EXHIBIT 10.8
BORATES SUPPLY AGREEMENT
BETWEEN
XXXXX 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 XXXXX 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
----------------------
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 Xxxxx 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
2
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.
--------------------------------
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.
---------------------------------------
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.
----------------
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.
----------------------
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
0000 Xxxxxxx Xxxx
Xxxxx, Xxxxx Xxxxxxxx 00000
Fax: 000-000-0000
Attention: General Manager
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With a copy to: AGY Holdings, Inc.
c/o Glass Holdings Corp.
0000 Xxxxxx Xxxxxxx Xxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Fax: 000-000-0000
Attention: President
And to: Jefferson Holdings, Inc.
Xxx Xxxxx Xxxxxxx Xxxxxxx
Xxxxxx, Xxxx 00000
Fax: 000-000-0000
Attention: Corporate Secretary
If to OC: Xxxxx Corning World Headquarters
Xxx Xxxxx Xxxxxxx Xxxxxxx
Xxxxxx, Xxxx 00000
Fax: 000-000-0000
Attention: VP Sourcing: Xxxx Xxxxxxxxx
With a copy to: Xxxxx Corning World Headquarters
Xxx Xxxxx Xxxxxxx Xxxxxxx
Xxxxxx, Xxxx 00000
Fax: 000-000-0000
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
--------------------------------
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
-----------------------
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.
XXXXX CORNING
By: /s/ Xxxxxxx X. Xxxx
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Name: Xxxxxxx X. Xxxx
Title: Vice President
ADVANCED GLASSFIBER YARNS LLC
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: General Manager
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EXHIBIT A
PRODUCTS AND PRODUCTS SPECIFICATIONS
See the list attached hereto.
CONFIDENTIAL TREATMENT REQUESTED [*]
EXHIBIT B
The Cost typically covers the following items:
Cost Elements
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Ore
Ocean freight
Agent fees
Marine insurance
Port charges
Dispatching Cost - Turkey
Dispatching Cost - United States
Stevedore
Temporary storage
Rail Frt. to Kings Creek
Rail Frt. to Aiken from Kings Creek
Inventory Carry Cost
Variable Items
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Each lot has a different cost
Cost varies by * content
Cost varies by moisture content
Cost varies by energy surcharges
Cost varies by over time at port
CONFIDENTIAL TREATMENT REQUESTED [*]
GLASS BATCH RAW MATERIAL
SPECIFICATION CHANGE RECOMMENDATIONS
PURCHASE ACCEPTANCE STANDARD BEING CHANGED. *
-
ACTIVE DOCUMENT DATE: 01/08/98
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MATERIAL NAME: *
-
THIS CHANGE WILL AFFECT THE FOLLOWING PLANTS:
Aiken
COMMENTS: The PAS has been revised for new lot.
Appendix A revised for * lot.
THE REVISED SPECIFICATION IS ATTACHED
------------------------- -------------------------
WRITTEN BY: X.X. Xxxxxxxx APPROVED BY: X. X. Xxxxxx
CONFIDENTIAL TREATMENT REQUESTED [*]
*
A. GUIDING PHILOSOPHY FOR MATERIAL PURCHASES
-----------------------------------------
Xxxxx Corning will enter into quality partnerships with key production
material suppliers. The relationship is a special long-term commitment
between Composites and its suppliers that will accomplish the following:
(1) Provide a product and/or service which meets our fitness-for-use
criteria.
(2) Provide continuing increased value to Xxxxx Corning.
(3) Commit Xxxxx Corning suppliers to use statistical process control
principles in their manufacturing processes.
Xxxxx Corning and our suppliers are committed to sharing information that
will aid in achieving continual improvements in the products and services
supplied and in the Xxxxx Corning processes in which they are used. This
should result in lower manufacturing costs, less variable products and
enhanced Xxxxx Corning customer satisfaction through manufacturing
stability.
B. FITNESS-FOR-USE CRITERIA
------------------------
This document specified the fitness-for-use criteria the material must
meet. Any shipment that does not conform to all these criteria shall not
be shipped to an Xxxxx Corning user-plant.
