Execution Copy
BAKERY PRODUCT SUPPLY AGREEMENT
This Bakery Product Supply Agreement ("Agreement"), dated as of
March 23, 1998, is by and between BUNGE FOODS CORPORATION, a Delaware
corporation ("Supplier") and AU BON PAIN CO., INC., a Delaware corporation
("Buyer").
WHEREAS, contemporaneously herewith, Supplier has acquired from ABP
Midwest Manufacturing Co., Inc., a Delaware corporation and an Affiliate (as
defined below) of Buyer ("ABP Midwest"), ABP Midwest's bakery products
manufacturing plant in Mexico, Missouri (the "Plant") pursuant to the terms of
an Asset Purchase Agreement by and among Supplier, ABP Midwest and Buyer (the
"Purchase Agreement"); and
WHEREAS, in partial consideration of Buyer's entry into the Purchase
Agreement, Supplier agreed to enter into this Agreement; and
WHEREAS, to induce Buyer to enter into this Agreement, Bunge
Corporation, a New York corporation ("Bunge Corporation"), has agreed to
guaranty the obligations of Supplier under this Agreement as provided
immediately following this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound hereby, agree as follows:
1. Definitions: In addition to other terms defined herein, capitalized terms
used in this Agreement shall have the following meanings:
"Affiliate" shall mean, with respect to any Person, any
Person directly or indirectly controlling,
controlled by, or under common control with
such other Person. For purposes of
determining whether a Person is an
Affiliate, the term "control" shall mean
possession, directly or indirectly, of the
power to direct or cause the direction of
the management and policies of a Person,
whether through ownership of securities, by
virtue of the office held by such Person, by
contract or otherwise.
"Base Standard Costs" shall mean, for each Product Code during any
period of time, the sum of: (a) the per unit
standard costs, including delivered raw
materials and delivered packaging (in each
case at the stipulated delivered price per
unit of material multiplied by the standard
usage in the Bill of Materials) and Direct
Labor Costs, as set forth in the Bill of
Materials, excluding the cost of flour and
butter; plus (b) the Billing Price for Flour
and Butter; plus (c) an allowance for
Employee Benefits on a cost per unit basis
determined according to the methodology set
forth on Schedule 1.1. Such sum shall be
calculated using the operating standards and
process specifications included in the Bill
of Materials.
"Bill of Materials" shall mean Buyer's bill of materials for
each Product Code, including any process
specifications, yield and usage information,
and the standard usage of electricity (as
described in Schedule 3.1). A copy of the
Bill of
Materials in effect as of the date hereof
for each Product Code is attached as Exhibit
1.1. Such bills of materials, which set
forth the cost structure for each Product
Code, are subject to modification by Buyer
as provided in Section 4.1.
"Billing Freight Allowance" shall mean the estimated per Case freight
allowance used for the purpose of
establishing the Invoice Price for a Product
Code to a Distributor, determined by
agreement of the parties as of the date
hereof (or at the time of introduction in
the case of a New Product or additional or
modified Product) and at the times and in
the manner specified in Section 3.3.
"Billing Price for Electricity" shall mean, for each Product Code during any
month, the weighted average price of
electricity per kilowatt hour estimated for
the purpose of establishing the Invoice
Price determined by agreement of the parties
as of the date hereof (or at the time of
introduction in the case of a New Product or
additional or modified Product) and at the
times and in the manner specified in Section
3.3 and consistent with the methodology
described on Schedule 3.1 multiplied by the
per unit standard kilowatt hour usage set
forth in the Bill of Materials as described
on Schedule 3.1.
"Billing Price for Flour shall mean, for each Product Code, the
and Butter" estimated cost per unit of Product of flour
and butter used for the purpose of
establishing the Invoice Price, determined
by agreement of the parties as of the date
hereof (or at the time of introduction in
the case of a New Product or additional or
modified Product) and at the times and in
the manner specified in Section 3.3.
"Buyer's System" shall mean the bakery/cafe retail outlets in
the continental United States owned,
franchised or licensed by Buyer and the
bakery/cafe retail outlets in the
continental United States operated by other
Persons pursuant to a joint venture or other
arrangement with Buyer in which Buyer holds
not less than a fifty-one percent (51%)
interest.
"Case" shall mean, for each Product Code, the
number of units that are packaged in each
standard case as set forth in the Bill of
Materials.
"CPI Allowance" shall mean, at any time for each job
classification, the actual regular,
non-overtime wage rates and Employee
Benefits (determined in accordance with
Schedule 1.2) as of the date of this
Agreement, plus a percentage increase equal
to the percentage increase in the Consumer
Price Index from the date of this Agreement
plus [ ].* As used
herein, the term "Consumer Price Index"
shall mean the "Consumer Price Index for
Urban Wage Earners and Clerical Workers,
U.S. City Average, All Items (1982-84=100)"
published by the Bureau of Labor Statistics
of the United States Department of Labor
(or, if such index is not available, any
comparable successor or substitute index,
appropriately adjusted, which is designated
by Buyer and approved by Supplier). As of
the last day of the month ending
*The information contained within these brackets has been omitted and filed
separately with the Commission pursuant to a request for Confidential Treatment
under Rule 24b-2.
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immediately prior to the date hereof, the
Consumer Price Index was 161.9.
"Direct Labor Costs" shall mean, the direct hourly labor costs
per unit of Product Code, as calculated in
accordance with the structure and
methodology in the Bill of Materials based
upon the non-overtime wage rates per
position as set forth in Schedule 1.2 (such
non-overtime wage rates plus Employee
Benefits not to exceed the CPI Allowance).
"Distributors" shall mean the distributors designated by
Buyer or members of Buyer's System (whether
independently owned and operated, or part of
Buyer's System), who are authorized pursuant
to Section 7.1 to order and/or receive
Product from Supplier, to perform
preliminary quality checks on Product, to
make payments to Supplier for Product as
invoiced by Supplier pursuant to the terms
of this Agreement, and to distribute Product
to Buyer's System. A current list of
approved Distributors is set forth on
Schedule 1.3.
"Employee Benefits" shall mean, for each Product Code during any
period of time, the total employee benefit
expense incurred by Supplier to or for the
benefit of the direct labor used to
manufacture such Product, which benefits
shall consist of the benefits described on
Schedule 1.4 for hourly employees.
"New Product" shall mean all items of bakery products that
are not capable of being manufactured on one
or more of the following existing production
lines at the Plant, as such production lines
may exist from time-to-time during the Term
or as they may be modified pursuant to
Section 3.5: (1) the Laminated Line
(including extruded Products); (2) the
Bread/Roll Line; (3) the Muffin Line; (4)
the Cookie Line; and (5) the Icing/Mix Line.
"Period" shall mean a period of time agreed-to
between Supplier and Buyer from time to time
during the Term, but in no event shall any
such period be longer than one (1) month.
"Person" shall mean an individual, a corporation, a
general partnership, a limited partnership,
a limited liability company, an association,
a trust or any other entity or organization,
including a government or political
subdivision or an agency or instrumentality
thereof.
"Product" shall mean all bakery goods that are
currently or hereafter manufactured at the
Plant (or manufactured at a facility other
than the Plant with the approval of Buyer in
accordance with the terms of this
Agreement), and then supplied directly or
indirectly for resale to Buyer's System,
provided that such bakery goods are capable
of being manufactured on one or more of the
following existing production lines at the
Plant, as such production lines may exist
from time-to-time during the Term or as they
may be modified pursuant to Section 3.5: (1)
the Laminated Line (including extruded
Products); (2) the Bread/Roll Line; (3) the
Muffin Line; (4) the Cookie Line; and (5)
the Icing/Mix Line (including, without
limitation, bakery goods in the categories
listed on Schedule 1.5). The
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foregoing notwithstanding, the term
"Product" shall not include bagels or PM
Sweets (brownies and bars).
"Product Code" shall mean an item of Product which is a
specific combination of formulation, unit
size, package size (including number of
units), package type and label, all in
accordance with the Bill of Materials, and
to which a specific product code has been
assigned for identification purposes.
"Purchase Target" shall mean the minimum amount of total
Upcharge to be earned by Supplier as a
result of the purchase of Product from
Supplier in each of the first four (4) years
of the Term, as set forth on Schedule 1.6.
"Quarter" shall mean the three (3) consecutive months
ending on the last day of the calendar month
occurring every May, August, November and
February during the Term.
"Stipulated Flour
and Butter Costs" shall mean, for each Product Code, the
delivered per unit cost of flour and butter
for a period of time, based on either: (1)
the purchase price for flour and/or butter
as selected by Buyer from time to time after
consultation with and advice from Supplier
from available contracts for flour and
butter for such period of time; or (2) the
methodology selected by Buyer for purchasing
flour and/or butter for a period of time
determined by Buyer (for example, but
without limitation, through purchases on the
spot markets), in each case multiplied by
the standard usage per unit of Product Code
in the Bill of Materials.
"Stock-out Shortage" shall mean the inability of a Distributor to
fill an order for Product placed by a member
of Buyer's System due solely to a failure by
Supplier to supply Product to such
Distributor. The amount of a Stock-Out
Shortage, for a Product Code, shall equal
the aggregate number of Cases of such
Product Code ordered from the affected
Distributor by Buyer's System less the
number of Cases of such Product Code in the
affected Distributor's inventory.
"Term" shall mean, unless earlier terminated due to
a Supplier Default or a Buyer Default or
pursuant to Section 3.7.3, the period during
which Supplier shall be required to
manufacture and supply Product and Buyer
shall be required to purchase, or cause to
be purchased, Product in accordance with the
terms of this Agreement, which shall be for
a period of five (5) years commencing on the
date of this Agreement, and shall be
automatically renewed on a year-to-year
basis thereafter unless notice of
termination by either party is given to the
other party not less than twelve (12) months
prior to termination.
