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EXHIBIT 10.15
AMENDED AND RESTATED JAMS MANUFACTURING AGREEMENT
THIS AGREEMENT is made and entered into as of March 3, 1997 by and
between Roseland Manufacturing, Inc., a Delaware corporation (hereinafter
referred to as "Seller"), and International Home Foods, Inc., a Delaware
corporation (hereinafter referred to as "Purchaser").
WITNESSETH:
WHEREAS, American Home Food Products, Inc., a Delaware corporation and
Seller entered into a Jams Manufacturing Agreement as of January 21, 1994 and
said Agreement was assigned by American Home Food Products, Inc. to Purchaser
on November 1, 1996; and
WHEREAS, Purchaser and Seller wish to further amend such Agreement and
to execute this Amended and Restated Jams Manufacturing Agreement in order that
Purchaser may continue to purchase Product from Seller, and Seller may continue
to sell Product to Purchaser, in each case upon the terms and conditions set
forth herein;
NOW THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. DEFINITIONS
As used herein, the following terms shall have the following meanings:
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person.
A "Case" of any finished Product means the stockkeeping-unit (sku) of
such finished Product, provided, however that shippers, multi-packs and other
multiple case units, notwithstanding their identification as SKUs, comprise
multiple quantities of equivalent cases of base SKUs.
"CD Limit" means the aggregate amount equal to (i) 2% multiplied by
(ii) the Overall Cost per Case for each Case of Product purchased by Purchaser
hereunder during the twelve months preceding the date of the occurrence to
which the CD Limit is applied.
"Consequential Damages" means any indirect or consequential damages
arising from, relating to or in connection with this Agreement, whether arising
from or relating to breach of warranty, agreement or covenant, negligence,
strict liability in tort or other causes.
"Direct Labor Cost" means the Standard Cost of direct labor utilized
in the production of Product, including the cost of fringe benefits, allocated
to Product in a manner consistent
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with current practices in effect for allocation of such labor cost to all
products manufactured by Seller, as set forth in Schedule 1 to Exhibit B
hereto.
"Force Majeure" shall have the meaning ascribed to such term in
Section 10.
"Intellectual Property Right" means any trademark, service xxxx, trade
name, invention, patent, trade secret, copyright, know-how (including any
registrations or applications for registration of any of the foregoing), trade
dress, logos, labels, labeling and other indicia of ownership, or any other
similar type of proprietary intellectual property right.
"Manufacturing Facility" means Seller's manufacturing facility located
at 000 Xxxxx Xxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx.
"Materials" means all materials and ingredients necessary for the
manufacture, labeling, packing and storage of Product which Purchaser has
purchased from Seller pursuant to Exhibit B hereto.
"Materials Cost" means the cost of Materials purchased by Seller to be
utilized in the production of Product.
"Overall Cost" means, per Case of any Product at any time, the sum of
(i) the Standard Cost of Materials utilized plus (ii) Direct Labor Cost plus
(iii) Overhead Cost, in each case per Case of such Product in effect at such
time.
"Overhead Cost" means the Standard Cost of overhead incurred at the
manufacturing plant of Seller where Product is manufactured, allocated to
Product in a manner consistent with Seller's current practices in effect for
allocation of overhead cost to all products manufactured by Seller, as modified
by Section 5, as set forth in Schedule 1 to Exhibit B hereto.
"Person" means an individual, corporation, partnership, association,
trust or other entity or organization.
"Product" means any and all jam, jelly and preserve products
manufactured for and marketed by Purchaser including, but not limited to, the
products listed in Exhibit A hereto.
"Product Defect" means any defect in any Product including, without
limitation, in the workmanship, in the manufacture of, in the ingredients or
raw materials comprising or in the labeling or packaging of any Product.
"Standard Cost" with respect to Materials Cost, Direct Labor Cost or
Overhead Cost, as the case may be, means the cost thereof that is based on
expected yields and utilizations consistent with current budgeting practices,
as modified by Section 5, as set forth in Schedule 1 to Exhibit B hereto.
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"Term" means the term of this Agreement as described pursuant to
Section 6.
2. PRODUCTION; PRODUCT SPECIFICATIONS
(a) During the Term hereof, Seller agrees to manufacture, package
and sell to Purchaser, and Purchaser agrees to purchase from Seller,
Purchaser's total requirements of Product, subject to Section 2(d).
(b) Purchaser agrees to purchase Product from Seller and Seller
agrees to sell Product to Purchaser pursuant to the purchase order procedures
described in section 3.
(c) Product delivered hereunder shall be manufactured in
accordance with current production standards and practices at the Manufacturing
Facility. Either party may, from time to time, during the Term, request the
approval of the other party to a change in such standards or practices, which
approval shall not be unreasonably withheld; provided that if any such
requested change is not agreed to, the standards and practices in effect
immediately prior to the time of such request shall remain valid and in effect.
