MMC CUSTOMER AGREEMENT

Terms and Conditions

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1.   Agreement.  Montalvo Machine Co., LLC, a Georgia limited liability company, its employees, representatives, and contractors (collectively “MMC”) shall arrange and provide certain welding, machining, fabrication, repair or prototyping services and such other services as may be requested by Customer (collectively the “Services”), subject to and in accordance with these terms and conditions (hereafter the “Agreement”).  For purposes of this Agreement, “Customer” shall mean the party identified on the proposal, quote, purchase order or invoice receiving the benefit of Services provided by MMC.   Customer’s authorization to allow MMC to proceed with the Services constitutes Customer’s acknowledgement of an agreement to all of the terms and conditions of this Agreement.

2.       Price. MMC will provide a quote for services to Customer as either a “Fixed- Price” quote, a “Time and Materials” quote, or an “Estimate”. MMC shall honor its projected quotes for labor for up to thirty (30) days following the printed date on the Quote or Estimate.  Prices for materials are based on market prices on the date of the Quote or Estimate.

A.       Fixed-Price Quote: MMC’s Fixed-Price quotes for services are based on a good faith estimate of the amount of labor and materials required to complete a given project.  A Fixed-Price Quote will reflect the final invoice amount unless written change orders are submitted to and approved by Customer.

B.       Time and Material Quote:  MMC’s Time and Material quotes for services list MMC’s hourly rates for the proposed project and, upon request, the maximum cost of labor and materials that can be billed under the quote. Actual labor and material costs will be calculated upon MMC’s completion of the project.  The price for the labor shall be billed according to the hourly rate listed on the quote or, if no such proposal or quote was provided, MMC will then apply its current standard billing rate as it is reflected on MMC’s invoice.  If materials are purchased for the project, regardless of the quantity used, customer agrees to pay their entire cost along with a 15% markup. Material that is pulled from MMC’s stock will be billed by the unit according to a good faith estimate of their market value.

C.   Estimate: MMC’s Estimate is an approximation of the cost of the materials and labor needed to complete the project requirement(s) as described by customer.  The estimate for material costs is based on the market prices at the time of the estimate.  The estimate for labor costs is based on MMC’s good faith estimate as to the amount of time required to complete the project using MMC’s then standard billing rate.  MMC’s estimate is not guaranteed and is not a contract, as the actual cost may change after all of the project elements have been negotiated and finalized.   

3. Payment. For contracts that require a deposit, Customer shall pay the deposit to MMC according to the specified value on the quote or in an amount no less than fifty percent (50%) of the quoted cost prior to commencement of work, and the balance shall be paid no later than thirty (30) days after the final invoice date.   Under a contract based on a Time and Material quote in which Customer is required to pay a deposit, MMC will specify the amount to be paid prior to work commencing.  Upon completion of the work, any excess deposit will be refunded, or additional balance due will be billed to Customer, depending on Customer’s balance against the final cost of labor and materials.  For all contracts and services, Customer shall pay all remaining balances to MMC for the invoiced Services within thirty (30) days of the invoice date.  If any invoice is not paid within the 30 days, then the following provisions shall apply:

A.   MMC may, at its option, suspend all Services until payments are current, and MMC shall have no liability to Customer for any delay occasioned thereby;

B.   Any late payments shall be subject to a $50.00 late fee, and any past due accounts shall have interest accruing at a rate of one and one half percent (1½ %) per month; and

C.   MMC shall be entitled to pursue all available remedies to recover all remaining balances owed by Customer, including but not limited to filing court claims or materialman’s liens, reimbursement of all costs and expenses, including, but not limited to, court costs and attorneys' fees, incurred in collecting payment of such unpaid invoices unless the remaining balance is above $15,000, in which the Dispute Resolution procedures outlined below in Paragraph 12 will be followed.

4.   Entire Agreement. This Agreement constitutes the complete and exclusive agreement between MMC and Customer with respect to the Services. The terms and conditions herein supersede any and all prior or contemporaneous communications, written or oral agreements, representations, and other understandings relating to the Services.  Any prior agreements or understandings between MMC and Customer are replaced by this Agreement alone.

