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EXHIBIT 10.34
DATED 29TH JANUARY 1993
(1) OSRAM GMBH
and
(2) EDIL INTERNATIONAL LIGHTING B.V.
-------------------------------
FRAMEWORK AGREEMENT FOR
SUPPLY CONTRACTS
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Xxxxxxxx Chance
000 Xxxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Tel: 000 000 0000
Fax: 000 000 0000
Ref: MS/C0791/04338/JBW
(Document ref: AJQM248D.50)
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CONTENTS
CLAUSE PAGE
ARTICLE I
Definitions
ARTICLE II
SUPPLY OF LAMP MATERIALS BY OSRAM TO EDIL AND BY EDIL TO OSRAM
SECTION 2.1 Scope of Article II ............................ 5
SECTION 2.2 Long-term Supply Agreements .................... 5
SECTION 2.3 Terms and Conditions ........................... 6
SECTION 2.4 Equal Treatment ................................ 16
ARTICLE III
CONTINUATION OF CERTAIN SUPPLY AGREEMENTS BETWEEN OSRAM
GROUP AND IL
SECTION 3.1 Lynx-L Compact Fluorescent Lamps ............... 17
SECTION 3.2 Supply Agreement for Bulbs between GTE Sylvania
S.A. and EMGO ......................................... 17
SECTION 3.3 The supply agreement between OSRAM GmbH and SABA
Schwaraweider ........................................ 18
SECTION 3.4 The Supply Agreement Between GTE de Brasil S/A
Industria e Comerco and OSRAM de Brazil Compantia de
Lampadas Eletricas for the supply of bulbs and tubes
("the Brazilian Glass Contract") ...................... 20
SECTION 3.5 Equipment for the Double Twin Compact
Fluorescent Line at Xxxxxxx, United Kingdom ........... 21
ARTICLE IV
CONTINUATION OF SUPPLY ARRANGEMENTS FOR FINISHED LAMPS
BETWEEN OSRAM, NAL AND IL
SECTION 4.1 Scope of Article IV ............................ 21
SECTION 4.2 Long-term Supply and Purchase Contracts ........ 21
SECTION 4.3 Terms and Conditions ........................... 22
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ARTICLE V
SUPPLY OF MANUFACTURING APPARATUS
ARTICLE VI
SECTION 5.1 Governing Law ................................. 33
SECTION 5.2 Arbitration ................................... 33
SECTION 5.3 Amendments .................................... 33
SECTION 5.4 Assignment .................................... 34
SECTION 5.5 Notices ....................................... 34
SECTION 5.6 Waiver ........................................ 35
SECTION 5.7 Severability .................................. 35
SECTION 5.8 Entire Agreement .............................. 36
SECTION 5.9 Counterparts .................................. 36
SECTION 5.10 Headings ...................................... 36
SECTION 5.11 Confidentiality ............................... 36
SECTION 5.12 U.N. Convention ............................... 36
SECTION 5.13 Inconsistent terms ............................ 36
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FRAMEWORK AGREEMENT FOR SUPPLY CONTRACTS
This Framework Agreement for supply contracts is made on the 29th day of
January, 1993, between OSRAM GmbH, a company incorporated in Munich, Germany,
with a principal place of business at Xxxxxxxxxxxx Xxxxxxx 0 X-0000, Xxxxxx 00,
Xxxxxxx ("OSRAM") and EDIL International Lighting B.V., a private limited
liability company (beslotenvensootschap met beperlcte aansparkelijkheid)
incorporated under the laws of the Netherlands and established in Amsterdam,
the Netherlands, whose registered office is at Xxxxxxxxxxx 000, 0000 X.X,
Xxxxxxxxx, Xxx Xxxxxxxxxxx ("EDIL").
Whereas, Siemens Aktiengesellschaft, ("Siemens") OSRAM, EDIL, and Citicorp
Capital Investors Europe Limited entered into a Master Agreement on August 6th
1992 whereby EDIL and OSRAM agreed to procure that the relevant members of their
respective groups enter into supply agreements corresponding to the terms set
forth in Supply Agreement Term Sheets attached in form to be aforesaid Master
Agreement.
Whereas, certain existing supply arrangements between OSRAM GmbH, NAL and IL
are to be continued.
Whereas, within twelve months of Closing, the parties shall, in good faith,
negotiate long-term supply agreements in respect of the most significant Lamp
Materials and Lamps to be supplied by OSRAM Group to EDIL Group and by EDIL
Group to OSRAM Group Provided that unless and until such long-term supply
agreements are concluded, Lamp Materials and Lamps shall be supplied by OSRAM
Group to EDIL Group, and by EDIL Group to OSRAM Group on the terms and
conditions of this Framework Agreement.
Therefore, the Parties hereto agree, for themselves and for and on behalf of
their respective Subsidiaries, as follows:
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ARTICLE I
1. Definitions
For the purposes of this Agreement, the following terms shall have the
meanings set forth below:
"Accessories" means any device designed or adapted for mounting or
supporting Lamps or for controlling the light thereof, together with
parts, materials and components for such devices, other than fixtures.
"Best Efforts" means serious and reasonable endeavours but not including
any unreasonable act or money payment.
"Buying Party" means in respect of each transaction hereunder either the
member of the EDIL Group which is purchasing Lamp Materials or Lamps from
a member of the OSRAM Group OR the member of the OSRAM Group which is
purchasing Lamp Materials or Lamps from a member of the EDIL Group.
"Buying Party Group" means whichever of the OSRAM Group or EDIL Group the
Buying Party belongs.
"Calendar Quarter Start Day" means either 1st January, 1st April, 1st July
or 1st October.
"Closing" means "Initial Closing" as defined in the IL Purchase Agreements
and "Closing" as defined in the NAL Purchase Agreements.
"Europe" means Portugal, Spain, Republic of Ireland, France, United
Kingdom, Germany, Italy, Belgium, Luxenbourg, the Netherlands, Denmark,
Greece, Sweden, Norway, Switzerland, Austria, Finland, Liechtenstein,
Poland, Hungary, Czech Republic, Rumania, Cyprus, Malta, Turkey,
Yugoslavia (as formerly constituted (including Croatia, Bosnia Herc),
Macedonia, Albania, Slovenia, Bulgaria, Russia, Ukraine and all other
former members of the Soviet Union (including the members of the CIS and
Baltic states).
"EDIL Group" means EDIL and any Subsidiaries of EDIL (including IL).
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"IL" means that part of GTE Electrical Products Group lighting business
(principally excluding North America) purchased by EDIL pursuant to the
terms and conditions of the IL Purchase Agreements.
"IL Purchase Agreements" means the Amended and Restated Stock Purchase
Agreement and the related agreements for the sale and purchase of IL
between EDIL and GTE Corporation, GTE Products of Connecticut Corporation
and GTE International Incorporated dated 6th August 1992, as amended and
restated by the IL Supplemental Stock Purchase Agreement and Amended and
Restated IL Intellectual Property Non-competition, Environmental and
Assurance Agreements dated 29th January 1993.
"Lamps" means any device which in operation emits ultraviolet, visible
and/or infra-red radiation of between 100 angstroms and 1,000,000 angstroms
in wavelength, including, without limitation, incandescent lamps,
photoflash products (including photoflash lamps), fluorescent lamps
(including sub-miniature fluorescent lamps), high intensity discharge
lamps, and other gaseous discharge lamps but shall not include devices
designed primarily for display of variable images, or for light storage or
intensification or conversion or for processing information bearing signals
or infra-red radiators and other heating devices which do not operate in a
hermetically sealed container or which are provided with a sealed metal
envelope, unless such infra-red radiators and other heating devices are
designed for use in connection with Lamps, Lamp Parts, Accessories or Power
Sources.
"Lamp Competitor" means any corporation (together with its Subsidiaries)
(excluding Siemens and its Subsidiaries) which during the calendar year
immediately preceding the relevant date of the determination of its status
as a Lamp Competitor manufactured Lamps and had aggregate worldwide sales
of Lamps, Lamp Parts, Accessories and Power Sources exceeding:
(i) in the case of corporations and their Subsidiaries whose ultimate
holding company is incorporated in Japan, Taiwan, Singapore, North
Korea, South Korea or China, twenty million United States dollars
(US$20,000,000); and
(ii) in the case of any other corporation and their Subsidiaries, fifty
million United States dollars (US$50,000,000).
"Lamp Materials" means all or any of Lamp Parts, Accessories, Power
Sources, globottles and starters;
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"Lamp Parts" means all of the components, materials and parts from which
Lamps are assembled and the materials used in the production of such
components and parts.
"NAL" means that part of GTE Electrical Products Group lighting business
(principally the North American business) purchased by OSRAM Acquisition
Corporation pursuant to the terms and conditions of the NAL Purchase
Agreements.
"NAL Purchase Agreements" means the stock purchase agreement and the asset
purchase agreement for the sale and purchase of NAL between OSRAM
Acquisition Corporation and Siemens Corporation and GTE Corporation. GTE
Products of Connecticut Corporation and GTE International Incorporated
dated 6th August 1992.
"North America" means the United States of America and Canada.
