SUPPLIER AGREEMENT
THIS SUPPLIER AGREEMENT (this "Agreement") is made this ____ day of July,
1999, by and between The Old Fashioned Syrup Company, Inc., a __________
corporation ("OFSC") and Beverage House, Inc., a Georgia corporation
("Supplier").
A. Supplier wishes to be designated by OFSC as a manufacturer and supplier
of the product described on Exhibit A (the "Product").
B. OFSC is willing to designate Supplier as a manufacturer and supplier of
the Product, subject to compliance by Supplier with the terms and conditions of
this Agreement, as it may be amended from time to time throughout its term (this
Agreement, together with all attachments and exhibits shall be collectively
referred to herein as the "Agreement").
1. Product. Supplier shall develop, manufacture and supply the Product in
accordance with the specifications for the Product described on Exhibit A. The
Product shall not be substituted, modified, or otherwise changed from these
specifications without first obtaining OFSC's written approval of such change,
such approval not to be unreasonably withheld.
2. Term. This Agreement shall be in effect commencing ___________, 1999,
with an initial term of two (2) years, expiring on ______ 2001 ("Initial Term").
This Agreement shall terminate at the end of the Initial Term if written notice
to terminate is given by either party at least thirty (30) days prior to the
last day of the Initial Term. Otherwise, following the Initial Term, this
Agreement shall automatically renew and continue for additional six (6) months
term(s) ("Renewal Term(s)") unless canceled by either party with at least thirty
(30) days written notice prior to the last day of any Renewal Term. This
Agreement may also be terminated earlier pursuant to the provisions of this
Agreement. Notwithstanding anything contained herein, the volume of Product
ordered and the number of orders placed during the Initial or Renewal Terms
shall be determined solely by orders placed pursuant to Section 3.
3. Order and Delivery.
3.1. Orders shall be placed in writing by OFSC, sent by U.S. Mail, or
facsimile or personally delivered to Supplier at the address set forth below
(the "Order"). Acceptance of any Order is expressly limited to the terms
thereof. OFSC shall allow forty-five (45) normal working days for delivery of
Supplier's first three production runs. OFSC shall allow thirty (30) normal
working days for delivery of all other Supplier production runs. OFSC agrees
that no Product shall be delivered until all microbiological tests have been
performed on each production run and each production run passes such
microbiological tests.
3.2. All Orders shall be shipped F.O.B. Supplier's facilities in
Cartersville, Georgia and in accordance with those requirements contained in the
Order. The risk of loss or damage in transit shall be upon OFSC. Supplier shall
in the event of a delay or threat of delay, due to any cause in the production
or delivery of the Product hereunder, immediately notify OFSC and shall include
with such notice all relevent information with respect to such delay or
threatened delay.
4. Price. The prices of the Product are set forth in Exhibit B.
5. Payment. Supplier shall invoice OFSC for all Product units produced
during each production run required to fill an Order, regardless of whether all
Produce such units produced are required to satisfy the Order (the "Invoice").
Each Invoice is payable by OFSC within thirty (30) days from the date of the
Invoice.
6. Exclusivity
6.1 Supplier agrees that the Product will be manufactured for and supplied
exclusively to OFSC and that Supplier shall not manufacture, supply, or sell the
Product, or any product packed in configuration packing similar to OFSC's
Product packaging, under Supplier's own label to third parties, or under any
private label for or to any other party, unless expressly agreed to in writing
OFSC.
6.2 At OFSC's request, Supplier shall enter into a Customer Mold Agreement
with Berlin Packaging in the form attached hereto as Exhibit C (the "Mold
Agreement"). The Mold Agreement provides for the production of exclusive Product
packaging to be used by Supplier. OFSC agrees to purchase such quantity of
Product so that the minimum production requirements set forth in the Mold
Agreement shall be met during the term of the Mold Agreement. In the event OFSC
does not order such minimum quantities, OFSC agrees to pay Supplier the
difference between the Product quantity ordered and the minimum production
requirements times the amortization rate set forth in the Mold agreement. In the
event OFSC satisfies the minimum quantity requirement or pays to Supplier any
ammortization costs owed to Berlin Packaging, then Supplier shall transfer
ownership of the mold(s) created under the Mold Agreement to OFSC.
