<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 4, 1997.
REGISTRATION NO. 333-18767
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 5
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
SINTER METALS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware
(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)
3399
(PRIMARY STANDARD INDUSTRIAL
CLASSIFICATION CODE NUMBER)
25-1677695
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
------------------------
50 Public Square, Suite 3200
Cleveland, Ohio 44113
(216) 771-6700
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
JOSEPH W. CARRERAS
Chairman of the Board and Chief Executive Officer
Sinter Metals, Inc.
50 Public Square, Suite 3200
Cleveland, Ohio 44113
(216) 771-6700
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPIES TO:
CHRISTOPHER M. KELLY, ESQ.
Jones, Day, Reavis & Pogue
901 Lakeside Avenue
Cleveland, Ohio 44114
(216) 586-3939
HOWARD S. LANZNAR, ESQ.
Katten Muchin & Zavis
525 West Monroe Street
Chicago, Illinois 60661
(312) 902-5200
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement has become effective.
------------------------
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following is a list of the estimated expenses to be incurred by the
Company in connection with the issuance and distribution of the Class A Common
Stock being registered hereby, other than underwriting discounts and
commissions.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee........ $ 20,652.08
National Association of Securities Dealers, Inc. filing
fee...................................................... 7,331.00
Transfer Agent and Registrar's fees........................ 5,000.00
NYSE Supplemental listing application fee.................. 15,000.00
Accounting fees and expenses............................... 550,000.00
Printing costs............................................. 400,000.00
Legal fees and expenses.................................... 400,000.00
Miscellaneous expenses..................................... 2,016.92
-------------
Total $1,400,000.00
=============
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Restated Certificate of Incorporation (Exhibit 3.1 to the
Registration Statement) provides for the indemnification of the Company's
Directors and officers against certain liabilities. Section 145 of the Delaware
General Corporation Law (Exhibit 99.1 to this Registration Statement) also
provides for indemnification of directors and officers of Delaware corporations
against certain liabilities. Reference is made to the Underwriting Agreement
(Exhibit 1.1 to this Registration Statement) which provides for indemnification
of the Company's Directors and officers by the Underwriters against certain
civil liabilities, including liabilities under the Securities Act of 1933 (the
"Securities Act").
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
No securities of the Company that were not registered under the Securities
Act have been issued or sold by the Company within the past three years, except
as follows:
On January 28, 1994 and October 26, 1994, the Company issued an aggregate
of 60,805 shares and 303,750 shares, respectively, of Class B Common Stock to
the members of the Company's senior management under the Company's Management
Incentive Stock Plan.
On June 26, 1995, the Company issued an aggregate of 100,000 shares of
Class A Common Stock to the previous owners of Sinterteknik as part of the
purchase price for such company. On July 18, 1996, the Company issued an
aggregate of 5,000 shares of Class A Common Stock to the previous owners of
SinterForm as part of the purchase price for such company.
All such transactions were effected in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act.
II-1
<PAGE> 3
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(A) EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ----------- ------------------------------------------------------------------------------
<C> <S>
*1.1 Form of Underwriting Agreement.
*2.1 Powder Metal Holding Stock Purchase Agreement, dated as of October 7, 1996, by
and between MAAG Holding AG and Sinter Metals, Inc.
*2.2 Krebsoge Stock Purchase Agreement, dated as of October 11, 1996, by and
between MAAG Holding AG and Sinter Metals, Inc.
*3.1 Restated Certificate of Incorporation of the Company.
*3.2 Restated By-Laws of the Company.
*4.1 Specimen certificate for the Class A Common Stock, $.001 par value, of the
Company.
*4.2 Form of certificate for the Class B Common Stock, $.001 par value, of the
Company.
*4.3 Stockholders' Agreement, dated as of October 18, 1994, by and among the
Company, Citicorp Venture Capital, Ltd. and certain other stockholders of the
Company.
*5.1 Opinion of Jones, Day, Reavis & Pogue as to the validity of the securities
being offered.
*10.1 1994 Key Employee Stock Option Plan.
*10.2 Employment Agreement, dated as of January 1, 1992, by and between Pennsylvania
Pressed Metals, Inc. and Donald L. LeVault, as amended.
*10.3 Form of Nonqualified Stock Option Agreement (with an attached schedule
identifying the Named Executive Officers of the Company that have entered into
option agreements with the Company).
+10.4 Purchase, Consignment, and Rebate Agreement, dated as of September 30, 1996,
by and between the Company and Hoeganaes Corporation.
*10.5 Credit Agreement, dated as of December 19, 1996, by and between the Company,
Sinter Metals GmbH, the Lenders party thereto, NBD Bank, as Administrative
Agent and Collateral Agent, and Salomon Brothers Inc, as Syndication Agent.
*10.6 Deferred Compensation Plan for Nonemployee Directors.
*10.7 Deferred Compensation Plan.
*21.1 Subsidiaries of the Company.
*23.1 Consent of Jones, Day, Reavis & Pogue (included in Exhibit 5.1).
*23.2 Consent of Arthur Andersen LLP.
*23.3 Consent of Deloitte & Touche LLP.
*23.4 Consent of Price Waterhouse GmbH.
*23.5 Consent of BDO Grunewalder Treuhand GmbH.
*24.1 Powers of Attorney.
*99.1 Section 145 of the General Corporation Law of Delaware.
</TABLE>
- ---------------
* Previously filed.
+ The Registrant's request for confidential treatment with respect to certain
portions of this Exhibit was granted March 4, 1997.
All other schedules have been omitted because they are not applicable, not
required or not material or the required information is included in the
financial statements and notes thereto.
II-2
<PAGE> 4
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes to provide to the underwriters
at the closing specified in the underwriting agreements, certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions or otherwise, the registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned registrant hereby undertakes that:
(1) For the purpose of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this registration statement as of the time it was declared
effective.
