Exhibit 2(h)
PURCHASE AND SUPPLY AGREEMENT (FRAMING CONSUMABLES)
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 HUNT CORPORATION, a Pennsylvania corporation ("Hunt").
RECITALS
WHEREAS, pursuant to an Asset Purchase Agreement, dated of
even date herewith (the "Purchase Agreement"), by and among Hunt, Hunt Holdings,
Inc. and Hunt 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 Hunt (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, the Seal
Parties shall manufacture and supply to Hunt the PrintGuard products and other
framing consumables products for the framing business as set forth on Schedule
1.1 to this Agreement (the "Products"), and Hunt shall provide the Seal Parties
with written orders for Products.
1.2 Budget. In order to aid the Seal Parties 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"),
Hunt shall provide the Seal Parties with a written good faith estimate of the
maximum and minimum quantities that Hunt estimates it will purchase each month
during the upcoming calendar quarter (the "Budget Range"). In the event that the
Seal Parties determine that they may be unable to supply the amounts of Products
set forth in the Budget Range, the Seal Parties shall give notice to Hunt that
it cannot supply the amounts of Products set forth in the Budget Range. The Seal
Parties must give such notice within ten (10) days after receipt of the Budget
Range, and such notice shall set forth the maximum quantity that the Seal
Parties are able to supply during such periods. The parties understand and agree
that the Budget Range reflects Hunt's good faith estimate of its requirements
and is not a binding order. The Budget Range will 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"), the Seal Parties shall supply Products to Hunt in such
quantities as Hunt 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, Hunt shall
purchase its requirements for Products from the Seal Parties during the term of
this Agreement. Notwithstanding the above, in the event that the Seal Parties
are unable to supply the amounts of Products set forth in the Budget Range
established by Hunt pursuant to Section 1.2 or Section 2.1 hereof, Hunt shall be
permitted to purchase from vendors other than the Seal Parties that amount of
Product within the Budget Range that the Seal Parties are 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, Hunt shall submit an order to the
Seal Parties 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
the Seal Parties. The Seal Parties shall accept every order that is within the
Budget Range for the period. In the event that Hunt has reason to believe, as of
the date that an order is given, that the Budget Range has become inaccurate,
Hunt shall deliver an updated Budget Range with the then-current order, which
reflects Hunt's updated good faith estimate of its 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). The Seal Parties may notify Hunt that they
cannot supply the amounts of Products set forth in the revised Budget Range. The
Seal Parties 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
the Seal Parties are able to supply during such periods. The purchase orders
will indicate that they are issued pursuant to this Agreement.
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.
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2.3 Prices. Products shall be sold by the Seal Parties to Hunt
at a price equal to a 15.0% mark-up over the total cost of production, which
shall include, but not be limited to, raw materials, direct labor and factory
overhead incurred by the Seal Parties to manufacture the Products. Prices will
be established by, and go into effect, on the second Monday of each of the Seal
Parties' 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 the Seal Parties' 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 (incurred partially by
Hunt) as a percent of standard cost of production for the same period.
The Seal Parties shall disclose to Hunt all information regarding their
cost of production for Products.
2.4 Terms of Payment, Shipping and Delivery.
2.4.1. Hunt will pay to the Seal Parties the full invoice
price of Products not later than thirty (30) days after the receipt of such
Products by Hunt.
2.4.2. Delivery of any and all Products sold by the Seal
Parties to Hunt hereunder shall be made F.O.B. Basildon, United Kingdom. Risk of
loss of the Products shall pass to Hunt upon delivery by the Seal Parties of the
Products to the carrier. All freight costs shall be paid by Hunt and all
distribution costs, including the cost of warehousing and handling the Products,
shall be paid by the Seal Parties.
ARTICLE III
Warranty
3.1 General Provisions. The Seal Parties warrant that any
and all Products sold to Hunt hereunder shall, upon delivery, be free from
defects in workmanship and materials and shall be in strict accordance with
specifications. The Seal Parties shall replace or repair, without charge, but at
the Seal Parties' option, any Product shown to be otherwise than as warranted,
provided that Hunt gives the Seal Parties notice of such defect within 30 days
of receipt of the Product. Hunt shall inform the Seal Parties promptly of any
warranty claims with respect to Products and shall take all reasonable steps in
order to avoid possible claims against the foregoing Warranty. In addition, Hunt
shall make no settlements with any of its customers with respect to warranty
claims which will be binding upon the Seal Parties without the Seal Parties'
consent.
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3.2 Returns. Hunt shall return Products subject to
warranty claims to the Seal Parties at Hunt's cost. If such Products are found
to be defective under the warranty, then the Seal Parties shall reimburse Hunt
for such shipping costs.
3.3 Exclusions. The warranty obligations hereunder shall
not apply to any defects caused by neglect or misuse by Hunt or normal wear and
tear.
ARTICLE IV
Term and Termination
4.1 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 4.2.
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.
4.2 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 parties 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 case, the other parties hereunder may terminate this Agreement
effective at once by giving notice of termination to the defaulting party.
4.3 Effect of Termination of Agreement. Upon the
expiration or termination of the Initial Term or any Renewal Term in accordance
with this Article IV, any and all Products manufactured or otherwise produced by
the Seal Parties which have not been ordered by Hunt (the "Inventory") shall
remain the property of the Seal Parties and the Seal Parties shall bear all
costs and other obligations arising out of such Inventory.
4.4 Other Rights. No party hereunder shall be discharged,
by reason of a termination pursuant to this Article IV, 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.
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ARTICLE V
General
5.1 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 Hunt, as follows:
Hunt Corporation
One Commerce Square
2005 Market Street
Philadelphia, Pennsylvania 19103
Attn: Donald L. Thompson
With a copy to:
John C. Bennett, Jr.
Drinker Biddle & Reath LLP
One Logan Square
18th & Cherry Streets
Philadelphia, Pennsylvania 19103
(ii) To the Seal Parties as follows:
Neschen AG
Hans Neschen Strasse 1
D-3165 Bueckeburg
Germany
Attn: Stefan Zinn
With a copy to:
William Harnisch, Esq.
Cummings & Lockwood
Four Stamford Plaza
P. O. Box 120
Stamford, Connecticut 06904-0120
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5.2 Counterparts. This Agreement may be executed in any
number of counterparts, no one of which needs to be executed by both 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.
5.3 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.
5.4 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.
5.5 Assignment. This Agreement shall not be assignable by
any party hereto, except as provided in Section 11.5 of the Purchase Agreement.
5.6 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.
5.7 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.
5.8 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.
5.9 Force Majeure. The Seal Parties shall not be
responsible for failure or delay in the delivery of any service or product
hereunder caused by an 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 the Seal Parties.
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5.10 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 Hunt and merges all prior discussions
between them and neither party 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.
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:
HUNT CORPORATION
By
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Name:
Title:
[SIGNATURE PAGE TO PURCHASE AND SUPPLY
AGREEMENT (FRAMING CONSUMABLES)]