EXHIBIT 10.19
PACIFIC BASIN FOODS, INC.
GENERAL PURCHASING TERMS AGREEMENT
THIS GENERAL PURCHASING TERMS AGREEMENT (this "Agreement") is effective on this
21st day of October 1996, by and between Pacific Basin Foods, Inc. with its
office at 0000 Xxxxxxxxxxxx Xxxxxx, Xxx X, Xxx Xxxxx, Xxxxxxxxxx 00000 herein
referred to as "PBF" and Xxxxx'x Restaurants, Inc., with its principal offices
at 0000 Xxxxxxxx Xxxxx, Xxx 000, Xxx Xxxxx, XX 00000 herein referred to as
"Buyer".
RECITALS
PBF is a corporation which purchases and distributes food, meat, beverages and
related supplies for restaurants and other food service businesses. Buyer is a
restaurant organization which purchases said items. The parties desire to
establish certain terms pursuant to which Buyer will purchase such food, meat,
beverages and related supplies from PBF.
NOW, THEREFORE, in consideration of the terms and covenants stated herein and
for other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree that the following terms shall relate to any
purchases by Buyer.
ARTICLE I
PURCHASE AND TERM
1(a). TERM. Buyer agrees to purchase from PBF, and PBF agrees to acquire and
to sell to Buyer, pursuant to Buyer's specifications, food, meat, beverages and
related supplies which are regularly stocked by PBF, herein referred to as
"Inventory" for an initial term beginning on the day of this Agreement and
expiring one year thereafter; PBF shall, in good faith, use its reasonable
efforts to provide such Inventory at the best cost and quality level consistent
with Buyer's specifications. PBF will use best efforts maintain a fill rate of
98% or more and to supply Buyer with relevant product information to make cost
and quality decisions.
ARTICLE II
INVENTORY
2(a). INVENTORY. Buyer shall buy for its account Inventory which shall be
categorized as either General Inventory or Dedicated Inventory.
2(b). DEDICATED INVENTORY. Dedicated Inventory is defined as specific food,
meat, beverages or other consumable supplies used by no other customer of PBF
and acquired by PBF for the exclusive, ongoing use of Buyer.
2(c). GENERAL INVENTORY. General Inventory is defined as all Inventory other
than Dedicated Inventory.
2(d). OBSOLETE DEDICATED INVENTORY. At the end of each PBF accounting period,
PBF will provide Buyer with an analysis of activity levels for all Dedicated
Inventory purchased for
the exclusive use of Buyer. To the extent that such Dedicated Inventory has
been taken off the menu, discontinued by Buyer's restaurants or for any other
reason is no longer purchased by Buyer from PBF, *** for such *** shall be
*** *** of an *** therefore. If *** is not *** within that time
frame, Buyer shall be *** for any *** associated with *** of such inventory.
PBF shall have the right, but not the *** to dispose of such *** in a
commercially responsible manner and shall *** with any net proceeds from such
sales after deducting PBF's costs.
2(e). OPPORTUNISTIC PURCHASES. From time to time, PBF may, in its sole
discretion, offer Buyer the opportunity to acquire certain items of Inventory at
prices, in amounts and upon terms which differ from those ordinarily offered by
PBF. Such opportunities shall be referred to as "Opportunistic Purchases". All
such Opportunistic Purchases shall be available only on such terms and
conditions as may be established by PBF from time to time, including, without
limitation, requirements for advance payment from Buyer, and PBF shall have no
obligation to execute any Opportunistic Purchase ordered by Buyer until such
time as Buyer is in full and strict compliance with all such terms and
conditions. PBF may, at its option offer finance terms at *** plus any
*** incurred. *** will be determined as published by Bank of America.
2(f). OPPORTUNISTIC INVENTORY PAYMENTS. All Opportunistic Purchases to be
paid for by Buyer shall be paid within *** after PBF's delivery of written
notice to Buyer confirming PBF's receipt of such Opportunistic Purchases, or
within the terms of PBF's payment to vendor for such product, whichever is
longer.
