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EXHIBIT 10.26
Date July 30, 2003
Name: Ed Alexander
Title: President /
COO
Company: Family Steak Houses of Florida
Inc
Address: 2113 Florida
Boulevard
Neptune Beach, Florida
32266
RE: FOODSERVICE PRODUCTS DISTRIBUTION
AGREEMENT WITH FAMILY
STEAK HOUSE OF FLORIDA INC.
Dear Ed:
BACKGROUND
A. Performance Food
Group, Inc. ("PFG")
has developed a national network of
foodservice product distribution companies
("PFG Distributors ") that perform
purchasing, marketing, warehousing, quality
control, product research and
development, transportation and
distribution services for national and regional
foodservice Customers.
B. Family Steak
Houses of Florida, desires to contract with PFG Florida as
its Primary Distributor (as hereinafter
defined) for foodservice products to all
of the Customer locations listed in Exhibit
A ("Customer Locations"), and PFG
Florida desires to perform these services.
C. Customer hereby
contracts with PFG to provide distribution services for
the Customer Locations pursuant to the
terms and conditions set forth in this
Foodservice Products Distribution Agreement
(this "Agreement").
AGREEMENT TERMS
In consideration of the mutual promises set
forth herein and other good and
valuable consideration, the receipt and
sufficiency of which are hereby
acknowledged, the parties hereby agree as
follows.
1. PFG TO SERVE AS
PRIMARY DISTRIBUTOR.
PFG shall serve as Customer's
Primary Distributor to Customer Locations
for foodservice products within the
designated categories listed in Exhibit "B"
"Designated Categories" set forth in
Section (5). For all purposes of this
Agreement, Primary Distributor shall mean
that Customer and/or the Customer Locations
shall purchase eighty-five percent
(85%) or more of the Products' requirements
in each Designated Category for the
Customer Locations (the "Requirements
Threshold") from the PFG Distributor (as
hereinafter defined).
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2. TERM OF
AGREEMENT. The term
("Term") of this Agreement will commence
effective as of (9/30/03) and shall
continue for Five years until 9/30/08 or
until termination by either party hereto
effective following ninety (90) days
prior notice of termination to the other
party. Either party
hereto may propose
any such amendments ("Amendment(s)") to
this Agreement by providing notice of
such proposed Amendment ("Amendment
Notice") to the other party hereto.
3. PRODUCTS COVERED
BY THIS AGREEMENT.
Products will include products
marketed under the PFG family of brands
("PFG Brands"), national brands,
locally controlled labels, other products
specified by Customer and stocked by
PFG Distributors, and Proprietary Products
(as hereinafter defined).
4. AGREED AVERAGE
DROP SIZE; ADDITIONAL CHARGES FOR ORDERS THAT DO NOT MEET
MINIMUM ORDER REQUIREMENTS. Fee pricing provided in Section
(5) hereof is based
on an average order size of $4000.00 per
location per delivery ("Agreed Average
Drop Size"). In the event that the average
order size for any thirty (30) day
period falls below the Agreed Average Drop
Size, PFG will give notice to
Customer, and Customer will cause such
average order size for the thirty (30)
day period following receipt of such notice
to equal or exceed the Agreed
Average Drop Size.
A. When calculating
the average drop size: Hot Shot, Fill-ins (because of
shortages), Will Calls and or other
Emergency Delivery incidents, will not be
used in the calculation.
B. Exhibit "A"
Details the amount of
deliveries per week, per unit
initially agreed upon by Ryan's Family
Steak Houses of Florida Inc and PFG
Florida.
In
addition, individual regularly scheduled orders under $1500.00 will
be
charged an additional $75.00 to offset the
additional charges incurred, and
orders below the minimum order size of
$500.00 will be delivered at the sole
discretion of the PFG Distributor.
Exception deliveries
made in the event of
emergencies will be handled on a
case-by-case basis.
5. DISTRIBUTION
FEES/MARGIN PRICING; DESIGNATED CATEGORIES.
Appointed Distributors shall distribute
Products to Customer Locations in the
Designated Categories based upon the Case
pricing scheme specified in this
Section (5).
