Exhibit 10.16

 

PLEASE NOTE: CERTAIN INFORMATION INDICATED WITH [***] IN THIS DOCUMENT HAS BEEN
OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE
COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

March 5, 2019

 

Mr. Rod Keller, CEO

Austin EV, Inc.

21 Cypress Blvd, Suite 1080

Round Rock, TX 78665

 

RE: MASTER PROCUREMENT AGREEMENT

 

Dear Mr. Keller:

 

Club Car LLC (“Buyer”) and Austin E-V, Inc. (“‘Seller”) have entered or
anticipate entering into one or more transactions (each a “Transaction”).

 

● Schedules: Each schedule A to this Master Procurement Agreement (“Schedule A”)
shall constitute a separate Purchase Agreement, as defined more specifically by
the Purchase Order Terms and Conditions (“Terms’’), incorporating by this
reference: i) this Master Procurement Agreement; ii) the Terms; iii) the
Non-Binding Memorandum of Intent between Club Car LLC and Austin EV, Inc.; and
iii) all related purchase orders and releases, as applicable. Each Schedule A
will describe the products and/or services, pricing, estimated annual volume,
identify the Buyer (if different than above) and provide other details about the
applicable Transaction(s). Schedule A’s may only be added if the Schedule A is
mutually executed by both parties. Prices in a Purchase Agreement are maximum
prices. Without express written agreement from Buyer, which shall not be
unreasonably withheld, Seller shall not be entitled to any price increase for
any reason including changes in exchange rates, increases in costs of materials,
labor or other cost increases or surcharges.     ● Orders: Products ordered
under a Schedule A shall be ordered by Buyer by means of purchase orders or
releases. as applicable, subject to the terms and conditions of such Schedule A.
Any volumes provided by Buyer(s) outside of purchase orders or releases are only
estimates and not commitments to purchase.     ● Terms: SUBJECT TO THE ORDER OF
PRECEDENCE SET FORTH IN THE FOLLOWING PARAGRAPH, THE TERMS AND CONDITIONS OF
PURCHASE ORDER ATTACHED HERETO ARE EXPRESSLY INCORPORATED INTO THIS MASTER
PROCUREMENT AGREEMENT BY REFERENCE. BY SIGNING BELOW, SELLER CONFIRMS THAT IT
HAS READ THE TERMS AND AGREES TO BE BOUND BY THE TERMS. Capitalized term used
but not defined herein shall have the meanings provided in the Terms.     ●
Conflicts: In the event of any conflict or inconsistency between the various
documents (including electronic documents) constituting a Purchase Agreement,
unless the parties agree otherwise in writing, the various components of the
Purchase Agreement shall be given the following precedence (in descending order
of precedence): 1) this Master Procurement Agreement (exclusive of any Schedules
A and the Terms); 2) an applicable Schedule A; 3) the Terms; 4) a purchase order
or release issued under the Purchase Agreement; 5) the Non-Binding Memorandum of
Intent dated December 7, 2018 between Club Car LLC and Austin EV. Inc.

 

 1 

 

 

We look forward to continuing our mutually beneficial relationship.

 

Sincerely,   Acknowledged and Accepted By,       /s/ Eric Powell 3/13/2019   /s/
Rod Keller 3/11/19 Buyer   Rod Keller, CEO

 

 2 

 

 

SCHEDULE A
#1

 

Upon execution by the Parties below, the Transaction(s) specified herein shall
be awarded and performed in accordance with the Master Procurement Agreement
dated December 20, 2018 and the Terms (which are hereby incorporated herein by
reference in their entirety) among Austin EV, Inc. (“Seller”) and Club Car LLC
(“Buyer”).

 

Description of Products

 

Part Number  

Products
Description

See Schedule B

  Currency   Price   Forecast
(Estimated
Annual
Volume)   Lead Time   Quantity   [***]   Club Car Branded-Truck with Flat Bed  
USD   [***]       [***]   as ordered   [***]   Club Car Branded-Truck with
Pickup Bed   USD   [***]       [***]   as ordered   [***]   Club Car
Branded-Truck with Van Box   USD   [***]       [***]   as ordered  

 

Product specifications are set forth in Schedule B and are incorporated herein
by reference.

 

Buyer and Seller shall continue to collaborate on new products or improvements
to existing Products during the Term. Buyer shall have a right of first refusal
on similar commercial utility electric vehicles developed by Seller during the
Term as outlined in Schedule B. Buyer would be required to exercise its right of
first refusal within thirty (30) days of notification of any such new products.
In the event Buyer exercises its right, Buyer and Seller will execute
schedule(s) adding the new products to the Master Purchase Agreement.

 

Buyer Legal Entity purchasing under this Schedule: Club Car LLC

 

Seller Legal Entity supplying under this Schedule: Austin EV, Inc.

 

The terms “Buyer” and “Seller” under the Purchase Agreement shall mean the above
entities for the purposes of this Schedule A.

 

Unless terminated earlier pursuant to the Terms, the duration/term of this
Schedule is 5 year(s) commencing January 1, 2019. Buyer may renew this agreement
for subsequent one year periods by delivering notice to Seller at least 60 days
prior to the end of the then current Term.

 

Buyer and Seller agree to review annual volume forecasts and any minimum volume
commitments for purchase by Buyer not less than sixty (60) days prior to each
subsequent twelve (12) month subsequent term of this Schedule A. Subsequently,
not less than thirty (30) days prior to each subsequent twelve (12) month term
of this Schedule A, Seller will update pricing for products using commercially
reasonable efforts to integrate any agreed to price modifications.