"Upcharge" shall mean, for each Product Code existing
as of the date hereof, the dollar amount per
unit of Product as set forth on Schedule
1.7, and for each Product Code for a New
Product the dollar amount per unit of
Product as shall be agreed upon in writing
by Buyer and Supplier. With respect to each
additional Product Code introduced by Buyer
pursuant to Section 3.5.1, the Upcharge
shall equal [ ]* (during each of the
*The information contained within these brackets has been omitted and filed
separately with the Commission pursuant to a request for Confidential Treatment
under Rule 24b-2.
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first four (4) years of the Term) and
[ ]* (during the fifth (5th) year of
the Term) of the sum of the Base Standard
Costs initially established for each such
additional Product Code plus a variance
equal to [ ]* of such Base
Standard Costs. Upcharge on any unit of
Product or New Product shall be deemed
earned at the time when title and risk of
loss pass pursuant to Section 6 of this
Agreement.
"Updated Electricity Costs" shall mean, for each Product Code during any
month, the weighted average price of
electricity per kilowatt hour determined in
the manner described on Schedule 3.1
multiplied by the per unit standard kilowatt
hour usage set forth in the Bill of
Materials as described on Schedule 3.1.
"Updated Freight Allowance" shall mean, for each Product Code during any
period, the per Case stipulated cost of
freight, equal to: (a) the freight cost per
truck from the Plant to each Distributor's
warehouse (or such other designated
destination) from available quotes for such
freight services as selected by Buyer (or by
Supplier in the absence of such a selection
by Buyer); divided by (b) the agreed-to
number of Cases shipped per truck.
"Updated Standard Costs" shall mean, for each Product Code during any
period of time, the sum of: (a) the per unit
standard costs, including delivered raw
materials and delivered packaging (in each
case at the actual delivered price per unit
of material multiplied by the standard usage
in the Bill of Materials) and Direct Labor
Costs, excluding the cost of flour and
butter; plus (b) the Stipulated Flour and
Butter Costs; plus (c) an allowance for
Employee Benefits allocated on a cost per
unit basis determined according to the
methodology set forth on Schedule 1.1. Such
sum shall be calculated using the operating
standards and process specifications
included in the Bill of Materials. The
foregoing notwithstanding, the Direct Labor
Costs and Employee Benefits (determined in
accordance with the methodology set forth in
Schedule 1.1) shall not exceed the CPI
Allowance.
2. Manufacture and Supply of Product:
2.1 Supply Requirements. Subject to the terms and conditions of this
Agreement, during the Term, Supplier shall: (a) manufacture and supply Product
in such quantities as may be required by each Distributor and/or member of
Buyer's System to enable them to meet the Product requirements and inventory
needs of Buyer's System; and (b) manufacture and supply Product in such
quantities as may be required by each Distributor to maintain an adequate level
of Product inventory as provided in this Agreement.
2.2 Exclusivity. So long as Supplier timely supplies Product in
accordance with the required recipes, formulas, processes and Product
specifications, and in the quantities required by each Distributor and Buyer,
Buyer shall purchase from Supplier (through its Distributors) one hundred
percent (100%) of its Product requirements for Buyer's bakery/cafe outlets in
the continental United States, and Buyer shall use its reasonable best efforts,
subject to applicable law, to direct the bakery/cafe outlets that are a part of
Buyer's System to purchase from Supplier (through its Distributors) one hundred
percent (100%) of their Product requirements. In the case of The SYGMA Network,
Inc. and its Affiliates (collectively, "SYGMA"), a Distributor, Supplier shall
supply each SYGMA distribution
*The information contained within these brackets has been omitted and filed
separately with the Commission pursuant to a request for Confidential Treatment
under Rule 24b-2.
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facility so that at any time each has no more than eight (8) days of inventory
of Product on hand, measured according to the following formula: The dollar
balance (at SYGMA's sales price) of SYGMA's Product inventory at such time
divided by SYGMA's average daily dollar sales of Product during the twelve-weeks
immediately preceding such time. Buyer shall not sell, directly or indirectly,
bakery products at wholesale to third-parties, except to Buyer's System pursuant
to this Agreement; provided, however, that nothing contained herein shall
prevent Buyer from manufacturing and selling fresh baked or refrigerated dough
products or frozen bagels from any of its commissaries to any third party.
2.3 Specifications and Packaging. Supplier shall manufacture Product in
accordance with Buyer's recipes, formulas, and Product specifications as set
forth in the current Bills of Materials, operating standards and other documents
listed on Schedule 2.3, as such requirements may be modified by Buyer upon
reasonable prior notice from time to time during the Term in accordance with
Section 4.1. Product shall be packaged in the manner prescribed by the
Distributors and Buyer. Notwithstanding anything to the contrary contained
herein, Supplier shall be entitled to alter any process or operating standard if
such an alteration is required to comply with good manufacturing practices as
set forth in the regulations promulgated by the U.S. Food and Drug
Administration (Current Good Manufacturing Practices in Manufacturing, Packing,
or Holding Human Food, 21 C.F.R 110 (1997)), as such regulations may be amended
from time to time, including, without limitation, alterations to prevent
microbial contamination. Supplier shall provide Buyer prompt notice of any
alteration, which shall be prior notice to the extent practicable.
2.4 Payment. Supplier shall invoice each Distributor for Product on
payment terms that Supplier and such Distributor may agree upon which do not
affect the determination and adjustment of the Invoice Price (as defined below).
Supplier shall provide Buyer with a copy of each invoice at the time it provides
such invoice to a Distributor.
3. Pricing and Adjustments:
3.1 General Pricing Structure.
(a) Supplier will charge each Distributor an Invoice Price per
Case of Product as set forth in Section 3.2. Supplier shall invoice freight
separately from Product. During the thirty (30) days prior to the adjustment of
each Invoice Price, the Invoice Price for the next succeeding year shall be
established as set forth in Section 3.3.
(b) Within ten (10) business days after the end of each
Period, during each Quarter as provided in Section 3.4, Supplier shall update
and report to Buyer the difference between the sum of the four (4) components of
the Invoice Price as set forth in Section 3.2(a) and the sum of the actual costs
for such components, in each case, as applied to the volume of Product shipped
during the Period. At the end of each Quarter, the net difference between the
sum of the four (4) components of the Invoice Price as set forth in Section
3.2(a) and the sum of the actual costs for such components during the Quarter
shall be determined and adjusted by a payment to or from Buyer, after taking
into account any Project Expenses and Structural Savings due to Supplier
pursuant to Section 3.5.
(c) The Invoice Price and updates each Period and adjustments
each Quarter shall be determined in the manner as set forth in this Article 3
consistent with the pricing diagram set forth in Schedule 3.1; provided,
however, that in the event of any inconsistency between the Schedule 3.1 and any
Section of this Agreement, the text in such Section shall at all times control.
All requests for credit from Buyer's System for failure to meet Product
specifications shall be processed directly through
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Supplier. Buyer and Supplier shall mutually agree upon reasonable administrative
procedures for processing of any credit requests.
3.2 Invoice Price Per Case. The Invoice Price for Product shipped
pursuant to this Agreement shall be invoiced by Product Code, and shall be
expressed in dollars per Case. The "Invoice Price" for each Case of Product
shipped to each Distributor shall equal, for each Product Code, the sum of the
FOB Mexico Billing Price Per Case plus the Billing Freight Allowance. As used
herein, the "FOB Mexico Billing Price Per Case" for each Product Code, shall
equal the product obtained by multiplying
(a) the sum obtained by adding:
(1) the Base Standard Costs established pursuant to Section
3.3; plus
(2) a variance equal to [ ]* of such Base
Standard Costs; plus
(3) the Billing Price for Electricity established pursuant to
Section 3.3; plus
(4) the Upcharge;
by
(b) the number of standard units of Product in a Case.
The Invoice Price shall be adjusted on May 1, 1999 and each May 1st thereafter,
and at other times, in the manner described in Section 3.3.
3.3 Changes to Invoice Price. During the thirty (30) days prior to May
1, 1999 and each May 1st thereafter, Supplier and Buyer shall mutually make a
reasonable estimate of the Base Standard Costs, and shall mutually agree on the
Billing Price for Electricity and the Billing Freight Allowance that will be in
effect for the upcoming year commencing as of each such May 1st. If the parties
are unable agree upon an estimate for the Base Standard Costs, the Billing Price
for Electricity and/or the Billing Freight Allowance, the Invoice Price shall
remain unchanged. The foregoing notwithstanding, if the accumulated net
adjustments from each Period due to or from Buyer computed pursuant to Section
3.4 exceed [ ]* during the course of
any year, Buyer and Seller shall discuss, within thirty (30) days after notice
from either party, the implementation of a reasonable adjustment to the Invoice
Price based upon changes in Base Standard Costs, Billing Price for Electricity
and/or Billing Freight Allowance since the immediately preceding adjustment to
the Invoice Price.
3.4 Periodic Updates and Adjustments. Within ten (10) business days
after the end of each Period during each Quarter, as required to ensure
accuracy, Supplier shall deliver to Buyer a summary report (the "Quarterly
Adjustment/True-Up Summary Report") in the form attached hereto as Exhibit 3.4.
Supplier shall post to the Quarterly Adjustment/True-Up Summary Report each such
Period the Total Dollar Adjustment (Direct Cost) determined in accordance with
Section 3.4.1 and the Total Dollar Adjustment (Freight) determined in accordance
with Section 3.4.2.