(2) For purposes of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE> 5
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE COMPANY HAS
DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF CLEVELAND, STATE OF OHIO,
ON MARCH 4, 1997.
SINTER METALS, INC.
By: /s/ IAN B. HESSEL
--------------------------
Ian B. Hessel
Controller
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES INDICATED ON MARCH 4, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ---------------------------------------- -----------------------------------
<S> <C> <C>
* Chairman of the Board and
- ---------------------------------------- Chief Executive Officer
Joseph W. Carreras (Principal Executive Officer)
* Vice President, Chief Financial
- ---------------------------------------- Officer and Secretary
Michael T. Kestner (Principal Financial Officer and
Principal Accounting Officer)
* President and Director
- ----------------------------------------
Donald L. LeVault
* Director
- ----------------------------------------
E. Joseph Hochreiter
* Director
- ----------------------------------------
Mary Lynn Putney
Director
- ----------------------------------------
William H. Roj
* Director
- ----------------------------------------
Charles E. Volpe
Director
- ----------------------------------------
David Y. Howe
</TABLE>
- ---------------
* The undersigned by signing his name hereto, does sign and execute this
Registration Statement pursuant to the Powers of Attorney executed by the
above-named officers and directors of the Company and filed with the
Securities and Exchange Commission on behalf of such officers and Directors.
/s/ IAN B. HESSEL
- ------------------------------------
Ian B. Hessel, Controller
II-4
<PAGE> 1
EXHIBIT 10.4
CONSIGNMENT AGREEMENT
BUYER: SINTER METALS, INC. SELLER: HOEGANAES CORPORATION
50 Public Square River Road & Taylors Lane
Suite 3200 Riverton, New Jersey 08077
Cleveland, Ohio 44113
I. This Agreement sets forth the legally binding terms and conditions
governing the consignment of Hoeganaes' metallurgical grade powders according
to grade designation and specification described in Schedule A.
BUYER and SELLER are also parties to an agreement of even date (the
"Purchase Agreement") pursuant to which BUYER agrees to buy and SELLER agrees
to sell certain quantities of Metal Powders. This Consignment Agreement
governs with respect to matters specifically addressed in this Agreement, while
the Purchase Agreement governs over all other matters.
II. Deliveries shall be made based upon the description of materials and
proposed delivery dates in BUYER'S release. Releases will be based on 90 day
lead time with routine 30 day update to establish firm delivery dates.
III. A. CONSIGNMENT
SELLER agrees to ship to BUYER'S plant designated accordingly
on a consignment basis such quantities of powders (product)
which SELLER deems it is reasonably able to supply during the
period of this Agreement.
BUYER will continue to place releases according to Article II.
Consignment quantities will be subject to quarterly review.
Changes will be mutually agreed by both parties.
B. ORDERING AND SHIPPING
BUYER shall place a release with SELLER for product to be
shipped freight _____(*)_____ to Emporium, Pennsylvania and/or
to Conover, North Carolina; and/or to Riverdale, Illinois
and/or Richton Park, Illinois; and/or to Zeeland, Michigan "on
consignment".
The release will give BUYER'S sales tax license number and
exemption declaration and BUYER'S sales tax number.
A Certificate of Analysis showing screen and chemical
analyses, as well as certain green and sintered properties,
shall be provided by SELLER for each lot of product released
to BUYER.
(*) Portions have been omitted pursuant to a request for confidential treatment.
<PAGE> 2
BUYER shall draw upon the consignment inventory in the same
consecutive order as received (first in - first out).
C. OWNERSHIP OF INVENTORY
Any product received by BUYER pursuant to this Agreement shall
remain the property of SELLER until drawn upon by BUYER or
until it has remained on BUYER'S premises in excess of __(*)___
(__) days, whereupon it shall become the property of BUYER.
"Drawn upon" shall mean transferred from a designated area for
the consigned inventory.
D. RESPONSIBILITY FOR INVENTORY
During the period in which consigned product is in the
possession of BUYER, but still the property of Seller, BUYER
Agrees that it shall:
Store the product in a suitable dry, heated building at
BUYER'S Emporium, Pennsylvania or Conover, North Carolina
plant free of charge, and keep all product on consignment,
secure and separate or separately identifiable from any other
goods or materials.
Pay any and all expenses incurred in order to properly handle
the product including, but without limiting the generality of
the foregoing, unloading trucks, moving and handling into and
out of storage and into production.
Risk of loss passes to Buyer and BUYER shall be liable to
SELLER for any damage or loss of product from any cause
whatsoever deemed to be BUYER'S fault or negligence.
Pay all associated costs related to the product arising out of
BUYER'S possession of the product or its subsequent
consumption thereof.
For itself, its successors and assigns, indemnify and hold
SELLER harmless from and against all claims, actions, suits,
demands and the like by whomsoever made in respect of any
bodily injury or loss or damage to property attributable in
any way to product held by BUYER.
Allow SELLER to take a physical inventory of the consignment
product on any normal working day with at least ten (10) days
notice.
Provide SELLER with results of BUYER'S own physical
inventories taken twice a year.
(*) Portions have been omitted pursuant to a request for confidential treatment.
- 2 -
<PAGE> 3
E. REPORTING OF USAGE
BUYER agrees that at the end of the Interlake calendar month,
Exhibit 1, (no later than 4PM Thursday) it shall FAX a report
to SELLER indicating:
The amount of product, by lot number, which has been consumed
during the reporting period. This shall include any product
that has been in BUYER'S possession for more than ____(*)____
(__) days, and any product not located in the designated
consignment area.
F. INVOICING, PAYMENTS AND PRICES
Upon receipt of the FAX report (or the closest working day
thereafter) SELLER shall invoice in U.S. dollars at a
specified prevailing price at the time of invoicing for the
amount reported as consumed since the previous report of
product.
