EXHIBIT 10.13
DATE January 22, 1998
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(1) XXXXX LIMITED
(2) XXXXX AUTOMOTIVE (PTY) LTD
__________________________________
SOUTH AFRICAN
SUPPLY AGREEMENT
__________________________________
THIS AGREEMENT is made on 22nd day of January 1998
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BETWEEN:
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(1) XXXXX LIMITED trading as Xxxxx Aftermarket Operations whose registered
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office is at Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxx Xxxxxxxx X00 0XX ("Xxxxx");
(2) XXXXX AUTOMOTIVE (PTY) LTD whose registered office is at 0 Xxxxx Xxxxxx,
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Xxx Xxxx, Xxxxxxx, 0000 Xxxxx Xxxxxx ("the Company")
RECITALS
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(A) Pursuant to a Share Sale and Purchase Agreement (as defined below) Xxxxx
Industries plc is selling all of its shares in the holding company of the
Company to Prestolite Electric Incorporated ("the Purchaser").
(B) On completion of the sale of such Shares to the Purchaser Xxxxx wishes to
continue to be supplied with Xxxxx Branded Products (as defined below).
The Company is willing to sell and Xxxxx is willing to purchase such Xxxxx
Branded Products on the terms set out in this Agreement.
NOW IT IS AGREED as follows:
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1. DEFINITIONS
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In this Agreement:
1.1 the following words and expressions
shall have the following meanings
except where inconsistent with the
subject matter or context:
1
"Aftermarket" means the market for (a) spare and
replacement parts for components or
sub-assemblies comprised within the
products of Original Equipment
Manufacturers and (b) automotive
accessories and includes Original
Equipment Service
"Agreement Year" means (i) the period from the
Commencement Date until 31st December
1998; (ii) every period of twelve
(12) months beginning thereafter on
each 1st January during the Term
except that should this Agreement
terminate on a day other than 31st
December in any year the final
"Agreement Year" shall be the period
from the 1st January last preceding
the date of termination to the date
of termination
2
"Associated Company" means any person which is either a
holding company (whether direct or
indirect) or a subsidiary company of
the relevant party or a subsidiary
company of any such holding company
or is otherwise directly or
indirectly controlled by, or is under
the same control, direct or indirect,
as the relevant party from time to
time and at the time that the
relevant clause in which such
expression appears has application,
which where a claim is to be made
under the relevant clause shall mean
when the cause of action accrued
under such clause
"Base Currency Exchange means the exchange rate of the South
Rate" African rand against the pound
sterling as specified in Schedule 1
as such currency exchange rate may
vary pursuant to clause 8.4
"Commencement Date" means the date hereof
3
"Competing Product" means any product which is
interchangeable in its application
and/or function with a Xxxxx Branded
Product but excludes a product which
is so interchangeable but is a
"second tier product". For the
purposes of this definition a "second
tier product" is a product which is
clearly aimed at a different market
sector than Xxxxx Branded Products,
being a market which does not require
a premium branded product but
requires a product which is markedly
cheaper than a premium branded
product and which is prepared to
accept a product which is of inferior
quality and/or is sold with a less
favourable warranty or other less
favourable conditions than that or
those applicable to premium branded
products, "second tier products"
being best illustrated by the
products which are manufactured or
sourced at the date hereof by the
Company in South Africa and marketed
under the brand name "Electrotech"
4
"Conditions of Sale" means the Company's conditions of
sale in force at the Commencement
Date a copy of which is attached at
Schedule 4
"control" means in relation to any person the
power of any other person or persons
to secure by law or by corporate
structure that the affairs of the
first person are conducted in
accordance with the wishes of that
other person or persons, and any
cognate word shall be construed
accordingly
"Controllers" means persons able to decide or
influence the management or policies
of the relevant company in any
material respect including (without
prejudice to the generality of the
foregoing) any of the following from
time to time: its owners, its
directors, any of its partners, or
any majority of its shareholders
"Country" means any country, state or
principality and includes any area or
part of any of the same
"customer" means a buyer whether such buyer is
an end user, retailer, wholesaler,
distributor, dealer or otherwise
5
"Distribution Outlet" means a wholesaler, retailer,
sub-distributor, dealer, stockist,
service outlet, garage, workshop
and/or other person who buys or
acquires products from the relevant
party thereto otherwise than as the
ultimate end user of those products
"FOB" has the meaning given to such
expression in Incoterms 1990 provided
that where there is any conflict
between the rights, duties and
obligations of the parties as set out
in Incoterms and those set out in
this Agreement, those set out in this
Agreement shall prevail
"Force Majeure" means any event or circumstance of
the following kinds which is beyond
the reasonable control of the party
in question: governmental actions,
war, riots, civil commotion, fire,
flood, tempests or other extreme
weather conditions, epidemics, acts
of terrorism, bombings, explosions,
acts of God, other natural disasters
or any event or circumstance similar
in nature to the foregoing
"Freely Distributable means Other Products which are not
Products" Competing Products
6
"holding company" means a company which either (a)
holds the majority of the voting
rights in another company or (b) is a
member of another company and has the
right to appoint or remove a majority
of its board of directors or other
corporate officers or (c) is a member
of another company and controls alone
pursuant to an agreement with other
shareholders or members, a majority
of the voting rights in it.
