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Exhibit 10.19
PRODUCT SALES AGREEMENT
This Product Sales Agreement (this "Agreement") is entered into
as of the 2nd day of August, 2001 between GENEVA STEEL LLC, a Delaware limited
liability company ("Geneva"), and FERROSTAAL INCORPORATED, a Delaware
corporation ("Ferrostaal").
AGREEMENT:
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In consideration of the promises and undertakings contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the parties hereto agree as follows:
1. Grant. Subject to the terms and conditions contained in this
Agreement, Geneva grants to Ferrostaal the right to purchase from Geneva for
sale and distribution to the customers identified on Exhibit A attached
hereto, as such Exhibit A may be modified from time to time in writing by the
parties hereto (the "Customers") those steel products produced by Geneva that
are more particularly described on Exhibit B attached hereto ("Products");
provided, however, Geneva shall have the option to exclude from time to time
from the "Products" and from the terms of this Agreement any slabs or pipe
produced at the Geneva Steel Works in Vineyard, Utah (the "Geneva Works").
Upon the reasonable request of Geneva from time to time, Geneva and Ferrostaal
shall enter into good faith negotiations to add additional Customers to the
Exhibit A.
2. Reservation of Right. Geneva reserves the right to sell
Products and other materials produced by Geneva to any customer, including
Customers.
3. Sale of Product.
3.1 Marketing and Sales Effort by Geneva. Geneva shall be
responsible for the marketing and sales effort for Geneva's Products to
Customers. Ferrostaal agrees to provide Geneva with prompt notice of any
refusal by a Customer referred to Ferrostaal by Geneva to place an order for
Geneva's Products through Ferrostaal or Ferrostaal's refusal to accept an
order for Geneva's Products from any Customer that has been generated by
Geneva's sales and marketing effort.
3.2 Future Marketing and Sales Effort by Ferrostaal. Upon
Ferrostaal's reasonable request, Geneva and Ferrostaal will enter into good
faith negotiations for the possible assumption by Ferrostaal of additional
marketing responsibilities with respect to the Products. Any arrangement with
respect to such additional marketing responsibilities shall be set forth in a
written amendment to this Agreement and shall thereafter be binding upon the
parties hereto. Such negotiations shall include the grant to Ferrostaal of a
right of first refusal to sell export Products, exclusive of house accounts
maintained by Geneva.
3.3 No Other Collaboration. Notwithstanding anything in this
Agreement to the contrary, in no event shall either Geneva or Ferrostaal
exchange information concerning either party's prospective business contacts
or plans, pricing or marketing efforts except to the extent permitted by law
with respect to orders or anticipated orders from Customers that will be
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submitted to Ferrostaal pursuant to the provisions of this Agreement. Nothing
in this Agreement is intended to be or shall permit either party to control,
influence or otherwise affect the output, pricing, or products of the other
party. There shall be no coordination of decisions regarding pricing, output,
customers, territories or similar competitively sensitive variables except to
the extent permitted by law with respect to the processing of orders or
anticipated orders from Customers that will be submitted to Ferrostaal
pursuant to the provisions of this Agreement. Geneva retains complete
discretion and control over all such decisions with respect to its Products.
Each party hereto shall establish and maintain such internal controls and
procedures as are reasonably necessary to ensure that such party is in strict
compliance with the provisions of this Section 3.3. Each party hereto is free
to engage in any other activity related to its separate business, including
those activities that are competitive with the sale of Products to Customers.
3.4 Customer and Ferrostaal Orders.
3.4.1 Submission. Upon receipt by Ferrostaal of a
purchase order by a Customer for Products, Ferrostaal shall submit to Geneva,
a Ferrostaal purchase order for such Products, provided that such order is for
a Customer and (a) would not cause the Applicable Credit Limit, as hereinafter
defined, for such Customer to be exceeded, or (b) would cause the Applicable
Credit Limit to be exceeded but Ferrostaal has approved such order. Ferrostaal
shall use commercially reasonable efforts to collect all Customer accounts
within terms so that the Applicable Credit Limit of a Customer is not
exceeded.
