REDACTED COPY
EXHIBIT 10.11
COMPOSITE AND CONFORMED
MASTER DISTRIBUTION AGREEMENT
BETWEEN
SYSCO CORPORATION
AND
ARAMARK FOOD AND SUPPORT SERVICES GROUP, INC.
This Composite and Conformed Master Distribution Agreement contains all of the
operative terms and conditions of that certain Master Distribution Agreement
dated January 2, 1992 (the "Original Agreement") by and between Sysco
Corporation and ARAMARK Food and Support Services Group, Inc., assignee of ARA
Marketing Services Group, Inc., as amended by the following: (1) a certain
Amendment Agreement dated May 26, 1994, (2) a certain Ancillary Agreement dated
as of May 26, 1994, (3) a certain Amendment No. 1 to Ancillary Agreement and
Master Distribution Agreement dated as of June 29, 1996, (4) a certain Amendment
No. 2 to Master Distribution Agreement dated February 7, 1997, (5) a certain
Amendment No. 3 to Master Distribution Agreement dated as of September 1, 1998,
and (6) a certain letter amendment dated August 29, 2001.
Terms and conditions in the Original Agreement, or in any Amendments, which are
no longer operative have been identified as "[Superseded.]"
For consistency, the defined term "ARAMARK" is used to refer to ARAMARK Food and
Support Services Group, Inc. and ARA Marketing Services Group, Inc.
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TABLE OF CONTENTS
-----------------
I. SCOPE OF AGREEMENT AND DESIGNATION OF DISTRIBUTORS
A. Scope of Agreement
B. Designation of Distributors
C. Distributor Status
II. PRODUCT CATEGORIES
III. SERVICE
IV. DELIVERY
V. DATA PROCESSING AND REPORT SCHEDULES
VI. ORDERING PROCEDURES
VII. TERMINATION
VIII. CALCULATION OF COST
IX. PRICING AND MARGINS
A. Pricing Calculations and Adjustments
B. Primary Distributor Pricing
C. [Superseded.]
D. Smallwares Pricing
E. Contract Pricing
F. Commodity Pricing
X. ALLOWANCES
XA. CLIENT-SPECIFIC MARGIN ADJUSTMENTS
XI. ARAMARK PROPRIETARY MERCHANDISE
XII. PAYMENT TERMS
XIII. INVOICING
XIV. AUDIT
XV. INSURANCE AND INDEMNITY
XVI. PROCEDURES MANUAL
XVII. MINORITY-OWNED AND WOMEN-OWNED SUPPLIERS
XVIII. MISCELLANEOUS PROVISIONS
ATTACHMENTS:
SCHEDULE "I" -- Products
SCHEDULE "II" -- Pricing Dates
SCHEDULE I.B. 1 -- Primary Distributors
SCHEDULE "III" -- Equipment Vendors
EXHIBIT "A" -- ARAMARK's Current Fiscal Year Calendar
EXHIBIT "B" -- Sample ARAMARK Audit Format
EXHIBIT "C" -- Minority-Owned & Women-Owned Suppliers
Additional Provisions of Composite and Conformed Master Distribution
Agreement
EXHIBIT A referred to in Section X and XA - Client-Specific Margin
Adjustments
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MASTER DISTRIBUTION AGREEMENT
THIS MASTER DISTRIBUTION AGREEMENT (the "Master Distribution Agreement") is made
this 2nd day of January, 1992, by and between ARAMARK FOOD AND SUPPORT SERVICES
GROUP, INC., ("ARAMARK") and SYSCO CORPORATION ("SYSCO").
RECITALS
A. SYSCO and its subsidiary and affiliated operating companies are engaged in
the wholesale distribution of products to the institutional food service
industry.
B. ARAMARK and its affiliates provide food service management to a variety of
institutional clients throughout the United States.
C. SYSCO has offered to ARAMARK a master distribution program providing for the
nationwide distribution of a full line of food service products, together with
pricing, service, delivery, reporting, verification and other provisions.
D. ARAMARK has agreed to participate in SYSCO's master distribution program to
fulfill a portion of ARAMARK's requirements, on the terms and conditions set
forth below.
NOW, THEREFORE, in consideration of the promises contained herein, ARAMARK and
SYSCO agree as follows:
I. SCOPE OF AGREEMENT AND DESIGNATION OF DISTRIBUTORS
A. Scope of Agreement
This Master Distribution Agreement is a distribution agreement for a full line
of food service products, which will be distributed to institutional food
service locations managed by affiliates of ARAMARK and designated by ARAMARK as
participating in SYSCO's program (collectively, "ARAMARK Components"). SYSCO
will cause each of its subsidiary and its affiliated operating companies which
provide distribution services to ARAMARK or any ARAMARK Components to perform in
accordance with the terms and conditions of this Master Distribution Agreement.
B. Designation of Distributors
1. The SYSCO operating companies set forth in Schedule 1.B.I attached hereto
are designated as Primary Distributors under this Master Distribution Agreement.
2. From time to time, ARAMARK may designate additional SYSCO operating
companies as Primary Distributors under the Master Distribution Agreement, with
the consent of SYSCO which will not be unreasonably withheld. The term "Primary
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Distributor" is defined as any SYSCO operating company designated by ARAMARK as
the authorized distributor of food service products within the product
categories set forth below in Section II(A) for certain ARAMARK Components.
3. Those SYSCO operating companies which are not designated by ARAMARK as
Primary Distributors but which are designated by ARAMARK with the consent of
SYSCO, which will not be unreasonably withheld, to distribute products to
ARAMARK Components on a secondary basis are hereinafter referred to as
"Secondary Distributors."
4. Primary Distributors and Secondary Distributors are collectively referred to
in this Master Distribution Agreement as "participating SYSCO companies."
5. SYSCO and all SYSCO operating companies servicing
are hereby designated as Primary Distributors to all service locations operated
by ARAMARK and its affiliates in , and all
service locations which come to be operated by ARAMARK and its affiliates in
during the 36 month period beginning on September 1, 1998.
C. Distributor Status
ARAMARK will grant SYSCO and all SYSCO operating companies which are Primary
Distributors, the opportunity to supply, on a preferred (but not exclusive)
basis, products in the categories set forth in Section II(A) of this Master
Distribution Agreement. As preferred distributors, SYSCO and the Primary
Distributors will be the designated distributors of such products to food
service locations managed by ARAMARK's affiliates and currently designated as
ARAMARK Components. With respect to food service locations which in the future
come under management by ARAMARK's affiliates, ARAMARK will in good faith
consider designating those locations as ARAMARK Components under this Master
Distribution Agreement. However, ARAMARK makes no guarantee, warranty or other
commitment that all food service locations managed by ARAMARK's affiliates will
be designated as ARAMARK Components, that any ARAMARK Components or other food
service locations managed by ARAMARK's affiliates will purchase any products, or
any minimum quantity of products, from SYSCO or any Primary Distributor, or that
any ARAMARK Component or other food service location managed by ARAMARK's
affiliates will purchase products from SYCO or any Primary Distributor to the
exclusion of any other vendor. As of the date this amended and restated
Paragraph 1.C. becomes effective, it is not ARAMARK's intention to designate
as the Primary Distributor for ARAMARK Components currently serviced
by SYSCO or SYSCO operating companies, absent a service deficiency, as
reasonably determined by ARAMARK.
II. PRODUCT CATEGORIES
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A. SYSCO will cause its participating SYSCO companies to distribute a full line
of food service products under this Master Distribution Agreement including
without limitation, SYSCO brand products, products bearing national brands, and
other products selected by ARAMARK and meeting ARAMARK's specifications,
including without limitation, ARAMARK Proprietary Merchandise (defined in
Section XI). The product categories consist of the following:
1. Dry Groceries
2. Frozen
3. Refrigerated Products
4. Paper and Disposables
5. Meat and Seafood
6. Beverages (including coffee and post-mix products)
7. Fresh Produce
8. Eggs
9. Equipment and Smallwares
10. Janitorial, Chemicals and Cleaning Supplies
Ice cream may be added upon agreement of the parties.
B. Products in any one of the product categories listed in Section II(A) that
are subject to weekly price fluctuations are hereinafter referred to as "Market
Commodity Products." Certain of the Market Commodity Products are set forth on
Schedule "I" attached hereto, From time to time, the parties may review and
amend Schedule "I", upon mutual agreement.
C. Unless otherwise specified by ARAMARK, when SYSCO label products are
purchased for an ARAMARK Component, only SYSCO label products bearing the brand
SYSCO Classic will be sold and delivered to such ARAMARK Component to ensure
consistency of quality and costs. SYSCO will notify ARAMARK and ARAMARK
Components of any modification to the quality or other characteristics of the
brand SYSCO Classic or any other SYSCO brand.
