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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
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CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): MARCH 24, 2000
[VLASIC FOODS INTERNATIONAL INC. LOGO]
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
NEW JERSEY 1-13933 52-2067518
(STATE OF INCORPORATION) (COMMISSION FILE (IRS EMPLOYER IDENTIFICATION NO.)
NUMBER)
</TABLE>
VLASIC PLAZA
SIX EXECUTIVE CAMPUS
CHERRY HILL, NEW JERSEY 08002-4112
(PRINCIPAL EXECUTIVE OFFICES)
TELEPHONE NUMBER: (856)-969-7100
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ITEM 5. OTHER EVENTS
On March 24, 2000, we amended the terms and conditions of our Foodservice
Supply Agreement with Campbell Soup Company dated March 30, 1998. The
Foodservice Supply Amendment Agreement and the Foodservice Supply Agreement are
incorporated by reference herein and included as exhibits 20.1 and 20.2,
respectively.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
(20.1) Foodservice Supply Amendment Agreement between Vlasic Foods
International Inc. and Campbell Soup Company dated March 24,
2000.
(20.2) Foodservice Supply Agreement between Vlasic Foods
International Inc. and Campbell Soup Company dated March 30,
1998.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
VLASIC FOODS INTERNATIONAL INC.
Date: March 31, 2000 By: /s/ Joseph Adler
--------------------------------------
Joseph Adler
Vice President and Controller
(Principal Financial and Accounting Officer)
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EXHIBIT 20.1
FOODSERVICE SUPPLY AMENDMENT AGREEMENT
THIS IS A FOODSERVICE SUPPLY AMENDMENT AGREEMENT dated as of March 24,
2000 (hereinafter "Amendment Agreement"), by and between Campbell Soup Company,
a New Jersey corporation (hereinafter, "Campbell"), and Vlasic Foods
International Inc., a New Jersey corporation (hereinafter, "Vlasic"), amending
that certain Foodservice Supply Agreement dated as of March 30, 1998 by and
between Campbell and Vlasic (hereinafter, "Supply Agreement"). The Supply
Agreement, as amended, is hereinafter referred to as the "Amended Supply
Agreement."
BACKGROUND
A. The Supply Agreement expires as of March 29, 2000.
B. Campbell and Vlasic have decided to extend the Supply Agreement through
March 30, 2001, provided that certain terms and conditions of the
Supply Agreement are modified as of March 30, 2000.
C. This Amendment Agreement sets forth the changes to the Supply
Agreement, effective as of March 30, 2000.
INTENDING TO BE LEGALLY BOUND, CAMPBELL AND VLASIC AGREE AS FOLLOWS:
1. MODIFICATION OF SUPPLY AGREEMENT
All terms and conditions of the Supply Agreement (including
definitions) remain in full force and effect, except to the extent
modified directly or by implication by this Amendment Agreement.
2. TERM AND TERMINATION
a. The term of this Amendment Agreement shall commence as of
March 30, 2000 and shall continue in full force and effect
through March 30, 2001 (the "Term"), unless extended or
earlier terminated by either party in accordance with the
provisions of this Amendment Agreement.
b. Except as provided in Section 2.c. hereof or unless earlier
terminated in accordance with either Section 2.d. hereof or
Article Ten of the Supply Agreement, this Amendment Agreement
will renew automatically for successive one year terms
commencing upon the initial expiration date set forth in
Section 2.c.
c. In the event that a party does not want this Amendment
Agreement to renew automatically, that party shall so notify
the other party in writing
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not later than the September 30 prior to the then scheduled
termination date.
d. Upon a change of control or substantial recapitalization of
either party or a joint manufacturing or marketing venture
involving the Facility or a sale of the Facility ("Major
Change"), any party may terminate this Amendment Agreement by
written notice delivered no later than thirty (30) days
following the first official public announcement of such a
Major Change, effective six (6) months after receipt of such
notice. "Control" means possessing, directly or indirectly,
the power to direct or cause the direction of the management
and affairs of a party hereto, whether through ownership of
voting shares, contract or otherwise.
e. Upon written notice of any termination in accordance with
Section 2.c or Section 2.d hereof or Article Ten of the Supply
Agreement or expiration of this Amendment Agreement for any
reason other than default by Campbell, Vlasic and Campbell, in
addition to carrying out the provisions of Article Ten of the
Supply Agreement, shall mutually work together to assure (i)
the orderly and economic shutdown or transition to other use
of the Facility and (ii) the orderly transition of production
to Campbell or to an alternative manufacturer designated by
Campbell and (iii) to the extent possible, that adequate
Campbell inventories of finished product are maintained by,
for example, building inventories prior to an effective date
of termination or expiration ("Transition Plan"). Campbell
shall reimburse Vlasic for any additional labor cost
reasonably incurred by Vlasic to maintain adequate line
staffing due to discontinuance of this Amendment Agreement
pursuant to a mutually agreed Transition Plan. Vlasic shall
provide Campbell with the consultation and advice of available
Vlasic technical and production employees for so long as the
parties shall deem reasonably necessary to effect an orderly
transition of production, which may include consultation with
Campbell or a third party manufacturer after an effective date
of termination or expiration; provided that Vlasic shall be
compensated upon an actual time and expense basis for the
services of such employees, with an administrative fee of five
percent (5%) added thereto.
f. Within thirty (30) days following the termination or
expiration of this Amendment Agreement, the parties shall
settle all amounts owed as provided herein. In addition, each
of the parties shall have the immediate right to offset any
amounts owed to or from the other party under this Amendment
Agreement and under any other supply agreement or co-pack
agreement or purchase order with the other party. The parties
also agree to a mutual right of offset under any supply or
co-pack agreements or purchase orders between them in the
event of a default under any one of them.
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3. DISPOSITION OF EQUIPMENT
The assets subject to the Option on Equipment granted by Section 10.4
of the Supply Agreement are listed on Schedule 3 to this Amendment
Agreement. The period of non-compete associated with the purchase of
any product manufacturing line pursuant to the Option on Equipment
shall be one year, rather than twenty-four months as stipulated in the
Supply Agreement. Moreover, to be effective, any exercise of the Option
on Equipment by Campbell must be done by written notice received by
Vlasic no later than May 5, 2000. Transfer of ownership and risk of
loss shall be upon payment of the purchase price, which shall be paid
in full prior to equipment disassembly and no later than the date of
expiration or termination of this Amendment Agreement. Vlasic's costs
shall be reimbursed by Campbell no later than thirty days following
receipt of an invoice from Vlasic for the same.
4. PRICE, CHARGES AND PAYMENTS
a. The "business as usual" pricing methodology pursuant to
Schedule "B" of the Supply Agreement is hereby amended by
adding thereto a provision for a margin and other terms as
indicated on Schedule 4.
b. Unless earlier terminated pursuant to the provisions of
Section 2.d. or Article 10 of the Supply Agreement, Campbell
will place orders for not less than the aggregate number of
cases of Product set out on Schedule 5 during the term of this
Amendment Agreement and Vlasic will manufacture, package and
supply such Products to Campbell. Campbell shall also have the
right to order up to an additional 800,000 cases of Product
and Vlasic agrees that it will manufacture such additional
cases of Product, subject to maximum line capacities and the
other terms and conditions of this Amendment Agreement.
c. In the event a quarterly minimum as indicated on Schedule 5 is
not ordered by Campbell for delivery in a given quarter,
Campbell shall pay Vlasic the costs indicated on Schedule 4,
Paragraph 4(b) with respect to such quarterly minimum.
d. In the event (1) Vlasic, acting reasonably, cannot produce
Product ordered by Campbell for delivery as requested by
Campbell without running a production line on overtime and (2)
Campbell agrees in writing that overtime production should be
run, then Campbell shall pay to Vlasic an Overtime Production
Charge as indicated on Schedule 4. If the reason why Vlasic
cannot produce Product requested without running a line on
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overtime is that Vlasic failed to adhere to the Production
Schedule for a reason or reasons not attributable to an action
or failure to act by Campbell, then Campbell will not be
responsible for an Overtime Production Charge.
e. In the event (1) Campbell places an order for delivery of an
SKU the fulfillment of which will cause Vlasic, acting
reasonably, to run a production line for less than one full
eight hour shift and (2) Campbell agrees in writing that such
production should take place despite the inefficiencies
involved, then Campbell shall pay to Vlasic a Partial Shift
Charge as indicated on Schedule 4.
f. On a quarterly basis, Vlasic will review ingredient and
packaging inventories unique to the performance of this
Amendment Agreement. Vlasic will charge Campbell and Campbell
will pay the value of all obsolete items. Obsolete items are
those items that (1) are not planned for use according to the
current Rolling Forecast, or (2) are overage or are projected
to be overage as of the next production scheduled per the
Rolling Forecast. In the event that Campbell initiates a
packaging or ingredient change that would result in obsolete
inventories, Vlasic shall upon request provide Campbell with a
good faith estimate of the amount of any resulting charge.