7. Quality Control.
7.1 Packaging. The Product and all packaging and promotional materials used
in connection with the Product ("Packaging and Promotional Material") shall be
of a consistent and high quality which conform to the standards developed by
OFSC or developed by Supplier and approved by OFSC. The quality and style of the
Product and Packaging and Promotional Material shall be at least as high as
similar goods presently sold or distributed by Supplier.
7.2 Inspection. Supplier will cooperate with OFSC to permit an inspection
of the production facility prior to Supplier's production of the Products.
Supplier agrees to permit two inspections per year of its operation to allow
OFSC to monitor the qulity of Products offered by Supplier to ensure they
conform to OFSC's standards, provided OFSC gives Supplier 24 hours prior notice
of such inspection. Supplier shall also provide OFSC with access to its qulity
assurance data documentation. Notwithstanding the above, OFSC will be entitled
to additional inspections under the same notice requirements in the event it
receives written or verbal complaints from consumers or retailers regarding the
quality of the Product or quality of the Packaging. OFSC shall provide copies of
all such complaints to Supplier.
8. Representation and Warranties of Supplier. Supplier represents and
warrants, which warranties and representations will survive the term of this
Agreement.
8.1 that the Product will conform to all specifications, including but not
limited to those contained in Exhibit A, and will be merchantable, free from
defects and will be fit for the purpose intended;
8.2 that the Product, including food articles, food ingredients, food
packaging, and food labeling relating to or comprising the Product or any part
thereof that is supplied by Supplier and delivered, sold or transferred to OFSC
hereunder shall be manufactured, stored and delivered in full compliance iwth
all applicable federal, state and local statutes, rules and regulations (the
"Regulations");
8.3 that the Product shall be manufactured, stored and delivered in
accordance with appropriate "Good Manufacturing Practices" or similar practices
that may be promulgated under the Regulations as applicable;
8.4 that the Product shall not be adulterated or misbranded within the
meaning of the Regulations;
8.5 that the Product shall not be a food product which may not, under the
Regulations, be introduced into interstate commerce except as provided herein;
8.6 that Supplier has the facilities and capacity to manufacture and supply
the Product to OFSC in accordance with the specifications set forth on Exhibit
A; and
8.7 that Supplier is free to enter into this Agreement, that Supplier's
execution of this Agreement has been duly approved by all applicable corporate
procedures, that this Agreement constitutes a legal, valid and binding
obligation of Supplier, and that to Supplier's knowledge this Agreement will not
violate the rights of any third party.
These warranties shall be in additional to all other warranties, express,
implied or statutory and in addition to all obligations contained in this
Agreement. Payment for, inspection of, or receipt of the Product by OFSC shall
not constitute a waiver of any breach or warranty.
9. Representations and Warranties of OFSC. OFSC represents and warrants,
which warranties and representations will survive the term of this Agreement:
9.1 that OFSC has the right to use the Sweet 'N Low brand artifical
sweetener and the associated Sweet 'N Low trademarks and logos (the "Marks") for
the manfuacture of the Product throughout the Initial Term of this Agreement and
any Renewal Term hereof;
9.2 that OFSC will have sufficient customers to require production of the
Product in the quantities contemplated by the terms of this Agreement and any
Renewal Term hereof;
9.2 that OFSC will have sufficient customers to require production of the
Product in the quantities contemplated by the terms of this Agreement and the
Mold Agreement;
9.3 that any food ingredients, food packaging, and food labeling relating
to or comprising the Product or any part thereof that is supplied by OFSC and
delivered, sold or transferred to Supplier hereunder shall be manufactured,
stored and delivered in full compliance with the Regulations; and
9.4 that OFSC is free to enter into this Agreement, that OFSC's execution
of this Agreement has been duly approved by all applicable corporate procedures,
that this Agreement constitutes a legal, valid and binding obligation of OFSC,
and that to OFSC's knowledge this Agreement will not violate the rights of any
third party.