C. PRODUCT CHARACTERISTICS
-----------------------
There are six sections of product characteristics, C1-C6. Each section has
a specific fitness-for-use criteria. Sections C.2-C.6 are self-
explanatory. However, Section C.1, the Chemical Composition section, is
rather complex, so the following clarifications have been added:
The oxide/elements are divided into one of two categories, either * or
*. * are those which are known to require some particular attention
on the part of the supplier to insure the specification is met. The
attention may be tight control of mining or blending of mine ores or
extra attention to some process variable. * are those which are known
to generally stay within the specification and exhibit acceptable
consistency due to the nature of the deposit and/or the process. They
only require monitoring to show evidence that their conformance to the
specification continues. The difference between * and * is the amount
of attention paid by the supplier and the frequency of the testing
required by
CONFIDENTIAL TREATMENT REQUESTED [*]
Xxxxx Corning. However, Xxxxx Corning reserves the right to reject
material based on * or *.
Based on the supplier's production planning, the material has
calculable average values for all oxides/elements. The specification
is based on the supplier continuing to operate his process such that
these average values, or "Target Nominals" are maintained. For
selected key oxides/elements (those listed in Section C 6.1), the
upper and lower specification limits are defined by adding and
subtracting * the maximum acceptable variation from the "Target
Nominal" value. The other oxides/elements have a lower or upper
specification limit based on Xxxxx Corning's fitness-for-use criteria.
This specification does NOT require that a moving average of
individual shipment values equal the "Target Nominal". It is required
that every shipment be within the specification limits. It is a goal
that the variation of critical oxides/elements be reduced and that the
shipment values approach random variation around the "Target Nominal".
Additional explanations and requirements for the Chemical Composition
are contained in Section C.6, "TECHNICAL NOTES".
C.1 CHEMICAL COMPOSITION
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PERCENT BY WEIGHT
Oxide or Test
Element Minimum Maximum Frequency
------- ------- ------- ---------
* * * * *
* * * *
*
* * * * *
* * * *
* * * *
* * * *
* * * *
* * * *
* * * *
* * * *
* * * *
* * * *
* * * *
* * * *
CONFIDENTIAL TREATMENT REQUESTED [*]
C.2 PHYSICAL COMPOSITION
--------------------
% of Original
Sieve Weight Retained Test Frequency
----- --------------- --------------
* * *
* * *
* * *
NOTE: Physical analysis must be performed according to * procedures using *
sieves.
C.3 CONTAMINATION
-------------
The finished product may not contain any contaminants that are deleterious
to the Xxxxx Corning processes. Contamination, both organic and inorganic,
including but not limited to * shall be avoided throughout the storage,
processing, and rail or truck loading of the shipment.
The ore deposit may contain trace amounts of * . As part of the
qualification procedure. Xxxxx Corning has measured the level of these
contaminants * and determined it to be acceptable. Hereafter, the supplier
is responsible for measuring the level of * contamination as new ore
deposits are opened to insure the level has not changed.
C.4 LABORATORY CERTIFICATION
------------------------
The chemical laboratory must be certified by Xxxxx Corning per procedure *.
Any change in analytical procedure requires re-certification. If the
supplier does not employ a certified chemical laboratory, then he must
submit a schedule by which his chemical laboratory will achieve
certification. This schedule must be mutually agreed upon by the supplier
and Xxxxx Corning.
C.5 SUPPLY OF TEST DATA
-------------------
The supplier shall provide the following data to the Xxxxx Corning user-
plant on the per shipment basis. *, percent retained on the * and *
sieves, and percent through the * sieve. Oxides and elements designated as
"*" shall also be provided at the intervals listed in Section C.1. Data
describing the Chemical and Physical Composition. Section C.1 and C.2
CONFIDENTIAL TREATMENT REQUESTED [*]
respectively, shall be transmitted to the Xxxxx Corning user-plant and
received prior to unloading.
In addition, complete chemistry of * and *, as described in Section C.1,
will be provided to Batch & Melting XXX, Xxxxxxxxx, Ohio, for the last five
(5) railcars of each lot and the first five (5) railcars of each lot.
