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RAVENS METAL PRODUCTS, INC.
FORM 8-K CURRENT REPORT
AUGUST 21, 1995
EXHIBIT (99)(A)
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SUPPLY AGREEMENT
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THIS SUPPLY AGREEMENT is entered into effective the ______ day of
_________________, 1995, between WIRT METAL PRODUCTS, INC., an Ohio corporation
of 861 East Tallmadge Avenue, Akron, Ohio 44310 (Wirt) and RAVENS METAL
PRODUCTS, INC., a Delaware corporation duly licensed to do business in Ohio,
with offices at 861 East Tallmadge Avenue, Akron, Ohio 44310 (Ravens).
R E C I T A L S
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A. Wirt is in the business of producing and selling aluminum
extrusions.
B. Ravens is in the business of designing and manufacturing aluminum
truck and utility trailers (Trailers) and uses aluminum extrusions in the
manufacture of its Trailers.
C. Wirt desires Ravens to sign a guaranty of certain financing from
the State of Ohio (Guaranty) to facilitate the relocation of Wirt's
manufacturing facility to Stark County, Ohio and to produce and supply aluminum
extrusions to Ravens to Ravens' specifications and Ravens desires to sign such
Guaranty to facilitate such financing and to have Wirt supply up to 60% of
Ravens' requirements for aluminum extrusions to manufacture its Trailers all in
accordance with the terms and conditions hereinafter set forth.
NOW, THEREFORE, for and in consideration of the mutual promises,
agreements, and covenants set forth below, the parties agree as follows:
1.0 INCORPORATION OF RECITALS. The recitals contained above are
incorporated herein by this reference.
2.0 PRODUCTS TO BE PURCHASED AND SOLD. The products to be purchased
and sold pursuant to this Agreement shall be aluminum extrusions manufactured
to Ravens' specifications (Product). Ravens' specifications are set forth in
EXHIBIT A, attached hereto and incorporated herein by this reference
(Specifications).
3.0 QUANTITY.
A. TOTAL VOLUME. Ravens shall have the right to purchase from Wirt
up to 60% of Ravens' requirements of Product to manufacture its
Trailers. Ravens shall endeavor to distribute its Product
purchases equally throughout a 12 month period. In no event,
shall Wirt be required to produce in excess of 1,500,000 pounds
per month for Ravens.
B. MINIMUM ORDER QUANTITIES. All orders for Product shall be in the
following minimum quantities and as illustrated in Figure 1-1.
The Product is manufactured from one of three press sizes. The
sizes are referred to as the (i) 3000 ton press, (ii) 2200 ton
press, and (iii) 1400 ton press. All orders from the 3000 ton
press shall have a minimum of 2000 lbs. per line item. All orders
from the 2200 ton press shall have a minimum of 1500 lbs. per line
item. All orders from the 1400 ton press shall have a minimum of
1000 lbs. per line item. Wirt shall advise Ravens of what press
produces each shape.
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FIGURE 1-1: MINIMUM ORDER QUANTITIES
PRESS (TONS) POUNDS PER LINE ITEM
3000 2000
2200 1500
1400 1000
4.0 PRICE. The purchase price (Purchase Price) for Product shall be
determined by either a formula price or a guaranteed price. Under either
pricing method, Wirt will be competitive with other qualified producers of
extrusions of like type and quality and Wirt will match such other qualified
producers' bona fide offers as to price.
A. FORMULA PRICE. Formula pricing shall be the sum of (i) the prior
month's Midwest transaction price for P-1020 primary aluminum as
published in METALS WEEK for the month prior to any order, (ii) a
$.10 per pound billet upcharge, until such time as Wirt's new cast
house is built and then at such lower per pound billet upcharge as
agreed upon by the parties, (iii) a $.335 per pound extrusion
upcharge (subject to SECTION 4.0(C)), (iv) if decking is involved,
a $.10 per pound charge, and (v) any additional charges incurred
by Wirt as a result of specifications and changes not reflected in
this Agreement (Formula Price).
B. GUARANTEED PRICE. In order for Ravens to have the opportunity to
sell Trailers forward into the future at fixed prices so as not to
be subject to the volatility of the aluminum market, Ravens shall
have the option to lock in a Purchase Price for a given tonnage
for a given period of time. Upon Ravens' written request, Wirt
shall provide Ravens a guaranteed price for billet with the
applicable upcharges as set forth in SECTION 4(A) (Guaranteed
Price). Ravens warrants and agrees that Guaranteed Price orders
are not cancelable, their scheduled months of delivery cannot be
changed, and their quantity is not subject to increase or
reduction.
