------------
PURCHASE AND SALE AGREEMENT
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ROLLS-ROYCE plc
and
TITANIUM METALS CORPORATION
------------
[ * ]
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
THIS PURCHASE AND SALE AGREEMENT (the "Master Agreement"), dated as of [ *
], is by and between ROLLS-ROYCE plc, incorporated under the laws of England
(Reg. No. 1003142) with its principal office in London, England ("R-R"), and
TITANIUM METALS CORPORATION, a Delaware corporation with its principal office in
Denver, Colorado, USA ("TIMET"). R-R and TIMET are referred to in this Master
Agreement individually as a "Party" and together as the "Parties." Certain other
capitalized terms used in this Master Agreement are defined in Article 1 in this
Master Agreement or in the Common Terms (defined below).
RECITALS
A. R-R is in the business of manufacturing aerospace engines that utilize a
substantial quantity of titanium parts in various forms. TIMET is a producer of
titanium metal products.
B. R-R and TIMET wish to cooperate in a strategic alliance addressing all
areas relating to the procurement by and delivery of Titanium Products to R-R,
including without limitation, defining and measuring methods of schedule
adherence and lead times consistent with meeting R-R's customer needs,
continuous quality improvement, reducing customer complaints and
non-conformances, and identifying and implementing opportunities for service
improvements and cost reduction which may reduce the cost of titanium metal
products to R-R.
C. In order to achieve long-term efficiencies in the supply by TIMET of
Titanium Products to R-R directly, R-R and TIMET have negotiated the terms to be
applicable to direct purchases by R-R from TIMET of TIMET Titanium Products for
end use by R-R in R-R aerospace applications, all as set forth in this Master
Agreement, including the Common Terms and the Terms & Conditions, pursuant to
which, among other things, TIMET has agreed to supply TIMET Titanium Products at
the pricing set forth in this Master Agreement in return for the agreement of
R-R to purchase from TIMET certain minimum volumes of TIMET Titanium Products,
all as set forth in this Master Agreement.
D. In addition, R-R and TIMET desire to improve on these long-term
efficiencies by including within the scope of this Master Agreement to the
maximum extent possible, on a voluntary basis, key suppliers to R-R that
purchase titanium metal products for ultimate application in R-R end products.
To this end, R-R and TIMET desire to provide in this Master Agreement a
mechanism for providing the pricing contained herein to such of those suppliers
that become Purchasers by agreeing to purchase from TIMET an agreed percentage
of R-R's requirements for Titanium Products.
E. The Parties therefore desire to enter into this long-term agreement for
the purchase and sale of TIMET Titanium Products.
NOW, THEREFORE, the Parties agree as follows:
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
1. DEFINITIONS
In addition to those definitions contained in the Common Terms, which are hereby
incorporated by reference, the following additional defined terms shall have the
meanings set forth below when used in this Master Agreement:
"Annual Indirect Purchase" means the aggregate volume of TIMET Titanium Products
actually purchased during a calendar year by all Purchasers (other than
R-R) under all of the Purchase Agreements (other than by R-R pursuant to
this Master Agreement).
"Common Terms" means the terms and conditions for the purchase and sale of TIMET
Titanium Products that are intended to be substantially common to all
Purchase Agreements (including this Master Agreement), attached to this
Master Agreement as Exhibit A.
"Customer Value Initiatives" has the meaning given such term in Section 6.1 of
this Master Agreement.
"Customer Value Task Force" has the meaning given such term in Section 6.2 of
this Master Agreement.
"De Minimus Volume" means a volume of a given Titanium Product in excess of [ *
] measured over the course of any given calendar year.
"Internal Audit" has the meaning given such term in Section 5.5 of this Master
Agreement.
"Outside Auditor" has the meaning given such term in Section 5.5 of this Master
Agreement.
"Purchase Agreement" has the meaning given such term in Section 3.2 of this
Master Agreement.
"Purchaser" means the entity identified as "Purchaser" in the heading of a
specific Purchase Agreement, and, collectively, all of such Purchasers
taken as a whole. R-R shall be regarded as "Purchaser" with respect to this
Master Agreement.
"Relevant R-R Price" has the meaning given such term in Section 5.1 of this
Master Agreement.
"R-R Assignee" has the meaning given such term in Section 7.5 of this Master
Agreement.
[ * ]
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* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
"Terms & Conditions" means the Purchase Order Terms & Conditions attached to the
Common Terms as Schedule 3.
2. DIRECT PURCHASE AND SALE OF TITANIUM PRODUCTS
2.1 On the terms and subject to the conditions of this Master Agreement,
including the Common Terms, R-R agrees to purchase from TIMET, and TIMET
agrees to sell to R-R, TIMET Titanium Products in the volumes and at the
prices set forth in the Common Terms (as may be adjusted pursuant to
Article 4 of this Master Agreement or any other provision in this Master
Agreement). The TIMET Titanium Products to be purchased and sold by this
Master Agreement will be in the form of the part numbers set forth on
Schedule 1 to the Common Terms (or, in the absence of a specific part
number, the alloys, shapes and specific sizes set forth on Schedule 1 to
the Common Terms).
2.2 Such purchases of TIMET Titanium Products by R-R from TIMET shall be made
by the placement of separate Purchase Orders by R-R directly with TIMET, as
provided in the Common Terms and the Terms & Conditions.
2.3 While this Master Agreement (and the related Purchase Agreements with other
Purchasers) is initially limited to the sale and purchase of TIMET Titanium
Products for ultimate use in an R-R aerospace product, TIMET agrees to
negotiate in good faith if R-R indicates a desire to expand the scope of
this Master Agreement to cover other R-R-related companies or non-aerospace
applications. Any such expansion will be evidenced by an appropriate
amendment to this Master Agreement or as a separate agreement on terms no
less favorable than those contained in this Master Agreement.
3. PURCHASERS
3.1 In addition to TIMET's supplying TIMET Titanium Products directly to R-R,
R-R and TIMET will work in good faith in an effort to promote and achieve
the recognition as Purchasers, as soon as practicable following the
execution of this Master Agreement, of all existing key suppliers to R-R of
materials, parts or assemblies containing titanium metal; provided,
however, that R-R and TIMET expressly agree that there will be no
consequences under this Master Agreement for any failure to achieve such
goal.
3.2 A supplier will be regarded as a Purchaser under this Master Agreement when
it has entered into a long-term supply agreement with TIMET similar to this
Master Agreement for the supply of TIMET Titanium Products on terms and
conditions mutually satisfactory to such supplier and TIMET (each such
agreement, a "Purchase Agreement" and, except as otherwise expressly
indicated, this Master Agreement shall be regarded as a Purchase Agreement
which, together with each other Purchase Agreement, are referred to as the
"Purchase Agreements"). [ * ]
-3-
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
4. PRICING
4.1 Initial pricing for deliveries of TIMET Titanium Products during the period
from [ * ] through [ * ] shall be as set forth on Schedule 1 to the Common
Terms.
4.2 Pricing for deliveries of TIMET Titanium Products during the period [ * ]
through [ * ] shall be adjusted annually, as of January 1 of each such year
(commencing [ * ]) based upon the application of the formula set forth in
Section 3.2 of the Common Terms. TIMET will provide R-R, no later than [ *
] of each year (commencing [ * ]), with TIMET's calculation of the
resulting price change for each TIMET Titanium Product.
5. [ * ]
5.1 [ * ]
5.2 [ * ]
5.3 In addition to any rights of termination it may have under Article 5 of the
Common Terms, R-R may also terminate this Master Agreement as follows:
[ * ]
5.4 For purposes of comparing pricing under this Article 5, all TIMET foreign
currency sales will be converted into U.S. dollars using the average of the
conversion rates reflected in The Wall Street Journal for the first day of
each month during the calendar year in question (or the next business day
thereafter).
5.5 [ * ]
6. CUSTOMER VALUE INITIATIVES
6.1 The parties agree to use all commercially reasonable efforts to pursue the
joint formulation, development, and implementation of initiatives intended
to improve TIMET's productivity and lower its manufacturing cost and
thereby result in lower pricing for TIMET Titanium Products and improved
service and delivery to all Purchasers (including R-R itself with respect
to direct purchases), including, without limitation, initiatives related to
yield, process improvements, alternative processes, alternate sponge source
approvals, and scrap utilization (collectively, "Customer Value
Initiatives"). The parties agree to work in good faith toward the
successful implementation of these Customer Value Initiatives and the fair
sharing of the resulting benefits therefrom (net of any relevant costs of
implementation). In this regard, TIMET specifically agrees that it will
-4-
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
not unreasonably decline to pursue and implement any such Customer Value
Initiative proposed that is established to be technically feasible and
likely to produce a reasonably acceptable internal rate of return on
investment to TIMET. The Parties, through the Customer Value Initiatives
process set forth in this Article 6, specifically target [ * ].
6.2 R-R and TIMET shall each designate a reasonable number of personnel to
serve on a task force (the "Customer Value Task Force"), which group will
be charged with the responsibility of evaluating and, subject to
appropriate agreements, implementing Customer Value Initiatives. R-R and
TIMET shall cooperate to attempt to reduce the costs of TIMET Titanium
Products to R-R. As part of its responsibility, the Customer Value Task
Force will develop specific proposals for consideration by each party with
respect to the appropriate and equitable sharing of implementation costs
and benefits associated with each Customer Value Initiative. Prior to any
material investment in furtherance of any such Customer Value Initiative,
any agreement regarding the sharing of implementation costs and benefits
will be memorialized in a writing executed by both R-R and TIMET. It is
anticipated that the sharing of benefits (net of any relevant costs of
implementation) will take the form of reduced future pricing under this
Master Agreement and the other Purchase Agreements. Upon the request of RR,
TIMET will provide R-R with the relevant data to allow R-R to verify the
savings and costs associated with any agreed-upon and implemented Customer
Value Initiative.
