Exhibit 10.11
EXCLUSIVE SUPPLY AGREEMENT
This Exclusive Supply Agreement (the "Agreement") is made and entered
into as of the 31st day of May, 1996 by and between Superior Supplements, Inc.,
a Delaware corporation ("SSI"), and Compare Generiks, Inc., a Delaware
corporation ("CGI").
W I T N E S S E T H:
WHEREAS, SSI is engaged in the business of manufacturing and
distributing certain vitamins in bulk tablet form; and
WHEREAS, SSI owns and operates a factory for the manufacture of
vitamins in bulk tablet form; and
WHEREAS, CGI is engaged in the business of marketing and distributing
vitamin products.
NOW, THEREFORE, the parties for good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged, agree as follows:
1. Exclusive Purchase and Sale of Products.
(a) During the term hereof (the "Term"), as defined at
paragraph 3 hereof, CGI, its successors, assigns, subsidiaries and affiliates
(collectively, "CGI") shall purchase from SSI, exclusively, all "Pills" (the
"Pills") which CGI distributes, markets or otherwise sells within the United
States ("US"). For purposes of this Agreement, the term "Pills" shall include
all vitamins manufactured in bulk tablet form, other than any vitamins now or
hereafter sold under the "Energex" trade xxxx or as part of the "Energex"
product line, as set forth on Schedule 1(a) attached hereto and as notified in
writing by CGI to SSI from time to time.
(b) SSI shall use its best efforts to fulfill all of CGI's
orders on a timely basis. SSI shall comply with applicable laws and regulations
regarding the manufacture and delivery of Pills for and on behalf of CGI.
(c) SSI will supply all materials used in connection with the
manufacture of the Pills. All Pills shall meet CGI's specifications.
(d) All sales by SSI to CGI will be FOB, SSI's manufacturing
facility in Hauppauge, New York or such other manufacturing facility of SSI of
SSI's choice. Title to and risk of loss of the products shall pass from SSI to
CGI upon acceptance by the carrier of CGI's choice.
(e) Nothing herein shall restrict or limit in any manner the
right of SSI to sell Pills, or any other products, to any party other than CGI.
2. Purchase Price and Payment. CGI will pay for the Pills as follows:
(a) CGI will pay to SSI, SSI's material cost ("Material Cost")
plus fifteen percent (15%). For purposes of this agreement "Material Cost" shall
mean SSI's actual material expenses incurred in the manufacture of the Pills.
(b) SSI shall invoice CGI upon delivery of each order and all
invoices shall be paid by CGI within thirty (30) days of the date of shipment.
CGI shall pay all costs and expenses, including reasonable attorney's fees,
reasonably incurred by SSI in the collection of any sum payable hereunder by CGI
to SSI. In addition to paying the price in effect under this Agreement, CGI
shall pay all sales or use taxes applicable to the sale or delivery by SSI or
the subsequent use by CGI of any items delivered hereunder.
3. Term of Agreement.
(a) The term of this Agreement (the "Term") shall commence on
the date hereof (the "Effective Date") and shall continue for a period of three
(3) years, and thereafter will be automatically renewed for successive one (1)
year terms unless either party provides written notice of intent to terminate
the Agreement at least ninety (90) days prior to the end of any Agreement Year,
as defined below.
(b) For purposes of this Agreement, an "Agreement Year" shall
commence on the Effective Date and on each anniversary thereof and shall end on
the day before the first anniversary of each such Agreement Year.
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4. Placement and Acceptance of Orders; Delivery Schedule.
(a) Written Orders. CGI will place all orders for the purchase
of Pills from SSI, by written purchase order executed by an authorized agent of
CGI, no less than forty-five (45) days in advance. Such orders shall be filled
by SSI, within such forty-five (45) day period, unless an order is significantly
in excess of previous orders, in which case SSI will use its best efforts to
process the order, or a substantial portion thereof, within a forty-five (45)
day period or a reasonable time period (subject to raw material availability).
(b) Rejection of Orders. SSI shall not be obligated to
manufacture or distribute to CGI any item, and shall have the right to reject
any order, in whole or in part, based upon SSI's determination that such
manufacture or distribution might violate existing regulatory standards,
requirements, regulations, or concerns. In the event, SSI declines to
manufacture any item requested by CGI, or rejects any order placed by CGI, CGI
shall have the right to purchase such item or items, or fill such requested
order or such portion of an order, through another manufacturer or distributor.
(c) Resale of Products. CGI will not sell or distribute any
product purchased from SSI hereunder to any party or entity that CGI knows, or
has reason to know, will utilize such product in any manner that is inconsistent
with or contrary to prevailing federal and state regulations or laws, including
the rules and regulations of any state or federal regulatory organization.
