Exhibit 10.2
PRE-PAYMENT AGREEMENT
THIS AGREEMENT, dated the 20th day of April, 1995, by and
between ZVL-LSA, a.s., a corporation organized and existing under the laws of
the Slovak Republic and having its principal place of business at Nadrazna,
SK-909 01 Skalica, Slovak Republic (hereinafter referred to as "Seller"); and
L&S Automotive Products Co., a corporation organized and existing under the
laws of the State of Oklahoma and having its principal place of business at 16
South Pennsylvania, Oklahoma City, OK 73101, U.S.A. (hereinafter referred to
as "Purchaser");
W I T N E S S E T H:
WHEREAS Purchaser desires to acquire tapered automotive roller
bearings, as more specifically defined herein, from Seller, and Seller desires
to deliver such products on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants set forth herein, the parties hereto agree as follows:
ARTICLE I. Definitions.
1.1 As used herein, the term "Products" shall mean tapered
automotive roller bearings with the specifications as described in Exhibit A.
1.2 As used herein, the term "Minimum Volume" shall mean,
Products in the aggregate ordered by Purchaser for delivery and shipped from
Seller's plant during each semi-annual (or other) period identified on Exhibit
B and having a value as further set forth on such exhibit. The Purchaser also
agrees to comply with the provisions of the Technical License, Technology
Assistance, Engineering and Manufacturing Plant Sales Agreement dated July 6,
1992 between Seller and Purchaser (along with any amendments and addendums
thereto especially the provisions concerning the obligatory purchase of
products (the "L&S Agreement")).
ARTICLE II. Sale and Purchase of the Products
2.1 Subject to the terms and conditions set forth herein,
Purchaser agrees to acquire from Seller and Seller agrees to deliver to
Purchaser during the term of this Agreement Products in an amount equal to the
Minimum Volume for each semi-annual period identified on Exhibit B.
2.2 For each period identified on Exhibit B during the
term of this Agreement, Purchaser agrees to place orders or have orders placed
with Seller, for delivery from Seller of Products in an amount equal to or
greater than the Minimum Volume, as calculated in accordance with Section 1.2
hereof. Purchaser shall place such orders prior to the commencement of the
semi-annual period in which delivery is to be made by Seller.
ARTICLE III. Product Specifications
3.1 Except as otherwise agreed upon by the parties, it is
the intent of the parties hereto that the Products shall be manufactured in
the same manner and will contain the same specifications as equivalent
products which Seller previously supplied to Purchaser which meet the
acceptance standards under Article IV below.
ARTICLE IV. Acceptance Standards
4.1 Exhibit A contains quality specifications, mutually
agreed upon by the parties hereto, which shall govern acceptance of the
Products sold hereunder by Purchaser. Such specifications may be modified as
agreed to in writing by the parties.
ARTICLE V. Quality Control
5.1 Seller shall be solely responsible for assuring the
quality of the Products and their conformity to the standards set forth in
Exhibit A.
5.2 In the event Purchaser shall receive Products from
Seller that do not comply with this warranty, Purchaser shall immediately
notify Seller of such nonconformity and shall instruct Seller to suspend
future shipments of the Product. A third party independently qualified
inspection company (the "Company") must visit the Seller's production
facilities in Skalica within 10 days of Purchaser notifying Seller of receipt
of nonconforming Products. Seller agrees to provide such Company's employees
and/or agents full access to Seller's production facilities including access
to all materials used in connection with the Products, the energy sources
utilized in connection with the Products, the energy sources utilized in
connection with manufacture of the products and books and records relating to
the specifications used in the manufacture of the Products. Within 10 days of
the arrival of such Company's employees or agents at Seller's facility in
Skalica, the employees and/or agents of such Company shall submit a written
report to Seller and Purchaser stating whether Seller's Products conform to
the specifications set forth in Exhibit A. Upon receipt of a report
specifying that Seller's Products meet the specifications in Exhibit A, Seller
may resume and continue delivery of Products and Purchaser must accept such
immediate and future deliveries, and Purchaser agrees to absorb the Company's
costs for the investigation. If the report states that the Seller's Products
do not meet the specifications in Exhibit A, Seller agrees to absorb the
Company's costs for the investigation and Seller shall have two options: (i)
make sure changes that are necessary to insure that the Products meet the
specifications in Exhibit A within 20 days, and deliver conforming replacement
Products to Purchaser within 30 days of implementing such changes or (ii)
purchase products made by other parties which meet the specifications set
forth in Exhibit A and deliver such substitute products to Purchaser within
180 days. Seller shall have the right and obligation to arrange for the dis-
position of the affected product at its sole cost and expense. Seller and
Purchaser agree to abide by the decision of the Company and comply with the
provisions of this Section 5.2.
5.3 Notwithstanding the sole responsibility of Seller with
regard to quality control, Purchaser shall have access to Seller's production
facilities during normal business hours with reasonable notice to Seller, in
order to verify that the Products conform to the specifications set forth in
Exhibit A.
5.4 Seller shall maintain appropriate records of the
specifications used in the manufacture of all Products. These records shall
be made available to Purchaser upon reasonable request or during a visit by
Purchaser described in Section 5.3.