6.3 TIMET agrees to share with R-R necessary technology and cost information
possessed by TIMET (to the extent permitted by law and, if applicable,
agreements with other parties and subject to the restrictions on
non-disclosure and non-use set forth in Article 6 of the Common Terms) in
order to support Customer Value Initiatives and aid in the development of
new Customer Value Initiatives, directed both to cost reduction and the
advancement of titanium technology. TIMET, acting reasonably and in good
faith, shall make the determination as to the relevancy of such technology
and cost information to support existing Customer Value Initiatives or its
aid in the development of new Customer Value Initiatives.
6.4 In addition, the Parties shall hold periodic meetings, as they shall agree,
in order to evaluate and assess the progress being made on Customer Value
Initiatives and the general management of this Master Agreement, including
without limitation, semi-annual meetings that will include at least one
senior executive of each Party, quarterly contract management review
meetings that will include at least one senior manager of each Party, and
such other meetings directed at cost, quality, technology, logistics,
supply chain performance and other relevant issues as the parties shall
jointly determine to be necessary or appropriate.
6.5 While the payment terms provided for in the Common Terms are currently
denominated in pounds sterling, R-R and TIMET agree to discuss a mechanism
for providing for payment in one or more alternate currencies (including
U.S. dollars).
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* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
6.6 The Parties shall work together vigorously to identify opportunities with
regard to service and other comparable issues but recognize that while
important to this Master Agreement, such may not result in any tangible
Customer Value Initiative.
7. MISCELLANEOUS
7.1 No provision of this Master Agreement (including without limitation, the
exhibits and schedules attached hereto) may be changed or modified except
by a writing signed by both R-R and TIMET that makes express reference to
this Master Agreement.
7.2 This Master Agreement, together with the schedules and exhibits hereto
(including, without limitation, the Common Terms, the Terms & Conditions,
and any subsequent amended or restated Schedule 1), each of which are
hereby incorporated into this Master Agreement by reference, and together
with all Purchase Orders (to the extent accepted by TIMET pursuant to this
Master Agreement), set forth the entire agreement between R-R and TIMET
with respect to the subject matter hereof, and supersede any and all other
prior agreements and understandings between R-R and TIMET with respect to
such matters.
7.3 R-R and TIMET each hereby certifies that this Master Agreement has been
duly approved and authorized by it and that the individual executing on
behalf of such Party has been duly authorized by such Party to do so.
7.4 Each Party shall use all commercially reasonable efforts to ensure that:
(a) the design, materials and specifications of all work performed or
goods supplied under this Master Agreement by such Party are such that
its performance under this Master Agreement and each Purchase Order
shall not fail to comply, in any respect that would cause a material
adverse effect to the other Party, with the British Standards
Institute's definition of Year 2000 conformity contained in BSI DISC
PD2000-1; and
(b) the above requirements are reflected in each subcontract or suborder
made in support of this Master Agreement.
7.5 TIMET agrees that, upon written request of R-R, TIMET will enter into an
agreement with R-R and any R-R supplier or sub-assembly producer or any
party to a risk and revenue sharing agreement with R-R (such supplier,
producer, or party referred to in this Master Agreement as an "R-R
Assignee") whereby the rights and obligations of R-R under this Master
Agreement in relation to any given R-R engine part are assigned by R-R to,
and assumed by, such R-R Assignee, in whole or in part as the case may be,
provided the terms of such agreement and the creditworthiness of such R-R
Assignee are reasonably satisfactory to TIMET.
-6-
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
8. COMMON TERMS AND TERMS & CONDITIONS APPLICABLE TO R-R ONLY
8.1 The following alternate Sections 3.7 and 4.1 shall apply solely to R-R in
lieu of their numerical counterparts in the Common Terms:
3.7 Except as otherwise set forth in Section 3.8 of these Common
Terms, the terms of sale for all TIMET Titanium Products
purchased and sold pursuant to the Purchase Agreement shall be, [
* ]
4.1 Subject to the other terms and conditions contained in these
Common Terms (including, but not limited to, any limitations on
TIMET's obligation to sell TIMET Titanium Products to R-R and to
Section 4.5 of these Common Terms), R-R agrees that it will
purchase directly from TIMET in each calendar year during the
term of the Purchase Agreement a volume of TIMET Titanium
Products [ * ]
Subject to the other terms and conditions of the Purchase
Agreement, TIMET agrees that it will sell to Purchaser such
volume of TIMET Titanium Products actually ordered by Purchaser.
For purposes of this Section 4.1:
(x) A TIMET Titanium Product shall be deemed to have been
purchased in the year in which it is scheduled for delivery
as agreed between Purchaser and TIMET (regardless of whether
actually delivered by TIMET during such year); provided,
however, that if payment for such TIMET Titanium Product is
not subsequently made by Purchaser, such TIMET Titanium
Product will be deducted from the volumes for the year in
which payment was due;
(y) TIMET Titanium Products with respect to which a Purchase
Order is terminated in accordance with Section 10.1 of the
Terms & Conditions shall be counted only in an amount equal
to the relevant volume (in kilograms) times the percentage
of applicable price actually paid as an Equitable
Termination Settlement in accordance with Sections 10.3 and
11.2 of the Terms & Conditions; and
(z) Any substitute Titanium Product purchased by Purchaser
pursuant to Sections 5.1(b) or 9.3 of the Terms & Conditions
shall be counted for purposes of this Section 4.1 as if it
were a TIMET Titanium Product purchased by Purchaser.
-7-
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
8.2 The following alternate Section 12.3 of the Terms & Conditions shall apply
solely to R-R in lieu of its numerical counterpart in the Terms &
Conditions:
[ * ]
8.3 [ * ]
-8-
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
IN WITNESS WHEREOF, this Master Agreement is executed by an authorized
representative of each Party as of the date first hereinabove set forth.
ROLLS-ROYCE plc
By: /s/ ▇▇▇▇▇ Hole
-------------------------------------------------
Name: ▇▇▇▇▇ Hole
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Title: Procurement Director
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Notices to:
Rolls-Royce plc
▇.▇. ▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
General Manager - Materials Supply Chain
Facsimile No.: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
TITANIUM METALS CORPORATION
By: /s/ J. ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------------
Name: J. ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Title: Chairman and CEO
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Notices to: With a copy to:
TIMET UK Limited Titanium Metals Corporation
▇.▇. ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ Denver, Colorado 80202
▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Attn: Director-Sales and Marketing Attn: Vice President,
General Counsel & Secretary
Facsimile No.: ▇▇-▇▇▇-▇▇▇-▇▇▇▇ Facsimile No.: ▇-▇▇▇-▇▇▇-▇▇▇▇
-9-
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
EXHIBIT A
to Purchase & Sale Agreement
------------
COMMON TERMS
OF PURCHASE AND SALE OF
TIMET TITANIUM PRODUCTS
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1. SCOPE AND PURPOSE
1.1 These Common Terms are intended to incorporate certain terms common to both
(a) the Master Agreement between R-R and TIMET for the direct purchase of
TIMET Titanium Products by R-R and (b) each additional Purchase Agreement
between a Purchaser (other than R-R) and TIMET relating to the indirect
supply of TIMET Titanium Products to R-R through such Purchaser.
1.2 To the extent of any conflict between the terms of the Purchase Agreement
to which these Common Terms are attached and these Common Terms, the terms
and provisions of such Purchase Agreement shall have precedence.
1.3 These Common Terms include certain provisions that will be administered by
R-R on behalf of each Purchaser. Purchaser agrees to accept as fully
binding upon it any determination made by R-R which is, by the express
terms of the Purchase Agreement (including these Common Terms) permitted to
be made by R-R, including without limitation, pricing adjustments under
Article 3 of these Common Terms, volume directions and allocations under
Article 4 of these Common Terms, and Customer Value Initiatives savings
verification and allocations under Article 6 of the Master Agreement.
Purchaser (if not R-R) hereby appoints R-R as Purchaser's agent and
attorney-in-fact for purposes of administering such provisions and entering
into any agreement with TIMET related to such provisions that will be
binding upon Purchaser.
2. DEFINITIONS
Except as otherwise expressly provided in the Purchase Agreement to which
these Common Terms are attached, the following defined terms shall have the
meanings set forth below when used therein:
Exhibit A--Common Terms
Page 1
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
2.1 "Aggregate Purchase Volume" means, for any given calendar year, the
aggregate volume of TIMET Titanium Products purchased by all Purchasers,
taken as a whole.
2.2 "Annual R-R Directed Percentage" means that percentage of Purchaser's
Annual Titanium Requirements that Purchaser is directed in writing by R-R
on an annual basis to purchase directly from TIMET in accordance with
Section 4.1 of these Common Terms.
