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DISTRIBUTION SERVICE AGREEMENT

Distribution Agreement

DISTRIBUTION SERVICE AGREEMENT | Document Parties: SUSSER HOLDINGS CORP | McLane Company, Inc | Stripes LLC You are currently viewing:
This Distribution Agreement involves

SUSSER HOLDINGS CORP | McLane Company, Inc | Stripes LLC

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Title: DISTRIBUTION SERVICE AGREEMENT
Date: 3/18/2011
Industry: Retail (Grocery)     Sector: Services

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Exhibit 10.24

DISTRIBUTION SERVICE AGREEMENT

This Distribution Service Agreement is entered into effective as of January 1, 2011 (the “Effective Date”) between Stripes LLC, a Texas corporation (“Stripes”) and McLane Company, Inc., a Texas corporation (“McLane”).

ARTICLE 1

SCOPE OF AGREEMENT

1.1 Exclusive Purchase and Supply . The Stripes Entities shall purchase from McLane, and McLane shall sell to the Stripes Entities and deliver to the Stores, all of the Stores’ requirements of products within the Contracted Categories during the term of this agreement; provided , however , that, Stripes shall not be obligated to purchase (i) on an exclusive basis, any restaurant or foodservice products within the Contracted Categories, (ii) any products from McLane for any Store located outside of a McLane distribution area, (iii) any product that McLane cannot or will not (within 30 days of a request by a Stripes Entity) sell and deliver to the Store(s) and (iv) any product that McLane cannot provide (or cannot provide requested allocations of) during the pendency of any force majeure event claimed under Section 7.13. For purposes of this agreement:

(a) “Stripes Entities” means, collectively, Stripes and all its Affiliates other than Susser Petroleum Company.

(b) “Affiliate” means, with respect to any entity, any other entity directly or indirectly controlling, controlled by, or under common control with that entity. Without limiting the generality of the preceding sentence, an entity will be deemed to control another if it owns or has the power to vote, directly or indirectly, more than 50 percent of the voting rights of that other entity.

(c) “Store” means any convenience food store owned, operated or managed by any Stripes Entity.

(d) “Contracted Categories” means all categories of food products offered by McLane and customarily supplied by convenience food wholesalers, as well as all categories of non-food general merchandise products (including cigarettes and tobacco products) offered by McLane and customarily supplied by convenience food wholesalers, as set forth on Exhibit A to this agreement as the same may be, by mutual agreement of the parties, supplemented or modified from time to time. However, Contracted Categories exclude any categories, items or brands that Stripes is procuring from DSD suppliers as of the Effective Date.

1.2 Other Business of McLane . Nothing in this agreement will prohibit McLane from supplying and delivering products or services to any other customer or person. Nothing in this agreement will require McLane to pass to Stripes, as a reduction in product cost or otherwise, the benefit of any backhaul income it generates at its own expense using its own or another authorized carrier; provided, however, that any [***]

 

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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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1.3 Dealers, Licensees and Other Third Party Stores . McLane shall extend the pricing, incentives and allowances under Article 4, and other benefits to certain third-party stores which, although not owned, operated or managed by Stripes, are authorized by Stripes to purchase from McLane under this agreement (each, a “Third Party Store”) and (i) maintain an average of [***] (ii) have [***] and (iii) agree to utilize McLane as their primary supplier. However, nothing in this Section 1.3 is to be construed as a covenant by or obligation of Stripes to require or otherwise cause any franchisee or licensee to purchase from McLane.

1.4 New Stores . If any Stripes Entity builds, acquires or otherwise commences operating or managing any Store during the term of this agreement that is not subject to a then-existing service agreement with McLane or a then-existing service agreement with another wholesale supplier that is not capable of being terminated for convenience, that Store will be, upon such commencement of its operation or management by an Stripes Entity, included within the definition of Stores and subject to the terms and conditions of this agreement.

