AGREEMENT : The
American Bottling Company
CROWN Cork
& Seal USA, Inc. (“Crown”) is pleased to offer the
following agreement for the supply of aluminum [...***...] beverage
cans and ends (“Containers”), consistent with standard
soft drink specifications and standard specifications for ABC
Containers attached as Exhibit A, and printed with up to six
color decoration. End units supplied shall be 202 diameter standard
“LOE” or Crown’s 202 diameter
“Super-Ends®”.
TERM OF
AGREEMENT : The term of
the Agreement shall be for a period of [...***...] years beginning
[...***...] and extending through [...***...]
LOCATIONS
& VOLUMES : Crown
shall supply and The American Bottling Company (“ABC”)
agrees to purchase from Crown, [...***...] of ABC’s Container
requirements (except as discussed below) for the sizes specifically
indicated with “Xs” below and at the indicated filling
locations:
It is
understood and agreed that at the Buena Park, CA Louisville, KY,
Jacksonville, FL and Sacramento, CA locations, Crown’s can
and/or end supply shall be less than [...***...], to the extent
that ABC fills Containers for [...***...] and [...***...]
designates an alternative can maker to supply its Container (can
and end ) requirements. [...***...]
***
CONFIDENTIAL TREATMENT REQUESTED
1
* Pending
completion and operation of the Victorville, CA location, the
parties will discuss the supply of Containers at that
facility.
Effective
January 1, 2009, pricing will be based upon the 2008 Base
Price for can bodies and ends as set forth below. [...***...]. The
2009 Base Price includes aluminum ingot, conversion, and delivery
charges, and will be used as the benchmark for ingot to sheet
conversion price changes, and non-metal sheet to can adjustments
for the Term of this Agreement as set forth below.
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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1.
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Base Prices include standard inks
with up to 6-color graphics.
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2.
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Aluminum London Metals Exchange plus
Mid-West Premium for ingot price of [...***...] per
pound.
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3.
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Base Price includes charge for
delivery on [...***...]. Delivery on [...***...] may or may not be
included (depending on the location) and is outlined under the
“Freight” section of this Agreement.
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***
CONFIDENTIAL TREATMENT REQUESTED
2
Additional
Pricing Considerations:
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1.
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Color Tabs — Additional charge
for color tabs (standard colors), add $ [...***...]/MEA ends. The
minimum order quantity for color tabs is [...***...] million
units.
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2.
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Cans requiring white basecoat: ADD
[...***...]/MEA
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CONVERSION
FACTORS (LBS PER MEA):
Throughout the
term of this Agreement, Container prices shall be adjusted based on
Net and Gross metal conversion factors outlined in the chart
below.
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Gross Weight
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Net Weight
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(pounds per
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(pounds per
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MEA)
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MEA)
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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During the Term
of this Agreement, the Base Prices for [...***...] and ends shall
be adjusted to reflect [...***...]
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The
[...***...] component of the price adjustment factor is based on
[...***...]
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•
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[...***...]
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•
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[...***...]
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***
CONFIDENTIAL TREATMENT REQUESTED
3
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Aluminum Ingot to Sheet Conversion
Costs
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The
Base Prices as of January 1, 2009 are the benchmark for price
adjustments beginning in 2010. The Base Prices for each calendar
year will be the basis for price adjustments in the next calendar
year.
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[...***...]
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[...***...]
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The
Base Prices as of January 1, 2009 are the benchmark for price
adjustments beginning in 2010. The Base Prices for each calendar
year will be the basis for price adjustments in the next calendar
year.
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On
[...***...] each contract year, [...***...]. The first such
adjustment shall be [...***...] and will reflect the [...***...]
and subsequent adjustments shall be made each [...***...]
thereafter [...***...]. An example is provided in Appendix I
[...***...]
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Freight Adjustments on
[...***...]
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***
CONFIDENTIAL TREATMENT REQUESTED
4
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[...***...] are sold on an ex works
basis and freight is prepaid and added to the invoice. The pick-up
allowances for 2009 are included in Appendix II. The base
freight costs are detailed in the “Freight” section of
the Agreement.
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[...***...]
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Except for the price adjustments
noted above, there will be no “Other Adjustments” for
metal or non-metal inflation during the Term of this
Agreement.
