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SUPPLY AGREEMENT
THIS SUPPLY AGREEMENT (this "Agreement") is entered into as of the 23rd
day of April, 1998, by and between SPRING & WIRE DESIGNS LLC, a limited
liability company established under the laws of California (the "Supplier"), and
INDESCO INTERNATIONAL, INC., a Delaware corporation ("Indesco"), for itself and
its subsidiaries including, but not limited to, AFA Products, Inc., Continental
Sprayers International, Inc. and AFA-Polytek B.V. (collectively, the
"Purchaser").
R E C I T A L S
A. Pursuant to a letter agreement dated June 19, 1997, the Supplier has
agreed to sell, and AFA Products, Inc. ("AFA") has agreed to purchase, on a
non-exclusive basis, certain industrial springs (the "Products") for a period of
five years at certain prices. With the Supplier's consent, AFA has assigned its
rights under the foregoing letter agreement to the Purchaser.
B. The terms and conditions of the sale of the Products are hereby
formalized and set forth in further detail in this Agreement.
NOW THEREFORE, in consideration of the mutual promises contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Supplier and Purchaser hereby agree as follows:
1. Products Supplied; Warranties; Disclaimer.
(a) Upon Purchaser's request from time to time, the Supplier shall
sell to Purchaser, and Purchaser shall purchase from the Supplier, on the terms
and conditions stated herein, the Products, as more particularly described on
Exhibit I attached hereto and incorporated herein by reference.
(b) The Supplier shall manufacture and package the Products in
accordance with Purchaser's applicable general and individual specifications, if
any, or as otherwise instructed by Purchaser from time to time (collectively,
the "Specifications").
(c) The Supplier warrants that each Product purchased by Purchaser
shall be of merchantable quality, shall not utilize or contain toxic materials,
shall otherwise comply with Purchaser's Product standards including, without
limitation, compliance with fatigue and durability requirements and, where
applicable, shall be in accordance with the Specifications. IN ALL OTHER
RESPECTS PURCHASER IS PURCHASING PRODUCTS HEREUNDER "AS
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IS" AND THE SUPPLIER MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING,
WITHOUT LIMITATION, OF FITNESS FOR A PARTICULAR PURPOSE.
(d) In the event that Purchaser receives Products that do not
conform to the Specifications, if any, or to the other instructions of
Purchaser, the Purchaser shall be entitled to obtain from the Supplier a
replacement of the non-conforming Product or a refund of, or adjustment to, the
purchase price (or any portion thereof regarding particular Product or Products
on order) paid therefor. If non-conformance is not timely cured by the Supplier
after written notice thereof by the Purchaser in accordance with Section 9,
Purchaser shall have the right to cancel its order with respect to such
non-conforming Products or, at its election, terminate this Agreement.
Notwithstanding any such cancellations or termination, Supplier shall promptly
pay to the Purchaser all Rebates (as defined below) earned and unpaid as of the
date of termination.
2. Term. The term of this Agreement shall commence on the date hereof and
shall end on April 23, 2002 (the "Term").
3. Price. The prices for Products in effect at the commencement of the
Term are set forth on Exhibit I and may thereafter be adjusted on terms mutually
agreeable to the parties based on competitive market conditions. The price per
1,000 units for any Products which Supplier has agreed to sell and Purchaser has
agreed to purchase which were not set forth on Exhibit I shall, by mutual
agreement of the parties, be added thereto.
4. Price Rebates. As an inducement to Purchaser to dedicate as much of its
business to Supplier as possible, Supplier shall pay price rebates ("Rebates")
to Indesco as set forth below based on Buyer's purchases of Products, net of
discounts and allowances:
Annual
Annual Purchases Periodic Rebate Aggregate Rebate
---------------- --------------- ----------------
Upon reaching $ 500,000 $ 50,000 $ 50,000
Upon reaching 1,000,000 additional 50,000 100,000
Upon reaching 1,500,000 additional 50,000 150,000
Upon reaching 2,000,000 additional 60,000 210,000
Upon reaching 3,000,000 additional 120,000 330,000
Upon reaching 4,000,000 additional 130,000 460,000
Upon reaching 5,000,000 additional 140,000 600,000
Upon reaching 6,000,000 additional 150,000 750,000
Rebates shall be calculated on a calendar year basis, commencing January 1,
1998, and shall be paid in cash to Indesco within twenty (20) days of the date
that such Rebate is earned.
