NN 8K EX 10.1 05-30-07


    
      

    


    GLOBAL
      SUPPLY AGREEMENT

    


    for
      delivery of steel balls

    


    


    between

    


    


    NN
      Europe, Aps

    DENMARK

    


    


    and

    


    


    SKF
      France S.A.

    34,
      Avenue des Trois Peuples

    78180
      Montigny Le Bretonneux

    FRANCE

    


    


    January
      1st, 2007


    
      
        
        

      

      
        Page
          1 of
          54

        
          

        

      

      
        
        

      

    


    TABLE
      OF CONTENTS

    


    


    
      	
              1.

            	
              DEFINITIONS

            	
              4

            
	 	 	 
	
              2.

            	
              SUPPLY
                AND PURCHASE OF PRODUCTS

            	
              5

            
	 	 	 
	
              3.

            	
              NEW,
                RE-ENGINEERED AND DISCONTINUED PRODUCTS

            	
              7

            
	 	 	 
	
              4.

            	
              PRODUCTS
                AND PRICES

            	
              7

            
	 	 	 
	
              5.

            	
              PAYMENT
                AND DELIVERY TERMS

            	
              9

            
	 	 	 
	
              6.

            	
              ORDERING
                AND DELIVERY TERMS

            	
              9

            
	 	 	 
	
              7.

            	
              DELAYS

            	
              11

            
	 	 	 
	
              8.

            	
              QUALITY

            	
              12

            
	 	 	 
	
              9.

            	
              PRODUCT
                WARRANTY.

            	
              13

            
	 	 	 
	
              10.

            	
              INSURANCE

            	
              14

            
	 	 	 
	
              11.

            	
              PATENT
                INFRINGEMENT

            	
              14

            
	 	 	 
	
              12.

            	
              CONFIDENTIALITY

            	
              14

            
	 	 	 
	
              13.

            	
              IMPROVEMENT
                ACTIVITIES AND NEGOTIATIONS

            	
              15

            
	 	 	 
	
              14.

            	
              DURATION

            	
              16

            
	 	 	 
	
              15.

            	
              TERMINATION

            	
              16

            
	 	 	 
	
              16.

            	
              MISCELLANEOUS

            	
              17

            
	 	 	 
	
              17.

            	
              GOVERNING
                LAW AND SETTLEMENT OF DISPUTES

            	
              19

            


    

     

    
      
        
        

      

      
        Page
          2 of
          54

        
          

        

      

      
        
        

      

    


    This
      GLOBAL FRAME SUPPLY AGREEMENT is entered into as of 2007 by and
      between

    


    NN
      Europe Aps,
      a
      limited liability company duly incorporated, organized and existing under the
      laws of Denmark, with corporate registration number 10020417 (hereafter called
      "NNE"), and

    


    SKF
      FRANCE S.A.,
      a
      company duly incorporated, organized and existing under the laws of France,
      acting on behalf of SKF Group (hereinafter called "SKF").

    


    The
      above
      parties are individually referred to as a "Party" and collectively as the
      "Parties".

    


    WITNESSETH:

    


    
      	
              WHEREAS
                

            	
              NNE
                and its Affiliates (as defined below) are manufacturing the Products
                (as
                defined below);

            


    

    


    
      	
              WHEREAS
                

            	
              SKF
                and certain of its affiliates (as defined below) use the Products
                in their
                production of bearings and other
                products;

            


    

    


    
      	
              WHEREAS
                

            	
              NNE
                manufacturing units include all units manufacturing the Products
                in
                Europe;

            


    

    


    
      	
              WHEREAS
                

            	
              the
                Parties wish to establish a long term close relation relating to
                the
                supply of the Products;

            


    

    


    
      	
              WHEREAS

            	
              the
                Parties now wish to record the detailed basis upon which NNE and
                certain
                NNE Affiliates will supply the Products to
                SKF

            


    

    


    NOW
      THEREFORE, the Parties have agreed as follows.


    
      
        
        

      

      
        Page
          3 of
          54

        
          

        

      

      
        
        

      

    


    
      	
              1.

            	
              DEFINITIONS

            


    

     

    
      	
              1.1

            	
              "Agreement"
                means this document, the Exhibits and appendices annexed hereto.

            


    

     

    
      	
              1.2

            	
              "Contract
                Period" means the three consecutive 12 months periods beginning
                January
                1, 2007 as set forth in section 15
                below.

            


    

     

    
      	
              1.3

            	
              "Contract
                Year" means any twelve (12) consecutive month period beginning
                on
                January 1st and ending on December 31st during the Contract
                Period.

            


    

     

    
      	
              1.4

            	
              "NNE
                Group" means the group of all present and future companies manufacturing
                units in Europe, of which NNE is the ultimate parent
                company.

            


    

     

    
      	
              1.5

            	
              "NNE
                Subcontractor" shall mean any company (other than NNE) that is
                approved
                by NNE and SKF to manufacture and deliver Products to SKF on behalf
                on NNE, as described in section
                2.4.

            


    

     

    
      	
              1.6

            	
              "Force
                Majeure" shall mean industrial disputes and any other circumstance
                beyond
                the control of a Party such as fire, war (whether declared or not),
                extensive military mobilization, insurrection, requisition, seizure,
                and
                embargo.

            


    

     

    
      	
              1.7

            	
              "General
                Conditions" shall mean the SKF General Conditions of Purchase,
                Exhibit
                1.7.

            


    

     

    
      	
              1.8

            	
              "NNE
                Supply Unit" shall mean any production unit of any company within
                the
                NNE Group (set in section 1.4
                above).

            


    

     

    
      	
              1.9

            	
              "Products"
                means the NNE products set forth in Exhibits
                1.9.1 to 1.9.2
                hereto, whenever
                applicable as amended pursuant to Section 3
                below.

            


    

     

    
      	
              1.10

            	
              "SKF
                Affiliate" shall mean any company belonging to the SKF Group other
                than
                SKF.

            


    

     

    
      	
              1.11

            	
              "SKF
                Group" means the group of companies of which AB SKF, a company
                duly
                incorporated under the laws of Sweden, from time to time is the ultimate
                parent company.

            


    

     

    
      	
              1.12

            	
              "SKF
                Production Unit" shall mean the production unit of the companies
                within
                the SKF Group listed in Exhibit
                1.12.

            


    

     

    
      	
              1.13

            	
              "Specification"
                means the technical specification for each of the Products specified
                in the SKF Material Specifications (Exhibit
                1.13)
                as
                amended from time
                to time.

            


    


    
      
        
        

      

      
        Page
          4 of
          54

        
          

        

      

      
        
        

      

    


    
      	
              1.14

            	
              "SKF
                Supplier Delivery Concept" shall mean the SKF Supplier Delivery Concept
                introduced by SKF in relation to supplies to the SKF Production
                Units,
                as amended from time to time, a copy of which has been already delivered
                to NNE.

            


    

     

    
      
        
          	1.15	
                  "Supply
                    Channel Contract" shall have the meaning set forth in Section
                    6
                    below.

                


        

         

      

    

    
      	
              1.16

            	
              Words
                or expressions defined in the Exhibits or any documentation referred
                to in
                this Agreement shall have the same meaning when used in this Agreement,
                unless
                expressly defined differently in this
                Agreement.

            


    

     

    
      	
              1.17

            	
              "NNE
                Reference Prices 2006" shall mean prices of the Products applied
                in 2006
                by NNE Group to SKF Production Units, as set in Exhibits
                1.17.1 to 1.17.18

            


    

     

     

    
      	
              2.

            	
              SUPPLY
                AND PURCHASE OF PRODUCTS

            


    

     

    
      	
              2.1

            	
              Pursuant
                to the terms of this Agreement, NNE hereby agrees to manufacture
                and
                supply to SKF the Products ordered by SKF, and SKF agrees to purchase
                from
                NNE the Products ordered hereunder.

            


    

     

    
      	
              2.2

            	
              Considering
                Products as defined in Exhibit Total Ball purchases from the NNE
                Group by SKF Production Units ("Base Volume") equal to [redacted*] in
                2006.

            


    

    For
      the
      2007 Contract Year, except in case of Force Majeure, SKF shall purchase
      at least 95% of the Base Volume from the NNE Group, calculated over NNE
      Reference Prices 2006.

    For
      the
      2008 and 2009 Contract Years, except in the case of an Excused Reduction (as
      defined below), SKF shall purchase at least 90% of the Base Volume
      from NNE Group, calculated over NNE Reference Prices 2006. An "Excused
      Reduction" shall be deemed to occur when SKF Ball Consumption in
      any
      year falls below the 2006 level of SKF Ball Consumption for any of the
following
      reasons: (i) Force Majeure (ii) unfavorable SKF market conditions, or
      (iii)
      loss in volumes purchased by SKF customers). If an Excused Reduction
      occurs in either the 2008 or 2009 Contract Year, SKF shall purchase
      at least (a) 90% of the Base Volume from NNE Group minus (b) the amount
      of
      the Excused Reduction.

     

    SKF
      Group
      Purchasing and NNE representatives will review the anticipated volume
      development a minimum of twice per calendar year. In the event where
      SKF
      will not be able to meet the purchased volume commitment due to reasons
      which are out of SKF or NNE control, some information will be confidentially
      shared with the NNE representatives in the semi-annual review meeting
      to explain the actual conditions leading to the need to reduce the purchased
      volume commitment The amount of an Excused Reduction, if applicable,
      will be agreed after the necessary information has been shared.

     

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

    
      
        
        

      

      
        Page
          5 of
          54

        
          

        

      

      
        
        

      

    


    
      	
              2.3

            	
              NNE
                itself or with its approved subcontractors shall reserve and/or maintain
                sufficient
                capacity to meet all of SKF's requirements of Products in both peak
                and
                down time market conditions, and shall ensure the timely deliveries
                of the
                Products.
                The Production capacity reserved for SKF will be based on Capacity
                Booking
                Information provided to NNE, according to the practice defined in
                the
                Supply Channel Contract between NNE and SKF Production
                Unit.

            


    

     

    
      	
              2.4

            	
              NNE
                shall have the right to use subcontractors when manufacturing Products
                to
                be sold to SKF under this Agreement. The use of such subcontractors
                will
                not relieve NNE from the responsibility for ensuring the quality
                of the
                subcontractors' materials, parts and services. Each NNE Subcontractor
                must
                be approved in writing by SKF, such approval not to be unreasonably
                withheld or delayed by SKF provided that such subcontractor fulfills
                SKF's
                requirements. SKF
                acknowledges and agrees that the following companies are approved
                subcontractors of NNE as of the date of this Agreement: NN
                Ball & Roller. Inc.
                ("NNBR") and NN
                Precision Bearing Products (Kunshan) Co.. Ltd ("NNA").

            


    

     

    
      	
              2.5

            	
              In
                case NNE divests a NNE Supply Unit (through a sale of shares or assets
                or
                otherwise, or through a merger or joint venture with a third party),
                NNE
                shall prior
                to such divesture

            


    

     

    
      	 	
              (i)

            	
              Confirm
                to SKF that NNE and its approved subcontractors have sufficient capacity
                to replace the divested capacity;
                or

            


    

     

    
      	 	
              (ii)

            	
              Cause
                the entity which will own such NNE Supply Unit following such divesture
                to
                be bound towards SKF to continue to supply Products pursuant to the
                conditions of this Agreement during the term hereof, and to confirm
                to SKF
                that it will be so bound.

            


    

     

    
      	
              2.6

            	
              In
                case SKF determines to shift production from SKF Production Units
                located
                in Europe, whether by closing a plant, moving a production line,
                decreasing
                European production levels, or otherwise, SKF shall give NNE at
                least
                six (6) months prior written notice and shall give NNE the right
                of first
                refusal to continue to supply the ball purchases of such shifted
                production (directly or, subject to required quality and customer
                approvals, through a parent or Affiliate), under the commercial conditions
                in this agreement.

