LONG TERM SUPPLY AGREEMENT
BETWEEN
WILSEY-HOLSUM FOODS L.L.C.
AND
HARVEST STATES COOPERATIVES
AUGUST 30, 1996
- TABLE OF CONTENTS
RECITALS................................................................... 1
1. PRODUCTS; SPECIFICATIONS .............................................. 2
2. MINIMUM QUANTITY REQUIREMENT........................................... 3
3. OPTIONAL QUANTITY; RIGHT OF FIRST REFUSAL ............................. 5
4. QUANTITY DEFICIENCIES ................................................. 7
5. VOLUME FORECASTS....................................................... 11
6. TERM; TERMINATION...................................................... 11
7. MINIMUM QUANTITY PRICE................................................. 13
Definitions: ......................................................... 13
8. WESTERN CASH CRUDE BASIS............................................... 14
9. ADJUSTMENT OF REFINING PREMIUMS........................................ 16
10. ADJUSTMENT OF REFINING LOSS............................................ 17
11. PURCHASE ORDERS: TERMS OF PAYMENT; DELIVERY............................ 17
a) Terms of Payment.................................................... 17
b) Delivery............................................................ 18
12. RISK OF LOSS ......................................................... 18
13. QUALITY; QUALITY CONTROL; QUALITY RESPONSIBILITIES..................... 18
a) Quality............................................................. 19
b) Quality Control..................................................... 19
c) Quality Responsibilities............................................ 19
14. INSPECTIONS............................................................ 19
15. NON-SPECIFICATION PRODUCTS............................................. 20
a) Rejection; Replacement.............................................. 20
b) Reworking........................................................... 21
16. MODIFICATIONS TO SPECIFICATIONS; NEW PRODUCTS.......................... 21
17. FOREIGN OIL............................................................ 24
18. CUSTOMER OIL PURCHASING OPERATIONS..................................... 24
19. SCOPE OF THIS AGREEMENT................................................ 25
20. EDIBLE OIL PURCHASES BY CUSTOMER AFTER SEVENTH CONTRACT
YEAR................................................................... 25
21. MATERIAL ADVERSE EFFECT................................................ 27
22. INDEMNIFICATION BY SUPPLIER............................................ 29
23. INDEMNIFICATION BY CUSTOMER............................................ 30
24. INDEMNIFICATION PROCEDURES............................................. 32
25. INSURANCE.............................................................. 34
26. TRADEMARKS AND TRADE NAMES............................................. 35
27. CONFIDENTIAL INFORMATION............................................... 35
28. RELATIONSHIP OF PARTIES................................................ 37
28. FORCE MAJEURE.......................................................... 37
30. GOVERNING LAW.......................................................... 37
31. ARBITRATION OF REFINING PREMIUM ADJUSTMENTS............................ 38
32. GENERAL DISPUTE RESOLUTION PROVISIONS.................................. 39
33. SEVERABILITY........................................................... 46
34. ASSIGNMENTS............................................................ 46
35. NOTICES................................................................ 47
36. ENTIRE AGREEMENT....................................................... 47
Draft 8/8/96
____________, 1996
LONG TERM SUPPLY AGREEMENT
This Agreement is made and entered into this 30th day of August, 1996,
between WILSEY-HOLSUM FOODS, L.L.C., a Delaware limited liability company
("Customer") and HARVEST STATES COOPERATIVES, a Minnesota corporation
("Supplier").
RECITALS
Pursuant to a Joint Venture Agreement dated August _, 1996 ("Joint
Venture Agreement") between WILSEY FOODS, INC. ("Wilsey") and Supplier, Wilsey
has this date transferred to Customer substantially all of its assets and
liabilities and Supplier has transferred to Customer substantially all of the
assets of its Holsum Foods Division and certain liabilities more particularly
described in the Joint Venture Agreement. As a result of the transaction, Wilsey
is a sixty (60%) percent owner of Customer and Supplier is a forty (40%) percent
owner of Customer. Wilsey and Supplier have entered into a Limited Liability
Company Agreement ("LLC Agreement") under the terms of which Customer is
governed by a Members Committee comprised of an equal number of representatives
of Wilsey and Supplier. It is a condition to the obligations of both Wilsey and
Supplier under the Joint Venture Agreement that this Agreement be entered into
by said parties at the closing of the transactions contemplated by the Joint
Venture Agreement. All references herein to Exhibits, Schedules and Paragraphs
are to the exhibits and schedules attached to this Agreement and to the
Paragraphs of this Agreement.
* * *
1. PRODUCTS; SPECIFICATIONS. The products to be sold by Supplier to Customer
under this Agreement shall be as follows:
a) Soybean Salad Oil;
b) Hydrogenated Soybean Oil 100 I.V. and below;
c) Hydrogenated Soybean Oil above 100 I.V; and
d) subject to Paragraph 16, any other edible oils which Supplier may
hereafter refine during the term of this Agreement.
All of the products described in a) through d) above are hereinafter
collectively referred to as the "Products". The specifications for the Products
described in a) through c) above are attached hereto as Exhibit A. Such
specifications, together with the specifications of any new Products referred to
in d) above, are hereinafter collectively referred to as the "Specifications".
2. MINIMUM QUANTITY REQUIREMENT. Subject to Paragraphs 4 and 7,
Supplier shall be obligated to sell to Customer and Customer shall be obligated
to purchase from Supplier, pursuant to the terms and conditions of this
Agreement, but only out of and subject to Customer's "Requirements", as defined
below, for each calendar year during the term of this Agreement ("Contract
Year"), the greater of (i) 430,000,000 pounds of Products, or (ii) fifty (50%)
percent of such Requirements, provided that if Customer's Requirements for any
Contract Year shall be less than 430,000,000 pounds of Products, then Customer
shall be obligated to purchase from Supplier 100% of Customer's Requirements for
Products during such Contract Year. The amount of Products described in the
preceding sentence of this Paragraph 2 is hereinafter referred to as the
"Minimum Quantity." The obligations of Supplier and Customer pursuant to this
Paragraph 2 are subject to the following:
a) The term "Requirements" as used herein means Customer's
requirements for Products which it shall satisfy through purchases from outside
suppliers, including Supplier, but shall not include that portion, if any, of
Customer's requirements for Products which Customer shall satisfy internally
from its Lou Ana Foods facility at Opelousas, Louisiana.
b) Of the total annual purchases of Products by Customer
within the Minimum Quantity, not less than (***) percent shall be (***).
