SEA BREEZE AND OLD FASHIONED SYRUP
SUPPLY CONTRACT
THIS AGREEMENT, executed as of this 26th day of
September, 1997, by and between Old Fashioned Syrup, 0000
X.X. 00xx Xxxxxx, Xxxxx X, Xxxxxxx Xxxxx, Xxxxxxx 00000
(hereinafter referred to as "Old Fashioned") and Sea Breeze,
000 Xxxxx 000, Xxxxxx, XX 00000 (hereinafter referred to as
"Sea Breeze").
WHEREAS, Old Fashioned desires to have Sea Breeze
exclusively manufacture and produce sugar free chocolate
syrup under the Old Fashioned trademarks or trade names
owned by Olf Fashioned (hereinafter referred to as the
"Products") for sale to Old Fashioned under the terms and
conditions herein set forth; and
WHEREAS, Sea Breeze is willing to manufacture and
produce Products for sale to Old Fashioned under the terms and
conditions set forth herein;
1. DEFINITIONS. Products shall mean Sugar
Free Chocolate Syrup and as more specifically described in
Exhibit "A" attached hereto. Such Products shall be
processed and packaged for sale under the brand name Old
Fashioned or other brand names as may be designated by Old
Fashioned. Formula shall mean the ingredients and process to
be used by Sea Breeze to pack the Products as set forth in
Exhibit "B". This formula and packaging for sugar free
chocolate syrup shall be provided by Sea Breeze exclusively to
Old Fashioned. As Sea Breeze is in the business of custom
formulating and packing syrups, Sea Breeze shall not be
precluded from formulating and/or packing any other products
in this or any other category of syrups.
2. QUANTITY AND PRICE. Upon order by Old
Fashioned, Sea Breeze will process and pack the ordered
quantity of the Products. The Products will be manufactured
and packaged in accordance with the formula set forth in
Exhibit "B" and shall be shipped at the direction of Old
Fashioned within fifteen (15) business days of the order. The
fee to be paid by Old Fashioned to Sea Breeze for the Products
shall be set forth in Exhibit "C" or as otherwise agreed to by
the parties in writing. Should Old Fashioned request a
modification of the formulation, the fee charged hereunder will
be adjusted based upon a unit cost basis. Should market costs
of ingredients and/or supplies change more than 10% for any
given component, then Sea Breeze will so advise Old
Fashioned and adjust pricing accordingly. Further, an annual
review of labor and utility incremental costs will be presented
by Sea Breeze to Old Fashioned for consideration of price
revision with overall annual increases in this area not to exceed
3% of total price.
3. TERMS OF PAYMENT. Old Fashioned shall
pay all invoices net fifteen (15) calendar days from receipt. Sea
Breeze shall send invoices by way of "fax" and mail hard copy
with Xxxx of Lading for the invoiced shipment. In the event
payment is not received within fifteen (15) calendar days of the
faxed invoice being received by Old Fashioned, Sea Breeze
will notify Old Fashioned by "fax" immediately and if Old
Fashioned does not make payment in full within 72 hours, all
shipments of Products will be immediately suspended until
payment is received.
4. SERVICES EQUIPMENT AND
INGREDIENTS. The fee paid to Sea Breeze shall be as set
forth on Exhibit "C" for the processing, packaging and other
services necessary to process and package the Products
including labor, equipment, ingredients and materials. Storage
of the finished Products prior to shipment, shall be at a fee to
be determined if the finished product storage becomes
excessive. It is understood this is to be a make and ship
arrangement.
5. TERM. This Agreement shall run for ten (10)
years with Sea Breeze being the exclusive packer of the
product, subject to the terms of Paragraph 6. This Agreement
shall be terminated upon the sale of Old Fashioned. Old
Fashioned shall have the exclusive rights to formula and to
give such rights to transferee.
6. ROYALTY. In the event Old Fashioned ceases
to purchase as was customary Old Fashioned will pay to Sea
Breeze a .50 per case research and development royalty for all
cases purchased elsewhere on a monthly basis payable net 15
calendar days from the end of the month. This is based on
consideration of Sea Breeze providing this formula exclusive to
Old Fashioned. Old fashioned shall have an affirmative duty to
provide Sea Breeze with the opportunity to view its sales and
purchase records in the event Sea Breeze is not being utilized
as the exclusive packer.
