LENS BLANK SUPPLY AGREEMENT
This Agreement is made as of this 13 day of February, 1997, between
Corning Incorporated, a New York corporation, having its principal place of
business at Xxx Xxxxxxxxxx Xxxxx, Xxxxxxx, Xxx Xxxx 00000 (hereinafter
"Corning") and Serengeti Eyewear, Inc. (formerly known as Solar-Mates, Inc.), a
New York corporation having its principal place of business at 0000 00xx Xxxxx
Xxxx, Xxxxxxxx, Xxxxxxx 00000 (hereinafter "Customer").
INTRODUCTION:
Corning manufactures certain fixed-tint and photochromatic glass lens
blanks; and
Customer and Corning have entered into an Agreement of Purchase and Sale,
dated as of October 29, 1996 (the "Purchase Agreement"), pursuant to which
Customer has acquired from Corning certain assets; and
It is a condition to the consummation of the Purchase Agreement that
Corning and Customer will have entered into this supply agreement.
In consideration of the foregoing and the covenants, terms and conditions
set forth herein, the sufficiency of which as consideration is acknowledged by
each of the parties and intending to be legally bound, Corning and Customer
agree as follows:
ARTICLE I. Definitions
The following terms when used in this Agreement with initial capital
letters shall have the following meanings for the purposes of this Agreement
unless the context in which they are used clearly requires otherwise.
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1.1 "Lens Blanks" shall mean the glass lens blanks specifically described
in the Specifications identified on Appendix A hereto, as such Specifications
may be revised by mutual written agreement of Corning and Customer from time to
time.
1.2 "Party" shall mean either Corning or Customer, as the case may be, and
both Corning and Customer when used in the plural.
1.3 "Purchase Agreement" shall mean the Purchase Agreement described in
the second paragraph of the Introduction to this Agreement.
1.4 "Specifications" shall mean Corning's written specifications relating
to the Lens Blanks identified on Appendix A.
1.5 "Term of this Agreement" shall mean the period of time commencing on
the date hereof, and ending three years from the date hereof; provided however,
that if neither party gives the other notice of its desire to have this
Agreement terminated at least ninety (90) days before the end of such period or
any yearly extension, this Agreement shall be extended on a year-to-year basis
unless earlier terminated in accordance with Article IX.
ARTICLE II. Sale and Purchase Obligation
Subject to the terms and conditions of this Agreement, Customer agrees to
purchase from Corning and Corning agrees to sell to Customer during the Term of
this Agreement Lens Blanks in the quantities set forth below.
ARTICLE III. Quantity and Price
3.1 During the Term of this Agreement, Customer shall purchase from
Corning and Corning shall sell to Customer under the terms and conditions of
this Agreement the Lens
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Blanks sufficient to meet all of Customer's requirements for the products
offered in the Serengeti Business immediately prior to the Closing Date (as such
terms are defined in the Purchase Agreement) for photochromic lens blanks of the
same or substantially similar type as Corning Glass Code 8155 and 8111 Lens
Blanks in an amount not to exceed 3,000,000 Lens Blanks per year for Glass Code
8155; and in an amount not to exceed 1,000,000 Lens Blanks per year for Glass
Code 8111 and such amounts of Lens Blanks for Code 8013 as customer deems
appropriate and in an amount not to exceed 1,000,000 Lens Blanks per year for
Glass Code 8013.
3.2 Customer shall order Lens Blanks under this Agreement from Corning for
so long as Corning is able to fulfill Customer's orders in full within the
agreed upon delivery times pursuant to Article IV below. If at any time Corning
cannot fulfill such an order as required by this Agreement, then Customer shall
be entitled to order such Lens Blanks from a third party until such time as
Corning is able to resume fulfillment of Customer's orders for Lens Blanks in
full within such agreed upon delivery times. Corning shall use reasonable
commercial efforts to notify Customer of its inability to fulfill an order and
of the resumption of its ability to fill such orders.