ARTICLE VI. Price
6.1 The total contract price for the Products shall be as
set forth in Exhibit B. The selling price for the Products at the time of
each purchase order shall be agreed to by the parties; provided, however, in
no event shall the selling prices be increased or decreased more than the
percentage (%) determined by the following from one year to the next:
1) the inflation or deflation rate in the U.S.A. as
measured by the Wholesale Price Index as
published by the U.S. Department of Commerce;
and provided, however, that
2) prices will not increase or decrease beyond the
increases or decreases announced and published
by major competitive bearing companies within
the U.S. such as Federal Mogul, SKF and Chicago
Rawhide during the period year and the Purchaser
agrees to provide, upon written request,
information as to the pricing by those
companies, to the extent available.
6.2(a)(1) If Purchaser stops issuing delivery orders because
of issues relating to quality of the Products under that Supply Agreement
dated as of even date herewith between Purchaser and Seller and, as a result
thereof, certain parties who are holders of drafts ("Drafts") and creditors to
Seller claim under a guarantee or aval issued by Vseobecna Uverova Banka, a.s.
("VUB"), dated as of even date herewith, then the Basic Amount under this
Agreement shall be automatically reduced by the amount of any payment by VUB,
and Exhibit B shall be recalculated.
(2) If thereafter, the Company states in its report
delivered under Section 5.2, that the Products meet the specifications in
Exhibit A, then any reduction of Minimum Volume under this Agreement shall
become "permanent" and the amounts due under Exhibit B shall be recalculated.
(3) If the Company states in its report that the
Products do not meet the specifications in Exhibit A then any reduction in
Minimum Volume is reinstated.
(b) If there exists sufficient funds in the escrow account
established pursuant to that Escrow Agreement of even date herewith at any
time to pay the drafts (and as a result, there is no demand under the
guarantees or avals), then there shall be no reduction in the Minimum Volume
under this Agreement due.
ARTICLE VII. Payment
7.1 The Seller acknowledges as of the date of this
Agreement, it is obligated to deliver Products, limited exclusively to the
Products in Exhibit A, to the Purchaser, at no additional cost to the
Purchaser, the Products equal to the amount set forth on Exhibit B.
ARTICLE VIII. Delivery
8.1 Delivery of the Products by Seller to Purchaser shall
be made FOB Hamburg or other European port, such other location as the parties
may, upon mutual agreement, from time to time designate, which agreement of
Purchaser shall not be unreasonably withheld. Any freight and insurance
expense from Skalica, Slovak Republic, to such port shall be borne solely by
Seller.
8.2 Delivery shall be deemed complete when Seller gives
Purchaser notice that a shipment of Products ordered by Purchaser is available
for pick-up at Hamburg or such other European Port or such other location as
the parties may, upon mutual agreement, designate.
ARTICLE IX. Title/Risk of Loss
9.1 Title and risk of loss or damage to the Products sold
hereunder shall pass to Purchaser when Seller, pursuant to an order placed by
Purchaser, delivers the Products in accordance with Section 8.2.
ARTICLE X. Warranty, Indemnity
10.1 IN LIEU OF ALL OTHER WARRANTIES (INCLUDING
MERCHANTABILITY AND FITNESS FOR PURPOSE), SELLER WARRANTS TO PURCHASER THAT
ALL PRODUCTS MANUFACTURED FOR PURCHASER UNDER THIS AGREEMENT SHALL MEET
PURCHASER'S PRODUCT SPECIFICATIONS AS SET FORTH IN EXHIBIT A, AND ARE FREE
FROM DEFECTS EXCEPT DEFECTS WHICH MAY BE INHERENT IN THE SAID SPECIFICATIONS
SET FORTH IN EXHIBIT A.
Subject to the last paragraph of this Article X, Seller shall
indemnify and hold Purchaser harmless from and against any and all liability,
loss or damage, and all direct out-of-pocket cost or expense, arising out of
the breach of the above warranty.
Subject to the last paragraph of this Article X, in the event
of complaints, demands, claims, or legal actions alleging illness, injury,
death or damage as a result of the use of any goods manufactured by Seller
hereunder, Seller shall indemnify and hold Purchaser harmless from and against
any and all liability, loss or damage, and all direct out-of-pocket cost or
expense, of whatsoever nature and by whomsoever asserted arising out of,
resulting from or in any way connected with such complaint, demand, claim or
legal action, except that Seller shall not be responsible for, and shall not
be required to indemnify Purchaser against, any liability for injury, death or
damage attributable to defects in Products which independent investigation
discloses originated after the goods left the custody and control of Seller or
were not attributable to any act of omission of Seller prior to shipment.