Campbell will arrange and pay for pick-up of such obsolete
items within 30 days of being invoiced for them by Vlasic. If
Campbell does not pick up obsolete items within such period,
Vlasic may arrange for disposition of the items on Campbell's
behalf and at Campbell's cost.
g. Special batches will be charged to Campbell and Campbell will
pay the cost of ingredients, packaging and direct labor plus a
mark-up of four hundred percent (400%) of direct labor to
cover overhead.
h. All payments by Campbell to Vlasic under this Amendment
Agreement shall be by either Electronic Funds Transfer or wire
transfer.
i. Vlasic and Campbell agree to work together in good faith to
reduce fixed overhead charged to Campbell under this Amendment
Agreement to the extent feasible. To facilitate this effort,
Vlasic will provide a breakdown of overhead costs by category
(e.g. fixed, variable, depreciation) by line (6,7, J/K/L) by
April 15, 2000. Both parties will promptly thereafter identify
teams from each company and will instruct them to identify and
pursue cost savings opportunities in order to reduce costs of
Products manufactured hereunder.
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5. PURCHASE PROCEDURES AND TERMS
a. Campbell shall provide to Vlasic on or before the 15th day of
every month a good faith, written twelve (12) month rolling
forecast by SKU consistent with Schedule 5 (hereinafter
"Rolling Forecast"). Campbell may modify the Rolling Forecast
at any time by a written notice.
b. Fifteen (15) days prior to the beginning of a month, the by
SKU forecast for such month in the current Rolling Forecast
shall become a Binding Production Order for the specific
quantities by SKU specified in the Rolling Forecast for such
month.
c. No later than ten (10) days prior to the beginning of a month,
working from the Binding Production Order, Vlasic will confirm
whether it has the ability to manufacture the requested
quantities and issue a written Production Schedule for the
Product it is able to manufacture during the relevant month.
Orders are considered to be properly filled if delivered to
within five percent (5%) of the case quantity ordered. Written
amendments to the Binding Production Order and the Production
Schedule will be made by mutual agreement of the Vice
President of Operations of the Away From Home Division of
Campbell Soup Company and the Vice President of Operations of
Vlasic or their functional successors. In the event that
overtime is required to effect such an amendment, Campbell
must agree to the Overtime Production Charge for such
production to be scheduled. Any such amendment shall also be
consistent with Schedule 5, taking into consideration the
different volume run rates by SKU on each line.
d. All Products will be delivered ex Facility, except that Vlasic
shall have the responsibility of loading the Products. Risk of
loss shall pass to Campbell upon completion of loading.
6. NON-COMPETE
Schedule "C" of the Supply Agreement is modified in accordance with
Schedule 6 to this Amendment Agreement.
7. MISCELLANEOUS
a. The Committee is dissolved.
b. Mutually agreed capital expenditures in furtherance of the
Cost Improvement Program will be paid by Campbell and any
equipment covered by such capital expenditure shall be owned
by Campbell and tagged as such.
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c. The following definition is added:
BANKRUPTCY EVENT means with respect to either Campbell or
Vlasic, as applicable, (a) the making by such party of an
assignment for the benefit of creditors of all or
substantially all of its assets or the admission by such party
in writing of inability to pay all or substantially all of its
debts as they become due; (b) the adjudication of such party
as bankrupt or insolvent or the filing by such party of a
petition or application to any tribunal for the appointment of
a trustee or receiver for such party or any substantial part
of the assets of such party; or (c) the commencement of any
voluntary or involuntary bankruptcy proceedings (and, with
respect to involuntary bankruptcy proceedings, the failure to
be discharged within 60 days), reorganization proceedings or
similar proceeding with respect to such party or the entry of
an order appointing a trustee or receiver or approving a
petition in any such proceeding.
d. Each party shall maintain all Confidential Information in
strict confidence and shall maintain a secure system for its
storage and/or handling, as applicable. The parties further
agree to (i) restrict disclosure of the Confidential
Information solely to its officers, employees, subcontractors,
and agents with a "need to know" such Confidential Information
for performance of the parties' obligations under this
Amendment Agreement (the persons to whom disclosure is
permissible being collectively called "Representatives"); (ii)
not disclose to any other person or copy the Confidential
Information without the prior written approval of the
disclosing party; (iii) use the Confidential Information
solely for purposes of this Amendment Agreement; and (iv)
inform the Representatives of the confidential nature of the
Confidential Information and obtain their agreement to the
obligations set forth herein. Each party shall be responsible
for breaches of confidentiality with respect to Confidential
Information by its Representatives. Vlasic and Campbell shall
each use commercially reasonable efforts to prevent the
disclosure of the terms of this Amendment Agreement to third
parties, except as required by law.
(Signature page follows)
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IN WITNESS WHEREOF the parties hereto have executed this Amendment
Agreement as of the date and year first above written.
CAMPBELL SOUP COMPANY
BY: /S/ CHARLES E. MILLER
-------------------------------------
NAME: CHARLES E. MILLER
TITLE: VICE PRESIDENT - PURCHASING
VLASIC FOODS INTERNATIONAL INC.
BY: /S/ ROBERT F. BERNSTOCK
-------------------------------------
NAME: ROBERT F. BERNSTOCK
TITLE: PRESIDENT & CHIEF EXECUTIVE
OFFICER
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Exhibit 20.2
FOODSERVICE SUPPLY AGREEMENT
BETWEEN
CAMPBELL SOUP COMPANY
AND
VLASIC FOODS INTERNATIONAL INC.
EFFECTIVE AS OF
MARCH 30, 1998
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FOODSERVICE SUPPLY AGREEMENT
THIS IS A FOODSERVICE SUPPLY AGREEMENT dated as of March 30, 1998
("AGREEMENT"), by and between CAMPBELL SOUP COMPANY, a New Jersey corporation
(together with its successors and permitted assigns, "CAMPBELL"), and VLASIC
FOODS INTERNATIONAL INC., a New Jersey corporation (together with its successors
and permitted assigns, "VLASIC").
BACKGROUND
A. Campbell has for some time past manufactured and packed Products for
foodservice distribution at its production facility located in Omaha,
Nebraska.
B. As of March 30, 1998, Campbell distributed to Campbell's shareowners
all of the outstanding shares of Vlasic's common stock (the "Spinoff").
C. As a result of the Spinoff, Vlasic has acquired title to the Omaha,
Nebraska facility and wishes to continue to produce, package and
deliver Products to Campbell.
D. This Agreement sets forth the arrangements between the parties with
respect to the supply of Products.
Intending to be legally bound, Campbell and Vlasic agree as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.1 DEFINITIONS. Unless the context otherwise requires, the
following words and phrases have the meanings set forth below:
AFFILIATE means, with regard to any person, any person who or which
directly or indirectly controls or is controlled by, or is under direct or
indirect control with, such person, and for such purpose, "controlling" means
possessing, directly or indirectly, the power to direct or cause the direction
of the management and affairs of such person, whether through ownership of
voting shares, contract or otherwise.
