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Manufacturing Services Agreement
THIS AGREEMENT (the “Agreement”) is effective as of the date any order is placed (the “Commencement Date”) through the MacroFab online Manufacturing Platform (the “Platform”), by and between MacroFab, Inc., a Delaware corporation having a principal place of business at 2000 W. Governors Cir. Ste. F, Houston, TX 77092 (“MACROFAB”) and the customer executing an order via the Platform (“CUSTOMER”).
This document was last updated on 06/21/2017.
The initial term of this Agreement shall commence on the Commencement Date and shall continue through the first anniversary of the Commencement Date unless sooner terminated by mutual agreement or in accordance with this Agreement. Upon the expiry of the initial term, this Agreement shall continue from year to year until one party terminates the Agreement by giving at least thirty (30) days’ prior written notice to the other party. Notwithstanding the foregoing, the term of this Agreement shall automatically extend to include the term of any purchase order, or order initiated via the Platform, (“Order”) issued hereunder.
2.1 Pricing. During the term, CUSTOMER shall have the right to purchase from MACROFAB the products specified in the quote displayed on the website at the time of order, as such quote may be amended from time to time (the “Products”, the “Quote”) at the prices set forth in the quote (the “Prices”). Prices (a) are in U.S. Dollars, (b) exclude the items set forth in Section 2.2, and (c) are based on (i) the configuration set forth in the Quote and (ii) the identified volume, minimum run rates and other assumptions set forth in MACROFAB’s Quote (if any). The Prices for the Quote related to the specific executed Order shall remain fixed for the term of the Agreement, subject to MACROFAB’s right to revise Prices (with prior written notice of price increases) (d) to account for any material variations on the market prices of components, parts and raw material (collectively “Components”), including any such variations resulting from shortages or (e) the price adjustments set forth in Section 2.3.
2.2 Exclusions from Price. Prices do not include (a) export licensing of the Product or payment of broker’s fees, duties, tariffs or other similar charges; (b) taxes or charges (other than those based on net income of MACROFAB) imposed by any taxing authority upon the manufacture, sale, shipment, storage, “value add” or use of the Product which MACROFAB is obligated to pay or collect; and (c) setup, tooling, or non-recurring engineering activities (collectively “NRE Charges”) not captured in the quote and related to activities performed on behalf of CUSTOMER at CUSTOMER’S request or performed as a necessary consequence of manufacture on behalf of CUSTOMER. NRE Charges which are not included in the attached quote must be authorized by CUSTOMER prior to being incurred. Any charges for these items shall be separately invoiced.
2.3 Other Price Adjustments:
(a) CUSTOMER acknowledges that the Prices set forth in the Quote are based on the forecasted volumes provided by CUSTOMER to MACROFAB. In the event CUSTOMER fails to purchase Product in sufficient volumes consistent with the quoted prices, MACROFAB reserves the right to bill back CUSTOMER for the difference between the prices paid and the prices associated with such lower volumes.
(b) CUSTOMER acknowledges that the Prices are based on MACROFABS specifications and the assumptions set forth in the Quote. In the event MACROFAB experiences an increase in cost as a result of changes in the pricing assumptions, whether they be based on design changes by customer, process changes necessary to successfully manufacture product as approved by CUSTOMER, or changes to any pricing assumption in the quote, MACROFAB shall be entitled to the Price adjustment set forth in Section 6.1.
2.4 Product Ordering. Product ordering shall be in accordance with the schedule or method of releases by Orders set forth in the Quote, or as documented in the Order being produced.
2.5 Online Orders. All online Orders issued or initiated through the Platform will be processed as-is. No changes may be made to Orders issued or initiated through the Platform after payment has been made without prior electronic or written approval by MACROFAB. All orders placed through the Platform are considered firm and final once paid for, and can only be cancelled or modified in accordance with Sections 6 and 10.