3.4.2 Acceptance and Rejection. Geneva shall, in its
sole discretion, have the right to accept or reject any such Ferrostaal order.
Any such order shall be deemed accepted by Geneva if notice of a rejection
thereof is not given to Ferrostaal as soon as is reasonable under the
circumstances, but in no event later than (a) within five (5) business days
after Geneva received such order from Ferrostaal, if such order is wholly for
Products or other materials that are generally and regularly produced by
Geneva and at Geneva's then current and applicable published price for such
Products or other materials, and (b) within ten (10) business days after
Geneva receives such order from Ferrostaal if any portion of such order is for
Products or other materials that are not generally and regularly produced by
Geneva, or at a price that is lower than Geneva's then current and applicable
published price for such Products or other materials.
3.4.3 Applicable Credit Limit. As used herein the term
"Applicable Credit Limit" means the Ferrostaal credit limit for a Customer for
Products sold to such Customer set forth on Exhibit A hereto, as such
Applicable Credit Limit may be modified from time to time by mutual written
agreement of both parties hereto.
3.5 Sales Allowance and Discount.
3.5.1 Sales Allowance. Ferrostaal shall be entitled to
receive as a sales allowance with respect to sales to Ferrostaal of Products
shipped, or anticipated to be shipped, to Customers (excluding any direct
sales by Geneva to a Customer) an amount (the "Sales Allowance") equal to 1.5%
of the Product invoice amount with respect to such sale. The Sales
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Allowance shall be deducted by Ferrostaal, at the times hereafter indicated,
from the funds remitted by Ferrostaal to Geneva.
3.5.2 Discount. In consideration for the acceptance of
the credit risk on Customer orders for Product as provided herein, Ferrostaal
shall be entitled to receive a discount with respect to each Payment Invoice,
as hereinafter defined, for Products sold to Ferrostaal for the benefit of a
Customer in an amount equal to the product of (x) the average number of days
in the period commencing on the date that payment for such Products is
received by Geneva in accordance with Section 5.2 of this Agreement and ending
on the date on which Ferrostaal receives payment from the Customer to which
such Products are shipped (the "Holding Period"); multiplied by (y) (i) the
average of the prime rate published in the Money Rates section of the Wall
Street Journal (the "Prime Rate") on each day during the Holding Period, plus
one percent (1%), divided by (ii) 365; and multiplied by (z) (i) the amount
set forth on the Payment Invoice with respect to such Product less (ii) the
Sales Allowance retained by Ferrostaal or otherwise remitted to Ferrostaal by
Geneva with respect to such Payment Invoice. The initial Holding Period shall
be fifty-five (55) days, comprised of an assumed ten (10)-day period between
the date when Geneva receives payment for such Products and the date such
Products are shipped (the "Storage Period"), and an assumed forty-five
(45)-day period between the date of shipment and the date of receipt by
Ferrostaal from a Customer of payment for such Products. The initial average
Prime Rate shall be 6.75%. The discount provided for in this Section 3.5.2
shall be deducted by Ferrostaal, at the times hereafter indicated, from the
funds remitted by Ferrostaal to Geneva.
3.5.3 Reconciliation. Following each calendar month in
any sales year either party hereto may propose an adjustment to the discount
described in Section 3.5.2 above, to be effective for Payment Invoices during
the then current calendar month, reflecting changes in (1) the Prime Rate and
(2) the actual Holding Period, including, but not limited to, the average
aging of receivables for accounts of Ferrostaal arising from sales by
Ferrostaal of Products purchased by Ferrostaal under this Agreement from those
in effect on the date hereof. Such proposal shall be accompanied by detailed
justification for such adjustment. In the event the parties hereto fail to
agree to the adjustment proposed, such element of the discount then in effect
shall continue until a written agreement on such an adjustment is entered
into; provided that (a) in no event shall any account receivable past due (as
measured based a net 30-day term unless otherwise approved in writing by
Geneva) by sixty (60) days or more for reasons primarily unrelated to the
specified quality or quantity of the Products in a Ferrostaal purchase order
with Geneva, an inexcusable delivery delay by Geneva in contractual delivery
date of the Products or to any other material breach by Geneva of a purchase
order with Ferrostaal related to such Customer, be included in the computation
of the Holding Period under Section 3.5.2 hereof, and (b) any changes in the
Prime Rate determined as provided in Section 3.5.2 shall be automatically
applicable for the following calendar month commencing on the first date of
such month. In the event the parties are unable to agree on a change in the
Holding Period proposed by either party, the matter shall resolved by
reference of the issue to Xxxxxx Xxxxxxxx XX, or such other nationally
recognized accounting firm, for resolution in accordance with the provisions
of this Agreement, whose decision thereon shall be final and binding on the
parties hereto. The costs incurred in connection with such accounting firm
with respect to such determination shall be equally borne by the parties
hereto.