(***) Denotes confidential information that has been omitted from the exhibit
and filed separately, accompanied by a confidential treatment request,
with the Securities Exchange Commission pursuant to Rule 406 of the
Securities Act of 1933, as amended.
c) Supplier's obligation to sell the Minimum Quantity to
Customer is absolute and subject to no conditions or qualifications, except for
Force Majeure as provided in Paragraph 29. If Supplier, for any reason
whatsoever, shall lack the capacity or otherwise be unable to deliver the
Minimum Quantity to Customer in the quarterly quantities set forth in the
Volume Forecasts provided for in Paragraph 5 and by the requested shipment dates
as provided in Paragraph 11, or if Supplier in its discretion shall so elect,
Supplier shall be obligated, subject to said Force Majeure provision, to
purchase on the open market in the United States for delivery to Customer the
Products necessary to satisfy Supplier's obligation to sell to Customer the
Minimum Quantity in the quantities requested by Customer pursuant to Paragraphs
5 and 11 and at the price and otherwise on the terms and conditions provided in
this Agreement.
3. OPTIONAL QUANTITY; RIGHT OF FIRST REFUSAL. For and during each of
the first seven (7) Contract Years of this Agreement, Supplier shall have the
right of first refusal to sell to Customer and Customer shall be obligated to
purchase from Supplier, to the extent such right of first refusal is exercised,
an amount of liquid or hydrogenated soybean oil (of any kind) equal to (***)
during each of said Contract Years, less the Minimum Quantity ("Optional
Quantity"). Subject to Paragraph 5, during each such Contract Year, Customer
shall, at such times as Customer in its sole discretion shall deem appropriate,
and regardless of whether or not Customer's obligation to purchase the Minimum
Quantity for any Contract Year shall have then been satisfied, disclose to
Supplier the type, quantity, shipment date, payment terms and delivered price of
such soybean oil which Customer is prepared to purchase from a third party,
identifying the third party, and shall offer to purchase the same type and
quantity of such soybean oil from Supplier for the same delivered price to the
relevant Customer Plant and otherwise on the same terms and conditions offered
by such third party. Such offer by Customer (the "Offer") may be made orally and
need not be in writing. Supplier shall advise Customer, not later than 11:00
A.M., Los Angeles time, on the next trading day of the Chicago Board of Trade
after the day upon which such Offer is made, whether Supplier accepts or rejects
such Offer. If Supplier shall fail to advise Customer that it accepts any such
Offer within the time specified in the preceding sentence, such Offer shall be
deemed to have been rejected by Supplier and the obligation of Customer to grant
Supplier a right of first refusal under this Paragraph 3 shall be thereby deemed
to have been satisfied with respect to the number of pounds of soybean oil
stipulated in such Offer. If Supplier shall reject any such Offer within the
time set forth above, Customer shall have the right to purchase the type and
quantity of soybean oil described in such Offer to Supplier from the third party
source identified in such Offer (or from any other source) but only for the same
(or a lower) delivered price to the relevant Customer facility and otherwise on
the same terms and conditions set forth in such Offer to Supplier, or on terms
and conditions not more favorable to the third party supplier than those set
forth in such Offer to Supplier. Complete information relating to any such
purchase from a third party source shall be furnished to Supplier upon request.
Such information shall be limited to information relating to Customer's
purchases of refined soybean oil from third parties after Customer shall have
previously offered to purchase such soybean oil from Supplier pursuant to
Supplier's right of first refusal granted by this Paragraph 3. The purpose of
such information right is to permit Supplier to confirm Customer's compliance
with the provisions of this Paragraph 3. Otherwise, Supplier shall have no right
to any information concerning prices paid by Customer to other suppliers of
refined soybean oil, in any particular or specific transaction, except as
provided in Paragraph 4.
(***) Denotes confidential information that has been omitted from the exhibit
and filed separately, accompanied by a confidential treatment request,
with the Securities Exchange Commission pursuant to Rule 406 of the
Securities Act of 1933, as amended.
4. QUANTITY DEFICIENCIES. If, during any Contract Year, Customer shall,
for any reason whatsoever (other than a "Supplier Deficiency", as defined
below), fail to purchase from Supplier the Minimum Quantity for such Contract
Year, as provided in Paragraph 2, the difference between the Minimum Quantity
and the amount of Products actually purchased during such Contract Year shall be
deemed the "Minimum Quantity Deficiency". If, during any Contract Year, Customer
shall, for any reason whatsoever, other than a Supplier Deficiency, fail to
offer to purchase from Supplier the Optional Quantity for such Contract Year, as
provided in Paragraph 3, the difference between the Optional Quantity and the
amount of Products which Customer shall have actually offered to purchase during
such Contract Year shall be deemed the "Optional Quantity Deficiency". The sum
of the Minimum Quantity Deficiency, if any, and the Optional Quantity
Deficiency, if any, for any Contract Year, shall be deemed the "Quantity
Deficiency" for such Contract Year.
In the event of a Quantity Deficiency for any Contract Year
("Deficiency Contract Year") and absent a Supplier Deficiency during the
Deficiency Contract Year, anything herein above to the contrary notwithstanding,
Customer shall be obligated, during the next succeeding Contract Year
("Succeeding Contract Year"), to offer to purchase all of its Requirements for
Products from Supplier until its purchases of Products, in pounds, equal the
Quantity Deficiency attributable to the Deficiency Contract Year. The purchase
price of Products so purchased in order to satisfy any such Quantity Deficiency
shall be determined in the same manner that the purchase price of the Minimum
Quantity of Products is determined pursuant to Paragraphs 7 and 8,
notwithstanding that the Quantity Deficiency may include an Optional Quantity
Deficiency. The purchase by Customer of Products during the Succeeding Contract
Year, for the purpose of satisfying a Quantity Deficiency attributable to the
preceding Deficiency Contract Year, shall not be counted toward Customer's
obligation to purchase the Minimum Quantity of Products during the Succeeding
Contract Year, provided, however, that Supplier shall not be obligated to sell
to Customer more than the Minimum Quantity of Products in the Succeeding
Contract Year nor any other Contract Year, except to the extent Supplier shall
have accepted Offers to sell to Customer all or part of the Optional Quantity,
pursuant to Paragraph 3. If Customer shall offer to purchase Products from
Supplier in a Succeeding Contract Year for the purpose of satisfying a Quantity
Deficiency from the preceding Deficiency Contract Year and Supplier shall, for
any reason, decline to accept such Offer or Offers, then Customer's obligation
to satisfy such Quantity Deficiency shall be deemed satisfied.
For purposes of this Paragraph 4, a "Supplier Deficiency" means the
inability of Supplier, for any reason whatsoever (including Force Majeure and
regardless of whether the cause thereof constitutes a breach by Supplier of its
obligations under this Agreement) to ship any Product timely ordered by Customer
on or before the shipment date stipulated in Customer's purchase order, in
accordance with the provisions of Paragraph 11.
