SUPPLY AGREEMENT
This Agreement made as of the 29th day of April, 1996, by and between Ambac
International Corporation ("Ambac"), a Delaware corporation having its principal
place of business at I-77 at Xxxxxxx Road, Columbia, South Carolina and
Electronic Fuel Control, Inc. ("EFC"), a Georgia corporation having its
principal place of business at Xxxxx 000, 0000 Xxxxxxx Xxxxxxx, Xxxxxx Xxxx,
Xxxxxxx.
WHEREAS, Ambac has developed and sold dual fuel control systems for various
engine applications as set forth in Attachment A;
WHEREAS, EFC has developed gaseous fuel technology and mixing devices for
use in the conversion system under which naturally aspirated and turbo charged
internal combustion engines can be fueled with compressed or liquefied natural
gas or propane, or converted to the use of multiple fuels; and
WHEREAS, EFC has approached Ambac to develop a duel fuel control system for
use with the EFC gaseous fuel technology mixing device in a dual fuel conversion
system.
1. DEFINITIONS
For the purposes of this Agreement, the following terms shall have these
respective meanings:
EFC Dual Fuel Control Systems and Components" shall mean an electronically
controlled, closed loop, speed and load sensitive, controller system, and
components thereof, meant to control both diesel and gas fuels,
proportionately metering both fuels via electronic control and said system
shall be specifically developed for and adapted to a EFC Gaseous Fuel
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Technology Mixing Device(s) as such term is defined below.
"EFC Gaseous Fuel Technology Mixing Device" shall mean the electronically
controlled, closed loop natural gas/diesel conversion system initially
developed by Xxxxx Xxxxx.
"Ambac Products" shall mean the products sold hereunder.
"Dual Fuel Control Systems and Components" shall mean an Ambac developed
electronic controller system, and components thereof, meant to control both
diesel and gas fuels, proportionately metering both fuels via electronic
control, and which is not developed specifically for EFC and for which
Ambac did not use Proprietary Information, as such term is defined
hereunder, of EFC in the development thereof.
2. DEVELOPMENT
Ambac agrees to design and develop an EFC Dual Fuel Control System(s) and
Components for use with the EFC Gaseous Fuel Technology Mixing Devices.
Ambac shall immediately begin development of an analog EFC Dual Fuel
Control System and upon mutual agreement of the parties, it will commence
development of a digital EFC Dual Fuel Control System. Ambac shall
establish proprietary part numbers in the name of EFC for the EFC Dual Fuel
Control System(s) and Components.
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3. EXCLUSIVE SALES RIGHTS
A. Ambac agrees to sell EFC Dual Control Systems and Components only to EFC
for a period of twenty (20) years from the date hereof and all parties
requesting information from Ambac on EFC Dual Control Systems and
Components and EFC Gaseous Fuel Technology Mixing Device shall be referred
by Ambac to EFC.
B. After successful completion of development and testing of the first EFC
Dual Fuel Control Systems and Components required hereunder, agreement on
price(s) and the exhaustion of existing EFC supplies of its current dual
fuel control systems (including EFC's existing inventory of and its open
orders for its current dual fuel control systems), EFC agrees to purchase
from Ambac, its requirements for dual fuel control systems for its EFC
Gaseous Fuel Technology Mixing Device(s) for a period of twenty (20) years
from the date hereof and upon the terms set forth herein; provided,
however, that the technology and price for components will allow EFC to
remain competitive and that Ambac is able to satisfy EFC's product
requirement as requested on a timely basis and that the products purchased
hereunder conform to industry quality standards. If Ambac becomes
non-competitive hereunder, it shall have an opportunity meet the
competitive conditions.
C. Ambac shall retain the right to sell Dual Fuel Control Systems and
Components to any party; provided, however, Ambac shall be prohibited
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from selling to any party other than EFC, any Dual Fuel Control System(s)
developed by Ambac which are identical or similar to the EFC Dual Fuel
Control System(s) to be developed hereunder.
4. SALES TERMS
A. On or prior to the completion of development of the respective EFC Dual
Fuel Control Systems and Components, the parties shall mutually agree on
price terms for each component thereof.
