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Product Supply Agreement PRODUCT SUPPLY AGREEMENT THIS AGREEMENT is by PrestigeLegalDoc

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A Product Supply Agreement is an agreement between a buyer and a supplier whereby the buyer agrees to purchase and receive certain products from the supplier pursuant to certain terms and conditions. The agreement is for a certain term with an option to renew for a further five years on the termination date of the agreement.

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									                        PRODUCT SUPPLY AGREEMENT
                 THIS AGREEMENT is made as of the _____ day of ___________, 2______.

B E T W E E N:

                        ______________________________________
                        a corporation incorporated under the laws of the State of ____________,

                        (“Buyer”)


- and -

                        ________________________________________
                        a corporation incorporated under the laws of the State of _____________,

                        (“Supplier”)



BACKGROUND:

1.        The Buyer wishes to enter into this Product Supply Agreement to receive the supply of
          Products from the Supplier.

2.        The Supplier wishes to enter into this Product Supply Agreement to supply Products to
          the Buyer and its Affiliates.

               IN CONSIDERATION of the premises and the mutual covenants and
agreements contained in this Product Supply Agreement and other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged by each party), the
parties hereby covenant and agree as follows:

                                          ARTICLE 1
                                       INTERPRETATION

1.1              Definitions etc.

                 In this Product Supply Agreement:

                 “Affiliate”, means in the case of Supplier, any subsidiary of Supplier;
“Arbitration Rules” means the rules of procedure for arbitration of the
governing jurisdiction;

“Business Day” means any day of the week other than a Saturday, Sunday or any
statutory or civic holiday observed in ______________________(enter city and
state);

“Default” has the meaning ascribed thereto in Section 6.2;

“Disputes” includes all disputes, controversies, claims, counterclaims or similar
matters:

(a)     which relate to or arise out of or in connection with this Product Supply
        Agreement including the validity, construction, meaning, performance or
        effect of this Product Supply Agreement or the rights and liabilities of the
        parties to this Product Supply Agreement; or

(b)     in respect of any defined legal relationship associated with this Product
        Supply Agreement or derived from it;

        whether they arise during the term of this Product Supply Agreement or
        thereafter;

“Force Majeure” has the meaning set forth in Section 5.3;

“Governmental Authority” means (i) any court or legislative, executive,
regulatory or administrative authority or agency of Canada or the United States or
any province or state thereof and (ii) any federal, provincial, state, local,
municipal or other political subdivision of Canada or the United States or any
province or state thereof;

“Initial Term” has the meaning set forth in Section 2.1;

“Negotiation Period” has the meaning set forth in Section 7.2;

“Person” shall be broadly interpreted and includes an individual, body corporate,
partnership, joint venture, trust, association, unincorporated organization, the
Crown, any Governmental Authority or any other entity;

“Price Period” means the period commencing when the Supplier institutes a
price change and ending when the Supplier institutes the next following price
change;

“Products” means ___________________________(enter description of Product
to be supplied), which meet industry specifications at the relevant time, which are
produced or sold by Supplier or its Affiliates at the relevant time;
               “subsidiary” and “body corporate” have the respective meanings set forth in the
               laws of the governing jurisdiction;

               “Product Supply Agreement” means this Product Supply Agreement, the
               Background and any agreement or schedule supplementing or amending this
               Product Supply Agreement, as the same may be supplemented, amended or
               restated from time to time;

               “Term” has the meaning set forth in Section 2.2;

               “Year” means a calendar year commencing January 1.

1.2            Statutes

                Unless specified otherwise, reference in this Product Supply Agreement to a
statute refers to that statute as it may be amended, or to any restated or successor legislation of
comparable effect.

1.3            Gender and Number

               In this Product Supply Agreement, words importing the singular include the plural
and vice versa, words importing one gender include all genders and words importing individuals
include persons, firms, bodies corporate, partnerships, joint ventures, associations, trusts and
governments and vice versa.

1.4            Headings

                The division of this Product Supply Agreement into articles, sections, subsections
and schedules and the insertion of headings are for convenience of reference only and shall not
affect the construction or interpretation of this Product Supply Agreement. The article, section,
subsection and schedule headings in this Product Supply Agreement are not intended to be full or
precise descriptions of the text to which they refer and are not to be considered part of this
Product Supply Agreement. All uses of the words “hereto”, “herein,” “hereof,” “hereby” and
“hereunder” and similar expressions refer to this Product Supply Agreement and not to any
particular section or portion of it. References to an Article, Section, Subsection or Schedule refer
to the applicable article, section, subsection or schedule of this Product Supply Agreement.

