ROTOR SUPPLY AGREEMENT
THIS ROTOR SUPPLY AGREEMENT dated as of February , 1998 by and between
Engelhard HexCore, L.P., a Delaware limited partnership (hereinafter referred to
as the "Seller") and Fresh Air Solutions, L.P., a Pennsylvania limited
partnership (hereinafter referred to as the "Purchaser").
W I T N E S S E T H :
WHEREAS, Purchaser desires to purchase from Seller and Seller desires
to sell to Purchaser, the Purchaser's Requirements (as hereinafter defined) for
Products (as hereinafter defined) for use by Purchaser in the Box Business (as
hereinafter defined);
NOW, THEREFORE, for and in consideration of the mutual premises and the
terms and conditions hereinafter set forth, the Purchaser and the Seller, with
the intent to be bound thereby, agree to the following.
ARTICLE I - DEFINITIONS
As used herein, the following terms have the meanings ascribed to them
in this Article (except as otherwise expressly provided) and include the plural
as well as the singular:
1.1 "Affiliate": as to any Person, any other Person Controlled by,
Controlling or under common Control with, such Person.
1.2 "Agreement" or "Supply Agreement": This agreement as of the date
first above written, as the same may be amended from time to time pursuant to
the terms hereof.
1.3 "Box Business": means the design, manufacture, assembly, marketing
and sale of Climate Control Systems for the cooling, dehumidification, drying,
heating, ventilation and microbe reduction markets.
1.4 "Climate Control Systems": means all air conditioning or air
treatment systems (whether pre-assembled units or kits that are to be assembled
by distributors, licensees, customers or affiliates of the Purchaser) that cool,
dehumidify, dry, heat and/or filter air; provided, however, that any such system
shall only be a "Climate Control System" if it operates, in part, by passing air
through one or more wheel-
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shaped rotors, which rotors may or may not be treated with a desiccant material.
1.5 "Control, Controlling, Controlled": as to any Person means the
possessing, directly or indirectly, of the power to direct or cause the
direction of the management and polices of such person, whether through
ownership of voting securities or partnership interests, by contract or
otherwise.
1.6 "Master Agreement": The Master Agreement, dated as of November 17,
1997, by and among ICC Technologies, Inc., ICC Desiccant Technologies, Inc.,
Engelhard Corporation, Xxxxxxxxx XX, Inc. and Engelhard/ICC, as the same may be
amended from time to time pursuant to the terms thereof.
1.7 "Order": A written request by Purchaser to Seller to supply a
specific quantity and type of Product on a requested delivery date or an oral
request by Purchaser to Seller to supply a specific quantity and type of Product
on a requested delivery date; provided, however, that any oral request is
confirmed in a writing sent by Purchaser to Seller within two (2) days of the
date of the oral request.
1.8 "Person" or "person" means an individual or a corporation,
partnership, trust, limited liability company, unincorporated association or
other entity.
1.9 "Products": Any and all rotors or wheels or similar products used
in Climate Control Systems.
1.10 "Requirements": All Products that Purchaser or its Affiliates may
require in connection with the conduct of the Box Business, including but not
limited to Products sold, purchased, leased, loaned, conveyed or transferred,
directly or indirectly, by or to the Purchaser, to or from third parties,
whether customers or suppliers, and whether separately or in combination with
other materials.
1.11 "Strategic Partner": means any entity listed on Schedule A.
ARTICLE II - SUPPLY OF PRODUCTS
2.1 Quantity. (a) Subject to the terms of this Agreement (including,
without limitation, Section 2.6), Purchaser will purchase exclusively from
Seller Purchaser's total Requirements for Products. Subject to the terms of this
Agreement, Seller will sell to Purchaser the Purchaser's total Re-
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quirements for Products. Products delivered to the Purchaser hereunder will have
the same specifications as Products manufactured by Seller as of the date of
this Agreement unless otherwise agreed by the parties.
(b) It is expressly agreed by the parties hereto that in no event may
Purchaser acquire Products from Seller for resale to any other party but only
for use by the Purchaser as (i) a component in the production or fabrication for
sale of a complete Climate Control System or as a part of a kit for sale by the
Purchaser or (ii) for sale by the Purchaser as part of a kit and/or Cassette (as
defined in the Master Agreement) to its Affiliates or its Strategic Partners for
inclusion in a complete Climate Control System.
