SUPPLY AGREEMENT
THIS SUPPLY AGREEMENT (the "Agreement") is made this 17th day of
November, 1995, by and between MIKE ROSE FOODS, INC., a Tennessee
corporation, with its address at 189 Spence Lane, Nashville, Tennessee
37210 ("Seller"), and SHONEY'S, INC., a Tennessee corporation, with its
address at 1727 Elm Hill Pike, Nashville, Tennessee 37210 ("Buyer");
W I T N E S S E T H
WHEREAS, Seller desires to supply Buyer's requirements of the
products listed on SCHEDULE 1A (the "Shoney's Products"), SCHEDULE 1B (the
"Captain D's Products") and SCHEDULE 1C (the Other Products") (the
Shoney's Products, the Captain D's Products and the Other Products are
collectively referred to as the "Products"); and
WHEREAS, Buyer desires to purchase from Seller all of Buyer's
requirements of the Products, subject to the terms and provisions hereof;
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants herein contained, the parties agree as follows:
1. SALE. During the term and in accordance with the terms
hereof, Seller hereby agrees to sell and deliver and Buyer agrees to buy,
receive and pay for the quantity set forth below of the Products at the
prices hereinafter specified.
2. TERM. Unless terminated earlier or extended in
accordance with the terms hereof, this Agreement shall begin as of the
date set forth above (the "Effective Date") and extend through and
including October 31, 2000.
3. PRODUCT REQUIREMENT AND PURCHASE OBLIGATIONS.
3.1. REQUIREMENTS.
(a) OF BUYER. Seller shall make available and
sell to Buyer and Buyer shall purchase from Seller all of Buyer's
requirements of the Products that are to be used at restaurants
operated by Buyer. Notwithstanding the foregoing, Buyer shall
purchase at least the minimum quantities of the Products required
by SECTION 3.2. For the purposes of this Agreement, "restaurants
operated by Buyer" includes restaurants operated by Buyer through
subsidiaries or other entities in which Buyer owns, directly or
indirectly, a
greater than fifty percent (50%) equity interest, but shall not include
any restaurant the operation of which is licensed or franchised by Buyer
(unless Buyer owns, directly or indirectly, a greater than fifty percent
(50%) equity interest in the entity that is the franchisee/licensee of
such restaurant).
(b) OF THIRD PARTIES SUPPLIED BY BUYER OR BUYER'S
AFFILIATES. The parties acknowledge and agree that Buyer and
Buyer's affiliates (including Commissary Operations, Inc.) engage
in the food distribution business. The parties further
acknowledge and agree that customers of that business may
purchase or request to purchase goods that are the same or
similar to the Products. Buyer agrees that, unless a customer
specifies a different brand or type of good, it will, and it will
cause its affiliates (including Commissary Operations, Inc.) to,
purchase Products produced by Seller in order to fill customer
orders to the greatest extent possible. Such purchases by Buyer
or its affiliates (including Commissary Operations, Inc.) shall
count toward the minimum purchase requirements set forth in
SECTION 3.2. Seller acknowledges that any customer of Buyer is
free to specify a different brand or type of any particular good
and, should a customer do so, Buyer may, without violation of any
duty or obligation owed to Seller, supply such customer with the
specified goods. Buyer shall not recommend to any third party
that it purchase any products manufactured by any party other
than Seller that are the same or similar to the Products.
3.2. MINIMUM PURCHASES. During each of Buyer's fiscal
years (consisting of 13 four-week periods) ending on the last
Sunday of October of each year during the term of this Agreement,
Buyer shall make the minimum purchases of the Products (each, a
"Minimum Purchase") as set forth on SCHEDULES 1A, 1B AND 1C
attached hereto.