3.4.1 Direct Cost Update. Within ten (10) business days after
the end of each Period during each Quarter, Supplier shall deliver to Buyer a
summary report (the "Interim Update (Direct Costs") in the form attached hereto
as Exhibit 3.4.1. Supplier shall also provide to Buyer each Period, for each
Product Code, the Bill of Materials and such other supporting documentation as
may reasonably be requested by Buyer to verify the computation of the net
adjustment due to or from Supplier. Each
*The information contained within these brackets has been omitted and filed
separately with the Commission pursuant to a request for Confidential Treatment
under Rule 24b-2.
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Interim Update (Direct Costs)), for each such Period, shall set forth the Total
Dollar Adjustment (Direct Cost). As used herein the term "Total Dollar
Adjustment (Direct Cost)" shall equal the total, for all Product Codes, of the
positive or negative difference between the FOB Mexico Billing Price Per Case
minus the Updated FOB Mexico Price Per Case multiplied by the number of Cases of
Product shipped during such Period. The "Updated FOB Mexico Price Per Case"
shall equal the product obtained by multiplying:
(a) the sum obtained by adding:
(1) the Updated Standard Costs; plus
(2) a variance equal to [ ]* of such Updated
Standard Costs; plus
(3) the Updated Electricity Costs; plus
(4) the Upcharge;
by
(b) the number of standard units of Product in a Case.
3.4.2 Freight Allowance Update. Together with the Interim
Update (Direct Costs), Supplier shall deliver to Buyer a summary report (the
"Interim Update (Freight)") in the form attached hereto as Exhibit 3.4.2. Each
Interim Update (Freight) shall set forth the Total Dollar Adjustment (Freight).
As used herein the "Total Dollar Adjustment (Freight)" shall equal the total,
for all Product Codes, of the net positive or negative difference for all
Distributors (expressed in dollars per Case) between the Billing Freight
Allowance for each such Distributor minus the Updated Freight Allowance,
multiplied by the total number of Cases shipped to each such Distributor during
such Period.
3.4.3 Within fifteen (15) business days after the end of each
Quarter, Supplier shall provide to Buyer a final proposed Quarterly
Adjustment/True-Up Summary Report for the Quarter. The final proposed Quarterly
Adjustment/True-Up Summary Report shall also set forth all Non-Capital Project
Expenses, Capital Project Expenses and Structural Savings due to Supplier for
the Quarter pursuant to Section 3.5. The aggregate, for all Product Codes, of
the amounts determined pursuant to Section 3.4.1 and Section 3.4.2 during each
Period of the Quarter, after taking into account any amounts due to Supplier for
Non-Capital Project Expenses, Capital Project Expenses and Structural Savings,
shall constitute Supplier's proposed net adjustment due to or from Supplier for
the Quarter.
3.4.4 Buyer shall have ten (10) business days to review the
final proposed Quarterly Adjustment/True-Up Summary Report for each Quarter
after its receipt. If Buyer is unable to reconcile or disputes any item included
in the final Adjustment Summary, or the computation of the net adjustment due to
or from Supplier, it shall notify Supplier within such ten (10) business days of
any such items it is unable to reconcile or which it disputes. The foregoing
notwithstanding, the failure by Buyer to dispute or question any item within
such ten (10) business days shall not constitute a waiver by Buyer or Supplier
of the right to subsequently dispute or question such item; provided, however,
that any such dispute or question by Buyer or Supplier shall be asserted not
later than ten (10) business days after the end of the immediately next
succeeding Quarter or shall be thereafter be deemed irrevocably waived. Supplier
and Buyer shall attempt diligently in good faith to reconcile any differences
and to resolve by mutual agreement any items in dispute within ten (10) business
days (the "Resolution Period") following such notification by Buyer. If any of
the items in dispute are not resolved within the Resolution Period, the parties
shall submit the disputed items for resolution to an arbitrator mutually agreed
upon by the
*The information contained within these brackets has been omitted and filed
separately with the Commission pursuant to a request for Confidential Treatment
under Rule 24b-2.
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parties (the "Arbitrator"), whose decision shall be final and binding on the
parties, and when made, shall be deemed to be an agreement between Supplier and
Buyer on the issues so determined. The expense of the Arbitrator shall be borne
equally by Buyer and Supplier.
3.4.5 Any net adjustment due to or from Supplier for any
Quarter shall be paid by or to Buyer within the later of: ten (10) business days
after the ten (10) business day review provided for in Section 3.4.4, or its
final determination if a dispute or question is raised within such ten (10)
business day review, provided, however, that any amounts not in dispute shall be
paid by the earlier of such dates.
3.5 Modifications to Products and Introduction of Additional
Products; Structural Savings.
3.5.1 Modifications and Additional Products. From time to time
during the Term, Buyer shall have the right, on a project-by-project basis, to
introduce additional Product items or make modifications to existing Product
recipes, formulas, specifications and preparation procedures which, in either
case, require expenditures by Supplier in order to manufacture such additional
Product or to implement such modifications. Such additional or modified Product
either may be in addition to or may replace one or more then-existing Product
Codes. Prior to implementing any such project, Buyer and Supplier shall develop
a mutually agreeable budget for the project. The actual direct, incremental
expenses associated with any one project to introduce additional or modified
Product, consisting of material, packaging, direct hourly labor (collectively,
"Non-Capital Project Expenses") and expenses with any one project which are
capital expenditures under generally accepted accounting principles
(collectively, "Capital Project Expenses"), shall be allocated as follows:
(a) If the total Non-Capital Project Expenses do not exceed
[ ]*, Supplier shall pay the total amount of such
expenses; provided, however, that Supplier shall not be obligated to incur more
than [ ]* of such expenses, in the aggregate,
during any one year of the Term.
(b) If the total Non-Capital Project Expenses (exclusive of any
expenses constituting capital expenses under generally accepted accounting
principles) exceed [ ]* per project or if the
annual [ ]* limit in Section 3.5.1(a) has been
exceeded, Buyer shall pay the total amount of such excess.
(c) If the total Capital Project Expenses do not exceed
[ ]*, Supplier shall pay the total amount of such
expenses.
(d) If the total Capital Project Expenses exceed
[ ]*, Buyer shall pay to Supplier an annual amount equal to
Buyer's "Pro Rata Share" (as hereinafter defined) of the total Capital Project
Expenses multiplied by a percentage amount, on a per annum basis, equal to
[ ]* over and above the yield on Ten-year Treasury Bills issued by the
United States Government as reported, from time to time, by the Wall Street
Journal. As used herein, the term "Pro Rata Share" shall mean, for any Quarter,
the amount of Product manufactured by Supplier for Buyer's System utilizing
capital equipment purchased by Supplier in connection with any project, divided
by the total amount of product (including Product) manufactured on such
equipment, multiplied by the Capital Project Expenses. For purposes of this
Section 3.5.1 and Section 3.5.3, the standard for measuring the amount of
Product manufactured shall be determined by agreement of the parties before
implementation of the project and shall be based upon one of the following
criteria: (i) units of Product manufactured; (ii) weight of Product
manufactured; or (iii) equipment utilization time.
*The information contained within these brackets has been omitted and filed
separately with the Commission pursuant to a request for Confidential Treatment
under Rule 24b-2.
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3.5.2 Limitations on Capital Project Expenses. The provisions
of Section 3.5.1(c) notwithstanding, Supplier shall not be obligated to incur
Capital Project Expenses under Section 3.5.1(c) during any year which exceed
[ ]*. Upon the termination of this Agreement for
any reason other than a Supplier Default, Supplier shall have the option of
selling the equipment acquired pursuant to Section 3.5.1(d) to Buyer for its net
book value, and Buyer shall be obligated to purchase such equipment from
Supplier within thirty (30) days of receiving notice thereof. This option shall
expire, if not sooner exercised, thirty (30) days prior to the termination date
of this Agreement, except in the case of a Buyer Default, in which case, this
option shall expire thirty (30) days after the termination date. For purposes of
this Section 3.5.2, all capital expenditures shall be deemed to have a seven (7)
year depreciable life and to be depreciated on a straight-line basis unless
otherwise agreed.
3.5.3 Structural Savings.
(a) From time to time during the Term, Supplier shall provide
Buyer with recommendations for improving the efficiency of the manufacturing and
supply processes and for reducing costs. Buyer and Supplier shall mutually
determine which, if any, of such recommendations are to be implemented on a
project-by-project basis, and shall work together to implement such agreed-upon
projects. Buyer and Supplier shall mutually determine the amount of cost savings
to be included in Updated Standard Costs and the time during which such cost
savings shall be realized. All agreed-upon savings shall be applied to reduce
the Updated Standard Costs by amending the applicable Bills of Materials upon
the agreed-upon implementation date of the project. Any provision hereof to the
contrary notwithstanding, any program implemented for the purpose of managing
flour and butter costs shall not be governed by this Section 3.5.3.
(b) If the implementation of any such project involves a
capital expenditure by Supplier under generally accepted accounting principles,
Buyer shall pay to Supplier an annual amount equal to Buyer's Pro Rata Share
multiplied by the amount of the project's capital expenditure multiplied by a
percentage amount, on a per annum basis, equal to [ ]* over and above the
yield on Ten-year Treasury Bills issued by the United States Government as
reported, from time to time, in the Wall Street Journal.
(c) If the implementation of any such project involves a
change in delivered raw materials, delivered packaging or Direct Labor Costs
which do not involve capital expenditures pursuant to Section 3.5.3(b) and which
are reflected in agreed-upon changes in the Bill of Materials, Buyer shall pay
to Supplier an amount equal to [ ]* of the agreed-upon
savings resulting from such changes during the agreed-upon time.
(d) The foregoing notwithstanding, if Supplier undertakes any
project which is not otherwise a part of any structural savings program
agreed-to by Buyer pursuant to this Section 3.5.3 (including, by way of
illustration and without limitation, the installation of a spiral blast
freezer), the cost structure for the appropriate Bills of Materials for the
Updated Standard Costs shall be modified to reflect any changes in the operating
standards resulting from the implementation of such project, without any
allocation of expense to Buyer.
