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EXHIBIT 10.39
OSI/SLI
FRAMEWORK AGREEMENT
FOR SUPPLY OF FINISHED LAMPS
AGREEMENT, (hereinafter called "Agreement") made as of January 29, 1997
between OSRAM SYLVANIA PRODUCTS INC a Delaware corporation, acting through its
General Lighting Business Group with a principal place of business at 000
Xxxxxxxx Xxxxxx, Xxxxxxx, XX 00000 (hereinafter called "OSRAM SYLVANIA") and
SYLVANIA LIGHTING INTERNATIONAL B.V. (formerly EDIL International Lighting
B.V.), a private limited company incorporated under the laws of the Netherlands
with a registered office located at Xxxxxxx 000, 0000 XX Xxxxxx, Xxx Xxxxxxxxxxx
("SLI").
W I T N E S S E T H.
WHEREAS, Osram GmbH and EDIL International Lighting, B.V. signed a Framework
Agreement for Supply Contract dated January 29, 1993 for the supply of many
products including lamps and various other agreements connected with the
separation of GTE Corporation's North American Lighting business acquired by
Osram GmbH) from the international lighting businesses of GTE Corporation and
GTE International Incorporated (acquired by SLI).
WHEREAS, Sylvania Lighting International B.V. has succeeded to all of the
rights, benefits and obligations of EDIL International Lighting B.V. under the
Framework Agreement for Supply Contract dated January 29, 1993;
WHEREAS, OSRAM SYLVANIA PRODUCTS INC. and Sylvania Lighting International B.V.
believe it desirable to enter into a new framework agreement setting forth the
standard terms and conditions that will apply to Schedule D lamp sales and
purchases thereby making unnecessary to negotiate such terms and conditions in
connection with each individual transaction;
NOW, THEREFORE, the parties agree as follows:
1. DEFINITIONS
The term "Products" shall mean Lamps as defined and set forth in Article
IV and Schedule D of the Framework Agreement by and between Osram GmbH and
EDIL International Lighting B.V., and dated January 29, 1993. Additional
products may be added to this Agreement or any of the Products may be
deleted herefrom, upon 6 months prior written notice given by OSRAM
SYLVANIA to SLI that such product or Products are, respectively, to be
added or deleted form this Agreement together with OSRAM SYLVANIA's written
designation of the effective date of such addition or deletion.
2. PRICE SCHEDULES; TERMS AND CONDITIONS
(a) OSRAM SYLVANIA will sell the Products to be sold and distributed by
SLI on accepted orders at prices to be negotiated annually for the
next calendar year. So long as the most recently completed calendar
year's purchases by SLI equal at least 80% of the prior calendar
year's purchases, then each year's price increase will not exceed the
published percentage increase for all general lighting products
(including lamps and ballasts) sold in the United States to
industrial/commercial distributors of the General Lighting business
division of OSRAM SYLVANIA. For the purpose of calculating the "80%".
SLI purchases
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shall be deemed to include unfilled, non-cancelable firm purchase
orders for product to be delivered during the then current calendar
year and firm purchase orders for products no longer commercially
available from OSI. Regardless of the date of receipt and acceptance of
orders OSRAM SYLVANIA reserves the right to invoice all or part of
accepted orders at prices in effect on the date of shipment for
backorders greater than 90 days.
The price of any particular Product type or family of product types may
be increased from time to time subject to the mutual written agreement
of the parties; provided, however, (a) the price adjustments result
from unfavorable changes in market conditions or labor, material energy
or other costs of manufacture, or other unfavorable factors beyond the
direct control of OSRAM SYLVANIA and (b) OSRAM SYLVANIA has given SLI
three (3) months' prior notice of the proposed price adjustment.
Conversely, favorable changes in market conditions of labor, material,
energy or other costs of manufacture will result in OSRAM SYLVANIA
providing to SLI price relief on the affected Product type or family of
products. In the event the parties cannot mutually agree on price
adjustments, the parties hereby agree to apply 50% of the price
adjustment for a ninety (90) day period while negotiations continue. If
at the end of such 90 day period, the parties fail to reach mutual
agreement, then OSRAM SYLVANIA will not have any obligation to supply
or SLI obligation to buy such Product type or family of product type
and no liability will result therefrom.
(b) SLI agrees to pay OSRAM SYLVANIA all sums incurred on SLI's open
account with OSRAM SYLVANIA in accordance with the following payment
terms: net 60 days from date of invoice no cash discount for early
payment. The date of invoice shall be the date of shipment or any
date thereafter. The method of payment shall be as OSRAM SYLVANIA
shall reasonably specify from time to time.
