NN EX 10.1 01-10-07


    
      

    


    Master
      Agreement

     

    


    
      	
              entered
                into by and between

            	
              NN
                Europa ApS

            
	 	
              Sundkrogsade
                5

            
	 	
              DK
                2100 Copenhagen

            
	 	
              Denmark

            
	 	 
	 	 
	 	
              (hereinafter
                referred to as “Supplier”)

            
	 	 
	 	 
	
              and

            	
              Schaeffler
                KG

            
	 	
              Industriestrasse
                1 - 3

            
	 	
              91074
                Herzogenaurach

            
	 	
              Germany

            
	 	 
	 	 
	 	
              acting
                for itself and on behalf of the companies located
                in the Federal Republic of Germany in which they or their respective
                shareholders individually
                or collectively, directly or indirectly hold
                a majority interest

            
	 	 
	 	
              (hereinafter
                referred to as “Customer”)

            
	 	 
	 	
              (each
                a “Party”; both, the “Parties”)

            


    

     

     

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          ©
            2006 Schaeffler KG, All rights reserved

          
            Level:
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              1.

            	
              Subject
                Matter of Master Agreement

            


    

    


    
      	
              1.1

            	
              This
                Master Agreement shall govern Supplier's long-term obligation to
                supply
                Customer
                with certain products (hereinafter the “Contract Products”) and the
                rights
                and obligations of the Parties associated
                therewith.

            


    

     

    
      
        	
                1.2

              	
                All
                  agreements and transactions of the Parties shall be governed exclusively
                  by the
                  following terms and conditions. The application of Supplier's general
                  terms and
                  conditions or Customer's general purchasing conditions is hereby
                  expressly
                  excluded.
                  The terms and conditions of this Master Agreement shall apply even
                  when
                  not expressly referenced in the applicable purchase order or scheduling
                  agreement,
                  and even when the Supplier or Customer refers to general terms
                  and
                  conditions and the other Party fails to expressly object to the
                  incorporation of
                  these terms and conditions.

              


      

    

    


    
      	
              1.3

            	
              Supplier
                shall deliver the Contract Products to Customer based upon purchase
                orders,
                volume contracts or scheduling
                agreements.

            


    

    


    
      	
              2.

            	
              Purchase
                order

            


    

    


    
      	
              2.1

            	
              Customer
                may place purchase orders for the delivery on specific delivery dates
                of
                fixed quantities of Contract Products. Each purchase order from Customer
                to Supplier
                shall be made in writing and include at least the following
                information:

            


    

    


    
      	 	
              -

            	
              product
                type(s)

            


    

    
      	 	
              -

            	
              price

            


    

    
      	 	
              -

            	
              quantity

            


    

    
      	 	
              -

            	
              delivery
                dates

            


    

    
      	 	
              -

            	
              place
                of delivery

            


    

    


    
      	
              2.2

            	
              The
                following provisions of this Section 2.2 shall apply only to the
                extent
                that the Parties
                have not agreed to deal with the matters herein in a different manner.
                Unless
                Supplier objects in writing, within 10 business days of the receipt
                of a
                written
                order, such order shall be deemed to have been accepted and confirmed
                by
                Supplier. Customer may terminate purchase orders up to eight weeks
                prior
                to the
                agreed delivery date. In the event of such termination, Customer
                shall
                bear the
                costs of materials that were already procured, as necessary within
                the
                scope of
                the order, prior to the termination and cannot otherwise be used.
                Upon
                such payment, Customer shall become the owner of such materials and
                shall
                instruct Supplier, and Supplier shall comply with such instructions,
                as to
                what has to be done
                with such materials. All other claims against Customer relating to
                such
                termination hereby shall be
                excluded.

            


    

     

     

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                ©
                  2006 Schaeffler KG, All rights reserved

                
                  Level:
                    07/2006

                

              

              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

        

      

    

     

    
      	
              3.

            	
              Scheduling
                agreement

            


    

    


    
      	
              3.1

            	
              Supplier
                and Customer may enter, with respect to one or more of the Contract
                Products,
                into a written agreement named “scheduling agreement”. Such agreement
                shall include at least the following
                information:

            


    

    


    
      	 	
              -

            	
              product
                type(s)

            


    

    
      	 	
              -

            	
              price

            


    

    
      	 	
              -

            	
              forecast
                of supply volume (non-binding target
                volume)

            


    

    
      	 	
              -

            	
              term

            


    

    
      	 	
              -

            	
              place
                of delivery

            


    

    


    
      	
              3.2

            	
              Supplier
                undertakes to have available sufficient personnel and technical
                resources
                to be able to supply the target volume specified in the scheduling
                agreement,
                as well as an additional volume of 15
                %.

            


    

    


    
      	
              3.3

            	
              Customer
                shall, within the limits of the target volume stipulated in the delivery
                schedule
                (plus additional volume), submit to Supplier written schedule lines
                defining
                the exact supply volumes and delivery dates for a certain time period.
                The
                submission of written schedule lines by Customer shall be deemed
                as
                release
                for the production and purchase of materials each for a certain go-ahead
                period.
                The written schedule lines shall be binding for the go-ahead period
                for
                production.
                For the go-ahead period for the purchase of materials Customer
                shall
                pay the costs of materials that are procured by Supplier, as necessary
                within
                the scope of such go-ahead period and that cannot otherwise be used.
                Upon
                such payment, Customer shall become the owner of such materials and
                shall
                instruct Supplier, and Supplier shall comply with such instructions,
                as to
                what
                has to be done with such materials. Any further claims of Supplier
                are
                excluded.
                With the exception of supply volumes defined in written schedule
                lines
                all supply volumes of Customer are provided to the best of Customer's
                knowledge
                but are not legally binding.

            


    

     

     

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          ©
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              4.