The "*" are to be obtained from the pre-shipment sample as defined in
Section E (below) with the exception of *, and *, which will be supplied by
the Analytical Services Laboratory of Xxxxx Corning, based upon the loading
composite for each shipment lot. The chemical analyses shall be generated
by a laboratory that is certified by the Analytical Services Laboratory of
Xxxxx Corning as described in Section C.4.
Control charts for * , as described in Section C.6.2, will be provided to
Batch & Melting XXX on a monthly basis.
C.6 TECHNICAL NOTES
---------------
1. Should long-term production planning indicate a need to shift a target
nominal, for instance, to optimize reserves or borate lot shipment
changes, the supplier may propose a change in the specification limits
for *. The supplier must then propose a target nominal value for the
oxide(s), and any proposed change must meet the boundary limits beyond
which no product is acceptable. The change must also meet the limit
on allowed variation. Those limits are:
Boundary Limit Maximum Range
-------------- -------------
* * *
The upper specification for the oxide shall be set as the new target
nominal plus * of the maximum range. The lower specification limit
shall be set as the target nominal minus * of the maximum range. If
the proposed specification results in a violation of the boundary
limit listed above, the Batch & Melting XXX Laboratory in Granville,
Ohio, must be informed immediately.
The Batch & Melting XXX must be consulted on any proposed change to
the "Target Nominals" for * before the upper/lower specification
limits are set. The new specification will take effect on a date
mutually acceptable to the supplier and to Batch & Melting XXX.
2. * is a critical process variable with respect to our manufacturing
process and our finished glass product. The process capability for *
must be established and control charts maintained.
CONFIDENTIAL TREATMENT REQUESTED [*]
Any assignable causes which result in out-of-control incidents should
be investigated and appropriate action taken.
3. Significant shifts in organic carbon of the finished product will
impact the manufacturing process at the Xxxxx Corning user-plant. The
supplier must inform the Xxxxx Corning user-plant when there is a
change in fuel source within the supplier's manufacturing process.
D. TEST METHODS
------------
The Supplier may use test methods at his discretion provided that they
yield results which conform to *. Xxxxx Corning test methods are
documented in the "Manual of Procedures for Glass Control".
E. PRESHIPMENT SAMPLING
--------------------
For each shipment, the supplier shall obtain a representative sample of the
material directly loaded for shipment or stored in the bin from which the
shipment was loaded. A sample library must be maintained for a minimum
period of 10 weeks. A representative sample is one which conforms to the
principles of probability sampling and sample size selection as defined in
ASTM Methods * and *. An example of such sampling can be found in ASTM
Methods *. At requested frequency, a * gram minimum split of the
representative sample shall be sent to the Xxxxx Corning user-plant as soon
as possible after loading. If a representative sample is currently
unobtainable, the supplier shall investigate alternate methods of sampling.
F. REJECTIONS
----------
Xxxxx Corning reserves the right to reject upon receipt, and hold for
vendor's disposal, any portion or all of the material furnished under this
specification which does not conform to all of the requirements set forth
herein. Rejection of out-of-specification material will be based solely on
Xxxxx Corning chemical and physical evaluation.
Rejection of material based on non-compliance with Section C.1 (CHEMICAL
COMPOSITION) or Section C.2 (PHYSICAL COMPOSITION) can only be based on
testing of a representative sample (see Section E above for the definition
of a representative sample). If a representative sample is not available
or cannot be obtained, or if the original representative sample has been
compromised (i.e. contaminated, lost, etc.), the sample to be used for
deciding compliance to this specification shall be determined by the Batch
& Melting XXX Laboratory of Xxxxx Corning.
CONFIDENTIAL TREATMENT REQUESTED [*]
Non-representative sampling such as grab or visual inspection can be used
to test conformance to requirements listed in Section C.3 (CONTAMINATION).
G. SAFETY DOCUMENTATION
--------------------
Material Safety Data Sheets shall be supplied to the Xxxxx Corning user-
plant and the Granville Batch & Melting XXX.
H. PACKAGING
---------
This material is to be shipped in 50-pound bags, bulk bags, railcars or
trucks as designed by the Purchasing Department. When covered hoppers are
requested, whenever possible they shall be fitted with a female vibrator
bracket. Bags must be clearly marked as to content. Cars or trucks must
be inspected, cleaned and dried if necessary to insure absence of
contamination before loading. Hoppers must be sealed with orange plastic
------
tags.