Any and all changes to such practices and standards shall be made only pursuant
to written agreement of the parties as aforesaid; provided that Seller shall be
entitled to increase its Standard Costs of production to the extent of any
increase in production costs resulting from any change in production standards
or practices pursuant to this Section 2 (c) from those in effect on the date
hereof; and provided further that if Seller notifies Purchaser of any such
increases in its Standard Costs of production, Seller shall furnish Purchaser
with documentation reasonably satisfactory to Purchaser evidencing the increase
in the Standard Costs of production.
In the event that the production standards and practices are changed by mutual
agreement pursuant to this Section 2 (c), Seller shall manufacture Product
hereunder in compliance with such changed production practices and standards.
(d) Purchaser has the right, exercisable at its option, to
transfer some or all production of Product to other manufacturing facilities
prior to the expiration of the Term of this Agreement, provided, however,
Purchaser gives Seller 180 days' prior written notice and reimburses Seller for
the lower of either (i) fixed costs of contract termination, or (ii) fixed
labor and overhead costs remaining in the Term of this Agreement (e.g. lease
and labor contract termination costs). Purchaser will be provided access to
Sellers facilities to remove equipment and make general repairs as necessary
following written notification.
3. PURCHASE ORDERS
(a) By December 1 of each year during the term hereof, Purchaser
shall provide Seller with an annual forecast for the following calendar year of
requirements of Product, by SKU, which shall be updated monthly and shall
include notice of any promotional activity and significant changes in case
volume activity.
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(b) On a regular and frequent basis, which may be daily, Purchaser
and Seller (i) shall review the inventory of Product and anticipated sales of
the Product; and (ii) agree upon a production schedule which will provide
Purchaser with sufficient amounts of Product to maintain appropriate customer
service levels. Seller shall be responsible for scheduling shipment of the
Product to Purchaser's designated locations based on deployment schedule
provided by Purchaser.
(c) In the event Seller, within five (5) business days after
receipt of an annual forecast (or monthly update), notifies Purchaser of its
inability to meet such forecast (or monthly update), including the specified
delivery dates, the parties shall attempt to arrange a substituted delivery
schedule by mutual agreement. Such notice shall include a statement of the
reasons for such inability and the amount of Product affected.
(d) Except in the case of Force Majeure (in which case the
provisions of Section 10 shall apply), in the event the parties are unable to
agree on a substituted delivery schedule, Purchaser shall have the right to
have Product manufactured by parties other than Seller or to undertake
manufacture itself, but only if Product can be obtained more expeditiously from
an alternative source and only in such amounts and for such periods necessary
to make up the difference between the amounts required by Purchaser hereunder
and only for such periods Seller is unable to timely supply Product to
Purchaser. In that event, Seller agrees to provide Purchaser or its nominee
with all technical assistance necessary for the manufacture of Product.
(e) In accordance with Purchaser's policy, Seller must obtain
written approval to purchase more than 50% of the annual requirement for any
component item.
4. PRICING: MATERIALS
(a) The price for Product ("Price") supplied pursuant to this
Agreement shall be determined as set forth in Exhibit B.
(b) The provisions relating to responsibility and payments
regarding purchase and sale of Materials shall be as set forth in Exhibit B.
(c) Seller represents and warrants that it has entered into
written commercially satisfactory arrangements pertaining to the Materials and
Purchaser, when it acquires title to and ownership of such Materials in
accordance with Section 7 of this Agreement, shall have all the rights and
benefits of Seller pursuant to such agreements as if it were Seller. Seller
agrees to provide Purchaser with copies of such bailment agreements.
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5. ADMINISTRATIVE SERVICES: EQUIPMENT RENTAL
(a) Seller will lease from Purchaser all of Purchaser's
manufacturing equipment that is, as of the date hereof, located at the
Manufacturing Facility (the "Equipment") in order for Seller to perform its
obligations hereunder, for $1 per month.
(b) Seller and Purchaser agree that the Equipment shall be located
in and remain in the Manufacturing Facility at all times, at no cost to
Purchaser therefor. Seller will not utilize the Equipment for any purpose other
than to manufacture Product or for any other use that the parties shall agree
to in writing. The Equipment may not be moved or relocated outside of the
Manufacturing Facility by Seller without Purchaser's prior written consent.
Seller agrees that it shall not impair the right, title or interest of
Purchaser in and to the Equipment, nor shall allow any lien or other
encumbrances to be levied thereon,
(c) Seller will operate and maintain the Equipment in accordance
with past practices. Seller agrees to provide routine daily maintenance to the
Equipment. Any capital expenditures required in connection with production of
Product hereunder shall be subject to Purchaser's approval, which shall not be
unreasonably withheld and Purchaser shall be liable for all such capital
expenditures.
(d) Upon exercise of Purchaser's rights under Section 2 (d),
Purchaser may remove Equipment from the Manufacturing Facility from time to
time upon reasonable notice to Seller, all costs of removal and transporting of
Equipment to be borne by Purchaser; provided that after any such removal
sufficient Equipment remains at the Manufacturing Facility to enable Seller to
perform its production obligations hereunder; provided further that in the
event of any such removal, the Direct Labor Cost and Overhead Cost per Case of
Product shall be increased to the extent necessary to reflect Seller's
increased costs arising from any such removal during the period from
commencement of any such removal to expiration or termination of this Agreement
pursuant to Section 6 or Section 17.
