EXHIBIT 10.10
NEW DISTRIBUTION AGREEMENT
This Distribution Agreement (sometimes referred to as the "New Distribution
Agreement" or this "Agreement") is entered into as of this 11th day of January,
1999 by and between Xxxxxx'x Grand Ice Cream, Inc., a Delaware corporation
headquartered at 0000 Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000 ("Distributor")
and Ben & Jerry's Homemade, Inc., a Vermont corporation headquartered at 00
Xxxxxxxxx Xxxxx, Xxxxx Xxxxxxxxxx, Xxxxxxx 00000-0000 ("Manufacturer").
WHEREAS, the parties wish to confirm that a certain Distribution Agreement
dated as of January 6, 1987, as amended, including by a Letter Amendment
Agreement dated on the date hereof (the "Letter Amendment Agreement", and such
1987 Agreement as so amended by the Letter Amendment Agreement being sometimes
referred to as the "Old Agreement"), will automatically expire, without further
notice or actions, as of the close of business on August 31, 1999, and wish,
simultaneously with the entering into the Letter Amendment Agreement and the
filing of the Stipulation of dismissal with prejudice in the pending case of
Xxxxxx'x Grand Ice Cream, Inc. and Edy's Grand Ice Cream vs. Ben & Jerry's
Homemade, Inc., to enter into this Agreement effective today, but providing for
the distribution upon the terms and conditions set forth below, commencing on
September 1, 1999, of the Manufacturer's Products by Distributor in the
Distributor Territory as defined below and for certain related matters set forth
below.
NOW THEREFORE, in consideration of these premises, the mutual promises of
the parties and other good and valuable consideration, receipt of which is
hereby acknowledged, the parties agree as follows:
1. PURPOSES OF AGREEMENT. Manufacturer is engaged in the manufacture, sale
and distribution of ice cream and frozen dessert products manufactured and sold
under the trade name "Ben & Jerry's" and in some cases other names. Distributor
is engaged in the manufacture, sale and distribution of ice cream products and
frozen desserts sold under several brand names including "Dreyer's" and "Edy's"
and including ice cream products manufactured by or for others. The use of the
term "Distributor" in this Agreement means Xxxxxx'x Grand Ice Cream, Inc. and
any controlled subsidiaries thereof engaged in ice cream operations in the
United States (production or distribution). The term "Manufacturer" shall mean
Ben & Jerry's Homemade, Inc. and any controlled subsidiaries thereof engaged in
the United States.
Distributor and Manufacturer desire to enter into this Agreement setting
forth the mutual rights and responsibilities of the parties with respect to the
distribution, resale and promotion of Products (as defined) of the Manufacturer
through the distribution system of the Distributor, being the Distributor's
owned and operated distribution system and its authorized subdistributors.
It is understood that such distribution will commence September 1, 1999,
and that all of the provisions of this Agreement shall only be effective
commencing September 1, 1999, provided, however, that the provisions of Section
13 hereof shall be effective immediately.
"Best efforts" as used in this Agreement means commercially reasonable use
of available resources to accomplish the specified objectives.
1.1 Representation. Distributor hereby represents that as of the date
hereof it is not in default in any respect under, and will not be in default in
any respect but for the running of any applicable grace period under, any loan
agreement or other agreement for the borrowing of money or capitalized leases.
2. Distribution.
2.1 Appointment of Distributor. Subject to all of the terms hereof,
Manufacturer hereby appoints Distributor, commencing September 1, 1999, as a
non-exclusive distributor for the Products (as defined below) in the Distributor
Territory within the United States as set out in Schedule 0X (xxx "Xxxxxxxxxxx
Xxxxxxxxx"), which Distributor Territory may be changed by mutual written
consent of the parties.
The Products distributed by Distributor hereunder include (i) Ben & Jerry's
brand items which are pints, quarts, half gallons, single serve and including
bulk sizes of ice cream, frozen yogurt, sorbet, novelties and other frozen
desserts manufactured by the Manufacturer and (ii) subject to the effect of
distribution agreements between Distributor and third parties effective prior to
a designation by Manufacturer adding Products hereunder, such other brand ice
cream, frozen yogurt, sorbet, novelties and other frozen desserts of other
persons as are involved in a significant relationship with Manufacturer as may
be designated by Manufacturer from time to time, all as set forth in Schedule 2B
as supplemented or revised by Manufacturer from time to time with reasonable
notice to Distributor (collectively, the "Products").
Subject to all of the terms hereof, Distributor accepts such appointment
and agrees to use its best efforts to distribute, resell, and deliver the
Products in all flavors and sizes to all types of retail stores and all other
types of accounts in this Distributor Territory and to promote the Products in
accordance with the terms of this Agreement throughout the Distributor
Territory.
In accordance with the foregoing, Distributor will use its best efforts to
meet the distribution performance standards set out in Schedule 2C, and with
such updates and revisions as shall be agreed at least annually with respect to
each ADI or other market area listed on Schedule 2A (the "Performance
Requirements"). It is understood that the Distributor is responsible for meeting
the Performance Requirements on an annual basis on a market by market basis
within the Distributor Territory for the Distributor Territory served directly
(and if expressly applicable under Section 2 of this Agreement, geographic areas
within the Distributor Territory served indirectly, by using authorized
subdistributors). It is understood that, in the event that the Manufacturer adds
an additional distributor in part of the Distributor Territory, the volume
levels contained in the Performance Requirements shall be appropriately reduced
to reflect such appointment.
The performance goals, i.e. annual business plan volume, etc. (the
"Performance Goals") for any given calendar year, determined as provided below,
shall include the performance matters referred to in the immediately preceding
paragraph that the Distributor reasonably should be expected to achieve in the
Distributor Territory for such year and shall be determined by taking into
account (a) the Performance Goals for the immediately preceding year, (b) actual
performance of the Distributor during the immediately preceding year, (c) any
events or situations out of the ordinary that have occurred in the immediately
preceding year or are reasonably expected to occur in the marketplace in the
following year, which affected or would reasonably be expected to affect
Distributor's performance, and (d) any reasonably reliable market performance
data for the various markets in which the Distributor and other distributors
distribute substantially the same products of the Manufacturer.
The Performance Requirements and the Performance Goals for each calendar
year commencing 2000 shall be proposed no later than October 1 of the preceding
year by Manufacturer, after prior consultation with Distributor, and thereafter
shall be the subject of good faith negotiations by the parties. In the event the
parties fail to reach agreement by October 15 in any year on the Performance
Requirements and Performance Goals for the next calendar year, then the
Performance Requirements and Performance Goals for the next calendar year shall
be determined by the averaging of the Performance Requirements and Performance
Goals (where applicable) for the top four (other than those to be applicable
under this Agreement) of the major national markets used by the Manufacturer for
distribution, planning and operational purposes, provided that, as to 1999
(which consists of the months of September - December), the parties commit to
reach agreement on the 1999 Performance Requirements and Performance Goals by no
later than March 31, 1999.
Distributor confirms that it will, except as otherwise specified in this
Agreement, use its best efforts to follow Manufacturer's general distribution
policies (the "Distribution Policies") as now in effect and as reasonably
amended for application to Manufacturer's distributors generally upon reasonable
written notice to Distributor (see Schedule 2D for the Distribution Policies as
in effect on the date hereof).
2.2 Accounts. It is agreed that Distributor Territory will include, for all
Products except bulk, any and all channels and all retail outlets, including,
but not limited to, supermarkets, A and B stores/supermarkets, military bases,
food service accounts and concession areas, Distributor owned push carts and
bunker promotions in supermarkets, convenience stores, Mom and Pops and
specialty food stores and club stores (including those served on a consignment
basis as provided below). Except for mutually agreed authorized subdistributors
(whether or not Distributor owns a minority interest therein), Distributor will
establish, maintain and operate company-owned and operated trucks, warehouse and
related assets as necessary to obtain the distribution coverage needed to carry
out Distributor's obligations to distribute the Products. Distributor will sell
the Products to accounts whether or not the account wishes to purchase any other
products distributed by Distributor.