3.3. DISCONTINUANCE OF PRODUCTS. Notwithstanding any
other provision of this Agreement to the contrary, it is
acknowledged and agreed that Buyer, in its discretion, may
discontinue the use of any of the Products at any time. In the
event of any such discontinuance, Buyer shall purchase from
Seller any inventory of such discontinued Product being held by
Seller that Buyer has ordered and that Seller is unable to
dispose of promptly in the ordinary course of business (at prices
then being paid by Buyer) through sales to others as well as any
inventory of raw ingredients and packaging that Seller cannot use
in the normal course of business in products (including those
manufactured for others)
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other than the discontinued Products. Also, in the event of any such
discontinuance, Buyer shall purchase substitute Products (which may
consist of purchases of remaining Products in excess of the minimum
amounts set forth on SCHEDULES 1A, 1B OR 1C) so as to provide Seller with
the same or greater aggregate gross margin (excess of sales price over the
cost of raw ingredients, packaging and other production costs) that Seller
would have received had Buyer purchased the minimum quantity of such
discontinued Product during each annual period referred to in Section 3.2.
3.4. NEW PRODUCTS. If, during the term of this
Agreement, Buyer begins using any manufactured food item not
listed on SCHEDULES 1A, 1B, AND 1C in the restaurants operated by
Buyer or supplies any such item to third parties, and such item
is of a type that is manufactured and/or produced by Seller,
Buyer shall offer Seller the opportunity to submit an offer to
supply such item(s), based upon Buyer's specifications for such
item(s), to Buyer. If Seller's proposed product meets Buyer's
specifications and Buyer's price is the lowest (or equal to the
lowest) bid price for the product, Seller shall be selected as
the supplier of such item. It is expressly acknowledged and
agreed that this procedure does not give Seller a "right of first
refusal" to supply such item(s) and that Buyer has no obligation
to select Seller as the supplier of any such item(s) if its
product does not meet Buyer's specifications or if Seller's price
is not the lowest (or equal to the lowest) price. It is also
acknowledged and agreed that: (a) changes in specifications
pursuant to SECTION 6.2 shall not constitute products encompassed
by this SECTION 3.4, but shall continue to be Products
encompassed by SECTION 3.1; and (b) Buyer shall have no
obligation under this SECTION 3.4 with respect to any new food
item supplied to a third party if such third party specifies a
type or brand manufactured by a party other than Seller as
contemplated by SECTION 3.1(B).
4. PRICES.
4.1. INITIAL PRICES. Upon the Effective Date, the
prices for the Products shall be those set forth on SCHEDULE 3.
4.2. ADJUSTMENTS. The prices of the Products shall
be subject to adjustments as follows (it being acknowledged and
agreed that the purpose of such adjustments being to avoid any
change in the gross profit margin (in dollars, rather than
percentage) recognized by Seller on the sale of each Product as
a result of changes in the cost of the components of the
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Products that are addressed below):
(a) In the event Buyer changes the specifications of
a Product, as set forth in SECTION 6.2, the
price for that Product shall be adjusted
immediately to reflect the change (which may be
either an increase or a decrease) in the raw
ingredient, packaging and production costs
resulting from the change in the Product
specification.
(b) The prices of the Products shall be adjusted (on
a basis consistent with price adjustments using
March 1995 cost assumptions (SCHEDULE 2(B) as
the base. SCHEDULE 2(A) sets forth the costing
of each Product using the March 1995 cost
assumptions), effective at the beginning of each
month, to reflect changes in the cost to Seller
of raw ingredients of and packaging materials
for the Products. The prices for a particular
month shall be set no later than five (5)
business days prior to the beginning of that
month. For the purposes of this SECTION 4.2(C),
raw ingredients includes, without limitation,
any of the following: soybean oil, sugar, corn
syrups, flour, eggs or tomato paste. For the
purposes of this SECTION 4.2(C), packaging
materials includes, without limitation, any of
the following: packaging film, corrugated
packing material and plastic packaging
containers. For the purpose of determining any
price adjustment pursuant to this SECTION
4.2(B), the cost of raw ingredients or packaging
materials shall be compared to the cost of those
ingredients or materials, as the case may be,
based on March 1995 cost assumptions, which are
set forth on SCHEDULE 2(B) attached hereto.
(c) The procedures for effecting the price
adjustments contemplated by this Section 4.2 are
specified on SCHEDULE 3.
