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Exhibit 10
FLAVORED SYRUPS
MASTER AGREEMENT
THIS MASTER AGREEMENT (the "Agreement") is made this 1st day of
September, 1999, by and between STARBUCKS CORPORATION, a Washington corporation,
d/b/a Starbucks Coffee Company ("Buyer"), and Xxxxxxx & Xxxxxx, Incorporated, an
Ohio corporation ("Seller").
A. Seller wishes to be designated by Buyer as a supplier of the
products described in EXHIBIT A (each a "Product", collectively the "Goods").
B. Buyer is willing to designate Seller as a manufacturer and/or
supplier of the Goods, subject to compliance by Seller with the terms and
conditions of this Agreement and the Contract, as it may be amended from time to
time throughout its term. This Agreement and its exhibits shall be collectively
referred to herein as the "Agreement." The "Contract" includes the Agreement and
any other documents referenced herein, including General Provisions and all
Orders.
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Buyer and Seller hereby agree as
follows:
1. GOODS. From time to time, upon Buyer request, Seller shall
manufacture and/or supply Goods for and to Buyer. Each Product and the
specifications for such Product shall be described in EXHIBIT A, which is part
of this Agreement. A Product shall not be substituted, modified, or otherwise
changed from these specifications without first obtaining Buyer's written
approval of such change.
2. TERM. This Agreement shall be in effect commencing September 1, 1999
with an initial term of two (2) calendar years ("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 ninety (90) days prior to the last day of the
Initial Term. Otherwise, following the Initial Term, this Agreement shall
automatically renew and continue for additional one (1) year term(s) ("Renewal
Term(s)") unless canceled by either party with at least ninety (90) days written
notice. This Agreement may also be terminated earlier pursuant to the provisions
of the Contract. Notwithstanding anything contained herein, the volume of Goods
ordered and the number of orders placed during the Initial or Renewal Terms
shall be determined solely by Orders placed pursuant to Article 3.
3. ORDER AND DELIVERY. Purchase orders ("Orders") shall be placed in
writing by Buyer (or its authorized distributor), sent by U.S. Mail, facsimile
or personally delivered to Seller at the address set forth below (the "Order").
See General Provisions for additional delivery requirements. All Orders shall be
shipped F.O.B. Destination. Prices established for delivery to Buyer's York, PA
and Sparks, NV warehouses are for full truckloads only, and Buyer shall pay
additional freight cost for orders requiring delivery of less-than-truckload
quantities to these locations. Orders of less-than-truckload-quantities shall be
delivered to Buyer's Kent, WA warehouse with no additional freight cost.
4. PRICE, INVOICE AND PAYMENT. Prices for Products are described in
EXHIBIT A and shall be valid for the Contract Term. Buyer and Seller agree that
following the Initial Term, changes in the cost of commodities used in the Goods
may justify increases or decreases in prices. Any party requesting a price
revision shall provide notification to the other party and include substantial
rationale for the requested revision. Following such notification, the parties
will enter good faith negotiations for price revisions, with no guaranty that
revised prices will result.
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MASTER AGREEMENT
See the Standard Terms and Conditions for basic invoice requirements.
Invoices will be sent to the following address:
Starbucks Coffee Company
Mail Stop S-AC3
X.X. Xxx 00000
Xxxxxxx, XX 00000-0000
Payment Terms are Net 30 days.
5. NO IMPLIED REPRESENTATIONS. Buyer makes no representations,
warranties, or guarantees, express or implied, regarding the duration of this
Agreement beyond the Initial Term, or any Renewal Term. Buyer reserves the right
to terminate this Agreement as provided herein without liability to Seller for
any damages, including but not limited to consequential damages, or lost profits
or other speculative damages. Buyer shall not be liable for any expenses,
capital or otherwise, incurred by Seller to perform its obligations herein.
6. SPECIAL PROVISIONS. The most recent version of "Starbucks Coffee
Company Standard Terms and Conditions" ("General Provisions") is incorporated as
part of the Contract. Special Provision Articles below are additive to the
General Provisions and may revise the General Provisions, but any revisions to
the Buyer's physical form are rejected. In the event of a conflict between the
terms of this Agreement and the General Provisions, this Agreement will prevail.
