Exhibit 10.16
SALES AND PURCHASE AGREEMENT
PACKAGING RESOURCES INCORPORATED AND
TRICON RESTAURANT SERVICES GROUP, INC.
THIS AGREEMENT has been entered into and made as of the 1st day of June
1998, by and between TRICON Restaurant Services Group, Inc ("TRSG"), a
wholly-owned subsidiary of TRICON Global Restaurants, Inc, for and on behalf
of itself, as well as, Taco Xxxx Corp. ("TBC"), and their respective
subsidiaries, commonly owned affiliates, licensees, franchisees, or successors
and assigns, as their interests may appear, hereinafter collectively referred
to as "Affiliates", with an office at 00000 Xxxxxx Xxxxxxx, Xxxxxx, Xxxxx
00000 and Packaging Resources Incorporated ("PRI"), One Xxxxxx Park, 000
Xxxxx Xxxxx, Xxxxx 000, Xxxx Xxxxxx, Xxxxxxxx 00000.
WHEREAS, TRSG desires to purchase certain polystyrene cups and lids from
PRI for its customers, including the Affiliates, as set forth on Exhibit A
("Products"); and,
WHEREAS, PRI desires to sell polystyrene cups and lids to TRSG and to the
Affiliates as set forth herein.
NOW THEREFORE, in consideration of the mutual promises of performance by
PRI and TRSG and for other good and valid consideration, the receipt and
sufficiency of which is hereby acknowledged, PRI and TRSG agree to the
following terms and conditions.
1. TERM AND TERMINATION. This Agreement shall commence on the day and
year stated above, and shall continue for a term of two (2) years thereafter,
unless earlier terminated as set forth herein. In the event of a material
breach by either party of a representation, warranty, guarantee, or covenant
made by the other party, which breach is capable of cure and is not cured by
the breaching party within thirty (30) days following the breaching party's
receipt of written notice which specifies the breach, this Agreement may be
terminated. In such event, termination will be deemed to occur at the end of
such thirty (30) day period; provided, however, that such right to cure shall
not apply to any breach which is not capable of cure or is substantially the
same as a breach for which the breaching party had previously received a
notice of default pursuant to this Section during the six (6) month period
immediately preceding the occurrence of the breach in question, in which
event termination will be deemed to occur immediately upon the breaching
party's receipt of written notice thereof from the non-breaching party. In
the event that PRI fails to have product available for TRSG approved
distributors for a period of 48 hours or more arising out of PRI's breach
under this agreement, TRSG shall have the option to secure goods from other
sources to ensure un-interrupted supply to restaurants. Sourcing will resume
with PRI when product is again available and meets specifications, during the
30 day cure period. PRI shall be responsible for all
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incremental FOB and freight costs associated with securing products from
alternative sources while supply interruption persists. In addition, this
agreement may be terminated with two (2) months written notice for the
following reasons:
A. If PRI provides a lower cost of any of the products outlined in this
agreement to a competitor (e.g. QSR concept with more than 100 outlets)
of TRSG according to the terms and conditions for section 3B.
B. TRSG may terminate the agreement with respect to a particular product
if TBC discontinues the sale of that particular product. The agreement
remains in full force and effect for all products that have not been
discontinued, e.g. if TBC discontinues lids only, this agreement remains
in full force and effect with respect to the cup products. TRSG shall
pay for and take delivery of all remaining inventory as required by
termination provisions set forth in section 2.
2. QUANTITY.
A. TRSG agrees to purchase annually at least [*] of its actual requirements
of the Products or similar size and design, thermoformed polystyrene cup
products and lids (both Base Business and Promotional as defined on Exhibit
A) from PRI between June 1st, 1998 and June 1st, 1999, provided however that
PRI shall not be obligated to produce move than [*] Products per week in Year
1. Subject to TRSG's purchase requirements. PRI agrees to use good faith
efforts (i.e. normal manufacturing practices, conditions, and schedules
without overtime) to build printed min/max inventory levels as soon as
allowable in Year 1 within a range of [*] Base Business Cups/Lids (as defined
in Exhibit A) (minimum) and [*] Base Business Cups/Lids (maximum). Within
ninety (90) days of termination of this Agreement for any reason TRSG shall
pay PRI for, and agrees to take delivery of, all on-hand printed inventory, up
to [*] Base Business Cups/Lids, produced pursuant to the foregoing min/max
provision.
B. For the period from June 1st, 1999 through June 1st, 2000 ("Year 2"), TRSG
agrees to purchase at least [*] of its requirements for Products or similar
size and design, thermoformed polystyrene cup Products and lids (both Base
Business and Promotional as defined on Exhibit A) from PRI. PRI also has the
unilateral option to sell TRSG an additional [*] of TRSG's actual
requirements for the Products, provided that PRI agrees to meet competitive
prices according to the terms set forth in Section 3(D). If PRI exercises its
option:
1. PRI shall not be obligated to produce more the [*] Products per
week in Year 2.
