Sysco Corporation
Master Distribution
Agreement
For
Creative Host Services, Inc.
TABLE OF CONTENTS
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1. Appointment of Distributor
2. Customer Service Provided by SYSCO
2.1 Account Executive
2.2 Item List
3. Delivery Service Provided by SYSCO
4. Information Services Provided by SYSCO
4.1 Usage Reports
4.2 Direct Order Entry
4.3 Supporting Software
4.4 Third Party Providers
5. Pricing
5.1 Definition of Cost
5.2 Merchandising Services
5.3 Sell Price
5.4 Customer Contract Pricing
5.5 Substitutions
5.6 Section Deleted
5.7 Adjustment in Margins for Unanticipated Problems
6. Supplier Agreements - Administration and Handling
6.1 Supplier Agreements
6.2 Equivalent SYSCO Branded Product
6.3 Effectiveness of Additional Supplier Agreements
6.4 Administrative Maintenance of Supplier Agreements
6.5 Specifically Inventoried Proprietary Product - Effectivens of
Pricing
Changes
7. Price Verification
8. Proprietary and Special Order Products
8.1 Definition of Special Order Products
8.2 Definition of Proprietary Products
8.3 Stocking of Proprietary Products
8.4 Proprietary Product and Special Order Products Requirements
8.5 Customer Responsibility for Proprietary Products and Special Order
Products
9. Credit
9.1 Net Terms
9.2 Set Off
9.3 Service Charge; Collection Fees
9.4 Applications
9.5 Financial Information
9.6 Delivery Stoppage
10. Term
11. Termination
12. Arbitration and Waiver of Jury Trial Right
12.1 Arbitration
12.2 Waiver of Jury Trial Right
13. Perishable Agricultural Commodities
14. Miscellaneous
14.1 Assignment
14.2 Entire Agreement
14.3 Amendements
14.4 Notices
14.5 Donations
MASTER DISTRIBUTION AGREEMENT
Master Distribution Agreement (this "Agreement"), dated January 3, 2000,
between SYSCO CORPORATION for itself and on behalf of those of its operating
subsidiaries and/or divisions listed in Schedule 1 (collectively, "SYSCO") and
Creative Host Services, Inc. and each entity that owns or operates any of the
establishments listed as Customer Locations on Schedule 1 (collectively,
"Customer'').
BACKGROUND
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A. SYSCO performs regional and national marketing, freight management,
consolidated warehousing, quality assurance and performance-based product
marketing for suppliers of products to the foodservice distribution industry;
B. SYSCO performs purchasing, marketing, warehousing, quality assurance,
product research and development, transportation and distribution services for
foodservice customers directly and through its operating subsidiaries and
divisions (collectively, "Operating Companies" and individually, "Operating
Company"); and
C. Customer owns, operates, is a franchiser of, and/or acts as a group
purchasing organization for the establishments listed in Schedule 1 (the
"Customer Locations")-
D. Customer desires to contract with SYSCO as its primary distributor for
foodservice products (i.e., supplying 80% or more of such products) to all of
its participating Customer Locations and SYSCO desires to perform these
services.
In consideration of the mutual obligations set forth below, the parties agree as
follows:
1. APPOINTMENT OF DISTRIBUTOR
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Customer appoints SYSCO to serve as its primary distributor to the Customer
Locations of foodservice products within the product categories described in
Schedule 2 ("Products"). By appointing SYSCO its "primary distributor" Customer
agrees that each participating Customer Location will purchase not less than 80%
of the dollar volume of such Customer Location's purchase requirements of
Products in each Product category.
Products will include SYSCO brand, national brand and other products stocked by
SYSCO. SYSCO brand products include all products under trademarks or tradenames
owned by SYSCO as well as products under trademarks available exclusively to
SYSCO in foodservice distribution channels.
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2. CUSTOMER SERVICE PROVIDED BY SYSCO
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2.1 Account Executive- SYSCO will assign an account executive and/or a
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customer service representative to service Customer's account. The account
executive and/or customer service representative will maintain contact with
Customer Locations, on a mutually agreed basis, to review service requirements.
2.2 Item List - SYSCO, with assistance from Customer, will prepare
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order guides to be used by the Customer when placing orders which will be
provided on a monthly basis for items priced monthly and on a weekly basis for
items priced weekly. SYSCO will provide order guides in hard copy format or
electronically if the Customer utilizes a SYSCO direct order entry system, at
Customer's option.
3. DELIVERY SERVICE PROVIDED BY SYSCO
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Each Operating Company will establish a delivery schedule for each Customer
Location within its market area taking into consideration Customer needs and
preferences and will use reasonable, good faith efforts to make on-time
deliveries.
4. INFORMATION SERVICES PROVIDED BY SYSCO
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4.1 Usage Reports- SYSCO can provide Customer usage data selected from
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SYSCO's standard report or flat file options. Standard data is made available
either on hard copy or electronically. The electronic options include EDI ANSI
X.12, bulletin board, tape or diskette. Should it become necessary to develop
customized reports in lieu of or in addition to the standard SYSCO reports,
SYSCO will use reasonable efforts to provide such reports. Customer agrees to
pay for any additional costs incurred by SYSCO for the development of any
customized reports.
4.2 Direct Order Entry- If Customer desires electronic order entry,
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SYSCO will provide either Customer Companion software or an Internet order entry
application utilizing a browser. Either option will enable the Customer
Locations to directly place orders electronically with the servicing Operating
Company. Any participating Customer Locations must provide, at their own cost,
compatible hardware, Internet and network connections in order to utilize the
above software or browser application.
4.3 Supporting Software- SYSCO has available supporting software
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modules that interface with the eSYSCO Order Entry System. This supporting
software offers menu planning and inventory management system and can be
purchased through SYSCO for a nominal fee.
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4.4 Third Party Providers- Upon the Customer's written request, SYSCO
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will provide to an agent representing a Customer for the purpose of information
analysis, order placement or processing, or supplier rebate application (a
"Third Party Provider") purchasing information that is normally made available
to the Customer, subject to the below listed conditions: The information will
only be made available in, one of SYSCO's standard electronic formats or
utilizing EDI ANSI X.12 standards. All information sent by SYSCO to an
authorized Third Party Provider is for the sole use of the Customer. Selling,
utilizing, or disclosing such information to, anyone other than the Customer is
prohibited. Prior to providing any such information to any such Third Party
Provider, SYSCO requires a Confidentially Agreement be in place with both the
Customer and the Third Party Provider prior to transmission of data to a third
party. In the event SYSCO incurs additional costs as a result of Third Party
Provider requirements, such costs will be charged to either the Customer or the
Third Party Provider.
5. PRICING
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5.1 Definition of Cost- The price to Customer for all Products sold
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under this Agreement (the "Sell Price") will be calculated on the basis of Cost.
Except for contract pricing noted in 5.4, "Cost" is defined as the cost of the
Product as shown on the invoice to the delivering Operating Company, plus
applicable freight. The invoice used to determine Cost will be the invoice
issued to the delivering Operating Company by the supplier or by the
Merchandising Services Department of SYSCO Corporation. Cost is not reduced by
cash discounts for prompt payment available to SYSCO or the Operating Companies.
Applicable freight, in those cases where the invoice cost to the delivering
Operating Company is not a delivered cost, means a reasonable freight charge to
transport a Product from the Supplier (as defined below) to the Operating
Company. Freight charges may include common or contract carrier charges imposed
by the Product Supplier or a carrier, or charges billed by Alfmark, SYSCO's
freight management service. Applicable freight for any Product will not exceed
the rate charged by nationally recognized carriers operating between the same
points, for the same quantity of product, and the same type of freight service.
5.2 Merchandising Services- SYSCO performs value-added services for
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suppliers of SYSCO brand and other products (a "Supplier") over and above
procurement activities typically provided. These value-added services include
regional and national marketing, freight management, consolidated warehousing,
distribution, 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 reduce Cost and does not
diminish SYSCO's commitment to provide competitive prices to its customers.
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5.3 Sell Price
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(a) Calculation of Sell Price- The Sell Price of each Product sold
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under this Agreement will equal the Cost of such Product divided by 100% minus
the percentage margin on sell specified in Schedule 2 for such Product category,
less promotional allowances reflected on invoices to the delivering Operating
Company which will be passed along as a temporary reduction in the Sell Price
for the term of the promotion.
For Example, a Product with a Cost of $25.00 per case, a margin on sell of
10% and a promotional allowance on the face of the invoice of $.50 per case will
have a Sell Price calculated as follows:
Calculate base price from margins $25.00 = S25.00 = $27.78
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(▇▇▇ ▇▇-▇▇%) 90%
Less promotional allowance
shown the invoice (.50)
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Sell Price $27.28
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(b) Duration of Sell Price - Costs for all Products are recalculated
with the following frequencies:
1) Time of sale pricing - price sensitive products with volatile
fluctuations in, pricing (i.e. produce and fresh seafood);
2) Weekly pricing - commodity products which reflect declines and
advances in Cost on a regular basis, as determined by SYSCO (i.e, most protein
products)-will be in effect for seven consecutive days;
3) Monthly pricing - fairly stable pricing for extended periods (i.e. most
canned products) - will be in effect on the first calendar day of the month
through the last calendar day of the month.
Variances can occur to the Customer's invoiced price due to starting and ending
dates of Supplier Agreements, as detailed its Section 6 hereof (and the timing
of when "Cost" is determined).
SYSCO reserves the right to adjust monthly or weekly pricing in the event of
major (more than 10%) changes in Cost of any Product.
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(c) Time of Sell Price Calculation -The following schedule wall be used
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to determine when the sell price is calculated;
1) Time of Sale Pricing - day of invoicing;
2) Weekly pricing - Thursday p.m. of the prior week;
3) Monthly Pricing - 25th of previous month.
(d) Effective Date of Sell Price - Weekly pricing will be for 7
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consecutive days to be determined by the Operating Company. Monthly pricing will
be in effect on the 1st day of the calendar month through the last day of the
calendar month.
5.4 Customer Contract Pricing-- In the event the Customer negotiates
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contract pricing directly with a Supplier, such contract cost with such Supplier
will be used to calculate the Customer's Sell Price, regardless of SYSCO's Cost.
5.5 Substitutions - Should a substitution be necessary, the delivering
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Operating Company will ship a comparable product at a Sell Price calculated
using the same methodology and margin percentage as on the original Product
ordered.
5.7 Adjustment in Margins for Unanticipated ProblemsIf the operating
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costs of SYSCO or any particular Operating Company are increased as a direct
result of a significant regional or national economic problem, including but not
limited to fuel cost increases and power shortages, SYSCO may, with written
notice to the Customer, add a surcharge to the Customer's invoice to compensate
for such increased costs.
6. SUPPLIER AGREEMENTS - ADMINISTRATION AND HANDLING
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6.1 Customer will provide SYSCO with written evidence of the existence
of any contractual agreements it has with any Supplier for the purchase of
Products ("Supplier Agreements"), utilizing the SYSCO Supplier Detail Form
(Schedule 3). Supplier Agreements include agreements for which the Supplier and
Customer have agreed on off-invoice allowances for Customer ("Supplier
Off-Invoice Allowances") or the guaranteed cost Supplier will charge distributor
for Product to be resold to Customer ("Supplier Guaranteed Distributor Cost").
SYSCO will use the Supplier Guaranteed Distributor Cost (of which it has been
notified appropriately) as the Cost of such Product when calculating its Sell
Price, notwithstanding that the Cost of such Product to SYSCO otherwise varies.
SYSCO will provide for a Supplier Off-Invoice Allowance for a Product by
deducting such allowance value after the Sell Price of such Product is
calculated in accordance with Section 5.3.
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6.2 Equivalent SYSCO Branded Product. In the event Supplier is an
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authorized supplier of SYSCO branded Product which is the equivalent of any
Products covered by a Supplier. Agreement (the "Equivalent SYSCO Product"),
SYSCO may provide such Equivalent SYSCO Product to Customer under the terms of
such Supplier Agreement provided that (i) Customer has approved SYSCO branded
Product for purchase, (ii) Supplier agrees that such Supplier Agreement terms
can be applied to the equivalent SYSCO branded Product; and (iii) such
equivalent SYSCO branded Product is stocked by an Operating Company servicing
any Customer Location.
6.3 Effectiveness of Additional Supplier Agreements. For any Supplier
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Agreements which are either (i) not listed on Schedule 3 or (ii) the terms of
which change from what is listed on Schedule 3 ("New Supplier Agreements"),
SYSCO must be notified in writing by the tenth (10th) day of any month for the
pricing or allowances under such New Supplier Agreements to be effective as of
the first day of the following month. (For example: Written notification of a
New Supplier Agreement received on January 20th will not become effective until
March 1st.) Furthermore, in the event any documentation regarding the specifics
of any New Supplier Agreement is incomplete, while SYSCO will make every
reasonable effort to secure such necessary documentation to implement the terms
and provisions of such New Supplier Agreement, if such additional documentation
is not received by the tenth of any month, the effectiveness of the pricing and
allowance terms thereof shall be delayed until the first day of the second month
following receipt of such documentation.
6.4 Administrative-Maintenance of Supplier Agreements. Customer agrees
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that SYSCO is not responsible for inaccuracies, errors or omissions made by
Supplier in connection with the billing of the pricing and allowances under the
Supplier Agreements and that Customer's sole and exclusive remedy for any such
inaccuracies, errors or omissions shall be directly with Supplier. (For example:
If the terms and provisions of a New Supplier Agreement are received by January
20th with direction to be effective as of February 1st, the effective dates of
such pricing allowances will be March 1st and Customer will look only to
Supplier to resolve any issues with respect to such pricing and/or allowances
not being effective as of February 1st) If pricing error is found to be due to
the cause of SYSCO failing to implement or maintain pricing, when Creative Host
has followed guidelines, then SYSCO shall issue credit within 10 business days
after being notified of error.
6.5 Specifically Inventoried Proprietary Product - Effectiveness of
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Pricing Changes. For Proprietary Products which are specifically inventoried for
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Customer pursuant to the terms of a Supplier Agreement, Customer agrees that any
changes in the Supplier Guaranteed Distributor Cost will not be effective until
such time as SYSCO revalues its inventory of such Proprietary Product in
accordance with its normal and customary inventory valuation procedures, unless
Supplier allows SYSCO to ▇▇▇▇ back Supplier for such pricing and allowance
modifications on its existing inventory at the time
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of such changes, in which event the pricing to Customer shall change upon the
effective date of the New Supplier Agreement.
7. PRICE VERIFICATION
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Customer will be allowed two (2) annual price verification at each
delivering Operating Company for purchases made under this Agreement. The price
verification will consist of reviewing computer reports documenting SYSCO's
calculation of the Customer's invoice price and verification of the
participating SYSCO Operating Company's delivered Cost. If requested, applicable
Supplier invoices and accompanying freight invoices will also be made available.
Price verification adjustments, if applicable, will be made utilizing the net of
undercharges and overcharges to the Customer. The price verification process is
subject to the following:
a. Customer must request a price verification in writing at least
twenty (20) business days prior to the suggested date of the price
verification. This request must identify the fifteen (15) items to be
price verified and the period covered;
b. The date and time of price verification must be to the mutual
agreement of both parties;
c. The price verification will be made at the delivering Operating
Company's location;
d. Support for the price verification may not be removed from the
delivering Operating Company location;
e. The period for which pricing is to be verified will not begin more
than three (3) months prior to the date of the price verification, and
will cover only one pricing period-.
Due to the extensive time and complexity associated with price
verification, SYSCO will not permit computer generated price matching or
electronic audits by or on behalf of Customers or any Third Party Provider to be
used in lieu of the above price verification procedure.
8. PROPRIETARY AND SPECIAL ORDER PRODUCTS
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8.1 Definition of Special Order Products- Special Order Products axe
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defined as products not inventoried by the SYSCO Operating Company whereby the
Customer requests the Operating Company to purchase said products on the
Customer's behalf.
8.2 Definition of Proprietary Products- Proprietary Products are
-------------------------------------
defined as products bearing the customers name or logo or products with a unique
formulation which are restricted for sale to one Customer, or national branded
products that would otherwise not be inventoried except for the requirements of
the Customer. Products that are produced
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for SYSCO under the Sysco Brand will be considered Proprietary Products when the
Customer designates the product must be procured from specific suppliers.
Due to the highly perishable nature of fresh produce, SYSCO will not honor
proprietary status on any fresh produce item.
8.3 Stocking of Proprietary Products- Customer agrees that SYSCO shall
---------------------------------
only be required to stock no more than 8 Proprietary Products. If SYSCO agrees
to inventory any Proprietary Product for the Customer, in excess of the stated
amount, each additional Proprietary Product will carry a 5% increase in margin.
Schedule 4 lists the permitted Proprietary Products under this Agreement, and
may not be changed without a written agreement signed by both parties hereto.
8.4 Proprietary Product and Special Order Products Requirements -
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Proprietary Products and Special Order Products for the Customer must
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meet the following requirements:
a) Suppliers of Proprietary Products and Special Order Products must
provide SYSCO with SYSCO's required indemnity agreement and insurance coverage;
b) Proprietary Products and Special Order Products must have a valid
UPC number assigned and a scanable UPC bar code on each sellable unit;
c) No Operating Company will have an obligation to carry a Proprietary
Product if all Customer Location's purchasing from such Operating Company
purchase less than 10 cases per week of that Product and the sales volume of
such Proprietary Product in such Operating Company results in less than twelve
turns of the inventory of such Product in any twelve month period;
d) SYSCO utilizes several third party warehouses throughout the nation
for the purpose of efficiently redistributing products ("Redistribution
Warehouses"). Any Products placed into the Redistribution Warehouses must be
inventoried on a consigned basis by either the Supplier or the Customer.
8.5 Customer Responsibility for Proprietary Products and Special Order
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Products
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a) Hold Harmless - In the event any supplier of Proprietary Products or
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Special Order Products does not provide SYSCO's required indemnity, Customer
will defend, indemnify and hold harmless SYSCO and its employees, officers and
directors from all actions, claims and proceedings, and any judgments, damages
and expenses resulting therefrom, brought by any person or entity for injury,
illness and/or death or for damage to property in either case arising out of the
delivery, sale, resale, use or
-8-
consumption of any such Proprietary Product or Special Order Product, except to
the extent such claims are caused by the negligence of SYSCO, its agents or
employees.
b) Minimal Movement Requirements- In the event SYSCO, at the request of
-----------------------------
the Customer, inventories Proprietary Products or Special Order Products
(including without limitation, Products featured by Customer for a limited time
period) at either any Operating Companies or at any Redistribution Warehouse,
and there is no Product movement within 30 days of delivery to such location,
Customer agrees to cause such Products to be repurchased and if desired, take
possession of all such Product within 14 days following written notification
from SYSCO. Products repurchased will be at SYSCO's Cost plus a reasonable
transfer and warehouse handling charge not to exceed 50% of the Products Cost.
C) FOOD SAFETY AND GROUND BEEF- FOOD SAFETY IS OF PARAMOUNT IMPORTANCE
----------------------------
TO SYSCO, CUSTOMER AND THE ULTIMATE CONSUMER. TO THAT END, SYSCO HAS DEVELOPED A
SET OF STRINGENT STANDARDS FOR THE PRODUCTION AND PACKAGING OF GROUND BEEF (THE
"SYSCO GROUND BEEF SAFETY STANDARDS"). IN ORDER TO ADEQUATELY PROTECT SYSCO AND
CUSTOMER FROM POTENTIAL FOOD SAFETY ISSUES RELATING TO THE PRODUCTION AND
PACKAGING OF GROUND BEEF AND THE ULTIMATE CONSUMER, SYSCO SHALL NOT BE OBLIGATED
TO UTILIZE ANY SUPPLIER OF GROUND BEEF WHICH DOES NOT MEET THE SYSCO GROUND BEEF
SAFETY STANDARDS, A COPY OF WHICH HAS BEEN PREVIOUSLY PROVIDED TO CUSTOMER,
WHETHER OR NOT THE GROUND BEEF SUPPLIED BY SUCH SUPPLIER HAS BEEN DESIGNATED BY
CUSTOMER AS A PROPRIETARY PRODUCT OR SPECIAL ORDER PRODUCT.
d) Termination- In the event of termination or expiration of this
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Agreement, Customer will purchase, or cause a third party to purchase, all
remaining Proprietary Products and Special Order Products in SYSCO's inventory
at SYSCO's Cost plus a reasonable transfer and warehouse handling charge not to
exceed 10% of the Cost of such Proprietary Products or Special Order Products.
In such an event, Customer will
purchase or cause to be purchased all perishable Proprietary Products and
Special Order Products within seven (7) days of the termination of this
Agreement and all frozen and dry Proprietary Products and Special Order Products
within fifteen (15) days of the termination of this Agreement, and Customer
hereby guarantees payment for such Product purchased by a designated third
party.
9. CREDIT
9.1 Net Terms - Payment is due within 21 days from the date of the
invoice.
* Refer to Feb. 5 2001 Letter of ▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/
SYSCO reserves the right to modify payment terms for Customer or any company or
entity which purchases Products under this Agreement as a franchisee or member
of a group purchasing organization, in SYSCO's sole judgement, if any such
entity's financial condition materially deteriorates or SYSCO becomes aware of
circumstances that may
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materially and adversely impact such entity's ability to meet its financial
obligations when due.
Franchisee Customers which are franchisees or members of group purchasing
organizations will normally be offered the standard credit terms offered
hereunder. However, at the sole discretion of the servicing SYSCO Operating
Company and based on the credit worthiness of the individual Customer Location
(or the entity which owns or operates such Customer Location), terms other than
that stated in this Agreement may be applied.
9.2 Set Off - SYSCO's rights of set off and recoupment are recognized
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by Customer and preserved in all respects.
9.3 Service Charge; Collection Fees- If invoices are not paid when due,
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a service charge will be assessed to Customer, up to the maximum amount
permitted by law. Unpaid invoice balances and service charges due to SYSCO will
be deducted from any credits due to Customer. Customer shall pay all costs and
expenses (including reasonable attorney's fees) SYSCO incurs in enforcing its
rights under this Agreement including, without limitation, its right to payment
for Product sold to Customer.
9.4 Applications- Customer (and each Customer franchisee and member of
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Customer's group purchasing organization) will complete, execute and deliver a
new account form to SYSCO before this Agreement becomes binding upon SYSCO.
9.5 Financial Information- The continuing creditworthiness of Customer
----------------------
is of central importance to SYSCO. In order to enable SYSCO to monitor
Customer's financial condition and if requested by SYSCO, Customer will supply
quarterly and annual financial statements to SYSCO consisting of an income
statement, balance sheet and statement of cash flow. SYSCO may request such
further financial information from Customer from time to time, sufficient, in
SYSCO's judgment, to enable SYSCO to accurately assess Customer's financial
condition.
9.6 Delivery Stoppage- In the event Customer, or any company or entity
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which purchases Products under this Agreement as a Customer franchisee or a
member of Customer's group purchasing organization, fails to make payment when
due, SYSCO or any participating Operating Company to which such payment is due
may immediately cease shipment of any Products to Customer or other
participating entity until the outstanding receivable balance is fully within
terms.
10. TERM * Refer to Letter Dated Feb. 5, 2001 of ▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/
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The term of this Agreement will begin on February 1, 2001, and will end on
January 31, 2005 at 5:00 p.m. Houston time.
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11. TERMINATION
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This Agreement may be terminated prior to its ending date for the
following:
(a) By either party for failure of the other party to comply with any
material provision of this Agreement within sixty (60) days of such party's
receipt of written notice describing said failure;
(b) By SYSCO immediately upon written notice to Customer if Customer's
financial position deteriorates materially, determined by SYSCO in its sole
judgment; or SYSCO becomes aware of any circumstances that, in SYSCO's sole
judgement, materially impacts Customer's ability to meet its financial
obligation when due;
(c) By SYSCO with respect to Any Customer franchisee or a member of
Customer's group purchasing organization, immediately upon written notice to
such entity if its financial position deteriorates materially, determined by
SYSCO in its sole judgment; or SYSCO becomes aware of any circumstances that, in
SYSCO's sole judgment, materially impacts such entity's ability to meet its
financial obligations when due;
(d) By SYSCO, if Customer (or any Customer franchisee or member of
Customer's group purchasing organization) fails to meet its stated operational
representations set out in Schedule 5. The margin schedule submitted is based on
the Customer's operational representations concerning its service needs as
stated in Schedule 2 including, but not limited to its anticipated purchase
volumes, drop sizes, Product mix, location of Customer Locations, number of
deliveries, information services/technology requirements, and number of
Proprietary Products and Special Order Products as well as Customer's compliance
with the payment and other obligations specified in this Agreement. If SYSCO
determines at any time or times after ninety (90) days from the date of this
Agreement that Customer (or any Customer franchisee or member of Customer's
group purchasing organization) requires service which varies materially from the
levels contemplated in Customer's representations made to SYSCO in negotiating
this Agreement, SYSCO reserves the right to request an increase on the margin
specified. SYSCO shall give written notice to Customer (or any Customer
franchisee or member of Customer's group purchasing organization) of the
proposed increase in the margin. If the parties are unable to agree on such an
increase within 30 days after the date of the notice of such increase and
Customer's (or any Customer franchisee or member of Customer's group purchasing
organization) service requirements, and/or contract compliance continues to vary
from that contemplated or required by this Agreement, SYSCO may terminate this
Agreement on thirty (30) days written notice to Customer (or any Customer
franchisee or member of Customer's group purchasing organization).
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Upon, termination, Customer (or any Customer franchisee or member of Customer's
group purchasing organization) agrees to fully comply with all of its
obligations under this Agreement, including, without limitation to pay all
invoices at the earlier of 1) the time they are due or 2) two weeks from the
date of the last shipment to a Customer Location.
12. ARBITRATION AND WAIVER OF JURY TRIAL RIGHT
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12.1 Arbitration - All actions, disputes, claims or controversy of any
-----------
kind now existing or hereafter arising between the parties to this Agreement,
including, but not limited to any action, dispute, claim or controversy arising
out of this Agreement or the delivery by SYSCO of any Products to Customer (a
"Dispute") shall be resolved by binding arbitration in Houston, in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
and, to the maximum extent applicable, the Federal Arbitration Act. Arbitrations
shall be conducted before one arbitrator mutually agreeable to Customer and
SYSCO. If the parties cannot agree on an arbitrator within thirty (30) days
after the request for an arbitration, then each party will select an arbitrator
and the two arbitrators will select upon a third. Judgment of any award rendered
by an arbitrator may be entered in any court having jurisdiction. All fees of
the arbitrator and other costs and expenses of the arbitration shall be paid by
SYSCO and Customer equally unless otherwise awarded by the arbitrator; provided,
however, that the non-prevailing party in an arbitration shall pay all
reasonable attorneys' fees and expenses incurred by the prevailing party in
connection with the Dispute and the arbitration.
12.2 Waiver of Jury Trial Right- Customer affirmatively waives its
------------------------------
right to jury trial with respect to any disputes, claims or controversies of any
kind whatsoever; Customer having submitted to arbitration any of such disputes,
claims or controversies as set out above.
13. PERISHABLE AGRICULTURAL COMMODITIES
-------------------------------------
This Agreement may cover sales of "perishable agricultural commodities" as those
terms are defined by federal law. Generally, all fresh and frozen fruits and
vegetables which have not been processed beyond cutting, combining, and/or steam
blanching are considered perishable agricultural commodities as are oil blanched
french fried potato products. All perishable agricultural commodities sold under
this Agreement are sold subject to the statutory trust authorized by Section
5(c) of the Perishable Agricultural Commodities Act, 1930 (7 U.S.C. 499e(c)).
The seller of these commodities retains a trust claim over these commodities and
all inventories of food or other products derived from these commodities until
full payment is received.
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14. MISCELLANEOUS
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14.1 Assignment- Neither party may assign this Agreement without
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the prior written consent of the other party provided that SYSCO may utilize its
Operating Companies to perform as indicated in this Agreement. Subject to this
limitation, this Agreement shall be binding upon and inure to the benefit of the
successors and assigns of each of the parties.
14.2 Entire Agreement- The parties expressly acknowledge that this
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Agreement contains the entire agreement of the parties with respect to the
relationship specified in this Agreement and supersedes any prior arrangements
or understandings between the parties with respect to such relationship.
14.3 Amendments - This Agreement may only be amended by a written
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document signed by each of the parties.
14.4 Notices - Any written notice called for in this Agreement may
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be given by personal delivery, certified mail, overnight delivery service or
confirmed facsimile transmission. Notices given by personal delivery will be
effective on delivery; by overnight service on the next business day; by first
class mail five business days after mailing; and by facsimile when an answer
back confirming receipt by the recipient's facsimile machine is received. The
address of each party is set forth below.
14.5 Donations - Due to the extreme competitiveness of this contract,
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SYSCO will be unable to offer donations in either free goods, cash, or use of
SYSCO owned equipment.
-13--
Executed as of the date set forth at the beginning of this Agreement.
SYSCO CORPORATION
▇▇▇▇▇▇ ▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇ Date: 2/16/01
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Regional Vice President,
Multi-Unit Sales
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Copy to:
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SYSCO Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Operations Review
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
CREATIVE HOST SERVICES, INC.
▇▇. ▇▇▇▇▇ Ali
By: /S/ ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ #▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Date: 02/16/01
Attention: President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile:(▇▇▇) ▇▇▇-▇▇▇▇