EXHIBIT 10.19
MITSUI GLOBAL PRECIOUS METALS Sydney o
[LOGO Hong Kong o Tokyo o London o New York
Mitsui & Co. Precious Metals, Inc.
200 Park Avenue
New York, NY 10166
Tel (212) 878-4122
Fax (212) 878-4811
September 24, 2004
AMI Doduco Inc
1003 Corporate Lane
Trevose, PA 19053
Attention: Mr Raymond Matsey
Gentlemen:
We are pleased to confirm that we have entered into the following Consignment
Agreement (the "Agreement") with you as of the date written above.
Consignor: Consignee:
Mitsui & Co. Precious Metals Inc. AMI Doduco Inc
200 Park Avenue 1003 Corporate Lane
New York, NY 10166 Export, PA15632
Telephone: (212) 878-4122 Telephone: (724) 733-8332
Fax: (212) 878-4811 Fax: (724) 325-4007
1. MATERIAL: (a) Silver bars of approximately 1,000 toz each, minimum
99.99% fine, being of a quality acceptable for delivery
on the Commodity Exchange, Inc. ("Comex").
(b) Palladium, Loco Johnson Matthey PA or any other
mutually agreeable location PM 99.95 percent minimum
purity, or
(c ) Rhodium, Loco: Loco Johnson Matthey PA or any other
mutually agreeable location PM 99.9 percent minimum
purity, or
(d) any other material at any other location as mutually
agreed, "Material"
2. NATURE OF Consignee shall, from time to time during the duration
TRANSACTION: of this Agreement, take Material on consignment from
Consignor, whereby the following shall be mutually
agreed upon:
(i) the consignment rate payable with respect to the
requested consignment
(ii) the value of the Material on which Consignment Fees
shall be calculated
(iii) the date on which such Material shall be due to be
purchased or withdrawn from Consignment ("Maturity
Date").
(iv) agreed upon quantities of Material ("Consigned
Material"),
Each Consignment shall be governed by this Agreement
together with the specific terms of each Consignment as
set forth on Consignor's telex or telecopier confirmation
in the form of Exhibit A attached hereto ("Confirmation")
EXHIBIT 10.19
3. PLACE OF Consignee's Plant, or as otherwise agreed.
DELIVERY:
4. DATE OF From time to time, as requested by Consignee.
OF DELIVERY:
5. DURATION: This Agreement shall expire one year from the date on
which this Agreement is signed (the "Termination Date"),
unless at least five (5) Business Days prior to the
Termination Date (or any subsequent Termination Date) the
parties mutually agree to rollover the Agreement for
another one-year period. (Each one-year period being
referred to hereinafter as a "Term" and the Rate to be
applied during such Term.) The Termination Date for such
subsequent Term or Terms shall be as set forth in a
Confirmation.
6. PLACE OF Citibank New York
PAYMENT ABA # 021000089
In favor of: Mitsui & Co. Precious Metals, Inc.
A/C # 3043-5654
7. PLACE OF Place of origination or otherwise agreed.
RETURN
8. RETURN OR PURCHASE
OF CONSIGNED
MATERIAL: Consignee shall return or purchase consigned Material
hereunder as follows:
A. From time to time during the duration of this Agreement, Consignee,
upon notification to Consignor (which notification if oral shall be
confirmed by telex or facsimile) may purchase consigned Material at
a price equal to the product of (i) the number of ounces of
consigned Material being purchased and (ii) the London Fix (or
otherwise agreed ) price per troy ounce (the "Purchase Price.)
Consignee shall pay the Purchase Price within two Business Days of
pricing the Material, in accordance with the provisions of paragraph
6. above.
B. From time to time during the duration of this Agreement Consignee,
upon notification to Consignor and consent of Consignee (which
notification, if oral shall be confirmed by email or facsimile) may
return consigned Material to Consignor at the Place of Return,
provided Consignee pays to Consignor all Consignment Fees accrued to
the date of such return in respect of such consigned Material
9. TERMINATION:
A. Prior to the Termination Date, Consignee may elect one of the
following by written notice to Consignor received at least two (2)
Business Days before the Termination Date.
(i) Consignee shall purchase the consigned Material which has not
been purchased or returned (the "Remaining Material"), at the
Purchase Price, determined as of two Business Days prior to the
Termination Date: or
(ii) Consignee shall return the Remaining Material to the Place of
Return.
B. If the Consignee does not make one of the elections specified above,
all Remaining Material will be deemed purchased by the Consignee on
the Termination Date. The Purchase Price for the
EXHIBIT 10.19
Remaining Material, will be calculated using the formula described
in paragraph 8.A. above, as of two Business Days prior to such
Termination Date.