ARTICLE 2

PRODUCT MIX, ORDERING AND SUPPLY

2.1 Core Item Mix . Stripes shall develop a product mix for the Stores using the then-currently existing items in each applicable McLane division’s inventory mix, including store use items, together with Stripes’s proprietary and other specialty or exclusive items (such proprietary and specialty items, “Stripes Items”), which items McLane hereby agrees to carry, provided the manufacturers of all such items (i) enter into, and remain in substantial compliance with, McLane’s standard vendor agreement and any other standard terms imposed by McLane from time to time for the applicable category (including any distribution fees or minimum wholesale program terms), and (ii) satisfy, and remain in substantial compliance with, McLane’s credit requirements.

2.2 Slow-Moving Items . Stripes shall review the Stores’ product mix at least quarterly and shall replace each slow-moving item with an item reflecting greater unit sales within each applicable McLane division. A slow-moving item is any item which, with respect to the applicable McLane division, does not meet a minimum of [***] cases per week, with a “case” comprising the total number of selling units grouped together in the shipping unit; provided, however, that any product or supply purchased by the Stores primarily for a use other than resale to the public, and any ‘critical product(s)’ that are mutually agreed upon between Stripes and McLane, shall not be deemed to constitute ‘slow moving items.’ If the slow-moving item is a Stripes Item, or if any Stripes Item is discontinued for any reason, Stripes shall purchase from McLane all of McLane’s on-hand inventory of that Stripes Item within 30 days after the end of the month in which that item should be replaced at a price equal to the cost McLane paid for those items plus all reasonable, and necessary handling costs and expenses. Furthermore, upon expiration or termination of this agreement, Stripes shall purchase from McLane all of McLane’s on-hand inventory of Stripes Items at a price determined in accordance with the preceding sentence.

 

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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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2.3 Product Ordering and Delivery . Each Store shall order once per week from McLane, and McLane shall supply and deliver to that Store once per week unless the parties mutually agree in writing to a more frequent delivery schedule. The Stores shall accept each delivery by McLane, and shall be available for those deliveries.[***]

2.4 Item Maintenance and Store Traits [***]

2.5 Returns and Reclamation. McLane and Stripes shall follow the return and reclamation policies and procedures set forth on Exhibit B to this agreement.

ARTICLE 3

PRICING AND PAYMENT TERMS

3.1 Product Pricing . Unless a higher price is required by the Manufacturer under a written resale price maintenance policy or otherwise required by applicable law (in which case that higher price will apply), the applicable price for Products will be determined in accordance with this Section 3.1.

(a) Products Other than Cigarettes. The applicable price for any Product (as defined below) other than cigarettes, is the amount calculated in accordance with the following: (i) Cost (as defined below), plus (ii) the [***], minus (iii). [***] For any Product purchased which is not within one of the departments listed on Exhibit A,. [***] For purposes of this agreement:

(1) “Cost” means

(A) With respect to any tobacco or produce item, List Price (as defined below) based on the buying bracket in which McLane normally buys that product for the McLane division or subsidiary servicing the applicable Store, plus (i) the gross amount of any Wholesale Taxes paid or payable by McLane, (ii) any amounts authorized by Section 3.1(e) below, and (iii) any applicable freight charges from the Manufacturer’s shipping point to the applicable McLane division or subsidiary (including any applicable freight equalization charges and any special-handling charges, such as unloading and sort-and-segregation charges).

(B) With respect to any other item, (i) List Price based on the buying bracket in which McLane normally buys that product for the Primary Servicing Division (as defined below) at date of delivery to the applicable Store, provided that in no event shall McLane be obligated to charge an amount that is lower than the average List Price paid by McLane for the Product for Stripes across all applicable divisions; plus (ii) the gross amount of any Wholesale Taxes paid or payable by McLane; plus (iii) any applicable freight charges from the Manufacturer’s shipping point to the applicable McLane division or subsidiary (including sort and segregate charges). “Primary Servicing Division” means, for each six-month period commencing on the Effective Date and each six-month anniversary thereof, the McLane Southwest Division or, in the event that item is not then-currently being purchased by that division, the McLane High Plains Division.

 

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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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(2) “Product” means any product supplied under this agreement to any Store, whether or not such product is within the Contracted Categories.

