Exhibit 10.2
CERTAIN INFORMATION HAS BEEN OMITTED FROM THIS EXHIBIT 10.2, AS INDICATED BY
"***", PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT, AND HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
[XXXXXXXXX-XXXXXXXXX LETTERHEAD]
URBAN JUICE AND SODA COMPANY
BOTTLE SUPPLY AGREEMENT
This bottle supply agreement is made this 10th day of December, 1998 by
and between Xxxxxxxxx-Xxxxxxxxx, Inc. ("Z-H") and Urban Juice & Soda Company
("Urban Juice"). In consideration of the mutual promises herein contained and
intending to be legally bound, both parties agree as follows:
1. REQUIREMENTS: Urban Juice agrees to purchase 100% of their glass soda
bottle requirements from Z-H. Z-H will have the right of first refusal to
supply existing and new business upon the terms and conditions specified
hereinafter. If Z-H is unable to fulfill the request, then Urban will have
the right to seek supply or quotes from additional suppliers. The required
minimum annual purchases will be a total of 750,000 cases (24 bottles per
case) of bottles annually for the term of the contract.
A. BOTTLE PRICING:
XXXXX ILLINOIS BOTTLES
BOTTLE PACKING PRICE SHIP TO LOCATION
------ ------- ----- ----------------
12 oz. Flint Long Neck Glass Bulk ***/Gross Lawrenceburg, Indiana
Bottle w/XXXX Finish
12 oz. Flint Long Neck Glass Bulk ***/Gross Vancouver, BC. and
Bottle w/XXXX Finish Southern California
12 oz. Flint Long Neck Glass RSC, White, 1 Color, ***/Gross Vancouver, BC. and
Bottle w/XXXX Finish 4 Packs Inserted Southern California
12 oz. Flint Long Neck Glass RSC, White, 1 Color, ***/Gross Vancouver, BC. and
Bottle w/XXXX Finish Glass-to-Glass Southern California
B. FREIGHT: All pricing is delivered to Lawrenceburg, IN, Vancouver, BC
and Southern California from the chosen plant of manufacture. Presently,
bottles are scheduled for production in Zanesville, OH and Portland, OR.
C. PRICE INCREASES AND DECREASES: Prices hereunder will be those charged
by Xxxxx Illinois effective December 1, 1998, and will remain the same
throughout 1999. Prices are subject to change thereafter with OIGS (Xxxxx
Illinois Global Sourcing) announced industry pricing changes restricted to
increases no more than 4% during either of the second or third twelve month
periods. Notices of increases or decreases will be provided within 48 hours
of receipt of notice of such changes by Z-H. Pricing will be effective a
minimum of 30 days after notice of increase or decrease. During the term of
this agreement, Xxxxx and Z-H will provide Urban with competitive pricing, as
compared to that of the other major glass manufacturers. Industry increases
are defined as an increase announced by more than one major North American
glass manufacturer.
D. DUNNAGE: All pallets, frames and tier sheets will be memo billed to
Urban Juice and rectified on a quarterly basis. Urban Juice shall be
responsible for the replacement of those pallets, frames and tier sheets lost
or damaged due to Urban Juice's negligence. Bulk pallets, tier sheets and
frames are returnable and cost *** each. These costs will be memo billed as
they are released and reconciled on a quarterly basis. The cost of *** will
remain as it is for the effectiveness of this agreement.
2. STORAGE: Urban Juice will be granted six months of free storage at an
Xxxxx Illinois warehouse. However, the storage charge for xxxx still
remaining after six months will be $0.61 per gross per month. Urban Juice
shall be required to purchase from Z-H all existing glass bottle inventory
produced for Urban Juice at any of the Xxxxx Illinois plants at the end of
said contract term. The cost of *** per gross per month for storage will
remain as it is for the effectiveness of this agreement.