3. PAYMENT TERMS
Payment terms are one hundred percent (100%) net 0 calendar days due at the Commencement Date, unless otherwise agreed to in a separate written agreement. If the Quote includes a pre-payment before shipment, such prepayment shall be made immediately upon execution of order. Payment shall be made in U.S. Dollars. If CUSTOMER fails to make timely payments on existing invoices, MACROFAB may decrease net days due, or request that some or all of invoice be paid before shipment occurs, until such time as CUSTOMER has demonstrated renewed creditworthiness to the satisfaction of MACROFAB.
4. PURCHASE ORDERS – FORECAST – AMORTIZED NRE
4.1 Purchase Orders.
(a) CUSTOMER will issue to MACROFAB one or more Orders for Product covered by this Agreement. Each Order shall be placed and executed via the Platform: (i) a description of the Product by model number or quote identifier; (ii) the quantity of the Product; (iii) the delivery date or shipping schedule; (iv) the location to which the Product is to be shipped; and (v) transportation instructions. Each Order shall provide an order number for billing purposes, and may include other instructions and terms as may be appropriate under the circumstances.
(b) All Orders shall be confirmed by MACROFAB within five (5) business days of receipt. If MACROFAB does not accept or reject the Order within the five day period, the Order shall be deemed rejected by MACROFAB unless MACROFAB has commenced performance, in which case the Order shall be deemed accepted to the extent of such performance. In the event MACROFAB is unable to meet the delivery schedule set forth in a proposed Order, or finds the schedule to be unacceptable for some other reason, the parties shall negotiate in good faith to resolve the disputed matter(s).
4.2 Forecast; Minimum Buys; Excess and Obsolete Inventory.
(a) Initial Forecast. Upon the execution of this Agreement, CUSTOMER shall provide MACROFAB with (i) an initial firm Order and (ii) optionally, a subsequent 365 day flexible forecast. The Order – and all subsequent Orders – shall be binding and may be rescheduled only in accordance with Section 4.2(d). MACROFAB shall make purchase commitments for the Order to its Component suppliers (“Vendors”) based upon the Order, and CUSTOMER shall be responsible for all such Components purchased in support of CUSTOMER’s then-current Order.
(b) Subsequent Forecasts. Without a firm Order, any subsequent forecasts by customer will be construed as informative only, and, lacking a firm Order, neither MACROFAB nor CUSTOMER will be bound to such forecasts.
(c) Customer acknowledges that MACROFAB will be required to order Components in accordance with the various minimum buy quantities, tape and reel quantities, and multiples of packaging quantities required by the Vendor. In addition, CUSTOMER acknowledges that there is a lag time between any Customer cancellation and the cancellation of the Components required to support production.
(d) Reschedule. CUSTOMER may not reschedule all or part of a scheduled without prior written approval from MACROFAB. If any delivery re-schedule has been accepted and has occurred, and CUSTOMER wishes to further re-schedule delivery for the same Order, CUSTOMER shall either accept delivery of rescheduled finished units and/or pay the MACROFAB’s Delivered Component Cost (as defined in Section 4.2(e)) associated with rescheduled units not yet built.
MACROFAB shall use reasonable commercial efforts to accommodate, subject to Component and capacity availability, any upside schedule changes beyond the firm order periods.
(e) Customer Component Liability. CUSTOMER acknowledges that it shall be financially liable for all Components ordered in accordance with this Article. Specifically, CUSTOMER’s Component Liability shall be equal to MACROFAB’s Delivered Cost of all Components ordered in support of any Order, including any excess Components resulting from any minimum buy quantities, tape and reel quantities, and multiples of packaging quantities required by the Vendor less the actual cost (per the bill of materials) of those Components which are returnable to Vendor (less any cancellation or restocking charges). At CUSTOMER’S request, MACROFAB shall use commercially reasonable efforts to minimize CUSTOMER’S Component Liability by attempting to return Components to the Vendor; provided, however, that MACROFAB shall not be obligated to attempt to return to Vendor Components which are, in the aggregate, worth less than $100.00.
(f) Any obsolescence of manufactured or work-in-progress inventory, or components of product, in possession of MACROFAB at the time of a change (as documented in Section 6) shall be the financial liability of CUSTOMER, in accordance with Section 4.1(e) and Section 6.1.