Reference to "company" includes any
body corporate
"Improvement" means any invention, discovery or
design comprised within any change
made at any time during the Term to
Products or their method of
manufacture or use which makes them
of better quality or more efficient
or adaptable or enables them to be
manufactured more cheaply or more
efficiently
"Intellectual Property means any patent, copyright,
Rights" registered design, design right,
trade xxxx, topography, know-how or
similar property or right by whatever
name it is called and in whatever
Country it is registered or subsists
7
"Xxxxx Competitor" means any person, or an Associated
Company of any such person, listed in
Schedule 3
"Xxxxx Branded Products" means Products (including the
packaging for the same) to which the
Trade Marks have been or are to be
applied in accordance with this
Agreement
"Xxxxx Distribution Outlet" means a wholesaler, retailer,
sub-distributor, dealer, stockist,
service outlet, garage, workshop
and/or other person who buys or
acquires products otherwise than as
the ultimate end user of those
products and who was appointed prior
to the date hereof or who is
hereafter appointed by Xxxxx or any
Xxxxx Group Company in any Country in
the world
"Xxxxx Group Company" means LucasVarity plc and any company
which is a subsidiary of LucasVarity
plc or over which LucasVarity plc has
control from time to time and at the
time that the relevant clause in
which such expression appears has
application, which where a claim is
to be made under the relevant clause
shall mean when the cause of action
accrued under such clause
8
"Minimum Period" means the period of 5 years
commencing on the Commencement Date,
subject to the provisions of clause
8.3.2
"New Products" means products of the same generic
kind as those specified in Schedule 2
Parts 1 and 2 which the Company may
after the date hereof add to its
range of products, but for the
avoidance of doubt, the expression
excludes Products currently offered
by the Company set out in Schedule 2
Part 1 and Products specified in
Schedule 2 Part 2 to which in either
case Improvements are made
"Original Equipment means any manufacturer or assembler
Manufacturer" of transport vehicles, engines or
similar equipment including, but not
limited to, a manufacturer or
assembler of motor cars, vans, buses,
coaches, forklifts, industrial
vehicles, trucks, tractors or marine,
motive power or stationary engines or
a manufacturer of components or
sub-assemblies to be fitted as
original equipment to such vehicles,
engines or similar equipment
9
"Original Equipment Service" means the market for supplies of
spare and replacement parts to any
Original Equipment Manufacturer other
than for fitting as original
equipment or to any dealer of any
Original Equipment Manufacturer in
its capacity as a dealer for such
Original Equipment Manufacturer
"Other Products" means Products or New Products
(including the packaging for the
same) which are either unbranded or
are branded with a trade xxxx, name
or logo other than any of the Trade
Marks
"person" means any person, firm, association,
company or body corporate or
unincorporate
"Products" means those products currently
offered by the Company set out in
Schedule 2 Part 1 including any
Improvements to the same and from the
date they shall start to be
manufactured by the Company those
products in development at the
Commencement Date set out in Schedule
2 Part 2 including any Improvements
to the same
10
"Product Warranty" means the warranty the terms of which
are set out in Schedule 5
"Promotional Material" means catalogues, brochures and other
literature and material describing
Xxxxx Branded Products or their
technical characteristics for the
purposes of promoting the sale or use
thereof
"Purchaser Group means the Company and any company
Company" which:
(i) is a subsidiary of the Company;
(ii) is the direct or indirect holding
company of the Company or any
subsidiary of such holding
company; or
(iii) the Company or any such
holding company has control over
from time to time and at the time
that the relevant clause in which
such expression appears has
application, which where a claim is
to be made under the relevant clause
shall mean where the cause of action
accrued under such clause
11
"Quarterly Period" means a period of 3 months commencing
on 1st January, 1st April, 1st July
and 1st October in each Agreement
Year provided that the first
Quarterly Period shall in any event
commence or be deemed to have
commenced on 1st January 1998
"Relevant Country" means any Country from which it is
from time to time commercially viable
to export Products to the United
Kingdom and for those Products to be
competitive in terms of price and
delivery with Xxxxx Branded Products
being sold in the United Kingdom
"Reserved Territory" means the Republic of South Africa,
Namibia, Botswana, Swaziland and
Lesotho and includes any one or more
of such Countries
"sale" means any form of supply whether by
way of sale, lease, hire or exchange
and any cognate word shall be
construed accordingly
12
"Share Sale and Purchase means the Agreement made between
Agreement" Xxxxx Industries plc and the
Purchaser of even date herewith for
the sale of the shares of the holding
company of the Company and all
documents referred to therein
"subsidiary" means a company in which another
company (a) holds a majority of the
voting rights; (b) is a member of it
and has the right to appoint or
remove a majority of its board of
directors or other corporate
officers; or (c) is a member of it
and controls alone pursuant to an
agreement with other shareholders or
members, a majority of the voting
rights in it and includes a
subsidiary of a company which is
itself a subsidiary of another
company. Reference to "company"
includes any body corporate
"the Term" means the period between the
Commencement Date and the termination
of this Agreement howsoever arising
"Territory" means any Country other than the
Reserved Territory and Argentina
00
"xxx Xxxxx Xxxxx" means the trade xxxx, name and logo
"Xxxxx" and/or the Xxxxx diagonal
device and/or such other trade xxxx,
name or logo as Xxxxx xxx from time
to time decide in its absolute
discretion and notify in writing to
the Company shall be used in relation
to Xxxxx Branded Products to be
supplied by the Company to Xxxxx
pursuant to this Agreement
"Trade Xxxx Licence" means the licence dated 1st August
1993 between Xxxxx Industries plc and
the Company or such other trade xxxx
licence which is hereafter during the
Term granted by Xxxxx Industries plc
to the Company in relation to Trade
Marks registered in the Reserved
Territory enabling the Company to
apply such Trade Marks to the Products
"Trade Xxxx Licence Period" means the period during which the
Company has subsisting trade xxxx
rights in relation to Products in the
Reserved Territory pursuant to a
written agreement from Xxxxx or an
Associated Company of Xxxxx
14
"Warranty Replacement" means a repair and/or replacement to
a Xxxxx Branded Product sold by Xxxxx
in the Aftermarket that is also
during the Term sold by the Company
to Xxxxx and which a customer is
entitled to have carried out under
the terms of the Product Warranty
given to such customer and includes a
repair or replacement carried out
after the end of the Term
1.2 words used in this Agreement which denote the singular shall be deemed to
include the plural and vice versa. References to a particular gender
include all other genders;
1.3 references to clauses and Schedules are to clauses of and Schedules
to this Agreement, and references to paragraphs are to paragraphs in
the Schedule in which such references appear;
1.4 the Schedules form part of this Agreement and will have the same
force and effect as if expressly set out in the body of this
Agreement;
1.5 the headings to the clauses of this Agreement and to the paragraphs
of any Schedule will not affect its construction;
1.6 the word "including" or any cognate word shall be construed as
though the words "without limitation" immediately followed such word;
1.7 references in this Agreement to any instrument or agreement shall
include such instrument or agreement as may have been or may hereafter
be varied.
15
2. TERM
----
Subject to clauses 13 and 8.3.2, this Agreement shall continue in force for
the Minimum Period and shall thereafter continue in force unless and until
terminated by either party giving to the other at least 12 months' prior
written notice expiring on or at any time after the expiry of the Minimum
Period.
3. SUPPLY OF PRODUCTS
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3.1 Orders
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The Company shall manufacture and/or sell and Xxxxx shall purchase
such quantities of Xxxxx Branded Products as Xxxxx orders from the
Company from time to time in accordance with the terms of this
Agreement. Such Xxxxx Branded Products shall be for sale by Xxxxx
only in the Aftermarket (a) in the Territory during the Term
(subject to sub-clause (b) below); and (b) in the Territory and the
Reserved Territory and Argentina after the end of the Trade Xxxx
Licence Period, but then not through any Distribution Outlet
formally appointed by the Company as an authorised Distribution
Outlet of the Company unless it is also authorised by the Company to
sell Xxxxx products at the relevant time. Xxxxx shall not during
the Trade Xxxx Licence Period supply customers for Xxxxx Branded
Products in or for delivery in or who Xxxxx knows or has good reason
to believe intend to sell Xxxxx Branded Products in the Reserved
Territory or Argentina. Xxxxx shall during the Trade Xxxx Licence
Period refer to the Company any enquiries for Xxxxx Branded Products
received from any customer for supply to the Reserved Territory.