I. IDENTIFICATION
--------------
Material is identified on the Xxxx of Lading and invoice with product name
and the following O-C Stores Code Number: *.
J. SPECIFICATION INQUIRY
---------------------
Any inquiry regarding the contents of this specification should be
addressed to:
Batch & Melting XXX
Xxxxx Corning Fiberglas Corporation
0000 Xxxxxxxx Xxxx, Xx. 00
Xxxxxxxxx, XX 00000-0000
and a copy of such inquiry should be forwarded to:
Composites Logistics and Distribution
Xxxxx Corning Fiberglas Corporation
X.X. Xxx 0000
Xxxxxxxx, XX 00000-0000
CONFIDENTIAL TREATMENT REQUESTED [*]
APPENDIX A
----------
Attn: Xxxxx Xxxxx - Industrial Minerals
Please check appropriate box below and respond back concerning the approval for
the following borate lot change:
*
* Minimum Maximum
------------- ------- -------
* * *
Approval
--------
Yes No
Batch & Melting XXX X
------ ------
Services & Logistics X
------ ------
CONFIDENTIAL TREATMENT REQUESTED [*]
GLASS BATCH RAW MATERIAL
------------------------
SPECIFICATION CHANGE RECOMMENDATION
PURCHASE ACCEPTANCE STANDARD BEING CHANGED: *
ACTIVE DOCUMENT DATE: 7/23/98
MATERIAL NAME: *
THIS CHANGE WILL AFFECT THE FOLLOWING PLANTS:
Aiken
Anderson
Amarillo
Xxxxxxx
COMMENTS: Appendix A revised for * lot.
THE REVISED SPECIFICATION IS ATTACHED.
--------------------------------- -----------------------------------
WRITTEN BY: X. X. Xxxxxxxx APPROVED BY: X. X. Xxxxxx
CONFIDENTIAL TREATMENT REQUESTED [*]
*
A. GUIDING PHILOSOPHY FOR MATERIAL PURCHASES
-----------------------------------------
Xxxxx Corning will enter into quality partnerships with key production
material suppliers. The relationship is a special long-term commitment
between Composites and its suppliers that will accomplish the following:
(1) Provide a product and/or service which meets our fitness-for-use criteria.
(2) Provide continuing increased value to Xxxxx Corning.
(3) Commit Xxxxx Corning suppliers to use statistical process control
principles in their manufacturing processes.
Xxxxx Corning and our suppliers are committed to sharing information that
will aid in achieving continual improvements in the products and services
supplied and in the Xxxxx Corning processes in which they are used. This
should result in lower manufacturing costs, less variable products and
enhanced Xxxxx Corning customer satisfaction through manufacturing
stability.
B. FITNESS-FOR-USE CRITERIA
------------------------
This document specified the fitness-for-use criteria the material must
meet. Any shipment that does not conform to all these criteria shall not
be shipped to an Xxxxx Corning user-plant.
C. PRODUCT CHARACTERISTICS
-----------------------
There are six sections of product characteristics, C.1-C.6. Each section
has a specific fitness-for-use criteria. Sections C.2-C.6 are self-
explanatory. However, Section C.1, the Chemical Composition section, is
rather complex, so the following clarifications have been added:
The oxide/elements are divided into one of two categories, either * or
*. * are those which are known to require some particular attention
on the part of the supplier to insure the specification is met. The
attention may be tight control of mining or blending of mine ores or
extra attention to some process variable. * are those which are known
to generally stay within the specification and exhibit acceptable
consistency due to the nature of the deposit and/or the process. They
only require monitoring to show evidence that their conformance to the
specification continues. The difference between * and * is the amount
of attention paid by the supplier and the frequency of the testing
required by Xxxxx Corning. However, Xxxxx Corning reserves the right
to reject material based on * or *.
