EXHIBIT 10.3
DISTRIBUTION AGREEMENT
THIS AGREEMENT (referred to herein as "THIS AGREEMENT"), dated as of
January 1, 2003, between OHIO COATINGS COMPANY, a corporation existing under the
laws of Ohio (referred to herein as "OCC") and NIPPON STEEL TRADING AMERICA,
INC. (also known as Nittetsu Shoji America, Inc.), a corporation organized under
the laws of the State of California (referred to herein as "NSA") and, as
expressly limited by Paragraph 15 hereof, WHEELING-PITTSBURGH STEEL CORPORATION,
organized and existing under the laws of the State of Delaware (referred to
herein as "WPSC").
W I T N E S S E T H:
WHEREAS, OCC is engaged in the business of manufacturing for resale of
"Tin Mill Products" (as that term is hereinafter defined); and
WHEREAS, WPSC is currently the sole distributor of OCC products and NSA
is the sole distributor of Tin Mill Products for WPSC with respect to sale of
products to certain customers; and
WHEREAS, WPSC desires to release NSA from its distributorship
obligations to WPSC pursuant to the terms hereof and for OCC to engage NSA as a
distributor of Tin Mill Products to said customers, and to others; and
WHEREAS, OCC desires to sell OCC Tin Mill Products to NSA for resale to
said customers of NSA, and NSA desires to buy the same pursuant to the terms and
conditions provided herein.
NOW, THEREFORE, in consideration of the mutual premises and covenants
set forth herein, the parties hereby agree as follows:
1. DEFINITIONS
1.1 "Customer" or "Customers" shall mean those customers
for purchase of Tin Mill Products manufactured by OCC who are:
(a) Those Specified Accounts identified by name or
territory on EXHIBIT A attached hereto;
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(b) Additional customers for Tin Mill Products assigned
to NSA pursuant to Section 5(d) of this Agreement; and
(c) Those customers on Spot Orders by NSA accepted by OCC
and not previously assigned by OCC to other distributors or sales
agents, for purposes of those specific Spot Orders only.
1.2 "Effective Date" shall mean March 1, 2003.
1.3 "Export Customers" shall mean those customers whose principal
facilities are located outside of the United States of America, but Export
Customers shall not mean the companies listed on EXHIBIT A hereto and/or
domestic Customers who purchase Tin Mill Products for delivery to and use at
facilities located outside of the United States.
1.4 "First Period" shall mean the period in each calendar year
during the term of this Agreement from January 1st of each year through March
31st.
1.5 "Invoice" shall mean OCC's invoice sent to NSA with respect to
a Purchase Order.
1.6 "Initial Term" shall have the meaning set forth in Section
3(a) of this Agreement.
1.7 "Nominated Quantities" shall have the meaning set forth in
Section 2.3(a), 2.5 and Section 4 of this Agreement.
1.8 "OCC Aggregate Prime Gross Margin" for a Period, shall be a
percentage computed by multiplying 100% by a fraction the numerator of which
shall be all proceeds of sales by NSA of Nominated Quantities of prime OCC Tin
Mill Products during such period, minus the purchase price of the corresponding
goods paid by NSA to OCC, and the denominator of which shall be all proceeds of
sales by NSA of Nominated Quantities of prime OCC Tin Mill Products during such
Period. The "OCC Aggregate Prime Gross Margin" shall not include sale proceeds
or costs resulting from Spot Orders, sales of Secondary OCC Tin Mill Products to
Customers, sales of Tin Mill Products to Export Customers or Toll Coat Orders.
1.9 "OCC Aggregate Secondary Gross Margin" for a Period, shall be
a percentage computed by multiplying 100% by a fraction the numerator of which
shall be all proceeds of sales by NSA of
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Secondary OCC Tin Mill Products during such period, minus the purchase price of
the corresponding goods paid by NSA to OCC, and the denominator of which shall
be all proceeds of sales by NSA of Secondary Tin Mill Products during such
Period. The "OCC Aggregate Secondary Gross Margin" shall not include sale
proceeds or costs resulting from Spot Orders, sales of prime OCC Tin Mill
Products to Customers, sales of Tin Mill Products to Export Customers or Toll
Coat Orders.
1.10 "Order Acknowledgement" shall mean OCC's written or electronic
acceptance of a Purchase Order, howsoever labeled.
1.11 "Period" shall mean either the First Period or the Second
Period, as applicable.
1.12 "Plant" shall mean OCC's tin mill production facility in
Yorkville, Ohio.
1.13 "Prime Production Capacity" shall mean the practical
capability of the Plant to produce prime Tin Mill Products expressed as a rate
in tons per year.
1.14 "Production Forecast" shall have the meaning set forth in
Section 2.5 of this Agreement.
1.15 "Purchase Order" shall mean any written order for purchase of
Tin Mill Products submitted by NSA to OCC, howsoever labeled. However, the
written notification by NSA of Nominated Quantities shall not constitute a
Purchase Order.
1.16 "Purchase Forecast" shall have the meaning set forth in
Section 2.5 of this Agreement.
1.17 "Second Period" shall mean the period in each calendar year
during the term of this Agreement from April 1st of each year through December
31st.
1.18 "Secondary OCC Tin Mill Products" shall mean Tin Mill Products
produced by OCC to satisfy customer orders and which do not conform to the
Specifications for such customer orders.
1.19 "Specifications" shall mean the specifications attached to
each Purchase Order according to which OCC shall produce Tin Mill Products for
sale to NSA (provided that OCC has accepted the Purchase Order with an Order
Acknowledgement), which may include quality requirements for Substrate.
1.20 "Specified Accounts" shall mean those customers identified by
name or territory on EXHIBIT A attached hereto.
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1.21 "Spot Orders" shall mean any order of Tin Mill Products placed
by NSA which is not included in any of NSA's Purchase Forecasts delivered to OCC
pursuant to Section 2.5 below, and which is in excess of the Nominated Quantity
of Tin Mill Products for any calendar year. Without limitation, "Spot Orders"
shall include orders solicited for sale of Secondary OCC Tin Mill Products to
Export Customers.
1.22 "Substrate" shall mean the raw materials from which OCC
produces Tin Mill Products.
1.23 "Tin Mill Products" shall mean the product(s) manufactured by
OCC by the process of coating Substrate. OCC will produce Tin Mill Products
within the ranges specified in EXHIBIT C.
1.24 "Trademarks" shall mean, collectively, the trademarks or
tradenames owned, or which will be owned, by OCC and licensed for use by its
distributors or sales agents in the sale of Tin Mill Products, as listed on
EXHIBIT B attached hereto and made a part hereof, or as OCC may supplement by
giving notice of any revised EXHIBIT B from time to time.
2. SALE AND PURCHASE OF TIN MILL PRODUCTS
2.1 Distributorship: OCC hereby appoints NSA to be its authorized,
independent exclusive distributor of Tin Mill Products with respect to any
orders for such Tin Mill Products originating from those Specified Accounts
listed in EXHIBIT A, attached hereto and to those additional customers (or
geographical areas) hereafter designated by OCC, in writing or otherwise
pursuant to this Agreement, including, without limitation, customers on orders
accepted by OCC from any such customers not listed on EXHIBIT A. NSA shall also
have the exclusive right to sell to NSA Customers Secondary OCC Tin Mill
Products produced as the result of orders to OCC placed by NSA for two (2) weeks
after OCC notifies NSA of the availability, specifications and quantity of such
Secondary OCC Tin Mill Products. After the expiration of said two (2) week time
period, OCC retains the right to sell the Secondary OCC Tin Mill Products
produced as the result of orders to OCC placed by NSA for NSA's Customers.
NSA shall have the exclusive right to sell Tin Mill Products to "EXPORT
CUSTOMERS," provided that such orders are accepted by OCC and are submitted by
NSA to OCC during the period from
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December 1st through August 31" of the next year. OCC retains the right to
solicit orders pursuant to said "EXPORT CUSTOMERS" as it sees fit from September
1st to November 30th of each year.