(3) “List Price” means the higher of (A), [***] or (B). [***] However, in the event any source to McLane lowers the price of any Product, McLane may continue to apply the previous List Price(s) until such time as McLane has sold all inventories of the Product that were on-hand at the time of the price decrease.

(4) “Manufacturer” means the person that manufactures or causes others to manufacture products that are marketed under brands or labels controlled by that person, or any Affiliate of that person.

(5) “Wholesale Tax” means any tax, assessment, or charge imposed or collected at any time by any governmental entity or political subdivision thereof on a product or its sale or distribution, whether designated as a sales tax, excise tax, gross receipts tax, occupational or privilege tax, value-added tax, or similar imposition paid or payable, but does not include any tax based on McLane’s personal property or net income.

(b) Cigarettes. The price charged by McLane and to be paid by Stripes for cigarettes shall be the then-current Manufacturer’s List (as defined below); plus , [***]

(1) “Manufacturer’s List” means the applicable Manufacturer’s [***] to McLane at date of delivery of Products to the applicable Store, less. [***]

(2) “Statutory Markup” means, with respect to any jurisdiction having a minimum-price law applicable to cigarette wholesale transactions, an amount calculated by multiplying (A) the applicable product’s “basic cost” (or similar defined term) as defined by such applicable law by (B) the statutory presumptive markup(s) prescribed by such applicable law.

In the event of any post-Effective Date increase or decrease in the per-carton amounts payable to McLane, or discounts available to McLane (or both), from a cigarette Manufacturer related to the purchase of cigarettes from such Manufacturer by McLane, then McLane may increase or decrease, or newly impose, as applicable, a markup on affected brands by an amount equal to the per-carton change in such Manufacturer’s terms.

(c) Stripes acknowledges and agrees that the markups and other terms set forth in this agreement are predicated on various factors outside McLane’s control, including manufacturers’ wholesale programs, manufacturers’ standard product configurations (size/weight, case count, etc.), statutory state stamping discounts and other financial considerations. Effective any time after[***], McLane may adjust one or more markups, allowances, rebates and/or fees hereunder upon at least 90 days’ written notice to Stripes documenting the change in such factors. Upon receipt of any such notice, however, Stripes may decline to accept the adjustment(s) by sending McLane, within 180 days of receiving McLane’s notice, a written notice (“Opt-Out Notice”) that expressly (i) declines to accept the adjustment(s),

 

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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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and (ii) exercises Stripes’s right to terminate this agreement under Section 5.2 as of a date specified in the Opt-Out Notice. In that event, the adjustment(s) will not be effective for such duration of this agreement.

(d) McLane shall provide Stripes with [***] provided to McLane by a cigarette Manufacturer on increases in Manufacturer’s List occurring during the term of this agreement. In the event that McLane directly, or indirectly through any Affiliate, enters into any agreement or arrangement with a Stripes Competitor that has the effect of providing such customer a greater level of price protection than that afforded to Stripes pursuant to this agreement, McLane shall promptly amend this agreement so as to provide Stripes a level of cigarette price protection comparable to that provided to such Stripes competitor. For purposes of this agreement, “Stripes Competitor” means[***].

(e) McLane may[***].

3.2 Additional Fees . In addition to the item markups described above, the fees and charges described in Exhibit C will apply to the respective services, if applicable, utilized by Stripes.

3.3 Payment Terms . For all Products purchased and services received by the Stores, Stripes shall cause payment to be made by ACH Credit (or ACH Debit if approved by McLane) or wire transfer to McLane not later than 12:00 Noon, Central Time, [***] from statement date. Initial and ongoing payment terms are subject to McLane credit approval. Each payment shall be in the full amount of the statement to which they relate. Any amounts not paid when due will bear interest at the lesser of (a) [***], or (b) the maximum rate allowed by applicable law. [***]

3.4 Early Payment Rebate . Stripes may, at its sole election made in accordance with the following sentence, pay earlier than the time specified in Section 3.3, in which event McLane shall pay Stripes an early payment rebate calculated in accordance with the following schedule. Stripes may exercise such option by giving [***]prior written notice to McLane of the specific earlier payment date selected by Stripes under this section, and such earlier payment date shall continue to apply (instead of the date set forth in Section 3.3) until another such [***] notice is given by Stripes.