3.5.4 Accounting for Project Expenses and Structural Savings.
All amounts to be paid by Buyer to Supplier pursuant to this Section 3.5 shall
be accounted for by Supplier separately from the Pricing and Adjustment
provisions of Sections 3.1 through 3.4, and shall be included on the Quarterly
Adjustment/True-Up Summary Report delivered by Supplier to Buyer (itemized
according to project) at the end of each Quarter pursuant to Section 3.4.3.
*The information contained within these brackets has been omitted and filed
separately with the Commission pursuant to a request for Confidential Treatment
under Rule 24b-2.
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3.6 Supplier's Purchasing Duties; Vendors. Supplier shall use its best
efforts to assist Buyer in obtaining the most favorable available prices for raw
materials and packaging, including without limitation, flour and butter. To the
extent that raw materials and packaging are purchased by Supplier from vendors
designated by Buyer, the cost of such raw materials and packaging shall not
constitute a failure to satisfy Supplier's obligations under this Section 3.6.
Anything to the contrary herein notwithstanding, Supplier shall not change any
vendors without the prior consent of Buyer, which consent shall not be
unreasonably withheld. Grounds for Supplier to propose terminating a vendor
shall include, but not be limited to, the failure of such vendor to supply
sufficient quantities of any item purchased by Supplier from the vendor on a
timely basis and/or according to required specifications. Neither Supplier nor
Buyer shall enter into any formal or informal arrangement or understanding with
any vendor (regardless of whether such vendor is an Affiliate of either Supplier
or Buyer) by which either Supplier or Buyer receives, directly or indirectly,
any rebate, discount or other consideration, unless such arrangement or
understanding is fully disclosed to the other and the value of such rebate,
discount or other consideration is applied to reduce Base Standard Costs and
Updated Standard Costs pursuant to this Agreement.
3.7. Purchase Target Minimums; Purchase Target Deficiency Payments.
3.7.1 Purchase Target Minimums. In each of the first four (4)
years of the Term (each a "Year"), Buyer shall purchase, or cause to be
purchased, from Supplier an amount of Product that results in Supplier earning a
total Upcharge for that Year that is greater than or equal to the applicable
Purchase Target. In addition, pursuant to the Purchase Agreement, Supplier has
also entered into a bakery product supply agreement with Saint Louis Bread
Company, Inc. ("Saint Louis Bread"), a Delaware corporation and an Affiliate of
Buyer, upon terms and conditions similar to those contained in this Agreement,
pursuant to which Saint Louis Bread is required to purchase a certain amount of
bakery products from Supplier during each year of the term of the agreement. To
the extent Saint Louis Bread exceeds its purchase target during any Year in
which Buyer has failed to achieve its Purchase Target, such excess amount of
Upcharge earned by Supplier shall be deemed, solely for the purpose of
determining whether Buyer has achieved its Purchase Target, to have been earned
by Supplier hereunder during such Year.
3.7.2 Purchase Target Deficiency Payments. If, during any
Year, Supplier has not earned total Upcharges as part of the Invoice Price for
Product in an amount equal to or greater than the Purchase Target for such Year,
then Buyer shall pay Supplier, within thirty (30) calendar days of the end of
such Year, an amount equal to the Purchase Target less the amount of Upcharge
earned by Supplier on Product purchased during such Year as part of the Invoice
Price for Product (a "Purchase Target Deficiency Payment"). If the Upcharge
earned by Supplier in any Year is less than the Purchase Target for such Year
and such deficiency is a result of a Supplier Default or a Force Majeure Event
(as defined in Section 19), then the Purchase Target Deficiency Payment shall be
reduced to the extent such deficiency was attributable to such Supplier Default
or Force Majeure Event.
3.7.3 Maximum Upcharge. Any provision of this Agreement to the
contrary notwithstanding, after Supplier has earned a total Upcharge (excluding
any Upcharge attributable to New Product) of
[ ]*, the Upcharge for each Product Code
shall equal 36.14% of the sum of the Base Standard Costs plus a variance equal
to [ ]* of such Base Standard Costs, and Buyer and Supplier
shall each have the right to terminate this Agreement on not less than twelve
(12) months prior notice; provided, however, that Buyer shall have the right to
terminate this Agreement on not less than four (4) months prior notice during
the first twelve (12) months after such total Upcharge has been earned.
*The information contained within these brackets has been omitted and filed
separately with the Commission pursuant to a request for Confidential Treatment
under Rule 24b-2.
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4. Modifications to Product or Bill of Materials; New Product.
4.1 Modifications to Product.
(a) Buyer may, from time to time and with reasonable prior
notice, direct Supplier to manufacture additional Product, which is not New
Product, or to modify existing Product specifications, recipes, formulas and
processes. Supplier shall be responsible for implementing manufacturing and
supply changes required to accommodate such Product proposals.
(b) Subject to Section 2.3, Supplier shall not change any
specifications, recipes, formulas, or processes related to Product without
Buyer's prior approval.
(c) Buyer shall have the right to audit and approve all
changes to standard costs reflected in the Bills of Materials, including but not
limited to, changes in formulae, processes, ingredients, manning per line, line
speeds and yields, structural waste, and units per Case (including any change to
a Bill of Materials whereby an operating variance is reclassified into ongoing
direct cost). In addition, Buyer shall have the right to audit the transition to
any new information system implemented by Supplier to assure the consistent
treatment of Base Standard Costs and Updated Standard Costs and other concepts
set forth herein. Subject to Section 3.5, Supplier shall be responsible for
scaling up and implementing any manufacturing and supply changes required to
accommodate any changes to Product.
(d) Any provision of this Section 4.1 to the contrary
notwithstanding, if Buyer modifies existing Product specifications, recipes,
formulas or process, Buyer shall purchase, or cause to be purchased, Supplier's
entire inventory of a discontinued Product Code and any ingredients and
packaging made obsolete by the discontinuation of such a Product Code; provided,
however, that Buyer shall not be obligated to purchase such obsolete inventories
or ingredients or packaging in excess of twenty-five percent (25%) of the volume
of such ingredients or packaging which has been consumed or used by Supplier in
manufacturing such discontinued Product Code during the twelve (12) months
immediately preceding its discontinuance.
4.2 New Product. In the event that Buyer develops a New Product, Buyer
may solicit bids for the manufacture and supply of New Product from third
parties, provided, however, prior to entering into a commitment with a third
party to manufacture or supply such New Product, Buyer shall negotiate in good
faith with Supplier for Supplier to act as the manufacturer and supplier of such
New Product on terms consistent with this Agreement, but with an Upcharge to be
mutually agreed upon by Buyer and Supplier. Supplier may, but shall not be
obligated to, submit a bid to Buyer to manufacture or supply any New Product.
Although Buyer shall offer Supplier an opportunity to bid to be the supplier of
such New Product, such opportunity is not, and shall not be deemed to be, a
right of first negotiation, a right of first refusal, nor a right of last
refusal. If a New Product is manufactured and supplied by Supplier, such New
Product shall become Product and, then to the extent purchased, an agreed-to
upcharge shall be credited toward Buyer's Purchase Target obligation.
Notwithstanding anything contained herein to the contrary, Supplier shall not be
required to develop or fund the development of any New Product.
5. Duty to Supply:
5.1 Reliability. Supplier recognizes the importance of a reliable
source of supply of Product to Buyer's System. Subject to the terms of this
Agreement, Supplier shall use its best efforts to manufacture and supply one
hundred percent (100%) of the Product requirements of Buyer's System by
maintaining adequate inventory levels of Product with each Distributor. Buyer
shall provide Supplier
*The information contained within these brackets has been omitted and filed
separately with the Commission pursuant to a request for Confidential Treatment
under Rule 24b-2.
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with reasonable advance notice of any special promotions or other events that
would reasonably be expected to materially affect the demand for and the need
for additional Product.
5.2 Failure to Supply. In the event that:
(a) Supplier fails to supply the members of Buyer's System
with their respective Product requirements and such failure is not
attributable to an act or failure to act by Buyer, a Distributor or a
member of Buyer's System, then Buyer shall have the right to purchase
Product from sources other than Supplier to the extent Supplier is
unable to supply such Product, provided that Buyer gives Supplier prior
or contemporaneous notice thereof; and
(b) Supplier fails to supply Product (other than New Product
or additional or modified Product as contemplated by Section 4.1 and
Section 4.2 in its first ninety (90) days of supply by Supplier) and
such failure results in a Stock-out Shortage, then Supplier shall pay
to Buyer an amount equal to the then-current full retail price of each
Case of such undelivered Product less the Invoice Price of each Case of
such undelivered Product (the "Shortage Fee"); provided, however, that
no Shortage Fee shall be payable to Buyer if: (i) the Stock-out
Shortage is due to a failure by a Distributor to order timely such
Product in sufficient quantities or to take timely delivery of such
Product or provide Supplier with accurate information regarding
inventory management; (ii) the Stock-out Shortage is due to a failure
to provide notice to Supplier required by Section 2.3, Section 4.1 or
Section 5.1; (iii) the cumulative amount of Stock-out Shortages in any
calendar quarter is less than one-half of one percent (0.5%) of the
total number of Cases of all Product Codes shipped by such Distributor
to Buyer's System in such quarter; (iv) the Stock-out Shortage is due
to an increase in the number of Cases of any Product Code ordered by
members of Buyer's System during any fourteen (14) consecutive days
which is more than ten percent (10%) above the rolling two (2) week
average number of Cases ordered during the twelve (12) weeks
immediately preceding such fourteen (14) days; (v) the Stock-out
Shortage is due to a failure to receive one or more ingredients from a
vendor through no fault of Supplier and Supplier promptly notifies
Buyer of any such failure to receive an ingredient from the vendor; or
(vi) the Stock-out Shortage is due to a Force Majeure Event. The
Shortage Fee payable hereunder shall constitute liquidated damages and
Supplier shall not be liable to Buyer, the Distributors or members of
Buyer's System for any other damages, so long as the events described
in this Section 5.2 do not otherwise constitute a Supplier Default
pursuant to Section 15.1.
