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Exhibit 10.3
CONSIGNMENT AGREEMENT
THIS AGREEMENT, made this 1st day of January, 2001, ("Effective Date")
by and between ERAMET MARIETTA INC., a Delaware corporation ("Consignor") and
SPECIAL METALS CORP. with principal places of business located at Huntington,
W.V. and New Hartford, N.Y. ("Consignee").
WHEREAS, Consignor manufactures, fabricates and distributes certain
manganese and chromium products, as set forth on Exhibit A hereto (the
"Products"); and
WHEREAS, Consignee desires to receive from the Consignor, Products for
sale and storage at facilities owned and maintained by Consignee at the
locations set forth on Exhibit B hereto (the "Facility" or collectively, the
"Facilities"), and Consignor desires to consign to Consignee the Products for
sale and storage at the Facilities upon the terms and conditions set forth
herein;
NOW, THEREFORE, in consideration of the premises and mutual covenants,
conditions, stipulations and agreements herein contained, the adequacy and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the parties agree as follows:
1. Consignment of Products.
(a) Consignor shall ship to Consignee, FOB Consignee's Facilities,
on consignment, the Products set forth on Exhibit A, hereto.
Exhibit A also sets forth the price and other terms for sale
not provided for below for each type of Product consigned to
Consignee, including the total consideration due to Consignee
for each Product sold. Any and all additional Products
delivered by Consignor to Consignee shall be described on
additional Exhibits to this Agreement and upon the acceptance
of the terms of such Exhibits by the Consignee, as shall be
evidenced by the signature of an authorized officer of the
Consignee on such Exhibits, shall be made a part of this
Agreement. All Products so delivered are subject to all the
terms and conditions hereto.
(b) Consignee shall receive the Products and shall store them at
the Facilities, or such other place as the parties may agree
in writing, in a careful and proper manner, in an area
specifically designated and set aside for such Products,
segregated and identified in the manner set forth in
Paragraphs 6 and 11 below, as to protect the Products from
damage, loss or deterioration.
(c) Consignee shall: (i) identify such Products as the property of
the Consignor; (ii) pay all expenses incident to the storage
and sale of the Products, including, but not limited to all
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expenses of carting, handling, storage, selling, delivering to
customers, and using the Products, and all taxes and other
charges assessed and levied on the Products while in the
Consignee's possession; and (iii) promptly issue a written
receipt for the Products received by it, specifying the type,
quantity and condition of the Products and the Facility at
which the Products are stored.
2. Title to Products.
(a) Consignee agrees to accept possession of the Products on
consignment only, and to sell the Products on behalf of the
Consignor. Title to the Products shall remain in the Consignor
until the Products are sold, at which time title shall pass
from the Consignor to the purchaser of the Products. Consignee
shall at no time be deemed a purchaser of the Products or to
have any interest therein, legal or equitable unless the
Consignee purchases such Products for its own account or uses
the Products for its own account. If the Consignee purchases
or uses the Products for its own account, then at such time
the Consignee shall be deemed to be the purchaser of the
Products and title for such Products shall pass to the
Consignee.
(b) Consignee shall have the right to display the Products solely
in connection with their sale in the ordinary course of the
Consignee's business, and shall have the power to transfer
Consignor's rights to the Products only to a buyer in the
ordinary course of business who takes physical possession of
the Products or who directs that the Products be removed from
consignment to another location.
3. Loss or Damage to Products. Consignee shall be responsible to and shall
reimburse Consignor for all loss and expense to the Consignor resulting
from damage to or loss, theft, deterioration, contamination or
destruction of the Products, or from levy or attachment of any court
process or lien thereon, while in Consignee's possession and until such
time as title passes from the Consignor by reason of sale of the
Products or use by the Consignee thereof and proceeds from the sale or
use have been accounted for and remitted to the Consignor.
4. Report of Sales. Within three (3) days after the last day of each
calendar month, Consignee shall deliver a report ("Monthly Report") to
the Consignor (i) listing all sales and uses of the Products made by
the Consignee as of the last day of the previous calendar month in
units of Products sold and/or used and location of sale and/or use; and
(ii) an inventory of the Products as of the last day of the previous
calendar month. In addition, the Monthly Report shall indicate the
locations where the Products are situated and the amounts and
categories at such location. The Monthly Report shall be delivered to
the Consignor by facsimile, at ▇▇▇-▇▇▇-▇▇▇▇, 8763 or 8764, or by such
other method agreed to by the parties.