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5. Payment Terms; Freight Terms. The payment terms and freight terms for
each shipment of Products shall be as set forth on Exhibit I and are subject to
the provisions of Section 6(b) hereof.
6. Quantities and Delivery.
(a) Purchaser shall provide to Supplier a rolling forecast of
projected quantity requirements by Product for the next sixty (60) days. Such
forecasts shall be updated monthly or more frequently (in whole or in part) to
reflect significant changes. Supplier shall plan production and notify Purchaser
of the "order lead-time" it requires for timely delivery of each Product.
Supplier agrees to maintain in its inventory at all times at least a two week
supply of standard high volume Product.
(b) Purchaser shall issue purchase order releases to Supplier
specifying the quantities, delivery date and destination for each product. All
shipments shall be FOB destination when Supplier uses its in-house trucking
service. If any delivery of any Products is not made when specified, then at the
Purchaser's request, which request shall be made at the sole discretion of the
Purchaser, the Supplier shall deliver such Products by air freight and pay the
expense thereof.
7. Subcontracting. The Supplier shall obtain written authorization from
Purchaser prior to assigning or subcontracting work involved in the manufacture
of Products covered by this Agreement.
8. Insurance. The Supplier shall bear the risk of loss for, and carry all
perils and extended insurance to cover the value of, all Products required to be
shipped FOB destination. At Purchaser's request, the Supplier shall provide
Purchaser with evidence of such coverage. Purchaser shall bear the risk of loss
upon delivery to a common carrier for all Products requested by Purchaser to be
shipped FOB factory.
9. Termination for Breach. If the Supplier or Purchaser breaches any term
of this Agreement (including any extension(s)), the non-breaching party may
promptly notify the breaching party thereof and shall allow the breaching party
a reasonable opportunity and period of time (not to exceed thirty (30) days) to
cure such breach. If such breach is not remedied within such period, as
reasonably determined by the non-breaching party, then, subject to the
provisions of Section 1(d) hereof, the non-breaching party shall then have the
right to terminate this Agreement immediately without further obligation to the
breaching party and/or to pursue any other right or remedy at law or in equity
to which such non-breaching party may be entitled.
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10. Intellectual Property. The Supplier warrants and agrees that the
Products do not infringe any patent, trademark, copyright or other intellectual
property rights, and that the Supplier will defend any suit that may arise in
respect to such warranty and agreement, and that the Supplier will indemnify,
defend and save harmless Purchaser and its affiliates against any liabilities,
claims, damages, costs and expenses, including reasonable attorneys' fees, which
may be incurred by the assertion of such intellectual property rights by other
persons.
11. Employment Law Compliance. Whether this Agreement refers to
manufactured items or to work, the Supplier agrees that it will comply, in all
material respects, with applicable employment laws of the U.S. and any other
jurisdiction, including, without limitation, Social Security, unemployment
compensation, unemployment insurance, workers' compensation laws and the Fair
Labor Standards Act, as amended, each U.S. invoice must bear the following
certification: "Materials or work covered by this invoice were produced in
conformity with the Fair Labor Standards Act, as amended."
12. Customs Law Compliance. The Supplier shall be responsible for
complying with applicable customs and related governmental laws and regulations
for shipments delivered by the Supplier outside the country of origin. Purchaser
shall be responsible for complying with applicable customs and related
governmental laws and regulations for shipments delivered to Purchaser in the
country of origin and thereafter transported by or for Purchaser outside such
country. Each of the Supplier and Purchaser agrees to indemnify and save the
other harmless for any liability, cost or expense incurred as a result of its
failure to comply with its obligations under this Section 12.