D. ARAMARK acknowledges that SYSCO receives earned income and obtains
operational advantages from the sale of SYSCO brand products to ARAMARK
Components. SYSCO acknowledges that ARAMARK, as a global-food service provider
in a highly competitive marketplace, must retain discretion to select products
for use at food service locations managed by ARAMARK's affiliates. Accordingly,
SYSCO may at any time, and from time to time, offer to provide SYSCO brand
Products to ARAMARK and ARAMARK Components. ARAMARK may, in its discretion and
exercising its judgment as a global food service provider, choose to purchase
SYSCO brand products which are reasonably equivalent (as determined by ARAMARK
in its discretion and exercising such judgment) to other products from other
vendors of ARAMARK.
III. SERVICE
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A. Participating SYSCO companies will provide participating ARAMARK Components
with complete and timely service in all aspects of distribution services to be
provided under this Master Distribution Agreement,
including without limitation, (1) achieving the agreed-upon fill rate of each
order, (2) providing proper follow up of each order as required by each ARAMARK
Component, (3) correcting untimely or incomplete deliveries and deliveries of
damaged, spoiled or pilfered products and (4) preventing their recurrence. The
term "fill rate" is defined as for each order, the percentage of items of
products ordered by an ARAMARK Component which are actually delivered to such
ARAMARK Component.
B. Participating SYSCO companies will provide weekly price order guides on a
weekly basis, and monthly price order guides on a monthly basis, to all
participating ARAMARK Components to facilitate order placement under the
Ordering Procedures described in Section VI. SYSCO will cause all participating
SYSCO companies to provide two (2) copies of each such weekly and monthly price
order guide to ARAMARK at its address set forth in Section XVIII. All price
order guides will correspond with ARAMARK accounting periods (hereinafter
defined). Weekly price order guides will identify prices of all Market
Commodity Products. All price order guides provided to a participating ARAMARK
Component will be customized and tailored to the product requirements of the
ARAMARK line of business of which the participating ARAMARK Component is a part.
All price order guides will contain a product description, and will identify
product brands, pack and size, quality and grade, as well as item code number
and line item number, for each product. Upon request by a participating SYSCO
company, ARAMARK may agree to accept noncustomized, standard price order guides
from such participating SYSCO company which does not as of the date hereof have
available customized price order guides, provided that such participating SYSCO
company provides customized price order guides to all participating ARAMARK
Components which it serves within six (6) months after the date hereof. For any
participating SYSCO companies listed in Schedule I.B.1 which were not Primary
Distributors prior to May 26, 1994, the six (6) month grace period described
above will commence as of May 26, 1994. The term "ARAMARK accounting period" is
defined as each of those twelve (12) accounting periods, which together comprise
a fiscal year of ARAMARK. Exhibit "A" attached hereto is ARAMARK's current
fiscal year calendar and identifies each ARAMARK accounting period. Prior to
the commencement of each subsequent ARAMARK fiscal year, ARAMARK will provide
SYSCO a copy of ARAMARK's fiscal year calendar for such ARAMARK fiscal year.
C. Each participating SYSCO company will assign a salaried, non-commissioned
Account Executive and a Customer Service Representative to ARAMARK's account.
The SYSCO Account Executive and the SYSCO Customer Service Representative will
maintain contact with the manager (or his designee) of each ARAMARK Component
served by the participating SYSCO company which assigned them, on a basis
satisfactory to each ARAMARK Component manager (or his designee), to ensure
complete service levels, to enter and check the accuracy of orders and to
resolve service and product deficiencies. In addition, each SYSCO Account
Executive will visit
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each ARAMARK Component served by such SYSCO Account Executive and meet with the
manager of such ARAMARK Component, at least once each month, on a date and at a
time satisfactory to each of them.
D. The mechanics of service, including without limitation, credits and pick-
ups, will be established by the ARAMARK Component manager (or his designee), the
assigned SYSCO Account Executive and the assigned Customer Service
Representative based on the policies and procedures manual to be prepared and
supplied by SYSCO under Section XVI.
E. Participating SYSCO companies will provide each ARAMARK Component location
with at least one (1) delivery each week. More frequent deliveries may be
agreed upon by the ARAMARK Component manager (or his designee) and the
participating SYSCO company's assigned Account Executive on a participating
ARAMARK Component-by-ARAMARK-Component basis.
F. Upon request by a participating ARAMARK Component, participating SYSCO
companies will provide to that ARAMARK Component those products not normally
carried in inventory but which are required for special events, provided that
the ARAMARK Component gives reasonably adequate notice of its requirements.
IV. DELIVERY
A. Each participating SYSCO company will establish a delivery schedule for each
participating ARAMARK Component served by the participating SYSCO company, as
agreed upon by the ARAMARK Component manager and the participating SYSCO
company's assigned Account Executive. The number of deliveries to each ARAMARK
Component will be determined by the service level required, subject to Section
III(E).
B. All participating SYSCO companies will use their best efforts to make all
deliveries between the hours of 7:00 a.m. and 11:30 a.m. and 1:00 p.m. and 5:00
p.m. unless otherwise specified by the ARAMARK Component manager.
C. SYSCO and ARAMARK have entered into this Master Distribution Agreement to
achieve the highest and best level of service, product delivery, and product
quality, and the most efficient and consistent cost and pricing to ARAMARK.
SYSCO acknowledges that ARAMARK and ARAMARK Components will require, in each
geographic area, and from each participating SYSCO company, different delivery
schedules to provide the highest and best service levels, and the most efficient
and consistent cost and pricing, to ARAMARK. SYSCO therefore acknowledges and
specifically agrees that SYSCO and each participating SYSCO company will
cooperate and agree with ARAMARK and ARAMARK Components as to deliveries and
service on a basis mutually acceptable to ARAMARK and such participating SYSCO
company.
V. DATA PROCESSING AND REPORT SCHEDULES
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A. Each Primary Distributor and Secondary Distributor will provide, the
following reports to ARAMARK:
1. SYSCO will cause all participating SYSCO companies to provide ARAMARK and
ARAMARK Components with price order guides, in accordance with Section III(B).
SYSCO will develop, and ARAMARK will cooperate with SYSCO to establish, an
electronic link between SYSCO and ARAMARK's Corporate Office. SYSCO will
endeavor to establish such electronic link within six (6) months after the date
of this Master Distribution Agreement, so that all weekly and monthly price
order guides will be transmitted electronically to ARAMARK's Corporate Office by
direct electronic link or by magnetic tape or disk mailed to ARAMARK's Corporate
Office, as determined by ARAMARK. Until a direct electronic link and a magnetic
tape or disk system is established and operating to ARAMARK's satisfaction,
SYSCO will cause all participating SYSCO companies to provide ARAMARK with
written copies of each weekly and monthly price order guide.
2. Vendors' Product Usage Reports
Each month, all participating SYSCO companies win provide written vendors'
product usage reports for ARAMARK and ARAMARK lines of business, as specified by
ARAMARK, to ARAMARK at its Corporate Office. These reports will be provided
until ARATRACK (as defined in Section V(A)(3)) is in operation to ARAMARK's
satisfaction. Thereafter, ARAMARK will from time to time notify SYSCO of those
written vendors' product usage reports which ARAMARK no longer requires.
All vendors' product usage reports will include the following fields: item code,
product description, pack, size, vendors' product number, if applicable,
quantity and totals by vendor.
3. ARAMARK is currently modifying its computer product tracking system
("ARATRACK"). SYSCO will cause participating SYSCO companies to compile
computer product usage data ("ARAMARK Usage Data") and to provide ARAMARK Usage
Data on magnetic tape or cartridge to ARAMARK for input into ARATRACK, providing
ARAMARK with the same or greater product usage information as contained in the
vendor's product usage reports described in Section V(A)(2). ARAMARK will
develop and maintain ARATRACK. SYSCO will provide the services of a suitably
trained employee at SYSCO's corporate headquarters to coordinate development and
maintenance of ARATRACK and timely provision of ARAMARK Usage Data to ARAMARK.
Participating SYSCO companies will provide ARAMARK Usage Data to ARAMARK on a
monthly basis. ARAMARK Usage Data will be mailed to ARAMARK on magnetic tape or
cartridge, as determined by ARAMARK and in a form compatible with ARATRACK.
ARAMARK Usage Data will be provided to ARAMARK no later than the second Friday
following the close of each ARAMARK accounting period.
4. The ARAMARK Usage Data and above reports will be provided at cost to
ARAMARK. If ARAMARK requires special customized reports, such reports will be
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provided at rates necessary to recover the out-of-pocket incurred by the
participating SYSCO company which provides such reports.
