Exhibit 10.1
SUPPLY AGREEMENT
THIS SUPPLY AGREEMENT (this “Agreement”) is made and entered into as of June 1,
2009 (the “Effective Date”), by and between Sun Chemical Corporation, a Delaware
corporation, and its affiliates (“Sun”), and Graphic Packaging International,
Inc., a Delaware corporation (“GPI”).
Background
Sun and GPI have entered into an Asset Purchase Agreement dated May 20, 2009
(the “Asset Purchase Agreement”) pursuant to which Sun has agreed to buy certain
of the assets of certain of GPI’s subsidiaries engaged in the manufacture,
marketing and supply of certain printing inks, artists inks, coatings, varnishes
and alkyds (the “Business”) to internal and third-party customers (the “Asset
Purchase”). In connection with the Asset Purchase, Sun desires to sell and GPI
desires to purchase certain ink and related products (as defined below) on the
terms and conditions set forth in this Agreement.
Agreement
In consideration of the mutual representations, warranties, covenants and
agreements contained in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. Product Supply.
A. Subject to the terms and conditions of this Agreement, GPI agrees to
purchase, and Sun agrees to supply the products set forth in Appendix A attached
hereto (the “Products”) for any combination of GPI’s facilities in North
America, for the term of this Agreement. Notwithstanding the foregoing, GPI
shall not be obligated to purchase any particular Product until such product has
been qualified for supply to GPI, which qualification GPI shall determine in
accordance with GPI’s policies and practices (such qualified Product is referred
to herein as “Qualified Product”) provided that such failure to qualify is
solely attributable to the fault of Sun. It is agreed and understood by the
parties that GPI shall use reasonable commercial efforts to facilitate and
effect timely and prompt qualification of the Products at each of its facilities
having requirements for such Products and to cooperate with Sun as reasonably
required to achieve such prompt qualification of Products.
B. GPI may also purchase, and Sun may sell, such other items (“Additional
Products”) as may be mutually agreed upon by the Parties pursuant to mutually
satisfactory terms and conditions; provided that any purchases by GPI of such
Additional Products from Sun will be deemed to count toward the Minimum
Aggregate Purchase Amount, the Minimum Annual Purchase Amount, the purchase
thresholds necessary to achieve a specified rebate rate or percentage and the
purchase volumes eligible for rebates.
2. Term.

A. The term of this Agreement (“Term”) shall begin as of the Effective Date and
shall expire on June 30, 2017 unless earlier terminated automatically or by one
of the parties as provided by the terms of this Agreement. It is the desire of
the Parties to make the Agreement anniversary

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date fall on July 1 of each year of the Term so as to coincide with the start of
the third calendar quarter of each year; thus, the initial year of this
Agreement will begin on the Effective Date and will terminate on June 30, 2010
so that the successive terms thereafter will run from July 1 to June 30 for the
seven years after the initial year, with the period commencing on the Effective
Date and terminating on June 30, 2010, and each of the seven twelve-month
periods commencing on July 1 thereafter during the Term referred to herein as a
“Contract Year”.
B. Notwithstanding the foregoing, if GPI has not purchased the Minimum Aggregate
Purchase Amount over the Term, unless terminated early pursuant to Section(s) 20
below, then the Term shall be extended through and until such time as GPI’s
purchases of Qualified Products and Additional Products equals or exceeds the
Minimum Aggregate Purchase Amount. The “Minimum Aggregate Purchase Amount”
means, initially, the aggregate amount paid to Sun by GPI for purchases of
Qualified Products and Additional Products hereunder equal to $[*], exclusive of
rebates, taxes, duties and other charges; provided, however, that the Minimum
Aggregate Purchase Amount shall be updated and adjusted during the Term, as
follows: At the time of every price adjustment made pursuant to Appendix B, the
parties shall calculate the “Remaining Minimum Purchase Amount” by subtracting
from the Minimum Aggregate Purchase Amount then in effect the sum of (i) the
total amount of prior sales of Products and Additional Products plus (ii) the
total amount of other credits against the Minimum Aggregate Purchase Amount per
Sections 3B and 8B all as of the date of the price adjustment (all of the
foregoing prior sales and credits collectively referred to herein as “Prior
Purchase Credits”). A “Revised Remaining Purchase Amount” shall be calculated by
multiplying the Remaining Minimum Purchase Amount by the sum of (i) the number
one (1) plus the Weighted Average Price Change (as calculated pursuant to
Appendix B) at the time of such price adjustment. For the avoidance of doubt, if
the Weighted Average Price Change represents an overall price decrease, the
Weighted Average Price Change shall be deemed to be a negative number. The new
Minimum Aggregate Purchase Price shall be an amount equal to the Revised
Remaining Purchase Amount plus (ii) the Prior Purchase Credits. At the time of
every price adjustment, Sun shall inform GPI in writing of the new Minimum
Aggregate Purchase Amount.
3. Pricing, Quantity, Rebates and Audit. The consideration for GPI’s execution
of this Agreement in conjunction with the Asset Purchase Agreement shall be [*]
($[*]) in cash (the “Incentive Payment”). On the date hereof, Sun shall wire to
GPI, in immediately available funds to an account designated in writing by GPI,
the Incentive Payment. The Incentive Payment shall be fully refunded to Sun,
without interest, within fifteen (15) business days after any valid termination
of the Asset Purchase Agreement. The Incentive Payment shall become
nonrefundable at the time that the Asset Purchase is completed.
A. Pricing for Products as well as the mechanism for making future price
adjustments shall be as set forth in Appendix B attached hereto and incorporated
herein by reference.
 