5. RAW MATERIALS.
5.1. PURCHASE REQUIREMENTS. At Buyer's direction and
on Buyer's behalf, Seller shall place orders for Seller's
requirements of any raw ingredient or packaging material that
constitutes ten percent (10%) or more of the cost of any of the
Products.
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5.2. PRICE ADJUSTMENTS. In determining any
adjustments in Product prices under SECTION 4.2(B), the raw
ingredient cost utilized in making such adjustments shall utilize
the costs under any contracts that Seller has entered into at
Buyer's request pursuant to SECTION 5.1. Seller shall bear the
market risk or benefit of the failure to enter into any such
contracts that Buyer has requested.
6. PRODUCT FORMULAE AND SPECIFICATIONS; CONFIDENTIALITY.
6.1. OWNERSHIP. It is acknowledged and agreed that,
with the exception of the "Captain D's" fish breader (the formula
for which is the sole and exclusive property of Buyer), the
formulae and specifications for the Products (the
"Specifications") are the sole and exclusive property of Seller.
6.2. SPECIFICATION CHANGES. Buyer, in its discretion,
may at any time, upon notice that is commercially reasonable
under the circumstances, change the Specifications for any of the
Products, subject to SECTION 4.2(A); provided, however, that if
Buyer changes a product specification in a manner that would
require any capital expenditures by Seller in order to comply
with such specifications and Seller chooses not to make such
capital expenditures and, therefore, not produce the respecified
Product, Buyer shall be free to purchase such respecified Product
from any alternative source that Buyer deems appropriate and
Buyer's minimum purchase obligations hereunder shall be reduced
by the required quantities of the Product in question. Buyer
shall not circumvent or attempt to circumvent its obligations
hereunder through respecification of Products.
6.3 ACCESS TO SPECIFICATIONS. Buyer shall have access
to the Specifications, at Seller's place of business, as
necessary to confirm Seller's compliance with its obligations
under this Agreement. The access to and use of the
Specifications shall be subject to the terms of that certain
Confidentiality and Noncompete Agreement between Buyer and Seller
of even date herewith (the "Noncompetition Agreement") and
SECTION 6.4 of this Agreement.
At Seller's option, at any time following Buyer or any of its
Affiliates engaging in "Company Activities" (as defined in the
Noncompetition Agreement), Buyer shall have no further access to
the Specifications, and Seller's compliance with this Agreement
may be monitored by Buyer only through an independent escrow
agent which shall be permitted to access
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the Specifications pursuant to a mutually agreeable escrow agreement in
order to confirm, on Buyer's behalf, Seller's compliance with its
obligations under this Agreement. The expenses of the escrow agent shall
be the obligation of Buyer.
6.4. CONFIDENTIALITY AND NON-SOLICITATION.
(a) Seller and Buyer each acknowledge that, in the
course of their relationship, each of them may
receive, work with, and be exposed to certain
confidential information and knowledge
concerning their respective businesses and their
affiliates, whether or not reduced to writing,
including, without limitation, information and
knowledge pertaining to products, inventions,
developments, data, know-how, formulations,
uses, research, processes, technology, designs,
materials, ideas, plans, trade secrets,
customers, proprietary information,
manufacturing methods and systems, and other
information relating to services offered and/or
sold by, or the businesses of, the parties
(respectively, the "Seller Confidential
Information" and the "Buyer Confidential
Information," and collectively, the
"Confidential Information"), which each party
desires to protect from unauthorized disclosure
or use. It is expressly acknowledged and agreed
that the Specifications are included within the
Seller Confidential Information; provided,
however, that the formulae and specifications
for the "Captain D's" fish breader are included
within Buyer Confidential Information.
(b) Seller acknowledges that the Buyer Confidential
Information is confidential and agrees not to
disclose such Buyer Confidential Information to
anyone outside of Seller without the prior
written consent of Buyer. In addition, Seller
agrees that it will not, without the prior
written consent of Buyer, use the Buyer
Confidential Information for any purpose other
than to fulfill its obligations to Buyer under
this Agreement.
