[ ** ] = This xxxx indicates portions of the text which have been omitted and
filed separately with the Securities and Exchange Commission pursuant to a
request for confidential treatment of such omitted text in accordance with Rule
406 of the Securities Act of 1933, as amended.
AMENDED AND RESTATED
DISTRIBUTOR SERVICE AGREEMENT
THIS AMENDED AND RESTATED DISTRIBUTOR SERVICE AGREEMENT (the
"Distributor Service Agreement"), dated as of June 18, 2002, by and between
COSI, INC., a Delaware corporation (the "Company"), and XXXXXX PAPER & FOOD
SERVICE, INC., a Delaware corporation ("Distributor").
WHEREAS, the Company and Distributor entered into a Distributor Service
Agreement, effective as of January 7, 2002 (the "Initial Agreement") which
resulted in shared benefits, rewards and risks in a positively managed business
environment and designated Distributor as an exclusive distributor authorized to
provide Distribution Services to the Company's Restaurants in the Territory; and
WHEREAS, the Company and Distributor desire to amend certain provisions
of the Initial Agreement and to restate the Initial Agreement;
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Distributor Service Agreement and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and Distributor hereby agree as follows:
1. DESIGNATION OF EXCLUSIVE DISTRIBUTOR
1.1. The Company designates Distributor as its exclusive
distributor of Products to Restaurants in the Territory and
the Company shall not designate or allow another distributor
within the Territory or authorize or permit a distributor
located outside the Territory to accept orders from
Restaurants located within the Territory.
1.2. Subject to Distributors normal credit policies and standard
rules and regulations established by Distributor, Distributor
shall accept orders to purchase any Products, from any
Restaurant in the Territory.
1.3. The Company shall cause each Restaurant in the Territory to
order from Distributor not less than eighty percent (80%) of
all Products maintained in stock by Distributor and required
in the operation of the Restaurant.
2. PRICE
2.1. The pricing for services provided pursuant to this Distributor
Service Agreement shall be as set forth on Exhibit 2.1.
3. PRICE VERIFICATION- Throughout the term of this agreement the Company
will be allowed semi-annual audit privileges which will include up to
thirty (30) items maximum which can be reviewed thirteen (13) weeks
back with thirty (30) days written notice to Distributor. Any
discrepancies, which would be mutually agreed upon by the Company and
Distributor, would be either credited or invoiced to the Company
whichever is applicable. If pricing errors are discovered in twenty
percent of the items verified, the Company has the right to expand the
audit to include all items.
4. SERVICE OBLIGATIONS OF DISTRIBUTOR
4.1. Products covered by this Distributor Service Agreement are
listed in Exhibit 4.1.
4.2. Products will include Distributor's Brand, National Brand, and
other products as specified by the Company and stocked by
Distributor. Proprietary and the Company specified products
not to exceed 250 items.
4.3. Account Executive- Distributor will assign an Account
Executive and Customer Service Representatives to service the
Company's accounts. The Account Executive and the Customer
Service Representatives will maintain contact with the
Company's designated representatives on a monthly basis to
review service requirements.
4.4. Delivery Parameters
4.4.1 Two Deliveries Per Week- Each Restaurant will be
serviced by Distributor with two deliveries per week
utilizing one Driver.
4.4.2 Delivery Windows- Key drop schedules will be
developed for the Restaurants. Delivery windows will
be 10:00 p.m. to 11:00 a.m. and 2:00 p.m. to 5:00
p.m. seven (7) days per week, with the exception of
Restaurants that are closed for business on the day
of delivery.
4.4.3 Order Placement- Restaurants' orders are to be placed
not later than 8:00 a.m. the day of departure.
Add-ons may be accepted until 9:00 a.m. on the day of
departure.
4.4.4 Delivery Schedule Changes- Distributor reserves the
right to make changes to existing or proposed
delivery schedules by providing fourteen (14) days
notice to the designated representatives of the
Company.
4.4.5 Locks, Keys and Alarms- Lock, key and alarm changes
will be communicated and key provided via overnight
delivery, at the Company's expense, to Distributor at
least forty-eight (48) hours prior to dispatch.
4.5. Damages, Shortages and Errors on Delivery- Any damage,
shortage, or error shall be noted on the invoice and signed by
Restaurant's receiving personnel. Distributor utilizes
scanning devices that guarantee delivery of items. Once
scanned by driver-no credits issued. Credit for damages,
shorts, or errors will be
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noted by Distributors delivery personnel and will be final.
Notice of shortages on key-drop deliveries need to be made by
Noon on the same day as delivery. All reasonable efforts will
be expended in determining the root cause of the damage,
shortage, or error. If the error is determined to be that of
Distributor and the item is on the "Critical Item List" (see
"Exhibit 19.10"), Distributor will be responsible for the cost
of replenishing that Product to the respective location the
next day. If the situation is determined to be the error of
the Company's personnel, the Company will be responsible for
replenishing that product at a mutually agreed-upon cost, with
authorization by the Company's designated representative if
delivery cost exceeds [ ** ]. For purchases that are returned
for credit that are determined to be the result of a
Restaurant's excessive ordering or other ordering errors, a [
** ] restocking fee will be assessed. The restocking fee is [
** ] of total dollar value returned.
4.6. Shipment of Products Not Approved by the Company- Any products
not approved by the Company's designated representative cannot
be sold to the individual Restaurants by Distributor.