3.2 Orders and Delivery
-------------------
Minimum offtake quantities ("MOQ") and the multiples in which
products must be taken over and above the MOQ ("Batch" or
16
"Multiple") and lead times ("L/T") in relation to delivery of Xxxxx
Branded Products are shown in Schedule 2 and subject thereto the
Company shall deliver Xxxxx Branded Products at the times required
by Xxxxx. Delivery will be made by the Company FOB Johannesburg.
3.3 Branding
--------
Subject to clause 3.6, all Products supplied by the Company to Xxxxx
and the packaging in which they are supplied shall be labelled with
the Trade Marks according to the specifications for such labelling
from time to time reasonably stipulated by Xxxxx and the prices for
Xxxxx Branded Products shall include for this. All Product labelling
must unless and until otherwise stipulated by Xxxxx by giving not
less than 90 days notice in writing be in accordance with Xxxxx
specification 06021188. The Company shall not be required to cast,
emboss, etch or otherwise permanently incorporate any Trade Xxxx on
to Products to be supplied to Xxxxx pursuant to this Agreement.
3.4 EDI
---
The Company will work with Xxxxx with a view to enabling all orders,
forecasts, invoices and despatch advice notes to be communicated
between them by Electronic Data Interchange (EDI). Where this
capability is not yet in place the Company shall make all reasonable
commercial efforts to put it in place as soon as reasonably
practicable. An EDI communication shall be regarded for the purposes
of this Agreement as a written communication.
17
3.5 Amended Requirements
--------------------
The Company agrees to use all reasonable efforts to meet any amended
requirements for Xxxxx Branded Products notified to it in writing by
Xxxxx after an order has been placed.
3.6 Other items
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Other items from the Company's product range from time to time
(including Other Products which are not New Products) may be
supplied to Xxxxx by the Company with product and packaging
specification, prices, warranty cover and terms and conditions as
the Company and Xxxxx xxx agree from time to time. Xxxxx
acknowledges that such other items will be offered and marketed by
Xxxxx only in the Aftermarket in the Territory.
3.7 New Products
------------
The Company and Xxxxx shall work together where it is commercially
viable to do so to develop (by addition of new items and/or
modification of existing items other than by way of an Improvement)
the Company's range of products of the same generic kind as those
specified in Schedule 2 Parts 1 and 2 and the Company will consider
new products recommended by Xxxxx with the intention that key
original equipment units introduced into the vehicle parc will be
available 12 months following vehicle launch. If the Company
develops such range whether with or without the assistance of Xxxxx,
and whether or not at Xxxxx' instigation, or manufactures or factors
new products recommended by Xxxxx it will make the relevant products
available to Xxxxx as New Products on such terms as the parties
shall agree. In appropriate cases and by agreement any products so
developed or added may be designated
18
Xxxxx Branded Products and from the date of agreement be added as
such to this Agreement.
3.8 Country of Origin
-----------------
The country of origin for each Product is detailed in Schedule 2. It
shall be the responsibility of the Company to advise any changes
when they occur.
3.9 Packaging and Documentation
---------------------------
All Xxxxx Branded Products will be supplied boxed in accordance with
Xxxxx' packaging standards manual XXB201A current and in force at
the Commencement Date. Xxxxx Branded Product documentation and
packaging will be in line with Xxxxx' supplier guide for load
presentation and documentation XKB425 current and in force at the
Commencement Date. Where Xxxxx requires any change hereafter in such
standard specifications the Company will subject to agreement on any
reasonable cost adjustments comply with any revised specifications.
3.10 No restriction relating to Freely Distributable Products
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3.10.1 Notwithstanding anything impliedly to the contrary in
this Agreement, but subject to its express terms, the
Company shall be free to manufacture, sell, market,
distribute and otherwise deal in Freely Distributable
Products without restriction in any part of the world,
for any purpose.
3.10.2 Xxxxx shall not restrict or purport to restrict whether
by any contractual provision or in any other way any
Xxxxx Distribution Outlets from dealing with the Company
or any corporate body or entity which in
19
relation to the Company is an Associated Company as its
or their Distribution Outlet in relation to Freely
Distributable Products nor take legal or commercial
action against any Xxxxx Distribution Outlet if it
hereafter sells Freely Distributable Products by reason
of that fact alone but not so to prevent Xxxxx from
taking action in relation to any contractual provision
relating to any other matter.
4. MOST FAVOURED CUSTOMER
----------------------
4.1 The provisions of this clause 4 shall not apply for the benefit of
Xxxxx in relation to Other Products supplied to Xxxxx by the Company
unless they are New Products which have been designated as Xxxxx
Branded Products pursuant to clause 3.7. The Company shall in
supplying Xxxxx Branded Products to Xxxxx treat Xxxxx with most
favoured customer status by which is meant, that:
4.1.1 the Company will not supply, or offer to supply, Other
Products to any of its other customers in the
Aftermarket on shorter lead times than those from time
to time applicable to equivalent Xxxxx Branded Products
supplied to Xxxxx;
4.1.2 where the Company's production capacity for Products and
Other Products for whatever reason, and whether
temporarily or permanently, is unable to satisfy in
terms of time and number all the orders outstanding and
unfulfilled at any one time for the same from Xxxxx and
the Company's other customers (including those required
for sale by Purchaser Group Companies), the Company
shall in seeking to satisfy such orders or requirement
allocate the available Products and Other
20
Products between all those persons, including Xxxxx and
Purchaser Group Companies, who have ordered or require
supplies of the same which cannot be satisfied, pro rata
to their respective orders or requirement. In the
operation of this clause 4.1.2 orders from Original
Equipment Manufacturers to the Company requiring
Products or Other Products in any Country for inclusion
in new vehicles shall at all times take precedence and
shall accordingly not be taken into account;
4.1.3 if at any time the prices (on an equivalent basis having
regard to the place and method of delivery, payment and
other terms of sale) charged or offered by the Company
to any of its customers (other than Xxxxx and Original
Equipment Manufacturers) buying Products or Other
Products for inclusion in new vehicles in whichever
Relevant Country such customers are carrying on business
or are located, for Products or Other Products on the
basis of broadly equivalent quantities to be delivered
within a broadly equivalent time frame and having regard
to market structures, are less than the prices then
being charged by the Company to Xxxxx for Xxxxx Branded
Products then the Company shall charge those more
favourable prices to Xxxxx with immediate effect for as
long as those more favourable prices shall continue to
be charged or offered.