C. Consignee shall pay the Purchase Price, if any, and any outstanding
Fees on the Termination Date by deposit of immediately available
funds to Consignor's account, as set forth in paragraph 6 .
10. ASSIGNMENT:
Consignor may assign its rights to the Consignment Fee and/or its interest in
and rights to the return of or the purchase of and payment for the Material only
with the prior written consent of Consignee.
11. RISK
All risk of damage to or Loss of Material after delivery to Consignee shall be
assumed by Consignee.
12. ENTIRE AGREEMENT:
This Agreement incorporates the attached Appendix A - Consignment Agreement
Terms and Conditions, and constitutes the entire Agreement of the parties on the
subject matter thereof. This Agreement cancels and supersedes any prior
agreements, offers, proposals and negotiations between the parties.
To signify your agreement hereto, please sign indicated below and return to us a
copy of this letter together with a signed copy of Appendix A attached.
Sincerely yours,
MITSUI & CO PRECIOUS METALS INC.
By: /s/ Tim Gardiner
-------------------------------
Name: Tim Gardiner
Title: President and COO
AGREED:
AMI Doduco Inc
By: /s/ Thomas Considine
---------------------------------
Authorized Signatory
Name: Thomas Considine
-------------------------------
Title: Treasurer
------------------------------
Date: November 1, 2004
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EXHIBIT 10.19
Appendix A
CONSIGNMENT AGREEMENT
TERMS AND CONDITIONS
The provisions of this Appendix are terms and conditions of the Agreement to
which this Appendix is attached.
A. Definitions. The following terms, when used in the Agreement, have the
meanings stated:
1. "Agreement " means the letter agreement for the consignment of
silver between the Consignor and the Consignee evidenced by the
instrument to which this Appendix is attached, when signed by the
Consignor and the Consignee, and this Appendix, when signed by the
Consignee.
2. "Assignee" means an entity to which the Consignor makes an
assignment pursuant to paragraph 10. of the Agreement.
3. "Business Day" means any day except Saturday or Sunday on which
banks in New York City are open for business.
4. "Consignee" means the entity designated as such in the Agreement.
5. "Consignor" means Mitsui & Co. Precious Metals, Inc., a Delaware
corporation.
6. "Fair Market Value" of the Material means an amount equal to the
London Fix (or otherwise agreed) price per troy ounce on the date of
valuation multiplied by the number of fine troy ounces of Material
being valued.
7. "Material" means the quantity of silver, palladium, rhodium or any
other material at any other location as mutually agreed underlying
the Agreement, as specified in paragraphs 1 and 2, of the Agreement.
8. "Guarantor" means Technitrol Inc.
B, Representations, Warranties and Covenants of Consignee and Consignor.
Consignee and Consignor represents, warrants and covenants to each party
as of the time of entering into this Agreement and as of the time of
entering into each consignment hereunder that:
1. it is duly formed, validly existing and in good standing under the
laws or the jurisdiction of its incorporation;
2. it has the corporate power and authority to execute and deliver the
Agreement and to carry out all the provisions thereof;
3. the person signing this Agreement is duly authorized and empowered
to do so;
4. it shall not create, incur, assume or suffer to exist any mortgage
pledge, lien, charge or encumbrance of any nature whatsoever on any
Consigned Material delivered hereunder other than the security
interests granted to Consignor in paragraph D herein;
5. it shall notify Consignor promptly upon the occurrence of any loss,
theft or destruction of the Material hereunder;
EXHIBIT 10.19
6. it shall advise Consignor promptly in writing upon the occurrence of
any default under this Agreement.
C. Consignment Fee. Consignee will pay Consignor the Consignment Fee, based
on the number of days the material is held on consignment, in arrears, as
mutually agreed. Payment of the Consignment Fee shall be in U.S.Dollars in
immediately available funds to Consignor's Place of Payment, as specified
in paragraph 6. of the Agreement, provided that in the event Consignee
shall receive a Notice of Assignment which specifies that Consignor's
rights to the Consignment Fee have been assigned, Consignee shall pay the
Consignment Fee to such place as the Assignee specifies after such
receipt, and shall have no further obligations to the Consignor.
