Supply Agreement


This Supply Agreement is made on [AGREEMENT DATE] between [SUPPLIER NAME], a [CORPORATE JURISDICTION] corporation with its principal place of business at [SUPPLIER ADDRESS] (the "Supplier") and [COMPANY NAME], a [CORPORATE JURISDICTION] corporation with its principal place of business at [COMPANY ADDRESS] (the "Company").




The parties agree as follows:

1. Definitions. In addition to the terms defined above, the following definitions apply:

1.1. "Confidential Information" means all [material] [non-public] [business-related] information, written or oral[, whether or not it is marked as confidential], disclosed or made available to the Company,[ directly or indirectly,] through any means of communication by the Supplier or any of its representatives, but does not include information that

1.1.1. is or becomes publicly known through no wrongful act of the Company,

1.1.2. the Company received in good faith on a non-confidential basis from a source other than the Supplier or its representatives,

1.1.3. was in the Company's possession before its disclosure by the Supplier or its representatives,

1.1.4. the Company developed independently without breach of this agreement, or

1.1.5. the Supplier has explicitly approved, by Notice to the Company, for release to a third party.

1.3. "Effective Date" means [EFFECTIVE DATE].

1.4. "Governmental Authority" means

1.4.1. the government of the United States or any other nation, or any of its or their geographical or political units or subdivisions, and

1.4.2. any body, agency, tribunal, arbitrator, court, authority, or other entity that exercises executive, legislative, judicial, taxing, regulatory, or administrative powers or functions of, or relating to, government.

1.5. "Insolvency Event" means any of the following:

1.5.1. Insolvency. The Company admits in writing that it is insolvent or unable to pay its debts, or fails generally to pay its debts as they become due.

1.5.2. Bankruptcy. The Company files a voluntary petition, or one or more of its creditors file a petition, seeking its rehabilitation, liquidation, or reorganization under any Law relating to bankruptcy, insolvency, or other relief of debtors and the petition is not removed within [90] days of filing.

1.5.3. Receivership. A receiver or other custodian is appointed to take possession of substantially all of the Company's assets.

1.5.4. Dissolution. The Company takes any action toward the dissolution or winding up of its affairs or the cessation or suspension of its activities.

1.5.5. Liquidation. A court of competent jurisdiction enters a decree or order directing the winding up or liquidation of the Company or of all or substantially all of its assets.

1.5.6. General Assignment. The Company makes a general assignment for the benefit of its creditors.

1.5.7. Attachment. Any attachment, execution, or other judicial seizure is levied against all or substantially all of the Company's assets.

1.6. "Law" means

1.6.1. any law (including the common law), statute, by-law, rule, regulation, order, ordinance, treaty, decree, judgment, and

1.6.2. any official directive, protocol, code, guideline, notice, approval, order, policy, or other requirement of any Governmental Authority having the force of law.

1.7. ["Licensed Trademarks" means the trademarks owned now and in the future by the Company in connection with any of the Products.]

1.8. "Non-Conforming Product" means a Product that does not conform in all material respects to the Supplier's warranties.

1.9. "Notice" means any notice, request, direction, or other document that a party can or must make or give under this agreement.

1.10. "Person" includes

1.10.1. any corporation, company, limited liability company, partnership, Governmental Authority, joint venture, fund, trust, association, syndicate, organization, or other entity or group of persons, whether incorporated or not, and

1.10.2. any individual.

1.11. "Products" means [DESCRIPTION OF PRODUCTS].

1.12. "Secondary Vendor" means a third party that sells products that are the same as or substantially similar to any of the Products.

1.13. "Supply Forecast" means the Company's written forecast of its anticipated demand for all Products from the Supplier in the four calendar quarters next following the quarter in which the Supply Forecast is scheduled to be delivered.

1.14. ["Territory" means [DESCRIPTION OF TERRITORY].]

1.15. ["Trademark Use Policy" means the Supplier's Trademark Use Policy[, a copy of which is attached as Schedule B], currently in effect and as amended on one or more occasions.]

2. Supply and Purchase of Products. The Supplier shall supply, or cause to supply, to the Company the Company's requirements for Products in accordance with the terms of this agreement. The Company shall purchase all of its requirements of Products from the Supplier solely for resale in the retail market.

3. No Other Obligations. The Supplier will not be obligated to supply to the Company, and the Company will not be obligated to purchase from the Supplier, any items other than the Products.

