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