2.3 "Annual Titanium Requirements" means, for any given calendar year, the
total volume of all Titanium Products purchased (rounded to the nearest 50
metric tonnes), in whatever form and from whatever source, either by
Purchaser directly from the titanium producer, or indirectly by Purchaser
through a chain of one or more intermediate suppliers, in either case to be
used to manufacture parts or assemblies for use in R-R aerospace products,
but excluding any Excluded Volume. Such volume requirements shall be
calculated based upon the actual weight and form of titanium metal first
sold in the supply chain (but without duplicating volumes purchased in
different forms in multiple transactions in the supply chain), unless such
shipped product is titanium sponge, in which case the measurement shall be
the weight of the first downstream titanium product sold thereafter.
2.4 "Calendar Quarter" means the three-month periods ending March 31, June 30,
September 30, and December 31.
2.5 "Common Terms" means these Common Terms for the Purchase and Sale of TIMET
Titanium Products attached to the Purchase Agreement as Exhibit A, as
hereafter amended, modified, supplemented, or restated.
2.6 "Confidential Information" means confidential or proprietary information of
the Disclosing Party furnished to the Receiving Party in connection with
the Purchase Agreement, including without limitation, technical information
in the form of designs, concepts, requirements, specifications, software,
interfaces, components, processes, or the like, and which, if in visual,
written or graphic form, is clearly and conspicuously identified thereon as
"confidential" or "proprietary" or which contains a restrictive legend
clearly showing that the information is considered proprietary or, if in
oral form, is confirmed promptly thereafter in writing as "confidential" or
"proprietary," or, if not so marked or confirmed, which the Receiving Party
knows or reasonably should have known was confidential or proprietary
information of the Disclosing Party. Without limiting the generality of the
foregoing, the information contained on the Schedules of these Common Terms
shall be regarded as Confidential Information of TIMET (unless covered by
one of the exclusions set forth in the following sentence). The provisions
of this Section 2.6 and Article 6 of these Common Terms shall not apply to,
and the Receiving Party shall not be obligated to hold in confidence
pursuant to Article 6 of these Common Terms, information which:
(a) was in the lawful possession of the Receiving Party without
confidentiality restrictions prior to its receipt thereof from the
Disclosing Party;
(b) is or becomes public knowledge without the fault of the Receiving
Party;
Exhibit A--Common Terms
Page 2
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
(c) is or becomes available to the Receiving Party on an unrestricted
basis from a source having a right to make such disclosure;
(d) is made available on an unrestricted basis to a third party by the
Disclosing Party; or
(e) is developed by the Receiving Party independent of Confidential
Information received under Article 6 of these Common Terms.
2.7 "Customer Value Initiatives" means the joint formulation, development, and
implementation of initiatives intended to improve TIMET's productivity and
lower its manufacturing cost and thereby result in lower pricing for TIMET
Titanium Products and improved service and delivery to all Purchasers
(which includes R-R), including, without limitation, initiatives related to
yield, process improvements, alternative processes, alternate sponge source
approvals, and scrap utilization.
2.8 "Customer Value Task Force" means a task force comprised of personnel
designated by each of R-R and TIMET that will be charged with the
responsibility of evaluating and, subject to appropriate agreements,
implementing Customer Value Initiatives.
2.9 "Disclosing Party" means Purchaser or TIMET, as the case may be,
communicating Confidential Information to the Receiving Party in connection
with the Purchase Agreement.
2.10 "Excluded Volume" means, for any given calendar year, the aggregate volume
(rounded to the nearest 50 metric tonnes) of all Titanium Products
purchased directly or indirectly by Purchaser for end use in an R-R
aerospace application from a titanium producer other than TIMET solely for
one of the following reasons: [ * ]
2.11 "Master Agreement" means that certain Purchase and Sale Agreement by and
between R-R and TIMET, dated [ * ], as hereafter amended, modified,
supplemented or restated.
2.12 "Maximum Annual Volume" means [ * ]
2.13 "Maximum Lead Time" means, for a given TIMET Titanium Product, the maximum
permitted lead time from receipt of a Purchase Order until delivery of the
TIMET Titanium Product, as set forth on Schedule 2.
2.14 "Maximum Quarterly Volume" means, for a given Calendar Quarter and (a) for
any given TIMET Titanium Product, a volume of such TIMET Titanium Product
equal to [ * ] of the aggregate of the volume of such TIMET Titanium
Product ordered by all Purchasers in the immediately preceding Calendar
Quarter, not to exceed the Maximum Annual Volume limitation; and (b) for
all TIMET Titanium Products as a whole, a volume of such TIMET Titanium
Products equal to [ * ] of the aggregate of the volume of TIMET Titanium
Products ordered by all Purchasers in the immediately preceding Calendar
Quarter, not to exceed the Maximum Annual Volume limitation.
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
2.15 "Net Monthly" means [ * ]
2.16 "On-Time Delivery Rate" means [ * ]
2.17 "Purchase Agreement" means, individually, the Purchase and Sale Agreement
to which these Common Terms are attached, and collectively, all of the
Purchase and Sale Agreements between TIMET, on the one hand, and a
Purchaser, on the other hand, for the purchase and sale of TIMET Titanium
Products. Except as otherwise expressly indicated, the Master Agreement
shall be regarded as a Purchase Agreement.
2.18 "Purchase Order" means a purchase order for TIMET Titanium Products placed
by Purchaser with TIMET in accordance with, and on the terms and conditions
set out in, the Terms & Conditions.
2.19 "Purchaser" means the entity identified as "Purchaser" in the heading of
the specific Purchase Agreement (which shall be R-R itself under the Master
Agreement).
2.21 "Quality Related Default" has the meaning given such term in Schedule 4 of
these Common Terms. ------- ------- -------
2.22 "Quarterly Lead Time Schedule" has the meaning given such term in Section
4.4 of these Common Terms. --------- ---- ---- --------
2.23 "Quarterly Volume Forecast" has the meaning given such term in Section 4.3
of these Common Terms. --------- ------ --------
2.24 "Receiving Party" means Purchaser or TIMET, as the case may be, to which
Confidential Information is communicated by the Disclosing Party in
connection with the Purchase Agreement.
2.25 "Relevant Quarterly Lead Time" has the meaning given such term in Section
4.4 of these Common Terms. -------- --------- ---- ----
2.26 "Representatives" of a given party means its directors, officers, and
employees. ---------------
2.27 "R-R" means Rolls-Royce plc. ---
2.28 "Schedule" means a schedule attached to these Common Terms, unless
expressly identified as a schedule to another document.
2.29 "Terms & Conditions" means the Purchase Order Terms & Conditions attached
to these Common Terms as ----- - ---------- Schedule 3.
2.30 "TIMET" means Titanium Metals Corporation. -----
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
2.31 "TIMET Titanium Product" means a Titanium Product purchased from TIMET
pursuant to a Purchase Agreement.
2.32 "Titanium Product" means any titanium metal product ordered or purchased by
Purchaser for end use by R-R in an aerospace product, whether purchased
from TIMET or any other supplier of titanium metal products.
3. PRICING MATTERS
3.1 Pricing for all TIMET Titanium Products sold to Purchaser will be as set
forth on Schedule 1 to these Common Terms except (a) as otherwise agreed in
writing by R-R and TIMET, or (b) as otherwise provided in this Article 3
for TIMET Titanium Products originally scheduled for delivery on or after [
* ]. Pricing for TIMET Titanium Products not specifically identified in
Schedule 1 will be established by the mutual agreement of R-R and TIMET for
all Purchase Agreements (R-R acting as agent for Purchaser in such case).
Such pricing will be established [ * ]. Any such additional prices for new
or modified TIMET Titanium Products will be evidenced by the execution of
an amended and restated Schedule 1 signed by both R-R and TIMET which shall
set forth the effective date of such amended and restated Schedule 1 and
shall thereupon be substituted for the then-current Schedule 1. Schedule 1
shall be redacted, as appropriate from time to time, to contain only those
TIMET Titanium Products being purchased by Purchaser.
3.2 For TIMET Titanium Products originally scheduled for delivery [ * ], the
prices set forth in the then-current Schedule 1 are subject to annual
adjustment, up or down, effective January 1 of each such year, based upon
the following formula:
[ * ]
where:
[ * ]
Each successive calculation shall be rounded to the fourth
decimal, except that [ * ] shall be rounded to the second
decimal.
3.3 In accordance with the Master Agreement, R-R will administer the annual
pricing adjustments provided for in Section 3.2 of these Common Terms. Once
the pricing adjustment for a given year has been determined by R-R and
TIMET, TIMET will supply each Purchaser with a revised Schedule 1
reflecting revised prices for TIMET Titanium Products then being purchased
by such Purchaser from TIMET, which revised Schedule 1 shall have been
executed by R-R and TIMET on behalf of all Purchasers, and such revised
Schedule 1 shall thereupon be substituted for the then-current Schedule 1
for shipments to be made during the applicable period shown thereon.
Purchaser agrees to be bound by any such revisions to Schedule 1 that have
been agreed upon between R-R and TIMET.
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
3.4 Notwithstanding any provisions to the contrary, the price for any TIMET
Titanium Product that TIMET has agreed to deliver in a given calendar year,
but which is actually delivered in a subsequent calendar year because TIMET
failed to meet its delivery obligations, shall be the lower of (a) the
price that would have applied had delivery been timely made and (b) the
price for the calendar year in which delivery is actually made.
3.5 The parties recognize that pricing for a given year with respect to a
particular TIMET Titanium Product may also be subject to reduction,
independent of any adjustment resulting from the application of Section 3.2
of these Common Terms, based upon the results of Customer Value Initiatives
undertaken by R-R and TIMET in accordance with Article 6 of the Master
Agreement, as any such reductions are agreed upon by R-R and TIMET in
writing.