Distributor agrees that it will not knowingly, directly or indirectly,
through independent distributors or otherwise, sell, market or distribute the
Products to any person outside the Distributor Territory or for sale outside the
Distributor Territory.
2.3 Sales in Distributor Territory and Authorized Accounts. Food Service
Accounts. With respect to distribution of Food Service (which shall include
novelties that are also distributed as provided in Section 2.2. above and bulk)
which shall consist of sales to non-grocery channels, including, but not limited
to, concessionaires, captive accounts, institutional accounts, restaurants and
the like and shall also include such scooping venues (other than franchises) as
may be established from time to time by the Manufacturer, the Distributor shall
sell to such Food Service accounts as the Manufacturer may reasonably designate
from time to time. It is understood that there may be changes in the
Manufacturer's designation of Food Service accounts which are to be handled by
the Distributor, and the parties agree to reach reasonable accommodations in
order to realize the potential for sales of the Products to Food Service
accounts.
Distributor agrees to distribute only to the authorized types of accounts
in the Distributor Territory in accordance with this Agreement, including
Sections 2.2 - 2.4. In order to carry out the provisions of this Agreement,
Distributor will abide by and, where applicable, impose these contractual
restrictions on all the persons distributing Products under this Agreement who
are not presently bound by an agreement with Distributor, except when otherwise
authorized in writing by the Manufacturer. Notwithstanding the foregoing,
nothing herein shall permit enlargement of the Distributor Territory.
Nonetheless, in the event that the Products are made available to a
non-permitted account, Distributor agrees to use its best efforts to remedy the
situation. Distributor, consistent with applicable law, will use its best
efforts to terminate any distributor or other person who continues to sell
unauthorized accounts. It is understood that the best efforts obligations of
Distributor with respect to the customer/territorial limitations are to use best
efforts, consistent with law, in enforcing such customer/territorial
restrictions under this Agreement and that Distributor shall not be liable to
the Manufacturer for any unauthorized sales or resales by the other distributors
as long as Distributor has not authorized any sales by other distributors in
derogation of the rights retained by the Manufacturer.
2.4 Distribution to Franchisees, etc. To the extent Manufacturer supplies
the Products to Distributor, Distributor agrees to supply the Products,
including bulk, to Manufacturer's franchised, licensed and company-owned scoop
shops in the Distributor Territory on a drayage basis. Distributor understands
that Manufacturer's franchise agreements require it to serve franchise customers
first in the event of product shortage. Distributor will receive a handling fee
per item delivered as established by Manufacturer, that fee currently being [ *
] per 2 1/2 gallon bulk tub and [ * ] per sleeve of pints and miscellaneous
boxed goods, with [ * ] of the freight to the Distributor to be the
responsibility of Distributor.
* This confidential portion has been omitted and filed separately with the
Commission
2.5 No Exclusive Rights. As of the date of this Agreement, Manufacturer has
no other distributors in the Distributor Territory for the supermarket channels
of distribution. Before Manufacturer grants any other person a right to
distribute the Products in the Distributor Territory, Manufacturer shall first
give not less than 30 days prior written notice to Distributor and shall consult
with Distributor. Before Distributor commences the distribution of any ice cream
products of another person not being distributed by Distributor on the date
hereof, Distributor will give Manufacturer not less than 30 days prior written
notice and shall consult with Manufacturer.
2.6 Distributor's directly Owned and Operated Distribution System. It is
understood that in the Distributor Territory Manufacturer shall sell the
Products to Distributor for distribution through Distributor's distribution
system (as more specifically described in Section 5.2 hereof ("DSD")) and with a
small percentage distributed by authorized subdistributors of the Distributor.
Distributor agrees that its maximum resale prices on Products resold to
subdistributors will not exceed [ * ] above the prices paid by Distributor for
such Products to the Manufacturer, including freight, under Section 9.
Distributor agrees that all subdistributors shall be subject to the
approval of the Manufacturer, which may not be unreasonably denied. All current
subdistributors are hereby approved by Manufacturer and will be listed on a
Schedule 2.6 to be delivered by Distributor to Manufacturer as soon as
practicable after execution of this Agreement by the parties. Manufacturer shall
have the right to suggest subdistributors subject to the approval of
Distributor, which may not be unreasonably denied. Without limiting any other
provision of this Agreement, the Manufacturer shall also have the right to
appoint an additional subdistributor or, if Distributor does not accept a
designated subdistributor, a co-distributor in an area if Distributor is unable
to sell any Products into a particular class of trade (such as Mom & Pops) or a
particular account of significance (an account with at least six stores) and,
provided that this right shall be limited to sales to such account(s) or class
of trade.
2.7 SUPPLY OF PRODUCTS FOR DISTRIBUTION. Manufacturer agrees to use its
best efforts to make the Products available to Distributor hereunder F.O.B.
Manufacturer's plants in Vermont, in such quantities and flavor assortments as
Distributor may reasonably require, subject only to Manufacturer's right, if
reasonably required by force majeure or other unforeseen circumstances affecting
production delays (subject to any priority contractually required by the
franchise agreements referred to above) to allocate Products between all
distributors and franchisees, including Distributor and Manufacturer's other
distributors (independent or company-owned) in this country or those buying for
distribution in foreign countries. Distributor shall purchase on full pallet
basis (or on a split pallet basis with a picking charge), one flavor per pallet
and on half-trailer load minimum basis.
* This confidential portion has been omitted and filed separately with the
Commission
2.8 No Discrimination. In order to ensure that competition for the Products
and products of the Distributor is vigorous, Distributor agrees that all
incentive, commission or other compensation programs or benefits for its route
salesmen or other sales and sales-type employees and other employees directly
involved in the distribution function shall have
incentive/commission/compensation/benefit terms relating to distribution of the
Products of the Manufacturer that are at least equal to those relating to
distribution of products manufactured by Distributor or other products
distributed by Distributor and that the instructions to and conduct of the
Distributor's personnel in the Distributor Territory shall be implemented so as
not to discriminate, directly or indirectly, against distribution of the
Products of the Manufacturer.
2.9 Co-Distribution, Etc. As to all ADI's within the Distributor Territory
where Distributor distributes products directly (or through independent
distributors and subdistributors, if and where so permitted by the express terms
of this Agreement) and where Manufacturer may be selling to other distributors,
Distributor will be co-distributors with Manufacturer's other distributors, and,
as between the Manufacturer and Distributor, Distributor will not commit any
material unfair trade practices as to such other distributors or attempt to
unlawfully interfere with their customers, and Manufacturer, when acting as a
distributor, will not commit any material unfair trade practices as to
Distributor or attempt to unlawfully interfere with Distributor's customers, it
being understood that neither Distributor nor Manufacturer shall be responsible
for actions taken or not taken by any of the other distributors or
subdistributors used by them.
3. Marketing and Sales. Manufacturer shall be responsible for marketing of
the Products in accordance with the provisions of this Agreement, subject to the
following:
3.1 Manufacturer and Distributor shall regularly exchange by electronic
means any information necessary to the performance of their respective
responsibilities and roles hereunder. Manufacturer will receive from Distributor
data provided through the standard UCS 867 product transfer/resale set. The
data, provided weekly, will be of the same quality and coverage as has been
supplied by Distributor in 1998 under the Old Agreement. Each party will
cooperate with the other to be able to receive and transmit data through the
standard UCS 867 protocol as soon as practicable.