5.   Skills and Personnel. MMC shall provide the skills and staff necessary to perform the Services in a professional and workmanlike manner.

6.   Compliance with Laws. If any federal, state or local licenses, operating certificates, permits, or approvals are required to perform the Services, then Customer shall, at its own expense, procure and maintain for MMC all necessary federal, state or local licenses, operating certificates, permits or approvals.

7.       Add Ons. Labor or material costs that exceed the quote accepted by the Customer will require the Customer’s approval before added work is performed and materials are purchased.

8.   Dispute.  If Customer fails to dispute any charge on a MMC invoice within ten (10) days of issue date of an invoice, then Customer shall be conclusively presumed to have accepted that charge and waive its rights to object to it.

9.   Cancellation. Customer may cancel MMC’s Services only with reasonable, prior written notice to MMC.  Customer and MMC agree that 48 hours prior notice is reasonable notice.  Customer agrees to pay for any Services provided by MMC up through the effective date of the notice of cancellation as well as to compensate MMC for any reasonable expenses incurred by MMC prior to the effective date of the cancellation. 

10. Assignment. Customer may not delegate or assign any duties or rights under this Agreement without MMC’s prior written consent, which may be withheld for any or no reason. Any such delegation or assignment in violation of this Paragraph shall be void.

11. Liability. With respect to the Services provided hereunder, MMC's liability shall be limited as follows:

A.   MMC'S MAXIMUM LIABILITY, AND CUSTOMER'S EXCLUSIVE REMEDY WITH RESPECT TO ANY CLAIM ARISING OUT OF OR RELATED TO THE SERVICES, WHETHER ARISING IN CONTRACT, TORT (INCLUDING, BUT NOT LIMITED TO, NEGLIGENCE), BREACH OF WARRANTY OR OTHERWISE,  SHALL BE LIMITED TO THE AMOUNT THAT CUSTOMER ACTUALLY PAID FOR THE SERVICES;

B.   Except for Customer's rights pursuant to Paragraph 16, in no event shall MMC be liable, whether in contract, tort, warranty, under any statute, or on any other basis for special, incidental, indirect, punitive, multiple or consequential damages sustained by Customer or any other person or entity arising out of MMC’s performance or failure to perform its obligations relating to the Services, whether or not foreseeable and whether or not MMC is advised of the possibility of such damages, including without limitation, damages arising from or related to downtime, loss of revenue, lost profits, lost goodwill, lost business, or any other financial loss; and

C.   Customer waives any rights of offset for any alleged breach of contract and breach of warranty (except as set forth in Paragraph 16), negligence, strict liability in tort, and/or other tort.

12. Dispute Resolution.  Customer and MMC (collectively referred to as the “Parties”) agree that any controversy, claim, or dispute arising out of or relating to this Agreement, or the breach thereof, except for disputes involving balances owed by Customer to MMC less than $15,000 which are subject to the remedies provided in Paragraph 3 above, shall be resolved by using the following procedure prior to either party pursuing other available remedies:

A.   A meeting shall be held promptly between the Parties, attended by individuals with decision-making authority regarding the dispute, to attempt in good faith to negotiate a resolution of the dispute.  Any party may give the other party written notice of any dispute not resolved in the normal course of business.  Within 15 days after delivery of the notice, the receiving party shall submit to the other a written response. The notice and response shall include with reasonable particularity (a) a statement of each party's position and a summary of arguments supporting that position, and (b) the name and title of the individual who will represent that party and of any other person who will accompany him/her.  Within 30 days after delivery of the notice, the representatives of both parties shall meet at a mutually acceptable time and place that is within a fifty (50) mile radius of Barrow County, Georgia.

B.   If, within thirty (30) days after such meeting, the Parties have not succeeded in negotiating a resolution of the dispute, they agree to submit the dispute to mediation in accordance with the Commercial Mediation Rules of the American Arbitration Association and to bear equally the costs of mediation.

C.   The Parties will jointly appoint a mutually acceptable mediator who shall be an attorney certified as a mediator of commercial disputes.  If the Parties are unable to agree upon such appointment within twenty (20) days from the conclusion of the negotiation period, the Parties agree to seek assistance in such regard from the American Arbitration Association. 