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3.6 Collection of Accounts Receivable by Ferrostaal.
Ferrostaal shall use its commercially reasonable efforts to maintain the
average aging of receivables as low as possible with a target of not more than
forty-five (45) calendar days past the date of shipment of Product to which
such accounts receivable apply.
3.7 Title to the Products.
3.7.1 Title. Title to the Products shall pass to
Ferrostaal upon the Products being Identified to the Agreement (as defined
below). Promptly upon assignment of Products to an order, all such Products
shall be stamped, or the lots consisting of such Products shall be marked,
with a tracking number (a "Tracking Number") that shall be entered into
Geneva's inventory records.
3.7.2 Identified to the Agreement. Products shall be
deemed "Identified to the Agreement" on the earlier of:
(1) At the time at which the Tracking Number for
such Product or for the lot of which such Product is a part, is identified in
Geneva's inventory records as relating to a particular purchase order placed
by Ferrostaal; provided, however, that any Product Identified to the Agreement
that is placed in any of the inventory stockpiles, other than a stockpile
relating to the Ferrostaal purchase order to which such Product has been
identified, herein the "Geneva Inventory Stockpiles," shall be deemed to be
"fungible" for purposes of Article 7 of the Utah Uniform Commercial Code. (Any
fungible Product that is Identified to the Agreement and is located in the
"Geneva Inventory Stockpiles," may be replaced by or substituted for any other
Product of equal quantity, metallurgical quality and width, thickness and
length; provided, that such replacement or substitute Product is concurrently
Identified to the Agreement, as provided in the foregoing part of this Section
3.7.2(a)); or
(2) At the time at which a Payment Invoice is issued
to Ferrostaal for Products covered by a Ferrostaal purchase order for which
Ferrostaal has received a Geneva order confirmation, regardless of whether the
requirements of 3.7.2(a) have been met; provided that this Section 3.7.2(b)
shall not apply to the extent that the aggregate Storage Period, as identified
in Section 3.5.2, for such designated Products is more than fifteen (15) days
unless otherwise agreed in writing by the parties.
3.7.3 Protective Filing. Ferrostaal will file a
protective Form UCC-1 with the Utah Department of Commerce, Division of
Corporations and Commercial Code to give public notice of its interest in the
Products with respect to which title has passed to Ferrostaal. Geneva shall
from time to time execute and deliver such instruments or other documents and
take such other actions as Ferrostaal may reasonably request to confirm
Ferrostaal's rights in Products which have been Identified to the Agreement,
including, without limitation, the execution of such protective Form UCC-1's
covering such Products for notice purposes only.
3.7.4 Consent to Storage. Ferrostaal acknowledges and
consents to the storage of the Products on Geneva's premises whether such
Products have or have not been
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Identified to the Agreement. At all times while the Products are in the
possession of Geneva, Geneva shall furnish and maintain a suitable place for
storage.
3.8 Books and Records. Geneva shall have the right,
exercisable from time to time upon reasonable advance notice, to audit and
copy those portions of Ferrostaal's books and records necessary to determine
Ferrostaal's compliance with its obligations under this Section 3. Ferrostaal
shall have the right to access certain Geneva records for the purpose of
determining which Products have been Identified to the Agreement and whether
the Payment Invoices properly reflect such Products. Neither party shall have
the right to audit or copy any (a) confidential and proprietary information
pertaining to a customer or supplier (other than Customers of Products), (b)
the other party's books and records relating to salaries of its employees, or
(c) the other party's books and records unrelated to such other party's
obligations hereunder.
