SUPPLIER AGREEMENT
THIS SUPPLIER AGREEMENT (this "Agreement") is made
this ____ day of July, 1999, by and between The Old Fashioned Syrup
Company, Inc., a __________ corporation ("OFSC") and Beverage
House, Inc., a Georgia corporation ("Supplier").
A. Supplier wishes to be designated by OFSC as a
manufacturer and supplier of the product described on Exhibit A (the
"Product").
B. OFSC is willing to designate Supplier as a manufacturer
and supplier of the Product, subject to compliance by Supplier with the
terms and conditions of this Agreement, as it may be amended from time
to time throughout its term (this Agreement, together with all
attachments and exhibits shall be collectively referred to herein as the
"Agreement").
1. Product. Supplier shall develop, manufacture and supply
the Product in accordance with the specifications for the Product
described on Exhibit A. The Product shall not be substituted, modified,
or otherwise changed from these specifications without first obtaining
OFSC's written approval of such change, such approval not to be
unreasonably withheld.
2. Term. This Agreement shall be in effect commencing
___________, 1999, with an initial term of two (2) years, expiring on
______ 2001 ("Initial Term"). This Agreement shall terminate at the end
of the Initial Term if written notice to terminate is given by either party
at least thirty (30) days prior to the last day of the Initial Term.
Otherwise, following the Initial Term, this Agreement shall
automatically renew and continue for additional six (6) months term(s)
("Renewal Term(s)") unless canceled by either party with at least thirty
(30) days written notice prior to the last day of any Renewal Term. This
Agreement may also be terminated earlier pursuant to the provisions of
this Agreement. Notwithstanding anything contained herein, the volume
of Product ordered and the number of orders placed during the Initial or
Renewal Terms shall be determined solely by orders placed pursuant to
Section 3.
3. Order and Delivery.
3.1. Orders shall be placed in writing by OFSC, sent by
U.S. Mail, or facsimile or personally delivered to Supplier at the address
set forth below (the "Order"). Acceptance of any Order is expressly
limited to the terms thereof. OFSC shall allow forty-five (45) normal
working days for delivery of Supplier's first three production runs.
OFSC shall allow thirty (30) normal working days for delivery of all
other Supplier production runs. OFSC agrees that no Product shall be
delivered until all microbiological tests have been performed on each
production run and each production run passes such microbiological
tests.
3.2. All Orders shall be shipped F.O.B. Supplier's
facilities in Cartersville, Georgia and in accordance with those
requirements contained in the Order. The risk of loss or damage in
transit shall be upon OFSC. Supplier shall in the event of a delay or
threat of delay, due to any cause in the production or delivery of the
Product hereunder, immediately notify OFSC and shall include with
such notice all relevent information with respect to such delay or
threatened delay.
4. Price. The prices of the Product are set forth in Exhibit
B.
5. Payment. Supplier shall invoice OFSC for all Product
units produced during each production run required to fill an Order,
regardless of whether all Produce such units produced are required to
satisfy the Order (the "Invoice"). Each Invoice is payable by OFSC
within thirty (30) days from the date of the Invoice.
6. Exclusivity
6.1 Supplier agrees that the Product will be manufactured
for and supplied exclusively to OFSC and that Supplier shall not
manufacture, supply, or sell the Product, or any product packed in
configuration packing similar to OFSC's Product packaging, under
Supplier's own label to third parties, or under any private label for or to
any other party, unless expressly agreed to in writing OFSC.
6.2 At OFSC's request, Supplier shall enter into a
Customer Mold Agreement with Berlin Packaging in the form attached
hereto as Exhibit C (the "Mold Agreement"). The Mold Agreement
provides for the production of exclusive Product packaging to be used by
Supplier. OFSC agrees to purchase such quantity of Product so that the
minimum production requirements set forth in the Mold Agreement shall
be met during the term of the Mold Agreement. In the event OFSC does
not order such minimum quantities, OFSC agrees to pay Supplier the
difference between the Product quantity ordered and the minimum
production requirements times the amortization rate set forth in the Mold
agreement. In the event OFSC satisfies the minimum quantity
requirement or pays to Supplier any ammortization costs owed to Berlin
Packaging, then Supplier shall transfer ownership of the mold(s) created
under the Mold Agreement to OFSC.