 

 3 

 

 

Seller agrees to use its good faith efforts to utilize Minority, Women, and
Veteran-owned Business Enterprises (MWVBEs) in support of this Purchase
Agreement and strive to achieve the portion of total expenditures purchased from
MWVBEs equal to 10% of the value of Buyer’s purchases from Seller.

 

Other than bailment, consignment and joint development agreements, if any, the
only other agreements related to the above that are not superseded by this
Purchase Agreement are listed here: None

 

Exclusivity: Seller warrants and represents that it has the exclusive right to
sell, license, or distribute the Products to Buyer in North America.
Notwithstanding the Seller’s right to terminate in the Right of First Refusal
paragraph, in exchange for Buyer’s obligations under the Purchase Agreement and
as agreed to in Schedule B, during the Term (including any renewal term) and for
a period of three months after termination or expiration of the Term, Seller
shall not, directly or indirectly, sell, lease, rent, distribute, manufacture,
or license those products expressly described on this Schedule A (“Products”) or
substantially similar products to any Competitor, as such term is defined herein
below, of Buyer. For the purposes of this Schedule, a “Competitor” will mean any
dealer, distributor, manufacturer, rental company, or lessor of electric
vehicles or any parent, subsidiary, or affiliate thereof located in North
America, excepting only Buyer or entities expressly designed in writing by Buyer
including (but not limited to) EZ Go, Textron, Cushman, Yamaha, Polaris, John
Deere, and Toro. Buyer agrees to not buy any substantially similar product(s)
from a third party during the term of the Agreement; provided. however, that
nothing in this agreement shall prohibit Buyer from internally developing,
designing, or manufacturing a substantially similar product.

 

Right of First Refusal: If during the Term Seller receives an offer to directly
or indirectly acquire at least 51% of the assets or equity interests of Seller,
including but not limited to the intellectual property rights in the Products
(the “Rights’’), whether by license purchase of assets, or purchase of the
issued and outstanding equity or membership interests of Seller (collectively,
“Transfer”) from a third party, as such term is defined herein below, unless
otherwise prohibited by law and subject to execution of a confidentiality or
nondisclosure agreement, Seller will promptly notify Buyer and provide Buyer
with the terms of such offer (‘‘Acquisition Notice”).

 

During the forty-five (45) days following its receipt of an Acquisition Notice
from Seller, Buyer will have a first right of refusal to match or beat the terms
of the offer described in such Acquisition Notice (a “Competitive Offer”) by
giving notice to Seller of its intent to match such price in writing. In the
event Buyer matches or beats the Competitive Offer, Seller shall Transfer the
Rights to Buyer on the terms specified in the Acquisition Notice. Only after
Seller provides an Acquisition Notice to Buyer and Buyer’s failure to exercise
its right of first refusal during the forty-five (45) day period, will Seller be
allowed to accept such Competitive Offer. In the event Seller consummates a
Transfer with a Competitor of Buyer in accordance with the terms of this clause
from a Competitor of Buyer, Buyer shall for thirty days following receipt of
written notice of consummation of such Transfer have the right to immediately
terminate the Purchase Agreement upon providing Seller with written notice of
its intent to so terminate. If Buyer does not exercise its right of first
refusal and match or beat the terms of the offer from a Competitor described in
such Acquisition Notice (a “Competitive Offer”), Seller may, with 15 months’
notice (the “Notice Period”), terminate this Master Procurement Agreement.
During the Notice Period, Buyer may order, and Seller shall manufacture,
Products pursuant to the terms of this Master Purchase Agreement.

 

 4 

 

 

Notice Addresses (Each party may change its notice address by written notice to
the other party):

 

If to Buyer: If to Seller:     Club Car LLC Austin EV, Inc. Attention: Sourcing
Attention: CEO 4125 Washington Road 21 Cypress Blvd., Suite 1080 Evans, GA 30809
Round Rock, TX 78665     with a copy to:       Club Car LLC   Attn: Legal
Department   4125 Washington Road   Evans, GA 30809 USA      

 

Buyer: Club Car LLC   Seller: Austin EV, Inc.           By: /s/ Eric Powell  
By: /s/ Rod Keller Name: Eric Powell   Name: Rod Keller Title: VP Sourcing  
Title: CEO

 

 5 

 

 

SCHEDULE B

SPECIFICATIONS

 

[***]

 

 6 

 

 

PURCHASE ORDER TERMS AND CONDITIONS

 

“Buyer” means Club Car LLC or its affiliated companies. “Seller” means the party
selling the applicable products or services to Buyer. By selling products or
services to Buyer, Seller confirms that the following terms and conditions apply
to Buyer’s purchases. Any modifications must be in writing and signed by Buyer.
References to “products” include items specifically provided for in that certain
Master Purchase Agreement between Buyer and Seller, as amended from time to time
(the “Master Purchase Agreement”) or incorporated in services Buyer purchases
from Seller. References to “Specifications” refer to the technical
specifications incorporated into the Master Purchase Agreement.

 

1. TERMS AND CONDITIONS OF PURCHASE. (a) Any products or services Buyer
purchases from Seller by electronic, phone, paper or any other form of
transmission, are purchased subject to the following: (i) if Seller already has
a fully signed purchase agreement currently in effect with Buyer, then the terms
of that agreement, together with any terms and conditions of this purchase order
and any subsequent purchase orders issued hereunder not in conflict with that
agreement, constitute the complete agreement; and (ii) if Seller does not
already have a fully signed purchase agreement with Buyer, then the terms and
conditions of this purchase order and any subsequent purchase orders issued
hereunder constitute the complete agreement. The complete agreement as stated
hereinabove shall be referred to as the “Purchase Agreement”. No other terms or
conditions including, without limitation, Supplier’s standard printed terms and
conditions, whether printed on Supplier’s proposal, order acknowledgement,
invoice or otherwise, will have any application to any purchase between Buyer
and Supplier unless specifically accepted in writing by Buyer.