PURCHASER SHALL BE ENTITLED TO RECOVER CONSEQUENTIAL OR SPECIAL
DAMAGES (COLLECTIVELY "PURCHASER'S SPECIAL DAMAGES") INCURRED BY PURCHASER DUE
TO ACTS OR OMISSIONS OF SELLER'S SUPPLIERS OR OTHERS ARISING OUT OF OR
RELATING TO ANY BREACH OF THIS WARRANTY TO THE EXTENT AND SOLELY TO THE EXTENT
THAT SELLER RECOVERS AND COLLECTS PURCHASER'S SPECIAL DAMAGES FROM ITS
SUPPLIERS OR OTHERS, AND SELLER IS OBLIGATED TO PROMPTLY TAKE ALL REASONABLE
ACTION, INCLUDING BUT NOT LIMITED TO THE INSTITUTION OF LEGAL PROCEEDINGS, IN
ORDER TO RECOVER PURCHASER'S DAMAGES FROM ITS SUPPLIERS OR OTHERS, AND SELLER
SHALL BEAR THE COST OF SUCH ACTION (PROVIDED THAT SUCH COSTS MAY BE OFFSET
AGAINST ANY RECOVERY PURSUANT TO A JUDGMENT OR SETTLEMENT AGREED TO BY
PURCHASER FROM SELLER'S SUPPLIERS OR OTHERS), WHICH ACTION SHALL BE TAKEN IN
CONSULTATION WITH PURCHASER. EXCEPT AS SPECIFICALLY SET FORTH IN THE
PRECEDING SENTENCE, PURCHASER WAIVES ANY AND ALL RIGHT OR CLAIM TO RECOVER
PURCHASER'S SPECIAL DAMAGES FROM SELLER PROVIDED THAT THIS WAIVER SHALL NOT
APPLY TO LIABILITY FOR COMMISSION BY SELLER OF (I) AN INTENTIONAL TORT OR (II)
GROSS NEGLIGENCE. Anything in this Article to the contrary notwithstanding,
Purchaser must assert any claim of breach under this warranty, if at all,
within one (1) year after the due date of the invoice in regard to the goods
in question by written notice specifying the grounds for such claim. In any
and all actions, proceedings and investigations in regard to any claim by any
third person arising from an alleged breach of this warranty, seller shall pay
any damages which must be paid as a result of any judgment or settlement and
all costs of the defense thereof (including reasonable counsel fees) on the
following conditions: (i) Purchaser shall promptly notify Seller of any such
complaint, demand, claim or legal action; (ii) Purchaser shall have control of
said defense, but Seller shall have the right and opportunity to participate
therein; (iii) Purchaser shall select defense counsel subject to Seller's
consent; and (iv) Purchaser shall have the right to accept any settlement in
compromise subject to the consent of Seller, which shall not be unreasonably
withheld, and Seller shall have the right to demand that Purchaser accept any
settlement or compromise of the claim which does not otherwise adversely
affect Seller and, if Purchaser refuses such acceptance, Seller may elect to
pay Purchaser the amount of such proposed settlement in full satisfaction of
Seller's further obligations hereunder with respect to such claim.
ARTICLE XI. Term and Termination
11.1 This Agreement shall commence on April 20, 1995 and
become effective after the Escrow Account referred to in the Escrow Agreement
dated as of even date herewith itself has become effective and shall end after
fulfillment of the obligations under this Agreement referred to in Exhibit B
or at a date agreed to by all parties hereto.
ARTICLE XII. Force Majeure
12.1 Any failure or delay in the performance by either
party hereto of its obligations hereunder shall not constitute a breach of
this Agreement only if such failure or delay arises out of or results
primarily from fire, storm, flood, lightening, earthquakes, or other acts of
God, or explosion, insurrections, strikes, unavailability of fuel, utilities
or raw materials, epidemics or quarantine restrictions, partial or entire
failure of production facilities, inability to obtain transportation,
government restrictions or any other cause not within the control of the party
affected which by the exercise of reasonable diligence such party is unable to
prevent or overcome ("Force Majeure").
12.2 The occurrence of Force Majeure, as described in
Section 12.1 hereof, shall not excuse either party from the performance of its
obligations or duties hereunder, but shall merely suspend such performance
during the continuance of Force Majeure. The party prevented from performing
its obligations or duties because of Force Majeure shall immediately notify
the other party to this Agreement of the occurrence and particulars of such
Force Majeure and shall provide the other party, from time to time, with its
best estimate of the duration of such Force Majeure and with notice of the
termination thereof. If the Force Majeure, as described in Section 12.1
hereof, occurs and continues for more than one year, the party who is not
prevented or delayed from performing by an occurrence of Force Majeure shall
have the right to terminate this Agreement without penalty upon thirty (30)
days written notice. Upon such termination of this Agreement the value of the
undelivered portion of the pre-paid purchase amount as set forth on Exhibit B
shall be immediately paid to Purchaser.
ARTICLE XIII. Legal Relationship of the Parties
13.1 The relationship between the parties hereto is that of
independent contractors and not of principal-agent or employer-employee.
Neither party is in any way the legal representative of the other and has no
right or authority to assume or undertake any obligation or make any
representation on behalf of the other party.
ARTICLE XIV. General Conditions
14.1 This Agreement, and the rights and obligations of the
parties herein set forth, shall be binding upon and inure to the benefit of
and be enforceable by the respective successors and assigns of the parties
hereto and may not be assigned, transferred or subcontracted except to
parents, subsidiaries, or otherwise related corporations of either party, with
prior written notice to the other party, provided the parties hereto remain
liable under this Agreement. This Agreement is not subject to voluntary or
involuntary alienation except as provided herein.
14.2 The parties' remedies herein set forth shall be
cumulative, and in addition to any other or further remedies available to it
at law or in equity. The exercise by a party of any of its remedies
specifically enumerated herein shall not preclude that party from exercising
such other or further remedies.
14.3 The failure or omission of either party hereto to
insist, in any instance, upon strict performance by the other party of any
term or provision of this Agreement or to exercise any of its rights hereunder
shall not be deemed to be a modification of any term hereof or a waiver or
relinquishment of the future performance of any such term or provision by such
party, nor shall such failure or omission constitute a waiver of the right of
such party to insist upon future performance by the other party of any such
term or provision.
