Component 3 Supply Agreement.docx

Component 3 Supply Agreement.docx - SUPPLY AGREEMENT1 This...

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SUPPLY AGREEMENT 1 This Supply Agreement (this “Agreement”) is entered into as of October 12, 2014 (the “Effective Date”) by and between Karsten Farms, Inc. (“Seller”), an Arizona corporation, and Bistro 205, an Arizona sole proprietorship (“Buyer”). RECITALS WHEREAS, the parties hereto desire to enter into a long-term agreement pursuant to which Seller will sell, and Buyer will purchase, certain vegetable, fruit, herbal and botanical products for use in the business of Buyer; AGREEMENT NOW, THEREFORE, the parties agree as follows: 1. PURCHASE AND SALE OF PRODUCTS. On the terms and subject to the conditions set forth in this Agreement, Seller will sell, and Buyer will purchase, Products in the quantities and at the prices set forth herein. “Products” shall mean any of the products set forth on Schedule 1, as may be amended by the parties from time to time 2. PRICES. The price for Products initially shall be set at the amount listed in Schedule 1. Thereafter, such prices shall be subject to increases in an amount not to exceed 5%. Price increases are limited to increases in production or transportation costs for the Seller. In the event of any proposed change in price, Seller shall deliver to Buyer a written notice (a “Price Notice”) specifying the Products affected and the new price, no later than November 1 preceding the calendar year in which the new price is to take effect. New prices shall take effect ninety (90) days after Buyer has received a Price Notice with respect to such new prices. Each Price Notice shall include a written explanation of each price increase. 3. REQUIREMENTS. a. Buyer shall be obligated to purchase from Seller its requirements of Products for use in its restaurant business. Seller shall be obligated to supply to Buyer Products in the amount of such requirements, subject to certain requirements relating to advance notice and maximum production capabilities, as set forth in Section 4. b. Other Products. In the event that Buyer shall require any vegetable, fruit, herbal or botanical products not constituting Schedule 1 Products, for any of its operations, Buyer shall submit to Seller a notice setting forth its requirements with respect to product specifications and volume, and Seller shall have the right to competitively bid to supply Buyer with some or all of Buyer's requirements of such products pursuant to terms to be mutually agreed upon outside the scope of this Agreement. 1 Modified from a 1998 supply contract between Basic Vegetable Products and Natrol, Inc., available on line at http://contracts.onecle.com/natrol/basic.supp.1998.02.27.shtml.
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4. QUANTITIES AND PRODUCTION SCHEDULING. a. Annual Purchase Commitment. For each calendar year or partial calendar year during the Term of this Agreement (a “Contract Year”) beginning with 2015, Buyer shall submit to Seller a purchase commitment (the “Purchase Commitment”) specifying the volume of each Product contemplated to be supplied pursuant to the Supply Agreement during the following year (the “Volume Targets”). The Purchase
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