C. ESCALATION OF EXTRUSION UPCHARGE. SECTION 4.0(A)(III) above shall
be subject to price increases on Wirt's demonstration to Ravens
increased costs to Wirt due to extraordinary causes other than as
set forth SECTION 17.0.
In either pricing scenario in subsections 4.0(A) or 4.0(B), and other
than the decking, all of Ravens' pricing is the same whether the shape is solid
or hollow. Additionally, the pricing is the same for large order quantity and
small order quantity items. Any taxes that may be imposed upon the sale of
Product, whether Federal, state, or local government, shall be paid by Ravens
in addition to the Purchase Price.
5.0 TERM. This Agreement shall have a term of seven years from the
date hereof.
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6.0 FORECASTING ORDERS. Ravens shall provide Wirt a three month
rolling forecast of estimated Product requirements from Wirt (Forecast). The
Forecast shall be in gross pounds. By the end of the first week of the month
prior to the month of shipment, Ravens shall submit written purchase orders to
Wirt for the month of shipment (Purchase Orders). At the same time, Ravens
shall revise the Forecast, with the month of shipment removed, the next
calendar month added to the Forecast and the other months revised as needed.
Wirt agrees to block out production time for Ravens requirements hereunder.
7.0 ORDER PROCESS. Ravens shall submit to Wirt, written Purchase
Orders for Ravens' Product requirements (Firm Order) as set forth in SECTION
6.0 above. Wirt shall issue Firm Order acknowledgements acknowledging the Firm
Order. Ravens shall use its best efforts to provide Wirt as much lead time as
possible between the Purchase Order date and the delivery date, provided that,
Wirt shall be entitled to a minimum of three to four weeks between the Purchase
Order date and the requested delivery date.
8.0 UNSCHEDULED ORDERS. Orders that are non-scheduled and require
Wirt to work overtime to insure the Product will be delivered to Ravens'
location when needed, may be subject to an upcharge to be negotiated on a
case-by-case basis. Wirt shall use its best efforts to satisfy non-scheduled
orders, but in no event shall Wirt be in default if it is unable to satisfy
Ravens time requirements.
9.0 PAYMENT AND DELIVERY TERMS.
A. PAYMENT. The Purchase Price for Product shall be paid within 45
days of shipment of such Product to Ravens.
B. DELIVERY. Delivery of Product shall be F.O.B. at Wirt's
manufacturing facility and delivery shall be deemed complete when
such Product is so delivered.
C. SHIPPING TOLERANCES. All orders shall be deemed completed
provided they fall within the following shipping tolerances per
line item:
LINE ITEM # TOLERANCE
0 - 1000 -20%/+20%
1001 - 4999 -15%/+15%
5000 and over -10%/10%
D. PACKING REQUIREMENTS. Product will be packed in bare bundles for
all shipments. Requests for special packing requirements may be
subject to additional charges as determined by Wirt.
E. ACCEPTANCE/REJECTION OF PRODUCT. Ravens shall have ten working
days to inspect and/or reject Product for visible defects or
damage. On rejection, Wirt shall replace said Product at its sole
cost and expense including freight costs.
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10.0 EXTRUSION DIES. Wirt shall be responsible at its sole cost and
expense for maintaining and, if necessary, replacing Ravens' extrusion dies
which are in Wirt's possession or come into Wirt's possession in a method that
is customary and standard with the industry including such dies, if any, which
are damaged or worn out in Wirt's manufacturing process. The expense and cost
of any initial order for any new extrusion dies required by Ravens, will be
Ravens'. In the event Ravens does not purchase a particular Product requiring
a particular extrusion for 24 consecutive months, Wirt shall have the right to
dispose of the die for such Product upon prior notice to Ravens. Ravens has
the right to request within ten days of Wirt advising Ravens of its intention
to dispose of a die, that the die be retained. In such event, Wirt shall
retain the die.
11.0 FABRICATION. From time to time, Ravens may require fabrication
services for its products. Ravens shall give Wirt the opportunity to bid on
any and all fabrication services which it requires and which are within Wirt's
capabilities. Ravens shall have no obligation to purchase fabrication services
from Wirt. Price and delivery terms for any such fabrication services shall be
consistent with usual and customary industry practices.