14.4 In the event that individual provisions of this
Agreement are or are held to be invalid, the validity of the remainder of this
Agreement shall not be affected thereby and shall remain in full force and
effect. The parties agree to negotiate in good faith in order to replace the
invalid provisions with valid provisions that conform as closely as possible
to the economic and commercial intent of the invalid provisions.
14.5 Unless otherwise provided, all notices and other
communications which are required or permitted to be given under this
Agreement shall be in writing and shall be deemed given if delivered by hand,
by mail (three (3) business days after being sent by certified mail, return
receipt requested) or when received if delivered by commercial express
delivery service or by telex or telefax (if a confirmatory mailing is made) to
a party at its address set forth below:
If to Seller:
ZVL-LSA, a.s.
909 Skalica
Slovakia
Attention: Dipl. Ing. Zdenko Hosek
If to Purchaser:
L&S Automotive Products Co.
16 South Pennsylvania
Oklahoma City, OK 73101
Attention: Mr. David Goss
Either party may change its address for the receipt of such notices by giving
written notice to the other party in the manner herein provided.
14.6 This Agreement shall be governed by, and shall be
construed and interpreted in accordance with, the law of the Republic of
Austria.
14.7 This Agreement constitutes the entire agreement of the
parties with respect to the subject matter hereof, and all other prior or
contemporaneous agreements of the parties with respect to such subject matter
are hereby merged into this Agreement. This Agreement shall not be changed,
modified or amended otherwise than by a further written agreement signed by
the parties hereto. In the event of any conflict between the terms of this
Agreement and of any purchase order, the terms of this Agreement shall be
controlling.
14.8 Any controversy or claim arising out of or relating to
this Agreement, or the negotiation or breach thereof, shall be settled by
arbitration with the Vienna rules of the International Arbitral Tribunal of
Bundeswirtschaftskammer Osterreich in Vienna and judgment upon an award
rendered by the arbitrators may be entered in any court having jurisdiction
thereof. According to Sec. 598 Sec. 2 ZPO (Zivilprozessordnung, Austrian Code
of Civil Procedure) Section 595 Sec. 1 Line 7 ZPO shall not apply. The
arbitration shall be held in the English language in Vienna and shall be
conducted before three (3) arbitrators, with each party appointing an
arbitrator, who will jointly agree upon a third arbitrator, Chairman of the
Arbitration Panel. The arbitrators are empowered to award reimbursement of
attorneys' fees, taxes and other costs of arbitration in accordance with
Vienna rules of the International Arbitral Tribunal of the
Bundeswirtschaftskammer Osterreich in Vienna. The provisions of this section
shall not be deemed to preclude any party hereto from seeking preliminary
injunctive relief to protect or enforce its rights thereunder within the
competence of the competent court of the Slovak Republic or the Republic of
Austria or State or Federal courts located in the State of Oklahoma, USA, or
(not) to prohibit any (universal) such court from making preliminary findings
of fact in connection with granting or denying such preliminary injunctive
relief pending arbitration, or to preclude any party thereto from seeking
permanent injunctive or other equitable relief after and in accordance with
the decisions of the arbitrators, if those taking part require the court for
such proceeding.
IN WITNESS WHEREOF, the parties hereto, intending to be legally
bound, have caused this Agreement to be executed by their respective duly
authorized officers as of the day and year first above written.
ZVL-LSA, a.s.
By:___________________________
Name:
Title:
By:___________________________
Name:
Title:
L&S AUTOMOTIVE PRODUCTS CO.
By:___________________________
Name: David Goss
Title: Senior Vice President
- Operations
SUPPLY AGREEMENT
THIS AGREEMENT, dated the 8th day of May, 1995, by and between
ZVL-LSA, a.s., a corporation organized and existing under the laws of the
Slovak Republic and having its principal place of business at Nadrazna 909 01
Skalica, Slovak Republic (hereinafter referred to as "Seller"); and L & S
Automotive Products Co., a corporation organized and existing under the laws
of the State of Oklahoma and having its principal place of business at 16
South Pennsylvania, Oklahoma City, OK 73101, U.S.A. (hereinafter referred to
as "Purchaser");
W I T N E S S E T H:
WHEREAS Purchaser desires to acquire tapered automotive roller
bearings, as more specifically defined herein, from Seller, and Seller desires
to deliver such products on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants set forth herein, the parties hereto agree as follows:
ARTICLE I. Definitions.
1.1 As used herein, the term "Products" shall mean tapered
automotive roller bearings with the specifications as described in Exhibit A.
1.2 As used herein, the term "Minimum Volume" shall mean
the Products in the aggregate ordered by Purchaser for delivery and shipped
from Seller's plant during each semi-annual (or other) period identified on
Exhibit B and in an amount which when multiplied by the relevant price shall
equal the U.S. Dollar amount set forth on such exhibit according to the
relevant time period identified thereon. The Purchaser shall also agree to
comply with that Technical License, Technology Assistance, Engineering and
Manufacturing Plant Sales Agreement dated July 6, 1992 between Seller and
Purchaser, along with any amendments and addendums thereto especially the
provisions concerning the obligatory purchase of products (the "L&S
Agreement").