4. Warranty Provisions.
4.1 Warranty. The Products produced by Geneva and sold under
this Agreement are warranted to conform to contract specifications. The
obligations of Geneva under this warranty are limited to an amount equal to
the original invoice price of Products or other materials that have been
reported by Ferrostaal not to conform to such specifications and that have
been so found by Geneva after inspection, such amount to be paid either by
delivery of replacement product or offset against future invoices as the
parties may in good faith mutually agree.
4.2 Claims. All claims under the warranty set forth in
Section 4.1 shall be made in writing by Ferrostaal within five (5) business
days after receipt by Ferrostaal from its customer of notice of defect. Geneva
will not be responsible for any claim if notice thereof is not received by
Geneva promptly following delivery by Geneva to Ferrostaal or Ferrostaal's
customer, whichever is earlier, of the Products or other materials produced by
Geneva that are the subject of such claim. Notwithstanding the foregoing,
Geneva will not, in any event, be responsible for such a claim if notice
thereof is not received by Geneva within the same time limit Geneva
contractually prescribes from time to time for customers to whom Xxxxxx xxxxx
directly.
4.3 Sole Remedy for Defects. Ferrostaal agrees to accept the
warranty hereinabove contained in lieu of all other warranties, statutory or
otherwise, as the sole and exclusive remedy against Geneva for any defects of
any nature whatsoever. ANY STATUTORY OR IMPLIED WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE IS HEREBY WAIVED. EXCEPT FOR THE WARRANTY SET
FORTH IN SECTION 4.1 AND THE REMEDY PROVIDED IN SECTION 4.1, ALL WARRANTIES,
UNDERTAKINGS AND CONDITIONS, EXPRESS OR IMPLIED, BY STATUTE OR OTHERWISE, ARE
HEREBY EXCLUDED. IN NO EVENT SHALL GENEVA BE LIABLE FOR ANY DIRECT, INDIRECT,
SPECIAL OR CONSEQUENTIAL DAMAGES SUFFERED BY FERROSTAAL OR ANY CUSTOMER OF
FERROSTAAL.
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4.4 Disputes Regarding Warranty. If Geneva and Ferrostaal do
not agree regarding the merits of a warranty claim, the disagreement will be
settled by the good faith appointment by the parties of a qualified and
neutral inspection company that is agreed to by the parties to investigate and
report to the parties within a reasonable time regarding the merits of the
warranty claim. The results of such report shall be final and binding on the
parties hereto. As between Geneva and Ferrostaal only, the costs of such
inspection company shall be equally borne by such parties.
4.5 Ferrostaal Warranty. Nothing in this Agreement prohibits
Ferrostaal from offering any additional or different warranty of Products to
Customers; provided that Geneva shall have no liability for any warranty that
differs from the warranty set forth in this Section 4 unless Geneva has given
its prior written consent expressly and specifically agreeing to such
additional or different warranty terms or conditions. Any express warranty of
the quality of Product that is set forth in writing in a Ferrostaal order for
a Customer that is accepted by Geneva shall be binding on Geneva.