(c) OSRAM SYLVANIA reserves the absolute right to review and establish new
credit terms with respect to SLI's open account at any time and from
time to time.
(d) The pricing discussed in this Paragraph (2) is meant to apply only with
respect to the purchase by SLI of Products intended for resale outside
North America. In the event SLI (or any successor) were to purchase
Products under private label for resale in North America, then SLI
would need to negotiate and reach mutual agreement with OSI on the
pricing (and such other terms and conditions) that would apply with
respect to such products destined for resale in North America.
3. PURCHASE ORDERS
OSRAM SYLVANIA will not be required to make any shipments except against
orders sent by SLI to OSRAM SYLVANIA and accepted by OSRAM SYLVANIA. Any
provision of any order placed by SLI which is inconsistent with or in
addition to any provision hereof (other than provisions specifying lamp types
and quantities, delivery dates, invoicing and shipping instructions and
additional specifications) shall be null and void and not binding on OSRAM
SYLVANIA. All orders (excluding sample orders) will be subject to a minimum
order value of $1250 (U.S.) Orders below this amount will be subject to a
$55 (U.S.) handling charge.
4. DELIVERY
(a) Unless otherwise mutually agreed to OSRAM SYLVANIA shall deliver the
Products sold to SLI Ex-works (Incoterms 1990) shipping point from
the OSRAM SYLVANIA Distribution Center nearest the SLI customer
destination. Notwithstanding the foregoing, SLI private-label Product
will be warehoused at and shipped from OSRAM SYLVANIA's Bethleham,
Pennsylvania Distribution Center or such other locations as determined
by OSRAM SYLVANIA. Title and risk of loss with respect to the Project
will pass to SLI upon delivery at the f.o.b. point and all
transportation, insurance and other charges beyond such point of
shipment shall be for SLI's account. (Freight charges will be prorated
and added to the invoice.) OSRAM SYLVANIA shall ship Products in
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accordance with its standard mode of transportation at freight rates
then available to OSRAM SYLVANIA. If SLI requests a faster mode of
transportation, SLI shall be liable for the added transportation
cost. OSRAM SYLVANIA will containerize freight when requested by
SLI. Loading of containers will be to the maximum extent possible
under the circumstances.
(b) All delivery dates shall be deemed approximate. While OSRAM SYLVANIA
will endeavor to meet delivery schedules OSRAM SYLVANIA shall not be
liable for delays in delivery or failure to manufacture or deliver due
to (1) causes beyond its reasonable control, (2) acts of God, acts of
SLI, acts of civil or military authority, or other governmental
allocations or controls, fires, strikes or other labor difficulties,
flood, epidemics, war, riot or other civil disturbance, delays in
usual source of supply, delays in transportation or car shortage, (3)
inability on account of causes beyond its reasonable control to obtain
or delay in obtaining necessary labor, materials, components or
manufacturing facilities, or (4) any other commercial
impracticability. In event of any such delay, the date of delivery
shall be extended for a period equal to the time lost by reason of the
delay.
(c) When necessary and subject to mutual agreement, OSI will provide
palletized product at OSI's cost.
5. PRODUCT AVAILABILITY
(a) In the event of a shortage of Products for any reason, OSRAM SYLVANIA
shall have the right to allocate its available supply of Products
among its customers (including divisions, subsidiaries and affiliates
of OSRAM SYLVANIA that use Products) in any manner that OSRAM
SYLVANIA considers to be equitable or in its best interests.
Expressly subject to the preceding sentence limitation, OSI will
endeavor to supply SLI in accordance with historical buying patterns
of SLI. However, this is merely a non-binding target.
(b) OSRAM SYLVANIA agrees to notify SLI in writing 60 days prior to
obsoleting any specific lamp item and to identify substantially
equivalent replacement(s), if any,
(c) If possible, OSRAM SYLVANIA will provide SLI with a 6 months notice
advising of any known existing or anticipated long term capacity or
production problems (and plans to correct same) affecting a Product
or family of products, e.g., capacity problem experienced with PAR 38
lamps prior to EPACT implementation.
(d) In the event that OSRAM SYLVANIA experiences a short term capacity or
production problem, e.g., availability of F20D, F40D, circtines,
affecting any Product or family of products, it shall notify SLI of
the nature of the problem(s) (and plans to correct same) within 14
days after receiving SLI's firm orders for the affected Product(s).