ARTICLE II. Sale and Purchase of the Products
2.1 Subject to the terms and conditions set forth herein,
Purchaser agrees to acquire from Seller and Seller agrees to deliver to
Purchaser during the term of this Agreement Products in an amount equal to the
Minimum Volume for each period identified on Exhibit B.
2.2 For each period identified on Exhibit B during the
term of this Agreement, the Purchaser agrees to place orders (or already has
placed orders prior to the date of this Agreement), for delivery from Seller
of Products in an amount equal to or greater than the Minimum Volume, as
calculated in accordance with Section 1.2 hereof. If the Minimum Volume of
such orders are not placed in regard to delivery in any one calendar year, the
Purchaser agrees that such failure will cause irreparable injury to the
Seller. The Purchaser further acknowledges the impossibility of ascertaining
the amount of damages that would be suffered by Seller, especially as it
relates to Seller's obligations with respect to certain drafts executed by it
and sold by Purchaser to certain financial institutions. The Purchaser
thereby agrees that if Seller shall sue for such failure and Seller shall not
be in breach of this Agreement, Purchaser shall pay as liquidated damages, and
not as a penalty, the amount equal to the value of shipments required to be
shipped after the date of breach as set forth on Exhibit B. Notwithstanding
any term of this Section 2.2, Purchaser shall not be obligated to receive or
pay for any Product that does not comply with the acceptance standards under
Article IV hereof.
ARTICLE III. Product Specifications
3.1 It is the intent of the parties hereto that the
Products shall be manufactured in the same manner and will contain the same
specifications as equivalent products which Seller supplied to Purchaser
during the months prior to the date hereof which meet the acceptance standards
set forth under Article IV hereof.
ARTICLE IV. Acceptance Standards
4.1 Exhibit A contains quality specifications, mutually
agreed upon by the parties hereto, which shall govern acceptance of the
Products sold hereunder by Purchaser. Such specifications may be modified as
agreed to in writing by the parties.
ARTICLE V. Quality Control
5.1 Seller shall be solely responsible for assuring the
quality of the Products and their conformity to the standards set forth in
Exhibit A.
5.2 In the event Purchaser shall receive Products from
Seller that do not comply with this warranty, Purchaser shall immediately
notify Seller of such nonconformity and shall instruct Seller to suspend
future shipments of the Product. A third party independent qualified
inspection company (the "Company") must visit the Seller's production
facilities in Skalica within 10 days of Purchaser notifying Seller of receipt
of nonconforming Products. Seller agrees to provide such Company's employees
and/or agents full access to Seller's production facilities including access
to all materials used in connection with the Products, the energy sources
utilized in connection with the manufacture of the products and books and
records relating to the specifications used in the manufacture of the
Products. Within 10 days of the arrival of such Company's employees or agents
at Seller's facility in Skalica, the employees and/or agents of such Company
shall submit a written report to Seller and Purchaser stating whether Seller's
Products conform to the specifications set forth in Exhibit A. Upon receipt
of a report specifying that Seller's Products meet the specifications in
Exhibit A, Seller may resume and continue delivery of Products and Purchaser
must accept such immediate and future deliveries, and Purchaser agrees to
absorb the Company's costs for the investigation. If the report states that
the Seller's Products do not meet the specifications in Exhibit A, Seller
agrees to absorb the Company's costs for the investigation and Seller shall
have two options: (i) make such changes that are necessary to insure that the
Products meet the specifications in Exhibit A within 20 days, and deliver
conforming replacement Products to Purchaser within 30 days of implementing
such changes or (ii) purchase products made by other parties which meet the
specifications set forth in Exhibit A and deliver such substitute Products to
Purchaser within 180 days.
5.3 Notwithstanding the sole responsibility of Seller with
regard to quality control, Purchaser shall have access to Seller's production
facilities during normal business hours with reasonable notice to Seller, in
order to verify that the Products conform to the specifications set forth in
Exhibit A.
5.4 Seller shall maintain appropriate records of the
specifications used in the manufacture of all Products. These records shall
be made available to Purchaser upon reasonable request or during a visit by
Purchaser described in Section 5.3 or Article XI.
ARTICLE VI. Price
6.1 Pricing for the first year's order will be that of the
"Sample Bearing Order" Exhibit "B", Revised Purchase Price, page #3. Pricing
after the first year's shipment will be as follows:
A) The selling prices shall be negotiated annually
with prices set four (4) months prior to the end
of each calendar year for the succeeding
calendar year;
B) In no event shall the selling prices be
increased or decreased more than the percentage (%) determined by the
following from one year to the next:
1) the inflation or deflation rate in the
U.S.A. as measured by the Wholesale Price
Index as published by the U.S. Department
of Commerce; and provided, however, that
2) prices will not increase or decrease
beyond the increases or decreases
announced and published by major
competitive bearing companies within the
U.S. such as Federal Mogul, SKF and
Chicago Rawhide during the prior year and
Purchaser agrees to provide upon written
request, information as to pricing by
those companies, to the extent available.
ARTICLE VII. Payment
7.1 The terms of payment for the Products sold hereunder
shall be net cash due within five (5) days after Purchaser's receipt of a copy
of Seller's invoice and a copy of an Ocean Bill of Lading relating to the
shipment.