6. Place of Manufacture: Supplier shall manufacture all Product at the Plant and
supply all Product from the Plant, provided, however, that Supplier may
manufacture Product at facilities other than the Plant and supply Product from
facilities other than the Plant if: (i) Supplier obtains Buyer's prior written
approval; and (ii) Buyer is provided the same access to such other facilities
and such other facilities' employees and books and records as Buyer has with
respect to the Plant. Buyer's approval or disapproval shall be based upon the
impact the new facility is expected to have upon Product, including, among other
things, its quality and consistency, and the Invoice Price and adjustments
thereto. Title to Product and risk of loss shall pass to a Distributor or
Independent Operator (as defined in Section 7.5), as the case may be, when
Product is physically received by such Distributor or Independent Operator.
7. Distributors:
7.1 Supplier's Rights. Each Distributor and Independent Operator (as
defined in Section 7.5) shall be, at all times, creditworthy and reasonably
satisfactory to Supplier. Supplier shall be entitled to suspend supply of
Product to any Distributor or Independent Operator upon as much prior
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notice as is reasonably practical to Buyer if Supplier, in its sole discretion,
determines such Distributor or Independent Operator is not creditworthy or has
failed to perform in a commercially reasonable manner. If the sole reason for
such suspension is the creditworthiness of a Distributor or Independent
Operator, Buyer may avoid the suspension by providing to Supplier a guarantee of
the performance of such Distributor or Independent Operator in substantially the
form provided in Exhibit 7.1.
7.2 Appointment. If Buyer desires to appoint a new or alternate
Distributor, Buyer shall submit the name and business address of such proposed
Distributor to Supplier along with such other information as Supplier may
reasonably request. Supplier shall thereafter have thirty (30) calendar days in
which to approve or disapprove the appointment of such Person as a Distributor.
If Supplier disapproves the appointment, Supplier shall provide Buyer with
notice of the reason or reasons for such disapproval within such thirty-days,
and if the sole reason for disapproval is the creditworthiness of such
Distributor then Buyer may, at Buyer's sole discretion, obtain immediate
approval of such Distributor by providing to Supplier a guarantee of the
performance of such Distributor in substantially the form provided in Exhibit
7.1. If Supplier fails to provide Buyer with notice of disapproval within such
thirty-days, then Supplier shall be deemed to have approved the appointment of
such Person as a Distributor.
7.3 Default. If a Distributor or an Independent Operator materially
defaults in its obligations to Supplier, including without limitation, by
failing to pay Supplier for Product in accordance with the terms agreed upon by
Supplier and such Distributor or Independent Operator, Supplier shall have the
right to suspend supply of Product to such Distributor or Independent Operator
upon as much prior notice to Buyer as is reasonably practical, provided,
however, such Distributor, Independent Operator or Buyer or a member of Buyer's
System shall have the right to cure such default. Subject to Section 7.2, Buyer
shall have the right to replace a defaulting Distributor with an alternate
Distributor. In case of suspension or pending suspension of supply of Product to
a Distributor or an Independent Operator under Section 7.1 or Section 7.3,
Supplier shall cooperate with Buyer and Buyer's System to avoid any disruption
of supply to Buyer's System.
7.4 Alternative Pricing for Certain Distributors. Any provision of this
Agreement to the contrary notwithstanding, from time to time during the Term,
Buyer may direct Supplier to invoice certain Distributors at a price higher than
the Invoice Price (an "Additional Amount"). In such case, Supplier shall remit
to Buyer within ten (10) business days after the end of each Period the
Additional Amounts invoiced and received by Supplier. Except for the remittance
by Supplier of the Additional Amounts, all other terms and conditions of this
Agreement with respect to the manufacture and supply of Product to such
Distributors shall remain in effect, including, without limitation, the
adjustments contemplated in Section 3.4.
7.5 Direct Distribution. Certain members of Buyer's System
("Independent Operators") may, with Buyer's approval, purchase Product through
Buyer without using a Distributor. Supplier shall supply Product to such
Independent Operators designated by Buyer on terms and conditions to be
negotiated and agreed upon between such Independent Operators and Buyer, and on
payment terms to be determined in accordance with Supplier's credit policy.
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8. Quality Assurance:
8.1 Inspection. Upon demand, Buyer shall have the right, without prior
notice and during operating hours, to inspect the Plant (and all other
facilities where Product is manufactured) and to observe the Product
manufacturing process. Buyer shall also have the right, upon reasonable notice,
to escort its franchisees (and such other Persons as are approved by Supplier)
through the Plant during operating hours to observe the Product manufacturing
process.
8.2 Quality Assurance Program. Buyer shall establish with Supplier a
mutually acceptable quality assurance program, which program shall, among other
things, provide Buyer's management with reasonable and meaningful access to
Supplier and its employees in charge of Product. Buyer shall have the right, at
its sole option and expense, to station a full-time quality assurance
representative at the Plant who shall have the authority to accept or reject
Product prior to its shipment. Product may only be rejected if it fails to
comply with the Product specifications provided to Supplier. Any quality
assurance representative shall, at all times, be reasonably acceptable to
Supplier. Neither the presence of a quality assurance representative at the
Plant on behalf of Buyer, nor the failure of such representative to reject
Product prior to shipment, shall in any way modify Supplier's obligations to
manufacture and ship Product according to Product specifications pursuant to
Section 2.3.
9. Representations and Warranties of Supplier: Supplier represents and
warrants to Buyer that:
9.1 Organization and Good Standing. Supplier has been duly organized
and is existing as a corporation in good standing under the laws of the State of
Delaware, and is qualified and in good standing as a foreign corporation in the
State of Missouri, with full corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby.
9.2 Supplier Organization. Supplier is a wholly owned subsidiary of
Bunge Corporation. Supplier has provided to Buyer a copy of the Dun & Bradstreet
report on Bunge Corporation, certified by the Treasurer of Bunge Corporation to
be materially true and correct with respect to financial information contained
therein, a copy of which is attached hereto as Exhibit 9.2.
9.3 Execution and Delivery. All consents, approvals, authorizations and
orders necessary for the execution, delivery and performance by Supplier of its
obligations hereunder have been obtained. This Agreement has been duly
authorized by all necessary corporate action on the part of Supplier, has been
duly executed and delivered by Supplier, and constitutes the legal, valid and
binding obligation of Supplier enforceable against Supplier in accordance with
its terms, except as such enforcement is limited by bankruptcy, insolvency and
other similar laws affecting the enforcement of creditors' rights generally and
by general equitable principles.
9.4 No Conflicts. Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will (i) violate
any provision of the corporate charter or bylaws of Supplier or (ii) conflict
with, or result (immediately or upon the giving of notice or the passage of time
or both) in a breach or any violation of or any default under, or give rise to a
right of modification, termination, cancellation or acceleration of any
obligation or to a loss of a benefit under, any agreement, mortgage, indenture,
lease, instrument, permit, concession, franchise, license or other agreement, or
any statute, or any order, writ, injunction or decree of any court, governmental
body or agency or instrumentality thereof, or any arbitrator having jurisdiction
over Supplier or any of its assets, to which Supplier is a party or to which its
properties or assets may be bound, other than such conflicts, violations or
defaults or possible modifications, terminations, cancellations or accelerations
which
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individually or in the aggregate do not and will not have a material adverse
effect on Supplier or its ability to consummate the transactions contemplated
hereby.
9.5 Litigation. There is no legal action, suit, arbitration or other
legal, administrative or governmental investigation, inquiry or proceeding
(whether local or foreign) pending or, to the knowledge of Supplier, threatened
against or affecting Supplier or its respective properties, assets or
businesses, nor, to the knowledge of Supplier, does any basis therefor exist and
Supplier is not in default with respect to any order, writ, judgment,
injunction, decree, determination or award of any court or of any governmental
agency or instrumentality (whether domestic or foreign) which, in each case,
would materially impact upon Supplier's obligations hereunder or Supplier's
ability to perform its obligations hereunder.
9.6 Disclosure. No representation or warranty of the Supplier in this
Agreement and no information contained in any Schedule or other writing
delivered by Supplier pursuant to this Agreement contains or will contain any
untrue statement of a material fact or omits or will omit to state a material
fact required to make the statements herein or therein not misleading. To the
knowledge of Supplier after due inquiry, there is no fact that Supplier has not
disclosed to Buyer in writing that materially adversely affects, nor insofar as
Supplier can now foresee, will materially adversely affect Supplier's ability to
perform fully this Agreement.
9.7 Fees, Expenses and Commissions. Except for a fee payable solely by
Supplier to Chapman Partners, Inc., in connection with the Purchase Agreement,
Supplier has taken no action and has entered into no agreement, understanding or
other arrangement that would obligate Supplier or Buyer to pay any broker's or
finder's fee or any other similar fee or commission to any agent, broker,
investment banker or other firm or person in connection with any of the
transactions contemplated by this Agreement.
10. Representations and Warranties of Buyer: Buyer hereby represents and
warrants to Supplier that:
10.1 Organization and Good Standing. Buyer has been duly organized and
is existing as a corporation in good standing under the laws of the State of
Delaware, with full corporate power and authority to enter into this Agreement
and to consummate the transactions contemplated hereby.