2. Subject to TRSG's purchase requirements, PRI agrees to use good
faith efforts (as defined in Section 2(A)) to build printed min/max
inventory levels in Year 2
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within a range of [*] Base Business Cups/Lids (minimum) and [*] Base
Business Cups/Lids (maximum).
3. Within ninety (90) days of termination of this Agreement for any
reason, TRSG shall pay PRI for, and agrees to take delivery of, all
on-hand printed inventory, up to [*] Base Business Cups/Lids produced
pursuant to the foregoing min/max provision.
If PRI does not exercise its option to sell the additional [*] of Products to
TRSG, weekly production and min/max levels from Year 1 remain in effect through
June 1st, 2000.
C. The above min/max volumes are for Base Business Cups and Lids only and are
subject to reduction within a reasonable period of time, depending upon
shipment requirements, based on updated forecasting information submitted in
writing from TRSG. PRI will maintain a minimum of four weeks of inventory and
a maximum of eight weeks of inventory based on the revised forecast from TRSG.
D. Promotional cups will be produced based on volume requirements requested
by TRSG and accepted by PRI at the time TRSG places the Promotional order and
are not part of the min/max provision mentioned in 2 A and B.
E. All purchases of Products hereunder shall be made pursuant to purchase
orders/release orders generated by TRSG, of its designee, and transmitted by
paper, telephonically, or electronically. The purchase price and payment for
Products shall be made in accordance with Section 3 below. All the terms and
conditions of this Agreement shall apply to every purchase order/release
order issued. In the event of a conflict between the terms and conditions of
this Agreement and a purchase order/release order, the terms and conditions
of this Agreement shall prevail.
3. PRODUCTS AND PRICING.
A. TRSG and PRI agree that the polystyrene cups and lids, covered by this
Agreement are itemized in Exhibit "A" ("Products"), along with the parties'
agreement on pricing for said Products between June 1st, 1998 and June 1st,
1999.
B. PRI agrees that, during the term of this Agreement and in
consideration for TGR's annual minimum purchase commitment, the pricing for
the Products (considering the same or like grade and quality of resin,
rebates, and other terms and conditions) purchased will be as favorable as,
or better than, the pricing the Products are being sold by PRI to other
similarly situated buyers. In the event PRI sells Products to another buyer
at a lower price for the same or similar quantities and same or like terms
and conditions, PRI is obligated to promptly offer the lower price, in
writing, to TRSG. PRI warrants that the price for Products, listed on Exhibit
A shall be complete and no additional charges of any type shall be added
without TGR's prior written agreement.
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C. PRI agrees to guarantee pricing for items in Exhibit "A" throughout
the first year of the agreement. After which, PRI will adjust pricing
quarterly (up or down) for fluctuations in the cost of High Impact
Polystyrene ("HIPS") resin. The HIPS baseline price ("Baseline Price") will
be the HIPS price quoted in MONTHLY PETROCHEMICAL & PLASTICS ANALYSIS,
published by Chemical Data, Inc., as of June 1, 1999. The product price will
not be adjusted unless the quoted HIPS price moves outside of a range of [*]
per pound upward or downward from the Baseline Price. On June 1, 1998, and on
the first day of each succeeding quarter through the remainder of the term of
the Agreement, the Product price will be adjusted according to the resin
escalator/de-escalators on Exhibit A if the HIPS price published in MONTHLY
PETROCHEMICAL & PLASTICS ANALYSIS thirty (30) days prior to the start of the
quarter is outside of the total [*] range set forth above. This price
increase or decrease will be calculated on a [*] per lb.
escalator/de-escalator, as specified in Exhibit A.
D. If PRI exercises its option to supply [*] of TRSG's requirements
pursuant to Section 2 (B), PRI agrees to match good faith competitive prices
as of June 1st, 1999. Any competitive price comparison must be documented for
a TSRG-approved supplier and the same product specifications, technological
requirements, quantities, and other terms and conditions. The price arranged
as of June 1st, 1999 would remain in effect through June 1st, 2000, subject
only to resin adjustments provided in Section 3(C). If PRI does not exercise
its option to sell the additional [*] of Products to TRSG, the price in
effect at the [*] level as of June 1st, 1999, will remain in effect
throughout June 1st, 2000, subject only to resin adjustments provided in
Sections 3(C).
E. TRSG, or its designee shall pay for Products on the terms of 1% ten
(10) days, net thirty (30) days. Products will be delivered to distribution
centers servicing TBC restaurants, FOB Plant of Manufacture.
4. ADDITIONAL COMMITMENTS.
A. PRI agrees to provide artwork and print plate services according to
the terms and conditions contained in Exhibit C subject to PRI's capacity
constraints as they may exist at the time TRSG requests the service.
