Exhibit 10.8
Production Agreement
For The Processing of Branded Milk Products
1. Introduction. This Agreement is made this day of December 2003,
by and between
X. Xxxxx! Foods International Corp. (Bravo! Foods International)
00000 X.X. Xxxxxxx 0, Xxxxx 000
Xxxxx Xxxx Xxxxx, Xxxxxxx 00000
Registered in the State of Delaware No. 2619440
Chief Executive Officer: Xxx X. Xxxxxx
B. Saudia Dairy & Foodstuff Company (SADAFCO)
P.O. 5043 Xxxxxx 00000,
Xxxxx Xxxxxx
Registered in Saudi Arabia No. 9917
Managing Director: Xxxxx Xxxxxxxx
X. Xxxxxxx Xxxxx Xxxxxxxxx Establishment (Agent)
Xxxxxx 00000
Xxxxx Xxxxxx
000 Xxxxxxxx Xxx Xxxxx
Xxxxx, XX 00000
Registered in Saudi Arabia No. 4030116702
2. Considerations. The parties in entering into this Agreement
have duly considered the following facts and events:
2.1 By a Licensing Agreement with Marvel Enterprises, Inc. (Marvel
Comics), dated, January 7, 2004, Bravo! Foods International has
the licensed rights to utilize certain property of Marvel
Comics, consisting of the fictional cartoon characters,
including the names of such characters and all artwork
associated with such characters (the Licensed Property), and
other licensed property which Bravo! Foods International and
SADAFCO from time to time may agree to incorporate into this
Agreement, as set forth and amended in Schedule 2.1 attached to
this Agreement.
2.2 Bravo! has obtained trademarks for Slammers(TM) Fortified
Reduced Fat Milk, and Slim Slammers(TM) Low Fat Milk including
all associated artwork (the Bravo! Licensed Property).
2.3 Bravo! Foods International has the rights to utilize the
Licensed Property and the Bravo! Licensed Property in
connection with the advertising and promotion, manufacture,
distribution and sale of milk products (the Branded Milk
Products).
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2.4 Bravo! Foods International has developed ingredient formulas
for flavored milks (Flavor Ingredients) for use in conjunction
with the production of Branded Milk Products.
2.5 Bravo! Foods International has designed a program to assist
SADAFCO in the processing and sale of the Branded Milk Products
including promotional, marketing, product development and
design support for advertising and promotion.
2.6 SADAFCO is desirous of participating in the promotion,
processing, manufacture, distribution and sale of the Branded
Milk Products, within SADAFCO's network area of processing and
distribution (Territory), pursuant to the terms and conditions
of this Agreement.
2.7 By an Agency Agreement dated November 16, 2003, between Bravo!
Foods International and Xxxxxxx Xxxxx Ashemimry, Bravo! Foods
International has appointed Xxxxxxx Xxxxx Ashemimry as its
Agent for the administration of the sale of kits and the
monitoring of the promotion, distribution and resale of Branded
Milk Products in the Middle East on a co-pack basis through
third party dairies, including promotional, marketing and
logistical support for the sale of Branded Milk Products, as
the Agent of Bravo!.
2.8 Definitions. As used in this Agreement, the listed terms have
the following meanings:
2.8.1 "Approved Suppliers" means a supplier of Flavor
Ingredients or packaging for the Branded Milk Product
that is approved in writing by Bravo! Foods
International, which approval shall not be unreasonably
withheld.
2.8.2 "Branded Milk Products" means the milk products for which
Bravo! Foods International has the licensed rights to
utilize Licensed Property in connection with the
advertising and promotion, manufacture, distribution and
sale thereof.
2.8.3 "Flavor Ingredients" means ingredient formulas and actual
flavors for flavored milks for use in conjunction with
the processing of Branded Milk Products, which h ave been
developed by Bravo! Foods International in conjunction
with SADAFCO for use with the Licensed Property. The
parties agree and acknowledge that he Flavor Ingredients
will be formulated to meet the flavor profiles
appropriate for local taste preferences.
2.8.4 "Initial Term" means a term coterminous with the initial
term of the Bravo! Foods International License Agreement
with Marvel Comics., which expires February 1, 2005.
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2.8.5 "Kit" or "Kits" means the basic quantity of Flavor
Ingredients for a specified flavor plus the Production
Rights as granted herein. The compensation paid to Bravo!
