Exhibit 10.02
TEXTRON AUTOMOTIVE COMPANY
CONFIDENTIAL
SUPPLY AGREEMENT
AGREEMENT dated as of March 10, 2000 by and between Textron Automotive Company
Inc., a subsidiary of Textron Inc., a Delaware corporation (Buyer), and
StrandTek International, Inc., a Florida corporation (Seller).
Buyer and Seller desire to enter into an agreement to set forth the terms and
conditions under which Seller will sell to Buyer and Buyer will buy from Seller
the products described in this Agreement.
Agreement. Seller agrees to sell to Buyer and Buyer agrees to buy from Seller
all of Buyer's requirements during the term set forth below for the products
specified below (hereinafter "Products" or "Goods").
2. Term. Unless earlier terminated pursuant to Section 14, this Agreement
shall be for a term of five (5) years commencing 03/10/00 and ending 02/28/05.
3. Products Covered and Prices.
(a) Products and Prices. This Agreement will cover all of the polypropylene
products of Seller at the prices that Seller offers its most favored
customers from time to time.
(b) Monthly Adjustments. Buyer does not presently have a centralized purchasing
computer system; accordingly, if a Purchase Order price specified by or charged
to one of Buyer's plants is higher than the price provided herein, and if such
higher price instead of the price provided herein is paid by Buyer's plant,
Seller agrees to issue monthly adjustments to such plant, in the form of credits
or payments as Buyer may elect, without penalty to Buyer.
(b) Continuous Improvement - Reducing Process Costs. Seller agrees to work with
Buyer to reduce the total costs of Products by participating in a continuous
improvement program with Buyer. Seller commits to a goal of reducing total
product costs (including but not limited to transportation, scrap and
process time) to Buyer by five percent (5%) per annum. Seller agrees to meet
with Buyer on a semi-annual basis to review the progress of the continuous
improvement program.
(d) Anticipated Purchases. Buyer anticipates purchasing the following amounts
of Sellers Products on an annualized basis:
on or before:
12/th/ month - 1,000,000 lbs.
18/th/ month - 2,000,000 lbs.
24/th/ month - 3,000,000 lbs.
36/th/ month and for balance of contact - 5,000,000 lbs.
If Buyer does not achieve these levels of purchases, then Seller, upon sixty
(60) days notice to Buyer, may renegotiate this Agreement.
(e) Royalty. Royalty will be based on the selling price of StrandTek
International, Inc.'s finished polypropylene Product. Provided Buyer meets or
exceeds the anticipated Purchases in the amount stated in subparagraph (d)
immediately preceding, and Buyer sells Seller's automotive products to
purchasers
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other than subsidiaries or affiliates of Textron, Inc., then, Seller shall pay
to Buyer a sum equal to fifty percent (50%) of the Net Invoice sales price of
such automotive products in excess of $1.30 per pound for such amounts greater
than listed in subparagraph (d). Such price of $1.30 per pound "Net Invoice" is
based upon virgin polypropylene resin price at $.28 per pound. If virgin
polypropylene prices exceed $.28 per pound, then the base price of $1.30 per
pound, will be adjusted up or down if the base price is higher or lower by more
than $.02 per pound, on a quarterly basis. "Net Invoice" amount shall mean the
total price at which an order is invoiced to a buyer any increase or decrease in
the amount of the order, less shipping and insurance costs, sales, use or excise
taxes, tariffs, duties, export fees and commissions.
(f) Resin Buy Program. Buyer shall allow purchaser to participate in its
purchasing program for polypropylene resin and any other applicable products at
the same prices as Buyer pays for such products.
(g) Product Applications. During the term of this agreement, Buyer and its
affiliates shall provide Seller with the opportunity to bid for the sale of any
of Seller's products for all other applications of Buyer subject to the terms of
Sections 6 and 7, for which Seller's product has an application and right of
first refusal to match the competitor's pricing.
4. Confidential Information. Seller shall protect as proprietary and keep
confidential all Information, including but not limited to designs, processes,
drawings, specifications, reports, data, and other technical or business
information, whether contained in tangible or electronic media, and the features
of all parts, equipment, tools, gauges, patterns, and other items furnished or
disclosed to Seller by Buyer ("Information"). Unless otherwise provided herein
or authorized by Buyer in writing, Seller shall use Information and the features
thereof only in its performance hereunder of this Agreement Seller shall
disclose Information only to its own employees to the extent necessary for the
production of Goods described herein. Upon completion or termination of this
Agreement, Seller shall, at Seller's expense, make such disposition of all
Information as is required herein or as may subsequently be directed by Buyer.