4. [Grant of Trademark Licence. In order to enable the Company to properly sell the Products, the Supplier grants to the Company, and the Company accepts, a limited, non-exclusive, non-transferable, and revocable licence to use the Licensed Trademarks in the Territory in association with the Products.]

5. Supplier's Adherence to Standards

5.1. Quality Standards. The Supplier shall supply the Products to the Company in the same general manner and of the same general quality as with the Company's current practice and product specifications.

5.2. Substitutions. The Supplier may substitute ingredients or components of similar or better quality for specified ingredients or components so long as the substitution does not materially alter the quality of the Product into which the ingredient or component is incorporated.

5.3. Restrictions. The Company shall not resell or use any Products supplied under this agreement in a manner that is inconsistent with

5.3.1. applicable Laws or industry guidelines affecting the safety and quality of such products, or

5.3.2. any reasonable instructions that the Supplier provides to its clients, on one or more occasions, for maintaining the quality and safety of the Products.

6. Availability of Products

6.1. No Guarantee of Availability. The Supplier shall make reasonable efforts to supply all Products ordered in conformity with this agreement. The Supplier does not, however, guarantee the availability of any Products.

6.2. Shortages of Products. If shortages of any ordered Products arise for any reason, the Supplier may allocate any of its products among its customers, including the Company, on any reasonable basis of its choice.

7. Delivery. The Supplier shall deliver the ordered Products no more than [two] days after the delivery date noted in the applicable purchase order.

8. [Exclusivity. The Company shall purchase all its requirements for Products from the Supplier.]

9. Supply Forecasts. On or before the Effective Date, and thereafter on or before the last day of each calendar quarter, the Company shall send the Supplier a Supply Forecast. The Supply Forecast will be a binding commitment on the Company's behalf to purchase during the first quarter included in each Supply Forecast at least [MINIMUM PRODUCT PURCHASE PERCENTAGE]% of the quantity of the listed Product.

10. Purchase Orders. The Company shall submit Product purchase orders on the Supplier's standard form. Purchase orders will only become binding on the parties when the Supplier gives the Company Notice of its acceptance. The Supplier shall respond promptly to the Company's purchase order, advising the Company whether it accepts the order.

11. [Terms of Trademark License

11.1. Use of Licensed Trademarks. The Company shall use and display the Licensed Trademarks only

11.1.1. in association with the and sale of the Products,

11.1.2. in the manner and form that they are registered under the US Trademark Act of 1946, and

11.1.3. in accordance with the terms of this agreement.

11.2. Advertising. The Company may, in the Territory,

11.2.1. indicate to the public that it is an authorized supplier of the Products, and

11.2.2. use the Licensed Trademarks to advertise the Products.

11.3. Notice on Licensed Trademarks. The Company shall place the following notice (or any other notice that the Supplier may request[ in writing] on one or more occasions) in a legible manner on each licensed product that forms part of the Products and on any Promotional Materials (including any content posted on any Internet site):

"Mark(s) of [SUPPLIER NAME]; used under license by [COMPANY NAME]."

11.4. Reservation of Rights. Any rights not expressly granted to the Company in this agreement are reserved to the Supplier. The Company does not acquire any rights other than the right to use the Licensed Trademarks in accordance with the terms of this agreement.]

12. [Use of Licensed Trademarks

12.1. Trademark Use Policy. The Company shall abide strictly by the guidelines set out in Trademark Use Policy. The Supplier shall give reasonable Notice to the Company of any changes to the Trademark Use Policy.

12.2. Benefit of Use of Licensed Trademarks. The Company acknowledges that any use by it of the Licensed Trademarks accrues to the benefit of the Supplier.

12.3. Documenting Use of Licensed Trademarks. The Company shall assist the Supplier, if requested, by providing documentation of its use of the Licensed Trademarks in connection with any trademark application.

12.4. No Removal of Trademarks. The Company shall not alter or remove any of the Licensed Trademarks that have been applied to the Products.

12.5. No Use in Business Name. The Company shall not use any of the Licensed Trademarks as part of its business name or as part of prominent signage displaying its business name.

12.6. No Registrations based on Licensed Trademarks. The Company shall not create or register any new service or trademarks or tradenames based in whole or in part on any of the Licensed Trademarks.

12.7. No Rebranding. The Company shall not rebrand or private label any of the Licensed Trademarks.]

13. Price and Payment

13.1. Product Prices. The initial prices for all Products are set forth in Schedule A. All prices are FOB the Supplier's designated shipping point.