 

(b) Seller may not assign or subcontract its obligations under the Purchase
Agreement without the prior written consent of Buyer, and if Seller does so, the
assignment or subcontract will be void.

 

(c) The Purchase Agreement shall be governed by, and interpreted under, the
substantive laws of the State of Georgia.

 

(d) [***]

 

(e) Spare and Replacement Parts. In return for Buyer agreeing to enter into the
Purchase Agreement, Seller grants to Buyer an option during the term of such
Purchase Agreement and for seven (7) years thereafter to purchase component
parts of any Deliverables, including those which become obsolete during the term
of such Purchase Agreement, at the lowest price at which Seller sells such
parts. Prices for such parts shall be firm, at the last pre-termination price,
for the first five (5) years following the termination of such Purchase
Agreement or obsolescence of such Deliverable, as applicable, except for and
only to the extent changes are required by cost differences in packaging.

 

2. PRICING; PAYMENT. (a) Unless otherwise provided elsewhere in the Purchase
Agreement, prices are: (i) stated in U.S. dollars; (ii) not subject to increase
for the duration of the Purchase Agreement, (iii) FOB, Seller’s Round Rock, TX
assembly facility (INCOTERMS 2010). Buyer is responsible for all freight,
insurance and related transportation costs from Seller’s facility in Round Rock,
Texas to Buyer’s specified destination; and (iv) for a fully assembled vehicle
meeting the Specifications prior to shipment. No extra charges of any kind will
be allowed unless specifically agreed to by Buyer in writing. In the event of
material industry cost changes in Product components and parts, Buyer agrees to
work in good faith with Seller to mitigate such cost changes and/or share in
material cost increases.

 

 7 

 

 

(b) Unless prohibited by law, Seller will separately indicate on its invoices
any taxes imposed on the sale or delivery of products or services.

 

(c) Unless otherwise provided elsewhere in the Purchase Agreement, Payment terms
shall be [***].

 

(d) Seller warrants that it is selling at the lowest prices and upon the most
favorable terms (including, without limitation, volume, quality and/or payment
terms) that it offers any buyer for products or services of the same or similar
quality to that provided for in the Purchase Agreement. If, during the term of
the Purchase Agreement, Seller makes an offer to sell any such products or
services to a third party at a lower price or upon one or more terms that are
more favorable than the price or terms then applicable under the Purchase
Agreement, then an equivalent reduction or modification of terms will apply to
all products or services purchased thereafter for the balance of the term of the
Purchase Agreement.

 

(e) Buyer will be responsible for all sales, use, and similar taxes (excluding
taxes based on or measured by the net Income, net worth or gross receipts of
Seller) imposed as a result of the sale of products or services. With notice to
Seller, Buyer may pay such taxes directly to the taxing authority where allowed
by law. Seller shall remit all taxes paid by Buyer to the appropriate taxing
authority. Upon Buyer’s request, Seller will provide written evidence that
Seller is properly licensed to collect the taxes paid by Buyer.

 

3. TRANSPORTATION; DELIVERY. (a) Shipment dates are firm and TIME IS OF THE
ESSENCE WITH RESPECT TO DELIVERY. Buyer is to request targeted shipping dates in
each Purchase Order for Products. Seller will exercise commercially reasonable
efforts in scheduling the shipping date requested with either external third
party carriers or Buyer’s designated carrier. Seller will promptly notify Buyer
in writing if Seller anticipates difficulty in complying with a mutually agreed
to shipment date and will use all commercially reasonable efforts to meet the
required shipping date.

 

(b) Unless otherwise provided elsewhere in the Purchase Agreement, products are
shipped FOB Round Rock, Texas, and delivery will occur, and title and risk of
loss will transfer, when: (i) with respect to product not incorporated into
services, upon delivery to Buyer’s carrier or designated carrier and (ii) with
respect to product incorporated into services, the completed services have been
accepted by Buyer.

 

(c) Seller shall provide Buyer all documentation, information and other
materials, including, without limitation, user instructions, warranty
statements, manuals, including owner’s manuals, on the execution date of the
Master Procurement Agreement by the Parties. Seller shall provide updated
documentation and information as they become available. Seller will provide a
manufacturer statement of origin for each Product within five (5) days of
shipment.

 

 8 

 

 

4. INSPECTION. With commercially reasonable advance notification to Seller,
Buyer or its authorized dealer or distributor may inspect and test all products
and services and all materials, equipment and facilities utilized by Seller in
producing products or providing services for Buyer. Seller will maintain an
inspection and testing system for the same that is acceptable to Buyer and will
keep records of all inspection and testing data

 

5. WARRANTIES. (a) Seller warrants that all products and services will be: (i)
free of any claims by third parties; (ii) in strict accordance with the
specifications, samples, drawings or other descriptions approved by Buyer; (iii)
free from defects. Seller further warrants that all services will be performed
in accordance with the standards of care and diligence normally practiced by
persons performing similar services and in a good and workmanlike manner. The
above warranties will be in effect for the duration of any warranty provided by
Buyer in connection with Buyer’s sale of the final product, which durations are
publicly available and will be provided by Buyer upon written request and are
INCORPORATED HEREIN BY REFERENCE. If any products or services fail to conform to
the above warranties Seller will: (i) with respect to products, replace or
repair the nonconforming products with any installation required to return the
product to operating condition at Seller’s cost calculated at published labor
rates and estimated time to perform installation; or, (ii) with respect to
services, re-perform all services necessary to correct any such nonconformity at
Seller’s cost. Any replacement products or services also will be subject to the
above warranties and warranty period. If Seller does not replace, repair or
re-perform, as applicable, within sixty (60) days after notice, Buyer may do so
at Seller’s published expense.