3.2 Manufacturer will be responsible for the generation and [ * ] of the
cost of the following: all print, radio, tv or other media advertising placed by
the Manufacturer and all consumer promotions, i.e., scoop trucks, marketing
events and community events. Each party shall promptly pay, subject to the
following provisions, [ * ] of the cost of all slotting and trade promotions on
the Manufacturer's Products in the Distributor Territory, which shall not
include the foregoing items in the previous sentence, but shall include
off-invoice, retailer ads, retailer display specials, bunker programs, etc.,
other trade promotional techniques which may be used in lieu of such
conventional trade promotions. So long as each party's cost of trade promotions
and
* This confidential portion has been omitted and filed separately with the
Commission
slotting as so defined herein on the Manufacturer's Products does not in the
aggregate exceed for all markets in the Distributor Territory [ * ] per
Equivalent Unit (as such term is defined in Schedule 3.2) per year, the
Distributor shall pay its [ * ] share of such trade promotions and slotting,
without any requirement for consent by Distributor.
With respect to the second category of trade promotions that would in the
aggregate exceed for all markets [ * ] per EU per year [ * ] share of trade
promotions, the parties must mutually agree on the promotion, in the event of
which agreement the cost of the trade promotion shall be shared on a [ * ]
basis, provided that, in the event the parties do not mutually agree on a trade
promotion in this second category, then the Manufacturer may require such trade
promotion to be carried out as directed, but with [ * ] of the cost of such
trade promotion being the responsibility of Manufacturer, it being understood
that Manufacturer shall first be required to send a notice to Distributor
committing to such [ * ] cost responsibility. It is understood that the
provision of [ * ] per EU per year will be subject to appropriate adjustment in
the event of a meaningful change in market conditions for promotion of
Manufacturer's Products (for example, if a retailer materially changes its way
of doing business). All credits or other payments necessary to carry out the
provisions of this Section 3.2 shall be made by the parties on a monthly basis,
and any adjustment necessary to "true up" the amounts shall be made on a
quarterly basis, with the final adjustment promptly after the end of each
calendar year.
3.3 It is understood that, unless otherwise agreed, Manufacturer's sales
representatives shall make presentations and sales calls to Supermarket Channel
(three cash registers or more), convenience store chains, national accounts,
restaurants, and any other accounts designated by Manufacturer following
reasonable notice to Distributor as to presentations and sales calls in the
Distributor Territory, provided that Distributor personnel in the distribution
system may accompany Manufacturer's personnel, unless inappropriate in
Manufacturer's judgment, to assist in the effective promotion of the Products
through the distribution system. With respect to other accounts which are to be
sold by Distributor under this Agreement, including convenience stores (other
than convenience store chains) and Mom & Pops, Manufacturer has determined that
it would be most efficient for sales calls to be made by Distributor personnel
at the direction of the Manufacturer. In addition, all promotions on the
Products must be only those authorized by the Manufacturer, prior to offering
these to accounts.
4. Social Mission Activities. Distributor recognizes the benefit of the
image and reputation of the Products and of the Manufacturer that has been
previously created in the Distributor Territory, including that part of the
image and reputation related to the Manufacturer's approach to marketing
activities, community oriented events, promotions or benefits and the
Manufacturer's Social Mission, as set forth in Schedule 4.1. Distributor
acknowledges its responsibility to maintain and sustain that image and
reputation in Distributor activities as a distributor of the Manufacturer in the
Distributor Territory, including the obligations set forth in Section 4.1
hereof.
* This confidential portion has been omitted and filed separately with the
Commission
4.1 Distributor shall use its best efforts to integrate into its business
of distributing the Products of Manufacturer hereunder a reasonable number
(given the size of Distributor's operation) of socially responsible activities
which are not inconsistent with those activities and programs which Manufacturer
conducts to implement its social mission, as described in Manufacturer's Annual
Report for 1997 and other Manufacturer's materials attached as Schedule 4.1 and
as reasonably updated from year to year by Manufacturer upon reasonable notice
to Distributor. The Manufacturer acknowledges that the activities of the
Distributor set forth in Schedule 4.2 are examples of such socially responsible
activities and that activities of the Distributor in the "socially responsible"
arena have been acceptable overall through the date of execution of this
Agreement. However, Distributor as is its custom, will strive to make
improvements to the same as may be reasonable in the circumstances. It is also
understood that, in completing the Questionnaire furnished under Schedule 4.1 on
an annual basis, Distributor shall be entitled not to respond to the extent that
the response would include confidential business information of Distributor.
Material failure by Distributor to identify and implement such socially
responsible activity from time to time, after notice of such failure, in
reasonable detail, from Manufacturer and 90 days cure period, shall, unless
reasonably cured by Distributor in said cure period, constitute Cause under
Section 8.3.
5. Delivery; Other Services. Distributor shall be responsible for delivery
of the Products and shall provide the same delivery service and care it provides
for its own products, including service (such intervals in the week as is
necessary, given the retail outlet, to exploit the market potential) for all
types of accounts, products rotation, correct flavor assortment, proper display
and pricing of product, removal of damaged product (provided that in the event
that Product is required to be removed pursuant to a decision of the
Manufacturer, such as discontinuance of a slow moving item, the Distributor
shall be solely entitled to credit for the purchase price previously paid for
such Product), assurance of adequate back stock where allowed and display of
merchandising materials in and around the freezer case. Distributor also agrees
to comply with Manufacturer's general service standards for distributors as set
forth in the Distribution Policies referred to above and including those in
Section 5.2 below.
These services will be provided by Distributor where Distributor delivers
its own products. To the extent that the Products are expressly permitted by
this Agreement to be delivered by independent distributors (or subdistributors)
used by Distributor, Distributor will exercise best efforts to cause such
independent distributors (or subdistributors) to provide delivery service and
care of the Products as aforesaid but shall in no event be liable to
Manufacturer for any act or omission in respect thereof by any such distributor.
However, in the event that such independent distributors (or subdistributors) do
not provide such delivery and care of the Products, Distributor will take action
to correct the deficiency or appoint other distributors (or subdistributors) to
provide the required delivery and care of the Products.
5.2 Temperature/Handling. All Products of the Manufacturer must be stored
at -15 degrees F. The Products may at no time in the channel of distribution go
above -10 degrees F under this Section 5.2 and as provided in the Distribution
Policies of Manufacturer. In the event Manufacturer determines that Products are
being handled at improper temperatures, Manufacturer reserves the right to
insist that Product be destroyed if quality of such Product is affected at any
time and Distributor will remain responsible for payment for the destroyed
Products.
It is agreed that the required form of market delivery by Distributor under
this Agreement is direct store delivery ("DSD"). DSD is the process by which
consumer demand is fulfilled and delivered at the store level. As part of this
process, Distributor's personnel are directly responsible for developing store
specific orders, schematics, and replenishment schedules. Product delivery to
the store (non involving a retailer's warehouse) and merchandising may be
performed by Distributor or a contracted third party.
6. Other Distribution by the distributor. Notwithstanding any other
provision of this Agreement, the parties acknowledge that Distributor intends to
continue its existing business which may be deemed to compete with
Manufacturer's Products, and may manufacture, sell and/or distribute additional
ice cream products and other products which may compete directly with
Manufacturer's Products, in all parts of the United States and abroad, to all
classes of trade. Manufacturer agrees that nothing in this Agreement is intended
to, or shall limit or affect in any way such activities by Distributor. Nothing
herein shall be deemed to waive compliance with the "best efforts" commitment of
Section 2 hereof.
7. Relationship of Distributor and Manufacturer. The relationship of
Distributor and Manufacturer with respect to sale and purchase of Products is
that of distributor (purchaser) and manufacturer (seller), and nothing in this
Agreement shall be construed to create any agency or partnership or any other
relationship, except as set forth herein.
Neither Distributor nor Manufacturer shall have, nor shall either represent
itself as having, any right, power or authority to create any contract or
obligations, either express or implied, on behalf of, in the name of, or binding
upon the other party, or to pledge the other's credit or to extend credit in the
other's name unless the other party shall consent thereto in advance in writing.