(d) Obligation for Cost of Raw Materials. Upon placement of
any order, CGI shall become liable for all costs incurred by SSI in connection
with the purchase of raw materials to be used in fulfilling such order.
5. Force Majeure. SSI shall not be liable for any delay or failure to
perform in accordance with this Agreement if such delay or failure to perform is
a result of a strike, lock-out or other labor dispute; riot, insurrection, civil
disturbance or other hostility; embargo; inability or delay in obtaining fuel,
energy, equipment or power; inability or delay in obtaining labor or materials;
inability or delay in obtaining government approvals, permits or licenses;
inability or delay in obtaining transportation or other services; fire, flood,
lightning, storm, earthquake, or other Act of God; or is a result of causes
beyond SSI's reasonable control (each of the foregoing being hereinafter
referred to as an "Event of Force Majeure"). In
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such event, SSI's obligation to perform hereunder shall be suspended for the
duration of such Event of Force Majeure. SSI will use reasonable efforts to
promptly notify CGI, either orally or in writing, upon learning of the
occurrence or potential occurrence of such Event of Force Majeure. If any Event
of Force Majeure is not remedied by SSI within five (5) days of its occurrence,
CGI shall have the right to purchase Pills from another manufacturer or
distributor until such time as SSI can again fully meet CGI's needs and has
given CGI at least thirty (30) days written notice of such fact.
6. Exclusivity Provisions.
6.1 Exclusivity. This Agreement shall automatically terminate in the
event during any year of the Term CGI purchases Pills from any other parties in
violation of this Agreement.
6.2 Indemnification. CGI hereby agrees to indemnify and hold SSI, its
officers, directors, agents, servants, employees, subsidiaries and affiliates,
harmless from and against any and all claims, suits, demands, losses,
liabilities, damages, court costs, (including reasonable attorneys' fees),
whether based in contract or in tort, arising out of or related to, or as a
consequence of any act or omission of CGI relating to the Pills.
6.3 Termination of this Agreement.
(a) SSI shall have the right to terminate this Agreement at
its sole discretion, at any time, upon being advised that any regulatory
authority objects to the sale of the Pills by SSI to CGI.
(b) Upon the termination of this Agreement any then unpaid
accounts receivable fees shall accrue and become immediately due and payable.
7. Termination of Agreement.
(a) In the event of the occurrence of any of the following
events: (i) insolvency or the making by a party hereto of an assignment for the
benefit of creditors; (ii) the filing by or against a party hereto of, or the
entry of an order for relief against a party hereto in, a voluntary or
involuntary proceeding under any bankruptcy, insolvency, reorganization or
receivership law; (iii) the appointment
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of a receiver for all or a substantial portion of CGI's property; (iv) the
assumption of custody, attachment or sequestration by a court of competent
jurisdiction of all or a significant portion of a party's property; (v) a party
hereto or any principal thereof is charged with a felony or crime of moral
turpitude; (vi) notification to a party hereto from the United States Drug
Enforcement Administration, or any other federal or state regulatory agency,
that such party should discontinue business relations with the other party; or
(vii) fraudulent conduct by a party hereto in any of its dealings with the other
party, the non-defaulting party shall have the right to terminate this
Agreement, by written notice to the other party. No assignee for the benefit of
creditors, receiver, liquidator, trustee in bankruptcy, sheriff or any other
officer of the court or official charged with taking over custody of the assets
or business or a party shall have any right to continue performance of this
Agreement, and this Agreement may not be assigned by CGI by operation of law.
(b) Any failure by either party to terminate this Agreement by
reason of one or more of the foregoing acts or events shall not constitute a
waiver of the right to terminate this Agreement upon reoccurrence or continuance
of such acts or events.
8. Representations and Warranties of CGI. CGI (including all of its
subsidiaries and affiliates) represents and warrants to SSI as follows:
8.1 Organization and Qualification. CGI is a corporation validly
existing and in good standing under the laws of the State of Delaware, and has
all requisite corporate power and authority to (a) own, lease and operate its
properties and assets as they are now owned, leased and operated and (b) carry
on its business as now presently conducted. CGI is duly qualified to do business
in each jurisdiction in which the nature of its business or properties makes
such qualification necessary, except where the failure to do so would not have a
material adverse effect on the business of CGI.
8.2 Subsidiaries and Affiliates. Except as set forth on Schedule 9.2
hereof, CGI has no subsidiaries or affiliates.