 

(b) Any rights or remedies of Buyer set forth in the Purchase Agreement are not
exclusive and Buyer also has all rights and remedies available under applicable
law. All warranties by Seller may be assigned by Buyer to Buyer’s customers and
dealers or distributors.

 

(c) Recalls and Field Fix Programs. If at any time a governmental agency of any
country, state, province or municipality requires Buyer to conduct a product
safety recall or a field fix program, or Buyer voluntarily undertakes such an
action, related to the Deliverables, Buyer will notify Supplier within thirty
(30) days of the initiation any such action and Supplier shall, at Buyer’s
option, either repair or replace the related Deliverables, and reimburse Buyer
for any out-of-pocket costs or expenses related directly to the repair or
replacement of the Deliverables.

 

(d) Disclaimer. EXCEPT AS EXPRESSLY STATED (i) IN THESE TERMS AND CONDITIONS, OR
(ii) IN CONNECTION WITH SUCH WRITTEN LIMITED WARRANTY DELIVERED WITH THE
PRODUCTS, AEV DISCLAIMS All OTHER WARRANTIES, EXPRESSED OR IMPLIED, WITH RESPECT
TO THE PRODUCTS, INCLUDING WITHOUT LIMITATION, All WARRANTIES OF
MERCHANTABILITY, and FITNESS FOR A PARTICULAR PURPOSE.

 

6. QUANTITY TERMINATION; ORDER CHANGES. (a) Buyer may, by written notice to
Seller, terminate its purchase of any quantity of products or services (i) for
convenience, (ii) if Seller fails to complete or deliver any part thereof when
scheduled based on mutual agreement, or (iii) if Seller is in breach of any
material term of the Purchase Agreement, including, without limitation, any
provision of Sections 7, 8 or 9 below, immediately prior to the delivery
thereof. If terminating for convenience, Buyer will pay Seller termination
charges equal to the cost of materials and labor incurred (and not otherwise
mitigated) on ordered products or services prior to the date of Buyer’s
termination notice; provided Seller takes all steps reasonably necessary to
mitigate such costs. Seller will notify Buyer of the actual termination charges
within thirty (30) days after termination. If termination is due to a failure of
completion or delivery or breach of any material term of the Purchase Agreement,
no termination charges will apply and Buyer may procure substitute products or
services and Seller will be liable to Buyer for reasonable excess costs actually
incurred by Buyer in connection therewith.

 

 9 

 

 

(b) Prior to shipment or completion, Buyer may request changes with respect to
the products or services to be provided, including, changes in method of
shipping or packing, time or place of delivery and increases in delivered
quantity. Seller will promptly notify Buyer of any resulting increase or
decrease in cost and Buyer and Seller will agree on any price adjustment before
implementing any change.

 

7. COMPLIANCE WITH LAWS. General. All Deliverables supplied to Buyer shall
comply with, and Seller agrees to be bound by, all applicable foreign, United
States federal, state and local laws, orders, rules, regulations, guidelines,
standards, limitations, controls, prohibitions, or other requirements contained
in, issued under, or adopted pursuant to such laws, including, without
limitation, product content and labeling, including, without limitation, the
U.S. Toxic Substances Control Act and applicable RoHS and REACH regulations,
anti-bribery, anti-corruption laws, Conflict Mineral prohibition and Conflict
Mineral disclosure requirements. Seller further agrees that neither it nor any
of its subcontractors will utilize child, slave, prisoner or any other form of
forced or involuntary labor, or engage in abusive employment or corrupt business
practices, in the production or provision of Deliverables. Delivery of any
Deliverables shall constitute Seller’s representation to Buyer to the best of
its knowledge that there has been and will be full compliance with all
applicable laws and, at Buyer’s request, Seller shall certify in writing its
compliance with the foregoing:

 

(a) Environmental Compliance. Seller shall comply with 1) all applicable
environmental laws and regulations, and 2) the environmental compliance
guidelines set forth on Buyer’s website at
http://www.ingersollrand.com/supplier/environmental, as it may be amended by
Buyer from time to time. THESE COMPLIANCE GUIDELINES ARE INCORPORATED HEREIN BY
REFERENCE. At Seller’s request Buyer will mail Seller a hard copy.

 

(b) Equal Employment Opportunity. The parties shall comply with all Federal
equal employment opportunity obligations under 41 CFR 60-1.4(a), 60-300.5(a),
60-741.5(a) and federal labor law obligations under 29 CFR part 471, appendix A
to subpart A. THE FOLLOWING PROVISIONS ARE INCORPORATED HEREIN BY REFERENCE:
Executive Order 11246 and 41 CFR § 60-4.3(a); Executive Order 11701 and 41 CFR
§§ 60-250.5(a), 60-300.5; Executive Order 11758 and 41 CFR § 60-741.5(a); U.S.
immigration laws, including the L-1 Visa Reform Act of 2004 and the H-1B Visa
Reform Act of 2004; and Executive Order 13496.

 

The parties shall abide by the requirements of 41 CFR 60-1.4(a), 60-300.5(a) and
60-741.5(a). These regulations prohibit discrimination against qualified
individuals based on their status as protected veterans or individuals with
disabilities, and prohibit discrimination against all individuals based on their
race, color, religion, sex, sexual orientation, gender identity or national
origin. Moreover, these regulations require that covered prime contractors and
subcontractors take affirmative action to employ and advance in employment
individuals without regard to race, color, religion, sex, national origin,
protected veteran status or disability.