Without limitation of the foregoing, Manufacturer shall not make any
representation concerning Distributor or use of Distributor name in
Manufacturer's marketing and sales effort without Distributor's advance written
approval. Manufacturer does have the right without prior approval of Distributor
to inform the trade that the Products are being distributed through the
Distributor's system, and as is necessary to carry out the purposes of this
Agreement. Without limitation to the foregoing, Distributor shall not make any
representation concerning Manufacturer or use of Manufacturer's name in
Distributor's marketing and sales effort without Manufacturer's advance written
approval. Distributor does have the right without prior approval of Manufacturer
to inform the trade that the Products are being distributed through the
Distributor's system, and as is necessary to carry out the purposes of this
Agreement.
8. Term; Termination.
8.1 Term. The term of this Agreement shall start as of September 1, 1999
and shall continue for an indefinite period, unless in any case sooner
terminated pursuant to the terms of this Agreement or by mutual agreement;
provided, however, that the provisions of Section 13 hereof shall be effective
immediately.
8.2 Termination Withoug Cause. This Agreement may be terminated after
September 1, 1999 by either Distributor or Manufacturer without cause on not
less than six months prior written notice given to the other party; provided
that no such notice may be given during the months of October, November,
December, January, February or March in any year.
During the termination notice period under Section 8.2, the following
additional obligations set forth in this Section shall apply.
Manufacturer shall not be obligated to appoint additional distributors in
any market area during any termination notice period. The below obligations upon
termination shall only apply to the market area or areas in which the
termination is effective and shall be interpreted accordingly. A "market" or
"market areas" shall be any of the areas listed on Schedule 2A.
In the event that Distributor fails to comply in a material respect in a
market (as defined above) with its best effort obligation during the termination
notice period, this failure shall constitute Cause justifying termination by the
Manufacturer under Section 8.3 of this Agreement, effective immediately upon
written notice to Distributor (notwithstanding any contrary provision in Section
8.3, including any cure period in which to cure such default that would
otherwise be applicable under Section 8.3), or, alternatively, Manufacturer
shall have the right, by written notice to Distributor, to shorten the
termination notice period to a shorter period (but not less than 30 additional
days following the date of the Manufacturer's notice to shorten under this
paragraph). In the event of a termination by Distributor without cause,
Manufacturer may, by written notice to Distributor, shorten the termination
notice period to a shorter period (but not less than 30 additional days
following the date of Manufacturer's notice to shorten under this paragraph).
8.3 Termination for Cause. Either party may at any time terminate this
Agreement, either entirely or as to a particular affected portion of the
Distributor Territory only (as elected in any case by the terminating party, by
written notice to the other party), upon sixty (60) days' written notice to the
other for failure of the other party to comply with any of the terms set forth
herein (which terms shall include the Distributor's failure to satisfy the
Performance Requirements or Performance Goals for Products to be purchased by
Distributor for any year), in any material respect, which shall also have a
material adverse effect on Distributor's distribution performance in either the
Distributor Territory or in the affected area(s) within the Distributor
Territory ("Cause"), unless such default shall have been reasonably cured to the
satisfaction of the other party within sixty (60) days after receipt of such
written notice specifying the failure in reasonable detail. The failure of
Distributor to continue DSD as the method of distribution hereunder shall be
deemed to be "Cause", entitling Manufacturer to give Distributor the 60 day
written notice as specified in this Section. An "affected portion" of the
Distributor Territory shall be any of the markets within the Distributor
Territory that are specified in Schedule 2A.
8.3.1 Without limiting any of the foregoing provisions of this
Agreement, if Manufacturer notifies Distributor with reasonable specificity that
a particular account or group of accounts in a specific market in the
Distributor Territory is not, in the reasonable judgment of Manufacturer,
receiving appropriate distribution (i.e. in accordance with the Performance
Requirements or the Performance Goals, as in effect for the applicable period);
Distributor shall endeavor to correct the problem. If following sixty (60) days
from such notice, Manufacturer is not, in its reasonable judgment, satisfied
that the problem has been corrected, Manufacturer may propose a solution. If
within a reasonable period (generally thirty (30) days), Distributor agrees to
implement such solution and if Distributor in fact implements such solution,
such notice shall be of no further effect. If Distributor does not so agree to
implement such solution or does not in fact implement such solution,
Manufacturer shall have the right to terminate Distributor's distribution rights
to such account or group of accounts.
8.4 Termination Upon Change in Control. Upon a Change in Control (as
defined below) of the Distributor, the Manufacturer may terminate this Agreement
upon 180 days notice, and upon a Change in Control (as defined) of Manufacturer,
Distributor may terminate this Agreement upon 180 days notice, in each case
given at any time within the nine-month period following the Change in Control
of the other party, provided, further, that if notice of termination for Change
in Control is given more than six months (but not more than nine months) after
the Change in Control, the period of the six month purchase or sales obligation
set forth below shall be shortened by the number of days equal to the number of
days by which the date of the giving of such notice of termination is later than
six months after the date of the Change in Control and the purchase or sale
obligation shall be correspondingly adjusted.
A "Change in Control" of a party means a change in control of that party of
a nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A (or in response to any similar item on any
similar schedule or form) promulgated under the Securities Exchange Act of 1934
(the "Act"), whether or not that party is then subject to such reporting
requirements; provided, however, that, without limitation, such a Change in
Control of that party shall be deemed to have occurred if (a) any "person" (as
such term is used in Section 13(d) and 14(d) of the Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of that party representing 50% or more of the combined
voting power of that party's then outstanding securities eligible to vote in the
election of directors; provided, however, that in the event, with respect to a
Change in Control of Distributor, that person (or any entity controlled by or
controlling that person) is a manufacturer or distributor of frozen desserts
which is a significant competitive factor in the United States or, with respect
to a Change in Control of Manufacturer, that person (or any entity controlled by
or controlling that person) is a manufacturer or distributor of frozen desserts
which is a significant competitive factor in the United States, the "50%" figure
shall be "35%" in each case (calculated on a "fully-diluted basis", i.e.
assuming issuance of all shares issuable upon exercise or conversion of any
outstanding options, warrants or other securities or rights irrespective of the
exercise, conversion or exchange price thereof or any term limiting the current
exercisability);
(b) that party is a party to a merger, consolidation, sale of assets or other
reorganization, an issuance of securities or other transaction, or a proxy
contest, as a consequence of which members of the Board of Directors of that
party in office immediately prior to such transaction or event constitute less
than a majority of the Board of Directors thereafter; or (c) during any period
of twelve consecutive months, individuals who at the beginning of such period
constituted the Board of Directors (including for this purpose any new director
whose election or nomination for election by that party's stockholders was
approved by a vote of at least two-thirds of the directors then still in office
who were directors at the beginning of such period) cease for any reason to
constitute at least a majority of the Board of Directors of that party.
Notwithstanding the foregoing provisions of the definition, a "Change of
Control" of Distributor will not be deemed to have occurred solely because of
(i) the acquisition of securities of Distributor (or any reporting requirement
under the Act relating thereto) by an employee benefit plan maintained by
Distributor for the benefit of employees or by Xxxxxxx X. Xxxxx or T. Xxxx
Xxxxxx or their "affiliates" or "associates" (as such terms are defined in Rule
12b-2 under the Act) or members of their family (or trusts for their benefit) or
(ii) any merger, consolidation or reorganization involving Distributor in which
the holders of voting stock having power to cast 80% of the votes in elections
of directors of Distributor immediately prior to such merger, consolidation or
reorganization hold immediately after such transaction voting stock having power
to cast 80% of the votes in elections of directors of the surviving entity in
such transaction, and notwithstanding the foregoing provisions of the
definition, a "Change in Control" of Manufacturer will not be deemed to have
occurred solely because of (i) the acquisition of securities of Manufacturer (or
any reporting requirement under the Act relating thereto) by an employee benefit
plan maintained by Manufacturer for the benefit of employees or by Xxx Xxxxx,
Xxxxx Xxxxxxxxxx or Xxxxx Xxxx or other members of the executive management or
Board of Directors or their "affiliates" or "associates" (as such terms are
defined in Rule 12b-2 under the Act) or members of their family (or trusts for
their benefit) or (ii) any merger, consolidation or reorganization involving
Manufacturer in which the holders of voting stock having power to cast 80% of
the votes in elections of directors of the Manufacturer immediately prior to
such merger, consolidation or reorganization hold immediately after such
transaction voting stock having power to cast 80% of the votes in elections of
directors of the surviving entity in such transaction.
