PACKAGING MANAGEMENT PROGRAM SERVICE AGREEMENT
This Agreement sets forth the terms and conditions of the arrangement under which <CUSTOMER COMPANY NAME>will utilize SUPPLYONE, INC. as its primary source for innovative packaging solutions.
DESCRIPTION
<CUSTOMER COMPANY NAME>agrees to purchase from SUPPLYONE its requirements for corrugated containers and packaging materials, as indicated on Appendix A of this Agreement. If SUPPLYONE cannot provide a quality product in a timely fashion <CUSTOMER COMPANY NAME>has the right to acquire that product from another vendor. SUPPLYONE guarantees a direct cost savings to <CUSTOMER COMPANY NAME>of $______. This savings is based on transaction information provided by <CUSTOMER COMPANY NAME>andrelates directly to identified cost reductions and the difference in packaging spend, on an annualized basis, between SupplyOne and the baseline prices attached in Appendix A. The product categories in this agreement include but are not limited to corrugated containers, packaging materials, labels, thermoformed plastic, fabricated foam and other miscellaneous packaging supplies i.e. forms, Jan-San products, etc. – as measured against the Base Audit List. The basis for determining the benchmark for savings will be documented by last paid price by <CUSTOMER COMPANY NAME>compared to new pricing provided by SUPPLYONE. This comparison will only be valid with identical items and similar quantities.
In addition SupplyOne will provide additional cash flow savings of $______. This savings is based on average inventory levels provided by <CUSTOMER COMPANY NAME> to SupplyOne.
The guaranteed direct cost and cash flow savings will be based upon twelve months full implementation of the entire Base Audit List.
SupplyOne will perform a physical inventory of all items covered by this agreement, for the purpose of establishing a baseline from which to measure the first twelve months actual inventory reduction.
AGREEMENT PERIOD
This Agreement shall be effective (INSERT START DATE) and will automatically renew annually.
Either party has the right to cancel this Agreement upon providing sixty (60) days prior written notice to the other. In the event that <CUSTOMER COMPANY NAME>cancels this Agreement, <CUSTOMER COMPANY NAME>agrees to purchase within 90 days- a.) All inventories thatare not saleable in the ordinary course of business to other customers of SUPPLYONE b.) All inventories that are pre-authorized by <CUSTOMER COMPANY NAME>and designated as “reserved stock”. Purchase prices for such inventory shall be those in effect at the date notice of termination was delivered.
PAYMENT TERMS
Summary Bills shall be created on the 1st and 15th of each month. Payments shall be made on the basis of ______from the receipt of summary billing statement.
PRODUCTION AUTHORIZATION
Prior to the production of any custom made corrugated containers, thermoformed plastic or any other custom produced product, <CUSTOMER COMPANY NAME>agrees to provide written authorization for SUPPLYONE to produce and store all such products.
SLOW MOVING OR OBSOLETE INVENTORY
Any custom manufactured or purchased inventory for <CUSTOMER COMPANY NAME>that is on hand at SupplyOne for more than 90 days shall be billed to <CUSTOMER COMPANY NAME>on the first day of the following month.
ORDER ENTRY
<CUSTOMER COMPANY NAME>may utilize phone, fax or the SupplyOne OneOnline electronic ordering solution for order entry.
SEMI-ANNUAL REVIEWS
Semi-Annually, SUPPLYONE will meet with <CUSTOMER COMPANY NAME>to review the difference between the aggregate spend paid to SUPPLYONE, and the aggregate spend that would have been paid to other vendors as set forth on the Base Audit List. In determining the aggregate spend that would have been paid to other vendors, unit prices on the Base Audit List will be adjusted to reflect general or specific price changes prevalent in the market. In the absence of reliable published indices measuring such changes, we will use those price changes passed onto SUPPLYONE by its suppliers.
All new items not included on the Base Audit List will be priced as agreed to by both parties, and subsequently adjusted as set forth in the preceding paragraphs.
PRICING MANAGEMENT
Corrugated carton pricing adjustments will be based on Pulp & Paper Index, 42 lb. Kraft linerboard “Open market price” index, which is published each month, which for <DATE> is $XXX per ton. Pricing will be adjusted whenever the index changes an aggregate minimum of $20 per ton. For every $10 per ton change in the index, the sell prices will be adjusted 1.6%. The adjusted prices will take effect the 1st day of the month following the index change, with a minimum 60-day notification.
For all other products, pricing will be protected for 60 days minimum and will only be changed with written notification from SupplyOne. Written notification of increases will be supported by market and/or manufacturer documentation.
REMEDY PROCESS
If in the event <CUSTOMER COMPANY NAME>is not satisfied with the quality, price or service provided by SupplyOne, <CUSTOMER COMPANY NAME>will provide written notification to SupplyOne of their dissatisfaction, and SupplyOne will have up to 30 days to remedythe reported issue to<CUSTOMER COMPANY NAME> satisfaction. If the issue relates to pricing, <CUSTOMER COMPANY NAME>will provide a copy(s) of two competitive bids which statesprice, selling terms, service, and delivery methods beingproposed. The two competitive bids must be equivalent to thequality and services SupplyOne is providing. An average of the two bids will be used as the basis fora pricing remedy.
If <CUSTOMER COMPANY NAME>is not satisfied with the performance or quality of a productprovided by SupplyOne, a corrective action plan will be implemented to remedy the cause. Where applicable, this will include technical service support, provided by SupplyOne, to ensure products are calibrated to the associated packaging equipment. Replacement of any product determined to be defective will take place as soon as commercially feasible.
The remedy process regarding pricing management will take effect on the first day of the 19th month,following the date of full implementation for all product categories as indicated on Appendix A of this Agreement.
CONFIDENTIALITY
Both parties agree that the terms of this Agreement are completely confidential, and neither party will disclose such terms to anyone outside of their respective companies, other than as may be required by law. The terms of this Agreement are not generally available to other customers of SUPPLYONE, and disclosure could be detrimental to SUPPLYONE.
TITLE AND RISK OF LOSS
Title to all product covered by this Agreement shall pass to the <CUSTOMER COMPANY NAME>, FOB, <CUSTOMER COMPANY NAME>receiving dock, if delivered by SUPPLYONE owned or contracted delivery vehicles, or FOB SUPPLYONE shipping dock if delivered by public common carrier at the request of <CUSTOMER COMPANY NAME>.
SUPPLYONE’s liability for loss or damage shall be limited to the replacement of product in an expedited manner, or for other damages, limited to the value of the product.
Agreed to on ______, 2016, by
<CUSTOMER COMPANY NAME>SUPPLYONE, INC.
______
<CUSTOMER CONTACT NAME>(INSERT NAME)
<CUSTOMER CONTACT TITLE>President
Signature/Date / Signature/Date1