer's requirements for the fourth
month following the month in which the purchase order is issued. In the event
Buyer desires to issue a purchase order for a quantity of Generators 20% greater
than Buyer's average monthly orders for the previous twelve (12) months, Buyer
must provide Seller with written notice of such order no less than six months
prior to the start of shipment. All purchase orders for Generators to be
manufactured and delivered shall be firm and may not be canceled or modified by
Buyer without the written permission of Seller; provided, however, that Purchase
orders may be modified by Buyer to provide for a later delivery date (not in
excess of 60 days) upon notice to Seller at least 60 days prior to the requested
delivery date.
Purchase orders issued by the Buyer to the Seller shall specify the
Generators being ordered, the required delivery dates, and the address to which
Seller's invoice shall be sent. Any provision, term or condition set forth on
Buyer's purchase order or on any acknowledgment, invoice or other document or
communication provided by Buyer which is inconsistent with the terms of this
Agreement, or is not addressed herein, is void and of no effect.
(b) SELLER'S PURCHASE ORDER ACKNOWLEDGMENT. Seller's purchase order
acknowledgment shall reflect the Buyer's purchase order number. A separate
purchase order acknowledgment shall be rendered for each purchase order and
shall be transmitted by Seller to the address specified on the purchase order.
Each purchase order acknowledgment rendered by Seller shall separately identify
the Generators by model number, quantities thereof, unit prices, and total
amount due for such Generators. Applicable sales or use taxes shall also be
reflected.
(c) FORECASTS. Prior to the beginning of each calendar quarter, Buyer
shall provide seller with a rolling written forecast of its estimated
requirements for the Generators in each of the next four (4) calendar quarters
(the "Quarterly Forecast"). Each Quarterly Forecast shall contain an update of
the immediately preceding Quarterly Forecast with respect to the quarters
referred to in such preceding Quarterly Forecast.
In addition to the Quarterly Forecasts, if Buyer intends to purchase in
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any future four (4) calendar quarter period (the "Expansion Period") more than
120% of the number of Generators actually purchased in the four (4) calendar
quarters just ended, Buyer shall provide Seller with Buyer's estimated
requirements for the Generators in the Expansion Period a minimum of six months
prior to the start of the Expansion Period (the "Expansion Forecast").
Notwithstanding anything to the contrary in this Agreement, Seller
shall have no obligation during the applicable period to manufacture and sell to
Buyer any number of Generators greater than the Quarterly Forecast or the
Expansion Forecast as applicable. Buyer shall use its best efforts to ensure
that firm orders under section 3(a) of this Agreement conform to the estimates
in the latest forecast.
4. PRICES AND PAYMENT TERMS.
(a) GENERATOR PRICES. Buyer shall pay Seller for the Generators in
accordance with prices to be mutually agreed upon by Seller and Buyer based on
the Specifications of the particular model of Generator and accessories ordered
by Buyer, subject to modification from time to time in accordance with the terms
of this Agreement. At least 30 days prior to each annual anniversary of this
Agreement, the parties shall negotiate in good faith to determine the price for
Generators for the upcoming year. Any agreed upon change to the price for the
Generators shall be applied to Generators purchased during the following
twelve-month period. All prices for Generators supplied under this Agreement are
F.O.B. Seller's plant of manufacture in Eagle, Whitewater, or Waukesha,
Wisconsin, as the case may be.
(b) NON-RECURRING ENGINEERING CHARGE. Buyer agrees to pay Seller a
non-recurring engineering fee with respect to Seller's preparation for
manufacture of Generators of a configuration other than that described in the
Specifications and for the acquisition of certain tooling, equipment and
fixtures in connection with the manufacturing of such components. Upon Buyer's
request, Seller shall provide Buyer with the amount of such fee, reasonable
detail of the fee and the payment terms of such fee (the "Engineering
Proposal"). Buyer shall own title to certain tooling, equipment and fixtures
detailed in the Engineering Proposal and for which the payment of associated
non-recurring engineering fees has been received.
(c) PAYMENT TERMS. The terms of payment of Seller's invoices shall be
net 30 days from Seller's invoice date. If Buyer disputes any invoice in good
faith, in whole or in part, Buyer shall promptly notify the Seller in writing
and shall set forth the basis for such dispute. The parties will then use their
best efforts to resolve the dispute expeditiously. Any such dispute not resolved
within 30 days may be submitted to binding arbitration in accordance with
section 13 of this Agreement. Any invoice balance
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which remains unpaid after 30 days shall bear interest at the rate of 1.5% per
month until paid.
