EXHIBIT 10.8
BORATES SUPPLY AGREEMENT
BETWEEN
OWENS CORNING
AND
ADVANCED GLASSFIBER YARNS LLC
DATED AS OF SEPTEMBER 30, 1998
BORATES SUPPLY AGREEMENT
This Borates Supply Agreement (the "Agreement") is executed on this 30th day of
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September, 1998, by and between OWENS CORNING, a Delaware corporation
("Seller"), and ADVANCED GLASSFIBER YARNS LLC, a Delaware limited liability
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company ("Buyer"), and shall be governed by the following clauses.
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WHEREAS, Seller has entered into an Agreement (the "Etibank Agreement")
dated January 1, 1998, by and between Etibank and Seller under which Etibank has
agreed to mine, process, sell and deliver * and * (collectively,
"Products") to Seller; and
WHEREAS, Buyer requires certain Borate Products for use in its own
production facilities.
NOW, THEREFORE, Seller and Buyer agree as follows:
1. SALE AND PURCHASE OF PRODUCTS.
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1.1. THE PRODUCTS. Subject to the terms and conditions herein set forth,
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Seller agrees to sell, and Buyer agrees to purchase and accept its
requirements for the Products. The Products and the specifications
for the Products (the "Product Specifications") are more fully
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described in Exhibit A attached hereto and made a part hereof. Buyer
agrees that it is purchasing the Products solely for its own use in
its own facilities and that it will not resell the Products to any
third party.
1.2. NATURE OF OBLIGATION. In the event that Seller is unable purchase or
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obtain sufficient quantities of one or more Products for Owens Corning
and Buyer for any reason including but not limited to a Force Majeure
Event (as defined in paragraph 11 of this Agreement), the
unavailability or insufficient availability of one or more Products,
termination of the Etibank Agreement (by either party thereto, with or
without cause), unsatisfactory quality of one or more Products,
failure to perform by any person or party other than Seller with
respect to the sale, delivery, shipping or storage of one or more
Products, then, subject to the next succeeding sentence, Seller shall
have no obligation under this Agreement. Notwithstanding the
foregoing, should Seller decide to sever its supply arrangement with
Etibank for any reason, Seller can terminate this Agreement at any
time, provided that it has given Buyer 180 days' written notice prior
to the termination of the arrangement with Etibank. In the event that
Etibank will not allow Seller to resell the Products to Buyer or if
Etibank establishes a marketing arrangement in North America
prohibiting Seller to resell the Products to Buyer,
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* Omitted pursuant to a request for confidential treatment. The omitted portions
have been separately filed with the Securities and Exchange Commission.
then Seller can terminate this Agreement. If Seller continues to
purchase the Products from any other supplier or Etibank, Seller
agrees to continue to supply the Products to Buyer under this
Agreement.
1.3. Buyer agrees that Buyer will not, except in case Seller cannot provide
sufficient amount of the Products exceeding the Maximum Volume and
with the express written consent of Seller, purchase or accept the
Products from or approach any third party or Etibank.
1.4. Buyer acknowledges and agrees that Seller, at its sole discretion, may
request Buyer to purchase the Products from ABC, Inc. ("ABC"),
Seller's sole distributor for the Products, provided ABC accepts the
pricing for the Products as provided in Section 4.
2. TERM; CONTRACT YEAR.
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2.1. TERM. This Agreement shall be effective as of the date of execution
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and, unless earlier terminated as provided herein, shall continue in
full force and effect for the period of seven years and three months
through and including December 31, 2005. This Agreement shall be
automatically renewed for a period equal to any renewal or extension
of the term of the Etibank Agreement unless terminated by either party
upon 90 days' prior written notice. The initial term, together with
all renewal periods thereof, is referred to hereinafter as the "Term".
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2.2. CONTRACT YEAR. For purposes of this Agreement, each of the following
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periods is a "Contract Year".
