Exhibit 10.1
FORM OF MASTER SUPPLY AGREEMENT
This MASTER SUPPLY AGREEMENT dated as of January 1, 1998 by
and between CPC INTERNATIONAL INC., a Delaware corporation
("CPC") and CORN PRODUCTS INTERNATIONAL, INC., a Delaware
corporation ("CPI").
WHEREAS, prior to the date hereof, the business of CPI was
a division of CPC;
WHEREAS, prior to the date hereof, CPC (and its Affiliates
in the Territories) purchased the Products listed in the
Schedules hereto from CPI (and its Affiliates in the Territories)
on an intercompany basis;
WHEREAS, on December 31, 1997 CPI was spun-off from CPC and
is now an independent corporation, and the Affiliates of CPI are
no longer under common ownership with the Affiliates of CPC; and
WHEREAS, CPC and CPI desire to formalize the supply
relationships set forth in the Schedules hereto.
NOW, THEREFORE, the parties agree as follows:
1. Definitions.
As used herein, the following terms shall have the
meanings set forth below:
(a) "Affiliate" shall mean any entity which is
controlled by, in control of, or under common
control with, the party to which the reference is
made.
(b) "Applicable Law" shall mean any law, rule,
regulation, statute, ordinance, decree, treaty or
directive applicable to any of the Purchasers or
Suppliers.
(c) "Commodity Consumer Products" shall mean corn
starch, corn oil, corn syrup and dextrose which are
branded and packaged for sale to the retail trade,
club stores, mass merchandisers and the foodservice
sector. Each Schedule identifies the Commodity
Consumer Products sold in each Territory.
(d) "Commodity Industrial Products" shall mean bulk corn
starch, corn oil (crude or refined), corn syrup
(glucose), and dextrose purchased solely for the
production of Commodity Consumer Products. Each
Schedule identifies the Commodity Industrial
Products sold to the purchaser in each Territory.
(e) "Consumer Products" shall mean all branded and
packaged products (including Commodity Consumer
Products) produced by the Purchasers for sale to the
retail trade, club stores and mass merchandisers
utilizing any Products as ingredients.
(f) "Purchaser" shall mean any of the Purchasers.
(g) "Purchasers" shall mean collectively CPC and all of
its Affiliates who purchase under this Agreement.
(h) "Products" shall mean all products sold by the
Suppliers to the Purchasers (including the Commodity
Industrial Products) set forth in the Schedules
hereto for each Territory.
(i) "Supplier" shall mean any of the Suppliers.
(j) "Suppliers" shall mean collectively CPI and all of
its Affiliates who supply under this Agreement.
(k) "Territories" shall mean all of the countries for which
there is a Schedule.
(l) "Territory" shall mean any country for which there is a
Schedule.
2. Scope.
2.1. This Agreement shall apply to all purchases by
Purchasers from Suppliers of the Products listed
in the Schedules in the corresponding Territories.
The provisions of Section 5 shall apply to
Commodity Consumer Products and Commodity
Industrial Products and the provisions of Sections
6.1 and 6.2 shall only apply to Commodity Industrial
Products.
2.2. This Agreement does not constitute a purchase
order. Purchases under this Agreement shall be
made by purchase orders issued by Purchasers as
provided in Section 7 hereof.
3. Term.
3.1. This Agreement shall have an initial term of two
years from the date hereof (the "Initial Term"),
unless terminated earlier in accordance with
Section 3.4 below.
3.2. Six (6) months prior to the end of the Initial Term,
the Purchasers and Suppliers from each Territory shall
review the terms of their respective Schedules. If any
of the Purchasers and Suppliers are
2
unable to agree upon future terms for their respective
Schedules, this Agreement shall terminate as to
those Territories at the end of the Initial Term.
For those Purchasers and Suppliers that are able
to agree upon future terms for their respective
Schedules, this Agreement shall automatically be
renewed, as modified, as to those Territories for
successive renewal terms of one year each, unless
notice of termination is given by either party in
writing, not later than six (6) months prior to
the end of the one year term then in effect.
3.3 After the Initial Term, any Supplier or Purchaser
may terminate this Agreement in accordance with
Section 3.2 or 3.4 hereof as to some of the
Products in the corresponding Territories. In the
event of such a partial termination, this
Agreement shall remain in full force and effect as
to those Products in the corresponding Territories
for which this Agreement has not been terminated.
3.4. This Agreement may be terminated automatically at any
time in the event of the following:
(a) In the event of a breach or failure to perform
this Agreement by one party, the non-breaching
party may terminate this Agreement for those
Products in corresponding Territories where
the breach or failure occurred, if the breach
or failure has continued for a period of sixty
days after written notice thereof has been
received by the breaching party.
(b) In the event of a change in control of either
party, the other party shall have the right to
terminate this Agreement in whole as to (i) or
in part as to (ii) immediately after giving written
notice upon the occurrence of such change in control.
For purposes of this Agreement:
(i) change in control of CPC or CPI shall
mean: (y) the acquisition by any person (as
such term is defined in the Securities Act
of 1933, as amended) (excluding the party
to which the change in control relates or
any of its Affiliates or a fiduciary
holding its securities in any type of
benefit plan), directly or indirectly, of
beneficial ownership of 20% or more of the
combined voting power of the then
outstanding voting securities entitled to
vote generally at the election of
directors, or (z) the merger,
consolidation, reorganization, liquidation,
involving the sale or transfer of
substantially all of the assets of the
party; and
3
(ii) change in control of any Affiliate of
CPC or CPI shall mean any change in the
ownership of any Affiliate of CPC or CPI
such that CPC or CPI ceases to hold voting
control of its respective Affiliate(s).
3.5. In the event that this Agreement is terminated in
whole or in part in accordance with Section 3.2,
3.3 or 3.4 above, the obligations of CPI and its
Affiliates contained in Section 5 shall
nevertheless continue to remain in full force and
effect for a period of six months from the date of
such termination as to all Commodity Industrial
Products in corresponding Territories for which
this Agreement has been terminated.
4. Pricing.
Products shall be sold hereunder at prices to be
determined in accordance with the pricing mechanism currently
utilized by the relevant Purchasers and Suppliers. All pricing
mechanisms to be used for purposes of this Agreement are
described in the Schedules hereto.
5. Non-Competition.
5.1. For so long as this Agreement remains in force and
effect with respect to any Commodity Industrial
Products in any Territory, and for a period of six
months after any termination hereof, CPI agrees
that it will not, nor will its Affiliates:
(i) sell Commodity Consumer Products in the Territories
for which this Agreement is in effect as to the
corresponding Commodity Industrial Products;
(ii) sell, manufacture or package Commodity
Consumer Products to or for third parties if,
to the knowledge of CPI or its Affiliates after
reasonable inquiry of such third parties, such
Commodity Consumer Products are intended for
sale in Territories for which this Agreement is
in effect as to the corresponding Commodity
Industrial Products; or
(iii) acquire a controlling interest in any person
or entity which engages in (i) or (ii) above
(an "Acquired Business") unless, if a
portion of the Acquired Business consists of
(i) or (ii) above, CPI or its Affiliates
offers to sell the portion of the Acquired
Business that engages in (i) or (ii) above
to CPC or its Affiliates on reasonable terms
and conditions; provided, however, that if
CPI and CPC (or their respective Affiliates)
cannot agree on such terms and conditions
and CPI (or its Affiliate) proceeds to
4
acquire the Acquired Business then CPC (or its
Affiliate) shall have the automatic right to
terminate this Agreement as to such
Commodity Industrial Products in the
corresponding Territory upon written notice.
5.2. Nothing in this Section 5 shall be deemed to
prohibit CPI from performing any toll packaging
agreement with CPC or its Affiliates or from
selling any Products (including Commodity
Industrial Products) to third parties in any
Territory that may sell, manufacture or package
Commodity Consumer Products in any Territory.
6. Exclusivity and Product Volume.
6.1. For so long as this Agreement is in effect,
Suppliers shall be the sole and exclusive
suppliers to Purchasers and Purchasers shall
purchase 100% of their requirements for Commodity
Industrial Products from Suppliers in the
Territories for which this Agreement is in effect,
except as provided in Sections 6.2 and 8.2(b).
6.2 Notwithstanding Section 6.1, if at any time during
the term of this Agreement a Purchaser requires
Commodity Industrial Product in excess of a
Supplier's production capacity at the relevant
supply location, the Supplier shall notify the
Purchaser that it is unable to fill the entire
purchase order within five business days of
Supplier's receipt of the purchase order, and such
Purchaser shall be permitted to purchase Commodity
Industrial Product from a third party only for so
long as such Purchaser's requirements exceed such
Supplier's production capacity, and thereafter the
Supplier shall promptly notify the Purchaser when
it becomes able to fulfill the Purchaser's
requirements. Nothing in this Section 6 shall be
deemed to require any Supplier to increase its
production capacity. In the event of such
purchases from third parties, Suppliers shall not
be liable for the costs of such purchases,
including but not limited to the differential in
the price of such purchases.
6.3. Purchasers will provide as much forecasting
information as possible to assist Suppliers. Two
months prior to the start of the fiscal year of
each Purchaser for each year that this Agreement
will be in effect for the following year,
Purchasers shall provide Suppliers with estimates
of their volume requirements for the following
year.
6.4. Nothing in this Section 6 shall be deemed to
require Purchasers to purchase all of their
requirements for Products, other than Commodity
Industrial Products, from Suppliers and nothing in
this Section 6 shall prohibit Purchasers from
purchasing test quantities of
5
Commodity Industrial Products from third parties as
long as Purchasers neither sell such test quantities
nor sell Commodity Consumer Products containing such
test quantities.
7. Purchase Orders and Invoices.
7.1. Purchases hereunder will be made on the basis of purchase
orders issued by Purchasers. Purchase orders will contain
the following information:
(a) location for delivery;
(b) shipment date;
(c) volume; and
(d) Product specifications.
7.2. Invoices will be submitted by Suppliers to Purchasers
which will contain the following information:
(a) payment terms;
(b) title and risk of loss; and
(c) responsibility for insurance, freight and taxes.
7.3. Suppliers and Purchasers shall agree upon a form of
purchase order and invoice to be used in their Territory.
7.4. In the event of any conflict between a purchase
order or an invoice and this Agreement, the terms
of this Agreement shall prevail.
8. Warranties.
8.1 Suppliers warrant that all Products sold hereunder
shall: (a) comply with the specifications agreed
to by the parties, (b) be produced in accordance
with the quality assurance standards described in
Section 10 hereof, and (c):
(i) for Products sold within the U.S.A.: (I) shall
not be adulterated or misbranded within the
meaning of the U.S. Federal Food, Drug and
Cosmetic Act and regulations thereunder, and
(II) shall be produced in accordance with good
manufacturing practices, as such term is
defined in 21 U.S.C. Part 110 ("GMPs"); and
(ii) for Products sold outside the U.S.A.: (I)
shall be in compliance with all Applicable
Laws, and (II) shall be produced in accordance
with Applicable Law governing manufacturing
practices.
6
Suppliers make no other warranties, either
express or implied, including but not limited to
fitness for a particular purpose, except those set
forth above.
8.2 (a) In the event that any Products sold
hereunder do not comply with the warranties set
forth in this Section 8 or in Section 10,
Purchaser shall notify Supplier of such breach
and of its timing requirements for such
Products within five business days of
Purchaser's discovery of the breach.
(b) If Supplier is unable to replace the
non-complying Product in sufficient time to
meet Purchaser's timing requirements for such
Products pursuant to the notice given under
Section 8.2(a) above, Supplier shall refund to
Purchaser the purchase price of the
non-complying Product and Purchaser shall have
the right to purchase replacement Product from
a third party, notwithstanding Section 6.1.
(c) Supplier's liability under this Section 8 and
under Section 10 shall be limited to: (i)
replacement of the Products or a refund in the
amount of the purchase price of the Products in
accordance with Section 8.2(b), (ii) the cost
of manufacturing and packaging the Consumer
Products (less the purchase price of the
Products), (iii) the reasonable costs of
processing customer complaints as to Consumer
Products rendered unusable, and (iv) the
reasonable costs of recalling and disposing of
any defective Consumer Products.