B. All purchase orders placed by EFC with Ambac for Ambac Products sold
hereunder shall be subject in all respects to the terms and conditions of
this Agreement, including the Ambac's Standard Terms and Conditions of
Sale, attached hereto as Exhibit A and such terms and conditions of this
Agreement shall apply in lieu of any terms and conditions on EFC's purchase
order forms or other related documents.
C. EFC shall make payment for the Ambac Products purchased pursuant to this
Agreement in accord with the terms as set forth in EFC's Terms and
Conditions which are attached hereto as Exhibit B. Ambac shall have the
right to change the Terms and Conditions set forth in Exhibit A and B
hereto, applicable to all unaccepted orders upon 120 days written notice to
EFC.
D. EFC will not return any of the Ambac Products purchased hereunder for
credit or exchange unless and until EFC receives Ambac's consent. Ambac
shall not unduly withhold consent for the return of components supplied by
Ambac that are subject to coverage under the Ambac Warranty, as such
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term is defined below, due to a defect attributable to Ambac or its
vendors, which consent will not be unreasonably withhold and the decision
rendered by Ambac in each case shall be in accordance with industry custom,
standards and practice.
5. WARRANTY
Ambac Products sold under this Agreement shall be subject to Ambac's then
current standard warranty provisions covering the Ambac Products which are
contained in Ambac's Warranty Administration Manual ("Ambac Warranty"). Any
changes from Ambac's standard warranty policy must be agreed to by both
parties in writing.
6. OWNERSHIP OF TECHNOLOGY
Ambac shall retain all technological rights to the EFC Dual Fuel Control
Systems and Components and EFC shall retain all technological rights to the
EFC Gaseous Fuel Technology Mixing Device(s); provided, however, that the
technology to the EFC Dual Fuel Control Systems and Components is not
covered under the existing patents owned by the Xxxxx Family Trust.
7. CONFIDENTIALITY
In connection with the performance of this Agreement, Ambac and EFC
contemplate the possible disclosure to each other of portions of certain
"Proprietary Information" (defined below) of the disclosing party.
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A. For the purpose of this Agreement, the term "Proprietary Information"
shall mean any and all technical information bearing an appropriate
confidentiality notice which is originated or collected by the disclosing
party, whether recorded in documentary form or otherwise, relating to the
design, construction, operation, manufacture, testing, servicing and/or
selling EFC Dual Fuel Control Systems and EFC Gaseous Fuel Technology
Mixing Devices including without limitation, design concepts,
specifications, drawings, manufacturing procedures, parts lists, test
procedures and data, xxxx of materials, performance data, names and
addresses of components suppliers and service and maintenance manuals.
B. The receiving party agrees that it will maintain Proprietary Information
received from the other party hereto in strict confidence using the same
standard of care it uses in protecting its own Proprietary Information and
it will not disclose to any third party such Proprietary Information unless
and until it is released from this obligation in writing by the other party
hereto. The receiving party may disclose Proprietary Information only to
its employees necessarily in the use thereof for the purposes set forth
herein. The receiving party agrees to advise such employees of the
confidential nature of the Proprietary Information and of the existence and
importance of this Agreement and the terms protecting the confidentiality
of Proprietary Information.
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C. The receiving party will not use such Proprietary Information for any
purpose other than those set forth herein.
D. The obligations of this Agreement shall not apply to any part of the
Proprietary Information which the receiving party can show to have been in
the public domain or in the receiving party's possession at the time of the
disclosure hereunder.
8. TERM AND TERMINATION
A. This Agreement shall continue in force and effect for a period of twenty
(20) years from the date hereof, unless it is otherwise terminated by
either party for "good cause", which shall include, but not be limited to
any material or repetitive breach by either party of any obligation,
policy, procedure or requirement set forth in this Agreement, if such party
shall fail to correct such breach within forty-five (45) days after receipt
of written notice, which notice shall specify the grounds for such breach.
B. In the case of a termination, the terminating party shall give sixty
(60) days prior written notice of termination to the other party. The
forty-five (45) day period provided above to allow for cure of a breach
shall, for purposes of calculating the sixty (60) days notice period, be
included as part of such sixty (60) day period.