3.6 Except (a) as otherwise expressly provided in the Purchase Agreement
(including in these Common Terms) or (b) as otherwise expressly agreed in
writing between TIMET and Purchaser, all purchases and sales of TIMET
Titanium Products pursuant to the Purchase Agreement shall be subject to
the Terms & Conditions.
3.7 Except as otherwise set forth in Section 3.8 of these Common Terms, the
terms of sale for all TIMET Titanium Products purchased and sold pursuant
to the Purchase Agreement shall be [ * ]. Upon not less than ten (10) days
prior written notice to Purchaser, TIMET may adjust the credit terms as it
shall reasonably determine to be appropriate in light of [ * ]
3.8 TIMET may elect to supply TIMET Titanium Products from any of its
facilities as it may reasonably determine consistent with the commercial
and technical needs of R-R and Purchaser; [ * ]
4. VOLUMES
4.1 Subject to the other terms and conditions contained in these Common Terms
(including, but not limited to, any limitations on TIMET's obligation to
sell TIMET Titanium Products to Purchaser and to Section 4.5 of these
Common Terms), Purchaser agrees that it will purchase from TIMET a volume
of TIMET Titanium Products equal to not less than the Annual R-R Directed
Percentage of Purchaser's Annual Titanium Requirements for each calendar
year during the term of the Purchase Agreement. Subject to the other terms
and conditions of the Purchase Agreement, TIMET agrees that it will sell to
Purchaser such volume of TIMET Titanium Products actually ordered by
Purchaser. No later than [ * ] of each calendar year during the term of the
Purchase Agreement, R-R will notify each Purchaser and TIMET in writing of
such Purchaser's Annual R-R Directed Percentage. For purposes of this
Section 4.1:
(a) A TIMET Titanium Product shall be deemed to have been purchased in the
year in which it is scheduled for delivery as agreed between Purchaser
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
and TIMET (regardless of whether actually delivered by TIMET during
such year); provided, however, that if payment for such TIMET Titanium
Product is not subsequently made by Purchaser, such TIMET Titanium
Product will be deducted from the volumes for the year in which
payment was due;
(b) TIMET Titanium Products with respect to which a Purchase Order is
terminated in accordance with Section 10.1 of the Terms & Conditions
shall be counted only in an amount equal to the relevant volume (in
kilograms) times the percentage of applicable price actually paid as
an Equitable Termination Settlement in accordance with Sections 10.3
and 11.2 of the Terms & Conditions; and
(c) Any substitute Titanium Product purchased by Purchaser pursuant to
Sections 5.1(b) or 9.3 of the Terms & Conditions shall be counted for
purposes of this Section 4.1 as if it were a TIMET Titanium Product
purchased by Purchaser.
4.2 No later than [ * ] following each calendar year during the term of the
Purchase Agreement, commencing [ * ], Purchaser will certify in writing to
R-R and TIMET its Annual Titanium Requirements (including, separately, its
Excluded Volume) for the immediately preceding calendar year. Such amounts
will be subject to audit by or on behalf of TIMET, through an examination
by a mutually agreed, independent third party of the relevant records of
Purchaser upon reasonable notice and during normal business hours and at
TIMET's sole cost and expense.
4.3 By the last day of each Calendar Quarter, Purchaser will provide TIMET with
a rolling forecast by quarter (the "Quarterly Volume Forecast")
representing the most current estimate of the needs of Purchaser for TIMET
Titanium Products (by product) for [ * ]commencing with the next Calendar
Quarter. Such Quarterly Volume Forecasts shall be used only for planning
purposes and for calculating TIMET's Relevant Quarterly Lead Times as set
forth in these Common Terms and shall not be considered a firm delivery
schedule.
4.4 Within thirty (30) days of its receipt of each Quarterly Volume Forecast,
TIMET will prepare and distribute to Purchaser a chart (the "Quarterly Lead
Time Schedule") listing by product the lead times (in weeks) for TIMET
Titanium Products applicable to Purchase Orders placed during the second
quarter covered by the most recent Quarterly Volume Forecast provided to
TIMET by Purchaser (the "Relevant Quarterly Lead Time"); provided, however,
that the Relevant Quarterly Lead Time for a given TIMET Titanium Product
shall not exceed the Maximum Lead Time for such TIMET Titanium Product.
Lead times and quarterly volumes will be reviewed by the parties on a
quarterly basis to assure that they adequately support the schedule
requirements of Purchaser and R-R.
4.5 Notwithstanding any provision in the Purchase Agreement to the contrary,
TIMET's obligation to supply TIMET Titanium Products under all Purchase
Agreements taken together shall not exceed, on an aggregate basis, the
Maximum Annual Volume or the Maximum Quarterly Volume. In the event that it
appears at any time that either of these limitations will apply:
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
(a) TIMET shall allocate the Maximum Annual Volume or the Maximum
Quarterly Volume, as the case may be, among the various Purchasers as
R-R shall direct TIMET in writing (and in such event, such direction
shall automatically be deemed to have been incorporated by reference
as part of the Purchase Agreement and shall override any existing
obligations between TIMET and Purchaser); and
(b) R-R and TIMET shall promptly consult in an effort to develop a plan to
permit TIMET to produce at least the volume of TIMET Titanium Products
ordered by all Purchasers under all of the Purchase Agreements taken
as a whole; provided, however, that nothing in these Common Terms will
require either party to take any particular action or expend any
amount to achieve any such plan; and provided further, except as
otherwise agreed by TIMET and Purchaser in writing, nothing in the
Purchase Agreement shall be construed as assuring TIMET that any
expanded capacity will be utilized by the purchase obligations of
Purchaser.
4.6 If Purchaser places a Purchase Order with TIMET for a given TIMET Titanium
Product (or changes the scheduled delivery of a given TIMET Titanium
Product) on a date which does not precede the proposed delivery date by at
least the Relevant Quarterly Lead Time for such TIMET Titanium Product,
TIMET shall nevertheless be obligated to accept such Purchase Order, except
that the delivery date shall be deemed to be the date which is after the
date of TIMET's receipt of such Purchase Order (or change) by a period
equal to the Relevant Quarterly Lead Time for such TIMET Titanium Product.
5. TERM; TERMINATION
5.1 The Purchase Agreement shall expire on [ * ], if not sooner terminated in
accordance with another provision of this Article 5. TIMET shall not be
obligated to accept any Purchase Order calling for delivery of a TIMET
Titanium Product after such date.
5.2 Without prejudice to either party's rights and remedies as elsewhere
described in the Purchase Agreement, the Purchase Agreement may be
terminated as follows:
(a) [ * ];
(b) by Purchaser, by written notice to TIMET given not less than [ * ]
prior to the date of termination, in the event [ * ];
(c) by Purchaser, by written notice to TIMET given not less than [ * ]
prior to the date of termination, [ * ];
(d) by Purchaser, by written notice to TIMET, in the event of any breach
by TIMET (other than a breach covered by Section 5.2(b) or (c) of
these Common Terms) of the specific terms of the Purchase Agreement in
any material respect, which breach continues unremedied for more than
[ * ] following written notice of such breach by Purchaser to TIMET;
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
(e) by Purchaser, by written notice to TIMET, in the event of the
suspension, dissolution or winding-up of the business of TIMET, the
admission in writing by TIMET of its insolvency or inability to pay
its debts as they become due, the institution of reorganization,
bankruptcy, liquidation, or other such proceedings by TIMET, the
institution of reorganization, bankruptcy, liquidation, or other such
proceedings against TIMET which remain undismissed for more than [ *
], the appointment of a custodian, trustee, receiver, or similar
person for the properties or business of TIMET, or an assignment by
TIMET for the benefit of its creditors;
(f) by TIMET, by written notice to Purchaser, [ * ];
(g) by TIMET, by written notice to Purchaser, in the event of any breach
by Purchaser of the specific terms of the Purchase Agreement in any
material respect, which breach continues unremedied for more than [ *
] following written notice of such breach by TIMET to Purchaser; or
(h) by TIMET, by written notice to Purchaser, in the event of the
suspension, dissolution or winding-up of the business of Purchaser,
the admission in writing by Purchaser of its insolvency or inability
to pay its debts as they become due, the institution of
reorganization, bankruptcy, liquidation, or other such proceedings by
Purchaser, the institution of reorganization, bankruptcy, liquidation,
or other such proceedings against Purchaser which remain undismissed
for more than [ * ], the appointment of a custodian, trustee,
receiver, or similar person for the properties or business of
Purchaser, or an assignment by Purchaser for the benefit of its
creditors.
5.3 The provisions of Article 4 of these Common Terms shall survive the
expiration of the Purchase Agreement for the purpose of making
determinations as to whether Purchaser has met the volume requirements of
Section 4.1 of these Common Terms with respect to calendar year [ * ]. The
provisions of Article 6 of these Common Terms shall survive the expiration
or termination of the Purchase Agreement for the duration of the
confidentiality period set forth in Section 6.2 of these Common Terms.
5.4 The termination of the Purchase Agreement shall not affect the rights and
responsibilities of the Parties with respect to any breach that may have
occurred prior to such termination. Further, the termination of the
Purchase Agreement shall not affect the rights and obligations of the
Parties with respect to any Purchase Order outstanding as of the date of
such termination to the extent that manufacture of one or more TIMET
Titanium Products covered by such Purchase Order is still in process.