B. TRSG agrees to use reasonable efforts to provide PRI the "best"
available information concerning Product usage, market conditions,
promotional initiatives, and Product deletions in an effort to allow PRI to
efficiently supply and manage inventory levels and costs.
C. TRSG and PRI agree to create a joint product development process,
review cost savings hereunder, whereby savings will be shared on a 50/50
basis except where PRI unilaterally commits within its sole discretion to
provide the capital investment, in which case PRI will receive 100% of the
savings until the capital investment is recovered and at which point
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the savings will be shared 50/50; and set priorities, track and measure
progress and results of the foregoing efforts.
5. NOTICES. All notices pertaining to this Agreement shall be in
writing, and shall be deemed to have been duly given if hand delivered or
mailed by certified or registered mail, postage prepaid, and if addressed to
the party at the address shown on the face hereof or if addressed to such
other address as may be furnished in writing by either party.
6. SPECIFICATIONS. Specifications are attached hereto as Exhibit A.
PRI agrees to manufacture the Products in compliance with such
specifications. In the event PRI fails to comply with said specifications,
TRSG shall have the right to reject that Product as a nonconforming product.
No specification or specifications provided by TRSG or any Affiliate with
respect to any Product shall constitute a warranty, expressed or implied,
against any claims for infringement of patents, copyrights, trademarks, or
other intellectual property rights of any third party, and neither TRSG nor
any Affiliate shall be responsible to PRI, as indemnitor or otherwise, for or
on account of any such claim or liability.
7. ARTWORK AND WORDING. Except to the extent caused by PRI's
negligence or willful misconduct, TRSG assumes all responsibility for the
content of all artwork and wording printed on the Products, including the
assurance that such complies with all governmental and/or regulatory
(federal, local, or state) regulations and law concerning the Products. TRSG
agrees to indemnify and hold PRI harmless for any claims by any party arising
out of any deficiency or misstatement in labeling of the Products not caused
by the negligence or willful misconduct of PRI.
8. ASSIGNMENT. Neither this Agreement, nor its rights or obligations,
are assignable or transferable to any other party, except with the written
consent of the non-assigning party, which consent shall not be unreasonably
withheld. Notwithstanding the foregoing, however, TRSG shall have the
absolute right to assign or transfer this Agreement, indivisibly, to any of
the Affiliates, or to its successor in the context of a spin-off or other
reorganization involving TRSG or any of the Affiliates. Such an assignment or
transfer shall not relieve the assigning party of any of its rights or
obligations hereunder unless specifically agreed to by the other.
9. NOTICES GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS
OF THE STATE OF TEXAS.
10. WAIVER. No provision of this Agreement may be waived by either
party except in writing. Failure of either party to enforce any provision
hereof shall not be deemed to constitute a waiver of such provision with
respect to future breaches thereof.
11. WARRANTIES. PRI makes no warranty of any kind, either express or
implied, by fact or by law, other than as set forth below:
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A. WARRANTY OF CONFORMITY TO LAW. PRI warrants that the Products have
been or will be manufactured, processed, fabricated, and/or produced and may
be shipped, sold and used in a customary manner without violation of any law,
ordinance, rule or regulation of any governmental body, including without
limitation:
1. the Fair Labor Standards Act;
2. the Federal Consumer Product Safety Act;
3. the Federal Insecticide, Fungicide, and Rodenticide Act;
4. the Food, Drug, and Cosmetic Act;
5. the Federal Hazardous Substances Act;
6. the Occupational Safety and Health Act of 1970; and
7. the Equal Employment Opportunity Act
and/or any rules or regulations promulgated pursuant thereto.
B. WARRANTY OF MATERIALS AND WORKMANSHIP. PRI warrants that the
Products shall be free from defects in design and manufacture.
C. WARRANTY OF COMPLIANCE WITH SPECIFICATIONS. PRI warrants that the
Products delivered to TRSG and Affiliates pursuant to this Agreement will be
of PRI's standard quality and will meet in every respect the Product
specifications set forth in Exhibit A attached hereto. No deviations from
such specifications shall be made unless previously authorized, in writing,
by TRSG or an Affiliate.
D. WARRANTY OF TITLE. PRI warrants that it has the right to transfer
good and merchantable title to the Products; that the Products now are, and
on delivery will be, free from all security interests and other liens and
encumbrances, and that TRSG will have peaceful possession and quiet enjoyment
of the Products.