These warranties shall be in addition to all other warranties, express, implied
or statutory and in addition to all obligations contained in this Agreement.
Receipt of payment for the Product by Supplier shall not constitute a waiver of
any breach or warranty.
10. Non-Conformity. In the event the Products do not conform to the sample
or prototype approved by OFSC, then OFSC shall be permitted to reject all
non-conforming shipments and shall be entitled to, at OFSC's option, replacement
products or reimbursement for the costs (including shipping and delivery
charges) of the Products.
11. Widescale Defects/Recall
11.1 Whenever Supplier becomes aware that any ingredient or component of a
Product covered by this Agreement is or may become harmful to persons or
property or that a Product is mislabeled, Supplier shall immediately give notice
thereof to OFSC and Supplier shall provide all relevant information with respect
thereto.
11.2 In the event it is deemed necessary by OFSC and Supplier to recall any
quantity of the Product, from any store of OFSC or from any consumer, both
parties agree to take such reasonable steps necessary to protect the interests
of the public and to comply diligently with all product recall procedures
established by the Food and Drug Administration.
12. Insurance. Supplier agrees to maintain during the entire term of the
Agreement commercial, general liability insurance, including product liability
coverage, in minimum amounts of $1,000,000.00 per occurrence for damage, injury
and/or death to persons and $1,000,000.00 per occurrence for damage and/or
injury to property. Supplier further agrees to require all of its delivery
personnel to be licensed to drive, whether they are employees or independent
contractors. All policies of liability insurance required to be effected by
Supplier shall cover Supplier's employees, agents, and independent contractors
and shall include OFSC as an additional insured. Upon execution of this
Agreement, and annually thereafter, Supplier shall promptly provide OFSC with
certificates of insurance evidencing such coverage and each certificate shall
indicate that coverage represented thereby shall not be canceled or modified
until at least thirty (30) days prior notice has been given to OFSC.
13. Default and Termination.
13.1 In the event either party:
(a) breaches any term or condition of this Agreement; or
(b) abuses or misrepresents its status as a supplier and/or seller of the
Product to the detriment of the other party, or
(c) becomes the subject of any proceeding under the Bankruptcy Act, becomes
insolvent or any assignment is made for the benefit of creditors or a trustee is
appointed for all or any portion of the party's assets, or
(d) fails to comply with the Regulations, then, the non-breaching party, in
its sole discretion, may terminate this Agreement with fifteen (15) days written
notice to the breaching party.
13.2 Notwithstanding anything to the contrary, in the event the party's
breach is for noncompliance with the Regulations, termination shall be effective
immediately.
13.3 The failure to terminate the Agreement upon the occurrence of one or
more of these events of default by a party shall not constitute a waiver or
otherwise affect the right of the non-breaching party to terminate the Agreement
as a result of a continuing or subsequent failure or refusal by the breaching
party to comply with any such obligations. Failure by the non-breaching party to
exercise any of its rights or remedies hereunder or to insist on strict
compliance with any of the terms of this Agreement shall not constitute a waiver
of any of the terms or conditions of this Agreement with respect to any other
subsequent breach nor shall it constitute a waiver by the non-breaching party of
its rights at any time thereafter to require strict compliance with the terms of
this Agreement.
13.4 Upon termination, OFSC shall pay Supplier any supplier any outstanding
Invoices.
13.5 Upon termination, Supplier agrees as follows:
(a) Supplier shall immediately pay all sums due and owing to OFSC;
(b) Supplier shall immediately case the further production and
manufacturing of the Product; and
(c) Supplier shall cease any further use of the Marks and shall not
thereafter, directly or indirectly hold itself out or represent itself as
affiliated in any way with OFSC.