13.2. Updated Price List. The Supplier shall update its price list each calendar quarter and give Notice of the updated list to the Company no later than [15] days before the end of each calendar quarter.

13.3. Payment Terms. Payments are due and payable in full within [30] days after the date of the Product shipment or the date on which any other charge accrues, as applicable.

13.4. Payment Net of Taxes. All payments are exclusive of taxes. The Company shall pay, and the Supplier shall collect and remit, any taxes payable.

13.5. Late Payments. Any amount not paid when due will bear interest from the due date until paid at a rate equal to [1]% per month ([12.68]% annually) or the maximum allowed by law, whichever is less.

14. Term

14.1. Initial Term. The initial term of this agreement will begin on [TERM START DATE] and end on [TERM END DATE], unless terminated earlier.

14.2. Renewal Terms. Following the initial term, this agreement will automatically renew for successive [RENEWAL TERM PERIODS] terms, unless terminated earlier. If a party elects not to renew this agreement, that party shall provide Notice of that intention to the other party at least [NON-RENEWAL NOTICE PERIOD] days' before the renewal date.

15. No Conflicts. Each party represents and warrants to the other, acknowledging that the other party is relying on that this statement, that it under no restriction or obligation that may affect the performance of its obligations under this agreement.

16. Supplier Warranty. The Supplier warrants to the Company that, at the time and place of delivery to the Company, all Products will

16.1. be fit for the purpose intended, merchantable, and free from all defects, and

16.2. comply with all Laws relating to the production, distribution, and sale of the Products.

17. [Material Inducement. The Company acknowledges that its agreement to source all of its Product requirements exclusively from the Supplier is a material inducement to the Supplier entering into this agreement.]

18. Compliance with Laws. Each party shall comply with all Laws applicable to the production, distribution, and sale of the Products.

19. Confidentiality

19.1. Confidentiality Obligations. The Company shall hold all Confidential Information in confidence in accordance with the terms of this agreement.

19.2. Use Solely for Purpose. The Company shall use the Confidential Information solely for the purpose intended under this agreement.

19.3. Permitted Disclosure. The Company may disclose Confidential Information to its representatives but only

19.3.1. to the extent necessary to carry out the Purpose,

19.3.2. if the Company first informs them of, and directs them to maintain, its confidential nature in accordance with the terms of this agreement[, and

19.3.3. upon the Supplier's request in connection with any of its representatives, if they each first enter into separate written agreements to that effect[ in a form acceptable to the Supplier.

19.4. Required Disclosure. The Company may disclose Confidential Information to a third party if it is required to do so by Law but only if, before that disclosure, the Company, to the extent permitted by Law,

19.4.1. gives the Supplier Notice to allow it a reasonable opportunity to either seek a protective order or other appropriate remedy or waive the Company's compliance with this section,

19.4.2. reasonably cooperates with the Supplier[, at the Supplier's expense,] in its reasonable efforts to obtain a protective order or other appropriate remedy,

19.4.3. discloses only that portion of the Confidential Information that[, having consulted with its counsel,] it is legally required to disclose, and

19.4.4. uses reasonable efforts to obtain reliable written assurance from the third party that the Confidential Information will be kept confidential.

19.5. Value and Nature of Confidential Information. The parties acknowledge that the Confidential Information is proprietary and has competitive value. Accordingly, any disclosure to the Supplier's competitors or to the public would be detrimental to the best interests of the Supplier, which may incur losses, costs, and damages as a result.

19.6. Burden of Proof. The Company will have the burden of proof relating to all exceptions to the definition of Confidential Information.[ The Company may rely on its own written records in support of its position.]

20. Purchase from Secondary Vendor. The Company may purchase Products from a Secondary Vendor in any of the following situations:

20.1. if the Supplier is unable to fill all or any part of a purchase order for a Product within [30] days after the delivery date noted in the order, the Company may purchase the unfilled portion of the order from a Secondary Vendor, until such time as the Supplier is able to supply the quantity of the ordered Product to the Company, at which time the Company will once again be obligated to purchase its Product requirements only from the Supplier,

20.2. if the Supplier elects to discontinue producing a Product, the Company may purchase the discontinued Product from a Secondary Vendor, or

20.3. if the Supplier elects not to produce any new product desired by the Company, the Company may purchase the new product from a Secondary Vendor.

21. Non-Conforming Products

21.1. Notice to Supplier. The Company shall immediately give Notice to the Supplier if the Company becomes aware of having received any Non-Conforming Products.

