EXHIBIT 10.32
DEL MONTE FOODS RETAIL BROKERAGE AGREEMENT
THIS AGREEMENT, effective July 1, 2001 between DEL MONTE CORPORATION,
a corporation with its main business office at San Francisco, California,
hereinafter called "Client," and ADVANTAGE SALES AND MARKETING, a limited
liability company with its main business office at Irvine, CA, hereinafter
called "Broker."
WHEREAS, Client manufactures and distributes food and beverage
products under various brands including DEL MONTE, S&W and CONTADINA;
WHEREAS, Client desires that Broker act as a broker in connection with
the servicing, promotion, and sale of those food and beverage products listed on
Attachment A ("Products"), which attachment Client may modify in writing from
time to time, and Broker desires to so act;
NOW, THEREFORE, Client, in consideration of certain agreements
hereinafter set forth and to be performed by Broker, hereby appoints Broker to
act as broker in connection with the servicing, promotion, and sale of the
Products at the applicable brokerage rates and to the classes of trade listed on
Attachment B for direct buying accounts located within Broker's assigned
territory listed on Attachment C, and Broker, in consideration of the
commissions specified herein, agrees to so act.
The parties mutually agree as follows:
1. All Sales Subject to Client's Terms and Conditions. All Products
represented by Broker shall be sold subject to Client's prices, terms,
conditions, and confirmation by Client at its main office, and in amounts
and assortments authorized by, and to customers approved by Client. Broker
shall so advise the trade in receiving orders. Broker shall not solicit nor
accept orders from buyers located outside Broker's assigned territory and
no commissions will be paid on any such orders whether confirmed or not.
Broker agrees to assist Client in the collection of all due invoices. All
remittances due to Client shall be made by customers directly to Client,
unless otherwise instructed by Client. Broker understands that a customer's
order shall be subject to credit approval by Client and that Client shall
be the sole judge of a customer's credit-worthiness. If for any reason a
customer does not accept delivery or if Client does not effect delivery to
a customer because in Client's judgment customer's credit standing is
impaired, Client shall be entitled to sell or otherwise dispose of Products
and in such event Broker shall be entitled to no commission thereon. All
orders shall be booked and transmitted in the name of the actual customer.
2. Commission; Full Compensation. For Products sold by Broker to
direct accounts located within Broker's territory and confirmed by the main
office of Client, and subject to the terms and conditions set forth in this
Agreement, Broker shall be entitled to commissions computed as indicated on
Attachment B. Such commissions shall be based on Client's base delivered
price less: performance allowances, swell allowance, cash discounts and all
performance funds/accruals. Commissions shall become payable only after
Products are shipped and fully paid for in immediately available funds or,
if funds are not immediately available, then commissions shall become
payable only to the extent that Client's bank has finally collected such
funds and, in either case, customer has not asserted any right of set off
or other claim with respect to such funds. Client shall not be liable for
any costs or expenses of Broker in connection with any services performed
hereunder or the operation or maintenance of Broker's places of business.
The commissions specified herein shall constitute full compensation to
Broker for all services hereunder.
3. Promotional Programs and Trade Spending. Broker shall accurately
and completely convey to customers Client's terms and conditions of sale
and all terms and conditions of promotional programs in which the customer
is eligible to participate. Broker shall accurately and completely convey
terms and conditions of any promotional program. Broker shall use best
efforts to ensure that trade spending by Broker's customers does not exceed
amounts established by the Client. In the event that trade spending by
Broker's customers exceeds such amounts per SBU on a per market basis
("Overspends") and such Overspends are the direct result of the gross
negligence or willful misconduct of Broker's or Broker's employees, Client
shall have the right to set-off the amount of such Overspends against
commissions earned and to be earned by the Broker. Broker shall be
responsible for managing customer deductions and program performance
(including Overspends and unauthorized performance) but shall have no
financial obligation to Client for such Overspends and/or unauthorized
performance other than if such event is a direct result of the gross
negligence or willful misconduct of Broker or Broker's employees. Broker's
commissions shall be adjusted only as provided for herein and in accordance
with Client's Deduction Management Policy set forth on Attachment D.
4. Compliance with Law. Broker agrees to act in accordance with
applicable federal, state and local laws. Broker agrees not to pay or
transfer any part of commissions received from Client to anyone other than
employees of Broker other than as required by law. Broker warrants and
represents that no customer or account or representative thereof, or
governmental employee, has any ownership or financial interest, direct or
indirect, in Broker. Broker agrees to indemnify Client for expenses and
losses incurred by Client and caused by Broker's negligence or actions in
violation of the terms of this Agreement, or in violation of any laws,
regulations, or policies of Client, or without written authorization of
Client.
