AMENDMENT NO. 1 TO
MANUFACTURING AGREEMENT FOR "BEST BUY" CIGARETTES
THIS AMENDMENT NO. 1 is made as of the 31st day of December, 1997 (this
"Amendment"), between FAMOUS VALUE BRANDS, a division of PHILIP MORRIS
INCORPORATED, a Virginia corporation with offices at 120 Park Avenue, New
York, New York 10017 ("Manufacturer"), and C/M PRODUCTS, INC., a California
corporation with offices at 395 Oyster Point Boulevard, Suite 415, South San
Francisco, California 94080 ("C/M Products").
PRELIMINARY STATEMENTS
A. Manufacturer and C/M Products entered into that certain Manufacturing
Agreement for "Best Buy" Cigarettes dated as of July 1, 1993 (the
"Manufacturing Agreement"), providing for, among other things, Manufacturer
to manufacture and sell to C/M Products certain private label brand
cigarettes utilizing the Trademarks (as defined in the Manufacturing
Agreement).
B. Manufacturer and C/M Products desire to amend certain provisions of
the Manufacturing Agreement as more particularly described herein, and,
except as amended hereby, the Manufacturing Agreement shall continue in full
force and effect on the terms contained therein and herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, the parties hereto agree as
follows:
ARTICLE I
AMENDMENTS
Section 1.1 AMENDMENT TO SECTION 1.4. The Manufacturing Agreement is
hereby amended by inserting as the second sentence and the first word of the
third sentence in Section 1.4 thereof the following sentence and word:
"Without limiting the generality of the preceding sentence, this
Agreement shall not require that Manufacturer produce any packing of the
Products which is uneconomical for Manufacturer to produce due to the
unreasonably low level of sales of such packing relative to other Products.
Furthermore,"
Section 1.2 AMENDMENT TO SECTION 3.1. The Manufacturing Agreement is
hereby amended by deleting Section 3.1 in its entirety and inserting in lieu
thereof the following new Section 3.1.
"Section 3.1 TERM. Unless earlier terminated pursuant to Section
3.2 of this Agreement, this Agreement shall continue for an initial term
(the "Initial Term") ending on December 31, 2001, or, if C/M Products shall
have elected to extend to December 31, 2002 the initial term of the
Grant of Exclusive Manufacturing Rights, as amended on the date hereof,
between C/M Products, certain of its affiliates and Manufacturer, ending
on December 31, 2002. Thereafter, this Agreement shall continue in effect
upon the same terms and conditions for one or more additional one-year
periods (each a "Renewal Period") unless, at least ninety (90) days prior
to the end of the
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Extended Term, or any successive Renewal Period, either party provides
the other with written notice of its intent not to renew this Agreement."
Section 1.3 AMENDMENT TO SECTION 3.2
[Section 1.3 has been omitted and filed separately with the Commission
pursuant to Rule 406.]
ARTICLE II
GENERAL PROVISIONS
Section 2.1 PRE-EXISTING CONTRACTUAL RELATIONSHIP. C/M Products
represents and warrants that the pre-existing manufacturing agreement
referenced in Section 1.3 of the Manufacturing Agreement terminated, in
accordance with its terms and consistent with the rights and obligations of
the parties thereunder, and is no longer of any force or effect.
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Section 2.2 NO FURTHER MODIFICATION. The Manufacturing Agreement shall
remain in full force and effect and shall not be deemed to be amended,
modified or supplemented in any respect, except as expressly set forth in
this Amendment. For purposes of this Amendment, each of the representations
and warranties of Manufacturer in Section 2.1 of the Manufacturing Agreement
shall be deemed to be made by Manufacturer on and as of the date hereof, and
each of the representations and warranties of C/M Products in Section 2.2
of the Manufacturing Agreement shall be deemed to be made by C/M Products on
and as of the date hereof.
Section 2.3 SEVERABILITY. If any provision of this Amendment is
determined to be invalid or unenforceable, the provision shall be deemed to
be severable from the remainder of this Amendment and shall not cause the
invalidity or unenforceability of the remainder of this Amendment.
Section 2.4 GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York (other than
the choice of law provisions thereof).
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Section 2.5 ENTIRE AGREEMENT. The Manufacturing Agreement, as amended by
this Amendment, constitutes the entire agreement between the parties with
respect to the Products (as defined in the Manufacturing Agreement) and
supersedes all prior and contemporaneous agreements, contracts, negotiations
and understandings between them (other than the Grant of Exclusive
Manufacturing Rights, dated as of July 1, 1993, between Core-Mark
International Inc., Core-Mark Interrelated Companies, Inc. ("Licensor") and
C/M Products, as amended by Amendment No. 1 dated the date hereof, and the
Amended and Restated Trademark License Agreement, dated as of July 1, 1993,
between Manufacturer and Licensor, as amended by Amendment No. 1 dated the
date hereof).
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Section 2.6 COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, this Amendment No. 1 has been duly executed as of
the date first above written.
C/M PRODUCTS, INC. FAMOUS VALUE BRANDS, A
DIVISION OF PHILIP
MORRIS INCORPORATED, A
VIRGINIA CORPORATION
By: /s/ Robert A. Allen By: /s/ Roy Anise
------------------------------- ------------------------------
Robert A. Allen Its: V.P. - Discount Brands
President
Dated: 12/16/97 Dated: 12/29/97
Each of the undersigned hereby
agrees and consents to each of the
terms and conditions of this Amendment No. 1:
CORE-MARK INTERNATIONAL, INC.
By: /s/ Robert A. Allen
-------------------------------
Robert A. Allen
President
Dated:
CORE-MARK INTERRELATED COMPANIES, INC.
By: /s/ Robert A. Allen
-------------------------------
Robert A. Allen
President
Dated:
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