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2.2.1 FIRST CONTRACT YEAR. The first Contract Year shall be the
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period from the date hereof until December 31, 1998; and
2.2.2 SUBSEQUENT CONTRACT YEARS. Subsequent Contract Years shall be
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each successive twelve month period beginning January 1 and
ending December 31 during the Term of the Agreement.
3. ESTIMATES; RELEASES; DELIVERY.
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3.1. BUYER'S CONTRACT YEAR ESTIMATES. Within 30 days of the execution of
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this Agreement and, on or before September 30 of each Contract Year
thereafter during the Term of this Agreement, Buyer shall provide
Seller with Buyer's good-faith estimates of Buyer's requirements for
the Products, by type, and by calendar quarter, for the next
succeeding Contract Year (the "Contract Year Estimates"). Such
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Contract Year Estimates shall be subject to the conditions set forth
in
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paragraph 1.2 of this Agreement. The aggregate quantity of the
Products set forth in the Contract Year Estimates shall be the maximum
quantities of the Products that Seller is obligated to sell and
deliver to Buyer during the relevant Contract Year and shall be the
minimum quantities of Products that Buyer is obligated to purchase
during the relevant Contract Year. In addition, Seller is not required
to sell and deliver to Buyer more than ten percent (10%) of the
Contract Year Estimates in any given month.
3.2. MAXIMUM VOLUME. Buyer agrees to purchase and Seller agrees to sell a
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maximum quantity of 9,289 tons of * and 7,253 tons of *
("Maximum Volume"). This maximum volume represents the average usage
by Seller of * for the past three years. Buyer can elect to
increase quantities of * and reduce equal quantities of
* subject to availability. Seller agrees to supply Buyer on a
basis of first available quantity. For any quantity exceeding Maximum
Volume, Seller will supply Buyer only after Seller's own needs are
satisfied.
3.3. SELLER'S ASSURANCES. If for any reason Seller believes it will be
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unable to deliver all or any portion of Buyer's Contract Year
Estimates or Refined Estimates, Seller shall immediately notify Buyer
within ten (10) days of the date of receipt of Buyer's respective
estimates. Such notification shall not relieve Seller of any of its
obligations under this Agreement.
3.4. ORDERS FOR THE PRODUCTS/SHIPMENT. Orders for the Products shall be
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made, at Buyer's discretion, by Buyer issuing signed purchase orders
to Seller. The orders shall be submitted by authorized personnel of
Buyer no later than 30 days' prior to the desired date of delivery and
shall set forth the following: a statement identifying the order with
this Agreement; the number by which the order shall be identified; the
quantity of the Products to be delivered; the date of delivery; and
invoicing instructions. Subject to the volume limitations set forth in
paragraphs 3.1, 3.2 and 3.3 there shall be no limitation on the number
of orders issued hereunder. In the event Buyer places an order which
would exceed its Contract Year Estimate or if Buyer requires a change
in the quantity of more than 10%, type or delivery date of Products to
meet customer requirements, Seller may, but is not obligated to, fill
such order or make such changes. For these purposes, Seller shall
notify Buyer in writing whether it will be able to fill any order
which exceeds Buyer's Contract Year Estimate or which requires a
change in the quantity, type or delivery date of Products within the
10 days following its receipt of such an order.
3.5. DELIVERY. All Products will be sold to Buyer FOB Kings Creek, South
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Carolina.
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4. PRICE FOR THE PRODUCTS.
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4.1. The price for the Products sold will equal Seller's cost to purchase,
transport, process and terminal the sold Products (the "Cost")
including a fixed administrative charge of $150,000 to be paid pro-
rata with Product deliveries. If Buyer purchases less than 50% of the
Maximum Volume, the administrative charge will be reduced by 50%.
Prices shall be in United States Dollars. Exhibit B provides a list of
the typical cost items covered under the Cost
4.2. Buyer acknowledges and agrees that Seller will not provide Buyer a
copy of the Etibank Agreement. Seller hereby agrees to provide Buyer
with sufficient proof of the Cost and purchased quantity of the
Products.
