Exhibit 10.31
CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN
AFFORDED CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES
EXCHANGE ACT OF 1934. THE OMITTED MATERIALS HAVE BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
DEVELOPMENT, SUPPLY AND
SUBCONTRACTING AGREEMENT
This Development, Supply and
Subcontracting Agreement (the “Agreement”), dated as of
May 30, 2001, is by and between American Bank Note Holographics,
Inc., a Delaware corporation (“ABNH”), with its
principal place of business at 399 Executive Boulevard, Elmsford,
NY 10523, and CFC International, Inc., a Delaware corporation
(“CFC”), with its principal place of business at 500
State Street, Chicago Heights, IL 60411. Each of ABNH and CFC is
sometimes referred to herein individually as a “Party”
and collectively as the “Parties.”
RECITALS
WHEREAS, CFC currently manufactures
coatings and holographic products and with the assistance of ABNH,
has been formulating certain new foil products and coatings for the
use of ABNH for (i) holomagnetic stripes, which are collectively
referred to herein as “Holomag Foils” (Holomag® is
a registered trademark of ABNH);
WHEREAS, ABNH is a manufacturer of
security holograms, and embosses holograms onto hot stamp
foil;
WHEREAS, ABNH has been providing and
wishes to continue to provide to CFC certain proprietary
information and materials of ABNH concerning holography,
ABNH’s foil and coating requirements, the requirements of
ABNH’s customers, and other information consistent with the
intent of this Agreement (“ABNH Proprietary
Information”); and
WHEREAS, ABNH wishes to purchase
from CFC, and CFC wishes to sell to ABNH, the Holomag Foils, and
any improvements thereon that result from information supplied by
ABNH or that were developed on behalf of ABNH, and certain
subcontracting services including new foil formulations, embossing,
coating and applications thereof, and any improvements thereon that
result from information supplied by ABNH or that were developed on
behalf of ABNH (the “Services”), subject to the price,
specifications, customer and authorizing authorities requirements,
scheduling and payment terms (“Terms”) set forth on
Schedules A and B attached hereto.
NOW, THEREFORE, the parties covenant
and agree as follows:
1.
Obligations of
ABNH .
(a)
ABNH agrees to
use reasonable efforts to assist CFC in the development of Holomag
Foils for projects identified by ABNH. Such efforts may include
consultations with CFC technical personnel regarding the
characteristics of the Holomag Foils required by ABNH and its
customers, trials, testing and feedback to CFC.
(b)
ABNH agrees to
submit to CFC Purchase Orders specifying the amount and type of
Holomag Foils it wishes to purchase from CFC, if any, in accordance
with the Terms on a
1
periodic basis, assuming the
Holomag Foils have been accepted for use by ABNH and its
customers.
(c)
ABNH agrees to
remit payment to CFC within 30 days from date of receipt of a valid
invoice.
(d)
It is the intent
for CFC to supply substantially all of ABNH’s HoloMag foil
needs assuming, in ABNH’s sole discretion, CFC meets
ABNH’s and its customers’ requirements of quality,
service, security and delivery.
2.
Obligations of
CFC .
(a)
CFC agrees to use
reasonable efforts to develop and modify the Holomag Foils in
accordance with the specifications provided by ABNH from time to
time. CFC will retain ownership of all such technology developments
and ABNH will retain ownership of its intellectual property and
other Proprietary Information.
(b)
CFC agrees that
the Holomag Foils are being developed and sold for the exclusive
use of ABNH. CFC shall not during the term of this Agreement and
for a period of two (2) years after termination sell or offer to
sell the Holomag Foils or any products incorporating the Holomag
Foils to any third party without the prior written consent of ABNH.
CFC will not, at any time, solicit business from *, *, *, * or *.
With the prior written approval of ABNH, which shall not be
unreasonably withheld, CFC may sell HoloMag to other issuers of
credit cards on behalf of ABNH. In this event, ABNH will still buy
HoloMag foils from CFC and ABNH will set the price and resell to
the customer, but the price will be [*] the price set forth on
Schedule B hereof. CFC agrees to supply the Holomag Foils to ABNH
in accordance with the Terms and Purchase Orders submitted by
ABNH.
(c)
CFC agrees that
during the term of this Agreement, and for a period of two (2)
years after termination, it shall not solicit any client or
customer of ABNH whose business requirements become known to CFC as
a result of this Agreement.
3.
Term and
Termination .
(a)
The term of this
Agreement shall be for five (5) years and shall automatically renew
for successive terms of five (5) years unless either Party provides
the other Party not less than twelve (12) months notice of
non-renewal thereof (the “Term”).
(b)
This Agreement
may be terminated in the event of a commencement of a voluntary or
involuntary bankruptcy proceeding by or against either Party under
the United States Bankruptcy Code or any successor statute; which
proceedings are not dismissed with prejudice within sixty (60) days
after their institution; or upon the assignment of a substantial
part of either Party’s assets for the benefit of its
creditors; or in the event any substantial part of either
Party’s assets or inventory become subject to levy, seizure,
assignment, garnishment or
*Confidential
2
sale for or by any creditor
or governmental agency, unless released, satisfied or otherwise
resolved within thirty (30) days.
(c)
In the event of
material breach of any provision of this Agreement, and
specifically non-payment of invoices not being disputed in good
faith, or any Purchase Order submitted in accordance with this
Agreement, (a “Default”) the defaulting Party shall
have thirty (30) days after receipt of written notice thereof by
the non-defaulting Party within which to cure such default. In the
event such breach has not been cured within such period of time,
the non-defaulting Party may upon notice to the defaulting Party
terminate this Agreement.
(d)
The right to
terminate this Agreement granted hereby shall not prejudice any
other right or remedy of either Party in respect of the Default
concerned or any other Default.
4.
Representations and
Warranties of CFC .
CFC hereby represents and warrants
to ABNH as follows:
(a)
that it has all
requisite corporate power and authority to execute and deliver this
Agreement and to perform fully its obligations hereunder. The
execution and delivery by CFC of this Agreement and the performance
by CFC of its obligations hereunder have been duly and validly
authorized by all necessary corporate action on the part of CFC.
This Agreement has been duly executed by CFC, and this Agreement is
a legal, valid and binding obligation of CFC enforceable against it
in accordance with its terms (except as the enforceability thereof
may be limited by any applicable bankruptcy, insolvency or other
laws affecting creditors’ rights generally or by general
principles of equity, regardless of whether such enforceability is
considered in equity or at law).
(b)
that the Holomag
Foils will be manufactured by CFC in accordance with specifications
set forth on Schedule A, as such Schedule A may be
amended from time to time by mutual agreement of the parties. CFC
agrees to replace at its own expense any HoloMag Foils that are
supplied to ABNH which are not in conformance with the
specifications set forth on Schedule A.
(c)
that the Holomag
Foils will not be manufactured or sold or priced in violation of
any federal, state or local law and that CFC has complied with and
will continue to comply with all laws and conform to all
requirements of each applicable governmental authority with respect
to the supply of the ordered Holomag Foils, including those
concerning the packaging, storage, shipment and exportation of all
or any part thereof, and will ensure that no chemical substance
delivered to ABNH is on the list of prohibited substances described
in any applicable environmental laws. CFC will obtain all federal,
provincial, state, municipal and other government or regulatory
licenses, permits or other documents or permissions that are
required and that are incidental to the sale or shipment of the
ordered materials or items to ABNH.
(d)
that the Holomag
Foils, as manufactured in accordance with the specifications set
forth on Schedule A, are fit for use as holographic magnetic
foils to be used for the applications contemplated by this
Agreement as long as the foils are applied in accor
|