4.2 The Company will not be in breach of clauses 4.1.2 or 4.1.3 if on
infrequent occasions in relation to the supply of a particular
Product or Other Product to Original Equipment Service and in order
to meet
21
the requirements of an Original Equipment Manufacturer the Company
either gives preference over Xxxxx in the allocation of such Product
or Other Product or in the price it charges for such Product or
Other Products to Original Equipment Service provided that in
general the Company maintains a fair overall allocation judged over
a reasonable period of time on the basis laid down in clause 4.1.2
or as the case may be the weighted average of the prices charged by
the Company to Xxxxx shall not on the basis laid down in clause
4.1.3 be less favourable than those charged to Original Equipment
Service.
5. AVAILABILITY
------------
The Company agrees to use reasonable endeavours to achieve a 90%
performance level and once that has been achieved continuously to seek to
improve such performance level (as defined by Xxxxx' performance
measurement publication coded XKB427 current and in force at the
Commencement Date) for Xxxxx Branded Products in respect of orders placed
by Xxxxx under and in accordance with the terms of this Agreement, this
being without prejudice to the Company's obligations to deliver Xxxxx
Branded Products by other specific delivery dates agreed between the
Company and Xxxxx from time to time in respect of specific orders.
6. SPECIFICATION AND QUALITY
-------------------------
6.1 The Company will supply Xxxxx Branded Products to a functional
specification which is not inferior to the functional specification
of the equivalent original equipment and whose appearance is
comparable to the appearance of original equipment of the type in
question commonplace in the industry from time to time. Without
limiting the generality of the foregoing the Company must as from
the Commencement Date supply each type of Xxxxx Branded Product in
accordance with the technical specification as defined in
22
the Xxxxx Parts Acceptance Specification (PAS) current and in force
at the Commencement Date. Any amendments to specifications together
with any consequential price alterations will be agreed with Xxxxx
prior to any Product being delivered to the revised specification.
6.2 The Company will use its best endeavours to ensure that all Xxxxx
Branded Products supplied to Xxxxx under this Agreement comply with
all requirements imposed by law in Countries where they are intended
to be sold by Xxxxx relating to their manufacture, composition and
packaging provided such requirements in relation to each relevant
country have been made known in writing by Xxxxx to the Company, and
the Company is given a reasonable time after the Company receives
such written notification from Xxxxx in which to make any necessary
changes to Xxxxx Branded Products. The Company shall be entitled to
reflect any additional costs in relation to such compliance in the
prices for the relevant Xxxxx Branded Products.
6.3 The Company acknowledges that Xxxxx will not, and shall not be
required to, carry out inspection of Xxxxx Branded Products before
delivery of the same to Xxxxx' customers and that accordingly the
rights of Xxxxx under this Agreement in relation to Xxxxx Branded
Products shall not thereby be prejudiced.
6.4 The Company shall incorporate into Xxxxx Branded Products any
Improvement which is incorporated by the Company into equivalent
Other Products.
23
7. OBLIGATIONS ON COMPANY
----------------------
7.1 Warranty Replacement
--------------------
The Company will in relation to Warranty Replacement (a) supply free
of charge such replacement parts as are necessary and (b) reimburse
Xxxxx the costs and expenses incurred by Xxxxx in honouring the
Product Warranty (including only in those Countries where this is
applicable, the costs of removal and fitting or refitting any
relevant part from or to the product in question).
7.2 Point of Contact
----------------
The Company will appoint a person whose responsibility it will be to
ensure that Xxxxx has a ready point of contact at all reasonable
times for all operational matters concerning this Agreement. The
Company will notify Xxxxx of the name, business address, telephone
and fax numbers of such person within 14 days of the Commencement
Date. The Company may change its appointee from time to time by
written notice to Xxxxx.
7.3 Inspection
----------
The Company shall permit Xxxxx from time to time during the Term to
inspect at any time during normal working hours on reasonable prior
notice (a) any premises where Xxxxx Branded Products are being
manufactured or stored and (b) the relevant documentation relating
to the sale by the Company of Products and Other Products, to verify
that the Company has been and is complying with its duties and
obligations under this Agreement.
7.4 Product Liability
-----------------
The Company will indemnify and hold Xxxxx harmless against all
24
actions, claims, costs, demands, expenses and liabilities in respect
of any death, personal injury and loss or damage to property made
against, incurred or suffered by Xxxxx arising from any defective
product (whether a Xxxxx Branded Product, Other Product or other
item supplied pursuant to clause 3.6), other than where such defect
is a defect in a design made by Xxxxx or by a third party at Xxxxx'
instigation, supplied by the Company pursuant to this Agreement
provided that the limit of the Company's liability under this clause
shall be an amount equal to US $10,000,000 for each and every event
and in the aggregate in any one year of insurance pursuant to the
policy of insurance effected under clause 10.
7.5 Intellectual Property
---------------------
The Company will indemnify and hold Xxxxx harmless against all
actions, claims, costs, demands, expenses and liabilities in respect
of any infringement of the Intellectual Property Rights of any
person (other than any Xxxxx Group Company) made against, incurred
or suffered by Xxxxx resulting from the sale of any Xxxxx Branded
Products supplied by the Company during the Term or pursuant to
clause 14.2.1 by Xxxxx in the Aftermarket (a) in the Territory
during the Trade Xxxx Licence Period and (b) in the Territory or the
Reserved Territory after the end of the Trade Xxxx Licence Period
provided that such indemnity shall not apply to any such actions,
claims, costs, demands, expenses and liabilities (i) arising from
the application and/or use of the Trade Marks on Xxxxx Branded
Products in accordance with the relevant provisions of this
Agreement or (ii) to the extent that the same arise in relation to
the design of any Xxxxx Branded Product in circumstances where the
Company has not after the Commencement Date made any change to such
design or other aspect (including the re-sourcing of the
25
same) of the relevant Xxxxx Branded Product or in a design made by
Xxxxx or by a third party as Xxxxx' instigation.
7.6 Technical Information
---------------------
The Company shall, at the request of Xxxxx within a reasonable time
following the request, provide Xxxxx without charge, with such
technical information regarding Xxxxx Branded Products as Xxxxx xxx
reasonably require.
7.7 Millennium
----------
The Company confirms that its systems will be fully millennium
compliant by the end of 1998 and will not cease to be so at any time
thereafter. For the purposes of this warranty "millennium compliant"
means that neither performance nor functionality is or will be
affected by dates prior to during or after the year 2000.
7.8 Vendor Managed Inventory
------------------------
The Company will work with Xxxxx towards establishing as soon as
reasonably practicable a vendor managed inventory capability which
will involve the Company in providing Xxxxx Branded Products on a
periodic basis to bring Xxxxx' inventory up to an agreed minimum
level or above but not exceeding an agreed maximum level.
7.9 Exchange of Stock
-----------------
The Company may from time to time agree with Xxxxx that Xxxxx xxx
once per year, return (at its own cost) products (whether Xxxxx
Branded Products or Other Products) purchased from the Company that
are surplus to inventory requirements, subject to such terms and
conditions as the parties shall mutually determine.