5. Invoices. Within ten (10) days following receipt of each Monthly
Report, Consignor shall deliver an invoice to the Consignee ("Invoice")
by facsimile, at ▇▇▇-▇▇▇-▇▇▇▇ for Huntington and ▇▇▇-▇▇▇-▇▇▇▇ for New
Hartford, or by such other method agreed to by the parties, covering
the sales and/or uses shown in the Monthly Report for the previous
calendar month, in accordance with the prices set forth on Exhibit A or
such later Exhibit as may contain prices with respect to the Products
sold. Consignee agrees to pay to Consignor the amounts set forth on
each Invoice, as calculated herein, without regard to whether or not
the Consignee has received payment, in part
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or in full for such Products and which amounts shall, unless otherwise
agreed to in writing by the parties, be due and owing by the Consignee
to Consignor on the last day of the month in which such Invoice is
delivered.
6. Records; Segregation of Products. Consignee shall keep a true record of
the Products in its possession under consignment and shall give the
representatives of Consignor access to such records on demand.
Consignee shall permit such representatives, at reasonable times, to
make inventories of the Products in possession of the Consignee. Using
commercially reasonable efforts, Consignee shall keep the Products on
consignment hereunder in such a manner that they shall be
distinguishable and segregated from other goods of the Consignee.
7. Liens, Encumbrances and Indemnity.
(a) Consignee shall maintain the Products free and clear of and
from all liens and encumbrances of any nature whatsoever.
Consignee shall indemnify and hold harmless Consignor from and
against any loss, cost or damage to the Products, including
but not limited to, reasonable attorneys fees incurred by
Consignor in the event that the Consignee breaches this
Paragraph 7.
(b) In order to induce the Consignor to enter into this Agreement,
Consignee hereby represents and warrants, with the knowledge
that the Consignor will rely on such a representation and
warranty, that the only parties who have or who may claim a
security interest in the inventory of the Consignee are set
forth on Exhibit C, hereto.
8. No Authority to Act for Consignor. Consignee shall conduct the entire
business of selling/using the Products in Consignee's name and at
Consignee's cost and expense, and nothing contained herein shall
authorize or empower Consignee to assume or create any obligation or
responsibility whatsoever, expressed or implied, on behalf of or in the
name of Consignor, or to bind Consignor in any manner, or make any
representation, warranty, or commitment on behalf of Consignor.
9. Term. This Agreement shall remain in force, commencing on the Effective
Date, until either party gives to the other party thirty (30) days'
written notice of its intention to terminate this Agreement. During the
thirty (30) days after such notice, Consignee shall continue to sell,
in accordance with the other terms of this Agreement, the Products in
its possession and make deliveries of all Products sold in accordance
with this Agreement. Upon the expiration of such thirty (30) days, this
Agreement shall terminate. Notwithstanding any of the foregoing,
Consignor may terminate this Agreement without prior notice in the
event that Consignee violates any term of this Agreement or in the
event that Consignor becomes dissatisfied with the financial stability
of the Consignee, and Consignor shall in any event have the right to
remove Products from the Facilities of the Consignor or any other
locations where the Products may be located, at any time whatsoever.
Upon termination of this Agreement, Consignee shall return all Products
to Consignor or to Consignor's nominee in accordance with Consignor's
instructions and shall pay Consignor for all Products not returned, at
the prices for such Products specified in Exhibit A or
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such other Exhibits as may be applicable. The expense of the return
of the Products shall be borne by the Consignee.
10. Consignor's Rights in the Event of Consignee's Insolvency or Failure to
Pay. If Consignee shall become insolvent or admit in writing its
inability to pay its debts as they mature; or if Consignee applies for,
or consents to, or acquiesces in the appointment of a trustee or
receiver for itself or any of its properties or assets; or, in the
absence of any such action, if a trustee or receiver is appointed for
Consignee or for a substantial part of its properties or assets; or if
any bankruptcy, reorganization, debt arrangement or any other
proceeding under any bankruptcy or insolvency law, or any dissolution
or liquidation proceeding, is instituted by or against Consignee, and,
if instituted against the Consignee, is consented to or acquiesced to
by Consignee, or if Consignee fails to make payment when due of any sum
owing to Consignor pursuant to this Agreement; then and in any such
event, Consignor may, without further notice to Consignee, remove or
cause to be removed Consignor's Products from the Facilities and all
other locations of Consignee and Consignee shall forthwith pay
Consignor in full for any amounts owing to Consignor.
11. Identification. Consignee shall place and maintain at all times during
the term of this Agreement, at or adjacent to the place where
Consignor's Products are kept, one or more notices, conspicuously
displayed, identifying the Products as belonging to Consignor and
reading as follows:
All products of ERAMET MARIETTA INC. stored here belong to,
ERAMET MARIETTA INC. and are in the possession of the
undersigned on consignment only.
