COMPONENT AND MANUFACTURED PRODUCTS SUPPLY AGREEMENT
This COMPONENT AND MANUFACTURED PRODUCTS SUPPLY AGREEMENT (this
"Agreement") is dated as of March 30, 1998, by and between Harnischfeger
Corporation, a Delaware corporation ("Harnco"), and Xxxxxx Material Handling,
Inc., a Delaware corporation ("MMH") (collectively, the "Parties").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Recapitalization Agreement dated
as of January 28, 1998, as amended to date, by and between, among other parties,
MHE Investments, Inc. and Harnco (the "Recapitalization Agreement"), Harnco and
certain Affiliates of Harnco have agreed to sell, and MHE Investments, Inc. has
agreed to purchase a controlling interest in the MHE Business;
WHEREAS, in connection therewith, MMH and Harnco desire that Harnco
provide those Companies engaged in the MHE Business in the U.S. (the "U.S.
Companies") with certain manufacturing and other services as set forth herein;
and
WHEREAS, capitalized terms used herein and not otherwise defined
herein have the meanings given to such terms in the Recapitalization Agreement;
NOW, THEREFORE, in consideration of the premises and covenants set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Harnco and MMH agree as follows:
1. Harnco's Obligations. During the term of this Agreement as set
forth in Section 3 below (the "Supply Period"), subject to the terms and
conditions set forth herein:
(a) Harnco shall sell or shall cause its Affiliates to sell to MMH
and MMH may purchase from Harnco Manufactured Products in such quantities as
requested in written purchase orders submitted by the U.S. Companies to Harnco,
provided, however, that Harnco (A) shall not be required to supply Manufactured
Products in excess of its actual manufacturing capacity, and (B) shall not be
required to purchase additional machinery or equipment or hire any additional
temporary or permanent employees. For purposes of this agreement "Manufactured
Products" shall mean the products described in Annex "A" hereto.
(b) The price and payment terms for Manufactured Products purchased
by the U.S. Companies hereunder shall be in accordance with the provisions of
Annex "A" hereto. In addition to the terms set forth herein, the terms and
conditions of the sale of Manufactured
Products hereunder shall be in accordance with the provisions of Annex "B"
hereto:
2. Sales Documents. Any invoice, purchase order acknowledgment,
purchase order or other document issued by any Party or the U.S. Companies upon
the execution of this Agreement or subsequent hereto shall be deemed to (i) be
for the record keeping convenience of the Parties and (ii) confirm this
Agreement and not add to, delete from or change the provisions of this
Agreement, unless specifically agreed upon by the Parties in writing on a
case-by-case basis.
3. Term of Agreement. Subject to Section 4, the term of this
Agreement shall commence on the Closing Date and shall continue for a period of
two (2) years thereafter, at which time the Agreement shall terminate.
4. Termination.
(a) This Agreement may be terminated in its entirety at any
time as follows:
(i) by the mutual written agreement of the parties
hereto;
(ii) at the election of Harnco (such election to be made
in writing), in the event of a material default by MMH of its
obligations hereunder, which shall not have been cured within
sixty (60) days after written notice given by Harnco to MMH
or, in the event of a breach of a payment obligation, thirty
(30) days after written notice given by Harnco to MMH; or
(iii) at the election of MMH (such election to be made
in writing), in the event of a material default by Harnco of
its obligations hereunder, which shall not have been cured
within sixty (60) days after written notice given by MMH to
Harnco.
(b) No termination or expiration of this Agreement, in whole
or in part, shall discharge, affect or otherwise modify in any manner the rights
and obligations of the parties hereto which have accrued or have been incurred
prior to such termination, including, the obligation of MMH to pay to Harnco any
and all amounts payable hereunder in respect of goods or services theretofore
provided, or of Harnco to resolve pursuant to the terms hereof any claims
identified by MMH.
5. Assignment. This Agreement may not be assigned by either party
and shall not inure to the benefit of any third party without the prior written
consent of the other party, and any attempted assignment shall be null and void,
except that either party may assign this Agreement to any Affiliate.
