"Notice of Supply Agreement Termination"
AGREEMENT No. XXXXX Between Supplier name (Hereinafter referred to as “Supplier”) Address Zip Code and City Country Telephone. no.: [ ] Fax no.: [ ] E-mail - Sales: [ ] VAT-number: [ ] Internet address: [ ] and Electrolux Laundry Systems [Sweden/Denmark] AB (Hereinafter referred to as “Customer”) Adress: Telephone no.: Fax no.: ELS Standard Version Supply Agreement 1. Introduction The purpose of this Agreement is to regulate the business between Supplier and Customer. The Supply Agreement is, in prioritised order, build up of: ELS Standard Version Supply Agreement General Purchasing Conditions Of The Electrolux Group And exhibits: 1. Pricelist 2. The Electrolux Group Workplace Code of Conduct 3. The Electrolux Laundry Systems Environmental Policy 4. Fire prevention 5. Logistic parameters 6. Pack instructions 7. Electrolux Laundry Systems special conditions for tools 8. Transportation Plan 9. Contact Matrix 10. ELS Claim Routines 11. Contingency Planning In case the Parties do not wish to use the Agreement or any provisions hereof, this must be specified in the purchase order in question. The provisions of this Agreement, which consists of this Supply Agreement, shall prevail over all other provisions. It is Supplier‟s responsibility that the relevant employees at Supplier have been informed of and are familiar with the contents of this Agreement. 2. Scope of Agreement This Supply Agreement shall cover purchase of [ ] 3. Validity This Supply Agreement enters into force on [ ]. 4. Termination The Ending Date of this Supply Agreement is [ ]. If neither Party terminates the agreement, with a written notice of [ ] months to the end of a month before Ending Date, the agreement is automatically prolonged and the new Ending Date is the last Ending Date + [ ]months. Termination can only be addressed to the commercially responsible person according to this Supply Agreement. 2 In case a Party is in breach of this Agreement (e.g. for instance defects, faults, and delays in the supplied Goods) the other Party is entitled to terminate the agreement with a written notice of [ ] months to the end of a month. 5. Re-negotiation of Agreement Both Parties can without terminating the Supply Agreement request a re-negotiation of the Supply Agreement and/or Appendix (es) partly or entirely. The Party who requests such re-negotiation shall forward a written request to the other Party, stating reasons for such request. If the Parties cannot reach an agreement about the requested changes, the Agreement shall continue to be in force unchanged. Hereafter, both Parties have the right to terminate the Agreement according to Section Termination. As regards re-negotiation of prices, see Section Price Adjustments. 6. Electronic communication: Webrix or EDI All communication shall be done electronically, via EDI or Webrix, and the following messages shall be used: Forecast from Customer to Supplier Orders from Customer to Supplier Dispatch Advice from Supplier to Customer Goods Labels The sender of the document is responsible for transmission and receipt of the documents. The Supplier is responsible to look for changes in forecast and orders every day. Customer shall provide Supplier with all needed education in the @Webrix System. 7. Forecast Customer updates forecasts every day showing a 200day horizon. In case of termination - for any reason - of Agreement or appendixes, Customer accepts to buy the remaining stock hold of items involved equal to [ ] months forecast, within [ ] months. 8. Purchase order Customer sends order every day. Customer can cancel the individual purchase order in question according to this Frame Agreement. Supplier shall in this connection be placed in a situation as though the purchase order had not been issued. Supplier will be compensated actual and documented costs in connection with the purchase order without addition of Supplier‟s profit. 9. Yearly need 3 Yearly needs on each part no see exhibit Logistic parameters. This is an estimated need and Customer gives no guarantees and will not be hold consequences if not reached. 10. Material authorization Supplier has the approval from Customer to buy material for a [max 3] month yearly need given by the Customer, see Section Yearly need. The Customer binds to buy material within the authorization that is left over cause of dramatically changed needs or changes in specifications. Material with very long lead- times which may require a longer authorization is specified in exhibit Extended Material Authorization. This exhibit has to include the specific material and the total authorization in weeks, including the general 3months. The risk for material beyond the authorization will be covered by the Supplier. Though, the Supplier shall do its outermost in order to sell this material back to Sub-Supplier or to use it for other customers. 11. Outturn sample The Supplier shall provide the Customer with below measures/data whenever an outturn sample is produced. An outturn sample shall also always be send to Customer whenever Supplier‟s production- process is changed. - labelled with a red sticker stating „outturn sample for incoming inspection‟ - measurement protocol with reference: order number, part number, drawing including revision number, description, material certificates, x-ray protocol (only for casting) - drawings shall be enclosed clearly defining which positions that has been measured Whenever the Supplier does not provide the Customer with above information a cost of [200 EUR] will be invoiced the Supplier. 12. Safety Buffer-Stock The Supplier is obliged to have a safety buffer-stock of a [normally 2] weeks need which is based on the yearly need as in section Yearly need. When a normal delivery is executed the entire quantity is taken from the safety buffer-stock using the FIFO-method (first in, first out). It is the Suppliers responsibility to maintain the quantity in the safety buffer-stock as agreed. Customer binds to cover the cost if the safety buffer-stock has to be redesigned or scrapped due to phase-out. 13. Terms of payment Current month + 60 days from receipt of invoice. Invoicing shall not take place until full and approved delivery of the entire purchase order, receipt and approval of any certificates and/or other relevant documentation has taken place, unless otherwise stated in the purchase order in question. 