6. MARKING, PACKAGING AND PACKAGE
(a) Products shall be marked and their packages shall contain graphics and
be labeled in the manner specified by SLI provided, however, that
OSRAM SYLVANIA shall not be obligated to xxxx or label in a manner
that it, in its sole discretion, believes would violate obligated to
xxxx or label in manner that it, in its sold discretion, believes
would violate the law or applicable regulations or its own or another
party's rights. SLI will either provide OSRAM SYLVANIA with art work
and films for graphics and labeling or identify its packaging
suppliers and authorize OSRAM SYLVANIA to secure such packaging at
SLI's cost, in which event the price of Products will be equitably
adjusted to reflect the fact that OSRAM SYLVANIA is no longer bearing
the cost of unit packages and/or
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shipping cartons and their graphics and labeling. SLI will reimburse
OSRAM SYLVANIA for all costs associated with any change in graphics
and labeling after the original graphics and labeling have been
supplied, including all costs of obsolete packaging material that
result from the change. Periodically, if it so elects and within its
sole discretion, OSRAM SYLVANIA may substitute its standard SYLVANIA
branded packaging of OSRAM SYLVANIA and/or "white box" or generic
packaging, which includes no corporate reference. SLI's consent would
be required if more than 20% of ordered Product types would be
supplied in non-private labeled packaging. Under no circumstance will
OSRAM branded products be available for purchase by SLI.
(b) The parties will mutually agree on a list of those lamp types which
will be supplied under SLI's private labels and trademarks. Private
labeled Sylvania brand product will be produced for SLI, subject to
minimum purchase requirements and such other requirements as set
forth in OSRAM SYLVANIA Policy #OQ2-133-02 (a copy of which is
attached hereto and incorporated herein). SLI will provide OSRAM
SYLVANIA with its annual forecast (updated quarterly) of private
labeled product requirements. Private labeled product which fails to
meet forecasted demand levels will be subject to deletion or will be
supplied on a "made to order" basis, subject to minimum production
runs and shipment of all such production when the order is completed.
7. COMPLIANCE WITH LAWS
OSRAM SYLVANIA shall not be required to deliver to SLI any Products which,
in OSRAM SYLVANIA's reasonable judgment, do not conform to applicable
standards, rules, regulations (including, but not limited to EPACT) or
guidelines, if any, for Products established by any governmental
authority. In the event OSRAM SYLVANIA determines in its reasonable
judgment, that it can or will export these products to SLI, OSRAM
SYLVANIA may condition its approval on such reasonable, additional terms
and conditions of sale as they would apply to private-labeled products (see
Paragraph 6 above).
8. TRADEMARKS & TRADENAMES
(a) It is understood that the trademarks and tradenames of each of the
parties hereto shall remain the sole and exclusive property of such
party and subject to such terms, conditions, rights and obligations
as set forth in the Amended and Restated Intellectual Property
Allocation and License Agreement by and between EDIL International
Lighting B.V., Osram Acquisition Corporation and Osram GmbH and dated
August 6, 1992 ("Allocation and License Agreement"), as amended by
the Variation Agreement by and between Osram GmbH and Sylvania
Lighting International B.V. and dated December 23, 1994 ("Variation
Agreement"). Neither party will use any of the trademarks or
tradenames of the other party on or in connection with any product
except as permitted by this Agreement or the Allocation and License
and Variation Agreements.
(b) Any breach of Article 18(b) of the Allocation and License Agreement
shall be deemed a breach of a material term of this Agreement and
give rise to early termination, as set forth in Paragraph 9(b) herein.
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9. TERM AND TERMINATION
(a) The Initial term of this Agreement shall be for the period February
1, 1997 through December 31, 1999 and from year to year thereafter
unless otherwise terminated as provided herein. Notwithstanding the
foregoing, either party may terminate this Agreement, with or without
cause, during any renewal period hereof, by giving not less than nine
(9) months prior written notice of termination to the other party,
and upon the giving of such notice, this Agreement shall terminate
without further notice the date specified in such notice of
termination.
(b) Notwithstanding anything to the contrary contained in this Agreement
or this Paragraph 9, in the event of a breach by either party of any
material term, condition or provision of this Agreement, the other
party (in addition to such other rights as it may have) shall have
the right to terminate this Agreement forthwith by giving written
notice of termination to the defaulting party, provided at least 30
(thirty) days' prior written notice of breach and intention to
terminate has been given and the breach is not cured during such
period.