CONFIDENTIAL TREATMENT REQUESTED [*]
Based on the supplier's production planning, the material has
calculable average values for all oxide/elements. The specification
is based on the supplier continuing to operate his process such that
these average values, or "Target Nominals" are maintained. For
selected key oxides/elements (those listed in Section C.6.1), the
upper and lower specification limits are defined by adding and
subtracting * the maximum acceptable variation from the "Target
Nominal" value. The other oxides/elements have a lower or upper
specification limit based on Xxxxx Corning's fitness-for-use criteria.
This specification does NOT require that a moving average of
individual shipment values equal the "Target Nominal". It is required
that every shipment be within the specification limits. It is a goal
that the variation of critical oxides/elements be reduced and that the
shipment values approach random variation around the "Target Nominal".
Additional explanations and requirements for the Chemical Composition
are contained in Section C.6, "TECHNICAL NOTES".
C.1 CHEMICAL COMPOSITION
--------------------
PERCENT BY WEIGHT
Oxide or Test
Element Maximum Maximum Frequency
* * * * *
* * * *
*
* * * * *
* * * *
* * * *
* * * *
* * * *
* * * *
* * * *
* * * *
* * * *
*
CONFIDENTIAL TREATMENT REQUESTED [*]
C.2 PHYSICAL COMPOSITION
--------------------
% of Original
Sieve Weight Retained Test Frequency
* * *
NOTE: Physical analysis must be performed according to * procedures using *
sieves.
C.3 CONTAMINATION
-------------
The finished product may not contain any containments that are
deleterious to the Xxxxx Corning processes. Contamination, both organic
and inorganic, including but not limited to * shall be avoided
throughout the storage, processing, and rail or truck loading of the
shipment.
The ore deposit may contain trace amounts of *. As part of the
qualification procedure, Xxxxx Corning has measured the level of these
contaminants * and determined it to be acceptable. Hereafter, the
supplier is responsible for measuring the level of * contamination as new
ore deposits are opened to insure the level has not changed.
C.4 LABORATORY CERTIFICATION
------------------------
The chemical laboratory must be certified by Xxxxx Corning per procedure
*. Any change in analytical procedure requires re-certification. If the
supplier does not employ a certified chemical laboratory, then he must
submit a schedule by which his chemical laboratory will achieve
certification. This schedule must be mutually agreed upon by the supplier
and Xxxxx Corning.
C.5 SUPPLY OF TEST DATA
-------------------
The supplier shall provide the following data to the Xxxxx Corning user-
plant on the per shipment basis: * percent retained on the * and *
sieves, and percent through the * sieve. Oxides and elements designated
as "*" shall also be provided at the intervals listed in Section C.1.
Data describing the Chemical and Physical Composition, Section C.1 and
C.2 respectively, shall be transmitted to the Xxxxx Corning user-plant
and received prior to unloading.
CONFIDENTIAL TREATMENT REQUESTED [*]
In addition, complete chemistry of * and *, as described in Section C.1, will be
provided to Batch & Melting XXX, Xxxxxxxxx, Ohio, for the last ten (10) railcars
of each lot and the first ten (10) railcars of each lot.
The "*" are to be obtained from the pre-shipment sample as defined in Section E
(below). The chemical analyses shall be generated by a laboratory that is
certified by the Analytical Services Laboratory of Xxxxx Corning, as described
in Section C.4.
Control charts for *, as described in Section C.6.2, will be provided to Batch &
Melting XXX on a monthly basis.
C.6 TECHNICAL NOTES
---------------
1. Should long-term production planning indicate a need to shift a target
nominal, for instance, to optimize reserves or borate lot shipment
changes, the supplier may propose a change in the specification limits
for *. The supplier must then propose a target nominal value for the
oxide(s), and any proposed change must meet the boundary limits beyond
which no product is acceptable. The change must also meet the limit on
allowed variation. Those limits are:
Boundary Limit Maximum Range
-------------- -------------
* * *
The upper specification for the oxide shall be set as the new target
nominal plus * of the maximum range. The lower specification limit
shall be set as the target nominal minus * of the maximum range. If
the proposed specification results in a violation of the boundary
limit listed above, the Batch & Melting XXX Laboratory must be
informed immediately.
The Batch & Melting XXX must be consulted on any proposed change to
the "Target Nominals" for * before the upper/lower specification
limits are set. The new specification will take effect on a date
mutually acceptable to the supplier and to Batch & Melting XXX.
