refurbishedservicesagreement_

7/25/2019 RefurbishedServicesAgreement_

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Specialty Form

_:

Refurbished Services Agreement

This form will appear in Business Transactions Solutions Fall 2008) and is

presented with permission

o

ThomsonlWest. Copyright 2008 ThomsonlWest. For

more information or to order

call 1-800-762-5272.

Thisform

is

an agreement between a manl{facturer and another party, referred

to

herein

as the buyer, that sets out the terms upon which the manufacturer will receive and

service

(i.e.,

repair and/or maintain) products that the buyer has previously sold

to

its

customers.

The

agreement should describe

in

detail the exact services

to be

provided by

the mam1facturer which, in this

case,

includes securing all products deliveredfof' services

and providing the repair services according to agreed specifications and using paris,

tooling and packaging materials provided by the buyer.

The

manl{facturer will provide

trained labor and also contribute its own existing equipment for use in carrying out

the

repair services. Under the arrangement the manufacturer will become an authorized

service organization for the buyer and thus allow the buyer

to

outsource its service

requirements for a fixed price set forth

in

the agreement.

~ f u r b i s h e d

products can

either be returned to the buyer's original customer or resold by the buyer to new

customers as r ~ f i l r b i s h e d items at a price which covers the cost

o

he manl{facturer's

work plus an acceptable profit margin.

The

buyer will provide the manufacturer with

forecasts

o

the volume

o

products that will require service based on the buyer's

historical data regarding the quality and performance o the products.

In

cases where

the buyer anticipates a large volume o service requirements fi'om a single customer

under a warrant contract with that customer the parties may agree that the customer will

have the right to actively monitor the quality and eificiency

o

the manulacturer

s

activities under this agreement. The agreement should also cover standard issues such

as delivelY procedures, change orders, warranties, limits on liability, term and

termination, payment terms, dispute resolution and confidentiality.

This Refurbished Service Agreement ( Agreement ) is entered into

s

of

[-

date

-]

(the

Effective Date ) by and between [- name of service provider

-]

a [- name of state -]

corporation, with principal offices located at

[-

address

of

service provider

-]

( Company ) and

[-

nanle of buyer

-]

a

[-

name of state -] corporation with principal

offices located at [- address of service provider -] ( Buyer ).

1 Work Scope

During the

tenn of

this Agreement, Company will be an authorized service organization

for Buyer and Company will provide refurbished services to Buyer that meet all handling,

testing, and packaging requirements at a cost on the products in Company's quotation for

Buyer. The detail handling, testing and packaging specifications for such products

( Specifications ) shall be set forth in Exhibit I Company shall house and secure

approved products that have been delivered to Company approved location for repair and

service from Buyer's customer. Buyer will provide all testing and repair equipment that

are necessary to service Buyer's approved products. Furthermore, Buyer will provide

detail training in handling, testing and procedures deemed necessary to examine and


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repair all equipment. Buyer will also provide all approved parts and packaging material

required to use for repair, repackaging and delivery of products. Company will produce

production samples ( First Article )

of

the refurbished product for acceptance by Buyer

and Buyer's customer. In which case, regular refurbished service and delivery ofproducts

hereunder shall not commence until Buyer has signified acceptance of the First Article as

being in conformity with the Specifications and Statement

of

Work. Any statements or

advice, technical or otherwise, given by Company with respect to the preparation of the

Specifications or Statement of Work shall

be

deemed

to

be given as an accommodation

to

Buyer and for no charge and Company shall have no responsibility or liability for the

content or use of such statements or advice.

2 What is Covered

Company will furnish labor, use Buyer supplied parts, and/or replacement equipment

necessary to repair operational or mechanical breakdowns of the products specified in

this agreement, provided such service is necessitated by product failure during normal

usage. The products specified and covered includes only what is listed in Exhibit 1

3. Term and Forecasting

The initial term of this Agreement shall be twelve (12) months from the effective date

with

[

minimum number

]

units per month minimum. Upon the Effective Date (or

as

soon as possible thereafter), and at each subsequent renewal date, Buyer will provide

Company with a twelve (12) month rolling forecast of the refurbished products to be

worked on for the succeeding twelve (12) month period, which shall be updated

thereafter during the first week

of

each succeeding month. Company will invoice Buyer

based on a minimum order each month. In the event monthly volume is greater than

[-

minimum number

]

units, Company will invoice Buyer based on the higher number.

