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Exhibit 10.1
EXECUTION COPY
MASTER SUPPLY AGREEMENT
This MASTER SUPPLY AGREEMENT dated as of January 1, 1998 by and between
CPC INTERNATIONAL INC., a Delaware corporation ("CPC") and CORN PRODUCTS
INTERNATIONAL, INC., a Delaware corporation ("CPI").
WHEREAS, prior to the date hereof, the business of CPI was a division of
CPC;
WHEREAS, prior to the date hereof, CPC (and its Affiliates in the
Territories) purchased the Products listed in the Schedules hereto from CPI
(and its Affiliates in the Territories) on an intercompany basis;
WHEREAS, on December 31, 1997 CPI was spun-off from CPC and is now an
independent corporation, and the Affiliates of CPI are no longer under common
ownership with the Affiliates of CPC; and
WHEREAS, CPC and CPI desire to formalize the supply relationships set
forth in the Schedules hereto.
NOW, THEREFORE, the parties agree as follows:
1. DEFINITIONS.
As used herein, the following terms shall have the meanings set forth
below:
(a) "Affiliate" shall mean any entity which is controlled by, in
control of, or under common control with, the party to which the
reference is made.
(b) "Applicable Law" shall mean any law, rule, regulation, statute,
ordinance, decree, treaty or directive applicable to any of the
Purchasers or Suppliers.
(c) "Commodity Consumer Products" shall mean corn starch, corn oil,
corn syrup and dextrose which are branded and packaged for
sale to the retail trade, club stores, mass merchandisers and the
foodservice sector. Each Schedule identifies the Commodity
Consumer Products sold in each Territory.
(d) "Commodity Industrial Products" shall mean bulk corn starch,
corn oil (crude or refined), corn syrup (glucose), and
dextrose purchased solely for the production of Commodity Consumer
Products. Each Schedule identifies the Commodity Industrial
Products sold to the purchaser in each Territory.
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(e) "Consumer Products" shall mean all branded and
packaged products (including Commodity Consumer Products)
produced by the Purchasers for sale to the retail trade, club
stores and mass merchandisers utilizing any Products as
ingredients.
(f) "Purchaser" shall mean any of the Purchasers.
(g) "Purchasers" shall mean collectively CPC and all of
its Affiliates who purchase under this Agreement.
(h) "Products" shall mean all products sold by the
Suppliers to the Purchasers (including the Commodity Industrial
Products) set forth in the Schedules hereto for each Territory.
(i) "Supplier" shall mean any of the Suppliers.
(j) "Suppliers" shall mean collectively CPI and all of
its Affiliates who supply under this Agreement.
(k) "Territories" shall mean all of the countries for
which there is a Schedule.
(l) "Territory" shall mean any country for which there is
a Schedule.
2. SCOPE.
2.1. This Agreement shall apply to all purchases by
Purchasers from Suppliers of the Products listed in the
Schedules in the corresponding Territories. The provisions of
Section 5 shall apply to Commodity Consumer Products and
Commodity Industrial Products and the provisions of Sections 6.1
and 6.2 shall only apply to Commodity Industrial Products.
2.2. This Agreement does not constitute a purchase order.
Purchases under this Agreement shall be made by purchase orders
issued by Purchasers as provided in Section 7 hereof.
3. TERM.
3.1. This Agreement shall have an initial term of two
years from the date hereof (the "Initial Term"), unless
terminated earlier in accordance with Section 3.4 below.
3.2. Six (6) months prior to the end of the Initial Term,
the Purchasers and Suppliers from each Territory shall review
the terms of their respective Schedules. If any of the
Purchasers and Suppliers are
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unable to agree upon future terms for their respective
Schedules, this Agreement shall terminate as to those
Territories at the end of the Initial Term. For those
Purchasers and Suppliers that are able toagree upon future
terms for their respective Schedules, this Agreement shall
automatically be renewed, as modified, as to those Territories
for successive renewal terms of one year each, unless notice of
termination is given by either party in writing, not later than
six (6) months prior to the end of the one year term then in
effect.