SELLER shall also invoice BUYER for shortage of stock SELLER
may discover during the course of any physical inventory
conducted in accordance stated above.
IV. TERMS AND CONDITIONS
For all products purchased by BUYER other than those described in
Schedule A, SELLER standard terms and conditions apply.
(*)
-------------------------------
(*)
-------------------------------
V. CANCELLATION
This Agreement can be canceled by either party giving a thirty (30)
days notice in writing of the desire to discontinue the Agreement.
If BUYER wishes to cancel this Agreement in accordance with its
rights under this clause, BUYER shall report the remaining consigned inventory
to SELLER as having been consumed and BUYER will pay SELLER on the termination
date for the aggregate amount of all product supplied by SELLER under this
Agreement.
If SELLER wishes to cancel this Agreement with its rights under this
clause, BUYER shall continue to make its monthly report of usage, and SELLER
shall continue to invoice BUYER as provided in Article III, Item F, until
product supplied under this Agreement is reported as consumed, subject to all
prior provisions related to consumption, usage, and invoicing.
VI. MISCELLANEOUS
This Agreement shall be binding on the parties referenced throughout
and their respective successors and assigns PROVIDED that neither party shall
assign this Agreement without the prior
(*) Portions have been omitted pursuant to a request for confidential treatment.
- 3 -
<PAGE> 4
written consent of the other, except in the event of an assignment by SELLER to
a subsidiary or affiliated company.
SINTER METALS, INC. HOEGANAES CORPORATION
By /s/ Michael T. Kestner By /s/ William H. Michael
--------------------------- --------------------------
William H. Michael
Vice President
Sales and Marketing
Title Chief Financial Officer
------------------------ --------------------------
Date 9/17/96 Date 9/18/96
-------------- ------------
- 4 -
<PAGE> 5
HOEGANAES CORPORATION
POWDER METALLURGY GRADES
PRICE LIST - JANUARY 1, 1996
- --------------------------------------------------------------------------------
ATOMIZED STEEL POWDER
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
39,000 lbs. 3,000 to 500 to 100 to
Minimum 38,500 lbs. 2,500 lbs.* 400 lbs.**
----------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Ancorsteel 1000 $.363 $.393 $.468 $.783
Ancorsteel 1000 P/F .374 .404 .479 .794
Ancorsteel 1000B .384 .414 .489 .804
Ancorsteel 1000 C .415 .445 .520 .835
Ancorsteel 1015 .384 .414 .489 .804
Ancorsteel 45 P .458 .488 .563 .878
Ancorsteel 2000 .505 .535 .610 .925
Ancorsteel 2000 P/F .509 .539 .614 .929
Ancorsteel 4600 V .572 .602 .677 .992
Ancorsteel 4600 V P/F .577 .607 .682 .997
Ancorsteel 85 HP .483 .513 .588 .903
Ancorsteel 150 HP .617 .647 .722 1.037
</TABLE>
- --------------------------------------------------------------------------------
SPONGE IRON POWDER
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
Ancor MH 100 .364 .394 .469 .784
Ancormet 101 .380 .410 .485 .800
Ancor EP 1024* .529 .559 .634 .949
</TABLE>
-----------------------------------
CONDITIONS OF SALE
-----------------------------------
PRICES ARE F.O.B. SHIPPING PLANT AND ARE SUBJECT TO CHANGE. PRICE IN EFFECT ON
DATE OF SHIPMENT WILL BE APPLIED. MINIMUM ORDER, 100 LBS. TERMS: NET 30 DAYS
STANDARD PACKING 5,000 lb. FIBERBOARD CONTAINERS ON 38" x 38" SINGLE
FACED PALLETS. *PACKED IN 500 LB. FIBER DRUMS
**PACKED IN 100 lb. STEEL PAILS
PACKING OPTIONS 50.015 PER lb. FOR PACKING IN 500 lb. CAPACITY FIBER
DRUMS, 3,000 lbs. ON 38" x 48" SINGLE FACED PALLET.
50.002 PER lb. FOR PACKING IN 3,000 lb. CAPACITY
FIBERBOARD CONTAINER ON 38" X 38" SINGLE FACED
PALLET.
LOS ANGELES
WAREHOUSE PRICES ADD $0.065 PER lb. TO F.O.B. PRICE. NOT ALL PRODUCTS
ARE AVAILABLE.