AGREEMENT means this agreement and any instrument or Schedule attached
hereto or referred to herein.
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BUSINESS DAY means any day except Saturday, Sunday and a statutory
holiday in the United States.
COMMITTEE has the meaning set forth in Section 6.1.
COMPETITIVE ACTIVITY has the meaning set forth in Section 8.4.
CONTRACT PERIOD means either the 12-month period beginning on March 30,
1998 and ending on March 29, 1999 or the 12-month period beginning on March 30,
1999 and ending on March 29, 2000.
COST IMPROVEMENT PROGRAM has the meaning set forth in Section 7.1.
DESIGNATED OFFICERS has the meaning set forth in Section 12.1(2).
DISPUTES has the meaning set forth in Subsection 12.1.
EFFECTIVE DATE means March 30, 1998 or such other date as may be agreed
to by the parties.
FACILITY means the Omaha, Nebraska plant or other facility as mutually
agreed.
FORCE MAJEURE has the meaning set forth in Subsection 13.10.
INITIAL MEDIATION PERIOD has the meaning set forth in Subsection
12.1(2).
NON-COMPETE PRODUCTS has the meaning set forth in Subsection 8.4(1).
NON-CONFORMING PRODUCT has the meaning set forth in Subsection
4.1(3)(v).
OPERATING EQUIPMENT means all equipment, supplies and materials of
every nature and kind as may from time to time be required or desirable for the
due performance of Vlasic's obligations hereunder.
PACKAGING SPECIFICATIONS has the meaning set forth in Subsection
2.3(3).
PRICE SCHEDULE has the meaning set forth in Subsection 3.1.
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PRODUCTS means the Campbell food service products identified on the
attached Schedule "A" to be manufactured, packaged and delivered to Campbell by
Vlasic in accordance with this Agreement.
PRODUCT SPECIFICATIONS has the meaning set forth in Subsection 2.3(6).
SPECIFICATIONS means the Products Specifications and the Packaging
Specifications.
SPINOFF has the meaning set forth in the preamble to this Agreement.
VLASIC means Vlasic Foods International Inc.
SECTION 1.2 PARAGRAPHS AND HEADINGS. The division of this Agreement
into paragraphs and the insertion of headings are for convenience of reference
only and shall not affect the construction or interpretation hereof.
ARTICLE TWO
MANUFACTURE AND SUPPLY
SECTION 2.1 MANUFACTURE AND SUPPLY OF PRODUCTS. From and after the
Effective Date, and subject to the other terms and conditions hereof, Vlasic
shall manufacture, package and supply to Campbell Products in the quantities and
varieties ordered by Campbell pursuant hereto, which quantities shall not exceed
the full line capability of Lines 7, J, K and L. Campbell orders for Product
produced on Line 6 shall not exceed 50% of the capacity utilization of Line 6
unless such capacity is not needed by Vlasic. Campbell agrees that it will place
orders for not less than 5,564,736 cases of Product for delivery during each
Contract Period. Line capacity (capability) depends on product mix. Full line
capacity is based on a 48 week schedule, 6 days, 2 shifts.
SECTION 2.2 PRODUCTION FACILITY.
(1) Unless otherwise mutually agreed in writing by Campbell, from and
after the Effective Date hereof, Vlasic shall manufacture, package and supply
Products only from the Facility.
(2) Vlasic shall maintain the Omaha, Nebraska facility and any other
approved facilities at which Products are produced and/or stored, and all
Operating Equipment, in a clean, secure and sanitary condition, and shall comply
with any and all applicable local, state and federal laws, ordinances, rules and
regulations now in effect or which may hereafter be in effect.
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(3) Vlasic shall employ a sufficient number of suitably trained and
qualified management, production, engineering and technical personnel for the
purposes of producing and packaging Products and shall generally maintain
suitable Operating Equipment and allocate sufficient resources for the purposes
of enabling Vlasic to fulfill its obligations to Campbell under this Agreement.
SECTION 2.3 SPECIFICATIONS.
(1) Vlasic shall, in accordance with the terms and conditions hereof,
manufacture, package and supply Products of good quality, which Products shall
conform in all respects with the Specifications. Campbell shall provide Vlasic
with a minimum of sixty (60) days advance written notice of any changes,
modifications, deletions or additions to the Specifications that are (a)
required by changes in applicable laws or regulations or (b) otherwise, subject
to verification by Vlasic of manufacturing feasibility, deemed by Campbell to be
reasonably necessary or desirable to maintain or improve the quality of the
Products or to carry out the purpose and intent of this Agreement.
(2) Vlasic shall manufacture Products to ensure that the finished
Products meet Campbell's existing quality requirements for such Products and in
accordance with all applicable industry standards and federal, state and local
government regulations or requirements from time to time.
(3) Vlasic shall acquire, pay for and provide all ingredients, labels,
cartons and packaging materials required for the Products. Vlasic will package
Products only in containers and other packaging in accordance with Campbell's
packaging standards and specifications (the "Packaging Specifications") and in
accordance with all applicable industry standards and federal, state and local
government regulations and requirements. Campbell will be responsible for and
liable for, and will indemnify and hold Vlasic harmless from and against, any
claims for anyone (governmental authorities, private individuals, corporations
or otherwise) that such labels or case materials, or any other written or
printed materials prepared as instructed by Campbell, contain or fail to contain
information, trademarks, brand names, advertisements, or data that violates or
infringes upon any rights of anyone or otherwise violates any applicable law.
(4) Upon request from Campbell, Vlasic shall submit to Campbell samples
of containers or other packaging as Campbell may require for the purpose of
determining whether there has been compliance with the Packaging Specifications
or other provisions of this Agreement.
(5) Vlasic shall not use on any container or other packaging for
Products, any label, trademark, trade name, logo or design except as
specifically authorized by Campbell.
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(6) Because Specifications have not been agreed as of the Effective
Date, Campbell and Vlasic will operate in accordance with the past practice when
the foodservice business and the Omaha, Nebraska plant were both units of
Campbell until Specifications have been agreed. Within 30 days of the Effective
Date, the Committee shall recommend Specifications for the Products. Individual
Product Specifications shall become effective upon the written agreement of the
parties following receipt of the recommendation of the Committee as to each such
Specification. The Committee is hereby instructed to prioritize the making of
recommendations on individual Specifications based on the anticipated annual
value of the underlying Products.
(7) For the avoidance of doubt, because the Agreement is a cost-based
agreement, all costs required for Vlasic to comply with Specifications and
consistent with Schedule "B" shall be fully reflected in the prices established
pursuant to Article Three.
ARTICLE THREE
PRICES OF PRODUCT
SECTION 3.1 PRICES. The prices payable by Campbell for Product supplied
by Vlasic shall be as set forth on the attached Schedule "B" (the "Price
Schedule).
ARTICLE FOUR
PURCHASE PROCEDURES AND TERMS
SECTION 4.1 FORECASTS AND ORDERS.
(1) Prior to the beginning of such period, Campbell shall provide
Vlasic with a good faith, non-binding written annual estimate of the aggregate
amount of Product Campbell expects to request during such Contract Period, which
shall be updated quarterly. Every 30 days, Campbell will provide Vlasic with an
adjusted written estimate of its aggregate Product requirements on a weekly
basis. The adjusted estimate will cover a rolling twelve (12) week period,
commencing two (2) weeks from the date of the estimate.
(2) The forecasts provided by Campbell pursuant to Subsection 4.1(1)
above will represent estimated quantities only, will be based on available
information at the time of preparation, will not be binding upon Campbell and
may be revised by it at any time. The obligation to supply and purchase Products
hereunder shall be evidenced by written orders submitted by Campbell specifying
the quantity of Product, by MOA, and the required delivery date for the
Products. For delivery dates to be binding on Vlasic, orders must be consistent
with the order forecast and be received no less than eight (8) days before
delivery is requested.