(d) SUSPENSION OR TERMINATION FOR FAILURE TO PAY INVOICES WHEN DUE. In
the event that Buyer fails to pay any invoice, other than amounts which are in
good faith dispute, when due, Seller may, at its option, immediately suspend its
performance under the Agreement five days after providing written notice to
Buyer of the overdue amount if such amounts are not paid within the five day
period. Seller shall be under no obligation to resume performance until all
overdue amounts, other than amounts in good faith dispute, are paid. Seller may,
at its option, immediately terminate this contract if Buyer fails to pay any
such amounts due which are not in good faith dispute within 15 days of the
written notice of the overdue amount.
5. TESTING, DELIVERY, USE, PRIVATE LABELS AND SERVICE AND PARTS.
(a) SELLER TESTING. All Generators shall be inspected and tested by
Seller for conformity to the Specifications prior to shipment to the Buyer.
(b) DELIVERY. All Generators manufactured by Seller under this
Agreement shall be delivered F.O.B. Seller's plant of manufacture in Eagle,
Whitewater, or Waukesha, Wisconsin (as the case may be), and upon such delivery
to carrier, title and risk of loss shall pass to Buyer.
(c) RISK OF RESALE AND NO INDEPENDENT RIGHT TO RESELL. Risk of resale
of the Generators shall be with the Buyer. Under no circumstances shall Seller
assume any liability whatever in the event that Buyer is unable to resell the
Generators, and Buyer shall have no right to return the Generators to Seller
under such circumstances.
(d) After sale to an end-user, Buyer shall ensure that the Generator is
properly installed and maintained in accordance with Seller's installation and
maintenance procedures and the requirements of the Seller's Limited Warranty (as
defined in section 6(a) below).
(e) SERVICE AND PARTS. Seller shall, to the extent required by this
Agreement and to the extent requested by Buyer and agreed to by Seller, provide
repair services for the Generators and Buyer shall utilize Seller for the
performance of such repair services. Additionally, Seller shall sell to Buyer
and Buyer shall purchase from Seller spare and replacement parts for the
Generators, in the quantities which Buyer may request and which Seller may agree
to sell, at the price at which Seller sells such spare and replacement parts to
its master parts distributors, which may be modified by Seller from time to
time.
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6. WARRANTIES.
(a) LIMITED WARRANTY. The Generators will be subject to Seller's
standard limited warranty for the Generators which is set forth on Schedule A
(the "Limited Warranty"). Seller retains the right to modify the Limited
Warranty at any time and from time to time. SELLER MAKES NO OTHER WARRANTIES OR
REPRESENTATIONS, EITHER EXPRESSED OR IMPLIED, WITH RESPECT TO THE GENERATORS,
INCLUDING THEIR DESIGN, QUALITY, PERFORMANCE, MERCHANTABILITY, OR FITNESS FOR A
PARTICULAR PURPOSE.
(b) WARRANTY EXCLUSIONS. Seller makes no warranty of any kind with
respect to:
(i) Repairs for Generators necessitated by normal wear and tear, damage
in transit or accident, through abuse, misuse or negligence of Buyer or its
customers, or by failure of any of those persons to maintain or use the
Generators in accordance with Seller's written instructions; or
(ii) Generators that have been modified in any manner after shipment by
Seller.
(c) RETURN AUTHORIZATION. Generators warranted by Seller shall be
repaired or replaced at Seller's option and expense upon presentation of
evidence that demonstrates to Seller's reasonable satisfaction a breach of the
limited warranty. Prior to return of any Generator to Seller, Buyer shall obtain
a return authorization from Seller and comply with Seller's return authorization
procedures in force at the time of the return. Seller shall have no obligation
to repair or replace Generators returned without a return authorization.
(d) LIMITATION OF REMEDIES. Buyer's exclusive remedy for any defect in
the Generators or breach of Seller's warranty under section 6(a) of this
Agreement is, at Seller's option, either refund of the price paid by Buyer for
the defective Generators, repair of the defective Generators sufficient to cause
them to meet the Specifications or replacement of the defective Generators with
equivalent Generators that meet the appropriate Specifications.