7.2 Payment by Purchaser for the Products sold hereunder
shall be made in favor of Seller to an account established by Vseobecna
Uverova Banka with Bank Austria Aktiengesellschaft, New York Branch (the
"Bank"). Payment instructions are as follows: Credit Morgan Guaranty Trust
Co., New York, NY, ABA number 021-000-238 for the account of Bank Austria AG,
account number 63-000-260 for further credit to Vscobecna Uverova Banka,
account number 199350, Attention: Mr. David Darling. Payment shall be made in
U.S. Dollars, the lawful currency of the United States of America. Purchaser
shall pay the invoice price of the Products in full and without any deduction
or set-off of any kind whatsoever. Any dispute, including any dispute
regarding the amount of such invoice price shall be the subject of good faith
negotiation between the parties. In the event of any dispute regarding
quality specifications, orders under this Agreement may be suspended until
such dispute is resolved.
7.3 Interest will be charged daily on any sum not paid on
the due date, or the payment of which is deferred for any reason, except if
such deferral occurs due to an act or omission of the Seller, at a varying
rate of two (2) percentage points per annum above the rate of interest per
annum ("Prime Rate") announced by Morgan Guaranty Trust Co., New York, to be
in effect from time to time for prime domestic commercial loans of ninety (90)
day maturities, adjusted as of the date of each such variance in the Prime
Rate, from the due date to the date of Seller's receipt of full payment,
provided, however, that such rate of interest shall in no event exceed the
maximum rate of interest permissible under applicable law.
ARTICLE VIII. Delivery
8.1 Delivery of the Products by Seller to Purchaser shall
be made at FOB Hamburg or other European port, or such other location as the
parties may, upon mutual agreement, from time to time designate, which
agreement of Purchaser shall not be unreasonably withheld. Any freight and
insurance expense from Skalica, Slovak Republic, to such port, shall be borne
solely by Seller.
8.2 Delivery shall be deemed complete when Seller gives
Purchaser notice that a shipment of Products ordered by Purchaser is available
for pick-up at Hamburg, or such other European port or such other location as
the parties may, upon mutual agreement, designate.
ARTICLE IX. Title/Risk of Loss
9.1 Title and risk of loss or damage to the Products sold
hereunder shall pass to Purchaser when Seller, pursuant to an order placed by
Purchaser, delivers the Products in accordance with Section 8.2.
ARTICLE X. Cash Against Documents
10.1 All original (and negotiable forms of) ocean bills of
lading and other title documents from Purchaser with respect to each shipment
of the Products during the terms of this Agreement shall be delivered solely
to the Bank. The Seller shall courier to the Bank in connection with each
shipment of the Products, such bills of lading and title documents, in each
case endorsed in blank, along with invoices of Seller. The Bank shall
promptly notify the Purchaser of receipt of such documents and deliver a
photocopy of such documents to Purchaser by telefax. At the time of receipt
of payment in full of the invoice made by Purchaser through payment into the
escrow account referred to in Section 7.2, the Bank shall promptly send by
courier the bills of lading and other title documents to Purchaser. The Bank
shall bear no responsibility in connection with any failure of such courier to
deliver such documents. In the event that Purchaser fails to make payment
timely, the Bank shall have the right to retain the bills of lading and other
title documents and, take any remedy permitted by law in connection with such
non-payment.
10.2 The Bank shall charge fees for handling documents
equal to 1/8th of 1% of the invoice amount ($75.00 minimum) which fee shall be
paid by Purchaser.
10.3 Purchaser and Seller jointly and severally agree to
hold the Bank harmless, and indemnify the Bank from and against, any and all
claims, losses, liabilities, damages, costs or expenses whatsoever, including
attorneys' fees and disbursements, howsoever arising from or in connection
with any handling, transfer, delivery, surrender or endorsement of any
document at any time(s) held by the Bank, or arising out of any action for
injunctive or other judicial or administrative relief and affecting, directly
or indirectly, the Bank.
ARTICLE XI. Warranty, Indemnity
11.1 IN LIEU OF ALL OTHER WARRANTIES (INCLUDING
MERCHANTABILITY AND FITNESS FOR PURPOSE), SELLER WARRANTS TO PURCHASER THAT
ALL PRODUCTS MANUFACTURED FOR PURCHASER UNDER THIS AGREEMENT SHALL MEET
PURCHASER'S PRODUCT SPECIFICATIONS AS SET FORTH IN EXHIBIT A, AND ARE FREE
FROM DEFECTS EXCEPT DEFECTS WHICH MAY BE INHERENT IN THE SAID SPECIFICATIONS
SET FORTH IN EXHIBIT A.
Subject to the last paragraph of this Article XI, Seller shall
indemnify and hold Purchaser harmless from and against any and all liability,
loss or damage, and all direct out-of-pocket cost or expense, arising out of
the breach of the above warranty.
Subject to the last paragraph of this Article XI, in the event
of complaints, demands, claims or legal actions alleging illness, injury,
death or damage as a result of the use of any goods manufactured by Seller
hereunder, Seller shall indemnify and hold Purchaser harmless from and against
any and all liability, loss or damage, and all direct out-of-pocket cost or
expense, of whatsoever nature and by whomsoever asserted arising out of,
resulting from or in any way connected with such complaint, demand, claim or
legal action, except that Seller shall not be responsible for, and shall not
be required to indemnify Purchaser against, any liability for injury, death or
damage attributable to defects in Products which independent investigation
discloses originated after the goods left the custody and control of Seller or
were not attributable to any act of omission of Seller prior to shipment.
