SUPPLY DISTRIBUTION AGREEMENT BETWEEN
XXX. XXXXXX, INC.
and
LITTLE CAESAR ENTERPRISES, INC.
This Agreement is between Xxx. Xxxxxx, Inc. ("Buyer"), a Delaware
corporation located at 000 Xxxx Xxxxxxx Xxxxx, Xxxx Xxxx Xxxx, Xxxx 00000 and
Blue Line Distributing, a division of Little Caesar Enterprises, Inc.
("Seller"), a Michigan corporation located at 00000 Xxxxxxxx Xxxx, Xxxxxxxxxx
Xxxxx, Xxxxxxxx 00000.
Purpose
Seller is a distributor of restaurant and food service supplies and manages the
purchase, storage, inventory control and distribution of supplies for customers.
Buyer wishes to purchase exclusively from Seller such supplies and services for
its restaurant locations and to make Seller's services available to its
franchisees and licensees who operate under its trademarks) ("Franchisees").
Therefore, the parties agree as follows:
Scope of Services
During the term of this Agreement, Seller agrees to procure, store, and
sell to Buyer and its Franchisees and distribute to Buyer's and its Franchisee's
locations listed on Exhibit A (attached and made part of this Agreement)
(collectively, "Sites") and to such other and future store locations (within
areas currently being serviced by the Seller) as Buyer shall designate in
writing to Seller at least 60 days in advance of the first requested delivery to
such location, the items listed at the prices stated in Exhibit B (attached and
made a part of this Agreement). Distribution of supplies will be conducted in
accordance with the following guidelines:
a. Each Site will be notified in writing of its call days and times for
ordering and the delivery days and times. For the designated Holiday Period
(one week before Thanksgiving through one week after Christmas), Buyer
requires additional deliveries to be made to selected sites. Notification
by Buyer of delivery schedule changes will be made 60 days prior to the
expected change. Seller will provided the stores and Buyer's Corporate
Headquarters, with written notification of delivery schedule changes at
least 30 days in advance.
b. Distributor commits to three (3) hour windows, plus or minus 1 1/2 hours of
the scheduled delivery time, for deliveries less than or equal to 500 miles
from Distributor's servicing Distribution Center and five (5) hour windows,
plus or minis 2 1/2 hours of the scheduled delivery time, for deliveries
more than 500 miles from Distributor's servicing Distribution Center. . The
Distributor's targeted compliance with respect to these windows is at least
95% (computed monthly).
c. Distributor commits that no deliveries will be scheduled at any site
between 12:00 noon and 1:00 p.m. daily. All invoices except those invoices
which are for deliveries made after business hours to Sites identified on
Exhibit D hereto will be checked by the Site's store manager or designated
representative prior to the Distributor's driver leaving the Site, provided
however, the Distributor's driver shall not be unreasonably delayed.
d. (1) Any Product shortages at the Site which are caused by the Distributor
will be replaced by the quickest appropriate means of transportation at the
Distributor's expense. All other product shortages at the Site will be
replaced by the Distributor at the Company's expense. The Company's
District Sales Manager ("DSM") may request the mode of transportation which
is reasonable in the circumstances. Distributor will not incur any
transportation costs in conjunction with such Product replacement without
authorization from the Company. Such authorization will be in whatever form
the Company requires to enable the Company to pay such transportation costs
to the Distributor within the payment terms set forth in this Agreement. If
the shortage is noted before the driver leaves the Site, a call shall be
made to the originating distribution center, the time shall be noted, and
the response and remedy from the distribution center shall be within 24
hours.
(2)The Distributor has provided the Company with an order entry and
delivery procedure form which provides detailed procedures for processing
delivery adjustments (such form is set forth as Exhibit E).
(3)Distributor and the Company agree that for purposes of this Agreement,
visibly damaged goods that our caused by Distributor's negligence will be noted
at the Site at the time of delivery and will not be accepted by the Site and
will be treated as Distributor caused Product shortages. If hidden damage
surfaces after the Distributor's driver leaves, the Site store manager will
notify the designated Distributor customer service representative upon discovery
and receive a return item number that will authorize the Distributor's driver on
his next delivery to pick up the item and, subject to confirmation of
pre-delivery damage by receipt at the Distribution Center, issue a credit slip.