3.3 After the Initial Term, any Supplier or Purchaser may
terminate this Agreement in accordance with Section 3.2 or 3.4
hereof as to some of the Products in the corresponding
Territories. In the event of such a partial termination, this
Agreement shall remain in full force and effect as to those
Products in the corresponding Territories for which this
Agreement has not been terminated.
3.4. This Agreement may be terminated automatically at any
time in the event of the following:
(a) In the event of a breach or failure to perform this
Agreement by one party, the non-breaching party may
terminate this Agreement for those Products in
corresponding Territories where the breach or failure
occurred, if the breach or failure has continued for a
period of sixty days after written notice thereof has been
received by the breaching party.
(b) In the event of a change in control of either party, the
other party shall have the right to terminate this
Agreement in whole as to (i) or in part as to (ii)
immediately after giving written notice upon the
occurrence of such change in control. For purposes of
this Agreement:
(i) change in control of CPC or CPI shall mean: (y) the
acquisition by any person (as such term is
defined in the Securities Act of 1933, as amended)
(excluding the party to which the change in control
relates or any of its Affiliates or a fiduciary
holding its securities in any type of benefit plan),
directly or indirectly, of beneficial ownership of
20% or more of the combined voting power of the then
outstanding voting securities entitled to vote
generally at the election of directors, or (z) the
merger, consolidation, reorganization, liquidation,
involving the sale or transfer of substantially all
of the assets of the party; and
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(ii) change in control of any Affiliate of CPC or CPI
shall mean any change in the ownership of any
Affiliate of CPC or CPI such that CPC or CPI
ceases to hold voting control of its respective
Affiliate(s).
3.5. In the event that this Agreement is terminated in
whole or in part in accordance with Section 3.2, 3.3 or 3.4
above, the obligations of CPI and its Affiliates contained in
Section 5 shall nevertheless continue to remain in full force
and effect for a period of six months from the date of such
termination as to all Commodity Industrial Products in
corresponding Territories for which this Agreement has been
terminated.
4. PRICING.
Products shall be sold hereunder at prices to be determined in accordance
with the pricing mechanism currently utilized by the relevant Purchasers and
Suppliers. All pricing mechanisms to be used for purposes of this Agreement are
described in the Schedules hereto.
5. NON-COMPETITION.
5.1. For so long as this Agreement remains in force and
effect with respect to any Commodity Industrial Products in any
Territory, and for a period of six months after any termination
hereof, CPI agrees that it will not, nor will its Affiliates:
(i) sell Commodity Consumer Products in the Territories for
which this Agreement is in effect as to the
corresponding Commodity Industrial Products;
(ii) sell, manufacture or package Commodity Consumer Products
to or for third parties if, to the knowledge of CPI or
its Affiliates after reasonable inquiry of such third
parties, such Commodity Consumer Products are intended
for sale in Territories for which this Agreement is in
effect as to the corresponding Commodity Industrial
Products; or
(iii) acquire a controlling interest in any person or entity
which engages in (i) or (ii) above (an "Acquired
Business") unless, if a portion of the Acquired Business
consists of (i) or (ii) above, CPI or its Affiliates
offers to sell the portion of the Acquired Business that
engages in (i) or (ii) above to CPC or its Affiliates on
reasonable terms and conditions; provided, however, that
if CPI and CPC (or their respective Affiliates) cannot
agree on such terms and conditions and CPI (or its
Affiliate) proceeds to
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acquire the Acquired Business then CPC (or its Affiliate)
shall have the automatic right to terminate this Agreement
as to such Commodity Industrial Products in the
corresponding Territory upon written notice.
5.2. Nothing in this Section 5 shall be deemed to prohibit
CPI from performing any toll packaging agreement with CPC or its
Affiliates or from selling any Products (including Commodity
Industrial Products) to third parties in any Territory that may
sell, manufacture or package Commodity Consumer Products in any
Territory.
6. EXCLUSIVITY AND PRODUCT VOLUME.
6.1. For so long as this Agreement is in effect, Suppliers shall be
the sole and exclusive suppliers to Purchasers and Purchasers
shall purchase 100% of their requirements for Commodity
Industrial Products from Suppliers in the Territories for which
this Agreement is in effect, except as provided in Sections 6.2
and 8.2(b).
