SALES CONTRACT
CLARIANT CORPORATION, through its Superabsorbent Materials Business Unit, having
a manufacturing facility at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("Seller"), agrees to sell and deliver to PARAGON TRADE BRANDS, INC., ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ("Buyer") for Buyer's own consumption
and Buyer agrees to purchase from Seller and to take delivery of the product
described below subject to the following terms and conditions:
1. PRODUCT: SANWET(R) superabsorbent polymers (the "Product").
2. CONTRACT TERMS: This contract shall become effective January 1, 1999 and
shall be valid for a period of three (3) years.
3. QUANTITY: Quantities shall include the current annual volume requirements
of 30,000 tons at each of the Buyer's existing facilities. In addition, the
possibility for part of Buyer's planned requirements for superabsorbent polymer
at its Paragon Mabesa International facility in Tijuana, Mexico is included in
this Agreement. Incremental volume resulting from Buyer's acquisitions and/or
joint venture activity will be negotiated as they arise. Buyer's estimated
requirements are set forth in Exhibit I, attached hereto and made a part hereof.
4. SPECIFICATIONS: The Product delivered hereunder shall be in conformity with
Seller's product specifications agreed upon by the parties, and as set forth in
Exhibit II, attached hereto and made a part hereof.
5. PRICE: For 1999, the price for the Product shall be * /lb. for the first *
tons and * for the next * tons, F.O.B. Destination, freight prepaid and added to
invoice. The price for the Product will be reviewed by the parties on an annual
basis during the term of this Agreement. For the year 2000, the price for PTB
will be determined using a * approach. The price is not to exceed * price for
existing product. For 2000 the Seller offers the following: the first * tons at
* /lb. and * for the next * tons, FOB destination, freight pre-paid and added to
invoice. Both parties have agreed to continue with the * /lb. * approach.
Therefore, the invoice price will be * /lb. * than the prices agreed to in the
contract. *
6. VALUE COMPETITIVENESS: ***************************************************
*CONFIDENTIAL TREATMENT REQUESTED
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*CONFIDENTIAL TREATMENT REQUESTED
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*CONFIDENTIAL TREATMENT REQUESTED
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"Competitive Cost", as that term is used herein, shall mean the price per gram
of superabsorbent polymer products of equal or superior performance used in
Buyer's diaper and/or any other of its absorbent products, times the number of
grams required per diaper. The method for evaluating competitive cost is
determined as follows:
(a) Buyer will purchase sampling and test quantities only of the
alternate producer's superabsorbent product. Buyer will then produce
diapers on a commercial diaper machine in a manner which will isolate
the superabsorbent polymer products used as the only variable.
(b) Buyer will test the diapers product utilizing "statistically proven
in-vivo consumer leakage tests" as the preferred methodology for
testing.
(c) Seller may verify the competitive cost defined by Buyer through an
independent testing service. Buyer will provide sufficient diapers for
this purpose.
7. TECHNOLOGY CHANGES: If, at any time during the term of this Agreement,
Buyer notifies Seller in writing of its intention to convert its manu-
facturing processes to a technology which is not compatible with the current
form of Seller's Product, Seller shall have six (6) months in which to provide
a compatible product to Buyer. During such period, Buyer shall use its best
efforts to assist Seller in the commercial development of a compatible product.
If, at the end of the six (6) month period, the parties agree that progress is
being made in developing an acceptable product, they may extend the development
period for a mutually agreeable amount of time. If, on the other hand, the
parties agree that a compatible product cannot be developed within a reasonable
period of time, Buyer shall have the right to reduce the quantities of Product
that it is obligated to purchase under this Agreement by the quantities of
alternative product that Buyer purchases from other sources.
8. TERMS OF PAYMENT: Net fifteen (15) days after date of invoice for U.S. and
net thirty (30) days after date of invoice for Canada.
9. MEANS OF SHIPMENT: In Seller's standard packaging or as otherwise agreed
upon by the parties.