[*]   CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.

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B. In each of the first seven years of the Term, GPI will purchase from Sun at
least 95% of GPI’s Annual Organic Requirements for Qualified Products and in the
eighth year of the Term, GPI will purchase from Sun at least 75% of GPI’s Annual
Organic Requirements for Qualified Products. Notwithstanding the foregoing, GPI
shall purchase no less than the Minimum Aggregate Purchase Amount during the
Term. Sun and GPI agree that GPI may purchase less than 95% of its Annual
Organic Requirements for any Product that is not a Qualified Product as of the
first day of the applicable contract year, provided that failure to qualify such
Product is solely attributable to the fault of Sun; and further agree that, in
such instance, the percentage of Annual Organic Requirements of such Product(s)
qualified after the first day of the Contract Year which GPI shall be required
to purchase hereunder shall be prorated based on the date on which qualification
is achieved. If Sun cannot supply Qualified Product after December 31, 2009, for
reasons solely attributable to the fault of Sun, and GPI makes purchases of such
Product from a third party, such purchase will be deemed to count toward the
Minimum Aggregate Purchase Amount, the Minimum Annual Purchase Amount, and the
purchase thresholds necessary to achieve a specified rebate rate or percentage,
but shall not be counted toward calculated purchase volumes eligible for
rebates. “Annual Organic Requirements” means the annual requirements for Product
that are generated by the businesses owned by GPI as of the date hereof as the
same expand or contract or otherwise may be modified during the Term; provided,
however, for the avoidance of doubt, Annual Organic Requirements shall not
include (i) New Applications for Product in accordance with Section 12 unless
such New Applications become Qualified Products; and (ii) the requirements of
any business acquired by GPI from a third party (an “Acquired Business”).
C. Upon Sun’s request, GPI shall provide an officer’s certificate to Sun within
60 days of the end of each contract year certifying as to whether the percentage
of Qualified Products purchased from Sun satisfied the requirements of this
provision, and Sun shall have the right, no more frequently than once per
contract year and during regular business hours in a manner not disruptive to
GPI’s ordinary course of business, to have a mutually agreeable independent
third party audit GPI’s purchases to determine satisfaction of the requirements
of this provision. In the event that any such audit concludes that GPI has
satisfied such purchase requirements, the cost of such audit will be at Sun’s
expense; if not, such cost will be borne by GPI.
D. In the event of a dispute over whether the failure to qualify any Product(s)
is solely attributable to the fault of Sun, or instead attributable to the
failure of GPI to use commercially reasonable efforts to facilitate and effect
timely and prompt qualification at any or all of its facilities, the parties
shall endeavor in good faith to resolve the dispute. In the event that they are
unable to do so within thirty (30) days after one party notifies the other in
writing of the existence of such dispute, the parties shall retain a mutually
acceptable independent third party technical advisor (“Technical Advisor”) with
recognized experience and expertise in the inks and printing industry to resolve
the dispute. The parties shall afford Technical Advisor such access as Technical
Advisor may reasonably require during regular business hours, in a manner not
disruptive to the parties’ ordinary course of business and under provisions of
confidentiality mutually acceptable to the parties, to their facilities,
personnel, processes, products, equipment and information to the extent
necessary to resolve the dispute. In the event that Technical Advisor determines
that a disputed failure to qualify is solely attributable to the fault of Sun,
fees

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and costs of Technical Advisor’s services shall be borne by Sun. In the event
that the Technical Advisor determines that the failure to qualify is solely
attributable to the fault of GPI, fees and costs shall be born by GPI. In the
event that the Technical Advisor determines that the failure to qualify is
attributable to both parties, the fees and costs shall be born by the parties in
the proportion of their fault as determined by the Technical Advisor. The
decision of the Technical Advisor shall be final and shall be binding upon the
parties.
E. GPI shall be entitled to retain a mutually agreeable independent party to
audit Sun’s determination of the Margin for 2008 under obligations of
confidentiality satisfactory to Sun in accordance with Appendix B. In addition,
GPI shall have the right, no more frequently than once per contract year and
during regular business hours in a manner not disruptive to Sun’s ordinary
course of business, to have a mutually agreeable independent third party audit
any price adjustments made by Sun under obligations of confidentiality
satisfactory to Sun in accordance with this Agreement. In the event that any
such audit concludes that the actual price increase should have been an amount
greater than [*] or that the actual price decrease should have been an amount
greater than [*] (in either case, a “Significant Overcharge”), the cost of such
audit will be at Sun’s expense; if not, such cost will be borne by GPI. Sun
shall promptly, but in no event more than ten (10) days after the determination
of any overcharge, refund to GPI any amounts overpaid by GPI with respect to any
Qualified Product purchased since the date the applicable price change was
implemented by Sun.
F. Except as set forth below, on or before the thirtieth day following the end
of each of the first three quarters during each calendar year during the Term,
Sun will pay to GPI a quarterly rebate amount in cash or credit, at the election
of GPI, based on purchase volumes for Qualified Products and Additional Products
during such quarter, calculated as set forth below (a “Quarterly Rebate
Amount”):

      Total Purchase Volumes for Quarter   Quarterly Rebate Rate [*]   [*]      
[*]   [*]       [*]   [*]       [*]   [*]       [*]   [*]       [*]   [*]      
[*]   [*]

 

[*]   CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.