If a Quantity Deficiency shall occur and shall not be caused, in whole
or in part, by a Supplier Deficiency, such Quantity Deficiency shall not
constitute a breach of this Agreement by Customer, so long as the same is
satisfied in the Succeeding Year by Customer as provided above. If a Supplier
Deficiency shall occur, the same shall not constitute a breach of this Agreement
by Supplier if excused by Force Majeure, as provided in Paragraph 29. If a
Supplier Deficiency constitutes a breach by Supplier of its obligations under
this Agreement, Customer may terminate this Agreement if such Supplier
Deficiency shall continue for more than ninety (90) days and, provided further
that, regardless of the cause of such Supplier Deficiency (including Force
Majeure), if the same shall continue for more than three hundred and sixty-five
(365) days, Customer may terminate this Agreement. Any such termination of this
Agreement by Customer shall be upon thirty (30) days prior written notice to
Supplier. The termination of this Agreement by Customer, as provided above,
shall not be the exclusive remedy by Customer and Customer shall have, in
addition, such other remedies as shall be afforded by law or equity.
For so long as any Supplier Deficiency shall continue, regardless of
its cause, Customer shall have the right to purchase Products from other
suppliers. If, during any Contract Year, there shall exist one or more Supplier
Deficiencies, regardless of their cause or causes, then, the provisions of this
Agreement shall continue to apply during such Supplier Deficiencies and Customer
shall be obligated to purchase the Minimum Quantity and to offer to purchase the
Optional Quantity for such Contract Year, failing which Quantity Deficiencies
shall arise, as provided above and with the same effect as in all other cases
except that:
a) The number of pounds of Products purchased by Customer from
other suppliers during all such Supplier Deficiencies shall firstly be counted
toward Customer's obligation to purchase the Minimum Quantity for the Contract
Year during which such Supplier Deficiencies shall exist; and
b) The number of pounds of Products purchased by Customer from
other suppliers during all such Supplier Deficiencies shall secondly be counted
toward Customer's obligation to offer to purchase the Optional Quantity for the
Contract Year during which such Supplier Deficiencies shall exist, as if
Customer shall have made Offers, pursuant to Paragraph 3, with respect to all
such Products so purchased from such other suppliers in excess of the amount
described in (a) above and as if all such Offers shall have been rejected.
Customer shall have no obligation actually to make any such Offers to Supplier
during the existence of a Supplier Deficiency. Information relating to such
purchases of Products from other suppliers shall be furnished by Customer to
Supplier upon request, subject to the same limitations provided in Paragraph 3
with respect to information relating to purchases of soybean oil from third
parties.
5. VOLUME FORECASTS. Within thirty (30) days prior to (i) the
commencement of the first Contract Year under this Agreement and (ii) March 31,
June 30, September 30 and December 31 of each Contract Year thereafter, Customer
shall furnish Supplier with its Volume Forecast for the ninety (90) day period
commencing on the first day of the next succeeding month ("Quarter"). Each such
Volume Forecast shall be in writing and shall contain Customer's non-binding
estimate of (a) the number of pounds of Products out of the Minimum Quantity
provided for in Paragraph 2 which Customer expects to purchase from Supplier
during such Quarter, and (b) the number of pounds of soybean oil out of the
Optional Quantity provided for in Paragraph 3 which Customer expects to offer to
purchase from Supplier during such Quarter.
6. TERM; TERMINATION. The term of this Agreement shall commence on
January 1, 1997 (the "Commencement Date") and shall expire upon the later of
December 31, 2011 or the date upon which Supplier shall cease to own at least
twenty-five and one-half (25.5%) percent of the total outstanding equity of
Customer. This Agreement may be sooner terminated:
(a) By Customer in the event of a Supplier Deficiency
constituting a breach of this Agreement and continuing for more than ninety (90)
days, as provided in Paragraph 4;
(b) By Customer in the event of a Supplier Deficiency not
constituting a breach of this Agreement and continuing for more than five
hundred and forty (540) days, as provided in Paragraph 4;
(c) By Customer in the event of a material breach by Supplier
of its obligations under this Agreement (other than as provided in (a) above)
but only if such breach is not cured by Supplier within thirty (30) days after
notice thereof by Customer to Supplier; and
(d) By Supplier in the event of a material breach by Customer
of its obligations under this Agreement, including but not limited to its
obligation to timely pay to Supplier the price of Products, but only if such
breach is not cured by Customer within thirty (30) days after notice thereof by
Supplier to Customer.
7. MINIMUM QUANTITY PRICE. Subject to Paragraphs 8 and 9, the price per
pound of Products for the Minimum Quantity of Products shall be F.O.B. (***), as
defined below, and shall be determined in accordance with the following formula:
Price = (***)
Definitions: (***)
(***) Denotes confidential information that has been omitted from the exhibit
and filed separately, accompanied by a confidential treatment request,
with the Securities Exchange Commission pursuant to Rule 406 of the
Securities Act of 1933, as amended.
8. (***) Customer shall furnish Supplier with copies of all pruchase
orders and other documentation reasonably necessary to evidence the purchase
price of such (***).
(***) Denotes confidential information that has been omitted from the exhibit
and filed separately, accompanied by a confidential treatment request,
with the Securities Exchange Commission pursuant to Rule 406 of the
Securities Act of 1933, as amended.
9. ADJUSTMENT OF (***). The parties shall annually
renegotiate all (***) stipulated in this Agreement and all (***) applicable to
each new Product as provided in Paragraph 16. Such negotiations shall commence
within ninety (90) days prior to each anniversary of the Commencement Date (the
"Negotiation Period"). The (***) shall be renegotiated for the purpose of
adjusting them, as nearly as practicable, to (***) which would, as of the
adjustment date, be available to Customer from competitive alternative sources
in the marketplace ("Market Standard"). If the parties shall fail to agree on
the Market Standard and the resulting adjustment to the (***) within sixty (60)
days after the beginning of the Negotiation Period, the disagreement may be
referred to mediation by either party within ten (10) days after the expiration
of said sixty (60) day period. If either party shall so refer the matter to
mediation, the other party shall be obligated to participate in the mediation.
If no settlement of the disagreement is reached through mediation within thirty
(30) days after the end of said sixty (60) day period, the disagreement shall be
referred to binding arbitration as provided in Paragraph 31.
For purposes hereof, "mediation" shall consist of the designation by
the parties of a professional mediator whose fees and expenses shall be equally
borne by the parties. Any settlement recommended or negotiated by the mediator
must be acceptable to both parties in order to be binding upon them.
(***) Denotes confidential information that has been omitted from the exhibit
and filed separately, accompanied by a confidential treatment request,
with the Securities Exchange Commission pursuant to Rule 406 of the
Securities Act of 1933, as amended.
10. ADJUSTMENT OF REFINING LOSS. There shall be no adjustment to the
Refinery Loss during the term of this Agreement unless and until Subsection C
(Adjustments for Loss) of Section 3 (Settlements for Crude Soybean Oil) of Rule
102 (Grade, Quality, Settlements of Crude Soybean Oil and Referee Chemists)
promulgated by the National Oilseed Processors Association shall be amended to
provide for payment by "Shipper" to "Consignee" for more or less than "each 1.0%
loss above 5.0% calculated on the official net weight crude."In the event of any
such change, the Refining Loss shall be proportionately adjusted, upward or
downward, to reflect such change as of the date of such change.