8.4.1 In the event of termination by Manufacturer for Change in Control of
Distributor hereunder, Distributor shall be obligated, during the 180 day period
following the date of the giving of notice of termination for Change in Control,
to purchase from Manufacturer for resale and resell and, in the event of
termination by Distributor for Change in Control of Manufacturer hereunder,
Manufacturer shall be obligated, during the 180 day period following the date of
giving of such notice, to sell to Distributor, in each case in each market area
in the Distributor Territory, where Distributor was a distributor hereunder
immediately prior to the termination notice on a quarterly basis, not less than
the same amount of the Products as were purchased hereunder for resale and
resold in such market area during the comparable calendar quarter of the prior
year, provided that the amount required to be purchased and resold by
Distributor, during such period shall be reduced by the amount of any increased
purchases and resales during the period by such other person (or the
Manufacturer) previously distributing in such market area and by the amount of
any sales of such other person (or the Manufacturer) making distribution for the
first time in such market area of such termination notice period. A "market" or
"market area" shall be any of the areas listed on Schedule 2A. It is understood
that the amount required to be purchased and resold by Distributor pursuant to
this paragraph shall be reduced for adverse changes in market conditions beyond
the reasonable control of Distributor, including, for example, failure of the
Manufacturer to deliver Product or novelties of the Manufacturer or loss of a
chain due to the Manufacturer's action or inaction (and not by Distributor
action or inaction), or decline in consumer preference for super premium ice
cream or novelties on a market-wide basis, so long as Distributor is fulfilling
its applicable best efforts obligations during the applicable period under this
paragraph of Section 8.4.1 of this Agreement and that the amount required to be
sold by Manufacturer pursuant to this paragraph shall be reduced for adverse
changes in market conditions beyond the reasonable control of Manufacturer.
In the event that Distributor fails to comply in a material respect in a
market (as defined above) with the purchase obligations set forth above during
the termination notice period, this failure shall constitute Cause justifying
termination by the Manufacturer under Section 8.3 of this Agreement, effective
immediately upon written notice to Distributor (notwithstanding any contrary
provision in Section 8.3, including any cure period in which to cure such
default that would otherwise be applicable under Section 8.3), or,
alternatively, Manufacturer shall have the right, by written notice to the
Distributor, to shorten the termination notice period to a shorter period (but
not less than 30 additional days following the date of the Manufacturer's notice
to shorten under this paragraph).
The provisions of this Section 8.4 shall be in addition to the provisions
of Sections 8.2 and 8.3.
8.5 In addition to the applicable provisions of Sections 8.2 and 8.4 above
with respect to certain termination notice periods, Distributor agrees to
continue to use its best efforts hereunder during all applicable termination
notice periods under this Agreement to distribute the Products of the
Manufacturer and to preserve Manufacturer's shelf position for the replacement
distributor(s) selected by the Manufacturer upon any termination of this
Agreement in each market in the Distributor Territory listed in Schedule 2A
where Distributor was a distributor hereunder immediately prior to the
applicable termination notice.
Upon any termination of this Agreement, all materials and other data
submitted to Distributor by Manufacturer and still in Distributor possession
shall be returned to Manufacturer and Distributor shall not use the contents
thereof.
8.6 Post Termination Obligations. Upon the termination of this Agreement by
Manufacturer or by Distributor, Distributor shall return, and Manufacturer
agrees to repurchase all Products (other than unsalable Products) at
Distributor's original purchase price or in the event of Products close to
out-of-code (i.e. less than 60 days before the out of code date) at the
appropriate discount from such original purchase price, all in accordance with
the industry standards, or, at Manufacturer's option (exercisable by written
notice to Distributor), Distributor shall have the right to sell or liquidate in
the Distributor Territory in a manner approved by Manufacturer its then-current
inventory of Products, but not including unsalables in accordance with the
provisions of this Agreement. In the event of any return of Products hereunder,
the terminating party shall pay [ * ] of the applicable reasonable return
shipping charges; provided; however, that if either party terminates for cause,
then in such incident, the breaching party shall pay [ * ] of the applicable
reasonable return shipping charges. For the purposes of this provision,
"unsalables" means damaged or out-of-code Products which shall be destroyed. All
amounts due for Products sold to Distributor and all other amounts due under
Sections 3.2 and 9 and any other provisions of this Agreement shall be
immediately due and payable. Nothing in this Section should affect either
party's obligations to the other upon termination, including any claims for
damages.
9. Prices For Products; Payment Terms; Resale Prices; Related Matters.
9.1 Prices Payable by distributor. Manufacturer agrees to sell the Products
at the prices determined by Manufacturer from time to time (Manufacturer's
regular Distributor Prices), which shall initially be as set forth on Schedule
9.1 attached, F.O.B. Manufacturer's plants in Vermont, with freight arranged by
Manufacturer (or as requested by Distributor) using its reasonable efforts to
obtain the best possible freight charge available and reimbursed by Distributor.
Freight shall be split [ * ] between the parties, payable within 28 days after
receipt of invoice for freight services by the party obligated by this Section
to make such [ * ] reimbursement to the other party. Manufacturer may change
prices to the Distributor when it changes price to its other distributors
(absent unusual geographic market conditions), upon not less than reasonable
notice to Distributor which shall normally be not less than 30 days.
9.1.1 Rebate. Distributor will pay a rebate to Manufacturer in an amount
equal to [ * ] of the Distributor's monthly sales of all Products to all
customers, including (without duplication) sales by subdistributors (but
excluding sales to or by Non-affiliated subdistributors making purchases in
smaller quantities [i.e., 10 pallets or less on an occasional basis] up to an
aggregate of [ * ] of Distributor's total monthly sales), payable monthly in
arrears 28 days after the end of the month via Electronic Funds Transfer (EFT)
[EDI transaction type 820]. The term "Non-affiliated subdistributors" shall mean
subdistributors in which Distributor does not own more than 20% of the equity
interests.
As used in this Section 9.1.1, Distributor's monthly sales shall mean gross
revenues less returns and allowances for damaged goods.
* This confidential portion has been omitted and filed separately with the
Commission
The parties acknowledge that the pricing method they have, for convenience,
selected to reflect the sharing of the efficiencies or savings may erroneously
be viewed by others as a discriminatory net price charged by Manufacturer to
Distributor, when such view is not consistent with the economics of the matter.
Accordingly, to eliminate any uncertainty Distributor hereby agrees and confirms
that its submission from time to time of any purchase order for Products from
Manufacturer shall irrevocably (i) confirm the release of, and constitute a
covenant not to xxx in respect of, any claim of any kind whatsoever that its
payment of such net higher price for the Products covered by such invoice may be
in violation of the price discrimination provisions of the Xxxxxxxx-Xxxxxx Act
and any state price discrimination or unfair competition law and (ii) confirm
the release of, and constitute a covenant not to xxx in respect of, any claim of
any kind whatsoever that its payment of such higher price in respect of any
previously submitted purchase order for Products of the Manufacturer may be in
violation of the Xxxxxxxx-Xxxxxx Act or any state price discrimination or unfair
competition law. Each release and covenant not to xxx by Distributor shall
remain in effect notwithstanding any inconsistent or contradictory provision in
any purchase order or other instrument unless the provisions of this Section 9.1
are expressly terminated by a written amendment to this Agreement.