2.2 Sale By OCC and Purchase of Tin Mill Products by NSA. NSA
shall solicit sales of Tin Mill Products to Customers and shall submit Purchase
Orders to OCC for Tin Mill Products ordered by Customers. OCC shall sell to NSA,
and NSA shall purchase, on a commercially reasonable best efforts basis, Tin
Mill Products pursuant to the terms and conditions described below and in the
Purchase Orders and Order Acknowledgements for such orders. OCC acknowledges
that NSA is purchasing Tin Mill Products for resale to its Customers. NSA shall
have the exclusive right to invoice its Customers and to collect all accounts
receivable owing by Customers for Tin Mill Products delivered.
2.3 Quantities.
(a) Nominated Quantities: NSA shall have the right to
purchase from OCC approximately seventy percent (70%) of the Plant's entire
production of prime Tin Mill Products ("ANNUAL PRIME PRODUCTION OF OCC TIN MILL
PRODUCTS") for each calendar year during the term of this Agreement, which
quantities shall be nominated in accordance with Section 2.5 ("NOMINATED
QUANTITIES"), for resale to Customers under Section 1.1(a) and (b).
Notwithstanding the foregoing, OCC may, in its sole discretion, permit NSA to
nominate and to sell quantities of prime Tin Mill Products in any year in excess
of the foregoing maximum limits to satisfy orders solicited by NSA from
Customers. OCC may, at its sole discretion, permit itself or others, to sell
excess quantities of Tin Mill Products set forth in OCC's Production Forecast in
any period that NSA fails to nominate its targeted 70% of Annual Prime
Production of OCC Tin Mill Products.
(b) Spot Orders: In addition to the Nominated Quantities
described in 2.3(a), NSA shall have the right to request Spot Orders for
purchases of additional Tin Mill Products from OCC, which OCC may accept in its
sole discretion in accordance with Sections 2.3(b), 2.6(b) and 2.7(b) below.
(c) Toll Coating: This Agreement does not grant NSA any
exclusivity rights to solicit toll coating orders ("TOLL COAT ORDERS") from
Customers or govern the rights and obligations of the parties with respect to
Toll Coat Orders. Unless otherwise agreed by the parties, all Toll Coat Orders
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will be handled directly by OCC on a case-by-case basis. NSA may solicit Toll
Coat Orders from its Customers, but OCC reserves the right to reject any such
order. Any fee to NSA for Toll Coat Orders accepted by OCC will be determined by
agreement of NSA and OCC on a case-by-case basis.
2.4 Quality. OCC shall use its commercially reasonable best
efforts to produce quality Tin Mill Products in accordance with NSA
Specifications. To the extent that NSA specifies Substrate quality requirements
in orders accepted by OCC, OCC shall use commercially reasonable efforts to
achieve such quality requirements by the most cost effective means. NSA
acknowledges that OCC, in its sole judgement, reserves the right to use any
Substrate source it deems acceptable. If OCC agrees to procurement of Substrate
from a NSA recommended Substrate supplier in advance (and in writing), OCC will
use that Substrate. Failure of OCC Tin Mill Products to satisfy Specifications
which have been accepted by OCC in an Order Acknowledgement as the result of
Substrate quality deficiencies shall be subject to the warranties and
indemnifications to NSA set forth in this Agreement.
2.5 Forecasts. NSA shall prepare and deliver to OCC its good faith
forecasts for quantities of Tin Mill Products to be purchased from NSA by
Customers under Sections 1.1(a) and 1.1(b) of this Agreement during the First
Period and the Second Period (individually and collectively referred to as a
"PERIOD") of each calendar year (referred to herein as the "PURCHASE FORECAST"),
commencing with the first Purchase Forecast on or before January 1, 2003 for the
Second Period commencing on April 1, 2003. Each subsequent Purchase Forecast
shall be submitted at least 90 days prior to each subsequent Period during the
term of this Agreement. Each Purchase Forecast shall reasonably estimate
quantities, gauges, product mix and anticipated shipment dates for each such
Period. OCC shall collect from its customers and any other distributors or sales
agents all Purchase Forecasts, evaluate them and develop an annual Production
Forecast ("PRODUCTION FORECAST") based on OCC's reasonable business judgment of
market conditions and Plant capabilities.
From the Production Forecast NSA may submit the Nominated Quantities of
Tin Mill Products (subject to the purchase options described in Section 2.3)
which it expects to purchase for the next such
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Period for resale to Customers under Sections 1.1 (a) and (b) of this Agreement.
The Nominated Quantities will be specified by gauge, product mix and expected
shipment dates for each Period.
NSA will submit quantity updates every two weeks. NSA may revise its
annual Purchase Forecast or the annual Nominated Quantities on a quarterly
basis. Any such revisions shall be submitted to OCC at least 60 days prior to
the beginning of each calendar quarter. NSA may request OCC in its discretion to
make revisions to its Production Forecast based on its reasonable business
judgment, taking into consideration the customers', distributors' and sales
agents' revisions to Purchase Forecasts and/or Nominated Quantities, then
current market conditions and/or Plant capabilities. Revisions to Purchase
Forecasts, Nominated Quantities or Production Forecasts shall not alter the
obligations of the parties for specific orders agreed upon by the parties prior
to such revision.
2.6 Prices, Rebates and Adjustments.
(a) Prices - Nominated Quantities: Based on
(i) the Purchase Forecasts received from NSA pursuant to
Section 2.5 above aggregated with those from OCC's
other distributors, sales agents and customers;
(ii) the Specifications;
(iii) the volume and mix of Tin Mill Products;
(iv) the Plant capabilities; and
(v) then-current conditions in the Tin Mill Products
market,
OCC shall notify NSA in writing, not less than fifteen (15) days prior to the
First Period or the Second Period, respectively, in each calendar year, of its
Production Forecast and proposed prices for sale of Tin Mill Products to NSA to
satisfy the Specifications for Tin Mill Products to be sold to Customers during
such Period. OCC shall have the right to unilaterally modify its established
price list and/or to withdraw any price previously offered to NSA, provided that
OCC may not withdraw a price that applies to a specific order as to which a
Purchase Order and Order Acknowledgment have been issued. The prices on OCC's
established price list or otherwise established in this subsection shall not
apply to NSA's requests to purchase Tin Mill Products from OCC as Spot Orders or
to sales to Export Customers or to sales of
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Secondary OCC Tin Mill Products. However, OCC shall not, without NSA's consent,
change prices charged to NSA on annual or multi-year contracts with Customers
accepted by OCC.
(b) Prices - Spot Orders: Prices for Spot Orders shall be
negotiated by OCC and NSA on a case-by-case basis, taking into account the
Specifications, the volume and mix of Tin Mill Products, Plant capabilities and
then-current conditions in the Tin Mill Products market. If it wishes to quote a
price for such spot order, OCC shall notify NSA of the price for each Spot
Order, and NSA's receipt of OCC's written notification of such price shall
constitute a firm offer by OCC. If the price for such Spot Order is acceptable
to NSA, NSA shall submit a Purchase Order to OCC for such Spot Order of Tin Mill
Products within seven (7) days after price notification. Spot Order availability
is within the sole discretion of OCC.
(c) Resale Pricing: NSA has the sole and exclusive right
to establish its resale prices in its discretion with respect to all Tin Mill
Products and any other products whatsoever purchased from OCC. Except for
information provided after conclusion of a Period, as set forth in subsection
(d) below, in no event shall WPSC or OCC request from NSA nor shall NSA disclose
to WPSC or OCC the prices at which NSA is selling or offering to sell or
considering offering to sell Tin Mill Products to Customers during the current
Period. In no event shall WPSC, OCC or NSA directly or indirectly agree upon the
prices, including, but not limited to, maximum or minimum prices, or price
levels to be charged or offered to Customers by NSA for sale of Tin Mill
Products or any other products.