11. PURCHASE ORDERS; TERMS OF PAYMENT; DELIVERY.
a) Terms of Payment. Purchase orders for Products shall be in
writing and received by Supplier at least five (5) days in advance of the
requested shipment date. All Products ordered by Customer hereunder shall be
invoiced by Supplier to Customer as of the date of shipment. Terms of payment
shall be net cash 30 days from date of invoice.
b) Delivery. Although the price of the Minimum Quantity of
Products is F.O.B. Supplier's Plant, as provided in Paragraph 7, the delivery of
such Products and of Products comprising the Optional Quantity, as provided in
Paragraph 3, shall be deemed to have occurred, for all purposes of this
Agreement, when the Products are unloaded from the carrier at the facility of
Customer to which shipment is made ("Customer's Plant"). Notice of delivery
shall be promptly furnished Supplier. Shipping, transportation and delivery
charges shall be paid by Customer and included in the invoices to Customer to
the extent incurred or advanced by Supplier.
12. RISK OF LOSS. Supplier shall bear the risk of loss or damage to
Products until the Products are delivered pursuant to Customer's instructions,
to Customer's Plant. Customer shall bear the risk of loss or damage to Products
after the same shall have been delivered by the carrier to Customer's Plant.
13. QUALITY; QUALITY CONTROL; QUALITY RESPONSIBILITIES.
a) Quality. All Products shall be manufactured, processed and
packaged by Supplier under this Agreement in accordance with the Specifications,
which have been prepared by Customer. Products shall (i) not be short in weight,
adulterated, misbranded, mispackaged or mislabeled within the meaning of
applicable federal, state or local food and drug laws and regulations, and (ii)
be merchantable, of good quality and fit for the purpose intended.
b) Quality Control. In connection with the manufacture and
refining of Products under this Agreement, Supplier shall comply with the
quality standards and procedures set forth in the Specifications. Supplier shall
conduct periodic ingredient and process tests as set forth in the Specifications
and shall reject any ingredients or process which do not conform to the
standards set forth in the Specifications.
c) Quality Responsibilities. Supplier's responsibility to
Customer for the quality of Products sold by Supplier to Customer under this
Agreement shall be limited to its obligations set forth in Subparagraphs (a) and
(b) of this Paragraph 13. Anything herein to the contrary notwithstanding,
Supplier shall have no responsibility to Customer for the adequacy of the
Specifications.
14. INSPECTIONS. Customer shall have the right to have representatives
of Customer enter any Supplier's Plant for the purpose of observing, in behalf
of Customer, all aspects of Supplier's manufacturing techniques, quality
control, sanitation procedures and testing procedures. Supplier shall maintain
and make available to such representatives all records of chemical, physical and
microbiological tests of raw materials and ingredients used in the manufacture
of Products. Such representatives shall also be permitted to inspect Products
after manufacture and prior to delivery to Customer, provided that such
inspections shall not delay or in any manner interfere with Supplier's
production or delivery schedules.
15. NON-SPECIFICATION PRODUCTS. The term "Non-Specification Product"
shall mean any Product which is not manufactured and refined in accordance with
the Specifications.
a) Rejection; Replacement. Customer shall have the right to
reject any Non-Specification Products prior to their being delivered to
Customer's Plant or within three (3) business days thereafter. Rejection shall
be made by written notice to Supplier, stating in reasonable detail the reasons
for such rejection. Non-Specification Products so rejected after delivery may be
returned by Customer to Supplier at Supplier's Plant and within 10 days after
written request by Customer, Supplier shall refund the purchase price of
rejected Non-Specification Products. If Customer elects to return the rejected
Non-Specification Products, Supplier shall reimburse Customer for all reasonable
shipping and handling costs incurred thereby. If Customer shall return rejected
Non-Specification Products, other than the obligation to reimburse Customer for
any such shipping and handling costs, Supplier shall replace same with Products
which meet the Specifications ("Replacement Products") at Supplier's sole cost
and expense.
b) Reworking. Supplier shall not use or rework for Customer's
account any Non-Specification Products into Replacement Products unless such
Replacement Products meet the Specifications.
16. MODIFICATIONS TO SPECIFICATIONS; NEW PRODUCTS. The Specifications
for the Products described in Paragraph 1 and attached hereto as Exhibit A have
been prepared by Customer and may be changed by Customer, in its discretion, at
any time and from time to time, by ten (10) business days prior written notice
to Supplier, in which event, the Specifications, so changed, shall thereafter be
deemed to be the "Specifications" for all purposes of this Agreement, provided
that Customer and Supplier shall first agree upon the Refinery Premium
applicable to such changed Specifications. If Supplier shall, during the term of
this Agreement, manufacture or refine edible oils other than those described in
Paragraph 1 and Exhibit A ("New Products"), then such New Products shall be
deemed to be "Products" for all purposes of this Agreement, provided that:
a) Customer and Supplier shall agree on the specifications for
such New Products, in which case such specifications shall be deemed part of the
"Specifications" for all purposes of this Agreement; and
b) Customer and Supplier shall agree upon the Refinery Premium
applicable to each such New Product.
Unless and until Customer and Supplier agree upon the Refinery Premium
applicable to changed Specifications for Products subject to this Agreement, the
change in Specifications shall not become effective, in which case the Product,
if manufactured by another supplier in accordance with such changed
Specifications, shall not be deemed a "Product" under this Agreement and
Customer shall be entitled to purchase same from other suppliers without any
limitation imposed by this Agreement. Unless and until Customer and Supplier
agree upon the specifications for New Products and the Refinery Premium
applicable to such New Products, such New Products shall not be deemed
"Products" for purposes of this Agreement and Customer shall be entitled to
purchase such New Products from other suppliers without any limitation imposed
by this Agreement.
Notwithstanding anything to the contrary in Paragraphs 2, 3 or
elsewhere in this Agreement, Customer's obligation to purchase from Supplier the
"Minimum Quantity" as defined in Paragraph 2 shall apply only to the Products
specifically described in subparagraphs (a), (b) and (c) of Paragraph 1 and in
Exhibit A and shall not apply to any New Products. Instead, with respect to New
Products, Supplier shall be obligated to sell to Customer and Customer shall be
obligated to purchase from Supplier, fifty (50%) percent of Customer's
"Requirements" (as such term is defined in Paragraph 2(a)) for any New Product
during each full Contract Year during the term of this Agreement after the
Contract Year during which such New Product is first deemed a "Product"
hereunder as provided above and continuing for each Contract Year thereafter.