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
6. CONFIDENTIALITY
6.1 The Disclosing Party will not identify information as Confidential
Information unless the Disclosing Party believes that such information is
proprietary to, or constitutes a trade secret of, the Disclosing Party. The
parties will attempt to limit the exchange of Confidential Information to
only that Confidential Information necessary for the purposes of the
Purchase Agreement.
6.2 The parties agree that, for a period of [ * ] from the date of receipt of
Confidential Information (or such longer period as the Disclosing Party has
expressly identified, for bona fide and reasonable business considerations
with respect to specified items of Confidential Information based upon the
particular sensitivity of such Confidential Information), without the prior
written consent of the Disclosing Party and except as may be required by
law, the Receiving Party shall hold in confidence and not disclose
Confidential Information received by it, except to (a) Representatives of
the Receiving Party who require such Confidential Information for purposes
of the Purchase Agreement and who agree to hold such Confidential
Information in confidence in accordance with the terms of these Common
Terms or who have signed an intellectual property agreement obligating them
not to disclose proprietary information of others unless their employer has
acquired specific authorization, (b) suppliers to the Receiving Party whose
involvement is required by the Receiving Party for purposes of the Purchase
Agreement and who agree to hold such Confidential Information in confidence
in accordance with the terms of these Common Terms, and (c) as set forth in
Section 6.7 of these Common Terms.
6.3 Confidential Information shall not be used by the Receiving Party (or any
Representative to whom the Receiving Party discloses such Confidential
Information) except for the purposes contemplated in the Purchase
Agreement.
6.4 The Receiving Party will be deemed to have satisfied its obligations of
confidentiality and non-use under these Common Terms if it uses reasonable
care to protect against unauthorized disclosure or misuse of Confidential
Information received by it under these Common Terms, which care shall not
be less than the care taken by the Receiving Party to protect its own
confidential or proprietary information from disclosure or use by others.
Upon discovery of any accidental disclosure or misuse, the Receiving Party
shall take all reasonable steps to recover or limit further misuse of such
Confidential Information.
6.5 The Receiving Party will copy Confidential Information received by it only
as reasonably necessary for the purposes contemplated in the Purchase
Agreement.
6.6 The Receiving Party agrees to (a) return to the Disclosing Party all copies
of written Confidential Information received pursuant to the Purchase
Agreement, as well as all copies made thereof or written materials prepared
by the Receiving Party containing Confidential Information, within thirty
(30) calendar days of the written demand of the Disclosing Party or (b)
certify to the Disclosing Party within such period that it has destroyed
all Disclosing Party Confidential Information; provided, however, that the
Receiving Party may retain a single copy of all Confidential Information
received for
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
purposes of establishing compliance with the terms of these Common Terms,
which copy shall be segregated from the normal business records of the
Receiving Party and held in strict confidence in accordance with the terms
of these Common Terms.
6.7 If the Receiving Party or any of its Representatives becomes legally
compelled (by regulatory requirement, deposition, interrogatory, request
for documents, subpoena, civil investigative demand or similar process) to
disclose any of the Confidential Information or is required to disclose any
of the Confidential Information pursuant to any listing agreement with any
stock exchange on which its shares are traded, the Receiving Party will
advise and consult with the Disclosing Party prior to any such disclosure,
so that the Disclosing Party may seek a protective order or other
appropriate remedy and/or waive compliance with these Common Terms. If such
protective order or other remedy is not obtained, or compliance with these
Common Terms is waived as above, the Receiving Party will disclose only
that portion of the Confidential Information which the Receiving Party is
advised by counsel is legally required and the Receiving Party will
exercise reasonable efforts to obtain assurance that confidential treatment
will be accorded such of the Confidential Information as is disclosed. Any
disclosure made in accordance with the provisions of this Section 6.7 shall
not be regarded as a breach of the obligations of the Receiving Party
pursuant to these Common Terms.
6.8 Nothing in this Article 6 shall be construed as granting or conveying to
the Receiving Party any right or license to use Confidential Information of
the Disclosing Party except for the purposes contemplated in these Common
Terms or to practice any inventions described and claimed in any pending
patent applications or issued patents which are owned or controlled by the
Disclosing Party relating to such Confidential Information.
7. MISCELLANEOUS
7.1 TIMET and Purchaser shall each be responsible for complying with all laws,
including without limitation, any statute, rule, regulation, judgment,
decree, order, or permit, applicable to its respective performance under
the Purchase Agreement.
7.2 All notices and other communications under the Purchase Agreement shall be
in writing and shall be addressed as set forth on the signature pages to
the Purchase Agreement. Any party may change its address or facsimile
number by giving notice to the other party in accordance with the
provisions of this Section 7.2. All such notices and communications
(properly addressed) shall be deemed given as follows:
(a) when personally delivered;
(b) ten (10) business days after deposit in the mail, first class postage
prepaid;
(c) three (3) days after deposit with a recognized overnight business
delivery service; or
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
(d) when sent by verified facsimile to the facsimile number provided on
the respective signature page for such party.
7.3 The Purchase Agreement shall inure to the benefit of and be binding on each
of TIMET and Purchaser and their respective successors and permitted
assigns. Except for the right of TIMET to assign its right to payment under
a Purchase Order in accordance with Section 12.3 of the Terms & Conditions,
no party to the Purchase Agreement may assign its rights and obligations
under Purchase Agreement or under a Purchase Order without the written
consent of the other party; provided, however, that any party may assign
its rights and obligations under these Common Terms or under a Purchase
Order, without recourse, to a company succeeding to all or substantially
all of such party's business without the consent of the other party so long
as written notice of such assignment is given to the other party. A change
in control of either party shall not affect the respective rights and
obligations of the parties under these Common Terms.
7.4 The failure of any party at any time to enforce any provision of the
Purchase Agreement shall not constitute a waiver of such provision or
prejudice such party's right to enforce such provision at any subsequent
time.
7.5 Article and section headings used in the Purchase Agreement are for
convenient reference only and shall not affect the interpretation of the
Purchase Agreement.
7.6 If any provision of the Purchase Agreement, is or becomes void or
unenforceable, whether by operation of law or otherwise, the other
provisions of the Purchase Agreement shall nevertheless remain valid and
enforceable.
7.7 The parties have determined that it is reasonable that the Purchase
Agreement and any Purchase Order placed thereunder shall be governed by the
laws of England.
7.8 Without the prior written approval of each of the other Parties and R-R (if
R-R is not the Purchaser), neither TIMET nor Purchaser will (a) except as
may be required by applicable disclosure laws and regulations, cause or
permit to be released any publicity, advertisement, news release, public
announcement, or denial or confirmation of the same, in whatever form,
regarding the Purchase Agreement, or (b) use, or cause or permit to be
used, the name or trademark of the other in any form of promotion or
publicity.
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
SCHEDULE 1
to Common Terms
CONFIDENTIAL
PRICING SCHEDULE
[ * ]
Schedule 1
Page 1
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
SCHEDULE 2
to Common Terms
CONFIDENTIAL
MAXIMUM LEAD TIMES
Titanium Product Maximum Lead Time
[ * ] [ * ]
All periods are in weeks measured from placement of Purchase Order to delivery.
Schedule 2
Page 1
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
SCHEDULE 3
to Common Terms
PURCHASE ORDER TERMS & CONDITIONS
1. DEFINITIONS
As used throughout these Terms & Conditions and any related Purchase
Order, the following definitions apply unless otherwise specifically stated.
Capitalized terms used in these Terms & Conditions without definition are used
as defined in the Purchase Agreement (including the Common Terms).
1.1 "Equitable Adjustment" shall have the meaning given such term in Section
14.1 of these Terms & Conditions.
1.2 "Equitable Termination Settlement" shall have the meaning given such term
in Section 14.2 of these Terms & Conditions.
1.3 "Force Majeure" means any cause beyond the reasonable control and without
the fault or negligence of the party invoking "Force Majeure," including
without limitation, acts of God, war, riot, acts of government, fires,
floods, epidemics, quarantine restrictions, freight embargoes, strikes,
labor disputes, and unusually severe weather.
1.4 [ * ]
1.5 "Goods" means those TIMET Titanium Products set forth on the face of the
Purchase Order.
1.6 "Master Agreement" means that certain Purchase and Sale Agreement by and
between R-R and TIMET, dated [ * ], as hereafter amended, modified,
supplemented or restated.
1.6 "Notice of Termination" has the meaning given such term in Section 10.1 of
these Terms & Conditions.
1.7 "Purchase Agreement" means the Purchase and Sale Agreement by and between
Purchaser and TIMET to which these Terms & Conditions are attached (and the
Master Agreement shall be regarded as a Purchase Agreement, except as
otherwise expressly indicated).
1.8 "Purchase Order" means the purchase order placed by Purchaser with TIMET
for the purchase and sale of TIMET Titanium Products, to the extent
accepted in writing by TIMET (or deemed to have been accepted in accordance
with the terms of the Purchase Agreement), including any change notices,
supplements, amendments, or modifications thereto as agreed upon in writing
by Purchaser and TIMET.
Schedule 3--Terms & Conditions
Page 1
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
1.9 "Purchaser" means the entity identified as "Purchaser" in the heading of
the specific Purchase Agreement (and shall mean R-R itself under the Master
Agreement).
1.10 "Specifications" means the chemical, physical and other specifications
(including inspecting and testing criteria) for TIMET Titanium Products as
agreed to by Purchaser and TIMET from time to time in writing, subject to
immaterial variations with respect to weight. In the absence of written
agreement by Purchaser and TIMET on a different specification in a given
Purchase Order for TIMET Titanium Product, the applicable Specification for
such given TIMET Titanium Product shall be that represented by the most
recent revision agreed to in writing by Purchaser and TIMET. No such
Specification for a TIMET Titanium Product may be altered or modified in
any Purchaser Order without the express written agreement of TIMET.
