Exhibit 2(g)
PURCHASE AND SUPPLY AGREEMENT (FOAMBOARD)
This Purchase and Supply Agreement ("Agreement") is made as of
this 9th day of October, 2001 by and between SEAL GRAPHICS AMERICAS CORPORATION,
a Delaware corporation, SEAL USA CORPORATION, a Delaware corporation, and SEAL
GRAPHICS TECHNOLOGIES CORPORATION, a Delaware corporation ("the Seal Parties")
and XXXX CORPORATION, a Pennsylvania corporation ("Xxxx").
RECITALS
WHEREAS, pursuant to an Asset Purchase Agreement, dated of
even date herewith (the "Purchase Agreement"), by and among Xxxx, Xxxx Holdings,
Inc. and Xxxx Graphics Americas Corporation (collectively, the "Sellers") and
Neschen AG and the Seal Parties, the Seal Parties concurrently herewith will
purchase from the Sellers certain assets of the Sellers related to the Graphics
Products segment of Xxxx (the "Business");
WHEREAS, the execution and delivery of this Agreement is a
condition to the closing of the transactions contemplated by the Purchase
Agreement; and
WHEREAS, capitalized terms used herein but not defined herein
shall have the meanings set forth in the Purchase Agreement.
NOW, THEREFORE, in consideration of the premises, the
covenants set forth herein and the benefits to be derived herefrom, the parties
hereby agree as follows:
ARTICLE I
Supply and Purchase of Products
1.1 Supply. Effective as of 11:59 p.m. (Eastern Time) on
September 30, 2001 and subject to the provisions of this Agreement, Xxxx shall
manufacture and supply to the Seal Parties the foamboard products for commercial
graphics accounts in the United States and Canada set forth on Schedule 1.1 to
this Agreement and any other products which may be listed on Schedule 1.1, as
such schedule may be amended from time to time by written consent of the parties
hereto (the "Products"), and the Seal Parties shall provide Xxxx with written
orders for Products.
1.2 Budget. In order to aid Xxxx in its production
projections, on or before the first day of the month immediately preceding each
calendar quarter during which this Agreement is in effect (the "Budget Date"),
the Seal Parties shall provide Xxxx with a written good faith estimate of the
maximum and minimum quantities that the Seal Parties estimate they will purchase
each month during the upcoming calendar quarter (the "Budget Range"). In the
event that Xxxx determines that it may be unable to supply the amounts of
Products set forth in the Budget Range, Xxxx shall give notice to the Seal
Parties that it cannot supply the amounts of Products set forth in the Budget
Range. Xxxx must give such notice within ten (10) days after receipt of the
Budget Range and such notice shall set forth the maximum quantity that Xxxx is
able to supply during such periods. The parties understand and agree that the
Budget Range reflects the Seal Parties' good faith estimate of their
requirements and is not a binding order. The Budget Range may be updated
periodically as set forth in Section 2.1. During the term of this Agreement (as
defined in Section 5.1 below) (the "Term"), Xxxx shall supply Products to the
Seal Parties in such quantities as the Seal Parties may order under the terms
and conditions set forth in this Agreement. The Budget Range in effect for the
current calendar quarter as of the Closing Date shall be as previously agreed by
the parties.
1.3 Non-Exclusivity. Subject to this Section 1.3, the Seal
Parties shall purchase their requirements for Products from Xxxx during the term
of this Agreement. Notwithstanding the above, in the event that Xxxx is unable
to supply the amounts of Products set forth in the Budget Range established by
the Seal Parties pursuant to Section 1.2 or Section 2.1 hereof, the Seal Parties
shall be permitted to purchase from vendors other than Xxxx that amount of
Product within the Budget Range that Xxxx is unable to supply.
ARTICLE II
Orders, Prices and Terms
2.1 Orders. At least ten (10) days prior to the first day of
each month during the Term of this Agreement, the Seal Parties shall submit an
order to Xxxx for Products to be delivered during the upcoming month (which
order shall be within the Budget Range for such month). All orders for Product
under this Agreement shall be sent in writing, setting forth the quantity,
shipping and delivery instructions for that order, and shall be accepted in
writing by Xxxx. Xxxx shall accept every order that is within the Budget Range
for the period. In the event that the Seal Parties have reason to believe, as of
the date that an order is given, that the Budget Range has become inaccurate,
the Seal Parties shall deliver an updated Budget Range with the then-current
order, which reflects the Seal Parties' updated good faith estimate of their
purchase requirements for the remainder of the current quarter (or for the
following quarter if a Budget Range for such quarter is then in effect). Xxxx
may notify the Seal Parties that it cannot supply the amounts of Products set
forth in the revised Budget Range. Xxxx must give such notice within ten (10)
days after receipt of such revised Budget Range and such notice shall set forth
the maximum quantity that Xxxx is able supply during such periods. The purchase
orders will indicate that they are issued pursuant to this Agreement.