4.3 Amortized NRE Costs. If the Quote includes one or more line items indicating the amortization of Non-Recurring Expenses (NRE), then it is expected that these NRE payments will be made on the original production schedule dates. If CUSTOMER re-schedules production in accordance with Section 4.2(d), MACROFAB will have, at its discretion, the right to request that the amortized NRE payments be made on the original schedule. MACROFAB’s waiving of this right during any schedule change does not preclude its right to do so during any future rescheduling of delivery or guarantee and future waiving of such collection rights.
5. DELIVERY AND ACCEPTANCE
5.1 Delivery. All Product shipments shall be F.O.B. MACROFAB’s facility of manufacture and freight collect, and shall be to destination defined by CUSTOMER in the firm Order. Title to and risk of loss or damage to the Product shall pass to CUSTOMER upon MACROFAB’s tender of the Product to CUSTOMER’s carrier. MACROFAB shall mark, pack, package, crate, transport, ship and store Product to ensure (a) delivery of the Product to its ultimate destination in safe condition, (b) compliance with all requirements of the carrier and destination authorities, and (c) compliance with any special instructions of CUSTOMER. MACROFAB shall use reasonable efforts to deliver the Products on the agreed-upon delivery dates and shall use reasonable efforts to notify CUSTOMER of any anticipated delays.
5.2 Acceptance. Acceptance of the Product shall occur no later than ten (10) days after shipment of Product and shall be based solely on whether the Product passes a mutually agreeable Acceptance Test Procedure or Inspection designed to demonstrate compliance with the Specifications. Product cannot be rejected based on criteria that were unknown to MACROFAB or based on test procedures that MACROFAB does not conduct. Product shall be deemed accepted if not rejected within this twenty-day period. Once a Product is accepted, all Product returns shall be handled in accordance with Article 7 (Warranty). Prior to returning any rejected Product, CUSTOMER shall obtain a Return Material Authorization (“RMA”) number from MACROFAB, and shall return such Product in accordance with MACROFAB’s instructions; CUSTOMER shall specify the reason for such rejection in all RMA’s. In the event a Product is rejected, MACROFAB shall have a reasonable opportunity to cure any defect which led to such rejection.
6.1 General. CUSTOMER may upon sufficient notice make changes within the general scope of this Agreement. Such changes may include, but are not limited to changes in (1) drawings, plans, designs, procedures, Specifications, test specifications or BOM, (2) methods of packaging and shipment, (3) quantities of Product to be furnished, (4) delivery schedule, or (5) CUSTOMER-Furnished Items. All changes other than changes in quantity of Products to be furnished shall be requested pursuant to an Engineering Change Notice (“ECN”) and, if accepted by CUSTOMER, finalized in an Engineering Change Order (“ECO”). If any such change causes either an increase or decrease in MACROFAB’s cost or the time required for performance of any part of the work under this Agreement (whether changed or not changed by any ECO) the Prices and/or delivery schedules shall be adjusted in a manner which would adequately compensate the parties for such change.
6.2 ECN’s. Within five (5) business days after an ECN is received, MACROFAB shall advise CUSTOMER in writing or electronic communication (a) of any change in Prices or delivery schedules resulting from the ECN and (b) the Delivered Cost of any Finished Product, Work-in-Process or Component rendered excess or obsolete as a result of the ECN (collectively the “ECN Charge”). Unless otherwise stated, ECN Charges are valid from thirty (30) days from the date of the ECN Charge.
6.3 ECO’s. In the event CUSTOMER desires to proceed with the change after receiving the ECN Charge pursuant to Section 6.2, CUSTOMER shall advise MACROFAB in writing or electronic communication and shall pay the portion of the ECN Charge set forth in Section 6.2(b) in accordance with Section 3. In the event CUSTOMER does not desire to proceed with the Change after receiving the ECN change, it shall so notify MACROFAB. In the event MACROFAB does not receive written or electronic confirmation of CUSTOMER’s desire to proceed with the change within thirty days after MACROFAB provides CUSTOMER with the ECN Charge, the ECN shall be deemed canceled.