4.7. Distributor's Current Vendor Base- The Company agrees to
review Distributor's current vendor base for future product
needs or product changes where possible and mutually agreed
upon by both parties.
4.8. Inventory- Distributor will inventory and deliver the
Company's items as requested utilizing a four-week lead time
on new items and an eight-week lead time on deleted items.
Inventory of these items shall be sufficient to achieve the
fill rate indicated on "Exhibit 5.22", which will be regulated
by Distributor. If any Product requested by the Company
results in greater than four weeks on-hand inventory a
definitive action plan will be provided to Distributor by the
Company's designated representative. The written plan will
detail the actions that will be taken to lower the level to a
maximum of four weeks supply within twenty-one days of
notification. For inventory that remains on-hand thirty days
after notification, Distributor will charge the Company a
storage fee of [ ** ] per month.
4.9. Electronic Order Entry- Distributor requires electronic order
entry by all Restaurants.
4.9.1 Distributor agrees to provides interface programming
between Distributor and the Company's current
inventory management system in order to place the
Company's orders electronically. Distributor cannot
guarantee compatibility with a system that the
Company may utilize in the future.
4.9.2 Distributor can accept orders by telephone. Effective
sixty (60) days from first deliveries to Restaurants,
an additional [ ** ] charge will be added to each
order placed by telephone.
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5. COMPLIANCE WITH PERFORMANCE STANDARDS AND OTHER REQUIREMENTS
5.1. Distributor shall comply with the Performance Standards set
forth in Exhibit 5.22.
6. PROMOTIONAL ITEMS AND CONFLICTING INSTRUCTIONS- Distributor shall
follow all written directions from the Company's designated
representative with respect to the distribution and sale of promotional
items and new products.
7. HIDDEN PAYMENTS; GRATUITIES- Distributor performs value-added services
for suppliers of Products, beyond procurement activities typically
provided. These value-added services include regional and national
marketing, freight management, consolidated warehousing distribution,
quality assurance and performance-based product marketing. Distributor
may recover the costs of providing these services and may also be
compensated for these services and consider this compensation to be
earned income. Receipt of such cost recovery of earned income will not
reduce the cost of Products to the customers and shall not diminish
Distributors commitment to provide competitive prices to its customers.
Accordingly, Distributor shall be entitled to retain such earned income
without providing any accounting to or offset in favor of the Company
for the amounts thereof.
8. GENERAL INVENTORY AND ORDER PLACEMENT
8.1. If Distributor is out-of-stock with respect to any Product,
any affected Restaurant shall be notified regarding
out-of-stocks and the expected period of duration of the
out-of-stock prior to making the next scheduled deliveries.
8.2. Restaurants shall identify authorized representatives
responsible for developing and releasing orders to
Distributor.
8.3. Distributor shall establish internal practices that reasonably
ensure the achievement of the Performance Standards in
processing and shipping order to Restaurants.
8.4. Distributor will meet the expectations and requirements
outlined in "Exhibit 5.22".
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9. SUBSTITUTIONS- Should a substitution be necessary and approved by the
Company, Distributor will ship a comparable product at a sell price
calculated using the same Fee Per Unit as on the original product.
Substitutions caused by the fault of the Distributor will not be
charged a higher price per unit (pound or ounce) than the original
product.
10. EMERGENCY- PRODUCT ALLOCATION- In the event of a shortage of Approved
Product, as determined in a written notice to Distributor by the
Company's designated representative, Distributor shall allocate sales
of the Approved Product in short supply among the Restaurants based
upon the written instructions from the Company's designated
representative.
11. WITHDRAWALS AND RECALLS
11.1. In the event it is deemed necessary by either the Company, in
its discretion, or any of the Approved Suppliers, to withdraw
or recall from Distributor and/or from the Company's System
any quantity of any Products (a) as a result of failure of
such Products to satisfy the Company's Specifications, (b) for
any other reason bearing on quality and/or safety of such
Products, or (c) to prevent, minimize or otherwise protect
against an actual or perceived threat to the Company's brand,
Distributor shall comply diligently with all Product
withdrawal/recall procedures then in effect. See "Exhibit
11.1" "Product Withdrawals/ Recall".
11.2. Distributor shall not be required to bear the costs associated
with the withdrawal or recall of any Product unless such
withdrawal or recall is the result of the negligence or
intentional tortious acts of Distributor. The Company shall
cause the Approved Supplier(s) in question to reimburse
Distributor for such costs.
12. CONFIDENTIALITY
12.1. Without the prior written consent of the other party hereto,
neither Distributor nor the Company will disclose to any other
person any Confidential Information; provided, however, that
either party (the "Disclosing Party") may make such disclosure
as is required by law, regulation (including stock exchange or
similar regulations), administrative order or judicial or
administrative process, which requirement the Disclosing Party
has been advised by legal counsel (in which event, to the
extent practicable, the Disclosing Party will consult with,
and exercise in good faith all reasonable efforts to mutually
agree with, the non-disclosing party regarding the nature,
extent and form of such disclosure). The term "person" as used
in this section shall be interpreted broadly to include the
media and any corporation, partnership, group, individual or
other entity.