6.2 Notwithstanding Section 6.1, if at any time during
the term of this Agreement a Purchaser requires Commodity
Industrial Product in excess of a Supplier's production capacity
at the relevant supply location, the Supplier shall notify the
Purchaser that it is unable to fill the entire purchase order
within five business days of Supplier's receipt of the purchase
order, and such Purchaser shall be permitted to purchase
Commodity Industrial Product from a third party only for so long
as such Purchaser's requirements exceed such Supplier's
production capacity, and thereafter the Supplier shall promptly
notify the Purchaser when it becomes able to fulfill the
Purchaser's requirements. Nothing in this Section 6 shall be
deemed to require any Supplier to increase its production
capacity. In the event of such purchases from third parties,
Suppliers shall not be liable for the costs of such purchases,
including but not limited to the differential in the price of
such purchases.
6.3. Purchasers will provide as much forecasting information as
possible to assist Suppliers. Two months prior to the start of
the fiscal year of each Purchaser for each year that this
Agreement will be in effect for the following year, Purchasers
shall provide Suppliers with estimates of their volume
requirements for the following year.
6.4. Nothing in this Section 6 shall be deemed to require
Purchasers to purchase all of their requirements for Products,
other than Commodity Industrial Products, from Suppliers and
nothing in this Section 6 shall prohibit Purchasers from
purchasing test quantities of
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Commodity Industrial Products from third parties as long as
Purchasers neither sell such test quantities nor sell Commodity
Consumer Products containing such test quantities.
7. PURCHASE ORDERS AND INVOICES.
7.1. Purchases hereunder will be made on the basis of
purchase orders issued by Purchasers. Purchase orders will
contain the following information:
(a) location for delivery;
(b) shipment date;
(c) volume; and
(d) Product specifications.
7.2. Invoices will be submitted by Suppliers to Purchasers
which will contain the following information:
(a) payment terms;
(b) title and risk of loss; and
(c) responsibility for insurance, freight and taxes.
7.3. Suppliers and Purchasers shall agree upon a form of
purchase order and invoice to be used in their Territory.
7.4. In the event of any conflict between a purchase order
or an invoice and this Agreement, the terms of this Agreement
shall prevail.
8. WARRANTIES.
8.1 Suppliers warrant that all Products sold hereunder
shall: (a) comply with the specifications agreed to by the
parties, (b) be produced in accordance with the quality
assurance standards described in Section 10 hereof, and (c):
(i) for Products sold within the U.S.A.: (I) shall not be
adulterated or misbranded within the meaning of the
U.S. Federal Food, Drug and Cosmetic Act and regulations
thereunder, and (II) shall be produced in accordance with
good manufacturing practices, as such term is defined in
21 U.S.C. Part 110 ("GMPs"); and
(ii) for Products sold outside the U.S.A.: (I) shall be in
compliance with all Applicable Laws, and (II) shall be
produced in accordance with Applicable Law governing
manufacturing practices.
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Suppliers make no other warranties, either express or implied,
including but not limited to fitness for a particular purpose,
except those set forth above.
8.2 (a) In the event that any Products sold hereunder do not
comply with the warranties set forth in this Section 8 or
in Section 10, Purchaser shall notify Supplier of such
breach and of its timing requirements for such Products
within five business days of Purchaser's discovery of the
breach.
(b) If Supplier is unable to replace the
non-complying Product in sufficient time to meet
Purchaser's timing requirements for such Products pursuant
to the notice given under Section 8.2(a) above, Supplier
shall refund to Purchaser the purchase price of the
non-complying Product and Purchaser shall have the right
to purchase replacement Product from a third party,
notwith-standing Section 6.1.
(c) Supplier's liability under this Section 8
and under Section 10 shall be limited to: (i) replacement
of the Products or a refund in the amount of the purchase
price of the Products in accordance with Section 8.2(b),
(ii) the cost of manufacturing and packaging the Consumer
Products (less the purchase price of the Products), (iii)
the reasonable costs of processing customer complaints as
to Consumer Products rendered unusable, and (iv) the
reasonable costs of recalling and disposing of any
defective Consumer Products.