VI. ORDERING PROCEDURES
A. All orders will be placed by participating ARAMARK Components, ordering by
product item or line numbers shown in the price order guides. As of the date
hereof, CRT units are not available for orders at all participating SYSCO
companies. SYSCO and each of the participating SYSCO companies will use their
best efforts to establish uniform product item code numbers and to provide to
ARAMARK Components electronic order entry software packages and order entry
transmission units such as CRT units or hand-held order entry transmission units
for orders placed by participating ARAMARK components.
B. [Superseded.].
C. Each participating ARAMARK Component will be assigned a call day and
approximate call time for placing orders and will be notified of the assigned
call day and time. The assigned SYSCO Customer Service Representative will call
for the orders on the assigned call day at the approximate call time.
D. Each participating SYSCO company will incorporate ARAMARK's Specified
Products Program and into its written procedures
(and where established, into its computer systems and procedures) for responding
to orders placed by participating ARAMARK Components.
ARAMARK will from time to time notify SYSCO of those products which are
preferred under . SYSCO will notify participating
SYSCO companies of those products so preferred.
E. Any participating ARAMARK Component may place, and the Primary Distributor
serving the participating ARAMARK Component will fill, emergency orders to
provide continuity of service. The Primary Distributor serving the participating
ARAMARK Component placing an emergency order will fill each emergency order at a
price established in the manner provided in Section IX. Flagrant abuse of
emergency order procedures may be brought to the attention of ARAMARK's Regional
Distribution Managers by SYSCO.
F. Substitution of Products:
Except as provided in Section VI(D), no participating SYSCO company may
substitute any products for other products ordered by participating ARAMARK
Components. Products which are out of stock or product substitutions made
pursuant to Section VI(D) in connection with will be
communicated to each participating ARAMARK Component, prior to delivery as
follows:
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1. If a skip day ordering procedure is implemented, the participating SYSCO
company's Customer Service Representative will call those participating ARAMARK
Components affected and will suggest substitute products to be shipped.
Substitute products will be shipped to a participating ARAMARK Component
affected only after the ARAMARK Component manager (or his designee) has approved
the substitution. A substituted product of higher quality or grade than the
product ordered will be sold at the price in effect at the time of the order for
the product originally ordered, calculated pursuant to Section IX. A substitute
product of lower quality than the product ordered, will be sold at the price in
effect at the time of the order for that substitute product, calculated pursuant
to Section IX.
2. For those ARAMARK Components where a skip day ordering procedure is not
implemented the participating SYSCO company's Customer Service Representative
will use his or her best efforts to communicate out of stock products and
substitutions of products prior to delivery.
3. The term "skip day ordering procedure" is defined as that ordering procedure
where an ARAMARK Component specifically agrees to allow for one or more calendar
days, as specified by the ARAMARK Component, between the day the order is placed
and the day the product ordered is delivered.
G. Shortages:
SYSCO and each Primary Distributor acknowledge that the designation of a SYSCO
operating Company as a Primary Distributor limits the circumstances in which
ARAMARK and participating ARAMARK Component will purchase from alternate
suppliers. SYSCO, therefore, guarantees that each Primary Distributor will
supply each participating ARAMARK Component with its entire order if product is
available in the marketplace, provided that the participating ARAMARK
Component's order is placed using a skip day ordering procedure.
H. SYSCO Brand Frozen Juice Concentrate:
No participating SYSCO company will supply a participating ARAMARK Component
with SYSCO Brand frozen juice concentrate without the prior written consent of
the ARAMARK Regional Distribution Manager for the ARAMARK region in which the
participating ARAMARK Component is located.
VII. TERMINATION
A. Upon sixty (60) days' prior written notice to SYSCO, ARAMARK may terminate
any participating SYSCO company's designation as a Primary Distributor or status
as a Secondary Distributor in one or more market areas, as to one or more
ARAMARK Components, or any combination thereof. If, however, ARAMARK desires to
so terminate any participating SYSCO company's designation as a Primary
Distributor or status as a Secondary Distributor as a result of the expiration
or termination of any
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contract pursuant to which an affiliate of ARAMARK manages an ARAMARK Component,
ARAMARK will not be obligated to provide sixty (60) days' prior written notice
and ARAMARK will provide only such prior written notice as ARAMARK determines to
be practical under the circumstances. SYSCO will notify the terminated
participating SYSCO company of its termination, the scope of its termination and
the termination date. ARAMARK will order and the terminated SYSCO company will
deliver to one or more locations designated by ARAMARK all ARAMARK Proprietary
Merchandise on hand in inventory within thirty (30) days of the termination
date.
B. The term of this Master Distribution agreement will commence as of January
25, 1992, is of indefinite duration and is terminable by either party on 120
days' notice.
VIII. CALCULATION OF COST
A. Except as otherwise provided In Section IX(E), all prices to ARAMARK for
products, including without limitation, substitute products and products not
listed in a price order guide, will be calculated on SYSCO's cost (hereinafter
defined), plus a defined margin based on product type, as more fully provided In
Section IX.
B. Definition of SYSCO's Cost: The term "SYSCO's cost" is defined as the
Vendor's Last Invoice Price, plus freight charged (including Alfmark
freight), if included in the Vendor's Last Invoice Price, less all vendor off-
invoice allowances, discounts and promotions for the period of the promotion,
excluding cash discounts and allowances.
1. The term "Vendor's Last Invoice Price" is defined as, for each product
received, the invoice price shown on the last invoice for such product issued by
the product vendor prior to the date on which a participating SYSCO company
SYSCO's cost and establishes the price of such product.
4. Cash discounts, actual and imputed, breakage allowances and the cost
recovery and earned income referenced in Paragraph B.6. of Section VIII of this
Master Distribution Agreement will be excluded from the calculation of SYSCO's
cost of a product. Participating SYSCO companies will not increase the cost of
any product by an imputed cash discount, if the vendor does not offer a cash
discount. Participating SYSCO companies will not decrease SYSCO's cost of any
product by the amount of any actual cash discount made available by the vendor
to the participating SYSCO company, except as provided in Section IX(E)(5).
5. Each participating SYSCO company will reduce the of
products distributed by the participating SYSCO company and bid or sold to all
ARAMARK Components qualifying for allowances, by the amount
of those allowances. Each participating SYSCO company will reduce
of products distributed by
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the participating SYSCO company and bid or sold to all ARAMARK Components
qualifying for allowances through
, by the amount of those allowances; provided that ARAMARK supplies the,
participating SYSCO company with the for ARAMARK components
that are and provided that in the opinion of SYSCO's
counsel, such action by the participating SYSCO company does not violate any
applicable state law.
6. SYSCO and participating SYSCO companies perform value-added service for
suppliers of SYSCO brand and other products over and above procurement
activities typically provided. These value-added services include regional and
national marketing, freight management, consolidated warehousing, quality
assurance and performance-based product marketing. SYSCO may recover the costs
of providing these services and may also be compensated for these services and
considers this compensation to be earned income. Receipt of such cost recovery
or earned income does not affect product cost.
IX. PRICING AND MARGINS
A. Pricing Calculations and Adjustments:
1. SYSCO will cause each Participating SYSCO company to calculate SYSCO's cost
and to establish prices for all products sold to ARAMARK (other than Market
Commodity Products) prior to the commencement of each ARAMARK accounting period
(hereinafter defined). SYSCO will cause participating SYSCO companies to sell
all products (other than Market Commodity Products) ordered by ARAMARK during
such ARAMARK accounting period at such prices. Prior to the expiration of each
ARAMARK accounting period, SYSCO and participating SYSCO companies will
establish prices of all products (other than Market Commodity Products), which
will be in effect for the next following ARAMARK accounting Period and which
will reflect increases or decreases in the vendors' invoice prices for such
products. SYSCO will cause each participating SYSCO company to calculate SYSCO's
cost and to establish prices for all Market Commodity Products on a weekly
basis, and such prices will remain in effect for seven (7) consecutive days,
other than fresh produce and fresh fish, which may be adjusted daily.
2. Schedule "I" attached hereto identifies, of the products described in
Section IX(B)(3), (4) and (5), whether prices of such products are to be revised
on a weekly or monthly basis. Schedule "II" attached hereto identifies the day
of the week on which each Primary Distributor will calculate the weekly price
for Market Commodity Products and the day of the week on which the weekly price
becomes effective.
B. Primary Distributor Pricing: Except as provided in Section IX(E), all prices
to ARAMARK from Primary Distributors will be SYSCO's cost, plus a defined margin
based on product type, as specified below; provided, however, that the prices to
ARAMARK for those products whose margins are specified below in this Section as
a , will equal .