9.2 Payment Terms. Payment terms shall be 21 days with a 7-day grace period
from the date of Manufacturer's invoice (which shall be the post-marked date of
the invoice or any earlier date of facsimile transmission or other delivery to
Distributor). Distributor agrees to maintain its internal xxxx receipt and
payment procedures so that it will be able to meet the payment terms in the
Agreement, and the parties agree that all payments shall be EFT. It is agreed
that these are material terms of this Agreement and that failure of Distributor
to make timely payments shall constitute "Cause" under Section 8.3 (unless cured
or provided therein). Manufacturer also agrees to notify Distributor of any
substantial increase in freight charges before shipment is authorized.
9.3 National Pricing. Notwithstanding the foregoing provisions of Section 2
or this Section 9, it is understood that Manufacturer may, as is common in the
food industry, negotiate "national" or "regional" pricing agreements with
certain accounts (such as airlines or Wal-Mart, to take two examples) where the
Manufacturer's distributors, including the Distributor hereunder, continue to
sell to such accounts, but this Agreement is modified to the extent necessary to
accommodate such national pricing agreements, subject to reaching mutual
agreement between the parties in each case. The parties agree to make such
necessary amendments to implement agreements reached under this Section 9.3. In
the event that the Distributor does not agree to any such national pricing
arrangement within 14 days after a reasonably specific presentation of the
arrangement to the Distributor, then the Manufacturer shall have the right to
arrange for other distribution for such national pricing arrangement.
9.3.1 Consignment Sales. Notwithstanding the provisions of Section 2 and
this Section 9, it is understood that Manufacturer may, as is common in the food
industry, negotiate certain consignment arrangements for sales to club stores or
Food Service accounts and Distributor will use its best efforts to distribute
the Products to such outlets on a consignment basis, provided that consignment
sales shall require the mutual agreement of the parties. In the event that the
Distributor does not agree to any such consignment arrangement within 14 days
after a reasonably specific presentation of the arrangement to the Distributor,
then the Manufacturer shall have the right to arrange for other distribution for
such consignment arrangement.
9.4 Resake Prices. Distributor shall resell at such prices as it may
determine, and Manufacturer retains no control over such resale prices.
9.5 Trade Shows. The parties confirm that the arrangements and practices
with respect to trade shows attended by Manufacturer that are currently in
effect under the Prior Agreement shall continue under this Agreement, namely
that Distributor agrees to provide delivery of Products to Trade Shows in the
areas in which Distributor is distributing hereunder at no charge, provided that
Manufacturer provides the Products and necessary freezers for such shows.
9.6 Credit Line. Distributor shall have a line of credit under this
Agreement which shall be reasonably established by Manufacturer consistent with
the payment terms defined herein, and Manufacturer shall have the right, from
time to time at its election, to require C.O.D. payment for any Products at any
time when outstanding receivables under this Agreement and any that arose under
the Old Agreement, for purchase of the Products of the Manufacturer thereunder
(whether or not due) exceed the amount of such credit line or at any time when
the circumstances of Distributor's financial condition are such that
Manufacturer would be entitled under its regular credit policies to reduce this
amount of the credit line. Said credit line shall be available unless
Distributor is in breach of a material provision of this Agreement or unless
Manufacturer determines, pursuant to the exercise of its regular credit
policies, that Distributor's financial condition warrants a change in said
credit line. Distributor agrees to pay interest on overdue accounts at an annual
rate equal to the base rate charged to best commercial customers at BankBoston
(or its successor) from time to time plus [ * ]. Interest shall be payable to
Manufacturer on the last day of each month.
10. Compliance With Laws: Quality Control. Each party covenants and agrees
during the term hereof, that it will fully comply with all applicable laws,
ordinances, regulations, licenses and permits of or issued by any federal, state
or local government entity, agency or instrumentality applicable to its
responsibilities hereunder.
Manufacturer shall be responsible for the quality, including proof of
quality and quality control, labeling requirements and truth of labeling, and
fitness for human consumption of the Products delivered hereunder. Manufacturer
warrants and represents that the Products delivered hereunder (1) are not
adulterated or misbranded under the Federal Food Drug and Cosmetic Act, as
amended (the "Act"); and (2) are not articles which may not be shipped pursuant
to Sections 404 or 505 of the Act. Title shall pass upon delivery, F.O.B.
Manufacturer's plants in Vermont. Notwithstanding any other provision hereof,
the parties understand that loss or damage to the Products during shipment,
after delivery F.O.B. Manufacturer's Plant, shall be the responsibility of
Distributor.
* This confidential portion has been omitted and filed separately with the
Commission
10.1 Recall Possibility. In the event the Manufacturer determines to recall
or withdraw any of its Products (the "Recalled Products"), Distributor will use
its personnel (or a third party retrieval service if Distributor reasonably
believes the recall or withdrawal will be achieved faster, at less expense or
more efficient) to remove any Recalled Products from accounts to which it had
delivered the Recalled Products (and, where it uses any other distributors or
subdistributors, will use its best efforts to cause such other persons to do
likewise) and shall return (or cause to be returned) to Manufacturer or dispose
of Recalled Products as directed by Manufacturer. Distributor shall be
reimbursed by Manufacturer for all Recalled Products in the amount of the net
purchase price previously paid by Distributor for such Recalled Products
including freight costs and for its reasonable out-of-pocket expenses for using
its personnel or third party service to accomplish such recall or withdrawal,
including disposal costs, with payments by Manufacturer for Recalled Products
being in cash or replacement Products, at Manufacturer's option. In the event
that any recall or withdrawal of either party's products significantly disrupts
Distributor's ability to distribute the Manufacturer's Products or
Manufacturer's ability to have such distribution occur, then Manufacturer and
Distributor agree to discuss in good faith compensation for losses incurred by
either party by such disruption.
11. Hold Harmless.
11.1 It is expressly understood and agreed that Distributor shall not be
liable for and Manufacturer shall hold Distributor harmless from any
obligations, claims, demands, losses, costs, damages, suits, judgments,
penalties, expenses and liabilities of any kind or nature to a person not a
party to this Agreement ("Third Party") arising directly or indirectly out of or
in connection with this Agreement caused by Manufacturer's negligence, willful
misconduct or contractual breach, including but not limited to any costs,
expenses, court costs and reasonable attorneys' fees incurred by Distributor by
reason of any defense to any claims or lawsuits to which Distributor has been
named a party.
11.2 It is expressly understood and agreed that Manufacturer shall not be
liable for and Distributor shall hold Manufacturer harmless from any
obligations, claims, demands, losses, costs, damages, suits, judgments,
penalties, expenses and liabilities of any kind or nature to a Third Party
arising directly or indirectly out of or in connection with this Agreement
caused by Distributor's negligence, willful misconduct or contractual breach,
including but not limited to any costs, expenses, court costs and reasonable
attorneys' fees incurred by the Manufacturer by reason of any defense to any
claims or lawsuits to which Manufacturer has been named a party.