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(3) The following terms and conditions of sale shall be deemed to be an
integral part of every purchase order for Products and of every transaction of
purchase and sale of Products between Campbell and Vlasic. Notwithstanding any
stipulation of Campbell or contained in Vlasic's communications with respect to
Campbell's orders for Products which conflicts or is inconsistent with any
provision contained in this Agreement, the provisions herein shall prevail. No
waiver, alteration or modification of any of the terms and conditions set forth
herein shall be binding upon the parties unless such waiver, alteration or
modification is specifically agreed to in writing by the parties:
(i) Title to Products and Risk of Loss. All Products will be
delivered by Vlasic F.O.B. Campbell's designated warehouse.
Risk of loss shall pass to Campbell when the carrier delivers
Products to Campbell's designated warehouse.
(ii) Responsibility for Transportation. Vlasic will arrange and pay
for the transportation of any Products away from Vlasic's
Omaha, Nebraska facility, at the time and on the delivery date
specified by Campbell. Any claims for Products damaged or lost
en route to the warehouse will be pursued by, and at the
expense of (and will be for the account of) Vlasic. Vlasic
guarantees to Campbell that, when delivered, Products will
meet the Specifications, the other requirements of this
Agreement and all applicable laws.
(iii) Additional Delivery Terms. For the purposes of certainty,
prices shall include and Vlasic shall otherwise bear the
responsibility for all preparation, packing, boxing, crating,
dunnage, skids and returnable containers. Campbell shall be
responsible for any charges or costs associated with the use
of pallets transferred from Vlasic to Campbell and after the
applicable delivery date. Campbell shall have no obligation in
respect of the loading of Products upon a carrier at Vlasic's
facilities or the insurance of Products during such loading.
(iv) Inspection and Acceptance. Campbell may inspect Products prior
to loading upon a carrier at the Facility and may station
qualified Quality Assurance personnel at the Facility to
monitor Vlasic's production, provide advice concerning
compliance with the Specifications and accept Products on
behalf of Campbell. The Committee shall make a recommendation
to the parties concerning such stationing within 30 days of
the Effective Date. Any presence of Campbell Quality Assurance
people at the Facility shall not modify or change Vlasic's
obligation to manufacture the Products in accordance with the
Specifications.
(v) Return of Products. Vlasic will assume all costs with respect
to rejected Product which is unacceptable because of Vlasic's
failure to follow the
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Specifications or which result from some error by Vlasic in
the manufacturing or packaging process ("Non-Conforming
Product"). Vlasic agrees to take back any rejected
Non-Conforming Products which are tendered to it by Campbell
and to correct the defects in them within a reasonable time or
destroy them and replace them at its own expense. If Campbell
directs third parties to correct, replace or destroy
Non-Conforming Product, Vlasic shall assume all reasonable
costs thereof. In the event Product is destroyed, Vlasic shall
provide proof of destruction to Campbell. Vlasic shall
reimburse or credit Campbell for the invoiced cost of rejected
Non-Conforming Product previously paid for by Campbell and not
corrected or replaced by Vlasic. Vlasic shall also be
responsible for all freight and insurance costs connected with
the return of defective Product.
SECTION 4.2 PAYMENT TERMS. Each delivery of Products will be invoiced
based on Operating Plan Cost Per Case. Payment terms shall be net fifteen (15)
days from receipt and acceptance of such invoice. Payment shall be by check
forwarded to Vlasic's address for notice. Within fifteen (15) days after the
close of each month, Vlasic shall provide Campbell with a reconciliation of
amounts invoiced during such month against actual costs for the production of
Products invoiced. If the reconciliation shows that the aggregate amount
invoiced during such month was less than actual, Vlasic will submit an
additional invoice for such amount. If the reconciliation shows that the
aggregate amount invoiced during such month was more than actual, Vlasic will
pay the overage to Campbell by check forwarded to Campbell's address for notice.
SECTION 4.3 PRODUCTS ACCEPTABILITY.
(1) Vlasic recognizes that it is fundamental to the success of the
marketing, distribution and sale of Products that Campbell obtain good quality
Products from Vlasic. Accordingly, Vlasic warrants to Campbell that the Products
will be free from any defects of whatsoever kind in manufacture, ingredients,
packaging, and title, and will conform in every respect to the Specifications.
(2) The provisions of this Section shall not be deemed to diminish,
restrict or exclude the operation of any warranty implied or imposed by law or
otherwise nor any other rights and remedies provided by law for breach of
warranty and breach of contract.
SECTION 4.4 RECALL PROCEDURE. Subject to the limitations set forth in
Section 9.3, if any regulatory agency requires the recall of a Product or
Products or if Campbell or Vlasic wish voluntarily to recall a Product or
Products Agreement, Campbell and Vlasic shall coordinate such recall.
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SECTION 4.5 SALE OF PRODUCTS TO EMPLOYEES. Notwithstanding the other
terms and conditions of this Agreement, Campbell acknowledges that Products may
be sold by Vlasic to employees of Vlasic, provided such persons are prohibited
from reselling such Products.
ARTICLE FIVE
ADDITIONAL OBLIGATIONS OF VLASIC
SECTION 5.1 CONFLICTING AGREEMENTS. Vlasic covenants and represents
that it has no prior or existing, nor will it enter into any, agreements or
arrangements with or obligations to, any third party that would interfere or
conflict with any of the provisions of this Agreement in any manner whatsoever.
SECTION 5.2 INFORMATION REQUESTS. Vlasic shall from time to time
promptly, upon request by Campbell, furnish to Campbell in writing all
information and/or reports reasonably requested by Campbell relating to the
Products and Vlasic's obligations hereunder.
SECTION 5.3 TRADEMARKS.
(1) Vlasic shall not, for any reason, during the Term of this
Agreement, except as authorized in writing by Campbell, alter, deface or remove
any trademarks, patent numbers, notices, information or legends on Products
without the prior written consent of Campbell.
(2) Vlasic hereby acknowledges the validity of Campbell's title to all
trademarks, trade names and logos and designs (whether or not registered) owned
or claimed by Campbell and used in connection with the packaging, labeling or
marketing of Products, including the trademark "Campbell Soup Company", "Prego",
and "Chef's Savour". Vlasic covenants and agrees that it will not at any time
directly or indirectly contest the validity of the title of the aforesaid
intellectual property or Campbell's or Campbell's Affiliate's title to such
intellectual property.
ARTICLE SIX
OVERSIGHT AND INSPECTIONS
SECTION 6.1 JOINT COMMITTEE. Within thirty (30) days after the
Effective Date, Campbell and Vlasic shall establish a committee composed of
three representatives of each party (the "Committee"). The Committee shall meet
once per quarter after the Effective Date. The Committee will review "enabler"
projects, new technology which might be utilized to supply the Products
hereunder and will review other issues such as Product Specifications,
technological advancements, Product
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quality, business planning, forecasts, cost reductions, performance under this
Agreement, and such other matters as the Committee shall reasonably deem
appropriate.
SECTION 6.2 QUALITY CONTROL AND REPORTS. Vlasic shall establish and
maintain a rigorous quality control program covering all Products sold to
Campbell or for Campbell's account. Vlasic shall provide to Campbell the quality
control reports and such other reports as Campbell may reasonably request from
time to time.
SECTION 6.3 INSPECTIONS AND RECORDS. Vlasic shall at all times during
normal business hours permit Campbell's personnel and other Campbell-designated
representatives to have reasonable access to (a) those portions of the Omaha,
Nebraska Facility where Products are manufactured, the Products, and all
locations where the Products are stored, and (b) all operational, financial and
other records (including computer or other electronically encoded records) that
are records of the production and costs of the Products; provided that such
examination will be conducted during Vlasic's normal business hours and in such
a manner as to reasonably minimize disruption of Vlasic's business. Vlasic shall
cooperate fully with Campbell during all inspections and shall, upon request,
promptly provide to Campbell copies of any such records.