3. QUALITY: Z-H agrees to supply Urban Juice quality bottles that are
consistent with industry standards. If Z-H fails to supply Urban Juice with
quality bottles, Urban Juice will give Z-H notice in writing, detailing the
precise nature of the alleged lack of quality. Z-H will then have a thirty
(30) day period in which to cure the alleged lack of quality. If the bottles
still fail to meet industry standards at the conclusion of thirty (30) days,
Urban Juice will be free to purchase replacement bottles from an alternative
supplier for any bottles that do not meet industry standards. Urban retains
the right to receive compensation for damages incurred by lower than industry
standard bottles according to the conditions described above and based on the
following claim procedure: 1. All claims must be submitted by Urban to Z-H in
writing at the time the damages occurred. 2. All claims must be processed
through Xxxxx and Z-H within thirty (30) days. 3. Z-H will issue a credit to
Urban's account in which Urban will then have the right to apply the credit
to the invoice in question. If the above quality problem is not cured, then
the agreement will be considered canceled and Urban will therefore not be
responsible for the balance of the mold costs.
4. MOLD COSTS: Blow mold equipment cost corresponding to Xxxxx-Xxxxxxxx
drawing #BEI36368, 12 oz. Urban Juice, is *** for both sets of molds, each
set to be run in Zanesville, OH and Portland, OR, respectively. At the end of
the term of this
agreement (3 years), commencing with the date of the initial shipment
(or the date the molds are completed if the initial shipment is not within
six months of the mold completion date), Urban Juice has not purchased and
paid for a total of a minimum of 180,000 gross of this item (30,000 gross per
year per location). Urban Juice shall pay for any remaining unamortized
balance. Z-H will invoice Urban Juice for any remaining unamortized balance
on a pro rata basis at *** per gross covering the difference between the
quantity actually purchased during the contract period and the minimum
purchase required. This new mold equipment and any additional or replacement
equipment built under this job shall at all times be, and remain the property
of Xxxxx-Xxxxxxxx Glass. So long as the equipment is active in production or
commercial quantities, we will retain it for your exclusive use. If, however,
no orders for commercial quantities are received or accepted for any 24-month
period, Xxxxx-Xxxxxxxx shall have the right to scrap, sell, refuse to run, or
otherwise dispose of all equipment.
5. SERVICE: Urban Juice agrees to supply in writing to Z-H an annual
projection of bottle usage broken down by month. Urban Juice also agrees to
supply in writing to Z-H a 90-day rolling forecast of its requirements,
updated the first week of each month. Z-H agrees to supply Urban Juice
bottles on a timely basis consistent with Urban Juice's requirements as
reflected in the 90-day forecast. Z-H will use its best efforts to meet
requests for additional bottles in excess of the 90-day forecast, but cannot
guarantee supply of the excess bottle. Z-H will utilize any and all locations
necessary to meet Urban Juice's needs at no additional expense to Urban Juice.
6. EFFECTIVENESS AND TERM: This agreement will be effective for the
purchase of 375,000 gross of bottles or three (3) years commencing from the
date of the first shipment from Xxxxx Illinois, whichever comes first. At
the end of the term, Urban Juice shall give Z-H the right to match any bona
fide written proposal involving Urban Juice and their glass requirements. Z-H
shall have thirty (30) days to match the bona fide written proposal. If Z-H
is able to match the proposal, Z-H shall continue to be the exclusive
supplier of glass bottles, consistent with such terms.
7. PAYMENT: Payment terms will be 1. 10 Net 60 days. Interest will be
charged at Wall Street Journal "prime rate of interest" plus *** (***%)
percent per annum on all invoices over sixty (60) days. Shipments from Z-H
will stop on the 61st day until all invoices are paid current, or unless it
has been mutually agreed upon to extend.
8. CONFIDENTIALITY: The parties shall use reasonable efforts to cause their
respective employees, agents and other representatives to hold, in
confidence, all confidential information (as hereinafter defined), and the
parties shall use their best efforts to ensure that any other person having
access to the Confidential Information shall not disclose the same to any
person except in connection with this Agreement and otherwise as may be
reasonably necessary to carry out this Agreement and the transactions
contemplated hereby or to comply with applicable law. For purposes hereof,
"Confidential Information" means all information of any kind (including,
without limitation, sales and promotional results) obtained directly or
indirectly from either party's business, except information
which constitutes readily ascertainable public information. "Confidential
Information"" shall not include any information which (i) is generally
available to the public as of the date of this Agreement, or (ii) becomes
generally available to the public after the date of this Agreement, provided
that such public disclosure did not result, directly or indirectly, from any
act, omission or fault of either of the parties to this agreement or any of
their agents with respect to such information.