11.3 Third Person Claims. Promptly after a party has received notice of or
has knowledge of any claim against it covered by Section 11 by a Third Party or
the commencement of any action or proceeding by a Third Person with respect to
any such claim, such party (sometimes referred to as the "Indemnitee") shall
give the other party (sometimes referred to as the "Indemnitor") written notice
of such claim or commencement of such action or proceeding; provided, however,
that the failure to give such notice will not affect the right to
indemnification hereunder with respect to such claim, action or proceeding,
except to the extent that the other party has been actually prejudiced as a
result of such failure. If the Indemnitor has notified the Indemnitee within
thirty (30) days from the receipt of the foregoing notice that it wishes to
defend against the claim by the Third Person, then the Indemnitor shall have the
right to assume and control the defense of the claim by appropriate proceedings
with counsel reasonably acceptable to Indemnitee, provided that the assumption
of such defense by the Indemnitor shall constitute an acknowledgment of the
obligation to indemnify the Indemnitee hereunder. The Indemnitee may participate
in the defense, at its sole expense, of any such claim for which the Indemnitor
shall have assumed the defense pursuant to the preceding sentence, provided,
however, that counsel for the Indemnitor shall act as lead counsel in all
matters pertaining to the defense or settlement of such claims, suit or
proceeding other than claims that in Indemnitee's reasonable judgment could have
a material and adverse effect on Indemnitee's business apart from the payment of
money damages. The Indemnitee shall be entitled to indemnification for the
reasonable fees and expenses of its counsel for any period during which the
Indemnitor has not assumed the defense of any claim.
12. Trademarks. Distributor understands and agrees that it has received no
right or license, express or implied, to use in any manner the name "Ben &
Jerry's" or any other trade name or trademark used or owned by Manufacturer now
or in the future with the express written consent of Manufacturer except as set
forth herein. Subject to the terms and conditions of this Agreement and to the
continuing performance by Distributor of its obligations hereunder, Manufacturer
hereby grants Distributor a non-exclusive, non-transferable and personal license
to use Manufacturer's trademarks and logos ("Marks") solely in connection with
the distribution, display and sale of the Products pursuant to this Agreement.
Distributor agrees that such Marks shall be used only in the forms and manners
specified and approved in writing in advance by Manufacturer. All rights granted
to Distributor under this Agreement with respect to the Marks shall immediately
cease and terminate upon the termination of this Agreement. The provisions of
this Section shall survive termination.
13. Standstill. Distributor acknowledges that this Agreement is extremely
important to Manufacturer and will involve dependence of Manufacturer upon
Distributor's distribution of a significant amount of the total revenues of
Manufacturer, and accordingly, the Distributor agrees that until termination of
this Agreement, the Distributor and its affiliates (as such term is defined
under the Securities Exchange Act of 1934, as amended) ("Affiliates" for
purposes of this Agreement) shall not without the consent of Manufacturer (a) in
any manner acquire, agree to acquire or make any proposal to acquire, directly
or indirectly, any securities or property of the Manufacturer or any of its
subsidiaries or divisions, or any rights or options to acquire any such
securities or property (other than purchases of products or other properties in
the ordinary course of business), (b) propose publicly or otherwise to enter
into, directly or indirectly, any merger or business combination,
recapitalization, restructuring or other extraordinary transactions involving
the Manufacturer or any of its subsidiaries or divisions or stockholders, (c)
otherwise act, alone or in concert with others, to seek to control or influence
the executive management (except with respect to the distribution relationship
created hereby) or Board of Directors of the Manufacturer, (d) enter into any
contract, arrangement or understanding with any person with respect to any
securities of the Manufacturer (or any subsidiary of the Manufacturer),
including but not limited to any joint venture (other than relating to
distribution), loan or option agreement, put or call, guarantee of loans,
guarantee of profits or division of losses or profits, (e) make, or in any way
participate, directly or indirectly, in any "solicitation" of "proxies" (as such
terms are used in the proxy rules of the Securities and Exchange Commission) or
consents to vote, or seek to advise or influence any person with respect to the
voting of, any voting securities of the Manufacturer, (f) form, join or in any
way participate in a "group" (as defined under the Securities Exchange Act of
1934, as amended) with respect to any acquisition of or other action relating to
securities or properties (other than purchase and sale of products or properties
in the ordinary course) of the Manufacturer, (g) advise, assist or encourage any
other person or group in connection with any of the foregoing, (h) disclose any
intention, plan or arrangement inconsistent with the foregoing, (i) request the
Manufacturer (or its directors, officers, affiliates, stockholders, employees or
agents), directly or indirectly, to amend or waive any provision of this
paragraph (including this provision), or (j) take any action which might require
either party to make a public announcement regarding the possibility of a
business combination, merger or joint venture (other than relating to
distribution) involving the Manufacturer or any of its subsidiaries or
divisions.
The foregoing provisions shall not be applicable to proposals initiated by
or on behalf of Manufacturer.
13.1 The provisions of Section 13 shall not be applicable upon the
earlier of:
(a) the date on which Manufacturer determines to initiate, solicit or
pursue (1) a sale or transfer of all or substantially all of its assets
or common shares representing 50% or more of the then outstanding
common shares or (2) a merger, reorganization, consolidation or similar
transaction between Manufacturer and any other person in which such
person would obtain ownership of 50% or more of the then outstanding
common shares;
(b) the date on which the Board of Directors of Manufacturer approves of
(or approves in principle, by letter of intent, memorandum of
understanding or similar instrument) any transaction referred to
subparagraph (a) hereof; or
(c) the date on which any person not a member of Manufacturer's Board of
Directors at the date hereof acquires common shares if the effect of
such acquisition would be to cause such person to become the Beneficial
Owner of 40% or more of the then outstanding common shares.
Notwithstanding the foregoing, counsel or other advisors for Distributor
shall be entitled to contact Ropes & Xxxx, outside counsel for Manufacturer, to
consider whether a proposal by Distributor that is prohibited by this Section 13
would, if it were actually made by Distributor to Manufacturer, require public
disclosure by Manufacturer to Distributor. It is understood that if, in the
judgment of Ropes & Xxxx as outside counsel for Manufacturer, such a proposal
would require such public disclosure, then such proposal shall continue to be
prohibited by this Section 13 and cannot be made. If the judgment is that such
proposal would not require such public disclosure, then such proposal may be
made, but no further proposal (without complying again with this provision)
otherwise prohibited by this Section 13 may be made by Distributor.
The same procedure for advisors for Distributor to contact outside counsel
for Manufacturer may be used in the circumstances in which Distributor believes
that, as a result of prior action taken by the Manufacturer or by a third party
unaffiliated with Distributor, Manufacturer may be considered to be "in play" in
the securities market. The parties also recognize under such circumstances the
Manufacturer may, without being requested to do so, invite a proposal from the
Distributor.
Manufacturer will give Distributor immediate notice of the occurrence of
any of these three events.
The Distributor acknowledges that money damages would not be an adequate
remedy for breach of this Section 13, and accordingly, the Manufacturer shall be
entitled to preliminary and permanent injunctive relief without the need to post
a bond to enforce these provisions.
14. Stipulation of Dismissal With Prejudice. The parties shall deliver a
stipulation of dismissal with prejudice to terminate the case entitled Xxxxxx'x
Grand Ice Cream, Inc. and Edy's Grand Ice Cream v. Ben & Jerry's Homemade, Inc.
pending in the United States District Court, Northern District of California,
Case No. C-98-3357 FMS, in the form of Exhibit I attached hereto. Each party
shall be responsible for their own attorney's fees, costs and expenses relating
to said litigation. If any provision of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the other
provisions shall nevertheless be in full force and effect without being impaired
or invalidated in any way.
15. Confidential Information. Confidential Information about a party
learned under this Agreement shall not be used during or after the term of this
Agreement except for the purpose of this Agreement and, without limiting the
foregoing, such information as to the Manufacturer may not be used by the
Distributor in connection with the production, marketing, distribution or sale
of Distributor's products. Confidential Information shall, for purposes of this
Agreement, include all information relating to a party, its business and
prospect, disclosed by such party from time to time to the other party in any
manner, whether orally, visually or in tangible form (including, without
limitation, documents, devices and computer readable media) and all copies
thereof, created by either party. The term "Confidential Information" shall be
deemed to include all notes, analyses, compilations, studies, interpretations or
other documents prepared by a party which contain, reflect or are based upon the
information furnished to such party by the other party pursuant hereto.