 

 10 

 

 

(c) Low Speed Vehicle Compliance. In addition to the foregoing compliance
requirements, Seller shall ensure the Products comply with federal, state, and
local regulations concerning Low Speed Vehicles, including but not limited to
SAE J2358 requirements for Low Speed Vehicles. Seller will ship Products based
on a speed rating of twenty-five (25) mph. Buyer or Buyer’s dealer is
responsible for modifying speed via software tools provided by Seller to
regulate speed in the designated end-user jurisdictions to meet the applicable
Low Speed Vehicle statute. Seller shall be considered the registered Vehicle
Manufacturer for purposes of the National Highway Transportation Safety
Administration, including but not limited to any duties for early warning
reporting to NHTSA.

 

(d) From time to time, at Buyer’s request, Seller shall provide certificates to
Buyer relating to compliance with any applicable legal requirements, including
those listed in Section 7 above.

 

8. CONFIDENTIAL INFORMATION; OWNERSHIP OF DOCUMENTS AND MATERIALS. (a) Seller
and Buyer will treat as confidential and not disclose any proprietary or
confidential information received from the other party in connection with the
business relationship contemplated under the Purchase Agreement, to any person
not authorized by Discloser in writing to receive it. The party disclosing such
information is referred to herein as the “Discloser” and the party receiving
such information is referred to herein as the “Recipient”. Recipient will use
such information only as necessary to fulfill its obligations under the Purchase
Agreement. Upon termination of the Purchase Agreement, all such disclosed
information will be returned to Discloser, or at Discloser’s option, destroyed
by Recipient. Recipient will not make any announcement or release any
information concerning the Purchase Agreement to any other person or entity,
including the press or any official body, except as required by law, unless
prior written consent is obtained from Discloser.

 

(b) If a purchase order includes development services, such as the design of a
unique product or modification of an existing Seller product, and is
specifically identified on the Purchase Order accepted by Seller, then upon
payment in full to Seller for such development services, Seller grants to Buyer
and its affiliates a perpetual, worldwide, paid-up, royalty free, nonexclusive
license, with the right to sublicense, to make, have made, use, offer to sell,
sell, export, and import all inventions or other results of Seller’s development
work that Seller conceives, develops, acquires, or reduces to practice in the
course of performing work under the purchase order. Seller shall provide Buyer
all documentation, information and other materials, including, without
limitation, all drawings, prints, specifications, data, instructions and manuals
related to such inventions or other results of Seller’s development work,
necessary for Buyer to receive the full benefit of the license.

 

(d) Other than development services specifically contracted in 8(b) above, all
drawings, models, specifications and other documents, manuals, know-how, and
designs prepared by Seller whether in connection with the Purchase Agreement
constitutes the Seller’s intellectual property. Seller retains full right, title
and interest in such intellectual property.

 

 11 

 

 

9. INTELLECTUAL PROPERTY INFRINGEMENT. Seller represents and warrants that the
sale or use of the products or services provided to Buyer will not infringe or
contribute to the infringement of any patents, trademarks, or copyrights. If any
product, service, or part thereof is held to constitute an infringement, Seller
will, at its expense, obtain for Buyer a license to use the item or service, or
replace or modify the same, in a manner satisfactory to Buyer, so as to avoid
the infringement. Seller shall not assert any of its patents or other
intellectual property rights against Buyer or Buyer’s affiliates or customers
worldwide in connection with any use of products or services provided to Buyer
in the production, use, preparation, sale, or delivery of, or other action with
respect to, the products or services of Buyer or Buyer’s affiliates or
customers.

 

10. QUALITY. (a) Seller will not change the manufacturing location,
manufacturing process, raw materials or proportions of raw materials used in
products delivered to Buyer under the Purchase Agreement unless Seller notifies
Buyer in writing of the change at least ninety (90) days before its
implementation and Buyer agrees to the change in writing, with such approval not
to be unreasonably withheld. Seller will be liable for all losses and damages
that Buyer may suffer if Seller does not comply with the requirements of the
preceding sentence. At Buyer’s request, Seller will provide samples of product
produced with the proposed change to test in Buyer’s manufacturing process.

 

(b) Seller will review and assess and provide feedback to Buyer on timing and
potential cost impacts for Seller to participate in programs implemented by
Buyer with respect to quality in manufacturing and delivery of products and
services.

 

(c) Quality Standards. Supplier shall comply with the quality standards, which
are contained in the Buyer’s global supplier quality manual which is available
at http://www.ingersollrand.com/supplier/quality, as the manual may be amended
by Buyer from time to time (the “Quality Standards”). THE QUALITY STANDARDS ARE
INCORPORATED HEREIN BY REFERENCE. At Supplier’s request Buyer will mail Supplier
a hard copy. Buyer alone shall decide whether Quality Standards are being met.
Supplier shall maintain and enforce all measures necessary to secure the quality
of products and services and the manufacturing process thereof, including but
not limited to quality control standards, inspection standards and
specifications.

 

11. CUSTOMS AND TRADE. (a) Unless otherwise agreed by Buyer in writing, Buyer
will not be a party to the importation of products. All purchases under the
Purchase Agreement will be consummated subsequent to importation, prices will be
inclusive of all duties and other costs of customs clearance and Seller will not
cause or permit Buyer’s name to be shown as “importer of record” on any customs
declaration. In any case where Buyer agrees to be the importer of record, Seller
will provide all information needed to effect customs entry into each country
into which the products are to be imported.