IN NO EVENT SHALL SELLER BE LIABLE FOR ANY INDIRECT, SPECIAL,
INCIDENTAL, CONSEQUENTIAL OR OTHER DAMAGES, INCLUDING ANY LOST PROFITS OF BUYER,
IN CONNECTION WITH SELLER'S BREACH OF THIS AGREEMENT IN ANY WAY, INCLUDING, BUT
NOT LIMITED TO, THE FAILURE OF THE GENERATORS TO MEET THE SPECIFICATIONS OR
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SELLER'S FAILURE TO DELIVER THE GENERATORS WHEN DUE OR AT ALL.
The parties acknowledge that the limitation of damages contained in
this paragraph is a separate item of their agreement. The parties acknowledge
their intent that this limitation of damages shall be severable from the limited
warranty and shall be enforceable even if the limitations in the limited
warranty are held to be unenforceable.
7. CONFIDENTIAL AND PROPRIETARY INFORMATION.
(a) OWNERSHIP OF INFORMATION. Buyer acknowledges that all information
disclosed to it by Seller pursuant to this Agreement, including all information
pertaining to the design of and the manufacturing process for the Generators and
all information pertaining to the conduct of Seller's business and affairs,
shall, at all times, both during and after the termination of this Agreement,
however occurring, remain the exclusive property of Seller and that Buyer shall
not acquire any proprietary interest in such information.
Seller acknowledges that all information disclosed to it by Buyer
pursuant to this Agreement, including all information pertaining to the conduct
of Buyer's business and affairs, shall, at all times, both during and after the
termination of this Agreement, however occurring, remain the exclusive property
of Buyer and that Seller shall not acquire any proprietary interest in such
information.
(b) ACCESS TO CONFIDENTIAL INFORMATION. Neither party shall, directly
or indirectly, disclose, or permit anyone to disclose, any Confidential
Information disclosed or made available by the other party, and shall carefully
guard and keep secret all such Confidential Information. Neither party shall, at
any time, allow anyone other than the other party hereto, or those authorized by
the other party, to have access to or use any Confidential Information disclosed
or made available by the other party. Each party shall use all reasonable
efforts to protect the proprietary nature of any and all Confidential
Information of the other.
Except as expressly provided otherwise in this Agreement, neither party
shall copy, modify, transcribe, store, sell, lease or otherwise transfer or
distribute any Confidential Information of the other in whole or in part without
prior authorization in writing from the other party. Both parties shall use the
Confidential Information only during the term of this Agreement and solely for
the purpose of carrying out the intent of this Agreement.
For purposes of this Agreement, the term "Confidential Information"
includes, without limitation, a party's techniques, processes, procedures,
operations and
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other proprietary information relating to research and development, design,
manufacturing, operations, marketing and finances. Upon termination of this
Agreement, however occurring, both parties shall surrender to the other party
all documents including, but not limited to, plans, specifications, literature,
samples, documents and other tangible things, relating to Confidential
Information disclosed or made available by the other party and all supplies
which are the property of the other party.
(c) LIABILITY FOR DISCLOSURE. Neither party shall be liable for
disclosure to others of Confidential Information disclosed or made available to
it by the other party if the information: (i) can be demonstrated by
contemporaneous written records to have been in the other party's possession or
available to the other party prior to the receipt of same from Buyer or Seller
as the case may be; (ii) can be demonstrated by clear and convincing evidence to
have been received from a third party having no obligation to hold the same in
confidence; (iii) can be demonstrated by clear and convincing evidence to have
been generally known or generally available to the public prior to the date of
the disclosure; (iv) becomes generally known or generally available to the
public through no act or failure to act on the part of either party or its
affiliates; or (v) is required by a valid order of a court of law to be
disclosed.
If any Confidential Information of a party is required by law to be
disclosed by the other party hereto (as contemplated by section 7(c)(iv)), the
disclosing party shall provide the nondisclosing party with prompt notice of
such disclosure and take such legally available steps as may be necessary to
resist or narrow such request and/or to procure a court order stipulating that
the Confidential Information required to be disclosed shall be used solely for
the purposes for which the court order was issued.
(d) NO GRANT OF LICENSE. No rights or obligations other than those
expressly stated shall be implied from this Agreement. In particular, no license
or other right is hereby granted, either express or implied, to one party by the
other party (i) with respect to the other party's Confidential Information or
(ii) under any patent, patent application, copyright, trademark, or other
proprietary right or intellectual property right now or hereafter controlled by
the other party.