5. Fair and Equitable. Client's policy is to treat all competitive
customers on a fair, equal, and proportionate basis. Broker agrees to
follow such policy in representing the Products under this Agreement.
6. Ownership of Records. Files and records maintained by Broker and
directly relating to transactions between Client and Client's customers are
the property of Client and shall be delivered to Client promptly following
the written request by Client for such records. Broker acknowledges that
failure to promptly release records to Client may cause irreparable harm to
Client, and that Client shall be entitled to immediate injunctive relief to
obtain such records in addition to other remedies available at law. During
the term of this Agreement Broker shall maintain custody of such Client
records and shall permit Client or its agent(s), upon reasonable notice, to
inspect and copy such records at any time deemed appropriate by Client .
Broker may make copies of such records for its internal use.
7. (a) Services. Client shall establish quarterly and annual
performance objectives in consultation with Broker and Broker
shall accomplish the objectives so established and agreed upon
by Client and Broker. Broker agrees to provide services as
customary in the marketplace in connection with the servicing,
promotion and sale of products comparable to the Products.
Services shall include but not be limited to (a) retail store
coverage at the frequency and depth of coverage as agreed to
with Client; (b) retail services to assure the availability for
sale of Products to the consumer on the selling floor of all
retail stores; (c) promptly providing at Client's request
consumer marketing information which shall include but not be
limited to the areas of competitive activity, customer
coverage, product distribution, national marketing information,
and other reasonable information as requested by Client; (d)
activities designed to achieve all retail objectives of Client
regarding distribution, shelf placement, pricing, and
promotional merchandising support; (e) removing from sale
Products not meeting Client's standards or policies, (f)
reporting retail conditions as requested by Client, (g)
management and recovery of unauthorized deductions and customer
Overspends (subject to Section 3 and Exhibit D hereof), and (h)
conveying to Client information concerning customers'
credit-worthiness or changes in financial condition. Services
provided hereunder shall not include services provided by
divisions of Broker which are not customarily included as part
of the principal/broker relationship, including services
provided by Broker's Integrated Marketing Solutions and CPG3
divisions and/or any retail specific coverage service options,
not specifically set forth in this Agreement. Services not
covered by this Agreement shall be provided by Broker pursuant
to a separate written contract.
(b) Personnel. In performing services hereunder, Broker agrees to
dedicate a sufficient number of personnel to effectively
accomplish Client's business objectives within the time frames
set by Client. Client and Broker agree to meet annually (and
more often as deemed necessary by Client) to establish
necessary staffing levels, expertise, objectives and goals.
Broker shall retain responsibility for supervising Broker
personnel.
(c) Training. Broker acknowledges that training is essential to the
successful and consistent achievement of Client's sales
development objectives. Broker agrees to provide transitional
and ongoing training as directed by Client to its personnel
servicing Client's account to the extent necessary or
appropriate to accomplish Broker's obligations under this
Agreement. Broker shall designate and shall identify to Client
regional training supervisors to provide ongoing training to
Broker personnel. Broker acknowledges that ongoing training
among Broker's personnel shall be Broker's responsibility and
that Client's responsibility shall be limited to providing
training guidance and direction to Broker's regional training
supervisors.
(d) Retailer Services. Client acknowledges that pursuant to this
Agreement, Broker shall act as an exclusive broker to Client in
connection with the servicing, promotion and sale of the
Products for the classes of trade listed on Attachment B for
the assigned territory listed on Attachment C. If a retailer
performs similar services as those contemplated by Broker under
this Agreement ("Retailer Services") and the Retailer charges
Client (or deducts amounts due to Client) for the Retailer
Services, Client shall not deduct any amounts from Broker's
commissions related to such charges.
8. Confidential Information. Broker and Client each acknowledges that
from time to time each party to this Agreement will have access to certain
confidential and proprietary information and systems of the other party
(the "Disclosing Party") which is generally not available to or known by
the public, in which the Disclosing Party has a legitimate protectable
interest and which has particular value to the Disclosing Party, the
disclosure of which could be harmful to the Disclosing Party's interests
(the "Confidential Information"). Broker and Client each agree that it
shall not directly or indirectly disclose such Confidential Information to
any third party except as required by law or regulation or use any
Confidential Information for any purposes not expressly authorized in
writing by the Disclosing Party. Confidential Information means any and all
information, whether disclosed in writing or orally, identified as
confidential by the Disclosing Party. For purposes of this Agreement,
Client information relating to Client business strategies, deal rates,
promotional rates, marketing plans, new item introductions and business
development opportunities shall be considered Confidential Information.