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2.2 Inconsistencies. In the event of any inconsistencies
between the terms on a purchase order and the terms of this Agreement, the terms
of this Agreement shall take precedence.
2.3 Prices. Products shall be sold by Xxxx to the Seal Parties
at a price equal to a 16.9% xxxx-up over the total cost of production, which
shall include, but not be limited to, raw materials, direct labor and factory
overhead incurred by Xxxx to manufacture the Products. Prices will be
established by, and go into effect, on the second Monday of each of Xxxx'x
fiscal quarters during the term of this Agreement and will be effective until
the next fiscal quarter. Prices will equal the standard cost of the products
produced plus a variance factor equal to the previous quarters production
variances as a percent of the previous quarters standard cost of production. An
exception to this is required for Xxxx'x first fiscal quarter only. Recognizing
that new fiscal 2002 standard cost will be established at the end of the current
fiscal year and that certain production variances such as fixed overhead
variance and purchased material price variances should be reflected in the new
standard cost, prices for the first fiscal quarter will be equal to the 2002
standard cost of production plus a variance factor equal to production scrap for
the last six months of fiscal 2001 as a percent of standard cost of production
for the same period.
Xxxx shall disclose to the Seal Parties all information regarding their
cost of production for Products.
2.4 Terms of Payment, Shipping and Delivery.
2.4.1. The Seal Parties will pay to Xxxx the full invoice
price of Products not later than thirty (30) days after the receipt of such
Products by the Seal Parties.
2.4.2. Delivery of any and all Products sold by Xxxx to
the Seal Parties hereunder shall be made F.O.B. Statesville, North Carolina.
Risk of loss of the Products shall pass to the Seal Parties upon delivery by
Xxxx of the Products to the carrier. All freight costs shall be paid by the Seal
Parties and all distribution costs, including the cost of warehousing and
handling the Products, shall be paid by Xxxx.
ARTICLE III
Xxxx Warranty
3.1 General Provisions. Xxxx warrants that any and all
Products sold to the Seal Parties hereunder shall, upon delivery be free from
defects in workmanship and materials and shall be in strict accordance with
specifications. Xxxx shall replace or repair, without charge, but at Xxxx'x
option, any Product shown to be otherwise than as warranted, provided that the
Seal Parties give Xxxx notice of such defect within 30 days of receipt of the
Product. The Seal Parties shall inform Xxxx promptly of any warranty claims with
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respect to Products and shall take all reasonable steps in order to avoid
possible claims against the foregoing Warranty. In addition, the Seal Parties
shall make no settlements with any of its customers with respect to warranty
claims which will be binding upon Xxxx without Xxxx'x consent.
3.2 Returns. The Seal Parties shall return Products subject to
warranty claims to Xxxx at the Seal Parties' cost. If such Products are found to
be defective under the warranty, then Xxxx shall reimburse the Seal Parties for
such shipping costs. Notwithstanding the above, if the Seal Parties discover
that Products "out of the box" are defective, then such Products will be
returned to Xxxx at Xxxx'x cost.
3.3 Exclusions. The warranty obligations hereunder shall not
apply to any defects caused by neglect or misuse by the Seal Parties or normal
wear and tear.
ARTICLE IV
Non-Competition
4.1 Non-Competition by Xxxx. Xxxx shall conduct all activities
and operations pursuant to this Agreement in accordance with the terms of its
covenant not to compete as set forth in Section 9.1 of the Purchase Agreement.
ARTICLE V
Term and Termination
5.1 Term. This Agreement shall have a term of one (1) year
commencing on the date hereof (the "Initial Term"). Each of the parties
hereunder may terminate this Agreement without liability to the other parties
hereunder prior to the end of the Initial Term in accordance with Section 5.2.
Unless a terminating party gives notice to the other parties hereunder of its
intention to cause this Agreement to terminate at the end of the Initial Term or
any extension (which notice shall be given in writing at least sixty (60) days
prior to the end of the Initial Term), this Agreement shall automatically be
renewed and continue thereafter for additional one (1) year terms ("Renewal
Term") unless and until terminated by any of the parties hereunder by written
notice sent at least sixty (60) days before the end of any Renewal Term.
5.2 Termination for Cause. Notwithstanding anything to the
contrary set forth above, if any party hereunder shall fail to perform or
observe any material condition or undertaking required to be performed or
observed by it hereunder and such failure shall not have been cured within
thirty (30) days following the giving of notice in writing thereof by any of the
other party hereunder, or if any party hereunder shall be adjudicated bankrupt,
or shall make an assignment for the benefit of or enter into a creditors'
agreement or if a receiver shall be appointed for it, then, and in any such
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case, the other parties hereunder may terminate this Agreement effective at once
by giving notice of termination to the defaulting party.
