BOTTLE SUPPLYAGREEMENT

7.01        Warranty. Seller warrants that, at that time the Bottles are delivered to Buyer, the Bottles:

(a)           will conform to the applicable Specifications;

(b)           have been produced in compliance with all applicable laws, including without limitation the requirements of the Fair Labor Standards Act, as amended;

(c)           have been produced free from defects in manufacture.

(d)           shall, upon payment in full of the applicable purchase price, be conveyed with good title and free of any lien or encumbrance; and

(e)           (i) are not adulterated within the meaning of the U.S. Federal Food. Drug and Cosmetic Act, as amended (the “U.S. Act”), its attendant regulations or within the meaning of applicable U.S. or State laws or municipal ordinances in which the definition of adulteration is substantially the same as that contained in the U.S. Act; and (ii) do not constitute an article which may not due to adulteration, under the provisions of the U.S. Act, be introduced into interstate commerce.

7.02        Limitations. THE ABOVE EXPRESS WARRANTIES SHALL BE IN LIEU OF ALL OTHER WARRANTIES OR REPRESENTATIONS EXPRESS OR IMPLIED. INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PUROSE, AND THERE ARE NO WARRANTIES EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT.

7.03       Disclaimers. Seller specifically disclaims any warranty or other liability for:

(a)           Foreign substances of any kind in the goods that have been introduced by Buyer, its subcontractors, or a party other than Seller or one directed by Seller to handle Bottles;

(b)            Bottles that have not been (i) thoroughly cleaned immediately prior to filling, (ii) filled under sanitary conditions and in accordance with good manufacturing practices as required by the U.S. Food and Drug Administration and (iii) suitably sealed immediately after filling with the appropriate closure;

(c)           Bottles that have been (i) exposed to any water (warmer, rinser, etc.) with an alkalinity in excess of 50 ppm and or to line lubes and makeup waters with a combined alkalinity in excess of 100 parts per million; (ii) exposed to warmer temperatures in excess of 110°F; (iii) exposed to temperatures in excess of 100°F and or to direct sunlight during transportation or storage; or (iv) abused or misused by Buyer or Customer; and

(d)           Flavor, odor and color of the filled beverage unless, in any event; shown to be due to a failure of a Bottle to comply with the warranties set above.

7.04        Notification. Buyer must notify Seller of any breach of warranty claims without undue delay. Seller shall not be liable for any such claims unless Seller receives notice of the claim within 180 days after the date of delivery of the allegedly defective product. Failure to make a claim within such period shall constitute a complete and irrevocable waiver of such claim.

[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT, EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLCED WITH ASTERISKS [****], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]

7.05        Preservation. Buyer must preserve Bottles and other evidence in its possession or control that are reasonably related to a breach of warranty claim and provide Seller the opportunity to inspect, test and sample such Bottles and other evidence prior to destruction or alteration. Failure to comply with this provision shall constitute a waiver of the warranty claim.

7.06        Exclusive remedy. As Buyer’s exclusive remedy for a breach of warranty. Seller shall, at Buyer’s option, replace any defective Bottles or credit Buyer for Buyer’s total out of pocket cost (including without limitation filling, raw materials, packaging materials and freight) thereof including, the cost of inspecting, sorting, reworking, and scrapping the defective Bottles Seller may rework and/or scrap any defective Bottles, or authorize Buyer to do so, if Seller agrees (if Buyer so requests).

7.07        Domestic Use. The above warranties apply only to Bottles manufactured for domestic use in the United States and Canada. Exporting filled product in Bottles for domestic use voids all warranties and Seller shall not be liable for any damages.

8.01        General. Seller agrees to protect, defend, indemnify and hold harmless Buyer from all liabilities, claims, actions, losses, costs and expenses, including attorneys’ fees and court costs (“Losses”) incurred by Buyer arising from a claim by a third party asserted against Buyer for bodily injury, death or property damage to the extent that such bodily injury, death or property damage is due to a defect in the design or manufacture of the Bottles or other breach of warranty by Seller in respect of Bottles as delivered to Buyer. Buyer agrees to protect, defend, indemnify and hold harmless Seller from all Losses incurred by Seller arising from a claim by a third party asserted against Seller for bodily injury, death or property damage to the extent such bodily injury, death or property damage is due to Buyer’s negligence or willful misconduct.