5. Credit Risk and Payment.
5.1 Credit Risk. Subject only to the immediately following
sentence, the credit risk on all Products shipped by Geneva upon Ferrostaal's
order shall be borne solely by Ferrostaal and shall not be the liability of
Geneva or entitle Ferrostaal to deduct, withhold, delay or otherwise to pay in
full any Payment Invoice. Ferrostaal may withhold or offset from payments
otherwise due hereunder in an amount equal to the amount that a Customer
refuses to pay Ferrostaal for Products claimed to be defective in failing to
meet any warranty provided for in Section 4 hereof or an inexcusable delivery
delay by Geneva from the contractual delivery date of the Products in an
accepted purchase order from Ferrostaal or for reasons primarily related to a
material breach by Geneva of an accepted purchase order from Ferrostaal
related to such Customer,; provided that (a) the amount of such withholding or
deduction shall not exceed the amount being withheld from Ferrostaal by such
Customer due to such claim, (b) Ferrostaal shall promptly notify Geneva in
writing and in detail of any such claim, including but not limited to the
amount of such claim, (c) no amounts shall be withheld or deducted due to the
inability or refusal of any Customer to pay Ferrostaal for any other reason,
and (d) upon resolution or withdrawal of such Customer claim, Ferrostaal shall
immediately pay to Geneva the full amount of any such withheld or deducted
amount less only those amounts, if any, that Geneva has agreed to allow
Ferrostaal as an offset against the Ferrostaal order related to such claim. In
the event Ferrostaal has already paid Geneva for the Products at issue, then
to such extent Geneva will promptly reimburse Ferrostaal the amount of any
such withholding or deduction in payments by a Customer to Ferrostaal as
provided above. Ferrostaal hereby authorizes Geneva and its representatives to
communicate directly with any Customer concerning a Customer claim, including
proposing potential settlement or other avenues of resolution of such claim.
Geneva shall have the exclusive right to resolve any such claim to the extent
it relates to the quality, quantity or delivery of any such Product, and such
resolution shall be binding on Ferrostaal so long as it does not expose
Ferrostaal to any additional liability or obligations not contemplated in the
Ferrostaal order associated with such Product.
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5.2 Payment for Products. Notwithstanding any provision in
this Agreement to the contrary, with respect to any purchase order received
from Ferrostaal by Geneva under this Agreement, as soon as practicable after a
Product is Identified to the Agreement, Geneva shall forward, by U.S. Mail or,
at the discretion of Geneva, a faster medium such as overnight courier or
facsimile transmission, invoices relating to such Product, and the other
materials subject to such purchase order, (each a "Payment Invoice"). Each
Payment Invoice shall specify the purchase order to which it relates, the
estimated promise date with respect thereto and the status of production or
shipment of the order. With respect to the Products for which title has passed
to Ferrostaal but that are stored in Geneva's inventory stockpiles, Geneva
shall include with the Payment Invoice for such Products a mill test report
for such Product and a warehouse receipt, acknowledging Ferrostaal's title to
the Products, the form of which shall be reasonably acceptable to Geneva and
Ferrostaal and be sufficient as a warehouse receipt pursuant to Article 7 of
the Utah Uniform Commercial Code. Ferrostaal shall, every Monday and every
Thursday of each week, remit to Geneva by wire transfer in U.S. funds the full
amount of all Payment Invoices from Geneva with respect to which such payment
has not previously been made less the Sales Allowance owed Ferrostaal for
shipments to be made pursuant to such orders and the discount identified in
Section 3.5.2 of this Agreement. In addition to the information required
above, upon shipment of the Products, Geneva shall provide to Ferrostaal the
mill test report and bills of lading for such Products. Geneva and Ferrostaal
agree to meet periodically to reconcile their records with respect to the
transactions under this Agreement to assure that Ferrostaal is paid the
applicable Sales Allowance and, if necessary, to review and adjust the
procedures for billing and payment hereunder.
6. Indemnification.
6.1 Indemnification by Geneva. Geneva shall indemnify,
protect, defend and hold harmless Ferrostaal from and against any and all
claims (including claims for contribution and/or indemnification), demands,
causes of action, losses, damages, liabilities, suits, costs and expenses,
including, without limitation, attorneys' fees and court costs, asserted
against or suffered or incurred by Ferrostaal by reason of, arising out of or
in connection with the negligent acts or omissions of Geneva or its managers,
directors, officers, employees, agents, representatives, successors or
assigns.
6.2 Indemnification by Ferrostaal. Ferrostaal shall
indemnify, protect, defend and hold harmless Geneva from and against any and
all claims (including claims for contribution and/or indemnification),
demands, causes of action, losses, damages, liabilities, suits, costs and
expenses, including, without limitation, attorneys' fees and court costs,
asserted against or suffered or incurred by Ferrostaal by reason of, arising
out of or in connection with the negligent acts or omissions of Ferrostaal or
its managers, directors, officers, employees, agents, representatives,
successors or assigns.
