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CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION

PARTICIPANT DISTRIBUTION JOINDER AGREEMENT

By executing this Participant Distribution Joinder Agreement (this “Participant
Joinder Agreement”) effective this 24th day of August, 2010 (the “Effective
Date”), A&W Restaurants, Inc., KFC Corporation (“KFC”), Long John Silver’s,
Inc., Pizza Hut, Inc. (“Pizza Hut”) and Taco Bell Corp. (“Taco Bell”) (each a
“Participant” and, collectively, the “Participants”) are entitled to all rights
and privileges, and agree to be bound by the terms and conditions of that
certain Master Distribution Agreement, effective as of January 1, 2011 by and
between Unified Foodservice Purchasing Co-op, LLC (“UFPC”) and McLane
Foodservice, Inc. (“Distributor”) attached hereto as Attachment 1 (the “Master
Agreement”) as well as by the terms and conditions of this Participant Joinder
Agreement.  Terms used and not otherwise defined in this Participant Joinder
Agreement shall have the meanings given to such terms in the Master Agreement.

1.           Master Agreement.  The Participants and Distributor hereby
acknowledge and agree that the terms and conditions of this Participant Joinder
Agreement and the Master Agreement shall govern and control the provision of the
Distribution Services received by the Participants from Distributor.  Except for
Sections 7, 9, 10, 12, 13, 14, 15, 16, 18, 19(c), 19(d), 22, 24, 27, 30 and 36
of the Master Agreement, which do not apply to the Participants, all of the
terms and conditions of the Master Agreement are hereby incorporated into this
Participant Joinder Agreement to the same extent as if such terms and conditions
were fully reproduced in this Participant Joinder Agreement.  The Participant
acknowledge and agree that each shall only receive copies of the applicable
Brand Exhibits that correspond to the Brand(s) owned and operated by the
Participants.

2.           Consent to Provision of Information. The Participants hereby
consent to Distributor’s disclosure of reports, records, data and other
information concerning Distribution Services to Retail Outlets, Products,
pricing and otherwise to UFPC as contemplated by the Master Agreement.

3.           Purchases; Payment Terms and Policies. During the term of this
Participant Joinder Agreement, the Participants shall purchase from Distributor,
and Distributor shall purchase from Suppliers and resell and distribute to the
Participants, substantially all of the Products used or sold in the Retail
Outlets set forth on the Retail Outlet List (as defined below or, if the opt-in
is selected on Attachment 2, all of the applicable Participants’ Retail Outlets
in the Yum! System) in accordance with and subject to the terms and conditions
set forth in this Participant Joinder Agreement and the Master Agreement.  The
standard terms for payment of invoices for Products purchased hereunder by the
Participants that qualify under the Credit Policies are set forth in the
applicable Brand Exhibit(s) and the Master Agreement.

(a)           Prepay/COD.  Distributor may, in accordance with the Credit
Policies, and in any event upon a Participant’s failure to pay an invoice when
due, deal on a prepay/C.O.D. basis with the applicable Participant; provided,
however, that regardless of any delinquency in the account of a Participant,
Distributor shall not for any reason refuse to sell Products on a prepay/C.O.D.
basis to such Participant: (i) for a period of 30 days without qualification;
(ii) for a second period of 30 days upon Participant’s payment to Distributor of
an amount equal to at least 10% of the current amount of the delinquency in the
account of Participant; and (iii) for a third period of 30 days upon
Participant’s payment to Distributor of an amount equal to at least 10% of the
current amount of the delinquency in the account of Participant, it being
understood and agreed that at the end of such third thirty (30) day period the
total amount of the unpaid delinquency is due and payable.
 

 

 
 
 

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(b)           Interest and Suspension.  Without limiting the foregoing: (i) any
amounts not paid by the Participants when due shall bear interest until paid at
the lesser of eighteen percent (18%) per annum or the maximum rate allowed by
applicable law; and (ii) in the event Participant fails to make payments for any
Products delivered by Distributor at such time as payment is scheduled to be
made as prescribed by this Section, Distributor shall have the immediate right
to suspend performance of any or all of its obligations under this Participant
Joinder Agreement and the Master Agreement with respect to such Participant
until such time as the prescribed payment is made.  Distributor shall be
entitled to offset any or all amounts due to a Participant against any amounts
due and owing Distributor by such Participant pursuant to this Participant
Joinder Agreement or the Master Agreement, including any accrued interest
thereon.
 
