Interim Supply Agreement
THE GRAND UNION COMPANY ("GU") AND C&S WHOLESALE GROCERS, INC. ("C&S") intending
to be legally bound, agree as follows:
1. Term. Without further action of the parties or the Bankruptcy Court,
the term of this Interim Supply Agreement (the "Agreement") shall
expire on January 15, 2001; provided that if the DIP Loan should
terminate or if GU is unable to continue to borrow under the DIP loan,
then, the Term shall expire unless within 24 hours of such event, GU
pays all accrued but unpaid amounts to C&S and provides C&S with
adequate assurances that it will be able to continue to pay all amounts
under this agreement as such amounts become due. This Agreement shall
constitute a legally binding agreement between the parties hereto.
2. Surcharge. The Upcharges set forth in this Agreement shall be adjusted
by adding a Surcharge equal to 1% of purchases, such surcharge to be
increased to 1.5% if C&S is not the purchaser of substantially all of
the assets of GU; provided that, with respect to any such surcharge,
C&S makes a good faith offer to purchase such assets on terms similar
to C&S's expression of interest dated September 12, 2000. The surcharge
shall be noted at the bottom of each GU weekly statement with respect
to all amounts set forth therein. The surcharge shall accrue within two
business days of each week and be paid within two business days of
termination of this Agreement. All amounts due C&S under this
Agreement, including without limitation the surcharge shall be entitled
to administrative expense priority in GU's Chapter 11 case (the
"Case").
3. PACA Claim. GU acknowledges that C&S holds a valid perfected and
enforceable PACA trust claim with priority over all other liens,
claims, and encumbrances for all amounts due for unpaid delivery of
perishable agricultural commodities.
4. GMHBC. GU hereby certifies to C&S that C&S has no less than $10 million
of inventory at the Xxxxxxxxxx warehouse free and clear of any other
claims or liens. Over the next week, GU will identify all slow moving
product at Xxxxxxxxxx and use its best efforts to dispose of such
slow-moving product over the next succeeding four weeks. GU will use
its best efforts not to procure slow-moving or unique items into
Xxxxxxxxxx and will work diligently to reduce the amount of inventory
on hand.
10
5. Merchandise. Entire requirements for grocery, bakery, candy, store
supplies and all Perishables. Perishables means items in the following
categories: meat (other than frozen), deli, seafood (other than
frozen), produce, dairy and floral; provided that GU may continue to
purchase bakery items that it currently procures from Bakemark
Ingredients East, Inc. Entire requirements for frozen (mainline),
frozen bakery, ice cream, frozen meat, frozen seafood and ice for the
Northern division, and commencing upon 60 days written notice by C&S to
GU but no later than March 31, 2001, for the Southern and Eastern
divisions. Absent a service level deficiency, GU will not purchase from
a
1
secondary supplier product carried by C&S.
6. Base Price
1. General. Except as stated below, the Base Price shall be the
manufacturer's published price in the best bracket in which C&S
normally purchases such item (including all inbound transportation
charges), less any published retail off-invoice allowances.
Logistics initiatives over and above the truckload bracket that
require C&S to perform services and/or to incur a cost shall not
be reflected in Base Price. Base Price will not include any C&S
upcharges or other fees set forth herein.
2. Reserve Price. The "Reserve Price," shall be the price established
at the time product is booked into the Forward Buy Reserve.
3. Perishable Direct Bookings. Direct Bookings will have a Base Price
equal to GU's designated pricing on such Merchandise, as invoiced
to C&S by the vendor, including all in-bound transportation
charges.
4. Produce, Meat and Store Supplies The Base Price for items in the
produce, floral, store supplies, deli, meat, seafood, frozen
seafood and frozen meat categories, other than Direct Bookings,
will be quoted weekly by C&S based upon market conditions and
availability. The Base Price shall be reviewed with and reasonably
acceptable to GU.
7. Other Pricing Provisions.
1. Deal Extension. C&S will reflect in the Base Price all
manufacturers' published allowances from first ship date to last
ship date.