Confidential Information shall not include any information that:
(a) was in a party's possession prior to disclosure by the other party
hereunder, provided such information is not known by such party to be
subject to another confidentiality agreement with or secrecy obligation
to the other party;
(b) was generally known in the ice cream industry at the time of disclosure
to a party hereunder, or becomes so generally known after such
disclosure, through no act of such party;
(c) has come into the possession of a party from a third party who is not
known by such party to be under any obligation to the other party to
maintain the confidentiality of such information; or
(d) was independently developed by a party without the use of any
Confidential Information of the other party, to the extent that such
independent development is reasonably established by such first party
to the other party.
16. Entire Agreement; Survival. This Agreement and the Addendum of even
date herewith (and any documents referred to herein) represents the entire
agreement and understanding of the parties with respect to the distribution,
commencing September 1, 1999, of Products of the Manufacturer by the
Distributor, the standstill provisions of Section 13, and the stipulation of
dismissal with prejudice provided for above, and there are no representations,
warranties or conditions or agreements (other than implementing invoices,
purchase orders and the like necessary to implement this Agreement) not
contained herein (or in any documents not referred to herein) that constitute
any part hereof or that are being relied upon by any party hereunder.
Notwithstanding any termination of this Agreement, all claims arising prior to
such termination for any breach of or for any amount due under this Agreement
(excluding any such claims that have been satisfied, waived or released prior to
such termination) under this Agreement shall survive such termination, and in
addition, the following sections of this Agreement shall survive any termination
of the Agreement: 3.2 (as to Distributor's obligations to pay sums owing for the
period through termination), 8.6, 9 (as to Distributor's obligations to pay sums
owing for the period through termination), 11, 12, 14, 16 and 19.
17. Negotiation of Agreement. Each party and its counsel have cooperated in
the drafting and preparation of this Agreement and the documents referred to
herein, and any and all drafts relating thereto shall be deemed the work product
of the parties and may not be construed against any party by reason of its
preparation. Accordingly, any rule of law or any legal decision that would
require interpretation of any ambiguities in this Agreement against the party
that drafted it is of no application and is hereby expressly waived.
18. Amendment and Non-Assignability of Agreement. This Agreement may not be
amended or modified except by an instrument in writing signed by an authorized
officer of each party. It is agreed that neither party shall transfer or assign
this Agreement or any part hereof or any right arising hereunder, by operation
of law or otherwise, without the prior written consent of the other. Any
purported assignment without consent shall be void and of no force or effect or,
at the other party's option, shall terminate this Agreement. Subject to the
foregoing, this Agreement shall be binding on the respective parties and their
successors and assigns.
No waiver by either party of any default or breach of any covenant
hereunder shall be implied from any omission by either party to take action on
account of such default if such default persists or is repeated. No express
waiver shall affect any default other than the default specified in the waiver,
and then said waiver shall be operative only for the time and to the extent
therein stated. Waivers by either party of any covenant, term or condition
contained herein shall not be construed as a waiver of any subsequent breach of
the same covenant term or condition. The consent or approval by either party to
or of any act by either party requiring further consent or approval shall not be
deemed to waive or render unnecessary consent or approval to or of any
subsequent similar acts. If any provision of this Amendment is held by a court
of competent jurisdiction to be invalid, void, or unenforceable, the remaining
provisions shall nevertheless continue in full force without being impaired or
invalidated in any way.
No provision of any other instrument, including purchase orders, invoices,
bills of sale or like instrument which is inconsistent or conflicts with this
Agreement shall control or override any provision of this Agreement.
19. Waiver of Jury Rights; Governing Law; Jurisdiction. Each of the parties
hereto irrevocably waives all rights to a trial by jury with respect to any
dispute relating to this Agreement, the subject matter hereof or the entering
into or termination of this Agreement (a "Dispute"). This Agreement and all
actions related hereto shall be governed by, and any dispute shall be resolved
in accordance with, the laws of the State of New York, excluding its internal
choice of law principles.
In the event of any Dispute, such Dispute, if not resolved in the ordinary
course between representatives of the parties, shall be submitted for settlement
negotiation between the Chief Executive Officer of Manufacturer and Chief
Executive Officer of Distributor, and if such procedure does not resolve such
Dispute within 30 days after a request for such settlement negotiation to the
other party, then and only then shall all such Disputes be resolved exclusively
by the process of litigation in accordance with this Section. If such litigation
is brought by Manufacturer or by Distributor, it shall be brought in the State
of New York, New York City (Manhattan), provided that, if such dispute relates
to Section 13 of this Agreement, it may be brought without resort to the
settlement mechanics described above and it may also be brought by Manufacturer
in the State of Vermont and will be resolved under the laws of the State of
Vermont.
With respect to any litigation relative to any Dispute (other than disputes
arising out of Section 13) that has been commenced in accordance with the
foregoing provisions as to where and when such litigation may be brought, the
parties each hereby: (i) agree that each party has sufficient contacts with New
York City (Manhattan) and Vermont (with respect to disputes relating to Section
13) to subject it to the personal jurisdiction of the state and federal courts
located in New York City (Manhattan) and Vermont (with respect to disputes
relating to Section 13) for purposes of any such Proper Action (a "Proper
Action"); (ii) agree that venue of any Proper Action properly lies in New York
City (Manhattan)and Vermont (with respect to disputes relating to Section 13);
(iii) waives and agrees not to assert in any Proper Action any claim that it is
not subject personally to the jurisdiction of the above-named courts, such
action should be dismissed on grounds of lack of venue or forum non convenien;
should be transferred to any court other than the above-named courts or should
be stayed by reason of the pendency of some other proceeding in any court other
than the above-named courts; (iv) consents and agrees that service of process in
any Proper Action may be made in any manner permitted by law or by registered or
certified mail, return receipt requested, at its principal place of business,
and that service made in accordance with the foregoing is reasonably calculated
to give actual notice of any such action; and (v) waives and agrees not to
assert in any Proper Action any claim that service of process made in accordance
with the foregoing does not constitute good and sufficient service of process,
including upon written notice. Notwithstanding the foregoing, any proceeding for
temporary restraining order or preliminary injunction may be brought without
resort to the settlement mechanics described but shall only be brought in
accordance with the foregoing provisions as to where litigation with respect to
any Dispute may be brought.
20. Publicity. Both parties shall agree on a joint initial press release on
the entering into of this Agreement, the entering into of the Letter Amendment
Agreement and on the settlement in full, without any payment, of the litigation
referred to in Section 14.
21. Notices. Any notices to be given by either party to the other shall be
in writing by personal delivery or by mail, registered or certified, postage
prepaid with return receipt requested, or by facsimile (only with receipt
confirmed). Notices shall be addressed to the parties at the addresses set forth
on page one or to said other address as shall have been so notified to the other
party in accordance with this Section 21. Notices to Distributor shall be
addressed to Chief Executive Officer, with a copy to Xxxxxxx & Xxxxxx, 00
Xxxxxxxxxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxxxxxxx, XX 00000, Attention: Xxxxxx X.
Xxxxxxx, Esq. Notices to Manufacturer shall be addressed to Chief Executive
Officer, Ben & Jerry's Homemade, Inc., with a copy to Ropes & Xxxx, Xxx
Xxxxxxxxxxxxx Xxxxx, Xxxxxx, XX 00000, Attention: Xxxxxx X. Xxxxxx, Esq.
IN WITNESS WHEREOF, Xxxxxx'x Grand Ice Cream, Inc. and Ben & Jerry's
Homemade, Inc., have each executed and delivered this Agreement as of the day
and year first above written.
WITNESSED: XXXXXX'X GRAND ICE CREAM, INC.
By:
Title:
WITNESSED: BEN & JERRY'S HOMEMADE, INC.
By:
Title:
