EXHIBIT 10.21
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SUPPLY AGREEMENT
AMONG:
SAGAMORE HOLDINGS, INC.
A FLORIDA CORPORATION ("PARENT")
NECI ACQUISITION, INC.
A FLORIDA CORPORATION ("PURCHASER")
AND
JACO ELECTRONICS, INC.,
A NEW YORK CORPORATION ("SUPPLIER");
DATED AS OF SEPTEMBER __, 2004
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TABLE OF CONTENTS
SECTION 1. PURCHASE OF ELECTRONIC COMPONENTS............................1
SECTION 2. TERM.........................................................2
SECTION 3. TERMINATION..................................................2
SECTION 4. MISCELLANEOUS................................................3
4.1. Counterparts; Interpretation.................................3
4.2. Confidentiality..............................................3
4.3. Governing Law................................................3
4.4. Successors and Assigns; Assignment...........................3
4.5. Partial Invalidity and Severability..........................4
4.6. Waiver.......................................................4
4.7. Headings.....................................................4
4.8. Acceptance by Fax............................................4
4.9. Expenses.....................................................4
4.10. Attorneys' Fees..............................................4
4.11. Further Assurances...........................................5
4.12. Notices......................................................5
4.13. NO JURY TRIAL................................................5
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SUPPLY AGREEMENT
THIS SUPPLY AGREEMENT (this "Agreement") is made and entered into as of
this 20th day of September, 2004 (the "Effective Date") by and among SAGAMORE
HOLDINGS, INC., a Florida corporation ("Parent"), NECI ACQUISITION, INC., a
Florida corporation ("Purchaser") and JACO ELECTRONICS, INC., a New York
corporation ("Supplier"). Parent, Purchaser and Supplier are each referred to,
at times, as a "Party" and collectively as the "Parties".
RECITALS
WHEREAS, Purchaser is a wholly-owned subsidiary of Parent and Purchaser
has purchased substantially all of the assets of Nexus Custom Electronics, Inc.,
a wholly-owned subsidiary of Supplier (the "Purchase Transaction"), on the date
hereof; and
WHEREAS, as an inducement to Supplier to enter into the Purchase
Transaction, Purchaser and Parent have agreed to purchase and to cause all now
existing or hereafter acquired subsidiaries and businesses, as a result of
merger, acquisition or otherwise, (together with Purchaser and Parent,
individually and collectively, the "Purchaser Group Members") to purchase
certain electronic components from Supplier pursuant to the terms of this
Agreement.
AGREEMENT:
NOW, THEREFORE, in consideration of the mutual promises herein contained,
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the Parties agree as follows:
SECTION 1. PURCHASE OF ELECTRONIC COMPONENTS.
(a) During the Term (as defined below in Section 2) of this Agreement, the
Purchaser Group Members shall utilize the following procedures (the "Protocol")
for at least fifteen percent (15%) (the "Annual Percentage") of the dollar
amount of their annual purchases of those electronic components that are
included in Supplier's line card and are compatible with the customer needs of
the Purchaser Group Members (the "Eligible Components").
(i) Purchaser Group Members shall submit requests for proposals to
Supplier and such other suppliers as they may choose, for specific orders of
Eligible Components (the "RFP"). The RFP shall contain such terms as are
reasonably necessary for Supplier to formulate a proposal.
(ii) Supplier shall submit such proposal, if any, as it determines
to Purchaser within four (4) business days of Supplier's receipt of the RFP.
(iii) If Supplier's proposal contains the lowest price, and all
requirements of the RFP are satisfied in all material respects, the Purchaser
Group Member shall purchase the Eligible Components from Supplier pursuant to
the terms of the RFP.