7.1 MACROFAB Warranty. MACROFAB’s warranty period is for one year (365 days) from date of manufacture and is limited to correction of defects in MACROFAB workmanship. For the purpose of this Section, “workmanship” shall mean manufacture in accordance with the most current version of IPC-A-600 or IPC-A-610, or the CUSTOMER’s workmanship standards set forth in the Specifications. MACROFAB shall, at its option and at its expense, repair, replace or issue a credit for Product found defective during the warranty period. In addition, MACROFAB will pass on to CUSTOMER all manufacturer’s Component warranties to the extent that they are transferable, but will not independently warrant any Components.
7.2 RMA Procedure. MACROFAB shall concur in advance on all Product to be returned for repair or rework. CUSTOMER shall obtain a Returned Material Authorization (RMA) number from MACROFAB prior to return shipment. All returns shall state the specific reason for such return, and will be processed in accordance with MACROFAB’s Returned Material Procedure, a copy of which is available from MACROFAB upon request. MACROFAB shall pay all transportation costs for valid returns of the Products to MACROFAB and for the shipment of the repaired or replacement Products to CUSTOMER, and shall bear all risk of loss or damage to such Products while in transit; CUSTOMER shall pay these charges, plus a handling charge, for invalid or “no defect found” returns. Any repaired or replaced Product shall be warranted as set forth in this Article for a period equal to the greater of (i) the applicable warranty period relating to such Product or (ii) ninety (90) days after it is received by CUSTOMER.
7.3 Exclusions From Warranty. This warranty does not include Products that have defects or failures resulting from (a) CUSTOMER’s design of Products including, but not limited to, design functionality failures, specification inadequacies, failures relating to the functioning of Products in the manner for the intended purpose or in the specific CUSTOMER’s environment; (b) accident, disaster, neglect, abuse, misuse, improper handling, testing, storage or installation including improper handling in accordance with static sensitive electronic device handling requirements; (c) alterations, modifications or repairs by CUSTOMER or third parties or (d) defective CUSTOMER-provided test equipment or test software. CUSTOMER bears all design responsibility for the Product.
7.4 Remedy. THE SOLE REMEDY UNDER THIS WARRANTY SHALL BE THE REPAIR, REPLACEMENT OR CREDIT FOR DEFECTIVE PARTS AS STATED ABOVE. THIS WARRANTY IS IN LIEU OF ANY OTHER WARRANTIES EITHER EXPRESS OR IMPLIED, INCLUDING MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
8. CUSTOMER FURNISHED EQUIPMENT AND COMPONENTS
8.1 Customer-Furnished Items. CUSTOMER shall provide MACROFAB with the equipment, tooling, Components or documentation set forth in a separate exhibit or documented in the Quote (collectively the “Customer-Furnished Items”). The Customer-Furnished Items shall be fit for their intended purposes and shall be delivered to MACROFAB in a timely manner. Documentation (including BOM’s, drawings and artwork) shall be current and complete. CUSTOMER shall be responsible for schedule delay, reasonable inventory carrying charges and allocated equipment down time charges associated with the incompleteness, late delivery or non-delivery of the Customer-Furnished Items.
8.2 Care of Customer-Furnished Items. All Customer-Furnished Items shall remain the property of CUSTOMER. MACROFAB shall clearly identify all Customer-Furnished Items by an appropriate tag and shall utilize such Customer-Furnished Items solely in connection with the manufacture of CUSTOMER’s Product. MACROFAB shall not make or allow modifications to be made to the Customer-Furnished Items without CUSTOMER’s prior written or electronic consent. MACROFAB shall be responsible for reasonable diligence and care in the use and protection of any Customer-Furnished Items and routine maintenance and repairs of any Customer-Furnished Equipment as documented by CUSTOMER, but shall not be responsible for major repairs or replacements (including service warranties and calibration to the equipment) or repair or replacement of failed Customer-Furnished Item unless such failure was caused by MACROFAB’s negligence or willful misconduct. All Customer-Furnished Items shall be returned to CUSTOMER at CUSTOMER’s expense upon request.