1.11 "Stop-Work Directive" has the meaning given such term in Section 8.l of
these Terms & Conditions.
1.12 "TIMET" means Titanium Metals Corporation or the given subsidiary of
Titanium Metals Corporation with which a particular Purchase Order is
placed.
2. ISSUANCE OF PURCHASE ORDERS.
2.1 Each Purchase Order placed by Purchaser pursuant to the Purchase Agreement
from time to time shall contain a description of the TIMET Titanium
Product(s) ordered, a reference to the applicable Specifications for such
TIMET Titanium Product, the R-R purchase order number, the applicable
quantities desired, the price (determined in accordance with the Purchase
Agreement), the R-R part number (if applicable), the desired delivery
schedule, and any other proposed terms different from those set forth in
these Terms & Conditions or the Purchase Agreement.
2.2 Each Purchase Order placed under the Purchase Agreement shall contain a
reference to the Purchase Agreement. Any Purchase Order placed with TIMET
by Purchaser (other than R-R) which does not include such legend shall not
be regarded as a Purchase Order under the Purchase Agreement and shall not
be entitled to the benefits of the pricing or supply provisions of the
Purchase Agreement; provided, however, that any inadvertent omission of
such reference may be corrected by Purchaser within [ * ] of TIMET's
acknowledgment of the Purchase Order (or such longer period to which TIMET
consents).
2.3 Each Purchase Order shall be deemed to incorporate these Terms & Conditions
by reference and to be governed by these Terms & Conditions, except as
otherwise expressly agreed in writing between Purchaser and TIMET. Each
such Purchase Order shall represent the offer of Purchaser to purchase
strictly on the terms set forth in the Purchase Agreement. To the extent
Purchaser's submitted Purchase
Schedule 3--Terms & Conditions
Page 2
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
Order or any TIMET acceptance, acknowledgment or other document contains
terms inconsistent with the Purchase Agreement (including, without
limitation, these Terms & Conditions), the other party shall be deemed to
have objected to such inconsistent terms and they shall not become part of
the Purchase Order, whether or not material, unless the other party shall
expressly agree to such terms in writing. TIMET's commencement of
performance shall be deemed to represent TIMET's acceptance of such
Purchase Order, but only to the extent consistent with the Purchase
Agreement.
2.4 Purchaser and TIMET shall agree in writing upon the scheduled delivery date
for any TIMET Titanium Product.
2.5 Title to and risk of any loss of, or damage to, TIMET Titanium Products
shall pass from TIMET to Purchaser upon delivery in accordance with the
terms of delivery set forth in Section 3.7 of the Common Terms, except for
loss or damage thereto resulting from TIMET's negligence or willful
misconduct. Passage of title on delivery does not constitute acceptance of
such TIMET Titanium Product by Purchaser.
3. Inspection, Rejection and Acceptance.
3.1 Except for non-conforming Goods that have been approved in writing by
Purchaser, TIMET shall tender to Purchaser for acceptance only Goods that
have been inspected in accordance with the Specifications and have been
found by TIMET to be in conformity with the Specifications and with the
other requirements of the Purchase Order.
3.2 Notwithstanding (a) prior inspection, (b) payment for, or (c) use of the
Goods covered by the Purchase Order, Purchaser shall have the right to
reject any of such Goods which do not conform with the warranties contained
in Section 4.1 of these Terms & Conditions. Such right shall be exercisable
until the later of (i) Purchaser's commencement of use of the Goods in
manufacture or (ii) the time during manufacture when Purchaser should
reasonably have discovered such non-conformity. Rejected Goods shall not
again be tendered for acceptance without disclosure of former rejections.
Should Purchaser elect, with TIMET's written concurrence, to repair the
non-conforming Goods, all terms and conditions of the Purchase Order shall
remain in full force and effect as to the Goods furnished by TIMET. Prior
inspection or test, payment for, or use of the Goods does not relieve TIMET
from any responsibility regarding any failure to meet the requirements of
Section 4.1 of these Terms & Conditions that may be discovered prior to
acceptance.
Schedule 3--Terms & Conditions
Page 3
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
4. Warranty.
4.1 With respect to each TIMET Titanium Product delivered by TIMET to Purchaser
(or at its direction, to another), TIMET warrants to Purchaser that [ * ]
4.2 [ * ]
4.3 [ * ]
4.4 [ * ]
Schedule 3--Terms & Conditions
Page 4
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
5. Remedies.
5.1 Purchaser shall have the following remedies:
[ * ]
5.2 [ * ]
5.3 EXCEPT AS EXPRESSLY PROVIDED IN SECTION 4.3 OF THE COMMON TERMS AND EXCEPT
IN THE CASE OF CLAIMS FOR DEATH OR PERSONAL INJURY CAUSED BY TIMET'S
NEGLIGENCE (WITHIN THE MEANING OF THE UNFAIR CONTRACT TERMS ACT 1977), IN
NO EVENT SHALL TIMET OR PURCHASER BE LIABLE TO THE OTHER PURSUANT TO ANY
PURCHASE ORDER OR THESE TERMS & CONDITIONS UNDER ANY THEORY OF LIABILITY
FOR ANY FORM OF CONSEQUENTIAL OR PUNITIVE DAMAGES, INCLUDING WITHOUT
LIMITATION, ANY DAMAGES FOR LOSS OF PROFITS OR LOSS OF USE.
6. Changes.
6.1 Purchaser may, at any time, unilaterally, by written directive from a
representative of Purchaser, make changes within the general scope of the
Purchase Order, including, but not limited to, changes to any one or more
of the following: (a) shipping or packing instructions, (b) place or
schedule of delivery (subject to the Common Terms and to Section 8.1 of
these Terms & Conditions regarding postponements of delivery), (c) the
method or manner of performance of the work, and (d) Purchaser-furnished
property, facilities, equipment, materials, or services. TIMET shall
perform any such changes directed by Purchaser.
6.2 Subject to Section 6.3 of these Terms & Conditions, if any change under
this clause causes an increase or decrease in the cost of or the time
required for performance, an Equitable Adjustment shall be made in price or
delivery schedule or both in accordance with Article 11 of these Terms &
Conditions, and the Purchase Order shall be deemed to have been modified
accordingly.
6.3 Notwithstanding the pendency of any claim for an Equitable Adjustment
submitted by TIMET under these Terms & Conditions, TIMET shall diligently
proceed with the performance of the Purchase Order, as directed by
Purchaser, and nothing in these Terms & Conditions shall be construed as
relieving TIMET of its obligations so to perform, including without
limitation the failure of the parties to agree upon TIMET's entitlement to,
or the amount or nature of, any such Equitable Adjustment.
Schedule 3--Terms & Conditions
Page 5
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
7. FORCE MAJEURE. TIMET shall not be charged with any liability for failure or
delay in making deliveries of Goods when such failure or delay is due to
Force Majeure; provided, however, that TIMET shall give to Purchaser prompt
notice in writing when it appears that such Force Majeure will result in
failure or delay in making deliveries under the Purchase Order. In the
event of any such Force Majeure that continues for more than [ * ]
Purchaser shall have the right, at its option and without being under any
liability to TIMET, to cancel by notice in writing to TIMET the portion or
portions of the Purchase Order so affected. Correspondingly, Purchaser
shall be excused for failure or delay in performance in these Terms &
Conditions due to any Force Majeure; provided, however, that cancellation
of any Purchase Order by Purchaser due to cancellation of its order from
its customer shall (in the absence of default by TIMET) be governed by the
provisions of Article 10 of these Terms & Conditions ("Termination for
Convenience").
8. Stop-Work DIRECTIVE.
8.1 Purchaser may, at any time, by written stop-work directive to TIMET (a
"Stop-Work Directive"), require TIMET to stop all, or any part of the work
called for by the Purchase Order for a period of up to [ * ] after the
stop-work directive is delivered to TIMET, and for any further period to
which the parties may agree in writing. The stop-work directive shall be
specifically identified as a stop-work directive issued under this Section
8.1. Upon receipt of the stop-work directive, TIMET shall immediately
comply with its terms and take all reasonable steps to minimize the
incurance of costs allocable to the work covered by the Purchase Order
during the period of work stoppage. Within a period of [ * ] (or the actual
period of the stop-work directive, whichever is shorter) after a stop-work
directive is delivered to TIMET, or within any extension of that period to
which the parties shall have agreed, Purchaser shall by written notice to
TIMET either (a) cancel the stop-work directive or (b) terminate the work
covered by the Purchase Order as provided in Article 9 ("Termination for
Default") or Article 10 ("Termination for Convenience") each of these Terms
& Conditions. Unless Purchaser has taken one of such actions in the time
provided, TIMET will be entitled to treat the Purchase Order as having been
terminated for convenience under Article 10 of these Terms & Conditions.
8.2 If a stop-work directive issued under Section 8.1 of these Terms &
Conditions is canceled or the period of the stop-work directive or any
extension thereof expires, TIMET shall resume work. The applicable
scheduled delivery date under the relevant Purchase Order shall be deemed
to have been extended by the number of days elapsing from the date of
TIMET's receipt of the stop-work directive until the date of its receipt of
notice of cancellation of the stop-work directive, plus ten (10) days to
allow for the material to be worked back into the existing production
schedule in an orderly fashion.