            	
              Volume
                Contract

            


    

    


    
      	
              4.1

            	
              By
                entering into a volume contract, Supplier undertakes to hold a certain
                quantity of
                the Contract Products ready for delivery to Customer. For this purpose,
                Customer
                shall transmit a written volume contract to Supplier, which shall
                include
                at least the following information:

            


    

    


    
      	 	
              -

            	
              product
                type(s)

            


    

    
      	 	
              -

            	
              price

            


    

    
      	 	
              -

            	
              contract
                volume (a purchase obligation shall exist only if expressly agreed
                to
                in
                writing)

            


    

    
      	 	
              -

            	
              term

            


    

    


    
      	
              4.2

            	
              Unless
                Supplier objects in writing, within 10 business days of receipt of
                a
                written volume
                contract, to such written volume order, such volume contract shall
                be
                deemed
                to have been accepted and confirmed by Supplier. Supplier commits
                itself
                at all times to keep in stock the minimum quantity of Contract Products
                stipulated
                in the volume contract or, if no minimum volume has been stipulated,
                at
                least 25% of the contract volume, and to deliver such quantity of
                Contract
                Products
                immediately upon receipt of Customer's release order therefore. Upon
                receipt
                of written release order therefore from Customer, Supplier is obliged
                to
                deliver
                the stocked Contract Products to Customer within the delivery period
                stipulated
                in the volume contract or, if no delivery period is stipulated in
                the
                volume
                contract, within five business days of Customer's release order.
                If the
                quantity
                ordered by Customer exceeds the quantity to be kept in stock under
                the
                volume
                contract, then Supplier immediately shall manufacture the excess
                order
                quantity
                and deliver the same to Customer.

            


    

    


    
      	
              5.

            	
              Compliance
                with Regulations

            


    

    


    Supplier
      shall ensure that it will, in good time, have obtained all information relevant
      to the
      performance of its contractual obligations as well as of Customer's intended
      use
of
      the
      Contract Products. Supplier guarantees that the Contract Products are suitable
      for
      a
      safe and economical use in accordance with ail applicable regulations and are
      in
conformity
      with the state of the art and science. When carrying out its performance(s),
      Supplier will observe all relevant standards, laws and legal regulations,
      in particular those concerning hazardous materials and dangerous goods,
the
      protection of the environment and the prevention of accidents. Supplier will
      also act in compliance with generally acknowledged safety and industrial
      medicine specifications
      as well as with company standards of Supplier. Furthermore the Contractor
      is obliged to comply with the respective export control regulations and to
      inform
      the Customer unrequested in written form about the export control designation
      of
      the contractual products especially according to EU and US legislation at the
      latest with
      the
      delivery. Supplier shall notify Customer of any governmental permits or
notification
      requirements that may be required for the import or the use of the Contract
      Products.

     

     

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              6.

            	
              Modification
                Requests

            


    

    


    
      	
              6.1

            	
              Customer
                is entitled to request from Supplier modifications in design and
                construction
                of the Contract Products, so long as Supplier can be reasonably
                expected
                to meet such requests. Supplier shall implement such modifications
                within
                a reasonable period of time. Mutually satisfactory agreements shall
                be
                concluded
                concerning the consequences of such modifications, in particular
                with
                regard to delivery dates, extra and reduced costs. Customer will
                determine
                such consequences
                within its reasonable discretion if agreement (regarding the matters
                outlined in the previous sentence) cannot be reached within a reasonable
                period of time.

            


    

    


    
      	
              6.2

            	
              Supplier
                shall notify Customer as soon as possible of any planned changes
                in
                the
                manufacturing process and the place of manufacture of Supplier or
                any
                sub-supplier,
                as well as any changes in the materials used by Supplier or any
                sub-supplier. Such changes may not be undertaken until its receipt
                of
                Customer's written consent. Supplier shall bear all costs incurred
                in
                connection with such changes.

            


    

    


    
      	
              6.3

            	
              Supplier
                is obligated to propose to Customer any changes to the Contract
                Products
                that Supplier deems necessary or advisable. Supplier shall not
                implement
                changes until its receipt of Customer's written
                consent.

            


    

    

      
        	
                6.4

              	
                During
                  the term of this Agreement, the Parties shall make reasonable efforts
                  to
                  identify
                  potential cost savings through continuous value analyses and to
                  adjust the
                  price accordingly. The Parties shall, on a case-by-case basis,
                  agree upon
                  the
                  allocation of the cost benefits resulting from any potential savings
                  identified through
                  the Parties' joint value analyses.

              


      

       

       

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              7.

            	
              Prices/Payment
                Terms/Invoices

            


    

    


    
      	
              7.1

            	
              The
                agreed prices are firm prices. Unless otherwise agreed, payment will
                be
                made
                within 14 days with a 3% cash discount, until the 25th day of the
                subsequent
                month with a 2% cash discount, or within 90 days net. These periods
                are
                computed from the time of performance in compliance with the contract
                and receipt of a proper and verifiable invoice. If Customer receives
                and
                accepts
                a delivery at an earlier date than the date agreed upon, the payment
                period
                begins with the agreed delivery date. Customer is entitled to choose
                the
                method
                of payment in its own discretion (e.g., check or bill of exchange).
                Supplier agrees to participate, upon Customer's demand, in a credit
                note
                procedure.

            


    

    


    
      	
              7.2

            	
              Invoices
                are to be submitted without carbon copies but shall include the account,
                place
                of unloading, supplier number, part number, tax ID number, statistical
                product
                number (customs tariff code), order number, country of origin, number
                of
                pieces and price per piece, as well as volume per
                delivery.

            


    

    


    
      	
              7.3

            	
              Supplier
                is not entitled to assign a claim against Customer to a third party,
                or to
                have
                such claim collected by a third party. The provisions of § 354a of the
                German
                Commercial Code (Handelsgesetzbuch)
                shall
                not be affected by the foregoing
                sentence.

            


    

    


    
      	
              7.4

            	
              Supplier
                shall have the right to set-off against any claims of Customer or
                the
                right
                of retention, if and to the extent that Supplier's claims are undisputed
                or its counterclaims
                are final and non-appealable. Customer shall have the right to
                set-off
                against claims of Supplier any claims of affiliates of Customer within
                the
                meaning
                of section 15 AktG [German Stock Corporation Act]. Customer shall
                also
                have the right to set-off its claims against any claim of any affiliate
                of
                Supplier
                within the meaning of section 15
                AktG.

            


    

    


    
      	
              8.