12.0 TOLLING. The parties anticipate that in the future Wirt will
have the capacity to accept Ravens' scrap from aluminum extrusions Ravens uses
in producing its Trailers and to rework the same for producing new extrusions
(Tolling). The parties agree that Wirt will do such Tolling for Ravens at such
price as the parties shall agree.
13.0 ASSIGNMENT AND BENEFIT. Neither party to this Agreement may
assign its rights under this Agreement without the prior written consent of the
other party. Subject to the foregoing, this Agreement shall be binding upon
and shall inure to the benefit of the parties hereto, their successors and
assigns.
14.0 LIMITATION OF LIABILITY.
A. WARRANTY. Wirt hereby warrants to Ravens that all Product
furnished hereunder shall conform to the physical properties set
forth in the Mechanical Property Limits Tables as set forth in the
Aluminum Association publication entitled ALUMINUM STANDARDS AND
DATA TENTH EDITION 1990. Further Wirt warrants the Product shall
be free of defects in material and/or workmanship for a period of
four years from the date of receipt of said Product. Defective
product in amounts of less than 500 lbs. can be aggregated and
returned to Wirt on skids and Wirt shall either, at Ravens'
option, issue a credit to Ravens for such returned product or
shall replace the same.
IN CONSIDERATION OF THE EXPRESS WARRANTY SET FORTH ABOVE, RAVENS
UNDERSTANDS AND AGREES THAT ALL OTHER WARRANTIES EXPRESS OR IMPLIED ARISING
UNDER LAW, EQUITY OR CUSTOM OF TRADE INCLUDING, WITHOUT LIMITATION, THE
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR PURPOSE ARE EXCLUDED FROM ALL
FIRM ORDERS PROCESSED HEREUNDER.
B. LIMITATION OF LIABILITY. Except for liability to third parties,
if any, under the provisions of SECTION 16.0, Wirt's sole
liability to Ravens and Ravens' sole and exclusive remedy for
Wirt's breach of the express warranty set forth above shall be the
replacement at Wirt's expense of such Product. In no event shall
Wirt be liable to Ravens, whether arising under contract, breach
of warranty, tort (including negligence), for any special,
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incidental or consequential loss or damage of any nature arising from
or related to Wirt's performance, non-performance or mal-performance
hereunder.
15.0 DEFAULT.
A. It shall be a default hereunder if Wirt shall:
1. materially breach any of its obligations under this Agreement,
which material breach is not cured within 30 days after
written notice thereof is sent by Ravens to Wirt, provided,
however, that if Wirt shall initiate a good faith diligent
effort within such 30 day period to cure the material breach
specified in the notice, but shall not be able to do so
because of a cause or causes beyond the control of Wirt, then
any such failure shall not be considered a default of this
Agreement by Wirt so long as Wirt shall continue in good faith
such diligent efforts to cure such default, and shall do so
within a reasonable period of time; provided, however, that
the parties understand that delays in delivery or
non-compliance with Specifications will be detrimental to
Ravens' business and accordingly recognize that any pattern or
practice of delivery delays and/or specification
non-compliance by Wirt will constitute a pattern or practice
of material breaches by Wirt of its obligations under this
Agreement; or
2. materially breach any of its obligations under this Agreement,
and such material breach is the second material breach within
any six month period.
Upon any default by Wirt, Ravens shall be entitled to remedies at law
or in equity, except as limited in this Agreement, including, but not limited
to, the right to terminate this Agreement upon ten days prior written notice to
Wirt. Upon such termination, all obligations under this Agreement, excluding
Wirt's obligations to deliver Product theretofore ordered by Ravens and Wirt's
obligations relating to Product theretofore sold by Wirt to Ravens, and Ravens
payment obligations for Product delivered or to be delivered under the Orders,
shall terminate, and Ravens shall be entitled to remedies at law or in equity,
except as limited in this Agreement.
B. It shall be a default hereunder if Ravens shall:
1. materially breach any of its obligations under this Agreement,
which material breach is not remedied within 30 days after
written notice thereof is sent by Wirt to Ravens provided,
however, that if Ravens shall initiate a good faith diligent
effort within such 30 day period to cure the material breach
specified in the notice, but shall not be able to do so
because of a cause or causes beyond the control of Ravens,
then any such failure shall not be considered a default of
this Agreement by Ravens so long as Ravens shall continue in
good faith such diligent efforts to cure such default, and
shall do so within a reasonable period of time; or
2. materially breach any of its obligations under this Agreement,
and such material breach is the second material breach within
any six-month period.