8.02        Intellectual Property. Seller warrants to Buyer that Buyer’s purchase of the Bottles and the use thereof in the form furnished by Seller (but excluding any labels) will not in itself infringe any valid United States patent, copyright or trademark. If a claim of any such patent infringement is asserted by a third party against Buyer and provided that Seller is promptly notified thereof and offered the opportunity to assume the complete defense, Seller as its only obligation hereunder agrees to defend, indemnify and hold Buyer harmless from and against all judgments, decrees, damages, and out-of-pocket costs and expenses incurred by or imposed against Buyer as a result of such actual or alleged infringement. Upon the institution of any suit or action alleging infringement against Buyer, Seller may, at its option, (i) pay the royalties claimed; (ii) furnish non-infringing Bottles provided they are reasonably acceptable to Buyer; (iii) terminate this Agreement upon thirty (30) days written notice provided that such termination shall not relieve Seller of any obligation accrued hereunder prior to the date of termination, including deliveries of Bottles on order by Seller; or (iv) continue to supply the allegedly infringing Bottles provided that in such event, Seller shall reimburse Buyer for any loss sustained by Buyer on account of infringement if in such suit or action it is held that the purchase or use of such Bottles did infringe a valid United States patent, copyright or trademark Notwithstanding the above, if the Bottles were made in accordance with materials, designs or specifications furnished or designated by Buyer, Buyer shall indemnify Seller against any judgment for damages and costs which may be rendered against Seller in any suit brought on account of alleged infringement of any United States patent, copyright or trademark by such Bottles and any labels thereon,

[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT, EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLCED WITH ASTERISKS [****], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]

8.03        Insurance. Seller represents and warrants that it currently has and will continue to maintain in full force and effect for the duration of this Agreement commercially reasonable general liability and product liability insurance. Seller shall supply a new insurance certificate each year to Buyer upon request.

9.01        Force Majeure. If either party is unable to perform its obligations under this Agreement (other than the payment of monies owed), or if the Manufacturer is unable to perform its manufacturing obligations as contemplated herein as a consequence of a delay or failure from any cause or event beyond the control of such party, including but not limited to war, riots acts of God or public enemy, fire, explosion, flood, earthquake, strikes, lockouts or other labor disturbance, embargo, actions or any governmental authority, such party (and Seller, if the party unable to perform is the Manufacturer) shall be excused from the performance of such obligations for the period of and to the extent of any such cause or event. On the cessation of any event of force majeure as defined above, the disabled party shall notify the other party of such cessation or termination. If such cessation persists for a period of time greater than three months, this Agreement will terminate upon written notice from either party to the other party.

9.02        SELLER’S LIABILITY. SELLER WILL HAVE NO LIABILITY FOR ANY BUSINESS LOSSES OF BUYER, INCLUDING, WITHOUT LIMITATION, LOSS OF REVENUE, PROFIT OR GOODWILL, OR FOR ANY OTHER INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES WHATSOEVER, WHETHER ARISING OUT OF CONTRACT, TORT OR OTHERWISE. IN ANY EVENT SELLER’S MAXIMUM MONETARY LIABILITY IN CONNECTION WITH THIS AGREEMENT WILL BE THE AMOUNTS PAID TO SELLER HEREUNDER.

10.01     Confidentiality. Each party shall use reasonable efforts to cause their respective employees, agents and other representatives to hold, in confidence, all Confidential Information (as hereinafter defined), and the parties shall use their best efforts to ensure that any other person having access to the Confidential Information shall not disclose the same to any person except in connection with this Agreement and otherwise as may be reasonably necessary to carry out the provisions of this Agreement and the transactions contemplated hereby, or to comply with applicable law. “Confidential Information” means all information of any kind (including, without limitation, sales and promotional results) obtained directly or indirectly from either party’s business. Confidential Information shall not include any information which (i) is generally available to the public as of the date of this Agreement, or (ii) becomes generally available to the public after the date of this Agreement, or (iii) is or becomes known to either party from sources outside of the other party, provided that such information did not result, directly or indirectly, from any act, omission or fault of either of the parties to this agreement or any of their agents with respect to such information.

 

[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT, EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLCED WITH ASTERISKS [****], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]

Size		l6oz
Weight		36.5 grams
Color		Clear
Manufacturer		Amcor PET North America
Design		Heat Set Stock

 

A surcharge for East Coast shipments/deliveries is [****] per thousand and [****] per thousand for West Coast shipments/deliveries.

 

The following is “Addendum II” to the Bottle Supply Agreement dated the 15th day of February 2008 between Zuckerman-Honickman, Inc. (“Seller”) and Skinny Nutritional Corp (“Buyer”) (the “Agreement”).