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MONTHLY
RECONCILIATION: [...***...]. Crown also shall provide any final
hedge reconciliations by the end of the third (3rd) business day of
the next month.
***
CONFIDENTIAL TREATMENT REQUESTED
5
PAYMENT
TERMS : Payment for
Containers supplied under this Agreement shall be due net
[...***...] days from the date of invoice. No cash discounts will
be allowed.
FREIGHT : Cans and ends are packaged and loaded in order
to maximize trailer utilization (i.e. pin-wheeled loads) and
minimize freight costs. The prices herein include freight delivery
costs for [...***...]
ABC may use its
own fleet of trucks to pick up cans and/or ends at the Crown
manufacturing facilities and Crown shall give a freight allowance
equal to its cost to deliver by commercial carrier.
Appendix II includes the appropriate freight allowances by
location. Crown intends to supply can bodies to the various ABC
filling locations from the following can manufacturing
facilities:
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Crown’s Current Can
Supply
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[...***...]
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***
CONFIDENTIAL TREATMENT REQUESTED
6
[...***...].
Crown reserves the right to recalculate the freight component of
the Container price if ABC relocates the delivery sites for
substantial quantities of Containers or establishes new delivery
locations.
WAREHOUSING: Crown intends to ship all Containers directly to
each ABC filling location where applicable. At Crown’s
discretion, it may choose to establish and ship can bodies through
warehouses in close proximity to ABC filling locations where
shipping miles may be too far for reliable direct service. If such
warehouses are established, ABC would be offered freight pick-up
allowances if can bodies are picked-up by ABC trucks.
During the Term
of this Agreement, Crown agrees to provide, at [...***...] ABC,
warehouse storage space of [...***...] square feet in the Los
Angeles, CA area at a location that is mutually acceptable to both
parties. Such warehouse space is to be appropriate for the storage
of filled beverage cans and bottles.
***
CONFIDENTIAL TREATMENT REQUESTED
7
PACKAGING
EQUIPMENT : In the prior
agreement for the purchase and supply of [...***...] Containers
between Crown and ABC’s predecessor, in consideration for ABC
purchasing [...***...] Containers from Crown, Crown agreed to
obtain certain [...***...] can packaging equipment at a cost
(inclusive of installation costs) not to exceed [...***...] (the
“Equipment”) to be installed at [...***...]. The
Equipment remains the property of Crown until [...***...] at which
time ownership of the Equipment shall be transferred to ABC;
provided, however, that ABC shall not obtain ownership of the
Equipment if this Agreement terminates prior to [...***...] because
of a breach by ABC. ABC agrees that only [...***...] Containers
manufactured by Crown may be packaged using the Equipment during
Crown’s ownership of the Equipment. ABC shall keep the
Equipment in good order and repair at its sole cost in accordance
with industry standards, normal wear and tear excepted.
[...***...]. ABC shall obtain and maintain for the term of
Crown’s ownership of the Equipment, property insurance for
the full replacement value of the Equipment from a carrier
reasonably acceptable to Crown. Such policy shall name Crown as
loss payee until ownership transfers to ABC. The commercial general
liability and property insurance policies shall contain a clause
that Crown will be notified of any cancellation or material adverse
change thereto at least 30 days prior to the effective date of
the cancellation or material change to the policies. ABC shall
provide Crown with a certificate of insurance upon Crown’s
reasonable request. Crown shall not be responsible for any damage
to ABC caused by reason of the use or by reason of any defects in
the Equipment, unless caused by Crown. WITHOUT LIMITING THE
FOREGOING, CROWN MAKES NO WARRANTY, WITHER EXPRESS OR IMPLIED IN
FACT OR BY LAW WITH RESPECT TO THE EQUIPMENT, [...***...]. Crown
does agree however, to transfer any manufacturer’s warranties
to ABC and ABC shall look solely to the manufacturer of the
Equipment for any manufacturing defects in the
Equipment.
FORECASTING AND INVENTORY
TURNOVER
***
CONFIDENTIAL TREATMENT REQUESTED
8
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1.
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Forecasts of Requirements —
ABC shall supply Crown with a rolling 12 month forecast of
Container requirements. Such forecast shall be for planning
purposes only and shall not be binding on ABC. [...***...]. The
parties agree to work together to mitigate forecast issue and to
continually improve forecasting accuracy. [...***...]