2. * is a critical process variable with respect to our manufacturing
process and our finished glass product. The process capability for
* must be established and control charts maintained. Any assignable
causes which result in out-of-control incidents should be investigated
and appropriate action taken.
3. Significant shifts in organic carbon of the finished time product will
impact the manufacturing process at the Xxxxx Corning user-plant. The
CONFIDENTIAL TREATMENT REQUESTED [*]
supplier must inform the Xxxxx Corning user-plant when there is a
change in fuel source within the supplier's manufacturing process.
D. TEST METHODS
------------
The supplier may use test methods at his discretion provided that they
yield results which conform to *. Xxxxx Corning test methods are
documented in the Manual of Procedures for Glass Control.
E. PRESHIPMENT SAMPLING
--------------------
For each shipment, the supplier shall obtain a representative sample of the
material directly loaded for shipment or stored in the bin from which the
shipment was loaded. A sample library must be maintained for a minimum
period of 10 weeks. A representative sample is one which conforms to the
principles of probability sampling and sample size selection as defined in
ASTM Methods * and *. An example of such sampling can be found in ASTM
Methods *. At requested frequency, a * gram minimum split of the
representative sample shall be sent to the Xxxxx Corning user-plant as soon
as possible after loadout. If a representative sample is currently
unobtainable, the supplier shall investigate alternate methods of sampling.
F. REJECTIONS
----------
Xxxxx Corning reserves the right to reject upon receipt, and hold for
vendor's disposal, any portion or all of the material furnished under this
specification which does not conform to all of the requirements set forth
herein. Rejection of out-of-specification material will be based solely on
Xxxxx Corning chemical and physical evaluation.
Rejection of material based on non-compliance with Section C.1 (CHEMICAL
COMPOSITION) or Section C.2 (PHYSICAL COMPOSITION) can only be based on
testing of a representative sample (see Section E above for the definition
of a representative sample). If a representative sample is not available
or cannot be obtained, or if the original representative sample has been
compromised (i.e. contaminated, lost, etc.), the sample to be used for
deciding compliance to this specification shall be determined by the Batch
& Melting XXX Laboratory of Xxxxx Corning.
Non-representative sampling such as grab or visual inspection can be used
to test conformance to requirements listed in Section C.3 (CONTAMINATION).
G. SAFETY DOCUMENTATION
--------------------
Material Safety Data Sheets shall be supplied to the Xxxxx Corning user-
plant and the Granville Batch & Melting XXX.
CONFIDENTIAL TREATMENT REQUESTED [*]
H. PACKAGING
---------
This material is to be shipped in 50-pound bags, railcars or trucks as
designed by the Purchasing Department. When covered hoppers are requested,
whenever possible they shall be fitted with a female vibrator bracket.
Bags must be clearly marked as to content. Cars or trucks must be
inspected, cleaned and dried if necessary to insure absence of
contamination before loading. Hoppers must be sealed with yellow plastic
------
tags.
I. IDENTIFICATION
--------------
Material is identified on the Xxxx of Lading and invoice with product name
and the following OC Stores Code Number: *
J. SPECIFICATION INQUIRY
---------------------
Any inquiry regarding the contents of this specification should be
addressed to:
Batch & Melting XXX
Xxxxx Corning
0000 Xxxxxxxx Xxxx, Xx. 00
Xxxxxxxxx, XX 00000-0000
and a copy of such inquiry should be forwarded to:
Composites Logistics and Distribution
Xxxxx Corning
X.X. Xxx 0000
Xxxxxxxx, XX 00000-0000
CONFIDENTIAL TREATMENT REQUESTED [*]
APPENDIX A
----------
Attn: Xxxxx Xxxxx Industrial Minerals
Please check appropriate box below and respond back concerning the approval for
the following borate lot change:
*
* Minimum Maximum
------------- ------- -------
* * *
Approval
--------
Yes No
------- -------
Batch & Melting XXX X
------- -------
Industrial Minerals (Xxxxx Xxxxx) X
------- -------
CONFIDENTIAL TREATMENT REQUESTED [*]
