Exhibit 10.7
SPICES SUPPLY AGREEMENT
THIS AGREEMENT is made and entered into as of March 19, 1993 by
and between Xxxxx & Xxxxxxxxxxxx, Inc., a Delaware corporation (hereinafter
referred to as "Seller"), and X. Xxxxxxx, Inc., a New Jersey corporation
(hereinafter referred to as "Purchaser").
WITNESSETH:
WHEREAS, Purchaser desires to purchase Product from Seller, and
Seller desires 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.
"Annual Case Volume" with respect to any calendar year during the
Term, means the number of 12-jar equivalent Cases of Product purchased hereunder
during such calendar year; provided that the Annual Case Volume for calendar
year 1993 shall be deemed to include the aggregate number of 12-jar equivalent
Cases of Product manufactured by Seller from January 1, 1993 to the date hereof.
A "Case" of any finished Product means the stock-keeping-unit (sku)
of such finished Product.
"CD Limit" means the amount equal to (i) the aggregate Price paid by
Purchaser for Product hereunder less
(ii) the aggregate actual cost of Materials, direct labor and overhead incurred
by Seller in producing such Product, in each case through the date of
termination or expiration of this Agreement.
"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 with current practices in effect for
allocation of such labor cost to all products manufactured by Seller.
"DSD" means DSD, Inc., a Delaware corporation.
"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, labelling and other indicia of ownership, or any other
similar type of proprietary intellectual property right.
"Manufacturing Facility" means Seller's manufacturing facility
located in Hurlock, Maryland.
"Materials" means all materials and ingredients necessary for the
manufacture, labelling, packing and storage of Product.
"Materials Cost" means the cost of Materials purchased by Seller to
be utilized in the production of Product.
"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.
"Person" means an individual, corporation, partnership, association,
trust or other entity or organization.
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"Product" means any and all ready-to-use, shelf-stable, wet spice
products, 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 labelling or packaging of any Product.
"Quarter" means a period of three successive calendar months, and
"Quarterly" with respect to any event means that such event will occur once
within any Quarter.
"Reference Bank" means Xxxxxx Guaranty Trust Company of New York.
"Sales and Distribution Agreement" means the Sales and Distribution
Agreement dated the date hereof between Purchaser and DSD.
"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
set forth in Schedule 1 to Exhibit B hereto.
"Term" shall have the meaning assigned to such term in Section 5.
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), Purchaser hereby grants
to Seller the right, during the Term, to be the sole manufacturer and supplier
of Product for Purchaser and its Affiliates.
(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 past 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
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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) From and after the third anniversary of the date hereof,
Purchaser may cease to use Seller as its sole manufacturer of Product; provided
that (i) Purchaser shall give Seller at least 90 days' written notice of the
date (the "Exclusivity Cessation Date") from which Purchaser intends to cease
using Seller as its sole manufacturer of Product, (ii) the Exclusivity Cessation
Date shall be the last day of a calendar month and (iii) on the Exclusivity
Cessation Date, Purchaser shall pay to Seller an amount equal to the present
value at the Exclusivity Cessation Date of a future stream of monthly payments
of $100,000 that would be made on the last day of each calendar month remaining
in the Term of this Agreement from such date, discounted on a monthly basis
using the Reference Bank's prime rate in effect at such date.
3. PURCHASE ORDERS
(a) Purchaser shall provide Seller with a nonbinding best estimate
of its Quarterly requirements of Product from Seller no later than forty-five
(45) days prior to the beginning of each calendar Quarter during the Term of
this Agreement, commencing with the calendar Quarter beginning July 1, 1993.
Firm monthly purchase orders shall be placed by Purchaser thirty (30) days prior
to requested date of delivery; provided that Seller will use its reasonable
efforts to accommodate any purchase orders not placed in accordance with the
provisions of this Section 3(a). Each firm order shall be in the form of a
written purchase order, signed by Purchaser's duly authorized representative and
shall authorize Seller to manufacture such quantities of the Product.
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(b) In the event Seller, within five (5) business days after the
receipt of an order, notifies Purchaser of its inability to meet such order,
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.
(c) 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 this
alternative source and only in such amounts and for such periods necessary to
make up the difference between the amount that Seller manufactures and 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.
