EXHIBIT 10.26
Date July 30, 2003
Name: Xx Xxxxxxxxx
Title: President / COO
Company: Family Steak Houses of Florida Inc
Address: 0000 Xxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxx, Xxxxxxx 00000
RE: FOODSERVICE PRODUCTS DISTRIBUTION AGREEMENT WITH FAMILY
STEAK HOUSE OF FLORIDA INC.
Dear Ed:
BACKGROUND
A. Performance Food Group, Inc. ("PFG") has developed a national network of
foodservice product distribution companies ("PFG Distributors ") that perform
purchasing, marketing, warehousing, quality control, product research and
development, transportation and distribution services for national and regional
foodservice Customers.
B. Family Steak Houses of Florida, desires to contract with PFG Florida as
its Primary Distributor (as hereinafter defined) for foodservice products to all
of the Customer locations listed in Exhibit A ("Customer Locations"), and PFG
Florida desires to perform these services.
C. Customer hereby contracts with PFG to provide distribution services for
the Customer Locations pursuant to the terms and conditions set forth in this
Foodservice Products Distribution Agreement (this "Agreement").
AGREEMENT TERMS
In consideration of the mutual promises set forth herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows.
1. PFG TO SERVE AS PRIMARY DISTRIBUTOR. PFG shall serve as Customer's
Primary Distributor to Customer Locations for foodservice products within the
designated categories listed in Exhibit "B" "Designated Categories" set forth in
Section (5). For all purposes of this Agreement, Primary Distributor shall mean
that Customer and/or the Customer Locations shall purchase eighty-five percent
(85%) or more of the Products' requirements in each Designated Category for the
Customer Locations (the "Requirements Threshold") from the PFG Distributor (as
hereinafter defined).
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2. TERM OF AGREEMENT. The term ("Term") of this Agreement will commence
effective as of (9/30/03) and shall continue for Five years until 9/30/08 or
until termination by either party hereto effective following ninety (90) days
prior notice of termination to the other party. Either party hereto may propose
any such amendments ("Amendment(s)") to this Agreement by providing notice of
such proposed Amendment ("Amendment Notice") to the other party hereto.
3. PRODUCTS COVERED BY THIS AGREEMENT. Products will include products
marketed under the PFG family of brands ("PFG Brands"), national brands,
locally controlled labels, other products specified by Customer and stocked by
PFG Distributors, and Proprietary Products (as hereinafter defined).
4. AGREED AVERAGE DROP SIZE; ADDITIONAL CHARGES FOR ORDERS THAT DO NOT MEET
MINIMUM ORDER REQUIREMENTS. Fee pricing provided in Section (5) hereof is based
on an average order size of $4000.00 per location per delivery ("Agreed Average
Drop Size"). In the event that the average order size for any thirty (30) day
period falls below the Agreed Average Drop Size, PFG will give notice to
Customer, and Customer will cause such average order size for the thirty (30)
day period following receipt of such notice to equal or exceed the Agreed
Average Drop Size.
A. When calculating the average drop size: Hot Shot, Fill-ins (because of
shortages), Will Calls and or other Emergency Delivery incidents, will not be
used in the calculation.
B. Exhibit "A" Details the amount of deliveries per week, per unit
initially agreed upon by Xxxx'x Family Steak Houses of Florida Inc and PFG
Florida.
In addition, individual regularly scheduled orders under $1500.00 will be
charged an additional $75.00 to offset the additional charges incurred, and
orders below the minimum order size of $500.00 will be delivered at the sole
discretion of the PFG Distributor. Exception deliveries made in the event of
emergencies will be handled on a case-by-case basis.
5. DISTRIBUTION FEES/MARGIN PRICING; DESIGNATED CATEGORIES.
Appointed Distributors shall distribute Products to Customer Locations in the
Designated Categories based upon the Case pricing scheme specified in this
Section (5).
Designated Categories Over Cost
Dry Goods $ 1.79 per case
Frozen
Refrigerated
Meats/Seafood/Poultry
Janitorial
Dairy
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Fee calculation on sale = (Distributor landed) divided by (100%-Margin)
Example: Distributor Landed $20.00
Dollars on Sell $1.79 per case
Case Calculation ($20.00)+(1.79)= $21.79
6. PRICING; COST DEFINED; PRICE ADJUSTMENTS.
A. All pricing to Customer is calculated on PFG Distributors' cost ("Cost"), as
defined below.
B. "Cost" is defined as the price invoiced by the vendor, manufacturer, packer,
supplier or provider to the distributor plus applicable freight (based on
national published freight rates or better), delivery charges, back haul charges
(including invoices from in-house freight management) less off-invoice temporary
discounts or promotions during the applicable period (excluding cash discounts).