 

Date of Stripes Payment

  

Rebate

[***]

  

[***]

[***]

  

[***]

[***]

  

[***]

[***]

  

[***]

[***]

  

[***]

 

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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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McLane shall calculate the rebate as a percentage of all net purchases by Stripes in each McLane accounting period, and shall pay each rebate to Stripes within [***] days after the end of the applicable McLane accounting period.

ARTICLE 4

SERVICE ALLOWANCE

4.1 Service Allowance . McLane shall pay Stripes a service allowance (the “Service Allowance”) in the amount of $[***] per McLane accounting period (13 four-week accounting periods per year), with each such payment made within [***] business days after the end of each McLane accounting period during the term of this agreement.

ARTICLE 5

TERM AND TERMINATION

5.1 Term . The term of this agreement will commence on the Effective Date and, unless earlier terminated in accordance with this article, will continue thereafter until the second anniversary of the Effective Date. Thereafter, the term of this agreement will automatically renew for three additional periods of one year each. However, either party may decline to so extend this agreement as to any of all of such renewal periods by giving the other party written notice thereof at least 180 days prior to the then-current expiration date.

5.2 Termination for Convenience by Stripes . Effective any time after the first anniversary of the Effective Date, Stripes may terminate this agreement for any reason upon at least 60 days’ written notice to McLane.

5.3 Termination Due to Payment Default . If Stripes fails to make payments for any Products or services purchased by the Stores from McLane at the time payment is required to be made by this agreement (“Payment Default”), McLane may immediately suspend performance of its obligations under this agreement until the time the Payment Default is cured. Additionally, notwithstanding anything in Section 3.3, McLane may immediately require any future payments by Stripes to be made in a shorter time period than is set forth in Section 3.3, or require any future payments by Stripes to be made via any method specified by McLane, or both; and any such changes will remain effective until McLane agrees otherwise in writing. If a Payment Default is not cured within [***]days after Stripes receives notice of the default from McLane, then McLane may terminate this agreement at any time while the Payment Default continues. However, nothing in this agreement will constitute a waiver of McLane’s remedies under applicable law.

5.4 Termination Remedies to Both Parties .

(a) Either party may immediately terminate this agreement or suspend its performance under this agreement at that party’s sole discretion without notice upon: (1) the institution of insolvency, bankruptcy or similar proceedings by or against the other party; (2) any assignment or attempted assignment for the benefit of creditors by the other party; (3) any

 

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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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appointment, or application for that appointment, of a receiver for the other party; (4) the other party becoming insolvent or unable to pay its debts as they come due; (5) an involuntary lien being filed or levied against, or foreclosure or seizure of materially all or a significant portion of, the other party’s assets, including inventory, by a creditor, lienholder, lessor, governmental authority or other person, which has not been removed within 10 days; (6) the other party’s material falsification of any records or reports required hereunder; or (7) a material adverse change in the other party’s financial condition or results of operations.

(b) Either party may terminate this agreement immediately upon written notice if the other party breaches, or fails to comply with, any material term of this agreement and that breach or failure has continued for 30 days after that party received written notice of that breach or failure from the other party. This Section 5.3(b) does not apply to a Payment Default.

5.5 Effect of Termination . Any termination made in accordance with this agreement will have no effect on, nor diminish, alter, or affect (a) any rights or obligations of the parties that accrued or arose on or before the date of such termination, (b) any indemnification or confidentiality obligations under this agreement occurring before such termination, or (c) any provisions which by their express terms contemplate performance upon or following such termination.

ARTICLE 6

WIND-UP OF PRIOR AGREEMENT

6.1 Termination of Prior Agreement . This agreement succeeds, replaces and supersedes the Distribution Service Agreement between the parties dated January 1, 2008.

6.2 Clean-Up of Slow-Moving Inventory . Within 90 days after the Effective Date, Stripes shall purchase from McLane all of McLane’s on-hand inventory of slow-moving items (as determined by the regular reports issued by McLane) at a price equal to the cost McLane paid for those items plus all reasonable and necessary handling costs and expenses.