10.2 Execution and Delivery. All consents, approvals, authorizations
and orders necessary for the execution, delivery and performance by Buyer of its
obligations hereunder have been obtained. This Agreement has been duly
authorized by all necessary corporate action on the part of Buyer, has been duly
executed and delivered by Buyer and constitutes the legal, valid and binding
obligation of Buyer enforceable against Buyer in accordance with its terms,
except as such enforcement is limited by bankruptcy, insolvency and other
similar laws affecting the enforcement of creditors' rights generally, and by
general equitable principles.
10.3 No Conflicts. Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will (i) violate
any provision of the Certificate of Incorporation or bylaws of Buyer, in each
case as amended, or (ii) conflict with, or result (immediately or upon the
giving of notice or the passage of time or both) in a breach or any violation of
or any default under, or give rise to a right of modification, termination,
cancellation or acceleration of any obligation or to a loss of a benefit under,
any agreement, mortgage, indenture, lease, instrument, permit, concession,
franchise, license or other agreement, or any statute, or any order, writ,
injunction or decree of any court, governmental body or agency or
instrumentality thereof, or any arbitrator having
-16-
jurisdiction over Buyer or any of its assets, to which Buyer is a party or by
which its properties or assets may be bound, other than such conflicts,
violations or defaults or possible modifications, terminations, cancellations or
accelerations which individually or in the aggregate do not and will not have a
material adverse effect on Buyer or its ability to consummate the transactions
contemplated hereby.
10.4 Litigation. There is no legal action, suit, arbitration or other
legal, administrative or governmental investigation, inquiry or proceeding
(whether local or foreign) pending or, to the knowledge of Buyer, threatened
against or affecting Buyer or its properties, assets or businesses, nor, to the
knowledge of Buyer, does any basis therefor exist and Buyer is not in default
with respect to any order, writ, judgment, injunction, decree, determination or
award of any court or of any governmental agency or instrumentality (whether
domestic or foreign) which, in each case, would materially impact upon Buyer's
obligations hereunder or Buyer's ability to perform its obligations hereunder.
10.5 Disclosure. No representation or warranty of the Buyer in this
Agreement and no information contained in any Schedule or other writing
delivered by Buyer pursuant to this Agreement contains or will contain any
untrue statement of a material fact or omits or will omit to state a material
fact required to make the statements herein or therein not misleading. To the
knowledge of Buyer after due inquiry, there is no fact that Buyer has not
disclosed to Supplier in writing that materially adversely affects, nor insofar
as Buyer can now foresee, will materially adversely affect Buyer's ability to
perform fully this Agreement.
10.6 Fees, Expenses and Commissions. Except for fees payable solely by
Buyer to Brent Baxter Enterprises, LLC and Peter J. Solomon Company Limited in
connection with the Purchase Agreement, Buyer has taken no action and has
entered into no agreement, understanding or other arrangement that would
obligate Buyer or Supplier to pay any broker's or finder's fee or other similar
fee or commission to any agent, broker, investment banker or other firm or
person in connection with any of the transactions contemplated by this
Agreement.
11. Additional Covenants of Supplier: In addition to the other obligations
of Supplier under this Agreement, Supplier covenants that during the Term
(including any extensions or renewals thereof, unless expressly provided
otherwise):
11.1 Product. Except as provided herein, during the Term and for one
(1) year thereafter, Supplier shall not, either directly or indirectly, supply
any Product or any substitute for Product to any bakery/cafe included in Buyer's
System.
11.2 Operations; Compliance with Standards and Law. Subject to the
provisions of this Agreement, Supplier shall operate the Plant (and all other
facilities that manufacture Product which are approved by Buyer) and manufacture
Product in accordance with good manufacturing practices and manufacture and
supply Product in accordance with the recipes, formulas, processes, and Product
specifications (including as to vendors) established by Buyer and in accordance
with all applicable laws, rules and regulations, statutes, ordinances,
regulations, orders and bylaws.
11.3 Distributor Obligations. Subject to Section 7, Supplier shall not
terminate its obligation to supply Buyer's System nor shall Supplier withhold
delivery of Product from any non-defaulting member of Buyer's System or any
non-defaulting Distributor due to nonpayment or other default by a Distributor
or a member of Buyer's System.
11.4 Ownership of the Plant. Without limiting Buyer's rights pursuant
to Section 15, during the Term (but excluding any extensions or renewals
thereof), if Supplier shall sell, transfer or license any
-17-
part of the Plant or enter into any agreement or arrangement that would have the
effect of transferring operational control of the Plant to a third party,
Supplier shall cause such third party to assume, for the benefit of Buyer, all
obligations of Supplier hereunder.
11.5 Efficiency of Operation. Subject to Buyer's right to designate
vendors and processes, Supplier shall use its best efforts to operate the Plant
at optimal efficiency and to perform its other responsibilities hereunder,
including, without limitation, purchasing raw materials, contracting for labor
and arranging for freight in an efficient, cost effective and professional
manner.
11.6 Cooperation with Inspections. Supplier shall cooperate with Buyer
in any investigation or inspection by any governmental agency or by Buyer
relating to the Plant or Product which involves health, safety or product
liability issues.
11.7. Non-Solicitation. Supplier shall not, directly or indirectly,
during the Term and, so long as this Agreement is not terminated by Supplier as
a result of a Buyer Default, for one year thereafter, solicit or hire any
employee of Buyer, unless the employment of such employee has been terminated by
Buyer, or Buyer consents thereto.
11A. Additional Covenants of Buyer: In addition to the other obligations of
Buyer under this Agreement, Buyer covenants that during the Term (including any
extensions or renewals thereof, unless expressly provided otherwise):
11A.1 Compliance with Standards and Law. Buyer shall comply with all
applicable laws, rules and regulations, statutes, ordinances, regulations,
orders and bylaws, including, without limitation, antitrust and franchise laws.
11A.2 Distributor Obligations. Buyer shall not terminate its obligation
to purchase, or cause to be purchased, Product from Supplier due to nonpayment
or other default by a Distributor.
11A.3 Transfer of Interest. If Buyer shall enter into any agreement or
arrangement that would have the effect of transferring operational control of
Buyer or Buyer's System to a third party, Buyer shall cause such third party to
assume, for the benefit of Supplier, all obligations of Buyer or Buyer's System,
as the case may be, hereunder.
11A.4 Product Usage: Buyer shall use its best efforts to provide
Supplier with timely information with respect to Product usage.
11A.5 Cooperation with Inspections. Buyer shall cooperate with Supplier
in any investigation or inspection by any governmental agency or by Supplier
relating to the Plant or Product which involves health, safety or product
liability issues.
11A.6 Non-Solicitation. Buyer shall not, directly or indirectly, during
the Term, so long as this Agreement is not terminated by Buyer as a result of a
Supplier Default, and for one year thereafter, solicit or hire any employee of
Supplier or Bunge Corporation, unless the employment of such employee has been
terminated by Supplier or Bunge Corporation, as the case may be, or Supplier or
Bunge Corporation, as the case may be, consents thereto.
12. Insurance: During the Term (and any extension thereof), Supplier shall be
required to obtain and maintain insurance policies, in the amounts set forth on
Schedule 12. With respect to the Commercial General Liability and Umbrella
policies, Buyer shall be named as an additional insured.
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During the Term and (any extension thereof), Buyer shall obtain and maintain
insurance policies, in the amounts set forth on Schedule 12. With respect to the
Commercial General Liability and Umbrella policies, Supplier and Bunge
Corporation shall be named as additional insureds. All insurance policies
required by this Section 12 shall be obtained from recognized insurance carriers
with an A.M. Best rating of "A-" or better.
13. Confidentiality/Ownership:
13.1 Proprietary Information. As used in this Agreement, the term
"Proprietary Information" shall mean any knowledge or information, written or
oral, which relates in any manner to the respective businesses of Buyer and
Supplier which is confidential and proprietary information of the Disclosing
Party (as defined below), whether disclosed prior to, on or after the date of
this Agreement, including, without limitation, the recipes, formulas,
specifications, manufacturing processes, preparation procedures, financial
information, equipment, marketing methods, demographic and trade information,
customer profiles and preferences, costs, development plans, products and
production techniques and all related trade secrets and proprietary information
treated as such by the Disclosing Party, whether by course of conduct, by letter
or report, or by the use of an appropriate stamp or legend designating such
information to be confidential or proprietary. As used herein, the term
"Disclosing Party" shall mean the party to this Agreement which discloses or
makes available Proprietary Information to the Receiving Party, and the term
"Receiving Party" shall mean the party to this Agreement to whom Proprietary
Information is disclosed or made available by the Disclosing Party.
13.2 Restrictions on Use. The Receiving Party shall hold all
Proprietary Information in confidence, shall use such Proprietary Information
only for the benefit of the Disclosing Party and disclose such Proprietary
Information only to the Receiving Party's officers, directors, employees and
agents in order to assist the Receiving Party in performing its obligations
under this Agreement. The Receiving Party shall not disclose Proprietary
Information to any other Person, provided, however, the Receiving Party may
disclose Proprietary Information to a corporate Affiliate of the Receiving Party
if such Affiliate first agrees in writing to be bound by the covenants contained
in this Agreement with respect to the use and nondisclosure of Proprietary
Information.
13.3 Ownership. Subject to the terms and conditions of the Purchase
Agreement, ownership of all Proprietary Information relating to all recipes,
formulas, specifications, manufacturing processes or preparation procedures,
demographic and trade information, customer profiles and preferences, costs,
development plans, products and production techniques and any other trade
secrets and information used to make Product (including, without limitation,
information related to the cost of Product) shall remain solely the property of
Buyer, regardless of whether developed or modified by Buyer or Supplier. In
manufacturing bakery products other than pursuant to this Agreement, Supplier
shall use product codes and product names for product which are separate and
distinct from those used for Product manufactured for Buyer.