8.3 Validity and Execution of Agreement. CGI has the full legal right,
capacity and power and all requisite corporate authority and approval required
to enter into, execute and deliver this Agreement and any other agreement or
instrument contemplated hereby, and to perform fully its obligations hereunder
and
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thereunder. The stockholders and the board of directors of CGI has approved the
transactions contemplated pursuant to this Agreement. This Agreement has been
duly executed and delivered by CGI and constitutes the valid and binding
obligation of CGI enforceable against it in accordance with its terms.
8.4 No Conflict. Neither the execution and delivery of this Agreement
nor the performance by CGI of the transactions contemplated hereby will: violate
or conflict with (a) any of the provisions of the Certificate of Incorporation
or Bylaws or other organizational documents of CGI; (b) result in the
acceleration of, or entitle any party to accelerate the maturity or the
cancellation of the performance of any obligation under, or result in the
creation or imposition of any lien in or upon their respective assets or
constitute a default (or an event which might, with the passage of time or the
giving of notice, or both, constitute a default) under any contract, (c) any
order, judgment, regulation or ruling of any governmental or regulatory body to
which CGI are a party or by which any of its property or assets may be bound or
affected or with any provision of any law, rule, regulation, order, judgment, or
ruling of any governmental or regulatory body applicable to CGI.
8.5 Licenses and Permits. CGI maintains all governmental permits,
licenses, registrations and other governmental consents (federal, state and
local) which are necessary in connection with its operations and properties, and
no others are required. All such permits, licenses, registrations and consents
are in full force and effect and in good standing and shall continue to be in
full force and effect and in good standing following the consummation of the
transactions contemplated by this Agreement.
8.6 Compliance with Laws. CGI has complied in all respects with all
applicable federal, state and local laws, regulations and ordinances or any
requirement of any governmental or regulatory body, court or arbitrator
affecting the business or the assets the failure to comply with which could have
a material adverse effect on the business of CGI.
8.7 Products. There are no statements, citations or decisions by any
governmental or regulatory body that any product marketed or distributed at any
time by CGI is defective or fails to meet in any material respect any standards
promulgated by any such governmental or regulatory body. There have been no
recalls ordered by any such governmental or regulatory body with respect to any
product. To the best knowledge of CGI, there is no (a) fact relating to any
product that may impose upon the Companies a duty to recall any product or a
duty to warn customers of a defect in any product, other than defects about
which CGI has
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issued appropriate and adequate warnings or (b) latent or overt design,
manufacturing or other defect in any product.
8.8 Survival. All of the representations and warranties of CGI
contained herein shall survive the date hereof until the date upon which the
liability to which any claim relating to any such representation or warranty is
barred by all applicable statutes of limitations.
9. Representations and Warranties of SSI.
9.1 Organization and Qualification. SSI is a corporation validly
existing and in good standing under the laws of the State of Delaware, and has
all requisite corporate power and authority to (a) own, lease and operate its
properties and assets as they are now owned, leased and operated and (b) carry
on its business as now presently conducted. SSI is duly qualified to do business
in each jurisdiction in which the nature of its business or properties makes
such qualification necessary, except where the failure to do so would not have a
material adverse effect on the business of SSI.
9.2 Subsidiaries and Affiliates. Except as set forth on Schedule 10.2
hereof, SSI has no subsidiaries or affiliates.
9.3 Validity and Execution of Agreement. SSI has the full legal right,
capacity and power and all requisite corporate authority and approval required
to enter into, execute and deliver this Agreement and any other agreement or
instrument contemplated hereby, and to perform fully its obligations hereunder
and thereunder. The stockholders and the board of directors of SSI has approved
the transactions contemplated pursuant to this Agreement. This Agreement has
been duly executed and delivered by SSI and constitutes the valid and binding
obligation of SSI enforceable against it in accordance with its terms.
9.4 No Conflict. Neither the execution and delivery of this Agreement
nor the performance by SSI of the transactions contemplated hereby will: violate
or conflict with (a) any of the provisions of the Certificate of Incorporation
or Bylaws or other organizational documents of SSI; (b) result in the
acceleration of, or entitle any party to accelerate the maturity or the
cancellation of the performance of any obligation under, or result in the
creation or imposition of any lien in or upon their respective assets or
constitute a default (or an event which might, with
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the passage of time or the giving of notice, or both, constitute a default)
under any contract, (c) any order, judgment, regulation or ruling of any
governmental or regulatory body to which SSI are a party or by which any of its
property or assets may be bound or affected or with any provision of any law,
rule, regulation, order, judgment, or ruling of any governmental or regulatory
body applicable to SSI.