13. INDEMNIFICATION
13.1. The Company and Distributor shall each defend, indemnify and
hold harmless the other party including, its officers,
directors, employees, agents, parents, subsidiaries,
affiliates and members (collectively "Indemnitees"), of, from
and against any and all claims, demands, actions, causes of
action, losses, liabilities, damages, costs and expenses,
including, without limitation, reasonable attorney's
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fees and costs and expenses (all of the foregoing collectively
referred to as "Damages"), caused by one party to the other
and based upon or arising out of
13.1.1 any breach of this Distributor Service Agreement by
it;
13.1.2 any negligent act or omission of it in connection
with provision of Distribution Services which results
in any property damage or personal injury, including,
but not limited to, illness or death;
13.1.3 any negligent act or omission of it in connection
with the purchase, receipt, storage, shipment,
delivery, resale or consumption of any Product,
provided, however, that Distributor or the Company shall not
be liable for Damages to an Indemnitee to the extent such
Damages result from the negligence, recklessness or misconduct
of such Indemnitee- NOR, EXCEPT AS OTHERWISE PROVIDED, SHALL
DISTRIBUTOR OR THE COMPANY, UNDER ANY CIRCUMSTANCES BE LIABLE
TO ANY INDEMNITEE FOR ANY CONSEQUENTIAL OR INDIRECT DAMAGES,
INCLUDING WITHOUT LIMITATION, ANY CLAIM FOR LOST PROFITS OR
ANTICIPATED PROFITS.
14. INSURANCE- The Company and Distributor shall maintain comprehensive
liability insurance coverage during the entire term of this Distributor
Service Agreement, with minimum coverage amounts of $2,000,000 per
occurrence and $20,000,000 aggregate, including product liability
coverage for damage, injury and/or death to persons and for damage
and/or injury to property, and each shall provide to the other upon
request written evidence of such coverage.
15. TERM AND COMMENCEMENT
15.1. This Distributor Service Agreement shall become effective as
of June 18, 2002 and shall expire on January 7, 2005, unless
otherwise terminated or extended pursuant to the terms of this
Distributor Service Agreement.
15.2. Distributor and the Company may seek to extend this agreement
for periods of three (3) years each by giving written notice
of such extension on or before Six (6) months prior to the
expiration of the initial or any extended term hereof. Any
such extension shall be mutually agreed upon between
Distributor and the Company.
16. CANCELLATION, TERMINATION, EVENTS OF DEFAULT
16.1. A party may terminate this agreement upon the following Events
of Default:
(a) If the other party fails or refuses to comply with
any of its material obligations under this
Distributor Service Agreement after having been given
written notice of the breach of any provision and
having failed to cure such breach within thirty (30)
days, or
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(b) The other party becomes bankrupt, insolvent or
otherwise unable to pay its obligations as they
become due.
17. EFFECT OF END OF THIS DISTRIBUTOR SERVICE AGREEMENT- In the event of
the cancellation, termination, or expiration (hereinafter collectively
the "end") of this Distributor Service Agreement, the Company shall
purchase or shall cause a third party to purchase Distributor's
inventory of Approved Products at Distributor's Landed Cost plus a
reasonable transfer and warehouse handling charge not to exceed [ ** ]
of the Fee Per Unit in effect as of the date of the end (the "Charge").
The Company will purchase or cause to be purchased all perishable
Approved Products within seven (7) days of the end of this Distributor
Service Agreement and all frozen and dry Approved Products within
fifteen (15) days of the end of this Distributor Service Agreement.
18. DEFINITIONS
18.1. All capitalized terms that have not been otherwise defined
above shall have the meanings designated, below.
18.2. "APPROVED BRANDS LIST" means one or more documents issued by
the Company from time to time listing all Approved Suppliers,
and Approved Products.
18.3. "APPROVED SUPPLIER" means a supplier approved by the Company
to provide Approved Products to the Company's Restaurants.
18.4. "APPROVED PRODUCTS" means those products, including, without
limitation, food, packaging, and equipment (whether permanent
or promotional in nature), that (a) meet the Company's
Specifications, and (b) are produced by Approved Suppliers,
and (c) which are listed in the Approved Brands List, all of
which are purchased by the Company's Restaurants.
18.5. "ANCILLARY ITEMS" means incidental items used in the operation
of a Restaurant which do not need to be approved by the
Company such as pens, pencils, note pads, register tape and
certain smallware items.
18.6. "COMPANY'S SPECIFICATIONS" means the product specifications
developed by the Company for food products, packaging
products, equipment, uniforms and any other materials, systems
or services used in the construction of and/or ongoing
operation of Restaurants and/or the sale of products to
consumers from the Restaurants.
18.7. "COMPANY'S SYSTEM" means the system of Restaurants (either
owned by the Company or franchised/licensed by the Company)
operating in the United States, including the restaurant
concepts listed in Exhibit 18.7 the Company's and any other
restaurant concepts acquired or developed and operated by the
Company.
18.8. "CONFIDENTIAL INFORMATION" means all information communicated
by the Company to Distributor or by Distributor to the Company
which is considered by the Company or Distributor to be
confidential, including, but not limited to: the
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terms of this Distributor Service Agreement; all information
as to quantity, cost and prices charged by Approved Suppliers
for Products; the Company's Specifications; all information
relating to marketing, new products, sales volume and data
regarding the operations of the Company, the Company's System
and/or the Restaurants; and other information identified or
reasonably identifiable as confidential or proprietary.
Confidential information includes information in any manner
related to Distributor's compliance or failure to comply with
or meet the Performance Standards.
18.9. "CRITICAL ITEMS LIST" means the top twenty-five items as
determined by the Company (see Exhibit 18.9).