13.4 Exceptions. The obligations and prohibitions set forth in this
Section 13 shall not apply to any Proprietary Information that is required to be
disclosed by applicable law or that is shown, by preexisting documentary
evidence or other reliable evidence, to be information: (i) that was known by
the Receiving Party prior to the exchange of information in contemplation of
this Agreement; (ii) entered into the public domain other than through the act
of the Receiving Party; (iii) is independently developed by the Receiving Party;
or (iv) is rightfully received by the Receiving Party from a third party who is
not obligated to the Disclosing Party to keep such information confidential.
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13.5 Protected Signature Product; Competitors. If Buyer licenses to
Supplier the right to manufacture and sell any Product to any Person other than
to a Distributor or to Buyer's System, then Supplier shall, in any event, be
prohibited from: (i) using Buyer's trademarks, trade names, trade secrets and
trade dress; and (ii) selling to any third-party any "Protected Signature
Product," which is set forth on Schedule 13.5(a). In addition, Supplier shall
not manufacture or sell any dough product manufactured on any of the production
lines identified in the definition of Product in Section 1 to any Competitor.
For the purpose of this Section 13.5, the term "Competitor" shall mean any of
the retail operations listed on Schedule 13.5(b) and any retail operation with
at least one hundred (100) stores that sell baked goods and coffee, where such
sales of baked goods and coffee represent thirty percent (30%) or more of such
retail operation's total annual sales revenue. Nothing contained herein shall
prevent Supplier from selling any baked, par-baked or pre-proofed bakery
products to any Competitor or other customer of Supplier, so long as: (1) such
bakery products are materially different in formulation from any Product
manufactured by Supplier for Buyer hereunder, and (2) Supplier agrees to
manufacture Buyer's own baked, par-baked or pre-proofed bakery products which
are within the product categories listed on Schedule 1.5 and introduced by Buyer
as additional Product with an Upcharge as provided in the definition of
"Upcharge" in Section 1.
14. Opportunities/Conflicts of Interest: Except as otherwise set forth in this
Agreement: (i) neither party shall have any rights in or to the business
activities of the other party, nor to the income or profits derived therefrom;
(ii) neither party shall be obligated to offer any investment or other business
opportunity to the other party; and (iii) neither party shall have any duty,
fiduciary or otherwise, to afford the other party any opportunity to participate
in such activities.
15. Termination:
15.1 Supplier Default. The obligations to purchase Product under this
Agreement may be terminated by Buyer if any one or more of the following events
occur (each a "Supplier Default"):
(a) If Supplier files a petition for adjudication as a
bankrupt, for reorganization or for an arrangement under any bankruptcy or
insolvency law, or if any involuntary petition under such law is filed against
Supplier and is not dismissed within thirty (30) days thereafter; then, so long
as any such event is continuing, Buyer may by notice in writing to Supplier
terminate its obligations to purchase all or a portion of Product forthwith;
(b) If Supplier makes an assignment of all or substantially
all of its assets for the benefit of creditors, or if Supplier's interest under
this Agreement shall be taken upon execution;
(c) If Supplier fails to perform any material covenant or
material obligation including, but not limited to, the payment of any amounts
due to Buyer; provided, however, that no termination shall be made hereunder
unless and until Buyer gives Supplier notice of such failure to perform and
Supplier has not cured such failure within thirty (30) days after its receipt of
such notice, or ten (10) days in the case of failure to make payment of any
amounts due to Buyer; or
(d) There is a change of ownership or control of Supplier or
Supplier transfers its interest in the Plant to a third party (in either case,
other than to an Affiliate of Supplier), or if Bunge Corporation terminates its
guaranty provided below; provided, however, that Buyer's exclusive remedy upon
the occurrence of such an event in the absence of Buyer's prior written consent
to any such event (and without limiting Buyer's remedies in the event of any
other Supplier Default) shall be limited to the right to terminate this
Agreement.
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15.2 Cancellation Fee. In the event of a Supplier Default, which, if
subject to cure, is not timely cured, then no rights or remedies otherwise
available to the parties upon such termination shall be deemed surrendered,
except in the case of a Supplier Default under Section 15.1(d) in the case of
which Buyer's sole remedy shall be to terminate this Agreement. In addition to
all other rights and remedies granted herein to either party, and in addition to
all other rights and remedies each party may have at law, in equity or
otherwise, in the event that if this Agreement is terminated due to Supplier
Default (excluding a Supplier Default under Section 15.1(d)), Supplier shall pay
to Buyer a cancellation fee (the "Supplier's Cancellation Fee") in an amount
equal to [ ]* per year for each year
remaining in the first four (4) years of the Term, pro rated for any partial
such year remaining in the Term upon the effective date of termination. If Buyer
elects to terminate due to a Supplier Default, then Supplier's Cancellation Fee
shall be payable to Buyer in full within thirty (30) days following the
effective date of termination.
15.3 Buyer Default. The obligations to manufacture and supply Product
under this Agreement may be terminated by Supplier if any one or more of the
following events occur (each a "Buyer Default"):
(a) Buyer files a petition for adjudication as a bankrupt, for
reorganization or for an arrangement under any bankruptcy or
insolvency law, or if any involuntary petition under such law
is filed against Buyer and is not dismissed within thirty (30)
days thereafter; then, so long as any such event is
continuing, Supplier may by notice in writing to Buyer
terminate its obligations to manufacture or supply all or a
portion of Product forthwith;
(b) Buyer makes an assignment of all or substantially all of
its assets for the benefit of creditors, or if Buyer's
interest under this Agreement shall be taken upon execution;
(c) Buyer fails to perform any material covenant or material
obligation including, but not limited to, the payment of any
amounts due to Supplier from Buyer; provided, however, that no
termination may be made hereunder unless and until Supplier
gives Buyer written notice of such failure to perform and
Buyer has not cured such failure within thirty (30) days after
its receipt of such notice, or ten (10) days in the case of
failure to make payment of any amounts due to Supplier; or
(d) There is a change of ownership or control of Buyer and the
entity assuming ownership or control fails to assume Buyer's
obligations under this Agreement as contemplated by Section
11A.3.
15.4 Cancellation Fee. In the event of a Buyer Default (excluding a
Buyer Default under Section 15.3(d)), which, if subject to cure, is not timely
cured, then no rights or remedies otherwise available to the parties upon such
termination shall be deemed surrendered. In addition to all other rights and
remedies granted herein to either party, and in addition to all other rights and
remedies each party may have at law, in equity or otherwise, in the event that
this Agreement is terminated due to a Buyer Default, Buyer shall pay to Supplier
a cancellation fee (the "Buyer's Cancellation Fee") in an amount equal to
[ ]* per year for each year remaining in the
first four (4) years of the Term, pro rated for any partial such year remaining
in the Term upon the effective date of termination. If Buyer elects to terminate
due to a Buyer Default, then Buyer's Cancellation Fee shall be payable to
Supplier in full within thirty (30) days following the effective date of
termination.
*The information contained within these brackets has been omitted and filed
separately with the Commission pursuant to a request for Confidential Treatment
under Rule 24b-2.
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15.5 Effect of Termination
(a) Termination of this Agreement, whether by lapse of time,
mutual consent, operation of law, exercise of right of
termination or otherwise shall not affect the ownership
interests in the respective proprietary rights and other
rights of the parties, but shall only affect any obligations
of the parties to continue to cooperate in the manufacturing,
supply and purchase of Product.
(b) Upon termination of this Agreement by lapse of time or
mutual consent, Supplier shall complete the manufacture and
supply of Product to fill any outstanding orders that are
deliverable within thirty (30) days of such termination and
Buyer shall purchase, or cause to be purchased, such Product.
(c) Notwithstanding any termination of this Agreement, all
provisions regarding: (i) the sharing of costs between the
parties; (ii) the ownership, non-use, or protection of
Proprietary Information; (iii) indemnification, (iv)
representations of the parties being true as of the time made;
and (v) any obligations of either party to the other contained
herein which, by their nature, should reasonably extend beyond
the termination of any regular ongoing business relationship
between the parties as contemplated by this Agreement, shall
survive such termination.
16. Information and Audit Rights of Buyer:
16.1 Books and Records. Supplier shall maintain, in accordance with
generally accepted accounting principles consistently applied, accurate and
complete books and records with respect to all Base Standard Costs and Updated
Standard Costs and freight costs relating to Product.
16.2 Rights to Audit; Rights to Inspect. Upon reasonable prior notice,
Buyer shall have the right, during normal business hours, to inspect and audit
the books and records of Supplier relating solely to the calculation of Invoice
Price and adjustments thereto.
16.3 Certain Information. Upon Buyer's written request, Supplier shall
provide information in its control concerning the manufacturing and supply of
Product, including, without limitation, sources of raw materials used in Product
and information on Supplier's maintenance of confidential information relating
to Buyer.
17. Remedies: The relationship between Supplier and Buyer, which is reflected in
this Agreement, is special and unique and has a value which cannot be readily
measured in monetary terms. Therefore, in the event of any breach or threatened
breach by either party, the other party shall be entitled to seek both legal and
equitable relief, including, without limitation, temporary, preliminary and
permanent injunctive relief, to restrain such breach or threatened breach and to
mandate compliance with the terms set forth herein.