(c) If Seller completely exits the business of producing Products,
Seller will give Purchaser 180 days advance notice, and Purchaser shall have the
option to acquire from Seller the assets and related liabilities of the Products
production business for fair market value, as determined without giving any
value to such business as an on-going concern.
(d) The parties acknowledge that Seller may manufacture and sell to
third parties any products including Products, components of Products or Climate
Control Systems; provided, however, that Seller shall not have the right to sell
or license others to sell desiccant Products or Climate Control Systems
containing desiccant Products for standalone supermarkets, ice rinks and
pachinko halls in North America, Japan and Korea for seven years from the date
hereof; provided, further, that if Purchaser does not meet aggregate the sales
requirement for such markets, which shall be 1997 actual aggregate sales for
such markets compounded by a ____ growth rate for each year thereafter, the
restriction in the next preceding proviso for such markets shall be null and
void and of no further force and effect and Seller shall thereafter have the
right to sell Products for standalone supermarkets, ice rinks and pachinko halls
in North America, Japan and Korea.
2.2 Orders. Purchaser will place with Seller all Orders at least sixty
(60) days prior to the requested delivery date for such Products. Each Order
constitutes an irrevocable obligation of Purchaser to purchase from Seller the
quantity and type of Product set forth in such Order on the terms and conditions
set forth in this Agreement. In accordance with Seller's capacity and lead time
constraints, Purchaser will use its best efforts to consolidate Orders to avoid
abnormally small Orders and will use its best efforts to avoid requesting
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Seller to deliver abnormally large quantities of Product in any Order, and, in
any event, Seller will not be required to fill any Order to the extent it
exceeds Seller's capacity or does not meet the lead time requirements referred
to above; provided, however, that the Seller's minimum capacity in any one year
shall be at least equal to the Orders from the preceding year plus 15%.
2.3 Price; Payment. The price, payment procedures and invoicing for
Products are as set forth on Schedule B hereto.
2.4 Warranty. (a) Seller agrees that the Products manufactured by the
Seller shall be free from defects in material and workmanship for the period set
forth below under normal use and service and when properly installed, and its
obligation is limited solely to repair or replace (including labor for one year
from the date of original installation of a Climate Control System containing
the Product or eighteen (18) months from the date of shipment from Seller's
factory, whichever may first occur (such earlier date, the "One Year Period")),
or refund the purchase price at Seller's option, at Seller's factories, or any
part or parts proven to be defective or non-conforming, within five (5) years
from the date of the commencement of the One Year Period returned to Seller with
transportation charges prepaid, which Seller's examination shall disclose to its
satisfaction to have been defective or non-conforming. THIS WARRANTY IS
EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES, AND IS IN LIEU OF AND IN
DISCLAIMER AND EXCLUSIVE OF ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE, AS WELL AS ALL OTHER IMPLIED WARRANTIES, IN
LAW OR EQUITY, AND ALL OTHER OBLIGATIONS OR LIABILITIES ON OUR PART. THERE ARE
NO WARRANTIES WHICH EXTEND BEYOND DESCRIPTION HEREOF. Seller neither assumes or
authorizes any person to assume for Seller any liability or obligation in
connection with the sale of its Products, except said repair or replacement of
the defective part as set forth above. Except for the One Year Period, Seller's
liability does not include any labor charges for the replacement of parts,
adjustments, repairs or other work done outside its factories. Notwithstanding
the foregoing, Seller's liability does not include any (a) liability related to
or arising out of odors actually or allegedly emanating from or caused by any
Products or (b) consequential or resulting damage to person, property,
equipment, goods, merchandise, profits, good will or reputation arising out of
any defect in or failure of its Products. Seller's obligation to repair or
replace shall not apply to Products altered outside its factory in any way, or
which have
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been subject to negligence or to misuse. On parts not its manufacture, such as
motors, controls, etc., Seller extends only the same warranties given to the
Seller. Seller's agreement hereunder runs only to the immediate purchasers and
does not extend, expressly or by implications, to any other person. Nothing in
the above warranty provisions, however, shall impose liability or obligation of
any type, nature or description upon Seller if Seller has not received payment
in full for the Product in question.
Where the non-conforming Product is replaced by Seller or where Seller
refunds the sales price received from Purchaser for such Product, Purchaser
shall return the non-conforming Product to Seller strictly in accordance with
Seller's written instructions concerning handling, shipping, insurance, mode of
transportation, and other matters as to which Seller issues instructions. In no
event shall Seller be liable for: (1) Products damaged in shipment or otherwise
without fault of Seller; (2) defects in Products due to negligence (other than
that of Seller), accident, abuse, improper care or storage, abnormal condition
of temperature or moisture; (3) damage to Products which have been tampered with
or altered in any way other than by Seller; or (4) expenses incurred by
Purchaser in attempting to correct any defects in Products.