(d) Rebates and Adjustments: Within 30 days after the end
of each Period, commencing with the Period starting on the Effective Date, NSA
shall provide OCC with data sufficient to show NSA's total sales of prime Tin
Mill Products and Secondary OCC Tin Mill Products to Customers during the Period
and NSA's OCC Aggregate Prime Gross Margin and OCC Aggregate Secondary Gross
Margin on Tin Mill Product sales during the Period; provided, that this data
shall exclude NSA's sales of Tin Mill Products under Spot Orders or under Toll
Coat Orders and NSA's sales to Export Customers. OCC shall have the right, at
its sole expense, to verify NSA's data, including on an individual Customer
basis, for the sole purpose of confirming the accuracy of NSA's representations
of
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said OCC Aggregate Prime Gross Margin and OCC Aggregate Secondary Gross Margin
for such Period, after the Period has concluded. Certain adjustments shall be
made between NSA and OCC at the end of each Period, based on NSA's OCC Aggregate
Prime Gross Margin and NSA's OCC Aggregate Secondary Gross Margin, as follows:
(i) In the event that NSA's OCC Aggregate Prime Gross
Margin during the Period was less than three and one-half percent
(3.5%), OCC shall rebate to NSA funds sufficient to allow NSA to
achieve a 3.5% OCC Aggregate Prime Gross Margin for such Period,
provided that the rebate shall not exceed 1.0% of the dollar volume of
NSA's sales of prime Tin Mill Products during such Period.
(ii) In addition to the provisions in subsection (i)
above, at the end of each calendar year, commencing with the report due
for the Period ending December 31, 2003, NSA and OCC shall calculate
the OCC Aggregate Prime Gross Margin for the preceding calendar year
(the "ANNUAL OCC AGGREGATE PRIME MARGIN"). Such calculation of the
Annual OCC Aggregate Prime Margin shall include any payments made by
OCC to NSA pursuant to subsection (i) above as if they were NSA sales
proceeds and shall deduct any payments made by NSA to OCC pursuant to
subsection (iii) below from such sales proceeds. In the event that such
Annual OCC Aggregate Prime Gross Margin during such calendar year was
less than three and one-half percent (3.5%), OCC shall rebate to NSA
additional funds sufficient to allow NSA to achieve a 3.5% Annual OCC
Aggregate Prime Gross Margin for such calendar year, provided that the
rebate shall not exceed 1.0% of the dollar volume of NSA's sales of
prime Tin Mill Products during such calendar year.
(iii) In the event that NSA's OCC Aggregate Prime Gross
Margin during any Period or the Annual OCC Aggregate Prime Margin
exceeds 3.5%, NSA shall remit to OCC funds equal to the difference
between its actual OCC Aggregate Prime Gross Margin or Annual OCC
Aggregate Prime Margin and, respectively, a OCC Aggregate Prime Gross
Margin or Annual OCC Aggregate Prime Margin of 3.5%.
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(iv) In the event that NSA's OCC Aggregate Secondary Gross
Margin during the Period was less than one percent (1.0%), OCC shall
rebate to NSA funds sufficient to allow NSA to achieve a 1.0% OCC
Aggregate Secondary Gross Margin for such Period, provided that the
rebate shall not exceed 1.0% of the dollar volume of NSA's sales of
Secondary Tin Mill Products during such Period.
(v) In addition to the provisions in subsection (iv)
above, at the end of each calendar year, commencing with the report due
for the Period ending December 31, 2003, NSA and OCC shall calculate
the OCC Aggregate Secondary Gross Margin for the preceding calendar
year (the "ANNUAL OCC AGGREGATE SECONDARY MARGIN"). Such calculation of
the Annual OCC Aggregate Secondary Margin shall include any payments
made by OCC to NSA pursuant to subsection (iv) above as if they were
NSA sales proceeds and shall deduct any payments made by NSA to OCC
pursuant to subsection (vi) below from such sales proceeds. In the
event that such Annual OCC Aggregate Secondary Gross Margin during such
calendar year was less than one percent (1.0%), OCC shall rebate to NSA
additional funds sufficient to allow NSA to achieve a 1.0% Annual OCC
Aggregate Secondary Gross Margin for such calendar year, provided that
the rebate shall not exceed 1.0% of the dollar volume of NSA's sales of
Secondary Tin Mill Products during such calendar year.
(vi) In the event that NSA's OCC Aggregate Secondary Gross
Margin during any Period or the Annual OCC Aggregate Secondary Margin
exceeds 1.0%, NSA shall remit to OCC funds equal to the difference
between its actual OCC Aggregate Secondary Gross Margin or Annual OCC
Aggregate Secondary Margin and, respectively, a OCC Aggregate Secondary
Gross Margin or Annual OCC Aggregate Prime Margin of 1.0%.
All amounts payable by the parties pursuant to this
sub-section shall be due and payable not more than ten (10) days after
(i) the submission by NSA to OCC under this section and (ii)
verification as provided in this Section, of the OCC Aggregate Prime
Gross Margin data and/or OCC Aggregate Secondary Gross Margin data for
each Period. Such verification by OCC and
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payment by OCC shall occur within ten (10) days after NSA's submission
to OCC of the data required by Section 2.6(d) of this Agreement.
Notwithstanding the foregoing the payment of amounts pursuant to
subsections (ii) and (v) shall be made at the same time as payment
would be due for the Second Period of the applicable calendar year.
Notwithstanding the foregoing provisions of this subsection 2.6(d), NSA
and OCC may, from time to time, agree upon temporary changes to the Aggregate
Prime Gross Margin and/or the Aggregate Secondary Gross Margin for sales of Tin
Mill Products to a specified Customer or Customers. Such agreed-upon changes
shall be effective for the year or other limited time specified in the agreement
and shall supercede the foregoing 3.5% and 1.0% annual and Period margins for
sales of prime and secondary Tin Mill Products, respectively, to said Customer
or Customers. At the end of the agreed upon time for such changes, the annual
and Period margins for prime and secondary sales of Tin Mill Products for said
Customer or Customers shall revert to the 3.5% and 1.0% annual and Period
margins, respectively, set forth above in this section 2.6(d).
2.7 Purchase Orders and Order Acknowledgements.
(a) The contractual obligation to effect a purchase of
specific quantities of Tin Mill Products shall be evidenced by a Purchase Order
and an Order Acknowledgment. From time to time, NSA shall submit Purchase Orders
to OCC for Tin Mill Products based on its Nominated Quantities (as revised) for
the upcoming Period pursuant to Section 2.5 above or on a Spot Order basis
pursuant to Section 2.6(b) above. NSA shall only be committed to purchase
Nominated Quantities when and as Purchase Orders are issued by NSA and
acknowledged by OCC. OCC shall be committed to acknowledge those Purchase Orders
from NSA (i) which cover Tin Mill Products which were previously forecasted and
nominated for the upcoming Period pursuant to Section 2.5, and (ii) at prices
determined by OCC in accordance with Section 2.6(a) above.
(b) Upon receipt of a Purchase Order covering a Spot
Order from NSA in accordance with Section 2.6(b), OCC shall have 7 days to
deliver an Order Acknowledgement to NSA for such order or, in its discretion, to
reject such Purchase Order.
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(c) If OCC delivers any Order Acknowledgement to NSA, OCC
shall produce and shall deliver the Tin Mill Products according to the
quantities and Specifications in NSA's Purchase Order. OCC shall use reasonable
efforts to produce Tin Mill Products within the time limits contained in NSA's
Purchase Orders. OCC agrees to be responsible for actual Customer damages
against NSA for failure by OCC to produce Tin Mill Products within the time
limits specified in NSA Purchase Orders which have been accepted by OCC with an
Order Acknowledgement, pursuant to the indemnification provision and
accompanying limitations of Section 2.11. In the event of any irreconcilable
inconsistency between the terms of said Purchase Order or Order Acknowledgement
and this Agreement, the terms of this Agreement shall prevail. NSA's damages
against OCC for OCC's failure to produce Tin Mill Products within the time
limits in NSA's Purchase Orders which have been accepted by OCC with an Order
Acknowledgement shall be limited to those contained in the indemnification
provisions in section 2.11 of this Agreement.