"OSRAM" means OSRAM GmbH and its Subsidiaries (including NAL and its
Subsidiaries) and any successors thereto in the lamp and lighting business
or Persons within the Siemens Group who after the date hereof carry out
any of the Lamp, Lamp Part, Accessory, Power Source or Manufacturing
Apparatus research and development, production engineering, manufacturing
activities and other operations and business currently conducted by OSRAM
and any of its Subsidiaries (including NAL and its Subsidiaries).
"Person" means an association, a corporation, an individual, a
partnership, a university, and bank, a trust, or any other entity or
organisation.
"Power Sources" means apparatus having an operating frequency (including
carrier or modulation frequencies) between 0 hertz and 500 megahertz
(including starting, operating or control circuits)for energising and
operating Lamps, together with parts and components for such apparatus.
"Preferred Supplier" means that the parties hereto shall purchase Lamp
Materials and Lamps from each other in preference to other suppliers.
Provided that the terms on which such Lamp Materials or Lamps and Similar
Products are offered (including, without limitation, price, quantity,
delivery terms, specification and quality) are at least equal to the terms
offered by other suppliers of such Lamp Materials or Lamps or Similar
Products.
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"Research and Development and Engineering Support Agreement" means the
Research and Development and Engineering Support Agreement between OSRAM
GmbH and EDIL entered into at Closing.
"Selling Party" means in respect of each transaction hereunder either the
member of the OSRAM Group which is obliged to supply Lamp Materials or
Lamps to a member of the EDIL GROUP OR the member of the EDIL Group which
is obliged to supply Lamp Materials or Lamps to a member of the OSRAM
Group.
"Selling Party Group" means whichever of the OSRAM Group or EDIL Group the
Selling Party belongs.
"Signing" means August 6, 1992.
"Similar Product" means, in relation to a Lamp, Lamp Part, Accessory or
Power Source, a product which is of the same or similar type which means
that it is not materially different from such Lamp, Lamp Part, Accessory or
Power Source.
"Subsidiaries" means with respect to any Person, any other Person in which
such Person has a direct or indirect voting equity or voting ownership
interest in excess of 50% or is entitled to vote for the election of the
majority of directors or persons performing similar functions in such
Person.
ARTICLE II
SUPPLY OF LAMP MATERIALS BY OSRAM TO EDIL AND BY EDIL TO OSRAM
SECTION 2.1 Scope of Article II
Subject to Section 2.2 below, this Article II sets out the terms and conditions
upon which Lamp Materials which were supplied by NAL to IL, and by IL to NAL,
in the twelve (12) months prior to Closing (including those types of Lamp
Materials listed in the attached parts I and II of Schedule A) or Similar
Products shall be supplied by OSRAM Group to EDIL Group, and by EDIL Group to
OSRAM Group, for the period set out in Section 2.3k) in respect of UV Phosphors
and for a period until 31 December 2003 following Closing for all other Lamp
Materials.
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For the avoidance of doubt, the terms on which Lamp Materials are to be supplied
pursuant to this Article II shall not apply to Lamp Materials to be supplied
pursuant to supply agreements referred to in Article III which, save as amended
in Article III, shall continue on their terms.
SECTION 2.2 Long-term Supply Agreements
a) Within twelve (12) months of Closing the parties shall, in good faith,
negotiate long-term supply agreements for the most significant Lamp
Materials to be supplied by OSRAM Group to EDIL Group, and by EDIL Group
to OSRAM Group hereunder which agreements shall unless otherwise agreed
incorporate the terms and conditions set out in Section 2.3 and provide
for a commitment to purchase on the part of the purchaser (including
minimum quantities where appropriate) and fixed prices for such Lamp
Materials calculated in accordance with Section 2.3 c).
b) In the event that the parties agree and sign a long-term supply
agreement for a Lamp Material(s), the terms on which such Lamp Material(s)
shall be supplied thereafter will be as set out in such long-term supply
agreement and, for the avoidance of doubt, the terms of this Framework
Agreement shall thenceforth not apply to the supply of such Lamp Materials.
c) Notwithstanding the above, the parties shall be committed to supply or
procure the supply of Lamp Materials to the other party and its
Subsidiaries pursuant to its commitment in Section 2.3 a) unless and until
the parties agree that such commitment is replaced in respect of certain
Lamp Materials by a long term supply agreement.
SECTION 2.3. Terms and Conditions
a) Supply Commitments
OSRAM hereby agrees to itself and to procure that relevant members of the
OSRAM Group shall supply Lamp Materials (excluding Lamp Materials for sale
as lamp parts for, or for use in, motor vehicle lamps) which were supplied
by NAL to IL in the twelve months prior to Closing or Similar Products to
EDIL Group on the terms and conditions set out below, and EDIL hereby
agrees to itself and to procure that relevant members of the EDIL Group
shall supply starters and globottles which are supplied by IL to NAL in the
twelve months prior to Closing or Similar Products to OSRAM Group on the
terms and conditions set out below.
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For the avoidance of doubt, neither party shall be obliged to purchase
Lamp Materials from the other, other than in accordance with the rolling
forecast and firm orders mechanism set out in sub-section 2.3 e) below,
save that for the first 12 months following Closing, OSRAM Group and EDIL
Group shall be each other's Preferred Supplier of Lamp Materials or
Similar Products with NAL and IL supplied to each other in the 12 months
prior to Closing.
b) Duration
OSRAM and EDIL's respective supply commitments hereunder shall commence on
the date of Closing and shall continue for the period set out in Section
2.3k in respect of UV Phosphors and in respect of all other Lamp Materials
for a period of ____________ from Closing and such commitments shall not be
terminated prior to such date unless the parties shall have mutually agreed
in writing.
c) Prices
1) The prices for Lamp Materials or Similar Products to be supplied
hereunder shall be the prices charged by NAL to IL and by IL to NAL
prior to Closing (unless such prices have been increased since
Signing by an amount in excess of what can be justified under
paragraph 2 below in which case the prices shall be those charged
prior to the Signing) for the period of one year following the date
of Closing and thereafter unless and until such prices have been
charged pursuant to this section 2.3 c). The parties currently
believe that such prices are correctly set out in Parts I and II of
Schedule A.
2) Following the first anniversary of this Agreement and upon the
provision of six months' notice to the Buying Party, the Selling
Party may only change the prices for the Lamp Materials supplied
hereunder (see Parts I and II of Schedule A) if such change can be
justified by the Selling Party by reference to a corresponding change
(a) in the Selling Party's cost of labour, materials or energy used
in the production of such Lamp Materials; (b) in the reasonable costs
of environmental protection measures undertaken by the Selling Party
in connection with the facilities used in the production of such Lamp
Materials; (c) in the Selling Party's productivity in connection with
such Lamp Materials; and (d) in the cost of transportation of such
Lamp Materials from the Selling Party to the relevant port or Buying
Party facility where delivery is FOB, FAS, CIF or C&F (INCOTERMS
1990).
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3) Notwithstanding the above, the parties each undertake that the price
charged by it or any of its Subsidiaries for a Lamp Material supplied
to the other party and its Subsidiaries hereunder shall not on average
exceed the price charged by it or its Subsidiaries to other
manufacturers (including original lighting manufacturers) for such
Lamp Material at arm's length in the ordinary course of business
having regard to quantity, quality, delivery, payment and
transportation terms.
d) Payment Terms
The payment terms for the supply of Lamp materials the subject of this
Article shall be the same as applied between NAL and IL prior to Closing
(believed to be correctly set out in Parts I and II of Schedule A). The
date of invoice shall be the date of shipment or any date thereafter. The
method of payment shall be as the Selling Party shall reasonably specify
from time to time.
e) Rolling Forecasts and Firm Orders
The parties shall implement the following forecasts and firm orders
mechanism:
1) For the period from Closing to July 1st 1993, the parties will have
placed legally binding firm orders for Lamp Materials with each other
as set out in Part I of Schedule B and it is agreed that such orders
will be fulfilled in accordance with the terms of such orders as
set out in Part I of Schedule B.
2) The Buying Party shall within two weeks of Closing submit to the
Selling Party in writing its bona fide estimate of its requirements
for Lamp Materials for the 12 month period commencing on 1st April
1993 and shall thereafter submit, at least six weeks before each
Calendar Quarter Start Day, its bona fide best estimate of its
requirements for Lamp Materials for the twelve commencing months on
such Calendar Quarter Start Day.
3) Each such twelve month estimate shall show the Buying Party's
anticipated requirements in the first and second calendar quarters
separately (broken down by month) and the third and forth calendar
quarters together.
4) At the same time as the aforesaid twelve month estimate is submitted
to the Selling Party (except the first such estimate), the Buying
Party shall procure that it and its Subsidiaries
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submit legally binding firm orders to the Selling Party for Lamp
Materials for the first quarter (the "Committed Quarter") of such
estimate. All such firm orders shall be sent to the Selling Party's
head office in the country from where Lamp Materials are to be
supplied and a copy of orders and acceptances shall be sent to the
parties' nominated representatives.
5) The Buying Party's actual requirements for each Lamp Material in the
Committed Quarter shall not vary by more than 10 per cent from the
previous forecast for such quarter unless, after the Buying Party had
submitted its forecast for such quarter, the Selling Party has
altered the terms on which such Lamp Material(s) will be supplied.