 

(b) Buyer shall have all rights to drawback of duty or taxes paid by Seller in
its own country or in any third country where all or part of the work is
executed. Seller waives any interest in or rights to such drawback and agrees to
provide, at no cost to Buyer, proof of importation and/or re-exportation as the
case may be, satisfactory to Buyer and the customs administration, tax
collection agency, or other government agency in any country where taxes or
duties are paid, as well as to provide any other supporting documentation to
enable Buyer to claim drawback of duties and taxes on products or articles
manufactured from products provided under the Purchase Agreement.

 

 12 

 

 

(c) Seller will accurately indicate the country of origin of the products
provided under the Purchase Agreement on the customs invoice and other
applicable documentation. Seller will provide certificates of origin relating to
such products within the meaning of the rules of origin of the NAFTA
preferential duty provisions and execute such other documents as may be
necessary for Buyer to claim duty preference under any applicable programs.

 

12. SERVICES/LIENS; SITE RULES; INSURANCE; LIABILITY. Supplier shall provide and
maintain throughout the term of the Purchase Agreement the following insurance
in US Dollars (or such other currency as specified in the Purchase Agreement):
1) Workers Compensation/Work-related Injury Insurance: Statutory in accordance
with the state in which the products are being manufactured or assembled; 2)
Employers liability in the amount of $1 million each occurrence; 3) Commercial
General Liability with limits of $1 million each occurrence, $2 million
aggregate, for bodily injury and property damage combined, including the
following coverage features: i) blanket contractual liability, ii) Products,
iii) completed operations, and iv) independent contractors coverage; 4)
Automobile Liability with limits of $2 million each occurrence for bodily injury
and property damage combined, covering all “owned,” “hired” and “non owned”
automobiles and including contractual liability coverage; and 5) Umbrella or
Excess Liability with limits of $5 million each occurrence and aggregate for
bodily injury and property damage with such policy “following form” to all
primary policies listed above with the exception of Workers Compensation; All
insurance required a hove will be written with insurers rated A or better by the
latest “ A.M. Best” Guide. Where allowable under law, a waiver of subrogation
from Supplier (including affiliates, directors and officers) and its insurers
will be provided in favor of Buyer. If applicable, all policies, with the
exception of Workers Compensation, will identify Buyer as an additional insured
and require that the Buyer receive at least thirty (30) days’ notice prior to
cancellation or termination. Supplier’s insurance will be primary and
noncontributory to that maintained by Buyer. Such insurance shall not be subject
to any self-insured retentions without the prior written consent of Buyer. All
self-insured retentions and deductibles for such insurance shall be the
responsibility of Supplier. The insurance coverages under this section,
including, without limitation, the additional insured coverage provided to
Buyer, shall be independent of the indemnity obligations of the Purchase
Agreement, and are not designed solely to guarantee payment of Supplier’s
indemnity obligations. Supplier shall, at the request of Buyer, provide Buyer
with copies of all policies and/or a certificate, satisfactory to Buyer, of the
insurance coverages and endorsements set forth in this section and shall specify
all self-insured retentions. Supplier’s insurance coverage will not be Buyer’s
exclusive remedy; instead Buyer will be entitled to all remedies available to it
under equity or the law. No insurance will be deemed to be in effect until
satisfactory certificates thereof are delivered to Buyer, containing provisions
requiring the insurance carrier to notify Buyer at least thirty (30) days prior
to any expiration or termination of, or material change to, the policy. In
addition, all such policies shall name Buyer as an additional insured, and
contain a waiver of subrogation against Buyer. Seller will also require
insurance from all of its subcontractors with the same coverages and limits.

 

(d) It is agreed that Seller, in rendering any services on Buyer’s premises,
will be an independent contractor and that neither Seller nor any principal,
partner, agent or employee of Seller is the legal representative of Buyer for
any purpose whatsoever and has no right or authority to assume or create, by
action, in writing or otherwise, any obligation of any kind, express or implied,
in the name of or on behalf of Buyer and neither Seller nor any principal, agent
or employee of Seller shall be entitled to or be eligible to participate in any
benefit program extended by Buyer to its employees.

 

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All Seller’s employees providing services under the Purchase Agreement must be
authorized to work in the jurisdiction where the services are performed.

 

(e) Limitation of Liability for consequential damages. In no event shall either
party’s liability to the other of any kind include any special, indirect,
incidental, or consequential losses or damages, even if the breaching party is
advised of the possibility of such potential loss or damage.

 

13. INDEMNIFICATION. Seller will fully defend, indemnify, hold harmless and
reimburse Buyer, its officers, directors, shareholders, affiliates,
subsidiaries, employees, agents, customers and assigns from and against all
claims, suits, actions, proceedings, damages, losses and expenses, including
attorneys’ fees, arising out of, related to, or resulting from: (a) any breach
of any representation, warranty, certification, covenant or agreement made by
Seller in the Purchase Agreement; (b) any negligence or willful misconduct of
Seller or its agents or subcontractors in connection with performance under the
Purchase Agreement; (c) any litigation, proceeding or claim by any third party
relating to the obligations of Seller under the Purchase Agreement; (d) any
violation of law by Seller, its employees, agents, affiliates, contractors or
subcontractors and (e) Seller’s use, control, ownership, or operation of its
business and facilities, except to the extent caused by the negligence of Buyer.
Seller agrees to include this Indemnification provision in any subcontracts
issued hereunder.

 

14. BUYER’S AND SELLER’S PROPERTY. Unless Buyer and Seller otherwise agrees in
writing, all tools, equipment or other materials furnished by one party to the
other are the personal property of the furnishing party. Whenever practical,
each party will adequately identify the other party’s property and safely store
it separate and apart from its own property. Party B will not substitute any
property for Party A’s property and will use such property only in fulfilling
its obligations under the Purchase Agreement. While·in Party B’s custody or
control, Party A’s property will be held at Party B’s risk, kept insured by
Party B at Party B’s expense, and subject to removal at Party A’s request.