The foregoing notwithstanding, MMH (and any permitted successor or
assign)
may assign or transfer its rights hereunder as part of a merger or consolidation
with, or the sale, exchange or other transfer of all or substantially all of its
assets to, any Person other than an HII Competitor (as defined below). As used
in this Agreement, "HII Competitor" means any Person which engages in a business
or enterprise which competes with (i) any business or enterprise conducted by
HII or its Subsidiaries immediately after the Closing or (ii) any other business
or enterprise conducted by HII or its Subsidiaries in the future (other than as
a result of the acquisition of HII by a third party). Harnco shall have the
right to terminate this Agreement on 90 days prior written notice at any time
after an HII Competitor (x) acquires more than 50% of MMH's (or its direct or
indirect parent's) voting stock (or more than 50% of the voting stock of a
permitted successor or assign) or (y) acquires, directly or indirectly, the
power to direct or cause the direction of MMH's (or a permitted successor's or
assign's) management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise).
6. Confidentiality. Each party shall cause each of its Affiliates
and each of their officers, directors and employees to hold all information
relating to the business of the other party disclosed to it by reason of this
Agreement confidential and will not disclose any of such information to any
party unless legally compelled to disclose such information; provided, however,
that to the extent that any of them may become so legally compelled they may
only disclose such information if they shall first have used reasonable efforts
to, and, if practicable, shall have afforded the other party the opportunity to
obtain, an appropriate protective order or other satisfactory assurance of
confidential treatment for the information required to be so disclosed.
7. Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Wisconsin, without regard
to its conflicts of law principles.
8. Limitation of Liability, Indemnity.
(a) HARNCO SHALL HAVE NO LIABILITY TO MMH WITH RESPECT TO THE SALE
OF PRODUCTS HEREUNDER FOR LOST REVENUES OR PROFITS OR FOR SPECIAL,
CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL DAMAGES OF ANY KIND WHETHER ARISING IN
CONTRACT, TORT, PRODUCT LIABILITY OR OTHERWISE, EVEN IF ADVISED OF THE
POSSIBILITY OF SUCH LOST PROFITS OR DAMAGES. IN NO EVENT SHALL HARNCO BE LIABLE
TO MMH FOR ANY DAMAGES WHATSOEVER IN EXCESS OF THE PRICE OF PRODUCTS SOLD
HEREUNDER, OTHER THAN THE COST OF HARNCO'S WARRANTY OBLIGATIONS PURSUANT TO
"ANNEX B".
IN THE EVENT THAT ANY WARRANTY OF HARNCO FAILS OF ITS ESSENTIAL PURPOSE,
OR IS HELD TO BE INVALID OR UNENFORCEABLE FOR ANY REASON, IN CONSIDERATION OF
THE OTHER PROVISIONS OF THIS AGREEMENT, THE PARTIES UNDERSTAND AND AGREE THAT
ALL LIMITATIONS OF LIABILITY FOR SPECIAL,
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INCIDENTAL, AND CONSEQUENTIAL DAMAGES WILL NEVERTHELESS REMAIN IN EFFECT.
(b) MMH shall defend, indemnify and hold harmless Harnco and its
Affiliates, their shareholders, and their respective officers, directors,
employees, and agents from any Loss (for the purposes of this Agreement, "Loss"
shall mean any and all costs and expenses, damages, and losses actually
incurred) which results from or relates to the provision of the Manufactured
Products pursuant to this Supply Agreement, other than the cost of Harnco's
warranty obligations pursuant to "Annex B", unless such Loss is caused by the
willful misconduct or gross negligence of the indemnitee.
9. Dispute Resolution; Submission to Jurisdiction.
(a) In the event of any dispute or disagreement between Harnco and
MMH as to the interpretation of any provision of this Agreement (or the
performance of obligations hereunder), the matter, upon written request of
either party, shall be referred to representatives of the parties for decision,
each party being represented by a senior executive officer who has no direct
operational responsibility for the matters contemplated by this Agreement (the
"Representatives"). The Representatives shall promptly meet in a good faith
effort to resolve the dispute. If the Representatives do not agree upon a
decision within 30 calendar days after reference of the matter to them, each of
Harnco and MMH shall be free to exercise the remedies available to it under
applicable law, subject to clause (b) below.
