Exhibit 10.3
EXCLUSIVE MANUFACTURING AGREEMENT
THIS EXCLUSIVE
MANUFACTURING AGREEMENT is made as of the 1st day of August, 2008
by and between SMITH YOUNG AND ASSOCIATES, INC., a Colorado
Corporation, its successors, affiliates, and assigns, Morton
Weisbrot an individual residing in the State of Arizona, his
successors, and assigns (hereinafter all collectively referred to
as the "Licensee") and, FUEL CONCEPTS LLC, an Ohio Limited
Liability Company, its successors, affiliates, and assigns
(hereinafter all collectively referred to as the
“Manufacturer”). Sometimes referred to herein
collectively as “the parties”.
NOW, THEREFORE , in consideration of the promises hereinafter
made by the parties hereto, it is agreed as follows:
ARTICLE I
APPOINTMENT OF
MANUFACTURER
1.
Manufacturing Right . Licensee hereby appoints and
grants Manufacturer the exclusive world-wide non-assignable right
to manufacture products for
Licensee defined in the
“Current Price List" as set forth in “Exhibit "A"
attached hereto .
2. Prices
. All
prices stated are listed in the “Current Price List" as set
forth in “Exhibit A" attached hereto. Said prices
are listed at Manufacturer’s actual cost to produce each
individual unit of products listed in the “Current Price
List" as set forth in “Exhibit A" attached hereto and do not
include transportation or shipping costs of any kind or federal,
state or local taxes of any kind or nature.
3. Terms
. All
Purchase Orders submitted to Manufacturer shall be paid in full with in Seven (7) business
days of submission of the Purchase Order.
4. Title to Products
. Title to the Products
shall at all times remain with Licensee. Manufacturer shall at no
time, have any right, title and interest of any kind in products
manufactured under this Agreement.
(a)
Manufacturer shall cause all products submitted to
Manufacturer by Licensee for production under this Agreement, to be
manufactured in strict accordance with Licensee’s exact
product specifications and shall institute and comply with all
quality control procedures necessary to meet such requirements. All
product manufactured under this Agreement that do not meet or
exceed Licensee's product specifications shall either be replaced
or repaired in accordance with Article VI of this
Agreement.
(b)
In the event that Manufacturer shall fail to
manufacture Licensee’s products in accordance with
Licensee’s exact product specifications and Quality Control
requirement of any specific
PO, the circumstances of which would cause the specific PO to have
a failure of .003% or greater of the total number of
units ordered per that specific PO more three (3) times during the
term of this Agreement, this Agreement shall automatically and
without further notice, convert to a NON-EXCLUSIVE
(c) Manufacturing
Agreement and Licensee shall have full rights to manufacture its
products with any other manufacturer that Licensee may deem
appropriate. Failure is defined as the products inability to adjust
and maintain the desired flow of gasoline as specified by the
Manufacturer.
ARTICLE III
DELIVERY
1. Purchase Orders and Delivery
Requirements .
(a)
Licensee shall order all products to be manufactured by
written notice (The “Purchase Order” hereinafter
collectively referred to as the “PO”) to Manufacturer.
Each PO submitted to Manufacturer shall specify the number of units
to be manufactured, the type of units to be manufactured, which
shall be identified by the model number designations as indicated
in the Price List as set forth in
“Exhibit A" attached hereto and include the desired
method of shipment and delivery date requirements. Manufacture
shall indicate its acceptance of each PO submitted under this
Agreement by returning a signed, accepted copy to Licensee within
24 hours of submission by Licensee.
(b) In the
event that Manufacturer is unable to meet the specific delivery
requirements set forth in any PO submitted, Manufacturer shall
notify Licensee in writing no later then three (3) days from the
receipt of the PO and request a delivery modification. All delivery
modifications must be approved, in writing by Licensee prior to the commencement and
fulfillment of the specific PO.