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No later than thirty (30) days following the expiration of each calendar year
during the Term, with the exception of year 2009, Sun will pay to GPI an Annual
Rebate Amount in cash or credit, at the election of GPI, based on purchase
volumes for Qualified Products and Additional Products during such preceding
calendar year, in an amount, if any, equal to (A) the Annual Rebate Amount (as
defined below) less (B) the total of the Quarterly Rebate Amounts paid to GPI
for the first three quarters of such preceding calendar year, if a positive
number. If the total of the rebates paid to GPI for the first three quarters of
such calendar year exceeds the Annual Rebate Amount owed to GPI for such
calendar year, then GPI shall pay to Sun, within such thirty (30) day period,
the amount by which the sum of the Quarterly Rebate Amounts for the first three
quarters exceeds the Annual Rebate Amount earned for such calendar year or, at
Sun’s discretion, this amount will be deducted from the following quarterly
rebate payment(s) until it is fully depleted. The Annual Rebate Amount shall be
calculated as follows:

      Total Purchase Volumes for Calendar Year   Annual Rebate Amount [*]   [*]
      [*]   [*]       [*]   [*]       [*]   [*]       [*]   [*]       [*]   [*]
      [*]   [*]

In calendar year 2017, the regular Quarterly Rebate Amounts shall be paid in the
first and second quarters. If this Agreement terminates as scheduled on June 30,
2017, no Annual Rebate Amount shall be paid. If this Agreement is required to
continue after June 30, 2017 in accordance with Section 20, the regular
quarterly rebates and annual rebates shall continue for the remainder of the
Agreement, and in any partial calendar year the Quarterly Rebate Amounts will be
paid but no Annual Rebate Amount shall be paid.
Notwithstanding anything to the contrary in the foregoing, Quarterly Rebate
Amounts for the third and fourth quarters of calendar year 2009 shall be
calculated in accordance with the provisions of Appendix C attached hereto and
incorporated herein by reference.
The sum of any Quarterly Rebate Amounts payable in the third and fourth quarters
of calendar years 2009 is referred to herein as the “Initial Rebate Amount.”
 

[*]   CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.

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On or before January 31, 2010, Sun and GPI shall agree to the total volume of
Qualified Product and Additional Products purchased by GPI during the calendar
year 2009, whether or not such Qualified Products or Additional Products were
purchased pursuant to this Agreement, and Sun shall pay to GPI an amount, if
any, equal to (A) the 2009 Rebate Amount (as defined below) less (B) the Initial
Rebate Amount. The 2009 Rebate Amount shall be calculated as follows:

      Total Purchase Volumes for 2009   2009 Rebate Amount [*]   [*]       [*]  
[*]       [*]   [*]       [*]   [*]       [*]   [*]       [*]   [*]       [*]  
[*]

G. Unless otherwise specified herein, rebates, payments for purchases hereunder
and any other payments owed by one party to another hereunder may be made by ACH
transfer to an account designated in writing by the party receiving such
payment.
4. Payment Terms. Payment terms are net 60 days. Interest at the rate of 1% per
month will be charged on all past due amounts up to thirty (30) days past due,
and at the rate of 2% per month on all amounts past due longer than thirty
(30) days. Sun agrees all payment terms are dependent on accurately invoicing
GPI. As such, payment terms begin upon receipt of an accurate invoice by GPI
from Sun. If an invoice is incomplete or inaccurate, GPI will pay all undisputed
amounts within terms according to the original invoice date, but will not be
held in default for non-payment of disputed items until the dispute has been
resolved and any inaccurate or incomplete invoices have been corrected by Sun.
Products provided on a consignment basis shall be billed monthly once the
container is opened.
5. Shipment and Delivery. Subject to Section 16, Sun agrees to deliver Qualified
Products on or prior to the agreed-upon delivery dates and if any shipment or
delivery is made which is not in all material respects in accord with this
Agreement (including time of shipment or delivery), GPI reserves the right to
reject such delivery without liability to Sun, and, in the absence of an event
 

[*]   CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.