2.8 Payment. After the Effective Date, NSA will pay OCC the
purchase price for Tin Mill Products produced for shipment to NSA's Customers 30
days after NSA receives OCC's Invoice. Notwithstanding the foregoing, if OCC
offers NSA a prompt payment discount, NSA may, at its sole discretion, accept
these payment terms for any portion of the time period offered by OCC and
acceptable to NSA. Unless otherwise provided herein or otherwise agreed, in
writing, by NSA and OCC, in no event shall payment be reduced by any discount or
pricing provided to a customer by NSA for any "prompt payment" or "special cash"
discounts.
2.9 Additional Duties of OCC: OCC will, at no cost to NSA, perform
as follows: (a) provide personnel at the Plant and inventory storage locations,
to load and to release the product, upon reasonable advance written notice from
NSA; (b) account for inventory stored at the Plant or at the WPSC Yorkville
facility; (c) schedule the transportation within the Plant and coordinate with
NSA's traffic department to assure smooth and timely operation; (d) provide
technical support services to NSA and to Customers; (e) provide customer support
services to NSA; (f) satisfy reasonable Customer requirements that NSA presents
and OCC agrees to in advance, in writing or electronically, such as coil yield
guarantees, quality
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guarantees, etc., communicated to OCC by NSA; (g) not produce products to
satisfy Customer orders before normal industry lead times; and (h) pay NSA costs
of reasonably unforeseeable legislative increases intended to be borne by the
final seller, such as potential increases to property tax rates (premium portion
only), which are reasonably unforeseeable at the time of the execution of this
Agreement and of which NSA gives OCC reasonable notice upon NSA receiving notice
of such cost. NSA and OCC acknowledge that, upon agreement by OCC and NSA in
each case, barge load quantities of foreign Substrate will be processed into Tin
Mill Products upon their arrival at OCC. OCC shall make a reasonable effort to
permit NSA to modify Customer orders within normal lead times for such changes.
2.10 Storage of Inventory: OCC shall, at no cost to NSA, provide
storage for Tin Mill Products purchased by NSA at OCC's Plant and, subject to
WPSC's consent by signing this Agreement, at the Yorkville storage facility of
WPSC. In the event that additional warehouses around the country are required
for storage of Tin Mill Products prior to shipment to Customers, OCC will pay
for all costs of transportation to the warehouses and for unloading, storage and
reloading for shipment to Customers. NSA will not be responsible for payment of
any freight, provided, however, that NSA shall invoice Customers for any freight
paid by OCC beyond any agreed "equalization point" and NSA shall reimburse OCC
for any such freight costs paid by Customers within 30 days after NSA receives
such payment. All freight charges not paid by the Customer shall be paid by OCC.
OCC shall have the right, during normal business hours and with reasonable
advance notice, to inspect the records of NSA to verify amounts owing or paid by
OCC for transportation, freight, storage, loading and unloading, or which are
owing or paid by NSA for freight costs, pursuant to this Section. WPSC and OCC
covenant and agree to add and maintain NSA as an additional insured on any
casualty insurance policies maintained by WPSC and/or OCC to insure the Tin Mill
Products stored at WPSC's Yorkville storage facility and OCC's Plant from
casualty loss or damage to or loss of NSA's Tin Mill Products stored at such
locations and shall deliver current certificates of insurance to NSA evidencing
such coverage. NSA acknowledges and agrees that the deductible amount on WPSC's
casualty insurance policy for the Yorkville storage facility is $1,000,000 and
the deductible on OCC's casualty insurance policy for OCC's Plant is $100,000.00
and
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NSA agrees to the amounts of such deductibles and shall bear the risk of loss or
damage up to such deductible amounts. WPSC and OCC agree to notify NSA of any
change in said deductible amounts and to provide current certificates of
insurance evidencing such coverage upon expiration or renewal of such policies.
Notwithstanding the foregoing, neither OCC nor WPSC shall have any liability for
any casualty, damage or loss to NSA Tin Plate Inventory which is proximately
caused by the actions of NSA.
2.11 INDEMNIFICATION
(a) Products Indemnification By OCC: Except as expressly
limited by this Agreement, OCC hereby covenants and agrees to indemnify and to
hold NSA (and any subsidiary or affiliate corporation to which NSA has assigned
its rights and obligations under and pursuant to this Agreement) harmless from
any and all claims, suits, obligations, liabilities, and damages, including
reasonable counsel's fees, based upon, arising out of, or resulting from: (a)
any products liability claim allegedly caused by any Tin Mill Products
manufactured by OCC and sold by NSA during the term of this Agreement; or (b)
failure of Tin Mill Products to conform to the Specifications for such products
accepted by OCC with an Order Acknowledgement. Except as otherwise expressly
limited by this Agreement, OCC hereby further covenants and agrees to indemnify
and to hold NSA (and any subsidiary or affiliate corporation to which NSA has
assigned its rights and obligations under and pursuant to this Agreement)
harmless from any claims by Customers (including, without limitation,
cancellation by Customers of orders for Tin Mill Products purchased by NSA) only
that are the direct and proximate result of OCC's failure to produce and/or to
deliver Tin Mill Products within time limits specified in NSA Purchase Orders
and accepted by OCC in an Order Acknowledgement. Under no circumstances shall
NSA be permitted to make any claim for damages or indemnification based upon
additional NSA working capital costs. The indemnification in this section shall
be NSA's sole and exclusive remedy against, and the full extent of the damages
payable by, OCC for failure to produce and deliver Tin Mill Products within time
limits specified in NSA Purchase Orders. In no event will OCC be required to
indemnify and hold NSA harmless where said claims, suits, obligations,
liabilities and damages are based upon, arise out of, or result from the
negligent, gross negligent or erroneous willful acts or omissions of
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NSA, including but not limited to, instances where NSA may submit inaccurate,
incomplete or missing Specifications or order terms.
(b) General Indemnification by OCC: Except as expressly
limited by this Agreement, OCC, and its agents, successors and assigns, hereby
covenant and agree to indemnify, defend and hold NSA (and any subsidiary or
affiliate corporation to which NSA has assigned its rights and obligations under
and pursuant to this Agreement), and their officers, directors, employees,
agents, affiliates, successors and assigns, harmless from any and all claims,
suits, obligations, liabilities, and damages, including reasonable counsel's
fees, based upon, arising out of, or resulting from the negligence, gross
negligence, recklessness or willful misconduct of OCC.
(c) Indemnification by NSA: Except as expressly limited
by this Agreement, NSA, its agents, its successors and assigns, hereby covenant
and agree to indemnify, defend and hold OCC and WPSC (and any subsidiary or
affiliate corporation to which OCC or WPSC has assigned its rights and
obligations under and pursuant to this Agreement), and their officers,
directors, employees, agents, affiliates, successors and assigns, harmless from
any and all claims, suits, obligations, liabilities, and damages, including
reasonable counsel's fees, based upon, arising out of, or resulting from the
negligence, gross negligence, recklessness or willful misconduct of NSA.
(d) Intellectual Property Indemnification by NSA: Except
as expressly limited in this Agreement, NSA hereby covenants and agrees to
indemnify, defend and hold OCC (and any subsidiary or affiliate corporation to
which OCC has assigned its rights and obligations under this Agreement) harmless
from any and all claims, suits, obligations, liabilities and damages, including
reasonable counsel's fees, based upon, arising out of, or resulting from the
breach by NSA of its obligations under Section 10 of this Agreement.
(e) Notification and Defense: In case any action, suit or
proceeding shall be commenced or any claim shall be made against either party
(or a valid assignee) for which such party shall be entitled to indemnity from
any other party pursuant to any provision of this Agreement, the party entitled
to defense and/or indemnity must notify the indemnifying party of the
commencement or making
15
thereof within thirty (30) days thereafter. The indemnifying party shall be
entitled to select counsel and control the defense. The party entitled to
defense and/or indemnity shall be entitled, to the extent that it wishes, to
participate in the defense thereof at its sole expense.