After the initial twelve (12) month term this agreement will automatically

be

renewed for

another twelve (12) month period as long as Buyer or Company do not object in writing

three

3)

months prior to the expiration date of this agreement. These tem1S and

conditions are the only ones that govern Company's repair of Buyer's product. No other

oral or written terms or conditions apply.

4

Special Tooling Fixtures and Programs

In certain cases Company may be required to incur costs associated with tooling, fixtures

and set up charges which are not ret1ected

in

the quoted price for the service.

n

such

cases Company shall notify Buyer in advance of incurring any such costs. Buyer shall

signify in writing its acceptance

of

such costs and shall reimburse Company for such

costs prior to Company's acceptance of any Buyer orders for service. Title to fixtures and

tools shall pass to

Buyer upon receipt ofpayment by Company.

5 Engineering Change Orders


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Buyer may initiate engineering change orders ( ECO's ), which shall constitute a change

to the Specifications under the following conditions:

(a) Buyer shall provide Company with as much advance notice

of

the proposed ECO

as is reasonably possible.

If

the ECO is identified as being critical by Buyer, Company

will respond as soon as possible upon receipt

of

such notice. Implementation

of

the ECO

is contingent on accessory availability. All other ECO implementation schedules will be

as mutually agreed to.

(b) Company shall provide Buyer a written assessment

of

the anticipated effect

of an

ECO on Company's schedule and delivery costs. Buyer shall be responsible for all

rework or scrap costs (including costs associated with unusable inventory or parts on

order) incurred by Company that result from, design, test, component or material changes

made by Buyer. Company shall use reasonable efforts to minimize Buyer's liability

hereunder as a consequence

of an ECO.

6

rdering

All orders hereunder are subject to acceptance

by

Company. Orders shall be initiated

by

Buyer through the issuance

of

purchase orders in hard copy or electronic form provided

that any electronically submitted order is in a form acceptable to Company. Only the

transaction specific terms

of

an order shall apply. The preprinted tenns

of

any Buyer

purchase order shall be void and

of

no legal effect. Each order shall, subject to the criteria

set forth in the Specifications, Statement

of

Work and quoted lead times, specify the

products or services being ordered, quantities, prices, part numbers, descriptions,

requested delivery dates and such other information as may be necessary for Company to

fulfill the order. Once accepted, an order cannot be cancelled, modified or rescheduled

for shipment without Company's consent. Since the actual number

of

units that will be

reworked may change every month, a purchase order will be based on the minimlun

quantity; however, the actual invoice will be based on the actual number

of

units that may

be higher than the minimum order stated on the purchase order. Company will only

consent to cancellation

of

an order on the condition that Buyer will accept delivery

of

and

pay for all completed work at the time

of

cancellation and reimburse Company for all

costs associated with work in progress and inventory that resides at Company service

center.

7 Prices

Prices shall be as quoted by Company to Buyer based on $

[

dollar amount ] per unit

cost and

[

minimum number

]

units minimum order per month, FOB

[

address

of

service provider ]. Company will provide to buyer a copy

of

all processed orders placed

with Buyer's customer form. Unless otherwise specified in Company's quotation prices

quoted are good for [ number

]

days. Company reserves the right to increase the price

for any refurbished work whose cost is scheduled to increase beyond the current quoted

price due to major change in work requirement.


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8

Taxes

All prices are quoted net

of

any sales, use, excise, value added and similar taxes imposed

by any governmental authority regardless of how denominated; and any domestic

shipping charges, broker's fees, consular fees and customs duties, which shall be the

responsibility

of

Buyer or Buyer's customer. Buyer shall pay all such charges

in

the event

Buyer's customer refusal to pay. In the event Company is required to pay any taxes or

other charges for which Buyer or Buyer's customer is responsible hereunder, Buyer shall

promptly pay the same to Company upon receipt

of

Company's invoice therefore.

9 ayment Terms

Unless otherwise agreed, payments herennder shall be due [- number -] days from the

date

of

invoice, subject to Company's credit approval. Payments shall be made without

offset or deductions. Company reserves the right to require payment in advance or by

COD

if

Company reasonably and in good faith has reason to believe that Buyer's ability

to fultill its payment obligations may be impaired or if Buyer is delinquent in any

payments then owing to Company. Company also reserves the right to cancel or suspend

delivery of

all or part of an order

if

Buyer is delinquent in any payments owing

Company. Buyer shall nonetheless remain liable for any partial deliveries already made

as

well

as

for payment for any work in progress and inventory that cannot be returned to

Company's suppliers for credit. Upon request

of

Company Buyer agrees to provide such

financial information as Company may reasonably require for the extension

of

credit

terms. Company shall retain a purchase money security interest in any products delivered

pursuant to an order nntil it has received payment in full. Buyer agrees to execute any

financing statements or similar documents as may be reasonably required for Company to

perfect such security interest. Buyer shall pay a late payment charge of one l) percent

per month, but not in excess

of

the lawful maximum, on any past due balance. Late

payment charge is calculated based on the number

of

days late, the amolmt

of

past due

balance that is late, and an annual rate of 12 .