(e) Upon termination of this Agreement, the lease provided for in
Section 5(a) shall terminate and Purchaser shall, as soon as practicable
thereafter but in no event later than 30 days after termination of this
Agreement, remove the Equipment from the Manufacturing Facility. In the event
such Equipment has not been removed within such 30 day period, beginning on the
next day, Purchaser shall pay rent to Seller for the use of Manufacturing
Facility at the rate of $27,000 per month.
(f) In the event of the removal of Equipment pursuant to Section
5(d) or 5(e), Purchaser shall pay all costs of removal and transporting of the
Equipment and all costs to repair any damage to the Manufacturing Facility
caused by removal of the Equipment, which repairs shall include the patching
and filling of holes and repair of any structural damage. All repairs shall be
completed within 30 days following completion of equipment removal. In the
event repairs are not completed within such 30 day period, beginning on the
31st day, Purchaser shall pay rent to Seller at the rate of $27,000 per month
until said repairs are completed.
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6. TERM OF AGREEMENT
The term of the Agreement shall be twenty-four (24) months, commencing
on April 1, 1997 and expiring on March 31, 1999 (the "Initial Term"). Purchaser
will be provided the opportunity to discuss with Seller its labor contract
strategy and shall be allowed to review and approve contract strategy and
contract proposals prior to renewal. Seller will use its best efforts to
complete the renewal of its union contract and building lease by September 15,
1998. Purchaser shall have the right, exercisable at its option, to extend the
term of this Agreement for an additional period of twenty-four (24) months upon
180 days prior written notice to Seller (the "Option"), to be given no later
than September 30, 1998.
7. DELIVERIES: TITLE AND RISK
(a) Title to, ownership of and risk of loss with respect to all
Materials purchased by Seller shall remain with Seller until purchased by
Purchaser as described in Exhibit B hereto, and upon such purchase, title to
and ownership of all such Materials shall pass to Purchaser; provided, however,
that, except as expressly provided herein, risk of loss shall at all times
remain with Seller and Seller shall be liable for any loss of or damage to the
Materials including, but not limited to, any shortages in the Materials while
in the possession of Seller or Seller's bailees' possessions, subject to the
provisions of Section 7 of Exhibit B.
(b) The parties agree that Purchaser is hereby authorized to file
one or more financing statements, continuation statements or other documents
for the purpose of perfecting, confirming, continuing, enforcing or protecting
Purchaser's ownership interest in the Materials with or without the signature
of Seller.
(c) Shipments shall be made on the approximate date or dates
reasonably specified by Purchaser provided orders are received (and a delivery
schedule approved) by Seller at least thirty (30) days before such specified
date(s).
(d) All deliveries of Product purchased and sold hereunder shall
be F.O.B. the Manufacturing Facility.
(e) Risk of loss with respect to all Product purchased and sold
hereunder shall remain with Seller until delivery to a carrier at the
Manufacturing Facility as provided in Section 7 (d). Title to and ownership of
all Product (other than the Materials) and risk of loss with respect to such
Product purchased hereunder will pass to Purchaser upon delivery to the carrier
at the Manufacturing Facility.
8. PAYMENT TERMS
Payment of the Price of Product produced hereunder shall be made by
Purchaser within twenty (20) days from date of invoice. Seller shall invoice
Purchaser weekly based on actual production of Product in the week preceding
the date of such invoice. Invoices shall be
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submitted to Purchaser by facsimile transmission on the first business day of
each week, and no confirming copy of the invoice shall be required to be mailed
to Purchaser.
9. MATERIALS AND PRODUCT AT TERMINATION
(A) At the time of expiration or termination of this Agreement
pursuant to Section 2(d), 6 or 17:
(a) Purchaser shall purchase from Seller, at actual cost, all
Materials (i) in Seller's possession at such time or (ii) that are subsequently
delivered to Seller by the supplier thereof, in each case that Seller has
purchased pursuant to Section 1 of Exhibit B that Purchaser has not previously
purchased pursuant to the terms of Exhibit B;
(b) Purchaser shall purchase from Seller (i) all inventories of
finished Product manufactured hereunder that have not theretofore been
delivered or invoiced to Purchaser and (ii) all Product for which Seller has
outstanding orders at such time from Purchaser;
(c) Purchaser shall pay to Seller all amounts due hereunder less
the aggregate amount paid by Purchaser for Materials pursuant to Exhibit B
hereto; and
(d) Purchaser shall assume all obligations of Seller under or in
respect of any outstanding orders or agreements made by Seller pursuant to
Section 1 of Exhibit B for the purchase of Materials hereunder; provided that,
in the case of clauses (a) and (b) of this Section 9, such Materials and
inventories of finished Product are usable and in good order and salable
condition and can be used by Purchaser in future production of its products.
(B) Inventories of finished Product and Materials and work in
progress shall be within normal customary levels at the expiration of this
Agreement. The parties shall consult with each other from time to time prior to
expiration of this Agreement in order to minimize such inventory and work in
progress.