8.3 Customer-Furnished Components. Customer-furnished Components shall be handled in accordance with MACROFAB’s procedures regarding Customer-Furnished Material, incorporated by reference herein, copies of which are available upon request.
9. INDEMNIFICATION AND LIMITATION OF LIABILITY
9.1 MACROFAB’s Indemnification. MACROFAB shall indemnify, defend, and hold CUSTOMER and CUSTOMER’s affiliates, shareholders, directors, officers, employees, contractors, agents and other representatives (the “Customer-Indemnified Parties”) harmless from all demands, claims, actions, causes of action, proceedings, suits, assessments, losses, damages, liabilities, settlements, judgments, fines, penalties, interest, costs and expenses (including fees and disbursements of counsel) of every kind (each a “Claim,” and, collectively “Claims”) (i) based upon personal injury or death or injury to property to the extent any of the foregoing is proximately caused either by the negligent or willful acts or omissions of MACROFAB or its officers, employees, subcontractors or agents and/or (ii) arising from or relating to any actual or alleged infringement or misappropriation of any patent, trademark, mask work, copyright, trade secret or any actual or alleged violation of any other intellectual property rights arising from or in connection with MACROFAB’s manufacturing processes.
9.2 CUSTOMER’s Indemnification. CUSTOMER shall indemnify, defend, and hold MACROFAB and MACROFAB’s affiliates, shareholders, directors, officers, employees, contractors, agents and other representatives (the “MACROFAB-Indemnified Parties”) harmless from all Claims (i) based upon personal injury or death or injury to property to the extent any of the foregoing is proximately caused either by a defective Product, by the negligent or willful acts or omissions of CUSTOMER or its officers, employees, subcontractors or agents and/or (ii) arising from or relating to any actual or alleged infringement or misappropriation of any patent, trademark, mask work, copyright, trade secret or any actual or alleged violation of any other intellectual property rights arising from or in connection with the Products, except to the extent that such infringement exists as a result of use by CUSTOMER of MACROFAB’s manufacturing processes.
9.3 Procedure. A party entitled to indemnification pursuant to this Article (the “Indemnitee”) shall promptly notify the other party (the “Indemnitor”) inwriting of any Claims covered by this indemnity. Promptly after receipt of such notice, the Indemnitor shall assume the defense of such Claim with counsel reasonably satisfactory to the Indemnitee. If the Indemnitor fails, within a reasonable time after receipt of such notice, to assume the defense with counsel reasonably satisfactory to the Indemnitee or, if in the reasonable judgment of the Indemnitee, a direct or indirect conflict of interest exists between the parties with respect to the Claim, the Indemnitee shall have the right to undertake the defense, compromise and settlement of such Claim for the account and at the expense of the Indemnitor. Notwithstanding the foregoing, if the Indemnitee in its sole judgment so elects, the Indemnitee may also participate in the defense of such action by employing counsel at its expense, without waiving the Indemnitor’s obligation to indemnify and defend. The Indemnitor shall not compromise any Claim or consent to the entry of any judgment without an unconditional release of all liability of the Indemnitee to each claimant or plaintiff.
9.4 Limitation of Liability. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY INDIRECT, CONSEQUENTIAL, INCIDENTIAL OR SPECIAL DAMAGES, OR ANY DAMAGES WHATSOEVER RESULTING FROM LOSS OF USE, DATA OR PROFITS, EVEN IF SUCH OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES; provided, however, that this Section shall not prevent a party from incurring the liabilities set forth in Section 9 (Indemnification) or 10 (Termination). IN NO EVENT SHALL MACROFAB’S LIABILITY UNDER THIS AGREEMENT (WHETHER ASSERTED AS A TORT CLAIM OR CONTRACT CLAIM) EXCEED THE AMOUNTS PAID TO MACROFAB HEREUNDER. IN NO EVENT WILL MACROFAB BE LIABLE FOR COSTS OF PROCUREMENT OF SUBSTITUTE GOODS BY CUSTOMER. THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY.