5. TITLE AND RISK OF LOSS.
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The Products sold pursuant to this Agreement shall be delivered to Buyer as
provided in paragraph 4, and title and risk of loss shall pass to Buyer at the
time the Products leave Seller's processor's facility in Kings Creek, South
Carolina.
6. TERMS OF PAYMENT.
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Seller shall invoice Buyer with each delivery of the Products hereunder. Payment
of each invoice shall be made by Buyer within 15 days from the date of Seller's
invoice. Seller shall charge interest equal to the "base rate" of Citibank N.A.
as announced from time to time plus 2.0% per annum beginning on the 16th day
after the invoice date if not then paid in full. Remittance of interest under
this section shall be made in full without any reduction for any withholding or
other taxes. If withholding taxes or other taxes are applicable as prescribed
under laws of the payor country, Buyer shall remit the withholding taxes or
other taxes to the proper governmental agencies in such country on a timely
basis and supply Seller with a withholding tax receipt or other evidence of
payment as soon as legally possible.
7. TAXES, EXCISES AND OTHER CHARGES.
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Except for such taxes which Seller is required by law to collect from Buyer,
each party shall be responsible for payment of such taxes as such party is
required to pay under applicable law, including local, state, federal or foreign
law, and which are based upon or measured by the production, sale,
profitability, transportation, delivery or use of the Products sold and
delivered hereunder. Seller shall show VAT taxes, if applicable, separately on
its invoice.
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8. CHANGES, MODIFICATIONS OR SUBSTITUTIONS.
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Buyer understands and acknowledges that, although there is no obligation to do
so, Etibank, from time to time, to improve the efficiency in the manufacture or
use of the Products, may make changes to, modify or make improvements to the
Products, or substitute newly designed products for the Products. If during the
Term of this Agreement Seller shall propose to make changes, modifications or
improvements to the Products or shall substitute newly designed products for any
of the Products, Seller shall advise Buyer that the change, improvement,
modification or substitution is contemplated. As soon as practicable thereafter,
Seller shall provide Buyer samples of the proposed changed, modified, improved
or substitute product in sufficient laboratory test quantity to enable Buyer to
test and qualify such product in Buyer's manufacturing process. If Etibank
commences commercial manufacture of the changed, modified, improved or
substitute product and the product is qualified by Buyer, the product shall
become a Product and the specifications shall become Product Specifications
hereunder.
9. SELLER'S DISCLAIMER OF WARRANTY.
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BUYER ACKNOWLEDGES THAT ANY SALES MADE TO BUYER HEREUNDER ARE ON AN
ACCOMMODATION BASIS AND SELLER MAKES NO OTHER REPRESENTATION OR
WARRANTY OF ANY KIND WITH RESPECT TO THE PRODUCTS DELIVERED HEREUNDER,
WHETHER EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR USE OR PURPOSE, EVEN IF
DISCLOSED TO SELLER, AND SELLER HEREBY DISCLAIMS ANY SUCH OTHER
REPRESENTATION OR WARRANTY.
10. LIMITED WARRANTY.
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Seller warrants that the Products sold to Buyer shall be owned by Seller and
shall be free and clear of all liens and encumbrances, and that Seller shall
have complied with all applicable laws, regulations, ordinances and codes
concerning the Products. However, Seller does not warrant that the Products, in
fact, are of a type and quality desired or requested by Buyer, and Buyer's sole
and exclusive remedy for defects in the Products shall be to request that Seller
pursue a claim against Etibank or such other source, shipper or handler of the
Products as may have caused any such defects, at Buyer's own expense.
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11. FORCE MAJEURE.
