Support Services Agreement

EXHIBIT 10.10


SUPPORT SERVICES AGREEMENT


THIS SUPPORT SERVICES AGREEMENT (the "Agreement") is made as of September 30, 1998 (the "Effective Date"), between Advanced Glassfiber Yarns, LLC ("COMPANY"), a Delaware limited liability company with its principal place of business located at 2556 Wagner Road, Aiken, South Carolina 29801, and Owens Corning ("OC"), a Delaware corporation with its principal place of business located at One Owens Corning Parkway, Toledo, Ohio 43659.


WHEREAS COMPANY was formed to conduct the glass fiber specialty product manufacturing business formerly conducted by OC in Aiken, South Carolina, Huntingdon, Pennsylvania, and South Hill, Virginia (the "Business");


WHEREAS, pursuant to an LLC Interest Sale and Purchase Agreement, dated as of July 31, 1998 (the "SPA") among OC, COMPANY and AGY Holdings, Incorporated (as assignee of Glass Holdings Corporation under an assignment agreement dated as of September 28, 1998), AGY Holdings, Incorporated agreed to purchase a 51% membership interest in COMPANY;


WHEREAS COMPANY desires the assistance of OC for engineering, design and technical services relating to the Business; and


WHEREAS OC is capable of providing such services, is committed to the success of COMPANY, wishes to meet COMPANY's needs for such services and otherwise to treat COMPANY as a favored Affiliate and as a customer of OC's service operations, and desires to provide high quality services to COMPANY.


NOW THEREFORE, in consideration of the premises of and mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, COMPANY and OC (the "Parties") hereby agree as follows:


1. DEFINITIONS.
-----------


All terms not herein defined shall have the same meaning as that provided in the LLC Interest Sale and Purchase Agreement, dated July 31, 1998 (the "SPA").


2. PROVISION OF SERVICES.
---------------------


2.1 Scope of Services. Subject to the terms and conditions of this
----------------- Agreement, OC agrees to provide to COMPANY engineering, design and technical services (collectively hereafter the "Services") relating to the manufacture of Business Products. Such Services shall include services in connection with:


(a) the design of a large melter (as further specified in Section 2.2
below);
(b) replacement of a Batch Weigh System for the Aiken, South Carolina
facility (as further specified in Section 2.3 below);
(c) Aiken furnace rebuilds (as further specified in Section 2.4
below);
(d) technical and design assistance in the areas of furnace, bushing
and consolidation equipment design, ergonomics engineering,
reliability engineering organization ("REO"), and testing
services;
(e) maintenance and support of the CB 83 Chopper at the Huntingdon,
Pennsylvania facility (as further specified in Section 2.5
below); and


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(f) such other services as the Parties may mutually agree.


2.2 Large Melter Design. OC will design for COMPANY a large melter
------------------- suitable for manufacturing Business Products on cost and schedule terms to be agreed; provided, however, that: (i) the cost shall be sufficient to cover OC's internal and out of pocket costs; and (ii) the schedule will be as expeditious as reasonably possible and, unless otherwise agreed upon by the parties, the design of such melter is to be completed within two years of the Effective Date.


2.3 TI 990 Batch Weigh System Replacement. OC will provide for COMPANY a
------------------------------------- turnkey implementation of a TI 990 Batch Weigh System Replacement for the Aiken, South Carolina facility at OC's current projected cost of two hundred and forty- two thousand dollars ($242,000); provided, however, that such current cost projection is only an estimate and may increase or decrease by up to ten percent (10%). Unless otherwise agreed upon by the parties, this project shall commence during the 1999 second calendar quarter.


2.4 Aiken Furnace Rebuilds. OC will rebuild or provide rebuilds for Aiken
---------------------- furnaces 3D, 3E and 2D on approximately the following schedule: (i) 3D to commence during the 1998 third calendar quarter; (ii) 3E to commence during the 1998 fourth calendar quarter; and (iii) 2D to commence during the 1999 second calendar quarter. Such rebuilds shall be provided to Company on a capital cost basis which is currently projected to be eight hundred and ten thousand dollars ($810,000); provided, however, that such current cost projection is only an estimate and may increase or decrease by up to ten percent (10%).


2.5 CB 83 Chopper. COMPANY acknowledges that the CB 83 Chopper at the
------------- Huntingdon, Pennsylvania facility embodies OC's Confidential Information, and OC is concerned that such Confidential Information not be disclosed to third parties. COMPANY


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further acknowledges that maintenance, support, and spare part fabrication services for the CB 83 by third parties would necessarily entail disclosure of such Confidential Information. OC and COMPANY therefore agree that all maintenance and support services for the CB 83 (including fabrication and supply of all spare parts) shall be provided by: (i) OC; (ii) COMPANY, subject to the confidentiality provisions of Article 6 below; or (iii) third party providers subject to Section 2.6.2 below. COMPANY hereby grants to OC a right of first refusal to purchase the CB 83 in the event that COMPANY determines to sell the CB 83.