7. Force Majeure. Neither party will be liable for any failure or
delay in delivery caused by an act of God, labor strike, accident,
governmental restriction, raw material shortage, or any other cause beyond
such party's control, or because of equipment failure.
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8. Special or Consequential Damage. Neither party hereto shall be
liable to the other party for any special or consequential damages arising
from the breach of any obligation under this Agreement, including but not
limited to loss of profits or revenue, business interruption or loss of
production, costs of capital, downtime costs, or other similar losses, however
caused.
9. Relationship of the Parties. The relationship between the
parties hereto shall be one of independent contractors. Neither party hereto
is authorized to bind the other contractually or otherwise, or to make any
representation not permitted herein on behalf of the other party without such
other party's consent.
10. Term of Agreement. Subject to Section 11, this Agreement shall
expire at the close of business on July 31, 2003, unless extended by the
mutual written agreement of Geneva and Ferrostaal.
11. Termination. Notwithstanding Section 10, this Agreement may
be terminated:
11.1 by the non-defaulting party if the other party
materially breaches any of the terms of this Agreement, unless such breach is
cured within thirty (30) days after written notice thereof;
11.2 by Geneva if Ferrostaal violates the provisions of
Section 21 hereof relating to the transfer or assignment of this Agreement by
Ferrostaal;
11.3 by Ferrostaal if Geneva violates the provisions of
Section 21 hereof relating to the transfer or assignment of this Agreement by
Geneva;
11.4 by Geneva during the month of July 2002, if Geneva
believes that the arrangement provided for in this Agreement no longer
achieves Geneva's financial and marketing objectives, written notice of such
termination to be given to Ferrostaal during such month and such termination
to be effective on the date occurring thirty (30) days after such written
notice; or
11.5 By Geneva, at its option, if there is a Change of
Control, as hereinafter defined. As used herein, a "Change in Control" means
any of the following: (a) any person or group of persons shall have acquired
beneficial ownership of 32.5% or more of the issued and outstanding voting
stock of Geneva or its parent company, Geneva Steel Holdings ("Holdings"); (b)
during any period of 12 consecutive calendar months, individuals who at the
beginning of such period constituted the board of directors of Geneva or
Holdings cease for any reason to constitute a majority of the directors then
in office, or (c) Holdings shall cease to own and control sufficient voting
power to approve by itself all matters requiring a shareholder vote under the
Geneva's articles of incorporation or bylaws or pursuant to any requirement of
law.
12. Post-Termination Transition. Following a timely notice of
termination pursuant to Section 11 of this Agreement, or actual expiration
effected pursuant to Section 10 of this Agreement, each party shall promptly
afford the other party its full good faith cooperation in aiding either party
to effect a transition. The cooperation contemplated by this Section 12
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includes all acts reasonably necessary in such transition. Without limiting
the generality of the foregoing, Ferrostaal shall continue to be bound by and,
at Geneva's request, administer all orders that are open on the date of
termination, including, but not limited to, making payment for any Product
delivered or produced and identified to such orders, such payment to be made
by Ferrostaal in accordance with the terms provided for in this Agreement
(provided that Ferrostaal shall continue to be entitled to receive the Sales
Allowance and Discount as provided in Sections 3.5.1 and 3.5.2 of this
Agreement), and Geneva shall continue to be bound by and perform all such
orders accepted by Geneva prior to such termination.
13. Promotion of Reputations. Both parties hereto will use their
commercially reasonable efforts at all times that this Agreement is in force
to promote and maintain a positive reputation for the other party among the
Customers with a view to minimizing any inconvenience, concern or confusion on
the part of any such Customer caused by the entry into or termination of this
Agreement. The foregoing provision shall not prevent either party from seeking
redress and other remedies for any violation of law, including but not limited
to, the filing and prosecution of any trade cases with administrative or
judicial bodies with jurisdiction. With respect to any commercial
documentation relating to a sale or potential sale to a Customer that includes
the Ferrostaal name or logo, Geneva agrees to exercise reasonable efforts to
exercise the same care for accuracy and use as Geneva exercises with respect
to Geneva's use of its own name and logo in such contexts.