(c)           Credit Policies.  Distributor has provided the Participants with a
copy of the current Credit Policies and will provide the Participants with an
updated version of the Credit Policies as such Credit Policies are updated or
otherwise revised from time to time.  The Participants warrant to Distributor
that all financial information furnished for the purpose of obtaining credit
pursuant to the Credit Policies is true, correct and complete in all material
aspects, and the Participants authorize Distributor to investigate all
references furnished pursuant to the Credit Policies.  The Participants agree
that Distributor may request financial information from any lending institution,
trade creditor, and/or credit reporting firms concerning the Participants at any
time during the Term pursuant to the Credit Policies.  Further, the Participants
acknowledge that Distributor may be required to provide certain information to
these sources in order to obtain information necessary to evaluate the
Participants pursuant to the Credit Policies.  The Participants shall from time
to time provide Distributor with such financial information concerning the
Participants as Distributor may appropriately request under the Credit Policies
to confirm that the Participants have the financial stability to perform their
obligations under this Participant Joinder Agreement and the Master Agreement.
 
4.           Term and Termination.

(a)           Term.  The term of this Participant Joinder Agreement shall begin
on the Effective Date and shall continue coterminous with the Master Agreement
unless otherwise terminated earlier pursuant to Section 4(b) below.

(b)           Termination by Participant.  A Participant may terminate this
Participant Joinder Agreement in its entirety or with respect to a specific
distribution center (as provided below in this Section 4(b)) upon written notice
of termination to Distributor within 120 days of the occurrence of any one of
the following:
             (i)  except as qualified by clause (ii) below, Distributor fails to
cure any breach of this Participant Joinder Agreement, the Master Agreement or
any other agreement entered into between UFPC and Distributor within 30 days
after receipt by Distributor of written notice of the breach from UFPC or a
Participant, a Participant may terminate this Participant Joinder Agreement in
its entirety or with respect to the applicable distribution center(s);
 
             (ii)         Distributor fails to meet the applicable Service Level
Requirements (1) in any three 30 day reporting periods that occur within any
twelve month period or (2) in two consecutive 30 day reporting periods, a
Participant may terminate this Participant Joinder Agreement with respect to the
applicable distribution center(s);
 
             (iii)        upon receiving notice from Distributor, UFPC or
otherwise that any of the representations and warranties of Distributor set
forth in the Master Agreement are not true, a Participant may terminate this
Participant Joinder Agreement in its entirety or with respect to the applicable
distribution center(s);

 

 
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             (iv)       any of Distributor’s property, or any part thereof,
shall be attached or Distributor shall suffer the filing of any like process
against it, in either event which is not discharged within 30 days and which is
substantial in relation to Distributor’s assets, a Participant may terminate
this Participant Joinder Agreement with respect to the applicable distribution
center(s);
 
             (v)        Distributor shall have filed, or had filed against it, a
petition of bankruptcy or a similar petition under any bankruptcy law or under
any other law for the relief of debtors, a Participant may terminate this
Participant Joinder Agreement in its entirety;
 
             (vi)       Distributor suspends the performance of any material
obligation under this Participant Joinder Agreement and/or the Master Agreement
pursuant to Section 17 of the Master Agreement for a period in excess of thirty
(30) days, a Participant may terminate this Participant Joinder Agreement with
respect to the applicable distribution center(s);
 
             (vii)      Distributor ceases to be approved by Yum! to sell
Products to any Participant or the Distribution Services and Approval Agreement
between Distributor and Yum! is terminated pursuant to its terms, the applicable
Participant(s) may terminate this Participant Joinder Agreement in its entirety;
 
             (viii)     UFPC receives notice of a change in control of
Distributor as described in Section 27 of the Master Agreement and UFPC notifies
Distributor of its election to terminate the Master Agreement within ninety (90)
days after receipt of such notice, a Participant may terminate this Participant
Joinder Agreement in its entirety;
 
             (ix)        one or more Retail Outlets are permanently closed, a
Participant may terminate this Participant Joinder Agreement with respect to the
applicable Retail Outlet(s); or
 
             (x)         if a Participant is no longer associated with the Yum!
System such Participant may terminate this Participant Joinder Agreement in its
entirety with respect to such Participant.
 