(c) Notwithstanding anything to the contrary in Paragraph 9, or this
Agreement, if SLI ceases to function as a going business or if SLI
becomes involved in financial difficulties or becomes insolvent, or
in the event that: (a) any person, persons or company participating in
the general lighting market acquires twenty-five percent (25%) or
more common equity, ownership or control of SLI, its successors or
any of its assigns (other than pursuant to a public listing), or (b)
SLI, its successor or any of its assigns are or become a publicly
listed company and any person, persons or company participating in the
general lighting market acquires forty-nine percent (49%) or more of
the common equity of such company, or (c) any person, persons or
company participating in the general lighting market has the right to
appoint any director, officer, employee or one or more persons on the
board of management of SLI, its successors or any of its assigns, then
OSRAM SYLVANIA may, at its option, immediately terminate this
Agreement by giving written notice to SLI at termination. It is
expressly agreed that OSRAM SYLVANIA shall have the sole right to
determine whether any of the conditions set forth above shall have
occurred, and its determination, if not unreasonable, shall be binding
upon SLI. With respect to this Paragraph 9(c), any reference to "SLI"
shall be deemed to include any subsidiary owned or controlled by SLI.
(d) All claims shall survive the termination of this Agreement but
neither party shall be liable to the other for damages, indemnities,
losses or compensation of any kind by reason of, or attributable to,
the termination, for any reason, of this Agreement.
(e) In the event of termination of this Agreement by OSRAM SYLVANIA for
cause or by SLI for reasons other than OSRAM SYLVANIA's breach, SLI
will purchase all lamps under firm purchase orders of SLI in finished
packaged inventory at the time of termination plus reimburse OSRAM
SYLVANIA for the costs of all packaging materials, other stock
inventories and dedicated lamp inventories OSRAM SYLVANIA may have
purchased, committed to purchase or manufactured under this
Agreement, not to exceed ninety (90) days of annual purchases. If
such remaining inventory is not purchased by SLI within thirty (30)
days after termination of this Agreement, OSRAM SYLVANIA, without
waiving any other rights it may have, may sell this stock to
purchaser(s) of its choice at prevailing price; provided however, that
no packaging, artwork or labels of SLI shall be used in sales or
affixed to such stock.
10. WARRANTY AND INDEMNIFICATION
(a) Unless otherwise agreed to by the parties, OSRAM SYLVANIA will
manufacture Products to be delivered hereunder in accordance with
applicable specifications published by
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OSRAM SYLVANIA in its Large Lamp catalogue at the time of purchase by
SLI. This warranty shall apply only to defects appearing within one
(1) year from the date of delivery to SLI. Damages resulting from
external causes such as abuse, misuse, or acts of God are not covered
by this Warranty. The conditions of any tests concerning Products
which SLI claims fail to conform to this warranty shall be mutually
agreed upon in writing and OSRAM SYLVANIA shall be notified of, and
may be represented at, all tests that may be made. If any Product
does not meet the above warranty, and if SLI notifies OSRAM SYLVANIA
in writing within thirty (30) days after discovery of the defect,
OSRAM SYLVANIA shall thereupon correct such defect by either (at
OSRAM SYLVANIA's sole option) replacing the defective Product, or
part thereof, or refunding purchase price thereof. IN NO EVENT SHALL
OSRAM SYLVANIA BE LIABLE FOR CONSEQUENTIAL, INDIRECT, SPECIAL, OR
INCIDENTAL DAMAGES, INCLUDING, BUT NOT LIMITED TO LOSS OF PROFITS OR
REVENUE, COST OF CAPITAL, OR CLAIMS OF CUSTOMERS OF SLI FOR SUCH
DAMAGE. THIS WARRANTY REPRESENTS SLI'S EXCLUSIVE REMEDY UNDER THIS
AGREEMENT. THERE ARE NO OTHER WARRANTIES OF ANY KIND, WHETHER
EXPRESS OR IMPLIED, INCLUDING THE WARRANTIES OF MERCHANTABILITY AND
OF FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO PRODUCTS SOLD
UNDER THIS AGREEMENT.
(b) Where Products have limited life or may deteriorate through age or
other factors such as improper storage, or where industry accepted
visual imperfections exist as in glass or fused quartz products, such
limited life, or imperfection is not a defect or a failure to conform
to specifications as contemplated herein. SLI acknowledges that on
high volume production items such as Products, a small percentage of
defects (including failure to conform to specification(s) or breakage
is considered normal. SLI understands and acknowledges that
allowances for such defects and breakage is factored into the prices
for Products. Should any particular manufacturing lot of Products
develop an unusual number of defects, the parties shall negotiate
regarding an acceptable resolution of the problem, but, in no event
shall OSRAM SYLVANIA make available to SLI anything less in terms of
remedies that it makes generally available to its customers for the
same type of Product. If SLI desires specific acceptable quality
levels or a different remedy for exceeding such levels. SLI shall so
specify on the face of its Purchase Order.