Foods International for the grant of the Production
Rights under this Agreement shall be paid by SADAFCO's
purchase of Kits from Bravo! Foods International. The
charge for each Kit shall be for specified Flavor
Ingredients and for the grant of Production Rights, as
set forth in and as governed by Section 3.9 herein.
2.8.6 "Licensed Property" refers to the fictional cartoon
characters of Marvel Comics and other properties that may
be added from time to time to Schedule 2.1, including the
names of such characters and all artwork associated with
such characters.
2.8.7 "Production Rights" means the right to process,
manufacture, promote, distribute, sell and otherwise
market the Branded Milk Products in the Territory.
2.8.8 "Territory" means SADAFCO's areas of processing and
distribution as governed in Schedule 2.8.8 attached to
this Agreement.
3. Basic Agreement. In consideration of the mutual promises
contained in this Agreement, the parties agree to the following:
3.1 Grant of Rights. Bravo! Foods International hereby grants to
SADAFCO the exclusive right to process, promote, distribute,
sell and otherwise market the Branded Milk Products (Production
Rights) in the Territory, as set forth in Schedule 2.8.8. The
grant of Production Rights provided herein does not constitute
a license, sublicense or assignment of any license or
intellectual property to SADAFCO. SADAFCO shall be a co-
packer/supplier of the branded Milk Products.
3.2 Limitation of Grant. Subject to the provisions of Schedule
2.8.8, this Agreement and the rights granted hereunder apply
solely to the Branded Milk Products and nothing contained in
this Agreement precludes or limits in any way the right of
SADAFCO or Bravo! Foods International to process, promote,
distribute, sell and otherwise market, either directly or
indirectly, any of its other non-dairy products or services,
even though such other products may be functionally similar and
utilize components common to the Branded Milk Products.
3.3 Term of Agreement. This Agreement shall be effective as of the
date first set forth above and, unless otherwise terminated in
accordance with the provisions hereof, and shall remain in
effect for a term coterminous with the Bravo! Foods
International License Agreement with Marvel Comics, the initial
term of which expires February 1, 2005 (the Initial Term). This
Agreement may be renewed at the end of the Initial Term or any
extension by mutual agreement of the parties
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only if (a) the Bravo! Foods International - Marvel Comics
License Agreement is renewed; and (b) SADAFCO is not in default
of any if its obligations under this Agreement. The renewal
this Production Agreement shall be for a term coterminous with
the renewal term of the Bravo! Foods International - Marvel
Comics License Agreement
3.4 Processor's Obligations. SADAFCO shall use reasonable
commercial efforts to actively promote the marketing, sale and
distribution of the Branded Milk Products within the Territory.
Without in any way limiting the generality of the foregoing,
SADAFCO shall:
3.4.1 Process, distribute and sell the Branded Milk Products in
a manner consistent with the highest industry standards
and procedures to insure the production, distribution and
sale of Branded Milk Products of the consistently highest
quality.
3.4.2 Use reasonable commercial efforts to promote sales of the
Branded Milk Products in the Territory.
3.4.3 SADAFCO may request the cooperation of Bravo! Foods
International with respect to specific promotions, which
cooperation shall be pursuant to a future agreement
between the parties to this Agreement.
3.4.5 Purchase and maintain the minimum inventory of Flavor
Ingredients, necessary to process the Branded Milk
Products, and approved packaging, as set forth in
Schedule 3.4.5 of this Agreement.
3.4.6 Purchase all its requirements for Flavor Ingredients from
Bravo! Foods International and Packaging Supplies from
suppliers approved by Bravo! Foods International
(Approved Suppliers). Such approvals shall be in writing
by Bravo! Foods International. SADAFCO may change
suppliers with the written approval of the parties.
Nothing in this Agreement waives SADAFCO' right to return
non-conforming Flavor Ingredients directly to an Approved
Supplier.
3.4.7 Use advertising, promotional materials, media releases,
marketing materials and product packaging for the Branded
Milk Products approved in writing by Bravo! Foods
International.
3.4.8 Undertake approved appropriate promotional and
advertising campaigns at SADAFCO's expense and at its
discretion to stimulate sales of the Branded Milk
Products within the Territory, using materials developed
in cooperation with Bravo! Foods International.