9. ASSIGNMENT: This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Neither party shall assign this
Agreement without the prior written consent of the other party, assign to
anyone including a subsidiary or affiliate, or such party's rights, but not
obligations, to any lender of such party. Subject to obtaining the written
consent of Z-H, Urban Juice agrees that in the event Urban Juice conveys the
bulk of its business to a third party (whether pursuant to an asset sale,
stock sale or otherwise) during the term of this Agreement, Urban Juice shall
cause the purchaser of such assets, stock or otherwise, as the case may be,
to assume the obligations of Urban Juice under this Agreement.
10. NOTICES: Any notice or written communication regarding this agreement
should be sent by certified mail, returned receipt requested to: Urban
Juice & Soda Company, 0000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx,
Xxxxxx X0X 0X0, Attention: Xxxxx Xxx Xxxxx, or Xxxxxxxxx-Xxxxxxxxx, Inc., 000
Xxxxx Xxxxx Xxxx, Xxxx xx Xxxxxxx, XX 00000, Attention: President, or to such
other locations as the parties subsequently direct. All notices shall be
deemed to have been received three (3) business days after mailing.
11. ENTIRE UNDERSTANDING AMENDMENT: This agreement contains the entire
understanding between the parties with respect to the subject matter hereof,
superseding all prior written oral understandings or agreements. This
Agreement may only be amended by a writing signed by both parties.
12. ARBITRATION: All parties to this Agreement agree to attempt to
resolve any dispute, controversy or claim arising out of or relating to this
Agreement by mediation. The contents of all discussions of such mediation
shall be privileged, confidential and inadmissible in any later proceedings
unless such information was obtained independent of the mediation. If
mediation fails to resolve such dispute, any controversy or dispute arising
relating to the Agreement or the breach, termination, enforcement,
interpretation or validity of any provision hereof, shall be settled by
binding arbitration in Seattle, Washington. Either party to this Agreement
can initiate arbitration pursuant to this Agreement by serving notice on the
other party of the intent to arbitrate. The notice shall specify with
particularity the claims or issues that are to be arbitrated. Within ten (10)
days of receipt of the notice, the parties shall obtain a list of at least
five (5) available arbitrators from the local office of Judicial Dispute
Resolution, LLC ("JDR") and select a mutually acceptable arbitrator. If the
parties are unable to agree on an arbitrator within ten (10) days, either
party may petition the Presiding Judge of the Superior Court of King County
to select a single arbitrator from the JDR list. The parties shall have the
discovery
rights available under Washington's Civil Rules, subject to the limitation
that each side shall be limited to no more than twenty-five (25)
interrogatories and five (5) depositions unless, upon a showing of good
cause, the party can convince the arbitrator that more interrogatories or
depositions should be permitted. All discovery must be concluded within sixty
(60) days of the selection of an arbitrator. The arbitration hearing must be
concluded within thirty (30) days of the close of discovery and it will be
conducted in accordance with Washington Rules of Evidence. The arbitrator's
final decision shall be rendered within ten (10) days of the final hearing
day. Judgment upon the arbitrator's final award may be entered in any court
having jurisdiction thereof. Each party shall bear in equal shares the
arbitrator's fees and costs. The prevailing party in the arbitration shall be
awarded its reasonable attorneys' fees and all costs, other than the
arbitrator's fees and costs. For the purposes of determining who is the
prevailing party, each party shall submit to the other a single written offer
of settlement ten (10) days prior to the start of the arbitration hearing and
the party whose offer most closely approximates the the arbitrator's award
shall be deemed the prevailing party for the purpose of awarding attorneys'
fees. Any disputes about attorney's fees shall be decided by an arbitrator.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.
XXXXXXXXX-XXXXXXXXX, INC. URBAN JUICE & SODA COMPANY
/s/ Xxxxxxxx X. Xxxxxxxxx /s/ Xxxxx xxx Xxxxx
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XXXXXXXX X. XXXXXXXXX XXXXX XXX XXXXX
President President/CEO
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TITLE TITLE
12/10/98 Dec/10/1998
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DATE DATE