If KFC, Pizza Hut or Taco Bell (the “Triggering Participant”) has the right to
terminate this Participant Joinder Agreement under clause (i) of this Section
4(b), then all of the other Participants shall also have the right to terminate
this Participant Joinder Agreement by written notice to Distributor; provided
that all of the Participants exercise such right.  Notwithstanding the
foregoing, a breach of this Participant Joinder Agreement by Distributor with
respect to a single Triggering Participant shall be deemed a breach only as to
that Triggering Participant.

Unless otherwise provided in this Participant Joinder Agreement, Distributor
will not increase the applicable Brand specific mark-up(s) paid by a Participant
for Distribution Services under this Participant Joinder Agreement and the
Master Agreement in connection with any termination of this Participant Joinder
Agreement or transition of Distribution Services from a Retail Outlet previously
serviced by Distributor under this Participant Joinder Agreement to a subsequent
distributor even if such termination or transition results in such Participant’s
failure to satisfy any loyalty, exclusivity, volume, or other similar discounts
or factors considered by Distributor in determining the applicable Brand
specific mark-up(s).

(c)           Termination by Distributor.  Subject to Section 3(a) of this
Participant Joinder Agreement regarding prepay/C.O.D. payment terms which
provides, among other things, that upon a Participant’s failure to pay an
invoice when due, Distributor shall deal on a prepay/C.O.D basis with such
Participant, Distributor may terminate this Participant Joinder Agreement upon
written notice to a Participant of the termination within 120 days of the
occurrence of any one of the following:

 

 
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            (i)       If there is a material breach by Participant of Section
1(b) of the Master Distribution Agreement which is not cured within 30 days
after receipt by Participant of written notice of the breach from Distributor,
Distributor may terminate this Participant Joinder Agreement;
 
             (ii)   upon receiving notice from UFPC that any of the material
representations and warranties of UFPC set forth in the Master Agreement are not
true, Distributor may terminate this Participant Joinder Agreement in its
entirety;

                (iii)         Distributor or any Distributor distribution center
ceases to be approved by Yum! to sell Products to Participant(s) or the
Distribution Services and Approval Agreement between Distributor and Yum! is
terminated pursuant to its terms, Distributor may immediately terminate this
Participant Joinder Agreement in its entirety or with respect to the applicable
distribution center(s);
 
                (iv)    one or more Retail Outlets are permanently closed,
Distributor may terminate this Participant Joinder Agreement with respect to the
applicable Retail Outlet(s);
 
                (v)         Participant shall have filed or had filed against
it, a petition of bankruptcy or a similar petition under any bankruptcy law or
under any other law for the relief of debtors, Distributor may terminate this
Participant Joinder Agreement in its entirety; or
 
                (vi)        if a Participant is no longer associated with the
Yum! System, Distributor may terminate this Participant Joinder Agreement in its
entirety with respect to such Participant.
 
If Distributor has the right to terminate this Participant Joinder Agreement
under clause (i) of this Section 4(c) as to KFC, Pizza Hut or Taco Bell (the
“Triggering Participant”), then Distributor shall also have the right to
terminate this Participant Joinder Agreement as to all of the other Participants
by written notice to such Participants; provided that, in such event,
Distributor may only exercise such right as to all Participants; and provided
further that no breach by a Triggering Participant of this Participant Joinder
Agreement shall be deemed to be a breach by any other Triggering Participant.

(d)           Fresh Poultry Only Termination.  A Participant may terminate this
Participant Joinder Agreement with respect to fresh poultry Distribution
Services only, if applicable, upon written notice of termination to Distributor:
(i) for any reason set forth in Section 4(b) of this Participant Joinder
Agreement; (ii) if Distributor is selling or delivering fresh poultry Products
that do not meet Yum! specifications or are being supplied from a non-approved
supplier; (iii) Distributor is not providing fresh poultry Products within code
date or sufficient shelf life specifications; or (iv) if a Yum! Quality
Assurance investigation provides evidence that Distributor failed to
consistently follow all handling specifications and procedures including, but
not limited to, the handling, transportation and receiving of fresh poultry
Products.

(e)           Effect of Termination.  Upon termination of this Participant
Joinder Agreement or any part hereof (including with respect to one or more
Distributor distribution centers) for any reason, Distributor shall fulfill and
deliver any Products under any order placed by a Participant prior to the
effectiveness of a termination of this Participant Joinder Agreement, and such
Participant shall pay Distributor for all Products delivered, unless otherwise
mutually agreed in a writing signed by both parties.  Termination of the Master
Agreement for any reason shall result in the automatic termination of this
Participant Joinder Agreement.  Distributor shall use its reasonable efforts to
facilitate the transition of the Distribution Services provided under this
Participant Joinder Agreement to a successor distributor of the Products,
provided such successor distributor purchases from Distributor at the
Distributor’s Landed Cost, all proprietary Products, LTO Products, Test
Products, and all promotional, specialty and other exclusive Products of the
Brand or the applicable Participant that, for each type of Product (i) at the
time of termination meet applicable Yum! standards and specifications

 

 
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for such Products, including shelf-life standards, and (ii) were previously
purchased by Distributor specifically for a Participant at UFPC’s written
request.  No termination of this Participant Joinder Agreement shall relieve
Distributor of Distributor’s obligations created by this Participant Joinder
Agreement for the period prior to termination.

(f)           Survival After Termination.  No termination of this Participant
Joinder Agreement shall limit any party’s rights to remedies for breaches of
this Participant Joinder Agreement (whether known or unknown, contingent or
otherwise) as of the effective date of termination.  Additionally, Sections
5(a)(i) (with respect to sales of LTO Products being final), 5(a)(ii) (only the
seventh sentence), and 5(b)(ii) (only the last sentence) of the Master Agreement
and Sections 3(b), 4(e), 4(l), 5, 6, 7, 8, 9, 18 and 20 of this Participant
Joinder Agreement shall survive any termination or expiration of this Agreement.

5.           Indemnity and Liability.

(a)           No Punitive or Exemplary Damages.  DISTRIBUTOR SHALL NOT BE LIABLE
TO THE PARTICIPANTS FOR EXEMPLARY OR PUNITIVE DAMAGES IN CONNECTION WITH ANY
UNRESTRICTED OR RESTRICTED CLAIMS.

(b)           Product Recalls.

(i)    As between Yum! and Distributor, liability for expenses incurred as a
result of government, Yum!, or supplier initiated Product recalls, destructions,
withdrawals, or removals stemming from issues concerning product safety, product
quality, consumer protection, or other related matters (each a, “Product
Recall”) are not dealt with in this Participant Joinder Agreement but rather are
governed by the relevant terms of any Distribution Services and Approval
Agreement or other agreements entered into between Yum! and Distributor.

(ii)    In the event of a Product Recall, Distributor shall not be liable for
Products that a Participant or its affiliates have in their possession or
otherwise in their care, custody or control unless such Product Recall was due
to Distributor’s negligent acts or omissions, or wrongful
conduct.  Notwithstanding the foregoing, in the event of any Product Recall,
Distributor shall take all reasonable steps to cooperate with UFPC and the
Participant and otherwise facilitate the applicable, appropriate credit,
reimbursement or other refund from the responsible Supplier(s) to the
Participant.

(c)           “Unrestricted Claims.”  The following limitations on liability do
not apply to claims against Distributor by a Participant (i) where Distributor’s
liability is based on Distributor’s negligent acts or omissions, wrongful
conduct and/or breach of any representations, express warranties or agreements
made by Distributor in or through this Participant Joinder Agreement; (ii) for
breach of implied warranties, if any (including, without limitation, any implied
warranty of merchantability and any implied warranty of fitness for a particular
purpose) where the breach resulted from Distributor’s negligent acts or
omissions or wrongful conduct; or (iii) which seek to recover – by way of
indemnity, contribution, or otherwise – for amounts paid or obligated to be paid
by a Participant to third parties (“Unrestricted Claims”).