(c) SLI agrees to indemnify and hold OSRAM SYLVANIA harmless from and
against any damage, expense, or loss that OSRAM SYLVANIA may suffer,
sustain or be subject to by reason of infringement of patent or
trademark arising from compliance with SLI designs or specification,
modifications or instructions. Except as otherwise provided in the
preceding sentence. OSRAM SYLVANIA shall defend any suit or
proceeding brought against SLI so far as based on a claim that any
Product furnished under this Agreement constitutes an infringement of
any patent of the United States, if notified promptly in writing and
given authority, information and assistance (at OSRAM SYLVANIA's
expense) for the defense of same, and OSRAM SYLVANIA shall pay all
damages and costs awarded therein against SLI. The foregoing states
the entire liability of OSRAM SYLVANIA for patent infringement by the
said Product.
11. GENERAL PROVISIONS
(a) Anything hereinabove, or in any documentation relating to particular
sales-transactions pursuant hereto, to the contrary notwithstanding,
title to Products sold to SLI hereunder shall pass upon delivery to
SLI.
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(b) This Agreement does not, and shall not be deemed to, make either
party the agent or legal representative of the other party for any
purpose whatsoever and neither party shall have the right or
authority to assume or create any obligation or responsibility
whatsoever express or implied, in behalf of or in the name of the
other party, or to bind the other party in any respect whatsoever,
neither party shall make any guarantee, warranty or representation of
Products on behalf of the other party.
(c) This Agreement contains the entire and only understanding and
agreement between the parties with regard to the subject matter
hereof, there being merged herein all prior and contemporaneous oral
or written representations, understandings, agreements, promises, and
conditions relating to the subject matter hereof and any
representation, understanding, agreement, or condition not
incorporated herein or made a part hereof shall not be binding upon
either party.
(d) The terms of this Agreement may not be altered, waived, modified or
discharged except by an express declaration in writing signed on
behalf of OSRAM SYLVANIA by a duly authorized officer and referring
specifically to this Agreement, and no separate verbal or written
agreement, which may be made between SLI and OSRAM SYLVANIA's
employees shall in any way modify or affect this Agreement.
(e) The failure of either party at any time to require performance of the
other party of any provisions hereof, shall in no way affect the full
right to require such performance at any time thereafter nor shall
the waiver by either party of a breach of any provision hereof be
taken or held to be a waiver of the provision itself.
(f) In the event that this Agreement, or any of its provisions, is
declared invalid by a court, agency, commission or other entity
having jurisdiction thereof, neither party shall have any cause of
action or claim against the other party by reason of such declaration
of invalidity. The invalidity or unenforceability of any one or more
provisions of this Agreement shall not affect the validity or
enforceability of the remaining provisions.
(g) This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and assigns.
Neither party shall in whole or in part, directly or indirectly sell,
transfer, assign, pledge or otherwise encumber its rights or
obligations under this Agreement without the other party's prior
express written consent. Such consent shall not be unreasonably
denied or delayed.
(h) OSRAM SYLVANIA's liability arising from any claim, including for any
loss or damage resulting from or connected with agreements or from
the breach of performance thereof or from the design, manufacture,
sale, delivery, installation, repair or use of any Product sold or
delivered hereunder shall in no event exceed the price allocable to
the Product(s) which give(s) rise to the claim and shall terminate
three (3) years after delivery of such Product(s) to SLI.
(i) This Agreement and all transactions between OSRAM SYLVANIA and SLI
related thereto has been made and will be governed by and construed
according to the laws of the Commonwealth of Massachusetts, USA,
excluding its conflict of law rules and excluding the 1980 U.N.
Convention on Contracts for the international Sales of Goods.
(j) Except as provided in Paragraph 2(b) herein, 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 and/or damages. Any arbitration
shall take
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place in Paris, France, and shall be conducted in the English
language. The arbitration shall be governed in accordance with the
(1) language of the Agreement and (2) substantive law of the
Commonwealth of Massachusetts, as noted above, except to the extent
Massachusetts law conflicts with the language of this Agreement. In
which event this Agreement will prevail. 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, if 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.
IN WITNESS WHEREOF, this Agreement has been executed by both parties hereto as
of the day and year first above written.
OSRAM SYLVANIA PRODUCTS INC. SYLVANIA LIGHTING INTERNATIONAL B.V.
By: /s/ By: /s/ Xxxxxx X. Piltsi
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