12. Assurances of Title. Consignee agrees to execute all appropriate
documents required by Consignor properly to evidence that Consignor is
the legal owner of the Products consigned to Consignee, including
Uniform Commercial Code financing statements which designate Consignor
as owner of the Products, and such further documents as may be required
by Consignor to implement Paragraph 13 below. Consignor is hereby
authorized to execute and file financing statements without Consignee's
signature in any jurisdiction in which such procedure is authorized.
13. Security Interest. Deleted by agreement of the two parties.
14. Force Majeure. No liability hereunder shall result to either party from
delay in performance or nonperformance caused by circumstances beyond
the control of the party affected, including, but not limited to, act
of God, fire, flood, war, government regulation, direction, or request,
accident, strikes or labor problems or shortage or inability to obtain
material, equipment, or transportation, or by impracticability of
performance, except nothing herein contained shall excuse the Consignee
of its liability to pay for Products sold, used, retained, levied
against or unaccounted for after said Products are in its possession.
15. Trademarks and Trade Names. Consignee shall neither register nor use
any of Consignor's trademarks or trade names without Consignor's prior
written approval, nor shall it repack or relabel any Products or resale
under any other trademark or trade name, except upon prior written
approval by the Consignor.
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16. Independent Contractors. It is understood and agreed between the
Consignor and Consignee that nothing herein contained shall create a
relationship of employer and employee or principle and agent between
the parties hereto and that the parties are and shall remain
independent contractors.
17. Miscellaneous Provisions.
(a) Governing Law. This Agreement and the transactions
contemplated herein shall be governed by, interpreted,
construed and enforced in accordance with the laws of the
Commonwealth of Pennsylvania without regard to its conflict of
laws provisions that would require the application of the
substantive law of any other jurisdiction.
(b) Entire Agreement. This Agreement, and the Exhibits, hereto and
any subsequent Exhibits attached hereto pursuant to Paragraph
1 of this Agreement, constitute the entire agreement between
the parties relating to the consignment of the Products
hereunder.
(c) Amendments and Modifications. This Agreement shall not be
modified, amended or changed in any respect except in writing
duly signed by an authorized officer of each of the parties
hereto.
(d) Assignment. Consignee may not assign any of its rights under
this Agreement without the prior written consent of Consignor.
(e) Captions. The captions in this Agreement are solely for the
purposes of reference and shall not in any manner alter or
vary the interpretation or construction of this Agreement.
(f) Successors. This Agreement shall extend to and be binding upon
the successors and permitted assigns of the parties hereto.
(g) Nonwaiver. The specified remedies to which Consignor may
resort under the terms of this Agreement are cumulative and
are not intended to be exclusive of any other remedies or
means or redress to which Consignor may be lawfully entitled
in case of any breach or threatened breach by Consignee of any
provisions of this Agreement. The failure of Consignor to
insist in any one or more instances upon the strict
performance of any of the terms or conditions of this
Agreement shall not be construed as a waiver or relinquishment
for the future of such term or condition.
18. Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
19. Notices. Any notice permitted or required to be given to the other
party shall be deemed sufficient if mailed by certified or registered
mail, return receipt requested, to the other party as follows; or by
facsimile at the numbers provided in Paragraphs 4 and 5 hereto.
(A) If to Consignee:
Special Metals Corp.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
P.O. Box 1958
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▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
(B) If to Consignor:
Eramet Marietta Inc.
▇▇ ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or at such other addresses as the parties shall designate in writing to the
other party.
IN WITNESS WHEREOF, the parties hereto have executed or caused to be
executed this Agreement on the day and year first above written.
ATTEST: ERAMET MARIETTA, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 7/18/01 By: /s/ ▇. ▇. ▇▇▇▇▇ 7/18/01
--------------------------------- -------------------------------------
Secretary President
(Corporate Seal)
ATTEST: ERAMET NORTH AMERICA
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 7/18/01 By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 7/18/01
--------------------------------- -------------------------------------
Secretary President
(Corporate Seal)
ATTEST: SPECIAL METALS CORPORATION
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ T. ▇▇▇▇▇ ▇▇▇▇ 7/25/01
--------------------------------- -------------------------------------
Assistant Secretary President
(Corporate Seal)
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EXHIBIT A
DESCRIPTION OF PRODUCTS
(including type, description, price and terms of sale)
1. ELECTROLYTIC CHROMIUM METAL - VACUUM GRADE
2. ELECTROLYTIC CHROMIUM METAL - REGULAR GRADE (FLAKE)
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EXHIBIT B
FACILITIES
1. Special Metals Corporation, "Huntington Operations", ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
2. Special Metals Corporation, "New Hartford Operations", ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
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EXHIBIT C
PARTIES WHO HAVE OR WHO MAY CLAIM A SECURITY INTEREST
IN CONSIGNEES' INVENTORY
1. Credit Lyonnais, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