D. Title to Material; Security Interest.
1. At all times from delivery of Material to Consignee under the
Agreement until Material is returned, or purchased and paid for by
Consignee, title to Material shall be in Consignor and at no time
shall Consignee have, or have the ability to create in any third
party, any property interest in the Material. Consignee hereby
authorizes Consignor to take any and all steps necessary or
appropriate to advise third parties that the Material is the
property of the Consignor. Consignee shall permit agents or
representatives of Consignor to inspect, at reasonable hours and
upon reasonable advance notice, the Material and Consignee's books
and records relating directly to ownership of Material, and to make
abstracts or reproductions or such books and records. Consignee will
arrange and maintain insurance coverage on the Silver and will
deliver to Consignor a copy of an insurance certificate issued by
insurer.
2. Consignee agrees to sign such Financing Statements and
Continuation Statements and other documents, in such forms as
reasonably requested by Consignor to evidence Consignor's ownership
of Consigned Material.
E. Return or Purchase of Material. If and to the extent that Consignee elects
or is required to return Material as specified in paragraphs 8B and 9A of
the Agreement, Consignee shall return such Material to Consignor as
specified in the Agreement, provided that in the event this Agreement or
Consignor's rights to and interest in Consigned Material are properly
assigned hereunder, all Consigned Material then or thereafter to be
returned to Consignor under the Agreement shall be delivered to the
account of the Assignee named in the Notice of Assignment, at the address
specified therein, unless Consignee is otherwise instructed in writing by
the Assignee, and Consignee shall have no further obligation to Consignor.
If and to the extent Consignee elects or is required to purchase Material
as specified in paragraphs 8A. and 9. of the Agreement, Consignee shall
pay the Purchase Price to Consignor by depositing two Business Days after
such purchase the amount thereof in U.S. dollars in immediately available
funds to the Place of Payment specified in paragraph 6 of the Agreement,
provided that in the event this Agreement or Consignor's rights to and
interest in Material are properly Assigned hereunder, Consignee shall pay
such purchase price to the Assignee named in the Notice or Assignment, as
specified therein, unless Consignee is otherwise instructed in writing by
the Assignee, and Consignee shall have no further obligation to Consignor.
F. Time of Essence. Consignee and Consignor understand and agree that time is
of the essence in performing all of their obligations hereunder, including
Consignee's obligations to return, or purchase and pay for, Consigned
Material and to pay the Consignment Fee and Consignor's obligation to
deliver material on time.
G. Consideration. The parties mutually acknowledge that their agreement to
this transaction has involved the exchange of goods and valuable
consideration.
EXHIBIT 10.19
H. Events-of-Default. The occurrence or any of the following events shall
constitute an "Event of Default":
1. Consignee's failure to make any payment when due or to return any
consigned Material when due under this Agreement and such failure is
not cured on or before the third Business Day following receipt or
notice of such failure from Consignor;
2. Consignee's failure to perform any other material obligation under
the Agreement or any other agreement between Consignor and Consignee
and such failure is not cured within 30 days following receipt of
notice of such notice from Consignor; or
3. the commencement of any proceedings by or against Consignee under
any law relating to bankruptcy, insolvency or the relief or debtors,
if not stayed or dismissed within 60 days, or the making of an
assignment by Consignee for the benefit of creditors under any law
governing the relationships between debtors and creditors, or the
appointment of a trustee, conservator, liquidator or similar officer
for Consignee on any or all or its property.
I. Liability Upon an Event of Default. If at any time an Event of Default has
occurred and is then continuing, Consignor shall have the right to
terminate this Agreement, except that if an Event of Default under
paragraph H.3. herein should occur, the Agreement shall be deemed to have
been terminated prior to such date. Once the Agreement is terminated, the
parties' obligations to make payments or perform with respect to this
Agreement shall cease, except for the obligations set forth herein.
1. On the date of such termination, Consignee shall be obligated to
Consignor in an amount equal to:
(a) Subject to paragraph 2. below, the Fair Market Value of an
amount of Material equal to the quantity of Material previously
delivered by Consignor under the Agreement and not yet purchased or
returned, if any (the "Remaining Material"), whether or not then
due, on the day on which Consignor declares Consignee to be in
default or as soon thereafter as is reasonably practicable; and
(b) any unpaid amounts which had already accrued but had not yet
been paid under the Agreement; and
(c) any costs of enforcing this agreement, including legal fees,
incurred by Consignor, as a result of an Event of Default.
2. Consignee may, in lieu of making the payment in connection with
subsection 1.a. herein, return to Consignor the Remaining Material
at the Place of Return within one Business Day after Consignor
declares an Event of Default to have occurred, together with payment
to Consignee for Consignment Fees accrued in respect of Remaining
Material to the date of return.