E. WARRANTY AGAINST INFRINGEMENT. PRI warrants that neither the
unprinted nor unlabelled Products nor their normal use or resale will
infringe any patents, copyrights, trademarks, or other intellectual property
rights now existing or hereafter issued by the United States of America or
any foreign country. PRI further warrants that the words it thermoforms into
the bottom of the cup products do not infringe any patents, trademarks
copyrights, or intellectual property now existing. PRI hereby agrees that
upon prompt notification by TRSG of the commencement of any claim, suit or
proceeding against TRSG alleging infringement of any patent, trademark,
copyright or intellectual property rights subject to the warranty above, not
otherwise arising from a patent, trademark, copyright or intellectual
property rights held by TRSG, PRI shall defend, and indemnify and hold TRSG
and Affiliates harmless against any such claim, suit, or proceeding, at PRI's
sole expense. PRI hereby agrees that if the Products are held to constitute
an infringement of any such patent, trademark, copyright, or intellectual
property rights or the use of the Products are enjoined due to such
infringement, PRI shall, at its sole
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expense, either procure for TRSG and Affiliates the right to continue use of
the Products or replace the Products with non infringing Products of similar
quality and quantity, or modify the Products to the extent necessary to cause
them to be non infringing without materially affecting their value to TRSG,
or remove the Products and refund to TRSG the price thereof including
transportation and installation; provided however, that nothing in this
paragraph shall limit or otherwise affect any remedy in law or equity that
TRSG may have against PRI for breach of any warranty or other obligation
herein.
TRSG warrants that graphic designs, pictures, or wording it submits to PRI
for printing or labeling on the Products do not infringe any patents,
copyrights, trademarks, or other intellectual property rights now existing or
hereafter issued by the United States of America or any foreign country. If
TRSG breaches the foregoing warranty, it shall indemnify PRI pursuant to
Section 23.
F. SAMPLE OR MODEL. PRI warrants that the Products shall conform to
samples furnished to TRSG which is made a basis of the bargain.
G. SURVIVAL OF WARRANTIES. All warranties, express and/or implied,
shall survive inspection, delivery, acceptance, and payments by TRSG, subject
to the Agreement's limitation of actions provision which is contained at
Section 14.
12. RIGHT TO INSPECT. The parties agree that TRSG may, from time to
time, inspect the Products during their manufacture, processing,
construction, and/or preparation upon reasonable notice to PRI at PRI's place
of business. TRSG may, in addition to the described inspections, make any
further reasonable inspections it may desire, including but not limited to,
inspection at the time of delivery and/or completion of the Products.
13. EXCUSE OF PERFORMANCE. No liability shall result from delay in
performance caused by act of God, fire, flood, war, government action, or
other circumstances beyond the control of the party affected. Quantities so
affected may be eliminated from this Agreement at the discretion of the party
affected without liability to the other.
14. LIABILITY. Any action for breach of this Agreement must be commenced
within one (1) year after the cause of action in question accrues. Neither
party shall be liable to the other for any incidental or consequential
damages.
15. CAPTIONS. The captions used herein are inserted only as a matter of
convenience and for reference and in no way define, limit, or describe the
scope of the intent of any Paragraph hereof.
16. SEVERABILITY. In case any one or more of the provisions contained in
this Agreement shall for any reason be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision thereof, and
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this Agreement shall be construed as if such invalid, illegal, or
unenforceable provision had never been contained herein.--
17. OTHER DOCUMENTS. The terms, conditions, and provisions of any
invoice, billing statement, confirmation, receipt, or other similar document
relating to this Agreement, other than a written addendum or amendment
hereto, shall be subject and subordinate to the terms, provisions, and
conditions of this Agreement and, in the event of a conflict between the
terms, conditions, and provisions of any such document and of this Agreement,
the terms, conditions, and provisions of this Agreement or subsequent
agreement shall govern.
18. AUTHORIZATION. The parties represent and warrant that they have the
full and complete authority to enter into and perform this Agreement. The
individuals executing this Agreement on behalf of the parties represent and
warrant that he or she have the full and complete authority to do so and that
the parties will be bound thereby.
19. MEDIATION. All claims, disputes, and controversies arising out of or
in relation to the performance, interpretation, application, or enforcement
of this Agreement, including but not limited to, breach thereto, shall be
referred to mediation before, and as a condition precedent to, the initiation
of arbitration. If during mediation, a party ("offering party") makes a
written offer of compromise to another party which is not accepted by said
party ("refusing party") and the refusing party fails to obtain a more
favorable judgment or award in arbitration, the refusing party shall pay all
of the offering party costs and expenses, including reasonable attorney's
fees, incurred from the time the offer is refused. All applicable statutes of
limitation and defenses based upon the passage of time shall be tolled while
the mediation procedures described herein are pending. The parties will take
such action, if any, required to effectuate such tolling. Each party is
required to continue to perform its obligations under this contract pending
final resolution of any dispute in mediation or arbitration arising out or
connected to this contract.
20. ARBITRATION. Any disputes unresolved by mediation and arising out
of, or in connection with, this Agreement shall be settled exclusively by
arbitration in Dallas, Texas, in accordance with the commercial arbitration
rules of the American Arbitration Association by one arbitrator selected in
accordance with such rules. All documents and hearings in such arbitration
shall be prepared in the English language and each party shall bear its own
cost of presenting its case, including one half (1/2) the cost of the
arbitrator unless Paragraph 19 is applicable.