14. Invoicing Invoices shall be forwarded to: Electrolux Laundry Systems [Sweden/Denmark] 4 and shall as a minimum contain Customer‟s document purchase order number and Customer‟s article number. Invoices not containing such information shall be regarded as not issued and shall be returned to Supplier. Goods not referring to a purchase order shall not be invoiced. Such invoices will be returned to Supplier. Payment shall be made to account no. [ ] Purchase from other suppliers Customer has the right at any time to buy comparable or similar Goods from other suppliers. 15. Price adjustments Both parties expect continuously to cost optimise the co-operation, by both continuously to source alternative sub-suppliers and continuously to improve the internal manufacturing efficiency. The goal is to lower the turnover yearly by [ ] %. The Supplier has to present a plan showing how to reach this goal including a risk analysis. In case a Party wishes to initiate negotiations regarding adjustment of prices, this shall take place in writing to the other Party [ ] months before such new prices may enter into force. In case Supplier wishes to adjust the prices a detailed suggestion regarding the new prices shall be included in the request. Furthermore Supplier shall prepare a detailed calculation of consequences of the suggested price adjustment. The request shall be forwarded to the commercially responsible person according to this Supply Agreement. By mutual agreement the new prices can enter into force earlier than the mentioned [ ] months. In case the Parties cannot reach a new agreement within the mentioned negotiation period each Party has a right to terminate the agreement according to Section Termination. The prices and terms and conditions valid before forwarding of the request shall be valid until expiration of the Agreement or until a new agreement regarding adjusted prices enters into force. Prices according to this Agreement are stated in exhibit Pricelist. Prices are quoted in [ ] Prices are fixed during the term of the agreement and can only be changed according to this section in the Supply Agreement. All prices are quoted exclusive of VAT but including all setup costs. 16. Quantity tolerance The ordered quantities shall be regarded as fixed quantities. Delivered quantities can only be a multiple of the MOQ. Excess deliveries and short deliveries will not be accepted. 17. Delivery Supplier shall comply with Customers demand for an in-time delivery of  %. 5 In time = on or before requested-date, where requested-date is order-date + agreed lead-time. In the measure the Supplier is always given the lead-time. The Supplier always has to take in consideration the time for transport even if the Customer covers the freight. In the agreed lead-time the time for transport has to be included and considered. In exhibit Transportation Plan, the following has to be defined: The time for transport Forwarder and its contact information When goods are picked up at Supplier When goods arrive at the Customers dock (In-time) The Goods shall be delivered [ ] according to Incoterms 2000. The shipping company shall be informed about number of coli, weight, volume, pick-up place and at what time the Goods are ready to be collected. In case Supplier does not use this shipping arrangement, any freight costs cannot be invoiced Customer. Supplier shall mark all deliveries according to Section Electronic communication: Webrix or EDI On the delivery note the following shall be stated as a minimum: Customer‟s purchase order number Customer‟s article number with statement of the ordered quantity and the delivered quantity Agreed lead-times and MOQ see exhibit Logistic parameters In case nothing else is agreed than the agreed lead-time is [ ] days and MOQ (Minimum Order Quantity) is one full pallet. Goods are to be packed according to pack instruction, see exhibit Pack Instruction but also according to the „International standards for phytosanitary measures‟, see http://www.ippc.int In case the Supplier is aware of the fact that it will not be able to deliver the Goods at the agreed time, Supplier shall at once notify Customer hereof and agree on a new time of delivery. The Customer shall in this connection be entitled to make use of the provisions regarding breach of contract, see Section Termination in the Supply Agreement). In case Customer requests a delivery which cannot be handled within the agreed time of delivery such purchase order shall be handled separately and any additional costs shall be agreed upon before initiating such urgent delivery. Customer cannot be invoiced for costs, which have not been agreed upon before the delivery is initiated. 18. Statistics Supplier shall at his own account and upon Customer‟s request make statistical material available. Such statistical material shall only regard the co-operation between the Supplier and Customer and shall as a minimum include: Turnover and number of sold units per product Turnover and number of sold units per product group Turnover and number of hours spend on the various services 6 Delivery Statistics including symptom, cause and action in order to reach goal in section Terms of Delivery Quality Statistics including symptom, cause and action in order to reach goal in section Quality 19. Supplier Profile Tool If the Customer and the Supplier has agreed to a quarterly follow-up of the Supplier Profile Tool then the Supplier is responsible for actively every quarter present an actionplan on criteria‟s where the present score has not reached the minimum score. The Supplier is also responsible for presenting a long-term plan showing how to reach the preferred score. 20. Test and documentation demands The supplied Goods are delivered with the following documentation: Inspection report COC It is Supplier‟s responsibility that the supplied Goods are delivered with CE marking and declaration regarding conformity. 