3. Consignor's rights under this Section I., and otherwise provided in
this Agreement, shall be Consignor's sole rights upon an Event of
Default, (whether by agreement, operation or law, in equity of
otherwise). In no event shall Consignee be liable to Consignor for
any special, consequential, indirect or punative damages, including
lost profits.
J. Governing Law, Submission to Jurisdiction. The Agreement shall in all
respects be governed by and construed in accordance with the laws of the
Commonwealth of Pennsylvania applicable to contracts
EXHIBIT 10.19
made and to be performed within the Commonwealth of Pennsylvania. The
parties hereto consent to the jurisdiction and venue of the courts of the
Commonwealth of Pennsylvania or the courts of the United States sitting in
the Commonwealth of Pennsylvania in connection with any controversy or
dispute arising out of or related to this Agreement.
K. Reimbursement of Taxes, Etc. Consignee shall promptly reimburse
Consignor for all taxes (except taxes on Consignor's income), levies,
imposts, duties, charges, costs and fees incurred in connection with
delivery of Material to Consignee and shall indemnify Consignor against
any and all such liabilities. If Consignee shall be required to withhold
any taxes or similar charges from any Fee, Purchase Price, interest on any
Purchase Price or other amount payable hereunder, Consignee shall pay
Consignor such amount so that after any and all such withholding or
deduction Consignor shall receive the amount or such payment herein
provided for, had no such withholding or deduction been required.
Consignee may present Consignor evidence of an exemption for such
withholding or deduction and Consignor shall not withhold or deduct and
such amounts.
L. Amendments; No Waiver. The Agreement shall not be amended, or in any
way modified, except by a writing signed by the parties hereto and any
Assignee. No waiver of any provision of the Agreement may be implied from
any course of dealing by either party or any Assignee or from any failure
by either party or any Assignee to assert its rights on any occasion or
series of occasions.
M. Notices. All notices under the Agreement shall be given by certified or
registered mail or courier, postage prepaid, or by email or telecopy with
confirmation to the respective parties hereto at the address of such party
specified on the first page of the Agreement or at such other address as
either party shall designate for itself by written notice to the other
party hereto. All notices shall be sent to the attention of:
in the case of the Consignor, Mr R. Timothy Gardiner
and in the case or the Consignee, Mr Raymond Matsey
All notices to a party hereunder shall he deemed received when delivered
at the address for such party specified above during normal business
hours. Normal business hours shall be from 9:00 a.m. to 5:00 p.m., New
York time, on any Business Day.
N. Consignor Has No Responsibility for Recommendations: Consignee
represents that it did not enter into the Agreement, and agrees that it
shall not hold Consignor responsible for losses sustained by Consignee, as
a result or any prediction or recommendation made by any representative of
Consignor.
O. Force Majeure: Each party's performance of its obligations hereunder is
subject to suspension by reason of events of Force Majeure, which shall
include strikes, boycotts, fires, floods, other natural disasters, wars,
interruptions in transportation, requirements or regulations of
governmental agencies, and all other disabling causes without regard to
the foregoing enumeration beyond control of the party. Affected party's
obligations shall be suspended so long as any such cause prevents or
delays its performance. In the event of any occurrence interrupting or
reducing the operations of mines or plants where items covered hereby are
produced or processed or any other occurrence beyond Consignor's
reasonable control affecting Consignor's ability to perform hereunder,
delivery may, at Consignor's option, be deferred so long as the condition
prevents or delays performance, provided Consignee shall have the right to
terminate any outstanding orders upon notice of the Force Majeure. After
termination of any such contingency, Consignee may accept delivery in the
regular course, but shall have no obligation to accept delivery, and
Consignor shall not be liable for any delay. In the event of suspension,
interruption or termination of delivery by Consignor for a period in
excess of thirty (30) days, then Consignee may terminate this Agreement
upon five (5) days' written notice, and upon termination Consignee shall
have no further liability or obligation hereunder except for any payments
of obligations due up to such date of termination.
P. Late Payment: Any sum by Consignee if not paid when due shall bear
interest, compounded daily, from its due date until the actual date of
payment at a rate equal to Citibank N.A.'s publicly announced
EXHIBIT 10.19
prime rate per annum, plus 0.75% per annum, from time in time in effect
during the period (but not more than the highest amount at the time
permitted by law).
Q. Severability: In the event any provision or the Agreement shall be held
invalid or unenforceable by a court or competent jurisdiction, such
holding shall not invalidate or render unenforceable any other provisions
hereof.
AGREED:
AMI Doduco Inc
By: /s/ Thomas Considine
-----------------------------------
Authorized Signatory
Name: Thomas Considine
Title: Treasurer
Date: November 1, 2004
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