Exhibit 10.16
DISTRIBUTION SERVICE
AGREEMENT
This Distribution Service Agreement
(the “Agreement”) is made and entered into as of the
21st day of August, 1997, by and between S.S.P./Circle K
(hereinafter referred to as “Purchaser”) and McLANE
COMPANY, INC., a Texas corporation (hereinafter referred to as
“McLane”).
RECITALS
WHEREAS, Purchaser is in the
business of operating retail convenience food stores ;
and
WHEREAS, McLane is in the business
of wholesale distribution of food and nonfood/general merchandise
products throughout the United States of America;
NOW, THEREFORE, in consideration of
the foregoing premises and the mutual covenants contained herein,
the parties hereto agree as follows:
ARTICLE I
SCOPE OF AGREEMENT
1.1 Purchaser Stores . For
purposes of this Agreement, the term “stores” means the
owned or managed convenience food stores of Purchaser. Should
Purchaser build new or otherwise acquire additional food stores
after the date of this Agreement, such additional food stores shall
be included within the definition of stores.
1.2 Franchisees and Licensees
. During the term of this Agreement, Purchaser agrees to recommend
McLane as the supplier to any franchisees and licensees of
Purchaser, if any.
1.3 Purchase of Products and
Services . During the term of this Agreement, Purchaser will
purchase from McLane, and McLane will sell to Purchaser,
substantially all of Purchaser’s requirements of wholesale
food and non-food/general merchandise products customarily supplied
by convenience food wholesalers. Such products shall include those
standard convenience food store items, including, but not limited
to, the following (the “Products”):
(a) Groceries, including coffee,
tea, cereal, canned meats, condiments, juice, baby food, canned and
dry goods and eggs;
(b) Deli foods, including meats and
salads, breakfast foods, nachos and bulk sausage, franks, cheese
and fish;
(c) Frozen foods, such as fruits, vegetables and
juices;
(d) Frozen fast foods, such as
burritos, pizza, pizza pieces, frozen sandwiches and
salads;
(e) Candy, snacks and
popcorn,
(f) Cigarettes and tobacco
products;
(g) Cold packaged meats, lunch meats
and cheeses;
(h) Shortening, breading and kitchen
supplies;
(i) Private or controlled label soft
drinks and beverages;
(j) Post mix products;
(k) Store supply items, i.e., bags,
wraps, fast food supplies (including napkins, individual condiments
and cleaners);
(l) Cooler items, i.e., cheese,
biscuits, dips, cultured products, butter and margarine;
(m) Health and beauty aids, hosiery,
and film and flash; and,
(n) General merchandise items,
including motor oil, other automotive products, housewares,
hardware, electrical supplies, baby supplies, sunglasses, lighters,
toys and pet supplies.
McLane, by and through its divisions
and/or subsidiaries, shall supply and deliver those products
described hereinabove which are ordered by purchaser on a weekly
basis according to those prices outlined in the Billing Plan
attached hereto as Exhibit ”A” and made a part
hereof. Significant changes in fuel prices may also involve
additional charges.
1.4 Cost of Products . All
Products, other than cigarettes, shall be billed at Cost (as herein
defined), plus the applicable percentage markups for each category
of Products as set forth on Exhibit ”A,” plus any
taxes where prescribed by law. This total shall then be reduced by
deals and allowances granted by manufacturers specifically to
retailers. For the purpose of this Agreement, Cost shall mean the
manufacturer’s current published list price available to the
McLane division or subsidiary servicing the respective Store(s) at
date of delivery of Products to Purchaser (notwithstanding, the
fact that a particular Product may have been purchased from a
person or entity other than the manufacturer) without regard to any
cash discounts or volume discounts or rebates allowed by the
manufacturer to McLane, plus any applicable freight charges McLane
reserves the right to impute cash discounts of up to two percent
(2%) or any portion thereof which is not allowed by the
manufacturer to McLane and to do so based upon Cost.
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ARTICLE II
SUPPLY SERVICES
2.1 Product Delivery .
McLane, by and through its divisions and/or subsidiaries, shall
supply and deliver those products described hereinabove which are
ordered by Purchaser on a weekly basis except as otherwise agreed
to by the parties. In servicing Purchaser’s Stores, McLane in
its sole option, shall utilize a seven (7) day a week,
twenty-four (24) hour per day delivery flexibility schedule
throughout the designated trade area. However, it is understood
that some locations, due to peak periods of business with selected
stores, limited hours of operations and local governmental
restrictions may be unable to accommodate this preference. In such
instances, the Parties hereto will attempt to achieve the most
flexible delivery window possible considering the aforementioned
restrictions, if any.
2.2 Other Customers of McLane
. This Agreement shall in no way act to foreclose McLane from
supplying and delivering products or services to any other customer
or entity.
ARTICLE III
PAYMENT TERMS
3.1 Payment Terms for Products
Purchased . Purchaser shall cause payment to be made by
automatic clearing house (ACH) transfer to McLane for all products
purchased by the stores not later than 12:00 Noon, Central Standard
Time or if applicable, Central Daylight Savings Time, [***]
days from statement date.
ARTICLE IV
TERM AND
TERMINATION
4.1 Term . This Agreement
shall commence on the Effective Date and, unless earlier terminated
in accordance with terms of this Agreement, or by mutual consent of
the parties, will continue thereafter for a period of five
(5) years. Upon termination of this Agreement, McLane and
Purchaser will each fulfill their respective obligations hereunder
with respect to all orders that have been placed by Purchaser
and/or delivered by McLane prior to the effective date of such
termination.
4.2 Effective Date . The
“Effective” date of this Agreement shall be as of
August 21, 1997.
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CONFIDENTIAL
TREATMENT REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED IS OMITTED AND IS NOTED WITH
“[***].” AN UNREDACTED VERSION OF THIS DOCUMENT HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
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4.3 Termination Due to Payment
Default by Purchaser . In the event Purchaser fails to make
payments for any products or services purchased from McLane at such
time as payment is required to be made by this Agreement
(“Payment Default”), McLane will have the immediate
right to suspend performance of its obligations under this
Agreement until such time as the Payment Default is cured. In the
event of a Payment Default, if such default is not cured
with