Designated Categories
Over Cost
Dry Goods
$ 1.79 per case
Frozen
Refrigerated
Meats/Seafood/Poultry
Janitorial
Dairy
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Fee calculation on sale = (Distributor
landed) divided by (100%-Margin)
Example: Distributor
Landed $20.00
Dollars on Sell
$1.79 per case
Case Calculation ($20.00)+(1.79)= $21.79
6. PRICING; COST
DEFINED; PRICE ADJUSTMENTS.
A. All pricing to Customer is calculated on
PFG Distributors' cost ("Cost"), as
defined below.
B. "Cost" is defined as the price invoiced
by the vendor, manufacturer, packer,
supplier or provider to the distributor
plus applicable freight (based on
national published freight rates or
better), delivery charges, back haul charges
(including invoices from in-house freight
management) less off-invoice temporary
discounts or promotions during the
applicable period (excluding cash discounts).
Products contracted by Customer will be
billed at the contracted Cost plus
applicable freight and agreed to Fee.
If electronic data
interchange or other
invoice-less system is used, a printed
report or other appropriate verification
from the supplier confirming the purchase
order cost will be considered an
invoice for determining Cost.
7. JOINT PURCHASES.
In the event that
Customer and PFG Distributor mutually
agree to a forward, special or other
purchase on Customer's behalf that may
require a purchase of inventory beyond
thirty (30) days, PFG will impose a
surcharge of 2% per month after the first
thirty (30) days. The
surcharge will
be calculated based upon the Cost of any
such remaining inventory after thirty
(30) days and after each successive thirty
(30) day period thereafter.
A. This will
exclude the purchase of Fresh Beef for Ryan's (Beef
Sirloin Top Butts) Which PFG Florida will
purchase and hold in accordance with
Ryan's Family Steak Houses of Florida Inc.
requirements for age and price.
8. ORDERING
PROCEDURES. Each PFG
Distributor will agree upon the ordering
and other pertinent procedures with
Customer. A customized
order guide ("Order
Guide") will be provided to Customer
Locations not utilizing direct order entry
to facilitate order placement, and such
Customer Locations will utilize such
Order Guide to order Products by item
number and/or line number and desired
quantity. Customer will be provided with
monthly Order Guides and weekly Order
Guides for "at-market" products.
Comprehensive
instructions and on site
training will be provided to Customer
Locations utilizing the direct order entry
program.
9. CREDITS.
Customer is not to
return merchandise without written
authorization from the appropriate PFG
Distributor. All
requests for return or
adjustment of dry groceries must be
reported within seven (7) days of receipt of
merchandise and include the invoice number,
Customer code and invoice date in
order for the Customer to receive the full
amount of credit.
In the case of fresh or frozen merchandise,
returns must be identified at the
time of delivery. Returned merchandise must reach
the appropriate PFG
Distributor in resalable condition and must
be packed in its original carton,
unless Customer is authorized to return
merchandise for quality control
inspection. Merchandise made to order,
specially designed, crested or imprinted
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cannot be exchanged or returned.
Special order
(non-stock) merchandise may only
be returned if packed in original shipping
cartons and will be subject to
transportation and handling charges.
Credits shall be granted in accordance with
the terms of PFG'S Operating
Procedures Manual, which shall be
customized by the Appointed Distributors for
Customer with prior approval by Customer.
Appointed Distributors
may impose a
re-stocking fee of ten percent (10%) in
connection with any such returned
merchandise, that needs to be returned to the
vendor.
A. The 10%
Restocking Fee will only apply to special order or
proprietary products that were specifically
ordered for Ryan's Family Steak
Houses of Florida Inc. Any and all products
returned during the normal course of
business will not carry a restocking
fee.
10. DELIVERY AND
RECEIVING. All
deliveries will be made in accordance with
a prearranged delivery schedule designed by
PFG Distributors to meet Customer
needs. PFG Distributor (s) will establish
Holiday delivery schedules at least
fourteen (14) days prior to such holiday.
Customer will receive
an original
invoice and one copy with each order, which
shall be checked by an authorized
representative of Customer at the time of
delivery. Should any
product be short
or damaged, Customer's authorized
representative shall notify the PFG
Distributor's driver at the time of
delivery. The PFG
Distributor's driver will
note the discrepancy on the invoice, and
credit will be taken directly off the
invoice.
11. CREDIT TERMS.
All payments should be
received within 30 days from the
date of invoice. In the event of Cus