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Product
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1. Dry and Canned Groceries, Frozen or
Refrigerated Products, and Beverages
2. Fresh and Frozen Shellfish, as more fully
described in Section 7 of Schedule "I"
3. Fresh and Frozen Raw Ground Beef
(both bulk and patties)
4. Meats, as more fully described in Section
1(a) of Schedule "I" (other than Fresh and
Frozen Raw Ground Beef Meets, as more fully
described in Section 2(a) of Schedule "I,"
and Fresh Fish
If SYSCO's cost is
If SYSCO's cost is or higher
5. Meats, as more fully described in section
1(b) of Schedule "I" and Poultry, as more
fully described in Section 3 and 4(a) of
Schedule "I"
6. American processed cheese and
mozzarella cheese, shredded and loaf,
and butter
7. Catch weight cheeses, i.e., naturals
8. Shortening, oils, dressings, margarine,
oleo, and yogurt
9. Frozen Orange Juice Contract Price, Plus Freight, plus
Concentrate as well as allied juice
concentrates
Frozen SYSCO Brand juice concentrate:
With dispenser equipment and $ /case, plus
service:
10. Fresh Shell Eggs (as described below)
11. Paper and Disposables
12. Janitorial, Chemicals and Cleaning
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Supplies
13. Fresh Produce
Full Case:
Split Case:
14. Ice Cream (where available)
The margin for fresh shell eggs will be .
C. [Superseded.].
D. Smallwares Pricing: SYSCO will provide participating ARAMARK Components
with kitchen, cooking, storage and handling equipment, tabletop items and
smallwares (collectively, "Smallwares"). SYSCO will deliver Smallwares to
participating ARAMARK Components at SYSCO's option, from participating
SYSCO companies direct from the manufacturer, or from Central Warehouse.
1. From Participating SYSCO Companies: All prices for Smallwares shipped
from participating SYSCO companies to participating ARAMARK Components
will be SYSCO's cost, plus .
a. Opening Smallwares orders in excess of $ (but less than
$ ) will be SYSCO's cost, plus .
b. Opening Smallwares orders in excess of $ will be
SYSCO's cost, plus .
2. From Manufacturers (Drop Ship): All prices for Smallwares shipped from
a manufacturer's factory or distribution facility to ARAMARK Components
will equal SYSCO's cost for the participating SYSCO company servicing
the ordering ARAMARK Component, less any allowance or discount given by
the manufacturer identified herein, plus .
Manufacturers granting allowances or discounts are identified on
Schedule "III" (amended and restated) attached hereto. Freight costs
will be charged and paid by ARAMARK components .
3. From Central Warehouse: All prices from Smallwares shipped to
participating ARAMARK Components from SYSCO's Central Warehouse on
behalf of the participating SYSCO company will be at a SYSCO's cost for
such participating SYSCO company, plus . Freight will be charged
only on orders under $ .
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E. Contract Pricing
1. Coffee: Participating SYSCO companies will obtain ARAMARK's premium blend
coffee for ARAMARK's manual and vending operations through deliveries from
ARAMARK approved roasters. Participating SYSCO companies will deliver ARAMARK's
premium blend coffee to participating ARAMARK Components at the prices
to the participating SYSCO companies by ARAMARK approved roasters,
. If a participating SYSCO company provides service for manual blend coffee
brewing equipment to an ARAMARK Component, the participating SYSCO company will
be paid per pound by
. ARAMARK does not warrant or guarantee payment of those allowances.
2. Chemicals: Participating SYSCO companies will deliver
products to participating ARAMARK Components at the prices for those products
established under ARAMARK's contract with .
3. Disposables: Participating SYSCO companies will deliver
products to participating ARAMARK Components at the prices for those products
established in the contract between and ARAMARK,
plus the margin set forth in Section IX(B)(10).
4. Paper Products: Participating SYSCO companies will deliver
paper products to participating ARAMARK Components at the prices established in
its contract with ARAMARK plus the margin set forth in Section IX(B)(10).
5. (post-mix syrup): SYSCO will cause participating SYSCO
companies to distribute post-mix syrup at the
contract price as stipulated by the Program;
provided that each participating SYSCO company will reduce
by the amount of the cash discount received by the participating SYSCO company
from .
6.
F. Pricing
From time to time ARAMARK may choose to enter into
agreements with manufacturers. ARAMARK will notify SYSCO of the relevant terms
of those agreements. SYSCO will cause participating SYSCO companies to perform
this Agreement in a manner consistent with ARAMARK's
agreements.
X. ALLOWANCES
Under this Master Distribution Agreement, commencing as of September 1, 1998,
SYSCO will pay to ARAMARK a % national volume discount allowance on
any and all purchases by ARAMARK Components, .
15
SYSCO will pay the national volume discount allowance earned by ARAMARK based
on ARAMARK's purchases in a SYSCO accounting period by the
. In addition to the national volume discount allowance, SYSCO will pay to
ARAMARK a percent ( %) prompt payment allowance on
all ARAMARK purchases in accordance with Section XII.
XI. ARAMARK PROPRIETARY MERCHANDISE
A. When requested by ARAMARK, participating SYSCO companies selected by ARAMARK
will stock ARAMARK Proprietary Merchandise, merchandise bearing a national or
regional brand and private label merchandise providing there is a minimum
movement of cases per week for each participating SYSCO
company selected by ARAMARK to stock such items. There will be a
day grace period to reach the average movement of cases per
week, commencing on the date SYSCO notifies ARAMARK that cases of
the item are in stock at each participating SYSCO company selected by ARAMARK.
B. ARAMARK Proprietary Merchandise that has been discontinued by ARAMARK will
be the responsibility of ARAMARK to deplete from inventories of participating
SYSCO companies within days. ARAMARK will be responsible to
deplete perishable items within days.
C. The term "ARAMARK Proprietary Merchandise" is defined as only those products
purchased at the direction of ARAMARK exclusively for ARAMARK lines of business,
manufactured and packaged with the ARAMARK logo or other xxxx proprietary to
ARAMARK.
XII. PAYMENT TERMS
ARAMARK will pay invoices under this Master Distribution Agreement within forty-
two (42) days after the date of invoice. ARAMARK shall earn a prompt payment
allowance of percent ( %) on each payment made during
an ARAMARK accounting period; provided that at least percent (
%) of the total dollar amount of all payments made during such ARAMARK
accounting period were for invoices dated no earlier than days
prior to the date of such payments (the " "), and
provided that ARMARK shall use reasonable efforts to maintain its account with
SYSCO at a day average balance.
16
If ARAMARK fails to meet the , ARAMARK will earn the
prompt payment allowance only on that portion of the payments made during such
ARAMARK accounting period for invoices dated no earlier than
days prior to the date of such payment.
SYSCO will pay ARAMARK the prompt payment allowance earned in each ARAMARK
accounting period by the
; provided, however, that ARAMARK may at its option, deduct the amount of the
prompt payment allowance earned from payments of amounts owed SYSCO.
SYSCO may at any time, and from time to time, request a report from ARAMARK
showing that ARAMARK has, for each ARAMARK accounting period covered by the
report, met the for all payments made during such period. If the
report shows, or SYSCO otherwise demonstrates, that ARAMARK has not met the
for any payment made during such period and therefore has not earned the prompt
payment allowance deducted to arrive at the amount of such payment, ARAMARK
nevertheless will earn the prompt payment allowance only on that portion of such
payment which is for invoices dated no earlier than
days prior to the date of such payment. ARAMARK will pay to SYSCO the unearned
portion of the prompt payment allowance which ARAMARK deducted.
[Note: pursuant to a verbal agreement of the parties, the -day
-----------------------------------------------------------------------------
requirement described above, was changed to a -day requirement.
-----------------------------------------------------------------------------
The wording of the agreement has not been revised.]
---------------------------------------------------
XIII. INVOICING
A. Each participating SYSCO company invoice will be addressed to ARAMARK
Services, Inc. in care of the component's name and address, and will include the
correct ARAMARK Component number and the participating SYSCO company's supplier
number (as designated by ARAMARK) for payment.
B. Monthly price changes for all products (other than Market Commodity
Products) in the product categories listed in Section II(A) will become
effective with the commencement of each ARAMARK accounting period, Weekly price
changes for Market Commodity Products will become effective on the days, and
will remain in effect for the periods, identified in Schedule "II."