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Neither party shall be liable to the other for delay or failure to perform in
whole or in part, by reason of contingencies or events which: (i) are beyond the
reasonable control of the party whose performance is affected, (ii) are
unforeseeable, and (iii) could not have been reasonably prevented, whether
herein specifically enumerated or not (a "Force Majeure Event"). These
contingencies include, among others, act of God, act of war, revolution, riot,
acts of public enemies, fire, explosion, breakdown of plant, strike, lockout,
labor dispute, casualty or accident, earthquake, flood, cyclone, tornado,
hurricane or other windstorm, or by reason of any law, order, proclamation,
regulation, ordinance, demand, requisition or requirement or any other act of
any governmental authority, foreign or domestic, local, state or federal
(provided that the Force Majeure Event does not arise due to or is connected in
any way with a violation by party hereto of any law, order, proclamation,
regulation, ordinance, demand, requisition or requirement of any governmental
authority) except that contingencies shall not include a downturn in Buyer's
business or general economic downturn. A party so affected by a Force Majeure
Event shall: (i) promptly give written notice to the other party whenever such
contingency or other act becomes reasonably foreseeable (including an estimate
of the expected duration of the Force Majeure Event and its probable impact on
the performance of such party's obligations hereunder); (ii) exercise all
reasonable efforts to continue to perform its obligations hereunder; (iii) use
its commercially reasonable best efforts to overcome or mitigate the effects of
the contingency as promptly as possible and (iv) promptly give written notice to
the other party of the cessation of such contingency. Neither party, however,
shall be required to resolve a strike, lockout or other labor problem in a
manner which it alone does not deem proper and advisable. In no event shall any
Force Majeure Event excuse party's failure to pay when due any monetary
obligation hereunder. In the case of any Force Majeure Event relied on by
Seller, Seller agrees that it shall treat Buyer no less favorably than the most
favorably treated Affiliate or customer of Seller in dealing with or adjusting
to the consequences of such Force Majeure Event and in relation to the
allocation of any Products, the production or availability of which may have
been interrupted or diminished.
Deliveries of the Product omitted due to any Force Majeure Event affecting
Seller or Buyer shall, without liability, reduce by an equivalent quantity the
quantity of Products to be sold and delivered during the period in which the
Force Majeure Event occurred. To determine the quantity of Products that would
have been sold, the parties shall assume that Buyer's most recent Refined
Estimates would have been purchased on a ratable basis.
12. DEFAULT.
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Except as otherwise specifically provided in this Agreement, if either party
fails to perform any of the terms of this Agreement, (a) the other party may
defer its performance under this Agreement until the default is cured by the
defaulting party, or (b) at its option, the party may treat such default as a
breach of the entire Agreement and, if such default is not cured within 30 days
after the giving of notice thereof to the defaulting party (or, in the case of
default in payment of monies, within 10 business days), may immediately
terminate this Agreement upon
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notice to the defaulting party. This Agreement shall terminate automatically,
without necessity of notice, in the event Buyer or Seller makes an assignment
for the benefit of creditors generally, is adjudicated bankrupt or in the event
of the filing of any voluntary or involuntary petition in bankruptcy against
Buyer or Seller or the appointment of a receiver for Buyer or Seller or any
substantial part of their respective properties.
13. APPLICABLE LAW.
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This Agreement shall be governed by, and construed in accordance with, the laws
of the State of New York applicable to a contract executed and performed in such
State without giving effect to the conflicts of law principles thereof.
14. ENTIRE AGREEMENT.
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This Agreement sets forth the entire agreement and understanding of the parties
with respect to the subject matter hereof and supersedes all prior
understandings, negotiations, and dealings between the parties hereto with
respect to this subject matter. No agreement or understanding, oral or written,
in any way purporting to modify the terms hereof shall be binding on either
party hereto unless contained in a written document expressly referring to this
Agreement and duly executed by both parties. There are no representations or
warranties made by one party to the other except as expressly set forth in this
Agreement. In case of a conflict between any of the terms of any purchase order
of Buyer or any acknowledgment by Seller of the purchase order and any of the
terms set forth in this Agreement, the terms of this Agreement shall control. No
additional terms or conditions of sale other than those contained in this
Agreement shall be effective unless approved in writing by an authorized
representative of Seller and Buyer.