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of force majeure such rejected volumes shall be included in calculating GPI’s
rebate percentages, but not purchase volumes eligible for rebates. Sun will ship
the Products in a manner consistent with general industry practice so as to
minimize any damage while in transit. GPI is not responsible for any charge for
packing, boxing, storage or cartage.
6. Passage of Title.
A. Unless otherwise specifically agreed to by the parties, all Qualified Product
will be purchased on consignment. With respect to Product sold by consignment,
Sun agrees to deliver to GPI’s facility or facilities and GPI agrees to accept
Products. Sun will remain the owner of the Products until said Products are
purchased by GPI pursuant to the terms of this Agreement. Either the actual use
of the Product or its removal from the Storage Area (defined hereinafter), as
applicable, shall be deemed the time of purchase of such Product under this
Agreement. GPI shall receive and accept delivery of the Products, and safely
store them as Sun’s property at Buyer’s applicable place of business (the
“Premises”), so as to reasonably protect the Products from loss, damage or
deterioration. All such Products shall prominently bear Sun’s name and shall be
conspicuously marked and identified as being the property of Sun. GPI shall
designate a storage area (“Storage Area”) on the Premises solely for storage of
Sun’s Products. The Products in the Storage Area located at the Premises shall
be physically segregated from and not commingled either with GPI’s inventory or
other property or with the property of any other person, and GPI agrees to
execute such financing statements and other documents as Sun may reasonably
require to perfect Sun’s security interest in, and to give notice of and confirm
it’s ownership of, the Products to which Sun retains title.
B. With respect to any Qualified Product not sold by consignment, title to all
items sold to GPI hereunder shall pass to GPI upon delivery of same by Sun to
GPI DDU designated GPI converting facility (Incoterms 2000). All risk of loss or
damage to said items prior to such delivery shall fall upon Sun, and Sun shall
defend and hold GPI harmless against any claims asserted against GPI on account
of any personal injury or property damages caused by any transported materials,
or by the transportation thereof, prior to the completion of unloading at GPI’s
plant.
7. Material Specifications. All Qualified Products sold by Sun to GPI will
comply with the material specifications attached hereto as Appendix D and
incorporated herein by reference (“Specifications”).
8. Inspection; Non-Conforming Goods.
A. GPI shall have the right, but not the obligation, to inspect at any location
and at any time all Qualified Products, and to reject that which does not
conform to Specifications, or if not so specified, which do not conform to
standard industry specifications (“Non-Conforming Goods”). GPI may make returns
of Non-Conforming Goods to Sun at Sun’s expense and may purchase replacement
goods from third parties in accordance with Section 8B. No such inspection by
GPI shall in any manner affect any of the warranties of Sun or constitute a
waiver of any of GPI’s rights hereunder or otherwise, and all items are subject
to GPI’s inspection and right to reject notwithstanding prior payment.

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B. Upon determining that any Qualified Product supplied hereunder constitutes
Non-Conforming Goods, GPI shall notify Sun and may contact third-party suppliers
with respect to their ability to supply replacement Products meeting the
Specifications (“Replacement Products”). GPI may obtain Replacement Products
from Sun or a third-party supplier, whichever GPI in its sole discretion
determines is able to deliver such Replacement Products in the shortest amount
of time. Replacement Products supplied by Sun shall be supplied at Sun’s sole
cost and expense. For Replacement Products supplied by a third party, (i) GPI
shall receive a credit in the amount paid to Sun for such Non-Conforming
Product, if applicable; and (ii) purchases of Replacement Products from third
parties shall be treated as if purchased from Sun for the purpose of calculating
the Minimum Aggregate Purchase Amount, Minimum Annual Purchase Amount, and
Quarterly Rebate threshold. GPI shall continue to count Replacement Product
toward the calculations of the Minimum Aggregate Purchase Amount, Minimum Annual
Purchase Amount and Quarterly Rebate threshold (but not volumes eligible for
rebates) until Sun can produce Qualified Product once again.
C. Sun acknowledges that it will provide GPI with thirty (30) days notice before
making changes in raw materials or processes used by Sun in the manufacture of
any Product or Additional Product to the extent required by, and pursuant to the
terms of, the Management of Change Process attached hereto as Appendix E.
Regardless of whether notice is required under the Management of Change Process,
Sun agrees to maintain a log of all raw material or process changes made by Sun
in the manufacture of any Product or Additional Product, which log may be
consulted by GPI upon GPI’s request.
9. Business and Technical Support/In-Plant Technicians/Testing. In partial
consideration of GPI’s commitment hereunder, Sun shall provide the following
services at no additional cost to GPI:

  (a)   The services of a dedicated business manager, as more specifically
described in Appendix F, attached hereto.     (b)   The services of technical
support, Black Belt and Color Manager personnel, as more specifically described
in Appendix G, attached hereto.     (c)   Quarterly testing of inks as required
by GPI. Original testing will be performed by Nancy Plowman and Associates.
Future testing may be revised upon mutual consent of both parties.     (d)  
Additional support services currently provided by the Handschy business as set
forth in Appendix H.