7. Quality Control.
7.1 Packaging. The Product and all packaging and
promotional materials used in connection with the Product ("Packaging
and Promotional Material") shall be of a consistent and high quality
which conform to the standards developed by OFSC or developed by
Supplier and approved by OFSC. The quality and style of the Product
and Packaging and Promotional Material shall be at least as high as
similar goods presently sold or distributed by Supplier.
7.2 Inspection. Supplier will cooperate with OFSC
to permit an inspection of the production facility prior to Supplier's
production of the Products. Supplier agrees to permit two inspections
per year of its operation to allow OFSC to monitor the qulity of Products
offered by Supplier to ensure they conform to OFSC's standards,
provided OFSC gives Supplier 24 hours prior notice of such inspection.
Supplier shall also provide OFSC with access to its qulity assurance data
documentation. Notwithstanding the above, OFSC will be entitled to
additional inspections under the same notice requirements in the event it
receives written or verbal complaints from consumers or retailers
regarding the quality of the Product or quality of the Packaging. OFSC
shall provide copies of all such complaints to Supplier.
8. Representation and Warranties of Supplier. Supplier
represents and warrants, which warranties and representations will
survive the term of this Agreement.
8.1 that the Product will conform to all specifications,
including but not limited to those contained in Exhibit A, and will be
merchantable, free from defects and will be fit for the purpose intended;
8.2 that the Product, including food articles, food
ingredients, food packaging, and food labeling relating to or comprising
the Product or any part thereof that is supplied by Supplier and
delivered, sold or transferred to OFSC hereunder shall be manufactured,
stored and delivered in full compliance iwth all applicable federal, state
and local statutes, rules and regulations (the "Regulations");
8.3 that the Product shall be manufactured, stored and
delivered in accordance with appropriate "Good Manufacturing
Practices" or similar practices that may be promulgated under the
Regulations as applicable;
8.4 that the Product shall not be adulterated or
misbranded within the meaning of the Regulations;
8.5 that the Product shall not be a food product which
may not, under the Regulations, be introduced into interstate commerce
except as provided herein;
8.6 that Supplier has the facilities and capacity to
manufacture and supply the Product to OFSC in accordance with the
specifications set forth on Exhibit A; and
8.7 that Supplier is free to enter into this Agreement, that
Supplier's execution of this Agreement has been duly approved by all
applicable corporate procedures, that this Agreement constitutes a legal,
valid and binding obligation of Supplier, and that to Supplier's
knowledge this Agreement will not violate the rights of any third party.
These warranties shall be in additional to all other warranties, express,
implied or statutory and in addition to all obligations contained in this
Agreement. Payment for, inspection of, or receipt of the Product by
OFSC shall not constitute a waiver of any breach or warranty.
9. Representations and Warranties of OFSC. OFSC
represents and warrants, which warranties and representations will
survive the term of this Agreement:
9.1 that OFSC has the right to use the Sweet 'N Low
brand artifical sweetener and the associated Sweet 'N Low trademarks
and logos (the "Marks") for the manfuacture of the Product throughout
the Initial Term of this Agreement and any Renewal Term hereof;
9.2 that OFSC will have sufficient customers to require
production of the Product in the quantities contemplated by the terms of
this Agreement and any Renewal Term hereof;
9.2 that OFSC will have sufficient customers to require
production of the Product in the quantities contemplated by the terms of
this Agreement and the Mold Agreement;
9.3 that any food ingredients, food packaging, and food
labeling relating to or comprising the Product or any part thereof that is
supplied by OFSC and delivered, sold or transferred to Supplier
hereunder shall be manufactured, stored and delivered in full compliance
with the Regulations; and
9.4 that OFSC is free to enter into this Agreement, that
OFSC's execution of this Agreement has been duly approved by all
applicable corporate procedures, that this Agreement constitutes a legal,
valid and binding obligation of OFSC, and that to OFSC's knowledge
this Agreement will not violate the rights of any third party.