15. SUCCESSORS AND ASSIGNS.
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This Agreement shall be binding upon and shall inure to the benefit of both
parties and their respective successors and assigns. Except as otherwise
expressly provided herein, this Agreement shall not be assigned by either party
hereto without the express prior written consent of the other party, and any
attempted assignment, without such consents, shall be null and void.
Notwithstanding any nonassignment provisions contained in this Section 15,
Buyer, or any permitted assignee or transferee of Buyer, may assign or otherwise
transfer some or all of its rights and/or obligations hereunder (i) to any
entity or entities, or any assignee of such entity or entities, providing
financing for the transactions contemplated by this Agreement or to any entity
or entities providing to Buyer, Buyer's Affiliates, or to any such permitted
assignee of Buyer, financing relating to the Business (collectively, the
"Financing Sources"), (ii) to any Affiliate of
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Buyer, provided that (x) such Affiliate shall agree with Seller and its
permitted assignees or transferees, if any, in writing to assume the Buyer's
obligations hereunder and (y) any such assignment to an Affiliate of the Buyer
shall not relieve the Buyer from its obligations hereunder or (iii) to any
entity to which Buyer, or any assignee or transferee of Buyer, assigns, sells,
transfers or otherwise conveys (A) all or substantially all of the assets
constituting the Business (a "Complete Assignment") or (B) all or substantially
all of the assets constituting either the Aiken Facility, the Huntingdon
Facility or the South Hill Facility (a "Partial Assignment"), provided that such
acquiring entity agrees with and acknowledges in writing to Seller and its
permitted assignees or transferees, if any, that this Agreement shall be binding
upon and enforceable against such entity as though such acquiring entity were
Buyer and that such entity shall perform all of Buyer's obligations hereunder.
Notwithstanding any nonassignment provisions contained in this Section 15,
Seller, or any permitted assignee or transferee of Seller, may assign or
otherwise transfer some or all of its rights and/or obligations hereunder (i) to
any Affiliate of Seller, provided that (x) such Affiliate shall agree with Buyer
and its permitted assignees or transferees, if any, in writing to assume the
Seller's obligations hereunder and (y) any such assignment to an Affiliate of
the Seller shall not relieve the Seller from its obligations hereunder or (ii)
to any entity to which Seller, or any assignee or transferee of Buyer, assigns,
sells, transfers or otherwise conveys any portion of its business which owns,
licenses, or uses Business Patents or Business Know How (as each is defined in
the Patent and Know How License Agreement), provided that such acquiring entity
agrees with and acknowledges in writing to Buyer and its permitted assignees or
transferees, if any, that this Agreement shall be binding upon and enforceable
against such entity as though such acquiring entity were Seller and that such
entity shall perform all of Seller's obligations hereunder. To the extent that
assignment and/or transfer of any of the rights, privileges, and/or obligations
is permitted, this Agreement shall be binding on, and except as otherwise
expressly provided, shall inure to the benefit of, the legal successors,
assigns, or representatives of the parties.
16. NOTICES.
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All communications provided for hereunder shall be in writing and shall be
deemed to be given when delivered in person or by private courier with receipt,
when telefaxed and received, or three (3) days after being deposited in the
United States mail, first-class, registered or certified, return receipt
requested, with postage paid and,
If to Buyer: Advanced Glassfiber Yarns LLC
2556 Wagener Road
Aiken, South Carolina 29801
Fax: 803-643-1526
Attention: General Manager
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With a copy to: AGY Holdings, Inc.
c/o Glass Holdings Corp.
3802 Robert Porcher Way
Greensboro, North Carolina 27410
Fax: 336-545-7715
Attention: President
And to: Jefferson Holdings, Inc.