     GPI shall provide, at no charge, a safe and appropriate area close to the
pressroom, including desk, file cabinets, work table, telephone and such other
amenities as Sun may reasonably request to enable it to provide its in-plant
services. GPI will also provide, at no charge, heat, light, power and other
services for Sun’s in-plant services.
10. Equipment. In partial consideration of GPI’s commitment hereunder, Sun shall
provide and maintain all in-plant equipment necessary to perform its obligations
hereunder, as set forth in Appendix I. Ownership of such equipment will remain
with Sun, and such equipment will be labeled “property of Sun Chemical.” GPI
agrees to execute such financing statements and other

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documents as Sun may reasonably require to perfect Sun’s security interest in,
and to give notice of and confirm it’s ownership of, the Equipment to which Sun
retains title.
11. Profit Sharing Productivity Program. GPI and Sun agree that they shall use
their commercially reasonable efforts to implement a profit sharing productivity
program and to allocate the cost-savings realized from such program in the form
and as set forth in detail on Appendix J, attached hereto.
12. New Technology.
A. Sun will, to the extent that it is legally free to do so, provide GPI with
prompt notice on any new developmental breakthroughs developed by Sun and ready
for commercial use concerning the Products (“New Technology”), under such terms
of confidentiality as may be required by Sun, in its sole discretion. In
addition, Sun will provide a technology innovation presentation twice a year
during the Term which outlines, on a confidential basis, its ink development
programs concerning the Products. For any New Technology that GPI wishes to
pursue with Sun, Sun and GPI will use reasonable commercial efforts to qualify
products embodying New Technology as Qualified Products to be supplied to GPI
pursuant to the terms of this Agreement. In addition, where Sun is legally free
to do so, the parties agree to negotiate in good faith mutually satisfactory
agreements pursuant to which Sun would supply the New Technology exclusively to
GPI, and not to any other customer of Sun, for a period of time to be determined
by the parties.
B. GPI will provide to Sun, on a confidential basis, the opportunity to supply
all Product developments for New Applications. A “New Application” means, with
respect to any product: (i) an ink or coating that allows for a new performance
enhancement (e.g., gloss, metallic) or application (e.g., coating that provides
barrier) that is not commercial as of the signing of this Agreement; or (ii) a
new ink or coating that allows production of an existing capability with a new
process (e.g., HTL labels run flexo); provided, however, for the avoidance of
doubt, New Applications for Product shall not be considered part of GPI’s Annual
Organic Requirements unless such New Applications are, upon mutual agreement of
the parties,, qualified for such New Applications following which they will be
deemed “Qualified Products” with respect to such New Applications. If not so
qualified, they will be deemed “Additional Products”, as defined above. GPI will
use Sun as the vendor of choice for New Applications of Product so long as the
pricing and performance of the Product in the New Application is competitive; if
not competitive, GPI shall have the right to source the Product for the New
Application outside of this Agreement without penalty.
13. Indemnity.
A. Sun shall indemnify, defend, protect and hold harmless GPI, its employees,
agents, servants, successors and assigns from and against any and all losses,
damages, injuries, claims, demands, expenses, including legal fees and expenses,
of whatever nature, arising out of the performance by Sun of its obligations
hereunder, or arising out of the performance of the services provided by or on
behalf of Sun for GPI hereunder resulting in injuries to or death of any person
or persons or damage to any property occasioned by acts or omissions of Sun, its
officers, employees, agents

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or subcontractors, except to the extent due to the negligent or intentional acts
of GPI or its personnel.
B. GPI shall indemnify, defend, protect and hold harmless Sun, its employees,
agents, servants, successors and assigns from and against any and all losses,
damages, injuries, claims, demands, expenses, including legal fees and expenses,
of whatever nature, resulting from injuries to or death of any Sun in-plant
personnel at GPI’s facilities or locations resulting from the negligence or
willful misconduct of GPI.
C. Sun shall indemnify, defend, protect and hold harmless GPI, its employees,
agents, servants, successors and assigns from all costs, expenses, including
reasonable attorneys’ fees, damages or claims arising out of infringement or
claim of infringement of any patent rights, trademark, tradename or copyright
based on the sale, purchase or use of the items covered by this Agreement. Sun
further agrees that in the event of any such claim, and if required by GPI, Sun
shall at its expense and at no cost to GPI do one of the following:

  (i)   Procure for GPI the right of license to use and continue to use said
items; or     (ii)   Replace said items with non-infringing items and/or
services of like or superior kind, productivity, efficiency, quality and value;
or     (iii)   Modify said items so as to become non-infringing. Should the
items be modified, as provided herein, such modification shall not reduce the
usefulness or productivity of same.

14. Limited Warranty/Limitation on Liability.
A. Sun expressly warrants that title to all items sold to GPI under this
Agreement will pass to GPI free and clear of all liens, claims, security
interests or encumbrances and that no materials, equipment or supplies
incorporated into any items sold to GPI hereunder will have been acquired by Sun
subject to an agreement under which any interest therein or any encumbrance
thereon is retained by Sun which will survive delivery to GPI.
B. Sun expressly warrants that the Products sold hereunder shall conform to the
Specifications and shall be free from defects in materials or workmanship.
Equipment supplied pursuant to Section 10 of this Agreement is provided subject
to the manufacturer’s standard warranty. SUN HEREBY DISCLAIMS ANY AND ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR USE OR PURPOSE. IN THE EVENT OF
FAILURE OF ANY PRODUCT TO CONFORM TO THE WARRANTY PROVIDED HEREIN, SUN’S SOLE
OBLIGATION, AND GPI’S RIGHT, SHALL BE FOR SUN TO REPLACE SUCH NON-CONFORMING
PRODUCT OR REFUND THE PURCHASE PRICE. IN ADDITION, SUN WILL INDEMNIFY AND HOLD
HARMLESS GPI FOR DAMAGES DIRECTLY SUSTAINED OR INCURRED BY GPI RESULTING FROM A
BREACH OF THE WARRANTY PROVIDED HEREUNDER, INCLUDING WITHOUT LIMITATION COSTS OF
RE-WORK, DISPOSAL, RAW MATERIALS AND LABOR. IN NO EVENT SHALL SUN BE LIABLE TO
GPI FOR ANY OTHER CLAIMS (EXCEPT AS SPECIFICALLY PROVIDED IN SECTION 13, ABOVE),
REGARDLESS OF THE FORM OF ACTION, OR

