PACKAGING AGREEMENT
This Packaging Agreement (the "Agreement") is made and entered into
as of the 30th day of November, 1997 by and between Superior Supplements, Inc.,
a Delaware corporation ("SSI"), and PDK Labs Inc., a New York corporation
("PDK").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Non-Exclusive Supply Agreement
dated as of May 14, 1996, as amended (the "Supply Agreement"), by and between
SSI and PDK, SSI manufactures certain vitamins and food supplements in bulk
tablet form to PDK's specifications (the "Pills"); and
WHEREAS, SSI and PDK desire that SSI shall package product for PDK in
the "Futurebiotics" product range (the "Futurebiotics' Pills") and shall deliver
all such Futurebiotics' Pills in "finished goods" format upon the terms of this
Agreement; and
NOW, THEREFORE, the parties for good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged, agree as follows:
1. Packaging of Futurebiotics' Pills.
(a) During the term hereof (the "Term"), as defined at
paragraph 3 hereof, SSI shall package Futurebiotics' Pills for PDK pursuant to
the Supply Agreement and shall deliver all such Futurebiotics' Pills to PDK in
"finished goods" format.
(b) SSI will supply all materials used in connection with the
packaging of the Futurebiotics' Pills. All packaging for the Futurebiotics'
Pills shall meet PDK's specifications.
(c) On the date hereof, PDK will sell to SSI all packaging
components and labels in PDK's inventory on such date, at PDK's Material Cost.
For purposes of this Agreement, "Material Cost" shall mean PDK's actual material
expenses incurred in the purchase by PDK of such packaging components, labels
and bulk tablets.
2. Packaging Price and Payment. PDK will pay for the packaging of the
Futurebiotics' Pills as follows:
(a) PDK will pay to SSI, SSI's component cost ("Component
Cost") plus the amount set forth in the schedule below per bottle of
Futurebiotics' Pills. For purposes of this Agreement "Component Cost" shall mean
SSI's actual material expenses incurred in the packaging of the Futurebiotics'
Pills. Such expenses shall not exceed the fair market value of materials used in
packaging at the time of purchase by SSI.
PRICING SCHEDULE
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BOTTLE UNIT CHARGE
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50 CC .25
75 CC .25
100 CC .25
120 CC .25
150 CC .25
180-200 CC .25
225-275 CC .35
300 + CC .35
(b) SSI shall invoice PDK upon delivery of each order and all
invoices shall be paid by PDK within thirty (30) days of the date of shipment.
PDK shall pay all costs and expenses, including reasonable attorney's fees,
reasonably incurred by SSI in the collection of any sum payable hereunder by PDK
to SSI. In addition to paying the price in effect under this Agreement, PDK
shall pay all sales or use taxes applicable to the sale or delivery by SSI or
the subsequent use by PDK of any items delivered hereunder.
3. Term of Agreement.
(a) The term of this Agreement (the "Term") shall commence on
the date hereof (the "Effective Date") and shall continue for a period of two
(2) years, and thereafter will be automatically renewed for successive one (1)
year terms unless either party provides written notice of intent to terminate
the Agreement at least ninety (90) days prior to the end of any Agreement Year,
as defined below.
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(b) For purposes of this Agreement, an "Agreement Year" shall
commence on the Effective Date and on each anniversary thereof and shall end on
the day before the first anniversary of each such Agreement Year.
4. Force Majeure. SSI shall not be liable for any delay or failure to
perform in accordance with this Agreement if such delay or failure to perform is
a result of a strike, lock-out or other labor dispute; riot, insurrection, civil
disturbance or other hostility; embargo; inability or delay in obtaining fuel,
energy, equipment or power; inability or delay in obtaining labor or materials;
inability or delay in obtaining government approvals, permits or licenses;
inability or delay in obtaining transportation or other services; fire, flood,
lightning, storm, earthquake, or other Act of God; or is a result of causes
beyond SSI's reasonable control (each of the foregoing being hereinafter
referred to as an "Event of Force Majeure"). In such event, SSI's obligation to
perform hereunder shall be suspended for the duration of such Event of Force
Majeure. SSI will use reasonable efforts to promptly notify PDK, either orally
or in writing, upon learning of the occurrence or potential occurrence of such
Event of Force Majeure.