If pre-delivery damage is confirmed at the Distribution Center, the goods will
be treated as Distributor caused shortages.
e. Distributor will provide Company Corporate Headquarters, the District Sales
manager and each Site with a list of designated service representatives for
each Distribution Center (see Exhibit F) . Such list will be updated and
provided as required and at least quarterly.
f. The Company agrees to provide Distributor with thirty (30) days written
notice for promotional and new item requests. Such notice will include all
information requested by Distributor to enable Distributor to order such
items (i.e. product specifications, initial quantity, expected weekly
usage) . Distributor acknowledges that they will only ship such promo or
seasonal items according to the shipping schedule provided by the Company.
g. Distributor agrees to maintain a minimum order fill rate of 98% computed
monthly, by Site location, by product pieces for active Company proprietary
items only unless effected by acts of God, war and labor disputes.
h. The targeted core product temperature for Distributor's deliveries will be
set at fifteen (15)degrees Fahrenheit or lower, according to the Company's
published requirements, as set forth on Exhibit G hereto and as amended
from time to time. Such temperature will be measured via core probing
immediately upon delivery in the presence of Distributor's driver. No other
temperature measurement will be acceptable for purposes of applying this
section. Products not meeting the required core temperatures will not be
accepted by the Site and will be treated as Distributor caused Product
shortages as discussed in item 3 d. (1) above. Upon acceptance of the
Product by the Site manager or his designated representative, such Product
becomes the responsibility of the Company with respect to the Product
handling and storage.
i. Distributor agrees to provide weekly inventory and sales/usage reports via
hard copy and electronic data interchange. The format of these reports may
be modified to meet the Company's requirements, taking into consideration
the Distributor's data processing system capabilities. Distributor and the
Company agree that the goal of such reports is to provide:
(i) purchases by Product, by site, in cases and dollars,
(ii) descending usage by dollars and percentage of total,
(iii)inventory on hand, on order, average weekly movement, days on
hand, and excess days on hand.
j . Distributor will continue to provide an excess inventory report to the
Company upon request but not more of ten than once a week. Distributor will
continue to provide, on a monthly basis, an obsolete and slow moving item report
containing average weekly movement, days on hand, excess days on hand and date
of last delivery. An obsolete inventory management program, will begin on the
effective date and utilize a report prepared by Distributor. This report will
contain three classifications of inventory:
(i) all items do not sell for thirteen (13) weeks or longer
("Impaired")
(ii) items which do not sell for a period of three (3) weeks if
refrigerated and/or time dated, four (4) weeks with no sales for
dry and eight (8) weeks with no sales for miscellaneous items
(iii)items with over thirteen (13) weeks inventory on hand ("Excess
Inventory quantities purchased by the distributor without written approval by
the Company will be the sole responsibility of the distributor as long as the
Company provides Distributor accurate inventory guidelines on all Company
proprietary items prior to the commencement of this agreement.
Payment
Buyer guarantees payment on all supplies purchased by Seller for Buyer within
fourteen (14) days of the date of invoice. Seller will give Buyer a one percent
(1%) discount on payments received within (7) days of the date of invoice.
Seller acknowledges that Buyer does not guarantee payment for any other
purchaser, including its franchisees and licensees. Buyer will pay interest on
delinquent amounts at an interest rate of one percent (1%) per month and twelve
percent (12%) per annum. Seller shall ship supplies to Buyer's locations, F.O.B.
Destination, freight prepaid. Seller will provide these same terms to Buyer's
Franchisees.
Title and Risk of Loss Title and risk of loss for all supplies shall pass from
Seller to Buyer upon acceptance of shipment by Buyer.
Orders
Buyer shall place orders by facsimile, phone or by mail on order forms supplied
by Seller.
Inventory
Buyer shall purchase all unused inventory purchased by Seller for Buyer or
its Franchisees within one hundred and twenty (120) days of date of purchase by
Seller. Buyer agrees to pay for any non moving supplies (whether purchased by
Buyer or its Franchisees) within thirty (30) days after the supplies have been
identified as non moving. Non moving supplies are supplies which have not been
ordered by Buyer within ninety (90) days of purchase by Seller. Buyer shall pay
Seller the reasonable cost of disposing any inventory not purchased by Buyer.
Taxes Buyer shall be responsible for all applicable taxes to Buyer. Seller shall
be responsible for all applicable taxes to seller. Both Buyer and Seller agree
to indemnify and defend the other under the terms of the Indemnification and
Insurance section of this Agreement should either receive a claim for the
other's failure to pay such taxes. Neither will pay a claim which is the
responsibility of the other without first notifying the other and giving the
other the opportunity to contest the claim.