14. Indemnity.
14.1 Supplier agrees to indemnify and hold OFSC, its officers and
directors, employees or agents, customers and users of the Product, harmless
from all claims, demands, losses, liability, suits at law or in equity, costs
and expenses, including reasonable attorney's fees, resulting from injury,
illness and/or death caused, in whole or in part, by contact with, use and/or
consumption of the Product, unless (and then only to the extent) such injury,
illness and/or death is caused by the sole negligence or misconduct of OFSC. In
the event of any claim, threatened claim, or notification of either which may be
the subject of indemnification provided for in this Section, OFSC will give
Supplier prompt written notification thereof and provide Supplier with such
reasonable assistance in the response and prosecution of any defense as Supplier
may request, at Supplier's expense. Upon OFSC's tendering any suit to Supplier,
Supplier shall defend the same at its sole cost and expense. If Supplier fails
to assume such defense, OFSC may defend the action in the manner it deems
appropriate, and Supplier shall pay to OFSC all costs, including reasonable
attorneys' fees, incurred by OFSC in effecting such defense, in addition to any
sum which OFSC may pay by reason of any settlement or judgment against OFSC. The
provisions of this Section 14.1, and the indemnity hereunder, shall survive this
Agreement and any performance hereunder.
14.2 OFSC agrees to indemnify and hold Supplier, its officers and
directors, employees or agents, customers and users of the Product, harmless
from all claims, demands, losses, liabilities, suits at law or in equity, costs
and expenses, including reasonable atotrney's fees, resulting from the breach of
any of OFSC's Marks. In the event of any claim, threatened claim, or
notification of either which may be the subject of indemnification provided for
in this Section, Supplier will give OFSC prompt written notification thereof and
provide OFSC such reasonable assistance in the response and prosecution of any
defense as OFSC may request, at OFSC's expense. Upon Supplier's tendering any
suit to OFSC, OFSC shall defense the same at its sole cost and expense. If OFSC
fails to assume such defense, Supplier may defend the action in the manner it
deems appropriate, and OFSC shall pay to Supplier all costs, including
reasonable attorneys' fees, incurred by Supplier in effecting such defense, in
addition to any sum which supplier may pay by reason of any settlement for
judgment against Supplier. The provisions of this Section 14.2, and the
indemnity hereunder, shall survive this Agreement and any performance hereunder.
15. Confidentiality. All terms and conditions of this Agreement shall
remain confidential between Supplier and OFSC. Each party acknowledges that
during the course of carrying out this Agreement, it may receive confidential
and proprietary information related to the other party's business, including,
without limitation, recipes and formulations created or provided by the other
party ("Confidential Information"). Confidential Information includes any
information, designs, data or know-how that a party has designated as
proprietary and/or confidential, or that, by the nature of the circumstances
surrounding the disclosure, ought to be treated as exclusive property of the
other party and undertakes to retain in confidence all Confidential Information.
Each party's obligations under this Section 15 shall survive expiration and
termination of the Agreement and any amendments thereto.
16. Miscellaneous Provisions.
16.1 Independent Contractor Relationship. Supplier and OFSC are independent
contracting parties and this Agreement does not create the relationship of
principal and agent, partners, joint ventures or employer and employee between
OFSC and Supplier. Supplier shall have no authority to bind or otherwise
obligate OFSC in any manner nor shall Supplier represent to anyone that it has a
right to do so.
16.2 Severability. The provisions of the Agreement are severable and the
Agreement shall be interpreted and enforced as if all completely invalid or
unenforceable provisions were not contained in the Agreement, and partially
valid and enforceable provisions shall be enforced to the extent that they are
valid and enforceable.
16.3 Entire Agreement. The Agreement and the exhibits attached hereto
constitute the entire written agreement between OFSC and the Supplier and
supersedes any and all prior negotiations, understandings and/or agreements,
oral or written, between the parties to this Agreement with respect to the
subject matter of this Agreement. The parites agree that neither party is
relying on any statement or promise not contained in this Agreement.
