Customer Terms & Conditions

Consignment Agreement

1.                   Delivery of Goods. From time to time, and pursuant to documentation exchanged between Customer and accepted by Schumann, Schumann shall deliver to Customer on consignment, at the facility designated on Customer’s purchase order (the “Facility”), certain pellets, ingots, alloys, metals, elements, additives, fluxes, deoxidizers and degassers and other products (the “Products”), and Customer shall accept such Products on consignment according to the terms of this Agreement.  Unless Customer objects in writing within 3 days of delivery, Schumann’s record of Product quantities and composition shall be binding on the Parties.  Nothing contained herein shall require Schumann to accept any purchase order issued by Customer, or to require Customer to purchase any specific quantity of Products from Schumann.  

 

2.                   Consignment. Customer and Schumann shall agree on the desired level of Products to be maintained at the Facility.   Customer shall receive consigned Products and shall store and handle such Products, at Customer’s sole cost and expense, using due care and diligence, and in full compliance with all governmental laws, ordinances, rules and regulations relative to the safe and proper reception, storing and handling of such Products (including, without limitation, all OSHA and state, local and federal laws).  It is the Parties’ intent that this arrangement be considered a “true consignment” under applicable law.  Without limiting the foregoing:

 

a.                   At all times, Customer shall identify the Product as property of Schumann, keep the Products separate and apart from the property of Customer and others, and maintain accurate records of Products in Customer’s possession.

b.                   Customer shall not sell, lease, use, dispose of or remove from the designated Facility any of the consigned Products prior to purchase as expressly provided hereunder.

c.                   Customer shall neither allow any consigned Products to be commingled with any other product or material (including other consigned Products that are not identical) nor permit any lien, claim, security interest or other encumbrance to attach to any consigned Products.

d.                   If any Product is attached or made the subject of a purported lien, claim, security interest or encumbrance, Customer shall immediately notify Schuman, vigorously assert that all right, title and interest in and to such Product belongs to Schumann, and take any and all necessary action to remove such impairment of Schumann’s title.

e.                   Schumann shall have the right to inspect any consigned Products and to conduct a physical inventory of Products at least once during each calendar month, upon reasonable prior notice to Customer.

 

3.                   Purchase. When used or consumed by Customer, the Products shall be deemed to have been purchased by Customer.  Any goods not actually used, consumed or otherwise withdrawn from consignment within 30 days of delivery will be deemed used and purchased by Customer.  In any case, Customer shall notify Schumann immediately if Customer uses, consumes or otherwise withdraws from consignment any Product, and such action shall constitute an irrevocable agreement by Customer to pay for the affected Product, even without Customer’s issuance of any release, notice or other document evidencing such withdrawal.

 

4.                   Invoicing and Payment. Schumann shall invoice Customer for all Products when used, or deemed used, by Customer. Notwithstanding any terms and conditions (other than the agreed Product quantities, prices and delivery terms) contained in Customer’s purchase order or any other document issued by Customer, all sales of Products shall be governed exclusively by Schumann’s standard terms and conditions of sale as then in effect; provided, however, that the terms of this Agreement shall control with respect to the matters addressed herein.

 

5.                   Title to Products. The Products shall at all times prior to purchase be considered to be held by Customer only on a true consignment basis, and Customer shall have no right, title or interest in the Products until purchased in accordance with the terms hereof.  Schumann shall at all times retain all right, title and interest in and to all Products delivered to Customer under this Agreement until such time as Customer has paid the entire purchase price for such Products, at which time title to the Products shall pass from Schumann to Customer.

 

6.                   Risks and Insurance.  Upon delivery of Product to Customer, Customer shall bear all risk of loss or damage to such Product from any cause whatsoever, including damage caused by Customer’s negligence, weather, acts of God and other causes over which Customer has no control.  Customer agrees to exercise due care and provide reasonable protection from loss or damage to Products at the Facility. Customer shall maintain at all times insurance policies with coverage and limits sufficient to compensate Schumann in full, at Schumann’s then current prices, for any loss or damage to Products for which Customer is responsible hereunder, and Schumann shall be named as an additional insured with respect to such policies.  Upon Schumann’s request, Customer shall cause a certificate of insurance to be issued to Schumann evidencing such coverage.