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(iv) If Supplier submits a proposal and the Purchaser Group Member
receives a quotation from another supplier which it finds more favorable than
the quotation provided by Supplier (the "More Favorable Quotation"), the
Purchaser Group Member shall advise Supplier (the "Advice") of the manufacturer,
product, quantity, price, delivery, warranty (if other than the standard
industry warranty) and payment terms (collectively the "Primary Terms")
contained in the More Favorable Quotation. Supplier may notify the Purchaser
Group Member (in any event not later than two (2) business days after receipt of
the Advice) (the "Matching Quotation") of its commitment to supply the Eligible
Components identified in the Advice under substantially similar terms as
contained in the Advice. If the Matching Quotation contains terms that are
substantially similar to the Primary Terms in the Advice, the Purchaser Group
Member shall accept the Matching Quotation and place its order for the
components with Supplier. If Supplier advises the Purchaser Group Member that it
will not submit a Matching Quotation or does not timely submit a Matching
Quotation, the Purchaser Group Member may accept the More Favorable Quotation,
provided, however, if the Purchaser Group Member changes any of the Primary
Terms in its acceptance of the More Favorable Quotation, the above protocol
shall again be applicable, allowing Supplier to submit or resubmit a quotation,
as the case may be.
(b) Provided the Purchaser Group Member complies with the Protocol,
Purchaser shall not have any liability under this Agreement to Supplier if the
Purchaser Group Members do not purchase Eligible Components from Supplier equal
to at least the Annual Percentage.
SECTION 2. TERM.
Unless terminated pursuant to Section 3 below, the term of this Agreement
shall be for five (5) years beginning on the Effective Date (the "Term").
SECTION 3. TERMINATION.
(a) Supplier shall have the right to terminate this Agreement at any time
by providing written notice to Purchaser.
(b) This Agreement shall be subject to termination as follows:
(i) If Supplier is the subject of a bankruptcy, other insolvency
proceeding, or receivership which, if involuntary, is not dismissed or stayed
within sixty (60) days of its commencement; and
(ii) Upon thirty (30) days prior written notice to Supplier, if (x)
Supplier has systematically and continually failed to perform the material terms
of the accepted purchase orders hereunder for material amounts of components (a
"Material Failure"), and (y) Purchaser has notified Supplier in writing of a
Material Failure on not less than three (3) occasions in any twelve month
period, and Supplier has failed to cure the Material Failure within thirty (30)
days after receipt of written notice on each of the three occasions referred to
herein.
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SECTION 4. MISCELLANEOUS
4.1. COUNTERPARTS; INTERPRETATION. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, and both of
which shall constitute one and the same instrument. This Agreement supersedes
all prior discussions and agreements between the Parties with respect to the
subject matter hereof, and this Agreement contains the sole and entire agreement
between the Parties with respect to the matters covered hereby. This Agreement
shall not be altered or amended except by an instrument in writing signed by or
on behalf of all of the Parties hereto. No ambiguity in any provision hereof
shall be construed against a Party by reason of the fact it was drafted by such
Party or its counsel. References to "including" means including without limiting
the generality of any description preceding such term. Nothing expressed or
implied in this Agreement is intended, or shall be construed, to confer upon or
give any person other than the Parties any rights or remedies under or by reason
of this Agreement.
4.2. CONFIDENTIALITY. The Parties shall not, directly or indirectly,
disclose to anyone, any Confidential Information. For purposes of this
Agreement, "Confidential Information" shall mean information relating to the
Parties, their business and potential business, including, without limitation,
trade secrets, financial information, marketing and business plans, methods of
providing services, practices, documentation, drawings, facilities, customers,
policies, suppliers, pricing, customer lists and leads, and other information
and know-how that has actual or potential economic value to either Party because
it is not generally known to others and is not readily ascertainable by them.
The restrictions of this Section 4.2 shall not apply to information (i) which
enters the public domain through no fault of the other Party; (ii) the
disclosure of which is required by final order of a court of competent
jurisdiction; or (iii) the disclosure of which is required to be made by a Party
in any public filing.
4.3. GOVERNING LAW. The validity and effect of this Agreement shall be
governed by and construed and enforced in accordance with the laws of New York
without regard to principles of conflicts of laws thereof. Any dispute,
controversy or question of interpretation arising under, out of, in connection
with or in relation to this Agreement or any amendments hereof, or any breach or
default hereunder, shall be litigated exclusively in the courts of competent
jurisdiction located in New York, New York. Each of the Parties hereby
irrevocably submits to the jurisdiction of any court of competent jurisdiction
located in New York, New York. Each Party hereby irrevocably waives, to the
fullest extent it may effectively do so, the defense of an inconvenient forum to
the maintenance of any such action in New York, New York.