10. FORCE MAJEURE
Neither party shall be liable to the other party for any delay or
default in performance where occasioned by any cause of any kind or extent
beyond its reasonable control including, by way of example, but not limitation,
any act of God, any act, regulation or law of any government, war, civil
commotion, destruction of production facilities or materials by fire,
earthquake or storm, labor disturbance, epidemic, equipment breakdown or
failure, or failure of suppliers, public utilities or common carriers ("Force
Majeure"). The party claiming relief hereunder shall notify the other party in
writing of the Force Majeure causing delay or default in performance. Each
party shall take reasonable action within its control to alleviate the Force
Majeure causing delay or default in performance. During any period in which any
Force Majeure prevents Seller from producing or delivering Product in
accordance with the terms of this Agreement, Purchaser shall be entitled to
purchase Product from any other Person but only for the duration of such
period, provided that as soon as Seller notifies
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Purchaser that Seller is able to resume performing its obligations pursuant to
this Agreement, (i) Seller's rights under Section 2 shall be deemed thereupon
immediately reinstated in full and (ii) Purchaser shall forthwith resume
purchasing Product from Seller and shall otherwise perform its obligations in
accordance with the terms of this Agreement and Purchaser shall forthwith cease
to purchase Product from any other Person.
11. TRADEMARKS
(a) Purchaser and Seller agree that Purchaser is, and shall be,
the owner of all Intellectual Property Rights relating to Product. Seller shall
not make any claim of ownership in or to the foregoing. Title to any other
trademarks, or applications filed thereon, relating to Purchaser's sale of
Product shall reside in Purchaser. Nothing in this agreement shall constitute
Seller in any way as owner, part owner or licensee of the trademarks except to
the extent necessary to perform Seller's obligations hereunder. Seller shall
make only that limited use of the Intellectual Property Rights in
manufacturing, packaging and sale of Product, as provided for herein, or as
Purchaser in the future may direct in writing. Seller agrees that it will
neither take nor direct any action other than as provided herein, or as
Purchaser may from time to time request in writing, which would impair, the
rights and interests of Purchaser in Purchaser's Intellectual Property Rights
in and to Product. Except as may be otherwise provided herein, upon termination
or cancellation of the Agreement, Seller shall discontinue and make no further
use of the Intellectual Property Rights with respect to Product. Seller shall
not adopt, use, apply for registrations, register or own any such trademarks or
any marks confusingly similar thereto with respect to Product, in any country
of the world.
(b) Purchaser represents and warrants as of the date hereof, and
shall be deemed to represent and warrant as of each date that Product is
delivered hereunder, that it has, as of and since the date hereof, not granted,
conveyed, sold, assigned, transferred or otherwise disposed of to any Person,
any Intellectual Property Rights in and to any Product.
12. COMPLIANCE WITH LAWS
(a) Seller shall manufacture, package, label, store and load for
shipment Product, maintain the Manufacturing Facility and dispose of waste and
other by-products of manufacture and packaging in conformity with all federal,
state and local laws, rules and regulations applicable thereto, including, but
not limited to, the federal Food Drug and Cosmetic Act, as amended, the
Consumer Product Safety Act, as amended, and the Fair Labor Standards Act of
1938, as amended (collectively "Laws"), except that Purchaser shall be
responsible for designing and maintaining labels that comply with such Laws.
Seller warrants that Product is not adulterated within the meaning of the
Federal Food, Drug and Cosmetic Act, and are articles which, under said Act,
may be introduced into interstate commerce.
(b) Seller shall, within twenty four (24) hours, notify Purchaser
of any inspection of the Manufacturing Facility where Product is manufactured
by the United States Food and Drug Administration or any other federal, state
or local government agency and shall furnish Purchaser with copies of all
reports and analyses relating to such inspections where the
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inspections involve Product, its ingredients or the Manufacturing Facility used
to manufacture Product; provided that any failure so to notify or furnish shall
not constitute a breach of this Agreement. If such inspections are scheduled or
conducted with advance notice, Seller shall advise Purchaser and Purchaser
shall have the option to attend at the time of such inspection. Duplicate
samples of Product given to government agents will be provided to Purchaser, as
will duplicates of photographs, if any, taken during the inspection.
(c) Seller shall be responsible for all licenses and permits, and
fees and charges with respect thereto (which fees and charges will be reflected
in Overhead Cost set forth in Schedule 1 to Exhibit B), required by applicable
Federal, state and local law.
13. PRODUCT RECALLS
(a) In the event of a recall of Product required by a governmental
agency or authority of competent jurisdiction or if recall of Product is
mutually deemed advisable by Purchaser and Seller, such recall shall be
promptly implemented and administered by Purchaser in a manner which is
appropriate and reasonable under the circumstances and in conformity with
accepted trade practices. In the event a recall is required because Product
fails to conform with the production standards and practices mutually agreed
upon or the warranties of Seller set forth in this Agreement, or at the express
request of Seller, Seller shall, subject to Section 15(c), reimburse Purchaser
for its reasonable cost and expenses in administering the recall, and the cost
of Product and reasonable freight for all amounts of Product recalled. In the
event that a recall is required as a result of Purchaser's breach of its
obligations hereunder or due to Purchaser's negligence or fault, all reasonable
costs and expenses incurred by Seller in connection therewith shall be borne by
Purchaser.