6.3 Indemnity; Insurance . Each party (“Indemnifying Party”) agrees to defend, indemnify and hold harmless the other party, and their respective officers, directors, employees, agents and Affiliates (referred to collectively as the “Indemnified Parties”), and each of them from and against any and all claims, demands, suits, actions, liabilities, and/or actions asserted by any person, individually or through any representative, including all costs, attorney’s fees, settlement funds, damages or expenses to the extent resulting or allegedly resulting or arising from the acts or omissions by the Indemnifying Party or its employees, contractors or agents; provided that, the foregoing indemnified liabilities shall not include any liabilities arising from the gross negligence of an Indemnified Party, or arising from the sole negligence of an Indemnified Party. However, with respect to any lawsuit filed against both McLane and Stripes alleging negligence or other wrongdoing on the part of both parties, McLane shall, upon request from Stripes, provide Stripes’ defense if and for so long as the following conditions are met: (a) both parties are and remain named as parties to the lawsuit, (b) the joint defense of both parties can

 

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be provided by a single attorney or law firm, (c) McLane’s responsibility to provide the defense shall not commence until after the lawsuit is filed and served upon both McLane and Stripes, and (d) McLane shall have the right to recoup Stripes’ proportionate share (if any, as determined by the two parties’ proportionate share of any final judgment or settlement) of such defense costs from Stripes promptly at the end of the litigation, including via setoff against amounts otherwise owing and payable to Stripes. Additionally, McLane agrees to comply, at all times while any of the Services are being provided, with Stripes’ Certificate of Insurance requirements set forth on Exhibit D.

ARTICLE 7

MISCELLANEOUS

7.1 Reporting . If at any time Stripes’ parent company, Susser Holdings Corporation, ceases to publicly file financial statements with the US Securities and Exchange Commission, then upon McLane’s request, Stripes shall furnish McLane with Stripes’s then-most recent quarterly financial statements prepared in accordance with generally accepted accounting principles, and any other financial information as McLane deems necessary. Additionally, within 120 days after the end of Stripes’s fiscal accounting year, Stripes shall provide McLane with its annual audited financial statements. Those financial statements will be furnished to: Credit Department, McLane Company, Inc., P.O. Box 6115, Temple, Texas 76503-6115.

7.2 Entitlement to Financial Benefits . Stripes shall not be entitled to any allowance, rebate, discount, incentive, price protection or other payment or financial benefit under this agreement (including any such financial benefits set forth in Article 4 or Exhibit B) (collectively, “Financial Benefits”) and McLane shall not be obligated to pay any such Financial Benefit to Stripes unless, as of the date the Financial Benefit otherwise would accrue or be payable: (a) Stripes is in compliance with all terms and conditions of this agreement (including the payment terms set forth in Article 3), (b) , and (b) all Product purchases to which the Financial Benefit relates have been indefeasibly paid for in full by Stripes to McLane.

7.3 Records Examination Rights. Upon 10 days’ prior written notice to McLane, Stripes, at its sole cost and expense, may conduct an examination of the Manufacturers’ published price lists and retail deal sheets maintained by McLane relating specifically to the Cost of one or more Products within the Contracted Categories and identified in Stripes’s notice (“Records”). Such examinations shall be limited to one per Contract Year. Stripes may perform an examination using its own personnel or an independent certified public accounting firm retained by Stripes, or both. Each examination will be performed entirely at McLane’s facilities in Temple, Texas. McLane will cooperate with and give reasonable assistance to Stripes to examine the Records. All Records and other information examined shall be subject to Section 7.6 (Confidentiality), and no records may leave the McLane premises. If Stripes desires to engage an independent certified public accounting firm to perform any examination, an employee of Stripes must accompany the personnel of the firm during the examination, and the firm and each of its personnel performing the examination must execute and deliver to McLane a confidentiality agreement in form and substance reasonably satisfactory to McLane.

