Cos� Foodservice Distribution Agreement

Distribution Agreement

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COSI INC | Distribution Market Advantage, Inc.

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Title: Cos� Foodservice Distribution Agreement
Date: 3/16/2006
Industry: EATING

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exv10w6w1

EXHIBIT 10.6.1

[**] = This mark indicates portions of the text which have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment of such omitted text in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Così Foodservice Distribution Agreement

Schedule


DMA:		Distribution Market Advantage, Inc., 1515 Woodfield Rd.,
		Schaumburg, IL 60173. Fax: 847-413-0089. Email:
		bob.sala@dmasupport.com.

Distributors:		See attached exhibit entitled Distributors under Così
		Foodservice Distribution Agreement

Customer:		Così, Inc., 1751 Lake Cook Rd., 6^th Floor, Deerfield, IL 60015,
		Attention: V.P. Food & Beverage.
		Fax: 847-597-8884. Email: pseidman@getcosi.com

		With a copy to:

		Cosi, Inc., 1751 Lake Cook Rd., 6^th Floor, Deerfield, IL 60015,
		Attention: General Counsel, Fax: (847) 580-4964,
		Email: vbaue@getcosi.com

Restaurant Concepts:		Così

Units:		See attached exhibit entitled Units under Così
		Foodservice Distribution Agreement

Products:		Item
		Dry Groceries
		Meat, Poultry and Seafood
		Refrigerated and Dairy
		Other Frozen
		Produce
		Beverages (does not include dispensing equipment and/or service)
		Paper/Disposables
		Supplies and Equipment
		Chemicals

Unit of Sale:		(a) A unit of sale is each full case of Products. (b) If less than a full case of Products is sold, then each separate item within the case is a unit of sale. For example, if 3 cans out of a case containing 6 cans are sold, the transaction counts as 3 units of sale.


Selling Margin:		[ ** ] per unit of sale. If, on the first delivery date a fuel surcharge is required, the surcharge amount will be added to the Selling Margin.

Diesel Fuel Adjustment:		[ ** ]

CPI Adjustment:		[ ** ]

Date of Agreement:		November 1, 2005

Term:		Five (5) years, commencing as of the Date of Agreement.


Key Performance Indicators:

To be performed by Customer:

All Orders Placed With e-Advantage^®		100%

Maximum Deliveries Per Unit Per Week:		2 per week

Minimum System Average Selling Margin in Dollars per Delivery:		[ ** ]

Payment Terms:		Net 14 days from receipt of Products

To be performed by Distributor:

Distribution Center Warehouse Inspection/Audit Score		80% or better
(assigned by third party inspection service, such as ABI or
Siliker Labs, chosen by mutual agreement of the parties)

Non Key Stop Deliveries within 1 hour of scheduled time:		90%

Key Stop Deliveries delivered before 5:30 AM:		95%

Fill Rate (Distribution Center with 5, or more, Units):		99%

Table of Contents


	1.			Primary Distributors.
	2.			Term of Agreement.
	3.			Units.
	4.			Account Management.
	5.			Usage Reports and Data.
	6.			Ordering Procedures.
	7.			Deliveries.
	8.			Procedures Manuals.
	9.			Pricing.
	10.			Manufacturer Contracted Cost.
	11.			Adjustments.
	12.			Proprietary Products.
	13.			Invoicing and Payment Terms.
	14.			Key Performance Indicators.
	15.			Price Audit.
	16.			Credit and Collection.
	17.			Termination.
	18.			Warranties.
	19.			Indemnification and Claim Limitations.
	20.			Confidentiality.
	21.			Distributor Liability.
	22.			Force Majeure.
	23.			Contract Interpretation.
	24.			General.

DMA and Distributors (“we” or “us” or “our”) agree to furnish foodservice distribution of the Products and related services to Customer (“you” or “your”) for the Restaurant Concepts located at the Units during the Term of this Agreement as follows. Capitalized terms are defined either in the Schedule or in the section where first used.

Primary Distributors.

	1.1.		We accept your appointment as your primary distributor for the Restaurant Concepts operated at the Units. We will sell and you will purchase all of your agreed upon requirements for the Products at the Units from us during each calendar quarter of the Term.

	1.2.		You acknowledge that DMA is solely the marketing and coordination organization for the Distributors, and that the Distributors, and not DMA, will sell and deliver the Products to you. Accordingly, you acknowledge that all of our rights and obligations under this Agreement are rights and obligations of the Distributors, and not DMA, unless specified otherwise.