14. Insurance. Geneva shall cause Ferrostaal to be named as an
additional insured on any product liability insurance obtained by Geneva that
covers Products. Geneva shall insure under Geneva's standard insurance
policies any Products that have been Identified to the Agreement against loss
by fire, theft or other casualty for an amount equal to the replacement value
of such Products, subject to applicable policy deductibles and exclusions, and
Ferrostaal shall be named as an additional insured on such insurance policy to
the extent of any such loss. Geneva will direct the carrier(s) of any such
insurance to forward to Ferrostaal a certificate of insurance naming
Ferrostaal as an additional insured on the policy obtained and to give
Ferrostaal ninety (90) days notice of the termination, for any reason, of such
policy.
15. Notice. Any notice required or permitted hereunder shall be in
writing and sent by registered or certified mail, postage prepaid, as follows:
If to Geneva:
Geneva Steel, LLC
00 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxx X. Xxxxxxx
with a copy to:
Xxxx Xxxxxxxx Xxxxx Xxx & Xxxxxxxx
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, Xxxx 00000
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Attention: Xxxxx X. Xxxxxxxxx
If to Ferrostaal:
Ferrostaal Incorporated
00000 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxxx
or at such other address as either party to this Agreement may from time to
time designate by notice in writing to the other party. Notice shall be deemed
given two (2) business days after being mailed in the manner set forth above.
16. Amendments. Any amendment to this Agreement must be in
writing, and signed by all parties to this Agreement.
17. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Utah.
18. Required Performance. The failure of either party to this
Agreement to require the performance of any term of this Agreement or the
waiver by either party of any breach under this Agreement shall not prevent
the subsequent enforcement of such term and shall not be deemed a waiver of
any subsequent breach.
19. Costs Upon Default; Dispute Resolution; Joinder. In the event
of a default under the terms of this Agreement, the non-defaulting party shall
be entitled to recover from the defaulting party, all costs of the
non-defaulting party, including a reasonable attorney's fee, in enforcing the
rights of the non-defaulting party hereunder. In the event a dispute arises
between the parties related to the interpretation, enforcement or claimed
breach of this Agreement or any purchase order accepted by Geneva pursuant to
this Agreement, both parties agree to use their diligent, good faith efforts
to resolve such dispute without resort to formal proceedings to the extent
practicable. Without limiting the foregoing, each party agrees upon the
reasonable written request of the other party, to cause their respective
authorized representatives to meet (either in person or via telephone) in an
attempt to resolve such dispute. If the dispute is not resolved to the
satisfaction of the parties within ten (10) days after the conclusion of any
such informal dispute resolution meeting, either party shall be free to pursue
resolution of such dispute in any other manner provided by law, including
arbitration if mutually agreed to. In addition, in the event either party is
named in a third-party Customer claim that involves an obligation or
undertaking by the other party with respect to Products provided hereunder,
the other party agrees to be joined as a party in such proceeding to the
extent necessary to resolve common issues of fact and/or law, subject in all
cases to the limitations, defenses and restrictions set forth in this
Agreement or in or related to any purchase order by Ferrostaal accepted by
Geneva hereunder that relates to the Products that are or may be the subject
of any such claim.
20. Severability. If any provision of this Agreement is held to be
invalid or void by any court of competent jurisdiction, such provision shall
be deemed severable from the
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remainder of this Agreement and shall not effect any other provision hereof.
If such provision shall be deemed invalid due to its scope or breadth, such
provision shall be deemed valid to the extent of the scope or breadth
permitted by law.
21. Assignability. Neither party to this Agreement shall assign any
rights or delegate any obligations of such party hereunder, without the prior
written consent of the other party hereto. Consent to any assignment shall not
operate as a waiver of the necessity for consent to any subsequent assignment
and the terms of such consent shall be binding on any person holding by,
through or under Ferrostaal.
22. Merger. This Agreement (including all Exhibits hereto, which
Exhibits are hereby incorporated herein by this reference) contains the entire
understanding between the parties with respect to the subject matter hereof
and supercedes all prior understandings between the parties. In the event of
any conflict between the terms of this Agreement and any purchase order or any
document submitted by Ferrostaal to Geneva, this Agreement shall govern.