9.5 Licenses and Permits. SSI maintains all governmental permits,
licenses, registrations and other governmental consents (federal, state and
local) which are necessary in connection with its operations and properties, and
no others are required. All such permits, licenses, registrations and consents
are in full force and effect and in good standing and shall continue to be in
full force and effect and in good standing following the consummation of the
transactions contemplated by this Agreement.
9.6 Compliance with Laws. SSI has complied in all respects with all
applicable federal, state and local laws, regulations and ordinances or any
requirement of any governmental or regulatory body, court or arbitrator
affecting the business or the assets the failure to comply with which could have
a material adverse effect on the business of SSI.
9.7 Products. To SSI's knowledge, there are no statements, citations or
decisions by any governmental or regulatory body that any product marketed or
distributed at any time by SSI is defective or fails to meet in any material
respect any standards promulgated by an governmental or regulatory body. There
have been no recalls ordered by any such governmental or regulatory body with
respect to any product. To the knowledge of SSI, there is no (a) fact relating
to any product that may impose upon SSI a duty to recall any product or a duty
to warn customers or a defect in any product, other than defects about which SSI
has issued appropriate and adequate warning, or (b) latent or overt design,
manufacturing or other defect in any product.
9.8 Survival. All of the representations and warranties of SSI
contained herein shall survive the date hereof until the date upon which the
liability to which any claim relating to any such representation or warranty is
barred by all applicable statutes of limitations.
10. Nondisclosure. Neither party, nor any person controlled by it,
shall for any reason other than fulfilling its obligations hereunder, directly
or indirectly,
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for itself or any other person, use or disclose any trade secrets or
confidential information, know-how or proprietary information relating to the
other party, except to the extent (i) within the public domain; or (ii) pursuant
to a subpoena, court order or applicable law.
11. Relationship of the Parties. The relationship of the parties
created hereby is that of independent contractors, and neither party shall have
any right or authority to create or assume any obligation of any kind on behalf
of the other.
12. Disclaimer of Warranties. SSI makes no other representations or
warranties except as set forth in this Agreement, and SSI expressly disclaims
any implied warranties of merchantability, fitness for use or fitness for a
particular purpose.
13. Notices. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and shall be
given personally, telegraphed, telefaxed, sent by facsimile transmission or sent
by prepaid air courier, same day or overnight messenger or certified, registered
or express mail, postage prepaid. Any such notice shall be deemed to have been
given (a) when received, if delivered in person, telegraphed, telexed, sent by
facsimile transmission and confirmed in writing within three (3) Business Days
thereafter or sent by prepaid air courier, same day or overnight messenger or
(b) three (3) Business Days following the mailing thereof, if mailed by
certified first class mail, postage prepaid, return receipt requested, in any
such case as follows (or to such other address or addresses as a party may have
advised the other in the manner provided in this Section 13):
If to SSI, to:
Superior Supplements, Inc.
000 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxx
with copy to:
Xxxxxxxxx & Xxxxxxxxx, LLP
000 Xxxxx Xxxxxx, 00xx Xxxxx
0
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxxx
If to CGI, to:
Compare Generiks, Inc.
000 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
14. Binding Effect; Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns. Neither party shall assign any of its rights or delegate any of its
duties or obligations hereunder without the prior written consent of the other
party. Notwithstanding the foregoing, the parties hereto do not intend to create
hereby, and this Agreement shall not be read or construed to create or grant,
any rights or benefits in or for any person or entity other than the parties
hereto and any and all such third party rights or benefits are hereby expressly
disclaimed and denied.
15. Governing Laws. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York, without regard to
principles of conflicts of law, and the parties irrevocably agree to submit any
controversy or claim arising out of or relating to this Agreement to a court of
competent jurisdiction located in the State of New York. The parties agree that
any proceedings arising out of, relating to, or brought for the purpose of
enforcing this Agreement, or remedying any breach thereof shall be instituted in
the courts of the State of New York, and in no other jurisdiction.
16. Counterparts. This Agreement may be executed simultaneously in
counterparts, each of which will be deemed to be an original but all of which
together will constitute one and the same instrument.
17. Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
18. Amendment. This Agreement may be amended only by a writing signed
by all parties hereto.
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19. Entire Agreement. This Agreement contains the entire understanding
of the parties hereto with respect to its subject matter and supersedes any
prior arrangements or understandings (written or otherwise) between them.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the first date written above.
SUPERIOR SUPPLEMENTS, INC.
By: /s/ Xxxxxxxx X. Xxxxx
------------------------
Xxxxxxxx X. Xxxxx
COMPARE GENERIKS, INC.
By: /s/ Xxxxxx X. Xxxxx
------------------------
Xxxxxx X. Xxxxx