(b) Each of Harnco and MMH consents to the exclusive jurisdiction of
the federal courts of the Eastern District of Wisconsin for any legal action,
suit or proceeding arising out of or in connection with this Agreement, and
agrees that any such action, suit, or proceeding may be brought only in such
courts. If such forum is not available, each of the Parties consents to the
exclusive jurisdiction of the Milwaukee County Circuit Court for any such
action, suit or proceeding. Each of Harnco and MMH further waives any objection
to the laying of venue for any suit, action or proceeding in such courts. Each
party agrees to accept and acknowledge service of any and all process that may
be served in any suit, action or proceeding. Each party agrees that any service
of process upon it mailed by registered or certified mail, return receipt
requested to such party at the address provided in Section 11 below shall be
deemed in every respect effective service of process upon such party in any such
suit, action or proceeding. Each party agrees to waive any right it might have
to a trial by jury in any such suit, action or proceeding.
10. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
11. Notices. Unless otherwise indicated herein, all notices,
requests, demands or other communications to the respective parties hereto shall
be deemed to have been given or
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made when deposited in the mails, registered or certified mail, return receipt
requested, postage prepaid, or by means of overnight delivery service when
delivered to such service addressed or by facsimile to the respective party at
the following address:
To Harnco: Harnischfeger Corporation
0000 X. Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attn: Xxxxxxx Xxxxxxxxx
Vice President, General Counsel and Secretary
To MMH: Xxxxxx Material Handling, Inc.
000 X. Xxxxxx Xxxx Xxxxxx
Xxx Xxxxx, XX 00000-0000
Attn: General Counsel
with a copy to: Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
0000 Xxx Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxxx X. Xxxxx, Xx.
12. Modification, Nonwaiver, Severability. No alleged waiver,
modification or amendment to this Agreement or to Annex A or Annex B attached
hereto shall be effective against either party hereto, unless in writing, signed
by the party against which such waiver, modification or amendment is asserted,
and referring specifically to the provision hereof alleged to be waived,
modified or amended. The failure or delay of either party to insist upon the
other party's strict performance of the provisions in this Agreement or to
exercise in any respect any right, power, privilege, or remedy provided for
under this Agreement shall not operate as a waiver or relinquishment thereof,
nor shall any single or partial exercise of any right, power, privilege, or
remedy preclude other or further exercise thereof, or the exercise of any other
right, power, privilege, or remedy; provided, however, that the obligations and
duties of either party with respect to the performance of any term or condition
in this Agreement shall continue in full force and effect.
13. Interpretation. The headings and captions contained in this
Agreement and in Annex A and Annex B attached hereto are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. The use of the word "including" herein shall mean "including without
limitation."
14. No Strict Construction. The language used in this Agreement
shall be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
person.
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15. Entire Agreement. This Agreement, the Motor Rewind Agreements
with Harnco Affiliates and the Recapitalization Agreement contain the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof and supersede all prior agreements and understandings,
whether written or oral, relating to such subject matter.
16. Relationship of Parties. Harnco shall perform all of the
services hereunder as an independent contractor and none of the parties shall
act or represent or hold itself out as having authority to act as an agent or
partner of the other parties, or in any way bind or commit the other party to
any obligations. Nothing contained in this Agreement shall be construed as
creating a partnership, joint venture, agency, trust or other association of any
kind, each party being individually responsible only for its obligations as set
forth in this Agreement.
17. Force Majeure. If Harnco is prevented from complying, either
totally or in part, with any of the terms or provisions of this Agreement by
reason of fire, flood, storm, strike, lockout or other labor trouble, any law,
order, proclamation, regulation, ordinance, demand or requirement of any
governmental authority, riot, war, rebellion or other causes beyond the
reasonable control of Harnco or other acts of God, then upon written notice to
MMH, the affected provisions and/or other requirements of this Agreement shall
be suspended during the period of such disability and Harnco shall have no
liability to MMH or any other party in connection therewith, other than using
commercially reasonable efforts to provide an alternative, if possible, and at
the end of such suspended period to continue to provide any affected
Manufactured Products for the balance of the term hereof and at the price
therefor as set forth in "Annex A".
18. Effectiveness. The parties' obligations under this Agreement are
conditional upon the closing of the Recapitalization Agreement (the "Closing"),
the occurrence of which is subject to various conditions set forth in the
Recapitalization Agreement. This Agreement shall become operative if and when
the Closing occurs and shall be null and void if the Closing does not occur for
any reason. Nothing in this Agreement shall constitute a representation or
promise that any party hereto shall proceed with the Closing or obligate any
party to do so.