10. WARRANTY AND LIMITATIONS: Seller warrants only that the Product will
conform to Seller's specifications as described on Exhibit II. Except as
aforesaid, THERE IS NO WARRANTY, REPRESENTATION OR CONDITION OF ANY KIND,
EXPRESS OR IMPLIED (INCLUDING NO WARRANTY OF MERCHANTABILITY OR FITNESS OF THE
PRODUCT FOR ANY USE CONTEMPLATED BY BUYER) CONCERNING THE PRODUCT AND NONE SHALL
BE IMPLIED BY LAW. SELLER SHALL NOT BE LIABLE, AND BUYER WAIVES ALL CLAIMS
AGAINST SELLER, FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES. Seller will not be
liable to
*CONFIDENTIAL TREATMENT REQUESTED
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Buyer for any loss, damage or injury to persons resulting from the handling,
storage, transportation, resale or use of the Product alone, or in combination
with other substances or otherwise. Without limiting the generality of the
foregoing, the Seller shall indemnify, hold harmless and, if requested by Buyer,
defend Buyer against any and all liabilities, cost or damages (including out of
pocket expenses, court costs and attorney's fees) arising out of any claims,
demands or judgments (including settlement of any litigation, if such settlement
is made with consent of Seller, which consent shall not be unreasonably
withheld), including, but not limited to, any claims by third parties or Buyer's
customers, that Product sold hereunder infringes any U.S. or foreign letters of
patent, copyright, trademark, or any other rights or arising out of claims,
demands or judgments (including settlement of any litigation, if such settlement
is made with the consent of Seller, which consent shall not be unreasonably
withheld) of unfair competition or trade secret violations; provided Buyer gives
Seller prompt notice in writing of any action or proceeding and, at Seller's
expense, gives Seller necessary information, assistance and authority to do so.
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*CONFIDENTIAL TREATMENT REQUESTED
*****************Upon request, the Seller will furnish technical advice or
assistance as it has available in reference to the use of its Product by Buyer;
it is expressly understood, however, that all such technical advice or
assistance is given or results obtained, all such advice or assistance being
given and accepted at Buyer's risk. Buyer acknowledges that the Product covered
by this contract may be, or become considered as hazardous materials under
various laws and regulations. Seller has or shall have furnished to Buyer
material safety data sheets including warnings and safety and health information
concerning the Product and/or the containers in which such Product is sold
hereunder. Buyer agrees to disseminate such information so as to give warning of
possible hazards to persons who Buyer can reasonably foresee may be exposed to
such hazards, including but not limited to Buyer's employees, agents,
contractors, and customers. If Buyer fails to disseminate such warnings and
information, Buyer agrees to be responsible for such failure, including but not
limited to liability for injury, sickness, death and property damage; provided
however, that if such liability is based upon Seller's failure to meet written
specifications or Seller's failure to provide accurate information on Seller's
material safety data sheets, then Seller is responsible. Seller will provide
Buyer with reasonable notice and opportunity to defend in the event any claim or
demand that is made on Seller as to which such indemnity relates.
*CONFIDENTIAL TREATMENT REQUESTED
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11. FORCE MAJEURE: Except for Buyer's payment obligations hereunder, neither
party will be liable for nonperformance or delay in performance due wholly or
partly to any cause not in its control or not avoidable by reasonable diligence.
Upon the occurrence of any such contingency, the party so affected may suspend
or reduce deliveries during the period of such contingency, and the total
quantity deliverable under this Agreement will be reduced by the quantities so
omitted. The following, while not an exclusive listing, will not be considered
within a party's control or avoidable by reasonable diligence: acts of God,
labor controversies; court decrees; inability to use the full capacity of plants
or facilities as a result of governmental action, machinery malfunctions or
breakdowns; inability to obtain fuel, power, materials necessary to produce the
Product, labor, containers, or transportation facilities without litigation or
the payment of penalties or unreasonable prices or the acceptance of
unreasonable terms and conditions. Seller will have an agreed upon risk
management process in place which addresses securing alternate sources, as well
as priority access to available Seller's supply, without liability for any
failures of performance which may result therefrom.