13. Confidential Information. The Supplier and Purchaser hereby agree to
safeguard any proprietary or confidential information provided by the other (or
its affiliates). The Supplier and Purchaser agree not to disclose any such
information to any third party and to provide such information only to those
employees who have a need to know such information for the purposes of this
Agreement. These restrictions upon disclosure shall cease to apply as to any
specific portion of said information which is or becomes available to the public
generally, not due to the fault of such disclosing party or upon receipt by the
disclosing party of the written authorization of the other to make such
disclosure. Except as may be required by law, or judicial or governmental
process, the parties shall keep this Agreement and its terms and conditions
absolutely confidential and not disclose the same except to any assignee
permitted hereunder provided such assignee confirms its agreement with the
confidentiality provisions of this Section 13. The
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provisions of this Section 13 shall survive the expiration or earlier
termination of the Term.
14. Notices. Every notice, request, demand and other communication
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been given (a) when received, if delivered in person, or (b) when
sent, if sent by telecopier and confirmed within 48 hours by letter mailed or
delivered to the party to be notified at its address set forth herein or (c)
three (3) business days following the mailing thereof, if mailed by certified
first class mail, postage prepaid, return receipt requested, in any such case as
follows:
If to Purchaser, to:
Indesco International, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
Attention: Xx. Xxxxx X. Xxxxx, Xx.
Telecopy : (000) 000-0000
If to the Supplier, to:
Spring & Wire Designs LLC
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxxx Xxxxxxx
Telecopy: (000) 000-0000
or at such other address or addresses as any party may have advised the other in
the manner provided in this Agreement.
15. Complete Agreement. This Agreement, together with its exhibits, sets
forth the entire agreement of the parties with respect to the subject matter
hereof and supersedes all prior agreements, contracts, promises,
representations, warranties, statements, arrangements and understandings, if
any, among the parties hereto or their representatives with respect to the
subject matter hereof. No waiver, modification or amendment of any provision,
term or condition hereof shall be valid unless in writing and signed by the
party to be charged therewith, and any such waiver, modification or amendment
shall be valid only to the extent therein set forth.
16. Governing Law. The validity, performance, construction and effect of
this Agreement shall be governed by the substantive laws of the State of New
York, without regard to the provisions for choice of law thereunder.
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17. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns;
provided, however, that no party shall assign this Agreement or any of its
rights or obligations hereunder to any other person or entity without the prior
written consent of the other party, which consent shall not be withheld
unreasonably.
18. Severability. If any provision of this Agreement, or portion thereof,
shall be held invalid or unenforceable by a court of competent jurisdiction,
such invalidity or unenforceability shall attach only to such provision or
portion thereof, and shall not in any manner, affect or render invalid or
unenforceable any other provision of this Agreement or portion thereof, and this
Agreement shall be carried out as if any such invalid or unenforceable provision
or portion thereof were not contained herein. In addition, any such invalid or
unenforceable provision or portion thereof shall be deemed, without further
action on the part of the parties hereto, modified, amended or limited to the
extent necessary to render the same valid and enforceable.
19. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original and all of which taken together shall
constitute a single agreement.
20. Captions. The captions appearing in this Agreement are inserted only
as a matter of convenience and for reference and shall in no way affect the
interpretation or construction of this Agreement or any of the provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
SPRING & WIRE DESIGNS LLC
By: /s/ Xxxx Xxxxxxx
------------------------------------
Print Name: Xxxx Xxxxxxx
Title: General Manager
INDESCO INTERNATIONAL, INC.
By: /s/ Xxxxx Xxxxxx
------------------------------------
Print Name: Xxxxx Xxxxxx
Title: Vice Chairman
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EXHIBIT I
1. Products; Prices
AFA Part No. Price Per 1,000 Units
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210-592900 $ 10.81
240-752600 9.89
240-752900 12.95
260-765700 20.67
270-823100 6.81
280-873000 11.21
280-873900 21.72
290-254900 12.53
290-255600 14.31
2. Payment Terms. Terms of payment shall be net 30 from date of invoice.
Invoices shall be dated no earlier than date of delivery
of all items covered by that invoice.
3. Freight Terms. Freight terms shall be FOB destination unless separately
negotiated and specifically agreed upon in writing by
both parties.
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