(c) Buyer acknowledges that the Seller Confidential
Information is confidential and agrees not to
disclose such Seller Confidential Information to
anyone outside of Buyer without the prior
written consent of Seller. In addition, Buyer
agrees that
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it will not, without the prior written consent
of Seller, use the Seller Confidential
Information for any purpose other than to fulfill
its obligations to Seller under this Agreement.
(d) Each of Buyer and Seller agrees to take the
following minimum safeguards with respect to the
other's Confidential Information:
(i) Only those employees who need to
receive the other party's Confidential
Information for the purposes authorized
by this Agreement shall have access to
such Confidential Information, and such
access shall be limited to only so much
of the other party's Confidential
Information as is necessary for the
particular employee to perform his or
her duties; and
(ii) All documents and writings that contain
the other party's Confidential In-
formation shall be maintained in locked
files separate and apart from other
information in that party's possession
and shall be removed therefrom only as
needed to carry out the purposes au-
thorized by this Agreement.
(e) Each of Seller and Buyer warrants that its
employees who shall have access to the other
party's Confidential Information are, or will be
prior to gaining such access, under written
obligation: (a) to hold in confidence all such
Confidential Information made available to them
in the course of their employment; and (b) to
use such Confidential Information only in the
course of Buyer's or Seller's (as the case may
be) respective businesses as permitted by this
Agreement.
(f) In the event any unauthorized disclosure of any
Confidential Information should occur, the
disclosing party shall promptly take all
commercially reasonable actions, including legal
proceedings, to protect the further
dissemination and use of such Confidential
Information, including actions seeking
injunctive relief, all at the expense of the
disclosing party. In the event the disclosing
party fails to take such action after written
request from the other party, the non-
disclosing party may take such action itself and
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shall be entitled to reimbursement from the
disclosing party for all costs and expenses
(including reasonable attorneys' fees) associated
with such actions.
(g) Upon termination of this Agreement, all
documents and writings of any kind provided to
one of the parties by the other hereunder
(including, without limitation, all Schedules
attached hereto) and all copies thereof shall be
returned promptly to the providing party at that
party's request, together with all documents and
writings derived by that party from the other
party's Confidential Information.
(h) In the event that either party violates the
terms of this Agreement by utilizing the other
party's Confidential Information to develop a
new product or device, either alone or in
conjunction with a third party, that party
agrees to transfer, assign and convey to the
other party all of its right, title and interest
in and to the new product or device developed in
violation of this Agreement with the other
party's Confidential Information.
(i) It is agreed that the provisions of this SECTION
6.4 shall not apply to any portion of the
Confidential Information which: (1) is or
becomes generally available to the public other
than as a result of a breach of one of the
parties' obligations hereunder; or (2) becomes
available to one of the parties to this
Agreement on a non-confidential basis from a
source other than the other party to this
Agreement which source the receiving party does
not know to be bound by a confidentiality
obligation to the other party.
(j) The parties' obligations to protect the
Confidential Information shall survive the
termination or expiration of any business
relationship of Buyer and Seller and shall
survive the termination or expiration of this
Agreement.
(k) Seller agrees that for so long as this Agreement
is in effect it shall not solicit or attempt to
solicit any business from any customers of
Commissary Operations, Inc.
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7. BOOKS AND RECORDS. During the term of this Agreement and
for a period of five (5) years following the termination of this
Agreement, Seller agrees to maintain full and complete records of its
business operations relating to Products purchased by Buyer including,
without limitation, cost accounting records and invoices that support the
raw ingredient and packaging costs of any of the Products. Upon prior
notice reasonable under the circumstances and subject to Section 6.3,
Seller shall allow representatives of Buyer to inspect such books and
records at all reasonable times in order to monitor Seller's compliance
with this Agreement. All inspections shall be at the expense of Buyer;
provided, however, if the inspection results in a discovery of a failure
by Seller to abide by the terms of this Agreement in any material respect,
then Seller shall pay or reimburse Buyer for any and all reasonable
expenses incurred by Buyer in connection with the inspection including,
but not limited to, legal and accounting fees, as well as any damages due
Buyer for Seller's failure.
