1
Annexure A
DRAFT
product Supply Agreement
between
SOUTH AFRICAN AIRWAYS SOC LIMITED
Registration Number: 1997/022444/30
A state owned company registered in accordance with the Companies Act of South Africa
(hereinafter referred to as “SAA”)
and
______
Registration Number:______
A private companyregistered company in accordance with the Companies Act of South Africa
(hereinafter referred to as “the Supplier”)
CONTENTS
1definitions and terminology
2interpretation
3APPOINTMENT
4INCORPORATION OF TERMS AND CONDITIONS
5TERM AND EARLY TERMINATION
6scope of agreement
7ordering process
8packing, delivery and documentation of THE PRODUCTS
9continuous improvement
10PRICING
11payment
12INTELLECTUAL PROPERTY RIGHTS
13quality
14force majeure
15compliance with laws aNd regulations
16termination and breach
17notices and domicilium
18CESSION , ASSIGNMENT AND SUB-CONTRACTING
19ANTI-BRIBERY AND CORRUPTION
20entire agreement
21representation and warranties
22arbitration and disputes
ANNEXURE A
ANNEXURE B
Annexure C
Annexure D
SOUTH AFRICAN AIRWAYS SOC LIMITED
a state owned company (registration number 1997/022444/30) with limited liability and duly incorporated under the company laws of the Republic of South Africa with offices at Airways Park, Jones Road, OR Tambo International Airport, Republic of South Africa (hereinafter referred to as the "SAA"),
AND
______
a private company (registration number: ______) with limited liability and duly incorporated under the company laws of the Republic of South Africa, with offices at 2 Braeside Road, Kenilworth, 7708 (hereinafter referred to as the " the Supplier").
WHEREAS:
ASAA desires to purchase certain Products from the Supplier, and
Bthe Supplier is prepared to supply such Products to SAA; and
CThe Parties accordingly wish to record the terms and conditions in this Agreement governing the supply of the Products.
NOW THEREFORE it is agreed as follows:-
1definitions and terminology
In this Agreement, the following words and expressions shall bear the meanings assigned to them hereunder:
1.1“Agreement” means this signed Agreement as well as the annexures referenced or attached hereto.
1.2"Business Day" means each day other than a Saturday, Sunday or a proclaimed public holiday in the Republic;
1.3"CPI” - means consumer price index as published by statistics South Africa.
1.4"Commencement Date" means ______notwithstanding the Signature Date;
1.5“Parties” means the parties to this Agreement, namely SAA and the Really Great Brand Company, and Part shall mean a reference to any of them as the context may require;
1.6"the Products" means the goods to be manufactured, supplied and delivered by the Supplier to SAA in accordance with the provisions of this Agreement, all as more fully described in Annexure A hereto;
1.7“Products Prices” means those prices that are quoted on the in Annexure A and are inclusive of all import duties, surcharges and delivery charges, including Value Added Tax.
1.8“RFB” means the Request for Bids document no GSM-060/16, being an invitation to tender , the terms thereof being incorporated by reference into this Agreement;
1.9“SAA Designated Handling Agent” means the SAA appointed logistics provider.
1.10"Signature Date" means the date of last signature of this Agreement by the Parties provided that all parties have signed the Agreement;
1.11"Term" means the period commencing on the Commencement Date and terminating on ______or upon the earlier termination of this Agreement (as provided for in this Agreement);
1.12“Termination Date” means ______or upon the earlier termination of this Agreement in accordance with the provisions hereof;
2interpretation
2.1In this Agreement, the headings to the clauses are deemed to have been included for purposes of convenience only and shall not govern the interpretation hereof.
2.2In this Agreement, unless the context otherwise indicates, a reference to:
2.2.1the singular, shall be deemed to include the plural and vice versa;
2.2.2any one gender, shall be deemed to include the other gender; and vice versa.
2.3This Agreement shall not constitute a precedent in the event of any future agreement.