7. SEA BREEZE INDEMNIFICATION. Sea
Breeze will defend, indemnify and hold Old Fashioned and its
customers harmless (i) against any and all complaints or legal
actions by any agency of the Federal, state or local government,
including, without limitation, the Federal Food and Drug
Administration and comparable actions as those seeking
seizure of product or injunctive relief; and (ii) against any and
all complaints, claims, or legal actions alleging damages, death,
illness or injuries arising out of the purchase, sale or use of the
products, to which Old Fashioned may become subject by
reason of any breach of any warranties and the guarantee unless
such breaches are caused in whole or in part by the negligent or
willful act or omission of Old Fashioned or by Old Fashioned's
breach of its obligations hereunder. In the event any claim is
asserted or any suit is filed against Old Fashioned for which
Sea Breeze may be required to indemnify Old Fashioned under
this paragraph, Old Fashioned shall promptly notify within
fourteen (14) days Sea Breeze of such claim or suit. Sea
Breeze and/or its agent, upon receipt of such notice, shall
undertake the defense of such suit or the settlement of any such
claim at its own expense and in such event shall have charge
and direction of any proceedings relating thereto provided that
Old Fashioned, at its option, may employ counsel of its choice
and participate in the defense. In no event shall Old Fashioned
be free to settle any such claim or suit without the consent of
Sea Breeze if by such settlement Sea Breeze may be rendered
liable to indemnify Old Fashioned under the terms of this
Agreement. Failure on the part of Old Fashioned to notify Sea
Breeze within fourteen (14) days of any claim or suit or failure
of Old Fashioned to cooperate with discovery and trial
participation shall negate Sea Breeze's obligations under this
paragraph.
8. REPRESENTATIONS OF OLD FASHIONED.
Old Fashioned represents that:
a. all labels approved by Old Fashioned to
be used upon the products or supplied by Old Fashioned to be
used upon the products or supplied by Old Fashioned shall not
violate any law or regulations in effect in any jurisdiction in the
United States or where else sold. This is subject to the
condition that Sea Breeze not use the labels in a negligent
manner.
b. all labels, specifications and procedures
supplied by Old Fashioned hereunder shall not infringe any
valid United States letter patent, trademark or copyright of any
person not a party of this Agreement. Any notice of such
infringement will be handled by Old Fashioned and resolved.
9. TITLE ORDERING PRODUCTION
REQUIREMENTS. Old Fashioned agrees to provide Sea
Breeze before the 10th day of each month a projection of
anticipated quantity requirements, by product type and size, for
the following 90 days. Based upon these projections, Sea
Breeze shall (unles otherwise instructed) purchase and maintain
a supply of materials necessary to meet those projected
requirements and shall meet those requirements.
10. OLD FASHIONED'S INDEMNIFICATION.
Old Fashioned will defend, indemnify and hold harmless Sea
Breeze until (i) against any and all complaints or legal actions
by any agency of the Federal, state or local government,
including, without imitation, the Federal Food and Drug
Administration and comparable state or local agencies, and
including, without limitation, such actions as those seeking
seizure of product or injunctive relief, and (ii) against any and
all complaints, claims or legal actions alleging damages, death,
illness or injuries arising out of the purchase, sale or use of the
products, of which Sea Breeze may become subject by reason
of any breach of any warranties and guarantee in Section 8 of
this Agreement unless such breaches are caused in whole or in
part by the negligent or willful act or omission of Sea Breeze or
by Sea Breeze's breach of its obligations hereunder. In the
event any claim is asserted or any suit is filed against Sea
Breeze under this paragraph, Sea Breeze shall promptly notify
within fourteen (14) days Old Fashioned of such claim or suit.
Old Fashioned, upon receipt of such notice, shall undertake the
defense of such suit or the settlement of any such claim at its
own expense and in such event shall have charge and direction
of any proceedings relating thereto provided that Sea Breeze, at
its option, may employ counsel of its choice and participate in
the defense. In no event shall Sea Breeze be free to settle any
such claim or suit without the consent of Old Fashioned if by
such settlement Old Fashioned may be rendered liable to
indemnify Sea Breeze under the terms of this Agreement.
Failure on the part of Sea Breeze to notify Old Fashioned
within fourteen (14) days of any claim or suit or failure of Sea
Breeze to cooperate with discovery and trial participation shall
negate Old Fashioned's obligations under this paragraph.
11. REPRESENTATION. Sea Breeze shall
exercise due care in obtaining raw material, supplies,
packaging materials and ingredients necessary to produce the
Products, and in the processing, packaging materials and
ingredients necessary to produce the products, and in the
processing, packaging, storage and loading of all Products and
supplies covered by this Agreement and shall, in particular,
follow the practices set forth in the applicable Good
Manufacturing Practices as promulgated by the United States
Food and Drug Administration and other comparable
promulgations of Federal, State and local agencies. Sea Breeze
shall further notify Old Fashioned immediately of any action or
inspection report by any regulatory agency requiring corrective
action against Sea Breeze which would place licensing of the
Sea Breeze plan in jeopardy or any aspect of the production of
a Product covered by this Agreement or ingredients or supplies
used to manufacture a Product covered by this Agreement in
jeopardy, and shall confirm such notice promptly in writing.
This shall not infringe on proprietary rights of any third party.
Sea Breeze is fully licensed and authorized to manufacture,
package and deliver product to Old Fashioned.
