February 1, 2022
MANUFACTURING SUPPLY AGREEMENT TERMS AND CONDITIONS
1. Purchase and Sale. Subject to the terms and conditions of this Agreement, during the Term, Buyer and its Affiliates in North America (the United States, Mexico, and Canada) shall purchase exclusively from Seller, and Seller shall manufacture and sell to Buyer and its Affiliates in North America, at least the minimum number of Products set forth on Schedule 1 at market prices commencing on the date that Seller informs Buyer it has completed retrofitting, purchase, or installation of the equipment to manufacture the Products and such equipment is on-line (the “Effective Date”). Further subject to the terms and conditions of this Agreement, Buyer and its Affiliates in North America shall purchase from Seller, and Seller shall manufacture and sell to Buyer and its Affiliates in North America, 100% of Buyer’s and its North American Affiliates’ requirements of the Products.
As used herein, “Affiliates” means, with respect to Buyer, any other individual, partnership, corporation, trust, limited liability entity, unincorporated organization, association, or any other entity who, directly or indirectly (including through one or more intermediaries), controls, is controlled by, or is under common control with, Buyer, including any partner, member, stockholder or other equity holder of Buyer or manager, director, officer or employee of Buyer. For purposes of this definition, “control,” when used with respect to any specified Person, shall mean the power, direct or indirect, to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities or partnership or other ownership interests, by contract or otherwise; and the terms “controlling” and “controlled” shall have correlative meaning.
Buyer acknowledges that Seller’s break-even cost for the installation of additional machinery necessary to increase production for Buyer under this Agreement is the purchase by Buyer of the minimum number of Products at its market prices and Seller would not enter into such agreement without this guaranty.
2. Right to Manufacture and Sell Competitive Products. This Agreement does not limit Seller’s right to manufacture or sell, or preclude Seller from manufacturing or selling, to any other individual, partnership, corporation, trust, limited liability entity, unincorporated organization, association, governmental authority or any other entity (each, a “Person”), or entering into any agreement with any other Person related to the manufacture or sale of, the Products and other goods or products that are similar to or competitive with the Products; provided, however, that Seller will give Buyer priority in all production planning.
3. Delivery, Title; Risk of Loss. Unless otherwise expressly agreed by the Parties in writing, Seller shall deliver the Products to the location identified by Buyer, using Seller’s standard methods for packaging and shipping such Products. Any time quoted for delivery is an estimate only; provided, however, that Seller shall use commercially reasonable efforts to deliver all Products on or before any requested delivery date. No delay in the shipment or delivery of any Product relieves Buyer of its obligations under this Agreement, including accepting delivery of any remaining installment or other orders of Products. Title and risk of loss to Products passes to Buyer upon Seller’s tender of the Products to the carrier at Seller’s location.
4. Term. The term of this Agreement commences on the date of last signature to this Agreement and continues for a period of three (3) years from the Effective Date unless it is earlier terminated pursuant to the terms of this Agreement or applicable law (the “Initial Term”). Upon expiration of the Initial Term, the term of this Agreement will automatically renew for additional successive one-year year terms unless either Party provides written notice of non-renewal at least sixty (60) days prior to the end of the then-current term (each, a “Renewal Term” and together with the Initial Term, the “Term”). If the Initial Term or any Renewal Term is renewed for any Renewal Term(s) pursuant to this Section 7, the terms and conditions of this Agreement during each such Renewal Term will be the same as the terms in effect immediately prior to such renewal. In the event either Party provides timely notice of its intent not to renew this Agreement, then, unless earlier terminated in accordance with its terms, this Agreement terminates on the expiration of the Initial Term or then-current Renewal Term, as applicable.