3APPOINTMENT
3.1 SAA hereby appoints the Supplier and the Supplier hereby accepts the appointment to supply and deliver the Products to SAA on the terms and conditions of this Agreement;
3.2It is specifically recorded and agreed that should SAA in its sole discretion determine that the supply and delivery of the Products by the Supplier are unsatisfactory or insufficient for its purposes, then SAA shall have the right to obtain the supply and delivery of the Products from another Supplier.
4INCORPORATION OF TERMS AND CONDITIONS
The Parties hereto acknowledge and agree that, except as set forth herein, the terms set forth in the RFB, the LOA and the General Conditions of Contract shall be incorporated by reference and shall be used to assist with either interpretationof the terms hereof and/or the intention of the Parties with regard to their relationship in terms of this Agreement. The Parties agree that if any provisions conflict between the provisions of this Agreement, the RFB, the LOA and the General Conditions of Contract, the provisions of this Agreement, shall prevail.
5TERM AND EARLY TERMINATION
5.1This Agreementshall commence on the Commencement Date and shall unless the parties have agreed in writing to an extension of the Agreement and terminate on the Termination Date;
5.2Notwithstanding the provisions of clause ______above, SAA shall be entitled with or without cause and without any penalty to cancel this Agreement before the Termination Date, which cancellation shall be without prejudice to any other rights which SAA may have under law and under this Agreement:
5.2.1upon giving not less than 30 (thirty) days written notice to the Supplier;
5.2.2in accordance with the provisions of the breach and termination clauses below; or
5.2.3upon giving not less than 30 (thirty) days written notice to the Supplier should the Supplier:
5.2.3.1commit any act of insolvency as defined in the Insolvency Act, 1936 or become actually insolvent in that the Supplier’s liabilities exceed its assets;
5.2.3.2be wound up, whether provisionally or finally, and whether compulsorily or voluntarily; or
5.2.3.3enter into business rescue proceedings; or
5.2.3.4enter into any arrangement or compromise with any of its creditors; or
5.2.3.5be subject to any resolution passed by its members for its winding up or dissolution; or
5.2.3.6undergo, or any company which the Supplier is a subsidiary, undergo change of control without the prior written consent of SAA thereto having been obtained;
5.2.3.7have a judgement granted against it in any court of law which, if appealable, is not appealed against within the period allowed for the lodging of such an appeal or, if not subject to an appeal, remains unsatisfied for a period of 10 (ten) business days; or
5.2.3.8breach this Agreement 3 (three) times in a period of a calendar year, as a result of which notice is given in terms of this Agreement in each such instance of breach, regardless of whether or not such breach had been remedied by the Supplier in each instance
5.3Notwithstanding any other provision contained in this Agreement, it is recorded and agreed between the parties that the Supplier shall not enjoy a right of first refusal in respect of supply of the Products or any preferential right of renewal upon termination of this Agreement.
6scope of agreement
6.1The Supplier’s obligations shall be to:
6.1.1Strictly adhere to all the provisions of this Agreement and any orders and shall supply and deliver to SAA the Products as fully set out in Annexure A and in respect of which valid orders are received from SAA. The Supplier will deliver the Productsin full, on time and in good condition and free of defect;
6.1.2Allow reasonable SAA access to the Supplier’s technology and qualified personnel to the extent required for the performance of the obligations under this Agreement;
6.1.3provide a representative to handle all queries emanating from this Agreement;
6.1.4subject to SAA’s compliance with clause 6.2.4 hereunder, shall at all times hold a minimum buffer stock of 15% of forecasted annual consumption as stipulated in Annexure A on site. If SAA or its Designated Handling Agent requires more than thecalculatedaggregate provision for buffer stock, the Supplier shall, insofar as is reasonably possible, within a four (4) week period,adjust the buffer stock to the agreed quantities.