Products contracted by Customer will be billed at the contracted Cost plus
applicable freight and agreed to Fee. If electronic data interchange or other
invoice-less system is used, a printed report or other appropriate verification
from the supplier confirming the purchase order cost will be considered an
invoice for determining Cost.
7. JOINT PURCHASES. In the event that Customer and PFG Distributor mutually
agree to a forward, special or other purchase on Customer's behalf that may
require a purchase of inventory beyond thirty (30) days, PFG will impose a
surcharge of 2% per month after the first thirty (30) days. The surcharge will
be calculated based upon the Cost of any such remaining inventory after thirty
(30) days and after each successive thirty (30) day period thereafter.
A. This will exclude the purchase of Fresh Beef for Xxxx'x (Beef
Sirloin Top Butts) Which PFG Florida will purchase and hold in accordance with
Xxxx'x Family Steak Houses of Florida Inc. requirements for age and price.
8. ORDERING PROCEDURES. Each PFG Distributor will agree upon the ordering
and other pertinent procedures with Customer. A customized order guide ("Order
Guide") will be provided to Customer Locations not utilizing direct order entry
to facilitate order placement, and such Customer Locations will utilize such
Order Guide to order Products by item number and/or line number and desired
quantity. Customer will be provided with monthly Order Guides and weekly Order
Guides for "at-market" products. Comprehensive instructions and on site
training will be provided to Customer Locations utilizing the direct order entry
program.
9. CREDITS. Customer is not to return merchandise without written
authorization from the appropriate PFG Distributor. All requests for return or
adjustment of dry groceries must be reported within seven (7) days of receipt of
merchandise and include the invoice number, Customer code and invoice date in
order for the Customer to receive the full amount of credit.
In the case of fresh or frozen merchandise, returns must be identified at the
time of delivery. Returned merchandise must reach the appropriate PFG
Distributor in resalable condition and must be packed in its original carton,
unless Customer is authorized to return merchandise for quality control
inspection. Merchandise made to order, specially designed, crested or imprinted
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cannot be exchanged or returned. Special order (non-stock) merchandise may only
be returned if packed in original shipping cartons and will be subject to
transportation and handling charges.
Credits shall be granted in accordance with the terms of PFG'S Operating
Procedures Manual, which shall be customized by the Appointed Distributors for
Customer with prior approval by Customer. Appointed Distributors may impose a
re-stocking fee of ten percent (10%) in connection with any such returned
merchandise, that needs to be returned to the vendor.
A. The 10% Restocking Fee will only apply to special order or
proprietary products that were specifically ordered for Xxxx'x Family Steak
Houses of Florida Inc. Any and all products returned during the normal course of
business will not carry a restocking fee.
10. DELIVERY AND RECEIVING. All deliveries will be made in accordance with
a prearranged delivery schedule designed by PFG Distributors to meet Customer
needs. PFG Distributor (s) will establish Holiday delivery schedules at least
fourteen (14) days prior to such holiday. Customer will receive an original
invoice and one copy with each order, which shall be checked by an authorized
representative of Customer at the time of delivery. Should any product be short
or damaged, Customer's authorized representative shall notify the PFG
Distributor's driver at the time of delivery. The PFG Distributor's driver will
note the discrepancy on the invoice, and credit will be taken directly off the
invoice.
11. CREDIT TERMS. All payments should be received within 30 days from the
date of invoice. In the event of Customer's failure to make payment in
accordance with the payment terms specified in the preceding sentence, PFG
Florida may (in addition to any such other remedies provided for herein) make
adjustments to the margins or incentive payments applicable to Customer and/or
discontinue service, and PFG may terminate this Agreement. Family Steak Houses
of Florida Inc will have a 48 hour period to resolve any outstanding issues.
A. Payment Obligation Family Steak Houses of Florida Inc will provide PFG
Florida with weekly ACH Payments that PFG Florida initiates based on Net 30 day
terms. It is understood that Xxxx'x Family Steak Houses of Florida Inc has a
credit limit of 1 million dollars and if the balance due exceeds 1 million
dollars the total amount over the 1 million dollars is due in full at the next
occurrence of the next ACH payment.
B. Service Charge If invoices are not paid when due, a service charge equal
to lesser of 1 1/2% per month or the maximum interest rate permitted by law may
be assessed on the unpaid portion of any such overdue invoice. Unpaid invoice
balances and finance charges due to PFG Distributors may be deducted from and/or
offset against any credits otherwise due to Customer.
C. Financial Information Customer agrees to provide, from time to time,
promptly following receipt of a written request therefor from PFG, such
additional financial information, including, without limitation, audited
financial statements, statement of cash flow and/or any such other financial
information requested by PFG. Also a corporate cross guarantee to be provided
(See Attached Exhibit "C").