3.3 The price charged and to be paid by Customer for the Lens Blanks sold
hereunder shall be as set forth on Appendix B. At the end of the first year of
this Agreement and for every year thereafter during the Term of this Agreement,
these prices shall be increased for each subsequent year by a percentage equal
to the percentage increases in the Consumer Price Index (all cities) published
by the Department of Labor of the United States for the month of December
immediately preceding each such anniversary year of the Agreement for all
products other than Lens Blanks for Glass Code 8111.
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ARTICLE IV. Forecasting and Ordering
4.1 At least three (3) months prior to the beginning of each calendar
year, Customer will issue to Corning a forecast for such calendar year covered
by the Term of this Agreement. Such forecast shall contain anticipated annual
quantities of each type of Lens Blank subject to Section 3.1, and projected
Customer delivery requirements (provided, however, that in respect of 1997,
Customer shall have delivered such forecast and projections promptly after
execution of the Purchase Agreement). Customer will provide to Corning quarterly
updated forecasts of its quantity and delivery requirements for each type of
Lens Blank during the balance of the calendar year.
4.2 At least six (6) weeks prior to the scheduled melting of the glass to
be used in manufacturing the Lens Blanks, Customer will provide Corning with a
binding forecast containing its commitment to purchase quantities of each type
of Lens Blank, where each such binding forecast shall be for at least 10,000
pounds.
4.3 Lens Blanks sold hereunder will be released pursuant to four times
yearly firm releases issued by Customer and accepted by Corning releasing the
Lens Blanks for shipment as provided in such releases and as agreed upon by
Customer and Corning. No delivery date will be required to be less than one
hundred and twenty (120) days from date of Customer's first order therefor.
ARTICLE V. Delivery and Payment
5.1 All Lens Blanks sold under this Agreement shall be delivered by
Corning, FOB Harrodsburg, Kentucky; Suzano, Brazil; or Bagneaux, France, as
applicable. Payment for all Lens Blanks sold hereunder shall be made by Customer
to Corning in U.S. dollars net thirty (30) days (i.e., within thirty (30) days
of the date of Corning's invoice therefor) except in the
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case of the first order of any Lens Blanks pursuant to this Agreement as to
which payment will be made in U.S. dollars net sixty (60) days.
5.2 Title and risk of loss or damage to all Lens Blanks shall pass from
Corning to Customer when the Lens Blanks are shipped FOB Harrodsburg, Kentucky;
Suzano, Brazil; or Bagneaux, France, as applicable.
ARTICLE VI. Specifications, Inventory, New Products
6.1 Except as provided below, Corning shall have the right to make changes
in the Specifications with the written approval of Customer in each case, which
approval shall not be unreasonably withheld.
ARTICLE VII. Inspection and Warranty
7.1 Customer shall promptly after receipt, inspect each shipment of the
Lens Blanks to: (1) verify the quantity; (2) identify damage, if any; and (3)
determine compliance with the Specifications. Customer will notify Corning in
writing of any such noncompliance of Lens Blanks within thirty (30) days of
delivery to Customer.
7.2 Subject to Section 7.1 above, Corning warrants to Customer that the
Lens Blanks sold hereunder shall meet the Specifications and be free from
defects in materials and workmanship to the acceptable quality levels set forth
on Appendix A. Lens Blanks which fail to meet the foregoing warranty shall be
replaced or Corning shall issue a credit for such Lens Blanks which fail to meet
the Specifications and which have been purchased and paid for by Customer. The
option to replace or issue a credit shall be determined solely by Customer. The
foregoing shall be Customer's sole and exclusive remedies notwithstanding any of
the provisions of this Agreement and under no circumstances will Corning be
liable to Customer or any third party for any special, consequential, or
indirect damage or damages
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including, without limitation the loss of profits or production arising from any
cause whatsoever (and expressly excluding third party claims for personal injury
or property damage), even if Corning has been advised of the possibility of such
damage or damages.
7.3 Corning warrants to Customer that the Lens Blanks sold hereunder and
delivered by Corning do not infringe upon any patent rights of third parties
when used for their intended purpose and Corning will hold the Customer harmless
from any such claim; provided however that no such warranty is extended to any
Lens Blanks made in accordance with specifications or designs supplied by
Customer.
