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EXHIBIT 10.12
MANUFACTURING, DELIVERY & PRICING AGREEMENT
This agreement made and entered into as of this 11th day of September,
1996, by and between MIKE'S ORIGINAL, INC., a Delaware corporation (hereinafter
referred to as "MOI") and FIELDBROOK FARMS ICE CREAM, INC., a Delaware
corporation (hereinafter referred to as "FIELDBROOK").
WITNESSETH:
WHEREAS, MOI is engaged in the sale and use of certain food products
commonly described as "Mike's Original Ice Cream" (hereinafter called the
"Product"); and
WHEREAS, MOI is the rightful owner of the formulae, finished product
standards and specifications relating to the Product; and
WHEREAS, MOI is the rightful owner of certain intellectual property
including, without limitation, all trade names, trademarks, logos and patents
(hereinafter "Trademarks").
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained and other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereby agree as follows:
1. MANUFACTURE
FIELDBROOK shall manufacture and sell the Product only to MOI and said
manufacture shall be in accordance with the specifications furnished to
FIELDBROOK by MOI from time to time. The quality of the Product shall be as
specified by MOI.
FIELDBROOK shall manufacture and package the Product in cartons
acceptable to MOI and bearing its trademark "Mike's Original" and sell same to
MOI according to the pricing as shown in Schedule A and in the quantities as
shown in Section 4.
2. PRICING
MOI shall pay FIELDBROOK for the Product according to prices shown in
Schedule A.
Pricing to MOI shall be adjusted for bona fide ingredient and carton
price variations. MOI will be given thirty (30) days advance written notice
of such changes. Milk pricing will be in accordance with Federal Order #36.
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Processing cost adjustments shall be permitted annually on a
prospective basis. The costs of goods will be based on liquid cream cheese
formulation with a temporary surcharge added for the additional labor
requirements of handling and processing finished cream cheese with such time
as the liquid cream cheese formulation begins production.
All pricing to MOI on Schedule A shall be at FIELDBROOK's dock.
3. PAYMENT
Payment terms between FIELDBROOK and MOI shall be twenty-one (21) days
from the date the Product is shipped by FIELDBROOK.
4. QUANTITIES
FIELDBROOK shall fulfill MOI's reasonable quantity requirements by
delivering all orders to MOI within three (3) days for items in stock, and five
(5) days for items to be manufactured from date of FIELDBROOK's receipt of such
orders. FIELDBROOK shall be obliged to hold MOI products in the minimum
quantities set for in Schedule "B" attached hereto and made a part hereof, for
which quantities MOI guarantees payment. Schedule "B" will be reviewed/updated
quarterly to reflect any advances or declines in Par or minimum quantities.
5. TRADEMARK
Nothing herein contained shall give FIELDBROOK any right, title or
interest in or to the Trademarks, except the right to use the same in connection
with the packaging of the product strictly in accordance with the terms hereof
and FIELDBROOK acknowledges and agrees that MOI is the owner of the exclusive
right, title and interest in and to said Trademarks, that FIELDBROOK shall not
do or cause to be done, at any time, any act or thing in any way impairing any
part of MOI's right, title and interest in and to said Trademarks, and that any
and all uses of said Trademarks are and shall continue to inure to the exclusive
benefit of MOI. FIELDBROOK shall no longer be entitled to use the Trademarks of
MOI at such time as this Agreement is terminated.
6. CONDITION OF PREMISES
FIELDBROOK AGREES THAT THE PREMISES IN WHICH THE Product is
manufactured will at all times be kept clean, healthy and sanitary and will at
all times conform to all Federal, state and local health and sanitary
requirements. Upon receipt of reasonable notice from MOI, FIELDBROOK agrees to
authorize agents or employees of MOI at any and all times during FIELDBROOK's
regular business hours to enter FIELDBROOK's premises to inspect the said
premises, FIELDBROOK's manufacturing procedures and to obtain samples of the
Product in the process of manufacture as well as the finished Product for the
purpose of ascertaining or determining compliance with Section 1.