26
7.10 Service Response VOR's
----------------------
Where there is a need for Xxxxx to respond quickly and positively to
customers vehicle off the road requirements the Company will having
regard to the geographic location of the Company and the customer
make commercially reasonable endeavours to support this requirement
notwithstanding any prior agreements in terms of lead time or other
operational parameters provided that where relevant having advised
Xxxxx of any cost implications Xxxxx agrees to cover the Company's
costs unless such off the road requirements result from the Company
having failed to supply Products to Xxxxx in accordance with this
Agreement in which event the cost shall be borne by the Company.
8. PRICE AND PAYMENT
-----------------
8.1 Subject to clauses 4.1.3 and 8.5, the prices for Xxxxx Branded
Products shall be as set out in Schedule 2 until such time as they
are varied pursuant to clauses 8.2, 8.3 or 8.4. Such prices are in
pounds sterling and are exclusive of VAT or other similar sales
taxes which, if applicable, shall be an addition to such prices.
8.2 Subject to clauses 4.1.3 and 8.3 the Company will be entitled,
having first consulted with Xxxxx on giving Xxxxx not less than 90
days' prior written notice, to increase the prices for Xxxxx Branded
Products provided always that:
8.2.1 there shall not be more than one price increase for any
Xxxxx Branded Product in any Agreement Year save that
any price increase which on the basis of past practice
between the Company and Xxxxx would take place, after
the date hereof but on or before 31st March
27
1998 and which takes effect on the basis of prices laid
down by Xxxxx and not agreed between the Company and
Xxxxx shall be disregarded for the purposes of this
clause 8.2.1 in the first Agreement Year but if prices
are so agreed between the Company and Xxxxx such prices
shall remain fixed for a period of 12 months
notwithstanding the provisions of this clause 8.2;
8.2.2 each such increase shall be shown fairly and reasonably
to reflect any increase in the cost to the Company of
producing Xxxxx Branded Products and supplying them to
Xxxxx;
8.2.3 no increase shall affect any order placed by Xxxxx prior
to notice of such increase having been given;
8.2.4 no increase shall affect any orders placed by Xxxxx
during such 90 day period insofar as the aggregate
number of units of the Xxxxx Branded Products affected
by the price increase does not exceed the aggregate
number of units of the same Xxxxx Branded Products
ordered in the 90 day period prior to the Company
beginning to consult with Xxxxx about the price
increase;
8.2.5 no consultation or notice shall be required for an
increase or reduction in price resulting from the
operation of clause 8.4 and such clause shall operate
independently of the provisions of this clause 8.2.
8.3 Notwithstanding the provisions of clause 8.2:
8.3.1 where in respect of any Quarterly Period in any
Agreement Year an Exchange Rate Notice (as defined
28
in clause 8.4) has been given by either party pursuant
to the provisions of clause 8.4 by reason of the South
African rand having weakened against the pound sterling
by more than 5% in any such Quarterly Period the Company
shall be entitled at any time thereafter to give a
notice to Xxxxx under and in accordance with the
provisions of clause 8.2 provided always that not more
than two notices shall be given by the Company under
clause 8.2 in any Agreement Year (whether given under
that clause in its own right or pursuant to this clause
8.3.1);
8.3.2 the Company shall be entitled not earlier than 1st
October 1999 and not later than 31st December 1999 to
give written notice to Xxxxx (referring in such notice
to this clause 8.3.2) that in order to provide the
Company with a commercially viable profit margin on
Xxxxx Branded Products the prices for the same will be
increased with effect from 1st January 2001 by the
amounts stated in such notice. If Xxxxx is unwilling to
pay such increased prices or, after negotiations in good
faith between the parties any alternative increased
prices proposed by the Company, Xxxxx shall, unless the
Company and Xxxxx shall by then have determined that
there shall not be any increase in prices, be entitled
to give written notice to the Company not later than
31st March 2000 terminating this Agreement on 31st
December 2000. If Xxxxx shall not give such notice then
the prices specified by the Company in its notice given
to Xxxxx pursuant to this clause 8.3.2 shall become
effective from January 1st 2001, and such
29
prices, subject to clause 8.4, shall be fixed until 31st
December 2001 and thereafter may only be increased by
the Company in accordance with the provisions, subject
to clause 8.4, of clause 8.2 or clause 8.3.1.
8.4 The prices for Xxxxx Branded Products set out in Schedule 2 have
been agreed on the basis of the Base Currency Exchange Rate
specified in Schedule 1. If during any Quarterly Period during the
Term such Base Currency Exchange Rate moves so that its average
movement over such Quarterly Period, taking into account
fluctuations upwards and downwards on a daily basis, is such that
the Base Currency Exchange Rate has either strengthened or weakened
against the pound sterling by more than 5% (determined by reference
to currency exchange rates closing midpoint (Pounds)spot as shown in
the Financial Times published in London) then either Xxxxx or the
Company may give written notice (an "Exchange Rate Notice") to the
other of them stating that such movement has occurred and that the
prices for Xxxxx Branded Products should with effect from the first
day of the month following the month in which the Exchange Rate
Notice is given (the "Effective Date"), be increased where the South
African rand has so strengthened against the pound sterling and be
reduced where the South African rand has so weakened against the
pound sterling, in each case by 50% only of the average movement in
currency exchange rates measured over the relevant Quarterly Period
provided always that such varied prices shall not apply to firm
orders already placed by Xxxxx prior to the date of service of the
Exchange Rate Notice. The new Base Currency Exchange Rate for the
purposes of this Agreement shall as from the Effective Date be the
currency exchange rate to which the Base Currency Exchange Rate has
moved as shown in the Exchange
30
Rate Notice and the provisions of this clause shall apply to any
such new Base Currency Exchange Rate.
8.5
8.5.1 For the purposes of this clause 8.5 the following
expressions have the following meanings except where
inconsistent with the subject matter or context:
"delivered" means delivered by the Company to
Xxxxx pursuant to orders given by
Xxxxx in accordance with this
Agreement or which should have been
so delivered by the Company pursuant
to such orders having regard to the
relevant lead times for the Products
in question but have not been by
reason of any breach of this
Agreement by the Company.