 

15. SET-OFF. Buyer may set off any invoiced amount owing at any time from Seller
to Buyer or any of its affiliated companies, where Buyer maintains a
greater-than-51% ownership, against any amount payable at any time by Buyer
under the Purchase Agreement.

 

16. FORCE MAJEURE. (a) Any non-performance or delay in performance of any
obligation of Seller or Buyer under the Purchase Agreement will be excused to
the extent such failure or non-performance is caused by “Force Majeure.” “Force
Majeure” means any cause preventing performance of an obligation under the
Purchase Agreement which is beyond the reasonable control of the Seller or
Buyer, and which, by the exercise of due diligence, could not be overcome,
including without limitation, fire, flood, sabotage, shipwreck, embargo,
explosion, accident, riot, acts of a governmental authority, and acts of God. In
no event shall Seller’s ability to sell products or services at a better price
or Seller’s economic hardship in buying raw materials necessary to manufacture
products at a commercially reasonable price constitute Force Majeure.

 

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(b) If Buyer or Seller is affected by Force Majeure, it will (i) promptly
provide notice to the other party, explaining the full particulars and the
expected duration of the Force Majeure and (ii) use its best efforts to remedy
the interruption or delay if it is reasonably capable of being remedied. In the
event of Force Majeure, deliveries or acceptance of deliveries of products or
services which have been suspended will not be required to be made up on the
resumption of performance and, to the extent not otherwise permitted under the
Purchase Agreement, Buyer will have the right to purchase products and services
from other sources during the period of Force Majeure. If a Force Majeure
extends for more than sixty (60) days, the Purchase Agreement may be terminated
upon written notice by the party not declaring Force Majeure without any
liability on its part.

 

(c) If a Force Majeure compels Seller to allocate deliveries of products or
services, Seller will make such allocation in a manner that ensures Buyer at
least the same proportion of the Seller’s total output as was purchased by Buyer
prior to the Force Majeure. Seller will use best efforts to source products or
other items, at Seller’s expense, from its own or its affiliates’ global
operations or the market in order to meet Buyer’s required delivery dates.

 

17. TERMINATION. (a) Buyer or Seller may terminate the Purchase Agreement upon
thirty (30) days’ prior written notice if the other party breaches any material
term thereof or files for bankruptcy; provided, however that during such notice
period, the party in default may cure its default and thereby abate the
termination. In the event Seller has not complied in any respect with Sections
7, 8 or 9 above, Buyer shall have the right to immediately terminate the
Purchase Agreement, without further compensation to the Seller and without
Seller’s ability to abate the termination. In addition, Seller shall compensate
Buyer for any actual out of pocket damages suffered by Buyer as a result of
Seller’s breach of Sections 7, 8 or 9 above. After receipt of a notice of
termination, the Seller shall immediately: (i) stop work as directed in the
notice; (ii) place no further subcontracts or purchase orders for materials,
services or facilities, except as necessary to complete the continued portion of
the Purchase Agreement; and (iii) terminate all subcontracts to the extent that
they relate to the work terminated.

 

(b) Notwithstanding paragraph 17(a) Seller may only terminate a purchase order
after giving Buyer reasonable notice of such termination, as well as an
opportunity to identify and set up an alternate supplier.

 

18. ACCESS AND AUDIT. In order to assess Seller’s work quality and compliance
with the Purchase Agreement, Seller will permit Buyer reasonable access to (i)
all locations where work is performed in connection with the products or
services provided for in the Purchase Agreement, and (ii) Seller’s books and
records relating to the Purchase Agreement.

 

19. PERSONAL DATA PROTECTION. (a) “Personal Data” includes any information
relating to an identified or identifiable natural person; “Personal Data”
includes any Personal Data given by one party to another “Discloser” and
“Recipient”, respectively, any Personal Data being Processed by Recipient on
behalf of Discloser, and any Personal Data pertaining to any Discloser
personnel; and “Processing” includes any operation or set of operations
performed upon Personal Data, such as collection, recording, organization,
storage, adaptation or alteration, retrieval, accessing, consultation, use,
disclosure by transmission, dissemination or otherwise making available,
alignment or combination, blocking, erasure or destruction.

 

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(b) Recipient, including its staff, shall view and Process Discloser Personal
Data only on a need-to-know basis and only to the extent necessary to perform
this Purchase Agreement or Discloser’s further written instructions.

 

(c) Recipient agrees to keep Discloser Personal Data confidential and not to
disclose Discloser Personal Data to third parties without prior express written
consent from Discloser. Recipient further agrees to use technical and
organizational measures, commensurate with the risk associated with a breach of
such Data and in compliance with applicable data protection regulation(s), to
ensure the security and confidentiality of Discloser Personal Data in order to
prevent, among other things, accidental, unauthorized or unlawful destruction,
modification, disclosure, access or loss of such Data. Recipient shall
immediately inform Discloser of any Security Breach, where “Security Breach” is
defined as any event involving an actual, potential or threatened compromise of
the security, confidentiality or integrity of Discloser Personal Data, including
but not limited to any unauthorized access or use, or any broader circumstances
as defined in any applicable local law. Recipient shall also provide Discloser
with a detailed description of the Security Breach, the type of data that was
the subject of the Security Breach, the identity of each affected person, and
any other information Discloser may request concerning such affected persons and
the details of the breach. Recipient agrees to take action immediately, at its
own expense, to investigate the Security Breach and to identify, prevent and
mitigate the effects of any such Security Breach, and to carry out any recovery
or other action (e.g., mailing statutory notices) necessary to remedy the
Security Breach. The content of any filings, communications, notices, press
releases, or reports related to any Security Breach (“Notices”) must first be
approved by Discloser prior to any publication or communication thereof to any
third party. Recipient shall pay for or reimburse Discloser for all costs,
losses and expenses relating to any Security Breach, including without
limitation, the cost of Notices.