            


    

     

    
      	
              2.7

            	
              The
                list of products subcontracted to NNBR, as amended from time to time,
                is
                listed
                in Exhibits
                2.7.1 and 2.7.2.
                Landed Prices & delivery Service Performance of the Products
                manufactured in USA shall be the same as if Products were still delivered
                from a European NNE Supply Unit. In case of long distance sourcing
                (higher
                than 1 week time), Delivery conditions shall then
                include Consignment Inventories in Europe, at NNE's
                expenses.

            


    


    
      
        
        

      

      
        Page
          6 of
          54

        
          

        

      

      
        
        

      

    


    There
      shall not be any additional costs due to longer transportation distances between
      the Consignment Inventories and impacted SKF Production Units. In
      case
      such a situation would occur, delivery conditions shall also be adapted,
at
      NNE
      expenses, in order to fulfill the Supply Channel Contracts defined with the
      concerned SKF Production Unit.

     

    
      	
              2.8

            	
              NNE
                plan to transfer ball production to NNE Supply Unit in Kysucké
                Nove
                Mesto
                (Slovakia) set in Exhibit
                2.8.
                where Ball Diameter Groups, Volumes in Euro
                and applicable rules are defined.

            


    

    There
      shall not be any additional costs due to longer transportation distances
between
      NNE Supply Unit in Kysucké Nove Mesto
      (Slovakia) and impacted SKF
      Production Units.

    In
      case
      such a situation would occur, delivery conditions shall also be adapted,
at
      NNE
      expenses, in order to fulfill the Supply Channel Contracts defined with
      these SKF Production Units.

     

    
      	
              2.9

            	
              NNE
                plan to transfer ball production to its subcontractor NNA set in
                Exhibit
                2.9,
                where Ball Diameter Groups, Volumes in Euro and applicable rules
                are
                defined.

            


    

    There
      shall not be any additional costs due to longer transportation distances
between
      NNA and impacted SKF Production Units.

    In
      case
      such a situation would occur, delivery conditions shall also be adapted,
at
      NNE
      expenses, in order to fulfill the Supply Channel Contracts defined with these
      SKF Production Units.

     

     

    
      	
              3.

            	
              NEW,
                RE-ENGINEERED AND DISCONTINUED
                PRODUCTS

            


    

     

    
      	
              3.1

            	
              The
                Parties may during the term of this Agreement agree that certain
                New
                Products shall be added. Such changes shall be recorded in the form
                of a
                written
                amendment to Exhibit
                1.9
                setting forth (a) such New Product (b) the Specifications of any
                New
                Product, (c) the date when a New Product will be introduced, and
                (d) the
                price for such New Product to be applied at the time such
                amendment is executed. Such written amendment shall be executed in
                duplicate
                by each Party and added to this Agreement and shall thereafter be
                considered
                as valid. Each Party shall keep one copy of such written amendment.

            


    

     

    
      	
              3.2

            	
              Specifications
                of Products may change during the term of this Agreement. If a
                specification
                change results in a change in production cost, SKF and NNE agree
                to
                negotiate in good faith to appropriately adjust the price of
                Products.

            


    

     

     

    
      	
              4.

            	
              PRODUCTS
                AND PRICES

            


    

     

    
      	
              4.1

            	
              The
                prices for Products manufactured in Pinerolo (Italy), Kilkenny
                (Ireland), Eltmann
                (Germany) and its subcontractor NNBR shall develop according to
                the
                Price Development plan agreed between SKF and NNE set in Exhibits
                4.1.1 and 4.1.2.
                which contains information about the Price Reductions agreed per
                each
                product segment / range during each contract year. In 2007, the price
                adjustment
                factors shall be applied on NNE Reference Prices 2006 (All seventeen
                (17)
                Exhibits from Exhibit 1.17.1 to Exhibit
                1.17.17).

            


    


    
      
        
        

      

      
        Page
          7 of
          54

        
          

        

      

      
        
        

      

    

     

    
      	
              4.2

            	
              NNE
                Reference Prices 2006 are expressed in Euro (EUR), according to the
                development
                plan agreed with NNE for each year of the Contract. For
                Products manufactured by NN Precision Bearing Products (Kunshan)
                Co.,
                Ltd,
                a subcontractor of NNE located in China, PRC, prices shall be invoiced
                in
                Chinese Yuan (CNY) for all SKF Production Units in China, PRC. These
                prices will remain in CNY for the duration of this agreement with
                annual
                productivity adjustments. Prices in Euro will be converted to Chinese
                Yuan
                (CNY),
                using the following currency exchange rate: 1 EURO
                = 10,200 CNY. For
                Ball Diameter Group "Hub Balls", NN Reference Prices 2006 shall refer
                to
                NN reference Prices 2006 set in Exhibit
                1.17.17.

            


    

     

    
      	
              4.3

            	
              Prices
                of for Products transferred and manufactured by NNE Supply Unit in
                Kysucké
                Nove Mesto (Slovakia) and to NNE subcontractor NNA shall develop
                according to the plan set in Exhibit
                2.8
                and Exhibit
                2.9.

            


    

     

    
      	
              4.4

            	
              Some
                price adjustments due to steel price (base price and/or scrap surcharges)
                fluctuations
                shall be agreed in advance and applied to all subjected products.
                It
                shall conform to the raw material clause set in Exhibit
                4.4.1
                to
                Exhibit
                4.4.3.

            


    

     

    
      	
              4.5

            	
              SKF
                and NNE shall continuously work on programs to reduce the total costs
                for
                Products and the process for supply and delivery of Products aiming
                at
                reducing:

            


    

     

    
      	 	
              (i)

            	
              Costs
                in the internal SKF process;

            


    

    
      	 	
              (ii)

            	
              Costs
                in the internal NN process;

            


    

    
      	 	
              (iii)

            	
              Costs
                in the combined SKF and NNE processes;
                and

            


    

    
      	 	
              (iv)

            	
              Costs
                for the Products.

            


    

     

    The
      Parties shall during the work on such programs and the
      implementation thereof
      forward to each other full details on any such costs and any savings resulting
      there from, and the Parties shall discuss in good faith the sharing
      of any
      such
      savings pursuant to the principle described above. The
      Parties shall before incurring any such costs agree on such costs and
      the split
      of
      any savings achieved. Such
      discussions shall take place in the Forum for "Improvement
      activities" established
      by the Parties, as described in section
      13.2

     

    
      	
              4.6

            	
              For
                each year a cost reduction target for SKF's cost for Products shall
                be
                agreed
                between the parties based on the exchange of achievable projects
                requiring
                joint cooperation. At the end of each Contract Year the cost improvement
                results achieved will be jointly evaluated by NNE and SKF. The parties
                shall in connection therewith agree on appropriate adjustments of
                the
                prices referred to in section
                4.1. section 4.3. section 4.4
                and section
                4.5
                in
                order to reflect the achieved cost
                reduction.

            


    


    
      
        
        

      

      
        Page
          8 of
          54

        
          

        

      

      
        
        

      

    


    
      	
              5.

            	
              PAYMENT
                AND DELIVERY TERMS

            


    

     

    
      	
              5.1

            	
              The
                General Conditions of Purchase attached hereto as Exhibit 1.7, which
                are
                an
                integrated part of this Agreement, shall apply on all Purchase Orders
                agreed
                on according to this Agreement. In
                case of any discrepancy or ambiguity between the terms hereof and
                the
                SKF
                General Conditions of Purchase the terms and conditions of this
                Agreement
                shall prevail.

            


    

     

    
      	
              5.2

            	
              Delivery
                clauses shall be construed in accordance with the latest version
                of
                "INCOTERMS"
                2000 (or any successor thereof). The delivery terms used by the
                Parties on the date hereof shall continue to apply until new delivery
                terms have been agreed in writing. SKF wishes to initiate negotiations
                as
                soon as practicable with the aim to agree on CIF prices with respect
                to
                all SKF Production Units.

            


    

     

    
      	
              5.3

            	
              NNE
                shall pack the Products in accordance with instructions issued by
                SKF,
                or
                instructions commonly developed by the Parties. The cost for packaging
                and
                packaging material shall be borne by NNE, unless otherwise agreed
                in
                writing on a Product-by-Product level. In keeping with current practice,
                the GSP pallets (pallet, collars and lids) will be invoiced separately
                by
                NNE with a full credit issued when these pieces are returned to
                NNE.

            


    

     

    
      	
              5.4

            	
              Payment
                shall be made within a period from the later of receipt of the invoice
                and
                delivery of the Products to SKF Production Unit, as set in Exhibit
                5.4. Remittance
                of payment shall not be deemed to imply any acceptance of the delivery
                or the invoiced amount.

            


    

     

     

    
      	
              6.

            	
              ORDERING
                AND DELIVERY TERMS

            


    

     

    
      	
              6.1

            	
              SKF
                has developed systems, e.g. MCSS/Ramco, for the ordering and
                supply procedure.
                NNE accepts and agrees with the principles of these systems and
                procedures,
                e.g. electronic ordering and on-line entering of orders and other
                information
                (B2B, Systems to Systems communication/EDI, WebEDI) in the NNE
                planning systems. NNE also accepts and agrees with the SKF Supplier
                Delivery Concept, and that it will be used as the basis for NNE's
                deliveries to the SKF Production Units, and commits to work in accordance
                with the models, principles, criteria and rules set forth in the
                SKF
                Supplier Delivery Concept. The SKF Supplier Delivery Concept is based
                on
                the fact that each SKF Production Unit has different consumption
                patterns
                in respect of the Products, and that the SKF Production Unit has
                the role
                of being the customer in the supplier/purchaser relation. NNE will,
                with
                reference to the respective section and appendices headed capacity
                booking
                in the SKF Supplier Delivery
                Concept give feedback to each SKF Production Unit individually as
                soon
                as possible but within a maximum of five days from the date when
                the
                SKF
                Production Unit submitted its plan for volume requirements as described
                in
                the SKF Supplier Delivery Concept (i.e. capacity booking). In order
                to
                facilitate quick and efficient delivery meeting the requirements
                of each
                SKF Production Unit, ordering and supply shall take place in accordance
                with the specifications laid down in a separate document (the Supply
                Channel Contract as described in SKF Supplier Delivery Concept Appendix
                6).

            


    


    
      
        
        

      

      
        Page
          9 of
          54

        
          

        

      

      
        
        

      

    


    
      	
              6.2

            	
              The
                MCSS/Ramco and other alternative SKF systems, as well as the SKF
                Supplier
                Delivery Concept, are subject to successive improvement and development
                actions in order to make SKF and NNE together to better meet customer
                requirements and to make SKF and NNE together more competitive.

            


    

     

    
      	
              6.3

            	
              Supply
                Channel Contracts shall for each Product contain the information
                set
                forth
                in Appendix 6 to the SKF Supplier Delivery Concept. The meaning of
                the
                term Supply Mode and the details on the four Supply Modes (Supply
                Modes
                1-4) used in the Supply Channel Contracts is, as set forth in Appendix
                2,
                3 and 4 to the SKF Supplier Delivery Concept, which are agreed and
                accepted
                by NNE.

            


    

     

    
      	
              6.4

            	
              In
                cases where an SKF Affiliate has not implemented Supply Channels
                and/or
                Supply
                Channel Contracts but desires to implement, the Parties undertake
                to
                negotiate
                in good faith, and to use all reasonable efforts to reach agreement
                on
                Supply Channel Contracts. In those cases when SKF Production Channels
                are
                not implemented, the principles and rules for Supply Mode 3 and 4
                shall
                apply for such Factories or
                Channels.

            


    

     

    
      	
              6.5

            	
              Orders
                and deliveries of Products shall be made in accordance with the Supply
                Mode and other details specified for each Product in the relevant
                Supply
                Channel Contract. Unless otherwise set forth in the relevant Supply
                Channel
                Contract, the delivery conditions set out in section
                14
                shall apply to all
                deliveries hereunder.