Such obligation shall be in addition to the obligations of the parties to
purchase and sell the Minimum Quantity of the Products specified in subparagraph
(a), (b) and (c) of Paragraph 2. Any deficiency in the quantity of New Products
actually purchased by Customer during any Contract Year below the 50% annual
obligation stated above, shall be deemed a Quantity Deficiency within the
meaning of Paragraph 4 and shall be satisfied in the manner provided in
Paragraph 4 in the case of Quantity Deficiencies.
17. FOREIGN OIL. Anything herein above to the contrary notwithstanding,
if at any time during the term of this Agreement, the delivered purchase price
of crude soybean oil from a source outside the United States to the Supplier's
Plant nearest such foreign source shall be less than the lowest purchase price
of Western Crude Soybean Oil delivered to the same Supplies Plant from any of
the prime Western locations in the United States listed in Paragraph 8, such
foreign delivered purchase price shall be deemed to be the Western Cash Crude
for purposes of determining the price of the Minimum Quantity Products payable
to Supplier by Customer pursuant to the formula set forth in Paragraph 7; or if,
at any time during the term of this Agreement, the delivered price of refined
soybean oil, i.e. "Products", from a source outside the United States to a
Customer Plant ordering such Products shall be less than the price of such
Products determined in accordance with the formula stipulated in Paragraph 7
(except that such price shall include freight to such Customer Plant),then the
price of such Products shall be such delivered price from such foreign source,
notwithstanding the provisions of said Paragraph 7.
18. CUSTOMER OIL PURCHASING OPERATIONS. Customer shall have the sole
and exclusive authority over all its purchases of vegetable oil and other raw
materials. All such purchasing shall be conducted and the execution of all
purchase orders shall be made from Customer's offices in the City of Industry,
California and/or such other locations as Customer shall in its discretion
elect.
19. SCOPE OF THIS AGREEMENT. This Agreement shall apply only to the
sale by Supplier and the purchase by Customer of the Minimum Quantity of
Products as provided in Paragraph 2, the Optional Quantity of Products as
provided in Paragraph 3 and 50% of Customer's annual Requirements for any New
Products, as provided in Paragraph 16. Otherwise, Customer shall have the right
to purchase any and all other vegetable oils and other commodities from any
other sources, without any rights of first refusal in favor of Supplier being
applicable thereto, and for such prices and on such terms and conditions as
Customer shall in its sole discretion elect.
20. EDIBLE OIL PURCHASES BY CUSTOMER AFTER SEVENTH CONTRACT
YEAR. Under the provisions of Paragraph 3, the right of first refusal of
Supplier to sell liquid and hydrogenated soybean oil to Customer in excess of
the Minimum Quantity of Products will expire after the seventh Contract Year of
this Agreement, i.e. December 31, 2003 (the "Rights Expiration Date"). If, on or
before the Rights Expiration Date, Wilsey shall have given notice to Supplier to
the effect that one or more of its affiliates ("Wilsey Affiliate") have entered
into, or plans to enter into, the business of crushing soybeans and/or refining
soybean oil or other vegetable oils or other raw materials purchased by
Customer, including but not limited to "Products" then subject to this Agreement
("Raw Materials"),then the purchase of Raw Materials by Customer (but only to
the extent in excess of the Minimum Quantity of Products required to be
purchased from Supplier under this Agreement) shall be allocated between
purchases from Supplier and purchases from any such Wilsey Affiliate (and if
there should be more than one Wilsey Affiliate, all Wilsey Affiliates shall be
treated in the aggregate as one for this purpose ), in proportion to the then
respective equity ownership interests of Wilsey and Supplier in Customer and
otherwise on such terms and conditions as shall be fair and equitable to
Customer, Supplier and such Wilsey Affiliate or Affiliates. For purposes of this
Paragraph 20, the term "Affiliate" means any entity which controls Wilsey or is
controlled by Wilsey or which is under common control with Wilsey.
If, on or before the Rights Expiration Date, Wilsey shall not have
given notice to Supplier that a Wilsey Affiliate has entered into or plans to
enter into the business of crushing, refining, manufacturing or otherwise
producing Raw Materials, then, upon timely request of Supplier, Customer and
Supplier shall, during the six months prior to the Rights Expiration Date, enter
into negotiations relating to one or more new rights of first refusal on the
part of Supplier to sell to Customer additional amounts of Products, as then
defined under this Agreement, in excess of the Minimum Quantity, provided that
neither Customer nor Supplier shall be obligated to agree to any such additional
rights of first refusal.
21. MATERIAL ADVERSE EFFECT. If, at any time during the term of this
Agreement, either Customer or Supplier shall claim, in written notice to the
other, that economic, business or other conditions have changed since the
Commencement Date, with the result that the continuation of this Agreement would
have a material adverse effect upon its financial condition, business
operations, business prospects or business opportunities ("Material Adverse
Effect"), then the parties shall be obligated to negotiate in good faith in an
attempt to agree upon an amendment to this Agreement which will eliminate or
substantially reduce such claimed Material Adverse Effect. If, within 90 days
after the date of such notice, the issue shall not have been resolved to the
satisfaction of both parties, then the party claiming a Material Adverse Effect
may apply to CPR (as defined in Paragraph 32) for arbitration of the dispute in
accordance with the CPR Rules (as defined in Paragraph 32) and otherwise in
accordance with the arbitration rules and procedures provided for in Paragraph
32 in the case of other disputes under this Agreement except that
Subparagraph(a) of Paragraph 32 (informal dispute resolution) and Subparagraph
(b) of Paragraph 32 (mediation) shall not apply, nor shall the seventy-five (75)
day waiting period in the first sentence of Subparagraph (c) of Paragraph 32
apply. The arbitration proceedings shall commence upon referral of the dispute
to arbitration by either party after the expiration of the 90 day period
referred to above. In any such case, the sole issue to be determined by the
arbitrator shall be whether or not a Material Adverse Effect exists and to
determine with reasonable specificity the nature and extent thereof. The
arbitrator shall not have the authority to require any amendment to this
Agreement. If, the arbitrator shall determine that a Material Adverse Effect
exists, then the parties shall again negotiate in good faith in an attempt to
agree upon an amendment to this Agreement which will eliminate or substantially
reduce the Material Adverse Effect, as the same shall have been determined by
the arbitrator. Neither party shall be under any obligation to agree upon any
such amendment but only to negotiate in good faith. If, within 90 days after the
agreement of both parties that a Material Adverse Effect exists or the
arbitrator's decision to that effect, the parties shall not have executed an
amendment to this Agreement satisfactory to the party who referred to matter to
arbitration, then said party may, within 30 days after the expiration of said 90
day period, if said Material Adverse Effect shall then be continuing, by written
notice to the other party, suspend the effectiveness of this Agreement for so
long as the said Material Adverse Effect shall continue. Absent the agreement of
both parties that a Material Adverse Effect exists or a decision of an
arbitrator to that effect, as set forth above, this Agreement shall continue
unsuspended and in full force and effect in all of its parts and clauses. If the
other party shall, at the time of said suspension notice or at any time
thereafter, contend that the Material Adverse Effect has ceased and that the
suspension of this Agreement should, therefore, not occur or continue, then,
unless the parties shall agree on the matter, the party so contending may refer
the dispute to binding arbitration in accordance with Subparagraph (c) of
Paragraph 32, provided that the sole issue to be determined by the arbitrator
shall be whether or not the Material Adverse Effect has ceased or is continuing.