9. INDEMNIFICATION AND INSURANCE.
9.1 Each party (the "Indemnifying Party") shall defend,
indemnify and hold harmless the other party (the "Indemnified
Party") and its respective employees and representatives from
and against all liability, loss, damage and expense, (including
reasonable attorney's fees) actions and claims for injury and/or
death to persons and damage to property arising out of the
negligent or wrongful acts or omissions of the Indemnifying
Party, but only to the extent that such injury or damage is
attributable to the Indemnifying Party's negligent or wrongful
acts or omissions.
9.2 In the event that an Indemnified Party is subject to
any indemnifiable action or claim in accordance with Section
9.1, the procedures for indemnification in Article VI of the
Distribution Agreement dated December 1, 1997 between CPC and
CPI (the "Distribution Agreement") shall apply.
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9.3 Suppliers and Purchasers shall procure and maintain, at their
respective costs and expenses, for so long as this Agreement is
in effect, occurrence based commercial general liability
insurance and automobile liability insurance coverage. The
policies, including excess policies, shall have limits of not
less than $25,000,000 per occurrence and $25,000,000 in the
aggregate (combined single limit) for each policy year and
shall be obtained from insurers rated A- or better by A.M. Best
Company, and with a financial size category of VIII or larger.
The policies shall be endorsed to name the Indemnified Party as
an additional insured with respect to liabilities arising out
of the foregoing indemnification agreements and shall provide
that the insurance of the Indemnifying Party will be primary to
any other insurance of the additional insured. Purchasers and
Suppliers agree that their respective insurers shall not be
subrogated to the rights of the Indemnified Party against the
Indemnifying Party with respect to any claim arising under this
Agreement and neither party shall assign any such right of
subrogation to their insurers. In addition to the foregoing
insurance, Suppliers and Purchasers shall procure and maintain,
at their respective cost and expense, any additional insurance
as may be required by Applicable Laws. Each party shall
deliver to the other Certificates of Insurance and endorsements
evidencing the issuance of the required coverage and stating
that the policies are in effect and that such policies will not
be canceled or non-renewed without 30 days' prior written
notice to the additional insured. In the event of a claim,
copies of the policies shall be supplied to the party claiming
indemnification upon request.
10. QUALITY ASSURANCE AND CONTROL.
10.1. All Products supplied under this Agreement shall be produced
in accordance with Supplier's quality assurance standards and
program in effect as of the date hereof. Suppliers reserve the
right to reasonably modify their quality assurance standards
from time to time; provided, however, that any significant
changes shall be implemented by Suppliers only after full and
open discussion with Purchasers with regard to their impact on
manufacturing of the Products.
10.2. From time to time, upon prior notice to Suppliers, Purchasers
shall have the right to examine Suppliers' facilities used for
the manufacture of the Products hereunder.
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11. CONFIDENTIALITY.
11.1. The process, formulations, data and information (collectively
"Information") which has been or may be furnished by one
party to the other in order to perform this Agreement, is the
property of the providing party and has been or will be
furnished solely to enable the receiving party to perform this
Agreement, with the understanding that:
(a) the receiving party will not use or reproduce such
Information for any other purpose;
(b) the receiving party will take all reasonable care to
ensure that such Information is not disclosed to other
parties; and
(c) upon request by the providing party, the receiving party
will promptly return all such Information at any time
during the term of this Agreement or thereafter, except
that either party may continue to use such Information of
the other party as it may require in order to perform this
Agreement.
11.2. The foregoing restrictions will not apply to any
information and data which is:
(a) already in possession of the receiving party at the time
of first receipt from the providing party;
(b) independently developed by employees of the receiving
party who did not have access to the Information;
(c) becomes part of the public domain without breach of this
Agreement by the receiving party; or
(d) rightfully obtained by the receiving party from third
persons without restriction or breach by this Agreement
by any receiving party.
12. DISPUTE RESOLUTION.
Any dispute, controversy or claim in connection with this Agreement
shall be resolved in accordance with Article VI of the Distribution
Agreement. The parties acknowledge that disputes arising under Section 9.2 (or
the applicability thereof) may raise difficult factual questions relating to
proportional responsibility, proximate cause and duties to mitigate damages;
such questions and similar issues as to allocating responsibility and damages
shall be considered in the resolution of disputes.