 

(d) Recipient shall comply with all applicable laws and regulation pertaining to
Personal Data protection and will process employment data consistent with
Discloser’s employment data protection standards. In particular, where Personal
Data is collected by the Recipient from a data subject directly, Recipient shall
provide such data subject with the information required by applicable laws and
regulation, permit access by the data subject to the Personal Data collected
about him/her and, when necessary, obtain such data subject’s consent.

 

(e) Discloser reserves the right to conduct an on-site verification, with prior
written reasonable notice, of Recipient’s compliance with obligations relating
to Discloser Personal Data at any time, even after termination of this
Agreement, and Recipient agrees to provide access to all concerned facilities,
equipment and records necessary to conduct such verification.

 

(f) Upon termination of this Purchase Agreement, for whatever reason, Recipient
shall stop the Processing of Discloser Personal Data, unless instructed
otherwise by Discloser, and these undertakings shall remain in force until such
time as Recipient no longer possesses Discloser Personal Data.

 

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(g) Recipient understands and agrees that Discloser may require Recipient to
provide certain Personal Data (“Recipient Personal Data”) such as the name,
address, telephone number, and e-mail address of Recipient’s representatives in
transactions, and that Discloser and its affiliates and their contractors may
store such data in databases located and accessible globally by their personnel
and use it for purposes reasonably related to the performance of this Purchase
Agreement, including but not limited to supplier and payment administration.
Recipient agrees that it will comply with all legal requirements associated with
transferring any Recipient Personal Data to Discloser. Discloser will be the
“Controller” of this data for legal purposes, and agrees not to share Recipient
Personal Data beyond Discloser, its affiliates and their contractors, and to use
reasonable technical and organizational measures to ensure that Recipient
Personal Data is processed in conformity with applicable data protection laws.
Recipient may obtain a copy of the Recipient Personal Data and submit updates
and corrections to it by sending Discloser a written notice.

 

20. SUPPLIER SECURITY AND CRISIS MANAGEMENT POLICY. Seller will have and shall
comply with, and at Buyer’s request provide Buyer with a copy of, Seller’s
security and crisis management that, at a minimum, provides for measures that
ensure the physical integrity and security of all shipments against the
unauthorized introduction of harmful or dangerous materials. Buyer reserves the
right to request information in connection with such policy, conduct on-site
audits of Seller’s facility and practices to determine whether such policy and
Seller’s implementation of such policy are reasonably sufficient to protect
Buyer’s interests. If Buyer reasonably determines that Seller’s security and
crisis management policy and/or such policy implementation is/are insufficient
to protect Buyer’s property and interests, Buyer may give Seller notice of such
determination. Upon receiving such notice, Seller shall have forty-five (45)
days thereafter to make such policy changes and take the implementation actions
reasonably requested by Buyer. All costs associated with development and
implementation of Seller’s security and crisis management plan and Buyer’s
recommendations thereto shall be borne by Seller. In addition, Seller agrees
that it will review the requirements of applicable national security programs,
including but not limited to the Customs-Trade Partnership Against Terrorism
(“C-TPAT”) program of the United States (if applicable) and will (i) maintain a
written plan for security procedures in accordance with the recommendations of
such programs; and (ii) inform Buyer of its membership status and any changes
thereto, relative to such programs.

 

21. ETHICAL BUSINESS CONDUCT. Supplier shall adopt and comply with Buyer’s
Business Partner Code of Conduct (“BPCOC”), which is located at:
http://www.ingersollrand.com/supplier/BPCOC. THE BPCOC IS INCORPORATED HEREIN BY
REFERENCE. Additionally, Supplier shall take all reasonable steps necessary to
ensure that its sub-suppliers and subcontractors comply with the BPCOC. At
Supplier’s request Buyer will mail Supplier a hard copy. The BPCOC may be
amended by Buyer from time to time.

 

22. INTELLECTUAL PROPERTY RIGHTS. Except as otherwise addressed in any separate
contract between the parties, and subject to Section 8(b) above, Buyer and
Seller agrees that, where it undertakes, whether alone or jointly with Buyer,
any research, development and/or design activities relating to Deliverables 1)
as requested by Buyer in connection with any purchase agreement and/or 2) using
or derived from Confidential Information provided by Buyer, Buyer shall own all
rights in any resulting intellectual property and grants Seller a worldwide,
perpetual, non-exclusive, royalty-free license to use such intellectual property
outside the field of small motor recreational and utility vehicles. Seller shall
be solely responsible for any compensation payable, by law or by contract, if
any, to individual inventors of Seller. Buyer shall have the exclusive right to
apply for or register any patents, mask work rights, copyrights, and such other
proprietary protections, with respect to such intellectual property, on a
worldwide basis., and to require the incorporation of such intellectual property
into the Deliverables at no additional charge. Seiter shall execute such
documents, render such assistance, and take such other actions as Seller may
reasonably request to apply for, register, perfect, confirm, and protect Buyer’s
intellectual property rights under this section.

 

23. MEDIA. Seller shall not engage in (a) any external communications, media
interviews, press releases, trade shows, or external engagements or (b) issue or
prepare any marketing, social media, or advertising materials regarding the
products without Buyer’s prior written consent.

 

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