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 reimbursement for
purchasing of Materials shall be as set forth in Exhibit B.
5. TERM OF AGREEMENT
The term of this Agreement shall commence on the date hereof and
expire on the fifth anniversary of the date hereof (the "Term"), unless earlier
terminated pursuant to the provisions hereof.
6. CHANGE OF CONTROL
If at any time during the Term of this Agreement Beledia N.V. and/or
its Affiliates ceases to own, directly or indirectly, a majority of the voting
stock of Seller and does not otherwise control Seller, in each case as a result
of an arms length transaction with an unrelated third party, Seller shall have
the right, exercisable at Seller's option, to terminate this Agreement upon at
least six months' written notice to Purchaser of the effective date of such
termination
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(the "Termination Date"), which Termination Date shall fall on the last day of a
calendar month. In the event that Seller exercises such right of termination,
Purchaser shall be required to pay to Seller on the Termination Date an amount
equal to the present value at such date of a future stream of monthly payments
of $100,000 that would be made on the last day of each calendar month remaining
in the Term of this Agreement from such date, discounted on a monthly basis
using the Reference Bank's prime rate in effect at such date.
7. DELIVERIES; TITLE AND RISK
(a) Shipments shall be made on the 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).
(b) All deliveries of Product purchased and sold hereunder shall be
F.O.B. Seller's Manufacturing Facility.
(c) Title to, ownership of and risk of loss with respect to all
Product purchased and sold hereunder shall remain with Seller until delivery to
the carrier at the Manufacturing Facility as provided in Section 7(b). Title to,
ownership of and risk of loss with respect to all Product purchased and sold
hereunder will pass to Purchaser upon delivery to the carrier at the
Manufacturing Facility.
(d) Purchaser will be charged a delivery charge of $0.80 per 100
pound weight of Product shipped by Seller from the Manufacturing Facility to
DSD's distribution warehouse located in Roseland, New Jersey to be distributed
for Purchaser by DSD pursuant to the Sales and Distribution Agreement.
8. PAYMENT TERMS
Payment of the Price of Product sold and delivered by Seller to
Purchaser hereunder shall be made by Purchaser within fifteen (15) days from
date of invoice. Sales of Product hereunder shall be invoiced on the date of
delivery.
9. MATERIALS AND PRODUCT AT TERMINATION
(A) At the time of expiration or termination of this Agreement
pursuant to Section 5, 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
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the supplier thereof, in each case that Seller has purchased pursuant to
paragraph 1(a) of Exhibit B;
(b) Purchaser shall purchase from Seller (i) all inventories of
finished Product manufactured hereunder that have not theretofore been
delivered 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; and
(d) Purchaser shall assume all obligations of Seller under or in
respect of any outstanding orders or agreements made by Seller pursuant to
paragraph 1(a) 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
saleable 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 during the one hundred and
eighty (180) day period 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 Purchaser that Seller is able to
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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
trademark(s), 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 the
federal Food Drug and Cosmetic Act, as
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amended, the Consumer Product Safety Act, as amended, and the Fair Labor
Standards Act of 1938, as amended. 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 use its reasonable efforts to 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 use its reasonable efforts to furnish
Purchaser with copies of all reports and analyses relating to such inspections
where the 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 use its reasonable
efforts so to 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 taken
during the inspection.
(c) Seller shall be responsible for all licenses and permits, and
fees and charges with respect thereto, required by applicable Federal, state and
local law, and for all wages, salaries, fees and commissions due or claimed to
be due by persons in Seller's employ and/or retained by Seller relating to the
manufacture and packaging of Product.
13. PRODUCT RECALLS
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 reimburse Purchaser for its cost 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 costs and expenses incurred in connection therewith shall be borne
by Purchaser.
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14. WARRANTY; INSURANCE
(a) Seller warrants that Product sold hereunder (i) shall be in
accordance with the production standards and practices provided for in Section 2
and (ii) is merchantable, free from defects in material and workmanship and fit
for the purposes for which it is intended.