21. INTEGRATION. This Agreement and Exhibits constitutes the entire
agreement between the parties relating to the subject matter hereof and may
be amended only by writing signed by the party to be bound. No oral
modification of this Agreement or Exhibits shall have any legal effect.
22. CONFIDENTIALITY. The parties agree to the terms and conditions of
the attached Confidentiality Agreement which is referenced as Exhibit B and
incorporated herein.
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23. INDEMNIFICATION. To the extent PRI shall fail to meet the
specifications agreed to by the parties in accordance with Section 6 with
respect to Products, PRI agrees to defend, indemnify and hold harmless TRSG
and the Affiliates, from and against any and all claims, suits, losses,
damages, regulatory proceedings, liabilities, and\or expenses (including
reasonable attorney's fees and costs) of every kind whatsoever (collectively
"Claims") which may arise from or be connected with the breach of any
representation, warranty, covenant, or other obligation of PRI contained in
this Agreement. To the extent the Products supplied hereunder comply with the
specifications agreed to by the parties in accordance with Section 6, TRSG
shall indemnify, defend, and hold PRI harmless from and against any and all
demands, claims, actions, suits, and proceedings which may at any time be
brought against PRI and any all liabilities, losses, damages, costs, and
expenses (including, but not limited to reasonable attorneys' fees and other
legal costs and expenses) arising from or in connection with the handling,
transportation, or use of the Products or the items to be sold within the
Products and/or the breach of any obligation of TRSG contained in this
Agreement.
The provisions of this Section 23 shall survive the expiration or earlier
termination of this Agreement.
24. PRODUCT RECALLS. In the event that TRSG or any Affiliate
reasonably determines that it is necessary to recall any Products
manufactured or provided by PRI hereunder (I) for any reason bearing on their
safety, or (ii) for any material non- conformance of the Products with
specifications agreed to by the parties in accordance with Section 6. PRI
agrees to comply with recall procedures reasonably established from time to
time by TRSG or the Affiliates. Furthermore, PRI agrees to bear all costs and
expenses incurred by it in complying with such recall procedures. If TRSG and
PRI are unable to agree on whether the recall is necessary as required
herein, the parties shall advance equally the cost of the recall (including
the cost of any immediate recall solutions necessary for any Product not yet
delivered) and the parties shall initiate the dispute resolution process
described in Section 19 and 20 above.
25. ADVERTISING OR PUBLICITY OR ENDORSEMENTS. PRI agrees to disclose
and coordinate with TRSG any public announcement of this Agreement. However,
PRI retains the unilateral right to control final content of any public
announcement as required by law upon sole judgment of its legal counsel. PRI
shall not use the name of TRSG on any product or services which is directly
related to this Agreement or in any advertising, sales brochures, sales
presentations, trade shows, service proposals without the prior written
consent of TRSG. Such consent shall not be unreasonably withheld. By entering
into this Agreement, TRSG does not directly or indirectly endorse any product
or services provided by PRI, its successors, or licensees and no official
endorsement should be inferred. PRI shall not in any way imply that this
Agreement is an endorsement of any such product or service.
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IN WITNESS WHEREOF, and in agreement hereto the undersigned individuals
representing their respective companies have executed this Agreement.
"TRICON Restaurant Services Group" "Packaging Resources Incorporated"
"TRSG" "PRI"
By: /s/ Xxxx Xxxxxxx By: /s/ H.P. Xxxxxx
------------------------------- -------------------------------
Title: V.P. Title: Pres. C.E.O.
---------------------------- ----------------------------
Date: 10/12/98 Date: 10/26/98
----------------------------- -----------------------------
APPRVD AS
TO FORM
BY: /s/ WMS
--------
LAW DEPT.
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EXHIBIT "A"
"PRODUCTS" PRICING
CUP DISPOSABLE
CATEGORY SIZE DESCRIPTION VOLUME CUP LID
----------- ------------- --------------- ----------- ----------- -----------
Base 32 oz. 1-6 colors [*] [*] [*]
Business Cruiser Per Design
Cups/Lids (Thermoformed)
Base 32 oz. Therimage [*] [*] [*]
Business Cruiser Standard Per Design
Cups/Lids (Thermoformed)
Base 32 oz. Therimage [*] [*] [*]
Business Cruiser Color Change Per Design
Cups/Lids (Thermoformed)
Base 32 oz. Game Label [*] [*] [*]
Business Cruiser Application Per Design
Cups/Lids (Thermoformed) (See attached
Exhibit A-1)
PRICING NOTES - PRINTED CUP
1) Cup prices are based on minimum order of [*] (one design).
2) Prices are quoted per thousand cups and include the following:
A) Case pack of 500 for 32 oz. Cups.
B) Case Pack of 1,500 for lids.
C) Line art charges and/or Process art charges.
D) Prices are F.O.B. Plant of Manufacture (i.e. freight is not included
in prices).
E) Floor loading only.