6.1.5comply, with lead-times for stock deliveries (first delivery and subsequent call-offs) and ensure actual stock deliveries are made in full to the agreed timings;
6.1.6acknowledge receipt of orders placed by SAA/SAA Designated Handling Agent within 24 (twenty four) hours;
6.1.7subject to SAA’s compliance with clause 6.2.4 hereunder, make all reasonable endeavours to deliver in full and on time, but shall in any event provide SAA with reasonable written notification should it not be able to deliver in full and/or on time. Where delivery shall be seven (7) or more days late from the scheduled date of delivery, the Supplier must present SAA with an alternative ofthe same standard or higher than SAA specification. Such alternative is subject to SAA’s prior written approval;
6.1.8subject to clause 6.2.3 below, the Supplieris fully responsible for all aspects of quality assurance in respect of the Products delivered to ensure all the agreed quantities are delivered and fully comply to the applicable quality and specification thereof and that delivery is in accordance with SAA’s order.Where applicable, the Supplier shall, at no additional cost to SAA, exchange (or provide a credit where applicable) any Product(s) that is materiallynon-compliant to specification or quality whenever such is detected and notified to the Supplier in writing. The Supplier shall accordingly ensure it is able to track the Products supplied and all the stock by batch numbers to enable exchange of such Products at any time so required by SAA;
6.1.9immediately advise SAA in cases where foreseeable delays in stock deliveries may occur giving reason and provide delivery date update information on a regular basis as may be agreed with SAA. Where such delay shall exceed 7 (seven) days, the provisions of clause 6.1.7 shall apply;
6.1.10failure of the Supplier to comply with clause 6.1.7 shall entitle SAA may to terminate the relevant Purchase Order and/or this Agreement, and
6.1.11notify SAA and the SAA DesignatedHandling Agent of any change of contact details immediately.
6.2SAA’s obligations shall be to:
6.2.1purchase from the Supplier and subject to the provisions of this Agreement the Products for on-board use on SAA aircraft and in SAA loungesas specified in Annexure A and in accordance with the written orders placed by SAA,
6.2.2effect full and timeous payment, without set-off or deduction, of allundisputed invoices;
6.2.3verify the Products delivered by the Supplier against SAA’s invoice or delivery documents. SAA shall, on delivery, satisfy itself as to the correctness and quantity of the Products and the failure to notify the Supplier within 10 (ten) days of receipt of the said Products of any errors, shall be deemed to be correct quantity so delivered.Any Product(s) returned by SAA within the said 10 days period shall where possible and practical be in the same condition as they were when delivered by the Supplier,
6.2.4for planning purposes only providethe Supplier with an annual rolling forecast of its projected needs(See Annexure A)
7ordering process
7.1SAA shall, through the SAA Designated Handling Agent, place orders either by fax or via an electronic medium such as the internet as provided in Annexure B.
7.2The risk of the Products shall only pass to SAA when SAA has accepted it as being to its complete satisfaction and should SAA not be happy with the quality of the Products, SAA will return to the Supplier for credit or replacement as may be required by SAA and in the case of replacement, within the delivery period as originally specified in the order or as soon as reasonably possible thereafter.
8packing, delivery and documentation of PRODUCTS
8.1The Supplier shall deliver all the Products to SAA’s warehouse in Johannesburg and Cape Town SAA catering unit or to SAA’s Designated Handling Agent, as advised by SAA from time to time when placing an order.
8.2Subject to the provisions of clause 6.1.7 above, if the Supplier supplies an alternative Product to the one that was ordered by SAA, SAA shall be advised of such replacement item number prior to shipment. The Supplier shall attach all relevant documentation regarding the inter-changeability of the said Product to such alternative Product which must be of same or higher standard and, at the same price.
8.3Save as provided for in clauses 6.1.4 and6.1.7, all stock delivered must be to the agreed specification, quantity, and packaging. Stock delivered not in accordance with the Agreementwill not be accepted.
8.4Any cancellation of an accepted orderby SAA less than 48 hours before scheduled delivery shall be subject to a reasonable cancellation and handling fee as determined bythe Supplier.
8.5All stock delivered must bepacked properly so as to fully comply with all SAA’s requirements in terms of this Agreement and to reach SAA warehouse in a condition that is free from defects and allows for storage in SAA stores.
8.6The stock must be properly marked with the SAA part number, item description and quantity on the top and two adjacent sides of each box.
8.7All information contained in delivery notes and invoices must accurately reflect the quantity of stock actually delivered. All documentation must comply with SAA instructions and accounting requirements given to the Supplier.