9. Termination for Default.
Schedule 3--Terms & Conditions
Page 6
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
9.1 A Purchase Order may be terminated, in whole or in part, in the event of
any termination of the Purchase Agreement pursuant to Section 5.2 of the
Common Terms, but only by the party terminating the Purchase Agreement.
9.2 In addition, Purchaser may by written notice terminate the whole or any
part of an individual Purchase Order if TIMET fails to perform any
provision of such Purchase Order in any material respect and TIMET does not
cure such failure to Purchaser's reasonable satisfaction within a period of
thirty (30) days after receipt of notice from Purchaser specifying such
failure.
9.3 In the event Purchaser terminates the Purchase Order in whole or in part as
provided in Section 9.2 of these Terms & Conditions, Purchaser may, after
reasonable notice to TIMET giving TIMET the opportunity to procure
replacement Goods on Purchaser's behalf, procure, upon such terms and in
such manner as Purchaser may deem appropriate, Goods similar to those so
terminated, and TIMET shall be liable to Purchaser for the reasonable
excess costs for such similar Goods (not to exceed [ * ] of the price for
such Goods under the Purchase Order); provided, however, that TIMET shall
continue the performance of this contract to the extent not terminated
under the provisions of this clause.
9.4 Except with respect to defaults of vendors or subcontractors, TIMET shall
not be liable for any excess costs if the failure to perform the Purchase
Order arises out of any Force Majeure. If the failure to perform is caused
by the default of a vendor or subcontractor to TIMET, and if such default
arises out of causes beyond the reasonable control of TIMET, and without
the fault or negligence of TIMET, TIMET shall not be liable for any excess
costs for failure to perform unless the Goods to be furnished by the vendor
or subcontractor were obtainable from other sources.
9.5 If a Purchase Order is terminated under this Article 9, Purchaser, in
addition to any other rights provided in this section, may require TIMET to
transfer title and deliver to Purchaser in the manner and to the extent
directed by Purchaser (i) any completed Goods, and (ii) any partially
completed Goods and materials, parts, components, tools, dies, jigs,
fixtures, plans, drawings, information, and contract rights (hereinafter
called "contract materials") as TIMET has specifically produced or
specifically acquired for the performance of such part of such Purchase
Order as has been terminated. TIMET shall upon direction of Purchaser,
protect and preserve property in the possession of TIMET in which Purchaser
has an interest. Payment for completed Goods delivered or rendered to and
accepted by Purchaser, and for the protection and preservation of property,
shall be as set forth in Article 11 of these Terms & Conditions.
9.6 If, after Notice of Termination of the Purchase Order under this Article 9
it is determined for any reason that TIMET was not in default, or that the
default was excusable, the rights and obligations of the parties shall be
the same as if the Notice of Termination had been issued pursuant to
Article 10 of these Terms & Conditions entitled "Termination for
Convenience."
9.7 As used in this Article 9, the terms "subcontractor" and "subcontractors"
mean subcontractor(s) at any tier and the terms "vendor" and "vendors" mean
vendor(s) at any tier.
Schedule 3--Terms & Conditions
Page 7
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
10. Termination for Convenience.
10.1 The performance of work under the Purchase Order may be terminated, in
whole or from time to time in part, by Purchaser in accordance with this
Article 10. Termination of work under these Terms & Conditions shall be
effected by delivery to TIMET of a written notice of termination ("Notice
of Termination") specifying the extent to which performance of work under
the Purchase Order is terminated and the date upon which such termination
becomes effective.
10.2 After receipt of a Notice of Termination and except as otherwise directed
by Purchaser, TIMET shall:
(a) stop work under the Purchase Order on the date and to the extent
specified in the Notice of Termination;
(b) place no further subcontracts for materials, services, or facilities
except as may be necessary for completion of such portions of the work
under the Purchase Order as may not be terminated;
(c) terminate all outstanding subcontracts to the extent that they relate
to the performance of any work terminated by the Notice of
Termination;
(d) assign to Purchaser, in the manner, and to the extent directed by
Purchaser all of the right, title and interest of TIMET under the
subcontracts so terminated;
(e) settle all outstanding liabilities and all claims arising out of the
termination of such subcontracts, subject to the approval or
ratification of Purchaser to the extent it may require, which approval
or ratification shall be final for all purposes of this Section
10.2(e);
(f) transfer title and deliver in the manner, to the extent, and at the
times directed by Purchaser (1) the fabricated or unfabricated parts,
work in process, completed work, Goods, and other material produced as
a part of, or acquired in connection with the performance of, the work
terminated by the Notice of Termination, and (2) the completed or
partially completed plans, drawings, information, and other property
which, if the Purchase Order had been completed, would be required to
be furnished to Purchaser;
(g) use its commercially reasonable efforts to sell in the manner, to the
extent, at the time, and at the price or prices directed or authorized
by Purchaser, any property of
Schedule 3--Terms & Conditions
Page 8
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
the types referred to in (f) above; provided, however, that TIMET (1)
shall not be required to extend credit to any purchaser of any such
property and (2) may acquire any such property under the conditions
prescribed by and at a price or prices approved by Purchaser; and
provided further that the proceeds of any such transfer or disposition
shall be applied in reduction of any payments to be made by Purchaser
to TIMET under the Purchase Order or shall otherwise be credited to
the price or cost of the work covered by the Purchase Order or paid in
such other manner as Purchaser may direct;
(h) complete performance of such part of the work as shall not have been
terminated by the Notice of Termination; and
(i) take such action as may be necessary or as Purchaser may direct for
protection and preservation of the property related to the Purchase
Order which is in the possession of TIMET and in which Purchaser or
Purchaser's customer has or may acquire an interest.
10.3 Upon any such termination pursuant to this Article 10, Purchaser shall be
liable to TIMET for an Equitable Termination Settlement as determined
pursuant to Article 11.2 of these Terms & Conditions.
11. Equitable Adjustments/Settlements.
11.1 In the case of changes made by Purchaser in accordance with Article 6 of
these Terms & Conditions, an "Equitable Adjustment" in price shall mean the
following:
(a) for changes that increase TIMET's cost of performance, an increase in
the price of the Purchase Order in an amount intended to reimburse
TIMET for all costs reasonably incurred or to be incurred by TIMET as
a result of the change, such costs to be determined on a [ * ] basis;
and
(b) for changes that decrease TIMET's cost of performance, a decrease in
the price of the Purchase Order in an amount that reasonably reflects
the reduction in costs that have not been or will not be incurred by
TIMET as a result of the change, such costs to be determined on a [ *
] basis.
11.2 In the case of a termination for convenience by Purchaser in accordance
with Article 10 of these Terms & Conditions, an "Equitable Termination
Settlement" shall be equal to the sum of:
(a) the price, appropriately adjusted for any saving of freight or other
charges, for all completed Goods covered by the Notice of Termination
(whether or not accepted by Purchaser) and for which TIMET has not
theretofore been paid, and
Schedule 3--Terms & Conditions
Page 9
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
(b) for partially completed Goods, the reasonable [ * ] of all work
performed by TIMET prior to the effective date of the Notice of
Termination with respect to the Goods covered by the Notice of
Termination, including, but not limited to, all reasonable amounts
paid or payable by TIMET to any vendor or subcontractor on account of
work performed prior to the effective date of the Notice of
Termination for materials delivered or to be delivered or services
furnished or to be furnished by such vendor or subcontractor, to the
extent such materials or services supplied or to be supplied by such
vendor or subcontractor were necessary for work being performed by
TIMET on Goods subject to the Notice of Termination;
(c) the reasonable cost to TIMET (excluding any amounts covered under (a)
above) of settling and paying claims arising out of the termination of
work, as provided in Section 11.2(b) of these Terms & Conditions,
under subcontracts; provided, however, that in the event of disputes
between TIMET and its vendors or subcontractors, TIMET must tender to
Purchaser the opportunity to defend actual or threatened litigation;
and
(d) the reasonable costs of settlement, including accounting, legal,
clerical, and other expenses reasonably necessary for the preparation
of settlement claims and supporting data with respect to the
terminated portion of the Purchase Order (excluding any amounts
covered by (a), (b) or (c) above).
From which sum shall be deducted:
(e) all payments made prior to the Notice of Termination, including all
unliquidated advance or other payments made by Purchaser with respect
to the cancelled portion of such Purchase Order; and
(f) the agreed value for any titanium or other material retained by TIMET,
the value of which has been included in amounts determined pursuant to
clauses (a) and (b) above.
In no event shall the amount due under this Section 11.2 exceed the
contracted purchase price for such Goods (as adjusted in accordance
with Section 11.1 of these Terms & Conditions for any changes prior to
such Notice of Termination).
11.3 In the case of an Equitable Adjustment in price pursuant to Section 11.1 of
these Terms & Conditions or an Equitable Termination Settlement pursuant to
Section 11.2 of these Terms & Conditions, TIMET will provide Purchaser with
its determination of the amount owing by Purchaser in accordance with
Sections 11.1 or 11.2 of these Terms & Conditions, as appropriate, together
with reasonable supporting documentation. Such determination will be
provided promptly, but in any event no later than one hundred twenty (120)
days from the date of TIMET's receipt of the change giving rise to the
Equitable Adjustment in price under Article 6 or the Notice of Termination
pursuant to Section 10.1 of these Terms & Conditions; provided, however,
that TIMET shall be entitled to one extension of an additional sixty (60)
days by written notice to Purchaser.