6) Subject to sub-section 2.3f) below, OSRAM shall ensure that the
relevant member of the OSRAM Group shall accept EDIL Group's orders
for the Committed Quarter and that such relevant member of the OSRAM
Group shall confirm receipt and acceptance of EDIL Group's orders in
writing within 14 days of receipt.
7) Subject to sub-section 2.3f below, EDIL shall ensure that the
relevant member of the EDIL Group shall accept OSRAM Group's orders
for the Committed Quarter and that such relevant member of the EDIL
Group shall confirm receipt and acceptance of OSRAM Group orders in
writing within 14 days of receipt.
8) OSRAM and EDIL shall each nominate a representative to manage this
rolling forecast and firm orders procedure. Such nominated
representatives shall act as the point of first contact in the event
of supply difficulties and shall, in good faith, seek to resolve any
disputes which may arise. Any dispute relating to this rolling
forecast and firm orders procedure which cannot be resolved by the
nominated representatives shall be referred to a senior executive of
each of the parties, currently Mr. Swaanen for EDIL Group and Xx.
Xxxxxx for OSRAM Group. Either party shall give the other at least
14 days' notice of any change in its nominees from time to time.
f) Quantity
Subject to sub-section 2.3 q) below, OSRAM hereby agrees to itself and to
procure that OSRAM Group supply to EDIL Group all its requirements for
each Lamp Material of the type supplied by NAL to IL in the twelve months
prior to Closing or Similar Products thereto in the quantities ordered by
EDIL Group pursuant to sub-section 2.3 e) above and EDIL hereby agrees to
supply
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OSRAM Group with all its requirements for globottles and starters in the
quantities ordered by OSRAM Group pursuant to sub-section 2.3 e) above
Provided that in the event that the Selling Party notifies the Buying
Party on 6 months notice that Supplying Party has no capacity to
manufacture Lamp Materials or Similar Products or within 14 days of such
firm order that there is a reasonable shortage in production of such Lamp
Material, then the Selling Party shall only be obliged to supply to the
Buying Party the Lamp Material ordered for any quarter up to the greater
of:
1) the quantity of such Lamp Material or Similar Product supplied by the
Selling Party's Group to the Buying Party's Group in the relevant
quarter of the twelve month period prior to Closing or such date; or
2) a pro-rata share of the Selling Party's Group total available supplies
of such Lamp Material having regard to the Buying Party's Group orders
or purchases of such Lamp Material or Similar Product from the Selling
Party's Group and the purchases of such Lamp Material or Similar
Product by other customers of the Selling Party Group in the relevant
quarter of the twelve month period prior to Closing or such date,
and for the purposes of this sub-section f), where the Selling Party or
Buying Party is a member of the OSRAM Group, supplies to or from NAL or
for OSRAM Group's own use shall be included in such calculation, and where
the Selling Party or Buying Party is a member of the EDIL Group, supplies
to or from IL or for EDIL Group's own use shall be included in such
calculation.
g) Short Orders
1) In addition to the rolling forecasts and firm orders procedure set
out in sub-section e) above, and the supply obligations set out in
sub-section f) above, the Buying Party may from time to time order
Lamp Materials from the Selling Party to meet its unanticipated
requirements for such Lamp Materials.
2) The Selling Party shall supply such Lamp Materials within 14 days of
receipt of the Buying Party's order in respect of any Lamp Materials
which are in the Selling Party Groups stock and not assigned to any
customer or to the Selling Party's own factories at the time of order
and the relevant party hereto agrees to use reasonable efforts in all
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other circumstances to manufacture and deliver such Lamp Materials to
the Buying Party as soon as possible.
h) Quality
The quality of the Lamp Materials to be supplied by OSRAM Group or EDIL
Group to members of the other party's group pursuant to this Article II
shall equal the quality of such Lamp Materials supplied by OSRAM Group or
EDIL Group (as appropriate) to its own lamp manufacturing facilities or,
if not so supplied, the quality of similar lamp materials supplied to its
own lamp manufacturing facilities.
i) Amendment of Terms
1) The Selling Party may not amend specifications of Lamp Materials the
bulk of the Buying Party's requirements for which are purchased at
the time of such proposed amendment from the Selling Party and which
will affect the Buying Party's production of Lamps incorporating such
Lamp Materials, unless the Buying Party shall have consented in
writing to such amendments (such consent not to be unreasonably
withheld).
2) The Buying Party may from time to time with 6 month's prior written
notice require the Selling Party to reasonably amend the
specifications of Lamp Materials and the relevant party hereto shall
ensure that the Selling Party shall comply with such request unless
in the Selling Party's sole discretion said amendment has an adverse
affect on the Selling Party's production costs or schedule or
manufacturing process. In the event that the Selling Party amends
the specifications of a Lamp Material at the Buying Party's request,
the Selling Party may alter the price or schedule at which such Lamp
Material is supplied to the Buying Party to reflect any additional
production expenses or time delays reasonably caused to the Selling
Party as a result of such amendment.
3) The Selling Party may only amend terms relating to the availability
of Lamp Materials in the event that the Selling Party Group
permanently ceases production of such Lamp Materials or Similar
Products and the Buying Party Group has been given six months' notice
of such change.
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4) The Selling Party may only amend terms relating to quality if:
a) the same amendments have been made to the terms on which Lamp
Materials are supplied to the Selling Party's Group own lamp
manufacturing facilities; and
b) the Buying Party's Group has been given six months' notice of
such change.
j) Assignment
Without prejudice to OSRAM's commitment to supply Lamp Materials to EDIL Group,
in the event of a sale by EDIL or any of its Subsidiaries of a company or of the
whole or part of its business from time to time to any Person OSRAM shall enter
into a new supply contract for the duration of the unexpired term of this
Agreement at such time with the purchaser of such company or business on the
same terms as set out in this Article II in respect of the type of Lamp
Materials purchased by such company or business at the time of such sale
(including as to price, quantity, quality, delivery and payment terms.)
K) Exclusivity
1) Except as provided in sub-section 2) and 3) below, the Selling Party
shall supply Lamp Materials to the Buying Party hereunder on a
non-exclusive basis.
2) For a period of 7 years OSRAM hereby appoint the EDIL Group as the
OSRAM Group's exclusive distributor in Europe for suntanning and
therapeutic Lamps manufactured using UV phosphors (including UV
phosphors set out in paragraph 3 below) manufactured and/or supplied
by NAL and OSRAM shall not and shall ensure that no member of the
OSRAM Group shall itself distribute or appoint any third party to
distribute suntanning and therapeutic Lamps in Europe which
incorporate UV phosphors manufactured and/or supplied by NAL. For the
avoidance of doubt OSRAM xxx source UV phosphors from third parties or
manufacture such UV phosphors by itself but OSRAM shall not be
entitled to source UV phosphors from NAL.
3) Without prejudice to the above, for the duration of the supply
contract dated March 12th 1992 and amended July 8th 1992 between GTE
Licht GmbH and Kosmedico Kosmetische und Medizmische Lampan GmbH,
however, in no case longer than until December 31 2001 OSRAM shall
procure that OSRAM Group shall supply to EDIL Group on an exclusive
basis in Europe the following phosphors (currently) manufactured in
Towanda
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Pennsylvania) for use by EDIL Group in the manufacture of sun-tanning
and therapeutic lamps and the sale of such lamps in Europe through the
aforesaid distributor:
UV Phosphor No. 2090
UV Phosphor No. 2091
UV Phosphor No. GS 2011
UV Phosphor No. 2093
UV Phosphor No. 2094
UV Phosphor No. 2096
UV Phosphor No. 2097
For the duration of the aforesaid contract OSRAM shall not and shall ensure
that no member of the OSRAM Group shall manufacture or supply sun-tanning
or therapeutic Lamps incorporating the aforesaid phosphors in Europe, and
shall ensure that no member of the OSRAM Group shall supply such phosphors
for use by third parties in the manufacture of sun-tanning or therapeutic
Lamps for sale in Europe provided that EDIL Group purchase from OSRAM Group
a minimum quantity of the aforesaid phosphors needed for the manufacture of
two and a half (2.5) million items in the first and subsequent years of
this Agreement.
l) Delivery
1) Lamp Materials shall be delivered on the terms set out in Parts I and
II of Schedule A and for the avoidance of doubt any terms used shall
be INCOTERMS 1990.
2) In the event that the Selling Party fails to deliver Lamp Materials
to the Buying Party in the week stipulated by the Buying Party, the
Selling Party shall use all reasonable efforts to deliver such Lamp
Materials to the Buying Party as soon as practicable thereafter.
m) Warranty
1) The parties each undertake that it and the relevant members of the
Selling Party Group shall in respect of Lamp Materials supplied by it
and/or its Subsidiaries to a member of the Buying Party Group warrant
such Lamp Materials shall (a) be free from defects in material and
workmanship; (b) comply with the agreed functional and performance
specifications for that type of Lamp Material; and (c) equal the
quality of the same or
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similar type of Lamp Materials supplied to the Selling Party Group's
own manufacturing facilities.
Except as set out above, there are no other warranties express or
implied, including the warranties of merchantability and of fitness
for a particular purpose with respect to the Lamp Materials to be
supplied under this Article.