5. Termination by Buyer Prior to Expiration of Initial Term. In the event Buyer shall terminate this Agreement for any reason prior to the expiration of the Initial Term, Buyer shall pay to Seller: (a) the guaranty payment set forth in Section 2, (b) all amounts due to Seller for Products delivered by Seller to Buyer prior to Seller’s receipt of the termination notice; and (c) reimburse Seller for all of Seller’s out-of-pocket costs and expenses (including raw materials, machinery and equipment purchases) incurred by Seller prior to receipt of Buyer’s termination notice that arise from or relate to this Agreement or any Sales Confirmation issued by Buyer to Seller prior to Seller’s receipt of such notice (each, a “Reimbursement Payment”). Any termination under this Section 8 will be effective on the latest to occur of Seller’s receipt of Buyer’s written notice of termination, Seller’s receipt of the Reimbursement Payment or such other later date (if any) set forth in such termination notice (if and to the extent that such later date is approved by Seller in writing).
6. Representations and Warranties of the Parties. Each Party represents and warrants to the other Party that: (a) it has the full right, corporate power and authority to enter into this Agreement and to perform its obligations hereunder; (b) the execution of this Agreement by its Representative whose signature is set forth at the end of this Agreement, and the delivery of this Agreement by it, have been duly authorized by all necessary corporate action on its part; and (c) this Agreement has been executed and delivered by it and (assuming due authorization, execution, and delivery by the other Party) constitutes the legal, valid and binding obligation of it, enforceable against it in accordance with its terms, except as may be limited by any applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws and equitable principles related to or affecting creditors’ rights generally or the effect of general principles of equity.
7. DISCLAIMER OF OTHER REPRESENTATIONS AND WARRANTIES; NON-RELIANCE. EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 6, (A) NEITHER SELLER NOR ANY PERSON ON SELLER’S BEHALF HAS MADE OR MAKES ANY EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY WHATSOEVER, EITHER ORAL OR WRITTEN, INCLUDING ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OR PERFORMANCE OF GOODS OR PRODUCTS TO STANDARDS SPECIFIC TO THE COUNTRY OF IMPORT, WHETHER ARISING BY LAW, COURSE OF DEALING, COURSE OF PERFORMANCE, USAGE OF TRADE OR OTHERWISE, ALL OF WHICH ARE EXPRESSLY DISCLAIMED, AND (B) BUYER ACKNOWLEDGES THAT IT HAS NOT RELIED UPON ANY REPRESENTATION OR WARRANTY MADE BY SELLER, OR ANY OTHER PERSON ON SELLER’S BEHALF, EXCEPT AS SPECIFICALLY PROVIDED IN SECTION 6 OF THIS AGREEMENT.
8. Limitation of Liability.
8.1 NO LIABILITY FOR CONSEQUENTIAL OR INDIRECT DAMAGES. EXCEPT FOR OBLIGATIONS TO MAKE PAYMENT UNDER THIS AGREEMENT IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR CONSEQUENTIAL, INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE OR ENHANCED DAMAGES, LOST PROFITS OR REVENUES OR DIMINUTION IN VALUE, ARISING OUT OF OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF (A) WHETHER SUCH DAMAGES WERE FORESEEABLE, (B) WHETHER OR NOT THE OTHER PARTY WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND (C) THE LEGAL OR EQUITABLE THEORY (CONTRACT, TORT OR OTHERWISE) UPON WHICH THE CLAIM IS BASED, AND NOTWITHSTANDING THE FAILURE OF ANY AGREED OR OTHER REMEDY OF ITS ESSENTIAL PURPOSE.
8.2 MAXIMUM LIABILITY FOR DAMAGES. EXCEPT FOR OBLIGATIONS TO MAKE PAYMENT UNDER THIS AGREEMENT (INCLUDING WITHOUT LIMITATION, SECTION 1.2), IN NO EVENT SHALL EACH PARTY’S AGGREGATE LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT, WHETHER ARISING OUT OF OR RELATED TO BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EXCEED THE TOTAL OF THE AMOUNTS PAID TO SELLER PURSUANT TO THIS AGREEMENT IN THE TWELVE MONTH PERIOD PRECEDING THE EVENT GIVING RISE TO THE CLAIM.