Term of Agreement. Our obligation to furnish foodservice distribution of the Products and related services will be in effect for the Term specified in the Schedule. The Term may be renewed for successive one-year periods thereafter with an authorization signed by you and

		DMA giving mutual notice of renewal at least 90 days prior to the end of the Term specified in the Schedule or any successive one-year period.

3.		Units.

	3.1.		You have the right to add Units within our then current distribution service areas by notice to us. A map is in the Appendix. DMA will furnish you with a description or map of each Distributor’s service area at the commencement of the Term of this Agreement, and thereafter upon your request.

	3.2.		You have the right to request us to add Units outside of our then current distribution service areas. Upon your request, DMA will use commercially reasonable efforts to solicit a distributor to service the outside Units from among the Distributors, other DMA distributors not a party to this Agreement, or other distributors in the area.

	3.3.		Any of the Units which you do not own or manage (i.e. franchisees) will be required to sign an Acceptance of this Agreement in the form we provide, prior to making purchases under this Agreement. Credit terms offered to those Units will be independently determined by the Distributors serving them, but in no case shorter than net 14 days from receipt of Products.

Account Management.

	4.1.		DMA will serve as the central contact for the administration of this Agreement.

	4.2.		DMA will appoint an Account Executive as your single contact to manage this program. Sales professionals from each Distributor will be responsible to the DMA Account Executive for the purposes of this program. DMA will also appoint a Program Account Manager to expedite communications within the program.

	4.3.		Each Distributor will assign an Account Executive and Customer Service Representatives to each Unit, and it will be their responsibility to maintain contact with the Unit with regard to service levels.

	4.4.		DMA will coordinate the implementation and maintenance of this program between the Distributors and you, including development of a transition plan, program planning and meetings, development of order guides, development of procedures manuals for the Units, implementation of manufacturer contracts for contracted Products, and review of service levels, inventory management, and problem resolution between our distribution centers and you.

	4.5.		DMA will serve as the “clearing house” for program communications such as Product requirements, Unit changes, new Product rollouts, inventory issues, Product code changes and any other issues requiring system wide communications.

	4.6.		DMA will schedule business review meetings at least once per year to review performance against your goals and requirements, and the status of the Key Performance Indicators described in the Schedule.

Usage Reports and Data.

5.1.

You will be furnished at no additional charge with our standard usage reports generated by e-Advantage^®, our web based order entry and reporting system. DMA will make

			customized reports available to the extent practicable, but such reports will be at specified, mutually agreed additional cost to you.

	5.2.		Upon your request, DMA will provide Information to a third party you specify for the purpose of information analysis, order placement or processing, or supplier rebate application. Information means usage reports, data, and other information regarding this program provided by DMA to you or the third party. The Information will be made available in our standard formats. All Information we send to the third party is for your sole use. Neither party will sell, utilize, or disclose the Information to anyone other than the parties to this Agreement and the third party designated in writing by you. Prior to providing any Information to the third party, the third party will sign a Confidentiality Agreement, in a form reasonably requested by DMA.

	5.3.		All of the transactional data you provide contained in the reports provided by DMA and the Distributors to you and your third-designees is owned by you and is your property. The report formats are owned by DMA and the Distributors and are the property of DMA and the Distributors.

	5.4.		DMA will use commercially reasonable efforts to collect and process Information in an accurate manner and will correct any errors, omissions, or defects in the Information within 30 days after notice of the error, omission, or defect from you. The correction methods and procedures will be determined by mutual agreement of DMA and you. However, neither DMA nor the Distributors are liable for any loss, damage, or expense arising from or related to:

	5.4.1.		Loss or corruption of data;

	5.4.2.		Errors in data mapping or data input;

	5.4.3.		Errors, omissions, or defects in the Information not described in a notice from you;

	5.4.4.		Any action or failure to take action by you in reliance on the Information.

	5.4.5.		Nothing in this section (5.4) modifies the rights of either party as outlined in Section 15 (Price Audit) below.

Ordering Procedures.

	6.1.		Order guides will be available, as you elect and direct, to you and to each Unit on e-Advantage^®, to facilitate order placement. Order guides will be categorized utilizing your chart of accounts.

	6.2.		In order to permit us to capture efficiencies in the supply chain for you, you agree that each of your Units will place orders electronically. A standardized order entry format approved by you will be implemented across all our distribution centers.

	6.3.		Orders placed via any non-electronic method (e.g. phone, fax, mail, etc.) will incur a [ ** ] added charge on the Unit’s invoice for that order.

	6.4.		Skip day deliveries will be implemented as necessary with advance notification.

	6.5.		[ ** ].

Deliveries.

7.1.