3.4.9 Not engage in the sale, distribution, or processing of
other branded flavored milk products within the Territory
which are competitive with the
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Branded Milk Products, without the written approval of
Bravo! Foods International, which consents will not be
withheld unless such activity would, in the reasonable
judgment of Bravo! Foods International, prevent SADAFCO
fulfilling its obligations under this Agreement. Nothing
in this Section 3.4.9 shall be deemed to prohibit SADAFCO
from processing, marketing, distributing or selling its
competing branded products that are currently sold in the
Territory.
3.4.10 Use its best reasonable efforts to protect patents,
trademarks, copyrights and proprietary rights of the
owners in and to the Licensed Property; SADAFCO shall
promptly report any infringements of which SADAFCO
becomes aware and shall cooperate with Bravo! Foods
International in its efforts to protect its intellectual
property rights.
3.4.11 Submit reports to Bravo! Foods International as follows:
(a) at least thirty (30) days prior to the start of each
calendar quarter, a forecasted schedule of Flavored
Ingredients to be delivered to SADAFCO for the next
calendar quarter.
(b) on a monthly basis, such other reports regarding
matters limited to the purposes of this Agreement,
including sales reports, receivable aging reports for the
Branded Milk Products, and payable and purchasing history
reports for Flavor Ingredients and packaging supplies.
3.4.12 Promptly pay invoices for Kits submitted to it by Bravo!
Foods International as provided in Section 3.6.2 herein.
3.4.13 Promptly pay invoices for packaging submitted to it by
Approved Suppliers. SADAFCO shall pay invoices for
packing submitted to it by Approved Suppliers according
to the terms and conditions agreed by and between SADAFCO
and those suppliers.
3.5 Processor's Expenses. Unless otherwise agreed in writing, no
compensation or other expenses shall be paid by Bravo! Foods
International to SADAFCO for the performance of the duties set
forth in this Production Agreement. SADAFCO's sole compensation
will arise from the sale of the Branded Milk Products.
3.6 Ordering Procedures. During the term of this Agreement, SADAFCO
shall order Kits only pursuant to the procedures set forth in
this section.
3.6.1 SADAFCO shall not place a purchase order for Flavor
Ingredients directly with an Approved Supplier of such
goods.
3.6.2 To order Kits including Flavor Ingredients, SADAFCO shall
follow the procedures set forth in Schedule 3.6.2
attached to this Agreement. The
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Agent shall be responsible the processing of SADAFCO's
order and for ordering Flavor Ingredients directly from
an Approved Supplier.
3.6.3 SADAFCO shall pay promptly invoices for packaging issued
the Approved Supplier, in accordance with the terms and
conditions of such invoice.
3.7 Obligations of Bravo! Foods International. During the term of
this Agreement, Bravo! Foods International shall have the
following obligations:
3.7.1 Assist SADAFCO in product development, new product line
extension and secure all appropriate approvals from
Marvel Comics, as well as responsibility for packaging
design and development and Marvel Comics' approvals for
such packaging design.
3.7.2 Payment of all guaranteed fees and royalties pursuant to
the License Agreement.
3.7.3 Provide marketing support for advertising by SADAFCO,
within the guidelines set forth in this Section 3.7.3.
Where appropriate and based upon the written agreement of
the parties, Bravo! Foods International shall be
responsible for the development and production of
advertising and promotion concepts. SADAFCO shall be
responsible for the media costs of running such
advertising and promotions, as approved by SADAFCO prior
to implementation. Bravo! Foods International shall
assist in the coordination of marketing programs with
Marvel Comics and manage all administrative functions of
such coordination.
3.7.4 Where appropriate and upon the written agreement of the
parties to this Agreement, Bravo! Foods International
shall assist SADAFCO in the development of marketing
support programs to help increase sales and profits for
the Branded Milk Products, including co-op marketing
programs.
3.8 Orders and Minimum Inventory. Upon execution of this Agreement,
SADAFCO shall have the following obligations concerning orders
and inventory:
3.8.1 SADAFCO shall purchase approved packaging and Kits used
to process the Branded Products in amounts not less than
those set forth in a Schedule 3.4.5 attached to this
Agreement, as provided in Schedule 3.4.5 attached to this
Agreement.
3.8.2 SADAFCO shall order Kits in accordance with the
procedures established by and between SADAFCO and Bravo!