(b) Purchaser shall have the right to obtain from Seller, prior to
delivery of Product, samples (in reasonable quantity) of such Product to be
delivered hereunder. 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 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 obtain and keep in force Products Liability
Insurance with respect to Product in an
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amount not less than $5,000,000 (per occurrence) with an insurer of recognized
financial responsibility, and shall cause Purchaser to be included as an
additional insured 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 with
respect to or arising out of (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, covenants or agreements hereunder, except to the extent such
Damages are caused by the gross negligence or willful misconduct of Purchaser or
a 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 with respect to or arising out of (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 a 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,
the maximum aggregate liability of either party hereto to the other party hereto
for any Consequential Damages shall not exceed the CD Limit.
(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
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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 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 (ii) 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.
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:
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(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 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; INSPECTION
(a) Seller shall inspect, according to mutually agreed upon
specifications, the Materials received from third parties on receipt thereof, or
within two (2) business days after receipt, 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.
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(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.
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:
_______________________________
_______________________________
_______________________________
Attention:_____________________________
Telecopier:____________________________
For Seller:
_______________________________
_______________________________
_______________________________
Attention:____________________________
Telecopier:___________________________
(b) Entire Agreement; Inconsistency. This Agreement and the exhibits
and schedules hereto contain all of
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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 York (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.
(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.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first above written.
Xxxxx & Xxxxxxxxxxxx, Inc.
By /s/
--------------------------
Name:
Title:
X. Xxxxxxx, Inc.
By /s/
--------------------------
Name:
Title:
The undersigned hereby unconditionally and irrevocably guarantees to
X. Xxxxxxx, Inc. the performance and observance by Xxxxx & Xxxxxxxxxxxx, Inc. of
every warranty, covenant and agreement of Xxxxx & Xxxxxxxxxxxx, Inc. to be
performed and observed by Xxxxx & Xxxxxxxxxxxx, Inc. contained in this
Agreement.
B&G-DSD Holdings, Inc.
By: /s/
-----------------------
Name:
Title:
16
Exhibit A to Spices Supply Agreement
Listing of Product
See attached listing.
17
XXXXX & XXXXXXXXXXXX, INC.