C. SYSCO will cause participating SYSCO companies to design and use weekly and
monthly price order guides to conform to participating ARAMARK Components'
inventory format. Participating SYSCO companies will prepare and supply
participating ARAMARK Components with weekly and monthly price order guides
conforming to the participating ARAMARK Components' inventory format, and
complying with Section III. Participating SYSCO companies will identify on each
invoice subtotals of products purchased comporting to ARAMARK's accounting
format, which upon request, will be provided to SYSCO for distribution to
participating SYSCO companies.
17
XIV. AUDIT
A. Upon ten (10) business days' prior written notice to SYSCO and a
participating SYSCO company, ARAMARK may conduct an audit (including
verification of such participating SYSCO company's cost and prices) of any or
all participating SYSCO companies, as more fully provided in this Section,
ARAMARK's notice to SYSCO will state:
1. The participating SYSCO company or companies subject to the audit.
2. The date, time and place of audit.
3. The dates of the pricing periods to be audited.
4. The items to be audited.
B. ARAMARK will audit for a
period not to exceed prior to the date the audit commences
(collectively, the "Audit Documents"). Items to be audited will not exceed
line items, whether or not listed items in SYSCO's price order guides.
C. At the time of the audit, ARAMARK will have access to the Audit Documents
for all items being audited.
D. In addition to the Audit documents, SYSCO will make available
prior to the date on which SYSCO's Cost and the price of a product is
established, SYSCO will also make available
for the dates and pricing periods for which prices established by SYSCO or any
participating SYSCO company are to be audited.
E. SYSCO also agrees that, upon notification of an audit, each participating
SYSCO company which is the subject of the audit will utilize ARAMARK's format if
requested to do so. An example of ARAMARK's format is attached as Exhibit "B."
If (1) such participating SYSCO company does not utilize ARAMARK's audit format
and procedures or does not provide reports or other documents requested by
ARAMARK, or (2)
. ARAMARK reserves the right to re-audit at its discretion, where audit results
are unsatisfactory. In that event, ARAMARK may review
issued an additional prior to the audit period if such
documentation is available. Furthermore, ARAMARK may review additional line
items and additional materials, which will be provided by SYSCO upon ARAMARK's
request.
XV. INSURANCE AND INDEMNITY
18
A. SYSCO and each participating SYSCO company will obtain and continue in
force, during the term of this Master Distribution Agreement, at their own
expense, the following insurance coverage:
1. Workers' Compensation Insurance and Occupational Disease Insurance
as required by the laws of the state or states wherein the work is to be
performed.
2. Employer's Liability Insurance, with limits of at least
$100,000 each claim.
3. Comprehensive Automobile Liability Insurance with limits on Bodily
Injury Liability of $100,000 each person, $1,000,000 each accident and Property
Damage Liability of $500,000 each accident, $500,000 aggregate.
4. Comprehensive General Liability Insurance, including Operations,
Product Liability and Contractual Liability coverage, with limits on Bodily
Injury and Personal Injury Liability of $1,000,000 each occurrence, $2,000,000
aggregate and Property Damage Liability of $500,000 each occurrence, $500,000
aggregate.
SYSCO and each participating SYSCO company will purchase, obtain and maintain
insurance policies, providing the above-required coverage from qualified
insurance companies rated by A.M. Best Company, Inc. (or any successor rating
agency similarly recognized by the insurance industry) (the "Rating Agency") in
one (1) of the three (3) highest categories of the Rating Agency. Each
insurance policy will name ARAMARK, ARAMARK Corporation and their subsidiaries
as additional insured, will not contain any cross-liability exclusions and will
not be cancelled or materially changed without thirty (30) days' prior written
notice to ARAMARK. Such insurance maybe provided in the form of blanket
policies covering SYSCO and all of its operating divisions and subsidiaries,
including without limitation, participating SYSCO companies. Within thirty (30)
days after the date hereof, SYSCO and each participating SYSCO company will
obtain and deliver to ARAMARK certificates of insurance evidencing the coverage
required above. If any insurer from which SYSCO or a participating SYSCO
company obtains the above-required insurance coverage ceases to be rated in one
(1) of the three (3) highest categories of the Rating Agency, SYSCO or the
participating SYSCO company, as the case may be, will obtain, at the time of
renewal of such policy or policies, coverage from another qualified insurance
company rated in one (1) of such categories, and within thirty (30) days after
obtaining such replacement coverage, will deliver to ARAMARK certificates of
insurance evidencing the replacement coverage.
B. SYSCO will defend, indemnify and hold ARAMARK harmless from all costs,
liabilities or other obligations arising out of (1) the performance of this
Master Distribution Agreement by SYSCO or any participating SYSCO company, or
(2) any product supplied under this Master Distribution Agreement by SYSCO or
any participating SYSCO company, except to the extent such costs, liabilities or
other obligations are caused by the negligence or willful misconduct of ARAMARK,
19
ARAMARK Services, Inc., or their respective agents or employees or the. agents
of employees of entities or persons owning or controlling ARAMARK Components.
XVI. PROCEDURES MANUAL
Within six (6) months after the date hereof, SYSCO will prepare and supply each
participating ARAMARK Component, and each participating SYSCO company, at no
cost to ARAMARK or any ARAMARK component, with a detailed policies and
procedures manual consistent with this Master Distribution Agreement and
identifying and explaining all procedures, delivery schedules, credit memos,
etc. Such procedures manual will be prepared by SYSCO based upon the existing
manual used by SYSCO and ARAMARK, and will subject to ARAMARK's approval.
XVII. MINORITY-OWNED AND WOMEN-OWNED SUPPLIERS
It is the policy of both ARAMARK and SYSCO to encourage the interest of minority
and women-owned businesses. SYSCO represents and warrants that to the best of
SYSCO's knowledge, set forth on Exhibit "C" attached hereto is a true, correct
and complete list of minority-owned and women-owned suppliers from which SYSCO
operating companies are purchasing on the date hereof, compiled based on
information from SYSCO's suppliers.
If requested, SYSCO will provide ARAMARK, at no cost to ARAMARK, information
regarding the purchases of the minority-owned or women-owned suppliers' products
by ARAMARK Components by participating SYSCO company. SYSCO will notify ARAMARK
on a quarterly basis of additions or deletions Exhibit "C" attached hereto.
XVIII. MISCELLANEOUS PROVISIONS
A. SYSCO represents and warrants that it has full right, power and authority to
enter into this Master Distribution Agreement and to perform, and to cause each
participating SYSCO company to perform all of the terms and conditions of this
Master Distribution Agreement on its or their respective parts to be performed.
B. ARAMARK represents and warrants that it has full right, power and authority
to enter into this Master Distribution Agreement and to perform all of the terms
and conditions of this Master Distribution Agreement on its part to be
performed.
C. Any information supplied by either party to this Master Distribution
Agreement to the other party, including without limitation, client information
and purchasing specifications will be considered confidential and will not be
disclosed to any third party and will not be used by either party to this Master
Distribution Agreement for any reason other than to fulfill the terms of this
Master Distribution Agreement. Any party required by law or legal process to
disclose any such confidential information will notify the other as far in
advance of such required disclosure as is reasonably feasible. SYSCO will
disclose this Master Distribution Agreement to participating SYSCO Companies,
each
20
or whom will agree in writing to perform its terms and conditions, including
without limitation, this provision on confidentiality, SYSCO will provide
ARAMARK with an executed original of each such agreement within thirty (30) days
after the date of this Agreement.
D. This Master Distribution Agreement will not apply to any purchases made by
or on behalf of any ARAMARK components from any participating SYSCO companies,
including without limitation, any ARAMARK Components which are federal, state or
local governmental agencies or instrumentalities, if in the written opinion of
counsel to SYSCO or counsel to ARAMARK, the application of this Master
Distribution Agreement would violate any federal, state or local law or
regulation. In that event, for those ARAMARK Components and participating SYSCO
companies, this Master Distribution Agreement will apply and be enforceable to
the maximum extent permitted by such law or regulation, as determined by counsel
to SYSCO and counsel to ARAMARK. For all other Components and participating
SYSCO companies, this Master Distribution Agreement will remain in full force
and effect.
E. All notices required or permitted to be given under this Master Distribution
Agreement by ARAMARK to SYSCO, or by SYSCO or any SYSCO operating company to
ARAMARK, will be in writing signed by the notifying party and will be either
hand delivered, or deposited in the U. S. certified or registered mail, postage
prepaid, return receipt requested addressed as follows:
To ARAMARK: To SYSCO:
ARA Marketing Services Group, Inc. SYSCO Corporation
The ARAMARK Tower 0000 Xxxxxxx Xxxxxxx
Distribution Services Xxxxxxx, XX 00000
0000 Xxxxxx Xxxxxx/00xx Xxxxx ATTN: Xxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000 Executive Vice President
ATTN: Xxxx Xxxxxxx
Vice President, Distribution
or to such other addresses as the parties may direct notice given as herein
provided. All notices given by SYSCO or any SYSCO operating company to any
ARAMARK Component will be in writing and will be signed and given in the manner
provided above; to the ARAMARK Component's address, ATTN: Manager, with a copy
to ARAMARK. Notices may be transmitted electronically if followed by a
confirming written notice given as provided above. Notices will be deemed given
when hand delivered, or when received as evidenced by the return receipt or the
date notice is first refused if that be the case.