SECTION 6.4 REGULATORY MATTERS. Vlasic shall obtain all regulatory
and/or governmental permits necessary to manufacture and sell the Products
hereunder. Vlasic shall bear the responsibility for filing any reports relating
to the Products required by applicable government authorities.
ARTICLE SEVEN
PROCESS IMPROVEMENTS
SECTION 7.1 COST IMPROVEMENT PROGRAM. Both parties will, in good faith,
negotiate to develop and implement a program to reduce costs ("Cost Improvement
Program"). This Cost Improvement Program is intended to lower costs while
maintaining or improving quality, service and productivity. The parties agree in
principle that the economic benefit of any actions taken pursuant to a Cost
Improvement Program shall be shared with ninety percent (90%) of such benefit
accruing to Campbell.
SECTION 7.2 SHARED BENEFITS. Vlasic will make available to Campbell all
technologies and productivity improvement programs available to any other
co-pack customer of Vlasic. This Section 7.2 shall not be construed to require
(i) Vlasic to make available any such technologies or programs if such use would
be prohibited by an agreement with a third party or (ii) disclosure to Campbell
of any proprietary information of Vlasic.
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SECTION 7.3 NEW FORMULATIONS OR PACKAGING. Upon request by Campbell,
Vlasic will use reasonable efforts to evaluate new or modified Product
formulations, new varieties or new packaging for the Products, to determine
feasibility of production. If Vlasic and Campbell determine that such production
is feasible, then, upon written agreement by the parties as to the applicable
terms, including price, Vlasic will produce such new or modified formulations or
packaging.
SECTION 7.4 SPECIAL BATCHES. From time to time, Campbell may request
that Vlasic run special batches, which will be run as soon as reasonably
possible after receipt of a written request providing detailed instructions for
running the special batch. A Campbell research and development professional
shall be on-site at the Facility to supervise the running of any special batch
unless otherwise agreed by Vlasic. All remaining unique ingredients, packaging
materials and finished product inventory shall be purchased by Campbell from
Vlasic and removed from the Facility immediately after completion of the special
batch. These remaining materials will be shipped to an offsite storage location
and stored in an account for Campbell. Pricing of special batches shall be
computed and invoiced as the sum of (a) all materials, (b) actual direct labor
and (c) an overhead factor (which includes depreciation) equal to four hundred
percent (400%) of actual direct labor.
SECTION 7.5 ADDITIONAL CAPITAL EQUIPMENT. If both parties agree to add
additional capital equipment to modify existing processes (apart from repair and
replacement in the ordinary course) or existing Products or to produce a new
Product formulation, Campbell and Vlasic will negotiate in good faith the terms
of an appropriate return to the party who makes the capital investment.
ARTICLE EIGHT
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 8.1 CAMPBELL. Campbell represents and warrants to Vlasic as
follows:
(1) Qualification. Campbell is a New Jersey corporation duly organized,
validly existing and in good standing under the laws of New Jersey and has all
requisite power and authority to operate its business as and where presently
being conducted.
(2) Authorization and Enforceability. Campbell has full corporate power
and corporate authority to make, execute, deliver and perform this Agreement,
and the execution, delivery and performance of this Agreement by Campbell has
been duly authorized by all necessary action on the part of Campbell. This
Agreement has been duly executed and delivered by Campbell and constitutes a
valid and binding obligation of Campbell enforceable against Campbell in
accordance with its terms.
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(3) No Pending Litigation. There is no pending or threatened litigation
challenging Campbell's authority to enter into and perform this Agreement.
SECTION 8.2 VLASIC. Vlasic represents and warrants to Campbell as
follows:
(1) Qualification. Vlasic is a corporation duly organized, validly
existing and in good standing under the laws of the State of New Jersey and has
all requisite power and authority to operate its business as and where presently
being conducted.
(2) Authorization and Enforceability. Vlasic has full corporate power
and corporate authority to make, execute, deliver and perform this Agreement,
and the execution, delivery and performance of this Agreement by Vlasic has been
duly authorized by all necessary action on the part of Vlasic. This Agreement
has been duly executed and delivered by Vlasic and constitutes a valid and
binding obligation of Vlasic enforceable in accordance with its terms.
(3) No Violation of Laws or Agreements. The execution, delivery, and
performance of this Agreement does not, and Vlasic's performance of this
Agreement will not (i) contravene any provision of the Certificate of
Incorporation or Bylaws of Vlasic; (ii) violate, conflict with, or result in a
breach of any judgment, injunction, writ, award, decree, restriction, ruling or
order of any court, arbitrator or governmental or regulatory authority (domestic
or foreign) or any applicable law, ordinance, rule or regulation; or (iii)
violate, conflict with, result in a breach of, or constitute a default (or an
event which would, with the passage of time or the giving of notice, or both,
constitute a default) under, or result in or permit the termination,
modification, acceleration, or cancellation of any material indenture, mortgage,
loan or credit agreement, license, instrument, lease, contract, plan, permit or
other agreement or commitment, oral or written, to which Vlasic is a party or by
which any of its assets is bound.
(4) No Pending Litigation. There is no pending or threatened litigation
challenging Vlasic's authority to enter into and perform this Agreement.
(5) Consents. No consent, approval or authorization of, or registration
or filing with, any person is required in connection with the execution,
delivery and performance of this Agreement, or the performance of this Agreement
by Vlasic.
(6) Title Infringement. Vlasic has, or at the time of performance shall
have, and shall transmit to Campbell good title to the Products, free and clear
of liens and encumbrances of any kind whatsoever.
(7) Products. All Products sold or delivered to Campbell hereunder
shall (i) conform to the Specifications, (ii) be produced in accordance with
good food manufacturing practices under strict sanitary conditions, (iii) not be
adulterated or
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misbranded, and (iv) comply with all applicable federal, state and local laws,
rules and regulations, including, without limitation, the United States Food,
Drug and Cosmetic Act.
(8) Other. Vlasic is an Equal Opportunity Employer in compliance with
the provisions of Executive Order 11246 as amended by Executive Order 11375, and
Vietnam Era Veterans Readjustment Act of 1974, as implemented by 41 C.F.R.
60-250 and the Rehabilitation Act of 1973, as amended, as implemented by 43
C.F.R. 60-741, which among other things requires government contractors and
subcontractors to take affirmative action to employ and advance in employment
protected classes of people.
SECTION 8.3 VLASIC'S AFFIRMATIVE COVENANTS. Vlasic covenants that,
during the term of this Agreement, it shall:
(1) operate the Facility in compliance with all applicable laws,
rules and regulations;
(2) cooperate in good faith with Campbell in any investigation or
health or other inspection relating to the Omaha, Nebraska facility or the
Products; and
(3) within 90 days of the Effective Date, the Committee shall
propose certain additional general procedures relevant to quality assurance not
contained in the Specifications which, upon acceptance by both parties, shall
form a part of this Agreement.
SECTION 8.4 VLASIC'S NEGATIVE COVENANTS.
(1) Non-Compete. Vlasic acknowledges that Campbell would be irreparably
damaged if Vlasic were to use for its own benefit the proprietary formulae, and
other confidential information of Campbell which is or becomes known to Vlasic
in connection with the performance of this Agreement. In order to secure the
interests of Campbell hereunder, Vlasic covenants that, during the term of this
Agreement, it shall not, without the prior consent or approval of Campbell,
engage in any Competitive Activity. For purposes of this Agreement, "Competitive
Activity" means manufacture, sale, supply or distribution, directly or through
any intermediary, of the products listed on Schedule "C" ("Non-Compete
Products") to any person or entity other than Campbell. This covenant shall not
restrict Vlasic from acquiring in any manner, and subsequently operating and
managing, any business, organization, company or other entity which, directly or
indirectly, manufactures, sells, supplies or distributes any of the Non-Compete
Products so long as the manufacture, sale, supply and distribution of the
Non-Compete Product is not a principal product (i.e. does not constitute more
than twenty-five percent (25%) of the sales) of the entity acquired. Competitive
Activity shall not include (i) any retail product (other than the Products)
which is currently manufactured, sold, distributed or marketed by Vlasic or its
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Affiliates; or (ii) any use of a Non-Compete Product in a multi-component retail
pack. With respect to frozen soup, this covenant shall remain in full force and
effect during the three (3) year period commencing on the Effective Date.