Schedule 3--Terms & Conditions
Page 10
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
11.4 Purchaser shall have forty-five (45) days from the date of Purchaser's
receipt of TIMET's determination to decide whether it agrees or disagrees
with such determination; provided, however, that Purchaser shall be
entitled to one extension of an additional thirty (30) days by written
notice to TIMET.
11.5 If Purchaser agrees with TIMET's determination of the amount of the
Equitable Adjustment in price or Equitable Termination Settlement, it will
pay such amount to TIMET within the determination period set forth in
Section 11.4 of these Terms & Conditions. In the event of a deductive
change to which the parties agree, the contract price shall be modified
accordingly within the determination period set forth in Section 11.4 of
these Terms & Conditions.
11.6 In the event Purchaser disagrees with TIMET's determination, Purchaser
shall provide a written notice ("Notice of Disagreement") to TIMET that
shall set forth the bases for such disagreement within the determination
period set forth in Section 11.4 of these Terms & Conditions and the
parties shall negotiate in good faith to resolve their differences.
11.7 If a complete resolution is not reached as a result of such good faith
negotiations within ninety (90) days of the date of TIMET's receipt of the
Notice of Disagreement, each party reserves all of its rights thereafter to
obtain a judicial resolution in accordance with the other terms of the
Purchase Agreement.
11.8 TIMET shall invoice R-R for all amounts agreed or determined to be owing
pursuant to this Article 11 of these Terms & Conditions, together with
interest thereon at the rate of interest reflected as the "prime rate" in
The Wall Street Journal on the date of any such agreement or determination,
calculated from the date of the Notice of Disagreement to the due date of
the invoice, and such invoices will be payable by R-R [ * ].
11.9 In the case of changes made by Purchaser in accordance with Article 6 of
these Terms & Conditions, an "Equitable Adjustment in delivery date" shall
mean an extension of time beyond the then-scheduled delivery date
reasonably necessary for TIMET to accommodate the directed changes, taking
into account the nature of the change, the state of completion of the
Purchase Order at the time the change is received, the availability of
necessary raw materials, goods and labor, and the like.
12. Assignment and Setoff.
12.1 Upon written notice to TIMET, Purchaser may assign the Purchase Order or
any interest there under, without recourse, to any subsidiary or affiliate
of Purchaser, and TIMET hereby consents to any such assignment.
Schedule 3--Terms & Conditions
Page 11
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
12.2 Except as provided in Section 7.3 of the Common Terms in the case of
assignment to a successor, performance of the Purchase Order shall not be
assigned by TIMET in whole or in part without the prior written consent of
Purchaser. Any prohibited assignment by TIMET shall be null and void.
12.3 Except as provided in Section 7.3 of the Common Terms in the case of
assignment to a successor, claims for money due or to become due to TIMET
from Purchaser arising out of the Purchase Agreement may not be assigned,
unless such assignment is made to one assignee only and covers all amounts
payable under the Purchase Agreement and not already paid. Purchaser shall
be under no obligation to pay such assignee unless and until Purchaser
shall have received written notice of the assignment from TIMET, a
certified copy of the instrument of assignment, and suitable documentary
evidence of TIMET's authority to so assign. However, any payments made to a
third party subsequent to Purchaser's receipt of notice that any claims for
money due or to become due under the Purchase Agreement have been assigned
or should be paid thereto shall fulfill Purchaser's requirements to make
any such payments under the Purchase Agreement.
13. Materials, Tooling and Equipment.
13.1 All materials, tooling and equipment that Purchaser is required to furnish
to TIMET under the provisions of the Purchase Order shall be delivered in
sufficient time to enable TIMET to meet its delivery schedule. Purchaser
shall have no liability to TIMET by reason of any delay in delivery of, or
failure to deliver, such materials, tooling and equipment. If such
materials, tooling and equipment are not delivered to TIMET in sufficient
time, any resultant delay of TIMET in delivering to Purchaser shall be
excusable to the extent and for the period of such delay by Purchaser.
13.2 Title to any materials, tooling or equipment furnished by Purchaser to
TIMET (other than any revert material sold by Purchaser or Purchaser's
customer to TIMET) shall remain in Purchaser or Purchaser's customer as the
case may be.
13.3 TIMET shall maintain in good condition and repair (ordinary wear and tear
excepted) all such materials, tooling and equipment of Purchaser that is in
TIMET's possession and under its control.
14. Infringement Indemnity.
14.1 TIMET shall be liable for and shall indemnify, defend and save Purchaser
and each subsequent Purchaser or user thereof, harmless from, any claim,
suit, action, award (including, without limitation, award based upon
intentional infringement of patents known to TIMET at the time of such
infringement, exceeding actual damages and/or including attorneys' fees
and/or costs), liability, damage, attorneys' fees, and costs related to
Schedule 3--Terms & Conditions
Page 12
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
the alleged infringement of any United States or foreign intellectual
property right through the manufacture, use or sale of the Goods sold by
TIMET to Purchaser under these Terms & Conditions (including without
limitation, any right in a patent, copyright, industrial design or
semiconductor mask work, or based on misappropriation or wrongful use of
information or documents). For purposes of this Section 14.1, the term
"Purchaser" means Purchaser and all of its subsidiaries and the respective
officers, agents, and employees of each.
14.2 Section 14.1 of these Terms & Conditions shall not apply in the case of,
and Purchaser shall indemnify, defend, and save TIMET harmless from, any
claim, suit, action, award (including without limitation, award based upon
intentional infringement of patents known to Purchaser at the time of such
infringement, exceeding actual damages and/or including attorneys' fees
and/or costs), liability, damage, attorneys' fees, and costs related to the
actual or alleged infringement of any United States or foreign intellectual
property right (including without limitation, any right in a patent,
copyright, industrial design or semiconductor mask work, or based on
misappropriation or wrongful use of information or documents) when such
infringement arises from:
(a) TIMET's compliance with formal Specifications issued by Purchaser
(other than industry-standard specification, such as those promulgated
by AMS, ASTM, or the like); or
(b) the use or sale of Goods by Purchaser in combination with other goods
when such infringement would not have occurred but for the combination
with such other goods.
For purposes of this Section 14.2, the term "TIMET" shall include
Titanium Metals Corporation and all of its subsidiaries and the
respective officers, agents, and employees of each.
14.3 The party against whom such infringement claim is made, or such suit or
action is made, or such suit or action is commenced, shall promptly notify
the other party in writing. The party required to indemnify under the
provisions of this Article 14 shall promptly assume and diligently conduct
the entire defense of such alleged infringement at its own expense,
provided that such party receives prompt written notice of such claim,
suit, or action as such is commenced against the other party. Insofar as
its interests are affected the other party shall have the right, at its own
expense and without releasing any obligation, liability, or undertaking of
the party required to indemnify, to cooperate in the defense of such claim
and, with any necessary permission of the court, to intervene in any such
suit or action.
14.4 Notwithstanding any of the other provisions of this Article 14, Purchaser
shall have the further right, at its own election, to supersede TIMET in
the defense of any alleged infringement under Section 14.1 of these Terms &
Conditions and thereafter to assume and conduct the same according to
Purchaser's sole discretion, in which even TIMET shall be released from any
obligation arising from such infringement claim, suit or action under this
Schedule 3--Terms & Conditions
Page 13
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
infringement indemnity clause. In such case, TIMET, if requested in writing
by Purchaser, shall cooperate with Purchaser in Purchaser's defense of any
alleged infringement claim.
15. Compliance With Laws. In the performance of the Purchase Order, TIMET shall
comply with all applicable federal, state and local laws, ordinances,
rules, regulations, and ordinances.
16. Duty to Proceed. Except as otherwise expressly provided in these Terms &
Conditions or the Purchase Agreement, or as expressly authorized in writing
by Purchaser, no failure of TIMET and Purchaser to reach any agreement
provided for by the terms of the Purchase Order shall excuse TIMET from
proceeding diligently with the performance of the Purchase Order.
17. Partial Invalidity. If in any instance any provision of the Purchase Order
shall be determined to be invalid or unenforceable under any applicable
law, such provision shall not apply in such instance, but the remaining
provisions shall be given effect in accordance with their terms.
18. Waiver. A party's failure to insist on performance of any of the terms or
conditions in these Terms & Conditions or to exercise any right or
privilege or the waiver of any breach under these Terms & Conditions by a
party shall not thereafter waive any such terms, conditions, or privileges
or any other terms, conditions, or privileges, whether of the same or
similar type.
19. Applicable Law. The Purchase Order shall be governed by the laws of
England.
20. Captions. Captions, as used in these Terms & Conditions, are for
convenience of reference only and shall not be construed to limit
or extend the language of the provisions to which such captions may refer.
Schedule 3--Terms & Conditions
Page 14
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
SCHEDULE 4
to Common Terms
CONFIDENTIAL
QUALITY RELATED DEFAULT
--------------------------------------------------------------------------------
Timetal Grade MSRR Product HISTORICAL MANUFACTURING LOCATION
Description
--------------------------------------------------------------------------------
[ * ] [ * ] [ * ] [ * ]
--------------------------------------------------------------------------------
Schedule 4 - Quality Related Default
Page 1
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
EXHIBIT B
to Purchase & Sale Agreement
[ * ]
Exhibit B - R-R Preferred Titanium Products
Page 1
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
[ * ]
Exhibit B - R-R Preferred Titanium Products
Page 2
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.