D.  The mediation shall take place at a location within a fifty (50) mile radius of Barrow County, Georgia.

E.   The Parties agree to participate in good faith in the mediation and negotiations related thereto for a period of thirty (30) days.  If the parties are not successful in resolving the dispute through mediation, then the Parties agree that the dispute shall be settled by  binding arbitration.

F.   Arbitration will be administered through the American Arbitration Association and abide by the Commercial Arbitration Rules of the American Arbitration Association.  The arbitration shall be conducted by one arbitrator.  If the Parties cannot agree on the selection of an arbitrator within twenty (20) days of commencement of an arbitration proceeding by service of a demand for arbitration, the arbitrator will be selected by the American Arbitration Association. 

G.  The arbitration proceeding will be conducted within a fifty (50) mile radius of Barrow County, Georgia and shall be completed within 120 days from the date an arbitrator is appointed.  The time may be extended by the arbitrator in the interests of justice or the Parties may agree to extend this time in writing. 

H.  The arbitrator will apply the law of Georgia in determining the rights and obligations of the Parties.  The arbitrator will decide any questions of arbitrability.  The arbitrator will conduct binding arbitration of the Parties and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.  

I.         The arbitrator will award legal fees and costs to the prevailing party.

J.   The Parties will split the mediator and arbitrator fees and expenses equally, except that the arbitrator is free to award these fees and expenses to either party as part of the arbitration award.

13. MMC’s Remedies. In addition to MMC's rights pursuant to Paragraph 3, upon a breach by Customer of any promise, term, and/or condition contained in this Agreement, MMC shall have the right, in addition to any other right MMC may have at law or in equity, to take all or any of the following actions, at its sole option:

A.   Suspend its performance of the Services, even if partial payment for the Services has been received;

B.   Demand adequate assurance of due performance, including, but not limited to, the delivery to MMC of a third-party bond satisfactory to MMC;

C.   Declare the unpaid balance of the price for the Services immediately due and payable; and/or

D.  Collect from Customer all costs and expenses, including, but not limited to, court costs and attorneys' fees, incurred by MMC in enforcing any right or remedy hereunder or any right or remedy available to it at law or in equity, that pertains in whole or in part to the Services, Customer’s compliance with the terms and conditions of this Agreement, and/or securing payment for the Services.

14. Risk of Loss. Unless otherwise stated, with respect to any goods required to be delivered as part of the Services, the risk of loss for those goods shall pass to Customer upon the actual delivery of the goods to Customer or any agent, broker, carrier, contractor, customer, employee, or representative of the Customer (collectively for purposes of this Paragraph and Paragraph 15, the “Customer”), regardless of whether the goods are accepted by Customer.

15. Indemnification. Customer shall defend, indemnify and hold MMC, its shareholders, directors, managers, officers, employees, agents, successors and assigns (the “MMC Indemnitees”) harmless from and against any and all losses, damages, injuries (including death), demands, liabilities, claims, fines, penalties, lawsuits, administrative proceedings, petitions, costs and expenses (including without limitation reasonable attorneys’ fees incurred in responding to any of the foregoing actions), made or brought against any of the MMC Indemnitees arising from, related to, or caused by Customer’s acts or omissions, Customer’s breach of or failure to comply with the terms and conditions of this Agreement, or Customer’s failure to comply with any law.

16. Express Warranty; No Implied Warranties. MMC warrants that its Services were performed in accordance with the specifications requested by Customer in writing and in a professional and workmanlike manner (the “Express Warranty”). This Express Warranty is subject to the Claims filing requirements set out under Paragraph 12 of this Agreement.  MMC disclaims all implied warranties, including the implied warranties of fitness for a particular purpose and for merchantability and this Express Warranty is in lieu of all implied warranties, including the implied warranties of fitness for a particular purpose and for merchantability.  The Express Warranty of MMC is subject to the following further limitations:

A.   The Customer must pay for the Services in full as a condition precedent to MMC honoring the Express Warranty;

B.   The Express Warranty shall apply only to the Customer and is not transferrable unless agreed to in writing by MMC prior to supplying the Services;

C.   In no event shall MMC be liable for anticipated or lost profits, consequential damages or down time incurred by Customer; and,

D.  THE EXPRESS WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, AND MMC SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTY OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

E.   Subject to the liability limitations set out in Paragraph 8(a) of this Agreement, for any Service(s) MMC determines to be defective, MMC shall have the option to  (a) supply Customer with a refund of part or all of the cost of the Service(s) that are subject to the Claim, and/or (b) supply Customer with additional Service(s) at no additional charge to Customer to remedy the defective Service(s).