18.10. "DAMAGED PRODUCT" means any Product which has been damaged or
is otherwise unfit for distribution to the Company System.
18.11. "DISTRIBUTION SERVICES" means the receiving, inspecting,
handling, storage, shipment and distribution of all or some
Products by Distributor and/or Approved Suppliers to
Restaurants, and all related services including, without
limitation, those more particularly described in this
Distributor Service Agreement.
18.12. "DISTRIBUTOR SERVICE AGREEMENT" means this Distributor Service
Agreement, together with all amendments and exhibits hereto.
18.13. "EFFECTIVE DATE" means the date first set forth on page 1 of
this Distributor Service Agreement.
18.14. "EVENT OF DEFAULT" means events of default described
inSection15 of this Distributor Service Agreement.
18.15. "FACILITY" means one or more of Distributor's distribution
facilities at which Products will be handled and stored and
from which Products will be delivered to Restaurants.
18.16. "FRANCHISE AGREEMENT" means a franchise agreement or license
agreement by and between the Company and a Franchisee pursuant
to which, among other things, the Company has granted such
Franchisee a license to use the Company trademarks.
18.17. "FRANCHISEES" means any and all Company franchisees operating
under a valid Franchise Agreement.
18.18. "FREIGHT" means, in those cases where the invoice cost to
Distributor is not a delivered cost, applicable freight
charges will be added to invoice cost. Freight charges may
include common or contract carrier charges by the product
vendor or by Distributor's fleet back-haul, or by charges
billed by third party carriers. Applicable freight for any
product will not exceed the rate charged by nationally
recognized carriers operating in the same market for the same
type of freight
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service. Earned back-haul efficiencies are retained by XXXXXX
and do not reduce product cost.
18.19. "INVOICED F.O.B. PRICE" means the invoice F.O.B. Price as
established pursuant to and as defined in a supply agreement
by and between the Company and an Approved Supplier with
respect to a particular Approved Product.
18.20. "LANDED COST" means the Company's Approved Suppliers Invoiced
F.O.B. price plus applicable Freight, as provided for in the
definition of Freight.
18.21. "OTHER PRODUCTS" means all products, except for Approved
Products.
18.22. "PERFORMANCE STANDARDS" means the performance standards set
forth on "Exhibit 5.22" of this Distributor Service Agreement.
18.23. "PRODUCTS" means Approved Products and does not include
Ancillary Items or Other Products.
18.24. "RESTAURANTS" means the Company's restaurants (owned and/or
franchised).
18.25. "TERM" means the term of this Distributor Service Agreement as
described in Section 16.
18.26. "TERRITORY" means that geographic territory as set forth on
"Exhibit 18.26".
19. MISCELLANEOUS PROVISIONS
19.1. Entire Agreement- This Distributor Service Agreement
supersedes all prior negotiations, discussions,
representations, understandings and agreements between the
parties with respect to the matters contained herein, and
contains the only agreement between the parties hereto with
respect to the transactions contemplated by this Distributor
Service Agreement.
19.2. Amendments Modifications and Waiver- This Distributor Service
Agreement may not be waived, modified or amended except by a
written instrument executed by authorized representatives of
both parties. A waiver on one occasion shall not be a waiver
of the same or any other breach on any other occasion. No
course of dealing or performance by any party, and no failure,
omission, delay or forbearance by any party, in whole or in
part, in exercising any right, power, benefit or remedy shall
constitute a waiver of such right, power, benefit or remedy.
19.3. Cumulative Remedies- No remedy conferred upon either party is
intended to be exclusive of any other remedy, and each and
every such remedy shall be in addition to, and not in
limitation of or substitution for, every remedy available at
law or in equity or by statute or otherwise.
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19.4. Headings- The headings in this Distributor Service Agreement
are for convenience of reference and are not a part of this
Distributor Service Agreement and shall not affect the meaning
or construction of any of its provisions.
19.5. Governing Law- This Distributor Service Agreement shall become
valid when executed and accepted by the Company. The parties
agree that it shall be deemed made and entered into in the
State of New York and shall be governed and construed in
accordance with the law of the State of New York without
giving effect to any conflict of law rule or principle that
might require the application of the law of another
jurisdiction.
19.6. Alternative Dispute Resolution- Except as otherwise provided,
in the event of any dispute between the parties relating to
this Distributor Service Agreement, the parties agree that the
dispute shall be resolved in accordance with the Dispute
Resolution Procedure set forth "Exhibit 19.6" attached hereto
and incorporated herein (the "Dispute Resolution Procedure").
Any party may give written notice to the other party of the
existence of a dispute (a "Dispute Notice"). To the extent the
party's dispute is not required to be resolved by said Dispute
Resolution Procedure the following paragraph shall apply.
19.6.1 Jurisdiction and Venue- The parties acknowledge and
agree that if any dispute or controversy shall arise
pursuant to this Distributor Service Agreement or the
relationship created thereby, such dispute or
controversy not required to be resolved pursuant to
the above paragraph may only be brought for
resolution in the United States District Court for
the Northern District of New York, or, if such court
lacks subject matter jurisdiction, in the New York
State Supreme Court, in and for Xxxxxx County, New
York. Distributor and the Company hereby consent to,
and neither of them shall contest or challenge,
personal jurisdiction and venue in such courts.