(2) Use of Formulae. Vlasic will not use Campbell formulae anywhere but
on Products.
ARTICLE NINE
INDEMNIFICATION AND INSURANCE
SECTION 9.1 INDEMNIFICATION. Each party shall defend, indemnify and
hold harmless the other, its officers, directors, employees, shareowners,
affiliates, successors and assigns from and against any and all liability,
losses, costs, expenses, fees (including reasonable attorneys fees), judgments,
claims (including governmental investigations and enforcement proceedings) and
damages arising out of or resulting from (1) any alleged action or omission
which would constitute a breach by the other party of its representations,
warranties, responsibilities or obligations under the Agreement; (2) any
allegedly illegal acts or omission of the other party in connection with its
performance of this Agreement; or (3) any willful or negligent acts or omissions
of the other party relating to the manufacture, sale, labeling, advertising, use
or consumption of any Product hereunder.
SECTION 9.2 INSURANCE.
(1) Minimum Coverage. Vlasic shall maintain, at all times during
the Term of this Agreement, insurance in the amounts set forth below:
(i) Commercial general liability insurance (including
products liability and contractual liability coverage) at
$2,000,000 per occurrence combined single limit and $3,000,000
in the aggregate.
(ii) An umbrella excess insurance policy with a limit not
less than $25,000,000 per occurrence, $25,000,000 general
aggregate combined single limit.
(iii) Commercial automobile liability insurance at
$2,000,000 per occurrence combined single limit.
(iv) Workers' compensation insurance as required by
applicable law.
(v) Employer's liability insurance at $500,000 per
accident, per disease and per employee.
(2) Quality. Such insurance must (i) be maintained with
insurers with a Best's rating of at least "A-" and reasonably acceptable to
Campbell, (ii) be in the name of Vlasic, (iii) include Campbell as an additional
insured under the commercial general and umbrella/excess liability policies, and
(iv) be primary to any insurance maintained
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by Campbell. Vlasic may discharge its obligations hereunder through
self-insurance with Campbell's consent.
(3) Certificate. At proof of such coverage, Vlasic shall annually
provide to Campbell a certificate for the insurance stating the following
information: (i) name of the insurance company and the policy number, (ii)
policy period, (iii) named insured and address, (iv) description of coverage,
(v) policy limits, (vi) description and location of covered operations, (v) name
and address of certificate holder, (vi) notice of cancellation provision, and
(vii) authorized signature and date. In addition, each certificate must state
that the insurance reflected by such certificate will not be canceled unless
thirty (30) days' prior written notice has been given to Campbell. The failure
of Vlasic to provide such certificates to Campbell shall not be deemed a waiver
by Campbell of Vlasic's insurance requirements. Failure to obtain and maintain
insurance will be considered a material breach.
SECTION 9.3 LIABILITY FOR DAMAGES.
(A) EXCEPT TO THE EXTENT SET FORTH IN SECTION 9.3(b), IN NO EVENT DOES
SUPPLIER ASSUME ANY LIABILITY FOR CONSEQUENTIAL DAMAGES (INCLUDING,
WITHOUT LIMITATION, LOSS OF PROFITS, PUNITIVE DAMAGES, OR ANY STATUTORY
DAMAGES WHICH PROVIDE FOR CONSEQUENTIAL DAMAGES, LOSS OF PROFIT OR
PUNITIVE DAMAGES) RESULTING FROM OR RELATING TO DELIVERY TO PURCHASER
OF NON-CONFORMING PRODUCT OR RESULTING FROM OR RELATING TO THE
PERFORMANCE OF THIS AGREEMENT OR A BREACH HEREOF AND PURCHASER WAIVES
ANY CLAIM FOR ANY SUCH DAMAGES. FOR AVOIDANCE OF DOUBT, CONSEQUENTIAL
DAMAGES SHALL NOT INCLUDE DIRECT OR INCIDENTAL DAMAGES.
(b) Notwithstanding the foregoing, the limitations on
consequential damages contained in Section 9.3(a) shall not apply to:
(i) costs incurred by Purchaser in manufacturing any
final products into which Purchaser incorporated
Non-Conforming Product, provided that Supplier shall not be
liable for the proportion of such costs attributable to the
negligence or willful misconduct of Purchaser or its
employees, agents, representatives or contracts (other than
Supplier) with respect to the Non-Conforming Product or the
final product in question;
(ii) lost profits that result from cancellation of sales
involving Non-Conforming Product, to the extent that such
cancellations resulted from
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Non-Conforming Product received from Supplier. Purchaser shall
not be entitled to recover such lost profits to the extent
that cancellations of sales are due to the negligence or
willful misconduct of Purchaser or its employees, agents,
representatives or contractors (other than Supplier). Any
recovery of lost profits to which Purchaser is entitled under
this Section shall be limited to profits arising out of
cancellation of existing orders and shall not include lost
profits contemplated from anticipated or prospective sales;
(iii) in the event that (1) Purchaser institutes a recall
of a product, and (2) such recall is the result of Supplier's
delivery of Non-Conforming Product, then Purchaser shall be
entitled to recover from Supplier its direct costs involved in
conducting such recall; provided that Purchaser shall not be
entitled to recover recall costs to the extent the scope of
the recall is broader than is reasonably necessary to assure
the return of all Non-Conforming Product and products which
incorporate Non-Conforming Products (it being agreed that the
scope of a recall required by a regulatory agency shall be
deemed reasonable); and provided further that Supplier shall
not be liable for the proportion of recall costs attributable
to the negligence or willful misconduct of Purchaser, or its
employees, agents, representatives or contractors (other than
Supplier). Direct costs shall include reasonable costs
(including compensation for the time of the employees and
agents of Purchaser reasonably spent with respect to such
recall) incurred in providing notice of recall, retrieval and
disposal of recalled product, and replacing recalled product
or refunding the purchase price therefor. For avoidance of
doubt, Purchaser shall not be entitled to recover from
Supplier other costs associated with any such recall,
including but not limited to, loss of goodwill, public
relations costs, diminution of stock value, and, except as
provided in this Subsection, lost profits; and
(iv) Supplier's breach of any covenant or obligation under
this Agreement, provided that (1) Purchaser establishes,
beyond a reasonable doubt, that such breach occurred as a
direct result of a malicious and bad faith decision of senior
management of Supplier to intentionally breach such covenant
or obligation under this Agreement, and (2) for avoidance of
doubt, this Subsection shall not apply to any breach by
Supplier of any representation or warranty made by Supplier in
this Agreement, including without limitation any product
warranty.
The exceptions contained in this Section are cumulative and not mutually
exclusive.
It is the understanding of the parties that Purchaser does not perform a
statistical sampling of products but rather performs a representative sampling
of Products.
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Purchaser's reliance on such representative sampling process shall not, for
purposes of Section 9.3(b)(i), (ii) and (iii), be deemed negligence.
Except as provided in this Section, in the event of a breach of this Agreement
by Supplier, Purchaser shall be entitled to pursue, in addition to any remedies
specifically provided herein, all further remedies then available under the
applicable state Uniform Commercial Code or otherwise available at law or in
equity, including recovery of incidental damages.