2(g). PERIODIC STATEMENTS. Within *** after the end of each of PBF's four
week accounting periods, PBF shall provide to Buyer a statement summarizing in
reasonable detail the status of activity with respect to Opportunistic Purchases
held by PBF for Buyer's account during such period, and unless Buyer responds
within *** , such statement will be presumed to be correct.
2(h). NON FOOD MERCHANDISING MATERIALS. Any items such as uniforms
or promotional merchandise will be paid for by the Buyer directly pursuant to
the terms established by the vendor.
2(i). IDENTIFICATION OF INVENTORY AND WARRANTIES. Any description of the
Inventory sold under this Agreement is for the sole purpose of identifying such
Inventory and should not be construed as a warranty for any other purpose
whatsoever. PBF retains the right to change or to substitute with like kind the
Inventory. PBF will obtain Buyer's approval prior to substitution.
IT IS SPECIFICALLY AGREED THAT ANY WARRANTY FROM PBF TO BUYER WITH
REGARD TO ANY OF THE INVENTORY, WHETHER DEDICATED INVENTORY OR GENERAL
INVENTORY, MUST BE MADE IN WRITING FROM PBF TO BUYER, MUST BE SIGNED BY
A DULY AUTHORIZED OFFICER OF
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PBF, AND MUST CONTAIN THE EXPRESS TERMS "WARRANTY" AND "WARRANTS". ANY
SUCH WARRANTY GIVEN BY PBF TO BUYER SHALL BE IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY
WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE OR ANY WARRANTY OF
MERCHANTABILITY. THE SOLE AND EXCLUSIVE REMEDY FOR BREACH OF ANY AND
ALL WARRANTIES WITH RESPECT TO THE INVENTORY, WHETHER DEDICATED INVENTORY
OR GENERAL INVENTORY, SHALL BE THE REPLACEMENT OF SUCH INVENTORY WITHOUT
CHARGE TO BUYER. IN NO EVENT SHALL PBF BE LIABLE FOR INDIRECT,
INCIDENTAL, CONSEQUENTIAL OR SPECIAL DAMAGES, INCLUDING, BUT NOT LIMITED
TO, LOST PROFITS, PERSONAL INJURY OR ECONOMIC LOSS, ARISING IN CONNECTION
WITH OR OUT OF BUYER'S PURCHASE OR USE OF ANY INVENTORY.
Notwithstanding the foregoing, PBF agrees that, to the extent such
warranties or rights of recovery are assignable, PBF shall assign to
Buyer any manufacturers' or suppliers, warranties or rights or recovery
against manufactures or suppliers to which PBF may be entitled that are
applicable to the Inventory.
2(j). PRODUCT LIABILITY. At all times during the term of this Agreement, PFB
shall maintain product liability insurance in an amount which is not less than
*** per occurrence in accordance with then prevailing industry standards. All
such product liability insurance shall (1) be primary, (2) name Buyer and PBF as
insured, (3) contain waivers of subrogation, and (4) provide that no
cancellation or modification thereof will be effective without *** prior
written notice to Buyer and PBF. PBF will provide buyer with evidence of such
insurance. PBF will have Certificates of Insurance on file from its vendors.
ARTICLE III
PRICING
3(a). PRICING FOR INVENTORY. Inventory shall be sold to Buyer at Landed Cost
+ *** . Landed Cost shall be defined as the sum of the cost of an item of
Inventory to PBF, plus the actual cost of freight to PBF's facilities and, to
the extent necessary, the actual costs of outside storage (herein "Landed
Cost"). Outside storage costs will be deemed necessary in the event that PBF
takes delivery of Opportunistic Purchases for Buyer's benefit. PBF will provide
warehouse space for Buyer's normal requirements.
3(b). PRICING FOR FURNITURE, FIXTURES AND EQUIPMENT. Furniture, fixtures and
equipment shall be sold to Buyer at actual cost +***, plus the actual cost of
freight, installation and applicable sales tax.
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3(c). RIGHT TO CONFIRM COSTS/PRICING
(i) During the term hereof, Buyer shall have the right to inspect,
during PBF's normal business hours, accounting records, including purchase
orders, of PBF as may be reasonably necessary to confirm that Buyer has, in
fact, been charged no more than is permissible under Section 3 (a) above, it
being understood that any such inspection shall be limited to the sole purpose
of confirming that the prices, fees, and other amounts charged to Buyer comply
with the provisions of this Agreement. Buyer shall give PBF 30 days notice
prior to inspection. Any costs incurred for purposes of this verification are
the responsibility of Buyer.
(ii) If Buyer elects to review the accounting records of PBF to
confirm that the prices, fees, and other amounts which PBF has charged to Buyer
comply with the provisions of this Agreement and Buyer thereafter claims that is
has been charged amounts in excess of that which is permissible under Section
3(a) above, PBF and Buyer will determine amount of overcharge, if any, and
return said overcharge to Buyer within 30 days. Any shortfall shall be paid
from Buyer to PBF within 30 days.
(iii) Buyer's right to inspect such records of PBF shall be limited as
follows: (a) Buyer shall not inspect the records of PBF any more frequently than
two times per calendar year; and (b) Buyer shall audit only those records which
relate to transactions which have occurred within the twelve months immediately
prior to the notice of request to inspect.
ARTICLE IV
PAYMENT
4(a). BILLING FOR INVENTORY. Payment for Inventory other than Opportunistic
Purchases will be due from Buyer to PBF based upon the attached schedule of
payment due dates. Such payment will be remitted through electronic funds
transfer. Invoices must be paid in full and deductions shall be permitted only
when documented by a credit memo invoice issued by PBF. PBF shall use its best
reasonable efforts to issue such credit memo invoices within one week after the
delivery of the items of Inventory which give rise to such deductions.
4(b). BILLING FOR FURNITURE, FIXTURES AND EQUIPMENT. Billing for Furniture,
Fixtures and Equipment will be by invoice from PBF to Buyer on a restaurant by
restaurant basis. PBF will invoice Buyer for such Furniture, Fixtures and
Equipment once the project is completed. Payment for Furniture, Fixtures and
Equipment invoices shall be due from Buyer to PBF within *** of receipt.
4(c). FINANCE CHARGES. In the event that any payment is not paid by Buyer
within *** of the schedule referred to in Sections 4(a) and 4(b) above,
finance charges will be assessed at a rate of *** .
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ARTICLE V
DELIVERY
5(a). DELIVERY. Unless otherwise agreed, the Inventory shall be delivered at
two times per week during normal restaurant operating hours to each location
provided by Buyer. The day of delivery shall be the same for each week unless
an alternative day(s) is agreed to by both parties.
5(b). RISK OF LOSS. The risk of loss of the Inventory shall not pass to Buyer
until PBF delivers the Inventory to a location specified by Buyer or to Buyer or
Buyer's agent.
5(c). INSURANCE. PBF shall secure, at its own expense, adequate insurance
coverage for the Inventory sold under this Agreement. If the Inventory is lost
or damaged, the party then bearing the risk of loss under the terms of this
Agreement and applicable law shall look to the insurance proceeds for full
satisfaction regardless of the adequacy of those proceeds and without regard to
any breach of this Agreement by either party.
ARTICLE VI
TERMINATION, NOTICES & REMEDIES.
6(a). TERMINATION BY PBF. Without limiting any other rights or remedies which
PBF may have hereunder, at law, in equity or otherwise, at any time during the
term of this Agreement and at any time thereafter, PBF shall have the right to
terminate this Agreement and cease deliveries to Buyer's restaurants (1) if
Buyer fails to pay an amount due within seven days of Buyer having received
written notice of late payment as defined in Sections 4(a) and 4(b). Such
written notice may be issued no earlier than three days after the payment due
date; or (2) upon the appointment of a receiver for the property of Buyer or the
initiation of any bankruptcy, insolvency, reorganization or other proceeding for
the relief or protection of debtors, whether voluntary or involuntary, by or
against Buyer, where such appointment or proceeding is not dismissed within
thirty days.
6(b). TERMINATION BY BUYER. Without limiting any other rights or remedies
which Buyer may have hereunder, at law, in equity or otherwise, at any time
during the term of this Agreement and at any time thereafter, Buyer shall have
the right to terminate this Agreement (1) upon thirty days' prior notice if PBF
is in default hereunder and fails to cure such default within such thirty day
period; (2) upon thirty days' prior notice if PBF fails to pay its debts as the
same become due in the ordinary course of business; or (3) upon the appointment
of a receiver for the property of PBF or the initiation of any bankruptcy
insolvency, reorganization or other proceedings for the relief or protection of
debtors, whether voluntary or involuntary, by or against PBF, where such
appointment or proceeding is not dismissed within thirty days. In any event, a
material default is necessary for termination.
6(c). INVENTORY, TERMINATION. Upon termination, Buyer shall purchase ***
*** , including *** , which was purchased *** and will ***
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*** to PBF within *** of termination. PBF will deliver said *** to ***,
if desired.
6(d). *** OF INVENTORY. If Buyer *** any *** upon termination as
required under this Agreement, then PBF may, without limiting any other rights
and remedies which it may have hereunder, *** of all such *** in a
commercially reasonable manner apply the *** of such *** to all *** due
*** to PBF, and seek any *** from Buyer.
6(e). ACCOUNTS RECEIVABLE. Upon termination, Buyer will remit payment for all
amounts due related to accounts receivable within *** of termination.
6(f). NOTICES. Any notice required under this Agreement shall be provided by
first class, postage prepaid mail to the "designated party contacts" at the
addresses set forth below or by facsimile transmission to the number set forth
below unless otherwise changed by either party:
Designated Party Contacts:
Xxxxx'x Restaurants, Inc. Pacific Basin Foods, Inc.
0000 Xxxxxxxx Xxxxx 0000 Xxxxxxxxxxxx Xxxxxx
Xxx 000 Xxx X
Xxx Xxxxx, XX 00000 Xxx Xxxxx, XX 00000
Phone: (000) 000-0000 Phone: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
Attn: Xxxxxxxx Xxxxx Attn: Xxxxxxxx Xxxxxxxxxxx
Attn: Xxxxx Xxxxxxx
Mailed notices shall be deemed effective five days after mailing. Facsimile
notices shall be deemed effective on the date transmitted.
6(d). ATTORNEY'S FEES. Should any party be required to enforce its rights
under this Agreement, then in addition to any remedy or damage provided by law
or equity, the prevailing party shall be entitled to payment of its fees, costs
and reasonable attorney's fees incurred in enforcing such rights.
ARTICLE VII
MISCELLANEOUS
7(a). GENERAL. This Agreement constitutes the entire agreement between the
parties, shall be construed in accordance with the laws of the State of
California, and may not be assigned by any party without the consent of the
other party. Notwithstanding the foregoing, either party may assign its rights
under this Agreement to any person or entity which controls, is controlled by,
or is under common control with, the assigning party; provided, however, that
such assignment
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shall not serve to release the assigning party from its obligations under
this Agreement. This Agreement supersedes all prior agreements between the
parties.
7(b). FINANCIAL INFORMATION. Buyer shall provide PBF with quarterly
financial statements, and will notify PBF of any material changes in the
financial structure of Buyer's organization.
7(c). CONFIDENTIALITY. Buyer acknowledges that the accounting books and
records and other financial information of PBF to which Buyer or its agents may
have access pursuant to Article III hereof and the compilation of prices and
other contents of PBF's Order Guide Book are confidential and proprietary to
PBF. Buyer shall not disclose such information to any other person without
PBF'S prior written consent and will use such information only in furtherance of
Buyer's proper performance of its obligations under this Agreement or in
enforcing its rights hereunder. Upon the termination of this Agreement, Buyer
shall immediately return all such information, in whatever form, to PBF, and
thereafter Buyer shall not use such information for any purpose, unless and to
the extent that such information is deemed to be in the public domain or has
been obtained by Buyer from third parties without any prohibitions on
disclosures thereof. PBF acknowledges that all information obtained about
Buyer's financial condition and business operations that is not otherwise
available is confidential and proprietary to Buyer. PBF shall not disclose such
information to any other person without Buyer's written consent and will use
such information only in furtherance of PBF's proper performance of its
obligations under this Agreement or in enforcing its rights hereunder.
7(d). EXCUSABLE DELAYS. Neither party shall be liable for any delay in the
performance of any of its obligations hereunder, or for any damages suffered by
the other party as a result of such delay, where such delay directly or
indirectly causes or in any manner arises in connection with fires, floods,
accidents, riots, strikes or other labor unrest, acts of God, war, governmental
restrictions or interference, shortages of fuel, labor, materials or supplies,
transportation delays or any other causes which are beyond the reasonable
control of the party whose performance is so delayed; provided, however, that no
delay in the payment of monies due from either party hereunder shall be deemed
or construed to be excused pursuant to this Section 7(c).
7(e). WAIVERS AND MODIFICATIONS. All waivers or modifications hereunder must
be made in writing and signed by both parties, and the failure to require a
party's performance of any obligation hereunder shall not affect the other
party's right subsequently to require performance of that obligation. No waiver
of any breach hereunder shall be construed as a waiver of any continuing or
succeeding breach or a waiver of modification of the terms of this Agreement.
7(f). SEVERABILITY. If any provision of this Agreement is deemed to be
invalid or unenforceable under applicable law, such provision shall be
ineffective to the extent required by such invalidity or unenforceability
without affecting the remainder of such provision or the remainder of this
Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above.
PBF BUYER
By: /s/ Xxxxxxxx Xxxxxxxxxxx By: /s/ Xxxxx X. Xxxxxxx
------------------------------ --------------------------------
Title: President Title: Vice Pres.
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Xxxxx'x Restaurants, Inc.
1999 Schedule of Payments Due: Pacific Basin Foods
SCHEDULE OF PAYMENT DUE DATES
RUBIO'S FOR DELIVERIES
PERIOD/WEEK STARTING ENDING ***
FY96
P10 WEEK 2 9/30/96 10/13/96 ***
P10 WEEK 4 10/14/96 10/27/96 ***
P11 WEEK 2 10/28/96 11/10/96 ***
P11 WEEK 4 11/11/96 11/24/96 ***
P12 WEEK 2 11/25/96 12/08/96 ***
P12 WEEK 5 12/9/96 12/29/96 ***
FY97
P01 WEEK 2 12/30/96 01/12/97 ***
P01 WEEK 4 1/13/97 01/26/97 ***
P02 WEEK 2 1/27/97 02/09/97 ***
P02 WEEK 4 2/10/97 02/23/97 ***
P03 WEEK 2 2/24/97 03/09/97 ***
P03 WEEK 5 3/10/97 03/30/97 ***
P04 WEEK 2 3/31/97 04/13/97 ***
P04 WEEK 4 4/14/97 04/27/97 ***
P05 WEEK 2 4/28/97 05/11/97 ***
P05 WEEK 4 5/12/97 05/25/97 ***
P06 WEEK 2 5/26/97 06/08/97 ***
P06 WEEK 5 6/9/97 06/29/97 ***
P07 WEEK 2 6/30/97 07/13/97 ***
P07 WEEK 4 7/14/97 07/27197 ***
P08 WEEK 2 7/28/97 08/10/97 ***
P08 WEEK 4 8/11/97 08/24/97 ***
P09 WEEK 2 8/25/97 09/07/97 ***
P09 WEEK 5 9/8/97 09/28/97 ***
P10 WEEK 2 9/29/97 10/12/97 ***
P10 WEEK 4 10/13/97 10/26/97 ***
P11 WEEK 2 10/27/97 11/09/97 ***
P11 WEEK 4 11/10/97 11/23/97 ***
P12 WEEK 2 11/24/97 12/07/97 ***
P12 WEEK 5 12/8/97 12/28/97 ***
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