2) The Buying Party may within thirty days of the date of delivery,
reject delivered Lamp Materials which do not comply with the above
warranty by notifying the Selling Party in writing and the Selling
Party shall, at the Buying Party's option, either replace such Lamp
Materials within thirty days from the date of the Buying Party's
notice of rejection or issue a credit note for the respective invoice
amount and freight. The Selling Party shall be responsible for the
costs of re-transportation of rejected Lamp Materials back to the
Selling Party and delivery by air freight (if reasonably required by
the Buying Party) of any replacement Lamp Materials and, if necessary,
in order to effect such replacement as soon as possible the Selling
Party Group shall reschedule production and do everything in its power
to give the re-supply of Lamp Materials to the Buying Party the
highest priority.
3) The Selling Party shall not be liable for consequential, indirect,
special or incidental damages.
n) Taxes
Prices for Lamp Materials listed in Schedule A are exclusive of all taxes,
tariffs, duties and other charges whatsoever unless otherwise stated in
Schedule A.
o) Patents
1) Each party hereby warrants and represents to the best of its
knowledge and belief that the sale or use of Lamp Materials supplied
by it or any of its Subsidiaries to the Buying Party Group hereunder
shall not infringe the patent or other intellectual property rights of
a third party, and such party shall notify the Buying Party (in the
form of a patent infringement study to the extent available and to be
kept strictly confidential) of the existence or possibility of the use
or sale of such Lamp Material (whether as part of a
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Lamp or otherwise) infringing the patent or other intellectual
property rights of a third party.
2) Each party hereby undertakes to indemnify and hold harmless the other
party and its Subsidiaries from and against any and all losses,
damages or expenses, suffered or incurred by such other party and its
Subsidiaries arising from any claim by a third party that the use or
sale of Lamp Materials (whether as part of a Lamp or otherwise)
supplied by it or any of its Subsidiaries infringes such third parties
patents or other intellectual property rights.
3) Where a Lamp Material has been supplied to the Buying Party, and the
Buying Party's use or sale of such Lamp Material would constitute or
has constituted an infringement of the patent or other intellectual
property rights of a third party, the Selling Party shall issue a
credit note in return for such Lamp Materials equal to the respective
invoice amount for such Lamp Material and costs of freight.
4) Neither party shall be liable to the other party for consequential,
indirect, special or incidental damages.
5) Neither party shall be obliged to deliver Lamp Materials to the other
party in the event that it reasonably considers that the sale or use
of such Lamp Materials would infringe the patent or other intellectual
property rights of a third party.
p) Labelling and Packaging
1) The Lamp Materials (including packaging supplied hereunder) shall bear
such trade marks as the Buying Party may request. Such application of
the Buying Party's requested trade marks is made at the sole and
exclusive risk of the Buying Party regarding the validity or
infringement of any trade xxxx or other intellectual property right
and the Buying Party expressly undertakes to indemnify and hold the
Selling Party harmless from and against any and all claims, damages or
expenses which may arise by reason of applying trade marks, labels or
inscriptions to Lamp Materials at the instruction of the Buying Party.
2) The interior and exterior packaging of Lamp Materials supplied by the
Selling Party to the Buying Party under this Article II shall be the
packaging existing at the date of
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Closing, and any changes thereto which will or are likely to adversely
affect the Buying Party, require the Buying Party's prior written
consent, such consent not to be unreasonably withheld.
3) The labeling of Lamp Materials supplied by the Selling Party to the
Buying Party under this Article II shall be the labeling existing at
the date of Closing (except that the use of the trade xxxx "GTE" shall
be phased out) and any changes thereto require the Buying Party's
prior written consent, such consent not to be unreasonably withheld.
4) Any costs incurred by the Selling Party in making changes to the
packaging and labelling of Lamp Materials requested by the Buying
Party shall be for the Buying Party's account, except any changes
required as a consequence of the IL Purchase Agreements. All other
changes to labelling and packaging (including all costs connected with
removing the "GTE" and other trade marks associated with GTE
Corporation and its Subsidiaries) shall be made at the Selling Party's
cost and shall not increase the price of Lamp Materials supplied
hereunder.
q) Force Majeure
The Selling Party shall not be liable for failure to fulfil the orders of
the Buying Party where such failure or delay is due to force majeure
including, without limitation, fire; act of God; acts, restrictions or
failure to act of any government authority, domestic or foreign; strikes or
labour disputes; equipment failure; shortages of materials in the market
which were unforeseeable and which a prudent manufacturing company could
not reasonably have avoided; war or civil commotion; delays in
transportation or any other cause beyond its reasonable control, Provided,
however, that in such event the Selling Party shall use reasonable efforts
to fulfil the Buying Party's orders insofar as practicable and shall at
least supply to the Buying Party the quantity of Lamp Materials or Similar
Products equal to the percentage of the Selling Party's capacity to supply
such Lamp Materials at that time, such percentage to be determined by the
ratio of the Buying Party's firm orders to the Selling Party's sales to all
its customers and its own use of such Lamp Material, for the twelve (12)
month period preceding the force majeure event, for the duration of the
event constituting force majeure.
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4) CONFIDENTIALITY
The parties undertake to, and shall procure that their respective
Subsidiaries shall hold, so far as reasonably possible, the terms of any
supply arrangement to which this Article is applicable in confidence.
Neither EDIL nor OSRAM nor their respective Subsidiaries shall make any
reference to the origin of Lamp Materials supplied hereunder in their sales
promotion.
5) MINOR PRODUCT LINES
The parties shall within 12 months of Closing consider the continued
viability and practicality of each party supplying the other with small
quantities of Lamp Materials and in the event that the parties agree that
the Selling Party's costs of manufacturing such small quantities outweigh
the commercial benefits to the Buying Party of being supplied the same on
the terms and conditions set out herein then the Selling Party's
obligations to supply the Buying Party with such type of Lamp Materials
hereunder may be terminated by agreement.
SECTION 2.4 EQUAL TREATMENT
1) Upon request by EDIL, OSRAM agrees to authorise and consent to third
party suppliers using OSRAM Group's intellectual property rights,
tooling and manufacturing apparatus to make and sell Lamp Materials
(which are the same as or similar to those supplied by such third party
to OSRAM Group) to EDIL Group on the same terms and conditions as OSRAM
Group receives the same Provided that where OSRAM Group has financed the
tooling or manufacturing apparatus used by a third party, the price
charged to EDIL Group may reflect the cost of the OSRAM Group
investment.
2) OSRAM shall use its Best Efforts to ensure that any future joint
venture between OSRAM or any member of the OSRAM Group and a third
party agrees to supply Lamp Materials to EDIL Group on favourable terms
(including price) in a manner similar to that in which IL is currently
supplied with Lamp Materials from Eurospace maatschappij voor fabricage
en verkoop van gloeilam penonderdelen ("EMGO") including, but without
limitation, the price which shall be the same price as that paid by the
shareholders plus three and a half percent. Provided that EDIL Group
undertakes to purchase the bulk of its requirements from the said joint
venture.
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ARTICLE III
CONTINUATION OF CERTAIN SUPPLY AGREEMENTS BETWEEN OSRAM GROUP AND IL
SECTION 3.1 LYNX-L COMPACT FLOURESCENT LAMPS
The parties hereto shall, within 2 months of Closing, procure that the first
paragraph of Section 11.1 of the Supply Agreement between OSRAM GmbH and GTE
Sylvania S.A. dated March 31, 1992, regarding the supply of Lynx-L Compact
Flourescent Lamps shall be amended to read as follows:
"The Agreement comes into force on January 1, 1992, and will remain in full
force and effect until December 31, 1996, when it shall automatically terminate
unless otherwise agreed upon by the parties in writing."
SECTION 3.2 SUPPLY AGREEMENT FOR BULBS BETWEEN GTE SYLVANIA S.A. AND EMGO
a) EDIL will promptly approach Europese maatschappij voor fabricage en verkoop
van gloeilampenonderdelen of Lommel, Belgium ("EMGO") and propose the
amendment of the existing supply agreement dated December 6, 1982, between
GTE Sylvania S.A. and EMGO on the following terms:
1) the term of the agreement shall be extended for ten years after
signing;
2) a firm order for 120 million light bulbs for the first year is to be
given by EDIL on behalf of its Subsidiaries, and thereafter EDIL is
to acquire the bulk of its European light bulb requirements from EMGO;
3) the price to be charged to EDIL Group is to be 3 1/2% above the price
charged for such light bulbs by EMGO to EMGO's shareholders, with GTE
Sylvania S.A. to have the right to verify such price through audits.
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b) OSRAM will itself and procure that its trustees recommend to its joint
venture partner in EMGO that EMGO accept a proposal made by EDIL in
accordance with the terms set forth in the foregoing subparagraphs.