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FOR ANY OTHER DAMAGES WHETHER INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL,
INCLUDING BUT NOT LIMITED TO LOST PROFITS, WHETHER FORESEEABLE OR NOT, EVEN IF
SUN HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
15. Independent Contractor. Sun agrees that in the performance of this
Agreement, Sun shall act as an independent Contractor and all of its agents, and
employees, and agents and employees of its subcontractors, shall be subject
solely to the control, supervision and authority of Sun.
16. Force Majeure. Neither party shall be liable for delay in its performance of
its obligations and responsibilities under this Agreement due to causes beyond
its control such as, but not limited to, war, embargo, national emergency,
insurrection or riots, acts of the public enemy, fire, flood or other natural
disaster, (a “Period of Disability”) provided that said party has taken
reasonable measures to notify the other, in writing, of the delay or anticipated
delay. Failure of subcontractors and inability to obtain materials shall not be
considered a Period of Disability for purposes of this clause. If, due to a
Period of Disability, Sun should be unable to meet all of its delivery
commitments for items ordered hereunder as they become due, Sun shall not
discriminate against GPI or in favor of any other customer in making deliveries
of such items. If GPI believes that the Period of Disability or anticipated
Period of Disability as notified in writing by Sun may impair its ability to
meet its production schedules or may otherwise interfere with its operation, GPI
may at its option and without liability to Sun, cancel outstanding deliveries or
future orders hereunder wholly or in part during the Period of Disability; any
purchases made by GPI from alternative providers during any Period of Disability
of Sun shall nevertheless be credited towards GPI’s annual volume purchasing
with Sun for the sole purpose of determining rebate rate (but not sales volume
eligible for rebate), with appropriate documentation of the purchases from GPI.
If Sun’s Period of Disability lasts beyond 60 days, or if Sun notifies GPI that
it anticipates the Period of Disability to last beyond 60 days, GPI may, at its
option, cancel all or a portion of this Agreement in writing without liability
to Sun.
17. Compliance with Law. A. GPI hereby notifies Sun that, if covered, Sun has an
obligation to develop and maintain an affirmative action program in compliance
with EO 1246, as amended, the Rehabilitation Act of 1973, as amended, the
Vietnam Era Readjustment Act of 1974. Sun represents to GPI that, if covered, it
is in compliance with EO 11246, as amended, the Rehabilitation Act of 1973, as
amended, and the Vietnam Era Readjustment Act of 1974. The mandatory clauses
required under those laws, being set forth in 41 CFR 60-1.4(a), 41 CFR
60-250.4(a). 41 CFR 60-741.4(a) are incorporated herein by reference.
B. Sun (1) is required to meet the filing requirements of 41 CFR 60-1.7(a) and
41 CFR 61-250.11, if applicable, (2) hereby certifies that it currently observes
and will hereafter observe all requirements pertaining to non-segregated
facilities set out in 41 CFR 60-1.8(b), (3) will list, to the extent legally
required, all suitable employment openings with the appropriate state employment
service pursuant to 41 CFR 60-250.5(d), and (4) will make and/or retain all
records required by state and federal laws.
C. Sun currently observes and will continue to observe the requirements of the
Drug-Free Workplace Act of 1988.