3. TERM
(a) This Agreement shall become effective on the
Effective Date and shall continue through December 31, 2005 (referred to herein
as the "INITIAL TERM"), unless extended as provided herein or earlier terminated
as provided in Section 4 below. If neither party notifies the other of its
intent to terminate this Agreement at the end of the Initial Term, or at the end
of any extension thereof, on or before the first day of August prior to the end
of the then current term, the term of this Agreement shall be extended for an
additional one (1) year period. If such written notice is timely given by either
party, this Agreement shall terminate at the end of the then current term. Such
termination of this Agreement shall not affect the obligations of the parties
pursuant to orders accepted prior to such termination or any continuing duties
and obligations of the parties relating to any prior orders or sales of Tin Mill
Products to satisfy NSA Customer orders.
4. TERMINATION
(a) This Agreement may be (but is not necessarily
required to be) terminated:
(i) by NSA immediately upon notice to OCC if OCC is
merged or consolidated into another entity, if its assets are
sold or foreclosed upon by OCC's lender or if a majority of
the common stock of OCC is transferred, in any way, whether
directly or indirectly, to another party;
(ii) by NSA if OCC fails to produce and/or to deliver
sufficient quantities of Tin Mill Products in accordance with
Specifications of Customer Orders to satisfy NSA orders
accepted by OCC and, as a consequence thereof, Customers
cancel a material portion of their orders or refuse to submit
further orders to NSA for Tin Mill Products;
(iii) by OCC, if NSA fails to submit orders to WPSC for
sales of at least 42% of any year's Annual Prime Production of
OCC Tin Mill Products, provided that such failure
16
does not result principally from the failure of OCC to perform
in accordance with the terms of this Agreement or pursuant to
Purchase Orders accepted by OCC.
(b) This Agreement may be terminated by NSA upon delivery
of ten (10) days prior written notice to OCC if (i) OCC authorizes or agrees to
the commencement of a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any
bankruptcy, insolvency, corporate, receivership or other similar law now or
hereafter in effect authorizing the reorganization or liquidation of such party
or its debt or the appointment of a trustee, receiver, liquidator, custodian or
other similar official over OCC or any substantial part of OCC's property, (ii)
WPSC's pending Chapter 11 bankruptcy case is converted to a case under Chapter 7
of the United States Bankruptcy Code; (iii) a plan of reorganization of WPSC
providing for the sale of all or substantially all of WPSC's assets is confirmed
in WPSC's pending Chapter 11 bankruptcy case, upon entry of the Bankruptcy Court
order approving such confirmation; (iv) the Bankruptcy Court enters an order in
WPSC's pending bankruptcy case approving the sale of all or substantially all of
WPSC's assets; (v) a trustee or an examiner with expanded powers is appointed in
WPSC's pending Chapter 11 bankruptcy case; (vi) after a reorganization plan is
confirmed in WPSC's pending bankruptcy case, WPSC thereafter authorizes or
agrees to the commencement of a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency, corporate, receivership or other similar law
now or hereafter in effect authorizing the reorganization or liquidation of such
party or its debt or the appointment of a trustee, receiver, liquidator,
custodian or other similar official over WPSC or any substantial part of WPSC's
property, (vii) OCC makes a general assignment for the benefit of its creditors,
(viii) OCC fails generally to pay its debts as they become due, or (ix) OCC has
an involuntary case or other proceeding commenced against it seeking
liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
and such involuntary case or other proceeding is not dismissed or stayed within
60 days.
17
(c) This Agreement may be terminated by OCC upon delivery
of ten (10) days prior written notice to NSA if NSA (i) authorizes or agrees to
the commencement of a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any
bankruptcy, insolvency, corporate, receivership or other similar law now or
hereafter in effect authorizing the reorganization or liquidation of such party
or its debt or the appointment of a trustee, receiver, liquidator, custodian or
other similar official over NSA or any substantial part of NSA's property, (ii)
makes a general assignment for the benefit of its creditors, (iii) fails
generally to pay its debts as they become due, or (iv) has an involuntary case
or other proceeding commenced against it seeking liquidation, reorganization or
other relief with respect to it or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect and such involuntary case or other
proceeding is not dismissed or stayed within 60 days.
5. RIGHT TO PURCHASE AND SELL TIN MILL PRODUCTS; ADDITIONAL SALES
ACTIVITIES BY OCC:
(a) Nothing contained herein shall be deemed to prohibit
NSA from purchasing and reselling tin mill products from third parties for sale
to its Customers.
(b) NSA understands and agrees that OCC may enter into
distribution agreements with WPSC and/or with other parties for sale of the
remaining production of prime OCC Tin Mill Products to customers other than the
Customers. However, neither WPSC nor OCC shall directly or indirectly solicit
sales of Tin Mill Products to any Customers or permit any distributor or sales
representative to solicit sales of Tin Mill Products to any Customers. OCC shall
not disclose to any customer, distributor or sales agent, to Customers, or to
any other parties, the prices charged to or paid by NSA for purchase of Tin Mill
Products from OCC;
(c) NSA shall only solicit sales of Tin Mill Products to
Customers and Export Customers.
(d) OCC may, in its sole discretion, assign new customers
to NSA or to other distributors or sales representatives. New customers assigned
to NSA shall become "Customers" as if set forth on EXHIBIT A attached hereto.
18
(e) OCC agrees that it shall submit inquiries to NSA to
purchase black plate from foreign sources and shall give NSA a reasonable
opportunity to submit bids to sell such foreign black plate to OCC, but OCC
retains the sole discretion to select the source(s) of the black plate it
chooses to purchase and the terms of any such purchases.
(f) OCC may reassign Customers to other distributors or
sales agents, if a Customer is reasonably dissatisfied with NSA and refuses to
submit orders as the result of the Customer's reasonable dissatisfaction with
NSA. Upon reassignment, such customer shall no longer be a Customer of NSA for
any future orders. OCC shall not reassign such Customer until it has given NSA
reasonable advance written notice of the Customer's dissatisfaction, an
opportunity to contest the Customer's reasonable dissatisfaction and a
reasonable opportunity to cure. The following shall not constitute grounds for
reasonable dissatisfaction by a Customer or for reassigning a Customer to
another distributor or sales agent: (i) reasonable refusal of NSA to provide a
Customer with sufficient credit to purchase as much Tin Plate Products as it
desires; or (ii) refusal of NSA to provide payment terms to such Customers in
excess of 30 days; or (iii) any dissatisfaction resulting principally from the
failure of OCC to perform in accordance with the terms of this Agreement.
(g) Notwithstanding the foregoing, OCC may reassign
Customers to other distributors or to itself even if a Customer is not
dissatisfied with NSA, in the event:
(i) the Customer: (a) places orders with NSA for Tin Mill
Products in any year less than 75% of the Nominated
Quantities by NSA for said Customer for such year; or
(b) places orders with NSA for Tin Mill Products for
less than 75% of the quantity of Tin Mill Products
ordered by the Customer during the prior calendar
year; and
(ii) the reason for the Customer not ordering OCC Tin Mill
Products is not due, in whole or in substantial part,
to one or more of the following:
(1) OCC's price being higher than the price that
NSA could obtain from another manufacturer
or distributor;
19
(2) failure of OCC after a reasonable time to
provide satisfactory technical assistance or
customer service to the Customer despite
reasonable requests by the Customer and NSA;
(3) failure by OCC, or the Customer's
anticipation of OCC's failure, to produce
Tin Mill Products in accordance with the
Specifications or within the time limits in
accepted Purchase Orders;
(4) the Customer's reasonable anticipation of
non-performance or late performance by OCC
due to the insolvency or anticipated
bankruptcy of OCC or the reorganization,
sale, liquidation or ceasing to do business
in the ordinary course by OCC; or
(5) the solicitation or offer to Customers for
the sale of OCC Tin Mill Products directly
by OCC or by any other distributor of OCC
Tin Mill Products to such Customers prior to
complying with the provisions of this
subsection 5(g).
(6) other causes not within the reasonable
control of NSA.