SPICE PRODUCTION & TRANSFER SUMMARY
BUDGET 1993
file:SPC_BUD
----------------------------------------------------------
Item #
----------------------------------------------------------
1501 Basil/24
----------------------------------------------------------
1505 Oregano/24
----------------------------------------------------------
1506 Basil/24 French/English
----------------------------------------------------------
1508 Red Jalapeno/24
----------------------------------------------------------
1584 Large Cut Garlic/24
----------------------------------------------------------
1587 Chopped Garlic/24
----------------------------------------------------------
1590 Chopped F/E Garlic/24
----------------------------------------------------------
1591 Crushed Garlic/24
----------------------------------------------------------
Total 24 Pack
----------------------------------------------------------
----------------------------------------------------------
1507 Basil/12
----------------------------------------------------------
1508 Oregano/12
----------------------------------------------------------
1515 Green Jalapeno/12
----------------------------------------------------------
1516 Red Jalapeno/12
----------------------------------------------------------
1550 Chopped Garlic 25 oz/12
----------------------------------------------------------
1574 Chopped Garlic 10 oz/12
----------------------------------------------------------
1579 Crushed Garlic/12
----------------------------------------------------------
1580 Chopped Garlic/12
----------------------------------------------------------
1587 Large Cut Garlic/12
----------------------------------------------------------
Total 12 Pack
----------------------------------------------------------
----------------------------------------------------------
1518 Crushed Garlic 25 oz/6
----------------------------------------------------------
1535 Large Cut Garlic 25 oz/6
----------------------------------------------------------
27586 Chopped Garlic 25 oz/6 (Primarque)
----------------------------------------------------------
36584 Chopped Garlic 25 oz/6 (Sak-Dong)
----------------------------------------------------------
[Illegible] Chopped Garlic 25 oz/6
----------------------------------------------------------
Total 6 Pack
----------------------------------------------------------
----------------------------------------------------------
1570 Chopped Garlic 2 Gal
----------------------------------------------------------
28570 Sbarro Garlic 2 Gal
----------------------------------------------------------
Total 2 Gallon
----------------------------------------------------------
----------------------------------------------------------
1577 Chopped 5 Gal (No Pres.)
----------------------------------------------------------
1589 Chopped 5 Gal
----------------------------------------------------------
Total 5 Gallon
----------------------------------------------------------
----------------------------------------------------------
1556 Garlic Pre-Pack (2/587, 2/591)
----------------------------------------------------------
1557 Garlic Pre-Pack (2/584, 2/597)
----------------------------------------------------------
1558 Spice Shipper (3/587, 1/508)
----------------------------------------------------------
1561 Spice Shipper (501/505/508/587)
----------------------------------------------------------
1576 Garlic Pre-Pack (3/587, 1/504)
----------------------------------------------------------
1582 Garlic Pre-Pack (2/584, 2/587)
----------------------------------------------------------
1583 Garlic Pre-Pack (4/567)
----------------------------------------------------------
1593 Spice Shipper (3/587, 1/501)
----------------------------------------------------------
Exhibit B to Spices Supply Agreement
Materials; Pricing
1. (a) At least 30 days prior to the commencement of each calendar
Quarter in the Term (commencing with the Quarter beginning April 1, 1993),
Seller and Purchaser shall review Seller's planned purchases of Materials for
such Quarter, and Purchaser shall have the right to approve such purchases of
Materials. Subject to the preceding sentence, Seller shall order and purchase
all Materials and shall make payment of all costs of Materials directly to
Seller's suppliers.
(b) Seller will perform a physical inventory of Materials at the end
