1
EXHIBIT 10.22
REMINGTON
Remington Arms Company, Inc.
00 Xxxxxxx Xxxxxx - Xxxxx, Xxx Xxxx 00000
MASTER SUPPLY AGREEMENT
This Supply Agreement Number S&W060801 is hereby entered into on this 1st day of
August, 2001 between Remington Arms Company, Inc., Ilion, New York, and Xxxxx &
Wesson Corporation hence forth referred to as "Supplier".
This Agreement shall remain effective for a period of 3 years from date first
production quantities are delivered to Remington, commencing on or before
January 1st, 2002 and ending on December 31st, 2004.
1.0 GENERAL PROVISIONS
1.1
Exhibit "A" and all referenced drawings specifications and documents attached
hereto constitute Remington requirements and are hereby made a part of this
Master Supply Agreement.
1.2
Any modification and / or changes to this Agreement must be made in writing and
agreed to by mutual consent of both Remington and the Supplier before becoming
effective. Under no circumstances shall verbal instructions be accepted.
1.3
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] In the event of any conflict between the standard terms and
the provisions of this Agreement, the later shall govern.
1.4
Pursuant to this Agreement Remington intends to purchase each item specified in
Exhibit "A" over the term of this Agreement. This Agreement does not give the
supplier authority to produce and deliver any items set forth in Exhibit "A".
2
Supplier's authority to produce and deliver an item against this Agreement must
be authorized by official Purchase Orders or purchase order revision from
Remington, which will "release for production" specific receivers and
quantities. Each release against this Agreement must reference the Purchase
Order Number. To this extent, Remington liability shall be limited to each
specific release and will not become effective until such time said release is
communicated to the Supplier.
1.5
Remington Purchasing has the authority to issue a "Purchase Order" against this
Agreement. [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] All transactions and invoicing must be
processed directly with the user plant.
1.6
Supplier warrants that he has sufficient capacity (equipment, facilities,
tooling, manpower, etc.) to produce and meet Remington requirements specified in
Exhibit "A" herein. In the event capacity constraints do occur, Supplier agrees
to take immediate action to rectify the problem in a manner to assure continuity
of supply is maintained. Supplier shall be responsible for any costs associated
with capacity issues.
1.7
Any purchase order release made pursuant to this Agreement shall not be
assigned, transferred or sub-contracted to a third party without expressed
written consent of Remington Management. In the event Remington Management gives
the Supplier specific consent such permission shall not abrogate Suppliers
obligations and responsibilities under the terms of this Agreement.
2.0 PRICING
2.1
The net price charged by the Supplier and to be paid by Remington for each
individual "Production Release" against this Agreement shall be in accordance
with the price schedule as set forth in Exhibit "A" hereof. [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION]
2.2
During the term of this Agreement Remington may with adequate advanced
notification, add requirements, quantities and parts to Exhibit "A" if agreed to
by supplier. [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]
2
3
3.0 CHANGES
3.1
Remington may at any time by giving Supplier written notice, make changes in
specifications, drawings, additions and /or modifications to Exhibit "A"
delivery schedules or quantities, packaging, method of shipment, and delivery
destination. Supplier shall in good faith and without delay after proper
approval by both parties incorporates such changes that are properly documented
within a reasonable time frame that is consistent with Remington requirements.
3.2
At no time will Supplier accept verbal instructions to change specifications or
drawings without prior authorization of the Buyer. Should the Supplier act on
verbal instructions he shall do so at his own risk, and as such, assumes full
responsibility and liability for any adverse consequences resulting therefrom.
3.3
Supplier shall make no material substitutions or modify specification
requirements or manufacturing process changes other than minor tool or fixture
corrections without expressed written approval of the Buyer and Remington
Engineering.
4.0 QUALITY
4.1
Supplier shall not change any specification nor ship non-conforming goods
without first obtaining a written deviation from the Buyer. Any goods received
that are not in compliance with specification shall be rejected unless a valid
deviation to the specification is on file prior to receipt of parts.