 

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7.4 Critical Vendor . Stripes shall take all steps necessary or required (including, without limitation, including McLane in first-day notices and motions) to have McLane designated as a “critical vendor” entitled to payment in full for all prepetition deliveries of Products in any bankruptcy proceedings in which any Stripes Entity is the debtor.

7.5 Notices . Any notice, request, consent, waiver or other communication required or permitted hereunder will be effective only if it is in writing and delivered personally or sent by facsimile transmission, a nationally recognized overnight delivery service, or registered or certified mail, postage prepaid, to the other party at the address set forth on the signature block below (or to any other address as the parties will provide to the other in writing). All such notices, requests, consents, waivers or other communications will be deemed to have been given and received on the date of delivery if sent by personal delivery, facsimile transmission, or overnight delivery; or on the third business day after mailing it in accordance with this Section.

7.6 Confidentiality . Each party shall maintain in strict confidence all information communicated to that party by the other or any Affiliate, will use it only for purposes of this agreement, and will not disclose it, or any of the provisions of this agreement, without the prior written consent of the other party, except as may be necessary by reason of legal, accounting or regulatory requirements beyond the reasonable control of the recipient party. However, in accordance with the preceding sentence Stripes hereby authorizes McLane to submit store- and item-level product purchase data to the product Manufacturers regarding their own products for their own use except for cigarettes in which case data sharing amongst manufacturers is permitted. Each party shall be responsible for ensuring its Affiliates’ compliance with the provisions of this Section. This Section will survive any expiration or termination of this agreement. Neither party shall issue or make, or cause or permit to be issued or made, any media release or announcement concerning this agreement or the transactions contemplated by this agreement without the prior approval of the other party, except as may be necessary by reason of legal, accounting or regulatory requirements beyond the reasonable control of that party.

7.7 Authority to Bind . Each person executing this agreement represents that he or she has full and legal authority to execute this agreement for and on behalf of the respective party for which he or she is executing this agreement and to bind that party.

7.8 Waiver . No waiver of any provision of this agreement will be effective unless in writing and signed by an authorized representative of the party or parties bound thereby. The failure of either party to enforce any provision of this agreement or exercise any right granted hereby is not to be construed to be a waiver of that provision or right, nor to affect the validity of this agreement or any part of it, nor to limit in any way the right of either party subsequently to enforce any provision or exercise any right in accordance with its terms.

7.9 Assignment . This agreement will be binding upon, and inure to the benefit of, the parties and their respective successors and permitted assigns, but neither party may assign this agreement unless the other consents in writing. McLane may delegate performance of any of its obligations hereunder to one or more wholly-owned subsidiaries.

 

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7.10 Product Recalls . In the event of any product recall, market withdrawal, stock recovery (each as defined in 21 CFR Part 7), or similar action (each, a “retrieval”), regarding any Product previously purchased and distributed hereunder, McLane will use commercially reasonable efforts to promptly notify a single point of contact within Stripes of such retrieval at the address below, or the phone number or email address, if any, on file with McLane for such notification purposes. McLane may, but is under no obligation hereunder to, contact individual Stripes Stores regarding a retrieval; the parties agree that such responsibility will be borne by Stripes. McLane will have no obligation to accept returns of any affected Product unless the applicable Supplier of such item so directs and agrees to refund the cost thereof as well pay as an agreed-upon handling charge to McLane.

7.11 Manufacturers’ Warranties . McLane shall pass to Stripes any warranties, indemnifications or other protections made available by the applicable Manufacturer or vendor to the full extent McLane is authorized to pass those benefits. McLane shall use commercially reasonable efforts to procure from each Manufacturer or vendor a standard set of written warranties, indemnifications and protections for the benefit of both McLane and its retail customers, including Stripes, and upon request from time to time will provide Stripes with a list of those Manufacturers or vendors of items purchased by Stripes hereunder from which McLane has been unable to procure such provisions. In the event of any claims arising out of or related to any Product, Stripes shall look solely to the Manufacturer or vendor of such Product for defense, indemnification or other applicable relief, and not to McLane. EXCEPT AS OTHERWISE PROVIDED UNDER THIS SECTION, A


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