EXHIBIT 10(a)
Lincoln Snacks Company
0 Xxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
(000) 000-0000
Fax: (000) 000-0000
September 5, 1997
Mr. Xx Xxxxx
PLANTERS LIFESAVERS COMPANY
000 Xxxxxxxx Xxxxxx
Xxxx Xxxxxxx, XX 00000
Dear Xx Xxxxx:
Not withstanding anything contrary to Part 1, Paragraph 1.1 of the
Exclusive Distribution Agreement dated as of June 6, 1995, between
Lincoln Snacks Company ("Lincoln") and Planters Company, a unit of
Nabisco, Inc. ("Planters"), as amended, the parties hereby agree that
Fiddle Faddle product may be sold to Target Stores ("Target") on behalf
of Lincoln other than by Planters prior to December 31, 1997.
Please refer to the Amendment to Exclusive Distribution Agreement
dated as of February 28, 1997 (the "Amendment") between Lincoln and
Planters.
Pursuant to Xxxxxxx 0, Xxxxxxxx Xxxxxxxxxxxx, Xxxxxxxxx (x) of the
Amendment, during the six month period commencing July 1, 1997 and
ending December 31, 1997, among other things, Planters agreed to pay for
an aggregate of 750,000 Equivalent Cases to be billed at a rate of
125,000 Equivalent Cases per month. With respect to its obligations
under that paragraph (b), Lincoln is to xxxx Planters on the first day
of each month during such period, and Planters is to pay Lincoln within
15 days thereof, an amount of $300,000 (which amount represents $2.40
times 125,000). On the last day of each month, Lincoln is to xxxx
Planters (at the transfer price per Equivalent Case less $2.40) for the
number of cases manufactured during such month in accordance with the
monthly production schedule. Pursuant to this letter, on the last day
of each month during the referenced six month period, Lincoln hereby
agrees to credit Planters $1.75 per Equivalent Case for sales made to
Target during the month. The maximum credit in any monthly period will
be limited to 125,000 Equivalent Cases less the number of cases
manufactured during such month for Planters.
Xxxxxxx 0, Xxxxxxxx Xxxxxxxxxxxx, Xxxxxxxxx (c) of the Amendment,
is hereby amended to read as follows: In the event that during the
calendar year ending December 31, 1997, Planters has not sold at least
1,500,000 Equivalent Cases in non-liquidation channels, Planters shall
pay Lincoln, prior to January 15, 1998, an amount equal to (x) 1,500,000
minus (y) the amount of Equivalent Cases sold through non-liquidation
channels and the amount sold to Target prior to December 31, 1997 times
(z) $3.20. Lincoln and Planters agree that the amount contemplated by
the previous sentence to be paid by Planters, to the extent Planters
fails to sell at least 1,500,000 Equivalent Cases in non-liquidation
channels (inclusive of the amount sold to Target prior to December 31,
1997), is a reasonable estimate of the amount of damages Lincoln would
suffer as a result of Planters failure to sell such cases and
constitutes a fair and reasonable amount of compensation for any such
failure.
Please confirm you are in agreement with the foregoing by
executing a copy of this letter and returning it to me.
Very truly yours,
LINCOLN SNACKS COMPANY
By: /s/ Xxxxxxxx X. Crabs
------------------------------
Name: Xxxxxxxx X. Crabs
Title: Vice President and Chief
Financial Officer
Accepted and Agreed to:
PLANTERS COMPANY, a Unit of NABISCO, INC.
By: /s/ Xx Xxxxx
---------------------------
Name: Xx Xxxxx
Title: Vice President Finance
