Master Equipment Subscription Terms and Conditions (“Terms & Conditions”)
These Terms and Conditions (“Terms & Conditions”) shall apply to any Master Equipment Subscription and Service Agreement (“Agreement”) between Nikola Labs, Inc. (“Nikola”) and Company referenced therein that is ongoing while these Terms & Conditions are in effect. As used herein and in any such Agreement, the following terms shall have the following meanings:
“Affiliate” means, any entity that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, Company or Nikola. The term “control” (including the terms “controlling,” “controlled by” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of an entity, whether through the ownership of voting securities, through membership, by contract or otherwise. In addition, any entity (and its successors by way of change of organizational form) through which Company or Nikola is pursuing a business venture will be deemed an affiliate so long as Company or Nikola and/or its affiliates (as otherwise defined above) possess the power to elect not less than 25% of the whole number of the board of managers or directors of such entity or own not less than 25% of the assets or equity of such entity.
“Confidential Information” means any and all proprietary information of a Party, including, but not limited to, technical data, trade secrets, know-how, product plans and developments, product specifications, inventions, processes, formulas, consumer product testing data, technology, designs, drawings, models, mock-ups, marketing, finances and other business information (including, without limitation, all Intellectual Property), provided however, that Confidential Information shall not include any items that have become known generally to the public or ascertainable from public or published information (other than as a result of unauthorized disclosure by the receiving Party). Confidential Information shall also include all processes including, but not limited to, techniques, proprietary processes, management and economic policies, financial data, know-how, customer lists, computer software, intellectual property, inventions, patents rights and developments, or other rights of any nature used by Nikola to manufacture or develop Equipment or in connection with Nikola providing Services. Confidential Information shall also include confidential or proprietary information received from third parties that is subject to a duty on the part of the disclosing party to maintain the confidentiality of such information and to use it only for certain specified purposes.
“Data Analytics” means data analysis or analytical services, when produced by Nikola, will be provided and made available to Company as a separate Proposal for such Services.
“Equipment” means Nikola-owned hardware and wiring that Nikola will install, which could include one or more transponders, sensors, receivers, and/or umbilical cords as outlined in an applicable Proposal.
“Fees” means financial compensation paid by Company to Nikola in exchange for Services provided under each Proposal and will include one or more of the following:
Subscription Fees: means fees payable monthly in advance for the reporting of data measurements, such as vibration and temperature, and other data parameters as outlined in each Proposal.
Installation Fees:means fees associated with the initial or subsequent installation of Equipment and onboarding of Company.
Maintenance Fees:means fees associated with changes to Equipment requested by Company subsequent to the initial installation thereof, as well as replacement of or repair of Equipment that has been damaged by Company.
Upgrade Fees: means agreed-to fees associated with the upgrade or changes of Equipment, including sensors, receivers, and/or transponders,beyond those set forth in the then-current Proposal.
Early Termination Fees: means a fee in an amount equal to fifty percent (50%) of the total Subscription Fees for the period of time from the effective date of termination to the end of the Term.
“Intellectual Property” means, as the context may require, (a) Intellectual Property owned by Company; (b) Intellectual property owned by Nikola; or (c) any and all creative work product conceived, created, produced or reduced to practice by Nikola in connection with the Agreement, the Services, or the Equipment, including any trademarks, service marks, trade dress, trade secrets, patents, labeling, packaging, hang-tags, trade names, distinctive words, logos, drawings, art work, product ideas and concepts, pictures, colors, formulas, discoveries, inventions, specifications, proprietary information, processes, designs, design and/or utility models or copyrights, or any marks or works similar thereto, all applications for any of the foregoing, and any modifications, derivations, improvements or adaptations thereof.
“Parties” means Nikola and Company, collectively. Nikola and Company, separately, are each a “Party.”
“Person” means an individual, corporation, partnership, limited liability company, association, trust, or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
“Product Documentation” means guidance on Equipment use and care provided by Nikola in writing from time to time.
“Services” means those certain services to be provided by Nikola (and/or its subcontractors) under various Proposals.