(b) Seller shall, if requested by Purchaser, obtain (to the extent
obtainable) product recall insurance with respect to Product produced hereunder
in an amount (per occurrence and in the aggregate) (the "Product Recall
Insurance Coverage") agreed upon by the parties with an insurer of recognized
financial responsibility, and shall cause Purchaser to be included as a
co-insured under such insurance; provided that if no such insurance is
obtained, the amount of the Product Recall Insurance Coverage shall be deemed
to be zero. Purchaser shall pay the insurance premium expense for such
insurance and any deductible with respect to any claim under such insurance.
14. WARRANTY: INSURANCE
(a) Subject to Section 15(c), Seller warrants that Product sold
hereunder (i) shall be in accordance with the production standards and
practices mutually agreed upon and (ii) is merchantable, free from defects in
material and workmanship and fit for the purposes for which it is intended.
(b) Purchaser shall inspect each shipment of Product to determine
whether Product is as warranted herein. Purchaser shall send Seller a written
notice of objections to any shipment ("Rejected Shipment") that fails to meet
such warranties within fifteen (15) days of
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receipt of such shipment from the carrier. Such notice shall specify the
particulars of Purchaser's finding. In the absence of any such notice within
said time, the shipment shall be deemed to comply with such warranties.
Purchaser shall follow Seller's instructions as to the return of the Rejected
Shipment to Seller, return to be at Seller's expense if the Rejected Shipment
is determined to have been validly rejected Seller shall promptly provide
Purchaser with replacement Product that conforms to such warranties, which
replacement Product (and shipping expenses with respect thereto) shall be at
Seller's expense if the Rejected Shipment is determined to have been validly
rejected and shall be at Purchaser's expense if invalidly rejected. Seller
shall assume all liability for all validly rejected Product and validly
rejected Product shall be destroyed, reworked or salvaged (with Purchaser's
written consent) by Seller at its sole cost and expense and Seller shall
furnish Purchaser with a certificate affirming that same has been done. Any
such destruction shall conform to all applicable federal, state and local laws
and rules and regulations thereunder. Purchaser's right to inspect and right
to replacement of Product not conforming to such warranties shall not preclude
Purchaser from exercising or enforcing any other rights or remedies it may have
to redress any loss or damage resulting from Seller's failure to supply Product
conforming to such warranties. If Seller shall disagree with the finding by
Purchaser that such shipment fails to meet such warranties, such dispute shall
be resolved by an independent laboratory selected jointly by the parties. All
fees and disbursements incurred in connection with such determination shall be
borne by the party ultimately determined to have incorrectly judged whether
such shipment shall have met such warranties.
(c) Seller agrees to keep in force All Risk Property Insurance
with respect to the Materials owned by Purchaser while such Materials are in
Seller's custody, care and control with an insurer of recognized financial
responsibility and shall furnish Purchaser with a certificate attesting to such
insurance. The insurance premium with respect thereto will be reflected in
Overhead Cost set forth in Schedule 1 to Exhibit B and Purchaser shall pay any
deductible with respect to any claim under such insurance.
(d) Seller agrees to obtain and keep in force Products Liability
Insurance with respect to Product in an amount not less than $10,000,000 (per
occurrence and in the aggregate) with an insurer of recognized financial
responsibility, and shall cause Purchaser to be included as an additional
insured under such insurance. The insurance premium with respect thereto will
be reflected in Overhead Cost set forth in Schedule 1 to Exhibit B, and
Purchaser shall pay any deductible with respect to any claim under such
insurance.
15. INDEMNIFICATION: INFRINGEMENT
(a) Subject to Section 15(c), Seller shall indemnify and hold
Purchaser, its directors, officers, employees and agents harmless from and
against all liabilities, damages, losses or expenses (including reasonable
attorneys' fees and expenses) ("Damages") incurred or suffered by Purchaser
arising out of or in connection with (i) any injury, claim or damage resulting
from or caused by the manufacture of Product, operation of the Manufacturing
Facility or any Product Defect with respect to any Product, including injuries
to persons and property arising from such Product Defect or (ii) any breach by
Seller of its warranties,
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covenants or agreements hereunder, except to the extent such Damages are caused
by the gross negligence or willful misconduct of Purchaser or any breach by
Purchaser of its warranties, covenants or agreements hereunder; and provided
that Seller shall have no such indemnification obligation with respect to
Damages incurred or suffered by Purchaser arising out of or as a result of any
Force Majeure.