These warranties shall be in addition to all other warranties, express,
implied or statutory and in addition to all obligations contained in this
Agreement. Receipt of payment for the Product by Supplier shall not
constitute a waiver of any breach or warranty.
10. Non-Conformity. In the event the Products do not
conform to the sample or prototype approved by OFSC, then OFSC shall
be permitted to reject all non-conforming shipments and shall be entitled
to, at OFSC's option, replacement products or reimbursement for the
costs (including shipping and delivery charges) of the Products.
11. Widescale Defects/Recall
11.1 Whenever Supplier becomes aware that any
ingredient or component of a Product covered by this Agreement is or
may become harmful to persons or property or that a Product is
mislabeled, Supplier shall immediately give notice thereof to OFSC and
Supplier shall provide all relevant information with respect thereto.
11.2 In the event it is deemed necessary by OFSC and
Supplier to recall any quantity of the Product, from any store of OFSC or
from any consumer, both parties agree to take such reasonable steps
necessary to protect the interests of the public and to comply diligently
with all product recall procedures established by the Food and Drug
Administration.
12. Insurance. Supplier agrees to maintain during the entire
term of the Agreement commercial, general liability insurance, including
product liability coverage, in minimum amounts of $1,000,000.00 per
occurrence for damage, injury and/or death to persons and $1,000,000.00
per occurrence for damage and/or injury to property. Supplier further
agrees to require all of its delivery personnel to be licensed to drive,
whether they are employees or independent contractors. All policies of
liability insurance required to be effected by Supplier shall cover
Supplier's employees, agents, and independent contractors and shall
include OFSC as an additional insured. Upon execution of this
Agreement, and annually thereafter, Supplier shall promptly provide
OFSC with certificates of insurance evidencing such coverage and each
certificate shall indicate that coverage represented thereby shall not be
canceled or modified until at least thirty (30) days prior notice has been
given to OFSC.
13. Default and Termination.
13.1 In the event either party:
(a) breaches any term or condition of this
Agreement; or
(b) abuses or misrepresents its status as a supplier
and/or seller of the Product to the detriment of the other party, or
(c) becomes the subject of any proceeding under
the Bankruptcy Act, becomes insolvent or any assignment is made for
the benefit of creditors or a trustee is appointed for all or any portion of
the party's assets, or
(d) fails to comply with the Regulations,
then, the non-breaching party, in its sole discretion, may terminate this
Agreement with fifteen (15) days written notice to the breaching party.
13.2 Notwithstanding anything to the contrary, in the
event the party's breach is for noncompliance with the Regulations,
termination shall be effective immediately.
13.3 The failure to terminate the Agreement upon the
occurrence of one or more of these events of default by a party shall not
constitute a waiver or otherwise affect the right of the non-breaching
party to terminate the Agreement as a result of a continuing or
subsequent failure or refusal by the breaching party to comply with any
such obligations. Failure by the non-breaching party to exercise any of
its rights or remedies hereunder or to insist on strict compliance with any
of the terms of this Agreement shall not constitute a waiver of any of the
terms or conditions of this Agreement with respect to any other
subsequent breach nor shall it constitute a waiver by the non-breaching
party of its rights at any time thereafter to require strict compliance with
the terms of this Agreement.
13.4 Upon termination, OFSC shall pay Supplier any
supplier any outstanding Invoices.
13.5 Upon termination, Supplier agrees as follows:
(a) Supplier shall immediately pay all sums due
and owing to OFSC;
(b) Supplier shall immediately case the further
production and manufacturing of the Product; and
(c) Supplier shall cease any further use of the
Marks and shall not thereafter, directly or indirectly hold itself out or
represent itself as affiliated in any way with OFSC.