1 Equipment Warranty, Delivery, Pricing, and Payment.
1.1 Equipment Warranty. In addition to any other warranties expressed in the Agreement or applicable Proposal(s), all Equipment shall be free from defects in materials, workmanship, manufacture, labeling, packaging, of first quality and otherwise in compliance with industry standards, and in conformance with all certifications made by Nikola;
This warranty shall apply to all integrated components, including the housing, boards, chips, and ports. This warranty applies to all items that are properly maintained and operated in accordance with the Product Documentation. Nikola does not warrant against damages due to unauthorized product modification or if the product is misapplied or moved from the location where originally installed. This warranty only applies to Equipment and/or Services for which Nikola receives full payment or for which Company is ‘current’ through a recurring billing process as outlined in the Proposal. This Equipment Warranty is the sole and exclusive warranty offered by Nikola. There are no other express or implied warranties. Nikola expressly disclaims all implied warranties of merchantability and fitness for a particular purpose. After Nikola has been given adequate opportunity to remedy any defects in Equipment, materials, or workmanship, Nikola retains the sole option either to replace or repair the Equipment under this warranty. Such an exchange or repair will be the full extent of Nikola’s liability. Nikola shall not be liable for any other costs, expenses, or damages whether direct, indirect, special, incidental, consequential or otherwise, even if such costs, expenses, or damages were foreseeable by Nikola. Nikola’s maximum total liability is limited to, and only to, the installation of replacement Equipment, if covered under this agreement, or the refund of the amounts paid for the Services. Nikola is not, in any way, liable for the health or safety of Company employees. Failure to disclose performance or maintenance issues, including, but not limited to, improper use of Nikola Equipment, will void this warranty.
1.2 Delivery. Nikola shall ensure that all Equipment will be shipped or delivered to Company in accordance with any instructions set forth in the Proposal and, in the absence of specific instructions in the Proposal, FOB or FCA, the location specified by Company.
1.3 Pricing and Payment Terms. Company agrees to pay Nikola for the Services and all Fees at the rate(s) set forth in each Proposal. Nikola shall issue its invoices for Equipment and Services at the time of installation as outlined in the Proposal. Unless otherwise stated in any Proposal, the payment due date shall be thirty (30) days after the later to occur of Company’s receipt of Nikola’s invoice or the installation of the Equipment and the initiation of Services. A finance charge of 1.0% per month will apply to all past due amounts on undisputed invoices. Company shall not be obligated to reimburse Nikola for any costs and/or expenses that are not set forth in the Proposal unless such costs and/or expenses are pre-approved in writing by Company. Nikola will invoice Company for all applicable taxes levied by the taxing authorities and shall be solely responsible to remit to the appropriate taxing authority any and all taxes that are required to be paid by Company in connection with the performance of the Services by Nikola including, but not limited to, any sales and/or use taxes.
2 Term. This Agreement shall continue from the Effective Date and for two (2) calendar years thereafter, unless earlier terminated in accordance with the Agreement (the “Term”). This Agreement will renew automatically annually thereafter (each a “Renewal Term”) unless either Party provides the other Party written notice, at least thirty (30) days before the end of the thencurrent Term or Renewal Term, expressing a desire not to renew the Agreement. Notwithstanding the foregoing, the provisions of Sections 3,4, 5, 6, 7, 8, 10, 11, and 12, and the Exhibits to the Agreement shall survive the termination of the Agreement for the respective period specified in each such Section or Exhibit or, if not so specified, indefinitely.
3 Intellectual Property
3.1 Ownership. If Company provides its Intellectual Property for use with any Services or Equipment, such Intellectual Property shall remain the sole property of Company. If Nikola provides its Intellectual Property for use with any Services or Equipment, such Intellectual Property shall remain the sole property of Nikola. Company agrees that all instruments, means, and methods of providing Service are the sole and exclusive property of Nikola.
3.2 Modification of Intellectual Property. If any of Nikola’s Intellectual Property undergoes modification, improvement or adaptation or becomes the subject of a derivative work created by Nikola or by Company, the Intellectual Property created as a result of such modification, improvement or adaptation or created as a result of any derivative work shall be Nikola’s Intellectual Property.
3.3 Cooperation with Intellectual Property. As necessary to any Intellectual Property rights allocated to Nikola in Section 4.2, Company agrees to assign to Nikola all of its present and future rights, title, and interest throughout the world, if any, in and to such Intellectual Property. Company agrees that, when requested by Nikola, Company will, for all jurisdictions execute, all original, divisional, continuing, substitute and renewal, reissue, and all other patent and other applications on any and all Intellectual Property specifically allocated to Nikola pursuant to Section 4.3 and generally take all measures Nikola, its successors, assigns, and representatives shall reasonably request to secure, maintain, and enforce proper patent and other protections and/or vest unencumbered title to the Intellectual Property allocated to it pursuant to Section 3.2.
3.4 Data Collection and Usage. Nikola reserves the right to collect, analyze, compile, and implement into future proposals, products, projects, or services data collected from Nikola Equipment deployed at Company’s facility. Nikola agrees not to disclose to third parties the source of the data or the Company’s identity without the Company’s express written consent.