SECTION 3.3 The supply agreement between OSRAM GmbH and XXXX Xxxxxxxxxxxxx
Apparate-Bau-Anstalt August Xxxxxx Sohne GmbH ("GTE Licht") dated November 11,
1978, for the supply of glass for fluorescent lamps ("German Glass Contract").
a) The parties hereby agree that the German Glass Contract shall be amended
as follows:
1) Add the following recitals:
WHEREAS pursuant to Heads of Agreement dated 6 June 1992 and a Master
Agreement between Siemens Aktiengesellschaft, OSRAM GmbH ("OSRAM"),
Citicorp Capital Investors Europe Limited and Edil International
Lighting B.V. ("Edil") dated 6 August 1992 Edil agreed to purchase the
International Lighting Division including GTE Licht GmbH ("GTE"
Licht") from GTE Corporation and GTE International Incorporated on
condition, inter alia, that OSRAM agree to continue to supply GTE
Licht or its successors with glass and such party agrees to source
glass for flourescent lamps on the terms of the agreement between
OSRAM and GTE Licht originally concluded on 30 October 1978 as amended
by an amendment dated 19 February 1985 (the "Agreement") for as long
as the Erlangen plant continues its production of fluorescent lamps.
AND WHEREAS the parties to this Agreement wish to amend the Agreement
to ensure that OSRAM will supply and GTE Licht or its successors will
source the same glass for fluorescent lamps on the terms of the
Agreement for as long as the Erlangen plant continues its production
of fluorescent lamps.
It is now hereby agreed that:
2) Clause 1 (last paragraph) to be amended to read as follows:
"OSRAM undertakes to orientate its capacity at its plant at Augsburg
such that all the requirements of GTE Licht, as projected twelve
months in advance, can be met. The foregoing is subject to the
reservation that the obligation of OSRAM to supply all GTE
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Licht requirements shall not extend beyond 90 million units per
annum. Notwithstanding such capacity limitation, in the event that
the OSRAM Group extends the capacity for such glass at such plant or
at any other OSRAM Group plant in the future OSRAM hereby agree to
favourably consider an increase in supplies beyond 90 million units
per annum to GTE Licht on the same terms and conditions of this
Agreement.
3) Clause 14 to be replaced by the following clause:
"Clause 14 Term of Agreement, Termination
This Agreement shall run indefinitely. It will terminate, however,
if the production of bulbs for linear and ring lamps at the Erlangen
plant of GTE Licht is finally discontinued. It may also be
terminated by either party by giving at least 24 months' notice to
the end of the calendar year in writing to the other party, such
termination, however, not to take effect before 31 December 2005.
The right to terminate the Agreement for good cause remains
unaffected by the above."
4) New Clause 14A Assignment to include the following right:
GTE Licht may at any time assign all its rights and obligations under
this Agreement to EDIL International Lighting B.V. or any of its
Subsidiaries from time to time and OSRAM hereby assents to such
assignments.
b) The parties hereby agree that if the German Glass Contract is terminated
by OSRAM for any reason whatsoever except for a material breach by GTE
Light thereunder OSRAM shall immediatetely enter into a new agreement for
the supply of glass for fluorescent lamps on the same terms as the German
Glass Contract (as amended herein), save that the term of the renewed
agreement shall be for so long as the Erlangen plant continues production
of fluorescent lamps of, if less, 15 years.
c) EDIL may, at any time, assign the right to require OSRAM to enter into a
new agreement pursuant to subparagraph 3.3 b) above to any of its
Subsidiaries from time to time, and OSRAM hereby assents to such
assignment. Furthermore, EDIL may assign such right and the German Glass
Contract or any replacement thereof to the purchaser of a portion of whole
of
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EDIL's business making use of the light bulbs delivered or to be delivered
thereunder Provided the the purchaser of such business is not a Lamp
Competitor.
SECTION 3.4 The Supply Agreement between GTE do Brasil S/A Industria e Comerco
and OSRAM do Brasil Compantia de Limpadas Eletricas for the supply of bulbs and
tubes ("the Brazilian Glass Contract").
a) The parties hereby agree that the Brazilian Glass Contract shall be
amended to effect the following agreement:
1) Extend the term of the Brazilian Glass Contract from 31st December
1996 to the 31st December 2000;
2) From the 1st January 1997 until 31st December 2000 OSRAM shall
purchase all its requirements for glass (of the type currently
purchased from IL) for its Brazilian lamp and lighting manufacturing
operations from the Brazilian glass manufacturing facility currently
operated by GTE do Brasil S/A Industria e Comerco ("Brazil Glass
Facility") (excluding those quantities of glass which it is obliged
to purchase from GE or Vitroarma under and for the period of glass
contracts in force with such parties as at Closing) except for the
period and/or to the extent that EDIL notify OSRAM (on 12 month's
notice) that such Brazil Glass Facility has no further capacity to
meet all of OSRAM's requirements in which case OSRAM may purchase
such quantities of glass that the Brazil Glass Facility cannot supply
for that period from elsewhere. EDIL shall for this period procure
that glass supplied under the Brazilian Glass Contract is continued
to be supplied on competitive terms.
b) OSRAM hereby consents to the assignment of the Brazilian Glass Contract to
EDIL or any of its Subsidiaries and to assignments within the EDIL Group
and OSRAM also agrees for and on behalf of its Subsidiaries to waive any
right that it or any of its Subsidiaries may have to terminate the
Brazilian Glass Contract pursuant to Clause 16 of the Brazilian Glass
Contract. Osram continues to be entitled to terminate the Brazilian Glass
Contract for material breach.
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SECTION 3.5 Equipment for the Double Twin Compact Flourescent Line at Shipley,
United Kingdom
a) OSRAM agrees to sell EDIL the equipment necessary for the completion of
the double twin compact fluorescent line at EDIL's facility at Xxxxxxx,
United Kingdom (the "Xxxxxxx Line") on favourable terms, but in no event
at a price which is less than OSRAM's costs for such equipment.
b) OSRAM shall fulfill orders for equipment for the Xxxxxxx Line that are
outstanding as of Signing on the terms agreed upon by the relevant parties
at the time such orders were placed.
--------------------------
ARTICLE IV
CONTINUATION OF SUPPLY ARRANGEMENTS FOR FINISHED LAMPS
BETWEEN OSRAM, NAL AND IL
SECTION 4.1 Scope of Article IV
Subject to Section 4.3 below, this Article IV sets out the terms and conditions
upon which Lamps which were supplied by NAL to IL, by IL to NAL, by OSRAM Group
to IL and by IL to OSRAM Group in the twelve (12) months prior to Closing or
Similar Products, and Lamps which, although not supplied, were available to be
supplied by NAL to IL during such period as listed in Schedule D, shall be
supplied by OSRAM Group to EDIL Group, and by EDIL Group to OSRAM Group, for
the period set out in section 4.31 in respect of the Lamps set out on schedule
E and in respect of all other Lamps for a period of 4 years following Closing.
For the avoidance of doubt, the terms on which Lamps are to be supplied
pursuant to this Article IV shall not apply to Lamps supplied pursuant to
supply agreements referred to in Article III which, save as amended in Article
III, shall continue on their terms.
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SECTION 4.2 LONG-TERM SUPPLY AND PURCHASE CONTRACTS
a) Within twelve (12) months of Closing, the parties shall, in good faith,
negotiate long-term supply agreements for the most significant Lamps to be
supplied by OSRAM Group to EDIL Group, and by EDIL Group to OSRAM Group
hereunder which agreements shall incorporate the terms and conditions set
out in Section 4.3 and provide for a commitment to purchase on the part of
the purchaser (including minimum quantities where appropriate) and fixed
prices for such Lamps calculated pursuant to Section 4.3 c) unless
otherwise agreed.
b) In the event that the parties agree and sign a long-term agreement for a
Lamp(s), the terms on which such Lamp(s) shall be supplied thereafter will
be as set out in such long-term supply agreement and, for the avoidance of
doubt, the terms of this Framework Agreement shall thenceforth not apply to
such Lamps.
c) Notwithstanding the above, the parties shall be committed to supply or
procure the supply of Lamps to the other party and its Subsidiaries
pursuant to its commitment in Section 4.3 a) unless and until the parties
agree that such commitment is replaced in respect of certain Lamps by a
long term Supply Agreement.
SECTION 4.3 TERMS AND CONDITIONS
a) SUPPLY COMMITMENTS
OSRAM hereby agrees itself and to procure that relevant members of the
OSRAM Group shall supply to EDIL Group, Lamps of a type which were offered
to be supplied by NAL to IL (as set out in Schedule D) and were supplied by
OSRAM Group to IL, in the 12 months prior to Closing or Similar Products on
the terms and conditions set out below and EDIL hereby agrees itself to and
to procure that relevant members of the EDIL Group shall Supply to OSRAM
Group Lamps of a type which were supplied by IL to NAL or OSRAM Group in
the twelve months prior to Closing or Similar products on the terms and
conditions in this Section 4.3.
For the avoidance of doubt, neither party shall be obliged to purchase
Lamps from the other, other than in accordance with the rolling forecast
and firm orders mechanism set out in Section 4.3 e) below, save that for
the first 12 months following Closing OSRAM Group and EDIL Group shall be
each other's Preferred Supplier of Lams or Similar Products which NAL and
IL supplied to each other (or which were available to the other) in the 12
months prior to Closing.
