EXHIBIT 10.5
SUPPLY AGREEMENT
This SUPPLY AGREEMENT (this "Agreement") dated October 31, 2004 (the
"Effective Date") is by and between Dresser-Rand Company, a New York general
partnership having its principal place of business at Paul Clark Drive, P.O. Box
560, Olean, NY 14760 ("Seller"), and Ingersoll-Rand Company, a New Jersey
corporation having a place of business at 800-D Beaty St., Davidson, NC 28036
("Buyer").
WHEREAS, Seller desires to supply and sell to Buyer, and Buyer desires to
acquire and purchase from Seller, the frame/running-gear/crankshaft assemblies
for Ingersoll-Rand's Pet Star 4 product (the "Products").
NOW, THEREFORE, in consideration of the foregoing mutual premise and the
mutual promises contained in this Agreement, Seller and Buyer agree as follows:
1. TERM. The term of this Agreement will commence as of the Effective
Date and will continue until December 31, 2009, unless earlier terminated in
accordance with the terms herein.
2. PURCHASE ORDERS. Buyer shall submit written purchase orders for the
Products to be supplied by Seller pursuant to this Agreement. Each purchase
order shall specify the type and quantity of the Products to be supplied and the
delivery date. As soon as practicable after its receipt of each purchase order,
Seller shall acknowledge its acceptance of the purchase order by the issuance of
its order acknowledgment form. Acceptance of each purchase order is subject to
the terms and conditions of this Agreement. Any additions, deletions or
differences in the terms and conditions of this Agreement (whether contained in
Buyer's purchase order or otherwise) which are proposed by Buyer are objected to
and hereby rejected unless Seller otherwise specifically agrees in writing.
3. PURCHASE PRICES.
(a) The prices for the Products shall be a "not to exceed" base
price of $23,000 per unit with escalations as follows: 2005 - 0%, 2006 - 3%,
2007 - 3%, 2008 - 5%, 2009 - 5%.
(b) Unless otherwise explicitly specified by Seller in its order
acknowledgment form, (i) all Purchase Prices are in U.S. dollars, (ii) all
Purchase Prices are F.O.B. Seller's place of business or designated destination
and (iii) all transportation and other charges are the responsibility of Buyer,
including any increase or decrease in such charges prior to shipment. All
shipping and transportation arrangements shall be made by Buyer. Unless Seller
otherwise agrees in writing, Buyer shall bear all risk of loss and damage in
transit. Seller warrants and guarantees to Buyer that when title to the Products
passes to Buyer, such title shall be good and marketable title, free and clear
of liens and encumbrances.
4. TAXES; DUTIES. Any prices for Products quoted hereunder do not
include any federal, state or other taxes or any applicable duties, import or
export fees or similar charges. Wherever applicable, such charges will be added
to the invoice as a separate charge to be paid by Buyer. In any event, however,
Buyer shall have sole responsibility for the payment of all taxes, duties, fees
and similar charges arising directly from the sale of Products pursuant to this
Agreement. Notwithstanding the foregoing, Buyer shall not be obligated for the
payment of any taxes of the Seller that are measured by or in any way
attributable to the income derived from the transactions contemplated by this
Agreement.
5. PAYMENT. Seller shall render invoices to Buyer at the time of
shipment of each purchase order. Invoices will be dated the day of shipment and
at Buyer's request will be transmitted via fax to Buyer's offices. Terms of
payment are net 30 days.
6. DEFAULT; CURE. In the event either party shall default under any
obligation of such party hereunder, the non-defaulting party shall provide the
defaulting party with notice thereof and the defaulting party shall have thirty
(30) days from the date of such notice to cure any such default that is capable
of cure within said period, failing which the non-defaulting party shall have
the right to terminate this Agreement from and after the 31st day following the
date of the notice of default. Notwithstanding the foregoing, in the event of a
payment default the period to cure such default shall be ten (10) business days.
Notice of a default shall be a condition precedent to any termination of this
Agreement by reason thereof.