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12

D. Sun will comply with all provisions of the OSHA Hazard Communication Standard
(20) CFR 1910.1200, et seq.) including Sun’s obligation to furnish any
applicable material safety data sheets, together with appropriate labels and
employee training and instruction materials.
E. Sun will comply with requirements of the Fair Labor Standards Act of 1938, as
amended, and all applicable United States Department of Labor Regulations
promulgated thereunder or otherwise dealing with wages and hours of work, and
shall certify at time of delivery said compliance.
F. Sun shall not, under any circumstances, in connection with the work to be
performed hereunder, cause or permit the discharge, emission, release, storage,
disposal or transportation of any pollutant, hazardous contaminant, toxic or
other substance in violation of any applicable laws, rules or regulations which
are now or hereafter promulgated by Federal, state, or local authorities.
G. Sun further agrees to comply with any and all applicable federal, state and
local laws, orders and regulations not specifically referenced herein.
18. Sales and/or Use Taxes. Except as otherwise specifically provided herein,
GPI shall bear the cost of any taxes, levies, or fees of any kind, nature or
description whatsoever applicable to the sale of any Products sold by Sun to
GPI, and GPI shall forthwith pay to Sun all such sums upon demand, unless GPI
shall provide Sun, at the time of the submission of its orders to Sun, with tax
exemption certificates or permits acceptable to the appropriate taxing
authorities. Sun, as a contractor, will pay and be solely responsible for any
and all sales and/or use taxes on all materials, supplies and equipment used in
the performance of Sun’s obligations under this Agreement, all in accordance
with applicable law.
19. Insurance. If any of Sun’s employees, subcontractors, or agents will be
present on GPI’s premises at any time in order to perform under this Agreement,
Sun shall ensure that it, its subcontractors and/or agents have procured and
maintain insurance as required by GPI. GPI’s insurance requirements are attached
hereto as Appendix K. In exchange for the waiver of subrogation given by Sun to
GPI in Appendix K regarding workers compensation claims, GPI will grant to Sun
an equivalent waiver of subrogation on such claims.
20. Termination.
A. Either party may terminate this Agreement immediately upon giving written
notice in the event the other party ceases or threatens to cease to carry on its
business.
B. In addition, either party may terminate this Agreement by giving written
notice of a material default or breach by the other party in the prompt
performance of any obligation undertaken by it hereunder which is capable of
being cured and is not cured within fifteen (15) days of the receipt of notice
thereof; provided that neither the contesting in good faith the quality or the
effectiveness of the Product nor the withholding of amounts claimed to be owed
hereunder in connection with a good faith dispute concerning such Product as
provided in Section 4, above, shall be considered a material default or breach
for this purpose.

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13

C. Graphic may terminate this Agreement at any time by giving written notice to
Sun accompanied by a termination fee in the amount of [*]. No termination fee
will be payable upon a termination by Graphic after the end of the later of the
seventh contract year or the purchase by GPI of the Minimum Aggregate Purchase
Amount.
D. Sun may terminate this Agreement at any time prior to thirty (30) days
following the end of any contract year (other than the initial contract year) in
which Graphic does not purchase (on a gross basis prior to any rebates) at least
$[*] under this Agreement (the “Minimum Annual Purchase Amount”). Upon such
termination by Sun, Graphic will be required to pay to Sun within sixty
(60) days of receipt of such notice by Graphic a termination fee in the amount
corresponding to the period in which the termination notice is received and the
termination fee payable in Section 20C above.
E. If the Asset Purchase Agreement is terminated by either party or the Asset
Purchase does not close within three (3) months of the date hereof, this
Agreement shall automatically terminate and be of no further force.
F. For avoidance of doubt, no termination fees will be payable if this Agreement
is terminated by GPI pursuant to Sections 20A, 20B or 20E above.
G. Any right of termination hereunder accruing to either party under this
Section 20 shall be in addition to and not in lieu of and without prejudice to
any other rights and remedies which such party may have, including the right to
seek damages.
H. Notwithstanding anything to the contrary in the foregoing, at GPI’s request,
Sun will continue to supply GPI with specified Qualified Products in accordance
with the terms and conditions of this Agreement for a period of ninety (90) days
following delivery of a notice of termination by Sun under Sections 20A, or 20D
above.
21. Notices. All notices, requests, demands, and other communications hereunder
shall be in writing (which shall include communications by telex and telephonic
facsimile) and shall be delivered (a) in person or by courier or overnight
service, (b) mailed by first class registered or certified mail, postage
prepaid, return receipt requested, or (c) by facsimile transmission or pdf, as
follows:

     
     If to Sun:
  Sun Chemical Corporation
North American Inks
Attn: Brian Leen
35 Waterview Blvd.
Parsippany, NJ 07054-1285
Telephone: +1 (973) 404-6355
Facsimile: +1 (973) 404-6807
Email: brian.leen@sunchemical.com

 

[*]   CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.

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14

     
 
  with a copy (which shall not constitute notice) to:
 
   
 
  Sun Chemical Corporation
35 Waterview Blvd.
Parsippany, NJ 07054-1285
Attn: Legal Department
Telephone: +1 (973) 404-6550
Facsimile: +1 (973) 404)-6492
Email: eric.finkelman@sunchemical.com
 
   
     If to GPI:
  Graphic Packaging International, Inc.
Attn: General Counsel
814 Livingston Court
Marietta, GA 30067
Telephone: 770-644-3000
Facsimile: 770-644-2929
 
   
 
  with a copy (which shall not constitute notice) to:
 
   
 
  Alston & Bird LLP
1201 West Peachtree Street
Atlanta, Georgia 30309
Attention: Christopher Rosselli
Telephone: (404) 881-4945
Facsimile: (404) 881-7777
Email: chris.rosselli@alston.com

or to such other address as the parties hereto may designate in writing to the
other in accordance with this Section 21. Any party may change the address to
which notices are to be sent by giving written notice of such change of address
to the other parties in the manner above provided for giving notice. If
delivered personally or by courier, the date on which the notice, request,
instruction or document is delivered shall be the date on which such delivery is
made and if delivered by facsimile transmission or mail as aforesaid, the date
on which such notice, request, instruction or document is received shall be the
date of delivery.
22. Severability. In the event that any one or more of the provisions contained
in this Agreement shall for any reason be held to be unenforceable, illegal or
otherwise invalid in any respect with regard to this Agreement, such
unenforceability, illegality or invalidity shall not affect any other provision
of this Agreement, and this Agreement shall then be construed as if such
unenforceable, illegal or invalid provisions had never been contained herein.
23. Survivability. The provisions of this Agreement, which by their nature are
intended to survive the termination, cancellation, completion or expiration of
the Agreement, including but not limited to any expressed limitations of or
releases from liability, shall continue as valid and enforceable obligations of
the parties notwithstanding any such termination, cancellation, completion or
expiration.