8. F.O.B. TERMS. The purchase price set forth in SECTION 4 is
F.O.B., 189 Spence Lane, Nashville, Tennessee 37210. The term F.O.B. as
used in this Agreement is a price term only, and:
(a) Seller shall have the risk of loss until the Products
covered by this Agreement have been delivered to the facility of
Buyer and are approved after inspection by Buyer (unless such
Products are transported on vehicles of Buyer (whether owned or
leased), in which case Buyer shall have such risk of loss after
the Products are in Buyer's possession); and
(b) a tender of any document relating to the Products
shall not be a sufficient tender, tender under this Agreement
being required to be made only by a tender of the Products; and
(c) does not include the cost of transportation from
Seller's place of business, which costs shall be paid by Buyer.
9. ORDERS; DELIVERY AND INSPECTION. Orders for the Products shall
continue to be given and received, and delivery times established in
accordance with past practices between Buyer and Seller. Delivery of the
Products by Seller shall be made at Buyer's place of business at 2821
Eugenia Avenue, Nashville, Tennessee, or at such other place of business
of Buyer within the United States as may be designated by Buyer in any
purchase order or other document initiating a purchase under this
Agreement.
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Buyer shall have seventy-two (72) hours to inspect any shipment
of Products made hereunder. Upon failure of any Product or container to
conform to the provisions of this Agreement, including the
Specifications), Buyer may reject and return such Product or container,
in which case Seller shall pay all costs and expenses (including freight
and storage) incident to such inspection and/or rejection.
Notwithstanding any claimed right that Seller may have to "cure" under the
Uniform Commercial Code, upon three (3) shipments (it being acknowledged
and agreed that successive shipments from the same batch of a Product
constitute only one (1) "shipment") of any Product having been rejected
hereunder during any twelve (12) month period, Buyer may seek substitute
performance (by another seller, if Buyer so chooses) with respect to those
shipments of that Product, in which case any price differential shall be
absorbed by Seller and Buyer's purchase obligations hereunder shall be
reduced accordingly.
10. PAYMENT OF PURCHASE PRICE. Buyer shall pay the purchase price
for all Products delivered hereunder and not rejected by Buyer within
thirty (30) days after receipt of the appropriate invoice. The terms and
conditions of any sale shall be governed by this Agreement and any terms
and conditions of any invoice that are inconsistent with the terms of this
Agreement or contained on the reverse side of any such invoice shall be
of no force or effect. Any late payment shall bear simple interest at the
rate of one and one-half percent (1 1/2%) per month from the date that such
payment was due until paid.
11. SELLER'S GUARANTEE.Seller shall guarantee that any articles
comprising any shipment or other delivery made to Buyer pursuant to this
Agreement shall, as of the date of such shipment or delivery, not be
adulterated or misbranded within the meaning of the Federal Food, Drug and
Cosmetic Act and shall not be an article which may not under the
provisions of Section 404 or 505 be introduced into interstate commerce
and that any such article shall comply in all material respects with all
other laws, rules and regulations of the United States of America and all
political subdivisions thereof and with the applicable laws, rules and
regulations of the respective states and of their respective political
subdivisions whether now or hereafter enacted. This guarantee is in like
terms extended and shall be applicable to any state law or municipal
ordinance in which the definitions of adulteration or misbranding are
substantially the same as those in said federal act. Buyer agrees to
promptly, in writing, notify Seller of any demand, complaint or proceeding
for a claimed violation of any of the above-mentioned laws, giving the
name and address of the complaining party and the article concerned.
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12. INDEMNIFICATION.
