SUPPLY AGREEMENT
THIS SUPPLY AGREEMENT (this "Agreement") effective as of February
13, 1997, is by and between CARALOE, INC., a Texas corporation
("Seller"), and ALOE COMMODITIES INTERNATIONAL, INC., a Texas
corporation ("Buyer"),
WITNESSETH:
WHEREAS, Seller desires to sell to Buyer, and Buyer desires to
purchase from Seller, Caraloe's bulk raw material for drinks and other
consumer products (hereinafter referred to under the name "Products")
in the quantities, at the price, and upon the terms and conditions
hereinafter set forth; and
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, the parties hereto agree as
follows:
1. Term. The term of this Agreement shall commence on February
13, 1997, and shall end at midnight on January 31, 2007 , unless sooner
terminated as provided herein (the "Term").
2. Sale and Purchase. Subject to the terms and conditions of
this Agreement, Seller shall sell to Buyer, and Buyer shall purchase
from Seller, during each year of the Term, agreed upon monthly
quantities equal to all of Buyer's needs for bulk raw material for the
Products. Seller shall, however, not be required to sell monthly
quantities in excess of Seller's present plant, farm or manufacturing
capacity. The Products specifications shall be mutually agreed upon
by the Parties within ninety (90) days from the date of execution of
this Agreement. Failure to reach agreement on the specifications
within ninety (90) days shall cause this Agreement to terminate unless
an extension thereto is mutually agreed upon by the Parties hereto.
The initial Products and specifications shall not include Manapol
powder but such product may be added after March 31, 1997, if the
Parties so agree.
3. Quality. Seller warrants to Buyer that all bulk raw material
sold by Seller pursuant to this Agreement will generally conform to the
quality specifications set forth in Exhibit A to this Agreement as per
Buyer and Seller mutual agreement referenced above. EXCEPT AS PROVIDED
IN THIS PARAGRAPH 3, THERE ARE NO WARRANTIES OR REPRESENTATIONS OF ANY
KIND, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF
MERCHANTABILITY, FITNESS AND FITNESS FOR A PARTICULAR PURPOSE, MADE
WITH RESPECT TO THE BULK RAW MATERIAL TO BE SOLD HEREUNDER, AND NONE
SHALL BE IMPLIED BY LAW.
4. Deliveries. Buyer shall instruct Seller from time to time
during the Term, by placing a purchase order with Seller reasonably in
advance of the date Buyer desires bulk raw material to be delivered to
it hereunder, (i) as to the quantities of bulk raw material to be
delivered to Buyer, (ii) as to the specific date of delivery, (iii) as
to the specific location of delivery and (iv) as to the carrier or
particular type of carrier for such delivery. During the Term, Buyer
shall provide Seller (a) on an annual basis prior to the beginning of
each year of the Term a nonbinding forecast of Buyer's minimum and
maximum aggregate delivery requirements for bulk raw material for such
year (provided that such forecast for the second year of the Term shall
be provided to Seller by February 1, 1998), and (b) on a quarterly
basis at least thirty (30) days prior to the end of each three-month
period of the Term a forecast acceptable to Seller (which shall be
binding on Buyer) of Buyer's minimum and maximum delivery requirements
for bulk raw material for each month of the next three-month period
(provided that such forecast for the initial period of the Term ending
on April 30, 1997, shall be provided to Seller by February 28, 1997).
The quantities of bulk raw material ordered by Buyer pursuant to this
Agreement from time to time shall be spaced in a reasonable manner, and
Buyer shall order such quantities in accordance with Buyer's binding
forecasts. In no event shall Seller be required to deliver to Buyer in
any three-month period a quantity of bulk raw material in excess of
125% of the maximum delivery requirement for such period set forth in
the binding forecast for such period accepted by Seller. Deliveries of
bulk raw material shall be made by Seller under normal trade conditions
in the usual and customary manner being utilized by Seller at the time
and location of the particular delivery. The bulk raw material
delivered to Buyer hereunder shall be packaged per agreement of the
Parties. All deliveries of bulk raw material to Buyer hereunder shall
be made by Seller F.O.B. at the facilities of Seller or its affiliates
located in either Dallas, Texas or Liberia, Costa Rica as agreed upon.