2. Cash Discount. C&S will retain all cash discounts. C&S will
equalize cash discounts to 1.5% on ice cream and 2% on dairy items
for which there is no cash discount. In addition, if a vendor, in
any product category, selling product to C&S for GU subsequently
reduces its cash discount and reduces the cost of such product,
then C&S may equalize its Base Price for such product by adding to
the Base Price an amount equal to the reduced cash discount, but
will not add an amount in excess of the then reduction in the cost
of the product. Upcharges on items subject to cash equalization
shall be on the Base Price of such items without taking into
account any cash equalization.
3. Private Label. C&S has no obligation to carry GU's private label.
Nevertheless, C&S and GU will work to identify fast-moving private
label items and C&S will work to supply GU with such items. GU
shall promptly establish a program to sell through all private
label items on hand and on order on the date hereof and shall use
2
its reasonable best efforts to minimize the amount of on hand
private label inventory.
4. Ad Quantities.
1. Non-Perishables. On the day immediately following the end of the
ad period, C&S will add all leftover ad product to the Forward Buy
Reserve. GU will use its best efforts to work with C&S to minimize
the amount of leftover ad product. Such efforts will include (i)
providing to C&S the retail billbacks so as to exclude such items
from the Forward Buy Reserve, and (ii) the current method whereby
C&S receives approximately 70% of a projected ad booking prior to
the ad period with the remaining 30% to be received through the ad
period, all in an effort to minimize the amount of potential
excess inventory in the warehouse.
2. Perishables. As noted below, GU will no longer make direct
bookings. GU will still make leftover ad predictions and C&S will
procure appropriate quantities to meet such predictions. To the
extent that C&S is not able to ship leftover GU ad product to
other customers, GU will promptly establish a store distribution
for such items to avoid any code dating or quality issues,
provided that any mis-picks related thereto shall be the
responsibility of C&S. C&S shall continue to ship dairy items with
the same minimum receipt and ship dates as exist on the date
hereof.
5. Certain Perishable Procurement. GU will no longer make direct bookings.
Instead, GU will provide specifications to C&S and C&S will procure
such product according to GU's specifications. Absent compelling
circumstances, no unique items will be purchased by C&S. Thus, C&S will
not purchase Argentine beef but will purchase the appropriate
quantities of prime beef. To the extent that unique items are purchased
or with respect to direct bookings currently in the warehouse, GU must
purchase from C&S all such items before spoilage. If any such items
spoil before they are distributed to GU, then GU will pay the Base
Price for such product, all applicable upcharges, cash discount
equalizations, the applicable fees set forth in Section 10 hereof, any
other fees payable as agreed to by the parties (such as outside
storage) and C&S's disposal costs for such items. If GU is able to find
a Perishable item of the same quality but at a lower cost then C&S's
cost, then it shall communicate such lower price to C&S. If C&S can, it
will either purchase such product at the lower cost, match the price or
instruct GU to purchase such item. Regardless of the price or sourcing
of any product, C&S will cut all purchase orders and control all
inbound freight.
6. Outbound Diverting. GU may outbound divert product to a reasonable
extent; provided, that GU will use its reasonable best efforts to
provide C&S a right of first refusal on 50% of the amount and quantity
of outbound loads.
3
7. Cross-roads. C&S is entitled to share movement reports with cross-road
vendors.
8. Cost Changes
1. General Non-Perishables. C&S will provide GU with two weeks price
protection on vendor price advances subject to allocation, product
availability and vendor notification.
2. Non-Floorstocked Price Declines (Non-Perishables). C&S will use
its reasonable best efforts to minimize the in-house inventories
for all effected items at the time of the price decline. GU shall
be responsible for any leftover ad product on items booked in
excess of 500 cases that is still physically in the inventory, or
any previously reserved quantities. C&S will agree to move to the
new pricing no later than the date on which GU has purchased from
C&S four weeks of normal turn movement at the prior higher price,
such four weeks commencing from the first ship date of the new
costing, exclusive of the above noted leftover ad or reserve
product that has not depleted after the four weeks. It would be
our intent to move to the lower pricing expeditiously and we would
work to move to the pricing before the maximum time frames. The
above listed parameters are necessary due to the various vendor
brackets and palleting order requirements.
