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EXHIBIT 10.10
*PLEASE SEE ATTACHMENT 10.10A FOR DETAILS CONCERNING REDACTED PROVISIONS
AGREEMENT
TO SUPPLY BEARINGS
BETWEEN
PRECISION ENGINE PRODUCTS CORP.
0000 XXXXXX XXXXXX XXXXXXXXX,
XXXXXXXXXXX, XXXXXXX 00000
(HEREINAFTER REFERRED TO AS BUYER),
ON THE ONE PART
AND
INA BEARING COMPANY,
000 XXXXXXXXXX XXXX XXXX,
XXXX XXXX, XXXXX XXXXXXXX 00000
(HEREINAFTER REFERRED TO AS SELLER)
ON THE OTHER PART.
WHEREAS, the Buyer intends to purchase *** of its requirements for certain
bearings from the Seller upon the terms and conditions set forth in this
Agreement; and
WHEREAS, the Seller is willing to supply such requirements to the Buyer on the
terms and conditions set forth in this Agreement; and
WHEREAS, the Appendices to this Agreement describe separate Programs under
which the Seller will supply bearings to the Buyer; and
WHEREAS, this Agreement is intended to apply separately to each program;
IT IS AGREED AS FOLLOWS:
1. PRODUCTS
The term "bearings", with respect to each Program, shall mean all product(s)
listed in the Appendix to this Agreement that describes the Program, including
successor products that correspond to the basic types listed.
Seller shall supply Buyer with *** of Buyer's requirements for the bearings at
the prices set out in the applicable Appendix, subject to adjustment as
provided in this Agreement. Quantities indicated in the Appendices are
estimates only and do not obligate Buyer to Purchase more than its actual
requirements or limit Seller's obligation to supply Buyer's
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*PLEASE SEE ATTACHMENT 10.10A FOR DETAILS CONCERNING REDACTED PROVISIONS
actual requirements.
1.1 Replacements/ Additions
Modified bearings will be included in this Agreement automatically, provided
that the modifications are approved by Buyer. Additional products may be
included in this Agreement only by amending or adding Appendices by mutual
agreement of the parties.
In the event any modification of a bearing or addition of a product to this
Agreement necessitates additional tooling or capitalization expenditure, these
expenditures will be negotiated by both parties at that time.
2. TERM OF AGREEMENT
Each Appendix attached to this Agreement identifies a specific Program. This
Agreement is applied to each Program separately and the term of each Program is
expressed in Model Years. A Model Year is defined as a period of annual motor
vehicle production, from *** to ***, designated by the year in which
such production ends. For example, the 1993 Model Year would commence *** and
end ***. ***
2.1 ***
2.2 ***
2.3 ***
3. PRICES
The prices for all bearings purchased under this Agreement shall be calculated
using the base prices indicated in the Appendices.***
***
4. TERMS AND CONDITIONS
Buyer's Standard Terms and Conditions will apply with the exception of the
Payment Terms which are Net 30 days.
5. WARRANTY
Seller expressly warrants that all products covered by this Supply Agreement
will conform to the specifications, drawings, samples or descriptions furnished
by Buyer, and will be merchantable, of good material and workmanship and free
from defects. No other warranty provisions of either Seller or Buyer apply.
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*PLEASE SEE ATTACHMENT 10.10A FOR DETAILS CONCERNING REDACTED PROVISIONS
6. CANCELLATION
In the event of a program cancellation by any customer of the Buyer, the Seller
will be compensated for unabsorbed tooling unique to bearings manufactured
solely for the Buyer only to the extent specifically agreed upon in writing and
for existing unique inventory and raw material only to the extent the Seller is
required to maintain the inventory or purchase the raw material pursuant to
Paragraph 9 (Schedules/Forecasts) and Paragraph 10 (Safety Stock).
Tooling ownership remains with the Seller.
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*PLEASE SEE ATTACHMENT 10.10A FOR DETAILS CONCERNING REDACTED PROVISIONS
7. PACKAGING
Bearing(s) will be bulk packaged. Premiums will be negotiated for alternate
packaging requested by the Buyer.
8. SHIPPING
Seller shall ship all bearings, F.O.B. Seller's manufacturing facility in
accordance with purchase orders submitted by Buyer from time to time.
9. SCHEDULE/FORECASTS
Each quarter Buyer shall provide Seller with an updated forecast for not less
than ***; the first *** will be firm releases for finished products and
work-in-process, and the next ***. Any forecast beyond the initial *** period
will be for planning purposed only with no financial commitment with regard to
the Buyer.
10. SAFETY STOCK
Seller shall maintain an inventory of finished product(s) *** normal usage to
cover any unexpected interruptions in the supply of the product(s). Supply
protection beyond the scope of the Safety Stock as outlined can be negotiated
in good faith by Buyer and Seller as needed. In addition to financial
commitments identified in 9. above, Buyer is financially committed to his
safety stock.
11. QUALITY
Seller shall comply in all respects with Buyer's Supplier Quality Assurance
system, which may be altered from time to time by Buyer with Seller's approval,
and Seller's approval shall not be unreasonably withheld. In the event that
changes in the SQA system dramatically affects the Seller's labor or overhead
costs, Buyer and Seller will negotiate a price change in good faith.
12. SAMPLE AND APPROVAL PROCEDURE
Seller and Buyer must negotiate and agree upon sample and approval procedure in
advance. Prototype parts will be supplied as needed and quoted separately.
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*PLEASE SEE ATTACHMENT 10.10A FOR DETAILS CONCERNING REDACTED PROVISIONS
13. COMPETITIVE REQUIREMENT
Seller agrees to remain competitive with regard to quality and delivery during
the Term of this Agreement. In the event that Seller consistently fails to meet
Buyer's quality and delivery requirements, Buyer shall have the right to cancel
this Agreement or any program.