PRICING NOTES - THERIMAGE CUP
1) Pricing includes white cup, therimage label and therimage label
application.
2) Pricing DOES NOT include cylinder artwork charges.
3) Art charges - cylinders:
ONE IMAGES
Line Cylinders (17") [*]
Line Cylinders (31") [*]
--------------------
Process Cylinders (17") [*]
Process Cylinders (31") [*]
-----------------------
4) Prices are F.O.B. Kansas City (i.e. freight is not included in prices).
5) Therimage color change includes maximum of two color change colors.
CUP DISPOSABLE
CATEGORY SIZE DESCRIPTION VOLUME CUP LID
----------- -------------- --------------- ----------- ----------- -----------
Promotional 32 oz. 1-6 Colors [*] [*] [*]
Cups/Lids Cruiser Cup per Design
(Thermoformed)
Promotional 32 oz. 1-6 Colors [*] [*] [*]
Cups/Lids Cruiser Cup per Design
(Thermoformed)
Promotional 32 oz. Therimage [*] [*] [*]
Cups/Lids Cruiser Cup Standard per Design
(Thermoformed)
Promotional 32 oz. Therimage [*] [*] [*]
Cups/Lids Cruiser Cup Color Change per Design
(Thermoformed)
Promotional 32 oz. Game Label [*] [*] [*]
Cups/Lids Cruiser Cup Application Per Design
(Thermoformed) (See attached
Exhibit A-1)
PRICING NOTES - PRINTED CUP
1) Same as above for Base Business cups EXCEPT pricing DOES NOT include Line
art and/or Process art charges; such additional charges are as follows:
A) Line Art - [*] per color
B) Process Art - [*] per design
PRICING NOTES - THERIMAGE CUP
1) Same as above for Base Business cups.
EXHIBIT "A"
"PRODUCTS"
[LOGO]
TACO XXXX PACKAGING SPECIFICATION
Date Written: 6/1/98
Specification Number: 0134
Author: A. Marvel
PCN# TBD
-------------------------------------------------------------------------------
TITLE: Cup Lid for 32 oz Cruiser Cup (Packaging Resources Incorporated)
DESCRIPTION: Thermoformed Plastic Snap On Cup Lid for Disposable Cruiser Cup
MATERIAL: High Impact Polystyrene
Blue Color Concentrate (Ferro CS682261 - FDA)
DIMENSIONS: Outside Diameter [*]
Lid Weight Target [*]
Lid Weight Minimum [*]
Lid Wall Thickness Minimum [*]
DRAWING NUMBER/SUPPLIER: Reference Packaging Resources Lid Drawing #766C,
revision B dated 5-28-98
PRINTING: Embossed per approved drawing
PACKING INSTRUCTIONS: 1500 Lids/Case
100 Lids/Sleeve
15 Sleeves/Case
ADDITIONAL INFORMATION: Supplier must comply with FDA GMP practices in
manufacturing, processing, packaging and storage of
Taco Xxxx products.
This lid specification is to be used only with the [*]
lip diameter 32 oz. Cruiser Cup.
-------------------------------------------------------------------------------
APPROVAL: /s/ Xxxx X. Marvel 6/1/98 Alex Marvel National Packaging Manager
----------------------------
EXHIBIT "A"
"PRODUCTS"
[LOGO]
TACO XXXX PACKAGING SPECIFICATION
Date Written: 6/3/98
Specification Number: 0138
Author: A. Marvel
PCN# TBD
-------------------------------------------------------------------------------
TITLE: Cup Lid for 32 oz Cruiser Cup (Packaging Resources Incorporated)
DESCRIPTION: Thermoformed Plastic Snap On Cup Lid for Disposable Cruiser Cup
MATERIAL: High Impact Polystyrene
Blue Color Concentrate (Ferro CS682261 - FDA)
DIMENSIONS: Outside Diameter [*]
Lid Weight Target [*]
Lid Weight Minimum [*]
Lid Wall Thickness Minimum [*]
DRAWING NUMBER/SUPPLIER: Reference Packaging Resources Lid Drawing #TBD
PRINTING: Embossed per approved drawing
PACKING INSTRUCTIONS: 1500 Lids/Case
100 Lids/Sleeve
15 Sleeves/Case
ADDITIONAL INFORMATION: Supplier must comply with FDA GMP practices in
manufacturing, processing, packaging and storage of
Taco Xxxx products.
This lid specification is to be used only with the [*]
lip diameter 32 oz. PRI Cruiser Cup.
-------------------------------------------------------------------------------
APPROVAL: /s/ Xxxx X. Marvel 6/3/98 Alex Marvel National Packaging Manager
----------------------------
EXHIBIT "A"
"PRODUCTS"
[LOGO]
TACO XXXX PACKAGING SPECIFICATION
Date Written: 2/15/98; 5/20/98 (updated)
Specification Number: 0132
Author: A. Marvel
PCN# TBD
-------------------------------------------------------------------------------
TITLE: Plastic Cruiser Cup, 32 oz (Packaging Resources Company)
DESCRIPTION: A printed disposable 32 oz. white plastic cup
MATERIAL: High impact polystyrene
White concentrate
DIMENSIONS: Height [*]
Rim Diameter [*]
Base Diameter [*]
Diameter under stack shoulder [*]
Rim thickness [*] Maximum
Cup weight [*]
Fill Volume (to brim) [*]
Side wall caliper [*] Minimum
DRAWING NUMBER/SUPPLIER: Reference Packaging Resources Drawing #106758,
Revision B, dated 5/21/98
PRINTING: 6 color maximum printing per approved artwork
Dry offset lithographic printing
PACKING INSTRUCTIONS: Polybagged @ 500 cups per case
25 cups/stack
20 stacks/case
ADDITIONAL COMMENTS: The supplier must comply with FDA GMP practices in the
manufacturing, processing, packaging and storage of Taco
Xxxx Products.
-------------------------------------------------------------------------------
APPROVAL: /s/ Xxxx X. Marvel 5/21/98 Alex Marvel National Packaging Manager
----------------------------
EXHIBIT "B"
PACKAGING RESOURCES, INCORPORATED
AND
TRICON RESTAURANT SERVICES GROUP, INC.
MUTUAL CONFIDENTIALITY AND NONDISCLOSURE AGREEMENT
This Agreement in letter form follows discussions with TRICON Global
Restaurants Inc. ("TRSG") concerning the feasibility of a business
relationship between TRSG, for and on behalf of itself, as well as, Taco Xxxx
Corporation ("TBC") and their respective subsidiaries, commonly owned
affiliates, licensees, franchisees, or successors and assigns, as their
interests may appear, hereinafter collectively referred to as "Affiliates"
and Packaging Resources, Incorporated ("PRI") relating to TRSG's desire to
purchase polystyrene cups and lids from PRI. To permit TRSG and PRI to
jointly pursue this objective, it may be necessary for TRSG or PRI to
disclose to the other certain confidential and proprietary business and
technical information relating to our respective businesses.
In furtherance of this joint project, and to protect the confidential
and proprietary information of both PRI and TRSG, it is agreed we will keep
confidential (and not make any unauthorized use or disclosure, prior to,
during, or subsequent to the relationship between the companies without prior
written consent) the fact that we have entered into this relationship, any
knowledge or information of a confidential or proprietary nature acquired by
us from the other during the course of our relationship, including
information relating to the business (including the detail, operation,
layout, or design of equipment or manufacturing facilities), research, or
engineering activities of our companies, to our manufacturing processes,
formulas, and ingredients, or trade secrets, or to our sources of supply or
lists of customers, or to our marketing, or product plans, or contemplated
actions in those areas. We agree to limit access to any confidential or
proprietary information only to our agents and employees directly involved in
the relationship having a bona fide need to such access. We further agree to
take such steps as may be reasonable with them to insure their awareness of
these obligations.
It is understood that the foregoing obligations of confidence,
nondisclosure, and nonuse do not apply to (a) information already known to
either TRSG or PRI prior to the date of this Agreement and not subject to any
nondisclosure covenants, (b) information publicly available or which becomes
publicly available without a breach of this or any other Agreement by either
11
company, (c) information rightfully received from a third party, or (d)
information independently developed by either company prior to receipt of
such information from the other. The obligations in this Agreement regarding
confidentiality shall continue during its terms and for a period of two (2)
years thereafter.
All confidential and proprietary information shall remain the property
of the disclosing company; all documents, copies, and other tangible property
made, or received, by our companies during the course of the relationship
based on or related to such information will be the sole property of the
disclosing company. Neither company shall acquire any rights in such property
(or the intellectual property rights of the other), nor be obligated to enter
into any other business relationship, on account of this Agreement, unless
otherwise agreed to in writing. Upon written demand, the receiving company
will expeditiously deliver to the disclosing company all tangible forms of
this information.
This letter represents the entire Agreement between PRI and TRSG with
respect to the subject matter; it will be governed by the laws of Texas and
its terms may not be varied, except in writing signed by both parties. Any
action or proceeding which arises out of or relates to this Agreement shall
be brought only in a state or federal court located within Dallas County,
Texas.
TRICON RESTAURANT SERVICES GROUP, INC. PACKAGING RESOURCES INCORPORATED
By: /s/ Xxxx Xxxxxxx By: /s/ H.P. Xxxxxx
---------------------------------- ----------------------------
Title: VP. Title: Pres. C.E.O.
------------------------------- -------------------------
Date: 10/12/98 Date: 10/26/98
--------------------------------- --------------------------
12
EXHIBIT "C" FINAL
[LOGO]
March 26, 1998
Xxxxxx and Alex,
Achieving a consistent level of graphics among multiple suppliers is an
important component to the success of the Taco Xxxx polystyrene cup program.