"Excluded Product" means (a) in respect of Xxxxx Branded
Products the production of which is
commenced in an Agreement Year any
such Xxxxx Branded Product of which
less than 100 units are delivered to
Xxxxx by the Company in that
Agreement Year; and (b) any other
Xxxxx Branded Product of which less
than 250 units are delivered to Xxxxx
by the Company in the Agreement Year
and in each case excluding any Xxxxx
Branded Product which is not a
complete starter motor or alternator
31
"net invoice value" means the amount invoiced by the
Company to Xxxxx in respect of
Relevant Products excluding (a) VAT
or other similar sales taxes, (b)
carriage and freight charges shown
separately on such invoices and (c)
discounts for prompt payment, but
before deduction of any rebate
payable to Xxxxx pursuant to the
provisions of clause 8.5.2
"Relevant Products" means the aggregate number of all
Xxxxx Branded Products, other than
Excluded Products, delivered to Xxxxx
by the Company during the relevant
Agreement Year
8.5.2 Xxxxx shall be entitled to a volume rebate on the
aggregate net invoice value of Relevant Products
delivered in any Agreement Year as follows:
Volume of Relevant Products delivered
in the relevant Agreement Year Percentage rebate
-------------------------------------- --------------------------------------
In respect of the number of Relevant 5% of the net invoice value of such
Products delivered in excess of excess
42,250 but not exceeding 45,000
In respect of the number of Relevant 6% of the net invoice value of such
Products delivered in excess of excess
45,000 but not exceeding 47,500
32
In respect of the number of Relevant 7% of the net invoice value of such
Products delivered in excess of excess
47,500 but not exceeding 50,000
In respect of the number of Relevant 8% of the net invoice value of such
Products delivered in excess of excess
50,000 but not exceeding 52,500
In respect of the number of Relevant 9% of the net invoice value of such
Products delivered in excess of excess
52,500 but not exceeding 55,000
In respect of the number of Relevant 10% of the net invoice value of such
Products delivered in excess of excess
55,000
The specific Relevant Products which are to be taken for the purposes of
ascertaining the net invoice value to which the percentage rebate is to be
applied shall be on the basis of the dates the Relevant Products were delivered.
The sum due to Xxxxx in respect of each volume band in the left-hand column
above in the relevant Agreement Year shall be aggregated and the aggregate
rebate due to Xxxxx will be paid by the Company to Xxxxx in sterling within 60
days of the end of the relevant Agreement Year.
8.6 Xxxxx shall pay for Xxxxx Branded Products in sterling within 60
days from the end of the month in which delivery is made.
9. TRADE XXXX PROVISIONS
---------------------
9.1 Without prejudice to the provisions of the Trade Xxxx Licence, the
Company shall not (whether during the Term or after the termination
of this Agreement) have any rights pursuant to or deriving from this
33
Agreement to sell or offer for sale any Xxxxx Branded Products other
than to Xxxxx.
9.2 The Company shall not use any of the Trade Marks for any purpose in
relation to the Products other than for labelling the same in
accordance with clause 3.3 and in particular but without limiting
the generality of the foregoing shall not use any of the Trade Marks
as the whole or part of a corporate or other business name.
9.3 The Company agrees that the ownership of the Trade Marks and the
goodwill relating thereto shall always remain vested in Xxxxx, or a
Xxxxx Group Company, both during the period of this Agreement and
thereafter and that nothing in this Agreement shall give the Company
any right, title or interest in the Trade Marks.
9.4 The Company undertakes not knowingly to do any act in relation to
the use of the Trade Marks pursuant to this Agreement which will
invalidate or jeopardise in any way the rights of any Xxxxx Group
Company in the Trade Marks.
9.5 Issues associated with marketing and distribution of Products in
both Xxxxx' branding and that of the Company will be sought
initially to be resolved by the marketing/sales managers of both
parties maintaining a continuing dialogue in relation to marketing
and distribution matters with a view to avoidance of issues. Where
the marketing/sales managers of the parties, having tried, are
unable to resolve any particular issue such issue shall be referred
by either of them to the managing directors of each of the parties
for resolution.
10. INSURANCE
---------
Without prejudice to the provisions of clause 7.4, the Company will effect
and maintain or cause another Purchaser Group Company to effect and
maintain for its and the Purchaser Group Company's benefit insurance in
respect of
34
product liability for Xxxxx Branded Products manufactured and sold by the
Company to Xxxxx in an amount equal to not less than US$10,000,000 for each
and every event and in the aggregate in any one year of insurance under
such policy and will at the request of Xxxxx from time to time during the
Term produce written evidence that such insurance is in force. Insofar as
and to the extent that the Company or any such other Purchaser Group
Company receives any proceeds of insurance in respect of a claim made by
Xxxxx in respect of Products supplied to Xxxxx pursuant to this Agreement
such proceeds shall be held on trust by the Company or any such other
Purchaser Group Company for Xxxxx, pro rata where the insurance proceeds
recovered include monies in respect of claim(s) other than Xxxxx' claim.
11. PRODUCTION AND SUPPLY PLAN
--------------------------
Prior to the commencement of each Agreement Year other than the first
Agreement Year the Company and Xxxxx shall after discussion with each other
and exchange of relevant market information prepare and agree a production
and supply plan ("the Annual Plan") in respect of Xxxxx Branded Products
for such Agreement Year. Each such Annual Plan shall include estimates of
purchases in the relevant Agreement Year by Xxxxx from the Company of Xxxxx
Branded Products and estimates by the Company of planned dates for the
introduction of New Products and/or Improvements as well as additional
products intended to be added as additional Xxxxx Branded Products by
agreement.
12. CONFIDENTIALITY
---------------
Each party undertakes that it shall not, and shall ensure that its
employees and agents shall not, disclose, use or permit the use of any
confidential information disclosed to it by the other party except as may
be necessary for complying with its obligations under this Agreement and
then only in such a manner as to protect fully the confidentiality of such
confidential information. The obligations of non-disclosure by each party
shall continue to apply
35
notwithstanding the termination of this Agreement but shall not apply to
any information which falls into the public domain other than by breach of
such obligation of non-disclosure. Registration or notification of this
Agreement with or to any regulatory authority shall not be a breach of
confidence for the purposes of this clause.
13. TERMINATION
-----------
13.1 A party shall be entitled to terminate this Agreement summarily by
written notice to the other party if the other party is:
13.1.1 in material breach of this Agreement and shall have
failed to remedy the breach, within 3 (three) months
after receipt of a request in writing from the party not
in breach to remedy the breach, such request indicating
that failure to remedy the breach may result in
termination of this Agreement;
13.1.2 insolvent or has a receiver, manager, administrator,
administrative receiver, liquidator (other than for the
purposes of a solvent reconstruction or amalgamation)
(or a person of similar status in a Country which has
jurisdiction over such other party) appointed over it or
its undertaking assets or income or any part thereof.
13.2 In the event that any Force Majeure event or circumstance subsists
for an aggregate period of 180 days in any period of 365 days during
the Term and during the whole of such aggregate period supplies of
Xxxxx Branded Products are seriously affected (whether because the
Company is unable to deliver or Xxxxx is unable to take delivery of
the same) either the Company or Xxxxx shall be entitled to terminate
this Agreement summarily by giving written notice to the other
36
provided that such notice may only be given at a time when such
Force Majeure event or circumstance subsists.