10

Shipment

All deliveries are FOB Company's shipping point. Title and risk of loss shall pass to

Buyer upon delivery to the common carrier, which shall be selected by Company unless

otherwise specified by Buyer. Company shall be responsible for all transportation and

related shipping costs, charges for which shall be separately stated on Company's invoice

and invoiced to Buyer's customer. Shipping dates are approximate. Company shall use

reasonable efforts to meet Buyer's requested delivery dates but in no event shall

Company be liable for any damages or penalties because

of

failure to meet such dates,

nor shall any delay in the delivery

of

one or more installments give Buyer the right to

cancel all or part of an order. Company reserves the right to make deliveries

in

installments. Any claim regarding shortages must be made witllin [- number -] days of

arrival

of

the shipment at Buyer's customer facility. Buyer agrees to supply Company

with a monthly butTer management report which Company will use to monitor and decide

if the buffer should be increased or reduced in size. n the event this agreement is


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tenninated, Buyer agrees to accept all Buyer s inventory including testing and packaging

material that resides at Company s service center.

11 Acceptance

Buyer or Buyer s customer shall be responsible for inspection of products. Unless Buyer

gives Company notice within

[

number ] days of arrival of the shipment at Buyer s

facility, the products will

be

deemed

to

be accepted. Any notice of rejection or non

confonnance must state with specificity the reasons therefore. Products will only

be

accepted for return pursuant to a Return Material Authorization issued by Company.

Returned products must be in their original shipping cartons complete with all packing

materials and shall be returned

to

Company s designated return location freight prepaid.

12

Warranty

Company warrants to Buyer that, upon delivery, products reworked and marked as pass

hereunder will confonn to the Buyer s applicable specifications. Except for these limited

warranties which are made solely

to

Buyer, Company MAKES NO WARRANTIES TO

BUYER OR ANY THIRD PARTY, EXPRESS OR IMPLIED, INCLUDING BUT NOT

LIMITED TO THE IMPLIED WARRANTIES OF FITNESS FOR A PARTICULAR

PURPOSE AND MERCHANTABILITY, OR ARISING FROM A COURSE OF

DEALING, USAGE OR TRADE PRACTICE, OR RESPECTING NON

INFRINGEMENT. Company s warranty obligations with respect

to

products are limited,

at Company s option, to repair or replace the products pursuant

to

the Return Material

Authorization procedure described in Section 10 above, or to refund the service price

paid by Buyer for the affected products. With respect to any services or value-added

work perfonned by Company. Company s warranty obligations are limited, at

Company s option, to correct any deficiency or non-confonnity

of

the services or value

added work or refund the price paid

by

Buyer for the affected services or value-added

work. Company agrees to transfer

to

Buyer,

to

the extent the same are transferable, any

indemnities and warranties that Company has received from its suppliers with respect

to

the products, including any indemnities respecting intellectual property infringement.

13 Time for Service

The Company s refurbished services will be perfonned during the hours of [ time ]

a.m. to [ time ] p.m. local time Monday through Friday, excluding local holidays.

14 Place

o

Service

All refUrbished services will be provided at authorized Company service center:

[-

address of service provider

].

Buyer shall be responsible for all freight charges

associated with delivery to Company service center and shipping from Company service

center.

15

Failed Units


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All units or parts that are deemed failing and beyond repair will either be shipped

separately to Buyer or Buyer may elect Company to dispose such parts and products in

accordance with applicable provisions of law, and, Company will invoice Buyer

separately for any charges or disposing fees associated with such parts and products.

Buyer shall be responsible for all freight charges associated with failed parts and units

that are shipped out of Company service center.

16 Reselling By Buyer

If Buyer is reselling the products, Buyer represents that it has acquired all authorizations

and

regulatory approvals applicable to the products. Buyer shall be solely responsible for

providing support to its resellers or customers. Buyer agrees to indemnify and hold

Company harmless from any claim asserted by a third party, regardless of the theory

under which such claim is asserted, based on Company s compliance with the

Specifications or Statement of Work or a breach of any warranty or representation made

by Buyer with respect to the products.