(b) Seller additionally warrants that in the manufacture of Products it
complies with all applicable requirements of Sections 6, 7 and 12 of the Fair
Labor Standards Act as amended and the regulations and orders of the United
States Department of Labor issued under Section 14 thereof.
(c) Seller warrants to Purchaser that any Product sold by Seller to
Purchaser hereunder will not infringe the claim of any U.S. patent owned by a
third party covering the Product itself and agrees to indemnify the Purchaser
against liability for any alleged infringement; provided, however, that
Purchaser shall notify Seller within ten (10) days after receipt by Purchaser of
any such claim of alleged infringement or any notice of commencement of any suit
based on such alleged infringement, and provided further, that Seller shall
control and remain in control of any and all proceedings taken in defending such
suit, including without limitation utilization solely of counsel of Seller's own
selection to defend such suit. Seller does not warrant against infringement by
reason of use of any Product by Purchaser in combination with other materials or
in the operation of any process.
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(d) Recommendations by Seller, if any, covering the utilization,
properties or qualities of Products delivered hereunder or with respect to
services performed are believed reliable but Seller makes no warranty whatever
with respect thereto. Subject to the other terms of this agreement, use or
application of the Products sold by Seller to the Purchaser hereunder is at the
discretion of Purchaser without any liability or obligation on the part of
Seller; provided, however, that nothing in this Section 2.4(d) shall affect
Seller's liability, if any, under Section 2.4(a).
(e) THESE WARRANTIES ARE EXCLUSIVE AND ARE IN LIEU OF ANY AND ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, ARISING BY LAW OR CUSTOM, INCLUDING BUT NOT BY
WAY OF LIMITATION, THE IMPLIED WARRANTY OF MERCHANTABILITY AND THE IMPLIED
WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE.
2.5 Delivery. All Products supplied hereunder will be delivered and all
risk of loss and damage and title to Products will pass to the Purchaser F.O.B.
Seller's manufacturing site, Miami, Florida or any other location specified by
Seller in the continental United States, with markings and packaging as defined
in Schedule C hereto.
2.6 Specialty Products. In the event that Purchaser or its Affiliates
require Products that have performance characteristics that are substantially
different than those previously provided in Products ("Specialty Products"),
Purchaser shall first request Seller in writing to provide such Specialty
Products in accordance with this Agreement; provided, however, that if Seller
shall not have either responded to such request or shall have elected in writing
not to provide such Specialty Products, in each case within 90 days of receipt
of such written request, Purchaser may purchase such Specialty Products from a
third party; provided, however, that in no event shall Purchaser purchase
Specialty Products from a third party in aggregate, exceed 5% of Purchaser's
Requirements in any year.
ARTICLE III - GENERAL
3.1 Notifications. Any notice which either party may be required or
desires to give to the other party hereunder, except when otherwise provided
for, shall be deemed to be duly given: (i) when mailed by registered or
certified mail, postage prepaid to the other party at the following addresses or
any other address of addressee subsequently designated in writing by the duly
authorized representative of the party or (ii) when sent by facsimile to the
other party at the following
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telephone numbers or to any other telephone number subsequently designated in
writing by the respective duly authorized representative of the party:
To Purchaser: Fresh Air Solutions, L.P.
000 Xxxxx Xxxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Chairman
To Seller: Engelhard HexCore, L.P.
0000 X.X. 00xx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention:
with a copy to: General Counsel at:
000 Xxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000-0000
3.2 Term. This Agreement shall become effective as of the date hereof
and shall continue thereafter for a term expiring on February , 2012.
3.3 Termination for Breach. If either party is in material breach of
this Agreement, then the other party may, upon at least sixty (60) days' prior
written notice, terminate this Agreement, unless within such notice period the
breach is cured, in which event the notice of termination becomes ineffective.
3.4 Limitation of Liability. Notwithstanding anything to the contrary
in this Agreement or otherwise, in no event shall Seller be liable for indirect,
incidental, consequential or special damages incurred by Purchaser or any third
party arising out of or relating to this Agreement or any transactions hereunder
even if Seller has been apprised of or is aware of the possibility of such
damages. In no event shall the aggregate liability of Seller to Purchaser and
all third parties arising out of or relating to any supply of Products or the
transactions contemplated hereunder exceed the purchase price paid by Purchaser
with respect to the Products in respect of which such claim is made.