18. Indemnification: Supplier will at all times indemnify, defend and hold
harmless Buyer from and against any and all claims, damages, liabilities, costs
and expenses, including reasonable counsel fees, arising out of (i) any failure
by Supplier to perform its obligations hereunder; and (ii) the supply of Product
by Supplier that is not in compliance with the Product specifications. Buyer
will at all times indemnify, defend and hold harmless Supplier from and against
any and all claims, damages, liabilities, costs and expenses, including
reasonable counsel fees, arising out of (i) any failure by Buyer to perform its
obligations hereunder; (ii) any claim for infringement or violation with any
patent or trade secret of
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any third party, to the extent such claim is attributable to use by Supplier of
the recipes, formulae, processes and specifications provided to Supplier by
Buyer; and (iii) any claim or action by any third-party alleging infringement or
violation of, or conflict with, any trademarks, tradenames or trade dress, to
the extent such claim or action is attributable to the use of such trademarks,
tradenames or trade dress used in accordance with Buyer's specifications. Prompt
written notice of any claim or litigation hereunder shall be given to either
party, as the case may be, by the other party. The indemnifying party shall have
the right to control the defense of the claim at its expense. The indemnified
party shall have the right, but not the obligation, to participate in the
defense of any claim. There shall be no settlement of any claim to which an
indemnity relates without the prior written consent of the indemnitor, which
consent shall not be unreasonably withheld or delayed. If a third party brings
an action against either party and there is a dispute between Buyer and Supplier
as to who is responsible for defending such action, then, until such dispute is
resolved, Buyer and Supplier shall cooperate so as not to jeopardize the defense
of such action.
19. Force Majeure: Neither party shall be responsible for any resulting loss to
the other party if the fulfillment of any of the terms or provisions of this
Agreement is delayed or prevented by strikes, work stoppages and labor unrest
(other than with respect to strikes, work stoppages and labor unrest that occurs
at the Plant at any time after six (6) months after the date hereof),
transportation stoppages, ingredient shortages not the fault of Supplier, riots,
wars, acts of enemies, national emergency, floods, fires, acts of God, or by any
other cause not within the control of the party whose performance is interfered
with or which, by the exercise of reasonable diligence, such party is unable to
prevent (individually and collectively, a "Force Majeure Event"). Upon the
occurrence of a Force Majeure Event, the party claiming force majeure shall
notify the other party forthwith and both parties shall use their reasonable
best efforts to mitigate or eliminate any adverse effects of such event.
20. Relationship of Parties: Supplier and Buyer are each independent
contractors. Nothing herein contained shall be construed to place Supplier and
Buyer in the relationship of principal and agent, master and servant, partners,
joint venturers, and, except as otherwise set forth in this Agreement, neither
party shall have, expressly or by implication, the power to represent itself as
having any authority to make contracts in the name of or binding upon the other,
or to obligate or bind the other in any manner whatsoever.
21. Consents; Notices: Unless otherwise specifically set forth herein, any
notice, consent or approval of a party shall be in writing and given by
telecopier and original posted first class mail, postage prepaid, within two (2)
business days thereafter; or by certified or registered mail with an
acknowledgment of receipt, postage prepaid, return receipt requested; or by a
reputable private courier, such as Federal Express, which provides evidence of
receipt as a part of its delivery service, and addressed as follows:
If to Buyer: Au Bon Pain Co., Inc., Inc.
19 Fid Kennedy Avenue
Marine Industrial Park
Boston, MA 02210-2497
Attn: Chief Executive Officer
telecopier (617) 423-7879
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with copy to: Walter D. Wekstein, Esq.
Lawrence R. Katz, Esq.
Gadsby & Hannah LLP
225 Franklin Street
Boston, MA 02110
telecopier (617) 345-7050
If to Supplier: Bunge Foods Corporation
3701 Algonquin Road, Suite 360
Rolling Meadows, IL 60008
Attn: General Manager
telecopier (847) 342-0029
with a copy to: Bunge Corporation
11720 Borman Drive
St. Louis, MO 63146
Attn: Legal Department
telecopier (314) 994-6521
or to such other address as may be designated in writing by either party from
time to time in accordance herewith, and shall be deemed delivered two (2)
business days following delivery by hand, by private courier or when so
telecopied and five (5) business days following proper dispatch by certified or
registered mail. A business day is any Monday through Friday on which first
class mail is delivered.
22. Arbitration: If a dispute arises under this Agreement, the parties shall
submit their dispute to arbitration under the jurisdiction and in accordance
with the rules of the American Arbitration Association (the "Association")
located in Boston, Massachusetts or at any other mutually agreeable location.
The parties shall be bound by the decision of the arbitrator(s). Notwithstanding
the foregoing, the arbitrator(s) shall not have the authority to modify any
express provision of this Agreement. Moreover, and notwithstanding the
provisions of this Section 22 or anything else to the contrary contained in this
Agreement, each party shall have the right to seek injunctive or equitable
relief in a court of competent jurisdiction in addition to or in lieu of its
rights pursuant to this section.
23. Assignees and Third Parties: Subject to Buyer's rights in Article 15, this
Agreement may be assigned by Supplier to a third party which acquires all or
substantially all of the assets of Supplier or the Plant which agrees to be
assume and be bound by this Agreement. This Agreement may be assigned by Buyer
to an entity which acquires all or substantially all of Buyer's retail
bakery/cafe outlets and which agrees to assume and be bound by this Agreement as
provided in Section 11A.3.
24. Choice of Law: This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Missouri, as applicable to
agreements executed and entirely performed in said State.
25. Attorneys' Fees: If any action or proceeding is brought to enforce or
interpret any provision of this Agreement then, in addition to any other relief
to which the prevailing party may be entitled, the prevailing party shall be
entitled to recover its reasonable costs and attorneys' fees.
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26. Severability: If any term or provision of this Agreement is determined by a
court of competent jurisdiction to be invalid illegal or incapable of being
enforced by any law or public policy, all other terms or provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to the other parties.
27. Modification; Waivers: This Agreement (including the Schedules and Exhibits
hereto) may be modified or amended only with the written consent of each party
hereto. No party hereto shall be released from its obligations hereunder without
the written consent of all of the other parties. The observance of any term of
this Agreement may be waived (either generally or in a particular instance and
either retroactively or prospectively) by the party entitled to enforce such
term, but any such waiver shall be effective only if in a writing signed by the
party against whom such waiver is to be asserted. Except as otherwise
specifically provided herein, no delay on the part of any party hereto in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party hereto of any right,
power or privilege hereunder operate as a waiver of any other right, power or
privilege hereunder nor shall any single or partial exercise of any right, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder.
28. Headings: The headings of the articles, sections and other subdivisions of
this Agreement are for convenient reference only. They shall not be used in any
way to govern, limit, modify, construe this Agreement or any part or provision
thereof nor otherwise be given any legal effect.
29. Succession: This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and other legal
representatives and, to the extent that any assignment hereof is permitted
hereunder, their assignees.
30. Counterparts: This Agreement may be executed in counterparts. Each
counterpart, including a signature page executed by each of the parties hereto,
shall be an original counterpart of this Agreement, but all of such counterparts
together shall constitute one (1) instrument.
31. Additional Documents: Each party agrees to provide any additional documents
reasonably requested by the other party in order to carry out the purpose and
intent of this Agreement.
32. Approvals; Consents: Unless otherwise specifically set forth herein, the
approvals and consents that are required or permitted herein shall not be
unreasonably withheld or delayed.
33. Entire Agreement: This Agreement (including the Schedules and Exhibits
hereto) contains the full and complete undertaking and agreement between Buyer
and Supplier with respect to the within subject matter, and supersedes all other
agreements between Buyer and Supplier, whether written or oral,
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except any confidentiality agreements between the parties, which shall, to the
extent such agreements do not contradict the terms of this Agreement, continue
in effect.
IN WITNESS WHEREOF, the parties hereto have set their hands to this
Agreement as a sealed instrument and have delivered this Agreement as of the day
and year first above written.
BUNGE FOODS CORPORATION,
a Delaware corporation
By: /s/ Michael M. Scharf
---------------------
Its: Senior Vice President
AU BON PAIN CO., INC.,
a Delaware corporation
By: /s/ Anthony J. Carroll
----------------------
Its: Vice President and Treasurer
Bunge Corporation Guaranty:
In order to induce Buyer to execute and deliver the foregoing
Agreement, Bunge Corporation, a New York corporation, hereby unconditionally
guarantees to Buyer that it shall cause Supplier, a wholly-owned subsidiary of
Bunge Corporation, to fulfill each and every obligation of Supplier under this
Agreement, and in connection therewith and not in limitation of the foregoing,
Bunge Corporation hereby unconditionally guarantees to Buyer, the prompt payment
by Supplier of all amounts at any time due by Supplier to Buyer pursuant to this
Agreement, whether in the ordinary course of operations, arising as a result of
a Supplier Default or otherwise. This guaranty shall terminate if Supplier shall
cease to be an Affiliate of Bunge Corporation or if the Plant is sold or the
ownership of the Plant is otherwise transferred to a third-party who is not an
Affiliate of Bunge Corporation.
BUNGE CORPORATION,
a New York corporation
By: /s/ Michael M. Scharf
---------------------
Its: Senior Vice President
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Index of Schedules and Exhibits to
Bakery Product Supply Agreement
by and between
Bunge Foods Corporation and
Au Bon Pain Co., Inc.
dated as of March 23, 1998
Schedule* Title
- --------- -----
1.1 Methodology for Calculating Employee Benefits Allowance
1.2 Schedule of Wage Rates and Employee Benefits
1.4 Description of Employee Benefits
1.5 Product Categories
1.6 Purchase Targets
2.3 Product Specifications
3.1 Pricing Diagram
7.1 Form of Distributor Guaranty
12 Insurance
13.5(a) Au Bon Pain Protected Signature Product
13.5(b) Competitors
Exhibit* Title
- -------- -----
1.1 Bill of Materials for each Product Code as of Closing
3.4.1 Form of Adjustment Summary
9.2 Dun and Bradstreet Report
* All Schedules and Exhibits to this Bakery Product Supply Agreement have been
omitted. Copies will be provided supplementally to the Commission upon request,
provided that the Company reserves the right to request confidential treatment
for same.