7.4 THE FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES, WHETHER
EXPRESSED OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
ARTICLE VIII. Force Majeure
If the performance of this Agreement or any obligation under it is
prevented, restricted or interfered with by reason of fire, explosion, strike,
lockout, labor dispute, casualty, accident, lack or failure in part or in whole
of transportation facilities, sources of supply and labor, raw materials, power
or supplies; or war, revolution, civil commotion, acts of public enemies; or any
law, order, proclamation, regulation, ordinance, demand or requirement of any
government or subdivision, authority or representative of any such government or
delay or failure of a government authority to issue, export or import licenses
or approvals or any other conditions or acts whatsoever whether similar or
dissimilar to those enumerated which are beyond the reasonable control of the
parties, the party so affected by giving prompt notice to the other party shall
be excused from such performance to the extent of such prevention, restriction
or interference; provided that the party so affected uses its best efforts to
remedy or
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remove such causes of nonperformance and resumes performance hereunder whenever
such causes are removed.
ARTICLE IX. Default and Termination
If either party hereto shall fail to comply with any material term or
condition of this Agreement, or shall commit a material breach of any covenant
contained within this Agreement, and shall fail to remedy such breach within
thirty (30) days after notice of writing of the breach to the party in default,
the party not in default shall have the right to terminate this Agreement by
giving written notice of the termination within twenty (20) days following the
end of said thirty (30) day period and this Agreement shall terminate as of the
date of such notice with no further action being required by the terminating
party. The termination right provided for in this paragraph shall not affect any
other legal or equitable remedies which may be available to the non-defaulting
party and shall not affect obligations under this Agreement which have risen
prior to such termination. The parties acknowledge that Corning's failure to
deliver Xxx Xxxxxx duly ordered hereunder within thirty (30) days of the
delivery date agreed upon pursuant to Article IV is a material breach of this
Agreement as described above.
ARTICLE X. Choice of Law and Venue
This Agreement shall be construed and enforced in accordance with the laws
of the State of New York and the United States of America, applicable to
contracts relating to the same subject matter hereof entered into and fully
performed within said State, notwithstanding any choice of law principles to the
contrary. THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE
OF GOODS IS SPECIFICALLY EXCLUDED.
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ARTICLE XI. Confidential Information
All information which a Party has derived from the other Party as a result
of the provisions of this Agreement, including, but not limited to
specifications, designs or financial information, whether contained in
blueprints, drawings, written reports, letters or memoranda, process
descriptions, operating procedures, documents or samples shall be treated as
confidential unless: (a) such information shall have been in the possession of
such Party prior to its receipt from such other Party; (b) such information is
or becomes part of the public knowledge or literature through no fault of such
Party; (c) such information shall otherwise become available to such Party from
a source other than such other Party, said source not being known by such other
Party to be violative of any obligation of secrecy with respect to such
information; or (d) such Party is legally required to disclose information
provided it gives such other Party reasonable opportunity to seek a protective
order. Each Party shall use all reasonable efforts to prevent the use of all or
any part of such confidential information in any other connection or the
transmission thereof to third parties unless and until it has first obtained the
written consent of the other Party specifically authorizing such use or
transmission. All of a Party's obligations with respect to such confidential
information disclosed or made available to it by the other Party shall survive
for a period of five (5) years from the date such information was disclosed or
made available.
ARTICLE XII. General Provisions
12.1 This instrument sets forth the entire agreement between the parties
with respect to the supply of the Lens Blanks by Corning to Customer, and the
terms of this Agreement shall supersede the terms and conditions upon any
Customer's purchase orders and Corning's order acknowledgments issued to
implement purchases and sales of Lens Blanks under this Agreement, if such terms
and conditions are in conflict with, or purport to address the same matters as
the terms and conditions of this Agreement. This Agreement shall not be modified
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or extended except in writing identifying this instrument and executed by the
duly authorized officers of both parties.
12.2 In all matters relating to this Agreement, both parties will be
acting solely as independent contractors and will be solely responsible for the
acts of their employees; and employees of one party shall not be considered
employees of the other party. Neither party will have any right, power, or
authority to create any obligations, express or implied, on behalf of the other
party.