14. Indemnity.
14.1 Supplier agrees to indemnify and hold OFSC, its
officers and directors, employees or agents, customers and users of the
Product, harmless from all claims, demands, losses, liability, suits at law
or in equity, costs and expenses, including reasonable attorney's fees,
resulting from injury, illness and/or death caused, in whole or in part, by
contact with, use and/or consumption of the Product, unless (and then
only to the extent) such injury, illness and/or death is caused by the sole
negligence or misconduct of OFSC. In the event of any claim,
threatened claim, or notification of either which may be the subject of
indemnification provided for in this Section, OFSC will give Supplier
prompt written notification thereof and provide Supplier with such
reasonable assistance in the response and prosecution of any defense as
Supplier may request, at Supplier's expense. Upon OFSC's tendering
any suit to Supplier, Supplier shall defend the same at its sole cost and
expense. If Supplier fails to assume such defense, OFSC may defend the
action in the manner it deems appropriate, and Supplier shall pay to
OFSC all costs, including reasonable attorneys' fees, incurred by OFSC
in effecting such defense, in addition to any sum which OFSC may pay
by reason of any settlement or judgment against OFSC. The provisions
of this Section 14.1, and the indemnity hereunder, shall survive this
Agreement and any performance hereunder.
14.2 OFSC agrees to indemnify and hold Supplier, its
officers and directors, employees or agents, customers and users of the
Product, harmless from all claims, demands, losses, liabilities, suits at
law or in equity, costs and expenses, including reasonable atotrney's fees,
resulting from the breach of any of OFSC's Marks. In the event of any
claim, threatened claim, or notification of either which may be the
subject of indemnification provided for in this Section, Supplier will
give OFSC prompt written notification thereof and provide OFSC such
reasonable assistance in the response and prosecution of any defense as
OFSC may request, at OFSC's expense. Upon Supplier's tendering any
suit to OFSC, OFSC shall defense the same at its sole cost and expense.
If OFSC fails to assume such defense, Supplier may defend the action in
the manner it deems appropriate, and OFSC shall pay to Supplier all
costs, including reasonable attorneys' fees, incurred by Supplier in
effecting such defense, in addition to any sum which supplier may pay
by reason of any settlement for judgment against Supplier. The
provisions of this Section 14.2, and the indemnity hereunder, shall
survive this Agreement and any performance hereunder.
15. Confidentiality. All terms and conditions of this
Agreement shall remain confidential between Supplier and OFSC. Each
party acknowledges that during the course of carrying out this
Agreement, it may receive confidential and proprietary information
related to the other party's business, including, without limitation,
recipes and formulations created or provided by the other party
("Confidential Information"). Confidential Information includes any
information, designs, data or know-how that a party has designated as
proprietary and/or confidential, or that, by the nature of the
circumstances surrounding the disclosure, ought to be treated as
exclusive property of the other party and undertakes to retain in
confidence all Confidential Information. Each party's obligations under
this Section 15 shall survive expiration and termination of the
Agreement and any amendments thereto.
16. Miscellaneous Provisions.
16.1 Independent Contractor Relationship. Supplier
and OFSC are independent contracting parties and this Agreement does
not create the relationship of principal and agent, partners, joint ventures
or employer and employee between OFSC and Supplier. Supplier shall
have no authority to bind or otherwise obligate OFSC in any manner nor
shall Supplier represent to anyone that it has a right to do so.
16.2 Severability. The provisions of the Agreement
are severable and the Agreement shall be interpreted and enforced as if
all completely invalid or unenforceable provisions were not contained in
the Agreement, and partially valid and enforceable provisions shall be
enforced to the extent that they are valid and enforceable.