            	
              Spare
                Parts

            


    

    


    
      	
              8.1

            	
              Supplier
                shall ensure that he will continue to be able, for a period of at
                least 15
                years
                following the termination of the supply relationship (e.g.,
                discontinuation of series,
                expiration of scheduling agreement) and on reasonable terms and
                conditions,
                to deliver to Customer the Contract Products or parts thereof as
                spare
                parts.

            


    

     

     

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              8.2

            	
              Unless
                Customer has agreed-to otherwise, the prices for the Contract Products
                last agreed to by the Parties shall remain valid for the first three
                years
                of that period
                of time.

            


    

    


    
      	
              9.

            	
              Delivery
                Terms/Packaging

            


    

    


    
      	
              9.1

            	
              Deliveries
                are “DDU” (most recent Incoterms) to the location determined by
                Customer
                and, unless determined otherwise, shall include packaging and conservation.
                Customer's delivery and transport provisions in their most recent
                version
                shall apply. The Parties shall agree on dispatch notes on an individual
                basis.
                Each shipment shall include the shipping documents required by
                Customer,
                especially, a delivery note in
                duplicate.

            


    

    


    
      	
              9.2

            	
              If
                Incoterms other than “DDU” have been agreed upon, then Supplier shall
                inform
                Customer and the recipient designated by Customer in a timely manner
                of
                the
                size and weight of the shipment. Transport insurance, will be obtained
                by
                Customer
                to the extent that Customer is obligated to do so pursuant to the
                agreed-upon
                Incoterm.

            


    

    


    
      	
              9.3

            	
              When
                preparing the shipping documents, Supplier shall take into account
                that
                the
                customs clearance will be carried out at the plant of Customer and
                that
                Customer
                is exempted from the duty of presentation. For shipments from preferential
                countries, Supplier must provide a proof of preferential status with
                each
                shipment The long-term supplier declaration pursuant to EEC Reg.
                1207/2001
                must be presented annually. To the extent that the delivered goods
                require
                an export license, Supplier shall notify Customer thereof without
                undue
                delay,
                specifying the applicable export license number and export list position
                number.

            


    

    


    
      	
              9.4

            	
              To
                the extent that, under the agreed-upon Incoterm, Customer is responsible
                for the
                payment of any duties, taxes and other charges, Customer's payment
                obligation
                shall be limited to ordinary duties, taxes and other charges. Any
                extraordinary
                duties, taxes or other charges, such as customs penalties or
                anti-dumping
                duties, shall be paid by Supplier. Supplier shall, upon request,
                make
                available to Customer, all documents necessary for obtaining a refund
                of
                any paid
                duties, taxes or other charges.

            


    

     

     

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              9.5

            	
              Unless
                otherwise agreed, the Contract Products shall be packaged in conformity
                with
                the then effective Packaging Manual of Customer. If Customer returns
                reusable
                packaging to Supplier freight prepaid, Customer shall be entitled
                to a
                refund
                in the amount of the value of the
                packaging.

            


    

    


    
      	
              10.

            	
              Delivery
                Dates/Delivery Default

            


    

    


    Agreed
      dates and time limits are binding. A delivery date or term requirement shall
      be
      deemed satisfied if Customer or the consignee determined by Customer has
      received the
      Contract Products in time. Supplier shall inform Customer immediately in written
      form about any foreseeable delay in delivery. The Supplier must also indicate
      the reasons
      for such delay and its expected duration. If the reason for the delay is
beyond
      the control of Supplier, Supplier may invoke such reason only if Supplier has
      met
      its
      obligation to notify. In case of a culpable delay in delivery, Customer is
      entitled to
      demand
      a contractual penalty from Supplier. A penalty of 0,5% will be charged for
      each
      week
      or part of a week, the maximum penalty is 5% of the total order value. The
      agreement
      pertaining to the contractual penalty or enforcement thereof shall not affect
      any
      justified legal claims of Customer for delay in delivery. Paid contractual
      penalties shall be set off against claims for damages. The contractual penalty
      may be claimed until
      the
      date of payment of the delayed Contract Products.

    


    
      	
              11.

            	
              Quality
                Assurance

            


    

    


    Customer's
      quality assurance agreement for suppliers, as amended from time to time,
shall
      apply in addition to other applicable provisions. This quality assurance
agreement
      may be viewed on Customer's Web site, www.ina.com,
      under
      the heading “Purchasing,”
      subheading “Norms,” or shall be mailed to Supplier upon request.

    


    
      	
              12.

            	
              Inspection
                of Incoming Contract
                Products

            


    

    


    Customer
      inspects incoming Contract Products only with respect to externally apparent
      defects and externally apparent deviations in identity or volume. Customer
      will
      give
      notice of such defects without undue delay. Customer reserves the right to
      conduct
      additional inspections of Contract Products. Furthermore Customer will also
      give
      notice of defects as soon as such defects have been detected in the ordinary
      course
      of
      business. With respect to the foregoing, Supplier hereby waives the right to
      assert
      that the defects have been asserted too late. If defects have been discovered,
      Customer
      shall be entitled to return the entire shipment.

     

     

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              13.

            	
              Confidentiality

            


    

    


    
      	
              13.1

            	
              Unless
                the Parties have entered, or will enter, into a separate
                non-disclosure agreement,
                the following shall apply: Supplier shall keep secret all
                information received
                from Customer, including, without limitation, drawings,
                documents, know-how,
                samples, production devices, models, media, etc., may not make such
                information available to third parties (including any sub-suppliers)
                without the
                written consent of Customer and may not use such information for
                any purposes
                other than as determined by Customer. These obligations apply mutatis
                mudandis to
                copies and duplicates. This confidentiality obligation does not
                apply to information that the Supplier had already obtained legitimately
                at the time
                of disclosure provided such information was not subject to a
                confidentiality obligation,
                that the Supplier later obtains legitimately without being obligated
                to keep
                such information confidential, that is or becomes generally known
                to
                the public
                without any breach of contract by either Party or for the disclosure
                or
                the independent
                use of which the Supplier has received written permission. Supplier
                may not advertise its business relationship with Customer without
                the prior
                written consent of Customer. If Supplier breaches its foregoing
                obligations, a
                contractual penalty in the amount of Euro 25,000.00 shall become
                due
                and payable
                immediately for each breach. Supplier shall retain the right to have
                the reasonableness
                of the amount of contractual penalty determined by a court decision.
                Damages shall be set off against any paid contractual
                penalties.

            


    

    


    
      	
              13.2

            	
              Customer
                retains title and reserves all other rights (such as copyrights)
                in and to
                any
                information received from Customer. Copies or duplicates shall be
                made
                only
                with Customer's prior written consent. Title to the copies or duplicates
                passes
                to Customer at the time such copies or duplicates are created. Supplier
                hereby
                agrees with Customer that Supplier stores the copies or reproductions
                on
                behalf
                of Customer as bailee. Supplier agrees, to properly store, at its
                expense
                all
                documents and other objects, including copies thereof, that were
                made
                available
                to Supplier, to keep them in perfect condition, to obtain insurance
                for
                them
                and to return them to Customer or destroy them, in each case upon
                the
                request
                of Customer. Supplier has no right, on whatever grounds to retain
                such
                documents and items. Supplier shall confirm the complete return or
                destruction of
                the relevant document or item in
                writing.

            


    

     

     

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              14.

            	
              Liability
                for Product Defects/Costs

            


    

    


    
      	
              14.1

            	
              If
                a Contract Product is defective, Customer will be entitled to the
                statutory rights,
                unless the following conditions provide otherwise. If the industrial
                safety is
                threatened, if there is a danger of unusually high damages or for
                the
                purpose of maintaining Customer's ability to deliver its customers,
                Customer shall be entitled,
                following notification of the Supplier, to remedy the defects itself
                or
                have them
                remedied by a third party. Costs incurred as a result of remedial
                action
                taken
                in accordance with the preceding sentence shall be borne by Supplier.
                Supplier
                is responsible for all damages, costs and expenses resulting, directly
                or
                indirectly
                from defects. In case at least parts of a shipment have been found
                to
                be
                defective, Supplier will also be responsible for the costs for inspections
                of incoming
                goods that exceed the customary scope of inspection. The foregoing
                applies
                also to comprehensive and partial inspections of the shipment in
                the
                subsequent
                course of business by Customer and/or any of Customer's customers.
                If Supplier avails itself of a third party to carry out a performance,
                Supplier
                shall be held liable for this third party as for any other person
                employed
                in
                performing an obligation.

            


    

    


    
      	
              14.2

            	
              Supplier
                shall reimburse all costs incurred by Customer or any of Customer's
                customers
                in situations leading up to or arising in connection with liability
                for
                defects
                to the extent such costs have been incurred for the purpose of avoiding,
                preventing
                or mitigating damages (e.g.
                recalls).

            


    

    


    
      	
              14.3

            	
              Supplier
                shall reimburse all costs that Customer is obligated to bear as a
                matter
                of
                statutory liability vis-á-vis
                its
                customers to the extent that such costs are arising
                from defects of shipments delivered by
                Supplier.

            


    

    


    
      	
              14.4

            	
              Unless
                mandatory law provides otherwise, Supplier is liable for any defects
                that
                arise
                within 36 months of the date of receipt of the supplier's delivery
                or of
                the date
                of acceptance, provided such acceptance was required as a matter
                of law
                or
                agreement. In the case of Supplementary Specific Performance (cure
                of
                defects
                or delivery of goods free of defects) this period is extended by
                the time
                during which the Contract Product cannot be used as stipulated in
                the
                contract. Supplementary
                Specific Performance is also subject to the periods stated above.
                All
                claims relating to defects become time barred at the earliest two
                months
                after all
                claims of the final customer have been fulfilled. This delay in time
                bar
                expires at
                the latest five years after delivery to
                Customer.

            


    

     

     

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              15.

            	
              Product
                Liability

            


    

    


    
      	
              15.1

            	
              Supplier
                shall indemnify or release Customer from and against any and all
                third-party
                claims alleging that a defective Contract Product has resulted in
                death,
                bodily
                harm or property damage.

            


    

    


    
      	
              15.2

            	
              The
                Parties shall cooperate in all respects to defend against any pending
                or
                threatened
                claims. Supplier shall neither offer nor accept any settlements
                without
                the prior written consent of
                Customer.

            


    

    


    
      	
              16.

            	
              Insurance
                Coverage

            


    

    


    Supplier
      shall, for the duration of the supply relationship and for a reasonable time
      period
      thereafter, maintain reasonable insurance with worldwide coverage for risks
      arising from the supply relationship (including, without limitation, business
      liability insurance,
      expanded product liability insurance including coverage for costs of
installation
      and removal, inspection and sorting costs, and motor vehicle recall costs).
      Upon
      Customer's demand therefore, Supplier shall provide Customer with proof of
      insurance
      coverage.

    


    
      	
              17.

            	
              Reporting
                Duties

            


    

    


    Supplier
      shall report to Customer, immediately upon having knowledge thereof, any
safety
      defects or other irregularity of the Contract Products or any components
thereof.
      In particular, Supplier shall make available to Customer, in the form
requested
      by Customer, all information necessary for compliance with any reporting
duties
      owed to any German or foreign government authorities.

     

     

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              18.

            	
              Warranty
                of Title

            


    

    


    
      	
              18.1

            	
              Supplier
                shall indemnify Customer and Customer's customers from any and all
                third
                party claims arising from the infringement of any intellectual property
                rights and
                shall bear any and all associated costs. Each Party agrees to notify
                the
                other
                immediately of any known infringement risks and alleged infringements
                of
                which
                it becomes aware, and both Parties agree to provide to each other
                an
                opportunity
                jointly to take appropriate defensive action against such
                claims.

            


    

    


    
      	
              18.2

            	
              Customer
                shall have the right, exercising the care of a prudent merchant,
                to
                procure
                at Supplier's cost from the owner of the property rights, any consents,
                approvals
                or licenses necessary for the use of the Contract Products and
                services.

            


    

    


    
      	
              19.

            	
              Trademark

            


    

    


    Upon
      Customer's request, Supplier shall affix to the Contract Products to be
      delivered to
      Customer only the trademark specified by Customer. Supplier shall not use the
      trademark
      specified by Customer for any other purpose.

    


    
      	
              20.

            	
              Materials,
                Packaging and Tools provided by
                Customer

            


    

    


    Substances,
      parts, containers, special packaging, tools, measuring instruments or
substances
      or similar items provided by Customer (hereinafter “Accessory”) shall
remain
      the property of Customer. In case of processing of Accessories, Customer will
      become
      co-owner of the new goods. The co-ownership share of Customer shall be equal
      to
      the proportionate value of the Accessories compared to the overall value of
      the
      new
      item. Accessories may be copied only with the prior written consent of
Customer.
      The copies or duplicates become the property of Customer upon creation.
Supplier
      shall not have any rights of retention on whatever basis to the Accessories.
      Neither Accessory nor copies or duplicates thereof, may be made available to
      third parties
      (which shall include sub-suppliers) or may not be used for any other purposes
      other than the agreed upon purpose.

     

     

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              21.

            	
              Tools

            


    

    


    Notwithstanding
      any other agreement to the contrary, Customer shall receive full ownership
      or co-ownership of the tools to the extent that Customer has contributed
      to the
      proven costs for tools used in the manufacture of the supplied Contract
      Products. Customer
      shall acquire (co-) ownership of the tools upon payment. The tools
      shall remain
      on
      loan with Supplier. Supplier shall require the consent of Customer
      to dispose
      (in the legal or the factual sense of the term) of the tools, to move the
      location of
      the
      tools or to disable the tools permanently. Supplier shall label the tools as
      the property
      of Customer or property held in co-ownership by Customer as
      applicable. Supplier
      shall bear the costs for maintenance, repair or replacement of the
      tools. Customer
      shall have title in the replacement tools in the same proportion as in
      the original
      tools. Supplier must use the tools (co-)owned by Customer exclusively for
      the purpose
      of manufacturing the Contract Products. After the end of delivery,
      Supplier must,
      upon request of Customer, immediately turn over the tools to Customer.
      For tools
      co-owned by Customer, Customer shall, following hand over of the tools
      to Customer,
      reimburse Supplier for the then present value of Supplier's
      co-ownership share.
      In
      no event shall Supplier have a right to retain the tools. Supplier's
      obligation to
      turn
      over the tools shall apply also in case of an insolvency application with
      respect to
      Supplier and in cases of long term interruptions of the supply relationship.
      Supplier shall
      insure the tools within the agreed upon scope or, absent such agreement,
      within the
      customary scope. 

    


    
      	
              22.

            	
              Software

            


    

    


    Supplier
      agrees to modify/improve the software pursuant to the instructions of
Customer
      and in exchange for an adequate reimbursement of costs for a period of 5 years
      from the shipment of the respective Contract Products, unless the scope of
      the
      delivery includes standardized software. To the extent the software originates
      with a supplier
      of Supplier, Supplier shall obligate such earlier supplier
      accordingly.

    


    Supplier
      shall deposit the source code of the software with a German notary of its
choice
      and shall communicate to Customer the depositee's information. Customer shall
      have the right to access the deposited source code in all instances in which
      Supplier fails or is unable to perform its obligation under the first sentence
      of this section.

     

     

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              23.

            	
              Force
                Majeure, Long-Term Inability to Deliver Contract Products, Right
                of
                Emergency
                Production

            


    

    


    
      	
              23.1

            	
              Industrial
                conflicts, riots, acts of government and any other events that are
                unpredictable
                and unpreventable exempt the concerned party from the contractual
                obligations, in each case for such time as the disturbance exists
                and
                within
                the scope of its effects. The party affected by the force majeure
                event
                must
                fully inform the other party and must make all efforts, within the
                limitations of
                what can reasonably be expected, to limit the effects of such events.
                The
                party
                affected by the force majeure event must notify the other party without
                undue
                delay of the end of the force majeure
                event.

            


    

    


    
      	
              23.2

            	
              In
                cases of a long term inability to deliver, cessation of payments,
                the
                opening of an
                insolvency proceeding, the refusal to open insolvency proceedings
                due to
                insufficient
                assets or the commencement of comparable proceedings with respect
                to one of the parties the other party shall be entitled to rescind
                the
                contract
                with respect to the part that has not yet been performed. If one
                of the
                foregoing
                events occur with respect to Supplier, Supplier shall support Customer
                to
                the best of its abilities in the efforts of Customer to move the
                manufacture of the
                Contract Products to Customer or to a third party, which support
                shall
                include the granting of licenses to intellectual property rights
                to the
                extent such rights are necessary
                for the manufacture of such Contract Product(s), such licenses to
                be
                granted
                on terms customary in the industry.

            


    

    


    
      	
              23.3

            	
              In
                all cases of an anticipated or actual long-term inability to deliver
                the
                Contract Products,
                including in the event of a termination of the agreement by Customer
                for
                cause, Supplier shall grant a right of emergency production to Customer
                or
                to a
                third party designated by Customer, i.e., Supplier shall make available
                to
                Customer
                ail necessary tools and know-how (including licenses for property
                rights),
                and take all other measures, including personnel assistance and
                instruction,
                necessary for the continuation of production at a location designated
                by
                Customer. If Supplier is at fault for its inability to deliver the
                Contract Products,
                then the right of emergency production shall be granted to Customer
                at
                no charge; in all other cases, Customer shall reimburse Supplier
                for the
                proven
                costs incurred in connection therewith. Supplier shall have the right,
                upon
                reaching an agreement with Customer, to respond to any threatened
                or
                actual
                inability to deliver the Contract Products by relocating production
                of the
                Contract
                Products to one of Supplier's other
                plants.

            


    

     

     

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              24.

            	
              Term

            


    

    


    
      	
              24.1

            	
              This
                Master Agreement shall enter into effect at the time of the execution
                thereof by both Parties and shall have an indefinite
                term.

            


    

    


    
      	
              24.2

            	
              Unless
                otherwise agreed, either Party may terminate this Agreement as of
                the
                end
                of any given month by giving twelve months' prior written notice
                to the
                other Party.

