EXHIBIT 10.18
March 28,
1995
VIA FEDERAL EXPRESS
Xxxxxx X.X. Xxxxxxx
President & Chief Operating Officer
Bradlees, Inc.
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Dear Xxx:
This letter will serve to memorialize the
agreements we have reached on behalf of Bradlees, Inc., Bradlees
Administrative Co., Inc. (collectively "Bradlees") and The Stop
& Shop Supermarket Company ("Stop & Shop") regarding the
Product Supply Agreement, the Transitional Reimbursement
Agreement and the Management Information Reimbursement
Agreement, all dated as of June 23, 1992, and certain tax
deductions, which have been in dispute between Bradlees and Stop
& Shop.
The parties agree as follows:
Product Supply Agreement
1. The termination date is extended to
midnight, June 30, 1997. On and after July 1, 1996, Bradlees
shall not be entitled to receive the benefit of any "diverting
income," which is defined to mean the amount of money resulting
from the difference between the quoted price of a product
purchased directly from a manufacturer or its representative and
the contemporaneous acquisition cost of that product purchased
from a supplier other than the manufacturer or its
representative. In addition, diverting income shall include any
monies earned by selling a product purchased from the
manufacturer or its representative and sold in the open market.
2. Through June 30, 1996, Bradlees may reduce
the volume of products it purchases under the agreement
unilaterally upon 90 days notice to Stop & Shop. Thereafter,
such reduction may be made unilaterally upon 30 days notice to
Stop & Shop.
1
Body Text
2
3. Bradlees may add unique (Bradlees only) full
case items to the agreement only by mutual consent of the
parties. It may withdraw unique product lines as per current
practice, provided that on or before the termination date,
Bradlees must purchase all unique items at Stop & Shop's then
current book value plus delivery costs.
4. Stop & Shop will continue to service
Bradlees from its No. Haven, CT (Universal Distributors),
Readville, MA and Chicopee, MA warehouses so long as Stop & Shop
continues to operate such warehouses and to stock Bradlees
product needs at such warehouses. Stop & Shop will provide
Bradlees with at least thirty (30) days notice of its
discontinuance of operations at any of these warehouses.
5. Stop & Shop shall be permitted to adopt
operational/organizational changes affecting its warehouse
operations, e.g. Pic to Lite, buying organization, shifting
product among/between facilities. Bradlees store or
distribution changes affecting the Universal Distributors
operations, including delivery schedules, shall be implemented
only upon mutual consent of the parties.
6. Stop & Shop shall not be required to deliver
products to Bradlees if Stop & Shop's operations are interrupted
due to labor disputes; war or civil insurrection; or Acts of God.
Transitional Reimbursement Agreement
The parties shall enter into a mutually
acceptable transportation agreement for provision of
transportation services by Stop & Shop to Bradlees,
substantially in accordance with past practice which shall
provide that each party shall give the other at least 6 months
notice (which period shall be counted from the date of such
notice) of cancellation. Rates for such services for the period
February 1, 1995 through January 31, 1996 are as set forth in
the attached letter agreement dated December 20, 1994. Rates
for 1996 and 1997 may be adjusted annually as of February 1st of
each year, but it is agreed that no adjustment shall exceed 2%
of the prior year's rate. In the event that the parties are
unable to reach such an agreement, each agrees that the parties'
current arrangement for transportation services may only be
terminated upon 6 months notice (which period shall be counted
from the date of such notice).
Page 3
Management Information Reimbursement Agreement
1. Effective for the year commencing July 1, 1995,
the term "Minimum Annual Expense", which appears in Section 1,
shall mean 85% of the prior year's expenses and shall not
include any Excluded Expenses.
Disputed Tax Deductions
Bradlees confirms that it has not, and agrees that
it will not, claim any tax deductions based upon stock option
related compensation or stock option exercise of or by any
Bradlees or Stop & Shop employee under the terms of Stop &
Shop's Management Equity Plan. The parties agree that such
deductions shall be claimed only by Stop & Shop and its
subsidiaries.
If the above stated provisions fairly reflect your
understanding of our agreement, please sign and return one copy
of this letter agreement to me.
Sincerely,
/s/ Xxxxxx X.
XxXxxxxxxx
-------------------------------------------
Xxxxxx X.
XxXxxxxxxx
Senior Vice
President
Accepted for Bradlees, Inc.
and Bradlees Administrative Co., Inc.
By: /s/ Xxxxxx X.X. Xxxxxxx
----------------------------------------
Xxxxxx X.X. Xxxxxxx
President, Bradlees, Inc.
g/deprtmnt/corresp/s&s
Body Text
December 20, 1994
Xx. Xxxxxx Xxxxxx
Transportation Manager
Bradlees
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Dear Xx. Xxxxxx:
On February 1, 1995, we are forced to increase your
transportation rates by approximately 5.5%.
The increased rate is caused by many factors;
increased driver wages and benefits, diesel fuel increases,
replacement equipment price increases, and irregular scheduling
to meet your outbound needs.
Attached for your review are the new zone rate costs.
If you have any questions, please call me.
Sincerely,
/s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx
Vice President Transportation
CFA/rm
Enc.
cc: X. Xxxxxxx
ZONE RATES MERCANTILE
OUR RATES OUR RATES
OUR RATES
ROUND TRIP 1/30/93 1/30/94
1/30/95
ZONE MILES
1 10 $114.00
$116.00 $123.00
2 30 $126.00 $129.00
$136.00
3 50 $146.00 $149.00
$157.00
4 70 $170.00 $173.00
$183.00
5 90 $189.00 $193.00
$203.00
6 110 $210.00 $214.00
$226.00
7 130 $233.00 $238.00
$251.00
8 150 $254.00 $259.00
$273.00
9 170 $286.00 $292.00
$308.00
10 190 $297.00 $303.00
$320.00
11 210 $307.00 $313.00
$330.00
12 230 $324.00 $330.00
$349.00
13 250 $346.00 $353.00
$372.00
14 270 $363.00 $370.00
$391.00
15 290 $383.00 $391.00
$412.00
16 310 $405.00 $413.00
$436.00
17 330 $423.00 $431.00
$455.00
18 350 $445.00 $454.00
$479.00
19 370 $465.00 $474.00
$500.00
20 390 $482.00 $492.00
$519.00
21 410 $503.00 $513.00
$541.00
22 430 $524.00 $534.00
$564.00
23 450 $546.00 $557.00
$588.00
24 470 $564.00 $575.00
$607.00
$8,105.00 $8,266.00
$8,723.00
g/deprtmnt/corresp/s&s.4-5