5. Purchase Price. All bulk raw material to be purchased by
Buyer under this Agreement shall be purchased by it, during the first
and second years of this Agreement, at a price per Product as set forth
on Exhibit B to this Agreement. Thereafter, Buyer and Seller shall
meet on a yearly basis to mutually agree upon prices for the upcoming
contract year. If prices for the upcoming year cannot be agreed upon
the Agreement shall terminate on March 5 of the contract year in
question. At delivery point, Buyer shall bear all freight, insurance
and similar costs, and all sales taxes, with respect to such purchases
from that point forward. The purchase price of bulk raw material,
together with all related freight, insurance and similar costs, and
sales taxes, shall be paid by Buyer to Seller within thirty (30) days
after the date of invoice.
6. Labels and Advertising
(a) FDA Compliance of Labels and Advertising. All labels and
advertising relating to the bulk raw material that reference Xxxxxxxxxx
Laboratories or Seller sold hereunder must strictly comply with all
applicable rules and regulations of the FDA and all other applicable
laws, rules and regulations, including but not limited to FDA
requirements relating to product ingredients.
(b) Claims by Aloe Commodities International, Inc. ("ACI")
Unlimited. ACI hereby agrees not to make, or permit any of its
employees, agents or distributors to make, any claims of any properties
or results relating to bulk raw material and Xxxxxxxxxx Laboratories or
Seller, unless such claims have received written approval from the
Seller.
(c) FDA Approval of Claims. If ACI desires to seek FDA approval
as to any specific claims with respect to the bulk raw material, ACI
hereby agrees to (i) notify Caraloe of the claims and the application
prior to filing and (ii) to keep informed as to the progress of the
application, including but not limited to sending Caraloe copies of all
communications or notices to or from the FDA, as applicable.
(d) Right to Approve Labels, etc. If Caraloe so requests, ACI
shall not use any label, advertisement or marketing material or
individual spokesman associated with the bulk raw material and
Xxxxxxxxxx Laboratories or Seller, unless such label, advertisement or
marketing material or individual spokesman has first been submitted to
and approved by Caraloe. Caraloe shall not unreasonably withhold its
approval of any such label, advertisement or marketing material.
(e) Compliance by Third Parties. ACI shall take all steps
reasonably necessary to ensure that its distributors and any other
parties to whom it sells any of the bulk raw material for resale do not
relabel, repackage, advertise, sell or attempt to sell the bulk raw
material in a manner that would violate this Agreement if done by ACI.
7. Confidentiality. In the performance of Seller's obligations
pursuant to this Agreement, Buyer may acquire from Seller or its
affiliates technical, commercial, operating or other proprietary
information relative to the business or operations of Seller or its
affiliates (the "Confidential Information"). Buyer shall maintain the
confidentiality, and take all necessary precautions to safeguard the
secrecy, of any and all Confidential Information it may acquire from
Seller or its affiliates. Buyer shall not use any of such Confidential
Information for its own benefit or for the benefit of anyone else.
Buyer shall not publicly disclose the existence of this Agreement or
the terms hereof without the prior written consent of Seller.
8. Force Majeure. Seller shall not have any liability hereunder
if it shall be prevented from performing any of its obligations
hereunder by reason of any factor beyond its control, including,
without limitation, fire, explosion, accident, riot, flood, drought,
storm, earthquake, lightning, frost, civil commotion, sabotage,
vandalism, smoke, hail, embargo, act of God or the public enemy, other
casualty, strike or lockout, or interference, prohibition or
restriction imposed by any government or any officer or agent thereof
("Force Majeure"), and Seller's obligations, so far as may be
necessary, shall be suspended during the period of such Force Majeure
and shall be cancelled in respect of such quantities of bulk raw
material as would have been sold hereunder but for such suspension.