(b) Subject to Section 15 (c), Purchaser shall indemnify and hold
Seller, its directors, officers, employees and agents harmless from and against
all Damages incurred or suffered by Seller arising out of or in connection with
(i) any breach by Purchaser of its representations, warranties, covenants or
agreements hereunder or (ii) infringement of any Intellectual Property Right
arising from the manufacture by Seller or sale by Seller to Purchaser of any
Product hereunder, except to the extent such Damages are caused by the gross
negligence or willful misconduct of Seller or any breach by Seller of its
warranties, covenants or agreements hereunder; and provided that Purchaser
shall have no such indemnification obligation with respect to Damages incurred
or suffered by Seller arising out of or as a result of any Force Majeure.
(c) Notwithstanding any provision in this Agreement to the
contrary, (i) the maximum aggregate liability of either party hereto to the
other party hereto for any Consequential Damages shall not exceed the CD Limit,
(ii) the maximum aggregate liability of Seller arising from, relating to or in
connection with any recall of Product shall be limited to the amount of the
insurance proceeds actually received by Seller under the policy referred to in
Section 13 (b) and (iii) the maximum aggregate liability of Seller arising
from, relating to or in connection with any injury, claim or damage resulting
from or caused by any Product Defect with respect to any Product, including
injuries to persons and property arising from such Product Defect, shall be
limited to the amount of the insurance proceeds actually received by Seller
under the policy referred to in Section 14 (c).
(d) In the event that a party hereto (the "Indemnifying Party")
makes any payment pursuant to its indemnification obligations under this
Agreement, it shall be subrogated to all rights of the party indemnified
hereunder (the "Indemnified Party") to pursue any claim to receive payment or
other consideration from any other third party which may be liable with respect
to any claim, suit, action or proceeding for which indemnification was
provided. The Indemnified Party shall execute and deliver such instruments and
agreements and take such other action as may be required to subrogate the
Indemnifying Party to such Indemnified Party's rights to receive such payment
or consideration.
16. ASSIGNMENT
Neither Seller nor Purchaser may assign its rights or delegate its
performance hereunder without the prior written consent of the other party, and
any attempted assignment or delegation without such consent shall be void;
provided that this Agreement may be assigned or otherwise transferred (a) by
Seller to DSD, Inc. ("DSD") provided that DSD expressly assumes in Writing all
of Seller's obligations hereunder, (b) by Purchaser to an affiliate of
Purchaser, provided that such affiliate expressly assumes in writing all of
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Purchaser's obligations hereunder, which, however, shall not relieve Purchaser
from any obligations hereunder, and (c) by either party to (i) any purchaser or
successor to all or substantially all of the business of Seller or Purchaser
that is responsible for purchasing or selling Product, as the case may be,
hereunder or any successor corporation into which it may merge or with which it
may be consolidated or to which it may transfer all or substantially-all of its
assets, provided in each case that such purchaser or successor corporation
expressly assumes in writing all of the obligations hereunder of the assignor
or transferor, which, however, shall not relieve either party hereto of any
obligations hereunder.
17. DEFAULT
If either party shall be in default of any material obligation
hereunder, the other party may terminate this Agreement by giving thirty (30)
days' written notice to the party in default, specifying the basis for
termination, provided that if within thirty (30) days after receipt of such
notice the party in default shall remedy the conditions forming the basis for
termination, such notice shall cease to be operational and this Agreement shall
continue in full force. The right of either party to terminate this Agreement,
as herein above provided, shall not be affected in any way by its waiver of, or
failure to take action with respect to, any previous defaults.
Notwithstanding the foregoing, the occurrence of any of the following
events with respect to a party hereto shall be deemed to constitute a default
which shall give rise to an immediate right of the other party to terminate
this Agreement without notice:
(a) insolvency, the making of a general assignment for the benefit
of creditors, the suspension of business (except due to Force Majeure)
or the commission of any act amounting to a business failure, any
change in, or termination of, a party's corporate existence (except a
merger, consolidation or reorganization in which the obligations of
such party hereunder are expressly assumed in writing by the surviving
corporation);
or
(b) the institution of bankruptcy, reorganization, liquidation or
receivership proceedings by or against a party hereto and, if
instituted against such party, its consent thereto or the failure
to cause such proceedings to be discharged within thirty (30) days
thereafter.
18. RIGHTS UPON TERMINATION
Upon termination of this Agreement, Seller shall (i) not produce,
distribute or market any Product under any Intellectual Property Right owned by
Purchaser or make any further use of such Intellectual Property Right and (ii)
deliver to Purchaser all copies of Product's production standards and
practices, all technical data and any other know-how, documentation or
information used in connection with the manufacture and packaging of Product
hereunder ("Information") and shall, without the requirement of additional
consideration, cooperate with
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and assist Purchaser with respect to the execution of such documents as
Purchaser shall reasonably request to confirm Purchaser's ownership of and
rights in such Information.
19. ACCESS
(a) Seller shall inspect, according to mutually agreed upon
specifications, the Materials received from third parties on receipt thereof,
or within five (5) business days after receipt, but, in any event, prior to use
by Seller, to ensure that there has been no substitution, adulteration or
deterioration of such Materials while en route to Seller. Seller shall
immediately notify Purchaser of any such defects discovered in any shipment of
Materials received by Seller and shall not use any such defective Materials in
the manufacture and packaging of Product.