19.7. Severability- The provisions of this Distributor Service
Agreement are severable and this Distributor Service Agreement
shall be interpreted and enforced as it all completely invalid
or unenforceable provisions were not contained in this
Distributor Service Agreement, and partially valid and
enforceable provisions shall be enforced to the extent that
they are valid and enforceable.
19.8. Successors and Assigns- This Distributor Service Agreement
shall be binding upon, and shall inure to the benefit of the
parties hereto and their respective heirs, executors, legal
representatives, successors and permitted assigns; provided,
however, that the Company or Distributor may not assign,
delegate, transfer, convey or subcontract all or any portion
of its rights, duties, and obligations under this Distributor
Service Agreement without the prior written consent of the
other party, which consent may be given or withheld for any
reason or no reason. This Distributor Service Agreement is not
intended to confer on third parties, other than permitted
assigns, the right to enforce any provisions of the
Distributor Service Agreement.
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19.9. Contributions- Distributor is not to make charitable
contributions, donations, or sponsorship of events such as
golf tournaments, etc., for or on the behalf of the Company.
19.10. Notices and Authorized Representatives of the Company- All
notices, requests, demands, tenders and other communications
required under this Distributor Service Agreement shall be in
writing and shall be deemed given (a) if delivered, mailed
(certified or registered mail, postage prepaid) or sent by
overnight courier to the other party at its address set forth
below, or (b) if transmitted by facsimile to the facsimile
number of the other party if set forth below, or (c) if
transmitted by e-mail to the e-mail address of the other party
if set forth below. Any party may change its mailing address,
facsimile number, or email address by giving notice to the
other party in the manner provided herein.
Notices to the Company should be addressed as follows:
Address: Cosi, Inc.
000 X. 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Director of Food
Telephone #: (000) 000-0000
Facsimile #: (000) 000-0000
Notices to Distributor should be addressed as follows:
Address: Xxxxxx Paper & Food Service,
Inc.
XX Xxx 000
101 Xxxxxx Corporate Parkway
Xxxxxxx, NY 13748
Attention: Director of National Accounts
Telephone #: (000) 000-0000
Facsimile #: (000) 000-0000
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IN WITNESS WHEREOF, the Company and Distributor have executed this
Distributor Service Agreement as of the Effective Date.
WITNESS:
COSI, INC.
(COMPANY)
By: /s/ Xxxxxxxx X. Xxxxxxxxxx, Xx.
-------------------------------------------------
(signature)
Xxxxxxxx X. Xxxxxxxxxx, Xx.
-------------------------------------------------
(print name)
Title President
------------------------------------------------
Attest Xxxxxx Xxxxxxxxx
-----------------------------------------------
WITNESS:
XXXXXX PAPER & FOOD SERVICE, INC. (DISTRIBUTOR)
By: /s/ Xxxxxxx X. Xxxxxxxxxxxx
-------------------------------------------------
(signature)
Xxxxxxx X. Xxxxxxxxxxxx
-------------------------------------------------
(print name)
Title CFO VP of Finance
------------------------------------------------
Attest Xxxxx X. Mickiln
-----------------------------------------------
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EXHIBITS
(These are numbered using the section number where they have first been
referred to in the Distributor Service Agreement)
3.1 Pricing
3.4 List of Products Priced Monthly & Weekly
4.1 Products Covered by this Distributor Service Agreement
5.22 Distributor Performance Standards
11.1 Product Withdrawals/Recalls
18.7 Restaurant concepts included in the Company's system
18.9 Critical Items List
18.26 Territory
19.6 Dispute Resolution Procedures
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EXHIBIT 3.1
PRICE
3.1. Distributor shall charge the Landed Cost for Products plus a
Fee Per Unit, as defined and provided for below.
3.2. Fee Per Unit & Payment Terms
[ ** ]
3.2.1 Payment will be made by ACH transfer.
3.2.2 To control proprietary inventory, Distributor will
reduce the fee per unit by [ ** ]per unit on each
item that is utilized from Distributor's existing
inventory.
3.2.3 The fee, per unit will be reduced by [ ** ] per unit
when the restaurants in the Midwest are serviced from
a Xxxxxx Paper & Food Service, Inc., facility located
in the Midwest or a DMA affiliated distributor. The
distribution facility will begin service in the
Midwest when there are [ ** ]Restaurants within its
Territory.
3.2.4 Index - CPI-U
The Consumer Price Index (CPI) is a measure of the average
change over time in the prices paid by urban consumers for a
market basket of consumer goods and services. The CPI reflects
spending patterns for each of two population groups: All Urban
Consumers (CPI-U) and Urban Wage Earners and Clerical Workers
(CPI-W). The CPI-U represents about 87 percent of the total
U.S. population.
The Fee Per Unit may be adjusted annually at and after twelve
(12) months on the anniversary date of the agreement for
changes in the CPI-U as follows:
[ ** ]
3.2.5 Index- Fuel
The Fee Per Unit may be adjusted monthly for changes in the
Retail On Highway Diesel Price per Gallon for Mid-Atlantic as
follows:
[ ** ]
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3.2.6 Drop Size Incentive
Restaurants that achieve an average drop size of [ ** ] pieces
per delivery will receive a monthly credit of [ ** ] per unit.
Restaurants that receive an average drop size of [ ** ] pieces
per delivery will receive a monthly credit of [ ** ] per unit.