Foods International as set forth in Section 3.6 of this
Agreement.
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3.8.3 Flavor Ingredients and packaging supplies shall be
shipped to SADAFCO without any risk of loss to Bravo!
Foods International. All freight, insurance, duty and
value added, sales, use and excise taxes applicable to or
levied on the sale of such Flavor Ingredients and
packaging supplies shall be paid by SADAFCO in addition
to the current prices for such Flavor Ingredients and
supplies. The parties agree and acknowledge that, unless
it is commercially unreasonable to do so, or unless
otherwise agreed to by the parties, the Flavor
Ingredients and supplies shall be sourced FOB from
facilities of Approved Suppliers that are closest to
SADAFCO.
3.9 Prices and Payment. SADAFCO shall be charged an invoice amount
by Bravo! Foods International for Kits and SADAFCO shall pay
such invoice(s) in accordance with the following:
3.9.1 Such invoiced amounts shall be based upon and consist of
the following components: (a) a fee for Flavor
Ingredients and (b) a fee for Production Rights.
3.9.2 The pricing reflected in such invoices shall be in
accordance with the matters set forth in Schedule 3.9.2,
attached to this Agreement.
3.9.3 Payment of invoices by SADAFCO shall be in accordance
with the procedures set forth in Schedule 3.6.2 attached
to this Agreement.
4. Other Material Provisions. In addition to the foregoing, the
parties for good and valuable consideration agree as follows:
4.1 Insurance. During the term of this Agreement, SADAFCO shall
obtain and maintain, at its own expense, product liability
insurance providing adequate protection for the parties to this
Agreement and Marvel Comics against any such claims or suits in
amounts no less than 1.5 million dollars (US $1,500,000) per
occurrence, combined single limits. Upon written request,
SADAFCO shall produce to the other parties to this Agreement a
fully paid policy or certificate of insurance naming Bravo!
Foods International, the Agent and Marvel Comics as additional
insured parties and requiring that the insurer shall not
terminate or materially modify such policy or certificate
without written notice to the additional named insured parties
at least twenty days (20) in advance thereof.
4.2 Indemnification.
4.2.1 Except with respect to claims arising by reason of
defective Flavor Ingredients, SADAFCO shall, at its
expense, defend any claim, action or proceeding
instituted against Bravo Foods International and Marvel
Comics for any injury or damage to consumers of the
Branded Milk Products. SADAFCO shall hold harmless Marvel
Comics, Bravo! Foods
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International and the Agent (i) with respect to such
injury or damage to such consumers arising out of or as a
result of the processing, distribution or sale of the
Branded Milk Products by SADAFCO, (ii) and claim, demand
or action made or taken against Marvel Comics or Bravo!
Foods International or the Agent arising out of SADAFCO's
failure to pay promptly an invoice of an Approved
Supplier, for which SADAFCO has the responsibility of
payment under this Agreement. Such indemnification shall
include, but not be limited to, monetary damages and
costs awarded by final judgment in such claim, action or
proceeding, as well as attorneys fees.
4.2.2 Bravo! Foods International shall, at its expense, defend
any claim, action or proceeding instituted against
SADAFCO and hold SADAFCO harmless for any injury or
damage to SADAFCO arising out of or as a result of
SADAFCO's use of the Licensed Property or the Bravo!
Licensed Property in accordance with and pursuant to the
terms and conditions of this Agreement.
4.2.3 Bravo! Foods International shall, at its expense, replace
any defective Flavor Ingredients that are not replaced by
the Approved Supplier, where the defect is the
responsibility of such Approved Supplier.
4.3 Name and Trademarks.
4.3.1 All trademarks, trade names, and copyrights granted or
applied for in connection with the Licensed Property or
the Bravo! Licensed Property and related documents are
and shall remain the sole property of Bravo! Foods
International or Marvel Comics, as appropriate. SADAFCO
will not by its operations hereunder acquire any right,
title or interest thereto. SADAFCO shall not alter or
remove any trade name, trademark or other identification
marks, symbols or labels, nor change or alter approved
artwork for packaging, promotional materials or
advertising in connection with the Branded Milk Products,
without the written consent of Bravo! Foods
International.
4.3.2 Use of any of the Licensed Property or the Bravo!
Licensed Property on any sales promotion, advertising,
stationery or other media produced by or for SADAFCO may
be done only with the express written consent of Bravo!