(b) Seller shall permit Purchaser, its auditors and other agents
to visit and inspect the Manufacturing Facility upon reasonable notice to
verify that Product is produced in accordance with agreed upon production
standards and practices and that Seller is otherwise in compliance with the
provisions of this Agreement.
(c) The parties agree that in case of an emergency affecting the
quality of Product hereunder, a representative of Purchaser shall have
reasonable access, upon notice to Seller, to those areas of Seller's premises
concerned with or affecting Product, and Seller shall consult with Purchaser in
dealing with such emergency.
(d) Seller shall prepare and maintain at all times books of
account and records (specifically including the originals or copies of
documents supporting entries in such books of account) relating to the
manufacture, packaging and inventories of Product in accordance with generally
accepted accounting principles. Upon reasonable notice to Seller, Purchaser,
through its duly authorized representatives, shall have the right, during
normal business hours, to inspect at the Manufacturing Facility all such books,
records and supporting documentation and to verify that the price of Product is
in accordance with the terms and conditions of this Agreement and may make
copies thereof and take extracts therefrom.
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20. MISCELLANEOUS
(a) Notices. All notices, statements or other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered by (i) overnight courier or mail or (ii) telecopier with confirming
copy mailed, first class postage prepaid, to each of the parties hereto at the
following addresses or at such other address as may be designated by such party
by notice in writing sent in like manner.
For Purchaser:
International Home Foods, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
ATTN: Xxxxx Xxxx, Xx. V.P. Operations
Telecopier:(000) 000-0000
For Seller:
Roseland Manufacturing, Inc.
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
ATTN: Xxxxx Xxxxxx
Telecopier: (000) 000-0000
(b) Entire Agreement; Inconsistency. This Agreement and the
exhibits and schedules hereto contain all of the terms and conditions of sale
and purchase of Product and constitute the complete understanding of the
parties. No modification or extension of or release from any provision hereof
shall be effected by mutual agreement, acknowledgment, Purchaser's purchase
order forms, or otherwise, unless the same shall be in writing, signed by both
parties hereto and specifically described as an amendment or extension of this
Agreement. If there is any inconsistency between the provisions of this
Agreement and any invoice, purchase order or other document delivered hereunder
or in connection herewith, the provisions of this Agreement shall control.
(c) Choice of Law; Paragraph Headings. This Agreement and
performance hereunder shall be construed and interpreted according to the laws
of the State of New Jersey (without regard to its conflict of laws provisions).
The paragraph headings used herein have been inserted for convenience only and
shall not be used in any way to construe or interpret this Agreement or
performance hereunder.
(d) Independent Contractors. The parties hereto are independent
contractors. Nothing in this Agreement is intended or shall be deemed to
constitute a partnership, agency, franchise or joint venture relationship
between the parties. Neither party shall incur any debts or make any
commitments for the other, except to the extent, if at all, specifically
provided herein.
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(e) No waiver. Either party's failure to insist upon strict
performance of any provision of this Agreement shall not be deemed to be a
waiver thereof. No waiver shall be effective unless specifically made in
writing and signed by a duly authorized representative of Seller or Purchaser,
whichever party is granting such waiver.
(f) Severability. If any provision of this Agreement shall be
illegal or unenforceable, the remainder of this Agreement shall remain in force
and not be affected thereby.
(g) Counterparts: Effectiveness. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have
received a counterpart hereof signed by the other party hereto.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first above written.
ROSELAND MANUFACTURING, INC.
By: /s/ XXXXX XXXXXX
-------------------------------------
Name: Xxxxx Xxxxxx
Title: President
INTERNATIONAL HOME FOODS, INC.
By: /s/ XXXXX XXXX
-------------------------------------
Name: Xxxxx Xxxx
Title: Sr. Vice President Operations
The undersigned hereby unconditionally and irrevocably guarantees to
International Home Food Products, Inc. the performance and observance by
Roseland Manufacturing, Inc. of every warranty, covenant and agreement of
Roseland Manufacturing, Inc. to be performed and observed by Roseland
Manufacturing, Inc. contained in this Agreement.
B&G FOOD HOLDINGS, INC.
By: /s/ XXXXX XXXXXX
-------------------------------------
Name: Xxxxx Xxxxxx
-----------------------------------
Title: President
----------------------------------
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Exhibit B to Jams Manufacturing Agreement
Materials: Pricing
1. Purchasing of Materials. Subject to Purchaser's authorization, which
shall be timely given, Seller shall order and purchase all Materials, arrange
delivery of all Materials and make payment of all costs of Materials directly
to Seller's suppliers. Any purchaser contract which is greater than 50% of the
annual requirement must be approved by Purchaser in writing.
Seller and Purchaser agree that on a monthly basis Purchaser shall
purchase the Materials from Seller. Seller shall pay to Purchaser or Purchaser
shall pay to Seller, as the case may be, for Materials used during each month
by Seller to manufacture and package the Product and/or Materials purchased by
Seller during each such month (or at such other times as the parties may
mutually agree).