12.1. INDEMNIFICATION BY SELLER. Seller will indemnify,
defend and hold Buyer harmless from and against any costs
(including, without limitation, reasonable attorneys' fees and
court costs and costs of investigation), losses, damages,
liabilities or expenses (collectively "Costs") incurred by Buyer
(whether as a result of a third-party claim, or otherwise) as a
result of:
(a) the breach of Seller's guarantee under Section
11 with respect to any Products sold to Buyer by
Seller, unless the breach was caused by a
requirement or specification of Buyer;
(b) the nonfulfillment of any covenant, agreement or
obligation to be performed by Seller under or
pursuant to this Agreement; or
(c) alleged violations of rights under patents,
trademarks, copyrights or applications therefor,
unless the use of the allegedly infringing item
was required or specified by Buyer; or
(d) alleged violations by Seller of any statute,
regulation or ordinance of any governmental
authority in the manufacture, sale or delivery
of the goods or services furnished or required
to be furnished hereunder, unless the violation
was caused by a requirement or specification of
Buyer; or
(e) any negligent act or omission of Seller arising
out of or related to the manufacture (including,
without limitation, any claim arising out of a
failure to manufacture the Products in
accordance with the Specifications) or the sale
of the Products by Seller.
12.2. INDEMNIFICATION BY BUYER. Buyer will indemnify,
defend and hold Seller harmless from and against any Costs
incurred by Seller (whether as a result of a third-party claim,
or otherwise) as a result of:
(a) the nonfulfillment of any covenant, agreement or
obligation to be performed by Buyer under or
pursuant to this Agreement; or
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(b) alleged violations by Buyer or Seller of rights
under patents, trademarks, copyrights or
applications therefor if the use of the
allegedly infringing item was required or
specified by Buyer; or
(c) alleged violations by Buyer (or by Seller if the
alleged violation was caused by a requirement or
specification of Buyer) of any statute,
regulation or ordinance of any governmental
authority with respect to the Products sold
hereunder; or
(d) any negligent act or omission of Buyer
(including, without limitation, any claim
arising out of Seller's actions taken in
accordance with instructions from Buyer) arising
out of or related to the manufacture or the sale
of the Products by Seller.
12.3. PARTICIPATION IN THIRD PARTY CLAIMS. Should any
claim be made by a person not a party to this Agreement with
respect to any matter to which the foregoing indemnity relates,
the indemnified party shall promptly notify the indemnifying
party thereof. If the indemnified party fails to promptly notify
the indemnifying party, the obligation of the indemnifying party
shall be reduced by the amount of damages actually suffered as a
result of such late notice. The indemnified party may make
settlement of a claim and such settlement shall be binding on
both parties hereto for the purposes of this SECTION 12 if, not
less than thirty (30) days prior to such settlement, the
indemnified party delivers to the indemnifying party written
notice of its intent to settle such claim, which notice shall set
forth the terms of the proposed settlement; provided, however,
that if within such thirty (30) day period the indemnifying party
shall have requested the indemnified party to contest any such
claim at the expense of the indemnifying party, the indemnified
party shall promptly comply, and the indemnifying party shall
have the right to direct the defense of such claim or any
litigation based thereon at its own expense through counsel
reasonably acceptable to the indemnified party. The indemnified
party shall also have the right to participate in the settlement
of any such claim or in any such litigation so long as its
participation is at its own expense and with the understanding
that the indemnifying party may settle in its own discretion.
Any payment or settlement made by the indemnifying party in such
contest, together with the total expense thereof, shall be
binding on the indemnified party and
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the indemnifying party for the purposes only of this SECTION 12.
Notwithstanding anything herein to the contrary, an indemnifying party
shall not, without the prior written consent of the indemnified party,
settle any claim in any manner which adversely affects the indemnified
party. In addition to the foregoing, the indemnifying party shall assume
the defense of any claim, action or proceeding within the scope of the
foregoing indemnities upon the written request of the indemnified party.
13. TERMINATION.
13.1. TERMINATION BY BUYER. Buyer may terminate this
Agreement for cause only upon breach by Seller of any of its
obligations under this Agreement and failure by Seller to cure
such breach within thirty (30) days following written notice of
breach.
13.2. TERMINATION BY SELLER. Seller may terminate this
Agreement for cause only upon Buyer's breach of its obligations
under this Agreement and failure by Buyer to cure such breach
within thirty (30) days following written notice of breach.