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2.
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Assured Supply — If any of the
Crown plants encounter difficulties meeting the needs for the
Containers required by this Agreement, Crown will make commercially
reasonable efforts to source such Containers from other facilities
of Crown. The obligations of Crown in the preceding sentence shall
not apply in the case of difficulties relating to Force Majeure.
Crown will make commercially reasonable efforts to resume
production at the supply facility affected by the Force Majeure
event under the terms and conditions of this Agreement in a timely
manner.
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3.
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[...***...]
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1.
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Standard Can Graphics — Normal
and customary engraving costs and standard [...***...] press plate
costs will be absorbed by Crown; provided that the engravings and
press plates are actually used to produce for shipment a minimum of
[...***...] during the first [...***...] day period following
completion of the engravings. If the [...***...] minimum can
quantity is not shipped in that period, the total engraving and
press plate costs of [...***...] will be invoiced to
ABC.
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2.
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High Quality Graphics — More
complex can designs require additional separation work, higher
resolution printing plates [...***...], and incremental set-up time
on the press and entail greater spoilage. Crown reviews each design
submitted and will advise which designs, if any would benefit from
its High Quality Graphics process, which would then be subject to
an additional up-charge negotiated at the time of order.
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3.
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Proof Cans — Crown will send
samples for each color on the can, which must be approved by ABC.
In addition, sample cans will need to be supplied to the
appropriate Crown plant(s) for use as color targets. If Crown will
need to run the color target cans, either on the proofing press or
on-line, there will be a cost of [...***...] per design.
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CONFIDENTIALITY : ABC and Crown agree to maintain strict
confidentiality regarding the contents of this Agreement including
all pricing and other terms set forth herein.
PREVIOUS
AGREEMENTS : This
Agreement shall supersede and replace any previous agreement
between the parties [...***...] and the Supply Agreement dated
June 15, 2004 as amended in its entirety (including the
paragraph 8 reference to employees or consultants).
***
CONFIDENTIAL TREATMENT REQUESTED
9
TERMS AND
CONDITIONS : The attached
Terms of Business executed by the parties of even date herewith
shall be incorporated herein by reference and govern the supply of
Containers from Crown to ABC. To the extent there is a conflict
between the Terms of Business and the terms specified in this
Agreement, the terms of this Agreement shall supersede and take
precedence.
If you are in
agreement with the terms and conditions set forth above, please
sign in the space provided below and return one original copy to
Crown.
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CROWN Cork
& Seal USA, Inc.
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By:
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/s/ Thomas T.
Fischer
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(Authorized
Representative)
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THE AMERICAN
BOTTLING COMPANY
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By:
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/s/ Derry
Hobson
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(Authorized
Representative)
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10
Appendix I: Aluminum Ingot to Sheet
Conversion and Sheet to Can Conversion Price Adjustment
Examples
***
CONFIDENTIAL TREATMENT REQUESTED
11
2010
Producer Price Inflation Example
***
CONFIDENTIAL TREATMENT REQUESTED ON 5 PAGES
12
Appendix II: ABC Freight Allowances for
Customer Pick-Up (CPU)
***
CONFIDENTIAL TREATMENT REQUESTED
TERMS OF BUSINESS
(GOODS)
These Terms of
Business are signed in consideration of the mutual agreements
herein and other consideration, the receipt and adequacy of which
is hereby acknowledged, and with the understanding that the
undersigned companies are bound by their terms.
As used in
these Terms of Business, “we”, “our”,
“us” (and like terms) refers to Purchaser.
“You”, “yours” means you, the
Supplier.
PURCHASER . American Bottling Company
SUPPLIER . Crown Cork & Seal USA, Inc.
GOODS . “Goods” has the same meaning in
these Terms of Business as “Containers” in the letter
agreement.
QUANTITIES. Unless expressly specified in the letter
agreement, Purchaser will have no obligation to order, purchase or
use any quantity of Goods, except for those quantities ordered in
its written purchase order or expressly committed to in a hedging
order or, in the case of a blanket purchase order, releases issued
thereunder and not the entirety of the blanket purchase
order.
SUBCONTRACTORS . You may not subcontract the manufacturing of
Goods unless otherwise specified in the Agreement or with our prior
written approval. We specifically acknowledge that your
wholly-owned subsidiaries may manufacture Goods or components
thereof as part of your performance of this Agreement.
