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EXHIBIT 10.25
MASTER CONTRACT FOR PURCHASE AND SALE
This Master Contract, dated as of the 17 day of July, 1995, constitutes
an agreement by and between the parties, ▇▇▇▇▇ MATERIAL HANDLING COMPANY, a
Kentucky corporation with offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("▇▇▇▇▇") and CUSTOM TOOL AND MANUFACTURING COMPANY, a Kentucky
corporation, with offices at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and
production facilities at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Custom") for purchase by
▇▇▇▇▇ and sale by Custom of all products identified in the Appendix(es) hereto,
pursuant to the terms of this Master Contract and all Appendix(es) and Exhibits
("Master Contract").
NOW, THEREFORE, for and in consideration of the mutual covenants set
forth herein and in any and all Appendix(es) hereto, the parties hereto agree as
follows:
1. PURPOSE
1.1 To cause ▇▇▇▇▇ to contract for the manufacturing expertise and
production capabilities of Custom such that subject to the terms
of this Master Contract Custom shall be the preferred manufacturer
for ▇▇▇▇▇ of
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products (and/or their replacements, modifications and additions
as may be agreed by the parties from time-to-time) identified in
the Appendix(es) hereto (hereinafter referred to as "product" or
"products"). As used herein, the term "parts" means service and
replacement components, parts and accessories for all products
purchased by ▇▇▇▇▇ pursuant to this Master Contract.
1.2 Custom agrees to sell to ▇▇▇▇▇ products ordered by ▇▇▇▇▇ pursuant
to the terms of this Master Contract.
1.3 ▇▇▇▇▇ has selected Custom, because of its historical record of
producing and delivering quality products on a timely basis,
responding to volume adjustments and responsiveness to ▇▇▇▇▇'▇
requests and provided Custom continues to provide quality products
on a timely basis, respond to volume adjustments and respond to
▇▇▇▇▇'▇ reasonable requests as contemplated by the terms of this
Master Contract as its preferred producer of products. Custom
understands that ▇▇▇▇▇ intends to utilize products in its
production of lift trucks for sale in the United States and
elsewhere in the world.
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1.4 The purpose of this Master Contract is to set forth the terms and
conditions applicable to the sale by Custom to ▇▇▇▇▇ and the
purchase from Custom of products for use in ▇▇▇▇▇'▇ lift truck.
1.5 This Master Contract replaces and supercedes the Master Contract
For Purchase And Sale between the parties dated August 31, 1992
and applies to all transactions contemplated by this Master
Contract on and after its execution date, and ▇▇▇▇▇'▇ July 11,
1995 production schedule which have not been completed before the
execution date of the Master Contract.
2. TERM
2.1 The term of this Master Contract shall begin on the date first set
forth hereinabove for an initial period of five (5) years, and
will automatically be extended for an additional three (3) year
period thereafter unless terminated by either party upon 360 days'
prior written notice prior to expiration of the initial term.
3. SALE AND PURCHASE
3.1 During the Term of this Master Contract, and any extensions
thereto, Custom shall sell and deliver to ▇▇▇▇▇, those products,
accessories
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and parts to which this Master Contract applies, which are ordered
by ▇▇▇▇▇ during the term of this Master Contract, subject to the
terms and conditions of this Master Contract and in the quantities
as ordered by ▇▇▇▇▇.
4. WARRANTY PROVISIONS
4.1 Custom expressly warrants that the products sold pursuant to this
Master Contract will conform to ▇▇▇▇▇'▇ engineering
specifications, drawings, samples and other descriptions furnished
or specified by ▇▇▇▇▇, except as provided in Section 6.4. Custom
also expressly warrants the design of all tooling, fixtures, dies
and patterns used by Custom to produce products for ▇▇▇▇▇ under
this Master Contract. Custom assumes all responsibility and
warrants the products for component specifications, workmanship,
materials and construction as set forth hereinbelow from the date
of initial purchase of the lift truck for a period of three (3)
years or 4,000 hours. This warranty period shall commence upon
delivery of the lift truck to its purchaser as defined in ▇▇▇▇▇'▇
Warranty information forms for the specific lift truck itself. In
the case of a leased lift truck, the warranty period shall
commence upon delivery to
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the lessor/owner of the lift truck.
4.2 Custom assumes no responsibility for defects in product design or
engineering to the extent such product design or engineering is
provided by ▇▇▇▇▇. In the event any product design or engineering
is provided by Custom, the warranty provisions of this Section 4
shall apply in full. Custom assumes responsibility for the design
of all tooling, fixtures, dies and patterns used by Custom to
produce products for ▇▇▇▇▇ under this Master Contract, and the
warranty provisions of this Section shall apply in full thereto.
4.3 Custom warrants, pursuant to the warranty parameters set forth
herein, that products sold hereunder will be merchantable and
sufficient for the purpose intended, of good material and
workmanship and free from defects.
4.4 Replacement parts provided by Custom for products under the
warranty provisions of this Master Contract are covered by the
warranty provisions herein for the remainder of any applicable
warranty period and, thereafter, are covered by the parts warranty
to the extent that the parts warranty exceeds the initial product
warranty period.
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4.5 The warranty set forth in this Section 4 extends to the
performance of the products as follows:
(a) If any defect in material or workmanship or nonconformity with
▇▇▇▇▇'▇ specifications, drawings, samples or other
descriptions is discovered in a product prior to shipment from
▇▇▇▇▇'▇ location to a dealer or customer, Custom will pay or
reimburse ▇▇▇▇▇ for the parts and labor required to correct
the defect and any damage to the forklift truck resulting from
the defect. This warranty shall apply to design to the extent
product design or engineering is provided by Custom.
(b) If any defect in material or workmanship or nonconformity with
▇▇▇▇▇'▇ specifications, drawings, samples or other
descriptions is discovered in a product within twelve (12)
months after the date of delivery of the forklift truck
incorporating the product to the first ultimate user of the
industrial truck (provided the lift truck has not exceeded
4,000 hours of use), Custom will pay or
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reimburse ▇▇▇▇▇ for the part and labor (plus any reasonable
travel costs) required to correct the defect or any damage to
the forklift truck resulting from the defect. This warranty
shall apply to design to the extent product design or
engineering is provided by Custom.
(c) If any defect in material or workmanship or nonconformity with
▇▇▇▇▇'▇ specifications, drawings, samples or other
descriptions is discovered in a product after the period
stated in b. above but within thirty-six (36) months after the
date of delivery of the forklift truck incorporating product
to the first ultimate user of the industrial truck (provided
the lift truck has not exceeded 4,000 hours of use), Custom
will pay or reimburse ▇▇▇▇▇ for the parts required to correct
the defect and any damage to the forklift truck resulting from
the defect. This warranty shall apply to design to the extent
product design or engineering is provided by Custom.
4.6 For purposes of this Master Contract, the term
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labor costs to correct a defect shall include, without limiting
the general meaning of the term, reasonable charges to remove the
defective product or part thereof from the forklift truck and to
replace a repaired or replacement product or part thereof.
4.7 For purposes of this Master Contract, any failure of a product or
part to be as warranted is referred to as a "defect." This
warranty extends to the performance of the parts during the
warranty period.
4.8 Upon mutual written agreement of the parties, the amount of
warranty reimbursement may be changed after one (1) year of
experience with warranty claims.
4.9 If a defect in material or workmanship or non-conformity with
▇▇▇▇▇'▇ specifications, drawings, samples or other descriptions is
discovered at any time which poses a hazard which may cause
personal injury or property damage, the parties shall meet as soon
as possible to discuss such matter. ▇▇▇▇▇ will use good faith
efforts to estimate the total cost of the parts and labor (plus
reasonable travel costs) to correct the defect and any damage to
the forklift truck caused by the
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defect, the reasonable labor and directly related overhead
expenses to locate and repair any forklift trucks into which the
defective product has been incorporated, and costs to provide
reasonable and proper notice and warnings to customers, owners and
users of such forklift trucks, and allocate responsibility for all
such costs and expenses. Custom shall pay its allocated share of
such costs and expenses to ▇▇▇▇▇ on a monthly basis based upon
completed Application for Adjustments ("AFAs") and ▇▇▇▇▇'▇
documented costs and expenses. This Section 4.9 shall apply to
product design defects only to the extent product design or
engineering is provided by Custom.
4.10 If a defect in material or workmanship or non-conformity with
▇▇▇▇▇'▇ specifications,drawings, samples or other descriptions is
discovered at any time which affects products in a significant
number of forklift trucks, notwithstanding any other warranty
provision or warranty limitation, the parties shall undertake
their best efforts to agree to a reasonable allocation of costs to
remedy such defect. The costs of remedying the defect or
non-conformity set forth in this Section 4.10 shall
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not be included in any calculations associated with base price
reductions set forth in Section 7. In the absence of such
agreement, the parties agree to share all such costs equally. This
Section 4.10 shall apply to design defects to the extent product
design or engineering is provided by Custom.
4.11 Custom warrants that parts will conform to the specifications and
descriptions and will be merchantable, satisfactory and sufficient
for the purposes intended, of good quality and workmanship, and
free from defects for a period of twelve (12) months from the date
of sale to the first retail purchaser or the date the part is
installed in customer's equipment as a service or replacement
part, whichever occurs first. If any defect is discovered within
the warranty period, Custom will reimburse ▇▇▇▇▇ for the cost of
the defective part, for the labor of ▇▇▇▇▇'▇ authorized dealer
personnel at an hourly rate equal to the dealer national average,
and for the cost of repairing any damage to the product into which
the part has been incorporated caused by the defect.
4.12 When a written claim for warranty reimbursement is made by ▇▇▇▇▇
to Custom, subject to Section
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4.13 below, Custom may, within thirty (30) days of receipt of such
written claim, require ▇▇▇▇▇ to return the defective product or
parts thereof and/or the defective replacement products or parts
thereof at Custom's expense to ▇▇▇▇▇'▇ designated warranty claims
facility. Custom may inspect any and all allegedly defective
products and/or parts at the warranty facility and may further,
within thirty (30) days of receipt of written claim from ▇▇▇▇▇,
requires ▇▇▇▇▇ to return all or any of such products and/or parts
at Custom's expense. ▇▇▇▇▇ will notify Custom when such defective
products and/or parts are available for inspection and provide a
brief description of the warranty claims. Should Custom determine,
in the exercise of its best business judgement, after inspection
as provided herein that any such products or parts are in fact not
defective, Custom will provide ▇▇▇▇▇ with the data and analysis
upon which its determination is based. Otherwise, Custom will
promptly pay or reimburse ▇▇▇▇▇ in accordance with the applicable
warranty provision.
4.13 Notwithstanding Section . 4.12 above, all warranty claims made by ▇▇▇▇▇
shall be
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considered accepted unless within thirty (30) days after Custom's
receipt of ▇▇▇▇▇'▇ claim, Custom either notifies ▇▇▇▇▇ in writing: (a)
that the claim is denied, or (b) that Custom requests additional time
to review the claim. Each such notice by Custom shall include a
statement of the reasons for the denial or the requests for additional
time.
4.14 The warranties provided by this Master Contract do not apply to defects
in product or parts caused after delivery to ▇▇▇▇▇ by parties other
than Custom or Custom's representatives, by accident, misuse, or
neglect arising from alterations not authorized by Custom.
4.15 The warranties provided in this Master Contract are in lieu of all
other warranties of quality, expressed or implied, and state Custom's
entire obligations with respect to product defects or replacement
parts. THIS MASTER CONTRACT CONTAINS NO IMPLIED WARRANTIES OF
MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE. EXCEPT AS
OTHERWISE STATED PURSUANT TO THIS CONTRACT, CUSTOM WILL NOT BE LIABLE
FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY TYPE FOR BREACH OF THIS
WARRANTY.
5. INDEMNITY
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5.1 Custom will defend, indemnify and hold ▇▇▇▇▇ harmless from and against
any and all claims for injury or death of persons or damage to property
(including costs of litigation and attorneys' fees) in any manner
caused by, arising from, incident to, connected with, or growing out of
the manufacture of products and parts by Custom, sale of products and
parts by Custom to ▇▇▇▇▇, and design of tooling, fixtures, dies and
patterns used by Custom to produce products for ▇▇▇▇▇ under this Master
Contract. Custom further agrees to secure and maintain during the term
of this Master Contract for five (5) years thereafter a public
liability policy providing (a) products liability coverage with a broad
form vendor's endorsement protecting ▇▇▇▇▇ with respect to this Master
Contract, and (b) providing contractual liability coverage for the hold
harmless clause set forth above in this paragraph, each of such
insurance coverages to have the bodily injury and property damage
limits reasonably required by ▇▇▇▇▇ from time-to-time, but in each
instance to have bodily injury limits of not less than $1 Million per
person and $1 Million per occurrence and
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property damage limits of not less than $1 Million per occurrence, with
an umbrella or excess liability policy of an additional $2 Million per
person and $2 Million per occurrence for bodily injury and an
additional $2 Million per occurrence for property damage. Custom will
upon request furnish Clark with a certificate from Custom's insurance
carrier in a form satisfactory to ▇▇▇▇▇ and will provide for thirty
(30) days' prior written notice from the insurance carrier to ▇▇▇▇▇
prior to any cancellation or change reducing coverage.
5.2 ▇▇▇▇▇ will defend, indemnify and hold Custom harmless from and against
any and all claims for injury or death of persons or damage to property
(including costs of litigation and attorneys' fees) to the extent
caused by, arising from, incident to, connected with, or growing out of
the design and/or engineering of products by ▇▇▇▇▇, or ▇▇▇▇▇'▇ election
to utilize components provided by a ▇▇▇▇▇ designated single source
supplier in products manufactured by Custom, which pursuant to Section
6.4 have been determined to be defective or not in compliance with
▇▇▇▇▇'▇ specifications; provided, however, Custom has
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duly notified ▇▇▇▇▇ in writing.
▇▇▇▇▇ further agrees to secure and maintain during the term of this
Master Contract and for five (5) years thereafter a public liability
policy providing (a) products liability coverage with a broad form
vendor's endorsement protecting Custom with respect to this Master
Contract, and (b) providing contractual liability coverage for the hold
harmless clause set forth above in this paragraph, each of such
insurance coverages to have the bodily injury and property damage
limits reasonably required by Custom from time-to-time, but in each
instance to have bodily injury limits of not less than $3 Million per
person and $3 Million per occurrence and property damage limits of not
less than $3 Million per occurrence, ▇▇▇▇▇ will upon request furnish
Custom with a certificate from ▇▇▇▇▇'▇ insurance carrier in a form
satisfactory to Custom and will provide for thirty (30) days' prior
written notice from the insurance carrier to Custom prior to any
cancellation or change reducing coverage. Upon written notice to
Custom, ▇▇▇▇▇ may, in lieu of carrying insurance as set forth herein,
self-insure the indemnity obligations set forth in
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this Section 5.2.
6. BASE PRICING AND PRICING ADJUSTMENTS
6.1 The base price for each product and part will be that per unit price
set forth in the Appendix(es) for each particular product type.
6.2 The base price of any product or part thereof may be increased or
decreased at any time by mutual written agreement of the parties
(INTERIM PRICE ADJUSTMENT). Such interim price adjustments will be made
for mutually agreed upon design changes and under other appropriate
circumstances as the parties may agree. Provided, however, for design
changes which result in an increase in the base price, the amount of
the increase shall not be included in any calculations associated with
base price reductions set forth in Section 7.
6.3 Subject to the interim price adjustments, the initial base prices for
products will be effective without increase, for all products ordered
on or before June 30, 1996 for delivery on or before August 31, 1996.
Thereafter Custom may, after consultation and written agreement with
▇▇▇▇▇, adjust the base prices for products effective July 1, 1996 for
all products ordered on or after July 1, 1996, and
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annually on July 1, of each successive year thereafter during the term
of this Agreement and any extensions thereto for all products ordered
on or after July 1 of each successive year up to a maximum amount as
determined by the Formula set forth in the Appendix for that specific
product (ANNUAL PRICE ADJUSTMENT). Prices for products ordered on or
before June 30 of each successive year for delivery on or before August
31 of each successive year shall be the price in effect on June 30 and
shall not be subject to any July 1 price adjustment.
6.4 Unless otherwise agreed, ▇▇▇▇▇ and Custom shall, on an annual basis,
jointly review base prices of products no later than thirty (30) days
prior to the effective date for annual price adjustments. In addition,
the parties will also review the data produced by the Formulas set
forth in the Appendix for each specific product for computation of the
maximum annual price adjustments as a guide in determining the annual
price adjustments. The parties may use these computations in order to
negotiate a price adjustment of lesser amount than the annual price
adjustment Formulas in the Appendix(es) call for, and are in no way
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precluded from negotiating such a lesser base price increase. The
parties are not precluded from agreeing to a price adjustment which
exceeds the maximum annual price adjustment provided (i) extraordinary
circumstances have arisen regarding availability and/or price increases
involving ▇▇▇▇▇-designated single source component suppliers to Custom
and (ii) the parties agree in writing to such a price adjustment. The
parties also agree that should a ▇▇▇▇▇-designated single source
supplier, for reasons not caused by Custom, be unable or unwilling to
supply components, or supply components deemed defective or not in
compliance with ▇▇▇▇▇ specifications by ▇▇▇▇▇ to Custom for production
of products under the Master Contract, the parties shall cooperate to
attempt to correct the situation. In addition, Custom shall notify
▇▇▇▇▇ in writing in the event Custom determines, in the exercise of its
best business judgment, that components provided by a ▇▇▇▇▇-designated
single source supplier are defective or not in compliance with ▇▇▇▇▇
specifications. Each such notice by Custom shall include a statement of
the reasons for Custom's determination that such components are
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defective or not in compliance with ▇▇▇▇▇ specifications, and shall
include all substantiation relied upon by Custom to back up Custom's
determination. If, after such written notice and a joint determination
that such component is defective or not in compliance with ▇▇▇▇▇'▇
specifications, ▇▇▇▇▇ elects to utilize said components in the
manufacturing of products by Custom, ▇▇▇▇▇ hereby acknowledges and
agrees that it assumes all warranties of Custom as set forth in Section
4 solely to the extent directly related to such defective or
noncompliant component and waives all indemnity rights from Custom
pursuant to Section 5 of this Master Contract solely to the extent
directly related to such component. Further, ▇▇▇▇▇ will indemnify
Custom to the extent provided by Section 5.2 hereof from all claims
arising solely and directly to such component. If the situation cannot
be corrected in a timely fashion, the parties shall cooperate to select
an alternate source component supplier as soon as practical. If the
parties cannot reach a joint determination that such component is
defective or not in compliance with ▇▇▇▇▇'▇ specifications, the parties
will submit the
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issue to a mutually acceptable independent third party or, in the event
the parties are unable to agree on a third party, to the ▇▇▇▇ of the
University of Kentucky College of Engineering or his/her designate for
determination. Should the determination result in a finding that the
component is defective or not in compliance with ▇▇▇▇▇'▇ specifications
and ▇▇▇▇▇ elects to utilize the component(s), it assumes all warranties
of Custom set forth in Section 4 as mentioned hereinabove and waives
all indemnity rights from Custom pursuant to Section 5 as set forth
hereinabove.
6.5 Unless the parties mutually agree to a lesser base price increase, the
maximum annual price adjustment to the base price for each product will
be determined by multiplying the base price for each product which is
effective on June 30th by the applicable annual price adjustment
Formula set forth in the Appendix(es) for each specific product.
6.6 For annual price adjustments permitted under this Contract, the change
in the various Appendix(es) Formulas' indexes will be measured from the
indexes for March of the prior year, to the indexes for the month of
March in the
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succeeding year which immediately precedes the July annual price
adjustment. If the March index is not available by June 1 prior to the
effective date of the annual price adjustment, the most recent
available index may be used in its place.
6.7 Notwithstanding the foregoing, the parties agree to utilize joint
efforts and to cooperate to achieve and sustain subject to the terms of
this Master Contract base price reductions of at least five percent
(5%) from initial base prices for the World Truck a/k/a Global Truck
a/k/a Genesis Truck products (Genesis). To achieve such price
reductions, the parties each agree, for a period of six (6) months or
longer if mutually agreed from the execution date hereof, to assign
engineering/design support to work together.
7. PAYMENT TERMS
7.1 Immediately upon achieving the base price reduction of five percent
(5%) on Genesis Truck products, and so long as such reductions are
sustained subject to the terms of this Master Contract, the payment
terms shall be as follows: ▇▇▇▇▇ shall remit payment to Custom on all
invoices for products shipped by Custom and
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ordered by ▇▇▇▇▇ within thirty (30) days of receipt of invoice from
Custom of the ordered products.
7.2 Until the five percent (5%) base price reduction on Genesis Truck
products is achieved, the parties agree to the following schedule of
payment terms:
a. For the period from the date of this Master Contract
through the end of 1995, ▇▇▇▇▇ shall remit payment to
Custom on all invoices for products shipped by Custom
and ordered by ▇▇▇▇▇ for German production within
forty five (45) days of receipt of invoice from
Custom of the ordered products; and within forty days
(40) of receipt of invoice for all other products
ordered by ▇▇▇▇▇.
b. For the period from January 1, 1996 through March 31,
1996, (First Quarter 1996), ▇▇▇▇▇ shall remit payment
to Custom on all invoices for all products shipped by
Custom and ordered by ▇▇▇▇▇ within forty (40) days of
receipt of invoice
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from Custom of the ordered products. If at the end of
this period the parties are unsuccessful in achieving
or sustaining the base price reduction of five
percent (5%) on Genesis Truck products subject to the
terms of this Master Contract, the first quarter
payment terms shall remain in effect unless otherwise
mutually agreed.
7.3 Prior to Custom committing to build tooling, ▇▇▇▇▇ shall issue purchase
orders and remit payment as mutually agreed for all tooling necessary
for Custom to manufacture products pursuant to the Master Contract.
7.4 ▇▇▇▇▇ shall establish within 10 business days from the execution of
this Master Contract, an escrow account and/or post a letter of credit
or any combination of both in Custom's favor in a total amount equal to
(i) for the period through December 31, 1995, eight (8) weeks of the
dollar amount of Custom's component inventory for products covered by
this Master Contract and (ii) for the period January 1, 1996 through
March 31, 1996, six (6) weeks of the dollar
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amount of Custom's component inventory for products covered by this
Master Contract. The initial total amount to be covered by the escrow
account and letter of credit shall be $868,616.00. Such amount shall be
validated and adjusted as necessary each month based upon actual
schedules. The amount shall be payable to Custom if any of the
following events occurs: (i) the filing of a voluntary petition in
bankruptcy by ▇▇▇▇▇; or (ii) the filing of a petition of bankruptcy
against ▇▇▇▇▇, unless vacated within thirty (30) days from the filing
date; in the case of either (i) or (ii) above, to the extent that
Custom suffers actual financial loss for component purchases it has
made for products covered by this Master Contract, net of all
recoveries. The parties shall meet on or before March 31, 1996, to
discuss in good faith the reduction or elimination of the requirements
of this Section 7.4, with the expectation that the requirements of this
Section 7.4 shall be reduced or eliminated if ▇▇▇▇▇ has met its payment
obligations under this Section 7 and ▇▇▇▇▇ has achieved operating
profits. Promptly upon establishing the escrow account and/or letter of
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credit and/or combination of both as referenced herein, ▇▇▇▇▇ shall
duly notify Custom in writing of the names and addresses of all
financial institutions, the account numbers, the amounts deposited in
each and all other applicable information relating to the provisions of
this section reasonably requested by Custom.