17 Unauthorized Use of Products

The products reworked by Company hereunder, including accessories, are not intended

or authorized for use with any life saving or life sustaining systems, nuclear facilities

or

for any other application in which failure of the products could create a situation where

personal injury or death may occur. Buyer warrants that it will not use or knowingly sell

such products to Buyer s customers who intend to use the products in such unintended

and unauthorized applications.

18 Limitation o Liability

NEITHER PARTY SHALL BE LIABLE TO THE OTHER HEREUNDER FOR ANY

INDIRECT,

SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES,

INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS OR REVENUE, LOSS

OF DATA, PROCUREMENT COSTS, OR BUSINESS INTERRUPTION COSTS,

EVEN

IF

ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. EXCEPT

AS

SET

FORTH IN SECTION 16 BELOW, OR FOR PERSONAL INJURY OR PROPERTY

DAMAGE TO THE EXTENT CAUSED BY COMPANY S GROSS NEGLIGENCE

OR WILLFUL MISCONDUCT, IN NO EVENT WILL COMPANY BE LIABLE TO

BUYER FOR ANY DAMAGES IN EXCESS OF THE PURCHASE PRICE OF THE

PRODUCTS, SERVICES OR VALUE ADDED WORK GIVING RISE TO SUCH

CLAIM REGARDLESS

OF

THE THEORY UNDER WHICH SUCH CLAIM

IS

ASSERTED.

19 Intellectual Property Indemnities

Buyer shall indemnify and hold Company harmless from any claim asserted by a third

party, and pay all costs, settlements and judgments associated therewith, including


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reasonable attorney's fees, that the products, when produced or delivered in confOlmity to

the Specifications or Statement of Work, infringe a patent, copyright, trademark or other

intellectual property right of a third party.

To

the extent that any work perfonned

by

Company hereunder causes a product to infringe a patent, trademark, copyright or other

intellectual property right

of

a third party, except to the extent that such work was

required

to

ensure the product's compliance with the Specifications or Statement

of

Work, Company shall indemnify and hold Buyer hannless from such claim, and shall

pay

all costs, settlements and judgments associated therewith, including reasonable attorneys

fees. In the event of such claim, Company shall either procure for Buyer the right to

continue using the product; modify the product

so

as

to

make it non-infringing; or take

back the product and refund the purchase price paid less a reasonable amount for use,

damage or obsolescence.

20 Licensed Material

If

any software or other licensed materials ( Licensed Materials ) are delivered

to

Buyer

as part of an order, then the possession,

use

and further distribution of such Licensed

Materials by Buyer are subject to the

ten S

ofthe license agreements accompanying such

Licensed Materials. Unless Company and Buyer have executed a separate license

agreement covering the Licensed Materials, Company

is

not the licensor

of

Licensed

Materials and Buyer's license rights

to

the Licensed Materials are between Buyer and

Company's suppliers or their licensors. Nothing herein shall be construed as granting

Buyer any rights to Licensed Materials inconsistent with the tenns of any such license

agreements.

21 Termination

Either party may tenninate this Agreement, with or without cause, upon

[

number

]

days prior written notice. In the case of termination without cause

by

Buyer or

tennination with cause by Company, Buyer shall be obligated

to purchase all completed

products and reimburse Company for all costs associated with work in progress and

inventory (including parts or materials on order) that cannot be returned

to

the original

manufacturer for credit. Either party may tenninate this Agreement immediately

if

the

other party makes an assignment for the benefit

of

creditors (other than solely an

assignment of moneys due). If a proceeding is comnlenced under any provision of the

United States Bankruptcy Code by or against either party,

and

this Agreement has not

been tenninated, the non-debtor party may tile a request with the bankruptcy court

to

set

a date within sixty (60) days after commencement of the case by which the debtor party

will assume or reject this Agreement.

22 Export Control

Neither party shall export or re-export

any

product or technical data except

in

full

compliance with the export control laws and regulations of the United States government,

its departments

ffild

agencies, or import or re-export any product or technical data except


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in full compliance o the laws o the jurisdiction into which, or from which, such product

or technical data is being imported or re-exported.