<PAGE> 6
EXHIBIT 1
INTERLAKE - 1996 FISCAL CALENDAR
<TABLE>
<CAPTION>
1ST QUARTER 2ND QUARTER
------------------------------------ -------------------------------------
JANUARY APRIL
------------------------------------ -------------------------------------
5 Weeks 4 Weeks
------------------------------------ -------------------------------------
MON TUE WED THR FRI SAT SUN MON TUE WED THR FRI SAT SUN
------------------------------------ -------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 2 3 4 5 6 7 1 2 3 4 5 6 7
------------------------------------ -------------------------------------
8 9 10 11 12 13 14 8 9 10 11 12 13 14
------------------------------------ -------------------------------------
15 16 17 18 19 20 21 15 16 17 18 19 20 21
------------------------------------ -------------------------------------
22 23 24 25 26 27 28 22 23 24 25 26 27 28
------------------------------------ -------------------------------------
29 30 31 1 2 3 4
------------------------------------ -------------------------------------
------------------------------------ -------------------------------------
FEBRUARY MAY
------------------------------------ -------------------------------------
4 Weeks 4 Weeks
------------------------------------ -------------------------------------
MON TUE WED THR FRI SAT SUN MON TUE WED THR FRI SAT SUN
------------------------------------ -------------------------------------
5 6 7 8 9 10 11 29 30 1 2 3 4 5
------------------------------------ -------------------------------------
12 13 14 15 16 17 18 6 7 8 9 10 11 12
------------------------------------ -------------------------------------
19 20 21 22 23 24 25 13 14 15 16 17 18 19
------------------------------------ -------------------------------------
26 27 28 29 1 2 3 20 21 22 23 24 25 26
------------------------------------ -------------------------------------
------------------------------------ -------------------------------------
MARCH JUNE
------------------------------------ -------------------------------------
4 Weeks 5 Weeks
------------------------------------ -------------------------------------
MON TUE WED THR FRI SAT SUN MON TUE WED THR FRI SAT SUN
------------------------------------ -------------------------------------
4 5 6 7 8 9 10 27 28 29 30 31 1 2
------------------------------------ -------------------------------------
11 12 13 14 15 16 17 3 4 5 6 7 8 9
------------------------------------ -------------------------------------
18 19 20 21 22 23 24 10 11 12 13 14 15 16
------------------------------------ -------------------------------------
25 26 27 28 29 30 31 17 18 19 20 21 22 23
------------------------------------ -------------------------------------
24 25 26 27 28 29 30
------------------------------------ -------------------------------------
<CAPTION>
3RD QUARTER 4TH QUARTER
------------------------------------ -------------------------------------
JULY OCTOBER
------------------------------------ -------------------------------------
5 Weeks 4 Weeks
------------------------------------ -------------------------------------
MON TUE WED THR FRI SAT SUN MON TUE WED THR FRI SAT SUN
------------------------------------ -------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 2 3 4 5 6 7 30 1 2 3 4 5 6
------------------------------------ -------------------------------------
8 9 10 11 12 13 14 7 8 9 10 11 12 13
------------------------------------ -------------------------------------
15 16 17 18 19 20 21 14 15 16 17 18 19 20
------------------------------------ -------------------------------------
22 23 24 25 26 27 28 21 22 23 24 25 26 27
------------------------------------ -------------------------------------
29 30 31 1 2 3 4
------------------------------------ -------------------------------------
------------------------------------ -------------------------------------
AUGUST NOVEMBER
------------------------------------ -------------------------------------
4 Weeks 4 Weeks
------------------------------------ -------------------------------------
MON TUE WED THR FRI SAT SUN MON TUE WED THR FRI SAT SUN
------------------------------------ -------------------------------------
5 6 7 8 9 10 11 28 29 30 31 1 2 3
------------------------------------ -------------------------------------
12 13 14 15 16 17 18 4 5 6 7 8 9 10
------------------------------------ -------------------------------------
19 20 21 22 23 24 25 11 12 13 14 15 16 17
------------------------------------ -------------------------------------
26 27 28 29 30 31 1 18 19 20 21 22 23 24
------------------------------------ -------------------------------------
------------------------------------ -------------------------------------
SEPTEMBER DECEMBER
------------------------------------ -------------------------------------
4 Weeks 5 Weeks
------------------------------------ -------------------------------------
MON TUE WED THR FRI SAT SUN MON TUE WED THR FRI SAT SUN
------------------------------------ -------------------------------------
2 3 4 5 6 7 8 25 26 27 28 29 30 1
------------------------------------ -------------------------------------
9 10 11 12 13 14 15 2 3 4 5 6 7 8
------------------------------------ -------------------------------------
16 17 18 19 20 21 22 9 10 11 12 13 14 15
------------------------------------ -------------------------------------
23 24 25 26 27 28 29 16 17 18 19 20 21 22
------------------------------------ -------------------------------------
23 24 25 26 27 28 29
------------------------------------ -------------------------------------
</TABLE>
<PAGE> 7
EXHIBIT 2
TO: SUE BENOIT, HOEGANAES
FAX: 609/786-2574
CONSIGNMENT USAGE FROM TO
----------------- -----------------
<TABLE>
<CAPTION>
==========================================================================================================================
ON HAND REC'D SINCE TOTAL TO USED SINCE CURRENT
POWDER LOT NO. LAST REPORT LAST REPORT ACCOUNT FOR LAST REPORT BALANCE
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
==========================================================================================================================
</TABLE>
<PAGE> 8
PURCHASE AGREEMENT
SINTER METALS, INC.
BUYER: SINTER METALS, INC. SELLER: HOEGANAES CORPORATION
50 Public Square River Road & Taylors Lane
Suite 3200 Riverton, New Jersey 08077
Cleveland, Ohio 44113
This Agreement is made and is to be effective as of September 30,
1996 by and between the above named Buyer ("BUYER") and Seller ("SELLER").
I. DEFINITIONS. As used in this Agreement, the following terms
shall have the following meanings:
(a) "Fiscal Year" means the period which begins on the Monday
immediately following the last Sunday in December and which
ends on the last Sunday in the following December.
(b) "Fiscal Quarter" means the fiscal quarter year periods used by
SELLER for its accounting purposes. A copy of SELLER'S fiscal
calendar for Fiscal Year 1996, which shows the Fiscal
Quarters, is attached hereto as Exhibit 1 (1997 and 1998 are
not available at this time).
(c) "Metal Powder" or "Metal Powders" means those grades of virgin
atomized steel powder and virgin sponge iron powder described
on Schedule A hereto, and blends made therefrom.
(d) "Contract year" means the four consecutive Fiscal Quarters
which begin on the effective date of this Agreement and on or
about each anniversary of such effective date; provided,
however, in accordance with the provisions of Paragraph V
hereof, any such Contract Year shall be extended (and thus the
commencement of each following Contract year shall be
postponed) by the occurrence of a force majeure.
II. BUY AND SELL. During each Contract year during the term of
this Agreement, BUYER agrees to purchase ______(*)______ pounds of Metal Powder
from SELLER, and SELLER will sell, to the extent ordered by BUYER, at least
_____(*)_____ pounds of Metal Powder.
Actual purchases and deliveries shall be made in reasonably
even monthly quantities, as ordered by BUYER. BUYER shall place its
preliminary order 90 days in advance of the anticipated desired date of
delivery and the parties shall routinely establish firm delivery dates 30 days
prior thereto.