If the arbitrator shall find that the Material Adverse Effect has ceased, the
suspension of this Agreement shall cease as of the date of the arbitrator's
decision and this Agreement shall be reinstated and in full force and effect but
only as of the date of the arbitrator's decision. If this Agreement shall,
pursuant to this Paragraph 21, be suspended for a continuous period of more than
two years, then either party may, by written notice to the other, terminate this
Agreement.
22. INDEMNIFICATION BY SUPPLIER. Except as otherwise limited below,
Customer and its officers, directors, employees, successors and assigns shall be
indemnified and held harmless by Supplier from any and all liabilities, losses,
damages, claims, costs and expenses, interest, awards, judgments and penalties
(including, without limitation, reasonable legal costs and expenses) actually
suffered or incurred by it or them (hereinafter a "Customer Loss"), actually
arising out of or resulting from:
a) the breach of any representation, warranty, covenant or
agreement by Supplier contained herein;
b) the consumption or use by any person of any products sold
by Customer which include Products purchased by Customer from Supplier if such
Products fail to meet the Specifications or otherwise fail to meet the quality
standards set forth in Paragraph 13.
Notwithstanding the foregoing, Supplier shall have no obligation to
indemnify or hold harmless Customer to the extent such Customer Losses shall
result from (i) the negligence of Customer, (ii) compliance with the
Specifications, or (iii) the acts or omissions of employees or agents of
Customer. The provisions of this Paragraph 22, relating to indemnification of
Customer, shall not apply to Supplier's liability to Customer for
Non-Specification Products, which is governed exclusively by the provisions of
Paragraph 15.
23. INDEMNIFICATION BY CUSTOMER. Except as otherwise limited below,
Supplier and its officers, directors, employees, successors and assigns shall be
indemnified and held harmless by Customer from any and all liabilities, losses,
damages, claims, costs and expenses, interest, awards, judgment and penalties
(including, without limitation, reasonable legal costs and expenses) actually
suffered or incurred by it or them (hereinafter a "Supplier Loss") actually
arising out of or resulting from:
a) the breach of any representation, warranty, covenant or
agreement by Customer contained herein;
b) the consumption or use by any person of any Products which
meet the Specifications, provided that such Supplier Loss shall not have been
caused by the adulterating, mispackaging or mislabeling of such Products by
Supplier, within the meaning of applicable federal, state or local food and drug
laws or regulations;
c) the negligence of Customer;
d) defects in the Specifications; or
e) the acts or omissions of employees or other agents of
Customer while present in a Supplier Plant or otherwise.
24. INDEMNIFICATION PROCEDURES.
a) For the purposes of this Paragraph 24, the term
"indemnitee" shall refer to the person indemnified, or entitled, or claiming to
be entitled to be indemnified, pursuant to the provisions of Paragraphs 22 or
23, as the case may be, and the term "indemnitor" shall refer to the person
having the obligation to indemnify pursuant to such provisions. "Losses" shall
refer to "Customer Losses" or "Supplier Losses", as the case may be.
b) An Indemnitee shall give written notice (a "Notice of
Claim") to the Indemnitor within ten (10) business days after the Indemnitee has
knowledge of any claims (including a Third Party Claim, as hereinafter defined)
which could give rise to a right of indemnification under this Agreement. No
failure to give such Notice of Claim shall affect the indemnification
obligations of the Indemnitor hereunder, except to the extent Indemnitor can
demonstrate such failure materially prejudiced such Indemnitor's ability to
successfully defend the matter giving rise to the claim. The Notice of Claim
shall state the nature of the claim, the amount of the Loss, if known, and the
method of computation thereof, all with reasonable particularity and containing
a reference to the provisions of this Agreement in respect of which such right
of indemnification is claimed or arises.
c) The obligations and liabilities of an Indemnitor under this
Paragraph 24 with respect to Losses arising from claims of any third party that
are subject to the indemnification provisions provided for in this Paragraph 24
("Third Party Claims") shall be governed by and be contingent upon the following
additional terms and conditions:
The Indemnitee at the time it gives a Notice of Claim to the Indemnitor
of the Third Party Claim shall advise the Indemnitor that it shall be permitted,
at its option, to assume and control the defense of such Third Party Claim at
its expense and through counsel of its choice if it gives prompt notice of its
intention to do so to the Indemnitee and confirms that the Third Party Claim is
one with respect to which the Indemnitor is obligated to indemnify. In the event
that Indemnitor exercises its right to undertake the defense against any such
Third Party Claim as provided above, the Indemnitee shall cooperate with the
Indemnitor in such defense and make available to the Indemnitor all witnesses,
pertinent records, materials and information in its possession or under its
control relating thereto as is reasonably required by the Indemnitor and the
Indemnitee may participate through its own counsel and, subject to the proviso
below, at its own expense in the defense of such Third Party Claim; provided,
however, that in the event both the Indemnitee and the Indemnitor are named as
parties and the Indemnitee shall in good faith determine that representation by
the same counsel is inappropriate, the fees and expenses of the Indemnitee's
separate counsel shall be at the expense of the Indemnitor. Similarly, in the
event the Indemnitee is, directly or indirectly, conducting the defense against
any such Third Party Claim, the Indemnitor shall cooperate with the Indemnitee
in such defense and make available to it all such witnesses, records, materials
and information in its possession or under its control relating thereto as shall
be reasonably required by the Indemnitee and the Indemnitor may participate by
its own counsel and at its own expense in the defense of such Third Party
Action. Except for the settlement of a Third Party Claim which involves the
payment of money only, no Third Party Claim may be settled by the Indemnitor
without the written consent of the Indemnitee, which consent shall not be
unreasonably withheld or delayed. No Third Party Claim may be settled by the
Indemnitee without the written consent of the Indemnitor, which consent shall
not be unreasonably withheld or delayed.
25. INSURANCE. During the term of this Agreement, Supplier shall
maintain comprehensive general liability insurance of at least $10,000,000, with
a deductible not to exceed $500,000, endorsed to cover the indemnifications
contained in this Agreement. Customer shall maintain comprehensive general
liability insurance of at least $10,000,000 with a deductible not to exceed
$500,000 endorsed to cover the indemnifications contained in this Agreement.