6. WARRANTIES; DISCLAIMER OF WARRANTIES
OCC WARRANTS THAT: (A) THE TIN MILL PRODUCTS SOLD TO NSA SHALL CONFORM
TO THE SPECIFICATIONS AND QUANTITIES CONTAINED IN THE NSA PURCHASE ORDER AND
ACCEPTED BY OCC WITH AN ORDER ACKNOWLEDGEMENT; AND (B) OCC HAS FULL AUTHORITY TO
GRANT TO NSA THE EXCLUSIVE DISTRIBUTORSHIP RIGHTS TO CUSTOMERS SET FORTH IN THIS
AGREEMENT. OCC DOES NOT MAKE, AND SHALL NOT BE DEEMED TO MAKE, ANY OTHER
WARRANTIES EITHER EXPRESS OR IMPLIED, WITH REGARD TO THE TIN MILL PRODUCTS SOLD
UNDER THIS AGREEMENT, AND OCC HEREBY EXPRESSLY DISCLAIMS THE IMPLIED WARRANTIES
OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO ALL TIN
MILL PRODUCTS SOLD TO NSA.
20
7. TERMINATION OF WPSC DISTRIBUTION AGREEMENT AND TRANSITION:
(a) TERMINATION OF WPSC DISTRIBUTION AGREEMENT: Subject
to the conditions set forth in this Agreement, WPSC and NSA agree that the
Distribution Agreement between NSA and WPSC dated as of April 1, 2001 (the "WPSC
DISTRIBUTION AGREEMENT") shall terminate with respect to the obligations of the
parties to solicit orders for and to sell Tin Mill Products to Customers on and
after the Effective Date (referred to herein as the "NEW ORDERS"). The terms and
provisions of this Agreement between NSA and OCC shall govern all New Orders.
All orders for Tin Mill Products submitted to and accepted by WPSC prior to the
Effective Date which are not New Orders shall continue to be governed by the
terms and provisions of the WPSC Distribution Agreement, which will remain in
effect between the parties with respect to such orders. Notwithstanding the
foregoing, after the Effective Date NSA shall submit all Customer claims
relating to Tin Mill Products sold by NSA under the WPSC Distribution Agreement
directly to OCC and OCC shall accept, investigate and pay any proper claims as
if the orders for such products had been solicited by NSA pursuant to this
Agreement.
(b) TERMINATION OF REBATES AND ADJUSTMENTS FOR PRIME AND
SECONDARY TIN MILL PRODUCTS: Notwithstanding the provisions of section 2.6(d) of
the WPSC Distribution Agreement, NSA and WPSC agree that the end of the Second
Period on December 31, 2002 (the "FINAL WPSC PERIOD") shall be the final period
for reporting and adjustment of the Period and annual gross margins for sales of
primary and secondary Tin Mill Products under section 2.6(d) of the WPSC
Distribution Agreement. NSA shall provide the information to WPSC for the Final
WPSC Period, and WPSC shall either pay to NSA or NSA shall pay to WPSC any
adjustments required under section 2.6(d) of the WPSC Distribution Agreement for
the Final WPSC Period, within the time periods set forth in said section.
(c) WPSC CONSENT AND AMENDMENT OF OCC SOLE
DISTRIBUTORSHIP AGREEMENT: WPSC hereby acknowledges and consents to the terms of
this Agreement and agrees that the Distribution Agreement between OCC and WPSC
providing for WPSC to be the sole distributor of OCC Tin Mill Products shall be,
and hereby is, modified to permit OCC to comply with the terms and provisions of
this
21
Agreement with NSA. The Distribution Agreement between WPSC and OCC shall
otherwise remain in full force and effect unless modified by WPSC and OCC in a
written agreement.
8. SALE OF SUBSTRATE BY NSA TO OCC: NSA shall not be required to
sell Substrate to OCC without adequate security for payment or performance by
OCC of its obligations to NSA. OCC agrees to consider NSA as a supplier of
Substrate and shall permit NSA a fair opportunity to compete, in OCC's sole
discretion, for, the business of selling Substrate to OCC.
9. CONFIDENTIALITY
Each party hereby agrees that all confidential proprietary information
of the other parties, including, but not limited to, customer lists, customer
inquiries and customer specifications for Tin Mill Products, marked or held and
used by such parties as confidential("CONFIDENTIAL INFORMATION") shall be
considered confidential, and shall be held in strict confidence and shall not,
without the prior written consent of the other party, be made available or
disclosed to any third party (including, without limitation, any other
distributors of Tin Mill Products produced by OCC) or be used by the other party
other than as contemplated hereunder. Moreover, each party hereby agrees to
restrict dissemination of Confidential Information to only those persons in its
organization who are directly involved in the performance of its obligations
under this Agreement. Notwithstanding the foregoing, neither party shall have
any obligation to the other regarding the disclosure of information which is, or
becomes, generally known to the public without breach of the terms of this
Agreement, or for any disclosure of Confidential Information which is required
by court order or by order of any governmental or administrative tribunal having
jurisdiction over the parties hereto; provided that the disclosing party shall
provide the non-disclosing party with prompt written notice of. such required
disclosure and shall take reasonable steps to allow the non-disclosing party to
seek a protective order with respect to the confidentiality of the information
required to be disclosed. The disclosing party shall promptly cooperate with and
assist the non-disclosing party in connection with obtaining such protective
order. The parties hereto each understand and agree that disclosure of
Confidential Information may cause irreparable harm to the other party. This
provision shall survive the termination of this Agreement for any reason.
22
10. TRADEMARKS
Except for the rights granted to NSA in this Agreement to market and to
sell OCC Tin Mill Products bearing the Trademarks of OCC, nothing herein
contained shall give NSA any right, title or interest in any patent, trademark,
copyright or other intellectual property of WPSC or OCC. In connection with its
resale of Tin Mill Products purchased from OCC, NSA shall use only the
Trademarks of OCC specified in EXHIBIT B, provided that (a) NSA acknowledges
that OCC shall retain at all times during this Agreement all right, title,
interest and goodwill in and to the Trademarks and (b) NSA shall not use or
display the Trademarks in any way which would impugn the integrity of OCC; and
(c) NSA shall not at any time do or permit any act to be done which may impair
the rights of OCC in its Trademarks, including, but not limited to, registering
or attempting to register the Trademarks or any xxxx that is substantially
similar to the Trademarks. OCC reserves the right to monitor NSA's usage of the
Trademarks and require reasonable modification to or of such usage. NSA shall
promptly notify OCC in writing in the event NSA learns of any alleged
infringement of the Trademarks by any third party and, if requested by OCC, NSA
shall assist OCC promptly, in taking all such reasonable steps as OCC may
consider desirable for the protection of the rights concerned. Any recovery
which may be made in enforcing such rights shall be for the account of OCC.
11. LIMITATION ON LIABILITY
NO PARTY SHALL BE LIABLE TO ANY OTHER, OR TO ANY THIRD PARTIES (SUCH AS
CUSTOMERS), EITHER DIRECTLY OR INDIRECTLY, FOR ANY LOST PROFITS OR ANY INDIRECT,
CONSEQUENTIAL, SPECIAL, EXEMPLARY OR INCIDENTAL DAMAGES, WHETHER IN CONTRACT,
TORT OR OTHERWISE, ARISING FROM OR RELATING TO THIS AGREEMENT.
12. INDEPENDENT CONTRACTORS
The parties hereto hereby acknowledge that each party is an independent
contractor and nothing contained herein shall be construed to place the parties
in the relationship of partners or joint venturers, except as may be explicitly
or expressly provided herein.
23
13. ARBITRATION
Any controversy or dispute arising under or in connection with any
terms or provisions of this Agreement with respect to the performance or breach
of this Agreement or in connection with any sales consummated pursuant to this
Agreement, and whether arising at law, in equity, and/or under any theory of law
or any statute, which cannot be settled amicably shall be submitted to
arbitration to be held in Pittsburgh, PA, administered by the American
Arbitration Association under its Commercial Arbitration Rules. The arbitration
shall, to the greatest extent possible, continue on consecutive business days
and on a full-time basis until the matter is concluded. The decision of the
arbitration tribunal shall be final and conclusive and binding upon the parties
hereto, and judgment upon the arbitration award may be entered by either party
and enforced in any court having jurisdiction.