12.3 Each party agrees to use its best efforts to comply with, and
undertakes to notify the other party of any changes of which it becomes aware
in, all applicable laws, statutes, ordinances and governmental rules and
regulations applicable to the purchase and sale of Lens Blanks contemplated by
this Agreement.
12.4 All of the terms and conditions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the parties hereto and
their respective successors and assigns. No party to this Agreement may assign
its interest in this Agreement or any rights or duties thereunder without the
prior written consent of the other party, not to be unreasonably withheld,
delayed or conditioned.
12.5 All notices and other communications provided for hereunder shall be
given in writing and shall be sent to the principal office of Customer or
Corning set forth below.
(a) All notices and other communications to Corning shall be sent by hand
delivery, telex or telecopier, and if by telex or telecopier, confirmed, or by
certified mail with postage prepaid (return receipt requested) to:
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Corning Incorporated
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: The Secretary
(b) All notices and other communications to Customer shall be sent by hand
delivery, telex or telecopier, and if by telex or telecopier, confirmed, or by
certified or registered mail with postage prepaid (return receipt requested) to:
Serengeti Eyewear, Inc.
0000 00xx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: President
or, as to either party, at such other address as shall be designated by such
party in a written notice to the other party. All such notices and
communications shall be effective either: (a) when delivered by hand; (b) ten
(10) days after being deposited in the mail; (c) when telexed, answer-back
received; or (d) when telecopied, receipt acknowledged.
12.6 This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement and each of which shall be
deemed an original.
12.7 The rights of Corning and Customer shall not be prejudiced or
restricted by any indulgence or forbearance extended by either party to the
other. No waiver by either party in respect of any breach shall operate as a
waiver in respect of any subsequent breach.
12.8 All provisions of this Agreement shall be severable for purposes of
enforcement. If any provision of this Agreement is invalid, ruled illegal by any
court of competent jurisdiction, or unenforceable under present or future laws
effective during the term hereof, then and in that event, and provided the
invalid provision does not materially affect
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the intent and performance of this Agreement, it is the intention of the parties
hereto that the remainder of this Agreement shall not be affected thereby, and
it is also the intention of the parties that in lieu of each of such provision
which is invalid, illegal or unenforceable, there be added as part of this
Agreement a provision which shall be as similar in terms of such invalid,
illegal or unenforceable provision, and that deals equitably with the intended
benefits and obligations of the parties.
12.9 Corning and Customer shall cooperate in good faith in order that all
obligations of the parties are fulfilled hereunder and Corning shall use its
best reasonable efforts to inform Customer of any conditions which will prevent
Corning from fulfilling its obligations hereunder.
12.10 Preparation of this Agreement has been a joint effort of both
Corning and Customer and this Agreement shall not be construed more severely
against either Corning or Customer.
12.11 This Agreement shall be held in confidence by both parties and shall
not be disclosed to any third parties without the other party's prior written
consent.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first written above.
CORNING INCORPORATED
By: /s/ Xxxxxx X. Xxxxxxx
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SERENGETI EYEWEAR, INC.
By: /s/ Xxxxxxx Xxxxxx
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APPENDIX A
SPECIFICATIONS
Glass Code 8013 Corning Incorporated North American Optical division
Ophthalmic Product Specifications No. OPS-54, issued 2/01/89,
applies to the control of quality of standard fixed tint lens
pressings intended for sunglass lenses.
Glass Code 8111 Corning Incorporated North American Optical division
Ophthalmic Product Specifications No. OPS-53, issued 2/01/89,
applies to the control of quality of photochromic lens
pressings intended for sunglass lenses.
Glass Code 8155 Corning Incorporated North American Optical division
Ophthalmic Product Specifications No. OPS-53, issued 2/01/89,
applies to the control of quality of photochromic lens
pressings intended for sunglass lenses.
CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE
PRICE/LB. INFORMATION BELOW, WHICH
INFORMATION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION
APPENDIX B
PRICES
FOB POINT GLASS CODE PRICE/LB.
Harrodsburg, KY 8155
(Drivers, Strata)
Harrodsburg, KY 8111
(PhotoGray Extra Base Glass)
Suzano, Brazil 8013
(UV Xxxx - Signia Slate)
