EXHIBIT 10.1
Supply Agreement
SUPPLY
AGREEMENT, dated as of September 27 , 2005, between FUJI PHOTO
FILM
U.S.A., INC., a New York corporation
("Fuji"), and E-TOP-PICS, Inc., a
Massachusetts corporation ("Customer").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Customer desires to purchase quantities of Instax wide
format pack film and Instax Model 200
cameras (collectively, the "Products")
from Fuji and Fuji is willing to sell such
quantities of the Products to
Customer on the terms and subject to the
conditions set forth in this Agreement.
NOW,
THEREFORE, in consideration of the premises and the mutual
promises
herein contained, the parties hereby agree
as follows:
1.
Definitions. When used in this Agreement, the following terms will
have
the respective meanings set forth in this
Article 1. Definitions used herein are
used without regard to gender, and
definitions in the singular shall apply
equally when used in the plural.
(a) "Annual Period" means a period of time, the first of which
begins on the date of this Agreement and
ends on September 30, 2006; the second
and each successive Annual Period shall be
each successive twelve-month period
ending on an anniversary of the end of the
first Annual Period.
(b) "Confidential Information" means all information and data of
the
disclosing party designated as confidential
concerning products or the business
of the disclosing party or its affiliated
companies, disclosed to the receiving
party orally or in writing. If either party
hereunder discloses information to
the other party orally, then within two (2)
weeks after such disclosure the
disclosing party will confirm in writing to
the receiving party the confidential
nature of the information so disclosed.
"Confidential Information" shall not
include any information which the receiving
party can establish:
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(i) is now generally known or available to the public or which
hereafter through no act or failure on the
part of the receiving party becomes
generally known or available to the
public;
(ii) is legally known to the receiving party at the time of
receiving such information;
(iii) is furnished to others by the disclosing party without a
restriction on disclosure;
(iv) is hereafter furnished to the receiving party in writing
by a third party without restriction on
disclosure, where such third party
legally obtained such information and the
right to disclose it to the receiving
party; or
(v) is independently developed by the receiving party without
violation of any legal rights which the
disclosing party may have in such
information. A party shall be permitted to
disclose Confidential Information in
the event such party is required to do so
pursuant to a valid judicial or
administrative order requiring disclosure;
provided, however, that such party
shall notify the other party hereto in
writing promptly after receiving the
judicial or administrative order and such
party shall cooperate and consult with
the other party to take steps to avoid
disclosure.
(c) "Fuji Japan" means Fuji Photo Film Co., Ltd. and its direct
or
indirect subsidiaries to which the
manufacture of the Products will be delegated
hereunder.
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(d) "Minimum Order Requirement" means the minimum number of
Products
that Customer may order at any one time.
The minimum number of packs of Instax
Wide Format Pack Film that can be ordered
at any one time is Sixty Thousand
(60,000) packs with additional quantities
in incremental amounts of Six Thousand
(6,000) pack lots. The minimum number of
Instax Model 200 Cameras that can be
ordered at any one time is Six Thousand
(6,000).
(e) "Minimum Purchase Requirement" means that obligation of
Customer
to purchase from Fuji in each Annual Period
certain minimum quantities of
Products. For the first Annual Period in
the term of this Agreement, Customer
shall purchase at least One Million Eight
Hundred Thousand (1,800,000) packs of
Instax Wide Format Pack Film and One
Hundred Eighty Thousand (180,000) Instax
Model 200 Cameras. It is understood that
for each of the first five (5) months
of the term of this Agreement, Customer
shall only be required to purchase Five
Thousand (5,000) packs of Instax Wide
Format Pack Film and Five Hundred (500)
Instax Model 200 Cameras; the balance of
the Minimum Purchase Requirement for
the first Annual Period during the term of
this Agreement shall be satisfied in
the remaining seven months of the Annual
Period. For the second year of the term
of this Agreement, Customer shall purchase
at least Two Million Five Hundred
Thousand (2,500,000) packs of Instax Wide
Format Pack Film and Two Hundred and
Fifty Thousand (250,000) Instax Model 200
Cameras.
(f) "Products" means Instax Wide Format Pack Film and Instax
Model
200 Cameras manufactured by Fuji Japan or
its affiliates.
(g) "Two-Year Purchase Requirements" means the obligation of
Customer to purchase from Fuji by September
30, 2007 at least Four Million Three
Hundred Thousand (4,300,000) packs of
Instax Wide Format Pack Film and Four
Hundred and Thirty Thousand (430,000)
Instax Model 200 Cameras.
(h) "UCC" means the Uniform Commercial Code, as in force in the
State of New York on the date of this
Agreement.
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2.
Manufacture and Sale.
2.1 Fuji
will manufacture the Products according to its standard
manufacturing and packaging specifications
for the Products in place from time
to time. It is understood that Customer
does not require any changes to Fuji's
standard specifications for the
Products.
3.
Forecasts; Orders; Minimum Purchase Requirement; Marketing.