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15

24. Assignment. Neither GPI nor Sun shall have the right to assign or transfer
its interest or obligations hereunder without the prior written consent of the
other party, which consent shall not be unreasonably withheld or delayed.
25. Waiver. Neither this Agreement, nor any provision hereof, may be amended,
changed, waived, discharged, supplemented, or terminated orally, but only by an
agreement in writing signed by the party against which the enforcement of such
amendment, change, waiver, discharge or termination is sought. The failure or
delay of any party at any time or times to require performance of any provision
of this Agreement shall in no manner affect its right to enforce that provision.
No single or partial waiver by any party of any condition of this Agreement, or
the breach of any term of this Agreement or the inaccuracy or warranty of this
Agreement, whether by conduct or otherwise, in any one or more instances shall
be construed or deemed to be a further or continuing waiver of any such
condition, breach or inaccuracy or a waiver of any other condition, breach or
inaccuracy.
26. Complete Agreement. This Agreement, including the general terms and
conditions hereof, represents the entire agreement between Sun and GPI with
respect to the items sold to GPI. All prior agreements, representations,
statements, negotiations, and undertakings, whether oral or written, are
superseded hereby.
27. Governing Law. Regardless of any conflict of law or choice of law principles
that might otherwise apply, the parties agree that this Agreement shall be
governed by and construed in all respects in accordance with the laws of the
State of Delaware. As to any dispute, claim, or litigation arising out of or
relating in any way to this Agreement or the transaction at issue in this
Agreement, the parties hereby agree and consent to be subject to the
jurisdiction of the state or federal courts located in the State of Delaware.
Each party hereby irrevocably waives, to the fullest extent permitted by law,
(a) any objection that it may now or hereafter have to laying venue of any suit,
action or proceeding brought in such court, (b) any claim that any suit, action
or proceeding brought in such court has been brought in an inconvenient forum,
and (c) any defense that it may now or hereafter have based on lack of personal
jurisdiction in such forum.
28. Fees and Expenses. Regardless of whether the transactions contemplated by
this Agreement are consummated, Sun and GPI each shall pay their respective fees
and expenses in connection with the transactions contemplated by this Agreement.
29. No Third Party Beneficiaries. The terms of this Agreement are for the sole
benefit of the parties hereto and their respective heirs, executors,
administrators, legal representatives, successors and assigns, and they shall
not be construed as conferring any third-party beneficiary or any other rights
on any other persons.
30. United Nations Convention Not Applicable. It is specifically agreed that
this Agreement will not be covered by nor construed in accordance with the terms
of the United Nations Convention on Contracts for the International Sales of
Goods.
31. Confidential Agreement. Each of the parties agrees that the terms and
conditions of this Agreement and the information related to each party exchanged
in connection with the performance of this Agreement (collectively, the
“Confidential Information”) shall be treated as

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16

confidential and proprietary to each party, respectively. Accordingly, neither
party shall disclose any Confidential Information to any person without the
express written consent of the other party, except that each party shall be
permitted to disclose Confidential Information to those of its legal counsel,
advisors, representatives and employees that need to be familiar with such
information in connection with such party’s performance of the Agreement and who
are informed of such information’s confidential nature. Notwithstanding the
foregoing, a party may disclose Confidential Information, if (i) in the
reasonable opinion of its legal counsel the party is compelled to do so by any
applicable legal requirement, including without limitation the Securities Act of
1934, as amended, and the rules and regulations promulgated thereunder; provided
that such party will have afforded the other party reasonable opportunity to
obtain an appropriate protective order or other satisfactory assurance of
confidential treatment at such other party’s expense and (ii) such party may not
disclose any Confidential Information other that which it is legally compelled
to disclose.
[Signatures appear on following page.]

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17

     IN WITNESS WHEREOF, the parties have caused this Agreement to be effective
as of the date above first written.
Graphic Packaging International, Inc.

     
/s/ David W. Scheible
 
Authorized Signature
   
 
   
David W. Scheible
 
Name (Printed)
   
 
   
President and Chief Executive Officer
 
Title
   
 
   
June 1, 2009
 
Date
   
 
   
Sun Chemical Corporation
   
 
   
/s/ Brian Leen
 
Authorized Signature
   
 
   
Brian Leen
 
Name (Printed)
   
 
   
President, North American Inks
 
Title
   
 
   
June 1, 2009
 
Date
   

[Signature page — Supply Agreement]