10.1 Termination for Cause. Either party may terminate this Agreement or an Order hereunder for default if the other party materially breaches this Agreement; provided, however, no right of default shall accrue until thirty (30) days after the defaulting party is notified in writing of the material breach and has failed to cure or give adequate assurances of performance within the thirty (30) day period after notice of material breach. Notwithstanding the foregoing, there shall be no cure period for payment-related defaults.
10.2 Termination For Convenience. CUSTOMER may terminate this Agreement hereunder for any reason upon thirty (30) days’ prior written notice. In addition, CUSTOMER may terminate an Order hereunder for any reason upon ninety days’ (before scheduled shipment) prior written notice. MACROFAB may terminate this Agreement for any reason upon ninety (90) days’ notice.
10.3 Termination by Operation of Law. This Agreement shall immediately terminate should either party (a) become insolvent; (b) enter into or file a petition, arraignment or proceeding seeking on order for relief under the bankruptcy laws of its respective jurisdiction; (c) enter into a receivership of any of its assets or (d) enter into a dissolution or liquidation of its assets or an assignment for the benefit of its creditors.
10.4 Consequences of Termination.
(a) Termination for Reasons other than MACROFAB’s Breach. In the event this Agreement or an Order hereunder is terminated for any reason other than a breach by MACROFAB (including but not limited to a force majeure or termination for convenience), CUSTOMER shall pay MACROFAB, termination charges equal to (1) the contract price for all finished Product existing at the time of termination; (2) MACROFAB’s cost (including labor, Components and a twenty  percent mark-up on Components and labor) for all work in process; (3) CUSTOMER’S Component Liability pursuant to Section 4.2(f); and (4) any outstanding amortized NRE payments pursuant to Section 4.3.
(b) Termination Resulting From MACROFAB’s Breach. In the event CUSTOMER terminates this Agreement or any Order hereunder as a result of a breach by MACROFAB, CUSTOMER shall pay MACROFAB, termination charges equal to (1) the contract price for all finished Product existing at the time of termination; (2) MACROFAB’s cost (including labor, Components) for all work in process; (3) CUSTOMER’S Component Liability pursuant to Section 4.2(f);provided, however, that for the purposes of this subsection only, CUSTOMER’s Component Liability shall be calculated using “actual cost” rather than “Delivered Cost”; and (4) any outstanding amortized NRE payments pursuant to Section 4.3 which relate to work actually having been performed and with payment outstanding.
11.1 Specifications. Product shall be manufactured by MACROFAB in accordance with the Specifications set forth in the Quote or in separate Exhibit, as modified via written ECO’s in accordance with this Agreement. Neither party shall make any change to the Specifications, to any Components described therein, or to the Products (including, without limitation, changes in form, fit, function, design, appearance or place of manufacture of the Products or changes which would affect the reliability of any of the Products) unless such change is made in accordance with Section 6.1 and MACROFAB’s ECO procedure. Notwithstanding the foregoing, MACROFAB shall be permitted to make changes in its manufacturing process at any time, so long as such changes do not affect the form, fit or function of the Products.
11.2 Content of Specifications. The Specifications shall include, but shall not be limited to (i) detailed electrical, mechanical, performance and appearance specifications for each model of Product, (ii) the BOM; (iii) tooling specifications, along with a detailed description of the operation thereof, (iv) art work drawings, (v)Component specifications, (vi) supplier cross references.
11.3 Quality of Components. MACROFAB shall use in its production of Products such Components of a type, quality, and grade specified by CUSTOMER to the extent CUSTOMER chooses to so specify, and shall purchase Components only from Vendors appearing on CUSTOMER’s approved vendor list (“AVL”) if such list is furnished by CUSTOMER; provided, however, that in the event MACROFAB cannot purchase a Component from a Vendor on CUSTOMER’S AVL for any reason, MACROFAB shall be able to purchase such Component from an alternate Vendor, subject to CUSTOMER’s prior written or electronics approval, which approval shall not be unreasonably withheld or delayed.