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7. WARRANTIES AND REPRESENTATIONS OF FIELDBROOK
All warranties provided by the Uniform Commercial Code as adopted by
the state in which the manufacturing facility of FIELDBROOK used to manufacture
the Product is located shall apply to all transactions under this Agreement
unless otherwise specifically provided herein. In furtherance, and not by way of
limitation of any warranties provided by such Uniform Commercial Code,
FIELDBROOK represents and warrants that the Product when sold and delivered to
MOI shall (a) be fit and sufficient for the purpose intended; (b) be
merchantable, of good quality, and free from defects, whether patent or latent,
in material or workmanship; (c) conform to the standards and specifications set
forth in Exhibit A hereof; and (d) be in compliance with the Federal Food, Drug
and Cosmetic Act of 1938, as amended from time to time, with all other Federal,
state and local laws applicable to the sale of the Product and with all
applicable regulations thereunder. In the event a material used in the Product
to be sold hereunder is deleted from acceptance as a food ingredient or additive
by Federal, state or local regulatory action, or a supply thereof is no longer
available, such action or unavailability will constitute automatic cancellation
with respect to such material in the formulation of the Product and FIELDBROOK
shall have the right, subject to the prior written approval of MOI to substitute
other material. All warranties shall survive the random inspection and
acceptance hereinabove provided.
8. WARRANTIES OF MOI
MOI represents and warrants to FIELDBROOK that the MOI labels and
carton copy furnished and/or specified by MOI hereunder shall comply with all
applicable Federal, state and local laws and regulations, including without
limitation the Federal Food, Drug and Cosmetic Act of 1938, as amended from time
to time.
9. INDEMNIFICATION BY FIELDBROOK
FIELDBROOK agrees to defend, indemnify and hold MOI harmless from and
against any and all claims, actions, causes of action, liabilities, loss, cost,
damages or expenses, including reasonable attorneys' fees arising out of any
breach of its warranties, covenants or agreements herein contained including,
without limitation, product liability. FIELDBROOK shall be responsible for the
proper formulation, sanitation, processing procedures and other factors under
its control. FIELDBROOK shall not be responsible for normal Product
deterioration or other damage done to the Product once it has been delivered and
accepted F.O.B. Fieldbrook's dock. MOI and FIELDBROOK agree to promptly notify
the other party of any assertion of any such claim or assertion of liability.
FIELDBROOK shall maintain general liability insurance with an insurance company
licensed to do business in the State of New York having limits of not less than
$3,000,000 per occurrence which contains endorsements for both product liability
broad form vendor's coverage and contractual liability coverage for all
obligations of FIELDBROOK herein. Such endorsements shall be amended to
specifically include MOI and MOI shall be entitled to copies thereof and to
copies of other insurance documents related to the subject matter hereof. Any
such liability insurance policy(ies) and/or endorsement(s) shall provide that
MOI be entitled to thirty (30) days advance written notice prior to a reduction
or elimination of coverage.
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10. INDEMNIFICATION BY MOI
MOI agrees to defend, indemnify and hold harmless FIELDBROOK (except
in the case of the willful or negligent acts or omissions of FIELDBROOK, its
agents and employees) from and against any and all claims, actions, causes of
action, liabilities, loss, cost, damages or expenses, including reasonable
attorneys' fees, arising out of breach of its warranties that the label is in
compliance with all applicable Federal, state and local statutes and
regulations. In the event such a claim is proven, either MOI or FIELDBROOK may
terminate this Agreement upon ten (10) days written notice to the other party.
The names and addresses of any and all persons, businesses, corporations,
partnerships, associations, or other enterprises challenging the use of any
formulae, standards and specifications or procedures or the use of MOI's
trademark with details concerning the claim or challenge shall be furnished by
either MOI or FIELDBROOK to the other party immediately upon becoming aware of
such claims.
11. FORCE MAJEURE
MOI and FIELDBROOK shall each be relieved of its obligations under
this Agreement if, when and to the extent that either party is unable to perform
or is limited in such performance because of force majeure. As used herein,
"force majeure" shall include acts of God, fires, explosions, bombings, floods,
civil commotions, riots, strikes, declared or undeclared wars, military police
actions, blockades, embargoes, insurrections, crop failure, restraint of rulers
and peoples, and all such interruptions of business, casualties, events or
circumstances beyond the control of the party claiming the benefits of force
majeure. When the limitation or curtailment caused by force majeure shall have
ended, the obligations of the parties hereunder shall be restored or full force
and effect. FIELDBROOK and MOI shall take all reasonable business precautions to
anticipate force majeure conditions and to inventory said materials.