F. No waiver of any breach or default of this Agreement will constitute a
waiver of any other or further breach or default hereof. This Agreement will be
governed by the law of Pennsylvania, without regard to its choice or conflicts
of law rules. The parties
21
hereby waive any objection that venue in Philadelphia, Pennsylvania is improper
or inconvenient.
G. This Master Distribution Agreement constitutes the entire understanding and
agreement of the parties, supersedes all prior or contemporaneous agreements,
writings an undertakings between on the one hand, SYSCO and its subsidiary or a
companies and on the other hand, ARAMARK and its lines of business and their
components. Schedules "I", "II" and "Ill" and Exhibits "X," "X" and "C" are
incorporated herein by reference. This Master Distribution Agreement may not be
amended, altered, or otherwise modified except in a writing signed by SYSCO and
ARAMARK.
[Signatures omitted]
22
SCHEDULE "I"
------------
1 of 2
This Schedule "I" identifies each product whose margin is identified and whose
selling price is calculated by adding the margin to SYSCO's cost of the
participating SYSCO company which delivers the product. This Schedule "I" also
identifies whether those products are Market Commodity Products, whose selling
prices are calculated weekly and hence, listed in a weekly price order guide, or
whether those products' selling prices are calculated on a monthly basis, and
hence listed in a monthly price order guide.
1. MEATS ( Price Order Guides) ( )
-------------------------------------------
(a) Beef, Pork, Veal, Lamb, , as defined in the
, as amended from time to time. Includes
. Also includes
.
(b) Spareribs, baby back ribs, Canadian bacon, bacon, all smoked, cooked and
raw ham, sausage (fresh, smoked and dry), hot dogs, turkey xxxxxx, chopped
ham, luncheon meats, knockwurst, bratwurst, liverwurst.
2. MEATS ( Price Order Guides)
-----------------------------------------
(a) Portion cut steaks, cooked roast beef, pizza toppings, liver, cubed steaks,
cocktail xxxxxx.
(b) For meats, Primary Distributors will calculate the selling
price to ARAMARK using the margin set forth
in Section IX(B)(1) hereof.
3. POULTRY ( Price Order Guides) ( )
------------------------------------------
chicken breast, whole turkey, ,
cooked and turkey breast, smoked turkey, turkey ham, turkey xxxxxx,
chicken xxxxxx, ground chicken, ground turkey, chicken livers, chicken,
chicken, turkey hens, toms, quail, cornish hens, chicken and turkey roll, duck,
chicken fajita meat, pulled or diced chicken or turkey, and
unbreaded chicken products.
4. POULTRY ( Price Order Guides)
----------------------------------------------
(a) All chicken, both whole and parts.
23
(b) For poultry, Primary Distributors will calculate the selling
price to ARAMARK using the margin set forth
in Section IX(B)(1) hereof.
5. FRESH FRUITS AND VEGETABLES ( Price Order Guides) ( )
---------------------------------------------------------------
Prices may be adjusted daily.
6. FRESH FISH ( Price Order Guides) ( )
----------------------------------------------
Prices may be adjusted daily.
7. FRESH AND FROZEN SHELLFISH ( Price Order Guides) ( )
-------------------------------------------------------------------
Fresh and frozen shellfish, including without limitation, green headless
shrimp,cooked P&D shrimp, clams, oysters, crabs, crabmeat, crablegs and
crabclaws.
8. FRESH SHELL EGGS ( Price Order Guides) ( )
-------------------------------------------------------
9. DAIRY ( Price Order Guides) ( )
---------------------------------------------
Processed American and Swiss cheese and natural cheeses.
10. DAIRY ( Price Order Guides)
-------------------------------------------
Yogurt, cheese food, substitute cheese, cream cheese, sour cream, dairy xxxxxxx,
oleo and margarine and butter.
24
Schedule "II"
PARTICIPATING DISTRIBUTORS
Allied SYSCO Food Services, Inc. Thursday Tuesday thru Monday
Baraboo-SYSCO Food Services Thursday Monday thru Friday
Xxxxxxx/SYSCO Food Service Thursday Monday thru Friday
Deaktor/SYSCO Food Service Company Thursday Tuesday thru Monday
Hallsmith-SYSCO Food Service Thursday Tuesday thru Monday
Xxxxxx'x-SYSCO Food Services, Inc. Wednesday Monday thru Friday
Xxxxxxxx-SYSCO Food Services, Inc. n/a n/a
Maine/SYSCO, Inc. Thursday Tuesday thru Monday
Mid-Central/SYSCO Food Services, Inc. Thursday Monday thru Friday
Xxxxxx/SYSCO Food Service Company Thursday Monday thru Friday
Nobel/SYSCO Food Services Co. (Southwest Thursday Monday thru Friday
Division)
Nobel/SYSCO Food Services Co. (Denver) Thursday Monday thru Friday
Xxxxxx Xxx-SYSCO Food Services Co. Thursday Tuesday thru Monday
Pegler-SYSCO Food Services Company Thursday Monday thru Friday
SYSCO/Xxxxx Continental Food Services, Inc. Thursday Monday thru Friday
SYSCO Food Services of Portland, Inc. Thursday Monday thru Friday
SYSCO Food Services of Indianapolis, Inc. Thursday Monday thru Friday
SYSCO Food Services-Chicago, Inc. Thursday Monday thru Friday
SYSCO Food Services of Cleveland, Inc. Thursday Tuesday thru Monday
SYSCO Food Services of Atlanta, Inc. Friday Tuesday thru Monday
SYSCO Food Services of Arizona, Inc. Wednesday Friday thru Thursday
SYSCO Food Services of Arkansas, Inc. Friday Tuesday thru Wednesday
SYSCO Food Services of Iowa, Inc. Thursday Monday thru Friday
SYSCO Food Services of Los Angeles, Inc. Thursday Monday thru Friday
SYSCO Food Services of Minnesota, Inc. Wednesday (12 noon) Monday thru Friday
SYSCO Food Services of Seattle, Inc. Tuesday Monday thru Friday
SYSCO Food Services of Virginia, Inc. Friday Tuesday thru Monday
SYSCO/Frost-Pack Food Services, Inc. Thursday Monday thru Friday
SYSCO Food Services - Albany Thursday Monday thru Friday
SYSCO Food Services - Horseheads Friday Tuesday thru Monday
SYSCO Food Services - Syracuse Thursday Monday thru Friday
SYSCO/General Food Services, Inc. Thursday Monday thru Friday
SYSCO Intermountain Food Services Thursday Monday thru Friday
SYSCO/Louisville Food Services Co. Wednesday Friday thru Thursday
SYSCO Food Services, Inc. Friday Tuesday thru Monday
(University of Houston) Xxxxxx Xxxxxx School
only)
SYSCO Food Services of San Antonio, Inc. Friday Tuesday thru Monday
(USAA and Towers)
SYSCO Food Services of Montana, Inc. Friday Tuesday thru Monday
SYSCO Food Services of Arkansas, Inc. Friday Tuesday thru Monday
25
SCHEDULE I.B.1 TO MASTER DISTRIBUTION AGREEMENT
DATED JANUARY 2, 1992 AS AMENDED
PRIMARY DISTRIBUTORS
SUBSIDIARIES SUBSIDIARIES CONTINUED
Arrow - Sysco Food Services, Inc. Sysco Food Services of Indianapolis, Inc.
Deaktor/ Sysco Food Services Company Sysco Food Services of Iowa, Inc.
Xxxxxx'x- Sysco Food Services, Inc. Sysco Food Services of Los Angeles, Inc.
Xxxxxxxx- Sysco Food Services, Inc. Sysco Food Services of Montana, Inc.
Maine/Sysco, Inc. Sysco Food Services of Oklahoma, Inc.
Mid-Central Sysco Food Services Sysco Food Services of Portland, Inc.
Xxxxxx/ Sysco Food Services Sysco Food Services of San Antonio, Inc.
Nobel/ Sysco Food Services Sysco Food Services of Seattle, Inc.
Nobel/ Sysco Food Services (Southwest Sysco Food Services of St. Louis, Inc.