4.4. SUCCESSORS AND ASSIGNS; ASSIGNMENT. This Agreement shall be binding
upon and shall inure to the benefit of the Parties and their respective heirs,
executors, legal representatives, and successors. Neither this Agreement nor the
rights and obligations hereunder may be assigned by either Party, including any
assignment by operation of law, absent the express prior written consent of the
other.
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4.5. PARTIAL INVALIDITY AND SEVERABILITY. All rights and restrictions
contained herein may be exercised and shall be applicable and binding only to
the extent that they do not violate any applicable laws and are intended to be
limited to the extent necessary to render this Agreement legal, valid and
enforceable. If any terms of this Agreement not essential to the commercial
purpose of this Agreement shall be held to be illegal, invalid or unenforceable
by a court of competent jurisdiction, it is the intention of the Parties that
the remaining terms hereof shall constitute their agreement with respect to the
subject matter hereof and all such remaining terms shall remain in full force
and effect. To the extent legally permissible, any illegal, invalid or
unenforceable provision of this Agreement shall be replaced by a valid provision
which will implement the commercial purpose of the illegal, invalid or
unenforceable provision.
4.6. WAIVER. Any term or condition of this Agreement may be waived at any
time by the Party which is entitled to the benefit thereof, but only if such
waiver is evidenced by a writing signed by such Party. No failure on the part of
a Party to exercise, and no delay in exercising, any right, power or remedy
created hereunder, shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or remedy by any such Party preclude any
other future exercise thereof or the exercise of any other right, power or
remedy. No waiver by any Party to any breach of or default in any term or
condition of this Agreement shall constitute a waiver of or assent to any
succeeding breach of or default in the same or any other term or condition
hereof.
4.7. HEADINGS. The headings as to contents of particular sections of this
Agreement are inserted for convenience only and shall not be construed as a part
of this Agreement or as a limitation on the scope of any terms or provisions of
this Agreement.
4.8. ACCEPTANCE BY FAX. This Agreement shall be accepted, effective and
binding, for all purposes, when the Parties shall have signed and transmitted to
each other, by telecopier or otherwise, copies of the signature pages hereto.
4.9. EXPENSES. All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby will be paid by the Party
incurring such costs and expenses.
4.10. ATTORNEYS' FEES. In the event of any litigation arising under the
terms of this Agreement, the prevailing Party shall be entitled to recover its
or their reasonable attorneys' fees and court costs from the other Party,
including trial and appellate proceedings, as well as the costs of collecting
any judgment.
4.11. FURTHER ASSURANCES. The Parties shall from time to time do and
perform such additional acts and execute and deliver such additional documents
and instruments as may be required or reasonably requested by any Party to
establish, maintain or protect its rights and remedies or to effect the purposes
of this Agreement.
4.12. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given: (i) when delivered by hand; (ii)
one (1) day after delivery by internationally recognized express courier (i.e.,
Federal Express, DHL); or (iii) three (3) days after delivery by certified mail,
postage prepaid, to the Parties at the following addresses (or at such other
address for a Party as shall be specified by like notice):
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If to Purchaser: NECI Acquisition, Inc.
00 Xxxxx Xxxx Xxxxxx - Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxx/Xxxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Parent: Sagamore Holdings, Inc.
00 Xxxxx Xxxx Xxxxxx - Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxx/Xxxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Supplier: Jaco Electronics, Inc.
000 Xxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
4.13. NO JURY TRIAL. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PARTIES' ACCEPTANCE OF THIS AGREEMENT.
[SIGNATURE BLOCK ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have executed this Supply
Agreement on the date first set forth above.
SAGAMORE HOLDINGS, INC. JACO ELECTRONICS, INC.
By: /s/ Xxxxxx Xxxxxxx By: /s/ Xxxxxxx Xxxx
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Xxxxxx Xxxxxxx Xxxxxxx Xxxx
President Vice President
NECI ACQUISITION, INC.
By: /s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
President
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