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b) DURATION
OSRAM and EDIL's respective supply commitments for Lamps hereunder shall
commence on the date of Closing and shall continue (except in respect of
those type of lamps subject to long term supply agreements entered into
pursuant to Section 4.2) for the period set out in Section 4.3(j) in
respect of the Lamps set out in Schedule E and in respect of all other
Lamps for a minimum period of four years from the date of Closing and such
commitments shall not be terminated prior to such dates (and then or
thereafter only on twelve months advance written notice) unless the parties
shall have mutually agreed in writing.
c) PRICE
1) The prices for Lamps or Similar Products to be supplied hereunder shall
be the prices charged or if not purchased, quoted by the OSRAM Group
and EDIL Group to the other as at Closing (unless such prices have been
increased since Signing by an amount in excess of what can be justified
under paragraph 2 below in which case the prices shall be those charged
or quoted prior to Signing) for the period of one year following the
date of Closing and thereafter unless and until such prices have been
changed pursuant to this Section 4.3 c). The parties currently believe
that such prices are correctly set out in Schedule D.
2) Following the first anniversary of this Agreement and upon the
provision of six month's notice to the Buying Party, the Selling Party
may only change the prices for Lamps supplied hereunder to the extent
necessary to reflect increases or decreases (a) in the cost of labour,
materials or energy used in the production of such Lamps; (b) in the
reasonable costs of environmental protection measures undertaken by the
Selling Party in connection with the facilities used in the production
of such Lamps; and (c) in the Selling Party's productivity in
connection with such Lamps.
3) Notwithstanding the above, the parties hereby each undertake that the
price charged by it or its Subsidiaries for a Lamp supplied to the
other party or its Subsidiaries hereunder shall not on average exceed
the net price charged by it or its Subsidiaries to its most favoured
group of wholesalers, distributors, and original equipment
manufacturers less a reasonable margin in respect of such Lamps or for
similar quantities the price paid by original lamp manufacturers.
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4) OSRAM will use its best efforts that for as long as OSRAM Group is the
exclusive Supplier of Lamps in Schedule E to EDIL Group in Europe the
price of such Lamps to the EDIL Group shall enable the EDIL Group to
remain competitive in the relevant market place.
d) Payment Terms
The payment terms for the supply of Lamps the subject of this Article shall
be those which applied between the OSRAM Group and EDIL Group prior to
Closing (believed to be set out in Schedule D) Provided that in respect of
Lamps supplied to EDIL Group, payment shall be due no sooner than 60 days
from the date of invoice for deliveries of Lamps of the type listed on
Schedule D and all other Lamps except in the case of deliveries of any
Lamps from OSRAM's European locations to EDIL Group European locations of
Lamps previously supplied by OSRAM to IL where payment shall be due no
sooner than 30 days from the date of invoice. The date of invoice shall be
the date of shipment or any date thereafter. The method of payment shall be
as the Selling Party shall reasonably specify from time to time.
e) Rolling Forecasts and Firm Orders
The Selling Party and the Buying Party shall implement the following
rolling forecasts and firm orders mechanism:
1) For the period from Closing to July 1, 1993, the parties will have
placed legally binding firm orders for Lamps with each other as set
out in Part II of Schedule B and it is agreed that such orders will be
fulfilled in accordance with the terms of such orders as set out in
Part II of Schedule B.
2) The Buying Party shall within two weeks of Closing submit to the
Selling Party in writing its bona fide best estimate of its
requirements for Lamps for the 12 month period commencing on 1st April
1993 and shall thereafter submit, at least six weeks before each
Calendar Quarter Start Day its bona fide best estimate of its
requirements for Lamps for the twelve months commencing on such
Calendar Quarter Start Day.
3) Each such twelve month estimate shall show the Buying Party's
anticipated requirements in the first and second calendar quarters
separately (broken down by month) and the third and fourth calendar
quarters together.
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4) At the same time as the aforesaid twelve month estimate is submitted
to the Selling Party (except the first such estimate), the Buying
Party shall procure that its Subsidiaries submit legally binding firm
orders to the Selling Party for Lamps for the first quarter (the
"Committed Quarter") of such estimate. All such firm orders shall be
sent to the Selling Party's head office in the country from where
Lamps are to be supplied and a copy of orders and acceptances shall be
sent to the parties' nominated representatives.
5) The Buying Party's actual requirements for each Lamp in the Committed
Quarter shall not vary by more than 10 per cent from the previous
forecast for such quarter unless, after the Buying Party had submitted
its forecast for such quarter, the Selling Party has altered the terms
on which such Lamp(s) will be supplied.
6) Subject to sub-section 4.3 f) below, OSRAM shall ensure that the
relevant member of the OSRAM Group shall accept EDIL Group's orders
for the Committed Quarter and that such relevant member of the OSRAM
Group shall confirm receipt and acceptance of EDIL's Group's order in
writing within 14 days of receipt.
7) Subject to sub-section 4.3 f) below, EDIL shall ensure that the
relevant member of the EDIL Group shall accept OSRAM Group's orders
for the Committed Quarter and that such relevant member of the EDIL
Group shall confirm receipt and acceptance of OSRAM Group orders in
writing within 14 days of receipt.
8) OSRAM and EDIL shall each nominate a representative to manage this
rolling forecast and firm orders procedure. Such nominated
representative shall act as the point of first contact in the event of
supply difficulties and shall, in good faith, seek to resolve any
disputes which may arise. Any dispute relating to this rolling
forecast and firm orders procedure which cannot be resolved by the
nominated representatives shall be referred to a senior executive of
each of the parties, currently Mr. Swaanen for EDIL Group and Xx.
Xxxxxx for OSRAM Group. Either party shall give the other at least 14
days notice of any change in its nominees from time to time.
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f) Quantity
Subject to sub-section 4.3 p) below, OSRAM hereby agrees itself and to
procure that the OSRAM Group supply to EDIL Group all its requirements for
each Lamp of the type listed on Schedule D or supplied by OSRAM Group to IL
in the twelve months prior to Closing or Similar Products in the quantities
ordered by EDIL Group pursuant to Section 4.3 e) above and EDIL hereby
agrees itself and to procure that the EDIL Group supply to OSRAM Group all
its requirements for Lamps of a type supplied by IL to NAL in the twelve
months prior to Closing or Similar Products Provided that in the event that
the Selling Party notifies the Buying Party on 6 months notice that
Supplying Party has no capacity to manufacture Lamps or Similar Products,
or within 14 days of such firm order that there is a reasonable shortage in
production of such Lamp, then the Selling Party shall be obliged to supply
to the Buying Party the Lamps ordered for any quarter up to the greater of:
1) the quantity of such Lamp or Similar Product Supplied by the Selling
Party Group to the Buying Party Group in the relevant quarter of the
twelve month period to Closing or such date; or
2) a pro-rata share of the Selling Party Group total available supplies
of such Lamp having regard to the Buying Party's Group orders or
purchases of such Lamp or Similar Product from the Selling Party Group
and the purchases of such Lamp or Similar Product by other customers
of the Selling Party in the relevant quarter of the twelve month
period prior to Closing or such date; or
3) in respect of sub-miniature fluorescent Lamps or Similar Products 15%
of OSRAM Groups worldwide production capacity of such Lamps.
and for the purposes of this sub-section, where the Selling Party or Buying
Party is a member of the OSRAM Group, supplies to or from NAL or for OSRAM
Group's own use shall be included in such calculation, and where the Selling
Party or Buying Party is EDIL Group a member of the supplies to or from IL or
for EDIL Group's own use shall be included in such calculation.
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g) Quality
The quality of Lamps to be supplied by the Selling Party Group to the
Buying Party Group pursuant to this Article shall at least equal the
quality of Lamps manufactured for sale under the Selling Party's Group
trade marks in Europe or, if not supplied in Europe, such other relevant
territory.
h) Amendment of Terms
1) The Selling Party may only amend terms relating to the availability of
Lamps supplied under this Article in the event that such party
permanently ceases production of such Lamps or Similar Products and
the Buying Party has been given six months' notice of such change;
2) The Selling Party may only amend terms relating to the quality and
specification of Lamps supplied under this Article if:
A) the same amendments have been made to the terms on which such
Lamps are supplied to the Selling Party's own Lamp manufacturing
facilities; and
B) the Buying Party has been given six months' notice of such
change.
i) Assignment
Without prejudice to OSRAM's commitment to supply Lamps to EDIL and its
Subsidiaries hereunder, in the event of a sale by EDIL or any of its
Subsidiaries of a company or of the whole or part of its business from time
to time to any Person OSRAM shall enter into a new supply contract for the
duration of the unexpired term of this Agreement at such time with the
purchaser of such company or business on the same terms as set out in this
Article IV in respect of the type of Lamps purchased by such company or
business at the time of such sale (including as to price, quantity,
quality, delivery and payment terms).
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j) Exclusivity
1) Except as set out in paragraph 2) below the supply agreements
covered by this Article shall be on a non-exclusive basis.
2) For a period of 7 years OSRAM hereby appoint the EDIL Group as the
OSRAM Group's exclusive distributor in Europe for the Lamp Products
manufactured and/or supplied by NAL (except as limited by paragraph
3) below) listed in Schedule E and OSRAM shall not and shall ensure
that no member of the OSRAM Group shall distribute and sell or
appoint any third party to distribute and sell such Lamp Products in
Europe during this term. For the avoidance of doubt OSRAM may source
the Lamps listed in Schedule E from third parties or manufacture such
Lamps itself but shall not be entitled to source such Lamps (except
as permitted in paragraph 3 below) from NAL for distribution in
Europe.