11.4 Quality Specifications. MACROFAB shall comply with the quality specifications set forth in its Quality Manual, incorporated by reference herein, a copy of which is available from MACROFAB upon request.
11.5 Inspection of Facility. Upon reasonable advance written notice, CUSTOMER may inspect the Products and Components held by MACROFAB for CUSTOMER at MACROFAB’s facilities during MACROFAB’s regular business hours, provided that such inspection does not unduly affect MACROFAB’s operations. CUSTOMER and its representatives shall observe all security and handling measures of MACROFAB while on MACROFAB’s premises. CUSTOMER and its representatives acknowledge that their presence on MACROFAB’s property is at their sole risk.
11.6 Acceptable Loss. For all firm Orders, CUSTOMER acknowledges that some units may be considered a complete loss and undeliverable due to damage during manufacturing or inability to otherwise meet customer-defined tests or specifications. While MACROFAB will extend all commercially reasonable due diligence to prevent and contain such losses, for firm Orders some loss may be present. MACROFAB will not be liable for any loss below 0.25% of the total firm Order quantity, exhibited across one or more scheduled deliveries if there are multiple scheduled deliveries. For any units lost or otherwise made unusable during manufacturing which exceed 0.25% of the total firm Order quantity, MACROFAB will reimburse or credit customer for the per unit charge difference, less any amortized NRE or non-variable costs per unit, at CUSTOMER’s request.
12. FORCE MAJEURE
12.1 Force Majeure Event. For purposes of this Agreement, a “Force Majeure Event” shall mean (i) the occurrence of unforeseen circumstances beyond a party’s control and without such party’s negligence or intentional misconduct, including, but not limited to, any act by any governmental authority, act of war, natural disaster, strike, boycott, embargo, shortage, riot, lockout, labor dispute, civil commotion and (ii) the failure of a Vendor to timely deliver a Component to MACROFAB.
12.2 Notice of Force Majeure Event. Neither party shall be responsible for any failure to perform due to a Force Majeure Event provided that such party gives notice to the other party of the Force Majeure Event as soon as reasonably practicable, but not later than five (5) days after the date on which such Party knew or should reasonably have known of the commencement of the Force Majeure Event, specifying the nature and particulars thereof and the expected duration thereof; provided, however, that the failure of a party to give notice of a Force Majeure Event shall not prevent such party from relying on this Section except to the extent that the other party has been prejudiced thereby.
12.3 Termination of Force Majeure Event. The party claiming a Force Majeure Event shall use reasonable efforts to mitigate the effect of any such Force Majeure Event and to cooperate to develop and implement a plan of remedial and reasonable alternative measure to remove the Force Majeure Event; provided, however, that neither party shall be required under this provision to settle any strike or other labor dispute on terms it considers to be unfavorable to it. Upon the cessation of the Force Majeure Event, the party affected thereby shall immediately notify the other party of such fact, and use its best efforts to resume normal performance of its obligations under the Agreement as soon as possible.
12.4 Limitations. Notwithstanding that a Force Majeure Event otherwise exists, the provisions of this Article shall not excuse (i) any obligation of either party, including the obligation to pay money in a timely manner for Product actually delivered or other liabilities actually incurred, that arose before the occurrence of the Force Majeure Event causing the suspension of performance; or (ii) any late delivery of Product, equipment, materials, supplies, tools, or other items caused solely by negligent acts or omissions on the part of such party.
12.5 Termination for Convenience. In the event a party fails to perform any of its obligations for reasons defined above for a cumulative period of sixty (60) days or more from the date of such party’s notification to the other party then the other party at its option may extend the corresponding delivery period for the length of the delay, or terminate this Agreement effective immediately upon notice to the non-terminating party, subject to any termination liability pursuant to Section 10.4(a) above.