of May and the end of November of each year during the Term 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 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 therefor. At such time, Seller
shall calculate the amount (the "Materials Price Variance") equal to (i) the
price per Case actually paid by Seller for Materials utilized in producing
Product (assuming standard quantity utilized per Case) during such period minus
(ii) the price per Case of Materials used by Seller in determining its Standard
Costs per Case of Materials for such period, and Seller shall calculate the
amount (the "Materials Adjustment") equal to (x) the amount of the Materials
Price Variance per Case multiplied by (y) the number of Cases produced and sold
to Purchaser during such period. If the Materials Adjustment is greater than
zero, Purchaser shall pay to Seller the amount of the Materials Adjustment. If
the Materials Adjustment is less than zero, Seller shall pay to Purchaser the
absolute amount of the Materials Adjustment. It is agreed that there shall be no
adjustment for variance in actual Materials utilization from standard Materials
utilization.
(c) At the expiration of the period ending six months from the date
of this Spices Supply Agreement, and at the expiration of each succeeding six
month period thereafter, the Materials Cost set forth in Schedule 1 will be
changed by Seller prospectively to reflect expected actual costs on a
going-forward basis.
18
2. The Price per Case of Product purchased by Purchaser and
delivered by Seller hereunder in any calendar year during the Term shall be as
follows:
Annual Case Volume Price Per Case
(a) For Annual Case Volume Price per Case = (i) 101.5% of the
from 0 to 726,000: Standard Cost of Materials utilized per
Case as set forth on Schedule 1 hereto
plus (ii) Direct Labor Cost per Case
plus (iii) Overhead Cost per Case, as
set forth on Schedule 1 hereto; and
(b) For Annual Case Volume Price per Case = (i) the sum of (x)
over 726,000: 101.5% of the Standard Cost of Materials
utilized per Case set forth in Schedule
1, plus (y) Direct Labor Cost per Case,
plus (z) Overhead Cost per Case, plus
(ii) 5% of the sum of (a) Direct Labor
Cost per Case plus (b) Overhead Cost per
Case; provided that Overhead Cost in
clauses (i) and (ii) of this Section
2(b) will only include budgeted costs to
be incurred and will not include any
Incremental Contribution. As used
herein, "Incremental Contribution" per
Case shall mean the amount equal to (x)
the Direct Labor Cost per Case plus
Overhead Cost per Case set forth in
Schedule 1 hereto minus (y) the 1993
budgeted Direct Labor Cost per Case plus
Overhead Cost per Case. For purposes of
this Section 2(b), Direct Labor Cost per
Case and Overhead Cost per Case will be
as set forth in Schedule 2 to this
Exhibit B. In December of
19
each calendar year in the Term,
commencing December 1993, Direct Labor
Cost per Case and Overhead Cost per Case
set forth in Schedule 2 will be changed
by Seller on a prospective basis to
reflect actual costs incurred and
expected costs on a going-forward basis;
provided that for purposes of determining Direct Labor Cost and Overhead Cost in
each year during the Term, Seller shall use in such determination of its
Standard Costs an aggregate number of Cases of product produced by Seller during
such year other than Product produced hereunder ("Non-Spice Product") that (i)
is not less than 90% of the number of Cases of Non-Spice Product produced by
Seller in the year immediately preceding such year and (ii) in no event is less
than 80% of the number of Cases of Non-Spice Product budgeted to be produced by
Seller in calendar year 1993; provided further that at the end of each calendar
year in the Term, if the actual number of Cases of Product sold to Purchaser
hereunder in such year (the "Actual Case Volume") is less than 90% of the
budgeted Case volume used by Seller in calculating its Direct Labor Cost and
Overhead Cost for such year, Purchaser shall pay to Seller an amount equal to
(A) (x) 90% multiplied by such budgeted Case volume minus (y) the Actual Case
Volume, mulitiplied by (B) the Direct Labor Cost plus Overhead Cost per Case in
effect in such year, provided that in no event shall such budgeted Case volume
be less than 80% of Case volume budgeted for calendar year 1993.