If no special provisions are included, the General Provisions shall apply.
6.1 WIDESCALE DEFECTS/RECALL
A. Whenever Seller becomes aware that any ingredient or component of a
Product covered by this Contract is or may become harmful to persons or
property, or that the Product is defective in any manner which is or may become
harmful to persons or property, or that a Product is mis-labeled, Seller shall
immediately give notice thereof to Buyer and Seller shall provide all relevant
information with respect thereto.
B. In the event it is deemed necessary by either Buyer or Seller to
recall any quantity of the Goods, from any store of Buyer or from any Customer,
either as a result of failure of the Goods to satisfy the specifications, comply
with any warranties, or for any other reason bearing on quality and/or safety of
the Goods, Seller agrees to take such steps as Buyer deems necessary to protect
the interests of the public and Buyer and to comply diligently with all product
recall procedures established by the Food & Drug Administration. Seller shall
maintain a written recall procedure on file at its company offices.
C. Seller shall lot code each production run of Goods with a formalized
tracking system. The lot code shall identify the date and production run. Seller
agrees to bear all cost and expenses incurred by it and/or Buyer (including
consequential damages) in complying with such recall procedures, unless (and
only to the extent) such recall is the result of the gross negligence of the
Buyer. In the event Seller fails or refuses to comply with the recall of the
Goods upon request by Buyer, Buyer shall be authorized to take such action as it
deems necessary to recall the Goods from any and all stores of Buyer or from its
customers, and Seller shall reimburse Buyer for its costs and expenses incurred
in such recall procedure. Any such action taken by Buyer shall not relieve
Seller of its obligations or liability hereunder.
6.2 WARRANTIES AND REPRESENTATIONS. Seller represents and warrants,
which warranties and representations will survive the term of this Contract:
A. that the Goods, including food articles, food ingredients, food
packaging, and food labeling
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relating to or comprising the Goods or any part thereof delivered, sold or
transferred to Buyer hereunder shall be in full compliance with all applicable
federal statutes, rules and regulations, including, without limitation, with the
Federal Food, Drug and Cosmetic Act ("FDCA"), the rules and regulations
promulgated from time to time by the USDA, the Fair Packaging and Labeling Act
(FP&L Act), the Nutritional Labeling & Education Act (NLEA), the Canadian Food
and Drugs Act, the Canadian Consumer Packaging and Labeling Act, the Meat
Inspection Act, the Poultry Products Inspection Act, the Wholesome Meat Act, the
Food Additives Amendment of 1958, the Color Additives Amendment of 1960, the Tea
Importation Act, the Filled Milk Act, the Butter Act, the Federal Trade
Commission Act, and the Organic Foods Production Act of 1990, all current and
future amendments thereto, and all regulations and rules implemented thereunder
now and in the future;
B. that the Goods shall be manufactured, stored and delivered in
accordance with appropriate "Good Manufacturing Practices" or similar practices
that may be promulgated under the aforementioned acts, amendments, regulations,
and rules, as applicable, and in accordance with all state laws and local health
and sanitary ordinances or regulations, including but not limited to any
expiration date ordinances;
C. that the Goods shall not be adulterated or misbranded within the
meaning of the aforementioned acts, amendments, regulations, rules, and all
state laws and local municipal rules and ordinances, as applicable;
D. that the Goods shall not be food products which may not, under the
aforementioned acts, amendments, regulations, rules, and all state laws and
local municipal rules and ordinances, be introduced into interstate commerce
except as provided therein;
E. that the Goods will be in compliance with all accepted models and
samples and all written affirmations of fact, promises, descriptions or
specifications made or furnished by Seller and accepted by Buyer hereunder;
F. that Seller has the facilities and capacity to supply the Goods to
Buyer in accordance with the specifications of EXHIBIT A; that Seller shall use
Hazard Analysis of Critical Control Point and Statistical Process Control
techniques in its performance of this Contract; that Seller's facilities will
comply with the inspection and testing procedures established and carried out by
the American Institute of Baking, Silliker Laboratories and/or the United States
Department of Agriculture; and that Seller shall conform to the Food Safety and
Quality Assurance Standards set forth in EXHIBIT B.