            


    

     

    
      	
              6.6

            	
              Delivery
                following a call-off shall be made within the lead-time specified
                for
                each
                Product in the relevant Supply Channel
                Contract.

            


    

     

    
      	
              6.7

            	
              NNE
                shall reserve and/or maintain sufficient capacity to be able to deliver
                to
                the SKF Affiliates its demand of Products in accordance with the
                SKF
                Supplier Delivery Concept and the Capacity Booking information where
                applicable, in both peak and down time market conditions and shall
                ensure
                the
                timely deliveries of the Products with the precision as measured
                according
                to the SKF "Supperf" measurements or other comparable SKF systems.
                NNE
                must be notified of any significant volume deviation with reasonable
                time
                for capacity
                adjustment. Feasibility and delivery terms related to these volume
                changes
                must be agreed with NNE. A direct and confidential access to any
NNE
                Supply Unit delivery performance is given to nominated representatives
                of
                NNE Supply Units in SKF Purchasing portal (SKF.COM
                website).

            


    

     

    
      
        
          
          

        

        
          Page
            10 of
            54

          
            

          

        

        
          
          

        

      

       

      
        	
                6.8

              	
                NNE
                  shall deliver Products with Zero Broken Promises in accordance
                  with the
                  SKF Zero Defect Strategy.

              


      

       

       

      
        	
                7.

              	
                DELAYS

              


      

       

      
        	
                7.1

              	
                NNE
                  shall deliver timely with Zero Defect Delivery. If NNE anticipates
                  that it
                  will not be able to timely deliver Products, NNE shall forthwith
                  notify
                  SKF thereof in writing, acknowledging a new precise and reliable
                  delivery
                  time. NNE shall in such case at its own expense take all reasonable
                  measures to minimize such delay. NNE shall bear any extra cost
                  (including
                  but not limited to extra freight charges) incurred in ensuring
                  that
                  deliveries reach the SKF Production Unit on time and in ensuring
                  that
                  incurred delays are minimized. Should such extra costs occur as
                  a result
                  of circumstance for which SKF or an SKF Affiliate is responsible,
                  SKF
                  shall be responsible for such extra
                  cost.

              


      

       

      
        	
                7.2

              	
                In
                  line with the SKF Zero Defect policy SKF has in case of a delivery
                  delay,
                  provided
                  that the delay is not a result of an action taken by SKF, the right
                  to
                  cancel
                  the Purchase Order without any right for NNE to claim any alternative
                  volume or economical compensation.

              


      

       

      
        	 	
                If
                  NNE is in delay on multiple occasions for delivery of the same
                  Product,
                  SKF may choose to provide notice in writing that continued delivery
                  delays
                  could result in cancellation of the obligation to purchase that
                  Product
                  from the specific SKF Production Unit and/or delete the Product(s)
                  concerned from the assortment of this Agreement without any right
                  for NNE
                  to claim any alternative volume or economical compensation. After
                  such
                  written notice is given, NNE will be given 30 calendar days to
                  implement
                  such corrections as necessary to correct the cause(s) of the delivery
                  delay before SKF can exercise its right to cancel a Product from
                  the
                  assortment of this agreement. In case delays still occur after
                  the
                  implementation of such remedies, SKF will have the right to delete
                  the
                  Product from the assortment of this agreement with immediate effect
                  without any right for NNE to claim any alternative volume or economic
                  compensation.

              


      

       

      
        	
                7.3

              	
                If
                  delay in delivery is caused by Force Majeure or by an act or omission
                  on
                  the part of SKF, the time for delivery shall be extended by a period
                  which
                  is reasonable
                  having regard to all the circumstances in the
                  case.

              


      

       

      
        
          	
                  7.4

                	
                  In
                    case of current and/or anticipated serious delays, NNE has the
                    responsibility to immediately find SKF approved alternative sources
                    at
                    NNE's expenses. Should such extra costs occur as a result of
                    circumstance
                    for which SKF or an SKF Affiliate is responsible, SKF shall be
                    responsible
                    for such extra cost. Alternatively SKF may at its sole decision
                    employ a
                    third party supplier to supply the agreed Products at the risk
                    and at the
                    reasonable expense
                    of NNE. The terms, as specified in section 2.4, shall apply also
                    as
                    regards the alternative sourcing arranged by
                    NNE.

                


        

        

          
            
              
              

            

            
              Page
                11 of
                54

              
                

              

            

            
              
              

            

          

        

      

       

      
        	
                7.5

              	
                For
                  delays resulting from the fault of NNE or NNE Subcontractors, SKF
                  shall be
                  entitled to compensation up to the actual costs, damages or losses
                  suffered by SKF. Such compensation will not include any special,
                  consequential or punitive damages or any lost
                  profits.

              


      

       

      
        
          	
                  7.6

                	
                  NNE
                    shall bear any extra cost (including but not limited to extra
                    freight
                    charges) incurred in ensuring that deliveries reach the SKF Production
                    Unit on time and in ensuring that incurred delays are minimized.
                    Should
                    such extra costs occur as a result of circumstance for which
                    SKF or an SKF
                    Affiliate is responsible, SKF shall be responsible for such extra
                    cost.

                


        

      

       

      
        	
                7.7

              	
                In
                  addition to the remedies specified above the remedies and sanctions
                  set
                  forth in the General Conditions shall apply should NNE or the NNE
                  Supply
                  Unit fail to comply with the above.

              


      

       

       

      
        	
                8.

              	
                QUALITY

              


      

       

      
        	
                8.1

              	
                The
                  SKF Quality Standards for Suppliers, attached hereto as Exhibit 8.1
                  as amended from time to time, shall in applicable parts apply to
                  all
                  deliveries hereunder. In case of any discrepancy between the terms
                  hereof
                  and the SKF Quality Standards for Suppliers and the SKF General
                  Conditions
                  of Purchase, the terms hereof shall
                  apply.

              


      

      
        	 	
                SKF
                  Quality Standards for Suppliers can be downloaded from SKF website.
                  http://www.skf.com/portal/skf/home/about?contentId=243695&iang=e

              


      

       

      
        	
                8.2

              	
                NNE,
                  NNE affiliates and their subcontractors accept and agree to the
                  Principles
                  of the SKF Code of Conduct.

              


      

      
        	 	
                http://www.skf.com/portal/skf/home/
                  about?contentId=004557

              


      

       

      
        	
                8.3

              	
                NNE
                  accepts and agrees to the Principles of the SKF Environment, Health
                  and
                  Safety (EHS) policy.

              


      

      
        	 	
                NNE
                  shall submit an action plan related to the reduction of CO2 emission
                  by
                  the end of 2007 at the latest. It shall be part of Improvement
                  Activities
                  portfolio (see section 13.2 and section 13.3).
                  http://www.skf.com (select "Investors" –>
                  "Sustainability" –>
                  "Policies").

              


      

       

      
        	
                8.4

              	
                NNE
                  accepts and agrees to the principles of the SKF Zero Defect Strategy,
                  as
                  amended from time to time, and commits accordingly to deliver Products
                  with Zero Defects including Zero
                  delays.

              


      

       

      
        	
                8.5

              	
                NNE
                  shall aim for continuous improvement of its Delivery performance
                  ("Supperf') and Quality of the
                  Products.

              


      

       

      
        
          
            
            

          

          
            Page
              12 of
              54

            
              

            

          

          
            
            

          

        

      

       

      
        	
                8.6

              	
                NNE
                  accepts and agrees to work according to the requirements of the
                  SKF
                  prohibited substances or substances to be avoided. The lists of
                  prohibited
                  or restricted substances referred to in the SKF Quality Standard
                  for
                  Suppliers; in the chapter entitled "Environment" are included in
                  the
                  International Material System Database (IMDS) at the web site
                  http://www.mdsystem.com/html/en/home_en.htm

              


      

       

       

      
        	
                9.

              	
                PRODUCT
                  WARRANTY

              


      

       

      
        	
                9.1

              	
                NNE
                  warrants the proper and professional manufacture of the Products,
                  that
                  they will be free from defects, and mat they will conform to agreed
                  Specifications. NNE shall immediately upon SKF's written request
                  remedy
                  defective Products free of charge or, if SKF so wishes, compensate
                  SKF for
                  the value of such defective Products or for the cost of their
                  rectification.

              


      

       

      
        	 	
                In
                  addition, NNE shall compensate SKF for all costs, damages and losses
                  incurred by SKF as a result of the defective
                  Products.

              


      

       

      
        	
                9.2

              	
                The
                  shelf life warranty period is 12 months after delivery by NNE.
                  The warranty
                  for corrosion is limited to the 12-month shelf life period. The
                  warranty
                  period for manufacturing defects shall be 24 months from the date
                  of
                  delivery by NNE, except for automotive products, which always shall
                  have a
                  warranty period of 36 months from the date of delivery to
                  SKF.

              


      

       

      
        	
                9.3

              	
                When
                  a defective Product has been remedied, NNE shall be liable for
                  defects in
                  the replaced or repaired Product under the same terms and conditions
                  as
                  those applicable to the original Product pursuant to section 9.2
                  above.

              


      

       

      
        	
                9.4

              	
                SKF
                  shall without undue delay notify NNE of any defects which appears. 
                  Such
                  notice shall under no circumstances be given later than one (1)
                  month
                  after the defect became known to SKF. The notice shall contain
                  a
                  description of the defect. If SKF does not notify NNE of a defect
                  within
                  the time limit set forth above, SKF shall loose its right to have
                  the
                  defect remedied. Upon receipt of such notice NNE shall remedy the
                  defect
                  or replace the Product without undue delay and at its own
                  cost.

              


      

       

      
        	
                9.5

              	
                If
                  NNE does not fulfill its obligation to rectify or replace a Product
                  hereunder within a reasonable time, SKF may, by written notice,
                  fix a
                  final time (which should not be less than 8 calendar days) for
                  completion
                  of NNE's obligations. If NNE fails to fulfill its obligations within
                  such
                  final time, SKF may itself undertake to employ a third party to
                  supply new
                  Products or to undertake necessary remedial work at the risk and
                  expense
                  of NNE

              


      

       

      
        
          	 	
                  (i)

                	
                  Where
                    the Products have not been successfully remedied or replaced
                    SKF is
                    entitled to a reduction of the purchase price in proportion to
                    the
                    reduced value of the Product(s) concerned,
                    or

                


        

         

        
          	 	
                  (ii)

                	
                  Where
                    the defect is so substantial as to significantly deprive SKF
                    of
                    the
                    benefit of the supply of such Product, SKF may terminate the
                    order. Such
                    termination will have no effect on SKF's right to compensation
                    under this Agreement.

                


        

      

       

      
        
          
            
            

          

          
            Page
              13 of
              54

            
              

            

          

          
            
            

          

        

      

       

      
        	
                9.6

              	
                In
                  markets where SKF is required by applicable laws and regulations
                  or
                  alternatively is required by specific customer to provide an extended
                  warranty or is subject to extended liability for defects, SKF may
                  request
                  NNE to extend its warranty and liability to cover SKF's obligations.
                  The
                  parties agree to work together in good faith to resolve any unique
                  cost
                  issues related to this change. If NNE does not accept to extend
                  its
                  warranty and liability accordingly, SKF may cancel any affected
                  Purchase
                  Orders with immediate effect without any right for NNE to claim
                  any damage
                  or compensating volumes.

              


      

       

       

      
        	
                10.

              	
                INSURANCE

              


      

       

      
        	
                10.1

              	
                NNE
                  shall provide evidence of a business and product liability insurance
                  in
                  the amount of at least 5,000,000 Euro (five million Euro) for NNE
                  and all
                  NNE Supply Units and subcontractors (NN Balls and Rollers, Inc,
                  NN
                  Precision Bearing Products (Kunshan) Co., Ltd) must maintain such
                  insurance with regard to the risks covered and the amount of coverage
                  for
                  the term of this Agreement.