5.3 Effect of Expiration or Termination of Agreement.
5.3.1. Upon the expiration or termination of the Initial
Term or any Renewal Term in accordance with this Article V, any and all Products
manufactured or otherwise produced by Xxxx which have not been ordered by the
Seal Parties (the "Inventory") shall remain the property of Xxxx and Xxxx shall
bear all costs and other obligations arising out of such Inventory.
5.3.2. Upon the expiration or termination of the Initial
Term or any Renewal Term in accordance with this Article V, Xxxx shall sell or
otherwise dispose of all Inventory in accordance with Section 9.1 of the
Purchase Agreement.
5.4 Other Rights. No party hereunder shall be discharged, by
reason of a termination pursuant to this Article V, from any liability or
obligation to the other party hereunder which shall have accrued prior to such
termination or which by the terms of this Agreement shall continue beyond the
time after which this Agreement shall otherwise no longer be in force.
ARTICLE VI
General
6.1 Notices. All notices, requests for approval and other
communications hereunder shall be in writing and shall be deemed to have been
fully given if delivered or mailed, first class mail, postage prepaid or sent by
a recognized overnight delivery services as follows (or at such other address
for a party as shall be specified by like notice; provided that notices of a
change of address shall be effective only upon receipt thereof):
(i) To Xxxx, as follows:
Xxxx Corporation
One Commerce Square
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx
With a copy to:
Xxxx X. Xxxxxxx, Xx.
Drinker Xxxxxx & Xxxxx LLP
One Xxxxx Square
18th & Cherry Streets
Philadelphia, Pennsylvania 19103
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(ii) To the Seal Parties as follows:
Neschen AG
Xxxx Xxxxxxx Xxxxxxx 0
X-0000 Xxxxxxxxxx
Xxxxxxx
Attn: Xxxxxx Xxxx
With a copy to:
Xxxxxxx Xxxxxxxx, Esq.
Xxxxxxxx & Xxxxxxxx
Four Stamford Plaza
P. O. Xxx 000
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
6.2 Counterparts. This Agreement may be executed in any number
of counterparts, no one of which needs to be executed by the parties, and this
Agreement shall be binding upon the parties with the same force and effect as if
the parties had signed the same document, and each such signed counterpart shall
constitute an original of this Agreement.
6.3 Severability. In the event one or more of the provisions
of this Agreement or any application thereof shall for any reason be held to be
void, illegal or otherwise invalid or unenforceable, the same shall be severed
herefrom and such voidance, illegality, invalidity or unenforceability shall not
affect any other provision of this Agreement and such remaining provisions of
this Agreement and any applications thereof shall be construed as if such void,
invalid, illegal or unenforceable provisions had never been contained herein and
the Agreement so altered shall continue in full force and effect.
6.4 Waivers. Any waiver by any of the parties hereunder of any
rights arising from a breach of any covenants or conditions of this Agreement
shall not be construed as a continuing waiver of other breaches of the same or
other covenants or conditions of this Agreement.
6.5 Assignment. This Agreement shall not be assignable by any
party hereto, except as provided in Section 11.5 of the Purchase Agreement.
6.6 Headings. The descriptive words or phrases at the heads of
the various articles and sections hereof are inserted only for convenience and
for reference and in no way are, or are intended to be, a part of this
Agreement, or in any way define, limit or describe the scope or intent of the
particular article or section to which they refer.
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6.7 Governing Law. This Agreement shall be construed, governed
and enforced in accordance with the laws of the State of Delaware without giving
effect to otherwise applicable principles of conflicts of law.
6.8 Dispute Resolution. All disputes arising out of or in
connection with this Agreement and the transactions contemplated herein shall be
submitted to arbitration pursuant to the Rules of Arbitration of the
International Chamber of Commerce. Such arbitration shall be held in Wilmington,
Delaware and shall be conducted in English by one (1) arbitrator appointed in
accordance with said Rules.
6.9 Force Majeure. Xxxx shall not be responsible for failure
or delay in the delivery of any service or product hereunder caused by act of
God or public enemy, war, government acts, regulations, or orders, fire, flood,
embargo, quarantine, epidemic, labor stoppage or other disruption, accidents,
unusually severe weather, or other cause beyond the control of Xxxx.
6.10 Entire Agreement. This Agreement sets forth the entire
agreement and understanding between the parties hereof with respect to the
purchase and supply of the Products to the Seal Parties and merges all prior
discussions between them and no party hereunder shall be bound by any
definition, condition, warranty or representation other than as expressly stated
in this Agreement or as subsequently set forth in writing and executed by the
party to be bound thereby.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be signed by their duly authorized and empowered representatives as
of the day and year first above written.
SEAL GRAPHICS AMERICAS CORPORATION
By:
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Name:
Title:
SEAL USA CORPORATION
By
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Name:
Title:
SEAL GRAPHICS TECHNOLOGIES CORPORATION
By
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Name:
Title:
XXXX CORPORATION
By
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Name:
Title:
[SIGNATURE PAGE TO PURCHASE AND SUPPLY AGREEMENT (FOAMBOARD)]