Restaurants that receive an average drop size of [ ** ] or
more pieces per delivery will receive a monthly credit in the
amount of [ ** ] per unit. Distributor will process these
credits by the fifteenth of the following month. The Company
must be within payment terms to be eligible to receive this
incentive.
3.3. On those occasions when Products are sold as a "Split Case"
the "Fee Per Unit" shall be applied to the "Split Case" Landed
Cost. "Split Case" Landed Cost is the full case cost divided
by the number of units per case.
3.4. The prices for Products shall be based on the Landed Cost plus
the Fee Per Unit as provided for above and shall remain in
effect for a period ("Pricing Period") of not less than
twenty-eight (28) days for those Products priced monthly and
for periods of seven (7) days on certain commodities. A list
of Products priced monthly and weekly are detailed in "Exhibit
3.4".
3.5. Management of monthly price changes will follow market cost.
Market cost is defined as the Company's contract cost in
effect on the first day of the calendar month. Products not
contracted by the Company will be priced from the Distributors
market cost.
3.5.1 Weekly market sensitive items will be subject to
change based upon the current market value (see
"Exhibit 3.4"). Weekly price bulletins will be sent
to the Company's Authorized Representative via
e-mail. Monthly prices are published on Restaurants'
monthly order guide.
3.6. Any off-invoice allowances granted to Distributor by an
Approved Supplier shall be reflected in the Landed Cost. Any
cash discounts shall be the property of the Distributor.
Discontinued discounts from vendors will result in an adjusted
Fee Per Unit on applicable products. (Discount loss equals
increase in per unit fee).
3.7. Distributor shall submit invoices to Restaurants as follows:
3.7.1 Two hard copies of the invoice will be left with the
Restaurant at the time of delivery.
3.8. The Company and Distributor acknowledge that a change in the
Territory's boundaries could have either a material negative
or positive effect on Distributor's ability to maintain the
Fee Per Unit. Therefore, if any change in the Territory's
boundaries are proposed, the Company and Distributor shall
meet in advance of any proposed change to address any material
positive or negative impact and shall negotiate, in good
faith, an appropriate adjustment to the Fee Per Unit, as
warranted.
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Distributor acknowledges that the Company may at its
discretion broaden the geographic boundaries of the Territory
at any time, by adding contiguous areas provided that any such
modification does not have a material adverse effect on
Distributor's ability to maintain the Fee Per Unit. If the
modification is determined to have a material adverse effect
and an appropriate adjustment to the Fee Per Unit cannot be
agreed upon, the proposed modification shall not be made.
3.9. Vendor Company Agreements- The Company will provide
Distributor with written evidence of existence of agreements
with product manufacturers in which the manufacturers have
agreed on prices they will charge Distributor for products to
be resold to the Company. The Company must notify Distributor
in writing of the existence of any additional agreements of
this sort. Distributor will not be responsible for the failure
to purchase under such additional agreements in the absence of
written notice from the Company of the existence of such
agreements.
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EXHIBIT 3.4
LIST OF PRODUCTS PRICED MONTHLY & WEEKLY
PRODUCTS PRICED WEEKLY
[ ** ]
The items listed above will be priced on a weekly basis unless otherwise
contracted between the Company and the vendor. All such contracted items must be
provided to Distributor as provided in Section 4.8 of this Distributor Service
Agreement. All other items are priced on a monthly basis.
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EXHIBIT 4.1
PRODUCTS COVERED BY THIS AGREEMENT
Cheese
Dairy
Fluid Dairy
Refrigerated
Meat
Poultry
Seafood
Prepared Foods
Desserts
Ice Cream & Sherbet
Dry Groceries
Beverages
Coca-Cola Syrups
Paper
Plastics
Disposables
Chemicals
Cleaning Supplies
Economics Laboratories Products
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EXHIBIT 5.22
DISTRIBUTOR PERFORMANCE STANDARDS
Any capitalized terms that are not otherwise defined in this Exhibit 5.22 shall
have the same meanings ascribed to them in the Distributor Service Agreement to
which this Exhibit is attached.
All requirements are on a cumulative basis for all Restaurants serviced from the
Facility and must be submitted to the Company no later than fifteen (15) days
after the end of each calendar month. Distributor shall also have available in
an electronic format and allow the Company to access and review the raw data
supporting the information contained in the monthly reports.
DELIVERY ORDER FILL RATE - a measure of the completeness of Restaurant
deliveries as a percentage of the orders that were placed for those deliveries.
This calculation will be completed monthly in the aggregate for all Restaurants
served from the Distributor.
The following classifications SHALL NOT BE INCLUDED in the # of cases received
by the Restaurant:
MisPicks - For example, Restaurant ordered apples, but received a case of
oranges with a "selection label" calling for apples.
Damages - For example, Products arriving at Restaurant in a condition unsuitable
for purchase (this may include products not meeting the Company's Quality
Assurance temperature Requirements).
Out of Code - Products that arrive that do not meet the shelf-life expectations
and requirements of the Company, and have not been granted the Company's Quality
Assurance extensions. Distributor will deliver perishable product(s) with no
less than five (5) days usable shelf life. The Company will be responsible for
product that becomes not usable or "out of code" based upon inaccurate
projections or instructions to the Distributor.
Short on Truck - Although Product is listed on the invoice, the driver could not
find the item at the time of delivery.
Warehouse Outs - Any item not able to be loaded on the truck prior to dispatch.