              


      

       

       

      
        	
                11.

              	
                PATENT
                  INFRINGEMENT

              


      

       

      
        	
                11.1

              	
                NNE
                  shall hold SKF harmless against claims of patent infringement in
                  respect
                  to the Products provided that SKF shall without undue delay but
                  in any
                  event within 90 days after the claim is brought against it or an
                  SKF
                  Affiliate, notify NNE of the claim. After such notification NNE
                  shall
                  participate in and handle any negotiation and/or defense of the
                  claim or
                  legal proceeding at NNE's expense. In this event SKF shall fully
                  and at
                  its own expense co-operate with NNE. NNE shall continuously keep
                  SKF fully
                  informed of such claims or legal proceedings. If SKF desires to
                  maintain
                  its own defense, SKF shall do so at its own expense and NNE shall
                  fully
                  and at its own expense co-operate with
                  SKF.

              


      

       

       

      
        	
                12.

              	
                CONFIDENTIALITY

              


      

       

      
        	
                12.1

              	
                Unless
                  otherwise provided in this Agreement, during and after the term
                  of this
                  Agreement, each party hereto shall keep in confidence any and all
                  of the
                  other party's technical, engineering, production, marketing, sales
                  or
                  other business data and information (including, but not limited
                  to, all
                  documents, designs, samples, tools, drawings, plans and programs)
                  relating
                  to the Products or other products of the other party which shall
                  come to
                  its knowledge or be supplied or acquired from the other party in
                  the
                  course of the business transactions under this Agreement and shall
                  not
                  disclose the same to any third party without prior written consent
                  of the
                  other party.

              


      

       

      
        
          
            
            

          

          
            Page
              14 of
              54

            
              

            

          

          
            
            

          

        

      

      
         

        
          	 	
                  If
                    either party is requested or required by law or by legal or administrative
                    process to disclose any such information, such party (the "Recipient")
                    will notify the other party (the "Disclosing Party") of such
                    request or
                    requirement so that Disclosing Party may seek an appropriate
                    protective
                    order or other relief. If a protective order or other relief
                    is not
                    obtained by Disclosing Party within 30 days following Recipient's
                    delivery
                    of such notice, or if Recipient's legal counsel advises in writing
                    that
                    Recipient is required to disclose the Confidential Information
                    prior to
                    the expiration of such 30-day period, Recipient may disclose
                    Confidential
                    Information in accordance with such request or requirement, provided
                    that
                    Recipient (a) may disclose only that portion of the Confidential
                    Information which Recipient's legal counsel advises in writing
                    is required
                    to be disclosed, (b) must use its reasonable efforts to ensure
                    that the
                    Confidential Information so disclosed is treated confidentially,
                    and (c)
                    must notify Disclosing Party as soon as reasonably practicable
                    of the
                    items of Confidential Information so
                    disclosed.

                


        

         

         

      

      
        	
                13.

              	
                IMPROVEMENT
                  ACTIVITIES AND
                  NEGOTIATIONS

              


      

       

      
        	
                13.1

              	
                The
                  Parties have established a forum for Negotiations of possible disagreement
                  that may arise in connection with the supply and purchase of Products
                  hereunder, such as the introduction of new Products, modification
                  of
                  existing Products, negotiations of further Supply Channel Contracts,
                  Improvement activities and any extension of this Agreement or the
                  replacement hereof with a new or modified supply agreement after
                  the
                  termination hereof.

              


      

       

      
        	 	
                During
                  the Contract period, the parties shall meet regularly (frequency
                  to be
                  agreed) in order to identify, define, prioritize and review Improvement
                  activities and results according to QCDIM methodology (Quality,
                  Cost,
                  Development, Innovation, and
                  Management).

              


      

       

      
        	
                13.2

              	
                The
                  Negotiations and Improvement activities forum shall consist of
                  2 persons
                  of which each Party shall nominate one. NNE has for this purpose
                  initially
                  nominated Robert R. Sams and SKF has initially nominated Eric Durand.
                  If
                  one Party wishes to replace the person nominated by it, the Party
                  concerned shall notify the other Party in writing of the replacement.
                  SKF
                  and, respectively, NNE may also designate alternates who may participate
                  at meetings of the negotiation forum as substitutes for a designated
                  person. The persons appointed by the Parties shall also be entitled
                  to ask
                  in-house experts to participate in any negotiation to discuss specific
                  topics.

              


      

      


      
        
          
            
            

          

          
            Page
              15 of
              54

            
              

            

          

          
            
            

          

        

      

       

      
        	
                13.3

              	
                The
                  Negotiation forum shall meet whenever reasonably requested by a
                  Party.
                  Such
                  request shall be submitted in writing and shall contain such documents
                  and
                  information as is relevant and necessary for the other Party to
                  prepare
                  for a
                  negotiation. Any agreements reached during the negotiations shall
                  be made
                  in
                  writing and signed by the appointed persons who are hereby authorized
                  to
                  sign such documents on behalf of the Party who has appointed the
                  person in
                  question.

              


      

       

       

      
        	
                14.

              	
                DURATION

              


      

       

      
        	
                14.1

              	
                This
                  Agreement shall become effective on January 1st,
                  2007 and shall continue
                  in force and effect until December 31st,
                  2009, when it shall terminate automatically. The Parties shall
                  no later
                  than 12 months in advance of such expiration initiate negotiations
                  pursuant to the principle described in section 13 above concerning
                  a
                  possible new supply agreement to apply after the expiration of
                  this
                  Agreement.

              


      

       

       

      
        	
                15.

              	
                TERMINATION

              


      

       

      
        	
                15.1

              	
                This
                  Agreement may be terminated forthwith by written notice upon the
                  occurrence of any or more of the following
                  events

              


      

       

      
        
          	 	
                  (i)

                	
                  By
                    the other Party, if a Party hereto becomes incapable for a period
                    of 120
                    days of performing any of its obligations under this Agreement
                    because of
                    Force Majeure; or

                


        

         

        
          	 	
                  (ii)

                	
                  By
                    the other Party, if either Party hereto should become insolvent,
                    have
                    a receiver or administrator appointed of its assets, or if a
                    petition for
                    bankruptcy is filed by the Party itself or if other bankruptcy
                    proceedings are commenced against such Party;
                    or

                


        

         

        
          	 	
                  (iii)

                	
                  By
                    SKF, if NNE directly or indirectly becomes acquired by, or merged
                    with a
                    competitor of SKF or otherwise becomes controlled by a competitor
                    of
                    SKF.

                


        

      

       

      
        
          	
                  15.2

                	
                  SKF
                    may immediately terminate this Agreement, in whole or in part,
                    in respect
                    of one or several Products of a concerned SKF Production Channel's
                    assortment
                    or of the total SKF assortment, if NNE commits a material breach
                    of
                    any of its obligations under this Agreement and fails to cure
                    such breach
                    within
                    thirty (30) days after written notice by SKF of such breach.
                    NNE may
                    terminate
                    this Agreement, in whole or in part, if SKF commits a material
                    breach of
                    any of its obligations under this Agreement and fails to cure
                    such breach
                    within thirty (30) days after written notice by SKF of such
                    breach.

                


        


        
          
            
            

          

          
            Page
              16 of
              54

            
              

            

          

          
            
            

          

        

         

        
          	
                  15.3

                	
                  If
                    NNE does not comply with the SKF Quality Standards for Suppliers
                    or any
                    changes
                    thereof within reasonable time after notice of change, and continues
                    to
                    fail to comply following notice of such noncompliance and a reasonably
                    opportunity to cure, SKF shall be free to terminate this Agreement
                    with
                    immediate effect upon written notice. If changes in the SKF Quality
                    Standards for Suppliers cause increases in cost of the Products,
                    NNE shall
                    notify SKF in writing. In such circumstances, SKF and NNE agree
                    to
                    negotiate in good faith to appropriately adjust the price of
                    Products.

                


        

         

        
          	
                  15.4

                	
                  Termination
                    of this Agreement shall be without prejudice to the accrued rights
                    and liabilities of the Parties on the date of termination, unless
                    expressly waived
                    in writing by the Parties.

                


        

         

         

        
          	
                  16.

                	
                  MISCELLANEOUS

                


        

         

        
          	
                  16.1

                	
                  This
                    Agreement contains the entire agreement between the Parties with
                    respect
                    to the subject matter hereof and supersedes all other supply
agreements,
                    commitments or representations in respect of Products, which
may
                    have been made by the Parties either orally or in writing prior
                    to the
                    signing
                    hereof.

                


        

         

        
          	
                  16.2

                	
                  If
                    any provision of this Agreement is or becomes invalid, ineffective,
                    unenforceable
                    or illegal for any reason, this shall not affect the validity
                    or
                    enforceability
                    of any or all of the remaining provisions hereof. In such case,
                    the
                    Parties shall forthwith enter into good faith negotiations to
                    amend such
                    provision
                    in such a way that, as amended, it is valid and legal and to
                    the
                    maximum
                    extent possible carries out the original intent of the Parties
                    as
                    reflected herein with respect to the matter in
                    question.

                


        

         

        
          	
                  16.3

                	
                  The
                    provisions of section 9 and 11 above, as well as section 7 and
                    8 in the
                    General
                    Conditions of Purchase shall survive any termination or expiration
                    of
                    this
                    Agreement.

                


        

         

        
          	
                  16.4

                	
                  The
                    failure of one of the Parties under this Agreement to exercise
                    any right,
                    power or option given to it under this Agreement or applicable
                    law, or to
                    insist upon strict compliance with the terms of this Agreement
                    by the
                    other Party,
                    shall not constitute a waiver of the terms and conditions of
                    this Agree-
                    ment
                    with respect to any subsequent breach thereof, nor a waiver by
                    any of
                    the
                    Parties of its rights at any time thereafter to require strict
                    compliance
                    with all of the terms of this
                    Agreement.

                


        

         

        
          	
                  16.5

                	
                  Any
                    notice required or permitted by this Agreement shall be in writing.
                    Such
                    notices shall be written in English. Such notices shall be delivered
                    by
                    hand, or may be sent by telefax, by air courier, to the Parties
                    at the
                    following addresses:

                


        

         

      

      
        
          
            
            

          

          
            Page
              17 of
              54

            
              

            

          

          
            
            

          

        

      

       

      
        	
                16.5.1

              	
                If
                  to SKF:

              	
                SKF
                  France

              
	 	 	
                BP239

              
	 	 	
                37542
                  Saint-Cyr-sur-Loire Cedex

              
	 	 	
                France

              
	 	 	
                Attention: 
                  Director,
                  Finished Components

              
	 	 	
                 
                   Group
                  Purchasing Office 

              
	 	 	
                Telefax:
                  +33 2 47 40 33 80

              
	 	 	 
	 	
                with
                  a copy

              	 to:
	 	 	
                AB
                  SKF

              
	 	 	
                SKF
                  Group Headquarters

              
	 	 	
                SE-415
                  50 GOTEBORG

              
	 	 	
                Sweden

              
	 	 	
                Attention:  
                  Director,
                  Group Purchasing

              
	 	 	
                Telefax:
                  +46 31 337 1691

              
	 	 	 
	
                16.5.2

              	
                If
                  to NNE:

              	
                NN
                  Europe Aps

              
	 	 	
                Corso
                  Torino 378

              
	 	 	
                10064
                  Pinerolo (TO)

              
	 	 	
                Italy

              
	 	 	
                Attention:  
                  Sales
                  Director

              
	 	 	
                Telefax:
                  +39 0121 234307

              
	 	 	 
	 	
                with
                  a copy

              	 to:
	 	 	
                NN,
                  Inc. (USA) 

              
	 	 	
                2000
                  Waters Edge Drive 

              
	 	 	
                Building
                  C, Suite 12 

              
	 	 	
                Johnson
                  City, Tennessee 37604 

              
	 	 	
                USA

              
	 	 	
                Attention:  
                  V.P.
                  Sales 

              
	 	 	
                Telefax:
                  +1 423 743 2670

              


      

       

      
        
          	
                  16.5.3

                	
                  Any
                    Party may change its address and numbers by giving notice in
                    accordance
                    with
                    the terms of this sub-section 12.5 Any notice shall be effective
                    when
                    received in the offices of the Parry to which it is
                    sent.