Division)
Xxxxxxx'x- Sysco Food Services Sysco Food Services of Virginia, Inc.
Xxxxxx Xxx- Sysco Food Services Sysco/Frost-Pack Food Services, Inc.
Pegler- Sysco Food Services Company Sysco Intermountain Food Services, Inc.
Xxxxxx Sysco Food Services, Inc. Sysco/Louisville Food Services Co.
Xxxxxxxxxx Sysco Food Services, Inc. Sysco Xxxxxxxx Food Services, Inc.
Sysco Xxxxx Food Services, Inc. Tartan Sysco Food Services, Inc.
Sysco Food Services-Chicago, Inc.
Sysco Food Services-Jacksonville, Inc.
Sysco Food Services of Arizona, Inc. DIVISIONS
Sysco Food Services of Arkansas, Inc.
Sysco Food Services of Atlanta, Inc. Baraboo-Sysco Food Services
Sysco Food Services of Austin, Inc. Xxxxxxx/Sysco Food Services
Sysco Food Services of Central Florida, Hallsmith-Sysco Food Services
Inc.
Sysco Food Services of Cleveland, Inc. Sysco Food Services - Albany
Sysco Food Services of Dallas, Inc. Sysco Food Services- Horseheads
Sysco Food Services of Houston, Inc. Sysco Food Services - Syracuse
Sysco Food Services of Idaho, Inc. Xxxxxx/Sysco Food Services
26
SCHEDULE "III"
--------------
Equipment Vendors Providing Allowances.
27
SCHEDULE "III"
Page 1 of 3
EQUIPMENT VENDOR DISCOUNT
---------------- --------
List price less %
List price less %, then less %
List price less %
Beverage Equipment, Decanters List price less %,then less %
List price less %, then less %
pans and lids, boxes and lids, food List price less %, then less %,
storage containers, pitchers, micro pans then less %
All other items List price less %, then less
%
List priceless %, then less %
All orders at List price less %, then less
%
Direct
0-24 doz. List price less %
25-99 doz. List price less %
100-399 doz. List price less %, then less
%
400-Above List price less %, then less
%
List price less %, then less
%
Truck load pricing
Net price list varies from % off list price
to % consecutive reductions off
list price
List Price less % (Market pricing where
applicable)
List price less % (over $
)
28
50 each lot pricing
Net price list varies from to %
off list price
List Price less %, then less %
List price less % (orders 100-349)
List price less %, then less %
(orders 350-600)
List price less %, %,
% (orders over 600)
at / %
List price less %
List price less %, then less %,
then less %
from Warehouse List price less %, then less %,
then less %
OR
List price less %, then less
%
List price less %, then less
% on all Professional Xxxx
List prices less %, then less
% on all Premier Xxxx
Cutlery & List price less %
Household Weight List price less %
List price less % (all items)
List price less %, then less
%, then less % (all patterns)
List price less %, then less %
(Serving pieces and holloware)
Varies from list price less %, then less
% to list price less %, then less
%, then less %, then less %
List price less %, then less %
List price less %
29
Varies by size of order
List price less %, then less %
List price less %
List price less %, then less % on
$ net order
List price less %
List price less %
List price less % (special pricing on
certain items)
List price less %, then less
%
List price less %
List price less %, then less %
Flatware List price less %, then less %,
then less %
60 lot pricing. at list less %
30
EXHIBIT A - CLIENT-SPECIFIC MARGIN ADJUSTMENTS
31
EXHIBIT A
ARAMARK's Current Fiscal Year Calendar
[Superseded.].
32
EXHIBIT B
---------
Sample ARAMARK Audit Format
33
ARAMARK MARKETING SERVICES GROUP
PRICE VERIFICATION FORM
Item No._________
ITEM CODE NUMBER:
-----------------------------
DESCRIPTION/PACK/SIZE:
-----------------------------
VENDOR NAME:
-----------------------------
INVOICE # AND DATE:
-----------------------------
-----------------------------------------------------------------------------
PRICE CHARGED TO ARAMARK (From Order Guide (A) $
----------------------------
INVOICE COST $
----------------------------
PLUS: FREIGHT $
----------------------------
LESS: ALLOWANCES $
----------------------------
NET RECEIVING (INVOICE) COST $
----------------------------
PLUS: XXXX-UP (in dollars/cents) $
----------------------------
EQUALS: CALCULATED SELLING PRICE (B) $
----------------------------
DIFFERENCE (BETWEEN A &B) $
------------------------------------------------------------------------------
Notes:
Verified by: Date:
----------------------- --------------------
34
EXHIBIT C
TO
MASTER DISTRIBUTION AGREEMENT
Dated January 2, 1992
Vendor Name Ownership
----------- ---------
Black
Female
Female
Hispanic
35
ADDITIONAL PROVISIONS
TO
COMPOSITE AND CONFORMED MASTER DISTRIBUTION AGREEMENT
Table of Contents
-----------------
1. Ancillary Agreement 37
2. Tower-Based Support 41
3. SYSCO Performance Allowance 41
4. Transition Allowance 41
5. Exhibit B referred to in SYSCO 42
Performance Allowance
36
1. Ancillary Agreement:
ANCILLARY AGREEMENT
THIS ANCILLARY AGREEMENT, dated as of May 26, 1994 (the "Agreement"),
by and between SYSCO CORPORATION, a Delaware corporation ("SYSCO") and ARAMARK
FOOD AND SUPPORT SERVICES GROUP, INC., a Delaware corporation ("ARAMARK").
RECITALS
A. WHEREAS, SYSCO and ARAMARK are party to that certain Master
Distribution Agreement, dated January 2, 1992 (the "MDA"); and
B. WHEREAS, concurrently herewith, SYSCO and ARAMARK are entering
into an amendment agreement (the "Amendment Agreement") to expand the number of
locations to be serviced by SYSCO thereunder and to make certain other
modifications to the MDA; and
C. WHEREAS, Section 6 of the Amendment Agreement (the "Volume
Discount Modification") provides that the national volume discount allowance
described in Section X of the MDA (the "National Volume Discount") is
from percent ( %) to percent ( %)
(the "Discount "); and
D. WHEREAS, the parties wish to further amend the MDA by adding a
new Section XA thereto as hereinafter provided; and
E. WHEREAS, the parties hereto wish to set forth their agreement
relating to earned income under the MDA in addition to matters relating to the
foregoing.
NOW, THEREFORE, in consideration of the premises, the mutual covenants
and agreements herein contained and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. [Superseded.].
2. [Superseded.].
3. [Superseded.].
4. [Superseded.].
5. Confidentiality. The terms and conditions of this Agreement
---------------
shall be kept-confidential by SYSCO and ARAMARK and neither party shall disclose
37
the existence of this Agreement or the terms and provisions hereof unless the
other party shall give its prior written consent or unless such disclosure is
necessary, in the opinion of counsel to the disclosing party, to comply with
applicable requirements of federal or state laws, orders or regulations. The
parties shall limit disclosure of such information to those of its employees who
have a bona fide need to know. [Last sentence superseded.].
6. Disputes. In the event that any party hereto disputes any
--------
calculation hereunder, such party shall notify the other party of such dispute
and the parties hereto shall attempt in good faith to resolve such dispute. In
the event that any such dispute is not resolved by the parties hereto within ten
(10) days following receipt of such notice, the parties hereto shall submit said
dispute to an independent public accounting firm mutually acceptable to the
parties hereto for resolution, the determination of which firm shall be final
and binding on the parties hereto.
7. Notices. All notices or other communications made pursuant
-------
hereto shall be in writing and shall be deemed properly delivered, given or
served if (a) personally delivered against receipted copy, (b) delivered by
telegram, (c) mailed by certified or registered mail, return receipt requested,
postage prepaid, (d) transmitted by facsimile, provided an answer back is
received, or (e) sent by overnight courier service to the parties at the
following addresses:
ARAMARK: ARAMARK Marketing Services Group, Inc.
The ARAMARK Tower
0000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attention: General Counsel
Telephone (000) 000-0000
Facsimile: (000) 000-0000
SYSCO: Sysco Corporation
0000 Xxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
All notices shall be deemed received (i) if transmitted by facsimile
or telegram, on the business day when transmitted or if not transmitted at a
time which concludes during the business day of the reicipient, on the next
succeeding business day, (ii) if sent by courier, one (1) business day after it
is sent and (iii) if mailed, three business days after deposit in the United
States mail. Either party may change it address for the purposes of this section
by
38
giving ten (10) days prior written notice of such change ot the other party in
the manner provided in this section.
8. Counterparts. This Agreement may be executed in two or more
------------
counterparts each of which shall be deemed an original and all of which together
shall constitute but one and the same instrument.