One Owens Corning Parkway
Toledo, Ohio 43659
Fax: 419-248-8445
Attention: Corporate Secretary
If to OC: Owens Corning World Headquarters
One Owens Corning Parkway
Toledo, Ohio 43659
Fax: 419-248-7230
Attention: VP Sourcing: Dick Hottinger
With a copy to: Owens Corning World Headquarters
One Owens Corning Parkway
Toledo, Ohio 43659
Fax: 419-248-1723
Attention: Law Department
or to such other address as any such party shall designate by written
notice to the other parties hereto.
17. MISCELLANEOUS.
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17.1. PARAGRAPH HEADINGS; CONSTRUCTION. The paragraph headings contained
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in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.
This Agreement is a product of negotiation and shall not be construed
against either party as the drafter.
17.2. SEVERABILITY. If any provision of this Agreement shall be declared
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by any court of competent jurisdiction to be illegal, void or
unenforceable, all other provisions of this Agreement shall not be
affected and shall remain in full force and effect.
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17.3. AMENDMENT; WAIVER. This Agreement may be amended, supplemented or
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otherwise modified only by a written instrument executed by the
parties hereto. No waiver by either party of any of the provisions
hereof shall be effective unless explicitly set forth in writing and
executed by the party so waiving. The waiver by any party hereto of
a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach.
17.4. SURVIVAL. The provisions of paragraphs 4, 5, 6, 7 and 9 through 17
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of this Agreement shall survive any termination or expiration
hereof.
17.5. INDEPENDENT CONTRACTORS. The parties are independent contractors,
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and this Agreement does not create a partnership or agency
relationship between the parties, or any other relationship between
the parties except as expressly set forth herein. Neither party has
any right or authority to assume or incur any liability or
obligation on behalf of the other party except to such extent as may
expressly be set forth herein.
17.6. NO THIRD PARTY BENEFICIARIES. This Agreement is entered into solely
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for the benefit of the parties hereto and no person other than the
parties hereto, or their permitted successors and assigns, shall be
entitled to exercise any right or enforce any obligation thereunder.
17.7. CONFIDENTIALITY. Each party shall maintain in confidence the terms
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of this Agreement except as may be otherwise required by law.
17.8. LANGUAGE. This Agreement is to be executed in the English language.
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17.9. PUBLICITY. Each of Buyer and Seller agrees not to use the name or
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trademarks or logos of the other party or its divisions or
affiliates in any publicity, packaging, marketing materials or other
promotional activities or materials without the prior written
consent of the other party.
17.10. CONSENT TO JURISDICTION. Each of the parties hereto, irrevocably
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submits to the exclusive jurisdiction of the United States District
Court for the Southern District of New York located in the borough
of Manhattan in the City of New York, or if such court does not have
jurisdiction, the Supreme Court of the State of New York, New York
County, for the purposes of any suit, action or other proceeding
arising out of this Agreement or any transaction contemplated
hereby. Each of the parties hereto, further agrees that service of
any process, summons, notice or document by U.S. registered mail to
such party's respective address set forth in paragraph 16 shall be
effective service of process for any action, suit or proceeding in
New York with respect to any matters to which it has submitted to
jurisdiction as set forth above in the immediately preceding
sentence. Each of the parties hereto, irrevocably and
unconditionally waives any objections to the laying
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of venue of any action, suit or proceeding arising out of this
Agreement or the transactions contemplated hereby in (a) the United
States District Court for the Southern District of New York or (b)
the Supreme Court of the State of New York, New York County, and
hereby further irrevocably and unconditionally waives and agrees not
to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an
inconvenient forum.
17.11. COUNTERPARTS. This Agreement may be executed in counterparts, each
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of which shall be deemed to be an original and all of which together
shall be deemed to be one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by persons authorized to bind their respective companies as of the
date first above written.
OWENS CORNING
By: /s/ Charles E. Dana
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Name: Charles E. Dana
Title: Vice President
ADVANCED GLASSFIBER YARNS LLC
By: /s/ Robert B. Fisher
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Name: Robert B. Fisher
Title: General Manager
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