3.5 Force Majeure. Any delay in or failure of performance or delivery
by Seller shall not constitute a breach of or default under this Agreement or
give rise to any claims for damages if and to the extent caused, directly or
indirectly, by
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acts of God, acts of Purchaser, acts, rules or regulations of governmental
authority (civil or military, executive, legislative, judicial or otherwise),
strikes or other concerted acts of workers, lockout, labor difficulties, fires,
floods, storms, accidents, earthquakes, tidal waves or other natural disasters,
epidemics, war, riots, rebellions, sabotage, insurrection, difficulties or
delays in public transportation or in public or postal delivery services, car
shortages, fuel shortages, inability to obtain from usual sources of supply,
inability to obtain suitable or sufficient energy, labor, machinery, facilities,
supplies or materials as and when required, failure of any third party to honor
its contractual commitment or any other circumstances beyond Seller's reasonable
control, whether of a similar or dissimilar nature. Upon the occurrence of any
of the circumstances described in the foregoing sentence, Seller shall, to the
extent practicable, use its best efforts to allocate its available production,
deliveries, services, raw materials and resources to the production of Products
from Purchaser at the time of any such events; provided, however, that in no
event shall Seller be required to make changes to any products previously
produced or reclaim products previously shipped to others.
3.6 Assignment. (a) Purchaser shall have no right to transfer or assign
its interest or rights in this Agreement or delegate its obligations under this
Agreement without the prior written consent of Seller except in connection with
the transfer of all or substantially all of the property or assets of Purchaser.
In connection with any direct or indirect sale, transfer or other disposition,
whether in one or a series of transactions, of all of the property or assets of
Purchaser, the surviving or resulting entities of such transaction shall assume,
as a co-obligor with Purchaser and as a condition to the effectiveness of any
such transaction, the obligations of Purchaser hereunder.
(b) Seller shall have no right to transfer or assign its interest or
rights in this Agreement or delegate its obligations under this Agreement
without the prior written consent of Purchaser except in connection with the
transfer of all or substantially all of the property or assets of the Seller. In
connection with any direct or indirect sale, transfer or other disposition,
whether in one or a series of transactions, of all of the property or assets of
Seller, the surviving or resulting entities of such transaction shall assume, as
co-obligor with Seller and as a condition to the effectiveness of any such
transaction, the obligations of Seller hereunder.
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3.7 Severability. If any provisions of this Agreement or the
application of such provision to any party or circumstance shall be held invalid
the remainder of this Agreement or the application of such provision to a
different party or circumstance shall not be affected thereby; provided,
however, that the parties shall negotiate in good faith with respect to any
equitable modification of the provision or application thereof held to be
invalid.
3.8 Construction. Article and Section headings are for convenience of
reference only and shall not affect the interpretation of any of the provisions
of this Agreement. None of the provisions of this Agreement shall be for the
benefit of or enforceable by any third party.
3.9 Entire Agreement; Amendments. This Agreement, together with the
Master Agreement and the Transaction Documents and Related Agreements (each as
defined in the Master Agreement), contains the entire understanding between the
parties with respect to the within subject matter and shall be controlling to
the exclusion of all terms and conditions on any purchase order, acknowledgment
form or any other documents which may be issued by the parties hereto on or
after the date hereof. This Agreement may not be modified or amended except in a
writing signed by the parties hereto. No waiver or indulgence of any breach or
default hereunder shall be construed as a waiver of any subsequent breach of the
same or any other provision of this Agreement.
3.10 Prior Agreements. This Agreement cancels and supersedes all other
written or verbal agreements which may have been in effect prior to this
Agreement relating to the within subject matter.
3.11 Jurisdiction. The parties hereto agree that all of the provisions
of this Agreement and any question concerning its interpretation and enforcement
shall be governed by the laws of the State of Delaware.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their duly authorized representatives, as of the date first above
written.
FRESH AIR SOLUTIONS, X.X. XXXXXXXXX HEXCORE, L.P.
By its General Partner By its General Partner
ICC DESICCANT TECHNOLOGIES, INC. XXXXXXXXX XX, INC.
By: By:
---------------------------- ----------------------------
Name: Name:
Title: Title:
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