3.1
Beginning in October, 2005, Customer shall submit to Fuji a
six-month
written forecast of its monthly
requirements of the Products on or before the
15th day of each month. The parties agree
that the forecast for the first
three-month period set forth in each
monthly statement submitted by Customer to
Fuji shall constitute a "firm offer" within
the meaning of Section 2-205 of the
UCC for all Products listed for such
three-month period. The forecast for the
second three-month period in each monthly
statement submitted by Customer to
Fuji shall constitute estimates of
Customer's requirements of Products for such
period. The forecast for the first
three-month period set forth in each monthly
statement shall be deemed a purchase order
subject to acceptance or rejection by
Fuji. The format for such written forecasts
will be mutually agreeable to both
parties.
(a) Customer will submit purchase orders to Fuji in writing,
which
may be transmitted to Fuji by electronic
facsimile or by electronic data
interchange system. Customer will submit
its purchase orders by the 15th of each
month, with a requested Shipment Date from
Fuji's distribution center in the
United States of not less than one hundred
and twenty (120) days after receipt
of such purchase order by Fuji.
(b) Customer's purchase orders will be subject to acceptance by
Fuji, which will not be unreasonably
withheld or delayed; provided that, in all
events, Fuji will be entitled to withhold
or delay its acceptance of Customer's
purchase orders or to refuse to ship
Product ordered if Customer is in default
(and any grace or cure period therefore has
elapsed) under this Agreement and
such default is continuing.
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(c) Any purchase orders submitted by Customer under this
Agreement
shall contain only orders for the Products
to be manufactured pursuant to Fuji's
standard specifications for such Products.
It is understood that there will be
no custom or special manufacturing or
packaging requirements.
3.2
Customer shall, during each Annual Period hereof, purchase a
sufficient number of Products from Fuji so
as to satisfy the Minimum Purchase
Requirement. Customer's failure to purchase
the Minimum Purchase Requirement of
Product during any Annual Period shall
constitute cause for Fuji to terminate,
at Fuji's option, this Agreement as
provided in Section 8.2(d). Customer's
failure to submit the monthly forecast
statements on a timely basis shall also
constitute cause for Fuji to terminate, at
Fuji's option, this Agreement as
provided in Section 8.2 (d).
3.3 In the
event that Customer does not satisfy the Two-Year Purchase
Requirements for the Products, Customer
shall pay Fuji a penalty calculated as
follows: .10 ( (4,300,000 - Number of packs
of Instax Wide Format Pack Film
actually purchased by Customer by August
10, 2007 X $7.25) + (430,000 - Number
of Instax Model 200 Cameras actually
purchased by Customer by August 10, 2007 X
$47.50)) = Penalty Amount to be Paid by
Customer. Any such penalty shall be paid
by Customer on or before August 31, 2007.
By way of example only, if we assume
Customer purchased Four Million Two Hundred
Thousand (4,200,000) packs of Instax
Wide Format Pack Film and Four Hundred and
Twenty-Five Thousand (425,000) Instax
Model 200 Cameras as of August 10, 2007,
the penalty amount would be calculated
as follows: .10 ((4,300,000-4,200,000 X
7.25) + (430,000 - 425,000 X 47.50)) =
.10 ($725,000 + $237,500) = $96,250. In the
event Fuji and Customer agree to
renew this Agreement at least ninety (90)
days prior to the scheduled expiration
of this Agreement and such renewal is set
forth in writing and signed by both
parties, then any penalty amount calculated
in accordance with this Section 3.3
shall be reduced by fifty percent
(50%).
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3.3
Customer may only order the Product in whole lots of the Minimum
Order
Requirement, provided, however, Fuji may,
in its sole discretion, permit a
number of units to be shipped in an order
to vary up or down by 10%.
4. Sales
Terms; Delivery; Resale.
4.1 Fuji
shall sell, and Customer shall purchase, the Products in
accordance with the provisions of this
Agreement and Fuji's sales terms in
effect with respect to the Products at the
time of purchase.
4.2 Fuji
will deliver Products F.O.B. Fuji's or its agent's warehouse,
to
the address designated by Customer. Surface
freight and insurance from Fuji's or
its agent's warehouse to the address
designated by Customer shall be borne by
Fuji provided all shipments are sent via
ground surface carrier selected by
Fuji. Products ordered by Customer pursuant
to a particular purchase order shall
be completed and made available for
delivery or other disposition as specified
therein in approximately one hundred twenty
(120) days from Fuji's receipt of
such purchase order. It is expressly agreed
that no estimate of delivery time
made by Fuji will constitute a guaranty of
delivery by such date, that all
shipping and delivery dates will be
approximate, and that Fuji will not be
liable for any damages, consequential or
otherwise, for delays in delivery. Fuji
shall in no way be held liable for any
portion of Customer's claim for damages
for non-arrival, loss or any other damage
occurred to the Products in transit
exceeding the amount actually redeemed by
insurance. Customer shall be
responsible for transportation costs
associated with air shipment or any
expedited shipments requested by
Customer.
4.3
Customer shall sell the Products only within the United States
to
business customer segments approved by Fuji
in writing. CUSTOMER SHALL NOT SELL
PRODUCTS THROUGH ANY RETAIL OR CONSUMER
CHANNELS OR DIRECTLY TO RETAIL OR
CONSUMER OUTLETS OF ANY TYPE. CUSTOMER MAY
ONLY SELL PRODUCTS FOR BUSINESS
APPLICATIONS TO BUYERS APPROVED IN WRITING
BY FUJI.
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5. Prices;
Payment.
5.1
Subject to the provisions of this Article 5, the price for
Insta