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12. RESPONSIBILITIES UPON TERMINATION
In the event this Agreement is terminated as provided herein,
FIELDBROOK shall destroy or deliver to MOI, at MOI's written direction, all
unshipped product and all inventories of MOI trademarked packaging materials
existing on the effective date of such termination. MOI shall pay FIELDBROOK its
out-of-pocket cost therefor.
13. ASSIGNMENT
This Agreement and the rights and obligations hereunder shall not be
assigned or transferred in any manner whatsoever by either party, by the
operations of law, or otherwise, without the prior written consent of the other
party.
14. RELATIONSHIP OF PARTIES
Neither MOI nor FIELDBROOK is the agent, employee, joint venturer or
partner of the other, nor shall either of the parties hereto have the right,
power or authority to bind the other to any obligations whatsoever or to extend
the credit of or to assume or agree to assume any obligations or any liability
in the name of the other party.
15. TERMINATION
Either FIELDBROOK or MOI shall have the right to terminate this
Agreement without prejudice with ten (10) days advance, written notice if either
breaches any of the covenants of this Agreement. Notwithstanding anything to the
contrary, each party shall have fifteen (15) days after notice within which to
cure any such breach.
In any event, either party shall have the right to terminate this
agreement for any reason whatever within ninety (90) days advance, written
notice to the other.
16. ENTIRE AGREEMENT
This instrument constitutes the entire Agreement between the parties
with respect to the subject matter hereof and as an inducement to enter into
this Agreement, each party represents to the other that no representation or
statements have been made to the other party or its officers, agents, employees
or representatives, which would in any way tend to add, modify or change any of
the provisions of this Agreement shall not be enlarged, varied, modified or
waived by any agent or representative of MOI or FIELDBROOK except by an
instrument in writing executed by both parties hereto, and no party shall be
construed by and governed in accordance with the internal laws of the State of
New York.
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17. NOTICES
All notices hereunder shall be deemed to have been sufficiently given
if in writing and delivered or sent by registered or certified mail, postage
prepaid, as follows:
If to MOI, to
MIKE'S ORIGINAL, INC.
000 Xxxxxxx Xxxxxxxx
Xxxxxxx, XX 00000
Att: Mr. Xxxxxxx Xxxxx
If to FIELDBROOK, to
FIELDBROOK FARMS ICE CREAM, INC.
Xxx Xxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
Att:
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
in duplicate by their duly authorized officers as of the day and year first
above written.
MIKE'S ORIGINAL, INC.
By: /s/ Xxxxxxx Xxxxx
Xxxxxxx Xxxxx
FIELDBROOK FARMS ICE CREAM, INC.
By: /s/______________
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Item 1) Samples: samples collected and forwarded at MOI's direction will be
at cost, and payable by customer.
Item 2) Mix processing: extenuating mix processing cots above FIELDBROOK's
normal routine will be billed separately, at cost, and payable by customer.
Item 3) Case Cost: see attached sheets, item specific.
By: /s/
Fieldbrook Farms Ice Cream, Inc.
SCHEDULE A
RETAIL NOVELTIES
Pack Unit Cost Case Cost
---- --------- ---------
Mike's Pint Strawberry Fantasy 8/Sleeve $.940 $ 7.52
Mike's Pint Chocolate Tidbits 8/Sleeve $.894 $ 7.15
Mike's Pint Xxxxxx Cracker Delight 8/Sleeve $.920 $ 7.36
Mike's Gramwich Sandwich 12/4 Pks $.698 $ 8.37
Mike's Strawberry Sorbet Coated Bar 12/6 Pks $.821 $ 9.85
Mike's Cracker Crunch Bar 12/6 Pks $1.038 $12.46
Schedule "B"
Novelties Par Minimum
--------- --- -------
Xxxxxx Crunch 12/6 pack 35 Pallets 25 Pallets
Strawberry Sorbet 12/6 pack 25 Pallets 15 Pallets
Gramwich 12/4 pack 25 Pallets 15 Pallets
Pints Par Minimum
----- --- -------
Xxxxxx Delight 16oz/8 pack 15 Pallets 8 Pallets
Chocolate Tidbit 16oz/8 pack 15 Pallets 8 Pallets
Strawberry Fantasy 16oz/8pack 15 Pallets 8 Pallets
Bulk Novelties Par Minimum
-------------- --- -------
Xxxxxx Crunch 6/18 pack 5 Pallets -----
Strawberry Fantasy 6/18 pack 5 Pallets -----
Gramwich 3/24 pack 3 Pallets -----
