Exhibit 10.1
SUPPLY AGREEMENT
This Supply Agreement (the "Agreement") is dated as of August 7, 2006, by and
between Amscan Inc., a New York corporation ("Amscan"), and iParty Corp. a
Delaware corporation ("iParty").
Amscan and iParty are sometimes referred to
herein collectively as the "parties".
In consideration of the mutual promises herein contained and for all valuable
consideration, the parties hereby agree to be legally bound as follows:
1.
SUPPLY AGREEMENT.
A.
DURING THE TERM, AND SUBJECT TO THE TERMS
AND CONDITIONS SET FORTH HEREIN, IPARTY HEREBY APPOINTS AMSCAN AS A SUPPLIER OF
PARTY GOODS (AS HEREINAFTER DEFINED) AND AMSCAN SHALL SUPPLY IPARTY WITH PARTY
GOODS AS ORDERED BY IPARTY ON THE TERMS SET FORTH IN THIS AGREEMENT.
B.
IPARTY AGREES THAT, DURING THE TERM, AND
SUBJECT TO THE TERMS AND CONDITIONS SET FORTH HEREIN, AMSCAN SHALL SUPPLY PARTY
GOODS FOR STORES WHICH IPARTY NOW OR HEREAFTER OWNS OR OPERATES DURING THE TERM
AND IPARTY SHALL PURCHASE PARTY GOODS FROM AMSCAN IN THE AGGREGATE ANNUAL
MINIMUM AMOUNTS
SET FORTH ON SCHEDULE "A" ATTACHED HERETO (THE "ANNUAL PURCHASE
COMMITMENT").
NOTWITHSTANDING THE FOREGOING, THIS AGREEMENT SHALL NOT PROHIBIT
IPARTY FROM: (I) OBTAINING ANY PARTY GOODS FROM ANY PERSON IN EXCESS OF THE
ANNUAL PURCHASE COMMITMENT, (II) OBTAINING PARTY GOODS FROM ANY OTHER PERSON TO
THE EXTENT THAT AMSCAN IS UNABLE TO FILL AN ORDER FROM IPARTY FOR SUCH PARTY
GOODS, OR (III) OBTAINING PARTY GOODS FROM ANY OTHER PERSON IF AMSCAN SHALL NOT
BE ABLE TO PROVIDE IPARTY WITH COMPETITIVE PRICING.
AMSCAN SHALL BE DEEMED
"UNABLE TO FILL AN ORDER" FOR PURPOSES OF THIS AGREEMENT IF AMSCAN IS UNABLE TO
FILL AT LEAST EIGHTY PERCENT (80%) OF PARTY GOODS ORDERS WITHIN TEN (10) DAYS OF
SUBMISSION OF SUCH ORDERS BY IPARTY FOR A PERIOD OF AT LEAST SIXTY (60) DAYS.
C.
"PARTY GOODS" MEANS ALL KINDS OF PARTY
GOODS, INCLUDING WITHOUT LIMITATION PAPER AND PLASTIC TABLEWARE, ACCESSORIES AND
NOVELTIES, DISTRIBUTED BY AMSCAN OR ITS AFFILIATES, INCLUDING (I) ALL SUCH GOODS
CURRENTLY STOCKED BY IPARTY AND (II) ANY NEW GOODS EITHER DEVELOPED OR ACQUIRED
BY AMSCAN OR ITS AFFILIATES AFTER THE DATE HEREOF.
NOTWITHSTANDING ANYTHING SET
FORTH HEREIN, "PARTY GOODS" FOR THE PURPOSES OF THIS AGREEMENT SHALL NOT INCLUDE
METALLIC BALLOONS.
D.
THIS AGREEMENT IS NOT A REQUIREMENTS
CONTRACT AND NOTHING HEREIN SHALL BE CONSTRUED TO OBLIGATE IPARTY TO PURCHASE
ANY PARTICULAR PRODUCT OR PRODUCTS OR TYPE OF PRODUCT OR PRODUCTS EXCLUSIVELY
FROM AMSCAN.
2.
PRICING AND ANNUAL PURCHASE COMMITMENT.
A.
DURING THE TERM, "NON-CONTRACT PARTY GOODS"
SOLD BY AMSCAN TO IPARTY IN ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT
WILL BE INVOICED BY AMSCAN IN ACCORDANCE WITH THE PRICING SCHEDULE SET FORTH ON
SCHEDULE B, BASED ON AMSCAN'S
manufacturer's suggested retail price ("MSRP"), as reflected in Amscan's
catalog.
"Non-contract Party Goods," as used herein, shall mean all Party Goods
contained in Amscan catalogs, except for those Party Goods set forth on Schedule
"B" hereto, as the same may be from time to time amended.
In the event that
Amscan's price to