                


        

         

        
          	
                  16.6

                	
                  References
                    to SKF and NNE in this Agreement include - where appropriate
with
                    regard to the context - references to all SKF Affiliates and
                    NNE Supply
                    Units respectively to the intent and effect that each reference
                    to a Party
                    shall be
                    construed as a reference to that Party. Each Party shall take
                    all
                    necessary action
                    to ascertain that its Affiliates or units act in accordance with
                    the terms
                    and
                    conditions of this Agreement

                


        

         

        
          	
                  16.7

                	
                  The
                    fulfillment of an individual Purchase Order inside the scope
                    of this
                    Agreement
                    shall be the sole responsibility of the companies being parties
                    to
                    the
                    Purchase Order in question. However, the performance or non-
performance
                    of the undertakings of a Purchase Order may trigger rights and obligations
                    to the Parties to this Agreement and not only the companies being
                    party
                    to the individual Purchase
                    Order.

                


        


        
          
            
            

          

          
            Page
              18 of
              54

            
              

            

          

          
            
            

          

        

         

        
          	
                  16.8

                	
                  The
                    use of the customer relationship with SKF for advertising purposes
                    requires
                    the prior written approval of SKF.

                


        

         

        
          	
                  16.9

                	
                  At
                    the request of SKF, NNE shall provide SKF with information on
                    the
                    environmental
                    acceptability and recycling possibility of the Products, including
                    packaging.

                


        

         

        
          	
                  16.10

                	
                  NNE
                    shall not advertise or publicize, in any way, without the prior
                    written
                    approval of SKF, the fact that NNE supplies or has been contracted
                    to
                    supply Products to SKF.

                


        

         

        
          	
                  16.11

                	
                  The
                    Parties agree to cooperate in good faith and to correct any mistakes
                    or
                    errors in the text of the Exhibits and Schedules to this
                    Agreement.

                


        

         

        
          	
                  16.12

                	
                  Neither
                    party shall be liable in any circumstances for any special, consequential
                    or punitive damages beyond the extent of such Party's insurance
                    coverage
                    available for such damages.

                


        

         

         

        
          	
                  17.

                	
                  GOVERNING
                    LAW AND SETTLEMENT OF
                    DISPUTES

                


        

         

        
          	
                  17.1

                	
                  This
                    Agreement shall be governed by and construed in accordance with
                    the
                    substantive
                    laws of Denmark. Each Purchase Order agreed on based on this
Agreement
                    shall however, be governed by and construed in accordance with
                    the
                    laws of the country in which the purchasing SKF Affiliate has
                    its
                    principle
                    place of business.

                


        

         

        
          	
                  17.2

                	
                  Any
                    dispute, controversy or claim arising out of or in connection
                    with this
                    Agreement or a Purchase Order entered into based on this Agreement,
                    or
                    breach, termination or invalidity thereof, shall be finally settled
                    by
                    arbitration in accordance with the UNCITRAL Arbitration Rules
                    as at
                    present in force. The
                    number of arbitrators shall be three and at least the chairman
                    shall be
                    from
                    the country in which the proceeding shall take place. The appointing
                    authority shall be the International Chamber of Commerce in Copenhagen.
                    The place of arbitration shall be Copenhagen. The arbitration
                    proceedings
                    shall, unless otherwise agreed, be held in the English language.
                    Among the
                    remedies
                    available to them, the arbitrators shall be authorized to order
                    the
                    specific
                    performance of provisions of this Agreement. The award rendered
                    by the
                    arbitrators may include costs of arbitration, reasonable counsel's
                    fees,
                    and reasonable costs for expert and other
                    witnesses.

                


        

         

        
          	
                  17.3

                	
                  All
                    papers, documents or evidence, whether written or oral, filed
                    with or
                    presented
                    to the panel of arbitrators shall be deemed by the parties and
                    by the
                    arbitrators to be Confidential Information. No party or arbitrator
                    shall
                    disclose
                    in whole or in part to any other person any Confidential Information
                    submitted in connection with the arbitration proceedings, except
                    to the
                    extent reasonably necessary to assist counsel in the arbitration
                    or
                    preparation for arbitration
                    if the dispute. Confidential Information may be disclosed (i)
                    to
                    attorneys, (ii) to parties, and (iii) to outside experts requested
                    by
                    either party's counsel to furnish technical or expert services
                    or to give
                    testimony at the arbitration proceedings, subject, in the case
                    of such
                    experts, to execution of a legally
                    binding written statement that such expert is fully familiar
                    with the
                    terms
                    of this Section, agrees to comply with the confidentiality terms
                    of this
                    Section, and will not use any Confidential Information disclosed
                    to such
                    expert for personal or business
                    advantage.

                


        

      

       

      
        
          
            
            

          

          
            Page
              19 of
              54

            
              

            

          

          
            
            

          

        

      

       

      IN
        WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed
        in
two
        counterparts, as of the day and year first above written.

       

      
        	
                SKF
                  FRANCE

              	 	
                NN
                  Europe Aps

              
	 	 	 
	
                /s/
                  Jean Tournous

              	 	
                /s/Johannos
                  Cihau

              
	
                Signed

              	 	
                Signed

              
	
                Jean
                  Tournous

              	 	
                Johannos
                  Cihau

              
	
                By

              	 	
                By

              
	
                CEO

              	 	
                Sales
                  Director

              
	
                Title

              	 	
                Title

              
	
                15-05-2007

              	 	
                9.05.2007

              
	
                Date

              	 	
                Date

              
	 	 	 
	
                /s/
                  Jean Luc Thounieux

              	 	
                /s/
                  Nicola Trombetti

              
	
                Signed

              	 	
                Signed

              
	
                Jean
                  Luc Thounieux

              	 	
                Nicola
                  Trombetti

              
	
                By

              	 	
                By

              
	
                Purchasing
                  Director Finished Components

              	 	
                NNE
                  Managing Director

              
	
                Title

              	 	
                Title

              
	
                2007/05/24

              	 	
                3/5/2007

              
	
                Date

              	 	
                Date

              


      

       

       

      Page
        20 of
        54

      
        

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

      


      EXHIBIT
        1.7

      


      


      GENERAL
        CONDITIONS OF PURCHASE - valid since 2002-08-19

      These
        conditions of purchase shall apply in full unless otherwise agreed in writing.
        Any other general conditions shall not be applicable, even if they were not
        rejected explicitly in any individual case.

      1.
        Definitions

      
        	
                1.1

              	
                "SKF"
                  shall mean any company within the SKF Group of companies purchasing
                  products under these General conditions.

              
	
                1.2

              	
                "Supplies"
                  shall mean any company delivering products to SKF under these General
                  Conditions.

              


      

      


      
        	
                1.3

              	
                "Agreement"
                  shall mean any agreement between SKF and the Supplier related to
                  the sale
                  and purchase of any products. These General Conditions and the
                  SKF Quality
                  Standards for Suppliers (as defined below) form an integral part
                  of the
                  Agreement.

              
	
                1.4

              	
                "Products"
                  shall mean any products purchased by SKF under these General
                  conditions.

              


      

      


      
        	
                1.5

              	
                "Defective
                  Products" shall mean Products that are not in accordance with technical
                  and other specifications set up by SKF or are not fit for the purpose
                  intended. In the absence of documented SKF requirements, "Defective
                  Products" shall mean products that are not in accordance with approved
                  sample deliveries of the Products or where no samples are delivered,
                  does
                  not conform to generally accepted industry standards

              
	
                1.6

              	
                "SKF
                  Quality Standard for Suppliers" quality requirements issued b SKF
                  Group
                  Purchasing.

              


      

      2.
        Inspection of Production

      
        	
                2.1

              	
                SKF
                  shall have the right to inspect the Supplier's production, take
                  samples
                  and carry out other necessary investigations on the Supplier's
                  premises.

              
	
                2.2

              	
                It
                  is the Supplier's responsibility to see to it that SKF can exert
                  its right
                  according to clause 2.1 even in cases where production is assigned,
                  partially or entirely, to another
                  company.

              


      

      3.
        Quality

      
        	
                3.1

              	
                The
                  Products shall be in accordance with technical and other specifications
                  set up by SKF. The Supplier shall comply with the SKF Quality Standards
                  for Suppliers.

              
	
                3.2

              	
                The
                  Supplier is not allowed to change the function, appearance, properties
                  and
                  material of the Products concerned, without the prior written consent
                  of
                  SKF, after SKF has approved the sample
                  deliveries.

              


      

      


      
        	
                3.3

              	
                SKF's
                  approval of Products shall not affect the Supplier's liability
                  under the
                  Agreement.

              
	
                3.4

              	
                The
                  Supplier shall notify SKF forthwith of any known or apprehended
                  Defective
                  Products. SKF shall notify the Supplier of any Defective Products
                  within 6
                  months after the Defective Products have been detected by
                  SKF.

              


      

      


      
        	
                3.5

              	
                If,
                  on account of Defective Products, SKF deems it necessary to carry
                  out an
                  inspection of any or all Products delivered, this shall be effectuated
                  after consultation with the Supplier, at the Supplier's expense.
                  The
                  Supplier shall compensate SKF for the cost of such
                  inspection.

              
	
                3.6

              	
                The
                  Supplier shall, immediately upon SKF's request, replace or rectify
                  Defective Products free of charge or, if SKF so wishes, compensate
                  SKF for
                  the value of such Defective Products or for the costs of their
                  rectification. In addition, the Supplier shall compensate SKF for
                  all
                  costs, damages and losses incurred by SKF as a result of the Defective
                  Products.

              


      

      


      
        	
                3.7

              	
                If
                  Defective Products have been incorporated in SKF products that
                  have been
                  delivered to SKF customers, SKF shall have the right to call back
                  the SKF
                  products concerned, at the expense of the
                  Supplier.

              
	
                3.8

              	
                The
                  Supplier shall indemnify SKF for freight charges with respect to
                  Defective
                  Products and, if the Defective Products are returned to the Supplier,
                  the
                  freight charges for returned Defective Products. All transport
                  of the
                  Defective Products in conjunction with rectification of defects
                  shall be
                  at the Supplier's account and risk.

              


      

      


      
        	
                3.9

              	
                The
                  Supplier's obligations under clause 3.5-3.8 above shall expire
                  2 years
                  after the SKF Products, in which the Defective Products have been
                  incorporated, have been delivered to any SKF customer outside the
                  SKF
                  Group. The period of time under which the obligations shall exist
                  shall
                  however, not exceed 3 years from delivery of the Defective Products
                  to
                  SKF. For the avoidance of doubt in the event German Civil Code
                  is
                  applicable, §487,479 BGB shall remain unaffected. The time limitations in
                  this clause shall not affect the Supplier's product liability under
                  clause
                  7 below.

              
	
                3.10

              	
                When
                  a Defective product have been remedied Supplier shall be liable
                  for
                  defects in the replaced or required Product under the same terms
                  and
                  conditions as those applicable to the original
                  Products.

              


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      4.
        Technical Modifications

      SS   
        SKF reserves the right after the order has been placed, to modify the agreed
        product specifications. Any such modification shall be confirmed in writing.
        Any
        difference in price and/or delivery date resulting from such modifications
        is to
        be subject to mutual agreement and must be confirmed in writing.

       

      5.
        Deliveries

      
        	
                5.1

              	
                Deliveries
                  shall be made in accordance with agreed delivery dates.

              
	
                5.2

              	
                SKF
                  does not accept any responsibility for Products supplied in quantities
                  exceeding those agreed upon. Such products may be returned to the
                  Supplier's expense. The risk for such Products shall be borne by
                  the
                  Supplier.

              


      

      


      
        	
                5.3

              	
                SKF
                  does not accept any responsibility for Products delivered before
                  the
                  agreed date. Such Products may be returned to the Supplier at the
                  Supplier's expense. The risk for such products shall be borne by
                  the
                  Supplier.

              
	
                5.4

              	
                The
                  Supplier shall forthwith notify SKF in writing of any known or
                  apprehended
                  events that may result in a breach of the agreed delivery date
                  and advise
                  SKF as soon as possible thereafter when delivery can be
                  expected.

              


      

      


      
        	
                5.5

              	
                The
                  Supplier shall have to pay for any extra freight charges incurred
                  in
                  ensuring that delayed deliveries reach SKF on time.

              
	
                5.6

              	
                The
                  Supplier shall compensate SKF for all costs, damages and losses
                  incurred
                  by SKF as a result of late
                  delivery.

              


      

      
6.
        Termination

      
        	
                6.1

              	
                When
                  Products are delivered after agreed delivery time or when Defective
                  Products are not rectified or replaced within reasonable time,
                  without
                  limitations of SKF's other rights, SKF has the right to terminate
                  the
                  Agreement in full or in part.

              
	
                6.2

              	
                If
                  the Supplier fails to fulfill his obligations under the Agreement,
                  SKF
                  shall have the right to terminate the Agreement
                  forthwith.

              


      

      


      
        	
                6.3

              	
                If
                  the Supplier becomes insolvent or if the ownership of the Supplier
                  is
                  transferred to another party, SKF has the right to annul forthwith
                  the
                  Agreement in full or any part
                  therof.

              


      

       

      7.
        Product liability

      
        	
                 

              	
                To
                  the extent that SKF might incur product liability itself or toward
                  any
                  third party, the Supplier shall indemnify SKF as far as the damage
                  or
                  SKF's liability is due to Defective
                  Products.

              


      

       

      8.
        Confidentiality

      
        	
                8.1

              	
                Designs,
                  samples, tools, drawings, plans, programs or other information
                  provided by
                  SKF to the Supplier must not be used by the Supplier for any other
                  purpose
                  than the fulfillment of the agreement and must not be reproduced
                  or
                  disclosed to a third party without written permission from
                  SKF.

              
	
                8.2

              	
                On
                  the request of SKF the Supplier shall return all documentation
                  and
                  computer readable data, copies included, that the Supplier has
                  received
                  from SKF. Copies made by the Supplier or on behalf of the Supplier
                  shall
                  be destroyed forthwith.

              


      

      


      
        	
                8.3

              	
                The
                  Supplier shall not advertise or publicize in any way, without the
                  prior
                  written permission from SKF, the fact that he supplies, or has
                  been
                  contracted to supply, Products to SKF.

              
	
                8.4

              	
                Designs,
                  samples, drawings, plans and programs ordered by SKF are SKF's
                  property.

              


      

      


      
        	
                8.5

              	
                On
                  delivery, the Supplier shall free of charge provide SKF with the
                  agreed
                  number, or at least one copy, of documents and drawings that are
                  sufficiently detailed to enable SKF to carry out assembly, starting
                  up,
                  running and maintenance of the
                  Products.

              


      

       

      9.
        Laws and regulations

      
        	
                 

              	
                Supplier
                  shall comply with all relevant laws and
                  regulations.

              


      

       

      10.
        Terms of delivery

      
        	
                 

              	
                Delivery
                  clauses shall be constructed in accordance with the latest version
                  of
                  "INCOTERMS".

              


      

       

      11.
        Payment

      
        	
                11.1

              	
                The
                  term of payment shall take effect from the date the invoice reaches
                  SKF.
                  Payment shall never be made before the Product has been
                  delivered.

              
	
                11.2

              	
                Reception
                  of payment shall not affect SKF's right under the
                  Agreement.

              


      

       

      
        	
                11.3

              	
                SKF
                  Shall not accept additional charges, such as service fees or invoicing
                  charges.

              


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      12.
        Force majeure

      
        	
                12.1

              	
                Neither
                  of the parties shall be bound by any undertaking which it is prevented
                  from fulfilling by force majeure such as industrial disputes, third
                  party
                  strikes and lockouts, riots, insurrection, fire, flood, war, confiscation,
                  or if competition is prevented by governmental intervention or
                  regulations
                  or other circumstances beyond the control of the party and which
                  the party
                  could not reasonable be expected to have anticipated at the time
                  of the
                  purchase, and the consequences of which the party could not reasonably
                  have avoided or overcome.

              
	
                12.2

              	
                If
                  for any of the above reasons, the delivery delays exceed or is
                  estimated
                  to exceed six months the parties are free to annul that part of
                  the
                  Agreement relating to the delayed delivery or non-delivery without
                  incurring any liability with respect to the other
                  party.

              


      

      


      
        	
                12.3

              	
                If
                  a party wishes to refer to force majeure, he is obligated to notify
                  the
                  other party forthwith of the arising and ceasing
                  thereof.

              


      

       

      13.
        Arbitration

      
        	
                13.1

              	
                Any
                  dispute, controversy or claim arising our or in connection with
                  this
                  Agreement, or breach termination or invalidity thereof, shall be
                  finally
                  settled by arbitration in accordance with the UNCITRAL Arbitration
                  Rules
                  as at present force. The number of arbitrators shall be three and
                  at least
                  the chairman shall be from the country in which the proceeding
                  shall take
                  place. The appointing authority shall be the International Chamber
                  of
                  Commerce in Paris.

              
	
                13.2

              	
                The
                  place of arbitration shall be the capital city of the country in
                  which SKF
                  Affiliate has its principle place of business. The arbitration
                  proceedings
                  shall, unless otherwise agreed, be held in the English
                  languate.

              


      

       

      14.
        Applicable law

      
        	
                 

              	
                The
                  Agreement shall be governed by the substantial law of the country
                  in which
                  the purchasing SKF company has its principle place of
                  business.

              


      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    
      


      EXHIBIT
        1.9.1

      


      


      PRODUCTS

      


      Any
        steel
        balls approved by SKF according to SKF "D36 specifications for suppliers"
        in the
        diameter range from 3,969mm up to 60,325mm, as set below.

      


      Balls
        are
        spread in Ball
        Diameter Groups, as
        follow:

      ØFrom
        3,969mm to 8,731mm included hereinafter called "Small
        Balls"

      ØFrom 9mm
        up to 14,288mm included (Hub Balls excluded) hereinafter called
"Small/Medium
        Balls"

      ØHub
        Balls hereinafter called "Hub
        Balls"

      ØFrom
        14,5mm
        up to 20mm included hereinafter called "Medium/Large
        Balls"

      ØFrom
        20,5mm up to 60,325mm included hereinafter called "Large
        Balls''

      


      


       

      


       

      


        [Redacted*] 

       

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

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


       

      EXHIBIT
        1.9.2

       

      PRODUCTS
        (CONT'D)

      Any
        steel
        balls approved by SKF according to SKF "D36 specifications for suppliers"
        in the
        diameter range from 3,969mm up to 60,325mm, as set below.

      


      Balls
        are
        spread in Ball
        Diameter Groups, as
        follow:

      From
        3,969mm to 8.731mm included hereinafter called "Small
        Balls"

      From
        9mm up to 14.288mm included (Hub Balls excluded) hereinafter called
"Small/Medium
        Balls"

      Hub
        Balls hereinafter called "Hub
        Balls"

      From
        14,5 mm up to 20mm included hereinafter called "Medium/Large
        Balls"

      From
        20,5mm
        up to 60,325mm included hereinafter called "Large
        Balls"

      


        [Redacted*] 

       

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

      

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      


      EXHIBIT
        1.12

       

      SKF
        PRODUCTION UNITS

       

      SKF
        SABB
        Gothenburg (Sweden)

      SKF
        LSB
        Schweinfurt (Germany)

      SKF
        Steyr
        (Austria)

      SKF
        DGBB
        St Cyr sur Loire (France)

      SKF
        DGBB
        Bari (Italy)

      SKF
        Massa
        (Italy)

      SKF
        Vilar
        Perosa (Italy)

      SKF
        Nilaï
(Malaysia)

      SKF
        DGBB
        Bangalore (India)

      SKF
        Uitenhage (South Africa)

      SKF
        DGBB
        Fontenay Le Comte (France)

      SKF
        DGBB
        Cassino (Italy)

      SKF
        DGBB
        Jakarta (Indonesia)

      SKF
        DGBB
        Sopot (Bulgaria)

      SKF
        MSBU-CBU St Cyr sur Loire (France)

      SKF
        BTU
        St Cyr sur Loire (France)

      SKF
        HBU
        St Cyr sur Loire (France)

      SKF
        HBU
        Airasca (Italy)

      SKF
        HBU
        Tudela (Spain)

      SKF
        HBU
        Cajamar (Brazil)

      SKF
        HBU
        Changwon (Korea)

      SKF
        HBU
        Shanghai (China)

       

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      


      EXHIBIT
        1.13

      


      TECHNICAL
        SPECIFICATIONS OF THE PRODUCTS

      


      


      Technical
        specifications of the balls can be found in SKF "D36" Specifications for
        Suppliers that are kept in electronic format in SKF Databases to ensure their
        continuous update and validity. In case of any amendment, SKF shall inform
        its
        suppliers and submit the modifications in written.

       

       
        

      



      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        1.17.1

       

      NNE
        REFERENCE PRICES LIST 2006

       

      SKF
        PRODUCTION UNIT:  SKF SABB Bothenburg (Sweden)

       

      
        [Redacted*]

      

       

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



      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        EXHIBIT
          1.17.2

        
          NNE
            REFERENCE PRICES LIST 2006

           

          SKF
            PRODUCTION UNIT:  SKF LSB Schweinfurt
            (Germany)

           

          
            [Redacted*]

          

        

         

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

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        
          EXHIBIT
            1.17.3

          
            NNE
              REFERENCE PRICES LIST 2006

             

            SKF
              PRODUCTION UNIT:  SKF Steyr (Austria)

             

            
              [Redacted*]

            

          

        

         

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

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
              EXHIBIT
                1.17.4

              
                NNE
                  REFERENCE PRICES LIST 2006

                 

                SKF
                  PRODUCTION UNIT:  SKF DGBB St Cyr sur Loire
                  (France)

                 

                
                  [Redacted*]

                   

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

                  

                

              

            

          

        

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

         

        
          
            EXHIBIT
              1.17.5

            
              NNE
                REFERENCE PRICES LIST 2006

               

              SKF
                PRODUCTION UNIT:  SKF DGBB Bari (Italy)

               

              
                [Redacted*]

                 

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

                

              

            

          

        

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          
            EXHIBIT
              1.17.6

            
              NNE
                REFERENCE PRICES LIST 2006

               

              SKF
                PRODUCTION UNIT:  SKF Massa (Italy)

               

              
                [Redacted*]

                 

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

                

              

            

          

        

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        
          
             

            
              
                EXHIBIT
                  1.17.7

                
                  NNE
                    REFERENCE PRICES LIST 2006

                   

                  SKF
                    PRODUCTION UNIT:  SKF Villar Perosa
                    (Italy)

                   

                  
                    [Redacted*]

                     

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

                    

                  

                

              

            

             

          

           

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

          
             

            
              
                EXHIBIT
                  1.17.8

                
                  NNE
                    REFERENCE PRICES LIST 2006

                   

                  SKF
                    PRODUCTION UNIT:  SKF Nalaï
                    (Malaysia)

                   

                  
                    [Redacted*]

                     

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

                    

                  

                

              

            

             

            
              
                
                

              

              
                
                

                
                  

                

              

              
                
                

              

            

          

          
             

            
              