7.5 Invoices shall, at Custom's options, be dispatched by Custom to ▇▇▇▇▇
by telefax transmissions and/or by first class U.S. Mail, postage
prepaid.
8. DELIVERY
8.1 Custom will deliver the ordered products to ▇▇▇▇▇ freight prepaid,
pursuant to ▇▇▇▇▇'▇ order schedule with a maximum variance of minus
three (3) days per delivery. In addition, Custom will undertake its
best efforts to successfully respond to any and all unforeseen delivery
requirements of ▇▇▇▇▇ on an as-needed basis. Deliveries will be C.I.F.
Lexington, Kentucky or such other locations as directed by ▇▇▇▇▇. All
freight costs to Lexington, Kentucky shall be borne by Custom. Freight
costs to any other location shall be subject to agreement between the
parties.
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9. SCHEDULING
9.1 Each thirty (30) days, ▇▇▇▇▇ shall deliver to Custom a Supplier
Delivery Schedule containing released orders of products for the
ensuing four (4) month period and forecasted orders for eight (8)
months thereafter. Said Schedule shall set forth released orders for
the first four (4) months of the scheduled period and forecasted orders
to be placed by ▇▇▇▇▇ during the following eight (8) calendar months.
The eight (8) month rolling forecast will not constitute an order for
products, and ▇▇▇▇▇ does not assume any obligation to purchase all or
any portion of the forecasted quantities; However, solely with respect
to long lead time component inventory identified and substantiated by
Custom from time to time, ▇▇▇▇▇ shall have the option to purchase or
pay required penalties in connection with such long lead time component
inventory which is not cancellable without penalty based upon the first
two (2) months of the eight (8) month rolling forecast should the
forecast not be implemented. ▇▇▇▇▇ will pay a ten percent (10%)
handling fee to Custom in the event such component inventory has to be
returned. The parties agree that the
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quantity of products for delivery for the first thirty (30) days after
the Supplier Delivery Schedule is issued is firm. The parties further
agree that ▇▇▇▇▇'▇ ratio of actual-to-projected orders may vary +/- 10%
over the period from 31- 60 days from the date of the Schedule, +/- 20%
over the period from 61-90 days from the date of the Schedule, and +/-
20% over the period from 91-120 days from the date of the Schedule.
Notwithstanding the above, if notice is given by ▇▇▇▇▇ to Custom within
twenty (20) days after the date of the Supplier Delivery Schedule,
during the period from 90-120 days from the date of Schedule, ▇▇▇▇▇ may
make unlimited changes to the mix of products.
10. CANCELLATION OR DELAY
10.1 ▇▇▇▇▇ may, without charge, at any time upon written notice, up to sixty
(60) days prior to the scheduled delivery date, delay delivery of all
or any portion of an order for up to ninety (90) days.
11. INSPECTION
11.1 All material shall be received subject to ▇▇▇▇▇'▇ inspection and
rejection. Material not in accordance with specifications shall be held
for Custom's review and disposition at Custom's
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risk and, if Custom directs, the material will be returned at Custom's
expense. Payment for material prior to inspection shall not constitute
an acceptance thereof. Inspection of material by ▇▇▇▇▇ will not
constitute acceptance of any products and will not relieve Custom of
responsibility for any defect or nonconformity in any product.
12. TERMINATION
12.1 Either party may terminate this Master Contract for failure by the
other party to perform or adhere to any promises or obligations
undertaken pursuant to this Master Contract by giving the other party
thirty (30) days' written notice within which to cure such default. If
such default is not cured within the thirty (30) day period (cure
period), the party which gave the notice may terminate this Master
Contract at any time thereafter upon written notice to the other party.