Length of Agreement
This Agreement shall begin on May 1, 1996 and end on may 1, 1999 unless
extended otherwise by signed written agreement of both parties. Either party may
terminate this Agreement at any time upon one hundred and eighty (180) days
advance written notice of termination to the other. Notice will be considered
given on the date it is faxed or post marked if sent by U.S. mail.
Buyer's Minimum Purchase Guarantee
Buyer agrees to purchase for every location an average of one thousand
dollars ($1,000.00) worth of supplies per delivery drop 80% of the time, for
each one year period.
Price
Buyer and Seller agree to the prices set forth in Exhibit B but agree the
prices are subject to change if the manufacturers' FOB plant costs change,
freight changes or minimum quantities of supplies purchased by Seller or Buyer
change.
Seller will give Buyer written notice of any price change twenty (20) days
prior to implementation of the change, unless Seller and Buyer agree to a
shorter notice period.
Promotional Supplies
Seller will not purchase promotional supplies without advance written
quantities from Buyer. Buyer agrees to Purchase any leftover promotional
supplies (whether purchased by Buyer or its Franchisees) within thirty (30) days
after the promotion ends.
Warranties and Guarantees
Seller agrees to purchase and deliver only those products which have been
previously approved in writing by Buyer. Seller is not responsible for supplies
once they have been delivered to Buyer or its Franchisees unless they were
damaged due to Seller's negligence.
Indemnification and Insurance
Seller
Seller will indemnify, defend (including costs and attorney fees) and hold
harmless Buyer, its owners, directors, officers, employees and representatives
from and against any claims brought against Buyer which are the result of
Seller's negligent acts or omissions. Seller will maintain during the term of
this Agreement Products Liability Insurance of no less than ten million dollars
($10,000,000) per occurrence. Seller will add Buyer as an additional insured to
the policy and provide Buyer with a copy of the certificate. The certificate
will also provide for thirty (30) days prior notice to the additional insured
prior to cancellation.
During the time of this Agreement, Seller shall maintain property insurance with
replacement value coverage for all supplies stored by Seller and/or in transit
to Buyer's locations.
Buyer
Buyer will indemnify, defend (including costs and attorney fees) and hold
harmless Seller, its owners, directors, officers, employees and representatives
from and against any claims brought against Seller which are the result of
Buyer's negligence. Buyer will maintain during the term of this Agreement
Products Liability Insurance of no less than $10,000,000 (Ten million dollars)
per occurrence. Buyer will add Seller as an additional insured to the policy and
provide Seller with a copy of the certificate. The certificate will also provide
for thirty (30) days prior notice to the additional insured prior to
cancellation. Assignability This Agreement shall not be assignable by either
party without the signed written consent of both parties.
Amendments
This Agreement and its Exhibits may not be changed without the signed
written consent of both parties.
Applicable Law
This Agreement shall be governed by and construed in accordance with the
laws of the state of Michigan.
Confidentiality
Both Seller and Buyer agree to hold the terms of this Agreement confidential
except when required by law or court order to disclose them. Buyer agrees that
the Confidentiality Agreement between it and Buyer will terminate thirty (30)
days after this Agreement is terminated.
Severability
If any provision of this Agreement is declared illegal or void or otherwise
unenforceable, the remaining provisions shall remain in full force and affect.
Entire Agreement
This Agreement, including Exhibits A and B attached, constitutes the entire
Agreement of the parties and supersedes all prior verbal or written agreements.
Counterparts
This Agreement may be executed in two (2) separate or more counterparts and each
may be deemed an original but when put together, will constitute one Agreement.
Authority
The parties signing this Agreement represent they have authority to bind Buyer
and Seller to the above terms and conditions.
AGREED TO BY:
BLUE LINE DISTRIBUTING, a division XXX. XXXXXX, INC.
Of Little Caesar Enterprises, Inc.
By: /s/ By: /s/Xxxxx Xxxxxx
Title: Title: President CEO
Date: 9/26/96 Date: 8/19/96
EXHIBIT A
COMPANY AND FRANCHISE ADDRESSES
SEE ATTACHED
EXHIBIT D
ADDRESSES OF ACTUAL DELIVERY LOCATIONS
SEE ATTACHED