* * * * *
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives as of the date and year first
set forth above.
HARNISCHFEGER CORPORATION
By: /s/ Xxxx Xxxxxxx
-------------------------
Title: Assistant Secretary
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XXXXXX MATERIAL HANDLING, INC.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------
Title: President
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ANNEX A
Manufactured Products
For purposes of this Agreement, "Manufactured Products" shall mean products,
repair parts and rebuilds as have been manufactured by Harnco at its National
Avenue and Orchard Street facilities for the MHE Business from and after
November 1, 1995.
Price
The price of the Manufactured Products shall be fully absorbed standard cost for
normal production products and repair parts as of the date of shipment.
Calculation of standard cost is to be consistent with practices in effect for
all other Harnco products as of the Closing Date.
The price for rebuilds and repairs, which have no standard cost, will be fully
absorbed job cost as of the date of shipment.
Prices quoted are exclusive of all Taxes (except taxes levied on Seller's
income) and MMH shall pay all taxes in full or shall reimburse Seller for any
such taxes paid by Seller.
Payment Terms
All invoices shall be paid not later than thirty (30) days following receipt by
MMH of Seller's xxxx or invoice. Payments made after thirty (30) days from
receipt of bills or invoices shall bear interest at the rate of 12% per annum.
ANNEX B
SHIPMENT: Unless expressly stated otherwise in this Agreement, all shipments are
F.C.A. Harnco's plant or warehouse and title and all risk of loss with respect
to any goods shipped shall pass to MMH when such goods are delivered to the
carrier at such plant or warehouse. All delivery dates are estimates of
approximate dates of delivery and do not constitute a guaranty of delivery on
such dates.
WARRANTIES: Harnco warrants Manufactured Products against failure due to defects
in materials and workmanship for 1 (one) year after first use of 3,000 operating
hours, whichever first occurs, but in no event longer than eighteen (18) months
from the shipment date (the "Warranty Period"). Components and accessories not
manufactured by Harnco which are warranted separately by their respective
manufacturers are not warranted by Harnco and Harnco shall assign to MMH
whatever rights Harnco obtains under any such warranties. Harnco warrants
Services to conform in all material respects to the description of Services
included in this agreement at the time of performance of such Services. All
warranties and any obligations of Harnco therewith shall automatically terminate
with respect to any products which are operated in excess of rated capacities or
are otherwise misused, are altered or repaired in any manner not authorized by
Harnco, are damaged or are not maintained in accordance with recommended
practices and instructions.
THE FOREGOING WARRANTIES ARE IN LIEU OF, AND HARNCO EXPRESSLY DISCLAIMS, ALL
OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
WARRANTY REMEDIES: MMH's sole and exclusive remedy for nonconformance of any
Products with the Product description or for failure due to defects in materials
or workmanship in Products during the Warranty Period shall be, at Harnco's
election, either Harnco's repair or correction of such nonconformance or defect
or Harnco's furnishing without charge, F.C.A. Harnco's factory or warehouse, a
replacement for any such nonconforming or defective part provided that Harnco is
given immediate notice of any claimed nonconformance or defect and the part is
available for inspection or, at the request of Harnco and at MMH's expense,
delivered to Harnco. Harnco shall not be liable for the cost, including labor
costs, of dismantling and installing replacement parts or for any other expense
connected therewith or for any special, exemplary, incidental or consequential
damages. MMH's sole and exclusive remedy for nonconformance of any Services with
the foregoing warranty shall be Harnco's correction or reperformance of any such
nonconforming Services provided that Harnco is given notice of any claimed
nonconformance within 30 days of the performance of such Services. Except for
the Harnco's direct costs incurred in correcting or reperforming nonconforming
Services, Harnco shall not be liable for any other expense connected with the
correction or reperformance of any Services or for any special, exemplary,
incidental or consequential
damages.
THE FOREGOING REMEDIES SHALL CONSTITUTE MMH'S SOLE AND EXCLUSIVE REMEDIES FOR
BREACH OF WARRANTY AND ALL OTHER REMEDIES ARE HEREBY EXPRESSLY EXCLUDED.