8. Payments.
1. General. With respect to all categories of Merchandise except
produce, Grand Union will pay C&S each business day before 1 p.m.
by wire transfer an amount equivalent to 20% of its purchases
during the current week of all such Merchandise (including all
fees and charges payable under this Agreement), as estimated on a
weekly basis and all other amounts due and payable hereunder. C&S
will not be exposed to any credit risk under the terms and
conditions of this section, except as may result from the express
provisions of this Agreement. If there is an overage or shortfall,
it will be adjusted on the first Tuesday following the Saturday
weekly statement, provided -------- that both parties will use
their best efforts to insure that any overage or shortfall is
minimal and does not negatively impact either party. If the
relevant banks are not open for business on any Monday, Tuesday,
Wednesday, Thursday or Friday during a week, GU's wire transfers
during the remaining days of the week shall be in an amount
equivalent to 25% of the amount otherwise due. 1.
2. Produce. On the third Wednesday following each weekly statement,
and continuing through the next succeeding Tuesday, Grand Union
shall pay C&S each business day by wire transfer an amount equal
to 20% of Grand Union's produce purchases (including all fees and
charges payable under this Agreement) as set forth on the
4
applicable weekly statement; provided, that the total amount owing
from GU to C&S with respect to produce purchases shall at no time
exceed $13 million.
3. Time is of the essence. If GU fails to make any payment when due
under the Agreement, C&S shall both give notice to GU of such
failure to receive payment and shall have the right to stop
shipping product under this Agreement. If all payments due and
owing are not received within 72 hours from receipt by GU of such
notice, C&S shall have the right to terminate this Agreement.
Notwithstanding the foregoing, GU shall have the right to dispute
price, quantities and whether such amount is due and owing, and GU
will notify C&S promptly if it believes there is an error. The
parties agree to use their best efforts to resolve such dispute
within 2 weeks after delivery of such notice.
4. Notice. Any notice under this Agreement shall be provided to the
President, Chief Financial Officer and General Counsel of the
party receiving the notice.
5. Letter of Credit. GU shall maintain the existing letter of credit.
9. Standard Credit. The parties have established an overage/shortage
program with respect to all Merchandise categories, including meat and
deli, attached hereto (the "Standard Credit Policy"). The Standard
Credit Policy also provides for store delivery documentation and remedy
procedures in the event of a "missing pallet." Product shortages that
exceed the standard credit program cap will be investigated to
determine the whereabouts of the product. A credit will not be issued
under the following circumstances:
a. the product is located at the store,
b. the product is located at another site and reshipped,
c. the load has been audited, witnessed and verified as complete
without error,
d. the delivery receipt and load documentation indicate that the
product was received at the store.
If a store disagrees with the outcome of the investigation, it may
immediately appeal its claim through GU's operations liaison, who in
turn may contact the C&S customer service manager (Xxxxx Xxxxxxxx). The
parties will work to provide further information and reach an agreeable
solution within 5 working days. If an agreement cannot be reached, the
GU Vice President of Operations may contact the C&S Vice President of
Sales (Xxxxxxx Xxxxxxxxxxx) for final resolution. Through this process,
the parties will resolve any and all disputes involving amounts in
excess of the standard credit within fourteen days of one party
notifying the other that a dispute exists. Both parties shall authorize
and empower their respective designees to resolve such disputes.
10. Review Rights. C&S will transmit to GU all cost information on a weekly
basis. GU will match the C&S cost file to GU's cost file and transmit
an exception report back to C&S the next day. The parties will then
meet to resolve any cost discrepancies prior to billing. GU may also
review C&S's Base Price information at the end of the week with respect
to such
5
billing. Any and all alleged price discrepancies must be noticed to C&S
(attention: Xxxx Xxxxx and Xxxx Xxxxx) within seven days of the billing
of such goods. C&S will reimburse GU for any actual findings that C&S
over-billed GU (including any upcharges or other fees under this
Agreement related to such over-billed amount), and correspondingly GU
will pay C&S for any actual findings that C&S under-billed GU
(including any upcharges or other fees under this Agreement related to
such under-billed amount). It is the intent of the parties that the
weekly data transmittal and GU's review of such information shall be
the primary mechanism to ensure pricing accuracy.
11. Quality control. C&S will not substitute any item without GU's prior
authorization. If C&S substitutes an item of lower cost and quality
without GU's prior authorization, then (i) if GU returns the item, (a)
but does not purchase it from a third party, then GU will be entitled
to a full Base Price and upcharge credit, or (b) and buys the ordered
item from a third party at a higher price, then C&S will pay to GU the
difference between the cost charged by C&S for the substituted item and
the cost of the item purchased by GU from a third party, or (ii) if GU
does not return such item, then GU will be entitled to a credit equal
to the difference between the cost of the ordered item and the cost of
the substituted item.
12. Delivery Schedule.
1. Delivery Requirements. C&S shall use its best efforts to meet the
delivery schedule (as currently agreed to by the parties and as
amended from time to time by the parties' mutual agreement, the
"Delivery Schedule"), and GU shall order product (i) in full
truckloads and (ii) so that each store will receive a minimum of
1600 cubic feet of product per stop for grocery Merchandise, 10
pallets per stop for Perishable Merchandise and 5 pallets per stop
for frozen food Merchandise; provided, that such minimum pallet
requirements shall not apply to the extent that GU cannot comply
due to store space constraints as set forth on the Delivery
Schedule. To help maintain the upcharges and other pricing set
forth in the Agreement, the parties shall adjust the delivery
schedules to maintain full truckloads including, without
limitation, if C&S consolidates slow-moving Merchandise (i.e.,
store-ready cross-dock pallets of slow-movers) and/or C&S uses the
largest trucks allowable by law. GU will reasonably permit skipped
deliveries on slow-moving Merchandise. C&S will provide GU with
weekend deliveries as set forth on the agreed upon Delivery
Schedule without additional premium. The Delivery Schedule shall
incorporate two (2) hour windows. C&S and GU will mutually adjust
such schedules in response to store Sales.
2. Delivery Service Level. "Delivery Service Level" means a
percentage reflecting the ratio of (i) the number of orders
delivered on-time by C&S to GU in any week per the Delivery
Schedule, to (ii) the total number of orders scheduled for
delivery by C&S to GU during such week, per the Delivery Schedule.
Delivery Service Level percentages will not be adversely affected
by any event of force majeure or any nonperformance or error by GU
including, without limitation, delivery delays caused
6
by GU. For example, if a truck arrives at a store but no receiving
crew is present, then C&S will not be responsible for the delay
delivering at subsequent stops due to such GU mistake. C&S will
provide GU a weekly Delivery Service Level Reconciliation Report
showing the times of all deliveries during such week.
3. Delivery Service Level Deficiency. If, for any reason other than a
breach, nonperformance or error by GU or an event of force
majeure, C&S fails to achieve a 95% Delivery Service Level (the
"Targeted Service Level") for any three consecutive weeks during
the Term (the "Measurement Period") and GU gives notice of such
alleged delivery service level deficiency to C&S, then such
failure shall constitute a "Delivery Service Level Deficiency". In
the event of a Delivery Service Level Deficiency, C&S shall use
its reasonable best efforts to immediately restore the Delivery
Service Level to at least 95%.
4. Cure of Delivery Schedule Breach. If, during the week following
the occurrence of a Delivery Service Level Deficiency (the
"Delivery Penalty Week"), the Delivery Service Level is restored
to at least 95%, then the Delivery Service Level Deficiency shall
be cured and a new Measurement Period shall begin.
5. Delivery Service Level Deficiency Penalty. If C&S fails to restore
the Delivery Service Level to 95% during the Delivery Penalty
Week, then C&S will rebate to GU 25% of the load fees and stop
charges with respect to those deliveries that were not timely
delivered during such week and each subsequent week until the
Delivery Service Level is restored to 95%.
