Exhibit 10.1
MASTER CUSTOMER SERVICES AGREEMENT
This Master Customer Services Agreement (the "Agreement") is made and
entered into as of January 23, 1998 by and between Xxxxxx Foods Corporation, a
Delaware corporation ("BFC"), and Eagle Family Foods, Inc, a Delaware
corporation ("Customer").
This Agreement is entered into in connection with the Asset Purchase
Agreement, dated as of November 24, 1997, by and among BFC, BFC Investments,
L.P., a Delaware limited partnership, and Customer (the "Purchase Agreement").
Capitalized terms not defined herein have the meaning ascribed to them in the
Purchase Agreement.
1. Customer Services. Commencing as of the closing of the transactions
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described in the Purchase Agreement (the "Effective Date"), BFC shall provide or
cause to be provided, subject to Section 2(b), the services set forth on Exhibit
A hereto (the "Exhibit A Services"), Exhibit B hereto (the "Exhibit B Services")
and Exhibit C hereto (the "Exhibit C Services" and, together with the Exhibit A
Services and the Exhibit B Services, the "Customer Services"), provided,
however, that Customer Services shall not include any brand marketing, field
sales, financial analysis, any legal services or any services to be provided
under the Canadian Agreements. Customer Services shall be in all material
respects the same type, quality and level of service as provided to the Business
by BFC or its affiliates at comparable times and periods during the one-year
period prior to the Effective Date. Customer understands and agrees that BFC
may cause any of such services to be provided through any of BFC's affiliates.
In addition, BFC and Customer agree to act in accordance with the general
principles set forth on Exhibit D hereto.
2. Customer Services.
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(a) Fee. In exchange for the Customer Services provided hereunder,
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Customer shall pay to BFC the monthly or unit fee for each of the services set
forth on Exhibit A, Exhibit B or Exhibit C, as applicable (the "Services Fees"),
provided, however, that (i) with respect to the Exhibit B Services, Customer
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shall not be required to pay any Services Fees for Exhibit B Services which are
provided during the 90-day period commencing on the Closing Date and (ii) with
respect to Exhibit C Services, Customer shall pay the percentage of Services
Fees set forth below for Exhibit C Services which are provided during the
applicable period set forth below.
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Time Period % of Services Fees
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135-day period commencing
on the Closing Date 0%
next 60 days 25%
Time Period % of Services Fees
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next 60 days 50%
next 60 days 75%
thereafter 100%
Changes to services or fees mutually agreed to by the parties shall be
commemorated in writing from time to time, during the term hereof. In respect
of each calendar quarter, Customer shall pay the Services Fees quarterly in
arrears within thirty (30) days of its receipt of a reasonably detailed invoice
for the Services Fees during such quarter. Monthly fees for any Customer
Services shall be prorated on a per diem basis to the extent such Customer
Services shall have been provided for a partial month as of the end of any
calendar quarter. Unpaid amounts will bear interest at the rate of one and one-
half percent (1 1/2%) per month after thirty (30) days.
(b) Term; Discontinuation and Termination of Customer Services. The
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term of this Agreement shall commence as of the Effective Date and end on the
date that is 18 months after the Effective Date (the "Term"). In any event,
either party hereto may terminate this Agreement as provided in Section 8 below.
Notwithstanding anything contained herein to the contrary and subject to the
following sentences of this Section 2(b), Customer shall not be obligated to
purchase or accept any customer services. Customer will give to BFC at least
thirty (30) days prior written notice of its intent (i) not to take any Customer
Service as of the Effective Date or (ii) not to continue any Customer Service.
In the event of such termination, Customer will pay the Services Fees with
respect to such terminated Customer Services for the thirty (30) day period
following such notice at the higher of (i) the average of the rates charged for
such Customer Services during the prior sixty (60) days or (ii) the hourly or
other unit based charge for such Customer Services actually used.
(c) Rights to New Ideas. The parties acknowledge that performance of
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this Agreement by BFC may result in the development of new proprietary and
secret concepts, methods, techniques, processes, adaptations or ideas
("Proprietary Rights"). In such event, the parties agree to negotiate in good
faith an agreement with respect to the ownership and/or use of such Propriety
Rights which shall fairly recognize the
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contributions of each party, both financial and non-financial, to the
development thereof. If the parties are unable to reach agreement, the dispute
will be submitted to binding arbitration in accordance with American Arbitration
Association Rules.
3. Independent Contractor. Unless otherwise agreed in an exhibit for a
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particular project, BFC represents and warrants that it is an independent
contractor under this Agreement and that its employees performing services
hereunder shall be deemed to remain its employees subject to its direction and
control. BFC shall have sole responsibility for compliance with all laws
relating to the employer/employee relationship between BFC and such employees,
including, but not limited to, federal, state, and/or local laws on hours of
labor, wages, worker's compensation, unemployment compensation, insurance and
social security benefits.
4. Insurance. BFC shall provide the following insurance coverage during
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the term of this Agreement and shall obtain such insurance from companies
selected by BFC:
(a) Worker's Compensation Insurance as required by the laws of the
State of Ohio;
(b) Employees Liability Insurance in such customary amounts carried by
employers in a like business; and
(c) Comprehensive General Liability and Property Damage Insurance
including Contractual Liability coverage with Bodily Injury Limits of Five
Hundred Thousand Dollars ($500,000) each person, One Million Dollars
($1,000,000) each occurrence, One Million Dollars ($1,000,000) aggregate
operations and One Million Dollars ($1,000,000) aggregate contractual.
5. Litigation and Other Proceedings. In the event that Customer (or any
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of its officers or directors) at any time after the date hereof initiates or
becomes subject to any litigation or other proceedings before any governmental
authority or arbitration panel with respect to which the parties have no prior
agreement (as to indemnification or otherwise), BFC (and its employees, officers
and directors) shall (i) comply with any reasonable requests by Customer for
assistance in connection with such litigation or other proceedings (including
the provision of information and making available employees as witnesses) and
(ii) coordinate strategies and actions with respect to such litigation or other
proceedings to the extent such coordination would not be detrimental to BFC's
interests. In connection with the assistance provided by BFC under this
paragraph, BFC shall be reimbursed for its reasonable out-of-pocket expenses
including, but not limited to travel, temporary lodging and photocopying.
However, BFC shall not be entitled under this paragraph to any reimbursement of
salaries, wages or benefits paid to its employees.
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6. Cooperation; No Agency. Customer and BFC shall cooperate with each
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other with respect to all provisions of this Agreement and the Customer Services
provided hereunder. However, this Agreement creates no agency relationship
between Customer and BFC except as may be otherwise required for purposes of
this Agreement.
7. Limitation of Liability. Customer, its controlling persons, if any,
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directors, officers, affiliates, employees, agents and permitted assigns (each,
a "Customer Party") shall not be liable to BFC, its directors, officers,
affiliates, employees, agents or permitted assigns (each, a "BFC Party") and
each BFC Party shall not be liable to any Customer Party, in each case, for any
special, indirect, incidental or consequential damages, arising in connection
with this Agreement or the Customer Services provided hereunder.
8. Default and Termination.
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8.1 Any of the following shall constitute an event of default:
(a) Customer fails to cure any non-payment of a Services Fee or other
amount due and owing hereunder within thirty (30) days of receipt of written
notice of the existence of an event of default; or
(b) Either party fails to perform any other material obligation under
this Agreement and such failure remains uncured for more than thirty (30) days
after receipt of written notice thereof.
8.2 If any event of default occurs, the non-defaulting party, in addition
to any other rights available to it under law or equity, may terminate this
Agreement by giving written notice to the defaulting party. Remedies shall be
cumulative and there shall be no obligation to exercise a particular remedy.
8.3 The failure by a party to exercise any right hereunder shall not
operate as a waiver of such party's right to exercise such right or any other
right in the future.
8.4 Upon the termination of any Customer Service with respect to which BFC
holds books, records, files or any other documents owned by Buyer, BFC will
return all of such books, records, files and any other documents to Buyer as
soon as reasonably practicable. In addition, upon the termination of any
Customer Service which involved the compilation of data on BFC's computer
systems, BFC shall as soon as reasonably practicable deliver to Buyer on
magnetic media in readable format mutually acceptable to the parties, which
format shall be capable of being read by a computer mutually acceptable to the
parties, all data files maintained by BFC to the extent such files contain
information which is the property of Buyer, together with printed
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file descriptions sufficient to identify such data files and their contents and
structure.
9. Indemnification.
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(a) Subject to Section 7 and Section 17 hereof, BFC shall protect,
indemnify, defend and hold Customer harmless from and against all liabilities,
claims, damages, losses and expenses (including, but not limited to, court costs
and reasonable attorneys' fees) (collectively referred to as "Damages"), caused
by or arising in connection with the non-performance of its obligation to
provide Customer Services or the negligence or willful misconduct of any
employee or agent of BFC in connection therewith, except to the extent that
Damages were caused directly or indirectly by acts or omissions of any Customer
employee or agent. In the event that Customer knows of a claim that may be the
subject of indemnification under this paragraph, it shall promptly notify BFC of
such claim and BFC, in its sole discretion, may defend, settle, or otherwise
litigate such claim.
(b) Subject to Section 7 and Section 17 hereof, Customer shall
protect, indemnify, defend and hold BFC harmless from and against all Damages of
any kind or nature, caused by or arising in connection with the negligence or
willful misconduct of any employee or agent of Customer in connection with this
Agreement, except to the extent that Damages were caused directly or indirectly
by acts or omissions of any BFC employee or agent. In the event that BFC knows
of a claim that may be the subject of indemnification under this paragraph, it
shall promptly notify Customer of such claim and Customer, in its sole
discretion, may defend, settle, or otherwise litigate such claim.
10. Indemnity For Infringement. BFC represents, guarantees and warrants
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to Customer that the systems, programs and services covered by this Agreement
shall not violate or infringe any license agreement to which BFC or any of its
affiliates is a party, or any patent, trademark, trade name or copyright,
provided same are used by Customer in accordance with the terms of this
Agreement.
BFC shall protect, defend, indemnify and hold harmless Customer and
its employees, subsidiaries and affiliates against any Damages resulting from or
arising out of any breach or alleged breach of the warranties stated in this
Section 10, unless such breach or alleged breach was caused by the misuse,
negligence or willful misconduct of Customer.
In the event that a final injunction shall be obtained against the
Customer's use of the systems, software or programs by reason of such violation
or infringement, or if in BFC's opinion the systems, software or programs are
likely to become the subject of a claim of infringement, BFC will, at its option
and at its expense, either procure for Customer the right to continue using the
systems, software or programs, replace or
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modify the same so that they become non-infringing at no additional cost to
Customer.
11. Information. Subject to applicable law and privileges, each party
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hereto covenants and agrees to provide the other party with all information
regarding itself and transactions under this Agreement that the other party
reasonably believes are required for its compliance with all applicable federal,
state, county and local laws, ordinances, regulations and codes, including, but
not limited to, securities laws and regulations.
12. Confidential Information. (a) BFC agrees that all records, data,
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files, input materials, reports, forms and other data received, computed,
developed, used and/or stored pursuant to this Agreement which are related to
the Business are the exclusive property of Buyer and that all such records and
data shall be furnished to Buyer in available machine readable form as soon as
reasonably practicable upon termination of this Agreement for any reason
whatsoever. Moreover, upon Buyer's request, at any time or times while this
Agreement is in effect, BFC shall as soon as reasonably practicable deliver to
Buyer any or all of the data and records held by BFC pursuant to this Agreement,
in the form routinely available to BFC. BFC shall not possess any interest,
title, lien or right to any such data or records. In addition, BFC agrees, upon
Buyer's request, to permit Buyer and its auditors to have access, at all times
while this Agreement is in effect, to any of Buyer's records or data which are
in possession of BFC during BFC's regular business hours, upon reasonable prior
notice and in a manner which does not interfere with BFC's business or its
performance under this Agreement.
(b) BFC shall deliver to Buyer upon its request a backup tape of
Buyer's data in the form and with the content routinely available to BFC.
(c) Without limiting the rights or obligation of the parties under the
Purchase Agreement, BFC and Customer hereby covenant and agree to hold in trust
and maintain confidential all Confidential Information relating to the other
party. "Confidential Information" shall mean all information disclosed by either
party to the other in connection with this Agreement, whether orally, visually,
in writing or in any other tangible form, and includes, but is not limited to
the prices, terms and conditions for any service performed pursuant to this
Agreement, economic and business and financial data, business plans, and the
like, but shall not include: (i) information which becomes generally available
to the public other than by release in violation of the provisions of this
Section 12; (ii) information which becomes available on a nonconfidential basis
to a party from a source other than the other party to this Agreement, provided
such source is not and was not bound to hold such information confidential;
(iii) information acquired or developed independently by a party without
violating this Section 12 or any other confidentiality agreement with the other
party: and (iv)
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information that any party hereto reasonably believes it is required to disclose
by law, provided that it first notifies the other party hereto of such
requirement and allows such party a reasonable opportunity to seek a protective
order or other appropriate remedy to prevent such disclosure. Without prejudice
to the rights and remedies of either party to this Agreement, a party disclosing
any Confidential Information to the other party in accordance with the
provisions of this Agreement shall be entitled to equitable relief by way of any
injunction if the other party hereto breaches or threatens to breach any
provision of this Section 12. The obligations hereunder shall survive for a
period of two (2) years beyond any termination of this Agreement.
13. Assignment. Except as otherwise provided herein, neither party may
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assign or transfer any of its rights or duties under this Agreement to any third
person or entity without the prior written consent of the other party, which
consent shall not be unreasonably withheld or delayed; provided, however (i)
that at or following the Effective Date hereof, Customer may assign its rights
or delegate its duties to any affiliate of Customer, provided that no such
delegation will relieve Customer of its obligations hereunder, and (ii) Customer
(or any such assignee) may assign its rights hereunder (or any portion thereof)
to any lender or other person or entity in connection with any financing,
provided that no such delegation will relieve Customer of its obligations
hereunder.
14. Notices. Any notice, instruction, direction or demand under the terms
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of this Agreement required to be in writing will be duly given upon delivery, if
delivered by hand, facsimile transmission, overnight delivery or intercompany
mail, or five (5) days after posting if sent by U.S. mail, to the addresses
specified below or to such other address as either party may have furnished to
the other in writing in accordance with this Section 14:
If to Customer: Eagle Family Foods, Inc.
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx Xxxx, Esq.
If to BFC Xxxxxx Foods Corporation
Customer Services Administration
000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxx 00000-0000
Attn.: Xxxxx X. Xxxx
FAX No.: (000) 000-0000
Xxxxxx Foods Corporation
000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxx 00000-0000
Attn.: Xxxxx X. Xxxxx
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Vice President,
Legal and Corporate Affairs
FAX No.: (000) 000-0000
15. Governing Law. This Agreement shall be construed us accordance with
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and governed by the substantive internal laws of the State of Delaware.
16. Taxes. Customer agrees that it will pay or promptly reimburse BFC for
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any and all sales, use or proper taxes, assessments and other governmental
charges levied which result from the performance of services by BFC under this
Agreement, excluding payroll taxes with respect to BFC's employees, taxes based
on BFC's income generally or corporate franchise taxes.
17. Suspension. Except for Customer's obligation to pay BFC, neither
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party shall be liable for any failure to perform due to causes beyond its
reasonable control. In such event, the party's obligations hereunder shall be
postponed for such time as its performance is suspended or delayed on account of
such causes. The party suffering such causes shall promptly notify the other
party upon learning of the occurrence of such event, and will use its reasonable
best efforts to resume its performance with the least possible delay.
Furthermore, in the event of any failure, interruption or delay in performance
of any Customer Service, whether excused or unexcused, BFC shall use its
reasonable best efforts to restore such Customer Service as soon as may be
reasonably possible in accordance with its existing contingency plans for such
Customer Service.
18. Severability. If any provisions of this Agreement shall be invalid or
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unenforceable, such invalidity or un-enforceability shall not render the entire
Agreement invalid. Rather, the Agreement shall be construed as if not
containing the particular invalid or unenforceable provisions, and the rights
and obligations of each party shall be construed and enforced accordingly.
19. Rights Upon Orderly Termination; Survival. Upon termination or
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expiration of this Agreement or any of the Customer Services, each party shall,
upon request, forthwith return to the other party all reports, papers, materials
and other information ("Information") required to be provided to the other party
by this Agreement except that Customer shall in no event be required to return
to BFC Information that was transferred or otherwise acquired by Customer
pursuant to the Purchase Agreement. In addition, each party shall assist the
other in the orderly termination or discontinuation of this Agreement or any of
the Customer Services, described herein. Notwithstanding any termination of
this Agreement, the obligations of the parties hereto to make payments hereunder
and the provisions of Sections 7, 9, 10 and 12 and this Section 19 shall
survive.
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20. Amendment. This Agreement may only be amended by a written agreement
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executed by both parties hereto. No purchase order or other ordering document
that purports to modify or supplement the printed text of this Agreement or any
exhibit hereto shall add to or vary the terms of this Agreement. All such
proposed variations or additions (whether submitted by BFC or Customer) are
objected to and deemed immaterial unless agreed to in writing. To expedite
order processing, facsimile copies are considered documents equivalent to
original documents; however, Customer agrees to provide BFC with one fully-
executed original Agreement.
21. Entire Agreement. This Agreement, including the exhibits hereto,
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constitutes the entire agreement between the parties, and supersedes all prior
agreement, representations, negotiations, statements or proposals related to the
subject matter hereof.
22. Counterparts. This Agreement may be executed in separate
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counterparts, each of which shall be deemed an original and all of which, when
taken together, shall constitute one agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
signed by their duly authorized representatives.
XXXXXX FOODS CORPORATION
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
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Title: Vice President, General Counsel and Secretary
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EAGLE FAMILY FOODS, INC.
By: /s/ Xxxx O'X. Xxxxxx
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Name: Xxxx O'X. Xxxxxx
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Title: Chief Executive Officer, President and Director
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Exhibit A: Transition Services & Charges
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Function Description Charge Units
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Payroll Agreement should be with rSP - reconcile taxes 2,000 per month
to payment request and to ledger
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Payroll Administration Service will be provided by rSP 14.17 per assoc per mo
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*Medical & Dental Benefit Service will be provided by rSP 28.75 per assoc per mo
Administration
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*Flexible Spending Service Fees Service will be provided by rSP 6.00 per assoc per mo
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*Patient Advocacy Nurse Line Service will be provided by rSP 1.50 per assoc per mo
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Workmans Compensation Claims processing over cost of claim 6.25 per claim
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Market Research Project by request cost determined on project basis
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Syndicated Data Includes monthly refresh of syndicated data, 67,600 per month
and access to the data by associates through
data server
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Syndicated Data - Tapes Tapes for PPM (run semi annually) 13,500 per month
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Consumer Response Answer all consumer letter and phone contacts, 8.95 per contact
Provide detailed analysis (e.g. graphs, trends)
of contacts on a monthly basis or as needed, 8.95/
contact
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Note: Pension, 401K service fee, LTD, STD and life insurance support will need to be
established by buyer. These services cannot be provided by Xxxxxx because buyer would not be
participating in Xxxxxx plans.
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* Buyer will need to establish outside service provider within 60 to 90 days of closing because
of Xxxxxx'x plan status as a non-multi-employer plan.
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Exhibit A: Canada Transition Services Charges Amounts in $Cdn.
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Note: All costs are Canadian dollars
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Function Description Charge Units
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Market Research Projects by request
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Syndicated Data Includes monthly reporting of syndicated data 8,506 mo
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Consumer Response $8.00 per contact
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Advertising and Marketing Buyer's Responsibility
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EXHIBIT B: TRANSITION SERVICES & CHARGES
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Function Description Charge Units
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Commission Payments Process commission reports, calculate & arrange $ 2,250 per month
payments. Does not include cutting checks.
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Coupon Redemption Buyer will need to establish own arrangement 1,150 per month plus
with clearing house. copuon clearing
house charges
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Trade Marketing TIPS Trade Funding Management Services- 4,755 per month
Additionally, the following annual fees will
apply. Annual fee = $4,665
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General Ledger Includes: Balance Sheet Income Statement, 5,000 per month
Department Expense & Trends
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Accounts Payable Process invoices for payment process. Invoice/ 3,000 per month
check $6.50; print check only $1.50; manual
check $20
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Cash Management Record & Reconcile bank activity 2,000 per month
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Capital Accounting Includes payment of capital invoices, establishing 5,833 per month
depreciable lives for each asset and reporting
asset cost in FAST system
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Staffing Staffing, compensation administration, 15,625 per month
AAP/EEOC/OFCCP
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Exhibit B: Canada Transition Services Charges Amounts in $Cdn.
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Note: All costs are Canadian dollars
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Function Description Charge Units
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Coupon Redemption Buyer Responsibility. Must establish cut-over
procedure re: liability for coupons dropped
prior to sale.
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- General Ledger Includes: Balance Sheet Income Statement, 3,362 mo
Department Expense & Trends
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- Accounts Payable Process invoices for payment, print and mail 5,044 mo
checks
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- Cash Management Record & reconcile bank activity 841 mo
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- Trade Marketing Trade Spending Reporting 4,203 mo
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Exhibit C: Transition Services & Charges
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Function Description Charge Units
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Order Management Order Receipt - EDI/FAX; Order Edit/Validation; Order Problem Resolution- 25,660 per month
Pricing/Inventory; Order Monitoring/Expediting; Military EDI Processing;
Invoicing/EDI Transmission; Invoice Adjustment Process
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VMI Includes: Agreement of performance criteria with customers, analysis of 2,487 per month
inventory & placing orders on behalf of selected customers
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Master File Maintenance Includes: Customer Master File, Product File, Price File, Promotion Deal 8,273 per month
File, EDI Control Tables, Invoice Allowance tables
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Distribution Operations - Includes: Negotiation of rates, setup of accounts with 3rd party providers, 10,234 per month
Warehousing & Distribution monitoring performance of 3rd parties from cost & services standpoint
Functions
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Forecasting/Production Includes: Production Scheduling & Product Control -- Identification of Aged 30,000 per month
Planning/Finished Goods Product. Sale of aged product not included in cost
Inventory Management/
Inventory-Forecasting Management
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Total Credit Function 41,449 per month
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- A/R Cash Application, A/R Control, Database
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- Credit Review of credit applications, maintenance of customer credit lines, timely
resolution of past due items
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- Customer Financial Services Deduction Resolution - Assignment of proper accountability for Trade
Spending programs, unsaleables, invoices corrections
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Inventory Accounting Includes FG inventory accountability from production to customer delivery 9,128 per month
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Freight Accounting Includes payment and recording of freight from shipment confirmation to 9,924 per month
Payment of line hauls and accessorials to carrier
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Includes: Orders and invoices, Case sales information collected in SDW, 4,000 per month
Sales Reporting maintenance of SDW & reporting tools
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Function Description Charge Units
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Systems Operating & support costs for 180,100 per month
BFC systems assuming BFC users
running systems prior to
partitioning systems
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Export Export sales & expediting overseas 18% of transfer cost
shipments - est. $30,000/mo
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Exhibit C: Canada Transition Services Charges Amounts in $Cdn.
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Note: All costs are Canadian dollars
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Function Description Charge Units
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Order Management Order Receipt - EDI/FAX; Order Edit/Valuation; Order Problem 4,338 mo
Resolution-Pricing/Inventory; Order Monitoring/Expediting;
Invoicing/EDI Transmission; Invoice Adjustment Process
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Master File Maintenance Includes: Customer Master File, Product File, Price File, 414 mo
Promotion Deal File, Ed. Control Tables, Invoice Allowance
Tables
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Forecasting/Production Planning/Finished Includes: Production Scheduling & Product Control -- 1,520 mo
Goods Inventory Management/Inventory- Identification of Aged Product. Sale of aged product not
Forecasting Management included in cost
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Total Credit, Accounting Function, & 22,696 mo
Local MIS
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- A/R Cash Application, A/R Control, Database 1,681 mo
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- Credit Review of credit applications, maintenance of customer 1,681 mo
credit lines, timely resolution of past due items. Bad
debts are buyer's responsibility.
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- Customer Financial Services Deduction Resolution - Assignment of proper accountability 4,203 mo
for Trade Spending programs, unsaleables, invoice
corrections
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- Sales Reporting Includes: Orders and invoices, Case sales information, 1,681 mo
maintenance of reporting tools
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Systems Includes all systems currently supporting BBNA businesses. Under separate mo
Excludes any cost for separation of businesses. cover
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Export N/A for these businesses
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EXHIBIT D
GENERAL PRINCIPLES REGARDING INFORMATION SERVICES, PROCUREMENT, RESEARCH AND
DEVELOPMENT, SALES AND MARKETING TRANSITION ISSUES
Information Services "IS" Overview: One Xxxxxx IS individual will be identified
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to represent Xxxxxx in all IS transition activities.
PHASE I: Initial Transition Activity
Planning: Xxxxxx IS individuals will cooperate with Buyer to help finalize a
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workable and timely IS Transition Plan (the "Plan") from set-up through
decoupling completion. The Plan will include comprehensive inventory of base
systems,, processes, reports, technologies and data files. Xxxxxx IS individuals
will support the planning process but will not be responsible for developing the
Plan.
Systems Establishment: Within one month of Closing, there should be an
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independent identity for the Buyer in each aspect of distribution, including but
not limited to inventory management through order entry and invoicing, and
finance, including but not limited to accounts receivable through general ledger
and bank reconciliation information. This will not require partitioning of
Xxxxxx systems. Xxxxxx IS individuals will run Xxxxxx systems on the Buyer's
behalf.
Initial System Transfer: Xxxxxx IS personnel will cooperate to accomplish the
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Information transfer process in the order agreed to in the Plan.
PHASE 2: Decoupling Transition Activity
System Transfer: Xxxxxx IS personnel will cooperate and support the effort to
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separate data and information flow for set up into the Buyer's stand alone
system in accordance with the agreed to Plan. Additionally, Xxxxxx IS will
provide copies of existing documentation of all programs supporting Signature
Flavor Brands, developed by the Xxxxxx staff to the extent it can do so without
cost or undue inconvenience.
System Testing: Xxxxxx IS personnel will not be responsible for testing Buyer's
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stand alone systems but Xxxxxx IS personnel will provide support in the
validation and testing of the data during the transfer process to the Buyer's
stand alone systems.
System Transfer Completion: Xxxxxx will maintain its current level of service,
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control and responsiveness for all outsourced services provided to the Buyer
throughout the Transition Period.
PROCUREMENT
Xxxxxx will provide information with respect to (i) raw materials used and (ii)
historical suppliers of the raw materials. Xxxxxx will provide information or
manuals on its historical procurement policy and procedures. The foregoing is
intended to be only copies of existing documents.
RESEARCH AND DEVELOPMENT
To the extent Xxxxxx'x and development capacity will accommodate same, Xxxxxx
will perform research and development, quality assurance and recipe development
activities at Buyer's request and Buyer's cost.
SALES TRANSITION ACTIVITIES
At the earliest appropriate date, expected to be very early in December, Xxxxxx
and Buyer shall have an agreed upon joint letter/statement to the trade, brokers
and other relevant parties announcing the acquisition, transition plan and other
details necessary to address their anticipated concerns.
MARKETING
Xxxxxx will provide reasonable access to current senior product managers for
Signature Flavor Brands for a maximum of 120 days.
Xxxxxx will cooperate where feasible to achieve mutually beneficial joint
corporate marketing benefits including but not limited to discounts on media
purchases during the Transition Period.
