Sales And Distribution Agreement

Exhibit 10.6


SALES AND DISTRIBUTION AGREEMENT


THIS AGREEMENT is made and entered into as of March 19, 1993 by and between M. Polaner, Inc., a New Jersey corporation (hereinafter referred to as "MPI"), and DSD, Inc., a Delaware corporation (hereinafter referred to as"Distributor").


WITNESSETH:


WHEREAS, MPI desires that Distributor distribute certain products of MPI and its Affiliates within the DSD Territory, and Distributor desires to distribute such products for MPI within the DSD Territory, in each case upon the terms and conditions set forth herein;


NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:


1. DEFINITIONS


As used herein, the following terms shall have the following meanings:


"Additional Product" shall have the meaning assigned to such term in Section 2(b).


"Affiliate" means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person.


"AHP Product" means any Subject Product other than Excluded Product.


"Applicable Distribution Charge" means initially (i) with respect to Polaner Products, $2.95 per Case and (ii) with respect to any Additional Product, the amount per Case agreed upon in writing by the parties with respect to such Additional Product at the time such product becomes an Additional Product


pursuant to Section 2(b), in each case as adjusted pursuant to Section 5(a).


A "Case" of any Subject Product means the stock-keeping-unit (sku) of such Subject Product.


"Cash Discount" per Case of any Subject Product, means the (i) Cash Discount Percentage multiplied by (ii) the Distributor's Net Selling Price of such Subject Product.


"Cash Discount Percentage" means 2.0 percent.


"Competing Products" means jams, jellies, preserves, and wet spices, and any product directly competitive with any Additional Product.


"Consequential Damages" means any indirect or consequential damages arising from, relating to or in connection with this Agreement, whether arising from or relating to breach of warranty, agreement or covenant, negligence, strict liability in tort or other causes.


"Distribution Facility" means Distributor's distribution center, which is currently located at 426 Eagle Rock Avenue, Roseland, New Jersey, and which may be changed by notice in writing to MPI.


"Distributor's Net Selling Price" means, with respect to any Subject Product, the price of such Subject Product invoiced to the customer of the Distributor.


"Distributor's Aggregate Sales Revenue" means the aggregate Distributor's Net Selling Price of all Subject Product purchased by Distributor hereunder and sold to its customers.


"DSD Territory" means western Massachusetts, Connecticut, eastern New York State (from Albany southward), the New York metropolitan area, New Jersey and eastern Pennsylvania.


"Excluded Accounts" means the customer accounts listed on Schedule 1 hereto.


"Excluded Product" means (i) any product manufactured under the Spices Supply Agreement dated the date hereof between Bloch & Guggenheimer, Inc., a New Jersey corporation, and MPI and (ii) any product manufactured under the Jams Manufacturing Agreement during the term of that Agreement.


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"Intellectual Property Right" means any trademark, service mark, trade name, invention, patent, trade secret, copyright, know-how (including any registrations or applications for registration of any of the foregoing), trade dress, logos, labels, labelling and other indicia of ownership, or any other similar type of proprietary intellectual property right.


"Jams Manufacturing Agreement" means the Jams Manufacturing Agreement dated the date hereof between MPI and Newco.


"Jams Product" means any product manufactured under the Jams Manufacturing Agreement during the term of the Jams Manufacturing Agreement.


"List Price" of any Subject Product at any time, means, subject to Section 5(b), MPI's published list price per Case of such Subject Product in effect at such time within the DSD Territory.


"Marketing Allowance" shall have the meaning assigned to such term in Section 9(b).


"Net Price" per Case of Subject Product at any time means (i) the List Price of such Subject Product in effect at such time less (ii) the sum of the Applicable Distribution Charge, plus the Marketing Allowance, plus the Cash Discount, plus the Swell Allowance, in each case in effect at such time for such Subject Product.


"Person" means an individual, corporation, partnership, association, trust or other entity or organization.


"Polaner Products" means any product (i) with respect to which any Intellectual Property Right is now or hereafter owned or licensed and used or held for use by MPI and (ii) which is sold by MPI or its Affiliates.


"Product Defect" means any defect in any Subject Product including, without limitation, in the workmanship, in the manufacture of, in the ingredients or raw materials comprising or in the labelling or packaging of any Subject Product.


"Quarter" means a period of three successive calendar months, and "Quarterly" with respect to any event means that such event will occur once within any Quarter.


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"Specified Loss" means any loss arising from or relating to the theft or disappearance of, or accidental or intentional damage to or destruction or breakage of, any Subject Product after delivery thereof to Distributor, but excludes any loss, expense, liability or damage arising from or relating to any Product Defect.


"Spices Product" means any product manufactured under the Spices Supply Agreement dated the date hereof between Bloch & Guggenheimer, Inc., a New Jersey corporation, and MPI.


"Subject Product" means (i) all Polaner Products and (ii) all Additional Product.


"Swell Allowance" per Case of any Subject Product, means the (i) Swell Allowance Percentage multiplied by (ii) the List Price of such Subject Product minus the Marketing Allowance for such Subject Product minus the Applicable Distribution Charge for such Subject Product.