14. REMEDIES.
14.1. The remedies available to the parties to this
Agreement, whether by virtue of the provisions of the Tennessee
Uniform Commercial Code, or by the terms of this Agreement, are
in addition to and cumulative with all remedies arising under any
collateral or ancillary agreements between the parties. In no
event shall either party be liable to the other for any punitive,
special or exemplary damages; provided, however, that this
sentence is not intended to and shall not limit the right of
either party to this Agreement to receive indemnity and full
reimbursement under SECTION 12 for any claims by or amounts
(whether deemed compensatory, exemplary or punitive) that one of
the parties becomes obligated to pay to a third party pursuant to
any judgment or settlement entered into in accordance with
SECTION 12.
14.2. Buyer shall have the right to bring an action
against Seller for specific performance of this Agreement, both
parties agreeing that the goods and services described hereunder
are unique.
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15. NOTICES, PURCHASE ORDERS.
15.1 Any notice required or desired to be furnished
under this Agreement shall be in writing, postage prepaid, and
shall be sent by United States, certified, registered or express
mail, by an overnight delivery service (E.G., Federal Express) or
by facsimile transmission and addressed or delivered to the party
receiving notice at the address designated below. Any notice
shall be deemed to be given (i) when received or when first
refused if mailed or sent by overnight delivery service, and (ii)
when received if transmitted by facsimile transmission. All such
notices shall be addressed as follows:
If to Buyer: Shoney's, Inc.
1727 Elm Hill Pike
Nashville, Tennessee 37210
ATTN: Purchasing Agent- Mike Rose Foods
FAX No.: (615) 231-_____
If to Seller: Mike Rose Foods, Inc.
189 Spence Lane
Nashville, Tennessee 37210
Attn:
FAX No.: (615) ____________
copy to: Mike Rose Foods, Inc.
c/o Levmark Capital Corporation
175 Memorial Highway
New Rochelle, New York 10801
Attn: William J. Solomon
FAX No.: (914) 654-9414
In like manner, any party may change the address to which notice
to it is to be sent.
15.2 Any orders by Buyer of any Products to be delivered
hereunder shall be on Buyer's standard purchase order (a copy of
which is attached hereto) and may be sent by regular mail to:
Mike Rose Foods, Inc.
189 Spence Lane
Nashville, Tennessee 37210
ATTN: __________________
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At the request of Seller, upon mailing any such order,
Buyer shall also send to Seller either a telecopy of such
purchase order to such location as may be reasonably designated
by Seller or telex containing the requested quantity and delivery
dates and location. At the request of Buyer, Seller also shall
accept orders from Buyer by electronic data interchange or
transmission. The terms and conditions of any sale shall be
governed by this Agreement and any terms and conditions of any
purchase order that are inconsistent with the terms of this
Agreement or contained on the reverse side of any such purchase
order shall be of no force or effect.
16. ASSIGNMENT. This Agreement and the covenants,
restrictions and limitations contained herein shall be binding upon and
shall inure to the benefit of each of the parties and their respective
successors and assigns; provided, however, that, except as provided
herein, neither Seller's nor Buyer's obligations under this Agreement may
be assigned or delegated without the written consent of the other party
hereto. Seller agrees that Buyer's affiliates (including, without
limitation, Commissary Operations, Inc.) may act as Buyer's agent for the
purpose of executing orders for Products under this Agreement. Seller
agrees that if, during the term of this Agreement, Buyer sells all or any
part of its restaurant businesses or assets (whether by means of an asset
or stock sale, exchange, merger, consolidation or otherwise), Buyer may
assign Buyer's rights and obligations hereunder insofar as they relate to
the restaurant business or assets being sold to the purchaser of such
restaurant business or assets. Buyer's minimum purchase obligations
hereunder shall be deemed satisfied to the extent that the purchaser of
such restaurant business or assets purchases Products from Seller pursuant
to this Agreement (as assigned). To the extent that the purchaser of such
restaurant businesses or assets fails to purchase the minimum requirements
of any of the Products utilized by the transferred restaurant business or
assets (and Buyer fails to purchase same) during any 12-month period
referred to in Section 3.2 ending following a sale of restaurant
businesses or assets, any such Product shall be treated as a discontinued
Product under SECTION 3.3.