(c) In the
event that Manufacturer is unable to meet the delivery requirement
of any specific PO, the
circumstances of which would cause the delivery and fulfillment of
the specific PO to be delayed by thirty (30) days or more, Licensee
shall have the write to seek an outside manufacturer to manufacture
the specific PO.
(d) In the
event that Manufacturer is unable to meet the delivery requirement
of any specific PO, the
circumstances of which would cause the delivery and fulfillment of
the specific PO to be delayed by thirty (30) days three (3) times
during the term of this Agreement, this Agreement shall
automatically and without further notice, convert to a
NON-EXCLUSIVE Manufacturing Agreement and Licensee shall have full
rights to manufacture its products with any other manufacturer that
Licensee may deem appropriate.
2. Shipping and Transportation of
Manufactured Products.
(a)
Manufacturer shall ship units to Licensee in accordance
with the delivery requirement set forth in each PO as accepted by
Manufacturer.
(b) All
shipments of Product shall be made Fright On Board (herein after
referred to “FOB”) Manufacturer's facilities
and liability for loss or damage in transit, shall stay with
Manufacturer until such time as delivery of Product, as defined in
each individual PO, reaches its final port of
delivery.
(c)
Licensee shall bear all costs of transportation,
insurance, import duties, tariffs,
taxes and docking fees and will promptly reimburse
Manufacturer if Manufacturer prepays or otherwise pays for such
expenses.
(d)
Manufacturer shall not be in default by reason of any
failure in its performance under this Agreement if such failure
results from, whether directly or indirectly, fire, explosion,
strike, freight embargo, Act of God or of the public enemy, war,
civil disturbance, act of any government, dejure or de facto, or
agency or official thereof, material or labor shortage,
transportation contingencies, unusually severe weather, default of
any other manufacturer or a supplier or subcontractor, quarantine,
restriction, epidemic, or catastrophe.
(e) Licensee shall be responsible for
all costs from the port of delivery to their containment facility
for purchase orders .
3.
Cancellation . Licensee shall have the right to
cancel any specific PO upon three (3) business days written notice
to Manufacturer from the date of issuance of the original
PO.
ARTICLE VI
WARRANTY
(a)
Manufacturer warrants that Licensee shall acquire
all Product purchased hereunder free and clear of any and all liens
and encumbrances of any kind or nature, expressed or implied,
whether in law or by contract.
(b)
Manufacturer warrants all Product manufactured
under this Agreement shall be free from defects in materials,
workmanship, manufacturing or fabrication under normal use and
service for a period of ninety (90) days from the date of delivery
as provided under Section 2(a) of Article III of this
Agreement.
(c) All
repair covered by this warranty shall be done at Manufacturer's
facilities, or other such warranty repair facilities designated by
Manufacturer.
(d) Any
defect corrected within ninety (90) days and found to be within
this scope of the warranty shall be repaired or replaced by
Manufacturer in a timely manor and without delay of any kind
.
(e) Shipping costs for repaired
or replaced products shall be born by the Manufacturer back to
Licensee. Shipping costs for repaired or
replaced products to the
Manufacturer shall be born by the Licensee.
ARTICLE VI
SPARES, STANDARD SUBASSEMBLIES AND
PARTS
(a)
Spares, standard subassemblies and parts as used
herein, shall be defined as components defined and required by the
Licensee’s product specifications used to fabricate and/or
repair the Product manufactured by the Manufacturer .
(b)
Manufacturer shall make spares for purchase by Licensee
for a period of not less than one (1) year after shipment of the
last unit to Licensee hereunder. Such spares will be available to
Licensee at prices, terms and conditions in effect at the time such
spares are purchased.
ARTICLE VII
DURATION OF AGREEMENT
1. Term. The term of
this Agreement shall be for 5
years from the date hereof, unless sooner terminated.
Termination shall not relieve either party of obligations incurred
prior such termination.
2. Termination. This Agreement
may be terminated only:
(a) By either party for substantial
breach of any material provision of this Agreement by the other,
provided due notice has been given