6. Delivery Service Level Termination. If the Delivery Service Level
is below 90% for six consecutive weeks, and prior to the end of
the fifth week, GU has provided C&S with notice that it intends to
terminate the agreement, and prior to the end of the sixth week,
C&S has not restored the Delivery Service Level to at least 95%,
then GU may terminate the agreement within seven days following
the end of the sixth week.
13. Service Level.
1. Service Level Reporting. C&S will electronically transmit to GU a
daily Service Level Reconciliation Report showing, with respect to
each item, excluding private label and unique merchandise, the
number of cases ordered, shipped, out of stock (including
"warehouse scratches"), over-pulled, booked, unauthorized,
discontinued and manufacturer out-of-stocks, provided that C&S
placed orders for such cases within the normal lead time. C&S will
supplement this daily report with a weekly spread sheet with
adjustments as set forth in this Agreement so as to provide a
weekly Service Level Report. A unique item is an item that is
carried by C&S only for GU and not any other C&S customer.
7
2. Service Level. "Service Level" means a percentage reflecting (i)
the number of cases shipped divided by (ii) the number of cases
ordered, less cases not shipped in the following categories:
unauthorized, discontinued, over-pulled, private label, unique,
and manufacturers' out-of-stock cases. The term "manufacturer's
out-of-stock cases" refers to commodity shortages and cases that
are unavailable from the manufacturer or cut by the manufacturer.
The Service Level will not be adversely affected by any
nonperformance or error by GU, including without limitation errors
in booking advertising and feature items (including sales levels
of feature items in excess of projections made by GU and
adjustments to pre-orders where applicable), GU's directions with
respect to items procured by GU, or any event of force majeure.
C&S will use its commercially reasonable best efforts to achieve a
Service Level of 96%.
3. Service Level Deficiency. If, for any reason other than a breach,
nonperformance or error by GU or an event of force majeure, C&S
fails to maintain a 95% Service Level (the "Targeted Service
Level") for any two consecutive weeks during the Term (the
"Measurement Period") and GU gives notice of such alleged service
level deficiency to C&S, then such failure shall constitute a
Service Level Deficiency. In the event of a Service Level
Deficiency, C&S shall use its reasonable best efforts to
immediately restore the Targeted Service Level.
4. Cure of Delivery Schedule Breach. If, during the week following
the occurrence of a Service Level Deficiency (the "Service Penalty
Week"), the Service Level is restored to at least 95%, then the
Service Level Deficiency shall be cured and a new Measurement
Period shall begin.
5. Service Level Deficiency Penalty/Third Party Sourcing. If C&S
fails to restore the Targeted Service Level during the Service
Penalty Week, then GU will be entitled to either (i) the Penalty
Payment during such week and each subsequent week until the the
Targeted Service Level is restored ("Penalty Period") or (ii)
source product from a third party supplier. The Penalty Payment
shall be equal to: (i) the difference between 95% and the average
actual service level percentage during the Penalty Period,
multiplied by (ii) the number of cases delivered during the
Penalty Period, multiplied by (iii) $.25. The Penalty Payment
shall be paid within 15 days of the end of the Contract Quarter in
which the Penalty Period occurs. Upon restoration of the Targeted
Service Level, GU shall cease purchasing product from third-party
suppliers (except with respect to product previously ordered), and
C&S shall reimburse GU for any increased direct product cost
incurred by GU as a result of its sourcing product from a third
party supplier pursuant to this section.
6. Service Level Termination. If the Service Level is below 87.5% for
four consecutive weeks in a Contract Year, and prior to the end of
the third week, GU has provided C&S with notice that it intends to
terminate the agreement, and prior to the end of the fourth week,
C&S has not restored the Targeted Service Level to at least 95%,
then
8
GU may terminate the agreement within seven days following the end
of the fourth week. Furthermore, if (a) there have been five or
more separate Service Level Deficiencies in a Contract Year, (b)
during such deficiencies the Service Level was below 87.5%, and
(c) within seven days following the end of the fourth Service
Level Deficiency, GU has provided C&S with notice that it intends
to terminate the agreement, then GU may terminate the agreement
within seven days following the end of the fifth Service Level
Deficiency.