23 Force Majeure

Except for the payment o monies due and owing, neither party shall be liable for any

failure to perform hereunder where such failure

is due

to

causes beyond its reasonable

control, including, but not limited to, natural disasters and other acts o god, military or

civil strife, labor unrest, acts o govermnents, or material shortages. In the case o

material shortages Company reserves the right to allocate the delivery

o

affected

materials on a pro rata basis. The time for performance shall be extended by the period o

the force majeure.

24 Independent Contractors

Neither this Agreement nor the terms o any order shall constitute appointment

by

either

party as

the agent or legal representative

o

the other party for any purpose whatsoever, or

be deemed to create a partnership, joint venture, or relationship o associates. Both parties

are independent contractors and principals for their own accounts and neither party shall

represent or hold itself out in any other capacity.

25 Confidentiality

Company and Buyer acknowledge that infonnation supplied by either party in connection

with this Agreement and work performed under any order and designated by such party

as confidential is the confidential infon ation o the disclosing party. The receiving party

agrees: (i)

to

hold the confidential information in confidence using the same degree

o

care that it uses to protect its own confidential infonnation o similar importance, but not

less than a reasonable degree o care; (ii) not to make use o confidential infonnation

other than to perform the obligations under the order and (iii) not

to

reproduce

confidential information except

as

required

to

perform its obligations under this

Agreement. The receiving party s obligations with respect to confidentiality do not apply

to

information which: (i) becomes generally available

to

the public other than as a result

o unauthorized disclosure by receiving party, (ii) is disclosed

to

receiving party by a

third party whom receiving party has

no

reason

to

believe is wlder any obligation o

confidentiality with respect

to

such information, (iii) was in receiving party s possession

prior to disclosure by disclosing party, or (iv) was developed by receiving party

independent o the confidential information disclosed by disclosing party.

26 No License

Except as may be required for each party

to

carry out its responsibilities hereunder,

nothing in this Agreement shall

be

deemed

to

constitute a license,

by

implication or

estoppel, to either party s present or future patents, trade secrets, trademarks, copyrights

or other intellectual property rights.


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27 Compliance with Laws

Each party agrees to comply with all laws and regulations applicable to its perfornlance

under this Agreement and in the conduct

o

its business operations and to be responsible

for obtaining any approvals or licenses necessary to maintain such compliance.

28 Notices

All notices pertaining

to

this Agreement shall be in writing and delivered to the address

specified below or

to such other address as the parties may specify from time to time:

o

~ n a m e o service provider

~ a d d r e s s o

service provider

Attention:

~ r e s p o n s i b l e

person at service provider

1

To

~ n a m e o

buyer

~ a d d r e s s o

buyer

Attention:

[ ~ r e s p o n s i b l e

person at buyer

29 Assignment

Buyer shall not assign this Agreement or any order placed hereunder, by operation

o

law

or otherwise, without Company s prior written consent. Any assigmllent attempted in

violation

o

this provision shall be void and

o

no legal effect.

30 Governing Law

This Agreement shall be governed and construed in accordance with the laws

o

the state

o

California excluding its choice

o

law provisions. The United Nations Convention tor

the International Sale

o

Goods shall not apply.

31 Arbitration

Any dispute, claim or controversy arising out

o

or relating to this Agreement or the

breach, termination, enforcement, interpretation or validity thereof, including the

determination

o

the scope or applicability

o

this agreement

to

arbitrate, shall be

determined by arbitration in

[ ~ l o c a t i o n

before one arbitrator. The arbitration shall be

administered by the American Arbitration Association pursuant to its Commercial

Arbitration Rules. The arbitrator shall have no power to add to, delete from or modify

this Agreement. Each party shall have the right

to

conduct any and all discovery

to

which

it would be entitled had the dispute been resolved in a state court

o

general jurisdiction

in the state

o ~ n a m e o t a t e ~ ] .

Judgment

on

the arbitrator s award may be entered

in

any

court having jurisdiction. This clause shall not preclude parties from seeking

provisional remedies in

aid o

arbitration from a court

o

appropriate jurisdiction. The

arbitrator may, in the award, allocate all or part o the costs o the arbitration, including

the fees

o

the arbitrator and the reasonable attorneys fees

o

the prevailing party.


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11/11

IN

WITNESS WHEREOF, the parties have caused this Agreement

to

be executed

by

their duly authorized representatives as of the Effective Date.

[ name of service provider ] ( Company )

By: [ signature

]

N

arne

[ name of signatory ]

Title: [ title of signatory-]

[ name of buyer

]

( Buyer )

By: [ signature ]

Name: [ name of signatory-]

Title: [

title of signatory-]

Exhibit I

Testing Specifications: [ description-]

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