Upon the execution of this Agreement, Supplier and Customer shall furnish each
other with certificates of insurance evidencing such coverages. Such
certificates shall contain clauses for notification of both Supplier and
Customer thirty days in advance of any cancellation, reduction or change in
coverage.
26. TRADEMARKS AND TRADE NAMES. Supplier shall have no right, title or
interest in and to the trademarks or trade names of Customer. Supplier shall not
use any of such trademarks or trade names except as authorized in writing by
Customer.
27. CONFIDENTIAL INFORMATION. The term "Confidential Information" as
used herein shall mean (i) all information relating to the Specifications, (ii)
all information contained in the Volume Forecasts, and (iii) all other sales
volume information, Product distribution information, and other technical
information disclosed by Customer to Supplier and designated in writing by
Customer as "Confidential Information." Supplier shall hold the Confidential
Information in confidence and shall use the same only for the purpose of
manufacturing Products under this Agreement, provided that Supplier may disclose
the Confidential Information to such of its employees who shall have a need to
know same in order to carry out, in behalf of Supplier, Supplier's obligations
under this Agreement. Upon the expiration or termination of this Agreement,
Supplier shall return to Customer all such Confidential Information which shall
be in written form, together with all copies thereof, and retain none for its
files.
The restriction in this Paragraph 27, relating to Confidential
Information, shall not apply to such Confidential Information that (i) is or
becomes available to the public or part of the public domain other than as a
result of wrongful disclosure by Supplier, its employees, agents or
representatives, (ii) was known by Supplier (without a non-disclosure obligation
on the part of Supplier) before disclosure by Customer, its employees, agents or
representatives, (iii) becomes known to Supplier from any source (except from
parties obligated not to disclose same) other than Customer, its employees,
agents or representatives, (iv) is approved for release by written authorization
of Customer, or (v) shall be required by law to be disclosed. In the case of
clause (v), Supplier shall promptly notify Customer before such Confidential
Information is disclosed so that Customer may seek a protective order or other
appropriate remedy or waive compliance with this Paragraph. In the event that
such protective order or other remedy is not obtained, Supplier shall disclose
only that portion of the Confidential Information it is legally required to
disclose, as confirmed by a legal opinion of a nationally recognized law firm,
and will exercise all reasonable efforts to assist Customer to obtain reliable
assurance that confidential treatment will be accorded the Confidential
Information, provided, however, that any such assistance rendered by Supplier,
its agents and representatives, shall be at the sole cost and expense of
Customer.
28. RELATIONSHIP OF PARTIES. The parties hereto are independent
contractors and engage in the operation of their own respective businesses and
neither Supplier nor Customer shall be considered the agent of the other for any
purpose whatsoever, and neither Supplier nor Customer has any authority to enter
into any contracts or assume any obligations for the other or to make any
warranties or representations on behalf of the other. Nothing in this Agreement
shall be considered to establish a relationship of co-partners or joint
venturers between Supplier and Customer.
29. FORCE MAJEURE. If either Customer or Supplier is prevented from
performing any of its obligations under this Agreement or is substantially
delayed in such performance by reason of any cause beyond its reasonable
control, including any governmental restrictions, act of God, riots, war,
insurrections, fire, labor disputes, crop failure or other cases of force
majeure, such party shall be excused from the performance of its obligations
affected by the reasons referred to, or from the delay in such performance.
30. GOVERNING LAW. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of California without
regard to its provisions concerning conflicts or choice of law.
31. ARBITRATION OF REFINING PREMIUM ADJUSTMENTS. In the event of a
dispute between Supplier and Customer with respect to the annual adjustment of
one or more Refining Premiums, as provided in Paragraph 9, if no settlement of
the dispute is reached though mediation within ten (10) days after the beginning
of the mediation, as provided in Paragraph 9, then either Supplier or Customer
may apply to CPR (as defined in Paragraph 32) for arbitration of the dispute in
accordance with the CPR Rules (as defined in Paragraph 32) and otherwise in
accordance with the arbitration rules and procedures provided for in Paragraph
32 in the case of other disputes under this Agreement, except that the following
special rules shall apply:
a) Subparagraph (a) of Paragraph 32 (informal dispute
resolution) and Subparagraph (b) of Paragraph 32 (mediation) shall not apply,
nor shall the sixty-five (65) day waiting period in the first sentence of
Subparagraph (c) of Paragraph 32 apply. The arbitration proceedings shall
commence upon the referral of the dispute to arbitration by either party after
the expiration of the sixty (60) and thirty (30) day periods referred to in
Paragraph 9.
b) Prior to the commencement of the arbitration each of
Supplier and Customer shall communicate in writing to the arbitrator their
respective positions concerning the appropriate Refining Premiums to be
applicable to each Product under the Agreement for the Contract Year in
question.
c) The determination of the arbitrator shall be limited solely
to the issue of whether Supplier's or Customer's proposed Refining Premiums is
the closest to the "Market Standard", as defined in Paragraph 9.
d) The fees and expenses of the arbitrator shall be borne
solely by the losing party.
32. GENERAL DISPUTE RESOLUTION PROVISIONS.
The parties hereto desire to avoid all forms of traditional litigation,
subject to the provision for preliminary injunctive relief described in
Paragraph 32(d) below. Any dispute, controversy or claim of any nature
whatsoever between the parties hereto arising out of or relating to this
Agreement or the breach, termination or invalidity of this Agreement or any
related agreements, whether in contract, tort or equity, or under any statute or
regulation arising out of or relating to such agreements (a "Dispute"), shall be
resolved in accordance with this Paragraph 32. All other remedies to which the
parties (including their respective Affiliates) may otherwise have been
entitled, whether at law or in equity, are hereby waived to the fullest extent
allowed by law. The obligations under this Paragraph 32 shall survive
termination of this Agreement.
The preceding provision notwithstanding, if a Dispute arises out of
third-party litigation against any party hereto, these procedures shall not be
mandatory, and such party shall have the right to engage in such litigation with
the third-party claimant and with each other concerning such Dispute. For
purposes of this exception pertaining to Disputes arising out of third-party
litigation, a third-party means a party (i) which is not an Affiliate of a party
hereto, (ii) has no record or beneficial, financial, ownership or other
significant interest in or with a party hereto and (iii) in which a party hereto
has no record or beneficial, financial, ownership or other significant interest.
(a) Informal Dispute Resolution. The parties shall attempt in
good faith to resolve any Dispute promptly by confidential negotiations between
representatives of the parties with authority to settle the matter. All such
negotiations shall be treated as compromise and settlement negotiations for
purposes of the relevant rules of evidence. Any party making claim shall give
the other party written notice that the party is invoking the dispute resolution
procedures of this Paragraph 32 with respect to a specific Dispute. Within ten
(10) days after delivery of the written notice, the receiving party shall submit
to the other a written response. The notice and the response shall include (a) a
statement of each party's position and a summary of arguments supporting that
position, and (b) the name of the person (s) who will represent that party and
the name of any other person (and an indication, if applicable, that such other
person is an attorney) who will accompany the representatives (s) to the
meeting. Within thirty (30) days after delivery of the written notice, the
representatives of both parties shall meet at a mutually acceptable time and
place (or failing such agreement at Supplier's headquarters), or confer by
telephone and thereafter as often as they reasonably deem necessary, to attempt
to resolve the Dispute.