4.1 Indemnification by Company. Company agrees to indemnify, defend, and hold harmless Nikola and its officers, shareholders, directors, employees, agents, successors, and assigns from and against any and all claims, suits, debts, dues, obligations, actions, causes of action, liabilities, and damages (including reasonable attorneys’ fees) of any kind or native, in law or in equity (“Claims”) arising out of or relating to (a) a breach by Company of any representation, warranty, covenant, or obligation under the Agreement; (b) infringement of copyrights, patents, or trade dress, unfair competition, or theft of trade secrets relating to any Company-furnished materials, Company-requested implementations of Equipment, and Company-requested Services; and (c) any personal injury (including death) or property damage to the extent caused wholly or in part due to Company’s acts or omissions in connection with the Services or Equipment.
4.2 Indemnification by Nikola. Nikola agrees to indemnify, defend and hold harmless Company and its officers, members, managers, employees, agents, successors and assigns from and against any and all Claims, arising out of or relating to: (a) a breach by Nikola of any representation, warranty, covenant or obligation under the Agreement; (b) any personal injury (including death) or property damage to the extent caused wholly or in part due to acts or omissions to act by Nikola or any person directly engaged or employed by Nikola in connection with the Services or Equipment; (c) any claims of Nikola’s Affiliates, employees, agents, contractors or representatives; and/or (d) any claims arising out of relating to the Services or Equipment provided by Nikola hereunder.
4.3 Indemnification Procedures. The indemnified Party shall give the indemnifying Party prompt written notice of any Claim for which indemnification is sought. The indemnifying Party shall have sole discretion over the conduct of the defense and settlement of any Claims, and the indemnified Party, at its own expense, may retain counsel to participate in the defense of such Claims. The indemnified Party shall cooperate in the defense of any Claim and shall furnish or cause to be furnished such records, information and testimony, and attend such conferences, discovery proceedings, hearings, trials or appeals, as may be reasonably requested in connection therewith.
5 Relationship of the Parties. Nikola is an independent contractor. Nikola shall be solely responsible for the manner and hours in which Nikola will perform Services under the Agreement. Nikola shall not have the authority to bind in any manner or to enter into contractual obligations on behalf of Company. Nikola shall be solely responsible for any workers’ compensation, unemployment or disability insurance payments, or any social security, income tax or other withholdings, deductions or payments that may be required by federal, state or local law with respect to any sums paid to Nikola hereunder. None of Nikola’s employees shall be entitled to any Company employee benefits of any nature.
6.1 Termination by Company. Company may terminate the Agreement for any reason with or without cause at any time by providing thirty (30) days prior written notice to Nikola. If Company terminates the Agreement prior to the expiration of the Term then in effect, Nikola shall be entitled, at Company’s expense, to retrieve all Equipment at a date and time agreed to by Company and Company shall pay to Nikola the Early Termination Fee within thirty (30) days of the effective date of termination.
6.2 Termination by Nikola. Nikola may terminate the Agreement for any reason with or without cause at any time by providing thirty (30) days prior written notice to Company. If Company fails to make payments to Nikola in accordance with the Agreement, such failure shall be considered substantial non-performance and cause for termination or, at Nikola’s option and upon giving seven (7) days’ written notification to Company, cause for suspension of performance of Services. In the event of suspension of Services, Nikola shall have no liability for delay or damage caused to the Company because of such suspension of Services. Before resuming Services, Company shall pay all sums due prior to suspension including any expenses incurred in the interruption and resumption of Nikola Services.
In the event of termination by Nikola, Company shall pay Nikola through date of termination for all Services rendered. In the event of such termination, Nikola shall promptly provide a final invoice to Company, and Company shall pay Nikola the amount shown within fourteen (14) days of Company’s receipt of the final invoice.
6.3 Return of Equipment Upon Termination. In the event of termination by either Party, Company shall provide Nikola staff reasonable access to all Company facilities containing Equipment to enable Nikola to safely remove all such Equipment. Such access will be provided within a reasonable and practical time period from date of termination, but not to exceed fourteen (14) days from the effective date of termination, or as otherwise agreed by Company and Nikola in writing. Nikola reserves the right to charge Company fair and reasonable Maintenance Fees for any Equipment that was destroyed or damaged while in Company’s possession or control.
7 Remedies and Limitation of Liability. The Parties acknowledge and agree that the remedies at law for breach or threatened breach of any of the provisions of Sections 3,4,,8, or 12.8 hereof would be inadequate and, in recognition of this fact, each Party agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the other Party shall be entitled to seek equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available. BOTH PARTIES HEREBY AGREE THAT NEITHER PARTY SHALL HAVE ANY RIGHT TO SEEK ANY CLAIMS AGAINST THE OTHER PARTY FOR LOST PROFITS OR CONSEQUENTIAL, SPECIAL, INDIRECT, OR PUNITIVE DAMAGES. Company’s maximum recovery against Nikola relating to the Equipment or Services provided hereunder, whether in contract, tort, or otherwise, is the amount actually paid to Nikola hereunder. Other than the equitable relief set forth above, an award of damages not to exceed monies paid to Nikola is Company’s sole and exclusive remedy against Nikola. Nikola shall have no liability and shall offer no warranty of any kind unless it is fully paid for the Services set forth in the applicable Proposal. Nikola makes no guarantee of approvals from public agencies, as such approvals may be subjective. Nikola may not be subjected to liability for any such failed approvals.