PURCHASER SHALL BE ENTITLED TO RECOVER CONSEQUENTIAL OR SPECIAL
DAMAGES (COLLECTIVELY "PURCHASER'S SPECIAL DAMAGES") INCURRED BY PURCHASER DUE
TO ACTS OR OMISSIONS OF SELLER'S SUPPLIERS OR OTHERS ARISING OUT OF OR
RELATING TO ANY BREACH OF THIS WARRANTY TO THE EXTENT AND SOLELY TO THE EXTENT
THAT SELLER RECOVERS AND COLLECTS PURCHASER'S SPECIAL DAMAGES FROM ITS
SUPPLIERS OR OTHERS, AND SELLER IS OBLIGATED TO PROMPTLY TAKE ALL REASONABLE
ACTION, INCLUDING BUT NOT LIMITED TO THE INSTITUTION OF LEGAL PROCEEDINGS, IN
ORDER TO RECOVER PURCHASER'S DAMAGES FROM ITS SUPPLIERS OR OTHERS, AND SELLER
SHALL BEAR THE COST OF SUCH ACTION (PROVIDED THAT SUCH COSTS MAY BE OFFSET
AGAINST ANY RECOVERY PURSUANT TO A JUDGMENT OR SETTLEMENT AGREED TO BY
PURCHASER FROM SELLER'S SUPPLIERS OR OTHERS), WHICH ACTION SHALL BE TAKEN IN
CONSULTATION WITH PURCHASER. EXCEPT AS SPECIFICALLY SET FORTH IN THE
PRECEDING SENTENCE, PURCHASER WAIVES ANY AND ALL RIGHT OR CLAIM TO RECOVER
PURCHASER'S SPECIAL DAMAGES FROM SELLER PROVIDED THAT THIS WAIVER SHALL NOT
APPLY TO LIABILITY FOR COMMISSION BY SELLER OF (I) AN INTENTIONAL TORT OR (II)
GROSS NEGLIGENCE. Anything in this Article to the contrary notwithstanding,
Purchaser must assert any claim of breach under this warranty, if at all,
within one (1) year after the due date of the invoice in regard to the goods
in question by written notice specifying the grounds for such claim. In any
and all actions, proceedings and investigations in regard to any claim by any
third person arising from an alleged breach of this warranty, seller shall pay
any damages which must be paid as a result of any judgment or settlement and
all costs of the defense thereof (including reasonable counsel fees) on the
following conditions: (i) Purchaser shall promptly notify Seller of any such
complaint, demand, claim or legal action; (ii) Purchaser shall have control of
said defense, but Seller shall have the right and opportunity to participate
therein; (iii) Purchaser shall select defense counsel subject to Seller's
consent; and (iv) Purchaser shall have the right to accept any settlement in
compromise subject to the consent of Seller, which shall not be unreasonably
withheld, and Seller shall have the right to demand that Purchaser accept any
settlement or compromise of the claim which does not otherwise adversely
affect Seller and, if Purchaser refuses such acceptance, Seller may elect to
pay Purchaser the amount of such proposed settlement in full satisfaction of
Seller's further obligations hereunder with respect to such claim.
ARTICLE XII. Term and Termination
12.1 This Agreement shall commence on April 20, 1995 and
become effective after the Escrow Agreement dated as of even date herewith
itself has become effective and shall terminate once the Minimum Volume to be
purchased as set forth in Exhibit B has been made or thereafter with the
consent of the parties.
ARTICLE XIII. Force Majeure
13.1 Any failure or delay in the performance by either
party hereto of its obligations hereunder shall not constitute a breach of
this Agreement only if such failure or delay arises out of or results
primarily from fire, storm, flood, lightening, earthquakes, or other acts of
God, or explosion, insurrections, strikes, unavailability of fuel, utilities
or raw materials, epidemics or quarantine restrictions, partial or entire
failure of production facilities, inability to obtain transportation,
government restrictions or any other cause not within the control of the party
affected which by the exercise of reasonable diligence such party is unable to
prevent or overcome ("Force Majeure").
13.2 The occurrence of Force Majeure, as described in
Section 13.1 hereof, shall not excuse either party from the performance of its
obligations or duties hereunder, but shall merely suspend such performance
during the continuance of Force Majeure. The party prevented from performing
its obligations or duties because of Force Majeure shall immediately notify
the other party to this Agreement of the occurrence and particulars of such
Force Majeure and shall provide the other party, from time to time, with its
best estimate of the duration of such Force Majeure and with notice of the
termination thereof. If the Force Majeure, as described in Section 13.1
hereof, occurs and continues for more than one year, Purchaser shall have the
right to seek alternative suppliers and enter into supply agreements with such
parties as long as such agreements do not extend for more than one year. If,
at any time thereafter, a Force Majeure ceases to exist, Purchaser and Seller
shall then be obligated to continue performance under this Agreement, provided
that Purchaser shall not be required to place orders until after termination
of any supply agreement entered into during the Force Majeure as provided
above.
ARTICLE XIV. Legal Relationship of the Parties
14.1 The relationship between the parties hereto is that of
independent contractors and not of principal-agent or employer-employee.
Neither party is in any way the legal representative of the other and has no
right or authority to assume or undertake any obligation or make any
representation on behalf of the other party.
ARTICLE XV. Third Party Beneficiary.