(*) Portions have been omitted pursuant to a request for confidential treatment.
- 1 -
<PAGE> 9
The terms of this Agreement will be limited to the following
delivery locations:
Sinter Metals, Inc. Emporium
RR #2, P.O. Box 47
Emporium, Pennsylvania 15834-9740
Sinter Metals, Inc. Conover
407 Thornburg Drive
Conover, North Carolina 28613
Sinter Metals, Inc. Chicago
13605 South Halsted Street
Riverdale, Illinois 60627
Sinter Metals, Inc. Zeeland
475 N. Centennial Street
Zeeland, Michigan 49464
During the first and second contract year of this Agreement,
acquisitions by Sinter Metals, Inc. that result in new delivery locations will
be added based on minimum 30 day written notification to SELLER. Incremental
volume related to new delivery locations will be applied toward minimum and
rebate schedule thresholds not to exceed _____(*)_____ pounds total for each new
location.
However, in the event a new delivery location is added in the
first Contract Year, during the second Contract Year the qualified sales of the
new location recognized by Hoeganaes in their Fiscal Year will be used as the
new base and added to the minimum and rebate schedule thresholds less then the
_____(*)_____ pound consideration noted above.
III. TERM. This Agreement shall be effective as of the date
specified in the Heading above and shall remain in effect until 11:59 p.m. on
(the last day of the fourth Fiscal Quarter of the second year of the term of
this Agreement).
IV. PRICE.
(a) During the first Contract Year of the term of this Agreement,
the base price for the various grades of Metal Powders, excluding blends, shall
be the price specified therefore on Schedule A, _______(*)_______ and,
subject to paragraph IV(c) below, the purchase price hereunder for such grades
of Metal Powders shall be the price specified for them on Schedule A, less the
appropriate discount shown on Table I (the "Discount"). The discount applies
to virgin Metal Powders only, that is, to those base powder grades identified
on Schedule A which are purchased in their virgin state, and to blends of such
Metal Powders made by SELLER for BUYER.
(b) Effective as of the first day of the second Contract Year
hereunder and continuing during all of such second Contract
(*) Portions have been omitted pursuant to a request for confidential treatment.
- 2 -
<PAGE> 10
year, the base price for each grade of Metal Powder shall be the lower of (i)
SELLER'S published price for each grade of powder which is in effect on the
first day of such Contract Year, or (ii) the price for such grade of Metal
Powder specified on Table I and Schedule A, adjusted upward or downward by the
same percentage as the percentage of the increase or decrease, respectively, in
the Producer Price Index for Industrial Commodities (Unadjusted Index) 1982 =
100) as published by the Bureau of Labor Statistics of the U.S. Department of
Labor, from its level in the second calendar month preceding the calendar month
in which this Agreement becomes effective, to its level in the same calendar
month in the following year, provided that no price adjustment will be made
pursuant to this clause (b)(ii) unless the aforementioned change in the
Producer Price Index exceeds plus or minus 2%.
Subject to Paragraph IV(c) below, the purchase price for Metal
Powders, excluding blends, bought and sold hereunder during the second Contract
Year shall be such adjusted base price less the appropriate discount shown on
Table 1.
TABLE I
<TABLE>
<CAPTION>
HOEGANAES MATERIAL GRADE DISCOUNTED PRICE/LB.
------------------------ --------------------
<S> <C>
Ancorsteel 4600V P/F (*)
-------
Ancorsteel 1000 (*)
-------
Ancorsteel 1000B (*)
-------
Ancorsteel 4600V P/M (*)
-------
Ancorsteel 2000 P/M (*)
-------
Ancorsteel 2000 P/F (*)
-------
Ancorsteel 1000 P/F (*)
-------
</TABLE>
All other grades purchased will be discounted ____(*)____ from
prevailing published Powder Metallurgy Grade Price sheet (Schedule A).
(c) The purchase price of those Metal Powders which are
designated "Ancorsteel" on Schedule A ("Ancorsteel Powder") will be subject to
additional adjustments as of the first day of any Fiscal Quarter based on
changes in the costs of #1 scrap steel, nickel, and moly as follows:
(i) Steel scrap -- #1 Grade
The base purchase prices for Ancorsteel Powders in each Fiscal
Quarter will be adjusted by the amount shown on the right side of Table 2 which
corresponds to the "Scrap Amount" for the prior Fiscal Quarter. "Scrap Amount"
means the sum of $3.00 (handling charge) plus the average price per gross ton
for #1 grade steel scrap, determined as described below.
The average price per gross ton for #1 Grade steel scrap for
any Fiscal Quarter shall be (the average composite
(*) Portions have been omitted pursuant to a request for confidential treatment.
- 3 -
<PAGE> 11
price per gross ton for #1 Grade steel scrap in Philadelphia, Pittsburgh and
Chicago, as reported in each weekly edition of Iron Age) which has a cover date
on or after the first day of the Fiscal Quarter in question and before the
beginning of the fourth week of the third fiscal month of such Fiscal Quarter.
The average price so determined shall be rounded to the nearest whole Dollar.
These adjustments apply without regard to changes in the published price list.
<TABLE>
<CAPTION>
Table 2 - Scrap Adjustments ($/lb.)
<S> <C>
92 - 96 -0.0180
97 - 101 -0.0155
102 - 106 -0.0130
107 - 111 -0.0105
112 - 116 -0.0080
117 - 143 0.0000
144 - 148 0.0080
149 - 153 0.0105
154 - 158 0.0130
159 - 163 0.0155
164 - 168 0.0180
169 - 173 0.0205
174 - 178 0.0230
179 - 183 0.0255
184 - 188 0.0280
</TABLE>
The above scrap ranges and resultant adjustments represent what should be the
majority experience during the term of the Agreement. However, Table 2 would
be extended appropriately (up or down) should the scrap price fall outside the
ranges shown in Table 2.