3) Notwithstanding paragraph 2 above, OSRAM shall be entitled to sell
itself (but not through any third parties) the following Lamps
manufactured and supplied by NAL in the territories listed below:
(i) OSRAM may continue to sell VHO and HO Lamps and slimline
fluorescent Lamps in the United Kingdom up to a limit of the
same quantities of such Lamps as it currently sells in the
United Kingdom;
(ii) OSRAM may continue to sell Par 64 Lamps in Germany;
(iii) OSRAM may sell sub-miniature florescent Lamps throughout Europe
in any quantities but shall not sell any such Lamps to the
eight customers whom IL have sent quotations to prior to
Closing and who will be notified to OSRAM by EDIL within two
weeks of Closing. Furthermore EDIL assures OSRAM that it has
established a business relationship with such customers prior
to Closing.
4) Subject to paragraphs 4.3 L and N, EDIL hereby agree to indemnify
OSRAM Group against any losses, damages or expenses suffered or
incurred by OSRAM Group arising from any claim by a third party that
the use of sun-tanning or therapeutic lamps supplied by EDIL Group
has brought such third party health problems provided that the UV
Phosphors supplied to EDIL group and used in
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such lamps meet the agreed specification and comply with the
other warranties in paragraphs 4.3 L and N below. In the event
that such health claims are brought against OSRAM or EDIL and
as a result OSRAM Group withdraw completely from the
manufacture and sale of suntanning and therapeutic Lamps in
Europe then the distribution agreement in respect of such Lamps
supplied by NAL shall terminate forthwith.
k) Delivery
1) Lamps shall be delivered to the Buying Party on the terms as agreed
prior to Closing (set out in Schedule D) and for the avoidance of
doubt terms used in the schedule shall be INCOTERMS 1990.
2) In the event that the Selling Party fails to deliver Lamps to the
Buying Party in the month stipulated by such party, the Selling Party
shall use all reasonable efforts to deliver such Lamps to the Buying
Party as soon as practicable thereafter.
l) Warranty
1) The parties each undertake that it and the relevant members of the
Selling Party's Group shall in respect of Lamps supplied by it and/or
its Subsidiaries to a member of the Buying Party's Group warrant such
Lamps shall
(a) be free from defects in material and workmanship;
(b) comply with the agreed functional and performance
specifications for that Lamp; and
(c) equal the quality of the same or similar type of Lamps
supplied to the Selling Party's Group own manufacturing
facilities.
Except as set out above, there are no warranties express or implied,
including warranties of merchantability and of fitness for a
particular purpose with respect to the Lamps supplied under this
Article.
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2) The Buying Party may, within thirty days of the date of delivery,
reject delivered Lamps which do not comply with the above warranty by
notifying the Selling Party in writing. The Selling Party shall, at the
Buying Party's option, either replace such Lamps within thirty days from
the date of the Buying Party's notice of rejection or issue a credit
note for the respective invoice amount and freight. The Selling Party
shall be responsible for the costs of re-transportation of any rejected
Lamps and delivery by air freight (if reasonably required by Buying
Party) of any replacement lamps, and if necessary, in order to effect
such replacement as soon as possible the Selling Party Group shall
reschedule production and do everything in its power to give the
re-supply of Lamps to the Buying Party the highest priority.
3) The Selling Party shall not be liable for consequential, indirect,
special or incidental damages.
m) TAXES
Prices for the Lamps listed in Schedule D are exclusive of all taxes,
tariffs, duties and other charges whatsoever unless otherwise stated
in Schedule D.
n) PATENTS
1) Each party hereby warrants and represents to the best of its knowledge
and belief that the sale or use of Lamps supplied by it or any of its
Subsidiaries to the Buying Party Group hereunder shall not infringe the
patent or other intellectual property rights of a third party, and such
party shall notify the Buying Party (in the form of a patent
infringement study to the extent available and to be kept strictly
confidential) of the existence or possibility of the use or sale of
such Lamp constituting an Infringement of the patent or other
intellectual property rights of a third party.
2) Each Party hereby undertakes to indemnify and hold harmless the other
party and its Subsidiaries from and against any and all losses, damages
or expenses, suffered or incurred by such other party and its
Subsidiaries arising from any claim by a third party that the use or
sale of Lamps supplied by it or any of its Subsidiaries to the other
party and its Subsidiaries infringes such third parties patents or
other intellectual property rights.
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3) Where a Lamp has been supplied to the Buying Party, and the Buying
Party's use or sale of such Lamp would constitute or has constituted an
infringement of the patent or other intellectual property rights of a
third party, the Selling Party shall issue a credit note in return for
such Lamp equal to the respective invoice amount for such Lamp and costs
of freight
4) Neither party shall be liable to the other party for consequential,
indirect, special or incidental damages.
5) Neither party shall be obliged to deliver Lamps to the other party in
the event that it reasonably considers that the sale or use of such
Lamps would infringe the patent or intellectual property rights of a
third party.
0) LABELLING AND PACKAGING
1) The Lamps (including packaging supplied hereunder) shall bear such trade
marks as the Buying Party may request. Such application of the Buying
Party's requested trade marks is made at the sole and exclusive risk of
the Buying Party regarding the validity or infringement of any trade
xxxx or other intellectual property right and the Buying Party expressly
undertakes to indemnify and hold the Selling Party harmless from and
against any and all claims, damages or expenses which may arise by
reason of applying trade marks, labels, or inscriptions to Lamps at the
instruction of the Buying Party.
2) The interior and exterior packaging of Lamps supplied by the Selling
Party to the Buying Party under this Article IV shall be the packaging
existing at the date of Closing, and any changes thereto which will or
are likely to adversely affect the Buying Party require the Buying
Party's prior written consent, such consent not to be unreasonably
withheld.
3) The labelling of Lamps supplied by the Selling Party to the Buying Party
under this Article IV shall be the labelling existing at the date of
Closing (except that the use of the trade xxxx "GTE" shall be phased
out) and any changes thereto require the Buying Party's prior written
consent, such consent not to be unreasonably withheld.
4) Any costs incurred by the Selling Party in making changes to the
packaging and labelling of Lamps requested by the Buying Party shall be
for the Buying Party's account, except any changes required as a
consequence of the IL Purchase Agreements. All other
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changes to labelling and packaging (including all costs connected with
removing and replacing the "GTE" and other trade marks associated with GTE
Corporation and its Subsidiaries) shall be made at the Selling Party's
cost and shall not increase the price of Lamps supplied hereunder.
p) FORCE MAJEURE
The Selling Party shall not be liable for failure to fill the orders of the
Buying Party where such failure or delay is due to force majeure including,
without limitation, fire; act of God; acts, restrictions or failure to act of
any government authority, domestic or foreign; strikes or labour disputes;
equipment failure; shortages of materials in the market which were
unforeseeable and which a prudent manufacturing company could not reasonably
have avoided; war or civil commotion; delays in transportation or any other
cause beyond its reasonable control. Provided, however, that in such event
the Selling Party shall use reasonable efforts to fulfil the Buying Party's
orders insofar as practicable, and shall at least supply to the Buying Party
the quantity of Lamps or Similar Products equal to a percentage to be
determined by the ratio of the Buying Party's firm orders to the Selling
Party's sales to all its customers for said Lamp [and its own use of such
Lamp], for the twelve month period proceeding the force majeure event, for
the duration of the event constituting force majeure.
q) CONFIDENTIALITY
The parties undertake to, and shall procure that their respective
Subsidiaries hold so far as reasonably possible the terms of any supply
arrangement to which this Article is applicable in confidence. Neither EDIL
nor OSRAM nor their respective Subsidiaries shall make any reference to the
origin of Lamps supplied hereunder in their sales promotion.
r) MINOR PRODUCT FINES
The parties shall within 12 months of Closing consider the continued
viability and practicality of each party supplying the other party with small
quantities of Lamps and in the event that the parties agree that the Selling
Party's costs of manufacturing such small quantities outweigh the commercial
benefits to the Buying Party of being supplied the same on the terms and
conditions set out herein then the Selling Party's obligations to supply the
Buying Party with such type of Lamp hereunder may be terminated by agreement.
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ARTICLE V
SUPPLY OF MANUFACTURING APPARATUS
1) Whereas pursuant to the Research and Development and Engineering Support
Agreement OSRAM and EDIL were to have agreed, prior to Closing, full form
supply agreements for the supply by OSRAM to EDIL of Manufacturing Appararus
(as therein defined).
2) The parties have not agreed full form supply agreement for the supply of
Manufacturing Apparatus as at the date hereof and shall do so within 1 month
of Closing on the terms and conditions set out in the Research and
Development and Engineering Support Agreement (including Schedule 2) as well
as in the Master Agreement.
3) In addition, the parties hereby agree that the terms and conditions of
supply (including, but without limitation, prices, quality, delivery terms,
payment terms and capacity) shall be no less favorable than the terms
except the terms of the Supply Agreement between OSRAM and IL relating to
the Double Twin Company Fluorescent line installed at Shipley, United
Kingdom on which such Manufacturing Apparatus or similar Manufacturing
Apparatus was supplied by OSRAM to IL prior to Closing.