21. Spare part and wear part availability The Supplier is cognizant that prompt availability of spare parts for the Product(s) is essential for the successful sale and servicing by Customer of its products to its costumers and end-users. In view hereof, the Supplier undertakes to continue to supply spare parts for the Product(s) to Customer for ten years from the last delivery of the (relevant) Product. What is regulated for spare parts shall continue to be in force for a period of ten years from the termination of the ELS Supply Agreement. During such period the terms of the Logistics Agreement shall apply. 22. Rights Tools, moulds, production basis, immaterial rights etc. paid for by Customer shall be the property of Customer and shall be handed over to Customer upon request. All drawings, products and the like which have been and will be handed over to Supplier by Customer shall be the property of Customer. Such drawings, products etc. shall not be handed over to or used by Supplier or any third party. Customer reserves the property right to drawings made in co-operation between Supplier and Customer and can request that such drawings be handed over to Customer. Products made on basis of drawings handed over by Customer to Supplier shall not be sold or handed over to any third party unless Customer‟s commercially responsible person in Global Purchasing has approved this in writing. 23. Tools Tools are regulated according to exhibit Electrolux Laundry Systems special conditions for tools 24. Complaints In case Goods are rejected due to defects or faults in the supplied Goods Supplier will receive a Claimreport from Customer, see exhibit ELS Claim Routines 7 25. Quality Supplier shall comply with following quality demands: Every delivery shall be in 100% compliance with Customers current drawings and specifications. In case Supplier wishes to initiate changes regarding current drawings and specifications, this shall take place in writing. The change cannot come into force before Customer accepts it in writing. Goal: [ ] PPM (Parts Per Million). Supplier shall secure traceability of delivered goods. Customer use Milstandard 105E AQL 1.5 Normal for random testing. 26. Penalties If Customer and Supplier have agreed that a goal within Delivery and Quality has not been met then the following penalty shall be applied: Quality: For each or part of 500PPM above the goal, the Supplier shall pay the Customer, 0.5% of the invoiced value for that specific quarter. Delivery: For each or part of 2% under the goal, the Supplier shall pay the Customer, 0.5% of the invoiced value for that specific quarter. 27. Quality control system Supplier shall as a minimum have a quality control system according to the ISO 9001 standard or another equivalent quality control system approved by Customer. Customer shall at all times have access to verify that a quality control system is established and that this system works according to purpose. In case Customer wishes to audit the quality control system, Supplier shall allot the necessary time and staff for such audit. A quality control system, which is not satisfactory, justifies Customer to terminate the relevant Appendix (es) and possibly the Supply Agreement with immediate effect. Control Customer shall without notice have access to all parts of Supplier‟s administrative and production facilities in order to control status of a specific purchase order. 28. Environmental requirements The supplied Goods shall as a minimum comply with all environmental and safety provisions in the recipient country and/or country of use at the time of purchase order placement and shall comply with exhibit The Electrolux Environmental Policy 29. Code of Conduct Supplier shall comply with exhibit The Electrolux Group Workplace Code of Conduct 8 30. Supplier fire prevention commitment Supplier shall comply with exhibit Fire Prevention. If the score 7 is not reached within 3months after entering this agreement then the Customer has the right to terminate the agreement according to Section Termination. The Supplier [must/must not] fill in an contingency planning and reach score 7 within maximum [ ] months after signing this agreement, see exhibit Contingency Planning. 31. Reference Supplier is not allowed to refer to the co-operation with Customer in any form of advertising, articles, brochure material or the like, without prior acceptance from Customer 32. Exclusivity Supplier undertakes during the term of this Agreement not to enter into agreements regarding sale with other manufacturers/distributors of laundry systems. 33. Other companies within the Electrolux Group Companies within the Electrolux Group, associated companies and subsidiaries shall be able to use this Supply Agreement and attached Appendixes at the same prices and on the same terms and conditions. Ordering of Goods, invoicing and any bonus calculation shall take place directly between the company in question and Supplier. 34. Competitive Clause If during the period of this Agreement Customer advises Supplier in writing of a genuine offer from another supplier to supply the Product at a price taking fair account of any differences in quality, in terms or conditions of supply or delivery which is less than the price payable under this Agreement, then Supplier and Customer shall within thirty (30) days meet to discuss the position and if after discussion Supplier declines to offer new prices, or if Supplier's prices remains higher than those of the competitive offer, Customer may elect to purchase the quantity so offered and/or terminate this Agreement forthwith. 35. Governing law and jurisdiction Disputes between the parties shall be settled by arbitration in accordance with the rules of the Arbitration Institute of the Stockholm Chamber of Commerce. Swedish law shall be applied. The arbitration proceedings shall take place in Stockholm, Sweden. 36. Amendments Amendments to this Supply Agreement can only take place in writing signed by both Parties before entering into effect. 37. Contact Matrix For relevant contacts at each Party see exhibit Contact Matrix 38. Signatures 9 This Supply Agreement has been issued in two original copies of which each Party shall keep one. Place, 200X Electrolux Laundry Systems [Sweden/Denmark] Purchasing ______________________________________ ______________________________________ Purchasing Manager [SUPPLIER] ______________________________________ [NAME] [TITLE] 10