(ii) Nickel
The base purchase price for Metal Powders identified in Table
3 below in each Fiscal Quarter will be adjusted by the amounts shown in Columns
B and C of Table 3 which correspond to the Nickel Amount for the prior Fiscal
Quarter. "Nickel Amount" means the sum of $.15 (handling charge) plus the
average price per pound of Nickel determined as described below.
The average Nickel Price in any Fiscal Quarter shall be an
amount equal to the average of the daily closing prices per pound of Nickel
(1/2204ths of the price specified for a ton), for cash transactions, on the
London Metal Exchange, for each trading day during the first two fiscal months
and the first three weeks of the third
- 4 -
<PAGE> 12
fiscal month of such Fiscal Quarter, as published in the Financial Times.
These adjustments apply without regard to changes in the published price list.
Table 3 - Nickel Adjustments ($/Lb.)
<TABLE>
<CAPTION>
A B C
Nickel Price A-2000 A-4600V
------------ ------ -------
<S> <C> <C>
1.85-2.04 -0.0101 -0.0340
2.05-2.24 -0.0092 -0.0311
2.25-2.44 -0.0084 -0.0281
2.45-2.64 -0.0075 -0.0252
2.65-2.84 -0.0066 -0.0222
2.85-3.04 -0.0057 -0.0192
3.05-3.24 -0.0048 -0.0163
3.25-3.44 -0.0040 -0.0132
3.45-3.64 -0.0031 -0.0104
3.65-3.84 -0.0022 -0.0074
3.85-4.64 0.0000 0.0000
4.65-4.84 0.0022 0.0074
4.85-5.04 0.0031 0.0104
5.05-5.24 0.0040 0.0133
5.25-5.44 0.0048 0.0162
5.45-5.64 0.0057 0.0192
5.65-5.84 0.0066 0.0222
5.85-6.04 0.0075 0.0252
6.05-6.24 0.0084 0.0281
6.25-6.44 0.0092 0.0311
6.45-6.64 0.0101 0.0340
6.65-6.84 0.0110 0.0370
6.85-7.04 0.0119 0.0400
7.05-7.24 0.0128 0.0429
7.25-7.44 0.0136 0.0459
7.45-7.64 0.0145 0.0488
7.65-7.84 0.0154 0.0518
7.85-8.04 0.0163 0.0548
8.05-8.24 0.0172 0.0577
</TABLE>
- 5 -
<PAGE> 13
<TABLE>
<S> <C> <C>
8.25-8.44 0.0180 0.0607
8.45-8.64 0.0189 0.0636
</TABLE>
The above nickel ranges and resultant adjustments represent
what should be the majority experience during the term of the Agreement.
However, Table 3 would be extended appropriately (up or down) should the Nickel
Price fall outside the ranges shown in Table 3.
(iii) Molybdenum (Moly)
The base purchase prices for Metal Powders identified in Table
4 below in each Fiscal Quarter will be adjusted by the amounts shown in Columns
B, C, D and E of Table 4 which correspond to the Moly amount for the prior
Fiscal Quarter. "Moly Amount" means the sum of $.15 (handling charge) plus the
average price per pound of Moly determined as described below.
The average Moly Price in any Fiscal Quarter shall be an
amount equal to the average of the weekly closing prices per pound for cash
transactions for each trading week during the first two fiscal months and the
first three weeks of the third fiscal month of such Fiscal Quarter as published
in Platt's Metals Week under the classification, Molybdenum Dealer Oxide
Prices. These adjustments apply without regard to changes in the published
price list.
<TABLE>
<CAPTION>
==========================================================================================================
TABLE 4 - Molybdenum Adjustments ($/Lb.)
----------------------------------------
- ----------------------------------------------------------------------------------------------------------
A B C D E
Moly Amount A-2000 A-4600V 85 HP 150 HP
----------- ------ ------- ----- ------
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 3.50 .003 .003 .04 .0075
- ----------------------------------------------------------------------------------------------------------
4.00 .006 .006 .085 .0150
- ----------------------------------------------------------------------------------------------------------
4.50 .009 .009 .0128 .0225
- ----------------------------------------------------------------------------------------------------------
5.00 .012 .012 .0170 .0300
- ----------------------------------------------------------------------------------------------------------
5.50 .015 .015 .0212 .0375
- ----------------------------------------------------------------------------------------------------------
6.00 .018 .018 .0255 .0450
- ----------------------------------------------------------------------------------------------------------
6.50 .021 .021 .0298 .0525
- ----------------------------------------------------------------------------------------------------------
7.00 .024 .024 .0340 .0600
- ----------------------------------------------------------------------------------------------------------
7.50 .027 .027 .0382 .0675
- ----------------------------------------------------------------------------------------------------------
8.00 .030 .030 .0425 .0750
- ----------------------------------------------------------------------------------------------------------
8.50 .033 .033 .0468 .0825
- ----------------------------------------------------------------------------------------------------------
9.00 .036 .036 .0510 .0900
- ----------------------------------------------------------------------------------------------------------
9.50 .039 .039 .0552 .0975
==========================================================================================================
</TABLE>
- 6 -
<PAGE> 14
<TABLE>
<CAPTION>
==========================================================================================================
TABLE 4 - Molybdenum Adjustments ($/Lb.)