------------------------
ARTICLE VI
Section 6.1 Governing Law
This Agreement is governed by, and shall be constituted in accordance with the
laws of the state of New York, USA. Except:
(a) the Supply Agreements under Article III which are governed by the law
as provided in the respective Agreement; and
(b) the Long Term Supply Agreements and Purchase Orders between the parties
which shall be governed by such law as is agreed between the parties from
time to time.
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SECTION 6.2 ARBITRATION
1) Any differences or disputes regarding the supply of Lamp Materials or Lamps
subject to this Agreement are to be settled by an amicable effort on the
part of both parties. An attempt to arrive at a settlement shall be deemed
to have failed as soon as one of the parties so notifies the other party in
writing.
2) Any claim or controversy arising at any time out of or in relation to this
Agreement shall be settled in accordance with the rules of commercial
arbitration of the International Chamber of Commerce by an arbitrator
appointed in accordance with the rules who shall be entitled to award
specific performance, preliminary or final injunctions and/or damages. Any
arbitration shall take place in Paris, France and shall be conducted in the
English language. Judgment upon the award rendered may be entered in any
court having jurisdiction thereof. All proceedings shall be conducted in
confidence; the parties agree to provide such information and make
available such employees as the arbitrator deems necessary for his or her
determination. Each party will be afforded an opportunity to examine the
witnesses and documents referred to or submitted by the other party as a
part of such proceedings and to submit a reasonable list of document
requests, interrogatories and requests for admission to which the other
will respond, it being understood that time is of the essence in the
completion of such proceedings. The arbitrator shall be required to put his
or her award and decision in writing and provide all parties with a copy
thereof.
SECTION 5.3 AMENDMENTS
a) Except as otherwise permitted in this Agreement, no amendment, waiver or
modification of any provision of this Agreement shall be valid unless it is
in writing and signed by or on behalf of each of the parties hereto.
b) Nothing in this Agreement shall be construed to limit the right of the
parties mutually to agree to amend the terms of this agreement or any
agreement referred to herein.
SECTION 5.4 ASSIGNMENT
Except as expressly provided in this Agreement, neither party shall assign or
transfer or purport to assign or transfer any of its or obligations under this
Agreement.
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SECTION 5.5 NOTICES
Except as expressly provided herein, any notice or other communication under or
in accordance with this Agreement shall be in writing and shall be delivered
personally or sent by first class pre-paid recorded delivery (and by air mail
if overseas) or by fax (and confirmed by letter post) or by telex as follows:
if to OSRAM, to:
Address: Xxxxxxxxxxxx Xxxxxxx 0
X-0000 Xxxxxxxx 00
Xxxxxxx
Telefax: 0049 89 6213 2019
Marked for the attention of Xxxx Xxxxxxx;
if to EDIL, to:
Address: Apollolam 171
1077 AS, Amsterdam
X.X. Xxx 0000, 0000 XX
Xxxxxxxxx
Xxx Xxxxxxxxxxx
Telefax: 31 20 6769326
Marked for the attention of X. Xxxxxx:
and a copy to: CITICORP VENTURE CAPITAL UNLIMITED
Address: Xxxxxxxx Xxxxx
0xx Xxxxx
000 Xxxxxx
Xxxxxx XX0X 0XX
England
Telefax: 071 438 1420
Marked for the attention of X. Xxxxx;
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and
Address: [EDIL], Geneva
20 Route de Pre-Bois
X.X. Xxx 000
0000 Xxxxxx 00
Xxxxxxxxxxx
Telefax: 010 4122 7880363
Marked for the attention of R. Swaanen
or to such other person, address or telefax number as any party may specify by
notice in writing to the others. A notice shall be effective when received.
SECTION 5.6 Waiver
No waiver by either party of the exercise of any right or of enforcement of any
obligation of the other party shall operate as a waiver of any other such right
of enforcement of any other such obligation to a subsequent occasion.
SECTION 5.7 Severability
If any provision of this Agreement shall be held invalid, the remainder shall
nevertheless be deemed valid and effective, and it is the intention of both
OSRAM and EDIL that each provision hereof is being stipulated separately in the
event one or more of such provisions should be held invalid.
SECTION 5.8 Entire Agreement
This Agreement embodies the entire agreement of OSRAM and EDIL and supersedes
and cancels all previous negotiations, understandings, commitments or
agreements, written or oral, regarding the subject matter hereof.
SECTION 5.9 Counterparts
This Agreement may be executed in any number of counterparts, each of which
executed and delivered shall be an original, but all the counterparts together
shall continue one and the same instrument.
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SECTION 5.10 Headings
The headings of the articles, sections and subsections in this Agreement are
inserted for convenience of the reader only and do not form a part of this
Agreement.
SECTION 5.11 Confidentiality
The parties undertake to, and shall procure that their respective Subsidiaries
shall take reasonable steps to, hold the terms of this Agreement in
confidence. No public announcement, communication or circular (other than and
to the extent required by law) concerning the transactions referred to in this
Agreement, the terms and conditions of this Agreement or the financial affairs
of any of the parties to this Agreement shall be made or dispatched by any
party without the prior written consent of the other party (such consent not to
be unreasonably withheld or delayed).
SECTION 5.12 U.N. Convention
Except as may by expressly provided to the contrary in any agreement to be
amended or entered into pursuant to this Agreement, the parties agree that the
provisions of the United Nations Convention on Contracts for the International
Sale of Goods shall not apply to this Agreement or to such agreements.
SECTION 5.13 Inconsistent terms
The provisions set forth in any purchase order, invoice or other printed form
used in the ordering or supply of products pursuant to a supply agreement
amended or entered into pursuant to this Agreement shall not take precedence
over the terms of this Agreement and to the extent contradictory of this
Agreement's terms, shall be of no effect.
In Witness whereof, this Agreement has been executed by the parties on the date
first written above.
OSRAM GmbH EDIL International Lighting B.V.
By: /s/ By: /s/
--------------------------- --------------------------------
Name: Name:
Title: General Counsel Title: Authorized Signature
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SCHEDULES
SCHEDULE A - Lamp Materials
Part I - Lamp Materials supplied by NAL to IL
Part II - Lamp Materials xxxxxxx by IL to NAL
SCHEDULE B - Firm Orders for period from Closing to July 1st 1993
Part I - Lamp Materials
A) NAL to IL
B) IL to NAL
Part II - Lamps
A) NAL to IL
B) IL to NAL
SCHEDULE C
No Longer Applicable
SCHEDULE D - Finished Lamps
SCHEDULE E - Specialty Lamps purchased by IL from NAL
The products which present a Sylvania specialty in Europe and are purchased
from NAL are:
Metalarc M Types (excluding NAL types MP75 AND MP100)
VHO Fluorescent
HO Fluorescent
Slimline Fluorescent
Photocopy Fluorescent
UV suntanning and therapeutic lamps and UV phosphors
XXX 00 Xxxxx
Xxx-xxxxxxxxx Xxxxxxxxxxx Xxxxx
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\ 4.2.2 OSRAM shall retain for a period of two (2) years
after making a royalty report, the records, files,
and books of account prepared in the normal course of
business, which contain data reasonably required for
the computation and verification of the amounts to be
paid and the information to be given in such report.
OSRAM shall permit the inspection, with reasonable
advance notice and at reasonable times during normal
business hours, of such records, files, and books of
account, by a certified public accountant to when
OSRAM has no reasonable objection. Said accountant
shall be permitted to inspect such records, files,
and books and OSRAM shall give the accountant such
other information as may be necessary and proper to
enable the amounts of payments payable hereunder to
be accurately ascertained. Such inspection shall be
at SLI's expense unless it is determined by said
accountant that the royalties paid to SLI are
deficient in excess of five percent (5%), in which
case the costs of such inspection shall be paid by
OSRAM. Neither SLI nor said accountant shall
disclose to anyone, directly or indirectly, any of
the information which they obtain as a result of any
such inspection and such accountant shall report to
SLI only the amount of royalty due and payable.
5. Notwithstanding the provisions of section 4.3 c) part 3 of the
Supply Agreement, OSRAM hereby undertakes that the price charged to SLI, or its
Subsidiaries, by OSRAM, or its Subsidiaries, for subminiature fluorescent Lamps
to be supplied to SLI, or its Subsidiaries, pursuant to the Supply Agreement
shall in respect of orders received by OSRAM after January 29, 1993 always be
15% less than the Net Price (less all discounts, allowances, rebates and
credits) charged by OSRAM, or its Subsidiaries, to its most favoured group of
wholesalers, distributors, original equipment manufacturers or any third party
for the same type of subminiature fluorescent Lamps. The parties agree that
with effect from 29 January 1996 the price charged by OSRAM to SLI will be
reviewed with the purpose to agree an increase of such price by taking into
account the increased demand from the after market.
6. Except as provided above all other terms and conditions set forth
under the Supply Agreement shall remain unmodified and in full force and
effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment Agreement
as of the date first above written.
44
Sylvania Lighting OSRAM GmbH
International S.V.
/s/ /s/
----------------------------------- -----------------------------------
December 23, 1994 December 23, 1994