                EXHIBIT
                  1.17.9

                
                  NNE
                    REFERENCE PRICES LIST 2006

                   

                  SKF
                    PRODUCTION UNIT:  SKF DGBB Bangalore
                    (India)

                   

                  
                    [Redacted*]

                     

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

                    

                  

                

              

            

             

             

             

            
              
                
                

              

              
                
                

                
                  

                

              

              
                
                

              

            

            
               

              
                
                  EXHIBIT
                    1.17.10

                  
                    NNE
                      REFERENCE PRICES LIST 2006

                     

                    SKF
                      PRODUCTION UNIT:  SKF Uitenhage (South
                      Africa)

                     

                    
                      [Redacted*]

                       

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

                      

                    

                  

                

              

               

            

             

             

            
              
                
                

              

              
                
                

                
                  

                

              

              
                
                

              

            

             

            
               

              
                
                  EXHIBIT
                    1.17.11

                   

                  
                    NNE
                      REFERENCE PRICES LIST 2006

                     

                    SKF
                      PRODUCTION UNIT:  SKF DGBB Fontenay Le Comte
                      (France)

                     

                    
                      [Redacted*]

                       

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

                      

                    

                  

                

              

               

            

             

             

             

            
              
                
                

              

              
                
                

                
                  

                

              

              
                
                

              

            

             

            
               

              
                
                  EXHIBIT
                    1.17.12

                  
                    NNE
                      REFERENCE PRICES LIST 2006

                     

                    SKF
                      PRODUCTION UNIT:  DGBB Cassino ((Italy)

                     

                    
                      [Redacted*]

                       

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

                      

                    

                  

                

              

               

            

             

             

             

             

            
              
                
                

              

              
                
                

                
                  

                

              

              
                
                

              

            

             

            
              
                 

                
                  
                    EXHIBIT
                      1.17.13

                    
                      NNE
                        REFERENCE PRICES LIST 2006

                       

                      SKF
                        PRODUCTION UNIT:  SKF DGBB Jakarta
                        (Indonesia)

                       

                      
                        [Redacted*]

                         

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

                        

                      

                    

                  

                

                 

              

               

               

              
                
                   

                

                
                   

                  
                    

                  

                

                
                   

                

              

              
                
                  
                    EXHIBIT
                      1.17.14

                    
                      NNE
                        REFERENCE PRICES LIST 2006

                       

                      SKF
                        PRODUCTION UNIT: SKF DGBB Sopot (Bulgaria)

                       

                      
                        [Redacted*]

                         

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

                        

                      

                    

                  

                

                 

              

               

               

               

               

              
                
                  
                  

                

                
                  
                  

                  
                    

                  

                

                
                  
                  

                

              

               

              
                 

                
                  
                    EXHIBIT
                      1.17.15

                    
                      NNE
                        REFERENCE PRICES LIST 2006

                       

                      SKF
                        PRODUCTION UNIT:  SKF MSBU-CBU St Cyr-sur-Loire
                        (France)

                       

                      
                        [Redacted*]

                      

                    

                  

                

                 

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

                

              

               

               

               

               

               

              
                
                  
                  

                

                
                  
                  

                  
                    

                  

                

                
                  
                  

                

              

               

              
                 

                
                  
                    EXHIBIT
                      1.17.16

                    
                      NNE
                        REFERENCE PRICES LIST 2006

                       

                      SKF
                        PRODUCTION UNIT:  SKF BTU St Cyr-sur-Loire
                        (France)

                       

                      
                        [Redacted*]

                         

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

                        

                      

                    

                  

                

                 

              

               

               

              
                
                  
                  

                

                
                  
                  

                  
                    

                  

                

                
                  
                  

                

              

               

              
                 

                
                  
                    EXHIBIT
                      1.17.17

                    
                      NNE
                        REFERENCE PRICES LIST 2006

                       

                      SKF
                        PRODUCTION UNIT:  SKF HBU Airasca
                        (Italy)

                                                                        
                        SKF HBU St Cyr-sur-Loire (France)

                                                                        
                        SKF HBU Tudela (Spain)

                                                                        
                        SKF HBU Cajamar (Brazil)

                                                                         SKF
                        HBU Changwon (Korea)

                                                                        
                        SKF HBU Shanghai (China, PRC)

                       

                       

                      
                        [Redacted*]

                         

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

                        

                      

                    

                  

                

                 

              

               

               

              
                
                  
                  

                

                
                  
                  

                  
                    

                  

                

                
                  
                  

                

              

              
                 

                
                  
                    EXHIBIT
                      1.17.18

                    
                      NNE
                        REFERENCE PRICES LIST 2006

                       

                      for

                       

                      BALL
                        DIAMETER GROUP "Small/Medium Balls"

                       

                      
                        [Redacted*]

                         

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

                        

                      

                    

                  

                

                 

              

               

               

              
                
                  
                  

                

                
                  
                  

                  
                    

                  

                

                
                  
                  

                

              

               

              EXHIBIT
                2.7.1

               

              LIST
                OF PRODUCTS SUBCONTRACTED TO NN Balls and
                Roller sInc., USA (NNBR)

               

              [Redacted*]

               

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

              

               

               

               

               

               

              
                
                  
                  

                

                
                  
                  

                  
                    

                  

                

                
                  
                  

                

              

               

              
                EXHIBIT
                  2.7.2

                 

                LIST
                  OF PRODUCTS SUBCONTRACTED TO NN Balls and
                  Roller sInc., USA (NNBR)

                 

                [Redacted*]

                 

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

                

                 

              

               

               

            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

      EXHIBIT
        2.8

      


      


      NNE
        PRODUCTION TRANSFER PLAN 2007-2009 to Kysucké Nove Mesto
        (Slovakia)

      


      VOLUME
        MOVEMENT 2007-2008-2009

      


      The
        Parties have defined the Product range to be considered by this movement
        Volume
        transferred from NNE to its new Supply Unit in Slovakia is expressed in
        thousands of Euro. The Parties may amend product Content and Volume after
        an
        official approval of both Parties in writing.

      


       [Redacted*]

      


      PRICE
        DEVELOPMENT PLAN 2007-2008-2009

      
 [Redacted*]

       

      On
        January 1st,
        2007.
        SKF will
        be immediately granted  [Redacted*] percent (%) reduction on all
        Products planned to be manufactured by NNE Supply Unit in Slovakia.

      


      Additional  [Redacted*]
        percent (%) [i.e.  [Redacted*] minus  [Redacted*]] will be
        applied after approval of the PPAP according to the rules set
        below:

      


      
        	
                Ÿ

              	
                NNE
                  and SKF have agreed to specific product transfer plans, including
                  timing
                  for PPAP submissions, to the NNE Supply Units in Slovakia with
                  associated
                  price structures that provide additional savings to SKF on the
                  basis of
                  the volume movement agreed above.

              


      

      


      
        	
                Ÿ

              	
                If
                  NNE Supply Unit in Slovakia is not able to provide the PPAP submission
                  within sixty (60) calendar days of the agreed plan timetable for
                  any
                  reason other than Force Majeure, NNE is required to honor the price
                  development agreed beginning 6 months after the PPAP commitment
                  date, as
                  if the balls were being supplied from
                  Slovakia.

              


      

      


      
        	
                Ÿ

              	
                In
                  the event mat this clause must be enforced and NNE submits the
                  required
                  PPAP later than the sixty (60) calendar day period, SKF will have
                  a
                  maximum of six (6) months from the submission date of the PPAP
                  to grant
                  approval and begin to receive products from the new factory. If
                  this
                  approval is not granted within six (6) months of the PPAP submission,
                  the
                  price in effect will revert back to the appropriate price level
                  for the
                  original NNE Supply Unit.

              


      

       

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

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        2.9

      


      


      PRODUCTION
        TRANSFER PLAN 2007-2009 to NNE Subcontractor NNA

      


      VOLUME
        MOVEMENT 2007-2008-2009

      


      The
        Parties have defined the Product range to be considered by this movement
        Volume
        transferred from NNE to its Subcontractor is expressed in thousands of Euro.
        The
        Parties may amend Product Content and Volume after an official approval in
        writing.

      
      

      
         [Redacted*]

      

      


      PRICE
        DEVELOPMENT PLAN 2007-2008-2009

      


      
         [Redacted*]

      

      


       On
        January 1st, 2007, SKF will be immediately granted  [Redacted*]
        percent (%) reduction on all Products planned to be manufactured by NNA on
        behalf of NNE.

      


      Additional  [Redacted*]
        percent (%) [i.e.  [Redacted*] minus  [Redacted*]] will be
        applied after approval of the PPAP according to the rules set
        below:

      


      
        	
                Ÿ

              	
                NNE
                  and SKF have agreed to specific product transfer plans, including
                  timing
                  for PPAP submissions, to NNA (NNE Subcontractor in China) with
                  associated
                  price structures that provide additional savings to SKF on the
                  basis of
                  the volume movement agreed above.

              


      

      


      
        	
                Ÿ

              	
                If
                  NNA Supply Unit is not able to provide the PPAP submission within
                  60
                  calendar days of the agreed plan timetable for any reason other
                  than Force
                  Majeure, NNE is required to honor the price development agreed
                  beginning 6
                  months after the PPAP commitment date, as if the balls were being
                  supplied
                  from Slovakia

              


      

      


      
        	
                Ÿ

              	
                In
                  the event that this clause must be enforced and NNE submits the
                  required
                  PPAP later than the sixty (60) calendar day period, SKF will have
                  a
                  maximum of six (6) months from the submission date of the PPAP
                  to grant
                  approval and begin to receive products from the new factory. If
                  this
                  approval is not granted within six (6) months of the PPAP submission,
                  the
                  price in effect will revert back to the appropriate price level
                  for the
                  original NNE Supply Unit.

              


      

       

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

        



      
 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      EXHIBIT
        4.1.1

      


      


      PRICE
        DEVELOPMENT PLAN 2007-2008-2009 FOR PRODUCTS

      


      Manufactured
        by

      


      NNE
        Supply Units in Pinerolo (Italy), Kilkenny (Ireland), Eltmann (Germany) and
        its
        Subcontractor NNBR

      


      


      For
        all SKF Production Units except “SKF DGBB Sopot (Bulgaria)” and “SKF Nilai
        (Malaysia)”:

      


       
        [Redacted*] 

      


      
        	
                (1)

              	
                Price
                  change effective in 2007 shall be calculated over NNE Reference
                  Prices
                  2006, For Ball Diameter Group “Hub Balls”, NNE Reference Prices 2006 shall
                  refer to NNE Reference Prices 2006 set in Exhibit
                  1.17.17. For
                  all other Ball Diameter Groups, NNE Reference Prices 2006 shall
                  refer to
                  NNE Reference Prices 2006 set in Exhibits
                  1.17.1 to 1.17.7. Exhibits 1.17.9 to 1.17.13 and
                  Exhibits 1.17.15 to 1.17.16.

              


      

      


      
        	
                (2)

              	
                Each
                  year, price change compared to previous Contract year shall become
                  effective on the 1st
                  of
                  January of the Contract Year

              


      

      


      For
        SKF Production Unit “SKF DGBB Sopot (Bulgaria)”:

      


       
        [Redacted*] 

      


      
        	
                (1)

              	
                Price
                  change effective in 2007 shall be calculated over NNE Reference
                  Prices
                  2006 set in Exhibit
                  1.17.14.

              


      

       

       

    

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

      



    
      


      
        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

      


      


      EXHIBIT
        4.1.2

      


      PRICE
        DEVELOPMENT PLAN 2007-2008-2009 FOR PRODUCTS

      


      Manufactured
        by

      


      NNE
        Supply Units in Pinerolo (Italy), Kilkenny (Ireland), Eltmann (Germany) and
        its
        Subcontractor NNA

      


      


      For
        SKF Production Unit "SKF Nilai (Malaysia)":

      


       
        [Redacted*] 

      


      
        	
                (1)

              	
                Price
                  change effective in 2007 shall be calculated over NNE Reference
                  Prices
                  2006 set in Exhibit
                  1.17.8.