Confidential Information may also include, but is not limited to: business
models and plans, proprietary computer software and sales planning and
execution processes, information and/or knowledge regarding products,
processes, techniques, trade secrets, strategies and programs, financial
data, vendor and customer relationships, methods of operation and other
information or materials in any form proprietary to a party. For purposes
of this Agreement, Confidential Information shall not include the
following:
(a) Information available in the public domain, not as a result
of the violation of any undertaking herein;
(b) Information available to either party on a non-confidential
basis prior to disclosure of it by the other party;
(c) Information that is available from a third party, provided
that such source is not violating any duty or agreement of
confidentiality;
(d) Information that is independently developed by a party and
such independent development can be reasonably
substantiated; or
(e) Information that is required to be disclosed by law or legal
process.
9. Non-Solicitation. During the term of this Agreement and for a
period of six (6) months following its termination, the parties agree not
to solicit or induce any employee of the other, either directly or
indirectly, to leave such employment and/or become an employee of the other
or any company affiliated with or related to such party. Notwithstanding
the foregoing, a general solicitation, such as through a newspaper, website
or trade journal, and any hiring related thereto, shall not be prohibited
by this section.
10. No Diversion. Broker agrees not to divert Products to markets
outside the United States, and agrees not to divert Products between
markets within its assigned United States territory.
11. Insurance. Broker agrees to purchase and maintain general
liability and employee theft (crime) insurance naming Client as an
additional insured as respects its handling of the Client's account with
minimum liability limits of $1,000,000.00 per occurrence. Client shall
maintain general liability and product liability insurance coverage in such
amounts as deemed reasonable in the normal course of Client's operations.
Each of Broker and Client shall have the other named as an additional
insured under one another's liability insurance policy and shall provide
the other with a certificate of insurance evidencing such coverage. Such
certificate of insurance shall provide, without limitation, that such
insurance is not subject to modification or termination without at least
thirty (30) days' prior written notice to the other party.
12. Software. Any software provided by Client ("Software") is provided
pursuant to a license which shall terminate upon the termination of this
Agreement. Usage of such Software shall be subject to the following
conditions: (a) it is licensed for installation on a single computer only,
(b) it may not be copied except for reasonable backup and archival purposes
only, (c) it may not be sold, rented, leased, or transferred to any other
party except in connection with a permitted assignment pursuant to Section
17 hereof, (d) use shall be limited to Client's business only and it may
not be used for any other purpose, and (e) it may not be
reverse-engineered, decompiled, disassembled or modified. Broker shall not
create any derivatives of Software and shall not remove any product
identification, copyright notices or other indicia or ownership. Upon the
termination of this Agreement, Broker shall remove all Software from the
computer on which it resides and return to Client or destroy any media or
materials holding, describing or otherwise related to such Software.
13. (a) Term. This Agreement shall have a term of two years
beginning on July 1, 2001 and ending on June 30, 2003.
Thereafter, the Agreement shall be automatically renewed for
up to three (3) additional one (1)-year terms (running from
July 1 - June 30) unless Client or Broker provides written
notice of non-renewal at least thirty (30) days prior to the
expiration of the then current
term. Notwithstanding the foregoing, either party may
terminate this Agreement at any time, effective immediately
upon written notice if it has good cause for termination.
Without limiting the applicable law, the following
circumstances shall constitute good cause for termination:
(i) the other party shall be in material breach of any of
its obligations under this Agreement and, where the
breach involves an ongoing obligation that is capable of
cure, such party shall have failed to cure such breach
within thirty (30) days after receiving written notice
from the other party of the existence of such breach.
For purposes of this section, "material breach" shall
include, without limitation, any failure by Broker to
substantially achieve quarterly or annual qualitative
and/or quantitative performance objectives; comply with
Client's Deduction Management Policy (Attachment D); and
comply with Client's Sales Policy and Procedures, Manual
and such other policies and procedures as Client may
issue from time to time that are agreed to in writing by
Client and Broker; "material breach" shall also include
Client's failure to compensate Broker in accordance with
the terms of this Agreement; or
(ii) the other party shall have become insolvent or filed a
petition in bankruptcy, or entered into a composition
with its creditors, or had a receiver appointed for its
assets, or become the subject of any winding up of its
business or any judicial proceeding relating to or
arising out of its financial condition; or
(iii) a merger, consolidation or sale of the other party which
transaction would place the other party in breach of its
obligations under this Agreement.
(b) Liquidated Damages. Broker acknowledges that early
termination of this Agreement by Broker without good cause
will result in significant damages to the business of
Client. Accordingly, Broker agrees to pay to Client the sum
of Two Million Dollars ($2,000,000) as liquidated damages in
the event Broker terminates this Agreement prior to the
expiration of the term of this Agreement and other than in
accordance with subsection 13(a) or 13(e). Broker
acknowledges and agrees that such amount represents a fair
and reasonable estimate of the damages Client would suffer
in the event of such termination.