14. Fees. Upcharges are on Base Price and exclusive of ripening fees.
Merchandise shall be placed in a category classification according to
C&S's historical practices, subject to a list of grand-fathered items,
if any, attached to the supply agreement). The following fees shall
apply:
Grocery, supplies, candy (full case) 1.95%
Delivery Fee - first stop $85
- each additional $25
Perishables
Meat and deli 3.20%
Produce 7.50%
Dairy upcharge 2.25%
Delivery Fee
All Perishables delivered on same truck
- first stop $120
- each additional $25
Banana ripening $1.00/case
Stone Fruit ripening $48/pallet
Frozen and ice cream 2.00%*
* 1.95% when C&S starts supplying GU with all of GU's requirements
for frozen food in the Southern and Eastern divisions.
Delivery - first stop $120
- each additional $25
Label Charge $.02/case
Restocking Fee (charged on Base Price) 8%
Special Deliveries $75/stop
(extra delivery on already scheduled run)
ASAP deliveries $1.20/mile
(additional run; cost adjustable for additional fuel/cost)
9
Trailer rental (pick-up and delivery involves a mileage charge of
$1.20/mile, based upon current trip rates and fuel costs; trailer
rental is subject to increase for increases in third party rental
charges)
dry $100/week + pick-up and delivery
refrigerated $300/week + pick-up and delivery
turkey (extended use with maintenance) $500/week + pick-up and delivery
15. Xxxxx/totes/cross-dock/reclamation pick-up. $22,000/week. To assist C&S
in managing its own inventory and the Service Level requirements
herein, GU shall inform C&S of when GU has purchased/received
Merchandise into Xxxxxxxxxx and GU's intended distribution of such
product.
16. Frozen Holiday Turkeys/Shrimp. With respect to holiday turkeys and
shrimp (including to the extent that GU wishes C&S to handle frozen
holiday turkeys or shrimp for the Southern and Eastern divisions prior
to such goods becoming Merchandise hereunder), GU will be responsible
for all predistribution storage and handling. Commencing no sooner than
October 1, of each year, C&S will receive such product two days prior
to the agreed upon distribution or store order billing date for such
goods. All such product must be distributed out of C&S's facilities (i)
no later than the Sunday immediately following Thanksgiving for
Thanksgiving holiday turkey and shrimp and (ii) by February 1 for all
Christmas and New Year's holiday turkey and shrimp. It is the intent of
this section that C&S shall not have to store in its facilities any
holiday shrimp or turkeys for more than one week.
17. Forward Buy Reserve. No product, other than left-over ad product will
be added to the Reserve. Reserve charge as follows:
0 - 300,000 cases No charge to GU.
300,000 and above $.02/case/week
GU shall promptly establish a program to sell through all reserve
items.
18. Reduced Volume Surcharge. Payable on Monday for prior week sales. The
surcharge will be reconciled on a quarterly basis.
Weekly Purchases (Base Price) Weekly Surcharge
----------------------------- ----------------
If below $17.3 million - but equal to or above $16.35 million $57,692
If below $16.35 million - but equal to or above $15.38 million $96,154
If below $15.38 million - but equal to or above $14.42 million $173,077
If below $14.42 million - but equal to or above $13.46 million $269,231
If below $13.46 million $384,615
19. Reclamation. GU will participate in C&S' reclamation program for all
Merchandise other than produce, floral, meat, seafood and private
label. This product will be scanned at C&S' reclamation center within
seven days after the product is picked up from Grand Union Stores, and
Grand Union will receive credit, on a bi-weekly basis, for 82% of the
cost of this
10
product.
20. Third Party Deductions.
1. General. From time to time, GU may ask C&S to act as its agent to
deduct amounts that are due from manufacturers to GU. C&S has the
right, in its discretion, to refuse to honor any third party
deduction request that GU may make. If C&S makes a deduction on
GU's behalf and the manufacturer disputes the deduction made by
C&S, GU agrees to indemnify and defend C&S against and hold C&S
harmless from any claim by the manufacturer related to such
deduction. If C&S repays any deduction that C&S makes on GU's
behalf, GU will, upon notice from C&S, repay such amount to C&S.