"Swell Allowance Percentage" means 0.6 percent.


"Term" means the term of this Agreement as determined pursuant to Section 6(a).


2. DISTRIBUTION RIGHTS OF DISTRIBUTOR


(a) MPI hereby appoints Distributor to be its sole distributor of Polaner Products for resale by Distributor within the DSD Territory (except to Excluded Accounts) during the Term, and Distributor agrees to act in that capacity, subject to the terms and conditions of this Agreement.


(b) MPI or any Affiliate of MPI may, at any time during the Term, by written notice to Distributor, appoint Distributor to be its sole distributor within the DSD Territory (except to Excluded Accounts), during the Term, for resale by Distributor, of any other product sold by MPI or such Affiliate as is designated in such notice, and Distributor may agree to act in that capacity, upon the terms and conditions of this Agreement. Upon such appointment of Distributor and Distributor's acceptance of such appointment, each such other product so designated shall constitute an "Additional Product" for all purposes under this Agreement.


3. PURCHASE ORDERS


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(a) During the Term of this Agreement, and subject to the provisions hereof, MPI shall sell to Distributor, and Distributor shall purchase from MPI, such quantities of Subject Product as may be ordered by Distributor from MPI from time to time in accordance with Section 3(b). Acceptance of Distributor's orders is subject to the availability of Subject Product on the requested delivery dates. Upon 45 days' prior written notice to Distributor, MPI reserves the right to adjust the unit size, weight and form of Subject Product sold hereunder.


(b) Distributor shall provide MPI with a nonbinding best estimate of its Quarterly requirements for distribution of Subject Product within the DSD Territory no later than forty-five (45) days prior to the beginning of each calendar Quarter during the Term, commencing with the calendar Quarter beginning July 1, 1993. Firm monthly purchase orders shall be placed by Distributor fourteen (14) days prior to requested date of delivery; provided that MPI will use its reasonable efforts to accommodate any purchase order not placed in accordance with the provisions of this Section 3(b).


(c) Shipments shall be made on the date or dates reasonably specified by Distributor, provided orders are received (and a delivery schedule approved) by MPI at least ten (10) days before such specified date(s).


(d) All deliveries shall be F.O.B. Distributor's Distribution Facility.


4. TITLE TO SUBJECT PRODUCT; RISK OF LOSS


(a) Title to, ownership of and risk of loss with respect to all Subject Product shall remain with MPI until delivery to the Distribution Facility. Title to, ownership of and risk of Specified Loss with respect to all Subject Product purchased by Distributor hereunder will pass to Distributor upon delivery to the Distribution Facility.


(b) Distributor acknowledges that the Swell Allowance is intended to cover any damage to or breakage of Subject Product which occurs after delivery of Subject Product to Distributor; provided that the Swell Allowance shall not cover and MPI shall be liable for (i) any cost with respect to any Subject Product (other than Jams Product) that is damaged or broken at or prior to the time of delivery to Distributor and (ii) any loss, damage or cost incurred or suffered by Distributor arising from any Product Defect with respect to any AHP Product.


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(c) For purposes of this Agreement, any finished Jam Product shall only be deemed to have been delivered to the Distribution Facility when such finished Jam Product is identified and physically separated from other Jam Product at the Manufacturing Facility (as defined in the Jam Manufacturing Agreement) and is moved to a designated area of the Distribution Facility for storage pending distribution pursuant to this Agreement.


5. PRICING


(a) On a business day in December of each calendar year (the "Current Year") during the Term (commencing in December 1993), the Applicable Distribution Charge for each Subject Product to be effective for the calendar year immediately following the Current Year will be established by written agreement between the parties on a prospective basis based on (i) actual costs incurred by Distributor in distributing such Subject Product hereunder during the Current Year and (ii) the volume of such Subject Product expected to be distributed by Distributor hereunder in the calendar year next succeeding the Current Year. In the event that the parties cannot agree on the Applicable Distribution Charge for any Subject Product effective for such next succeeding calendar year, the Applicable Distribution Charge then in effect for such Subject Product shall remain in effect until the earlier of the date (i) of termination of this Agreement and (ii) that such Applicable Distribution Charge is changed by written agreement between the parties. Distributor shall permit MPI, its auditors and employees to inspect Distributor's books and records upon reasonable notice to verify the calculation of such Applicable Distribution Charge.


(b) MPI may change the List Price of any Subject Product at any time; provided that no increase in the List Price of any Subject Product shall be effective unless and until MPI shall have given Distributor 60 days' prior written notice of the increase in the List Price of such Subject Product. Price increases will be announced to the trade on a date designated by MPI.


6. TERM OF AGREEMENT; EXCLUDED ACCOUNTS


(a) This Agreement shall continue in full force and effect until terminated by either party by giving the other party (i) 6 months' prior written notice of termination if such notice is given on or prior to December 31, 1993 and (ii) 12 months' prior written notice of termination if such notice is given after December 31, 1993; provided that in no event


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shall the effective date of termination of this Agreement be prior to March 31 ...