            


    

    


    
      	
              24.3

            	
              Termination
                of this Master Agreement shall have no effect upon the continued
                validity
                of any agreements made by the Parties with respect to the supply
                of
                Contract
                Products pursuant to this Master Agreement, the provisions of this
                Master
                Agreement continuing to be in full force and effect with respect
                to such
                agreements.

            


    

    


    
      	
              25.

            	
              Termination
                for Cause

            


    

    


    In
      addition to the statutory termination rights, Customer shall have the right
      to
terminate
      in writing for cause this Master Agreement, and/or any agreements made by
the
      Parties with respect to the supply of Contract Products, without being required
      to provide any advance notice. Termination for cause shall include any of the
      following:

    


    
      	
              -

            	
              Supplier's
                failure, despite Customer's notice, on two or more occasions to deliver
                the
                Contract Products in compliance with the agreement of the
                Parties;

            


    

    


    
      	
              -

            	
              Supplier's
                failure, as detected during an audit, to produce the Contract Products
                in
                accordance with the quality norms specified by
                Customer;

            


    

    


    
      	
              -

            	
              Supplier's
                failure to meet its payment obligations in a timely manner, or the
                filing
                of a
                petition for the initiation of insolvency proceedings or comparable
                proceedings with
                respect to Supplier;

            


    

     

     

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              -

            	
              Substantial
                change in the ownership structure or management of Supplier;
                or

            


    

    


    
      	
              -

            	
              Supplier's
                serious breach of a material contractual obligation, including but
                not
                limited
                to the duty of confidentiality.

            


    

    


    
      	
              26.

            	
              General
                Provisions

            


    

    


    
      	
              26.1

            	
              The
                place of performance for all deliveries and services shall be the
                destination specified
                by Customer.

            


    

    


    
      	
              26.2

            	
              This
                Master Agreement, as well as any modifications, side agreements or
                termination
                notices shall require written form. Unless otherwise provided in
                this
                Master
                Agreement, all other representations or notices shall be valid only
                if in
                writing.

            


    

    


    
      	
              26.3

            	
              The
                contractual relationship shall be governed by the laws of the Federal
                Republic
                of Germany, excluding the German conflict of laws rules and the provisions
                of the UN Convention on Contracts for the International Sale of
                Goods
                (CISG), Unless the Parties agree to the exclusive jurisdiction of
                another
                competent
                court, all disputes between the Parties shall be heard and resolved
                by
                a
                court of competent jurisdiction in Nuremberg, Germany. Notwithstanding
                the
                foregoing,
                Customer shall have the right to file legal actions against Supplier
                in
                any
                other court of competent
                jurisdiction.

            


    

    


    
      	
              26.4

            	
              In
                the event that any provision of this Agreement is invalid or may
                become
                invalid,
                the validity of the remaining provisions shall not be affected thereby
                and
                shall
                remain valid. The Parties commit themselves, in good faith, reasonably
                to
                replace
                any invalid provision with a valid provision that has an economic
                result
                equivalent
                the original provision.

            


    

    


    
      	
              26.5

            	
              Supplier
                shall not, without the prior written consent of Customer, transfer
                to any
                third
                parties any rights and obligations set forth in this Master
                Agreement.

            


    

     

     

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              26.6

            	
              Customer
                shall store and process all (personal) data necessary for the performance
                of this Agreement in compliance with applicable
                law.

            


    

    


    


    
      	
              Place,
                Date

            	 	
              Herzogenaurach,
                05.01.2007

            
	 	 	 
	
              NN
                Europe ApS

            	 	
              Schaeffler
                KG

            
	 	 	 
	 	 	 
	
              /s/
                illegible

            	 	
              /s/
                illegible

            


    

     

     

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    Amendment
      to the

    Master
      Agreement

    


    


    
      	
              entered
                into by and between

            	
              NN
                Europe ApS

            
	 	
              Sundkrogsgade
                5

            
	 	
              DK
                2100 Copenhagen

            
	 	
              Denmark

            
	 	 
	 	 
	 	
              (hereinafter
                referred to as “Supplier”)

            
	 	 
	 	 
	
              and

            	
              Schaeffler
                KG

            
	 	
              Industriestraße
                1 -
                3

            
	 	
              91074
                Herzogenaurach

            
	 	
              Germany

            
	 	 
	 	 
	 	
              acting
                for itself and on behalf of the companies located
                in Europe in which they or their respective shareholders individually
                or
                collectively,
                directly or indirectly hold a majority interest

            
	 	 
	 	
              (hereinafter
                referred to as “Customer”)

            


    

    


    


    The
      following modifications to the Master Agreement are agreed upon:

     

    The
      contracting parties shall be modified as follows:

    


    “Schaeffler
      KG

    Industriestraße
      1 - 3

    91074
      Herzogenaurach

    Germany

     

    acting
      for itself and on behalf of the companies located
in
      Europe
      in which
      they or their respective shareholders individually or collectively, directly
      or
      indirectly hold a majority
      interest”


     

     

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              3.

            	
              Scheduling
                agreement

            


    

    


    Section
      3.3 shall be amended as follows after the second sentence:

    


    “The
      go
      ahead period shall be agreed between the parties with respect to the different
      ball sizes.”

    


    
      	
              4.

            	
              Volume
                Contract

            


    

    


    In
      Section 4.2 the following part of sentence two shall be deleted:

    


    “or,
      if
      no minimum volume has been stipulated, at least 25% of the contract
      volume,”

    


    
      	
              5.

            	
              Compliance
                with Regulations

            


    

    


    The
      first
      sentence shall be replaced by the following wording:

    


    “Supplier
      and customer shall ensure that they will in good time exchange all information
      relevant to the performance of the contractual obligations, as well of
Customers'
      intended use of Contract Products.”

    


    
      	
              6.

            	
              Modification
                Requests

            


    

    


    Section
      6.2 shall be amended in the last sentence as follows:

    


    “Supplier
      shall bear all costs incurred in connection with such changes, as far as such
      changes are in the sole interest of Supplier and not connected to any
      production
      transfer already agreed or to be agreed between the parties in
      writing.”

    


    
       

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              7.

            	
              Prices/Payment
                Terms/Invoices

            


    

    


    In
      Section 7.1 sentence two shall be modified as follows:

    


    “Unless
      otherwise agreed upon payment will be made within 30 days net.”