 

7.                   UCC-1 Statements.  Customer hereby authorizes Schumann to file UCC financing statements, and renewals and amendments thereto, listing Schumann as the “secured party” and Customer as the “debtor,” without obtaining any signature or additional consent of Customer, using the “consignor/consignee” designation on the UCC-1 form.  Customer also authorizes Schumann to provide notice of this consignment arrangement to Customer’s secured creditors of record.  The filing of any UCC financing statements shall not be deemed to be contrary to the Parties’ stated intent to treat this arrangement as a true consignment under applicable law.

 

8.                   Term; Renewal; Termination.  The term of this Agreement shall commence upon the date set forth above, and shall continue for a period of one (1) year from such date. 

 

a.                   This Agreement shall automatically renew for additional one (1) year terms, unless either Party provides written notice to the other Party indicating its intent to terminate not less than 30 days prior to the end of the current term.  This Agreement also may be terminated by either Party upon a material breach of the Agreement by the other Party that remains uncured thirty (30) days after the breaching Party has received written notice of such breach. 

b.                   Upon expiration or termination of the Agreement, at Schumann’s option, any quantity of Product remaining in the consigned stock shall either (i) become the property of Customer and Customer shall have the duty to pay to Schumann the then-effective price for such Product, or (ii) be subject to return to Schumann, at Schumann’s expense, and Customer promptly shall make the same available for removal by Schumann or its agent.

c.                   Notwithstanding the foregoing, no such termination of this Agreement shall be effective until all Products in Customer’s possession have been paid for in full or been returned to Schumann as provided above, and in any event the provisions of Sections 6, 7 and 10 shall survive termination.

 

9.                   Insolvency of Customer. Should Customer become insolvent or seek protection under any bankruptcy, receivership, insolvency, creditors arrangement, composition or comparable proceeding, or if any such proceeding is instituted against Customer (an “Insolvency Event”), Customer will immediately notify Schumann of such occurrence.  Customer hereby acknowledges that notwithstanding any Insolvency Event, all Products for which title has not transferred hereunder will remain the property of Schumann and are merely located on Customer’s property for storage purposes.  Schumann shall have the right, upon an Insolvency Event, to enter Customer’s premises for the purpose of inspecting and/or reclaiming the Products.

 

10.               Lender Accommodations. Customer has been informed that Schumann may from time to time have financing arrangements whereby a lender provides financing to Schumann with respect to the Products (a “Lender”).  Each Lender shall be a third-party beneficiary as to the rights of Schumann hereunder and shall have the right to, upon reasonable notice and during normal working hours, enter the Facility and inspect all Products.  Customer agrees to promptly execute, from time to time, such customary documents as may be reasonably required or requested by Lender to protect its interests in the Products.

 

11.               Amendment or Modification.  This Agreement may not be amended or modified except by a written agreement that specifically references this Agreement and is signed by each of the Parties hereto.

 

12.               Authority.  Each Party hereby represents and warrants that the undersigned person is duly  authorized to sign and deliver this Agreement on behalf of the applicable Party hereto and that this Agreement is a binding obligation of such Party, enforceable in accordance with its terms. 

 

13.               Entire Agreement.  This Agreement constitutes the entire agreement between the Parties hereto pertaining to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, representations and discussions of the Parties, whether oral or written, express or implied.

 

14.               Assignments.  No Party hereto may assign any of its rights or benefits or delegate any of its duties, obligations or liabilities under this Agreement without the prior consent of each of the other Parties hereto; provided, however, that Schumann may assign its rights hereunder to any Lender and either Party may assign its rights and obligations hereunder to any entity that acquires all or substantially all of the operating assets or business of such Party, so long as the assigning Party provides notice of such assignment.

 

15.               Successors and Assigns.  This Agreement will apply to, be binding in all respects upon, and inure to the benefit of, the successors and permitted assigns of the Parties.