Seller shall give to Buyer prompt notice of any such Force Majeure, the
date of commencement thereof and its probable duration and shall give a
further notice in like manner upon the termination thereof. Each party
hereto shall endeavor with due diligence to resume compliance with its
obligations hereunder at the earliest date and shall do all that it
reasonably can to overcome or mitigate the effects of any such Force
Majeure upon its obligations under this Agreement.
9. Rights Upon Default.
(a) Seller's Rights Upon Default. If Buyer (i) fails to purchase
the quantities of bulk raw material specified for purchase by Buyer
hereunder, (ii) fails to make a payment hereunder when due or (iii)
otherwise breaches any term of this Agreement, and such failure or
breach is not cured to Seller's reasonable satisfaction within 5 days
(in the case of a failure to make a payment) or 30 days (in any other
case) after receipt of notice thereof by Buyer, or if Buyer fails to
perform or observe any covenant or condition on its part to be
performed when required to be performed or observed, and such failure
continues after the applicable grace period, if any, specified in the
Agreement, Seller may refuse to make further deliveries hereunder and
may terminate this Agreement upon notice to Buyer and, in addition,
shall have such other rights and remedies, including the right to
recover damages, as are available to Seller under applicable law or
otherwise. If Buyer becomes bankrupt or insolvent, or if a petition in
bankruptcy is filed by or against it, or if a receiver is appointed for
it or its properties, Seller may refuse to make further deliveries
hereunder and may terminate this Agreement upon notice to Buyer,
without prejudice to any rights of Seller existing hereunder or under
applicable law or otherwise. Any subsequent shipment of bulk raw
material by Seller after a failure by Buyer to make any payment
hereunder, or after any other default by Buyer hereunder, shall not
constitute a waiver of any rights of Seller arising out of such prior
default; nor shall Seller's failure to insist upon strict performance
of any provision of this Agreement be deemed a waiver by Seller of any
of its rights or remedies hereunder or under applicable law or a waiver
by Seller of any subsequent default by Buyer in the performance of or
compliance with any of the terms of this Agreement.
(b) Buyer's Rights Upon Default. If Seller fails in any material
respect to perform its obligations hereunder, and such failure is not
cured to Buyer's reasonable satisfaction within 30 days after receipt
of notice thereof by Seller, Buyer shall have the right to refuse to
accept further deliveries hereunder and to terminate this Agreement
upon notice to Seller and, in addition, shall have such other rights
and remedies, including the right to recover damages, as are available
to Buyer under applicable law or otherwise. Any subsequent acceptance
of delivery of bulk raw material by Buyer after any default by Seller
under this Agreement shall not constitute a waiver of any rights of
Buyer arising out of such prior default; nor shall Buyer's failure to
insist upon strict performance of any provision of this Agreement be
deemed a waiver by Buyer of any of its rights or remedies hereunder or
under applicable law or a waiver by Buyer of any subsequent default by
Seller in the performance of or compliance with any of the terms of
this Agreement.
10. Disclaimer and Indemnity. Buyer shall assume all financial
and other obligations for Buyer Products, and Seller shall not incur
any liability or responsibility to Buyer or to third parties arising
out of or connected in any manner with Buyer Products. In no event
shall Seller be liable for lost profits, special damages, consequential
damages or contingent liabilities arising out of or connected in any
manner with this Agreement or Buyer Products. Buyer shall defend,
indemnify and hold harmless Seller and its affiliates, and their
respective officers, directors, employees and agents, from and against
all claims, liabilities, demands, damages, expenses and losses
(including reasonable attorneys' fees and expenses) arising out of or
connected with (i) any manufacture, use, sale or other disposition of
Buyer Products, or any other products of Buyer, by Buyer or any other
party and (ii) any breach by Buyer of any of its obligations under this
Agreement.