Foods International. Any actions or representations made
by SADAFCO not expressly contained in this Agreement or
in published or written information provided by Marvel
Comics or Bravo! Foods International are made at
SADAFCO's risk and shall constitute a material default of
this Agreement.
4.3.3 SADAFCO shall have the right to place its logo, and the
logo of a regional subsidiary where appropriate, on the
Branded Milk Products. The size and location of such logo
shall be subject to the written approval of Bravo! Foods
International, which approval shall not be unreasonably
withheld.
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4.3.4 SADAFCO shall incorporate the following information on
all labels and promotional materials used in connection
with the Branded Milk Products:
"Manufactured under a production agreement with Bravo!
Foods International Corp. (Xxxxxxx Xxxxx Ashemimry, Agent
Middle East - i.ashemimry @xxxxxxxxxxx.xxx)"
4.4 Early Termination of This Agreement. The following terms and
conditions shall control the circumstances under which this Agreement may
be terminated before the end of the term hereof.
4.4.1 If either Party to this Agreement shall breach its
obligations to perform its duties under this Agreement or
any Party to this Agreement shall be in material default
of any of the terms and conditions of this Agreement, the
party not in default may terminate this Agreement by
sending written notice to such effect to the defaulting
party, at least thirty (30) days prior to the effective
date thereof. Such termination shall be effective on the
date set forth in the notice, unless such defaulting
party cures such default or breach within such thirty
(30) day period. Such right of termination shall be in
addition to and shall not prejudice any other rights or
claims that the nondefaulting party may have against the
defaulting party either at law or in equity.
4.4.2 In the event of the insolvency, bankruptcy or inability
to pay debts as and when due, or an assignment by any
party to this Agreement for benefit of creditors, or the
appointment of a receiver for all or a substantial part
of its business or property, or an attachment of any of
its assets lasting more than thirty (30) days, the non-
event party may, at its option, at any time after the
occurrence of such an event, immediately terminate this
Agreement by mailing written notice to the other party
that it elects to do so.
4.4.3 In the event that Marvel Comics terminates the License
Agreement with Bravo! Foods International and such
License Agreement is not reinstated within ninety (90)
days, this Agreement shall be void and, except as to the
consequences of termination set forth herein, shall have
no further binding effect.
4.4.4 SADAFCO has and will continue to operate within the laws
governing the Kingdom of Saudi Arabia. In the event the
Ministry of "The Presidency of Promotion of Virtues And
Prohibiting Vices", imposes rules, regulations,
restrictions or injunctions on SADAFCO, which prohibit
SADAFCO's performance of a material obligation under this
Agreement, SADAFCO will not be deemed to be in breach of
or held to the requirements of this Agreement with Bravo,
nor penalized in anyway whatsoever. In such an event,
this Agreement shall be void and, except as to the
consequences of termination set
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forth herein, shall have no further binding effect,
unless modified in writing by the parties to this
Agreement.
4.4.5 In the event that SADAFCO is unable to sell, despite
reasonable commercial efforts, sufficient Branded Milk
Products over a six (6) month period to utilize at least
60% of the minimum ordered Flavor Ingredients for that
period, SADAFCO shall have the option of terminating this
Agreement upon four (4) months written notice to Bravo!
Foods International and the Agent.
4.5 Consequences of Termination. Upon the termination of this
Agreement pursuant to Section 4.4 of this Agreement, the respective parties
shall have the following rights and obligations:
4.5.1 SADAFCO shall return to Bravo! Foods International, at
SADAFCO's expense, all furnished proprietary,
confidential or material containing the Licensed Property
for which SADAFCO has not incurred a purchase expense.
4.5.2 The parties shall not by reason of the termination of
this Agreement, for any reason whatsoever, be liable to
each other for compensation, reimbursement or damages on
account of present or prospective loss of profits on
sales, goodwill, creation of clientele, salaries,
expenditures, investments or commitments made in
connection herewith.
4.5.3 The provisions of this Section in no way will prohibit or
relieve SADAFCO from continuing other business after the
termination of this Agreement or to continue to support
any of SADAFCO's commitments and/or obligations.