2.6 Limitations on OC's Obligations.
-------------------------------


2.6.1 Personnel Limitations. COMPANY acknowledges that OC may not
--------------------- always be capable of providing certain of the Services requested by COMPANY, in that OC is transferring personnel to COMPANY, or may divest its composites business or otherwise cease its involvement in the composites industry, and for this and other reasons may not always have appropriate personnel to perform certain of the Services. Therefore, except for the Services specified in Sections 2.2 and 2.3, OC is under no obligation to provide requested Services.


2.6.2 Use of Third Party Providers and Former OC Employees. In the
---------------------------------------------------- event that OC is unable to provide requested Services because of OC's lack of suitable personnel, or for service of the CB 83 Chopper pursuant to Section 2.5 above, COMPANY may engage the services of third party providers and/or former employees of OC, subject to the following restrictions:


(a) COMPANY shall first enter into, and supply to OC an executed copy
of, a Confidentiality Agreement substantially in the form
attached as Exhibit B to this Agreement;


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(b) former employees of OC shall not be released from their
obligation to preserve the confidentiality of OC proprietary
information of which they have knowledge except to the extent
reasonably necessary to provide the Services for which they are
engaged by COMPANY;


(c) any OC proprietary information communicated from former
employees of OC to COMPANY shall be subject to the
confidentiality provisions of the Patent and Know How License
Agreement to be entered into under the SPA (the "License
Agreement");


(d) unless otherwise agreed by the Parties, this provision shall
not entitle COMPANY to access to OC proprietary information to
which COMPANY is not otherwise entitled pursuant to the License
Agreement; and


(e) COMPANY's use of third party providers shall be subject to the
provisions of Section 6.6 of the License Agreement.


2.6.3 Priority. For as long as COMPANY is an Affiliate of OC, OC
-------- shall accord to COMPANY at least the same priority as OC gives in rendering services to its other most favored Affiliates and licensees. Notwithstanding the foregoing, OC acknowledges that COMPANY shall have a heightened need for the Services during the six (6) month period following the Effective Date (the "Transition Period") and OC is committed to facilitating COMPANY's success during the Transition Period, as well as thereafter. OC therefore agrees to use commercially reasonable efforts, consistent with OC's internal operations, to respond to COMPANY's requests for Services during the Transition Period, and to give higher priority to


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rendering the Services requested by COMPANY than those of OC's other Affiliates and licensees.


2.6.4 Written Work Product. In the event that COMPANY desires OC to
-------------------- prepare any specific designs, drawings, flow sheets, reports, manuals, equipment specifications, process descriptions, operating procedures, equipment and process control descriptions, method engineering studies, purchasing studies, engineering reports or any similar document or report relating to the Services, such document or report shall be furnished as promptly as circumstances permit, provided that OC shall not be required to supply any such materials hereunder that OC determines in its reasonable judgment to have been unreasonably requested in light of the intent and purposes of this Agreement.


2.6.5 Restricted Information. OC shall not be obligated to prepare
---------------------- or furnish any document or report which would disclose any information which OC is at the time prevented from disclosing to COMPANY by reason of government regulations, obligations arising from contracts with third parties which are not Affiliates of OC, or other restrictions of any kind imposed upon OC by a third party which is not an Affiliate of OC. Furthermore, nothing in this Agreement shall authorize the disclosure of, or access to, or obligate OC to provide or make available, classified or restricted information, material or know-how of the government of the United States of America.


2.6.6 No Obligation to Grant a License. Except as provided in
-------------------------------- Article 5 of this Agreement, nothing herein shall obligate OC to license or otherwise transfer any technology to COMPANY.


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2.7 COMPANY Services. The Parties contemplate that COMPANY may have or
---------------- develop technical service capabilities of interest to OC, and agree that OC may request services from COMPANY on the same terms as those applying to the Services.


3. WORK ORDERS AND FEES.
--------------------


3.1 Work Orders. Individual requests for Services to be performed under
----------- this Agreement shall be defined by a Work Order prepared substantially in the form of Exhibit A. Each Work Order shall include a description of the Services requested, specifications, pricing, delivery and completion schedule, payment schedule, special terms and conditions applicable to the specific project, a Statement of Work, and testing and acceptance criteria. Each Work Order, together with this Agreement, is a separate contract governed by the terms and conditions of this Agreement that will be effective as of the date signed by authorized representatives of both COMPANY and OC. If any explicit terms of the Work Order (including the Statement of Work) conflict with the terms of this Agreement, such explicit terms of the Work Order will take precedence.


3.2 Changes to Work Orders. If COMPANY requests or OC recommends changes
---------------------- during performance of a Work Order, OC shall provide COMPANY with a written change order proposal setting forth: (i) a description of the proposed changes; (ii) the impact on pricing; (iii) the impact on the project schedule; and (iv) a revised Statement of Work. COMPANY may accept or reject any such change order proposal. A change order proposal shall be considered rejected if COMPANY does not accept the change order proposal within ten business days after receipt of the change order proposal. If accepted, change orders will be effective upon execution


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of the change order prop ...