8.8The Supplier shall comply with all the requirements for the performance of the Products as may be agreed between the Parties from time to time. This would include ensuring that the Products are supplied and delivered in accordance with the service levels or the Products are delivered per stipulated delivery times (per written orders), in the correct vehicle and the correct temperature. Failure to abide by agreed performance standards or delivery specifications will attract a service penalty in terms of the penalty clauses hereunder.
9continuous improvement
One of the main objectives of this Agreement is to reduce the cost payable for the Products. To achieve this objective, continuous improvement methodologies will be optimized by all the parties in respect of specifications, service levels, quality, technology, operations and management of this Agreement and the parties shall co-operate in good faith to address any aspects that may arise from customer surveys, either by SAA or by the Supplier.The Supplier shall also advise SAA of any of its customer survey feedback and where comparable products at a lower cost are or become available so SAA can consider such feedback and alternative. SAA shall also be entitled to annually benchmark price, quality and lead times and where findings are less favourable than industry standards, the parties shall renegotiate such in good faith.
10PRICING
10.1All prices in Annexure A hereto are quoted in South Africa Rands (ZAR).
10.2All prices in Annexure A hereto are inclusive of VAT, all packaging and delivery costs.
10.3The prices is Annexure A shall remain valid and unchanged for a period of twelve months from the commencement date and thereafter no price variation shall take place unless mutually agreed in writing by the Parties. If the Supplier wants to request a price variation, it shall provide SAA with a written request for the price variation at least three months prior to the anticipated effective date of the price variation.
10.4The Parties shall negotiate in good faith to establish an increased variation price for the Productsand if a new price is agreed between the Parties in writing then such new price shall be valid for a period of one year from the date on which it came into force.
10.5The Supplier shall not withhold any supply of Products pending any negotiation of price variation. Should the Supplier withhold any supply of the Products, SAA shall procure similar products from other suppliers and pass through the cost to the Supplier.
10.6Any increase price variation agreed in terms of this clause shall not exceed the latest published Consumer Price Index excluding interest rates on mortgage bonds (“CPI”) as published from time to time by Statistics South Africa, or any other relevant Government Agency on the anniversary date. For the avoidance of doubt, the latest officially published CPI figures immediately preceding the anniversary date will be used in the determination of such increase.
10.7If the Parties fail to agree on the proposed price variation, then in such instance this Agreement may be terminated without cause and without any liability herein by either party giving the other party three months written notice.
10.8If any circumstance arises after conclusion of this Agreement which necessitates the supply of additional Products or services, the Parties may agree to the rendering of such additional Products or services at an additional fee to be agreed to in writing by both Parties, subject to each Party’s internal approval and/or procurement processes.
10.9In the event it emerges that the Supplier’s charges in respect of the pricing and fees under this Agreement are materially higher than the reasonable benchmark ascertained by SAA or that SAA can acquire similar Products of a like quality from another Supplier at a total delivered cost to SAA that is lower than the total delivered cost of the product supplied and delivered under this Agreement, SAA shall have the right to notify the Supplier of such total delivered cost and the Supplier shall have an opportunity to adjust the pricing under this Agreement, on such basis as to result in the same or lesser total delivered cost to SAA, within 30 (thirty) calendar days of such notice.
10.10If the Supplier fails to do so or cannot legally do so, SAA may:
10.10.1obtain supply and delivery of the Products from such other supplier in which case the obligations, including, but not limited to, any supply and delivery requirements or commitments, if any, of SAA and the Supplier shall be reduced accordingly; or
10.10.2terminate this Agreement without any penalty, liability or further obligation.
11payment
11.1The Supplier shall submit an invoice with deliveries to SAA as well as a consolidated monthly statement together with all original VAT invoices to the Manager, Finance, South African Airways, Private Bag X024, Kempton Park, 1620.
11.2SAA shall make payment of the full amountwithin thirty (30) days from the date of submission of the consolidated monthly statementto SAA.
11.3SAA shall make payment of the full invoiced amount into the following bank account or such other South African bank account as the Supplier may notify SAA in writing at least 60 (sixty) days in advance: