TRANSITION STORAGE AND HANDLING AGREEMENT
This Transition Storage and Handling Agreement (this "Agreement") is
made and entered into as of April 29, 1996 by and between HEINZ PET PRODUCTS
COMPANY, a Division of Star-Xxxx Foods Inc., a California corporation,
(hereinafter referred to as "HEINZ") and XXXXX XXXX PET FOOD COMPANY INC., a
Delaware corporation (hereinafter referred to as "XXXXX XXXX").
WHEREAS, this Agreement is entered into in connection with the
acquisition of the Tuffy's, Vets, and Kozy Kitten Pet Food Businesses (the "Pet
Food Business") by XXXXX XXXX, pursuant to the terms and conditions of a certain
Asset Purchase Agreement, dated April 17, 1996 (the "Purchase Agreement").
WHEREAS, upon the consummation of the acquisition and related
transactions contemplated by the Purchase Agreement, XXXXX XXXX will carry on
the Pet Food Business acquired from HEINZ.
WHEREAS, XXXXX XXXX desires to have HEINZ provide certain storage and
handling services as specified in Attachment 1 to this Agreement and HEINZ has
agreed to provide such services pursuant to the terms and conditions set forth
below, and
WHEREAS, all capitalized terms used without definition in this
Agreement shall have the meaning specified in the Purchase Agreement.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
that this Agreement contains, and for other good and valuable consideration, the
receipt and adequacy of which the parties acknowledge, XXXXX XXXX and XXXXX, in
tending to be bound legally agree as follows:
(1) This Agreement shall become effective on April 29, 1996 (the
"Effective Date") and continue in full force and effect through July 29, 1996.
XXXXX XXXX may, at its sole
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discretion, elect to terminate services at any one or more of the warehouses
(each a "Warehouse" and collectively, the "Warehouses") under this Agreement
before July ___, 1996. XXXXX XXXX shall give HEINZ thirty days' prior written
notice of such early termination.
(2) HEINZ shall store and handle at each of the Warehouses products of
the Pet Foods Business for XXXXX XXXX as an independent contractor, not as a
partner or agent of XXXXX XXXX, and shall render services as specified in this
Agreement at the Warehouses.
(3) Services provided by HEINZ shall include in and out handling, order
filling, supervision and clerical services, maintaining inventory records and
supplying daily reports listing quantities received and quantities shipped and
balance on hand, by SKU. HEINZ shall properly rotate the XXXXX XXXX merchandise.
Damage to XXXXX XXXX products and inventory loss from causes other than the
negligence of XXXXX XXXX shall not exceed 0.5% of the dollar amount of outbound
shipments during the term of this Agreement. At the end of the term of this
Agreement, HEINZ shall reimburse XXXXX XXXX for all loss and damage from causes
other than the negligence of XXXXX XXXX in excess of said allowance, in an
amount equal to XXXXX XXXX standard product cost for said excess. HEINZ may
recoup any such damaged product and thus reduce inventory loss. XXXXX XXXX may,
but shall not be required to, salvage and resell any damaged merchandise, in
which case the net proceeds of the sale shall reduce the inventory loss. HEINZ
shall have no liability or obligation to XXXXX XXXX for merchandise that becomes
unsaleable because of age due to circumstances other than a breach of the
obligations of HEINZ under this Agreement. HEINZ shall store all goods and
merchandise warehoused for XXXXX XXXX by XXXXX under this Agreement in a manner
similar to the manner that HEINZ stored such merchandise at the Warehouses
immediately before the Effective Date. HEINZ shall not permit XXXXX XXXX to
install its inventory management systems at the Warehouses.
HEINZ shall process all orders, shipments, and inventory transactions
through its "COPS" or normal system. HEINZ shall provide XXXXX XXXX with
information which is currently available as requested at no additional charge.
HEINZ shall honor special requests for information when possible at a
compensation level mutually agreeable to HEINZ and XXXXX XXXX.
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HEINZ shall tender all outbound shipments shipper load / carrier count.
The carrier count shall be binding upon XXXXX XXXX with respect to product count
and product damage. Notwithstanding the foregoing, HEINZ shall be liable for
shortages or product damage on outbound shipments if HEINZ does not permit the
carrier to count or if XXXXX XXXX has sufficient evidence that the shortage or
damage was due to the negligence or misconduct of HEINZ. HEINZ may, but shall
not be obligated to, refuse to load any trailer not meeting the safety or
sanitation standards of HEINZ or of XXXXX XXXX.
HEINZ retains the right, but shall not be obligated to, to inspect all
inbound shipments and to reject any products not meeting its sanitation or
safety requirements. XXXXX XXXX shall indemnify and hold harmless HEINZ
(including its affiliates, parent, and subsidiary companies) from and against
any and all claims, demands, actions, suits, causes of action, liabilities,
damages, and expenses (including, but not limited to attorneys' fees) arising
from the warehousing, storage, or handling of infested or contaminated XXXXX
XXXX merchandise under this Agreement.
HEINZ shall be responsible for payment of all demurrage charges of
incoming inventory not unloaded in a timely manner in accordance with historical
standards.
(4) For the services specified above, XXXXX XXXX shall pay in
accordance with Section 5 to HEINZ a monthly storage, handling, administrative
and transportation charges as set forth in Attachment 1. The monthly storage and
administrative charges shall not be prorated for any partial month of services
being provided. All months shall be on a HEINZ fiscal month basis. These rates
are inclusive and cover all services provided by HEINZ excluding charges for
conducting a physical inventory or charges for extra services.
In the event of a product recall necessitating extra services from
HEINZ with respect to XXXXX XXXX merchandise at the Warehouses, XXXXX XXXX shall
reimburse HEINZ fully for the labor costs, at the regular or overtime rate,
whichever is applicable, that HEINZ incurs in providing such extra services. If
XXXXX XXXX shall desire other extra services from HEINZ at the Warehouses not
associated with recall, the parties shall negotiate a price for such services.
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(5) XXXXX XXXX shall pay all monies due and payable to HEINZ under this
Agreement in accordance with the Transition Services Agreement of even date with
this Agreement between the parties or if such Transition Services Agreement is
not in effect, within ten days after receipt of invoice. HEINZ shall xxxx XXXXX
XXXX within ten days after the fifteenth day of each month for the handling
charges incurred in the month preceding and storage charges for the month
following, such invoice to be accompanied by appropriate documentation and in a
fashion so as to recap the activity with reasonable specificity. If termination
of this Agreement is on a date other than the fifteenth day of a month, HEINZ
shall xxxx XXXXX XXXX within ten days after termination for the handling charges
incurred from the most recent fifteenth day of a month during the term of this
Agreement to termination.
(6) All taxes, utilities and maintenance relating to the Warehouses
will be the responsibility of HEINZ and are included in the storage rate.
(7) (a) XXXXX XXXX shall indemnify and hold harmless HEINZ (including
its affiliates, parent and subsidiary companies) from and against any and all
claims, demands, actions, suits, causes of action, damages and expenses
(including, but not limited to, expenses of investigation, settlement,
litigation and attorneys' fees incurred in connection therewith), (i) which are
hereafter made, sustained, or brought against HEINZ (including its affiliates,
parent and subsidiary companies) and/or any of its customers by any individual,
corporation, partnership, limited liability company, joint venture, association,
joint-stock company, trust, unincorporated organization or foreign, federal,
state, local or other governmental authority or regulatory body (each, a
"Person") in connection with damages to or defects in XXXXX XXXX products
resulting from XXXXX XXXX'X actions; or (ii) which arise from a breach by XXXXX
XXXX of the terms of this Agreement.
(b) HEINZ shall indemnify and hold harmless XXXXX XXXX (including
its affiliates, parent and subsidiary companies) from and against any and all
claims, demands, actions, suits, causes of action, damages and expenses
(including, but not limited to, expenses of investigation, settlement,
litigation and attorneys' fees incurred in connection therewith), (i) which are
hereafter made, sustained, or brought against XXXXX XXXX (including its
affiliates, parent and subsidiary companies) and/or any of its customers by
any Person in connection
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with damages to or defects in XXXXX XXXX'X products resulting from HEINZ'
actions; or (ii) which arise from a breach by HEINZ of the terms of this
Agreement.
(c) With respect to any third person claim, demand, action, suit,
cause of action, damages and / or expenses against a party entitled to
indemnification hereunder (an "Indemnifying Party"), the party responsible for
indemnification hereunder (the "Indemnifying Party") shall have the right to
conduct and control, through counsel of its choosing, the defense, compromise or
settlement of any such matter as to which indemnification will be sought by the
Indemnified party from the Indemnifying Party hereunder, and in any such case
the Indemnified party shall cooperate in connection therewith and shall furnish
such records, information and testimony and attend such conferences, discovery
proceedings, hearings, trials and appeals as may be reasonably requested by the
Indemnifying party in connection therewith; provided that the Indemnified Party
may participate, through counsel chosen by it and at its own expense, in the
defense of any such claim, demand, action, suit or cause of action as to which
the Indemnifying Party has so elected to conduct and control the defense
thereof. Notwithstanding the foregoing, the Indemnified party shall have the
right to pay, settle or compromise any such claim, demand, action, suit, cause
of action, damages or expenses; provided, however, that in such event the
Indemnified party shall waive any right to indemnity therefore hereunder.
(8) It is understood and agreed that if any paragraph or portion of
this Agreement shall be in violation of any applicable law, such paragraph or
portion shall be inoperative, but the remainder of the Agreement shall remain
valid and shall continue to bind the parties.
(9) For a period of one year after the end of the term of this
Agreement, XXXXX XXXX may request HEINZ to provide warehousing and handling
services under this Agreement. HEINZ on its sole discretion may agree to provide
or decline to provide such services. If HEINZ provides such services, the
charges shall be as set forth in Section (B) of Attachment 1.
(10) This Agreement may be terminated by the parties as follows:
(a) XXXXX XXXX may terminate this Agreement at any time, for
any reason, if it shall have given at least thirty days' prior written
notice of such termination.
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(b) XXXXX XXXX may terminate this Agreement as to any
Warehouse upon thirty days' notice.
(c) XXXXX XXXX may terminate this Agreement in the event of a
material breach of this Agreement by HEINZ, which breach remains
unremedied fifteen days after notice thereof to HEINZ
Upon expiration or termination of this Agreement for any reason HEINZ
shall return to XXXXX XXXX all written confidential information received from
XXXXX XXXX or its affiliates. For the purpose of this paragraph, HEINZ agrees
that upon expiration or termination of this Agreement, it shall promptly advise
XXXXX XXXX of the quantity of XXXXX XXXX'X products that it has on hand at such
termination date.
(11) HEINZ shall maintain at its expense such insurance as will fully
protect it from claims under Worker's Compensation and Occupational Disease Acts
and from any other claims for damage for bodily injury, inducing death, and for
property damage, that may arise from operations under this Agreement, whether
such operations be by HEINZ or by any subcontractor or anyone directly or
indirectly employed by either of them.
(12) Any notice required or permitted under the terms of this Agreement
may be given by either party to the other by registered mail, addressed to the
party to whom the notice is to be given at the address as follows:
HEINZ: STAR-XXXX FOODS, INC.
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Vice President - Purchasing and Logistics
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XXXXX XXXX: XXXXX XXXX PET FOOD COMPANY
Xxx Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: President
(13) This Transition Storage and Handling Agreement shall be binding
upon the parties, their heirs, beneficiaries, legal representatives, successors
and/or permitted assignees and may not be modified except by instrument in
writing signed by the parties or their respective successors in interest.
(14) This Agreement may not be assigned by XXXXX XXXX or HEINZ (except
to any majority owned subsidiary or division) unless mutually agreed in writing.
Any assignment of this Agreement other than in accordance with this Section 14
shall be void and of no effect.
(15) This Transition Storage and Handling Agreement contains all of the
agreements of the parties with respect to any matter covered or mentioned in
this Transition Storage and Handling Agreement. No prior agreements or
understanding pertaining to any such matters shall be effective for any purpose.
This Agreement shall not be effective or binding on any party until fully
executed by both parties.
(16) All questions of law, rights and remedies regarding any act, event
or occurrence relating to this Agreement, shall be governed by and construed in
accordance with the law of the Commonwealth of Kentucky without regard to its
provisions concerning conflicts or choice of law.
(17) HEINZ shall not be considered the consignee or the owner of any
merchandise that it stores under this Agreement. XXXXX XXXX shall not list HEINZ
and shall not permit HEINZ to be listed, as consignee on any xxxx of lading or
other shipping document for merchandise shipped to the Warehouse for storage
under this Agreement.
(18) Under no circumstances whatsoever shall HEINZ or XXXXX XXXX be
entitled to offset any amounts payable pursuant to this Agreement against any
amounts payable pursuant
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to, or with respect to, any claims of whatsoever nature between HEINZ and XXXXX
XXXX and any of their respective affiliates under, any other agreement or
arrangement between HEINZ and XXXXX XXXX or any of their respective affiliates,
without limitation, the Asset Purchase Agreement, dated April 17, 1996, the Kozy
Kitten License Agreement, the Promissory Note, and any other agreement
contemplated by or executed in connection with the Asset Purchase Agreement.
Notwithstanding the foregoing, either party shall be entitled to set off or
recoup against any amount payable to the other party pursuant to this Agreement
any amount payable by the other party to such first party pursuant to this
Agreement.
IN WITNESS WHEREOF, each party has signed this Transition Storage and Handling
Agreement, as of the day and year first above written.
HEINZ PET PRODUCTS COMPANY
A Division of Star-Xxxx Foods, Inc.
By: /s/ Xxxxxxx Xxx Xxxxxxxx
---------------------------------
Title: Chief Cost Officer
XXXXX XXXX PET FOOD COMPANY
By: /s/ Xxxxxx X. Xxxx
---------------------------------
Title: V.P. Finance
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Attachment 1
Rates for Xxxxx Xxxx
Warehousing:
(A)
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Storage
Location Handling Initial Recurring
-------- -------- ------- ---------
Bloomsburg, PA $.76 / cwt $.24 / cwt $.32 / cwt
Carrollton, TX * .96 .21 .28
Jacksonville, FL * .76 .195 .26
Kankakee, IL .93 .38 .50
Carson, CA .56 .30 .40
Stockton, CA* .81 .285 .38
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Order Processing / Logistics Services
$7,875 / month or portion of Month
This charge will cover dispatching, combining of orders, and inventory
management. Xxxxx Xxxx will provide shipment information via EDI to HPP
locations and Global Logistic Services, our third party dispatching provider.
Freight and Delivery
Actual Costs + $.10 / cwt assessorial fee
(B) Should Xxxxx Xxxx desire to continue to utilize HPP warehouses after
the end of the term of this Agreement pursuant to Section (9) of this
Agreement, the flat fee of $7,875 for Order Processing and Logistic
Services will be replaced by a $13 per order administrative charge. The
separate Storage and Handling charges per cwt. and Freight and Delivery
charges would also continue to apply.
(C) Xxxxx Xxxx will provide all specialized forms and reports. Xxxxx Xxxx
will contract directly with any third party warehouses as required.