4.5.4 Upon the termination of this Agreement pursuant to
Section 4.4.4 of this Agreement, Bravo! Foods
International agrees to repurchase from SADAFCO Flavor
Ingredients held in inventory by SADAFCO, up to a value
(based upon the cost of such inventory) of US$25,000.
4.6 Processor as an Independent Contractor. SADAFCO shall be deemed
an independent contractor hereunder and, as such, SADAFCO shall not be nor
hold itself out as an employee or agent to or representative of Bravo!
Foods International or Marvel Comics. SADAFCO acknowledges that it does not
have any authority to act for or in the name of Bravo! Foods International
or Marvel Comics or to commit Bravo! Foods International or Marvel Comics
in any manner whatsoever. SADAFCO indemnifies and holds harmless Bravo!
Foods International and Marvel Comics for any damage or expenses arising
from acts of SADAFCO in contravention to this Section.
4.7 Nonassignability. Neither this Agreement nor any rights or
obligations hereunder shall be assignable or transferable, in whole or in
part, by operation of law or
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otherwise without the prior written consent of the other party, except that
Bravo! Foods International may assign this Agreement without SADAFCO'
consent to a parent, to a wholly owned subsidiary or in connection with a
transfer of all or substantially all its assets. Further, except as
provided in Schedule 4.7 attached to this Agreement, SADAFCO shall not,
without the prior written consent of Bravo! Foods International, enter into
any agency agreement, co-pack or other or arrangement with respect to the
processing, marketing, distribution or sale of the Branded Milk Products
under this Agreement with non subsidiaries or non affiliates. Subject to
the above, this Agreement shall be binding upon and shall inure to the
benefit of the successors and assigns of the respective parties hereto.
4.8 Notices. Unless otherwise specified in this Agreement, all
notices required hereunder shall be in writing and shall be dispatched by
prepaid first class mail, commercial telegraph or commercial international
expedited delivery service to the addresses of the respective parties first
set forth in this Agreement, or by verified facsimile or E-mail
transmission, if such number or address has been provided in accordance
with this Section. Any notice so given shall be deemed duly delivered (i)
if by mail, seven days after mailing (except in the event of the inability
of the postal service to deliver mail on a national basis), (ii) if by
telegraph, facsimile or E-mail, upon transmission (iii) if by delivery
service, upon delivery. The parties hereto may change its address for the
purposes of this Agreement by giving the other party written notice.
4.9 Force Majeure. In the event of fire, earthquake, explosion,
strikes, war, act of any government agency, material or labor shortage,
transportation contingency, act of God or any other causes beyond the
control of Bravo! Foods International, or Force Majeure, Bravo! Foods
International shall not be liable for any default in the performance of
this Agreement arising therefrom and SADAFCO is bound to accept the delayed
shipment or delivery made within a reasonable time. The same causes shall
be sufficient excuse for the failure of SADAFCO to take and pay for the
Flavor Ingredients ordered under this Agreement, except such as are in
transit or have been received by SADAFCO, until such contingencies are
removed. In the event such conditions cannot be corrected by the party
affected within thirty (30) days from the date of the occurrence of the
condition, then the other party has the option to terminate this Agreement.
The party claiming relief shall immediately notify the other parties in
reasonable detail and estimate the interval necessary to correct such
condition.
4.10 Enforceability/Governing Law.
4.10.1 If any provision or any portion of any provision of this
Agreement shall be held invalid, illegal or unenforceable
under either the laws of the United States or the country
in which SADAFCO's facilities are located, the remainder
of this Agreement shall remain valid and enforceable. Any
waiver by any party of any provision or breach of any
provision of this Agreement must be in writing. The
failure of any party to enforce at any
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time any provision hereof shall not be construed to be a
waiver of the right to enforce such provision or of the
provision itself.
4.10.2 If any party deems it necessary to bring suit or retain
an attorney to enforce its rights under this Agreement,
the prevailing party in such dispute shall be entitled to
recover from the other party, in addition to any judgment
or award, reasonable attorneys' fees and court costs
related to such dispute.
4.10.3 This Agreement shall be construed in accordance with the
laws of the country in which SADAFCO's facilities are
located, and the parties agree to resolve any disputes
derived from the interpretation, execution or enforcement
of this Agreement by means of Arbitration in accordance
with the International Arbitration Rules of the American
Arbitration Association.