(e) Buyer understands and agrees that the Generators embody design and
manufacture information including, but not limited to, design or production
concepts, methods, materials, structures, assemblies or similar information
which is proprietary to Seller (the "Design Information"). Buyer shall not
reverse engineer or disassemble the Generators and shall not use, nor permit any
third party to use, the Design Information for any purpose other than those
necessary to further the transactions contemplated by this Agreement. Under no
circumstances shall the Buyer have the right to use the Design Information to
design or manufacture any product, or assist any third
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party in manufacturing any product, which competes with the Generators.
(f) SPECIFIC PERFORMANCE. The Parties agree that breach of this section
7 by either party would cause irreparable damage to the other party and that
monetary damages alone would not provide the injured party with an adequate
remedy for such breach. Therefore, if any controversy arises concerning the
rights or obligations of either party under this section 7, such rights or
obligations may be specifically enforced by an injunction order issued by a
court of competent jurisdiction. Such remedy, however, shall be in addition to
any other remedy to which the injured party may be entitled.
8. INDEMNIFICATION.
(a) BREACH OF THIS AGREEMENT. Subject to the limitations set forth in
section 6(d) of this Agreement, each party agrees to indemnify and hold the
other party, its affiliates, shareholders, directors, officers, employees,
customers, successors and assigns harmless against all liabilities, claims,
costs, damages, losses and expenses, including reasonable legal fees and related
costs, which the indemnified party incurs by reason of the defaulting party's
failure to perform its obligations under this Agreement.
If a claim, demand or suit is presented or filed against the
nondefaulting party and indemnification by the nondefaulting party is sought
pursuant to this provision, the nondefaulting party shall give prompt notice to
the defaulting party and provide reasonable assistance to and cooperation with
the defaulting party, at the defaulting party's cost, in the settlement or
defense of the claim, demand or suit. The right of indemnification shall be
extinguished if the nondefaulting party fails to give notice of the claim,
demand or suit, or settles the same without the written consent of the
defaulting party.
(b) INDEMNIFICATION BY BUYER. Buyer agrees to indemnify and hold
harmless Seller, its officers, employees and agents, from and against all loss,
damages, liability and expense incurred by reason of any claims, actions, suits
or governmental investigations or proceedings including, but not limited to,
product liability claims, brought against or involving them or any of them,
which relate to or arise out of the manufacture of the Generators by Seller for
the Buyer. Provided, however, that Buyer shall not be obligated to indemnify
Seller for any claim which arises out of Seller's failure to comply with the
limited warranty for the Generators described in section 6 above or failure to
manufacture the Generators in compliance with the Specifications.
(c) PRODUCT LIABILITY.
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(i) INSURANCE. During the term of this Agreement, and for a period of
three years thereafter, each party will at its own expense purchase (if it has
not already purchased) and maintain general product liability insurance, naming
the other party as an additional insured. The coverage shall have limits of
liability of no less than $5 million and shall be placed with an insurance
carrier having a Best's rating of no less than "A". Each party shall provide a
copy of the insurance policy to the other party upon the other party's request.
9. TERMINATION. In addition to any other provision of this Agreement
which grants a right of termination, the following shall also constitute bases
for termination:
(a) A material default in the performance of an obligation under this
Agreement, provided such default continues for more than 120 days after written
notice is provided by the nondefaulting party.
(b) If either party becomes the subject of a voluntary bankruptcy or
insolvency proceeding; if such proceeding is involuntary, then the right of
termination shall exist only if such proceeding has continued unstayed for a
period of 60 consecutive days after filing.
Upon the expiration or termination of this Agreement as set forth
above, Seller will complete Generators on order at the date of termination, and
Buyer shall purchase such Generators from Seller. Expiration or termination of
this Agreement for any reason shall not affect any liabilities or obligations of
either party which have accrued at the date of expiration or termination or
which by their nature survive expiration or termination (including, without
limitation, the obligations under sections 6, 7, 8, 9 and 13).