ARTICLE TEN
TERM AND TERMINATION
SECTION 10.1 TERM. Unless terminated earlier, this Agreement shall
become effective on the Effective Date and shall terminate on March 29, 2000
("Term").
SECTION 10.2 EARLY TERMINATION.
(1) By Campbell. Campbell shall have the right to immediately
terminate this Agreement, without penalty and without prejudice to any other
right or remedy it may have, if (i) Vlasic breaches or otherwise fails to
perform its obligations under Section 2.1 hereof and fails to correct such
default or breach within ten (10) days after Campbell has provided Vlasic with
written notice of such default, or (ii) there is a change of control of Vlasic
and Campbell reasonably deems the new controlling party of Vlasic incompatible
with Campbell's objectives under this Agreement.
(2) By Either Party. Either party shall have the right to
immediately terminate this Agreement, without penalty and without prejudice to
any other rights and remedies it may have, if: (i) the other party fails to
perform any material provision of this Agreement and the failure is not
corrected within thirty (30) days after the other party gives the defaulting
party notice of the breach, (ii) the other party persistently commits any breach
of a term of this Agreement and fails to correct such breach within ninety (90)
days after first receiving notice of such breach from the other party, (iii)
either party is subject to a Bankruptcy Event or (iv) the other party is unable
to perform for a period of six months or more due to a Force Majeure Event.
(3) Remedies Upon Default. Termination or expiration of this
Agreement by either party shall not limit or otherwise affect the remedies of
the non-defaulting or non-breaching party against the defaulting or breaching
party. In the event that either party is in material default under any of the
terms or conditions of this Agreement or has materially breached any of its
representations or warranties in this Agreement, the non-defaulting or
non-breaching party shall be entitled to pursue, in addition to any remedies
specifically provided herein, all further remedies then available at law or in
equity.
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(4) Effect of Termination. Within thirty (30) days following the
termination or expiration of this Agreement, the parties shall settle all
amounts owed as provided therein. In the event of a termination as a result of a
breach of this Agreement by Vlasic, Campbell shall have no further liability
with respect to the minimum case obligation set out in Section 2.1 after such
termination date.
SECTION 10.3 RESULTS OF TERMINATION.
(1) The rights of termination under this Agreement by either party
shall be in addition and without prejudice to any other rights to which such
party may be entitled at law or under this Agreement by way of damages,
accounting or otherwise, and any such termination shall not affect such party's
right to any other remedies to which it may be entitled by reason of any breach
hereunder at the date of such termination. Upon termination or expiration of
this Agreement, Vlasic shall immediately cease producing Products and shall also
cease using all confidential information and other proprietary data pertaining
to Campbell but shall continue at all times to take all necessary measures and
use its best efforts in order to protect the confidentiality of such data and
information, and shall return any confidential information pertaining to
Campbell in accordance with the provisions of this Agreement.
(2) Within ten (10) days of termination or expiration of this
Agreement Campbell shall:
(i) purchase from Vlasic at Vlasic's cost (which cost includes
deductions for discounts and rebates), F.O.B. Vlasic's loading
docks at Vlasic's Omaha, Nebraska facility reasonable
quantities of ingredients, labels and case materials required
for Products, provided that such ingredients are not
reasonably useable elsewhere in Vlasic's operations. Campbell
agrees that Vlasic may purchase reasonable, economical
quantities of such ingredients, and packaging materials during
the term of this Agreement, having regard to the forecasts
provided by Campbell to Vlasic pursuant to this Agreement; and
(ii) purchase from Vlasic all remaining reasonable quantities of
Products produced hereunder having regard to the forecasts
provided by Campbell to Vlasic pursuant to this Agreement.
SECTION 10.4 OPTION ON EQUIPMENT. Upon expiration of the Term or
earlier termination of this Agreement, Campbell has the right to purchase one or
more of those groups of assets specified in a schedule to be mutually agreed on
as recommended by the Committee within thirty (30) days of the Effective Date at
a purchase price of net book value on the date this Agreement ends. If Campbell
exercises this option, removal and removal costs of the lines, together with the
costs of repairing the Facility
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to return it to USDA standards and the costs of downtime for other Vlasic lines
affected by the removal and repair will be Campbell's responsibility. If
Campbell elects to purchase one or more of the groups of assets, the parties
agree that any non-compete covenant in Section 8.4 related to such group(s) of
assets will continue for an additional twenty-four (24) months after the
termination of this Agreement. During the second Contract Period of this
Agreement, the parties acknowledge that Campbell may elect to exercise its
option on certain equipment before the expiration of the Term and Vlasic and
Campbell agree to negotiate in good faith the terms of any such exercise by
Campbell; provided that Campbell's obligation to purchase the minimums set out
in Section 2.1 will not be affected by any early exercise under this paragraph.
ARTICLE ELEVEN
CONFIDENTIALITY
SECTION 11.1 CONFIDENTIALITY. Vlasic and Campbell may provide to each
other certain confidential, proprietary and/or trade secret information and
material relating to the Products (including but not limited to the
Specifications, the financial terms of this Agreement, equipment, processes, and
internal financial data is deemed by the parties to be confidential. It is
understood that unauthorized disclosure or use, whether intentional or
unintentional, of any of such confidential information may be detrimental to the
disclosing party. Accordingly, both parties agree:
(1) Not to use any of the confidential information received from
the other party for any purpose other than in connection with this Agreement.
(2) To maintain all of the confidential information in confidence
and not to disclose any portion of such information to any person or entity
other than each party's representatives (which term shall include such party's
directors, officers, employees, agents and advisors) who must use the
information in connection with this Agreement.
(3) To cause each of the party's representatives who has access to
the confidential information to comply with the terms and provision of this
Agreement in the same manner as each party is bound hereby, with each party
remaining responsible for the actions and disclosures of such representatives.
In no event shall the confidential information described in this Section include
any information which has come within the public domain through no fault of or
action by the recipient, or been rightfully made available to recipient on a
non-confidential basis or been independently developed or created by the
recipient.
SECTION 11.2 REQUESTS TO DISCLOSE. If any recipient of such
confidential information or anyone to whom a party transmits confidential
information pursuant to this Agreement becomes legally compelled by oral
questions, interrogatories, requests
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for information or documents, subpoena, civil investigative demand or similar
process to disclose any confidential information, such recipient will promptly
notify the other party so that it may seek a protective order and/or waive
compliance with the provisions of this Agreement. If such protective order is
not obtained, or if the other party waives compliance with the provisions of
this Agreement, the recipient will furnish only that portion of the confidential
information which is legally required, and the recipient will exercise its best
efforts to obtain reliable assurance that the confidential information will be
accorded confidential treatment.
SECTION 11.3 RETURN OF CONFIDENTIAL INFORMATION. Upon the written
request of a party which has disclosed information covered by Section 11.1 which
has been recorded by either party in written, printed or other tangible form,
all such available information and all copies thereof, including samples or
materials, shall be returned to the party that disclosed such information.
SECTION 11.4 SURVIVAL OF CONFIDENTIALITY PROVISIONS. The provisions of
this Article 11 shall survive the termination or expiration of this Agreement.
ARTICLE TWELVE
DISPUTE RESOLUTION
SECTION 12.1 DISPUTE RESOLUTION.
(1) Resolution of any and all disputes arising from or in
connection with this Agreement, whether based on contract, tort, statute or
otherwise, including, but no limited to, disputes in connection with claims by
third parties (collectively, "Disputes"), shall be subject to the provisions of
this Section 12.1; provided, however, that nothing contained herein shall
preclude either party from seeking or obtaining (i) injunctive relief or (ii)
equitable or other judicial relief to enforce the provisions hereof or to
preserve the status quo pending resolution of Disputes hereunder.