(b) Mediation. If the Dispute has not been resolved by
negotiation within forty-five (45) days of the initial written notice (or such
longer time as the parties may agree), either party may notify the other that it
intends to submit such Dispute to non-binding mediation under the then current
model procedure for mediation of business disputes promulgated by CPR. In such
event the parties shall mediate the Dispute. The parties shall promptly attempt
to agree upon a reputable and experienced mediator. Failing agreement within
five (5) days after the notice of intent to mediate has been given by a party
hereto (or such longer time as the parties may agree), the mediator will be
selected in accordance with the previously mentioned CPR procedure. Any such
mediation process shall be concluded in Los Angeles, California and must be
completed within seventy-five (75) days of delivery of the initial written
notice unless otherwise agreed by the parties
(c) Formal Dispute Resolution.
(i) Any Dispute which remains unresolved seventy-five
(75) days after delivery of the initial written notice shall
be promptly resolved by final and binding arbitration. Such
arbitration shall be conducted pursuant to the CPR Rules
except to the extent herein otherwise provided. The place of
arbitration shall be Los Angeles, California unless both
parties agree to a different locale. There shall be a single
neutral and impartial arbitrator appointed by CPR experienced
in the subject matter of the Dispute and who has not had a
material personal or financial relationship with either
participant to the Dispute or any Affiliate of either
participant in the preceding three years, to be selected in
accordance with the CPR Rules. The arbitration shall be
conducted in the English language, provided that a witness may
testify in another language if the party calling such witness
shall provide an interpreter at such party's expense. The
arbitrator shall follow the laws of the State of California
(without regard to conflict of law provisions) in resolving
any Dispute, provided that any question concerning
arbitrability shall be governed exclusively by the United
States Arbitration Act as then in force. Each party hereby
waives any right to and the arbitrator shall not have the
power to award punitive, exemplary, double or treble damages.
The award of the arbitrator shall be final and binding, and
judgment on it may be entered in any court having
jurisdiction. The parties agree that any decision or award
resulting from proceedings in accordance with this dispute
resolution provision shall have not preclusive or other effect
in any other matter between the parties or involving a
third-party.
(ii) The arbitrator may consolidate an arbitration
under this Agreement with any other arbitration between the
parties to this Agreement if the subject of the Dispute arises
out of or relates essentially to the same facts or
transaction(s). No other person may be included in the
arbitration of a Dispute, whether by consolidation, joinder or
in any other manner, except by written consent of both parties
to the Dispute.
(iii) Each party shall bear its own costs and
attorneys' fees, and the parties shall equally bear the fees,
costs and expenses of the arbitrator and the arbitration
proceedings; provided, however, that the arbitrator may
exercise discretion to award costs and/or attorneys' fees to
the prevailing party.
(d) Injunctive Relief. The parties agree that notwithstanding
anything to the contrary contained herein, any party may seek a temporary
restraining order or a preliminary injunction from any court of competent
jurisdiction in order to prevent immediate and irreparable injury, loss or
damage; provided such party has commenced in good faith an informal dispute
resolution proceeding pursuant to this Paragraph 32. The arbitrator once
appointed shall have the power to modify or vacate such temporary restraining
order or preliminary injunction or to issue a restraining order or injunction.
(e) Confidentiality. The dispute resolution proceedings
contemplated by this Paragraph 32 shall be as confidential and private as
permitted by law. To that end, the parties shall not disclose the existence,
content or results of any proceedings conducted in accordance with this
Paragraph 32, and materials submitted in connection with such proceedings shall
be treated as confidential, and not be admissible in any other proceeding,
provided, however, that this confidentiality provision shall not prevent a
petition to vacate or enforce an arbitral award, and shall not bar disclosures
required by law. Any decision or award resulting from proceedings in accordance
with this Paragraph 32 shall have no preclusive effect in any matter involving
third parties.
(f) Limitations Period. The statutes of limitation of the
State of California shall be applicable to the arbitration of any Dispute
hereunder just as if such arbitration were a lawsuit between the parties, except
that all applicable statutes of limitation and defenses based upon the passage
of time shall be tolled during the pendency of any informal dispute resolution
or mediation under Subparagraphs 32(a) and (b) hereof. The parties shall take
such action, if any, as may be required to effectuate the tolling provided for
in this Subparagraph 32(f).
(g) Continued Performance. Each party is required to continue
to perform its obligations under the Agreement pending final resolution of any
dispute arising out of or relating to this Agreement.
(h) Certain Definitions. For purposes of Paragraph 31 and this
Paragraph 32, the following definitions shall apply:
(i) "Affiliate" shall mean a person, form or
corporation, which directly or indirectly, alone or through
one or more intermediaries, controls, or is controlled by, or
is under common control with a party to this Agreement.
(ii) "CPR" shall mean the CPR Institute for Dispute
Resolution (formerly, the Center for Public Resources).
(iii) "CPR Rules" shall mean the Non-Administered
International Arbitration Rules promulgated by CPR.
33. SEVERABILITY. If any portion of this Agreement shall be in
violation of any applicable law, such paragraph or portion shall be inoperative,
but the remainder of this Agreement shall remain valid and shall continue to
bind the parties.
34. ASSIGNMENTS. This Agreement shall be binding and inure to the
benefit of each of the parties, their successors and assigns, provided that this
Agreement may not be transferred or assigned by either party without the prior
written consent of the other party.
35. NOTICES. All notices permitted or required to be given by Customer
and Supplier hereunder shall be given in the manner set forth in the Joint
Venture Agreement.
36. ENTIRE AGREEMENT. This Agreement, together with the Schedules
attached hereto, contains all of the terms, warranties, representations,
agreements, covenants, conditions, and provisions agreed upon by the parties
with respect to the matters described herein. This agreement shall not be
altered or changed unless the change shall be in writing and signed by
authorized officials of both parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
HARVEST STATES COOPERATIVE
By: /s/ Merritt E. Peterson
--------------------------------
Name: Merritt E. Peterson
-------------------------------
Title: Group Vice President
------------------------------
WILSEY-HOLSUM FOODS, L.L.C.
By: HARVEST STATES COOPERATIVE By: WILSEY FOODS, INC.
Member Member
By: /s/ James D. Tibbitts By: /s/ Jack Davis
--------------------- --------------------------------
James D. Tibbitts Name: Jack Davis
Senior Vice President -------------------------------
Title: President and CEO
------------------------------