11. Equitable Relief. A breach by Buyer of the provisions of
Paragraph 2(b) shall cause Seller to suffer irreparable harm and, in
such event, Seller shall be entitled, as a matter of right, to a
restraining order and other injunctive relief from any court of
competent jurisdiction, restraining any further violation thereof by
Buyer, its officers, agents, servants, employees and those persons in
active concert or participation with them. The right to a restraining
order or other injunctive relief shall be supplemental to any other
right or remedy Seller may have, including, without limitation, the
recovery of damages for the breach of such provisions or of any other
provisions of this Agreement.
12. Survival. The expiration or termination of the Term shall not
impair the rights or obligations of either party hereto which shall
have accrued hereunder prior to such expiration or termination. The
provisions of Paragraphs 7, 9,10 and 11 hereof, and the rights and
obligations of the parties thereunder, shall survive the expiration or
termination of the Term.
13. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of
Texas.
14. Succession. Neither party hereto may assign or otherwise
transfer this Agreement or any of its rights or obligations hereunder
(including, without limitation, by merger or consolidation) without the
prior written consent of the other party; provided, however, that
Seller may assign any of its rights or obligations hereunder to any
affiliate of Seller. Subject to the immediately preceding sentence,
this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
15. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto relating to the matters covered
hereby and supersede any and all prior understandings, whether written
or oral, with respect to such matters. The terms of this Agreement
shall prevail over any inconsistent terms contained in any purchase
order issued by Buyer and acknowledgment or acceptance thereof issued
by Seller. No modification, waiver or discharge of this Agreement or
any of its terms shall be binding unless in writing and signed by the
party against which the modification, waiver or discharge is sought to
be enforced.
16. Notices. All notices and other communications with respect to
this Agreement shall be in writing and shall be deemed to have been
duly given when delivered personally or when duly deposited in the
mails, first class mail, postage prepaid, to the address set forth
below, or such other address hereafter specified in like manner by one
party to the other:
If to Seller: Caraloe, Inc.
0000 Xxxxxx Xxxx Xxxx
Xxxxxx, Xxxxx 00000
Attention: President
If to Buyer: Aloe Commodities International, Inc.
00000 Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxxxx, XX 00000
Attention: President
17. Interpretation. In the event that any provision of this
Agreement is illegal, invalid or unenforceable as written but may be
rendered legal, valid and enforceable by limitation thereof, then such
provision shall be deemed to be legal, valid and enforceable to the
maximum extent permitted by applicable law. The illegality, invalidity
or unenforceability in its entirety of any provision hereof will not
affect the legality, validity or enforceability of the remaining
provisions of this Agreement.
18. No Inconsistent Actions. Each party hereto agrees that
it will not voluntarily undertake any action or course of action
inconsistent with the provisions or intent of this Agreement and,
subject to the provisions of Paragraph 8 hereof, will promptly do all
acts and take all measures as may be appropriate to comply with the
terms, conditions and provisions of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their duly authorized officers as of the day and year
first above written.
CARALOE, INC.
By:___________________________
Name:_________________________
Title:________________________
ALOE COMMODITIES INTERNATIONAL, INC.
By:___________________________
Name:_________________________
Title:________________________
EXHIBIT A
[TO BE AGREED UPON WITHIN NINETY (90) DAYS}
EXHIBIT B
Product Prices F.O.B. Irving, Texas
1. Aloe Xxxx Gel $1.557 per Kilogram
2. Bifurcated Aloe Xxxx Gel $1.07 per Kilogram
3. Aloe Xxxx Gel ENZ $1.79 per Kilogram
4. Bifurcated Aloe Xxxx Gel XXX $1.20 per Kilogram
5. Pulp Aloe Xxxx Gel Fillet $1.557 per Kilogram
Prices F.O.B. Xxxxxxxxxx
Product Costa Rica Plant
6.Aloe Juice with AVMP powder $1.93 per Quart
plus Bifurcated Powder
NOTE: Exact specifications for the Products listed in
Exhibit B are set forth in Exhibit A. Exhibit A is
to be mutually agreed upon by the parties hereto
within ninety (90) days of the effective date of
the Agreement.