4.2
Supplier warrants that all parts delivered under this Agreement conform to
Remington drawings, specifications, and quality requirements. All parts produced
by Supplier and delivered to Remington shall be of sound materials and
workmanship. Material must be fit for use intended by Remington and be equal in
all respects to samples, or specifications provided hereunder; or be capable of
meeting Design/Performance Test specifications as specified within this
Agreement.
4.3
Remington must approve in writing pilot production samples before Supplier is
authorized to start up production.
4.4
Before delivery of parts, the Supplier shall carefully inspect parts for
compliance with this Agreement. Evidence of specific inspections performed, such
as inspection data
3
4
sheets, sub tier certification of procured and/or manufactured items or any
other pertinent data shall be submitted with each shipment when requested by the
Buyer. Supplier shall keep proper records of all inspections and test performed.
4.5
Remington reserves the right to inspect any item in this Agreement at Supplier
facility. Remington representative may elect to conduct inspection on a random
basis, witness Suppliers' final inspection, or perform source inspection.
Remington will notify the Supplier in advance of the ship date, if such
inspection is required. In the event inspection is required the Supplier shall
provide Remington representative all reasonable facilities and assistance to
perform its duties.
4.6
If as a result of any inspection or test, the parts produced by Supplier,
whether before or after delivery, are not in accordance with this Agreement,
Remington may return said parts to the Supplier at their expense. Remington at
it's sole option shall debit for the value of the parts plus costs incurred or
have supplier immediately replace the defective parts with conforming parts.
4.7
The Supplier shall replace at his expense or give Remington full credit for any
parts found to be dimensionally discrepant within twelve (12) months from the
date said parts were received at Remington and stored in as received condition.
4.8
Remington may, upon prior Supplier Notification, elect to 100% inspect, repair,
sort and / or rework any delivered parts that do not conform to the
specifications set forth in this Agreement. In this event, the Supplier after
receiving proper notification, shall reimburse Remington for all reasonable
expenses incurred in connection with said decision.
4.8.1
Supplier agrees to correct quality audit recommendations made by Remington
representative(s) and take appropriate action to upgrade quality processes and
systems with the intent of becoming a certified Supplier.
5.0 DELIVERY
5.1
Remington shall issue purchase order releases against specific line items
identified in Exhibit "A" and each release shall be in accordance with
lead-times stated therein and will show required quantity, delivery dates,
direct ship destination, ship mode, and invoicing instructions.
4
5
5.2
Line item volumes shown in Exhibit "A" constitute minimum and maximum
requirements as identified in 1.5. [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
5.3
Time is of the essence with each line item released against Exhibit "A".
Supplier agrees to deliver parts in accordance with the parameters specified in
each release received from Remington. Supplier shall deliver parts released no
later than the date specified and no earlier than three (3) days prior to the
required delivery date. Any parts delivered more than three (3) days prior to
the due date and any overshipment in excess of an agreed quantity will be
returned to the Supplier at his own risk and expense. Supplier shall reimburse
Remington for any expense resulting from the return or storage of any early
shipments.
5.4
Supplier shall notify Remington in advance, if a scheduled delivery date will
not be met; and, in such instances that are determined to be Supplier fault, he
shall be responsible for all premium expenses incurred to meet an expedited
delivery to include, but not limited to overtime hours, special air/truck
shipments etc. Remington may at its option, require Supplier to reimburse it for
all incremental expenses incurred as a direct result of the Suppliers late
delivery.
5.5
Supplier shall furnish Remington with a monthly or quarterly report of all
releases and shipments made against this Agreement.
5.6
Supplier is responsible for adequate packaging and shipment of finished parts to
avoid in transit damage and ensure safe arrival at the Remington's ordering
plant. Method of shipment shall be in accordance with Exhibit "A" and returnable
dunnage shall be acquired at Remington's agreed to expense and will be used for
all shipments.
5.7
Remington shall provide Supplier with a six- (6) month rolling production
forecast for purposes of planning his future production. Subject is a demand
forecast only and not Suppliers authority to produce and deliver any parts
relating thereto. Authority to produce and deliver can only be authorized by
purchase order or purchase order revision.