9. Indemnification and Insurance.
9.1 Each party (the "Indemnifying Party") shall
defend, indemnify and hold harmless the other
party (the "Indemnified Party") and its respective
employees and representatives from and against all
liability, loss, damage and expense, (including
reasonable attorney's fees) actions and claims for
injury and/or death to persons and damage to
property arising out of the negligent or wrongful
acts or omissions of the Indemnifying Party, but
only to the extent that such injury or damage is
attributable to the Indemnifying Party's negligent
or wrongful acts or omissions.
9.2 In the event that an Indemnified Party is subject
to any indemnifiable action or claim in accordance
with Section 9.1, the procedures for
indemnification in Article VI of the Distribution
Agreement dated December __, 1997 between CPC and
CPI (the "Distribution Agreement") shall apply.
7
9.3 Suppliers and Purchasers shall procure and
maintain, at their respective costs and expenses,
for so long as this Agreement is in effect,
occurrence based commercial general liability
insurance and automobile liability insurance
coverage. The policies, including excess policies,
shall have limits of not less than $25,000,000 per
occurrence and $25,000,000 in the aggregate
(combined single limit) for each policy year and
shall be obtained from insurers rated A- or better
by A.M. Best Company, and with a financial size
category of VIII or larger. The policies shall be
endorsed to name the Indemnified Party as an
additional insured with respect to liabilities
arising out of the foregoing indemnification
agreements and shall provide that the insurance of
the Indemnifying Party will be primary to any
other insurance of the additional insured.
Purchasers and Suppliers agree that their
respective insurers shall not be subrogated to the
rights of the Indemnified Party against the
Indemnifying Party with respect to any claim
arising under this Agreement and neither party
shall assign any such right of subrogation to
their insurers. In addition to the foregoing
insurance, Suppliers and Purchasers shall procure
and maintain, at their respective cost and
expense, any additional insurance as may be
required by Applicable Laws. Each party shall
deliver to the other Certificates of Insurance and
endorsements evidencing the issuance of the
required coverage and stating that the policies
are in effect and that such policies will not be
canceled or non-renewed without 30 days' prior
written notice to the additional insured. In the
event of a claim, copies of the policies shall be
supplied to the party claiming indemnification
upon request.
10. Quality Assurance and Control.
10.1. All Products supplied under this Agreement shall
be produced in accordance with Supplier's quality
assurance standards and program in effect as of
the date hereof. Suppliers reserve the right to
reasonably modify their quality assurance
standards from time to time; provided, however,
that any significant changes shall be implemented
by Suppliers only after full and open discussion
with Purchasers with regard to their impact on
manufacturing of the Products.
10.2. From time to time, upon prior notice to Suppliers,
Purchasers shall have the right to examine
Suppliers' facilities used for the manufacture of
the Products hereunder.
8
11. Confidentiality.
11.1. The process, formulations, data and information
(collectively "Information") which has been or may
be furnished by one party to the other in order to
perform this Agreement, is the property of the
providing party and has been or will be furnished
solely to enable the receiving party to perform
this Agreement, with the understanding that:
(a) the receiving party will not use or reproduce
such Information for any other purpose;
(b) the receiving party will take all reasonable care
to ensure that such Information is not disclosed
to other parties; and
(c) upon request by the providing party, the
receiving party will promptly return all such
Information at any time during the term of
this Agreement or thereafter, except that
either party may continue to use such
Information of the other party as it may
require in order to perform this Agreement.
11.2. The foregoing restrictions will not apply to any information
and data which is:
(a) already in possession of the receiving party at the
time of first receipt from the providing party;
(b) independently developed by employees of the receiving
party who did not have access to the Information;
(c) becomes part of the public domain without breach of
this Agreement by the receiving party; or
(d) rightfully obtained by the receiving party
from third persons without restriction or
breach by this Agreement by any receiving
party.