Buyer shall have the right to audit all pertinent books and records of Seller in
order to verify compliance with this paragraph. In all subcontracts for
performance of work related to this Agreement, Seller shall include provisions
which provide Buyer the same rights and protections as provided hereunder.
Unless Seller has written authorization from Buyer, Seller agrees not to
disclose Information by furnishing it in any way to any other person, firm, or
corporation for any purpose, including without limitation the design or
manufacture of goods, and further agrees that Seller shall not itself use
Information for this design or manufacture of goods for any third party. Nothing
in this Agreement shall be construed as granting Seller any license for any
purpose under any patent or industrial property right of Buyer or any other
rights except those required to effectuate the purposes of this Agreement.
Seller acknowledges that Buyer's Information is unique and proprietary and that
monetary damages will be inadequate to compensate Buyer for Sellers breach of
this provision. The parties agree that, in addition to any other remedies
available to Buyer under this Agreement or at law or in equity, Buyer will be
entitled to injunctive relief to enforce the terms of this paragraph.
5. Terms and Conditions. The Terms and Conditions set forth on Attachment A is
incorporated herein as amended hereby. Specifically, terms and provisions of
Paragraph 20 of Attachment A, are specifically deleted and the following is
inserted in its place: "Buyer understands certain processes of Seller may be
patented. Each party hereto shall retain its own intellectual property. Any new
use of Seller's polypropylene products specifically engineered for Buyer at
Buyer's request in the automotive industry including any innovations, designs,
inventions, drawings or other copyright, patentable or trademarkable information
resulting therefrom shall be the sole property of Buyer." Notwithstanding any
contrary provision therein, (i) payment will be made in U.S. Dollars.
6. Competitive Technology. If another supplier offers to sell to Buyer products
as a substitute for NewTextron AgreementFinalDocChrisRev
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Products, and in Buyer's judgment in its sole discretion such substitute
products provide significant technological improvements from the current state-
of-the-art technology as of the date of this Agreement; Buyer agrees to provide
to Seller written notice of the availability of such advanced technology
(without identifying the other supplier) provided Buyer is authorized to release
such information. Seller shall have one hundred eighty (90) days from receipt of
Buyer's notice to respond with counter technology. If Buyer deems Seller's
counter technology proposal to be inadequate in Buyers sole discretion for any
reason whatsoever, then notwithstanding any other provision herein, Buyer by
written notice to Seller may terminate this Agreement with no further obligation
other than to take Products previously ordered and not yet delivered and Buyer
shall thereafter be free to purchase the substitute product.
7. Competitive Price. If Buyer provides to Seller, by written notice,
reasonable proof (Which may consist of a copy of a letter or other document from
another supplier from which all identification of such supplier has been
deleted.) of another supplier's offer to sell to Buyer, products that provide
significant cost improvements from product, then Buyer will provide written
notice to the Supplier. Seller shall have fifteen (15) days from receipt of
Buyers notice to respond with counter bid. If Buyer deems counter bid to be
inadequate for any reason, then Buyer's obligation to purchase Products from
Seller for the application hereunder, shall be terminated and Buyer shall be
free to purchase alternate Product without further obligation or liability to
Seller except to pay for orders pending.
8. Pre-Production Materials. Supplier will provide Buyer with all pre-
production materials free of charge regardless of volume of material used by
Buyer.
9. Material Substitution an Current Programs. Supplier will bear all related
costs for conversion of material.
10. Local Staging for J.I.T. Buyer and Seller agree to work together in good
faith to set up local staging for J.I.T. on a case-by-case basis.
11. Labor Issues/Product Bank. Seller agrees to notify Buyer no less than one
hundred eighty (180) days in advance of any pending labor contract negotiations
involving any of Seller's facilities involved directly or indirectly in the
production of Products or involving any of Seller's suppliers, and of Seller's
plan to support Buyer's production requirements in the event of a labor
disruption. Upon Buyers written request, Seller agrees to manufacture and
warehouse in a neutral location until labor negotiations are completed, such
quantity of Products as Buyer may request.
12. NAFTA; CERTIFICATION OF ORIGIN; DUTY DRAWBACK: With respect to all Goods
delivered from any point within the NAFTA territory (Canada, Mexico and the
United States of America), Seller shall provide, with its invoice, a North
American Free Trade Agreement Certificate of Origin on U S. Customs Form 434 or
the corresponding Canadian or Mexican form. Seller agrees to transfer to Buyer
all customs duty and import drawback rights, if any (including rights developed
by substitution and rights which may be acquired from Seller's suppliers),
related to the Goods and which Seller can transfer to Buyer. Seller agrees to
inform Buyer promptly of any such rights and to supply all documents which Buyer
may request or which may be required to enable Buyer to obtain such customs duty
and import drawback rights.