20
Schedule 1 to Exhibit B to Spices Supply Agreement
XXXXX & XXXXXXXXXXXX, INC.
SPICE PRODUCTION & TRANSFER SUMMARY
BUDGET 1998
PER CASE DOLLARS
----------------------------------------------
ITEM # CASES LABOR MATERIAL OVERHEAD TOTAL
----------- --------- --------- ----------- ----------- ---------
1501 Basil/24 16,644 $ 0.3937 $ 5.0466 $ 2.9884 $ 8.4186
1505 Oregano/24 6,110 $ 0.4860 $ 5.4221 $ 3.1576 $ 9.0477
1506 Basil/24 French/English 311 $ 0.3837 $ 5.0486 $ 2.9884 $ 8.4166
1508 Red Jalapeno/24 7,631 $ 0.3613 $ 6.0034 $ 2.9492 $ 9.3139
1584 Large Cut Garlic/24 35,814 $ 0.3876 $ 5.5362 $ 3.0368 $ 8.9597
1587 Chopped Garlic/24 171,240 $ 0.3762 $ 5.7928 $ 3.0399 $ 9.2089
1590 Chopped F/E Garlic/24 3,215 $ 0.3726 $ 5.7315 $ 3.0489 $ 9.1530
1591 Crushed Garlic/24 11,535 $ 0.5476 $ 5.5933 $ 3.0580 $ 9.1989
TOTAL 24 PACK 254,500 $ 0.3878 $ 5.6887 $ 3.0365 $ 9.1131
0000 Xxxxx/00 5,508 $ 0.5542 $ 2.5732 $ 1.7771 $ 4.9405
1509 Oregano/12 2,640 $ 0.5723 $ 2.7691 $ 1.6639 $ 5.0053
1515 Green Jalapeno/12 1,443 $ 0.2540 $ 3.0652 $ 1.5344 $ 4.8436
1516 Red Jalapeno/12 6,852 $ 0.2540 $ 3.0652 $ 1.5341 $ 4.8436
1550 Chopped Garlic 25 oz/12 0 $ 0.4064 $ 9.9339 $ 3.0997 $ 13.4400
1574 Chopped Garlic 10 oz/12 4,880 $ 0.2781 $ 5.6210 $ 1.5933 $ 7.4924
1579 Crushed Garlic/12 10,118 $ 0.2639 $ 2.8895 $ 1.5729 $ 4.7264
1580 Chopped Garlic/12 113,897 $ 0.2711 $ 2.9468 $ 1.5664 $ 4.7743
1597 Large Cut Garlic/12 13,465 $ 0.2415 $ 2.8206 $ 1.5592 $ 4.6214
TOTAL 12 PACK 158,800 $ 0.2822 $ 3.0044 $ 1.5671 $ 4.8538
1548 Crushed Garlic 25 oz/6 49 $ 0.2332 $ 5.2252 $ 3.0997 $ 8.5591
1585 Large Cut Garlic 25 oz/6 9,517 $ 0.2493 $ 5.1318 $ 3.1788 $ 8.5600
27586 Chopped Garlic 25 oz/6 (Primarque) 65 $ 0.2499 $ 5.0620 $ 3.0697 $ 8.4016
36588 Chopped Garlic 25 oz/6 (Sak-Done) 915 $ 0.2499 $ 5.0620 $ 3.0697 $ 8.4016
1568 Chopped Garlic 25 oz/6 124,973 $ 0.2499 $ 5.0620 $ 3.0697 $ 8.4016
TOTAL 6 PACK 135,539 $ 0.2499 $ 5.0656 $ 3.0774 $ 8.4126
1570 Chopped Garlic 2 Gal 3,468 $ 0.4733 $ 6.8766 $ 3.5989 $ 10.9483
26570 Sbarro Garlic 2 Gal 2,767 $ 0.6000 $ 6.9400 $ 3.6000 $ 11.1800
TOTAL 2 GALLON 6,235 $ 0.5295 $ 6.9225 $ 3.5994 $ 11.0514
1577 Chopped 5 Gal (No Pres.) 4 $ 0.6080 $ 16.7945 $ 7.1982 $ 24.8007
1589 Chopped 5 Gal 1,522 $ 0.8080 $ 16.7945 $ 7.1982 $ 24.8007
TOTAL 5 GALLON 1,526 $ 0.8080 $ 16.7945 $ 7.1982 $ 24.8007
1556 Garlic Pre-Pack (2/587, 2/591) 401 $ 1.8476 $ 34.0416 $ 12.1958 $ 48.6850
1557 Garlic Pre-Pack (2/584, 2/591) 16 $ 1.8704 $ 35.0796 $ 12.1876 $ 49.1376
1566 Spice Shipper (3/587, 1/508) 107 $ 1.4693 $ 34.3855 $ 12.0689 $ 47.9443
1561 Spice Shipper (501/505/508/587) 16 $ 1.5892 $ 33.4614 $ 12.1351 $ 47.1857
1576 Garlic Pre-Pack (3/587, 1/584) 2,709 $ 1.5162 $ 34.6523 $ 12.3356 $ 48.5040
1582 Garlic Pre-Pack (2/584, 2/587) 95 $ 1.5276 $ 34.9474 $ 12.1514 $ 48.6264
1585 Garlic Pre-Pack (4/587) 957 $ 1.5048 $ 34.3672 $ 12.1598 $ 48.0215
1593 Spice Shipper (3/587, 1/501) 199 $ 1.5123 $ 34.6063 $ 12.1081 $ 46.2267
TOTAL PRE-PACK/SHIPPERS (NOTE A) 4,500 $ 1.5443 $ 34.6015 $ 12.2641 $ 48.4090
GRAND TOTAL PRODUCTION 861,100
Schedule 1 to Exhibit B to Spices Supply Agreement (continued)
TOTAL TRANSFER DOLLARS
-----------------------------------------------------------
ITEM # LABOR MATERIAL OVERHEAD TOTAL
----------- ---------- ------------ ------------ ------------