21.2. Supplier's Options. The Supplier shall, in that case, either

21.2.1. replace all Non-Conforming Products at its own expense (including transportation costs of getting replacement Products to the Company), or

21.2.2. credit the Company account for the delivered price of the Non-Conforming Products plus transportation expenses.

21.3. Liability for Non-Conforming Products. The Supplier's replacement of or credit for a Non-Conforming Products in accordance with this agreement will be the Supplier's entire liability and the Company's exclusive remedy in the matter.

22. Inspection

22.1. Right to Inspect Supplier's Facility. The Company may, on reasonable advance Notice, no more than twice during any [12] month period, and with the Supplier's consent (such consent not to be unreasonably withheld), inspect that part of the Supplier's facility engaged in the manufacture of the Products.

22.2. Conduct of Inspection. The Company shall conduct any inspection at a time during normal business hours when production for the Company is taking place and in a manner so as not to unreasonably disrupt the Supplier's business. During its inspection the Company may view and audit the production logs for the Products. The Company shall otherwise restrict the scope, manner, and duration of its inspection to what is reasonably necessary to achieve its purpose. Any costs associated with the inspection will be for the Company's account.

22.3. Quality Control Checks. The Supplier shall conduct regular quality control checks of its Product production process to ensure that quality standards are upheld. The Supplier shall also provide commercially reasonable reports based on these checks to the Company upon request, but no more than [two] times a year.

23. Termination

23.1. Termination upon Notice. Either party may terminate this agreement for any reason upon [TERMINATION FOR CONVENIENCE NOTICE] business days' Notice to the other party.

23.2. Termination upon Breach

23.3. Failure to Pay. If the Company fails to pay when due any amount owing under this agreement and that failure continues for [five] business days, the Supplier may terminate this agreement, with immediate effect, by giving Notice to the other party.

23.4. Any Other Breach. If one party

23.4.1. commits any material breach or material default in the performance of any obligation under this agreement (other than the Company's obligation to pay money), and

23.4.2. the breach or default continues for a period of [CURE PERIOD] business days after the other party delivers Notice to it reasonably detailing the breach or default,

23.4.3. then the other party may terminate this agreement, with immediate effect, by giving Notice to the first party.

23.5. Termination upon Insolvency Event. This agreement will terminate immediately upon the occurrence of an Insolvency Event.

24. Effect of Termination

24.1. Return of Property. Upon termination[ or expiration] of this agreement, the Company shall return to the Supplier all the Supplier property, both originals and copies, under its direct or indirect control.

25. Third Party Infringement

25.1. Notice to Supplier. The Company shall promptly give Notice to the Supplier when it becomes aware of any actual, suspected, or threatened Infringement of the Licensed Trademarks by a third party in the Territory. The Supplier may, in that case, take any steps it considers appropriate to enforce its rights in the Licensed Trademarks. The Company[, at its own expense,] shall cooperate with the Supplier to the fullest possible extent.

25.2. Company's Rights. If, within [10] business days of receipt of the Company's Notice, the Supplier either fails to respond to the Company's Notice or gives Notice to the Company that it elects not to take any steps to enforce its rights, the Company may, upon Notice to the Supplier, take any steps it considers appropriate in the circumstances in the name and on behalf of the Supplier. The Company may then keep any damages or proceeds of settlement it obtains as a result.

26. Claim of Infringement against Company

26.1. Notice to Supplier. The Company shall promptly give Notice to the Supplier of any action, claim, or demand brought or threatened by a third party against it arising out of its use of the Licensed Trademarks in accordance with this agreement. The Supplier shall, in that case, take all steps it considers appropriate, at its own expense, to defend the Company and the Licensed Trademarks (including settling any legal actions in the Company's name). The Company shall, at its own expense, cooperate with the Supplier to the fullest possible extent.

26.2. Claims Resulting from Company's Breach. If it is established that the third party's action, claim, or demand resulted from a material breach of the Company's obligations under this agreement, the Company shall reimburse the Supplier for all costs and expenses (including legal fees) incurred in defending the Company and the Licensed Trademarks.

27. Indemnification

27.1. Supplier Indemnity. The Supplier shall indemnify the Company[ and its directors, officers, employees, shareholders, partners, agents, and affiliates,] against all claims, liability, and expenses (including legal fees) arising from any third party claim or proceeding brought against the Company arising out or relating any defects or irregularities in any of the Products sold under this agreement that exist upon delivery to the Company, except to the extent any the claims arise out of or are related to the Company's negligence.