17. No solicitation or hire of MMC’s employees.  For a period of one (1) year after the later of MMC’s (1) last performance of any Services for Customer or (2) last shipment of any goods to Customer, Customer agrees not to solicit for hire, or actually hire, any person employed by MMC at the time of the last Services performed, or last goods shipped, or at any point thereafter.

18. Modifications. Any alteration, addition, or modification to this Agreement shall be of no force and effect unless in writing and signed by a duly authorized representative of MMC and Customer.

19. No Implied Waiver. A party’s failure to require, in one or more instances, the performance of any term or condition contained herein shall not be construed as a waiver or relinquishment of such party’s right to such performance or other future performance of such term or condition, and the other party’s obligations with respect thereto shall continue in full force and effect. A party’s consent to or approval of any act by the other party requiring such party’s consent or approval shall not be deemed to render unnecessary the obtaining of such consent or approval of any subsequent act.

20. Severability. If any term or condition contained herein is determined to be invalid or illegal by any court of competent jurisdiction or other lawmaking authority, then, to the extent allowed by law, that term or condition shall be deemed automatically amended to the extent necessary to make it valid, or, if not allowed by law, such provision shall be severed from this Agreement, and all remaining terms and conditions contained herein shall remain in full force and effect.

21. Rules of Construction. There is no presumption against MMC as the drafter of this Agreement. Customer has had the opportunity to review all terms and conditions of this Agreement and negotiate those terms prior to authorizing MMC to proceed with the Services. Additionally, any headings contained in the Agreement are for convenience of reference only.

22. Independent Contractor. The parties hereto expressly agree that nothing in this Agreement or the provision of the Services by MMC to Customer shall create a partnership, joint venture, agency, or any other similar relationship.  Each party enters into this Agreement for its own account, carrying out its respective business, separately and independently, limited only by the terms and conditions contained herein. No party may bind the other to any agreement or obligation with any other third party without the other party’s written consent.

23. Binding Effect.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, successors, and assigns, but shall not confer any rights or remedies upon any third-party beneficiaries or other persons who are not parties to this Agreement.

24. Termination. MMC may terminate this Agreement and have no obligation to provide the Services to Customer immediately upon the bankruptcy or insolvency of Customer or Customer’s breach of this Agreement. MMC shall not be liable to Customer in such instances for any costs, expenses, losses, damages, or liabilities arising out of such termination.  At the time of termination, any credits or payments not earned shall be repaid to Customer.

25. Notices. To be effective, all notices and other communications under this Agreement shall be in writing and sent to the intended recipient by personal delivery, by registered or certified mail, return receipt requested, or recognized overnight courier, at that party’s address as set forth on the MMC invoice to Customer for the Services. Each party may change its address for receipt of notice by giving notice of such address change pursuant to this Paragraph. Notice is given immediately upon personal delivery, three (3) business days following the date on which such notice is mailed in accordance with this Paragraph or the next day following the date on which such notice is sent by overnight courier.

26. Governing Law; Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of Georgia. The parties agree that venue shall be proper in the state and federal courts located in the County of Barrow, State of Georgia, for any legal proceedings that may be necessary to enforce the terms and conditions of this Agreement.

27. Attorneys’ Fees.  In addition to its rights under Paragraphs 3, 13 and 15 of this Agreement, if any legal action becomes necessary by MMC to enforce the terms and conditions of this Agreement, or, alternatively, MMC is responding to any legal action brought against it by Customer, MMC shall be entitled to recover its reasonable attorneys’ fees and costs incurred if it is the substantially prevailing party in such action.

28.    TIME OF ESSENCE.  Time is of the essence under this Agreement and in the performance of every term, covenant and obligation contained.