16.4 Amendments in Writing. Neither the Agreement nor any of its provisions
may be waived, modified or amended except by an instrument in writing signed by
the parties to this Agreement.
16.5 Assignment. The Agreement shall be binding upon and shall inure to the
benefit of the parties to this Agreement, provided, however, it shall not be
assigned by either OFSC or Supplier, without the prior written consent of the
other party.
16.6. Applicable Law. The Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia without regarding to its
conflict of laws rules.
16.7. Force Majeure. Neither party shall be liable for defaults or delays
or non-performance of any covenant, agreement, work, service, or other act
required under this Agreement to be performed by such party, if such delay or
hindrance is due to strikes, lockouts, failure of power or other utilities,
injunction or other court or administrative order, governmental law or
regulations which prevent or substantially interfere with the required
performance, condemnations, riots, insurrections, martial law, civil commotion,
war, fire, flood, earthquake, or other casualty, acts of God, or other causes
not within the control of such party. The performance of any covenant,
agreement, work, services, or other act shall be excused for the period of delay
and the period for the performance of the same shall be extended by such period.
16.8 No Delegation of Authority. Supplier shall not subcontract to or
permit third parties to produce the Product or to perform its obligations under
this Agreement.
16.9 Cumulative Remedies. The rights and remedies above provided to either
party shall be cumulative and in additional to all other rights and remedies
available to either party in law and in equity.
16.10 Notices. Whenever a provision is made under this Agreement for any
demand, notice or declaration of any kind, or where it is deemed desirable or
necessary by either party to give or serve any such notice, demand or
declaration to the other party, it shall be in writing and served either
personally or sent by United States mail, certified, postage prepaid, addressed
at the addresses set forth below or at such address as either party may advise
the other from time to time. It shall be deemed delivered upon receipt.
To Supplier at: Beverage House, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn:____________________
Tel: (000) 000-0000
Fax: (000) 000-0000
With copies to:
Xxxxxx & Bird, LLP
000 Xxxxxxxxxxxx Xxxxxx,
X.X.
North Building, 11th Floor
Washington, D.C. 20004-
2601
Attention: Xxxxxx X. Xxxx,
III
Tel: (000) 000-0000
Fax: (000) 000-0000
To OFSC at: The Old Fashioned Syrup
Company, Inc.
0000 X.X. Xxxx Xxxxx
Xxxx., X-00
Xxxx Xxxxx, XX 00000
Attn:________________________
Tel: (
)_________________
Fax: (
)_________________
with copies to: Aronauer, Goldfarb, Xxxxx &
Re, LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
00000
Attn: Xxxxxx Xxxxxxxx,
Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
THE OLD FASHIONED SYRUP BEVERAGE HOUSE,
INC.
COMPANY, INC.
By: /s/ Xxxx Xxxxxx By: /s/ Xxxxx X. Xxxxxxxxx
Title: Chair/CEO Title: President
EXHIBIT A
Product
The Product covered by the terms and conditions contained herein shall
specifically be the following:
[Sweet 'N Low brand chocolate syrup]
Specifications
Supplier shall develop, manufacture, package, label and deliver the Product
according to the following instructions and specifications:
EXHIBIT B
Pricing.
The following prices are based on an annual volume of 100,000 gallons of
the Product to be purchased by OFSC. All prices are subject to change in the
event 100,000 gallons of Product is not purchased annually by OFSC. The retail
pack price includes an allotment of seventy-two cents ($.72) per case for front
and back labels. A one-time setup charge shall be issued to OFSC by Supplier in
the event camera- ready art for such labels is provided by OFSC to Supplier.
Prices will be reviewed quarterly during the Initial Term and any Renewal
Term(s) in order to analyze price increases or reductions based on increased
costs, increased sales, or other factors affecting price.
PACKAGING XXXX XXXXX
00 XXXXXX XXXX $247.00
4/1 GALLON PACKAGES $20.60
RETAIL PACK $11.40
CLUB PACK* $12.95
The Club Pack price may be adjusted downward depending upon the carton
selected by OFSC.