13.3 Xxxxx shall be entitled to terminate this Agreement summarily within
3 months of becoming aware of any change in the Controllers of:
(a) the Company
(b) any direct or indirect holding company of the Company or
(c) any subsidiary of any such holding company to which
there has been a Business Transfer pursuant to clause
16.1 without there being a Business Transfer back in
accordance with the provisions of such clause
resulting in the new Controllers being a Xxxxx Competitor. The
Company undertakes to notify Xxxxx in writing of any such change
within 7 days of the same occurring.
14. EFFECTS OF TERMINATION
----------------------
14.1 The termination of this Agreement will be without prejudice to the
rights and duties of any party accrued prior to termination. The
clauses in this Agreement which expressly or impliedly have effect
after termination will continue to be enforceable notwithstanding
termination. The Company will honour any orders placed by Xxxxx
prior to termination which have not been performed at termination
save where termination is effected by the Company pursuant to clause
13.1 or by either party pursuant to clause 13.2. Any indemnities
given in this Agreement will continue to apply notwithstanding
termination.
14.2 As from the date of termination:
37
14.2.1 Xxxxx will be entitled to sell Xxxxx Branded Products
held by it in stock at termination or which are
delivered thereafter by the Company pursuant to orders
placed by Xxxxx prior to termination;
14.2.2 the Company will not hold itself out as a manufacturer
for Xxxxx in respect of Xxxxx Branded Products, provided
always that following the termination of this Agreement
if Xxxxx shall not have agreed to buy the same the
Company will be entitled to sell
(a) Xxxxx Branded Products held by it in stock at
termination;
(b) in relation to factored Xxxxx Branded Products
where those Xxxxx Branded Products are not also
sold by the Company as Other Products or to which
the Trade Marks have been or inevitably will be
applied by such supplier and which have been
contracted from the supplier not delivered and
which cannot be cancelled; or
(c) any Xxxxx Branded Products which are in the course
of manufacture, and which are completed thereafter
provided in each case such sales of Xxxxx Branded
Products shall be to any Xxxxx authorised distributor or
dealer in the Reserved Territory or elsewhere if so
permitted under the Trade Xxxx Licence and provided such
sales are on normal terms and conditions
38
(including as to price) and are released on to the
market in an orderly way so as not to disrupt the same.
14.3 References in this clause 14 to "termination" mean termination
howsoever arising.
15. FORCE MAJEURE
-------------
Neither Xxxxx nor the Company shall be liable to the other for any failure
or delay in performing its obligations under this Agreement due to Force
Majeure provided always that:
15.1 the date for performance of the contractual obligation which has
been delayed by Force Majeure shall be deemed suspended only for a
period equal to the delay thereby caused;
15.2 the party seeking to exempt itself from liability by virtue of the
provisions of this clause 15 shall give notice to the other party
within 7 (seven) days of becoming aware of the Force Majeure event
or circumstance and of its consequences and shall at all times use
all reasonable endeavours to mitigate the severity of the same;
15.3 the party seeking to exempt itself from liability by virtue of the
provisions of this clause 15 shall not be entitled to payment from
the other party in respect of extra costs and expenses incurred by
virtue of the Force Majeure event or circumstance.
16. ASSIGNMENT
----------
16.1 Neither Xxxxx nor the Company will be entitled to assign the benefit
or delegate the burden of this Agreement without the prior written
consent of the other party. Each party hereby consents to a Business
Transfer by the other under clause 16.2 where the transferee in
question is a 100% subsidiary of or, a holding company holding
39
100% of the shares in the party concerned or another 100% subsidiary
of such holding company, and the remainder of clause 16.2 is
complied with. If any such Business Transfer occurs and
subsequently, the holding company of any subsidiary to whom there
has been such Business Transfer proposes to enter into any
transaction whereby such holding company no longer has control over
such subsidiary Xxxxx or the Company (as the case may be) or the
relevant holding company shall procure that (unless otherwise agreed
by the other party hereto) there shall prior to the proposed change
of control of such subsidiary be a Business Transfer of the whole of
the business and assets of such subsidiary back to a company in the
same group of companies as such subsidiary prior to such proposed
change of control and the provisions of clause 16.2 shall apply
mutatis mutandis to such Business Transfer.
16.2 If either party shall during the Term sell or otherwise dispose of
its business and assets, or substantially the whole of its business
and assets ("Business Transfer") and the other party shall consent
to the assignment to the transferee of the benefit of this Agreement
pursuant to clause 16.1, the party selling or disposing of its
business and assets shall require that the transferee of the same
shall as a condition of such sale or other disposal enter into a
novation of this Agreement with the other party, the form of such
novation agreement to be in terms reasonably stipulated by the other
party and which shall require such transferee to covenant with the
other party to be bound by the terms of this Agreement.
16.3 The Company shall not sub-contract or sub-license the manufacture of
Xxxxx Branded Products without the prior written consent of Xxxxx.
If and to the extent that such consent is given the Company shall be
liable for all acts and omissions of any such sub-contractor or sub-
licensee as though such acts or omissions were acts and
40
omissions of the Company. This clause 16.3 shall not prevent the
Company from sub-contracting the manufacture of individual
components or sub-assemblies without consent.
16.4 This Agreement shall be binding on the successors and permitted
assigns of each of the respective parties.
16.5 Xxxxx shall have power to perform its covenants, to exercise its
rights and to accept benefits accruing to it under this Agreement
through the agency of any other Xxxxx Group Company. Xxxxx
nonetheless shall remain liable for acts and omissions of any Xxxxx
Group Company who acts as agent for Xxxxx pursuant to the foregoing
provisions of this clause 16.5 as though they were acts and
omissions of Xxxxx. In relation to the indemnities given in favour
of Xxxxx in clauses 7.4 and 7.5 Xxxxx enters into this Agreement not
only for itself but also as trustee for all other Xxxxx Group
Companies. Each such Xxxxx Group Company shall have the benefit of
such indemnities as if it was named in such clauses in addition to
Xxxxx.
17. SEVERABILITY
------------
The illegality, invalidity or unenforceability of any clause or part of
this Agreement will not affect the legality, validity or enforceability of
the remainder. If any such clause or part is found by any competent court
or competent authority to be illegal, invalid or unenforceable the parties
agree that they will substitute provisions whose effect is as similar to
the offending provisions as is possible without thereby rendering them
illegal, invalid or unenforceable.
18. ENTIRE AGREEMENT
----------------
18.1 This Agreement, and the documents referred to in it, contain the
whole agreement between the parties relating to the transactions
41
contemplated by this Agreement and supersede all previous agreements
between the parties relating to such transactions.