13. Taxes. Seller's price are exclusive of any Federal, State or Local sales,
use or excise taxes levied upon, or measured by, the sales, the sales price, or
the use of Products. Seller agrees to list separately on its invoice any such
taxes lawfully applicable to Products and payable by Buyer with respect to which
Buyer has not furnished to Seller lawful evidence of exemption.
14. Termination.
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(a) Default. If either party is in default of or breaches any term or covenant
of this Agreement, the defaulting party shall have five (5) days from
receipt of written notice providing details thereof to cure such default or
breach. If the default or breach is not cured within such five (5) day
period, the non-defaulting party may, upon written notice, terminate this
Agreement, effective upon receipt of such notice.
(b) Automatic Termination. This Agreement shall terminate automatically and
without further action by either party upon the occurrence of any of the
following events: (i) if either party shall cease to do business, or shall
attempt to assign any of its rights under this Agreement except as permitted by
Section 17.(a); (ii) if this Agreement or any material term hereof is held
invalid or unenforceable by the determination of any agency of the government of
the United States or any court of competent jurisdiction; or (iii) if either
party shall become insolvent, or shall file or have filed against it a petition
in bankruptcy or for an arrangement or a reorganization, shall be adjudicated a
bankrupt, or shall make a general assignment for the benefit of creditors or
enter into any arrangement or composition with its creditors, or if a receiver
or trustee shall be appointed for its property, or if a petition for dissolution
or the reorganization of its affairs shall be filed by or against it, or if it
shall admit in writing its inability to pay its debts as they become due or its
insolvency shall otherwise become evident.
(c) Obligations Surviving Termination. Neither termination nor expiration of
this Agreement shall affect the rights or liabilities of the parties with
respect to obligations previously incurred hereunder; the provisions of
paragraphs 4 and 12 hereof shall survive termination of this Agreement.
15. Excuse of Performance. Performance hereunder, except for the payment of
money for Products already delivered or services already performed, may be
suspended by either party if such performance is prevented by causes beyond the
reasonable control of such party, including but not limited to acts of nature,
acts of war, rebellion, riot, nuclear incident, acts of governmental authority,
or any other cause of like nature.
16. Notices. A11 notices hereunder shall be in writing and shall be deemed to
have been given if mailed, postage prepaid, return receipt requested, at the
respective addresses of the parties set forth below (or to such other address
as a party may hereafter designate by notice given in accordance with this
paragraph 16):
(i) If to Buyer:
Textron Automotive Company Inc.
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750 ▇▇▇▇▇▇▇▇▇▇ Highway
Troy, Ml 48007-7054
Attention: Vice President Purchasing
(ii) If to Seller:
StrandTek International, Inc.
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▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
17. Miscellaneous
(a) Assignment. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns.
Notwithstanding the above, this Agreement may not be assigned by either
party without the written consent of the other party, except that Buyer may
assign its rights and obligations under this Agreement to any company
controlling, controlled by or
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controlled in common with it, to a successor to that portion of its business
to which this Agreement relates.
(b) No Waiver. Any waiver by either party of any provision hereof or of the
full and timely performance by the other party of its obligations hereunder must
be in writing and will be effective only in the specific instance and only for
the purpose for which given. No failure or delay on the part of either party in
exercising any right, power or privilege under this Agreement shall operate as a
waiver thereof nor will any single or partial exercise of any right, power or
privilege by such party constitute a waiver of any provision of this Agreement.
(c) Order of Precedence. Insofar as any provision herein conflicts or is
inconsistent with any provision of Attachment A or of any preprinted terms and
conditions contained in any purchase order form or sales form or acknowledgment,
the provisions herein shall take precedence and shall govern, and such
preprinted terms or conditions shall be considered null and of no effect.
(d) Entire Agreement. This Agreement represents the entire agreement between
the parties relating to its subject matter and supersedes any and all prior
agreements, whether written or oral, that may exist between the parties
regarding the same. No terms, conditions, prior course of dealings, course of
performance, usage of trade, understandings, or agreements purporting to modify,
vary, supplement or explain any provision of this Agreement shall be effective
unless in writing, signed by duly authorized representatives of each party. The
preprinted terms or conditions found on any purchase order, acceptance or like
document shall not be considered an amendment or modification of this Agreement,
even if such document is signed by representatives of both.
(e) Governing Law. This Agreement shall be governed by and contracted in
accordance with the laws of the State of Michigan without regard to its conflict
of laws provisions.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
TEXTRON AUTOMOTIVE COMPANY INC. STRANDTEK INTERNATIONAL, INC.
a subsidiary of TEXTRON INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Vice President of Purchasing Title: V. P. / TREASURER
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Date: 5/22/00 Date: 5/19/00
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