Overlooked and Returned - This is an item that is found on the delivery vehicle
at the end of the driver's route bearing a "selection label" for one of the
Restaurants delivered to earlier by this vehicle. An Aggregate DELIVERY ORDER
FILL RATE OF [ ** ] shall be deemed as acceptable. An Aggregate Delivery Order
Fill Rate of less than [ ** ] shall be deemed unacceptable.
If the Company at any time determines that Distributor does not perform in
accordance with the standards set forth herein, the Company must notify
Distributor of said nonperformance. Said notice shall be in written form and
contain the specific non-performance issue with proof thereof
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regarding Distributor's non-performance. Distributor shall have sixty (60) days
from receipt of said notice to remedy the nonperformance issue.
ON TIME DELIVERY RATE - measures the distributor's ability to achieve "on-time"
deliveries as a percentage of the total number of deliveries made by the
Distributor. This calculation will be completed monthly in the aggregate for all
Restaurants served from the Distributor. A delivery will be considered as
"on-time" as long as the delivery process begins either +/- one-hour from the
time set for the expected delivery.
An "ON-TIME" aggregate percentage of [ ** ] shall be deemed as acceptable. An
"On-Time" aggregate percentage of less than [ ** ] shall be deemed as
unacceptable.
If the Company at any time determines that Distributor does not perform in
accordance with the standards set forth herein, the Company must notify
Distributor of said nonperformance. Said notice shall be in written form and
contain the specific nonperformance issue with proof thereof regarding
Distributor's non-performance. Distributor shall have sixty (60) days from
receipt of said notice to remedy the nonperformance issue.
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EXHIBIT 11.1
PRODUCT WITHDRAWALS/RECALLS
1. Distributors can be notified of a product withdrawal by either the Company
or the supplier. The Distributor will coordinate the withdrawal of product
from Restaurants.
When a withdrawal order is issued, the product or material will be
identified by the:
a. Product/material name
b. Processor and brand
c. Production code or date
2. Upon receipt of the withdrawal notice, on the Company or vendor
letterhead, the Distributor will:
a. Call a meeting of the recall/withdrawal team members.
b. Immediately segregate and xxxx, with appropriate warning or
instructions, all involved distributor stock to assure that none
shall be delivered to Restaurants.
c. Assign a new item number to the Product that has been segregated.
d. Immediately alert personnel to segregate and xxxx all involved
en-route stock.
e. Notify the Company of the:
i. Number of cases Distributor has in its possession, and
ii. Number of cases sold to Restaurants or shipped to other parties
approved to receive or purchase the affected item.
f. If the withdrawal involved Restaurant stock, the Distributor shall:
i. Generate a query indicating all Restaurant locations that have
received the recalled/withdrawn product.
ii. Immediately begin notifying all Restaurants to which the
involved product has been shipped, giving all pertinent information.
iii. Keep a list of Restaurants called, time called, and person
receiving information.
iv. Promptly pick up stock involved and keep records of amount
returned.
v. Replace stock promptly to minimize impact on restaurant
operations.
g. When all necessary return or withdrawal actions have been completed,
the Distributor shall:
i. Notify the Company in writing and by telephone, verifying what
actions have been taken or not taken.
ii. Give the Company data on the amount of product/material
recovered, as well as the total amount originally received and held
in storage.
h. If the returned or withdrawn product/material was Company labeled,
the distributor shall request disposition from the Company. If the
product/material is identified by some other brand name, disposition
instructions shall be obtained from the processor.
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i. In order to facilitate returns or withdrawals, distributor shall
maintain a current list of:
i. Restaurants serviced and locations.
ii. Telephone numbers of restaurants.
iii. Names of managers and assistant managers. The list shall be
revised and updated to keep information current.
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EXHIBIT 18.7
RESTAURANT CONCEPTS INCLUDED IN COMPANY'S SYSTEM
Xando Coffee & Bar
Cosi Sandwich Bar
Xando Cosi
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EXHIBIT 18.9
CRITICAL ITEMS LIST
[ ** ]
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EXHIBIT 18.26
TERRITORY
MIDWEST REGION
- Service within [ ** ] of the Center of Chicago, Illinois.
- Service to and between Chicago, Illinois, and the northern most
point of Milwaukee, Wisconsin.
- Service within [ ** ] of the Center of Detroit, Michigan.
- Service within Lansing, Michigan.
- Service all points within the State of Ohio.
MID-ATLANTIC REGION
- Service to all points in Maryland West of Hagerstown.
- Service to Northern Virginia
o [ ** ] .
o [ ** ] .
- Service to all points in Delaware.
- Service to all points in New Jersey.
- Service to all points in Pennsylvania.
NORTHEAST REGION
- Service to all points in New York.
- Service to all points in Connecticut.
- Service to all points in Rhode Island.
- Service to all Points in Massachusetts.
New locations outside the defined service territory will be reviewed
on an individual basis to define service capabilities and additional
associated costs.
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EXHIBIT 19.6
DISPUTE RESOLUTION PROCEDURES
If a dispute (as hereinafter defined) arises between the parties in connection
with or relating to the Distributor Service Agreement to which this Exhibit is
attached, and the parties are unable to resolve the Dispute, the parties agree
to use the following procedures in good faith to resolve such Dispute promptly
and non judicially. "Dispute" shall mean any alleged material breach of any
representation, warranty or obligation therein, or a disagreement regarding the
interpretation, performance or nonperformance of any provision thereof, or the
validity, scope and enforceability of these Dispute Resolution Procedures, or
any dispute regarding any damages arising from the termination of the
Distributor Service Agreement: provided that, any attempt by either party to
obtain or enforce equitable remedies, including but not limited to preliminary
or permanent injunctions, temporary restraining order or specific performance
shall not be deemed a Dispute hereunder.