2. Materials Inventory. Seller will perform a physical inventory of
Materials each April and October during each year of the Term and upon
termination of this Agreement in order to reconcile (i) the actual cost of
Materials utilized in the production of Product delivered to Purchaser during
the period (the "Inventoried Period") since the last such inventory (or since
the start of the Term if no such prior inventory has been performed) and (ii)
the amount paid by Purchaser there for.
3. Price of Product. The Price of Product per Case at any time shall be
an amount equal to the sum of (i) the Purchaser approved Overall Cost of such
Product at such time plus (ii) $0.2025 (the "Markup") of the Overall Cost of
such product excluding industrial and bulk products for which a separate
"Markup" schedule has been defined in Schedule 1 to Exhibit B.
4. Change in Standard Costs. At the beginning of each calendar year, the
Standard Cost of Materials, Direct Labor Cost and overhead Cost set forth in
Schedule 1 to this Exhibit B will be changed by Seller prospectively to reflect
expected actual costs on a going forward basis. Any change in any of the above
costs will first be reviewed and approved by Purchaser, in writing, which
approval shall not be unreasonably withheld.
5. Materials Price Adjustment. At the end of each monthly accounting
period, Seller shall calculate the amount (the "Materials Price Adjustment")
equal to the aggregate of the actual price paid for Materials (excluding for
purposes of this calculation the Markup with respect to such Materials) during
such month minus the aggregate standard cost of such Materials. If the
Materials Price Adjustment is greater than zero, Purchaser shall pay to Seller
the amount of the Materials Price Adjustment. If the Materials Price Adjustment
is less than zero, Seller shall pay to Purchaser the absolute value of the
amount of the Materials Price Adjustment.
6. Materials Efficiency Adjustment. At the time of each inventory
performed pursuant to Section 3 of this Exhibit B, Seller shall calculate the
amount (the "Materials Efficiency adjustment") equal to (A) (i) the actual
aggregate quantity of Materials utilized in producing Product during the
Inventoried Period minus (ii) the aggregate quantity of Materials budgeted to
be utilized (based on the number of Cases actually produced) during such
period, multiplied by (B) the Standard Cost of Materials during such period.
If the Materials Efficiency
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Adjustment is greater than zero, Purchaser shall pay to Seller one-half of the
amount of the Materials Efficiency Adjustment. If the Materials Efficiency
Adjustment is less than zero, Seller shall pay to Purchaser one-half of the
absolute value of the amount of the Materials Efficiency Adjustment.
7. Production Volume Adjustment. (a) Following the end of each monthly
accounting period (each a "Period End") in the Term, Seller shall calculate the
amount (the "Labor and Overhead Absorption Variance") equal to the difference
between (i) the aggregate cumulative Direct Labor Cost plus Overhead Cost
billed to Purchaser with respect to Product produced during the period (the
"Relevant Period") minus (ii) the aggregate cumulative Direct Labor Cost and
Overhead Cost budgeted to be billed to Purchaser during the Relevant Period. If
the Labor and Overhead Absorption Variance is less than zero, Purchaser shall
pay to Seller the absolute value of the amount of the Labor and Overhead
Absorption Variance.
(b) At the time of each inventory performed pursuant to Section 3 of this
Exhibit B, Seller shall calculate the amount (the "Cumulative Labor and
Overhead Absorption Variance") equal to the aggregate of the amounts of the
Labor and Overhead Absorption Variance calculated for each monthly accounting
period (pursuant to Section 7 (a) of this Exhibit (B) since the last such
inventory (or since the start of the Term if no such prior inventory has been
performed). Based on such calculation:
(I) If the Cumulative Labor and Overhead Absorption Variance is less than
zero, Seller shall calculate the amount (the "Under Budgeted Sales Adjustment")
equal to (T) direct labor and overhead incurred in producing Product hereunder
during the Inventoried Period minus (B) the aggregate Direct Labor Cost and
Overhead Cost budgeted to be incurred during such period. If the amount of the
Under Budgeted Sales Adjustment is greater than zero, Purchaser shall pay to
Seller the amount of the Under Budget Sales Adjustment. If the amount of the
Under Budgeted Sales Adjustment is less than zero, Seller shall pay to
Purchaser the absolute value of the amount of the Under Budgeted Sales
Adjustment.
(II) If the Cumulative Labor and Overhead Absorption Variance is greater
than zero, Seller shall calculate the amount (the "Over Budgeted Sales
Adjustment") equal to (A) the aggregate actual cost of direct labor and
overhead incurred in producing Product hereunder during the Inventoried Period
minus (B) the aggregate Direct Labor Cost and Overhead Cost billed to Purchaser
with respect to Product produced hereunder during such period. If the amount of
the Overbudgeted Sales Adjustment is greater than zero, Purchaser shall pay to
Seller the amount of the Over Budgeted Sales Adjustment. If the amount of the
Over Budgeted Sales Adjustment is less than zero, Seller shall pay to Purchaser
the absolute value of the amount of the Over Budgeted Sales Adjustment.
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