23. Confidentiality. Each of Ferrostaal and Geneva acknowledges
that information, data and documents disclosed or produced by the other party
hereto (the "Disclosing Party") pursuant to this Agreement, orally or in
writing, including but not limited to, the terms and conditions of this
Agreement, unless otherwise specifically designated, shall be deemed
"confidential information" within the meaning of this Agreement. Except with
prior written consent of the Disclosing Party, all confidential information is
solely for use in connection with the performance of the party to which such
confidential information was disclosed or produced (the "Recipient Party") of
its obligations hereunder and shall not be used by the Recipient Party or
disclosed to any other person except with the prior written consent of the
Disclosing Party in each instance, unless disclosure is required pursuant to
applicable federal, state or local law. "Confidential information" shall not
include any such information, data or documents that (a) at the time of
disclosure is or subsequently becomes, through no fault of such party, part of
the public domain, (b) was known to the party to whom it was disclosed, or (c)
was disclosed to the other party by a third party legally entitled to do so.
24. Counterparts and Facsimile Signatures. This Agreement may be
executed in counterparts, each of which shall be deemed to be an original and
all of which together shall constitute but one and the same instrument.
Counterparts and signatures transmitted by facsimile shall be valid as
originals.
25. Business Days. For purposes of this Agreement "business day"
shall mean every Monday through Friday except state, federal and company
holidays.
26. Inurement. This Agreement shall be binding upon and inure to
the benefit of Geneva and Ferrostaal and their respective successors and
assigns.
27. Effective Date. This Agreement shall be effective as of August
2, 2001, unless the parties mutually agree in writing on a different effective
date.
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28. Certain Modifications. Ferrostaal recognizes that Geneva is or
may in the future be subject to various financial covenants and indebtedness
in favor of certain lenders and that Geneva's ability from time to time to
maintain or obtain financing may in part be dependent upon the acceptability
of the terms of this Agreement to the lenders concerned. Accordingly,
Ferrostaal agrees that from time to time it shall, if so requested by Geneva
and if doing so will not materially and adversely affect Ferrostaal's economic
interests hereunder, join with Geneva in amending this Agreement so as to meet
the needs or requirements of any lender which is considering making or which
has made a loan to Geneva.
29. Compliance With Laws. Geneva and Ferrostaal shall each comply
with all applicable laws, ordinances and codes applicable to such party's
performance of this Agreement.
30. Interpretation. The parties hereto acknowledge that this
Agreement has been prepared after extensive negotiations and the opportunity
for each party to review the Agreement with and obtain advice from their
respective legal counsel. In construing the Agreement, the fact that one party
or the other may have drafted its various provisions shall not affect the
interpretation of such provisions.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
GENEVA STEEL, LLC,
a Delaware limited liability company
By: /s/ XXX X. XXXXXXX
-------------------------------
Name: Xxx X. Xxxxxxx
Its: President and CEO
FERROSTAAL INCORPORATED,
a Delaware corporation
By: /s/ XXXX X. XXXXXX
-------------------------------
Name: Xxxx X. Xxxxxx
Its: Vice President
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EXHIBIT A
(ATTACHED TO AND FORMING A PART OF THE
PRODUCT SALES AGREEMENT)
------------------------------------------
CUSTOMERS
Name and Address Applicable Credit Limit
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EXHIBIT B
(ATTACHED TO AND FORMING A PART OF THE
PRODUCTS SALES AGREEMENT)
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The term "Products" shall mean all steel products manufactured
within the mill capabilities by Geneva on July 1, 2001 or thereafter,
including hot rolled bands and sheets in thickness of 13 gauge and above,
black or temper passed coils, hot rolled plate (including but not limited to
strip mill plate), floor plate, welded pipe, and slabs; provided, however,
that such term shall not include non-prime or secondary items, products for
sale to Geneva or any of its affiliates or ingots or, at Geneva's option, slab
or pipe products produced by Geneva or at the pipe xxxxx located at the Geneva
Works.