12. Dispute Resolution.
Any dispute, controversy or claim in connection with
this Agreement shall be resolved in accordance with Article VI of
the Distribution Agreement. The parties acknowledge that disputes
arising under Section 9.2 (or the applicability thereof) may
raise difficult factual questions relating to proportional
responsibility, proximate cause and duties to mitigate damages;
such questions and similar issues as to allocating responsibility
and damages shall be considered in the resolution of disputes.
9
13. Removal of Equipment.
In the event that any Purchaser removes packaging
equipment owned by it from the plant of a Supplier either during
the term of this Agreement or following termination hereof, the
Purchaser shall, at its own expense, restore the area of the
plant where the equipment was located, to reasonable working
condition.
14. Independent Contractor.
Suppliers shall act under this Agreement solely as
independent contractors. Nothing herein shall constitute any
Supplier or Purchaser as an agent of the other, nor shall it
constitute any member of one party's staff as an agent or
employee of the other party.
15. Assignment.
None of the rights or obligations of either party
hereunder is assignable either by voluntary act or operation of
law, nor transferable by it without the prior written consent of
the other party, which consent shall not be unreasonably
withheld.
16. Force Majeure.
If performance by either party of any of its duties or
obligations under or pursuant to this Agreement is prevented,
hindered, delayed or otherwise made impracticable by reason of
any strike, flood, riot, fire, explosion, war or any other
casualty which cannot be overcome by reasonable diligence and
without unusual expense, such party shall be excused from such
performance to the extent that it is so prevented, hindered or
delayed thereby during the continuance of any such happening or
event and for so long as such event shall continue to prevent,
hinder or delay such performance.
17. Notices.
Any notice to be given hereunder by either party shall
be in writing and shall be deemed given when: (i) sent by
registered mail, return receipt requested upon receipt by the
sender of confirmation of receipt; (ii) sent by telecopy upon
receipt by the sender of confirmation of transmittal; or (iii)
delivered to the addressee as follows:
In the case of Purchaser to: CPC International Inc.
X.X. Xxx 0000, Xxxxxxxxxxxxx Xxxxx
Xxxxxxxxx Xxxxxx, Xxx Xxxxxx 00000
Attn: Corporate Secretary
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
10
In the case of Supplier to: Corn Products International, Inc.
X.X. Xxx 000, 0000 Xxxxxx Xxxx
Xxxx, Xxxxxxxx 00000-0000
Attn: Corporate Secretary
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any party may from time to time designate by written notice
to the other revised address or telecopy information.
18. Severability.
The invalidity or unenforceability of any particular
provision of this Agreement shall not affect any other provisions
hereof, and this Agreement shall be construed in all respects as
if such invalid or unenforceable provision were omitted.
19. Headings.
The headings of this Agreement are for the convenience
of the parties, and shall not be construed as having any legal or
binding meaning or effect.
20. Entire Agreement and Amendment.
This Agreement constitutes the entire understanding and
agreement between the parties hereto with respect to the subject
matter hereof, and cancels and supersedes any prior negotiations,
and merges all understandings, and agreements, whether verbal or
written, with respect thereto. This Agreement can be amended only
by a written instrument executed by the parties hereto.
21. Binding Effect.
This Agreement shall be executed by CPC and CPI on their
own behalf and on behalf of their respective Affiliates. Each of
CPC and CPI agrees to cause their respective Affiliates to
perform each and every one of the obligations hereunder to be
performed by such Affiliates.
22. No Waiver.
The failure by either party to insist upon strict
performance of any covenant or condition of this Agreement, in
any one or more instances, shall not be construed as a waiver or
relinquishment of any such covenant or condition in the future,
but the same shall be and remain in full force and effect.
11
23. Survival.
Notwithstanding any termination of this Agreement the
provisions of Section 5 shall survive such termination for the
period stated therein.
24. Choice of Law.
THIS AGREEMENT SHALL, IN ALL RESPECTS, BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY, EFFECT AND
PERFORMANCE, EXCEPT FOR SUCH LAWS OF THE STATE OF NEW YORK WHICH
REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written.
CPC INTERNATIONAL INC.
By:___________________________________
Title:________________________________
CORN PRODUCTS INTERNATIONAL, INC.
By:___________________________________
Title:________________________________
12