1501 $ 7,153.56 $ 94,088.55 $ 65,715.04 $ 156,957.15
1505 $ 2,059.36 $ 33,129.24 $ 19,292.81 $ 55,281.41
1506 $ 119.33 $ 1,569.49 $ 929.38 2,616.20
1508 $ 2,757.08 $ 45,811.94 $ 22,505.35 $ 71,074.38
1584 $13,863.18 $ 198,273.62 $ 106,725.27 $ 320,832.06
1587 $64,415.55 $ 991,856.48 $ 520,653.95 $1,576,935.98
1590 $ 1,197.83 $ 18,426.76 $ 9,802.37 $ 29,426.97
1591 $ 6,316.21 $ 64,519.21 $ 35,274.28 $ 106,109.70
$98,702.10 $1,447,785.29 $ 772,796.45 $2,319,285.84
1507 $ 3,048.22 $ 14,152.46 $ 9,773.81 $ 26,974.49
1509 $ 1,510.77 $ 7,310.56 $ 4,392.73 $ 13,214.11
1515 $ 367.79 $ 4,429.93 $ 2,221.81 $ 7,013.53
1516 $ 1,710.41 $ 20,934.23 $ 10,513.71 $ 33,188.35
1550 $ 0.00 $ 0.00 $ 0.00 $ 0.00
1574 $ 1,357.13 $ 27,430.48 $ 7,775.31 $ 36,562.92
1579 $ 2,670.14 $ 29,236.97 $ 15,814.60 $ 47,821.71
1580 $30,874.38 $ 335,627.37 $ 177,272.51 $ 543,774.26
1597 $ 3,251.78 $ 37,981.42 $ 20,991.41 $ 62,227.60
$44,820.62 $ 477,097.42 $ 246,858.94 $ 770,770.98
1548 $ 11.43 $ 256.08 $ 151.89 $ 419.40
1585 $ 2,372.76 $ 48,840.63 $ 30,252.39 $ 81,465.78
27586 $ 21.25 $ 431.07 $ 260.92 $ 714.14
36588 $ 226.70 $ 4,650.03 $ 2,808.78 $ 7,687.50
1568 $31,236.00 $ 635,112.61 $ 383,629.59 $1,049,978.20
$33,870.13 $ 689,291.33 $ 417,103.56 $1,140,265.02
1570 $ 1,641.27 $ 23,848.06 $ 12,481.02 $ 37,970.32
26570 $ 1,680.20 $ 19,313.66 $ 9,961.20 $ 30,935.06
$ 3,301.47 $ 43,161.69 $ 22,442.22 $ 68,905.38
1577 $ 3.23 $ 67.13 $ 28.79 $ 99.20
1589 $ 1,229.74 $ 25,561.24 $ 10,953.73 $ 37,746.71
$ 1,232.98 $ 25,628.42 $ 10,984.53 $ 37,845.92
1556 $ 740.89 $ 13,971.48 $ 4,390.52 $ 19,602.69
1557 $ 29.93 $ 561.28 $ 196.00 $ 786.20
1566 $ 159.42 $ 3,679.25 $ 1,291.37 $ 5,130.04
1561 $ 25.43 $ 535.38 $ 194.16 $ 754.97
1576 $ 4,107.39 $ 90,873.08 $ 33,416.87 $ 131,397.34
1582 $ 145.12 $ 3,320.00 $ 1,154.38 $ 4,619.51
1585 $ 1,440.09 $ 32,879.94 $ 11,636.74 $ 45,956.67
1593 $ 300.95 $ 6,886.66 $ 2,409.51 $ 9,567.11
$ 6,949.21 $ 155,706.97 $ 55,186.55 $ 217,844.73
$188,876.51 $2,838,671.11 $1,527,376.24 $4,554,923.86
Note (A): All Pro-Pack and Shipper Costs include cost of manufactured finished
product, bin, header card, box, and packing labor.
Schedule 2 to Exhibit B to Spices Supply Agreement
1993 Budgeted Cost Based On 1982 Actual
Item Labor Overhead Total
---- ----- -------- -----
Basil/24 0.3188 1.8373 2.1561
Oregano/24 0.4264 2.8919 3.3183
Basil Fr/E/24 0.3188 1.8373 2.1561
Basil/12 0.1917 0.9555 1.1472
Red Jalapeno/24 0.3065 1.8471 2.1536
Oregano/12 0.1896 1.0226 1.2122
Chopped Green Jalapeno/12 0.2378 1.0803 1.3181
Red Jalapeno/12 0.2378 1.0803 1.3181
Crushed Garlic 25 oz/6 0.2891 1.4487 1.7378
Chopped Garlic 2 Gal 0.4203 2.6553 3.0756
Chopped Garlic 10 oz/12 0.2286 1.3687 1.5973
Chopped Garlic 5 Gal 0.6991 6.3229 7.0220
Crushed Garlic/12 0.2563 1.2373 1.4936
Chopped Garlic/12 0.1978 1.0731 1.2709
Chopped Garlic Fr/Eng/12 0.1978 1.0731 1.2709
Large Cut Garlic/24 0.3116 1.7632 2.0743
Large Cut Garlic 25 oz/6 0.1640 0.8949 1.0589
Chopped Garlic/24 0.3034 1.7063 2.0097
Chopped Garlic 25 oz/6 0.1804 0.9453 1.1257
Chopped 5 Gal 0.6991 6.3229 7.0220
Chopped F/E Garlic/24 0.3034 1.4650 1.7684
Crushed Garlic/24 0.3034 1.6959 1.9983
Large Cut Garlic/12 0.1896 1.0785 1.2691
Sbarro Garlic 2 Gal 0.4203 2.6529 3.0732
Note: Costs for Materials remain unchanged from Schedule 1 to Exhibit B to
Spices Supply Agreement.