Either party may give written notice to the other of the existence of a Dispute
("Dispute Noticee"). Any capitalized terms that are not defined herein shall
have the same meanings as those set forth in the Distributor Service Agreement.
STEP ONE: NEGOTIATION BY SENIOR EXECUTIVES
Within ten (10) business days of delivery of any Dispute Notice, each party will
designate a Senior Executive who has no direct operational responsibility for
the matters contemplated by the Distributor Service Agreement and who is
authorized to settle the Dispute on such party's behalf subject to the approval
of the Board of Directors, if required (the "Senior Executives"). Within ten
(10) days of such designation, the Senior Executives for the representatives
parties shall meet at a mutually agreeable time and place and thereafter as
often as they deem reasonably necessary to exchange relevant information and
attempt in good faith to negotiate a resolution of the Dispute.
STEP TWO: MEDIATION
If the Dispute is not resolved within twenty (20) business days of the first
meeting of the Senior Executives, or if one of the Senior Executives will not
meet within twenty (20) business days, then either party may request that the
Center for Public Resources provide a member of the CPR Panel of Neutrals to act
as mediator to work with the parties to resolve their differences. The mediator
appointed shall be qualified by experience to deal with issues arising in
contracts similar to the Distributor Service Agreement and may be rejected by a
party only for bias. The mediator shall meet with the parties within thirty (30)
days of his or her appointment to help the parties resolve the Dispute. Efforts
to reach a settlement will continue until (a) a written settlement is reached,
(b) the mediator concludes and informs the parties in writing that further
efforts would not be useful, or (c) the parties agree in writing that an impasse
has been reached. The costs of the mediation, including fees and expenses, shall
be borne equally by the parties.
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After the mediator or the parties have determined that further mediation is not
likely to resolve the Dispute, either party may request in writing that the
mediator make a recommended resolution of the Dispute in writing to each party
which recommendation shall not be binding upon the parties; provided, however,
the parties shall give good faith consideration to the settlement of the Dispute
based upon such recommendation. If either party thereafter pursues the matter to
resolution by arbitration as provided herein such party shall pay the reasonable
attorney's fee, costs, and other expenses (including expert witness fees) of the
other party incurred in connection with the pursuit and achievement of (and
defense against) such arbitration, if any, if the result thereof is less
favorable to such pursing party than the recommendation of the mediator. The
arbitrator shall be authorized to make a determination as to whether the
resulting arbitration is more or less favorable to a party than the mediator's
recommendation and to determine the amount of any award for fees, costs, and
expenses.
STEP THREE: BINDING ARBITRATION
If the parties are not successful in resolving the dispute through the
mediation, then either party may initiate final resolution of the Dispute by
binding arbitration conducted in accordance with the Center for Public Resources
Rules for Non-Administered Arbitration of Business Disputes, by three
arbitrators, of whom each party shall appoint one and the third to be selected
by the other two. The arbitration shall be governed by the United States
Arbitration Act, 9 U.S.C. Sections 1-16, and judgment upon the award
rendered by the arbitrator(s) shall be binding upon the parties and may be
entered by any court having jurisdiction thereof. The place of arbitration shall
be Xxxxxx County, New York. The arbitrator(s) are not empowered to award damages
in excess of those damages authorized by the Distributor Service Agreement. All
costs of arbitration including the fees of the arbitrator(s) shall be borne
equally by the parties.
GENERAL PROVISIONS:
1. All deadlines specified in this Exhibit may be extended by mutual
agreement.
2. If at any meeting conducted pursuant to these Dispute Resolution
Procedures a negotiator intends to be accompanied at a meeting by an
attorney, the other negotiator shall be given prompt, but at least
three (3) business days notice of such intention and may also be
accompanied by an attorney.
3. The procedures specified in this Exhibit are an essential
provision of the Distributor Service Agreement and one that is
legally binding on them. These procedures shall be the sole and
exclusive procedures for the resolution of Disputes between the
parties arising out of or relating to the Distributor Service
Agreement to which it is attached. In case of violation of the
obligations of each party pursuant to the Exhibit V, the other
party may bring an action to seek enforcement of such obligation
in any court of law authorized in the Distributor Service
Agreement.
4. The parties acknowledge that the foregoing Dispute Resolution
Procedures are intended to provide a private resolution of
Disputes between them. Accordingly, all documents, records, and
other information relating to the Dispute shall at all
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times be maintained in the strictest confidence and not disclosed to
any third party except when necessary for the specific purpose of
resolving the pending Dispute. All negotiations pursuant to these
Dispute Resolution Procedures are confidential and shall be treated
as compromise negotiations for all purposes, including for purposes
of the Federal Rules of Evidence and State Rules of Evidence.
5. If the Distributor Service Agreement has not been terminated, the
parties agree to act in good faith to comply with all of their
respective obligations under the Distributor Service Agreement as
much as possible as if there were no Dispute during any pending
Dispute Resolution Procedures.
6. The parties agree that the terms of this Exhibit shall survive the
termination or expiration of the Distributor Service Agreement.
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