GU will insure that supply of Merchandise from manufacturers to
C&S is not adversely affected by any third party deductions that
C&S may take on GU's behalf. Service Level shall not be adversely
affected by an interruption in the supply of Merchandise from a
manufacturer to C&S if the interruption is caused by the refusal
of the manufacturer to ship product to C&S and such refusal is
attributable to a disputed deduction that C&S has taken on GU's
behalf. C&S will add to each deduction from a vendor a fee of no
less than $250 to process the deduction made by C&S on GU's
behalf. Each Friday, C&S will reimburse GU for all deductions
collected during the preceding seven day period, less C&S' fee.
2. Direct Booking Errors. If there is an error in vendor invoicing on
a Perishable direct booking, GU may request C&S to collect any
amounts GU is owed pursuant to the terms of paragraph (a) of this
Section.
21. Termination by C&S. C&S may terminate this Agreement for cause and
without further order or approval of the Bankruptcy Court. Cause shall
be
1. nonpayment of amounts owed hereunder uncured for 72 hours
following receipt by GU of written notice;
2. if GU does not obtain court approval hereof within 5 days of the
commencement of the Case;
3. other material breach uncured after 90 days following receipt by
GU of written notice; and
4. the end of the Term.
22. Termination by GU. GU may terminate this Agreement for cause. Cause shall
be:
1. nonpayment of amounts owed hereunder uncured for 72 hours
following receipt by C&S of written notice;
2. material breach uncured after 90 days following receipt by C&S of
written notice; and
3. As set forth in Sections 12 or 13.
11
23. Transfer of Assets. GU will provide C&S with written notice of any GU
plan to sell, transfer, assign, close, cease doing business or
otherwise convey ownership (a "Sale") in one or more store. Such notice
shall be given at the earliest practicable time and shall state, among
other things, the name of the proposed purchaser, the location of the
store to be sold, the approximate timetable for consummating the Sale
and the purchaser's plans for supplying the store in the aftermath of
the Sale, to the extent that such plan is known to GU.
24. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of GU and C&S and their respective successors and assigns.
25. Sale Incentive Fee.
Aggregate Consideration Paid C&S Share Percent of Total Aggregate Consid.
---------------------------- --------------------------------------------
1. Below $275 million 0%
2. $275 million - 300 million 1%
3. $300 million - 330 million 1 & 1/3%
4. in excess of $330 million 1 & 2/3%
26. Termination of Prior Agreements. C&S currently supplies GU pursuant to
the Amended and Restated Term Sheet: Supply Agreement, dated as of
September 24, 1999, between C&S and GU, dated October 15, 1999 (the
"October 15 Supply Agreement") and the Supply Agreement between C&S and
GU, dated as of September 24, 1999 and sent to GU on November 12, 1999
(the "November 12 Supply Agreement" and together with the October 15
Supply Agreement, the "Prior Supply Agreement"). This Interim Supply
Agreement will set forth the parties' rights and obligations during the
Term. Notwithstanding anything herein to the contrary, C&S shall be
entitled to file a proof(s) of claim for any amounts owed or that may
become due under the Prior Agreement, including, without limitation,
any termination fee or prorated termination fee relating to the Prior
Agreement, as if GU had rejected the Prior Agreement prior to the
conclusion of the Case. GU reserves its right to contest the allowance,
validity, priority, or amount of such claim(s) but cannot use the
existence or any provision of this agreement as evidence or an
admission. GU and C&S acknowledge and agree that objections to the
allowance, validity, priority or amount of such claim(s) of C&S shall
be decided as if this interim supply agreement did not exist.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first written above.
THE GRAND UNION COMPANY C&S WHOLESALE GROCERS, INC.
---------------------------------
Xxxxx X. Xxxxx Xxxx Xxxxx
Senior Vice President Senior Vice President