17. WAIVER. The failure of either Buyer or Seller to seek
redress for the breach of, or to insist upon the strict performance of,
any term, clause or provision of this Agreement, shall not constitute a
waiver of such breach or non-performance, unless such waiver shall be in
writing and signed by the party executing the waiver. Any waiver so
signed shall not constitute a waiver of any different or subsequent breach
or non-performance.
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18. VALIDITY OF PROVISIONS. Whenever possible, each
provision and term of this Agreement shall be interpreted in such a manner
as to be valid and enforceable; provided, however, that in the event any
provision or term of this Agreement should be determined to be invalid or
unenforceable, all other provisions and terms of this Agreement and the
application thereof to all persons and circumstances subject thereto shall
remain unaffected to the extent permitted by law. If any application of
any provision or term of this Agreement to any person or circumstance
should be determined to be invalid or unenforceable, the application of
such provision or term to other persons and circumstances shall remain
unaffected to the extent permitted by law.
19. CONSTRUCTION. As used herein, the singular number shall
include the plural, the plural the singular, and the use of any gender
shall be applicable to all genders, unless the context would clearly not
admit such construction. This Agreement shall be construed and
interpreted in accordance with the laws of the state of Tennessee
including, except when expressly inconsistent therewith, the provisions
of the Tennessee Uniform Commercial Code, T.C.A. Sections 47-1-101 ET SEQ.,
including all definitions contained therein. Section or paragraph
headings are employed herein solely for convenience of reference, and such
headings shall not in any way affect the meaning, validity or
enforceability of any term or provision of this Agreement. All references
herein to "section" or "paragraph" shall mean the appropriate numbered
section or paragraph of this Agreement except where reference is
particularly made to some other instrument or document.
20. FORCE MAJEURE. Either party shall be excused from
performance of its duties under this Agreement during any period of time
when that party is prevented from so performing due to act of God, war,
strike, riot, acts of governmental authorities, shortages in supply of
ingredients used in manufacturing the Products (other than as a result of
Seller's acts or omissions) or other cause beyond its control; provided,
however, that should such continue for a period of two (2) consecutive
months, the other party may, at its option, terminate this Agreement with
respect to any Products the delivery or manufacture of which has been
prevented.
21. RELATIONSHIP OF THE PARTIES. It is the express intention
of the parties hereto that Seller is and shall be an independent
contractor under this Agreement, and no partnership, joint venture or
fiduciary relationship shall exist between Buyer and Seller. This
Agreement does not constitute either party as the agent, legal
representative or employee of the other for any purpose whatsoever, and
neither party is granted any right or authority to assume or create any
obligation for or on behalf of, or in the name of, the
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other party or in any way to bind the other party.
22. COSTS AND EXPENSES.Except as otherwise expressly provided
in this Agreement, each party hereto shall be responsible for the payment
of the fees and expenses (including legal fees and expenses) incurred by
that party in connection with this Agreement and the transactions
contemplated herein.
23. ENTIRE AGREEMENT; MODIFICATION. This Agreement, as
executed, constitutes the entire agreement between the parties and no
representation, promise, condition, warranty or understanding, other than
herein set forth, shall be binding upon any of the parties hereto. Seller
makes no implied warranty other than that of merchantability and fitness
for a particular purpose. None of the provisions of this Agreement shall
be waived, altered or amended except in a writing signed by the party to
be bound thereby.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement, each by its duly authorized officer or representative, as of
the date and year first above written.
MIKE ROSE FOODS, INC. SHONEY'S, INC.
By:____________________________ By:____________________________
Title:_________________________ Title:_________________________
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EXHIBITS AND SCHEDULES
OMITTED FOR
FILING PURPOSES