8.3 ASSUMPTION OF RISK. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BUYER ASSUMES ALL RISK AND LIABILITY FOR THE RESULTS OBTAINED BY THE USE OF ANY GOODS IN THE PRACTICE OF ANY PROCESS, WHETHER IN TERMS OF OPERATING COSTS, GENERAL EFFECTIVENESS, SUCCESS OR FAILURE, AND REGARDLESS OF ANY ORAL OR WRITTEN STATEMENTS MADE BY SELLER, BY WAY OF TECHNICAL ADVICE OR OTHERWISE, RELATED TO THE USE OF THE GOODS.
9. Tooling. All tooling, dies, test and assembly fixtures, gauges, jigs, patterns, casting patterns, cavities, molds, and documentation (including engineering specifications and test reports) used by Seller in connection with its manufacture and sale of the Products, together with any accessions, attachments, parts, accessories, substitutions, replacements and appurtenances thereto (collectively, “Tooling) is owned by Seller. Buyer has no right, title, or interest in or to any of Seller’s Tooling.
10. Relationship of the Parties. The relationship between Seller and Buyer is solely that of vendor and vendee, and they are independent contracting parties. Nothing in this Agreement creates any agency, joint venture, partnership or other form of joint enterprise, employment or fiduciary relationship between the Parties. Neither Party has any express or implied right or authority to assume or create any obligations on behalf of or in the name of the other Party or to bind the other Party to any contract, agreement or undertaking with any third party.
11. Entire Agreement. This Agreement, including and together with the Sales Confirmation Terms, Website Terms, and any related exhibits and schedules, constitutes the sole and entire agreement of the Parties with respect to the subject matter contained herein and therein, and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter.
12. Miscellaneous. Each Party shall deliver all communications in writing either in person, by certified or registered mail, return receipt requested and postage prepaid, by email (with confirmation of transmission), or by recognized overnight courier service, and addressed to the other Party at the addresses set forth above (or to such other address that the receiving Party may designate from time to time in accordance with this section). This Agreement and all matters arising out of or relating to this Agreement is governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than those of the State of Delaware. The invalidity, illegality, or unenforceability of any provision herein does not affect any other provision herein or the validity, legality, or enforceability of such provision in any other jurisdiction. The Parties may not amend this Agreement except by written instrument signed by the Parties. No waiver of any right, remedy, power, or privilege under this Agreement (“Right(s)”) is effective unless contained in a writing signed by the Party charged with such waiver. No failure to exercise, or delay in exercising, any Right operates as a waiver thereof. No single or partial exercise of any Right precludes any other or further exercise thereof or the exercise of any other Right. The Rights under this Agreement are cumulative and are in addition to any other rights and remedies available at law or in equity or otherwise. Neither party may directly or indirectly assign, transfer, or delegate any of or all of its rights or obligations under this Agreement, voluntarily or involuntarily, including by change of control, merger (whether or not such party is the surviving entity), operation of law, or any other manner, without the prior written consent of the other party. Any purported assignment or delegation in violation of this Section shall be null and void. This Agreement is binding upon and inures to the benefit of the Parties and their respective successors and permitted assigns. Except for the Parties, their successors and permitted assigns, there are no third party beneficiaries under this Agreement. Any provision that, in order to give proper effect to its intent, should survive the expiration or termination of this Agreement, will survive such expiration or termination for the period specified therein. This Agreement may be executed in counterparts, each of which is deemed an original, but all of which together are deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission is deemed to have the same legal effect as delivery of an original signed copy of this Agreement if the party sending such facsimile, e-mail or other means of electronic transmission has received express confirmation that the recipient party received the Agreement (not merely an electronic facsimile confirmation or automatic e-mail reply). The Parties drafted this Agreement without regard to any presumption or rule requiring construction or interpretation against the Party drafting an instrument or causing any instrument to be drafted. The exhibits, schedules, attachments and appendices referred to herein are an integral part of this Agreement to the same extent as if they were set forth verbatim herein.
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