8 Non-Disparagement. At all times during the Term and thereafter, the Parties agree they will not knowingly make any statement, written or oral, or take any other action relating to the other Party or such Party’s business, products or any officer, director, member, manager or shareholder, respectively, that would disparage or otherwise harm the other or the other Party’s business or reputation or those of any of their respective officers, directors, members, managers or stockholders.
9 Insurance. For as long as Nikola’s obligation to indemnify remains in effect, Nikola will maintain comprehensive liability insurance, including product liability coverage, in minimum amounts of One Million Dollars ($1,000,000) U.S. currency per occurrence and Five Million Dollars ($5,000,000) U.S. currency in the aggregate, One Million Dollars ($1,000,000) U.S. currency per occurrence for damage and/or injury to property and Worker’s Compensation Insurance as required by law. Such coverage shall be on a date of occurrence form. The insurance coverage required shall be provided by an insurance company or companies with a rating of at least “A” or greater in Bests’ Insurance Guide. Upon Company’s reasonable request, and annually thereafter, upon reasonable request, Nikola shall provide Company with certificates of insurance evidencing such coverage.
10 Governing Law; Jurisdiction. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Ohio, without regard to the conflicts of law principles thereof. The Parties agree that any action arising under the Agreement shall be brought exclusively in a state or federal court located in the County of Franklin, Ohio. The Parties consent to the jurisdiction of such courts and to the service of process in any manner provided under Ohio law.
11 Notices. Except as otherwise expressly specified herein, all notices, requests or other communications required hereunder shall be in writing and shall be deemed to have been given or made if delivered personally or mailed, by certified or registered mail, postage prepaid, return receipt requested, to the Parties at the notice addresses set forth on the cover page of the Agreement or at such other addresses as shall be specified in writing by either of the Parties to the other in accordance with the terms and conditions of this Section 11. Notices, requests, or communications shall be deemed effective upon receipt or refusal.
12.1 Assignment. This Agreement shall not be assignable by either Party without the prior written consent of the other Party, provided however, that Company’s rights and obligations hereunder may be assigned to and among any of its Affiliates or to any successor to its business that assumes the Company’s obligations at any time without the consent of Nikola. This Agreement shall be binding upon and inure to the benefit of the Parties hereto, and each of their respective permitted successors and assigns. No provision of the Agreement is intended to confer upon any Person other than the Parties hereto any rights or remedies hereunder.
12.2 Entire Agreement. This Agreement (including Proposals) contains the entire understanding of the Parties relating to the matters referenced herein and therein and supersedes all prior agreements or understandings and may not be modified, amended or terminated except in writing signed by an authorized representative of Company and Nikola.
12.3 Severability. If any provision of the Agreement is held to be void, invalid, unenforceable, or illegal by any court of competent jurisdiction, the remaining provisions will remain valid and enforceable in accordance with the original intent of the Parties under the Agreement.
12.4 Attorneys’ Fees and Costs. The prevailing Party in any dispute arising out of the Agreement shall be entitled to recover from the non-prevailing Party all reasonable attorneys’ fees and costs related to the dispute.
12.5 Inconsistencies Among Documents. In the event there is a conflict between the Terms & Conditions and a Proposal, the Terms & Conditions shall control unless the Parties have in writing expressly acknowledged the conflict in the Proposal and agreed that the applicable Proposal shall control. No additional or different terms contained in any Proposal, acceptance, invoice, acknowledgement, bill of lading or any other similar document, or other terms and conditions provided with any other documents or materials shall be binding on Nikola. No course of dealing or usage of the trade shall be applicable unless expressly incorporated into these Terms & Conditions.
12.6 Waiver. Failure to enforce any provision of the Agreement by a Party will not constitute or be construed as a waiver of such provision or of the right to enforce such provision by such Party. No waiver by a Party of any condition or provision of the Agreement shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.
12.7 Counterparts. This Agreement may be executed in separate counterparts and by email, PDF or facsimile with the same effect as if the signatures thereto and hereto were upon the same instrument.
12.8 Disclosure to Third Parties. Company shall not disclose to any third-party these Terms & Conditions, the Agreement, or any Proposal and agrees not to communicate, divulge, or otherwise make available to any third party (other than Company’s financial advisors, accountants, or attorneys) any information with respect to the Agreement without obtaining prior written consent from an authorized representative of Nikola. Nikola will obtain prior consent from Company, which shall not be unreasonably withheld, to depict Company’s projects and logos, for promotional purposes.