7. FORCE MAJEURE. Neither party hereto shall be liable to the other for
any delay or failure in performance of any act required hereunder, or for any
damages suffered as a result of such delay or failure, when such delay or
failure is, directly or indirectly, caused by, or in any manner arises from,
acts of God, or of public enemies, war, terrorism, fires, floods, unusually
severe weather, explosions, accidents, epidemics, or any other cause or causes
(whether or not similar in nature to any of those specified) beyond such party's
control. In no event shall either party be liable to the other for any
consequential damages for delay in or failure of performance excused by the
foregoing.
8. WARRANTIES. Seller warrants that all Products sold hereunder shall
be free from defects in materials and workmanship for a period of six (6) months
from the date of Buyer's receipt ("Warranty"). In the event of a breach of this
Warranty, Seller shall, at Seller's option, either (i) repair the applicable
product at the original F.O.B. point of delivery, (ii) refund an equitable
portion of the contract price, or (iii) furnish replacement equipment or parts,
as necessary to the original F.O.B. point of delivery. EXCEPT AS SPECIFICALLY
SET FORTH IN THE PRECEDING SENTENCES, SELLER MAKES NO WARRANTIES EITHER EXPRESS
OR IMPLIED WITH RESPECT TO THE PRODUCTS SOLD HEREUNDER.
9. DEFECTIVE OR NONCONFORMING GOODS. Buyer shall have the right, prior
to shipment or at any time prior to acceptance, to reject any or all Products
which are defective or nonconforming. Products rejected by Buyer shall be held
for Seller's instructions and at Seller's risk, and if Seller so directs, the
rejected Products will
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be returned to Seller at Seller's expense. Payment for Products prior to their
inspection by Buyer shall not constitute an acceptance thereof, nor will
acceptance remove Seller's responsibility for latent defects.
10. EXCLUSION OF DAMAGES. NEITHER PARTY HERETO SHALL IN ANY EVENT BE
LIABLE TO THE OTHER OR ANY OTHER PERSON OR ENTITY FOR ANY INCIDENTAL, INDIRECT,
PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES OR LOST PROFITS PURSUANT TO THIS
AGREEMENT, EVEN IF THE POSSIBILITY OF SUCH DAMAGES COULD HAVE BEEN FORESEEN.
11. LEGAL EXPENSES. The prevailing party in any litigation concerning
the terms of this Agreement and the performance by the parties of their
respective obligations hereunder shall be entitled to recover reasonable
attorney's fees and costs.
12. JURISDICTION AND VENUE. Both parties hereto consent to the
jurisdiction of any state or federal court located within the area encompassed
by the Southern District of the State of New York for the purpose of resolving
any and all controversies and claims between Seller and Buyer arising out of or
relating to this Agreement or the underlying transaction. Any controversy or
claim arising out of or relating to this Agreement or the underlying transaction
shall be resolved in the any state or federal court located within the area
encompassed by the Southern District of the State of New York.
13. AMENDMENTS AND WAIVERS. No amendment, modification or waiver of
any of the terms and conditions of this Agreement or of any provision of any
order acknowledgment form of Seller shall be effective unless it is in writing
signed by both Seller and Buyer. No waiver by any party of any breach of any
provision hereof will constitute a waiver of any other breach of such provision.
A party's failure to object to provisions contained in any communications from
the other will not be deemed an acceptance of such provisions or as a waiver of
the provisions hereof.
14. ASSIGNMENT. Any assignment of this Agreement by a party without the
prior written consent of the other, which consent shall not be unreasonably
withheld, shall be void.
15. NOTICE. All notices, unless otherwise provided in this Agreement,
shall be in writing addressed to the party at the address set forth in this
Agreement and shall be deemed properly given if mailed via registered mail, sent
via guaranteed overnight delivery service or hand-delivered.
16. GOVERNING LAW. This Agreement and all purchase orders accepted under
this Agreement shall not become effective until accepted by Seller at its
offices in Olean, New York, and shall be governed by and interpreted in
accordance with the laws of the State of New York without regard to conflicts of
law principles.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, and intending to be legally bound hereby, the
undersigned hereby execute this Agreement as of the date set forth above.
DRESSER-RAND COMPANY
By: /s/ Vincent R. Volpe Jr.
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Name: Vincent R. Volpe Jr.
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Title: President & CEO
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INGERSOLL-RAND COMPANY
By: /s/ Barbara A. Santoro
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Name: Barbara A. Santoro
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Title: Secretary
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