5
6
6.0 TECHNICAL SUPPORT
6.1
Supplier agrees to provide Remington Technical Support Personnel as may be
required to work on productivity improvement projects involving such activities
as process refinements and value analysis / value engineering ideas on any item
identified in Exhibit "A" herein.
6.2
Supplier shall, upon request, make available technical personnel to assist
Remington Engineering in the design and development of new production part
requirements. Pursuant hereto, the Supplier shall provide at no cost to
Remington, its process and manufacturing "know-how" assistance with the purpose
of optimizing a cost-effective production part design.
6.3
Supplier agrees to support and incorporate within their Company organization
systems enhancements and / or modifications, as may be required, to establish an
electronic communications bridge between the Supplier and Remington that will
more efficiently process activity requirements in execution of this Agreement.
7.1 SPECIFICATIONS
7.1
Specifications, as defined herein, includes drawings, quality plans, standards,
performance requirements, functional requirements, dimensional tolerances, test
specifications, fitness for use standards, quality control requirements and any
other requirement included and made a part of Exhibit "A", which may be
delivered to the Supplier from time to time during the term of this Agreement.
7.2
All ideas, data, designs, drawings, specifications, photographs and other
engineering and manufacturing information supplied by Remington shall remain
Remington property. The Supplier agrees to retain such information in confidence
and not disclose it to any other person or entity and it shall not be used or
incorporated into any product or item later manufactured for anyone other than
Remington.
7.3
Any unpatented knowledge or information concerning suppliers processes or uses
which Supplier may disclose to Remington employees in connection with this
Agreement shall, unless specifically agreed to in writing, be deemed to have
been disclosed as part of the consideration for this order. Supplier agrees not
to assert any claim against Remington by reason of any use or alleged use to
which such knowledge may be utilized by Remington.
6
7
8.0 PATTERN AND TOOLING
8.1
All patterns, tools, dies, jigs, fixtures, test equipment or materials furnished
to the Supplier or paid for by Remington shall remain Remington property. Such
property shall be plainly marked in accordance with Remington property
specifications and shall be safely stored and adequately protected against
possible damage and or disclosure to third parties. Supplier shall maintain all
such property in the original working order and condition. The Supplier shall be
responsible for any damage caused to such tooling, other than reasonable wear
and tear and shall repair or replace said tooling at their expense when deemed
necessary by Remington personnel.
9.0 TERMINATION
9.1
Remington may terminate this Agreement upon written notice for "non-performance"
of any term or condition stated herein. In this event the Supplier shall
immediately stop all work in process at the time and date said notice is
received. Material in process shall be segregated from other work and identified
as to level of completion and a complete accounting by materials and operation
shall be conducted. Supplier shall provide Remington within 14 days of subject
termination with a detail accounting and cost breakdown of the termination
charges. Remington liability and obligation shall be limited to those purchase
order releases against Exhibit A and/or written material authorizations.
THE TERMS AND CONDITIONS AS SET FORTH AND STATED HEREIN CONSTITUTES THE FULL AND
EXCLUSIVE UNDERSTANDING AND BINDING AGREEMENT OF BOTH PARTIES AND ANY ADDITIONAL
TERM OR CONDITION SHALL NOT BE BINDING ON EITHER PARTY UNLESS MUTUALLY AGREED TO
IN WRITING WITH A CONFIRMING ADDENDUM ISSUED TO THIS CONTRACT.
7
8
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE EXECUTED THIS MASTER SUPPLY
AGREEMENT AS OF THE DAY AND YEAR INDICATED.
SUPPLIER REMINGTON ARMS COMPANY, INC.
ILION, NEW YORK
ACCEPTANCE: ACCEPTANCE:
---------- ----------
By: /s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxx Xxxx
------------------------------ -----------------------------------
Xxxxx Xxxx
Title: Vice President Operations Title: Plant Manager
Date: 8/1/01 Date: 8/2/01
---------------------------- ---------------------------------
ATTACH.
8
9
EXHIBIT "A"
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION]