27.2. Notice of Claim. The Company shall give prompt Notice to the Supplier of any claim or potential claim for indemnification under this section.

28. Liability for Defects, etc. The Supplier will not be liable for any defects or impurities caused after delivery of the Products to the Company under this agreement, or for any variation not caused by or beyond the control of the Supplier.

29. General

29.1. Entire Agreement. This agreement contains all the terms agreed to by the parties relating to its subject matter. It replaces all previous discussions, understandings, and agreements.

29.2. Further Assurances. Each party, upon receipt of Notice from the other party, shall sign (or cause to be signed) all further documents, do (or cause to be done) all further acts, and provide all assurances as may reasonably be necessary or desirable to give effect to the terms of this agreement.

29.3. Amendment. This agreement may only be amended by a written document signed by both parties.

29.4. Assignment. The Company may not assign this agreement or any of its rights or obligations under this agreement without the Supplier's prior written consent. The Supplier may assign this agreement or any of its rights or obligations under this agreement, effective upon Notice to the Company.

29.5. No Partnership. Nothing contained in this agreement creates a partnership, joint venture, principal-and-agent, or any similar relationship between the parties.

29.6. Third Party Beneficiaries. The Indemnification terms of this agreement confer rights and remedies upon the Supplier's directors, officers, employees, shareholders, partners, agents or affiliates. No Person other than the parties themselves and those beneficiaries has any rights or remedies under this agreement.

29.7. Notices

29.7.1. Form of Notice. All notices and other communications between the parties must be in writing.

29.7.2. Method of Notice. Notices must be given by (i) personal delivery, (ii) a nationally-recognized, next-day courier service, (iii) first-class registered or certified mail, postage prepaid[, (iv) fax][ or (v) electronic mail] to the party's address specified in this agreement, or to the address that a party has notified to be that party's address for the purposes of this section.

29.7.3. Receipt of Notice. A Notice given in accordance with this agreement will be effective upon receipt by the party to which it is given or, if mailed, upon the earlier of receipt and the fifth business day following mailing.

29.8. Remedies Cumulative. The rights and remedies available to a party under this agreement are cumulative and in addition to, not exclusive of or in substitution for, any rights or remedies otherwise available to that party.

29.9. Survival. Sections 7 (Confidentiality), 8 (Non-Competition), 9 (Non-Solicitation), and 10.4 (Effect of Termination) survive the termination[ or expiration] of this agreement.

29.10. Severability. If any part of this agreement is declared unenforceable or invalid, the remainder will continue to be valid and enforceable.

29.11. Waiver. A party's failure or neglect to enforce any of rights under this agreement will not be deemed to be a waiver of that party's rights.

29.12. Equitable Relief. The Company acknowledges that its breach or threatened breach of any its obligations under sections 7 (Confidentiality), 8 (Non-Competition), or 9 (Non-Solicitation) would not be susceptible to adequate relief by way of monetary damages only. Accordingly, the Supplier may, in that case, apply to court for any applicable equitable remedies (including injunctive relief), without the need to post any security.

29.13. Governing Law. This agreement will be governed by and construed in accordance with the laws of the State of [GOVERNING LAW STATE], without regard to its conflict of laws rules.

29.14. Waiver of Jury Trial. Each party irrevocably waives its rights to trial by jury in any action or proceeding arising out of or relating to this agreement or the transactions relating to its subject matter.

29.15. Attorney Fees. If either party brings legal action to enforce its rights under this agreement, the prevailing party will be entitled to recover its costs and expenses (including reasonable attorneys' fees) incurred in connection with the action and any appeal.

29.16. Interpretation

29.16.1. Currency. Unless otherwise specified, all dollar amounts expressed in this agreement refer to American currency.

29.16.2. Statutes, etc. Unless specified otherwise, any reference in this agreement to a statute includes the rules and policies made under that statute and any provision that amends, supplements, supersedes, or replaces that statute or those rules or policies.

29.16.3. Number and Gender. Unless the context requires otherwise, words importing the singular number include the plural and vice versa, words importing gender include all genders.

29.16.4. Headings. The headings used in this agreement and its division into articles, sections,[ schedules, exhibits, appendices,] and other subdivisions do not affect its interpretation.

29.16.5. Internal References. References in this agreement to articles, sections, and other subdivisions are to those parts of this agreement.

29.17. Counterparts. This agreement may be signed in any number of counterparts, each of which is an original and all of which taken together form one single document.

29.18. Effective Date. This agreement is effective as of the Effective Date, even if any signatures are made after that date.