Notwithstanding the foregoing and regardless of whether
subcontracting was specified or otherwise approved, including if we
pay directly for such Goods, you remain fully responsible for the
payment and performance of all of your subcontractors, suppliers
and vendors.
PRICES FOR
GOODS . The price(s) for
Goods (the “ Prices ”) and any applicable
pricing adjustments are set forth in the letter agreement (the
“ Price ”).
TAXES . We will pay those sales, use, excise or other
similar taxes (excluding taxes based on your net income or business
enterprise) assessed on the Prices paid hereunder. Unless we
provide you a valid exemption certificate, we will pay you those
taxes you actually paid or are required to collect or pay. Such
taxes must be invoiced along with the Prices, and we will pay them,
in accordance with the Payment Terms Section above.
SPECIFICATIONS FOR GOODS . All delivered Goods (and their packaging) must
comply with any and all applicable Specifications or as we may have
mutually agreed with you in the Agreement or otherwise in writing.
If no such Specifications exist for their containers, the
containers must be recognized standard containers suitable for
their transportation, handling and storage and sufficient to
prevent any leakage, spillage or damage. In addition, you may not
modify the Goods in any way without notice to, and prior written
approval from, us prior to shipment so that we may evaluate and
consent to any modification of the Goods. If we receive any
modified Goods without our consent, we may return them at your
expense, and you will reimburse us for all losses, damages and
expenses we incur as a result of the modification.
BACKUP
DOCUMENTATION . You will
maintain, and upon our request, promptly provide complete and
accurate backup documentation sufficient to substantiate all
transactions with us and charges claimed on each invoice.
[...***...]. You will otherwise cooperate with all reasonable
requests in connection with such review. You shall promptly refund
to us any overcharge resulting from such review. This Section shall
survive for 12 months after the later of the last transaction
between us or the expiration or termination of any applicable
agreement between us.
FORECASTS . We may, from time to time, provide you with
good faith forecasts/estimates and/or blanket purchase orders for
our anticipated needs for Goods. These may be for annual and/or
monthly rolling
***
CONFIDENTIAL TREATMENT REQUESTED
periods. These
are separate and apart from any hedging requests we may issue
pursuant to the letter agreement and will create no obligation or
liability for Purchaser. They are provided solely so that you can
plan your production, inventory and capacity in order to supply
Purchaser in the normal course of your business and in accordance
with the terms herein.
ORDERING . We will notify you of any and all required
quantities, delivery dates (“ Delivery Dates ”),
delivery locations, shipping instructions and other terms for Goods
via our written purchase order. This purchase order, once accepted,
will be binding upon you. Any pre-printed terms and conditions
contained in forms used by either you or us to implement this
Agreement, including any purchase order, acknowledgment, invoice or
other correspondence will be disregarded.
DELIVERY OF
CONFORMING GOODS . You
agree to deliver all ordered Goods, undamaged, without
substitution, and in compliance with our accepted Purchase Order,
the Specifications, all warranties and other terms and conditions
of this Agreement.
Failure to
Deliver Goods . If you
fail to deliver or if you deliver non-conforming Goods as required
above, Purchaser may do any or all of the following: cancel
shipment, reject, return or hold them for you (for full credit and
at your expense and risk), and/or require replacement (but only
with our written authorization). [...***...]
Removal of
Insignia/Destruction of Goods . For any rejected, returned or unpurchased
Goods, you will remove any evidence of our name, trademarks or the
like before selling or otherwise disposing of them, destroy any
food or beverage product not fit for human consumption, and
indemnify us against any claim, loss or damage arising out of your
failure to do so.
INSPECTION/ACCEPTANCE . We may inspect Goods prior to payment or
acceptance to verify compliance with the terms of this Agreement
and applicable criteria or Specifications. Payment will not
constitute acceptance thereof. However, neither our inspection,
approval or acceptance, nor lack thereof, nor anything else in this
Agreement, will relieve or limit any of your obligations and
warranties under this Agreement (including for testing, inspection,
and quality control), whether or not a defect or nonconformity is
apparent on examination.
TITLE AND
RISK OF LOSS OF GOODS .
Title and risk of loss w
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