    


    The
      last
      sentence of section 7.1 shall be amended as follows:

    


    “Supplier
      agrees to participate in a credit note procedure in case both parties agree
      on
      such a procedure.”

    


    Section
      7.4 shall be deleted.

    


    
      	
              8.

            	
              Spare
                Parts

            


    

    


    Section
      8.1 shall be amended as follows:

    


    “In
      case
      Supplier is not able to ensure the foregoing, Supplier shall in agreement with
      Customer
      produce the life time volume of the relevant Contract Product in advance on
      stock or Supplier shall offer the relevant tooling to Customer.”

    


    
      	
              9.

            	
              Delivery
                Terms/Packaging

            


    

    


    Secton
      9.5 shall be modified in the first sentence as follows:

    


    “The
      Contract Products shall be packed in conformity with the then effective
      Packaging Manual of Customer and packaging will be invoiced separately to
Customer.”

    


    
      	
              10.

            	
              Delivery
                Dates/Delivery Default

            


    

    


    Sentence
      7 shall be modified as follows:

    


    “A
      penalty of 0,5% will be charged for each week or part of week, beginning
      with the second
      week of delay,
      the
      maximum penalty is 5% of the total order value.”

    


     

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              12.

            	
              Inspection
                of Incoming Contract
                Products

            


    

    


    The
      last
      sentence shall be modified as follows:

    


    “If
      defects ... shall be entitled to return the entire lot.”

    


    
      	
              14.

            	
              Liability
                for Product Defects/Costs

            


    

    


    In
      section 14.1 the second sentence shall be amended as follows:

    


    “...,
      following notification of the Supplier, to start emergency actions and to remedy
      the defects itself or have them remedied by a third party after consultation
      with Supplier.”

    


    In
      section 14.4 the first sentence shall be amended as follows:

    


    “....
      any
      defects (according to section 434 clause 1 sentence 1 German Civil Code
(BGB))
      that arise....”.

    


    
      	
              17.

            	
              Reporting
                Duties

            


    

    


    Sentence
      two shall be modified as follows:

    


    “In
      particular, ... in a reasonable form, all information ....”

    


    
      	
              21.

            	
              Tools

            


    

    


    shall
      be
      deleted

    


    
      	
              22.

            	
              Software

            


    

    


    shall
      be
      deleted

     

     

    
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              25.

            	
              Termination
                for Cause

            


    

    


    shall
      be
      modifed and amended as follows:

    


    “...
      Termination for cause shall include any of the following:

    


    -
      Suppliers'
      failure, despite Customers' notice, on repeated occasions to deliver the
      Contract Products in compliance with the agreement of the Parties

    


    -
      Suppliers'
      failure to remedy a failure, as detected during an audit, to produce the
Contract
      Products in accordance with the quality norms specified by Customer within
      a
      reasonable period of time

    


    -
      (unchanged)

    


    -
      Supplier
      directly or indirectly acquires, or becomes aquired by, or merged with a
competitor
      of Customer or otherwise becomes controlled by, or aquires control over
such
      competitor

    


    Supplier
      shall have the right to terminate in writing for cause this Master Agreement
      and/or
      any agreements made by the Parties with respect to the supply of Contract
Products,
      without being required to provide any advance notice. Termination for
cause
      shall include any of the following:

    


    -
      Customers
      failure, despite suppliers notice on repeated occasions to pay Suppliers
invoices
      for delivered products in compliance with the agreement of the
      parties

    


    -
      Customers
      serious breach of a material obligation, including but not limited to the
agreement
      on commercial terms dated [......].

    


    


    All
      other
      regulations of the Master Agreement shall remain unaffected.

    


    
      	
              place,
                date

            	 	
              Herzogenaurach,

            
	 	 	 
	
              Supplier

            	 	
              Schaeffler
                KG

            
	 	 	 
	
              /s/
                illegible

            	 	
              /s/
                illegible

            


    

    


    


    
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              1.

            	
              Commercial
                terms to the Supply
                Agreement

            


    

     

    between
      NN Europe ApS/ NN Inc., ball and roller division

    


    and

     

    Schaeffler
      KG

    

      
        	
                1.

              	
                Contract
                  duration

              


      

      
        	 	
                24
                  month,

              	
                1.period
                  from 1.07.06 through 30.06.07

              


      

      2.period
        from 1.07.07 through 30.06.08

      


      
        	
                2.

              	
                Volumes
                  (minimum purchasing volumes)

              


      

      
        	 	
                Europe:

              	
                1.period

              	
                approx.
                  € [redacted*]

              


      

      
        	 	
                2.period

              	
                approx.
                  € [redacted*]

              


      

    

     

    The
      european volumes are based on the EU 25 GDP growth of
      [redacted*]% and remain stable until a GDP of [redacted*] % is reached.
Below
      a
      EU 25 GDP of [redacted*] %, the volumes are reduced
      by [redacted*]
      %
      per[redacted*]1% reduction of GDP, until the limit of € [redacted*]
of
      sales
      volume per period. The GDP is calculated as an average
      of 12 month period.

    


    North
      Amerika:

    
      
        	 	
                1.
                  period

              	
                US
                  $ [redacted*]

              


      

      
        	 	
                2.
                  period

              	
                US
                  $ [redacted*]

              


      

       

      *Information
        omitted and submitted separately to the Commission under Rule 24b-2

       

    

    
      
        04/01/2007

        
        

      

      
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          1

        
          

        

      

      
        
        

      

    


    
      	
              3.

            	
              Pricing
                Europe

            


    

    Based
      on
      actual pricelists, price reductions are offered as follows

     

     [redacted*]

    


    NN
      will
      start sample production of Hub Balls in their slovakian
      plant within the second half of 2006, After PPAP of
      balls,
      Schaeffler KG will have 6 month to release these balls.
      If
      production release is in time, price reductions are as above.

    If
      balls
      can not be successfully released within 6 month period,
      due to reasons that are under Schaeffler's and Schaeffler
      costumers responsability, the [redacted*]

     

    NN
      commits oneself to provide a detailed time schedule for this
      shifting to Slovakia, at least 3 month before the first movement.