6.3 INGREDIENT AND NUTRITIONAL INFORMATION.
A. Seller shall provide an ingredient list for each Product which meets
the requirements, as may be applicable, of the United States Code of Federal
Regulations, Sections 10 1. 4 and 10 1.22, and Regulation B.01.010 of the
Canadian Food and Drugs Act. Seller shall not change the formulation, the design
or the production process of a Product in any way without prior written approval
from Buyer. In the event of such approved changes, Seller shall provide Buyer
with a revised statement of ingredients for the Product. Seller shall bear all
costs and expenses associated with such change unless initiated by Buyer
direction.
B. Seller shall comply with all applicable nutritional labeling
requirements, including, but not limited to, the Code of Federal Regulations,
Section 10 1.9(a) through (c) or Regulation B.0 I of the Canadian Food and Drugs
Act, and shall pay all costs associated therewith. In the event that the Seller
changes the formulation of a Product in any way, it shall provide Buyer with
revised nutritional information for that Product. Seller shall provide
documentary evidence establishing the source from which Seller obtained such
nutritional information for the purpose of demonstrating, to Buyer's reasonable
satisfaction, that the nutritional information supplied was generated by a
credible source. If nutritional labeling is not required by applicable statute,
regulation or law, Seller nevertheless agrees to furnish all information
reasonably required by Buyer for the purpose of providing nutritional
information to its customers. Notwithstanding anything contained herein to the
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MASTER AGREEMENT
contrary, Seller agrees to provide nutritional information for any Goods
containing nutritional or dietary representations or those labeled or designated
(by way of example and not limitation) "healthy", "high fiber", "low
cholesterol", "low fat", "whole grain" or "nonfat".
6.4 PRODUCT RECALL INSURANCE. In addition to insurance required by the
General Provisions, Seller agrees to maintain product recall insurance in a
minimum amount of $2,000,000.00 per occurrence and with a deductible of not more
than $10,000.00 during the entire term of the Contract. All required policies of
liability insurance shall cover Seller's employees, agents, and independent
contractors and shall include Buyer as an additional insured, and in addition
shall contain cross liability and severability clauses protecting Buyer with
respect to claims by Seller or other persons as if Buyer were separately
insured.
6.5 EXCLUSIVITY. If a Product is designated as an "Exclusive Product"
in the Contract, Seller agrees that unless expressly agreed to in writing by
Buyer: (1) The Product will be manufactured for and supplied exclusively to
Buyer, and (2) The Seller will not manufacture, supply, distribute or sell the
Product under Seller's own label to third parties, or under any private label
for or to any other party. If the Product is designated as having "Defining
Characteristics" in the Contract, Seller agrees that it will not manufacture any
product with such Defining Characteristics for any third party, unless expressly
agreed to in writing by Buyer.
6.6 RIGHTS TO WORK - EXCLUSIVE PRODUCTS. Seller agrees that any work
performed by Seller for Buyer with respect to any Exclusive Product has been
specifically ordered and directed by Buyer. Seller hereby agrees to provide
Buyer with all work in connection with an Exclusive Product, including without
limitation, steps, processes, ingredient certification, nutritional analysis,
specifications, list of ingredients by weight and percentage, ingredient
composition, and flavoring specifications including specific brand names (the
"Work"). The Work shall be considered works-made-for-hire and all patents,
copyrights, trademarks and other proprietary rights in or related to the Work
shall be owned exclusively by Buyer. To the extent the Work is deemed to be
other than works-made-for-hire, Seller hereby irrevocably grants, assigns and
conveys to Buyer all right, title and interest in and to the Work and all works
and other proprietary data and all other materials conceived, developed or
formulated by Seller or its agents, during and in connection with the
performance of goods and services under this Contract including without
limitation all patents, trademarks, copyrights and trade secrets in the Work and
all rights to secure registrations, renewals and extensions of the same; and all
rights to make use, practice, import, export and otherwise fully exploit the
Work and any and all modifications and improvements that Seller or Buyer may
hereafter make or develop.