C. Within thirty (30) days after the effective date of termination, EFC
shall pay all monies due and owing hereunder. EFC shall pay interest on any
past due balances at the rate of fifteen percent (15%) per annum and
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shall also pay the Company's cost of collection, including reasonable
attorney fees. 9. NOTICES
All notices or communications are permitted to be sent by one party to the
other under the provisions of this Agreement shall be in writing and shall
be deemed sufficiently sent if transmitted by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:
If to Ambac: Ambac International Corporation
X.X. Xxx 00
Xxxxxxxx, XX 00000
Attention: President
If to EFC: Electronic Fuel Control, Inc.
Suite 210
4851 Georgia Xxxxxxx 00
Xxxxxx Xxxx, XX 00000
Attention: Xxxxx Xxxxx & J. R. Xxxxxx
10. ASSIGNMENT
This Agreement is not assignable by either party without the other party's
prior written consent, which consent will not be unreasonably withheld;
provided, however, either party may assign this Agreement to a successor
entity acquiring all or substantially all of the property, assets and
business of either party.
11. WAIVER
That the failure by either party to enforce any term or condition of this
Agreement shall not constitute a waiver of that party's right to enforce
the same term or condition upon the occasion of a subsequent default or
breach.
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12. SEVERABILITY
If one or more provisions of this Agreement shall be held, by a court or
other adjudicatory body, to be unenforceable for any reason, such finding
shall in no manner affect the enforceability of the remaining provisions of
this Agreement.
13. CHOICE OF LAW
This Agreement shall be construed and enforced in accordance with the laws
of the State of Georgia, U.S.A.; without regard to the principles of
conflict of laws thereof.
14. RESOLUTION OF DISPUTES
In the event of any dispute or difference arising out of or relating to
this Agreement or the breach thereof, the parties shall use their best
efforts to settle such disputes or differences. To this effect, they shall
consult and negotiate with each other, in good faith and understanding of
their mutual interest, to reach a just and equitable solution satisfactory
to both parties. If the parties do not reach such solution within a period
of thirty (30) days, then the disputes or differences shall finally be
settled and determined by a single arbitrator under the then current
Commercial Arbitration Rules of the American Arbitration Association
("AAA"). The arbitration shall be held and the award shall be deemed to be
made in Augusta, Georgia. The decision and award of the arbitrator shall be
final and judgment may be entered upon it in accordance with the applicable
law in any court having jurisdiction.
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15. FORCE MAJEURE
Neither party shall be liable for failure to perform any part of this
Agreement when such failure is due to strikes, riots, fires, wars, acts of
God, or any other contingencies beyond the reasonable control of the
parties.
16. AMENDMENT
This Agreement may not be modified or terminated orally, an no
modification, termination, or attempted waiver shall be valid unless set
forth in writing signed by all of the parties hereto.
17. BINDING AGREEMENT
That this Agreement shall be binding and conclusive upon and inure to the
benefit of the respective parties hereto and their respective successors,
heirs, assigns, executors, administrators and legal representatives.
18. ENTIRE AGREEMENT
A. That this Agreement together with the Exhibits hereto are a part of this
Agreement as though set forth in full herein.
B. That this Agreement together with the Exhibits hereto, contains the
entire agreement of the parties hereto, and this Agreement supersedes any
and terminates all previous agreements made between the parties hereto.
19. EFFECTIVE DATE
This Agreement shall commence as of the date it is fully executed by both
parties hereto.
AMBAC INTERNATIONAL ELECTRONIC FUEL CONTROL, INC.
CORPORATION
/s/ Xxxxxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxxx
----------------------- ------------------
By: Xxxxxxxx X. Xxxxxxx By: Xxxxx X. Xxxxx
its General Counsel & its President
Assistant Secretary
Exhibit A
Standard Terms and Conditions of Sale
1. PURCHASE ORDERS
The Buyer agrees that the terms and conditions set forth herein shall be
applicable to all quotations and purchase orders covering the sale of Seller's
products and services and shall supersede all printed terms and conditions set
forth in Purchase Orders used by the Buyer, Seller shall not be deemed to have
waived these terms and conditions of sale if it fails to object to terms and
conditions appearing in Buyer's purchase orders and Buyer's acceptance of
products or services called for in said orders shall constitute the Buyer's
acceptance of these terms and conditions of sale as the only terms applicable to
the purchase of such goods or services.