4.11 Entire Agreement. This Agreement contains the entire
understanding between and among the parties hereto with respect to the
subject matter hereof and supersedes any and all prior contracts,
correspondence and discussions. This Agreement can be altered, amended or
varied only by a written document signed by responsible officers of each
party.
4.12 Preeminence of Licensing Agreement. In the event of any
conflict between a provision of this Agreement and the Licensing Agreement
with respect to the Licensed Property and the Branded Milk Products, the
Licensing Agreement shall control. SADAFCO acknowledges that is has
reviewed the License Agreement and agrees to be bound by the terms and
conditions thereof with respect to SADAFCO' participation in the
production, manufacture, promotion, distribution and sale of the Branded
Milk Products, which incorporate the Licensed Property. SADAFCO agrees to
execute a document that may be reasonably requested to effect the
provisions of this Section.
[SIGNATURES ON FOLLOWING PAGES]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
Bravo! Foods International Corp.
By _________________________________
Xxx X. Xxxxxx, Chief Executive Officer
XXXXX XX XXXXXXX
XXXXXX XX XXXX XXXXX
Xx this ___ day of January 2004, before me, the undersigned officer,
personally appeared Xxx X. Xxxxxx known personally to me to be the Chief
Executive Officer of the above named corporation, and that they, as such
officer, being authorized so to do, executed the foregoing instrument for the
purposes therein contained, by signing the name of the corporation by
themselves as such officer.
IN WITNESS WHEREOF I have hereunto set my hand and official seal.
_______________________
Notary Public
(Notary Seal)
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Saudia Dairy & Foodstuff Company
By __________________________________
Xxxxx Xxxxxxxx, Managing Director
Xxxxxxx Xxxxx Ashemimry Establishment
____________________________________
Xxxxxxx Xxxxx Ashemimry, for Agent
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Schedule 2.1
Licensed Property
Marvel Enterprises, Inc.
------------------------
The following characters as they appear in Marvel's comic book publications
sold at retail (excluding characters and/or the portrayal of characters in
comics based upon motion picture, television, video games or any other
entertainment products) limited to:
Spider-Man, Xxxxx Xxxxxx, Aunt Xxx, Xxxx Xxxx Xxxxxx Xxxxxx, J. Xxxxx
Xxxxxxx, Green Goblin, Venom, Black Cat, Kraven the Hunter.
Beast, Colossus, Cyclops, Gambit, Archangel, Xxxx Xxxx, Professor X,
Psylocke, Rogue, Storm, Wolverine, Iceman, Xxxxxx and Cable, Juggernaut,
Magneto, Sabretooth, Sentinels, Blob, Apocalypse, Mystique and Toad.
Mr. Fantastic, The Thing, The Human Torch, The Invisible Woman, Dr. Doom
and Mole Man.
The Incredible Hulk, Abomination, The Leader.
Captain America, Iron Man
Daredevil, Elektra and Kingpin.
The following characters as they appear in the Spider-Man and Friends kids
toy style guide limited to: Spider-Man, Spider-Girl, Storm, Wolverine, Hulk
and Captain America. The characters must appear in a group of at least
three or more. If there are only three characters, two characters cannot be
in the same group. Spider-Man and Spider-Girl are in a group and Wolverine
and Storm are in another group. For example, Spider-Man, Spider-Girl and
Hulk is not allowed, but Spider-Man, Hulk and Wolverine is allowed.
However, individual characters may appear if the multiple character heads
logo prominently appears and is 25% of the size of the actual character
image on the Licensed Article. No one character may be more prominent than
another.
Schedule 2.8.8
Territory
The Territory shall consist of the geographic area, which is generally
known as the Middle East:
Saudi Arabia
Kuwait
Baharain
Qatar
Oman
United Arab Emirates
Lebanon
Egypt
Jordan
Syria
SADAFCO shall have exclusive processing (manufacturing) rights in the
Territory for the Branded Milk Products. No other processor shall be
allowed to export the Branded Milk Products into the Territory.
Schedule 3.4.5
Initial Order And
Minimum Order Requirement
SADAFCO shall submit an initial order for 270 Kits contemporaneous
with the execution of this Agreement (the "Initial Order"). SADAFCO shall
have the discretion to determine the number of Kits for each flavor
ordered, so long as the total number of Kits ordered for the Initial Order
is at least 270.