14. AMENDMENTS/ADDITIONS
This Agreement, together with the documents referenced herein, constitutes the
entire agreement of the parties relating to its subprice change in good faith.
To become effective, all amendments and/or additions to this Agreement shall be
made in writing between the parties. This Agreement, all orders placed under
this Agreement, and any disputes in connection with this Agreement, shall be
governed by the laws of the Sate of South Carolina
Stanadyne Automotive INA Bearing Company, Inc.
Precision Engine Products Corp.
/s/ Xxxxxx X. Xxxxxx /s/ Xxxxxx Xxxxxx
Xxxxxx X. Xxxxxx Xxxxxx Xxxxxx
Vice President, General Manager Vice President, Automotive Marketing
Date: 1/2/96 Date: 1/8/96
/s/ X. X. Xxxxxxxx
Xxxxx X. Xxxxxxxx
President and CEO
Date: 1/8/96
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*PLEASE SEE ATTACHMENT 10.10A FOR DETAILS CONCERNING REDACTED PROVISIONS
APPENDIX A
TO
MULTI-YEAR AGREEMENT
BETWEEN
STANADYNE AUTOMOTIVE
PRECISION ENGINE PRODUCTS CORP.
AND
INA BEARING COMPANY, INC.
Program: ***
Model Years: ***
Cost Basis Date: March 1995
------------------------------------------------------------------------------
Stanadyne Part Number ***
INA Part Number ***
Average MY Volume***
Average MY Volume***
Prices @
***
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*PLEASE SEE ATTACHMENT 10.10A FOR DETAILS CONCERNING REDACTED PROVISIONS
APPENDIX B
TO
MULTI-YEAR AGREEMENT
BETWEEN
STANADYNE AUTOMOTIVE
PRECISION ENGINE PRODUCTS CORP
AND
INA BEARING COMPANY, INC.
Program: ***
Model Years: ***
Cost Basis Date: March 1995
------------------------------------------------------------------------------
Stanadyne Part Number ***
INA Part Number ***
Average MY Volume ***
Prices @
***
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*PLEASE SEE ATTACHMENT C FOR DETAILS CONCERNING REDACTED PROVISIONS
APPENDIX C
TO
MULTI-YEAR AGREEMENT
BETWEEN
STANADYNE AUTOMOTIVE
PRECISION ENGINE PRODUCTS CORP.
AND
INA BEARING COMPANY, INC.
Program ***
Model Years ***
Cost Basis Date March 1995
------------------------------------------------------------------------------
Stanadyne Part Number ***
INA Part Number ***
Average MY Volume ***
Prices @:
***
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*PLEASE SEE ATTACHMENT 10.10A FOR DETAILS CONCERNING REDACTED PROVISIONS
EXHIBIT I
TO
MULTI-YEAR AGREEMENT
BETWEEN
STANADYNE AUTOMOTIVE
PRECISION ENGINE PRODUCTS CORP.
AND
INA BEARING COMPANY, INC.
Price Adjustment
Calculation Example
***
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ATTACHMENT 10.10A
Confidential Treatment Request for
Stanadyne Automotive Corporation
Confidential Provisions of Exhibit 10.10:
the Agreement to Supply Bearings
between Precision Engine Products Corp
and INA Bearing Company, Inc.
1. In the first recital beginning with "WHEREAS", the four words
following the word "purchase;"
2. Section 1: Products Requirements - The word after "with" in
the first line of the second paragraph;
3. Section 2: Term of Agreement - (i) The last two sentences of
the first paragraph in their entirety and all date provisions,
(ii) all of the text in the subsection 2.1, (iii) all of the
text in the subsection 2.2 and (iv) all of the text in the
subsection 2.3;
4. Section 3: Prices - (i) All of the text in the second sentence
of the first paragraph, (ii) all of the text in the subsection
3.1, (iii) all of the text in the subsection 3.2, and(iv) all
of the text in the subsection 3.3;
5. Section 9: Schedules/Forecasts - The sixteen words following
the phrase"...the next three (3)months" in the first paragraph
and all time provisions;
6. Section 10: Safety Stock - the seven words following the
phrase "...inventory of finished product(s)" in the first
sentence of the section;
7. Appendix A - Volume and Price Provisions - (i) all of the
information following the heading: "Program", (ii) all of the
information following the heading: "Model Years", (iii)all of
the numerical information following the words "Stanadyne Part
Number", (iv) all of the numerical information following the
words "INA Part Number"; (v) all of the numerical information
following the heading "Average MY Volume", (vi) all of the
numerical information following the heading "Average MY
Volume", (vii) all of the information following "Prices @";
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8. Appendix B - Volume and Price Provisions - (i) all of the
information following the heading: "Program", (ii) all of the
information following the heading: "Model Years",(iii)all of
the numerical information following the words "Stanadyne Part
Number", (iv) all of the numerical information following the
words "INA Part Number"; (v) all of the numerical information
following "Average MY Volume", and(vi)all of the information
following "Prices @";
9. Appendix C - Volume and Price Provisions - (i) all of the
information following the heading: "Program", (ii) all of the
information following the heading: "Model Years",(iii)all of
the numerical information following the words "Stanadyne Part
Number", (iv) all of the numerical information following the
words "INA Part Number"; (v) all of the numerical information
following "Average MY Volume", and(vi)all of the information
following "Prices @";
10. Exhibit 1 to Multi-Year Agreement between Stanadyne Automotive
Precision Engine Products Corp. and INA Bearing Company, Inc.-
All of the text contained in the Exhibit following the phrase
"Price Adjustment Calculation Example".