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Upon any default by Ravens, Wirt shall be entitled to any remedies
available in equity or at law, except as limited in this Agreement, including,
but not limited to the right to terminate this Agreement upon ten days prior
written notice to Ravens. Upon such termination, all obligations under this
Agreement, excluding Wirt's obligations to deliver Product theretofore ordered
by Ravens and Wirt's obligations relating to Product theretofore sold by Wirt
to Ravens, and Ravens' payment obligations for Product delivered or to be
delivered under the Orders, shall terminate, and Wirt shall be entitled to
remedies at law or in equity, except as limited in this Agreement.
16.0 INSURANCE. Wirt will provide at its sole cost and expense,
general and products liability insurance. Such insurance will include the
following terms and conditions: (a) Ravens as additional insured, (b)
contractual liability coverage, (c) 30 day notice of cancellation or material
change, and (d) limits of $3 million per occurrence.
Any deductible applicable to claims is the sole expense of Wirt. Wirt
will not make any modifications to the provisions set forth in (a) through (d)
above without the written consent of Ravens, which consent shall not be
unreasonably withheld.
17.0 FORCE MAJEURE. Wirt shall not be responsible or liable to Ravens
for delay or damages associated therewith for delay arising from or directly
related to strike, fire, floods, other acts of God, reasonable inability to
obtain labor or materials, war or civil insurrection or any other similar act
or occurrence whether related or unrelated and beyond the reasonable control of
Wirt. In the event of any such delay, Wirt shall promptly notify Ravens of the
event and as soon as practicable, the resultant delay resulting therefrom.
In the event Wirt incurs cost increases due to the occurrence of any
such event, Wirt shall be entitled to recover the direct cost increases from
Ravens in the pricing of Product to be delivered hereunder.
18.0 NOTICES. Any notice or other communications required under this
Agreement shall be in writing (including telecopy communications), and shall be
sent by mail, telecopier or courier as follows:
(a) if to Wirt Metal Products, Inc., addressed to:
Wirt Metal Products, Inc.
861 East Tallmadge Avenue
Akron, Ohio 44310
Attention: Richard D. Pollock, President
Telephone: (216) 630-4545
Telecopier: (216) 630-4540
(b) if to Ravens Metal Products, Inc. addressed to:
Ravens Metal Products, Inc.
861 East Tallmadge Avenue
Akron, Ohio 44310
Attention: Lowell Morgan, President
Telephone: (216) 630-4528
Telecopier: (216) 630-4535
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Any party hereto shall be entitled to specify a different address by
giving written notice as aforesaid to the other party. All notices shall be
deemed to have been duly given or made when delivered by courier or three days
after being deposited in the mail, postage prepaid, or when telecopied, receipt
acknowledged.
19.0 MISCELLANEOUS. This Agreement supersedes all prior agreements
between the parties with respect to the subject matter hereof. Headings are
for convenience only and are not a part of this Agreement. Any failure by any
of the parties to comply with any of the obligations, agreements, or conditions
set forth in this Agreement may be waived by the other party, but any such
waiver shall not be deemed a waiver of any other obligations or conditions
contained in this Agreement. A corporate officer signing this document on
behalf of a corporate party warrants that he or she has full authority to sign
this document. This Agreement shall be construed and governed under the laws
and jurisdiction of Ohio. If a lawsuit is filed with respect to this
Agreement, the prevailing party shall be entitled to collect all reasonable
attorney's fees and costs. This Agreement may not be altered, amended, or
modified except by written instrument signed by all parties.
IN WITNESS WHEREOF, the parties have executed this agreement effective
the day and year first above-written.
WIRT METAL PRODUCTS, INC.
BY________________________________________
_________________ ITS ____________________
RAVENS METAL PRODUCTS, INC.
BY________________________________________
_________________ ITS ____________________
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[RAVENS LOGO]
EXHIBIT A RAVENS SPECIFICATIONS
Aluminum Extrusions supplied to Ravens will meet Mechanical Property Limits and
Chemical Composition Limits set forth in published "Aluminum Association
Standards and Data" for the specified alloy and temper.
Critical dimensional tolerances, including length of extrusions will be within
limits specified by Ravens for individual part numbers. Part numbers for which
dimensional tolerances are not specified by Ravens will be supplied within
Aluminum Association Standard Extrusion Tolerances.