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12. AUDIT PRIVILEGES. Customer shall have the right, at Customer's sole
expense, to audit records of PFG Distributors related to Customer under this
Agreement; provided, however, that any such audits shall be subject to following
limitations: (i) date and time of audit shall be mutually agreed upon following
reasonable notice from Customer of its audit request; (ii) Customer shall not be
entitled to audit a given PFG Distributor more than two times in any twelve
month period; (iii) any such audits shall be conducted at such reasonable times
during normal business hours and without any unreasonable disruption of the
applicable PFG Distributor's business or year-end accounting procedures; and
(iv) any such audit will consist of a maximum of 20 items covering the prior 13
week period immediately preceding the audit request.
13. SUBSTITUTIONS/BACK ORDER. PFG Distributor shall be obligated to ship a
complete order on every delivery, and in the event that a substitution becomes
necessary, the PFG Distributor will substitute an appropriate product at the
agreed upon Fee.
14. PROPRIETARY PRODUCTS; SPECIAL ORDERS. PFG Distributor will deliver
products requested and specified by Customer that are proprietary to Customer's
operations ("Proprietary Products") and special orders by Customer under the
conditions specified in the following provisions of this Section (14). PFG
Distributors will not bring into stock any product or lines of product for a
Customer Location unless Customer's management has authorized, in writing, such
action. If Customer approves and authorizes products not currently in existing
inventory, the following minimum guidelines will apply to any new products
brought into stock:
A. PFG Distributors shall not be required to stock any special order or
Proprietary Product that does not have or will not have average weekly sales of
10 cases per participating distribution center and 12 annual turns.
B. Customer will sign a special stocking request form.
C. Customer shall provide PFG Distributors with a minimum of 21 days notice
in connection with any request by Customer to bring in any new normally stocked
items. Further, customer shall provide PFG Distributors with a minimum of six
weeks' notice on special order items. PFG cannot guarantee that the minimum
notice periods provided for in the two preceding sentences will be sufficient,
and PFG shall not be responsible for or be deemed to be in default of this
Agreement by virtue of the inability to obtain items within such minimum notice
periods. However, the PFG Distributor shall be required to use commercially
reasonable efforts to obtain such items within the prescribed notice periods.
D. If PFG has not previously purchased from the supplier/manufacturer
designated by Customer, a certificate of insurance indicating coverage that
satisfies PFG' required coverage and an appropriate indemnification from
supplier/manufacturer must be provided before any product can be brought into
inventory. If the specified supplier/manufacturer will not issue an appropriate
certificate of insurance and/or provide appropriate indemnification, PFG Florida
will not stock or distribute such items.
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E. In the event Customer (i) decides to discontinue any Proprietary Product
or products subject to special orders or (ii) Customer gives or receives notice
of termination of this Agreement, Customer shall provide notice thereof to PFG
Distributors within 30 days in accordance with the notice provisions of this
Agreement.
F. Upon thirty (30) days of notice of a request from an Appointed
Distributor, Customer agrees to purchase or advise Appointed Distributor how to
dispose of such products that constitute remaining special order or Proprietary
Products inventory on hand that does not meet the minimum stocking requirements
listed in Section 14 (A) hereof. The Appointed Distributor may dispose of these
items if they have not been removed from the distribution center after such 30-
day period, and Customer shall pay the Appointed Distributor for these items
within 15 Days of such disposal.
G. In the event that either terminates this Agreement party hereto, Customer
agrees (i) to use commercially reasonable efforts to effect an orderly
transition with respect to and (ii) to remove from the distribution centers for
all PFG Distributors all perishable products within 7 days of the termination
date, (all Proprietary Products, Special Order Products, obsolete inventory,
other applicable products in stock, and products for which non-cancelable orders
have been placed). All other items will be removed within 30 days of termination
of contract. All items will be FOB distribution center, and Customer or new
distributor will pay for all such inventory and all freight in connection with
the disposition of all such Products. Payment for this inventory transition
will be made within 30 days of the invoice date.
15. FORCE MAJEURE. Neither party shall be liable to the other party for any
loss, delay or failure to perform resulting directly or indirectly from fires,
floods, riots, strikes or other circumstances beyond either party's reasonable
control.
16. COMPLIANCE WITH LAWS. Each party hereto agrees that it will comply with
all laws and regulations applicable to this Agreement and its performance
hereunder. Without limiting the foregoing, Customer agrees to fully and
accurately report to the appropriate federal and state agencies and authorities
all discounts (as such term is defined in 42 CFR Sec 1001.952 (h)) granted
hereunder in accordance with all applicable laws and regulations.
17. REPORTING. In addition to monthly and weekly Order Guides, PFG Florida
will provide any customer reports if requested by Family Steak Houses of
Florida, that are available in the PFG system.