16.3 Entire Agreement. The Agreement and the
exhibits attached hereto constitute the entire written agreement between
OFSC and the Supplier and supersedes any and all prior negotiations,
understandings and/or agreements, oral or written, between the parties to
this Agreement with respect to the subject matter of this Agreement.
The parites agree that neither party is relying on any statement or
promise not contained in this Agreement.
16.4 Amendments in Writing. Neither the Agreement
nor any of its provisions may be waived, modified or amended except by
an instrument in writing signed by the parties to this Agreement.
16.5 Assignment. The Agreement shall be binding
upon and shall inure to the benefit of the parties to this Agreement,
provided, however, it shall not be assigned by either OFSC or Supplier,
without the prior written consent of the other party.
16.6. Applicable Law. The Agreement shall be
governed by and construed in accordance with the laws of the State of
Georgia without regarding to its conflict of laws rules.
16.7. Force Majeure. Neither party shall be liable for
defaults or delays or non-performance of any covenant, agreement, work,
service, or other act required under this Agreement to be performed by
such party, if such delay or hindrance is due to strikes, lockouts, failure
of power or other utilities, injunction or other court or administrative
order, governmental law or regulations which prevent or substantially
interfere with the required performance, condemnations, riots,
insurrections, martial law, civil commotion, war, fire, flood, earthquake,
or other casualty, acts of God, or other causes not within the control of
such party. The performance of any covenant, agreement, work,
services, or other act shall be excused for the period of delay and the
period for the performance of the same shall be extended by such period.
16.8 No Delegation of Authority. Supplier shall not
subcontract to or permit third parties to produce the Product or to
perform its obligations under this Agreement.
16.9 Cumulative Remedies. The rights and remedies
above provided to either party shall be cumulative and in additional to
all other rights and remedies available to either party in law and in
equity.
16.10 Notices. Whenever a provision is made under this
Agreement for any demand, notice or declaration of any kind, or where it
is deemed desirable or necessary by either party to give or serve any such
notice, demand or declaration to the other party, it shall be in writing and
served either personally or sent by United States mail, certified, postage
prepaid, addressed at the addresses set forth below or at such address as
either party may advise the other from time to time. It shall be deemed
delivered upon receipt.
To Supplier at: Beverage House, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:____________________
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇▇▇ & Bird, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇.▇.
North Building, 11th Floor
Washington, D.C. 20004-
2601
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇,
III
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
To OFSC at: The Old Fashioned Syrup
Company, Inc.
▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇., ▇-▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:________________________
Tel: (
)_________________
Fax: (
)_________________
with copies to: Aronauer, Goldfarb, ▇▇▇▇▇ &
Re, LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
N WITNESS WHEREOF, the parties have executed this Agreement as
of the date first above written.
THE OLD FASHIONED SYRUP BEVERAGE HOUSE,
INC.
COMPANY, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chair/CEO Title: President
EXHIBIT A
Product
The Product covered by the terms and conditions contained herein shall
specifically be the following:
[Sweet 'N Low brand chocolate syrup]
Specifications
Supplier shall develop, manufacture, package, label and deliver the
Product according to the following instructions and specifications:
EXHIBIT B
Pricing.
The following prices are based on an annual volume of 100,000
gallons of the Product to be purchased by OFSC. All prices are subject
to change in the event 100,000 gallons of Product is not purchased
annually by OFSC. The retail pack price includes an allotment of
seventy-two cents ($.72) per case for front and back labels. A one-time
setup charge shall be issued to OFSC by Supplier in the event camera-
ready art for such labels is provided by OFSC to Supplier. Prices will be
reviewed quarterly during the Initial Term and any Renewal Term(s) in
order to analyze price increases or reductions based on increased costs,
increased sales, or other factors affecting price.
PACKAGING
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▇▇ ▇▇▇▇▇▇ ▇▇▇▇
$247.00
4/1 GALLON PACKAGES
$20.60
RETAIL PACK
$11.40
CLUB PACK*
$12.95
The Club Pack price may be adjusted downward depending upon
the carton selected by OFSC.