TO PAY
HSC and Buyer Confidential
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INVOICES WHEN DUE OR FINANCE CHARGES WHEN ASSESSED MAY RESULT IN DELAYED OR
CANCELLED SHIPMENTS. NO UNAUTHORIZED DEDUCTIONS FROM INVOICES ARE PERMITTED.
7.
TITLE AND RISK OF LOSS. BUYER SHALL
PURCHASE THE PRODUCTS FROM HSC FCA HEMLOCK (INCOTERMS 2000) WITH TITLE AND RISK
OF LOSS WITH RESPECT TO ALL PRODUCTS PASSING TO BUYER WHEN THE GOODS HAVE BEEN
DELIVERED TO THE CARRIER AT HEMLOCK, MICHIGAN.
8.
TERM. THE TERM OF THIS AGREEMENT SHALL
BE FROM THE EFFECTIVE DATE THROUGH DECEMBER 31, 2019 (THE "INITIAL TERM"). THE
AGREEMENT MAY NOT BE TERMINATED DURING THE INITIAL TERM, EXCEPT AS EXPRESSLY SET
FORTH IN SECTION 10.
9.
MANUFACTURING FACILITY.
BUYER ACKNOWLEDGES THAT HSC WILL BE EXPANDING ITS MANUFACTURING FACILITIES (THE
"EXPANDED MANUFACTURING FACILITY") IN ORDER TO PRODUCE THE PRODUCTS TO BE
SUPPLIED UNDER THIS AGREEMENT. THE ESTIMATED COMPLETION DATE FOR 50% OF THE
MANUFACTURING FACILITY CAPACITY IS JANUARY 1, 2010, WITH ESTIMATED CAPACITY OF
75% COMPLETED ON JANUARY 1, 2011, AND 100% OF ESTIMATED CAPACITY COMPLETED ON
JANUARY 1, 2012. BUYER ACKNOWLEDGES THE POSSIBILITY OF DELAYS IN COMPLETING THE
MANUFACTURING FACILITY AND EXPRESSLY AGREES THAT, SO LONG AS 50% OF THE
MANUFACTURING CAPACITY COMMENCES PRODUCTION BY JUNE 30, 2010, HSC SHALL HAVE NO
LIABILITY TO BUYER FOR ANY SUCH DELAY.
THE PARTIES FURTHER AGREE TO THE
FOLLOWING LIQUIDATED DAMAGES FORMULA AS BUYER'S SOLE AND EXCLUSIVE REMEDY AND
DAMAGES FOR DELAYS BEYOND JUNE 30, 2010:
LIQUIDATED DAMAGES CALCULATION: $*** MULTIPLIED BY THE NUMBER OF MONTHS DELAYED
BEYOND JUNE 30, 2010 (PRO-RATED FOR PARTIAL MONTHS). THE TOTAL LIQUIDATED
DAMAGES SHALL NOT EXCEED THE AMOUNT OF BUYER'S ADVANCE PAYMENT.
HSC AGREES THAT THE EXPANDED MANUFACTURING FACILITY SHALL BE SUBJECT TO
BI-ANNUAL INSPECTIONS BY BUYER. SAID INSPECTIONS SHALL BE SUBJECT TO HSC'S
CONFIDENTIALITY AND SECURITY POLICIES FOR SITE VISITS. ANY FEES AND COSTS
ASSOCIATED WITH SUCH INSPECTION SHALL BE BORNE BY BUYER.
10.
TERMINATION. BUYER UNDERSTANDS AND
ACKNOWLEDGES THAT HSC IS MAKING SUBSTANTIAL CAPITAL INVESTMENTS TO EXPAND ITS
MANUFACTURING CAPABILITIES IN ORDER TO SATISFY BUYER'S DEMAND FOR THE PRODUCTS.
THE PARTIES ACKNOWLEDGE IT IS THEIR EXPRESS INTENT THAT BUYER IS OBLIGATED TO
PURCHASE THE CONTRACTED VOLUMES OVER THE INITIAL TERM OF THIS AGREEMENT.
ACCORDINGLY, THE BASIS AND CIRCUMSTANCES UNDER WHICH THE PARTIES CAN TERMINATE
THIS AGREEMENT PRIOR TO THE EXPIRATION OF THE INITIAL TERM OF THIS AGREEMENT IS
EXPRESSLY LIMITED TO THE TERMS OF THIS SECTION 10.
(A)
TERMINATION BY BUYER. BUYER MAY, AT ITS
OPTION, TERMINATE THIS AGREEMENT ONLY UPON THE OCCURRENCE OF ALL OF THE
FOLLOWING EVENTS: (I)(1) ONCE PRODUCTION OF PRODUCTS HAS COMMENCED AT THE
EXPANDED MANUFACTURING FACILITY, A FAILURE BY HSC TO DELIVER THE CONTRACTED
AMOUNT OF PRODUCTS PROPERLY ORDERED BY
HSC and Buyer Confidential
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CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY
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BUYER OR (2) OTHER MATERIAL BREACH OF THIS AGREEMENT BY HSC OTHER THAN (A) HSC'S
FAILURE TO COMPLETE THE EXPANDED MANUFACTURING FACILITY