In the event that it is not possible to cure such default within the
cure period, provided the defaulting party has demonstrated due
diligence in its prompt efforts to cure such default, such cure period
may be extended for one (1) additional thirty (30) day period (extended
cure period). The
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above provision with regard to the cure and extended cure periods shall
not apply to the payment terms in Section 7. In the event ▇▇▇▇▇ fails
to make a payment to Custom within seven (7) days of its due date in
accordance with the payment terms in Section 7, Custom shall have the
right, at its election, but with notice to ▇▇▇▇▇, to immediately refuse
shipment of products to ▇▇▇▇▇. Upon cure of such payment default by
▇▇▇▇▇, Custom shall immediately resume shipment of products to ▇▇▇▇▇ on
a C.O.D. basis.
12.2 Either party may terminate this Master Contract immediately by written
notice to the other party if any of the following events occur:
(a) Any attempted transfer of assignment of this Master Contract
or any right or obligation hereunder by the other party unless
the assignment is otherwise permitted by this Master Contract.
(b) The filing of a voluntary petition in bankruptcy by the other
party.
(c) The filing of a petition of bankruptcy against the other
party, provided it is not vacated thirty (30) days from the
date of such appointment.
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12.3 The termination of this Master Contract will not affect or impair the
rights, liabilities and obligations of either party under any order
prior to the termination, will not relieve either party of any
obligation or liability accrued under this Master Contract or pursuant
to any order issued prior to the termination, and will not relieve
either party or the continuing obligations pursuant to Section 4,
Warranty; Section 13, Quality Assurance; Section 5, Indemnity; Section
14, Confidential Information; Section 15, Design Rights; and Section
17.7, Replacement Parts, which obligations will survive any termination
of this Master Contract.
13. QUALITY ASSURANCE
13.1 Custom warrants that it will establish and maintain a quality assurance
program which conforms to the criteria stated in Exhibit 1 and which is
satisfactory to ▇▇▇▇▇, and, further, warrants that each product and
part sold by Custom to ▇▇▇▇▇ pursuant to this Master Contract will be
manufactured (or if certain parts are purchased, purchased and
inspected) subject to and in compliance with said quality assurance
program.
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13.2 ▇▇▇▇▇ may, at its option and expense, continuously or periodically
review and inspect Custom's quality assurance program and product
quality at Custom's facilities. Custom will provide ▇▇▇▇▇'▇
representatives with good faith cooperation and such access and
facilities as may be reasonably be required by ▇▇▇▇▇'▇ representatives
to conduct such review and inspection. ▇▇▇▇▇ will use its best efforts
consistent with accomplishing its review and inspection to avoid
disruption or delay of Custom's operations. Inspection or review of
Custom's quality assurance program or products at Custom's facilities
will not constitute acceptance of any products and will not relieve
Custom of responsibility for any defect or nonconformity in any
product.
13.3 Custom further warrants that if Custom at any time has reason to
believe that any defect in design or manufacture or any nonconformity
may be present in any products or parts sold or to be sold pursuant to
this Master Contract, Custom will immediately advise ▇▇▇▇▇ and will
cooperate with ▇▇▇▇▇ to determine whether the defect or nonconformity
is present and, if so, will cooperate promptly with ▇▇▇▇▇ in good
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faith to correct it. This provision will not be construed to expand
Custom's warranty to ▇▇▇▇▇ or to relieve Custom of its responsibility
for the consequences of any such defect or nonconformity.
14. CONFIDENTIAL INFORMATION
14.1 During the term of this Master Contract and for a period of three (3)
years thereafter, each party will hold in confidence any confidential
information received from another party in connection with this Master
Contract and (except for mandatory disclosures to governments) will not
disclose the confidential information to any third party or reproduce
or reverse engineer products using the confidential information without
the written consent of the party which provided the information. A
party receiving confidential information will protect it from
disclosure by handling it with the same care that the party normally
exercises in respect of its own confidential information of similar
importance.
14.2 As used in this Master Contract, confidential information means any
information held in confidence by a party and disclosed by that party
and disclosed by that party to another
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party in connection with this Master Contract; provided the information
is:
(a) a type of information classified as confidential by other
provisions of this Master Contract;
(b) information provided in a written form and identified as
confidential; or
(c) information provided verbally, and identified as confidential
when disclosed.
14.3 Information will not be considered confidential and the obligations of
this Section 14 "Confidential Information" will not apply under the
following circumstances:
(a) the information is in the public domain at the time of
disclosure or become part of the public domain thereafter
without the fault of the receiving party;
(b) the information is known to the receiving party at the time of
the disclosure; or
(c) the information is rightfully acquired by the receiving party
from a third person which is not a party to this Master
Contract, or is independently developed by the receiving
party.