10. FORCE MAJEURE. Neither party to this Agreement shall be liable for
delay or failure to perform under this Agreement which results from any
occurrence or event which could not have been reasonably avoided including,
without limitation, accident, action of the elements, act of God, civil unrest,
enemy action, epidemic, explosion, fire, flood, insurrection, strike, lockout or
other labor trouble or shortage, natural catastrophe, riot, unavailability or
shortage of material, equipment or transportation, war, act, demand or
requirement of law or of the Government of the United States or any other
competent governmental authority, or any other similar cause beyond such party's
control, if the party in default makes reasonable efforts to remove or overcome
the effects of such occurrence or event. If a party believes that any one or
more of the above occurrences or events shall cause a delay or prevent its
performance hereunder, it shall promptly notify the other party in writing of
such fact.
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11. RELATIONSHIP OF THE PARTIES. The relationship established between
the parties by this Agreement during its term shall be solely that of vendor and
vendee. Under no circumstances shall the contractual relationship between the
parties be deemed or construed as one of agency, joint venture, employment or
otherwise. This Agreement does not give either party any right to act as a
representative or agent of the other party or any authority to incur or create
any obligation in the name of or on behalf of the other party.
12. ASSIGNMENT, SUCCESSORS AND ASSIGNS AND SALE OF SELLER'S BUSINESS.
Neither party may assign this Agreement or any rights or obligations hereunder
without the prior written consent of the other party; provided, however, Seller
may assign, upon written notice to Buyer and without Buyer's consent, this
Agreement or its interest herein to any affiliate or to any third party
succeeding to Seller's business. Subject to the foregoing, this Agreement shall
bind and inure to the benefit of Buyer, Seller, and their respective
representatives, heirs, successors and assigns. If Seller desires to sell or
transfer more than 50% of its stock (except for transfers among existing
shareholders of Seller or any trusts for the benefit thereof and among existing
shareholders of Seller and their spouses, siblings and lineal descendants or any
trusts for the benefit thereof) or sell or transfer substantially all of its
assets used in connection with manufacturing of the Generators, Seller agrees to
have the party purchasing or receiving the stock or assets accept assignment of
this Agreement subject to the term adjustment provision contained in section 2,
above.
13. ARBITRATION OF DISPUTES. All disputes or claims arising out of,
resulting from or related to this Agreement shall be finally settled under the
Rules of the American Arbitration Association (the "Rules") by an arbitrator
appointed in accordance with the Rules. If the parties fail to so nominate a
sole arbitrator within 30 days from the date when the claimant's request for
arbitration has been communicated to the other party, the sole arbitrator shall
be appointed in accordance with the Rules. Any decision made by such an
arbitrator within the scope of his or her authority shall be binding upon the
parties. The cost for such arbitrator shall be borne equally between the
parties, but all other costs involved in the arbitration shall be borne
separately by the parties. Each party shall enter into an arbitration agreement
providing reasonable protection to the arbitrator. The place of arbitration
shall be in Milwaukee County, Wisconsin, USA. Judgment on any award rendered by
the arbitrator may be entered by any court of competent jurisdiction. The
parties irrevocably consent and submit to the jurisdiction of any local, state
or federal court in Milwaukee County, Wisconsin, USA.
14. NOTICES. Notices permitted or required to be given under this
Agreement shall be deemed sufficient if sent by mail or other delivery service,
facsimile,
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or, if promptly confirmed in writing, by telephone, addressed to the parties as
set forth below. Notices so given shall be effective upon (a) receipt by the
party to which notice is given or (b) on the fifth day following the date such
notice was posted or transmitted, whichever occurs first. Notices shall be
addressed as follows:
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If to Seller: Generac Corporation
X.X. Xxx 0
Xxxxxxx 00 at Hillside Road
Waukesha, WI 53187
Attn: Chief Executive Officer
If to Buyer: Generac Portable Products, Inc.
(f/k/a GPPC, Inc.)
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xx. Xxxx Xxxxxxxxx
or to such other address as the parties may designate in writing.
15. ENTIRE AGREEMENT. This Agreement and the exhibits attached hereto
constitute the entire understanding between the parties with reference to the
subject matter hereof and no statements or agreements, oral or written made
prior to the signing of this Agreement shall vary or modify the written terms
hereof. No amendment or modification of this Agreement or release form any of
the provisions hereof shall be valid unless made in writing and signed by the
parties.