Subsequent to the Initial Order, the Parties shall determine by the
mutual agreement the minimum number of Kits that shall be ordered in the
future by SADAFCO (the "Minimum Order Requirement"). This Minimum Order
Requirement shall be determined by Parties to this Agreement at the end of
the three (3) month period after the first processing run of any Branded
Milk Product by SADAFCO. This three (3) month period shall commence on the
first day of the next month following the first processing run of any
Branded Milk Product by SADAFCO. In making this Minimum Order Requirement
determination, the Parties shall exercise good faith and give due
consideration to the sales volume of the Branded Milk Products within the
aforesaid three (3) month period, and to projected sales volumes going
forward.
The Minimum Order Requirement shall set forth the minimum number of
Kits to be ordered by SADAFCO during any calendar quarter subsequent to the
Parties' determination of the Minimum Order Requirement. The first quarter
during which the Minimum Order Requirement applies shall commence on the
first day of the next month following the Parties' determination of the
Minimum Order Requirement.
SADAFCO shall have the discretion to place one or more orders for
Kits during each such calendar quarter and to determine the number of Kits
for each flavor ordered, so long as the total number of Kits ordered for
all flavors during each calendar quarter is at least equal to the Minimum
Order Requirement. The Parties, by mutual agreement, may make adjustments
to the Minimum Order Requirement, where and when appropriate, and may set
different Minimum Order Requirements for different selling seasons, based
upon a demonstrated history of significant fluctuation in seasonal sales.
The Minimum Order Requirement, and any adjustment thereto, shall be
in writing and executed by the Parties to this Agreement and shall be
deemed incorporated by reference herein.
Schedule 3.6.2
Kit Ordering and Payment Procedures
1. SADAFCO shall forward a purchase order to the Agent, who shall be
responsible for the processing of such order.
2. Upon receipt of a copy of the purchase order from the Agent, Bravo!
Foods International shall issue promptly an invoice for the
appropriate amount, payable in U.S. Dollars by SADAFCO, and
immediately forward such invoice to the Agent and SADAFCO.
3. The Agent shall record SADAFCO's purchase order in its books and
forward such order to the appropriate Approved Supplier of Flavor
Ingredients, with instructions to commence production of the Flavor
Ingredients immediately. The Approved supplier shall be instructed
not to ship the Flavor Ingredients without the prior authorization of
the Agent or Bravo! Foods International.
4. Upon SADAFCO's receipt of the Bravo! Foods International invoice,
SADAFCO shall cause to be issued an international Letter of Credit
for the benefit of Bravo! Foods International, exercisable upon the
presentation of evidence of the shipment of the Flavored Ingredients
by the Approved Supplier to SADAFCO. The Letter of Credit shall be on
terms and conditions satisfactory to and approved by Bravo! Foods
International.
5. Upon the receipt of the Letter of Credit, Bravo! Foods International
shall instruct the Agent to authorize the shipment of the Flavored
Ingredients to SADAFCO.
6. The Production Rights granted by this Agreement attached to the
Flavored Ingredients ordered by SADAFCO shall not become effective
until such time as the Agent or Bravo! Foods International authorizes
the Approved Supplier to ship the Flavored Ingredients to SADAFCO.
7. Upon receipt of copies of the Xxxx of Lading, Certificate of Origin,
Packing List, Analysis Certificate or other evidence of shipment
consistent with the terms and conditions of the Letter of Credit,
Bravo! Foods International shall present such evidence of shipment to
the designated payor bank under the Letter of Credit for payment of
its Kit invoice.
8. The parties anticipate that the time between the placement of an
order with the Approved Supplier of Flavor Ingredients and the
shipment of the Flavor Ingredients to SADAFCO by the Approved
Supplier shall not exceed 21 days.
Schedule 3.9.2
Pricing
Kit Cost Components:
* Ingredients (excluding stabilizer and raw milk)
* Production Rights Fee
Kit Costs (USD):
Chocolate $***
Strawberry $***
Banana $**
The listed prices are net of a US$*** per kit marketing fund
allowance by Bravo! Foods International.
Schedule 4.7
Agents, Assignees and Co-Packers
SADAFCO may utilize non subsidiary or affiliated processors to
process, market, distribute and sell the Branded Milk Products in the
Territory only upon the written modification of this Schedule 4.7 by the
parties to this Agreement.