12. CONFIDENTIAL INFORMATION. Sea
Breeze and its representatives as well as Old Fashioned and its
representatives will maintain as secret and confidential and not
disclose to third parties without prior written permission from
the other any trade secrets and other confidential information
gained from discussions, or in any way, including but not
limited to, formulae, descriptions, specifications and the like
furnished by Sea Breeze to Old Fashioned, except as provided
for in paragraphs 5 and 6. For other purposes of this paragraph
the terms "trade secrets and other confidential information"
shall include and be limited to information disclosed by one
party to the other that was not: (i) at the time of disclosure or
thereafter known to or available to the public through sources
entitled to disclose such information; (iii) disclosed to one
party in good faith by another party having the right to disclose
such information.
13. PRODUCTION SITES; INSPECTION;
RECORDS. Representatives of Old Fashioned shall be
permitted to enter Sea Breeze's plant and any other plants
which Sea Breeze may sub-contract the production of the
Product to Old Fashioned at all reasonable times, including,
without limitation, during preparation, processing, packaging
and/or clean-up hours to inspect the manner in which the
Product is being packaged, stored and loaded.
14. REPLACEMENT OF NON-SPECIFICATION
PRODUCT. Sea Breeze shall replace without cost, or refund
money to Old Fashioned, at Old Fashioned's option, all
Products sold which are defective or below standard, unless
failure to meet the specifications is caused by the negligent or
willful act or omission of Old Fashioned or by the failure of
Old Fashioned to comply with its obligations under the
Agreement. Replacement or refund shall be made promptly
upon receipt of reasonable proof of such defect and demand by
Old Fashioned.
15. RELATIONSHIP OF THE PARTIES. This
Agreement shall not make or constitute either party or
representative for the other for any purpose whatsoever.
Neither party shall have the power or authority, except as
specifically authorized, to act in the other's behalf or by in the
other's name, or to bind the other, either directly or indirectly,
in any manner or thing whatsoever.
Neither parties shall have any authority to
employ any person on behalf of the other. Each party shall
have, as between the parties, the exclusive right to select,
engage, fix the compensation of, discharge, and otherwise to
manage, supervise and control the persons hired by it and shall,
with respect to all persons, perform all obligations and
discharge all liabilities imposed upon employers under labor,
wage-hour, worker's compensation, unemployment
compensation or insurance, social security, and other Federal,
state and municipal laws and regulations.
16. INSURANCE.
a. Throughout the life of this Agreement,
Sea Breeze shall maintain comprehensive general liability
insurance in the following amounts:
Bodily Injury: $1,000,000 per person
$1,000,000 each accident
Property Damage $ 300,000
(except automobile)
Each Occurrence
including Contractual Liability coverage specifying this
contract, and product liability coverage with Broad Form
vendor's Endorsement naming Old Fashioned as Vendor. Sea
Breeze shall furnish Certificate of Insurance to Old Fashioned
evidencing the coverage described in this paragraph as soon as
practicable but not more than thirty (30) days after the
execution of this Agreement. Said Certificate shall provide for
at least thirty (30) days prior notice of cancellation of
substantial change.
17. PERFORMANCE DISCLAIMER. Except as
otherwise provided in this Agreement, each party shall be
excused for failure or delay in performance caused by war,
riots, insurrections, laws, proclamations, regulations, strikes,
floods, fires, explosions, unavailability of materials and
supplies or other disturbances beyond their control without
default of such party. Nevertheless, such party shall use its best
efforts to perform in spite of the difficulties causing such
failure or delay and shall resume performance with the utmost
dispatch as soon as cessation of difficulties permits. Any party
claiming such excuse or delay for nonperformance shall give
prompt written notice thereof to the other party.
18. NOTICES. Except as otherwise specifically
provided herein, all notices or communications provided for
herein shall be in writing addressed as follows:
Xxxx Xxxxxxxxxx, President Xxxxxx Xxxxxxx, President
Old Fashioned Syrup Company Sea Breeze
0000 XX 00xx Xxxxxx, Xxxxx X 000 Xxxxx 000
Xxxxxxx Xxxxx, XX 00000 Xxxxxx, Xxx Xxxxxx 00000
or to such other address or addresses as may be designated by
either party by written notice to the other.
19. SUCCESSORS AND ASSIGNS. Except as
otherwise provided herein, this Agreement shall inure to the
benefit of and be binding upon the successors and assigns of
the respective parties hereto.
20. MISCELLANEOUS PROVISIONS.
A. The captions at the beginning of each paragraph are for
the convenience of the parties and shall in no event be
construed to alter or in any way affect the meaning of the
substantive text of this Agreement.
B. This agreement shall be governed under the laws of the
State of New Jersey.
C. This Agreement, together with any Exhibits, contains
all of the covenants, stipulations and provisions agreed upon by
the parties hereto and the terms hereof shall not be altered or
changed unless the change is in writing and signed by an
authorized representative of both parties. Such changes, if any,
shall be attached hereto as addenda.
D. Neither party is nor shall be bound by any statement or
representation not in conformity herewith.
By signing below, we agree to the foregoing.
OLD FASHIONED SYRUP COMPANY
By: /s/ Xxxx Xxxxxxxxxx
Title: President
SEA BREEEZE, INC.
By: /s/ Xxxxxx Xxxxxxx
Title: President