(2) Either party may give the other party written notice of any
Dispute not resolved in the normal course of business. The parties shall attempt
in good faith to resolve any Dispute promptly by negotiation between executives
of the parties who have authority to settle the controversy and who are at a
higher level of management than the persons with direct responsibility for
administration of this Agreement. Within 30 days after delivery of the first
notice, the foregoing executives of both parties shall meet at a mutually
acceptable time and place, and thereafter as often as they reasonably deem
necessary for a period not to exceed 15 days, to attempt to resolve the Dispute.
All reasonable requests for information made by one party to the other will be
honored. If the parties do not resolve the Dispute within such 45 day period
(the "Initial Mediation Period"), the parties shall attempt in good faith to
resolve the Dispute by negotiation between (i) in the case of Campbell, the
Chief
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Financial Officer or the Vice President - Treasurer and (ii) in the case of
Vlasic, the Chief Financial Officer (collectively, the "Designated Officers").
Such officers shall meet at a mutually acceptable time and place (but in any
event no later than 15 days following the expiration of the Initial Mediation
Period) and thereafter as often as they reasonably deem necessary for a period
not to exceed 15 days, to attempt to resolve the Dispute.
(3) If the Dispute has not been resolved by negotiation within 90
days of the first party's notice, or if the parties failed to meet within 30
days, or if the Designated Officers failed to meet within 60 days, either party
may commence any litigation or other procedure allowed by law.
ARTICLE THIRTEEN
GENERAL
SECTION 13.1 CONFLICTING DOCUMENTS. To the extent that any purchase
orders, invoices, sales receipts, shipping documents, forms, billing documents
or other similar documents issued in connection with the sale of Products
hereunder contain terms or conditions which conflict with, or derogate from this
Agreement, they shall be null and void and the terms of this Agreement shall
control.
SECTION 13.2 NOTICES. All notices, requests, claims, waivers, consents,
approvals or other communication hereunder shall be in writing and shall be
given or made (and shall be deemed to have been duly given or made upon receipt)
by delivery by hand, by reputable overnight courier service, by facsimile
transmission, or by registered or certified mail (postage prepaid, return
receipt requested) to the respective parties at the addresses (or at such other
address for a party as shall be specified in a notice given in accordance with
this Section listed below:
If to Campbell:
Campbell Soup Company
Campbell Place
Camden, New Jersey 08103-1799
Fax: (609) 342-5999
Attention: Vice President - Global Food Service
With copies to:
Campbell Soup Company
Campbell Place
Camden, New Jersey 08103-1799
Fax: (609) 342-3936
Attention: General Counsel
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If to Vlasic:
Vlasic Foods International Inc.
P.O. Box 5071
Cherry Hill, NJ 08034-5071
Fax: (609) 342-4804
Attention: General Manager - Frozen Food Division
With copies to:
Vlasic Foods International Inc.
P.O. Box 5071
Cherry Hill, NJ 08034-5071
Fax: (609) 342-4804
Attention: General Counsel
or to such other address as any party may, from time to time, designate in a
written notice given in a like manner. Notice given by hand shall be deemed
delivered when received by the recipient. Notice given by mail as set out above
shall be deemed delivered five calendar days after the date the same is mailed.
Notice given by reputable overnight courier shall be deemed delivered on the
next following business day after the same is sent. Notice given by facsimile
transmission shall be deemed delivered on the day of transmission provided
telephone confirmation of receipt is obtained promptly after completion of
transmission.
SECTION 13.3 INDEPENDENT CONTRACTOR. This Agreement shall not
constitute or give rise to a partnership between the parties. All activities by
Vlasic hereunder shall be carried on by Vlasic as an independent contractor and
not as an agent for Campbell. All activities by Campbell hereunder shall be
carried on by Campbell as an independent contractor and not as an agent for
Vlasic. Neither party shall have, nor represent that it has, the power to bind
the other party to this Agreement.
SECTION 13.4 GOVERNING LAW. This Agreement shall be construed and
governed in accordance with the laws of the State of New Jersey, without giving
effect to the conflict of law principles thereof.
SECTION 13.5 ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding of the parties and supersedes any prior agreements or
understandings, written or oral, between the parties with respect to the subject
matter hereof. All Schedules annexed hereto are hereby incorporated by reference
and made a part of this Agreement as if set forth herein.
SECTION 13.6 SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, that no party may,
directly or indirectly, license, subcontract, assign, delegate or otherwise
transfer any of its rights or
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obligations under this Agreement without the prior written consent of the other
party hereto; except that Campbell may assign this Agreement and any rights and
obligations hereunder to its Affiliate, CFDC Inc., a Pennsylvania corporation.
SECTION 13.7 SEVERABILITY. This Agreement shall be deemed severable,
and the invalidity or unenforceability of any term or provision hereof shall not
affect the validity or enforceability of this Agreement or of any other term or
provision hereof. Furthermore, in lieu of any such invalid or unenforceable term
or provision, the parties hereto agree that there shall be added as a part of
this Agreement a provision as similar in terms to such invalid or unenforceable
provision as may be possible and be valid and enforceable.
SECTION 13.8 NO OTHER BENEFICIARIES. This Agreement is being made and
entered into solely for the benefit of Vlasic and Campbell, and no party intends
hereby to create any rights in favor of any other person, as a third party
beneficiary of this Agreement or otherwise.
SECTION 13.9 WAIVERS AND AMENDMENTS. This Agreement may not be altered
or amended, nor may rights hereunder be waived, except by writing executed by
the party or parties to be charged with such amendment or waiver. No waiver of
any term, provision or condition of or failure to exercise or delay in
exercising any rights or remedies under this Agreement shall be deemed to be, or
construed as, a further or continuing waiver of any such term, provision,
condition, right or remedy or as a waiver of any other term, provision or
condition of this Agreement.
SECTION 13.10 FORCE MAJEURE. Neither party shall be liable for, or
deemed to be in default hereunder or subject to any remedies of the other party
as a result of, delays or performance failures due to fire or other acts of God,
strikes, riots or similar causes beyond such party's reasonable control, and
without the fault or negligence of Vlasic or Campbell (each a "Force Majeure
Event"). Vlasic acknowledges that the assurance of supply of Products to
Campbell is of fundamental importance. When Vlasic has reason to believe that
deliveries of Product will not be made as scheduled, Vlasic shall use all
reasonable efforts to assist Campbell in securing alternative supplies of
Product, including using its commercially reasonably best efforts to supply
Products from Vlasic's other facilities. In the event any Force Majeure Event
extends for six (6) months or more, Campbell shall have the right to terminate
this Agreement by giving written notice to Vlasic.
SECTION 13.11 SPECIFIC PERFORMANCE. The parties acknowledge and agree
that a remedy at law for any breach, or threatened breach, of any material
provision of this Agreement will be inadequate and, accordingly, the party
affected by such breach shall, in addition to any other rights and remedies
which such party may have, be entitled to equitable relief, including injunctive
relief, and to the remedy of specific performance with respect to such breach or
threatened breach, as may be available from any court of
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competent jurisdiction. Such right to obtain equitable relief may be exercised,
at the option of the affected party, concurrently with, prior to, after, or in
lieu of, the exercise of any other rights or remedies which the affected party
may have as a result of any such breach or threatened breach.
SECTION 13.12 FURTHER ASSURANCES. Each party shall execute such other
instruments, give such further assurances and perform such acts which are or may
become necessary or appropriate to effectuate and carry out the provisions of
this Agreement.
SECTION 13.13 ANNOUNCEMENTS. During the Term of this Agreement and
thereafter, neither party hereto shall make or allow any public announcement or
other disclosure to anyone regarding this Agreement or the terms hereof, unless
such announcement or disclosure is approved in advance as to form, substance and
timing by the other party hereto.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as
of the date and year first above written.
CAMPBELL SOUP COMPANY
BY: /S/ BASIL ANDERSEN
TITLE: EXECUTIVE VICE PRESIDENT & CEO
VLASIC FOODS INTERNATIONAL INC.
BY: /S/ ROBERT F. BERNSTOCK
TITLE: PRESIDENT & CEO
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