9. Governing Law. This agreement shall be governed by and construed
-------------
in accordance with the laws of the State of Delaware without reference to its
conflict of laws provisions.
[Signatures omitted]
39
EXHIBIT A
[Superseded.].
40
2. Tower-Based Support:
SYSCO shall provide at its cost and expense, a SYSCO Account Executive
acceptable to ARAMARK, who shall be based in the ARAMARK Tower, Philadelphia, PA
or such other location as ARAMARK may designate and who shall report to
ARAMARK's Director, Distribution. SYSCO agrees that SYSCO and such SYSCO
employee may be required to execute, and if requested, shall execute, a
nondisclosure agreement in a form reasonably satisfactory to counsel for SYSCO
and ARAMARK, to protect and avoid or limit disclosure of any trade secrets or
other confidential or proprietary information of ARAMARK or information of third
parties whose confidentiality has been entrusted to ARAMARK.
3. SYSCO Performance Allowance:
(a) Effective on September 1, 1998, and continuing thereafter during the term
of the Agreement, SYSCO shall pay to ARAMARK a SYSCO Performance Allowance (the
"SPA" or "Performance Allowance"), under and subject to the terms and conditions
of Exhibit B.
---------
(b) SYSCO shall immediately supply ARAMARK and its designated manufacturers
with dedicated SUPC numbers for each manufacturer's line of products and for
specific SKU's. SYSCO guarantees that the SYSCO Brand version of a product
previously supplied to ARAMARK by any such manufacturer with the manufacturer's
brand or other brand shall be packed by such manufacturer.
4. Allowance:
----------
SYSCO shall pay to ARAMARK a allowance (the " Allowance")
in the form of a of the margin on of products purchased by
ARAMARK and ARAMARK Components .
41
EXHIBIT B -- SYSCO Performance Allowance
All Terms used in this agreement shall have the meanings assigned to them in the
Master Distribution Agreement between Sysco Corporation and ARAMARK Corporation,
as amended to date, of which this Exhibit B is a part.
General:
--------
SYSCO will pay an allowance to ARAMARK for purchases of Sysco Brand
Products (hereinafter defined) under this agreement.
"Sysco Brand Products" means all products bearing trademarks or tradenames
which are owned by Sysco Corporation or which are exclusively available in the
foodservice industry to SYSCO ("Sysco Trademarks"). The current list of Sysco
Trademarks is attached to this Exhibit B and may be amended from time to time by
SYSCO in its sole discretion as it develops new Sysco Trademarks and
discontinues existing Sysco Trademarks.
Calculation and Payment:
------------------------
SYSCO will pay a allowance to ARAMARK based on
purchases of Sysco Brand Products. The allowance will be paid on a quarterly
basis within the month following the end of the fiscal quarter in question and
will be based on the following schedule with the first payment to be made in
January 1999:
-----------------------------------------------------------------------------------------
Period Allowance
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
9/1/98 through 12/31/98 %
-----------------------------------------------------------------------------------------
1/1/99 through 6/30/99 %
-----------------------------------------------------------------------------------------
7/1/99 though 9/1/2001 %
-----------------------------------------------------------------------------------------
In the event ARAMARK purchases of Sysco Brand Products reach % of
ARAMARK's total purchases from SYSCO or the dollar amount stated in the
following matrix, SYSCO will pay the difference between the "
allowance" set forth above and the allowance determined from the following table
on an annual basis. Payment of this allowance will be made within 60 days
following the end of ARAMARK's fiscal year.
42
------------------------------------------------------------------------------------------
Sysco Brand % Total Sysco Allowance
Of Total Purchases Brand Purchases
-------------------------------------------------------------------------------------------
40% $ %
41% %
42% %
43% %
44% %
45% %
46% %
47% %
48% %
49% %
50% %
------------------------------------------------------------------------------------------
SYSCO reserves the right to adjust the dollar amounts in the table in the
event of an acquisition by ARAMARK of an operation with more than $
in annualized sales.
43
-------------------------------------------------------------------------------------------------------------------
SYSCO CORPORATION
-------------------------------------------------------------------------------------------------------------------
BRANDS BEING TRACKED AS SYSCO
-------------------------------------------------------------------------------------------------------------------
BRAND DESCRIPTION BRAND DESCRIPTION BRAND DESCRIPTION
-------------------------------------------------------------------------------------------------------------------
AREZZIO AREZZIO BBRL BLOCK & BARREL RELIANCE BBRLCLS BLOCK & BARREL CLASSIC
-------------------------------------------------------------------------------------------------------------------
BBRLIMP BLOCK & BARREL IMPERIAL BBRLRTS BLOCK & BARREL ROTISERIE BBRLSHT BLOCK BARREL SMARTLINE
-------------------------------------------------------------------------------------------------------------------
BBRLSUP BLOCK & BARREL SUPREME BLK DIA BLACK DIAMOND CASASOL CASA SOLANA
-------------------------------------------------------------------------------------------------------------------
CLASICO CLASSICO CLS/MCC CLASSIC/MC COMRICK CLS/SCH CLASSIC/XXXXXXXXX
-------------------------------------------------------------------------------------------------------------------
COLCLSY COOL & CLASSY D/F CLS DELI FARE CLASSIC D/F IMP DELI FARE IMPERIAL
-------------------------------------------------------------------------------------------------------------------
D/F REL DELI FARE RELIANCE D/F SUP DELI FARE SUPREME GOLDCST GOLD COAST
-------------------------------------------------------------------------------------------------------------------
HSE REC HOUSE RECIPE HUNTGRN HUNTERS GREEN (SED IMP ANG IMPERIAL ANGUS
-------------------------------------------------------------------------------------------------------------------
IMP/DYN IMPERIAL DYNASTY IMP SUP IMPERIAL SUPREME IMP/MCC IMPERIAL/MC CORMICK
-------------------------------------------------------------------------------------------------------------------
IMP/SCH IMPERIAL/XXXXXXXXX IMPRALE IMPERIALE INTLCLS SYSCO INTERNATIONAL CLS
-------------------------------------------------------------------------------------------------------------------
INTLIMP SYSCO INTERNATIONAL IMPRL INTLREL SYSCO INTERNATIONAL REL INTLSUP SYSCO INTERNATIONAL SUPRM
-------------------------------------------------------------------------------------------------------------------
JADE MT JADE MOUNTAIN KEYSTNE KEYSTONE (SYSCO CHECICAL) XXXXXXX PASTA XXXXXXX
-------------------------------------------------------------------------------------------------------------------
MNSTWOK MEIN STREET WOK MOZRT B MOZART BLU WATER MXF CLS MEXICAN FARE CLASSIC
-------------------------------------------------------------------------------------------------------------------
MXF IMP MEXICAN FARE IMPERIAL MXF REL MEXICAN FARE RELIANCE MXF SUP MEXICAN FARE SUPREME
-------------------------------------------------------------------------------------------------------------------
NWMNOWN NEWMANS OWN OPA CLS OPPA CLASSIC OPA IMP OPPA IMPERIAL
-------------------------------------------------------------------------------------------------------------------
OPA REL OPPA RELIANCE REL/MCC RELIANCE/MC CORMIC SAHAR B SAHARA BURST
-------------------------------------------------------------------------------------------------------------------
TEL SEDOWICK & TELFORD (SED) SERENE SYSCO SERENE SERENE 2 SYSCO SERENE 2
-------------------------------------------------------------------------------------------------------------------
SOF TOUCH SMRTBBL SMARTLINE BLOCK & BARREL SMRTCLS SMARTLINE CLASSIC
-------------------------------------------------------------------------------------------------------------------
SMRTIMP SMARTLINE IMPERIAL SMRTLIN SMARTLINE SMRTREL SMARTLINE RELIANCE
-------------------------------------------------------------------------------------------------------------------
SMRTSUP SMARTLINE SUPREME SUP ANG SUPREME ANGUS SUPREMA SUPREMA
-------------------------------------------------------------------------------------------------------------------
SYS CLS SYSCO CLASSIC SYS IMP SYSCO IMPERIAL SYS INT SYSCO INTERNATIONAL
-------------------------------------------------------------------------------------------------------------------
SYS MED SYSCO MEDICAL SYS NAT SYSCO NATURAL SYS XXX SYSCO XXXXXX
-------------------------------------------------------------------------------------------------------------------
SYS REL SYSCO RELIANCE SYS SUP SYSCO SUPREME SYSCO SYSCO BRAND
-------------------------------------------------------------------------------------------------------------------
SYSWARE SYSCO XXXX WHLFARM WHOLESOME FARMS
-------------------------------------------------------------------------------------------------------------------
44