2. PRICES
Prices are subject to adjustment in accordance with provisions contained
elsewhere herein. In addition to the stipulated purchase price of the goods, any
and all taxes (not including any income or excess profits taxes) that may be
imposed by any taxing authority, arising from the sale, delivery, or use of the
goods and for which the Seller may be held responsible for collection or payment
either on its own behalf or on behalf of the Buyer, shall be paid by the Buyer
to Seller upon the Seller's demand.
3. DELIVERY, TITLE AND RISK OF LOSS
All goods shall be delivered to the Buyer F.O.B. the Seller's factory. Title to
and the risk of loss of or damage to all goods sold hereunder shall remain with
the Seller until, and shall pass to the Buyer upon, delivery of the goods to the
Buyer or any agent of the Buyer, including a common carrier or warehouse.
4. INSPECTION
If upon receipt and inspection of goods by Buyer at destination, such goods
shall appear not to be in conformance with the Contract, the Buyer shall, within
thirty (30) days after the receipt hereof, notify the Seller of such condition
and afford Seller a reasonable opportunity to inspect the goods and make any
appropriate adjustment or replacement. The remedies afforded Buyer under the
Paragraph 7 hereof entitled "Warranty" shall be exclusive for defective goods
discovered upon inspection but shall not be cut off by reason of Buyer's failure
to discover the defect in the goods within the inspection period provided above
this paragraph.
5. PAYMENT
Unless otherwise provided, payment for goods purchased and delivered under this
Contract shall be made in U.S. dollars at the prices stipulated within thirty
(30) days after the date of delivery to the F.O.B. point. Buyer shall not delay
payment for goods pending inspection under Paragraph 4 above.
6. PACKAGING
The goods to be delivered hereunder shall be packed and packaged in accordance
with sound commercial practice for domestic shipment. Unless otherwise provided,
export or other special packaging will be at additional charge to the Buyer.
7. EXCUSABLE DELAYS
Buyer acknowledges that the goods called for hereunder are to be manufactured by
or for Seller to fulfill this order and that the delivery dates are based on the
assumption that there will be no delay due to causes beyond the reasonable
control of Seller. Seller shall not be charged with any liability for delay or
non-delivery when due to delays of supplier, acts of God or the public enemy,
compliance in good faith with any applicable foreign or domestic governmental
regulation or order whether or not it proves to be invalid, fires, riots, labor
disputes, unusually severe weather or any other cause beyond the reasonable
control of Seller. To the extent that such causes actually retard deliveries on
the part of the Seller, the time for the performance shall be extended for as
many days beyond the date thereof as is required to obtain removal of such
causes. This provision shall not, however, relieve Seller from using its best
efforts to avoid or remove such causes. This provision shall not, however,
relieve Seller from using its best efforts to avoid or remove such causes and
continue performance with reasonable dispatch whenever such causes are removed.
8. LIMITATION ON LIABILITY
The price allocable in this Contract to any product or service alleged to be the
cause of any loss or damage to the Buyer shall be ceiling limit on Seller's
liability, whether founded in Contract or tort (including negligence), arising
out of, or resulting from (i) this Contract or the performance of breached
thereof, (ii) the design, manufacture, deliver, sale, repair, replacement or
(iii) the use of any such product or the furnishing of any such service. In no
event shall Seller have any liability of any incidental or consequential
damages.
9. COMPLIANCE WITH FAIR LABOR STANDARDS ACT
Seller hereby certifies that goods sold hereunder which are produced or
manufactured in the United States are produced in compliance with the Fair Labor
Standards Act of 1938, as amended. All requirements as to the certificate
contemplated in the October 26, 1949 amendment shall be considered as satisfied
by the certification.
EXHIBIT A.EF
EXHIBIT B
EFC Terms and Conditions
TERMS: 2% Net 10th Proximo