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13. REMOVAL OF EQUIPMENT.
In the event that any Purchaser removes packaging equipment owned by
it from the plant of a Supplier either during the term of this Agreement or
following termination hereof, the Purchaser shall, at its own expense, restore
the area of the plant where the equipment was located, to reasonable working
condition.
14. INDEPENDENT CONTRACTOR.
Suppliers shall act under this Agreement solely as independent
contractors. Nothing herein shall constitute any Supplier or Purchaser as an
agent of the other, nor shall it constitute any member of one party's staff as
an agent or employee of the other party.
15. ASSIGNMENT.
None of the rights or obligations of either party hereunder is
assignable either by voluntary act or operation of law, nor transferable
by it without the prior written consent of the other party, which consent shall
not be unreasonably withheld.
16. FORCE MAJEURE.
If performance by either party of any of its duties or obligations
under or pursuant to this Agreement is prevented, hindered, delayed or
otherwise made impracticable by reason of any strike, flood, riot, fire,
explosion, war or any other casualty which cannot be overcome by reasonable
diligence and without unusual expense, such party shall be excused from such
performance to the extent that it is so prevented, hindered or delayed thereby
during the continuance of any such happening or event and for so long as such
event shall continue to prevent, hinder or delay such performance.
17. NOTICES.
Any notice to be given hereunder by either party shall be in writing
and shall be deemed given when: (i) sent by registered mail, return receipt
requested upon receipt by the sender of confirmation of receipt; (ii) sent by
telecopy upon receipt by the sender of confirmation of transmittal; or (iii)
delivered to the addressee as follows:
In the case of Purchaser to: CPC International Inc.
P.O. Box 8000, International Plaza
Englewood Cliffs, New Jersey 07632
Attn: Corporate Secretary
Telephone: (201) 894-2381
Facsimile: (201) 894-2192
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In the case of Supplier to: Corn Products International, Inc.
P.O. Box 345, 6500 Archer Road
Argo, Illinois 60501-0345
Attn: Corporate Secretary
Telephone: (708) 563-6958
Facsimile: (708) 563-6851
Any party may from time to time designate by written notice to the other
revised address or telecopy information.
18. SEVERABILITY.
The invalidity or unenforceability of any particular provision of this
Agreement shall not affect any other provisions hereof, and this Agreement
shall be construed in all respects as if such invalid or unenforceable
provision were omitted.
19. HEADINGS.
The headings of this Agreement are for the convenience of the parties,
and shall not be construed as having any legal or binding meaning or effect.
20. ENTIRE AGREEMENT AND AMENDMENT.
This Agreement constitutes the entire understanding and agreement
between the parties hereto with respect to the subject matter hereof, and
cancels and supersedes any prior negotiations, and merges all understandings,
and agreements, whether verbal or written, with respect thereto. This
Agreement can be amended only by a written instrument executed by the parties
hereto.
21. BINDING EFFECT.
This Agreement shall be executed by CPC and CPI on their own behalf
and on behalf of their respective Affiliates. Each of CPC and CPI agrees to
cause their respective Affiliates to perform each and every one of the
obligations hereunder to be performed by such Affiliates.
22. NO WAIVER.
The failure by either party to insist upon strict performance of any
covenant or condition of this Agreement, in any one or more instances, shall
not be construed as a waiver or relinquishment of any such covenant or
condition in the future, but the same shall be and remain in full force and
effect.
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23. SURVIVAL.
Notwithstanding any termination of this Agreement the provisions of
Section 5 shall survive such termination for the period stated therein.
24. CHOICE OF LAW.
THIS AGREEMENT SHALL, IN ALL RESPECTS, BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY, EFFECT AND PERFORMANCE, EXCEPT FOR SUCH LAWS OF THE
STATE OF NEW YORK WHICH REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER
JURISDICTION.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CPC INTERNATIONAL INC.
By:
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Title:
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CORN PRODUCTS INTERNATIONAL, INC.
By:
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Title:
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