12. BUYER'S CREDIT: Credit terms may be decreased, canceled or limited by
Seller, both as to time and amount, only upon prior thirty (30) days written
notice to Buyer, and the price of any part of the Product deliverable hereunder
shall, at Seller's option and only upon prior written notice to Buyer, be
payable in cash before shipment or on offer of delivery. Seller shall not be
obligated to make any shipment when Buyer is in default to Seller under this or
any other contract. Buyer shall pay interest on all invoices not paid within the
terms of payment specified, at the maximum rate allowable under applicable
federal or state law but in no event higher than one percent (1%) per month on
the unpaid balance.
13. SHIPMENT NOTICE: Buyer shall give Seller reasonable notice of shipments
required, and take delivery accordingly. Seller will not be required to ship in
any one calendar month more than 10% of the annual quantity specified herein for
the then current contract year. Seller will use its best efforts to make greater
quantities available if requested by Buyer, and Buyer will provide forecasts and
orders for such greater quantities with as much lead time as possible.
14. CLAIMS: Buyer will test and inspect the Product for compliance with this
Agreement within a reasonable time after each shipment, and if Buyer fails to
notify Seller within 45 days after its receipt of any shipment, and before any
part of the Product (except for reasonable test and inspection quantities) has
been changed from its original condition, that the Product is defective or short
in any respect, Buyer will have waived any right or claims against Seller.
Seller's invoice weights, volumes, sizes and tares established in good faith
will govern unless proved erroneous. Variations of 1% or less from invoice
quality of shipment will be disregarded.
15. HANDLING, LOADING, UNLOADING AND CONTAINERS: Buyer acknowledges that the
Product may require special handling, storage, transportation, treatment
or use to comply with applicable safety and environmental laws and will take
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all reasonable action to comply with these laws and avoid spills or other
damages to persons, property or the environment. Buyer will (1) unload and
release all transportation equipment promptly so Seller incurs no demurrage,
other expense or loss (2) comply with instructions Seller may give for the
return of the equipment, and (3) pay any invoice for this demurrage, other
expenses or loss within 10 days.
16. LIMITATION OF ACTIONS: Any action against the Seller arising out of this
Agreement or by reason of any sale hereunder, or by reason of any federal or
state statutory provisions relating hereto shall be commenced within one (1)
year from the date such cause of action arises, otherwise the same shall be
barred notwithstanding any statutory period of limitations to the contrary.
Unless otherwise indicated herein, risk of loss and responsibility for all
Product sold hereunder shall pass to Buyer upon Seller's delivery to Buyer
hereunder. Prepayment of freight is negotiated in each particular case, and does
not determine the passing of title. Title to the Product passes from Seller to
Buyer at FOB point.
17. ASSIGNMENT: Either party may assign this Agreement, without the consent of
the other party, to the purchases of all, or substantially all, of the assets of
the business unit responsible for performing the Agreement. Otherwise, this
contract is not transferable or assignable by either party and any attempt by
either party to assign its rights, duties or obligations hereunder shall be
void.
18. MISCELLANEOUS: This Agreement constitutes the entire contract for the sale
and purchase of the Product and Seller shall not be liable for or bound in any
manner by any representation, guarantees or commitments, except as specifically
provided herein. No modifications of this Agreement shall be of any force or
effect unless in writing and signed by the party claimed to be bound thereby,
and no modification shall be effected by the acknowledgment or acceptance of
purchase contract forms containing different conditions.
19. FAIR LABOR STANDARDS ACT: All Product delivered by Seller hereunder will be
produced in compliance with the Fair Labor Standards Act of 1938 as amended.
20. NOTICES: Any notice or request given under this Agreement shall be
addressed as follows:
If to Seller: Clariant Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Sales & Marketing Manager
If to Buyer: Paragon Trade Brands, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Executive Vice President of Materials
and Technology
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IN WITNESS WHEREOF, the parties hereto have duly caused this Agreement
to be executed in duplicate by their duly authorized representatives as of this
30th day of April, 1998.
CLARIANT CORPORATION PARAGON TRADE BRANDS, INC.
By: /s/ ▇.▇. ▇▇▇▇▇▇▇ By: /s/ A.D. Jezzi
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Vice President
Date: 5-12-98 Date: 5-7-98
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By: /s/ M. ▇▇▇ ▇▇▇▇▇▇
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Date: 5-13-98
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