MACROFAB agrees to maintain during the term of this Agreement (a)workers’ compensation insurance as prescribed by the law of the state in which MACROFAB’s services are performed; (b) employer’s liability insurance with limits of at least $500,000 per occurrence; (c) comprehensive automobile liability insurance if the use of motor vehicles is required, with limits of at least $1,000,000 for bodily injury and property damage for each occurrence; (d) commercial general liability insurance, including blanket contractual liability and broad form property damage, with limits of at least $3,000,000 combined single limit for personal injury and property damage for each occurrence; and(e) commercial general liability insurance endorsed to include products liability and completed operations coverage in the amount of $3,000,000 for each occurrence. The minimum amount of insurance required may be satisfied by MACROFAB purchasing primary coverage in the amount specified, or a separate umbrella or excess liability policy together with a lower limit primary underlying policy. The structure of coverage is at MACROFAB’s option so long as the total amount of insurance meets these minimum requirements. MACROFAB shall furnish to CUSTOMER certificates or evidence of the foregoing insurance indicating the amount and nature of such coverage and the expiration date of each policy. Each party agrees that it, its insurer(s) and anyone claiming by, through, under or in its behalf shall have no claim, right of action or right of subrogation against the other party and the other party’s affiliates, directors, officers, employees and customers based on any loss or liability insured against under the insurance required by this Agreement.
14. CREDIT LIMIT
MACROFAB shall provide CUSTOMER with an initial credit limit of zero dollars ($0.00), unless otherwise agreed to in a separate written agreement, which shall be reviewed (and, if necessary, adjusted) as required. MACROFAB shall have the right to reduce the credit limit upon sixty (60) days’ prior written notice to CUSTOMER, or in accordance with Section 3. In the event CUSTOMER exceeds this credit limit or has any outstanding invoice for more than the net days due of the invoice, MACROFAB shall have the right to stop shipments of Product to CUSTOMER until CUSTOMER makes a sufficient payment to bring its account within the credit limit provided.
15.1 Integration Clause. This Agreement (including the Exhibits and Schedules to this Agreement) constitutes the entire agreement of the parties, superseding all previous Agreements covering the subject matter. This Agreement shall not be changed or modified except by written Agreement, specifically amending, modifying and changing this Agreement, signed by MACROFAB and an authorized representative of the CUSTOMER.
15.2 Order of Precedence. All quotations, Orders, acknowledgments and invoices issued pursuant to this Agreement are issued for convenience of the Parties only and shall be subject to the provisions of this Agreement and the Exhibits hereto. When interpreting this Agreement, precedence shall be given to the respective parts in the following descending order: (a) this Agreement; (b)Schedules and Exhibits to this Agreement; and (c) if Orders are used to release product, those portions of the Order that are not pre-printed and which are accepted by MACROFAB. The Parties acknowledge that the preprinted provisions on the reverse side of any such quotation, Order, acknowledgment or invoice shall be deemed deleted and of no effect whatsoever. No modification to this Agreement, the Exhibits or any Order shall be valid without the prior written consent of the Purchase Agreement Coordinators of MACROFAB and CUSTOMER.
15.3 Assignment. Neither this Agreement nor any rights or obligations hereunder shall be transferred or assigned by either party without the written consent of the other party, which consent shall not be unreasonably withheld or delayed. This Agreement may be assigned by either party to any corporation controlling, controlled by or under common control with its parent corporation or to any successor to substantially all the business of the party.
15.4 Notices. Wherever one party is required or permitted or required to give written notice to the other under this Agreement, such notice will be given by hand, by certified U.S. mail, return receipt requested, by overnight courier and addressed as follows:
If to Buyer: with a copy to:
Contact information provided
via the Platform.
If to Seller: with a copy to:
Purchasing and Contracts
2000 W. Governors Cir. Ste. F
Houston, TX 77092
All such notices shall be effective upon receipt. Either party may designate a different notice address from time to time upon giving ten (10) days’ prior written notice thereof to the other party.
15.5 Disputes/Choice of Law. The parties shall attempt to resolve any disputes between them arising out of this Agreement through good faith negotiations. This Agreement shall be construed in accordance with the substantive laws of the State of Delaware (excluding its conflicts of laws principles).