6.7 TRADEMARKS AND DESIGNS. The Products may bear the Starbucks and/or
Fontana name, logo and/or other proprietary marks ("Trademarks") and proprietary
designs ("Designs"). Seller acknowledges that rights to the Trademarks in the
United States are owned by Starbucks U.S. Brands Corporation under license to
Starbucks and rights to the Trademarks outside the United States are owned by
Starbucks. Seller will use the Trademarks and Designs only in the manner and
form approved by Starbucks, only with approved Products meeting Starbucks
specifications and only on Products manufactured for Starbucks at Starbucks'
direction. Seller acknowledges that the Trademarks and Designs remain the
property of their respective owner and that Seller's use of the Trademarks and
Designs does not create any separate rights. Seller agrees not to contest the
ownership of the Trademarks or Designs, not to otherwise use or attempt to
register the Trademarks or Designs in any country and to refrain from any action
adversely affecting Starbucks' trademark, copyright or other rights. Subject to
the terms of this Agreement, Starbucks grants to Seller the limited right to use
the Trademarks and Designs on and in connection with Products that are made for
Starbucks, pursuant to this Agreement and purchase orders placed from time to
time. All Trademarks and Designs shall be accurately reproduced in their
approved forms in accordance with Starbucks guidelines and graphic standards,
with such trademark and copyright notice markings as may be prescribed by
Starbucks. Seller shall promptly implement at its expense any change required by
Seller's failure to properly xxxx the Products. Seller will cooperate with
Starbucks to facilitate Starbucks control over the use of the Trademarks.
Starbucks will not use Seller's trademarks in Starbucks' advertising or
promotions except with Seller's prior written approval.
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6.8 REVISIONS TO STARBUCKS STANDARD TERMS AND CONDITIONS. The following
revisions are hereby incorporated:
A. Paragraph 7.B. "Lots/Expiration": Delete entirely.
B. Paragraph 17.B. "Termination-Convenience": Add "Buyer shall
provide 90 days written notice to Seller of such termination. To the extent that
such termination is solely for the purpose of obtaining more favorable pricing,
Seller will be given a fair opportunity to re-quote pricing for Buyer's
consideration, if such quote has not previously been requested in conjunction
with the decision to Terminate."
C. Paragraph 21.A. "Publicity": Seller may release information
regarding the Contract if required by Law, such as Securities and Exchange
Commission filings.
D. Supplier Handbook (ref. Paragraphs 15 and 6): Buyer has not
released the Supplier Handbook at the time of this execution, and will forward
it to the Seller when available. Seller's current operations are considered to
be in compliance with the Supplier Handbook.
7. NOTIFICATIONS. In accordance with the NOTIFICATIONS clause in the
General Provisions, notifications will be forwarded to the following addresses:
To Seller at: Xxxxxxx & Xxxxxx, Incorporated
00 Xxxxxxx Xxxxxxx, XX Xxx 0000
Xxxxxxxxx, Xxxx, 00000
Fax: (000) 000-0000
To Buyer at: Xxxxxxxxx Xxxxxxxxxxx
Xxxxxxxxxx Xxxxxxxxxx X-XX0
X.X. Xxx 00000
Xxxxxxx, XX 00000-0000
Fax: (000) 000-0000
with copies by mail to: Starbucks Corporation
Law and Corporate Affairs Department
X.X. Xxx 00000
Xxxxxxx, XX 00000-0000
or by delivery to: 0000 Xxxx Xxx. X.
Xxxxxxx, XX 00000
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
BUYER: SELLER:
STARBUCKS CORPORATION XXXXXXX & XXXXXX, INCORPORATED
a Washington corporation an Ohio corporation
/s/ Xxxx Xxxxxxx /s/ Xxxx X. Xxxxxxxxx
------------------------------- ---------------------------------------
By: Xxxx Xxxxxxx By: Xxxx X. Xxxxxxxxx
Title: Vice President Title: Chief Financial Officer
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