14. MISCELLANEOUS
14.1 Conditions of Obligations: As conditions to any obligation of
NSA or OCC to enter into the proposed transactions, the following conditions
shall be satisfied or waived, as well as any conditions in other sections of
this Agreement:
(a) Bankruptcy Court Approval: The approval by the United States
Bankruptcy Court in which WPSC's Chapter 11 bankruptcy case is
pending of: (i) the execution of this Agreement by WPSC; (ii)
the execution by the stockholders of OCC of the amendment to
the Close Corporation and Shareholders' Agreement described in
subsection (c) of this section 14.1; (iii) the termination of
the Distribution Agreement between WPSC and NSA dated April 1,
2001; and (iv) the modification of the Distribution Agreement
between WPSC and OCC pursuant to Section 7(c) of this
Agreement.
(b) Secured Creditor Approval and Intercreditor Agreements:
Approval by all parties having a security interest in OCC's
accounts and inventory to: (a) the terms and provisions in
this Agreement and the performance by OCC under this
Agreement; and (b) the sale to NSA of Tin Mill Products, for
resale to Customers, free and clear of the security interest
of such parties.
24
(c) Stockholders Agreement: An amendment to the Close Corporation
and Shareholders' Agreement shall be executed by OCC and its
stock holders to appropriately reflect the modification of the
arrangement and agreements between and among WPSC, NSA and
OCC.
(d) OCC and WPSC Approval and Execution: The execution by OCC and
WPSC, and the approval by the Board of Directors for OCC and
WPSC of the acknowledgements, terms and provisions relating to
OCC and WPSC in this Agreement.
(e) Documentation: The transaction documents referenced in this
Section shall be evidenced by agreements, acceptable in all
respects to the parties and their counsel.
(f) Approval of NSA Board of Directors: Approval by the Board of
Directors of NSA of the final form of this Agreement and the
business transactions and documents contemplated herein and
execution by NSA of this Agreement:
14.2 Amendments. No change, alteration, modification, or addition
to this Agreement shall be effective unless reduced to writing and properly
executed by each of the parties.
14.3 Assignment. Except as otherwise expressly provided in this
Agreement or in the United States Bankruptcy Code, this Agreement may not be
assigned or otherwise transferred by either party hereto without the prior
written consent of the other, which consent shall not unreasonably be withheld.
14.4 Entire Agreement. Subject to the terms and conditions of the
agreements contemplated in Section 14.1 hereof, this Agreement and any Purchase
Orders, Order Acknowledgements and Invoices submitted pursuant hereto constitute
the entire agreement between the parties, except for supplementary letter
agreements between and among NSA, WPSC and/or OCC relating to transition
matters, purchase of inventory or other matters. In the event that there is a
conflict between this Agreement, on the one hand, and a Purchase Order or an
Order Acknowledgement, on the other hand, the terms of this Agreement shall take
precedence. The parties acknowledge and agree that none of them has made any
representation with respect to the subject matter of this Agreement or any
representations inducing the execution and delivery
25
hereof, except as specifically set forth herein and each of the parties
acknowledges that it has relied on its own judgment in entering into the same.
14.5 Descriptive Headings. The descriptive headings of the several
sections and subsections of this Agreement are used for convenience only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
14.6 Waiver. The failure of any party at any time to require
performance by the other party of any provision hereof shall in no way affect
the right to require such performance at any time thereafter, nor shall the
waiver by any party of a breach of any provision hereof be a waiver of any
succeeding breach of such provision or be a waiver of the provision itself. No
waiver shall be effective unless in writing signed by all parties hereto.
14.7 Notice. Any and all notices or communications required or
desired to be given in connection with this Agreement shall be in writing and
shall be transmitted to the applicable party either by hand delivery, mail,
return receipt requested, or by telecopy) addressed as follows:
If to NSA: If to WPSC:
President President and/or General Counsel
Nippon Steel Trading America, Inc. Wheeling-Pittsburgh Steel Corporation
Suite 1860, Citicorp Center 0000 Xxxxxx Xxxxxx
000 Xxxxx Xxxxxxxx Xxxxxx Xxxxxxxx, XX 00000
Xxx Xxxxxxx, XX 00000 FAX #: (000) 000-0000
FAX #: (000) 000-0000
If to OCC:
President
Ohio Coatings Company
0000 Xxx Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
FAX #: (000) 000-0000
or to any party at any other address as it notifies the other in writing under
the provisions of this Section. A notice sent by certified mail or courier shall
be deemed to have been given upon the signing of the notice of receipt or
refusal after such notice has been mailed/sent to the notice address of the
recipient.
26
14.8 Effective Date of Notices. Any notice given under this
Agreement shall be effective, if sent by mail, telecopy, telegram or telex, upon
receipt, and if delivered by personal delivery, upon the date of such delivery,
or in the case of either such method of transmittal, as such times as delivery
is refused by the addressee upon presentation.
14.9 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Ohio, without regard to
its conflict of laws rules.
14.10 Severability. If any provision of this Agreement shall be held
or made invalid or unenforceable for any reason, such invalidity shall not
affect the remainder of this Agreement and the parties hereto will use their
respective best efforts to substitute in the place of such invalid or
unenforceable provision a valid and enforceable provision of like force, effect
and economic intent.
14.11. Binding Effect. The terms and provisions of this Agreement
shall bind and inure to the benefit of and be enforceable by the parties, their
successors and assigns.
14.12 Counterparts. This Agreement may be executed in several
counterparts, by the different parties hereto on separate counterparts, each of
which shall be deemed to be an original and all of which, when taken together,
shall constitute one and the same Agreement.
15. Limited WPSC Agreement. WPSC shall be a party to this
Agreement as to Sections 2.6(c), 2.10, 5(b), 7, and 12 through 14 only,
including any definitions pertaining thereto, and shall not be a party to any
other Sections of this Agreement.
27
IN WITNESS WHEREOF, authorized representatives of the parties hereto
have caused this Agreement to be executed as of the date first noted above.
OHIO COATINGS COMPANY
By /s/ Xxxx X. XxXxx
---------------------------------
Name: Xxxx X. XxXxx
Title: President & CEO
Date Signed: 2/10/03
NIPPON STEEL TRADING AMERICA, INC.
[formerly known as Nittetsu Shoji America, Inc.]
By /s/ Susumu Tadenuma
---------------------------------
Name: Susumu Tadenuma
Title: President
Date Signed: February 6, 2003
WHEELING-PITTSBURGH STEEL CORPORATION
By /s/ Xxxx Xxxxx
---------------------------------
Name: Xxxx Xxxxx
Title: Vice President
Date Signed: 2/10/03
28
APPROVED AS TO FORM PURSUANT TO THE SIXTH AMENDMENT TO CLOSE CORPORATION AND
SHAREHOLDERS' AGREEMENT BETWEEN XXXX XXXX TINPLATE AMERICA CORP., NIPPON STEEL
TRADING AMERICA, INC. (formerly known as NITTETSU SHOJI AMERICA, INC.), WHEELING
PITTSBURGH CORPORATION AND OHIO COATINGS COMPANY DATED as of January 1, 2003.
WHEELING-PITTSBURGH CORPORATION.
By /s/ Xxxx Xxxxx
------------------------------------
Name: Xxxx Xxxxx
Title: Vice President
XXXX XXXX AMERICA CORPORATION
By /s/ Xxxx X. Xxxx
------------------------------------
Name: Xxxx X. Xxxx
Title: Authorized Agent
29
EXHIBIT A
NSA CUSTOMERS
ArbonBall Corp. Purchasing Alliance*
BWay Corporation
Can Corporation
Cargill
G&S
X. X. Xxxxx
X. X. Xxxxx/Impress
NAMASCO
Penn-Wheeling Closures
Silgan Container Corp.
Titan Industries
T.P.I.
Seneca Foods
Zapata North American Closures
South Texas Can
Xxxxxx Can
Xxxxxxxx
Van Can
Export Customers (12/1 - 8/31)
Secondary for NSA Customers - (Entered During Designated 2 Week Period)
NOTE:
Secondary for NSA Customers at the Discretion of WPSC after
designated 2 week period
Export Customers 9/1 - 11/30 at the Discretion of WPSC
*Ball Corp. "Purchasing Alliance" assumes 70% of plant
production being nominated and orders for such production
being obtained by NSA per Clause 2.3.a. in that year.