5. Minimum Annual Purchase by PDK. PDK hereby covenants with SSI, and
agrees to purchase from SSI during each year of the Term hereof a minimum of
1,000,000 bottles of Futurebiotics' Pills per annum (the "Minimum Packaging
Amount"). In the event that PDK fails to purchase the Minimum Packaging Amount
during any year falling during the Term hereof, PDK shall pay SSI the sum of
$100,000 (or such lesser sum pro-rated by reference to the percentage of the
Minimum Packaging Amount actually purchased by PDK during such year) as
liquidated damages. PDK's obligations pursuant to this Section 5 shall be
terminated in the event that (a) the packaging for the Futurebiotics' Pills does
not meet PDK's specifications, (b) SSI is unable to purchase materials for
packaging at fair market value unless PDK supplies the materials used in
production pursuant to Section 2, or (c) in the event that this Agreement is
terminated pursuant to Section 6 below. All payments made hereunder are solely
for packaging and shall not be included towards the cost of the Futurebiotics'
Pills supplied pursuant to the Supply Agreement.
6. Termination of Agreement.
(a) In the event of the occurrence of any of the following
events: (i) insolvency or the making by a party hereto of an assignment for the
benefit of creditors; (ii) the filing by or against a party hereto of, or the
entry of an order for relief against a party hereto in, a voluntary or
involuntary proceeding under any bankruptcy, insolvency, reorganization or
receivership law; (iii) the appointment of a receiver for all or a substantial
portion of PDK's property; (iv) the assumption of custody, attachment or
sequestration by a court of competent jurisdiction of all
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or a significant portion of a party's property; (v) fraudulent conduct by a
party hereto in any of its dealings with the other party, the non-defaulting
party shall have the right to terminate this Agreement, by written notice to the
other party; or (vi) the termination of the Supply Agreement. No assignee for
the benefit of creditors, receiver, liquidator, trustee in bankruptcy, sheriff
or any other officer of the court or official charged with taking over custody
of the assets or business or a party shall have any right to continue
performance of this Agreement, and this Agreement may not be assigned by PDK by
operation of law.
(b) Any failure by either party to terminate this Agreement by
reason of one or more of the foregoing acts or events shall not constitute a
waiver of the right to terminate this Agreement upon reoccurrence or continuance
of such acts or events.
7. Nondisclosure. Neither party, nor any person controlled by it,
shall for any reason other than fulfilling its obligations hereunder, directly
or indirectly, for itself or any other person, use or disclose any trade secrets
or confidential information, know-how or proprietary information relating to the
other party, except to the extent (i) within the public domain; or (ii) pursuant
to a subpoena, court order or applicable law.
8. Relationship of the Parties. The relationship of the parties
created hereby is that of independent contractors, and neither party shall have
any right or authority to create or assume any obligation of any kind on behalf
of the other.
9. Notices. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and shall be
given personally, telegraphed, telefaxed, sent by facsimile transmission or sent
by prepaid air courier, same day or overnight messenger or certified, registered
or express mail, postage prepaid. Any such notice shall be deemed to have been
given (a) when received, if delivered in person, telegraphed, telexed, sent by
facsimile transmission and confirmed in writing within three (3) Business Days
thereafter or sent by prepaid air courier, same day or overnight messenger or
(b) three (3) Business Days following the mailing thereof, if mailed by
certified first class mail, postage prepaid, return receipt requested, in any
such case as follows (or to such other address or addresses as a party may have
advised the other in the manner provided in this Section 9):
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If to SSI, to:
Superior Supplements, Inc.
000 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxx
with copy to:
Xxxxxxxxx & Xxxxxxxxx, LLP
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxxx
If to PDK, to:
PDK Labs Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx
10. Binding Effect; Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns. Neither party shall assign any of its rights or delegate any of its
duties or obligations hereunder without the prior written consent of the other
party. Notwithstanding the foregoing, the parties hereto do not intend to create
hereby, and this Agreement shall not be read or construed to create or grant,
any rights or benefits in or for any person or entity other than the parties
hereto and any and all such third party rights or benefits are hereby expressly
disclaimed and denied.
11. Governing Laws. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York, without regard to
principles of conflicts of law, and the parties irrevocably agree to submit any
controversy or claim arising out of or relating to this Agreement to a court of
competent jurisdiction located in the State of New York. The parties agree that
any proceedings arising out of, relating to, or brought for the purpose of
enforcing this Agreement, or remedying any breach thereof shall be instituted in
the courts of the State of New York, and in no other jurisdiction.
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12. Counterparts. This Agreement may be executed simultaneously in
counterparts, each of which will be deemed to be an original but all of which
together will constitute one and the same instrument.
13. Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
14. Amendment. This Agreement may be amended only by a writing signed
by all parties hereto.
15. Entire Agreement. This Agreement contains the entire
understanding of the parties hereto with respect to its subject matter and
supersedes any prior arrangements or understandings (written or otherwise)
between them.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the first date written above.
SUPERIOR SUPPLEMENTS, INC.
By: /s/ Xxxxxxxx X. Xxxxx
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PDK LABS INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
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