              


      

       

       

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

        




      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      


    

    
      EXHIBIT
        4.4.1

       

      RAW
        MATERIAL CLAUSE

      


      SKF
        and
        NNE agree that the prices of Products will be subject to periodic adjustment
        due
        to changes in the base material price from the raw material suppliers of
        NNE and
        its Subcontractors as well as due to changes in scrap surcharges. Due to
        the
        fact that NNE and its Subcontractors have unique commercial conditions with
        their suppliers, the material price adjustment will be calculated based on
        the
        origin of the products.

      


      
        	
                 

              	
                1.

              	
                For
                  products from NNE'sEuropean
                  facilities:

              


      

      


      
        	
                 

              	
                a.

              	
                Adjustment
                  for Change in Base Price: Pricing
                  of Products will be adjusted January 1st
                  of
                  2008 and 2009 in accordance with material cost changes by applying
                  the
                  Material Content Percentage, [Redacted*] to the Percentage Change
                  in
                  Material Cost. The base material cost effective January 1,2007
                  is 
                  [Redacted*]. NNE will provide to SKF its best estimate of the pending
                  change by October 15th
                  of
                  each year to facilitate SKF's planning process. Once material negotiations
                  are completed, NNE will provide to SKF the actual ball price adjustment
                  with the supporting calculation of the Percentage Change in Material
                  Cost
                  and the associated adjustment to Product prices as well as evidence
                  showing these material cost
                  changes.

              


      

      


      
        	
                 

              	
                b.

              	
                Adjustment
                  for Quarterly Change in Scrap Surcharges: Effective
                  January 1, 2007, a Base Scrap Surcharge of  [Redacted*] ton has been
                  established by calculating the average scrap surcharge experienced
                  by NNE
                  in 2006. For reference this was derived from the French E8 Index
                  during
                  the period from October 2005 through September 2006. On January
                  1, April
                  1, July 1 and October 1 of each year covered by the Global Supply
                  Agreement (GSA), NNE shall calculate the impact of change in the
                  actual
                  surcharge in place for the previous quarter compared to the Base
                  Scrap
                  Surcharge established at the beginning of the GSA. The result of
                  this
                  calculation will be shared with SKF Group Purchasing. On July
                  1st
                  and January 1st,
                  NNE will issue an invoice or credit note for the accumulated impact
                  of
                  scrap surcharges for the previous two quarters. The Scrap Surcharge
                  or
                  Credit shall be separate from Product invoices and issued from
                  NNE to each
                  SKF location with payment terms consistent with the terms in the
                  General
                  Supply Agreement. The calculation of the of the Scrap Surcharge
                  or Credit
                  will be based on the actual tons of balls invoiced during the previous
                  quarter divided by [redacted*] (material yield factor) multiplied
                  times
                  the change in the actual scrap surcharge for the previous quarter
                  compared
                  to the Base Scrap Surcharge.

              


      

       

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

        



       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      EXHIBIT
        4.4.2

      


      RAW
        MATERIAL CLAUSE (CONT'D)

      


      
        	
                 

              	
                2.

              	
                For
                  products from NNE's Subcontractor, NN Asia
                  (NNA):

              


      

      


      The
        current NN Asia raw material price development from current suppliers uses
        base
        price adjustments as often as quarterly with no surcharges. Material price
        adjustments for NN Asia Products will be handled in the following
        way:

      


      
        	
                 

              	
                a.

              	
                Annual
                  Product Price Adjustment: Pricing
                  of Products will be adjusted January 1st
                  of
                  2008 and 2009 in accordance with material cost changes by applying
                  the
                  Material Content Percentage,  [Redacted*],  to the Percentage
                  Change in Material Cost. The base material cost effective January
                  1,2007
                  is  [Redacted*] ton. NNB will provide to SKF its best estimate of the
                  pending change by October 15th
                  of
                  each year to facilitate SKF's planning process. Once material negotiations
                  are completed, NNE will provide to SKF the actual ball price adjustment
                  with the supporting calculation of the Percentage Change in Material
                  Cost
                  and the associated adjustment to Product prices as well as evidence
                  showing these material cost
                  changes.

              


      

      


      
        	
                 

              	
                b.

              	
                Credit
                  / Debit Note for quarterly Change in Material Cost: At
                  the end of Quarters 2, 3 and 4, NNA will calculate me impact of
                  material
                  price change, if applicable, by comparing the current material
                  price to
                  the price in effect on January 1st.
                  This calculation will be shared with SKF Group Purchasing. On July
                  1st
                  and January 1st,
                  NNA will issue an invoice or credit note for the accumulated impact
                  of
                  material price changes for the previous two quarters. The Material
                  Invoice
                  or Credit shall be separate from Product invoices and issued from
                  NNA to
                  each affected SKF location with payment terms consistent with the
                  terms in
                  the General Supply Agreement. The calculation of this Material
                  Surcharge
                  or Credit will be based on the actual tons of balls invoiced during
                  the
                  previous quarter divided by  [Redacted*] (material yield factor)
                  multiplied times the change in the actual material cost for the
                  quarter
                  compared to the material cost in effect when the Product price
                  was set in
                  January.

              


      

       

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

        



       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      EXHIBIT
        4.4.3

       

      RAW
        MATERIAL CLAUSE (CONT'D)

      


      
        	
                3.

              	
                For
                  products from NNE's Subcontractor, NN Ball and Roller
                  (NNBR):

              


      

      


      The
        current NNBR raw material price development from current suppliers uses base
        price adjustments as often as quarterly with no surcharges. Material price
        adjustments for NNBR Products will be handled in the following way:

      


      
        	
                 

              	
                a.

              	
                Annual
                  Product Price Adjustment: Pricing
                  of Products will be adjusted January 1st of 2008 and 2009 in accordance
                  with material cost changes by applying the Material Content
                  Percentage,  [Redacted*], to the Percentage Change in Material
                  Cost for sizes <33mm diameter made from wire rod. For sizes >33mm
                  coming from forged blanks, the adjustment will be based the Material
                  Content Percentage,  [Redacted*], to the Percentage Change in
                  Forged Blank Cost. The base material cost effective January 1,
                  2007 is
                  €1019/ton for wire rod. The base forged blank cost effective January
                  1,
                  2007 is  [Redacted*] /ton of which it is assumed the material cost
                  is  [Redacted*]/ton before yield loss. The material factor for forged
                  blanks is based on this material cost. NNE will provide to SKF
                  its best
                  estimate of the pending change by October 15th of each year to
                  facilitate
                  SKF's planning process. Once material negotiations are completed,
                  NNE will
                  provide to SKF the actual ball price adjustment with the supporting
                  calculation of the Percentage Change in Material Cost and the associated
                  adjustment to Product prices as well as evidence showing these
                  material
                  cost changes.

              


      

      


      
        	
                 

              	
                b.

              	
                Credit
                  / Debit Note for quarterly Change in Material Cost: At
                  the end of Quarters 2, 3 and 4, NNBR will calculate the impact
                  of material
                  price change, if applicable, by comparing the current material
                  price to
                  the price in effect on January 1st. This calculation will be separated
                  into two parts based on Products made from wire rod (ball sizes
<33mm)
                  and Products made from purchased forged blanks (ball sizes >33mm).
                  These calculations will be shared with SKF Group Purchasing. On
                  July 1st
                  and January 1st, NNBR will issue an invoice or credit note for
                  the
                  accumulated impact of material price changes for the previous two
                  quarters. The Material Invoice or Credit shall be separate from
                  Product
                  invoices and issued from NNBR to each affected SKF location with
                  payment
                  terms consistent with the terms in the General Supply Agreement.
                  For ball
                  sizes <33mm, the calculation of this Material Surcharge or Credit will
                  be based on the actual tons of balls invoiced during the previous
                  quarter
                  divided by [Redacted*] (material yield factor) multiplied times
                  the change
                  in the actual material cost per ton for the quarter compared to
                  the
                  material cost per ton in effect when the Product price was set
                  in January.
                  For ball sizes >33mm, the calculation of this Material Surcharge or
                  Credit will be based on the actual tons of balls invoiced during
                  the
                  previous quarter multiplied by the forged blank material factor 
                  [Redacted*] multiplied times the change in the actual forged blank
                  cost
                  per ton for the quarter compared to the forged blank cost in effect
                  when
                  the Product price was set in
                  January.

              


      

      


      4. As
        it is
        in the best interest of NNE and its Subcontractors to develop and approve
        additional raw material suppliers, the parties agree that the prices to be
        used
        in the above calculations will be based on a prorated price calculation using
        the ratio of raw material purchases by NNE or its Subcontractor during the
        period from sources approved by SKF.

      


      5. SKF
        and
        NNE agree to negotiate in good faith to adjust these material pass-through
        provisions if there is a change in the current structure of raw material
        price
        development for any of the three geographic regions.

       

       
        

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

        




      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


       

      EXHIBIT
        5.4

      


      PAYMENT
        TERMS PER SKF PRODUCTION UNIT

      


      


      
        	
                SKF
                  PRODUCTION UNIT 

              	
                Payment
                  terms 

                [Redacted*]

              	
                Comments 

              
	
                SKF
                  SABB Gothemburg (Sweden) 

              	
                 

              	
                 

              
	
                SKF
                  LSB Schweinfurt (Germany) 

              	
                 

              	
                 

              
	
                SKF
                  Steyr (Austria) 

              	
                 

              	
                 

              
	
                SKF
                  DGBB St Cyr-sur-Loire (France) 

              	
                 

              	
                 

              
	
                SKF
                  DGBBBari (Italy) 

              	
                 

              	
                 

              
	
                SKF
                  Massa (Italy) 

              	
                 

              	
                 

              
	
                SKF
                  VillarPerosa (Italy) 

              	
                 

              	
                 

              
	
                SKF
                  Nilaï (Malaysia) 

              	
                 

              	
                For
                  supplies from consignment stock 

              
	
                 

              	
                 

              	
                For
                  all other supplies 

              
	
                SKF
                  Bangalore (India) 

              	
                 

              	
                 

              
	
                SKF
                  Uitenhage (South Africa) 

              	
                 

              	
                 

              
	
                SKF
                  DGBB Fontenay Le Comte (France) 

              	
                 

              	
                 

              
	
                SKF
                  DGBB Cassino (Italy) 

              	
                 

              	
                 

              
	
                SKF
                  Jakarta (Indonesia) 

              	
                 

              	
                For
                  supplies from NNA 

              
	
                 

              	
                 

              	
                For
                  supplies from NNE 

              
	
                SKF
                  DGBB Sopot (Bulgaria) 

              	
                 

              	
                 

              
	
                SKF
                  MSBU-CBU St Cyr-sur-Loire (France) 

              	
                 

              	
                 

              
	
                SKF
                  BTU St Cyr-sur-Loire (France) 

              	
                 

              	
                 

              
	
                SKF
                  HBU Airasca (Italy) 

              	
                 

              	
                 

              
	
                SKF
                  HBY St Cyr-sur-Loire (France) 

              	
                 

              	
                 

              
	
                SKF
                  HBU Tudela (Spain) 

              	
                 

              	
                 

              
	
                SKF
                  HBU Cajamar (Brazil) 

              	
                 

              	
                 

              
	
                SKF
                  HBU Changwon (Korea) 

              	
                 

              	
                For
                  supplies from NNA 

              
	
                 

              	
                 

              	
                For
                  supplies from NNE 

              
	
                SKF
                  HBU Shanghai (PRC) 

              	
                 

              	
                For
                  supplies from NNA 

              
	
                 

              	
                 

              	
                For
                  supplies from NNE 

              


      

       

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

        




      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      


      EXHIBIT
        8.1 

      


      THE
        SKF QUALITY STANDARDS FOR SUPPLIERS