30
EXHIBIT B
OCC TRADEMARKS
[graphic]
31
EXHIBIT C
TIN MILL PRODUCT RANGES
[OHIO COATINGS LOGO]
------------------------------------------------------------------------------------------------
PRODUCT CAPABILITY MATRIX
------------------------------------------------------------------------------------------------
Minimum Maximum
------------------------------------------------------------------------------------------------
COIL DIAMETER (at exit) (inches) 70
------------------------------------------------------------------------------------------------
(millimeters) 1778
------------------------------------------------------------------------------------------------
COIL WIDTH (Inches) 20 40
------------------------------------------------------------------------------------------------
(millimeters) 508 1016
------------------------------------------------------------------------------------------------
GAUGE (inches) 0.006 0.025
------------------------------------------------------------------------------------------------
(millimeters) 0.15 0.64
------------------------------------------------------------------------------------------------
MAXIMUM COIL WEIGHT (entry) 40000 lbs. (18144 kg)
------------------------------------------------------------------------------------------------
(xxxx) 00000 xxx. (18144 kg)
------------------------------------------------------------------------------------------------
COATING WEIGHT (lb/BB) 0.05 1.00
------------------------------------------------------------------------------------------------
CHEMICAL TREATMENT SDCD CDC5
------------------------------------------------------------------------------------------------
ATBC SURFACE OILING (g/BB) 0.10 0.60
------------------------------------------------------------------------------------------------
32
Execution Copy
AMENDMENT NO. 1 TO DISTRIBUTION AGREEMENT
AND STOCKHOLDERS' AGREEMENT
AMENDMENT NO. 1, dated as of March __, 2003 (the "AMENDMENT"), to the
Distribution Agreement, dated as of January 1, 2003 (as amended hereby, the
"AGREEMENT"), between OHIO COATINGS COMPANY, a corporation existing under the
laws of Ohio (referred to herein as "OCC") and NIPPON STEEL TRADING AMERICA,
INC. (also known as Nittetsu Shoji America, Inc.), a corporation organized under
the laws of the State of California (referred to herein as "NSA") and, as
expressly limited by Paragraph 15 of the Agreement, WHEELING-PITTSBURGH STEEL
CORPORATION, organized and existing under the laws of the State of Delaware
(referred to herein as ' WPSC").
W I T N E S S E T H:
WHEREAS, OCC is engaged in the business of manufacturing for resale of
"Tin Mill Products" (as that term is defined in the Agreement);
WHEREAS, OCC is in the process of refinancing its borrowed money debt
and Bank of America, OCC's proposed new lender, asked that OCC's distribution
arrangements be revised;
WHEREAS, OCC, WPSC and NSA executed the Agreement in order to revise
distribution arrangements to conform with the Bank of America requests;
WHEREAS, certain conditions to the transactions under the Agreement
have not been met; WHEREAS, the Bank of America financing has not closed; and
WHEREAS, the parties hereto have agreed to amend certain provisions of
the Agreement in light of the foregoing and to effectuate their original intent,
NOW, THEREFORE, in consideration of the mutual premises and covenants
set forth herein, the parties hereby agree as follows:
1. DEFINITIONS. The definition of "Effective Date" in Section 1.2
of the Agreement is hereby amended by replacing the date "March 1, 2003" with
"the first business day immediately following
1
written notification to NSA of the consummation of a refinancing of OCC's
borrowed money debt on terms and conditions satisfactory to OCC and WPSC;
provided, however, that if no such notice has been delivered to NSA prior to
January 1, 2005, and if the WPSC Distribution Agreement has not been extended
through December 31, 2005, then the Agreement shall take effect on January 1,
2005".
2. AMENDMENT TO SECTION 7(a). Section 7(a) is hereby amended by
inserting after the first sentence thereof the sentence "The WPSC Distribution
Agreement shall remain unchanged and in full force and effect prior to the
Effective Date."
3. AMENDMENT TO SECTION 7(c). Section 7(c) is hereby amended by
adding to the end thereof the sentence "Notwithstanding the foregoing, the
Distribution Agreement between WPSC and OCC shall remain unchanged and in full
force and effect prior to the Effective Date."
4. DELAY IN EFFECTIVENESS OF SIXTH AMENDMENT TO SHAREHOLDERS'
AGREEMENT. By signing below, OCC, NSA, Wheeling-Pittsburgh Corporation ("WPC")
and Xxxx Xxxx Tinplate America Corp. (`DYT") hereby consent to the terms and
provisions of this Amendment and agree that the terms and provisions of the
Sixth Amendment to Close Corporation and Shareholders' Agreement between and
among said parties dated as of January 1, 2003 (the "SIXTH SHAREHOLDERS'
AMENDMENT"), shall be effective only upon the "Effective Date" as that term is
defined in the Agreement as amended by this Amendment.
5. IMPLEMENTATION: WPSC, NSA and OCC hereby acknowledge and agree
that any and all invoices for Tin Mill Products sent by OCC to NSA purportedly
pursuant to the Agreement shall be treated as though they had been sent by WPSC,
and any payments for such Tin Mill Products made by NSA to OCC shall be treated
as though they had been made to WPSC. The WPSC Distribution Agreement shall
govern all other orders for OCC Tin Mill Products until the "Effective Date" set
forth in the Agreement as amended by this Amendment.
6. EFFECT ON AGREEMENT. Except as expressly provided herein, the
Agreement and the Sixth Shareholders' Amendment shall remain unchanged and in
full force and effect, and capitalized terms used but not defined herein shall
have the meanings specified in the Agreement.
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7. DESCRIPTIVE HEADINGS. The descriptive headings of the several
sections and subsections of this Amendment are used for convenience only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
8. GOVERNING LAW. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of Ohio, without regard to
its conflict of laws rules.
9. SEVERABILITY. If any provision of this Amendment shall be held
or made invalid or unenforceable for any reason, such invalidity shall not
affect the remainder of this Amendment and the parties hereto will use their
respective best efforts to substitute in the place of such invalid or
unenforceable provision a valid and enforceable provision of like force, effect
and economic intent.
10. BINDING EFFECT. The terms and provisions of this Amendment
shall bind and inure to the benefit of and be enforceable by the parties, their
successors and assigns.
11. COUNTERPARTS. This Amendment may be executed in several
counterparts, by the different parties hereto on separate counterparts, each of
which shall be deemed to be an original and all of which, when taken together,
shall constitute one and the same Amendment.
12. AUTHORITY: WPSC hereby warrants and represents to NSA that
WPSC and WPC are executing this Amendment in the ordinary course of the conduct
of its business and that approval of the Bankruptcy Court of the execution of
this Amendment by WPSC and/or by WPC is not required.
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IN WITNESS WHEREOF, authorized representatives of the parties hereto
have caused this Amendment to be executed as of the date first noted above.
WHEELING-PITTSBURGH STEEL OHIO COATINGS COMPANY
CORPORATION
By /s/ Xxxx X. Xxxxxx By /s/ Xxxx X. XxXxx
--------------------------------- ---------------------------------
Name: Xxxx X. Xxxxxx Name: Xxxx X. XxXxx
Title: Executive V.P. & CFO Title: President & CEO
Date Signed: March 20, 2003 Date Signed: March 19, 2003
XXXX XXXX AMERICA NIPPON STEEL TRADING CORPORATION
AMERICA, INC.
[formerly known as Nittetsu Shoji
America, Inc.]
By /s/ Xxxx X. Xxxx By /s/ Susumu Tadenuma
-------------------------------- ---------------------------------
Name: Xxxx X. Xxxx Name: Susumu Tadenuma
Title: Authorized Agent Title: President & CEO
Date Signed: March 19, 2003 Date Signed: March 19, 2003
WHEELING-PITTSBURGH
CORPORATION
By /s/ Xxxx X. Xxxxxx
---------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive V.P. & CFO
Date Signed: March 20, 2003
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