Packaging Resources shares your opinion that realization of this goal is best
achieved through the use of a lead graphics supplier. In undertaking this
role, Packaging Resources understands its role to include the following:
- Evaluate initial artwork and perform any necessary revisions
- Generate and supply color proofs to all parties (Taco Xxxx, Solo,
Sandusky, Design firm)
- Supply films to other suppliers (Solo, Sandusky) that meets their
specific printing requirements
- Supply printing plates where necessary (process art) to other
suppliers (Solo, Sandusky)
- Provide initial target cups to other suppliers (Solo, Sandusky)
A more detailed explanation of how Packaging Resources envisions its role in
the Taco Xxxx polystyrene cup program, including costs and timing, is as
follows:
ARTWORK
Dry offset printing is a unique process that has different requirements from
conventional paper printing. As such, and in order to minimize delays, it is
important that Packaging Resources be involved in the planning stages of any
artwork design. Although requirements will vary from job to job, the attached
Line Art Design Specifications (Exhibit 1) and Process Art Design
Specifications (Exhibit 2) provide guidelines as to acceptable artwork. Any
deviations from these attached guidelines could result in additional costs
and delays.
PRE-PRESS
Upon receipt of artwork meeting the defined specifications, Packaging
Resources will undertake in 10 working days the following steps:
CUSTOMER ARTWORK EVALUATION
Packaging Resources will analyze the artwork design and determine the
following:
- Can this design be printed successfully or are changes required?
- Is the design line or process art?
- Basic print area sizes
- Size and location of graphic elements
- Number of and designations of Pantone colors
- Required customer approved target proof and originals (Process
design only)
COMMUNICATION WITH ALL INVOLVED PARTIES
Packaging Resources will communicate to Taco Xxxx, Solo, Sandusky, and
the involved design firm our questions, concerns and recommendations
concerning the received artwork
ANY NECESSARY ARTWORK REVISIONS
The above stated pre-press procedure is performed at no cost to you.
However, if significant artwork revisions are required, costs as defined
on the attached Line Art Design Specifications or Process Art Design
Specifications will apply.
[LETTERHEAD]
PRI COLOR PROOFING
Upon receipt of customer approved artwork, Packaging Resources will generate
color proofs at the following cost:
1st color proof [*]
Each additional color proof [*]
If upon receipt of the color target proof you require significant "artistic"
changes (i.e. changing size and/or location or graphic elements, copy
changes, photo retouching, etc.), costs as defined by the Line Art Design
Specifications and Process Art Design Specifications will be incurred. Even
though the amount of time required for these revisions will vary depending on
the amount of work necessary, the PRI color proofing system offers an
opportunity for both time and cost savings on color proof revisions.
Packaging Resources can generally complete most revisions and provide a
revised color proof within 24 hours (this turnaround time can further be
reduced to as little as a couple of hours if the customer is on-site). In
comparison, Chromalin proofs as supplied by a third party vendor on the
recent Taco Xxxx Godzilla project cost [*] for a 1st color proof and took two
days to turnaround.
Although the Packaging Resources color proofing system provides the closest
representation of Pantone colors available; you should refer to the attached
Pantone color chips for the actual target ink colors. For line art designs,
the provided color chips will serve as the target colors. For process art
designs, the PRI color proof will serve as the color target proof for your
cup.
FILM
Upon receipt of an approved target color proof, Packaging Resources will
begin film preparation. Film produced for Solo and Sandusky will take into
account their individual plate and press specifications (film for both will
be right reading, emulsion down). Film preparation procedures will differ
between line art and process art and are defined as follows:
LINE ART
- 5 working days for film preparation
- [*] per color plus mail charges
- Film and target printed cup supplied to Solo and Sandusky
After the first few initial designs, it is Packaging Resources belief that we
will have developed a better understanding of other supplier plates and
presses and therefore, we will be able to reduce our film preparation time to
3 days.
PROCESS ART
- 10 working days for film preparation
- Maximum film charge of [*] (this charge will vary depending on the design
elements and can be as much as [*] less)
- Taco Xxxx press proof at Packaging Resources facility (refer to Exhibit 3 -
PRI Press Proof Policy for specific guidelines)
- Film, target printed cup and initial printing plates ([*] per plate plus
freight charges) to Solo and Sandusky within 24 hours of cup approval
[LETTERHEAD]
In addition, Packaging Resources would like to be represented at all press
proofs in which our film is used. We believe that this will help eliminate
any miscommunication between suppliers and further ensure the desired
consistency.
Packaging Resources looks forward to its role in making the Taco Xxxx
polystyrene cup program a success. If you should have any questions or need
of further information, please do not hesitate to contact me.
Sincerely,
/s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx
Manager of Graphics
cc: Xxxxx Xxxxx - Tricon
Xxx Xxx - Xxxxxxxx
Xxxx Xxxxxxxxxxxx - Solo