 

16.               No Third Party Rights.  Except as set forth above with respect to Lenders, nothing herein will be construed to give any person or entity other than the Parties to this Agreement any legal or equitable right, remedy, or claim under or with respect to this Agreement or the Products, and this Agreement and all of its provisions and conditions are for the sole and exclusive benefit of the Parties to this Agreement and their respective successors and permitted assigns.

 

17.               Remedies.  The rights and remedies provided by this Agreement are cumulative and the use or election of any one right or remedy by either Party shall not preclude or waive its right to use any or all other remedies.  The rights and remedies provided for herein are in addition to any other rights the Parties may have by law, statute, ordinance, principles of equity or otherwise.

 

18.               Waiver.  Neither the failure nor any delay by any Party in exercising any right, power or privilege under this Agreement will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege. No waiver shall be effective unless made in writing and signed by the Party against whom the waiver is sought to be enforced.

 

19.               Severability; Reformation.  The provisions of this Agreement are severable, and if any provision should, for any reason, be held invalid or unenforceable in any respect, it will not invalidate, render unenforceable or otherwise affect any other provision, and such invalid or unenforceable provision will be construed by limiting it so as to be valid and enforceable to the maximum extent compatible with, and possible under, applicable law.  Without limiting the generality of the foregoing, if this arrangement is determined by any court to constitute a sale of goods or otherwise create a security interest governed by the Uniform Commercial Code rather than a true consignment relationship, the Parties agree that Customer hereby grants, and Schumann shall have, a first priority purchase money security interest in all Products in Customer’s possession, and all proceeds and products thereof, in the amount of the unpaid purchase price relating thereto.

 

20.               Relationship of the Parties.  This Agreement does not constitute or create a joint venture, partnership, agency or similar arrangement between the Parties.  Each Party shall conduct all business in such Party’s own name as an independent entity.  Neither Party has the right or power to act for or on behalf of the other or to bind the other in any respect whatsoever, other than as expressly provided for herein.

 

21.               Notices.  All notices and other communications hereunder will be in writing and will be sent either by (a) certified mail, postage prepaid, return receipt requested; (b) an overnight express courier service that provides written confirmation of delivery; or (c) email with confirmation of receipt, in each case addressed as set forth in the initial paragraph of this Agreement.  Any Party may change its address for receiving notice by giving notice of a new address in the manner provided herein.  Any notice given under this section, will be deemed to be delivered on the third business day after the same is deposited in the United States Mail, on the next business day if sent by overnight courier, or on the same business day if sent by facsimile before the close of business of the recipient, or the next day, if sent by email after the close of business of business of the recipient.

 

22.               Jurisdiction; Service of Process.  The Parties hereby irrevocably agree that any action or proceeding seeking to enforce any provision of, or based on any right arising out of, this Agreement must be brought exclusively in the courts of the State of Ohio located in Cuyahoga County, Ohio, or, if it has or can acquire jurisdiction, in the United States District Court for the Northern District of Ohio.  Each of the Parties hereto irrevocably consents and submits itself to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and irrevocably waives any objection it may now or hereafter have to the placing of venue in any such courts and any right to remove any such action or proceeding to another court.  Process in any action or proceeding referred to in the preceding sentence may be served on any Party anywhere in the world.

 

23.               Governing Law.  This Agreement will be governed by the laws of the State of Ohio, without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any other jurisdiction.

 

24.               Further Assurances.  The Parties agree (a) to furnish upon request to each other such further information, (b) to execute and deliver to each other such other documents, and (c) to do such other acts and things, all as the other Party may reasonably request for the purpose of carrying out the intent of this Agreement.

 

25.               Counterparts.  This Agreement may be executed in one or more counterparts, including by facsimile, email or electronic signature or as included in an Adobe PDF or other electronic file, each of which shall be an original and all of which together shall constitute one and the same agreement.  The execution of counterparts shall not be deemed to constitute delivery of this Agreement by any Party until all of the Parties have executed and delivered their respective counterparts.