----------------------------------------
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
10.00 .042 .042 .0595 .0105
- ----------------------------------------------------------------------------------------------------------
10.50 .045 .045 .0638 .1125
- ----------------------------------------------------------------------------------------------------------
11.00 .048 .048 .0680 .1200
- ----------------------------------------------------------------------------------------------------------
11.50 .051 .051 .0722 .1275
- ----------------------------------------------------------------------------------------------------------
12.00 .054 .054 .0765 .1350
- ----------------------------------------------------------------------------------------------------------
12.50 .057 .057 .0808 .1425
- ----------------------------------------------------------------------------------------------------------
13.00 .060 .060 .0850 .1500
- ----------------------------------------------------------------------------------------------------------
13.50 .063 .063 .0892 .1575
- ----------------------------------------------------------------------------------------------------------
14.00 .066 .66 .0935 .1650
- ----------------------------------------------------------------------------------------------------------
14.50 .069 .069 .0978 .1725
- ----------------------------------------------------------------------------------------------------------
15.00 .072 .072 .1020 .1800
- ----------------------------------------------------------------------------------------------------------
15.50 .075 .075 .1062 .1875
- ----------------------------------------------------------------------------------------------------------
16.00 .078 .078 .1105 .1950
- ----------------------------------------------------------------------------------------------------------
16.50 .081 .081 .1148 .2025
- ----------------------------------------------------------------------------------------------------------
17.00 .084 .084 .1190 .2100
==========================================================================================================
</TABLE>
The above Moly ranges and resultant adjustments represent what
should be the majority experience during the term of the Agreement. However,
Table 4 would be extended appropriately (up or down) should the moly price fail
outside the ranges shown in Table 4.
(d) Blend Prices. During the first Contract Year of this
Agreement, the price per pound of any blended composition of Metal Powders will
be equal to (i) the sum of the amounts determined by multiplying the price
(determined as herein provided) of each base grade of Metal Powder included in
such composition by the percentage thereof included in the blend, plus (ii)
Seller's prevailing charge as of the effective date of this Agreement for
ingredients other than base grade Metal Powders included in the blend
("Purchased Ingredients"), plus (iii) Seller's blending charge shown on Table 5
below.
During the second year of the effective date of this Agreement
the price for blended Metal Powders will be adjusted -- in addition to the
periodic adjustments made to reflect changes in the price of the base grade
Metal Powder included in the blend -- to reflect the amounts of the difference,
if any, (x) between Seller's then prevailing charge for Purchased Ingredients
and the amount of the charge for Purchased Ingredients which was included in
the purchase price hereunder for blended Metal Powders during
- 7 -
<PAGE> 15
the preceding Contract Year, and (y) between Seller's then prevailing blending
charge and the amount of the blending charge which was included in the purchase
price hereunder for blended Metal Powders during the preceding Contract Year.
TABLE 5
<TABLE>
<S> <C> <C>
(*) (*) (*)
--------------- ---------- ---------
(*) (*) (*)
--------------- ---------- ---------
(*) (*) (*)
--------------- ---------- ---------
</TABLE>
V. Force Majeure. Seller shall not be liable to Buyer in respect of
a delay in or failure to make the deliveries which Seller agrees to make in
Paragraph II hereof, and Buyer shall not be liable to Seller in respect of a
delay in or failure to purchase the quantities of Metal Powders which Buyer
agrees to buy in Paragraph II hereof, if and to the extent that such delay or
failure is caused by, as applicable, Seller's inability to manufacture and/or
deliver the Metal Powders or by Buyer's inability to accept or use the Metal
Powders, as result of, in either case, a force majeure, which includes an act
of God, actions of any governmental authority (whether valid or invalid),
fires, floods, windstorms, explosions, riots, natural disasters, wars,
sabotage, labor problems (including lockouts, strikes and slowdowns), inability
to obtain powder, material, labor, equipment or transportation, or court
injunction or order, or other causes beyond the reasonable control of the part
affected.
In case either party's ability to perform hereunder is
affected by force majeure, such party shall promptly advise the other party of
the nature and expected duration thereof and of such other details concerning
the situation as are reasonable under the circumstances.
The Contract Year in which any such force majeure occurs shall
be extended by an amount of time equal to the duration of the force majeure.
Notwithstanding any provision hereof to the contrary, in the event of a force
majeure, the duration of which is at least three (3) consecutive months, Buyer
shall be entitled, upon notice to Seller, to cancel this Agreement and,
following any such cancellation, Buyer shall have no further responsibilities,
obligations or liability hereunder.
VI. Specification. Conformance to specification shall be based on
Seller's certified test data. Seller shall be responsible to maintain and
supply required quality assurance documentation per Buyer's quality assurance
requirements.
Seller's facility and quality process records will be
available for Buyer audit based on 10 days notification.
(*) Portions have been omitted pursuant to a request for confidential treatment.
- 8 -
<PAGE> 16
Certified test data will be determined by mutual agreement between Buyer and
Seller.
Goods and services supplied under this Agreement will be
manufactured and handled using QS 9000 Standards as the fundamental quality
system requirement.
VII. Limited Warranty. Seller warrants that the material Seller
sells to Buyer under this contract will conform to specifications based on
Seller's test data. If Buyer claims that the material sold hereunder is
defective and Seller determines such claim is justified, Seller agrees to
replace the material, or at Seller's option, to refund the purchase price.
VIII. Limitation of Liability. The total liability of Seller (and
any subcontractors) on any claim (whether in contract, tort, sole or concurrent
negligence or otherwise) arising out of or related to any material or service
or the manufacture, sale, delivery, resale, repair, replacement or use thereof,
shall be limited to the purchase price of the material or service or part
thereof which gave rise to the claim.
IX. Terms and Conditions of Sale. The parties agree that this
Purchase Agreement will govern all transactions between the parties. Any terms
or conditions in any purchase order or other forms or documents of buyer or
Seller or their agents, other than descriptions of material and shipping dates,
delivered in the past or future, shall not become part of any contract and
shall b of no effect whatsoever, unless signed by both parties and explicitly
identified as modifying this Purchase Agreement.