15.1 The Bank, acting as agent for the purchasers of the
Drafts initially issued to Purchaser, shall be a third party beneficiary of
Seller's rights under this Agreement and the parties agree that the Bank, as
agent, shall have a direct right of action against Purchaser or Seller for its
breach of any of the provisions of this Agreement.
ARTICLE XVI. General Conditions
16.1 This Agreement, and the rights and obligations of the
parties herein set forth, shall be binding upon and inure to the benefit of
and be enforceable by the respective successors and assigns of the parties
hereto and may not be assigned, transferred or subcontracted except to
parents, subsidiaries, or otherwise related corporations of either party, with
prior written notice to the other party, provided the parties hereto remain
liable under this Agreement. This Agreement is not subject to voluntary or
involuntary alienation except as provided herein.
16.2 The parties' remedies herein set forth shall be
cumulative, and in addition to any other or further remedies available to it
at law or in equity. The exercise by a party of any of its remedies
specifically enumerated herein shall not preclude that party from exercising
such other or further remedies.
16.3 The failure or omission of either party hereto to
insist, in any instance, upon strict performance by the other party of any
term or provision of this Agreement or to exercise any of its rights hereunder
shall not be deemed to be a modification of any term hereof or a waiver or
relinquishment of the future performance of any such term or provision by such
party, nor shall such failure or omission constitute a waiver of the right of
such party to insist upon future performance by the other party of any such
term or provision.
16.4 In the event that individual provisions of this
Agreement are or are held to be invalid, the validity of the remainder of this
Agreement shall not be affected thereby and shall remain in full force and
effect. The parties agree to negotiate in good faith in order to replace the
invalid provisions with valid provisions that conform as closely as possible
to the economic and commercial intent of the invalid provisions.
16.5 Unless otherwise provided, all notices and other
communications which are required or permitted to be given under this
Agreement shall be in writing and shall be deemed given if delivered by hand,
by mail (three (3) business days after being sent by certified mail, return
receipt requested) or when received if delivered by commercial express
delivery service or by telex or telefax (if a confirmatory mailing is made) to
a party at its address set forth below:
If to Seller:
ZVL-LSA, a.s.
Nadrazna
SK-909 01 Skalica
Slovak Republic
Attention: Dip. Ing. Zdenko Hosek
If to Purchaser:
L&S Automotive Products Co.
16 South Pennsylvania
Oklahoma City, OK 73101
Attention: Mr. David Goss
Either party may change its address for the receipt of such notices by giving
written notice to the other party in the manner herein provided.
16.6 This Agreement shall be governed by, and shall be
construed and interpreted in accordance with, the law of the Republic of
Austria.
16.7 This Agreement constitutes the entire agreement of the
parties with respect to the subject matter hereof, and all other prior or
contemporaneous agreements of the parties with respect to such subject matter
are hereby merged into this Agreement. This Agreement shall not be changed,
modified or amended otherwise than by a further written agreement signed by
the parties hereto. In the event of any conflict between the terms of this
Agreement and of any purchase order, the terms of this Agreement shall be
controlling.
16.8 Any controversy or claim arising out of or relating to
this Agreement, or the negotiation or breach thereof, shall be settled by
arbitration with the Vienna rules of the International Arbitral Tribunal of
Bundeswirtschaftskammer Osterreich in Vienna and judgment upon an award
rendered by the arbitrators may be entered in any court having jurisdiction
thereof. According to Sec. 598 Sec. 2 ZPO (Zivilprozessordnung, Austrian Code
of Civil Procedure) Section 595 Sec. 1 Line 7 ZPO shall not apply. The
arbitration shall be held in the English language in Vienna and shall be
conducted before three (3) arbitrators, with each party appointing an
arbitrator, who will jointly agree upon a third arbitrator, Chairman of the
Arbitration Panel. The arbitrators are empowered to award reimbursement of
attorneys' fees, taxes and other costs of arbitration in accordance with
Vienna rules of the International Arbitral Tribunal of the
Bundeswirtschaftskammer Osterreich in Vienna. The provisions of this section
shall not be deemed to preclude any party hereto from seeking preliminary
injunctive relief to protect or enforce its rights thereunder within the
competence of the competent court of the Slovak Republic or the Republic of
Austria or State or Federal courts located in the State of Oklahoma, USA, or
(not) to prohibit any (universal) such court from making preliminary findings
of fact in connection with granting or denying such preliminary injunctive
relief pending arbitration, or to preclude any party thereto from seeking
permanent injunctive or other equitable relief after and in accordance with
the decisions of the arbitrators, if those taking part require the court for
such proceeding.
IN WITNESS WHEREOF, the parties hereto, intending to be legally
bound, have caused this Agreement to be executed by their respective duly
authorized officers as of the day and year first above written.
ZVL-LSA, a.s.
By:___________________________
Name: Zdenko Hosek
Title: General Manager
By:___________________________
Name: Maria Florkova
Title: Financial Director
L&S AUTOMOTIVE PRODUCTS CO.
By:___________________________
Name: David Goss
Title: Senior Vice President
- Operations
ACKNOWLEDGED AND AGREED
AS TO ARTICLE X.
BANK AUSTRIA AKTIENGESELLSCHAFT
By:____________________________
Name:
Title:
By:_____________________________
Name:
Title:
sec\10q\tq395xt2.wpe