15. DESIGN RIGHTS
15.1 The design rights to the design of products,
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drawings, specifications, tools, dies, patterns, fixtures and other
materials and information provided or designed by ▇▇▇▇▇ or designed by
Custom and paid for by ▇▇▇▇▇ shall remain in ▇▇▇▇▇. All drawings,
specifications, tools, dies, patterns, fixtures and other materials and
information provided to Custom (or provided or designed by Custom and
paid for by ▇▇▇▇▇) to enable Custom to produce products and parts for
▇▇▇▇▇ belong to ▇▇▇▇▇ and shall be considered confidential, and shall
promptly be returned to ▇▇▇▇▇ upon termination of this Master Agreement
for any reason, along with all copies thereof. Custom shall have no
right to use any of such drawings, specifications, tools, patterns,
dies, fixtures or other materials and information provided to Custom
for any purpose other than producing products and parts for ▇▇▇▇▇ under
this Master Contract. All such tools, dies, fixtures and other
materials shall bear legends to the effect that they are the property
of ▇▇▇▇▇. During the term of this Master Contract, Custom agrees that
if it provides or offers to provide to any other customer products
which are similar to products covered by this Master Contract, it
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shall give ▇▇▇▇▇ prior written notification. Notwithstanding the prior
sentence, Custom shall not use any of the drawings, specifications,
tools, dies, patterns, fixtures or other materials or other information
identified in this Section 15.1 to produce products and parts for any
one other than ▇▇▇▇▇.
16. NOTICES
16.1 All notices required or permitted hereunder shall be in writing and
shall be deemed duly given when personally delivered or sent by
ordinary, registered or certified mail, postage prepaid, or by telefax,
confirmed by letter as aforesaid, addressed as follows:
Custom: Custom Tool and Manufacturing Company
Production Machining Plant
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
▇▇▇▇▇: ▇▇▇▇▇ Material Handling Company
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
or to such other address as either party may hereafter designate in
writing by like notice.
17. MISCELLANEOUS PROVISIONS
17.1 This Master Contract hereto shall enure to the benefit of and be
binding upon the parties hereto and their successors and assigns. The
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parties further agree that this Master Contract shall not be assignable
by either party without consent of the other party, such consent not to
be unreasonably withheld, except that ▇▇▇▇▇ may assign this Master
Contract to any subsidiary or affiliate of ▇▇▇▇▇ or to a successor to
substantially all of the business of ▇▇▇▇▇.
17.2 This Master Contract hereto encompasses the entire agreement by and
between Custom and ▇▇▇▇▇ respecting the sale and purchase of products
identified in the Appendix(es) hereto covered by this Agreement and
supercedes any and all previous agreements, memoranda, negotiations, or
understandings of the parties with respect thereto. No addition to,
deletion from or modification of any of the provisions of this Master
Contract shall be binding upon the parties unless made in writing and
signed by a duly authorized representative of each party. Any such
additions, deletions or modifications shall refer specifically to this
Master Contract and shall also state that it is an amendment thereof.
17.3 Any failure by ▇▇▇▇▇ or Custom to enforce, at any time any term or
condition of this Master Contract shall not constitute, nor shall it be
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construed as, a waiver of that party's right to enforce each and every
term and condition hereof.
17.4 If, for any reason any provision of this Master Contract is deemed
invalid, illegal, or unenforceable, then such provision will be deemed
severable from the other provisions hereof, all of which shall remain
in full force and effect and binding on ▇▇▇▇▇ and Custom pursuant to
the Master Contract.
17.5 This Master Contract and all purchase orders issued pursuant hereto
shall be governed by and construed in accordance with the laws of the
Commonwealth of Kentucky.
17.6 The titles and headings herein are used for convenience of reference
only and shall not be deemed part of this Agreement for purposes of
interpretation.
17.7 Service Replacement Parts: Custom agrees to provide replacement parts
for a minimum period of seven (7) years after the date of termination
or expiration of this Master Contract. Components and/or complete
assemblies will be provided to ▇▇▇▇▇'▇ aftermarket parts organization
at OEM price levels, as long as the ordered components
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and/or complete assemblies are in production at the time the order is
placed. If not, pricing will be negotiated on a case-by-case basis.
Custom will furnish Clark with a complete list of replacement parts,
all requested technical information and documentation in connection
with replacement parts, and appropriate descriptions and illustrations
required to service replacement parts.
IN WITNESS WHEREOF, the parties have caused this Master Contract for
Purchase and Sale to be executed in duplicate originals by their duly authorized
representative as of this 17 day of July, 1995.
▇▇▇▇▇ MATERIAL HANDLING COMPANY
By: /s/
---------------------------------
Title: President
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Date: 17 July 95
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CUSTOM TOOL AND MANUFACTURING COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------------
Title: President
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Date: 7/18/95
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