16. WAIVER. The failure of either party at any time to require
performance by the other party of any provision hereof will in no way affect the
right to require such performance at any time thereafter, nor will the waiver by
either party of a breach of any provision hereof constitute a waiver of any
succeeding breach of the same or any other provision, or constitute a waiver of
the provision itself.
17. SEVERABILITY. If any provision of this Agreement is held to be
invalid or unenforceable for any reason, the parties agree that such invalidity
or unenforceability shall not affect any other provision of this Agreement, the
remaining terms, covenants and provisions hereof shall remain in full force and
effect.
18. GOVERNING LAW. This Agreement and any disputes hereunder shall be
governed and construed in accordance with the internal laws of the state of
Wisconsin.
19. HEADINGS. The headings used in this Agreement are for convenience
and reference purposes only and shall not affect the meaning or interpretation
of this Agreement.
20. COUNTERPARTS. This Agreement may be executed in
counterparts,
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each of which shall be deemed an original, but both of which taken together
shall constitute one and the same instrument.
The parties intending to be bound hereby have caused this Agreement to
be signed by their duly authorized representatives on the day and year first
written above.
GENERAC CORPORATION
BY /s/ Xxxxxx X. Xxxx
-------------------------------
Xxxxxx X. Xxxx
Chairman of the Board
GENERAC PORTABLE PRODUCTS, INC.
(F/K/A GPPC, INC.)
BY /s/ Xxxx X. Xxxxxxxxx
-------------------------------
Xxxx X. Xxxxxxxxx
President
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LIST OF SCHEDULES
Schedule A: Limited Warranty
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SCHEDULE A
GENERAC'S STANDARD 1 YEAR LIMITED WARRANTY FOR STANDBY POWER SYSTEMS
For a period of one (1) year or 1500 hours of operation from the date of
original sale, whichever occurs first, Generac will, at its option, repair or
replace any part which, upon examination by Generac, is found to be defective
under normal use and service in accordance with the warranty schedule set forth
below. Any equipment which the buyer claims to be defective must be returned to
and examined by the nearest authorized Generac warranty service facility. All
transportation costs under the warranty, including return to the factory, are to
be borne and prepaid by the buyer. This warranty applies only to generators used
in standby applications ("Standby" as defined by Generac), provided said unit
has been initially installed and inspected by an authorized Generac distributor
or branch thereof.
WARRANTY SCHEDULE
YEAR ONE - 100% coverage on labor and parts listed:
ENGINE - All components
ALTERNATOR - All components
TRANSFER SYSTEM - All components
All warranty expense allowances are subject to the conditions defined in the
published GENERAC POLICIES AND PROCEDURE Manual.
Units which have been resold are not covered under the Generac warranty, as this
warranty is not transferable.
THIS WARRANTY SHALL NOT APPLY TO:
1. Costs or normal maintenance, adjustments, installation, and startup.
2. Units sold, rated or used for "prime power" applications as "Prime
Power" has been defined by Generac.
3. Failures due to (a) normal wear and tear, or (b) accident, misuse,
abuse, negligence, or improper installation.
4. Products which are modified or altered in a manner not authorized by
Generac in writing.
5. Any incidental, consequential, or indirect damages caused by defects in
materials or workmanship or any delay in repair or replacement of the
defective parts.
6. Failure due to misapplication.
7. Telephone, telegraph, teletype, or other communication expenses.
8. Living or travel expenses for person performing service.
9. Rental equipment used while warranty repairs are being performed.
10. Overtime labor.
11. Starting batteries, fuses, light bulbs and engine fluids.
THIS WARRANTY IS IN PLACE OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED.
SPECIFICALLY, GENERAC MAKES NO OTHER WARRANTIES AS TO MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE. Some states do not allow limitations on how long an
implied warranty lasts, so the above limitation may not apply to you.
GENERAC'S ONLY LIABILITY SHALL BE THE REPAIR OR REPLACEMENT OF PARTS AS STATED
ABOVE. IN NO EVENT SHALL GENERAC BE LIABLE FOR ANY INCIDENTAL OR CONSEQUENTIAL
DAMAGES, EVEN IF SUCH DAMAGES ARE A DIRECT RESULT OF GENERAC'S NEGLIGENCE. Some
states do not allow the exclusion or limitation of incidental or consequential
damages, so the above limitation may not apply to you. Buyer agrees to make no
claims against Generac based on negligence.
This warranty gives you specific legal rights, and you may also have other
rights which very from state to state.
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