EXHIBIT 10.45
THE COLONEL'S/DOW CHEMICAL
SUPPLY AGREEMENT
QUANTITY OBLIGATIONS
The agreement shall be from January 1, 1996, through December 31, 1997.
For the term of this agreement, The Colonel agrees to purchase and ▇▇▇
agrees to supply 100% of its consumption of RIM, TPU and TPO from Dow
provided these products are equivalent and available.
PRODUCT ESTIMATED ANNUAL VOLUME
SPECTRIM* 50A reaction moldable product 2,100,000 pounds
SPECTRIM 50BS 2,100,000 pounds
PREVAIL* XU72547.00 thermoplastic resin 480,000 pounds
TPO 750,000 pounds
Total 5,430,000 pounds
The Colonel's commits to provide annual forecasts to Dow 30 days prior to
beginning of each calendar year. Any increase in product demand, which
exceeds 110% of the agreed upon annual forecast, will require a written
request by the Colonel's to Dow. Dow will respond, in writing, concerning
their ability to meet the increased volume requirement(s).
In the event that a competitor's material provides significant performance
improvement over the Dow product being supplied to The Colonel's for a
particular application, Dow will be given an opportunity to trial
alternative Dow materials at The Colonel's facility. If, after trialing
the available Dow product(s) for the particular application, Dow is unable
to match the performance of the competitor's material at a competitive
price, The Colonel's shall be excused from its remaining contractual
obligations for the product for that particular application. However, if
at any time during the remaining term of this contract, Dow develops a new
product which provides performance characteristics comparable to the
competitor's material, The Colonel's agrees to use its best faith efforts
to qualify the new Dow product for the particular application.
PRICING
Prices are firm from January 1, 1996, through June 30, 1996. Firm is
defined as: no increases or decreases to be requested by The Colonel's or
Dow. Price increases/decreases for the remainder of the agreement will be
negotiated/implemented by The Colonel's and Dow in six month intervals with
at least 30 days written notice prior to the next six month period. The
schedule for price adjustments is as follows: July 1, 1996, through
December 31, 1996; January 1, 1997, through June 30, 1997; July 1, 1997,
through December 31, 1997. Pricing negotiated and agreed upon for each six
month period is firm. Should Dow and The Colonel's not be able to
negotiate an agreement acceptable to both parties, this contract can be
terminated with 30 days written notice by either party.
*Trademark of The Dow Chemical Company
From January 1, 1996, through June 30, 1996, pricing from RIM, TPU and TPO
products shall be as follows:
PRODUCT T/L PRICE
SPECTRIM 50A $1.36 per pound
SPECTRIM 50BS $1.36 per pound
PREVAIL XU72547.00 $1.65 per pound
TPO** $0.97-$1.00 per pound
**Excludes reacter grade materials
PROMOTIONAL ALLOWANCE
Dow will issue three annual material credit(s) totaling the price of three
truck loads of SPECTRIM product (estimated at $183,600). A material credit
for one truck loan of SPECTRIM product will be issued during the months of
January, May and September. This credit is to be used in support of The
Colonel's annual golf tournament, other promotional events and continued
growth.
THE COLONEL'S, INC. THE DOW CHEMICAL COMPANY
By ________________________________ By __________________________________
Name_______________________________ Name_________________________________
Title______________________________ Title________________________________
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