(c) Orders after Termination. Immediately upon notice of
termination being served by either party, Client shall have
the right to obtain orders through another broker or sales
office and Broker shall have the right to offer its services
to third parties, subject to the confidentiality provisions
set forth herein. Since Broker will not be obtaining such
Client orders, Broker shall have no right to a commission on
said orders. However, Broker shall continue to receive the
commission and bonus amounts as applicable provided in this
Agreement for any orders, which are obtained by Broker and
are actually shipped prior to the termination date. Client
is not obligated to accept orders from Broker for shipment
after the termination date.
(d) Coverage/Commission Adjustments. Notwithstanding any other
provision of this Agreement, Client shall have the option to
modify this Agreement to implement changes in coverage or
services (i.e., converting coverage to retail-only coverage
and/or converting services to services payable on a
fee-for-service basis). In the event Client exercises this
option, commissions payable hereunder shall be adjusted to
reflect modified Broker responsibilities, as agreed to by
Client and Broker.
(e) Termination Upon Coverage/Commission Adjustment. In the
event that the parties are unable to agree on amounts
payable for such modified Broker responsibilities as set
forth in Section 13(d), either party shall have the option
to terminate this Agreement upon thirty (30) days' written
notice to the other party, in which case Section 13(b)
hereof shall not be applicable.
14. Audit. Client shall have the right to inspect and copy Broker's
books and records to the extent such books and records directly relate to
Client's business. Such inspection shall be conducted by Client or Client's
authorized accountants during regular business hours upon at least
forty-eight (48) hours' written notice to Broker at a time mutually agreed
upon by Broker and Client (but in any event within five (5) days of
Client's demand for an inspection). Broker agrees to maintain its records
in accordance with generally accepted accounting principles and to conform
its accounting practices (to the extent they relate to Client's business
and to the extent consistent with generally accepted accounting principles)
to reasonable recommendations made by Client's accountants. This provision
shall survive the termination or expiration of this Agreement for a period
of two (2) years.
15. Conflicts. Broker shall not interview to represent competitive
products within the fruit, vegetable, tomato and specialty bean categories
without Client's prior written consent, which consent shall not be withheld
if Broker can reasonably demonstrate to Client that the proposed
representation will not negatively impact Client's business. For purposes
of this Agreement, if Broker obtains Client's consent to interview to
represent competitive products within the aforementioned categories, such
consent shall also act as Client's consent and approval for Broker to act
as a broker for such competitive product(s).
16. No Agent. Except as Broker may be specifically authorized in
writing by Client, nothing herein contained shall be construed as
authorizing Broker to bind Client in any way nor as constituting Broker an
agent or representative of Client. Broker shall have no authority to make
any expenditure on behalf of Client without Client's prior written consent.
17. Entire Agreement. This Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof, and
supercedes all prior or contemporaneous agreements and understandings,
whether oral or written, with respect to the same subject matter. In the
event any provision of this Agreement is found void or unenforceable, the
remainder of this Agreement shall remain in full force and effect. This
Agreement may not be altered or amended except in a writing executed by
both parties. This Agreement may not be assigned without the prior written
consent of the other party. This Agreement is subject to attached
Attachments, which are incorporated fully herein.
18. Governing Law; Arbitration. This Agreement shall be governed by
California law, without reference to the conflicts of laws principles
thereof. Except for breaches of Section 6 and Section 8, any dispute
arising out of or related to this Agreement, including the termination
thereof, shall be resolved through binding arbitration in accordance with
the Commercial Arbitration Rules of the American Arbitration Association
("AAA"). The arbitration shall take place before a single arbitrator
mutually selected by the parties in San Francisco, California. The
prevailing party in such dispute shall be awarded its attorneys' fees and
costs, in addition to any other relief deemed appropriate, and such award
may be entered in any court of competent jurisdiction. In the event the
parties are unable to agree to a single arbitrator within fifteen (15) days
of the demand by either party for arbitration, the arbitrator shall be
appointed by the AAA upon application by either party. Where Broker has
breached Section 6 by failing to promptly release records to Client or
where either party has breached Section 8 by improperly disclosing or using
Confidential Information, the non-breaching party shall be entitled to
immediate injunctive relief without a showing of harm upon application to
any court of competent jurisdiction.
19. Notices. Any and all notices or other communications required or
permitted by this Agreement or by law to be served on or given to the other
party hereto shall be in writing, addressed to a senior officer of the
other party at its principal business address, and shall be deemed duly
served (a) when personally delivered, (b) three days after deposit in the
United States mail, first class delivery, return receipt requested, or (c)
two days after deposit with a nationally recognized overnight courier
service.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
DEL MONTE CORPORATION ADVANTAGE SALES AND MARKETING
By /s/ XXXXXX X. XXXXXXX By
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Xxxxxx X. Xxxxxxx
Senior VP Sales Name:
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Title:
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