    The
      concerned hub ball sizes are:

    10.5
      mm,
      11.112 mm, 11.5 mm, 13.494 mm and 14.288 mm.

    


    
      	
              4.

            	
              Pricing
                North America

            


    

     

    
      *Information
        omitted and submitted separately to the Commission under Rule
        24b-2



    
      
        04/01/2007

        
        

      

      
        Page
          2

        
          

        

      

      
        
        

      

    


    Based
      on
      actual pricelist all prices remain stable during the duration
      of the contract, except two hub balls. From 1.07.06 the following prices are
      applied:

     

    
      	
              Size
                [redacted*]mm G 16: 

            	
              US
                $[redacted*]per 1000 

            
	
              Size
                [redacted*]mm G 16: 

            	
              US
                $ [redacted*]per 1000 

            


    

    


    For
      all
      north american prices the steel price impact is only twice
      a
      year taken into consideration: January, 1 and July, 1, based
      on
      average price of first half 2006.

    


    
      	
              5.

            	
              Volume
                rebate

            


    

    


    NN
      will
      pay a volume rebate of 1 % of total, in 12 month period
      achieved sales volume to Schaeffler, when the defined minimum
      purchasing volumes in Europe for the different periods
      are reached acording § 2:

     

    
      	
              Period
                1: 

            	
              €
                [redacted*]  

            
	
              Period
                2: 

            	
              €
                [redacted*]  

            


    

    


    Those
      volumes are fix and depend only from the discontinued NN
      production (basis € [redacted*]), but not from EU 25 GDP rate
      (§
2). The
      volume rebate is payable in the month after period ending.

    


    
      	
              6.

            	
              Extraordinary
                rebate

            


    

    


    NN
      will
      pay an extraordinary rebate of 5 % on european turnover
      in excess of € [redacted*] for the calendar year 2007 and
      in
      excess of € [redacted*] for the first half of 2008.

     

    
      *Information
        omitted and submitted separately to the Commission under Rule
        24b-2

    


    
      
        04/01/2007

        
        

      

      
        Page
          3

        
          

        

      

      
        
        

      

    


    Those
      volumes are fix and depend only from the discontinued NN
      production (basis € [redacted*]), but not from EU 25 GDP rate.

    The
      extraordinary rebate is payable in the month after period ending.

    


    
      	
              7.

            	
              Steel
                Price Europe

            


    

    


    NN
      will
      apply a [redacted*] % price reduction on all european volumes
      effective 1.01.07, under the condition that there are no base
      price increases in 2007 and the quarter 1/2006 scrap costs will
      remain in place for the balance of 2006 (reference: index FERRAILLES
      E8).

    Reference
      point for all steel price effects are steel base prices and scrap surcarges
      (E8)
      at first quarter 2006.

    All
      price
      reductions or increases refer to the [redacted*] % under stable
      conditions.

    


    In
      general, steel price effects can only be taken into consideration
      at the beginning of a quarter: January, 1., April, 1., July,
      1.
      and October, 1.

    


    
      	
              8.

            	
              Terms
                of payment

            


    

    


    payment
      will be made within 30 days net after receiving of invoice

    


    
      	
              9.

            	
              Terms
                of shipment

            


    

    


    The
      shipment will be DDU according INCO Terms

     

    
      *Information
        omitted and submitted separately to the Commission under Rule
        24b-2

    


    
      
        04/01/2007

        
        

      

      
        Page
          4

        
          

        

      

      
        
        

      

    

    

      
        	
                10.

              	
                Exit
                  of NN products

              


      

    

    


    NN
      commits to secure supply of the Products covered by this agreement
      for the duration of the agreement. If, for any reason,
      NN should desire to exit production of any of the Products
      or transfer the manufacturing to another NN factory, NN must provide to
      Schaeffler one of the following solutions upon
      mutual agreement

    


    
      	 	
              1.

            	
              In
                case of a transfer of the manufacturing to another NN facility
                NN supplies the products after submission and approval
                of requested samples. NN to bear the cost of product
                testing and approval in the amount of max, € 50.000 for fourteen (14)
                automotive applications according
                attachment 1. (except aerospace
                applications,)

            


    

    
      	 	
              2.

            	
              NN
                will provide to Schaeffler a minimum of 6 months notice
                of the stoppage of supply of specific products which allows Schaeffler
                the
                opportunity to resource the business
                to another supplier or Schaeffler's in-house production,
                except 13 part numbers already comunicated according attachment 2.
                The
                foregoing is not applicable for
                aerospace applications.

            


    

    
      
        	 	
                3.

              	
                Special
                  ease aerospace: Following notification of minimum
                  3 month time to exit of production,or such shorter time as the
                  parties
                  shall agree given conditions, NN
                  will make its best efforts to make the aerospace ball manufacturing
                  assets available to Schaeffler at fair market
                  value to allow Schaeffler to convert this Product to
                  in-house production.

              


      

    

     

    
      
        04/01/2007

        
        

      

      
        Page
          5

        
          

        

      

      
        
        

      

    


    
      	
              11.

            	
              General
                issues

            


    

    


    This
      document is the commercial basis for the cooperation of both
      companies for the next 24 month beginning 1.07.06. It is valid after
      signing.

    In
      parallel both parties declare to work out a “general supply agreement”
      and a “Quality Asurance Agreement”, that should be
      the
      guideline for the further cooperation independent from these
      commercial conditions.

    


    Herzogenaurach,
      05.01.2007

    


    
      	
              NN
                Europe

            	 	
              Schaeffler
                KG

            
	 	 	 
	
              /s/
                illegible

            	 	
              /s/
                illegible

            


    

     

    
      
        04/01/2007

        
        

      

      
        Page
          6

        
          

        

      

      
        
        

      

    


    SCHAEFFLER
      GROUP

     

    Attachment
      -1- to commercial terms of the Supply agreement NN

     

     [table redacted*]

     

     

    
      *Information
        omitted and submitted separately to the Commission under Rule
        24b-2

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    Attachment
      -2- to commercial terms of the Supply agreement NN

    


    [table
      redacted*]

     

     

    
      *Information
        omitted and submitted separately to the Commission under Rule
        24b-2