Exhibit 10.6
CO-PACK AGREEMENT
THIS CO-PACK AGREEMENT (" Agreement" ) is dated and effective as of June 27, 2005 (" Effective Date" ), by and between Dean Foods Company (" Dean" ), a corporation organized and existing under the laws of the State of Delaware, and TreeHouse Foods, Inc. (" TreeHouse" ), a corporation organized and existing under the laws of the State of Delaware.
RECITALS
WHEREAS, Dean, through its subsidiaries, operates the Specialty Foods Group, Mocha Mixae, Second Natureae, and food service dressings businesses (the " Transferred Businesses" );
WHEREAS, the Board of Directors of Dean has determined that it would be advisable and in the best interests of Dean and its stockholders for Dean to transfer and assign, or cause to be transferred and assigned, to TreeHouse the business, operations, assets and liabilities related to the Transferred Businesses;
WHEREAS, the date on which the above transaction is to become effective is referred to as the " Distribution Date" as defined in that certain Distribution Agreement between Dean and TreeHouse, dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the " Distribution Agreement" );
WHEREAS, following the Distribution Date, Dean desires to obtain a supply of imitation sour cream and dip products as more fully described on Exhibit A , which is attached to and made a part of this agreement (the " Dean Products" ) and TreeHouse desires to supply the Dean Products to Dean under the terms of this Agreement; and
WHEREAS, following the Distribution Date, TreeHouse desires to obtain a supply of Mocha Mixae and Second Natureae products as more fully described on Exhibit B , which is attached to and made a part of this agreement (the " TreeHouse Products" and, together with the Dean Products, the " Products" ) and Dean desires to supply the TreeHouse Products to TreeHouse under the terms of this Agreement;
NOW, THEREFORE, for and in consideration of the mutual promises and covenants set forth herein, and intending to be legally bound, the parties do hereby agree as follows:
1. Defined Terms . When used in this Agreement, the following terms shall have the following meanings:
a. " Co-Packer" shall mean: (i) Dean, when the Products to be co-packed are TreeHouse Products and (ii) TreeHouse, when the Products to be co-packed are Dean Products.
b. " Buyer" shall mean: (i) TreeHouse, when the Products to be co-packed are TreeHouse Products and (ii) Dean, when the Products to be co-packed are Dean Products.
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2. Purchase and Sale of Products . Throughout the Term of this Agreement, and subject to the terms and conditions set forth herein, Buyer shall place orders with Co-Packer, and Co-Packer shall sell and deliver to Buyer, quantities of the Products.
3. Term . The term of this Agreement shall commence on the Effective Date and shall continue in effect (a) with respect to the Dean Products, for a period of twenty-four (24) months and (b) with respect to the TreeHouse Products, until July 31, 2005 (subject to an extension until September 30, 2005 if due to unforeseen circumstances the transition of production at the City of Industry South plant facility cannot be completed by July 31, 2005) (the " Term" ).
4. Orders; Delivery; Transfer of Title .
a. Orders. Buyer shall submit orders for Products to Co-Packer pursuant to such terms, conditions and procedures as may be mutually and reasonably agreed upon by the parties, including procedures to be utilized for canceling or modifying any such orders after submittal. Without limiting the generality of the foregoing, it is specifically understood and agreed that if Buyer cancels or modifies a previously submitted order, then Buyer shall be obligated to purchase any and all Products so ordered which Co-Packer has commenced to manufacture, or for which Co-Packer has acquired ingredients, materials or packaging which may not otherwise be reasonably used in the normal course of Co-Packer' s operations, at the time of such cancellation or modification. All purchase orders shall be subject to acceptance by Co-Packer, shall be in a form reasonably acceptable to both parties and shall clearly indicate the amount and kind of Products desired as well as the desired pick-up/delivery date.
b. Delivery . Co-Packer shall deliver the Products as directed by Buyer. For the avoidance of doubt, Buyer shall also have the right to pick up the products at Co-Packer' s facility.
c. Transfer of Title to Products. Property, title and risk of loss with respect to all Products sold hereunder shall pass from Co-Packer to Buyer upon the earlier of (i) tender of possession to Buyer, if Buyer receives shipment of Products at Co-Packer' s designated facility, or (ii) tender of possession to a carrier, if Products are delivered by a carrier arranged or approved by Buyer.
5. Prices; Payment Terms .
a. Prices. Prices for Products ordered by Buyer shall be calculated as set forth on Schedule 5(a) attached hereto. Buyer shall have the right to audit Co-Packer' s cost records (as they relate to the Products co-packed for Buyer) from time to time in order to verify Co-Packer' s cost, and Co-Packer agrees to provide Buyer with all cost-related information Buyer may reasonably request in order to perform such audits.
b. Payment Terms. Co-Packer will issue invoices to Buyer for all Products purchased hereunder, and Buyer shall pay all invoices received from Co-Packer (without deduction or set-off) pursuant to this Agreement in full within twenty-one (21) days of receipt thereof.
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c. Non-Payment. In addition to any other rights and remedies Co-Packer may have with respect to Buyer' s failure to fully and timely pay any amounts due hereunder, any amounts not paid when due shall be subject to an interest charge of one and one-half percent (1 1 / 2 %) per month computed from the applicable due date, or the maximum rate legally permitted, whichever is less.
6. Warranties.
a. Co-Packer' s Warranties. Co-Packer represents and warrants to Buyer that (i) all Products provided to Buyer pursuant to this Agreement shall be produced and packaged in accordance with the Federal Food, Drug and Cosmetic Act, as amended (the " FDA Act" ) and all other applicable federal, state and local laws, rules and regulations; (ii) no Prod ...
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