18.2 Each of the parties acknowledges that in agreeing to enter into this
Agreement it has not relied on any pre-contractual representations
warranties or other assurances in relation to the subject matter of
this Agreement except those set out in this Agreement but without
prejudice to any representations, warranties or other assurances
given in any other agreement between the parties or between any
Xxxxx Group Company and the Company or any Purchaser Group Company.
18.3 Each party hereby agrees that it shall have no remedy against the
other party for any innocent or negligent misrepresentations made by
such other party in relation to such transactions prior to this
Agreement being entered into except to the extent that the same
shall have been incorporated in this Agreement as a warranty
representation or indemnity in which case any claim in relation to
the same shall lie only on the basis of a breach of this Agreement
or under the relevant indemnity provision.
19. VARIATIONS
----------
No variation to this Agreement shall be effective unless in writing signed
by a duly authorised representative of each of the parties hereto.
20. WAIVER
------
20.1 Failure to exercise or delay in exercising on the part of any party
any right, power or privilege of that party under this Agreement
shall not in any circumstances operate as a waiver thereof nor shall
any single or partial exercise of any right, power or privilege in
any
42
circumstances preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
20.2 Any waiver of a breach of any of the terms hereof or of any default
hereunder shall not be deemed a waiver of any subsequent breach or
default and shall in no way affect the other terms of this
Agreement.
21. NOTICES
-------
Any demand, notice or communication in relation to this Agreement shall be
made in writing and served by hand, by registered airmail post, or by
facsimile transmission addressed to the recipient at its registered office
or its address stated below (or such other address or facsimile number as a
party may nominate in writing from time to time).
Xxxxx
-----
Xxxxx Aftermarket Operations
Xxxxxxxxx Xxxx
Xxxxxxxx
Xxxx Xxxxxxxx
X00 0XX
England
Attn: Legal Director
Facsimile: 0121 697 5026
With a copy of the notice to be sent to the Company Secretary of Xxxxx
Limited at Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxx Xxxxxxxx, X00 0XX, Xxxxxxx.
The Company
-----------
Xxxxx Automotive (Pty) Limited
0 Xxxxx Xxxxxx
00
Xxx Xxxx
Xxxxxxx
0000
Xxxxx Xxxxxx
Attn: Managing Director
Facsimile: x00 000 000 0000
With a copy of the notice to be addressed to "Managing Director and Finance
Director" Prestolite Electric Limited, Xxxxxxxxx Xxxx, Xxxxxxx, Xxxxxxx,
Xxxxxxxxxx, XX0 0XX, England.
22. LANGUAGE
--------
22.1 The English language version of this Agreement shall be the
authoritative version even though it may have been translated into
some other language.
22.2 All communications between the parties shall unless otherwise agreed
in writing be in the English language.
23. ASSOCIATED COMPANY
------------------
Any act or omission of any Associated Company of Xxxxx or the Company (as
the case may be) which if committed or omitted by Xxxxx or the Company (as
the case may be) would have been a breach of this Agreement by Xxxxx or the
Company (as the case may be) will be deemed to be a breach of this
Agreement by Xxxxx or the Company (as the case may be) who will be liable
to the other party accordingly.
24. TERMS AND CONDITIONS OF SALE
----------------------------
44
24.1 The Conditions of Sale and the terms of this Agreement shall apply
in relation to the sale of any products by the Company to Xxxxx
pursuant to this Agreement, which Conditions of Sale and the other
provisions of this Agreement shall apply to the exclusion of any
terms and conditions of purchase from time to time used by Xxxxx and
to the exclusion of any terms and conditions of sale from time to
time used by the Company, whether or not such terms and conditions
are endorsed upon or delivered with any document sent by either
party to the other from time to time. In the event of any conflict
between the terms of this Agreement and the Conditions of Sale, the
terms of this Agreement including clause 7.4 shall prevail.
24.2 Xxxxx acknowledges and agrees that to the extent that Xxxxx provides
to its customers product warranty commitments or other contractual
promises or terms which are more generous than those set out in the
Product Warranty Xxxxx does so at its own risk and cost and the
Company's obligations to Xxxxx under this Agreement and the
Conditions of Sale are not thereby affected or extended.
25. EXPENSES
--------
Except where otherwise expressly provided herein each party will bear its
own costs and expenses in relation to the preparation, completion and
operation of this Agreement.
26. APPLICABLE LAW
--------------
The formation, construction, performance, validity and all aspects
whatsoever of this Agreement shall be governed by the law of England and
Wales and the parties submit to the non-exclusive jurisdiction of the
English Courts.
45
SCHEDULE 1
----------
CURRENCY EXCHANGE RATE PROVISIONS
---------------------------------
The Base Currency Exchange Rate applicable for the purposes of this
Agreement is:
South African rands to (Pounds)1 sterling.
46
SCHEDULE 5
----------
PRODUCT WARRANTY
----------------
1. Products found to be defective upon receipt at Xxxxx will be, at the
Company's discretion, either:
(a) rejected and returned to the Company as a complete batch, or
alternatively, scrapped off at the discretion of the Company, for a full
credit of the products plus a handling charge of (Pounds)25.00*; or
(b) sorted by Xxxxx, the cost of sorting being agreed in advance with and
charged to the Company. Items found to be defective will then be
returned for full credit plus a handling charge of (Pounds)25.00*. This
is subject to final approval by a Xxxxx appointed engineer.
2. If the product is used in Xxxxx' re-manufacturing operation and is found to
be defective during assembly it will be returned for full credit. In
addition, a charge of (Pounds)3.00* will be made for each defective item to
offset some of the costs of rework. A quotation for rework is to be
submitted by Xxxxx and an official order raised to cover the expenditure.
No costs are to be incurred until these documents have been processed.
3. All products supplied must be guaranteed for 12 months from date of sale of
final product to the end user.
Genuine claims within this period, relating to products supplied within 3 years
of the date of receipt by Xxxxx will be charged back to the Company for credit
as follows:
(a) cost of the failed part at the current purchase price;
plus
(b) handling and examination charge of 10% of the purchase price;
47
(c) on/off charges of approximately (Pounds)20.00 in certain territories where
they apply. A schedule of territories can be provided;
(d) consequential losses and/or contingency claims are not acceptable; and
(e) warranty returns - documents to be checked by a Xxxxx representative prior
to claim being submitted to the Company.
(N.B. Items marked "*" are subject to Annual Review)
48
SIGNED by XXXXX XXXX-LEATHER /s/ Xxxxx Xxxx-Leather
---------------------------- -------------------------
as duly authorised attorney for and Xxxxx Xxxx-Leather as
-------------------------
on behalf of XXXXX LIMITED attorney of Xxxxx Limited
SIGNED by P. XXX XXXXXXX
--------- --------------
duly authorised for and on behalf of /s/ P. Xxx Xxxxxxx
-------------------
XXXXX AUTOMOTIVE (PTY) LTD
-------------------------- _________________________
49