X. Entire Agreement; Waiver. These standard terms and conditions
supersede all prior discussion and writings and constitute the entire agreement
between the parties with respect to terms and conditions. No waiver or
modification is binding upon Buyer or Seller unless made in writing and signed
by a duly authorized representative. Buyer's or Seller's failure to insist on
any of these terms or conditions in any instance shall not thereafter cause
waiver in any other instance.
XI. (*)
-------------------------------
XII. Assignment. This Agreement is not assignable by Buyer without
the prior written consent of Seller.
XIII. Dispute Resolution. Any dispute or controversy which may
arise between the parties out of, or in relation to this Agreement, shall be
settled amicably by consultations between them and in accordance with the tenor
and intent of this Agreement. Should a dispute arise and not be settled by
consultations, any litigation shall be subject to the law and exclusive
jurisdiction and venue of the state of Pennsylvania should Seller initiate
legal proceedings, and subject to the law and exclusive jurisdiction and venue
of the state of New Jersey should Buyer initiate legal proceedings.
(*) Portions have been omitted pursuant to a request for confidential treatment.
- 9 -
<PAGE> 17
IN WITNESS WHEREOF the parties have signed this Agreement as of the
date first above written.
SINTER METALS, INC. HOEGANAES CORPORATION
By /s/ Michael T. Kestner By /s/ William H. Michael
---------------------------- -----------------------
William H. Michael
Vice President
Title: Chief Financial Officer Sales and Marketing
------------------------
Date: 9/17/96 Date 9/18/96
----------------------- ---------------
- 10 -
<PAGE> 18
REBATE AGREEMENT
This Agreement is made and effective as of September 30, 1996 by and
between Sinter Metals, Inc. ("Buyer") and Hoeganaes Corporation ("Seller").
RECITALS
Buyer and Seller are parties to an agreement of even date (the
"Purchase Agreement") pursuant to which Buyer agrees to buy and Seller agrees
to sell certain quantities of Metal Powders. Buyer and Seller now desire to
provide for the payment of a rebate to Buyer, based on Buyer's purchase of a
specified minimum quantity of Metal Powders.
Therefore, in consideration of the mutual promises set forth herein
and in the Purchase Agreement, Buyer and Seller agree as follows:
1. Definitions. All terms which are used herein as defined terms --
as indicated by initial capitals -- which are not defined herein shall have the
same meaning herein as in the Purchase Agreement.
2. Rebate and Discount. Any rebate payable hereunder will be in
addition to and not in lieu of any discount allowed to Buyer under the Purchase
Agreement.
3. Quantity Rebate. If during any Contract Year, Buyer purchases
from Seller pursuant to the Purchase Agreement the minimum quantities of Metal
Powders specified below, then Buyer shall be entitled to the applicable
specified rebate on all Metal Powders purchased under the Purchase Agreement
during such Contract Year:
<TABLE>
<S> <C> <C>
(*)
------------------
(*) (*)
------------------ ------------------
(*) (*)
------------------ ------------------
(*) (*)
------------------ ------------------
(*) (*)
------------------ ------------------
(*) (*)
------------------ ------------------
</TABLE>
The foregoing rebate will be payable by means of a quarterly and
year-end rebate, as follows: Within 30 days after the end of each fiscal
Quarter (other than the last Fiscal Quarter of the Contract Year), Seller shall
determine the quantity of Metal Powders which Buyer has purchased under the
Purchase Agreement during the period from the beginning of the Contract Year in
question to the end of such Fiscal Quarter. Quantities purchased from new
shipment locations will be applied up to _____________(*)____________ for each
new location for attainment of threshold. Rebate calculation will include
total
(*) Portions have been omitted pursuant to a request for confidential treatment.
- 1 -
<PAGE> 19
quantities of all locations (new location(s) quantities will start at the date
of notification). Seller shall then "annualize" such quantity by calculating
the total quantity of Metal Powders which buyer would purchase during the
Contract Year in question assuming that Buyer continues to purchase at the same
rate for the remainder of the Contract Year as it did during the preceding
Fiscal Quarter(s) of such year. Then, using such annualized quantity, Seller
shall determine from the foregoing table the appropriate cents-per-pound rebate
which is applicable to Buyer's purchases during the preceding Fiscal Quarter.
Such cents-per-pound rebate shall be multiplied by the total number of pounds
of Metal Powders purchased under the Purchase Agreement by Buyer during the
Fiscal Quarter in question, and an amount equal to 40% of the product of such
multiplication shall be rebated to Buyer within 30 days after the end of the
Fiscal Quarter in Question.
Within 30 days after the end of each Contract Year, Seller shall
determine the total quantity of Metal Powders which Buyer has purchased under
the Purchase Agreement during such Contract Year and shall by reference to the
foregoing table determine the total amount of the rebate, if any, which is due
to Buyer in respect of such purchases. If such total amount exceeds the
aggregate amount of the quarterly rebates theretofore made by Seller to buyer
in respect to Buyer's purchases during such Contract Year, Seller shall pay
such excess to Buyer within 30 days after the end of such Contract Year. If
the aggregate amount of such quarterly rebates exceeds the total amount of the
rebate due to Buyer in respect of Buyer's purchases during the Contract Year in
question, Seller shall notify Buyer of the particulars thereof and Seller shall
recover the excess by deducting it from subsequent payments due to Buyer
hereunder. If this Agreement is terminated before Seller recovers the amount
due to it pursuant to the preceding sentence, Buyer shall promptly pay such
amount to Seller.
4. Term. This Agreement shall remain in effect as long as the
Purchase Agreement is in effect and shall terminate when the Purchase Agreement
terminates.
5. Assignment. This Agreement is not assignable by Buyer without
the prior written consent of Seller.
- 2 -