1.5            Performance on Holidays

               If any action is required to be taken pursuant to this Product Supply Agreement on
or by a specified date which is not a Business Day, then such action shall be valid if taken on or
by the next succeeding Business Day.
1.6            Calculation of Time

                In this Product Supply Agreement, a period of days shall be deemed to begin on
the first day after the event which began the period and to end at 5:00 p.m. on the last day of the
period. If, however, the last day of the period does not fall on a Business Day, the period shall
terminate at 5:00 p.m. on the next Business Day.

1.7            Currency and Units of Measurement

               Unless specified otherwise, all statements of or references to dollar amounts in
this Product Supply Agreement are to lawful money of the United States.

1.8            Schedules

           The following Schedules form part of this Product Supply Agreement:

            Schedule         Description of Schedule

                 1           Prices for Period January 1, 2_________ to ___________

                2            Rules of Procedure for Arbitration

1.9            Third Party Beneficiaries

                 Nothing in this Product Supply Agreement is intended expressly or by implication
to, or shall, confer upon any Person other than the parties, any rights or remedies of any kind.

1.10           Including etc.

               Whenever the words “include”, “includes” or “including” are used in this Product
Supply Agreement, they shall be deemed to be followed by the words “without limitation”,
unless the context otherwise requires.

                                          ARTICLE 2
                                            TERM

2.1            Term

               The term of this Product Supply Agreement (the “Initial Term”) shall commence
on ________________ and shall end on ________________, unless renewed pursuant to Section
2.2 or terminated earlier pursuant to Section 6.1 or Section 6.3
2.2            Renewal

                If Supplier is not in default under the terms of this Product Supply Agreement on
the expiry of the Initial Term, the term of this Product Supply Agreement shall be automatically
renewed for an additional term of five (5) years so that it will expire on the December 31,
2_____. The Initial Term and any renewal term as provided in this Section 2.2 is herein called
the “Term”.

                                     ARTICLE 3
                         SUPPLY AND PURCHASE OBLIGATIONS

3.1            Supplier’s Obligation

               Subject to the terms and conditions of this Product Supply Agreement, during the
Term, Supplier shall supply Buyer, with all the Products that Buyer and such Affiliates may
require from time to time to manufacture or produce the goods manufactured or produced by
Buyer and such Affiliates from time to time.

3.2            Buyers’ Obligation

               Buyer shall cause its Affiliates to, purchase from Supplier or its Affiliates, (i) all
the Products that they require to manufacture or produce the goods manufactured or produced by
them which require the Products and (ii) all Products that any of them wishes to resell to third
parties. Buyer agrees not to and Hargest shall cause his Affiliates not to, purchase any Product
(or any substitute or replacement therefor) from any Person other than Supplier or an Affiliate,
unless such purchase is expressly permitted by this Product Supply Agreement.

3.3            Warranty and Liability

                Supplier hereby represents and warrants that any Products sold by it to the Buyer
or an Affiliate shall meet prevailing industry standards for quality and shall be fit for the purpose
for what they were intended, as they are then manufactured by the Buyer. The other terms and
conditions of sale shall be governed by the standard terms and conditions contained in the
Supplier’s invoices or bills of sale used by it in connection with the sale of Products at that time.

                                     ARTICLE 4
                              PURCHASE PRICE AND TERMS

4.1            Price

       (a)     Prices for the Year 2______ broken down by Product for the period, January 1,
               2_____ to ___________ are set forth in Schedule 1. Commencing ___________,
               the parties shall negotiate in good faith to determine the prices by Product for the
               balance of the year 2_____ commencing _________. If the parties have not
               agreed on such prices by _________, either party may submit the determination
               of such prices directly to arbitration pursuant to Section 7.3. The Supplier shall
               continue to supply Products to the Buyer on and after ___________ at the then
               current prices while such matter is arbitrated, but upon the determination of the
               prices by the arbitrator, there shall be an adjusting payment by the Supplier to the
               Buyer or the Buyer to the Supplier as the case may be, to reflect the difference in
               prices between those in effect on ___________ and those determined by the
               arbitrator.

       (b)     On or before ____________ in each Year, Supplier shall provide to the Buyer a
               certificate of its auditor as to the Customer Average for each Price Period which
               occurred during the immediately preceding Year.

4.2            Terms of Payment

               Purchases of Products by the Buyer from Supplier must be paid on or before the
last Business Day of the month after the month in which an invoice therefor is given by Supplier
to a Buyer.

                                       ARTICLE 5
                                SPECIAL CIRCUMSTANCES

5.1            Inability of Supplier to Supply

                If Supplier is unable to supply the Buyer with enough Products to satisfy the
Buyer’s production needs at any time during the Term such that the Buyer will, as a result, have
to shut down or curtail production, and provided that such inability is not due to such Buyer
failing to follow Supplier’s standard order procedures or due to the Buyer requiring delivery
otherwise than on such Supplier’s usual delivery terms, the Buyer may purchase Products from
other suppliers but only in quantiti
								
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