18. NOTICES. Any written notices called for in this agreement may be made
by facsimile, personal delivery, overnight or other delivery service or first
class mail. Notices by fax will be effective when the transmission is complete
and confirmed; notices by personal delivery will be effective upon delivery;
notices by overnight or other delivery services will be effective when delivery
is confirmed; notices by mail will be effective four business days after
mailing. The notice address for each party is set forth below and shall be
subject to change upon written notice thereof in accordance with the provisions
of this Section (18).
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19. CHOICE OF LAW; VENUE. This Agreement, including, without limitation,
any dispute or claim hereunder, shall be governed by and construed in accordance
with the laws of the State of Florida without reference to the choice of law
provisions of any state. Further, the parties hereby agree that any and all
actions or proceedings arising from or relating to this Agreement shall be
brought in the Circuit Court for the County of Hillsborough, Florida, or the
United States District Court for the District of Tampa, Florida Division and
hereby consent to personal jurisdiction of such courts for any such action of
proceeding.
20. LIMITATION OF LIABILITY. PFG shall not be liable to the Customer for any
special, indirect, incidental, consequential or punitive damages arising out of
or relating to this Agreement under any legal theory.
21. MISCELLANEOUS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument. PFG and Customer have
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement. Any
reference to any federal, state, local, or foreign statute of law shall be
deemed also to refer to all rules and regulations promulgated thereunder, unless
the context requires otherwise. The parties intend that each representation,
warranty and covenant contained herein shall have independent significance. All
such exhibits, schedules and other documents, or portions thereof, identified in
this Agreement are incorporated herein by reference and made a part hereof. At
either party's reasonable request and without further consideration, the other
party shall promptly execute and deliver such instruments and documents, and
take such other action, as such party may reasonably request to effectuate
completely the transactions provided for in this Agreement and to otherwise
carry out the purpose and intent of this Agreement. The failure of any of the
parties to this Agreement to require the performance of a term or obligation
under this Agreement or the waiver by any of the parties to this Agreement of
any breach hereunder shall not prevent subsequent enforcement of such term or
obligation or be deemed a waiver of any subsequent breach hereunder. If any one
or more of the provisions of this Agreement is held to be invalid, illegal or
unenforceable, the validity, legality or enforceability of the remaining
provisions of this Agreement will not be affected thereby, and the parties will
use all reasonable efforts to substitute for such invalid, illegal or
unenforceable provision(s) one or more valid, legal and enforceable provision(s)
that, insofar as practicable, implement the purposes and intents hereof. To the
extent permitted by applicable law, each party waives any provision of law that
would render any provision of this Agreement invalid, illegal or unenforceable
in any respect. No remedies set forth herein shall be exclusive and no party
shall be limited to any remedy set forth herein. All remedies available to any
party shall be cumulative. This Agreement may not be amended or modified, nor
may compliance with any condition or covenant set forth herein be waived, except
by a writing duly and validly executed by each party hereto, or in the case of a
waiver, the party waiving compliance. The titles and/or captions contained in
this Agreement are included for convenience only and in no way define or limit
any of the provisions hereof or otherwise affect their construction or effect.
The masculine, feminine or neutral gender and singular or plural nouns shall
each to be deemed to include the others whenever the context so indicates.
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22. ENTIRE AGREEMENT. This agreement sets forth the complete understanding
of the parties hereto with respect to the subject matter contained herein, and
may not be amended or supplemented except in writing signed by both parties.
See Attached Documents:
Exhibit A - "Customer Locations"
Exhibit B - "Designated Categories"
Exhibit C - "Corporate Guaranty"
Exhibit D - "Credit Terms / Quick Pay Incentive"
Addendum I - Xxxx'x Family Steak Houses of Florida Inc "Beef Pricing"
Addendum II - Xxxx'x Family Steak Houses of Florida Inc "Produce Pricing"
[SIGNATURES APPEAR ON FOLLOWING PAGE]
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Agreement between Family Steak Houses of Florida Inc. and PFG Florida
ACCEPTED BY:
CUSTOMER: PFG:
Customer Representative Name PFG Representative Name
Xx Xxxxxxxxx Xxxx Xxxxxx
Title: President / COO Title: President, CEO
Company: Family Steak Houses of Florida Inc. Performance Food Group Florida
Address: 0000 Xxxxxxx Xxxxxxxxx 0000 X. Xxxxxxxxx Xx
Xxxxxxx Xxxxx, XX 00000 Xxxxx, XX 00000
Phone: 000-000-0000 000-000-0000
Fax: 000-000-0000 000-000-0000
_____________________________ ______________________________
(Please Print) (Please Print)
_____________________________ ______________________________
(Signature) (Signature)
_____________________________ ______________________________
(Title) (Title)
_____________________________ ______________________________
(Date) (Date)
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