(i)    Limited Waiver of Implied Warranties.  With respect to claims other than
Unrestricted Claims (“Restricted Claims”), any and all implied warranties, if
any (including, without limitation, any implied warranty of merchantability and
any implied warranty of fitness for a particular purpose) shall be deemed to
have been waived.  This limited waiver shall not be construed as a waiver or
disclaimer of such warranties for any other purpose and shall not restrict the
rights of a Participant to assert Unrestricted Claims against Distributor for
breach of any implied warranties.

 

 
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             (ii)         No Indirect or Consequential Damages.  With respect to
Restricted Claims only, Distributor shall not be liable to a Participant for any
indirect, special, incidental, or consequential damages, or for lost revenues,
lost profits, lost business value or goodwill, even if Distributor has been
advised of the possibility of those damages.
 
             (iii)             Insurance.  The foregoing limitations and
restrictions shall not apply to any Unrestricted Claims asserted against
Distributor by any subrogated insurer of a Participant.
 
             (iv)    Assignments.  Distributor will provide the Participants,
upon reasonable request, with an appropriate mutually agreeable assignment of
claims against Suppliers to facilitate claims, made with or without
Distributor’s direct participation, by Operators against Suppliers.
 
             (v)         Non-SBRA Products.  Sections 5(c)(i) and 5(c)(ii) of
this Agreement shall not apply to claims against Distributor by Participants
with regard to Products purchased by Distributor from any Supplier which does
not have a current SBRA with UFPC (“Non-SBRA Products”); provided that
Distributor’s liability to Participants for Restricted Claims with regard to
Non-SBRA Products shall be limited to amounts actually recovered by Distributor
from the Supplier with regard to such Non-SBRA Products.  Distributor shall
either: (a) diligently pursue all claims that Distributor may have against any
Supplier with regard to such Non-SBRA Products; or (b) assign such claims to
Operators as provided in Section 5(c)(iv).

(d)           Distributor Indemnity.  Distributor shall indemnify and hold
harmless the Participants, their successors and assigns, and their officers,
directors, and employees (collectively, the “Indemnified Parties”) from and
against any and all suits, actions, claims, losses, damages, liabilities,
obligations, judgments, costs or expenses (including, without limitation,
reasonable attorneys’ fees and expenses) that any of the Indemnified Parties may
suffer or incur as a result of any claim by any third party, but only to the
extent attributable to the Distributor’s negligent acts or omissions, wrongful
conduct, or breach of any representations, express or implied warranties or
agreements, as each is made by a Distributor in or through this Participant
Joinder Agreement and the applicable provisions of the Master
Agreement.  Notwithstanding the foregoing and for the avoidance of doubt,
Distributor does not agree to indemnify or hold harmless a particular
Indemnified Party for any suits, actions, claims, losses, damages, liabilities,
obligations, judgments, costs or expenses arising from the negligence or willful
misconduct of the Indemnified Party.

(e)           Participant Indemnity.  The applicable Participant shall indemnify
and hold harmless Distributor, its successors and assigns, and its officers,
directors, and employees (collectively, the “Distributor Indemnified Parties”)
from and against any and all suits, actions, claims, losses, damages,
liabilities, obligations, judgments, costs or expenses (including, without
limitation, reasonable attorneys’ fees and expenses) that any of the Distributor
Indemnified Parties may suffer or incur as a result of any claim by any third
party, but only to the extent attributable to the Participant’s negligent acts
or omissions, wrongful conduct, or breach of any representations, express or
implied warranties or agreements, as each is made by a Participant in or through
this Participant Joinder Agreement and the applicable provisions of the Master
Agreement.  Notwithstanding the foregoing and for the avoidance of doubt, the
Participants do not agree to indemnify or hold harmless a particular Distributor
Indemnified Party for any suits, actions, claims, losses, damages, liabilities,
obligations, judgments, costs or expenses arising from the negligence or willful
misconduct of the Distributor Indemnified Party.

6.           Confidentiality.  The Participants and Distributor acknowledge that
as a result of the matters provided for in this Participant Joinder Agreement
and the Master Agreement, trade secrets and information of a proprietary or
confidential nature relating to the business of the parties and their affiliates
may be disclosed to and/or developed by the parties including, without
limitation, information about trade secrets, agreements, Products, services,
goods and equipment, licenses, costs, sales and pricing information, and any
other

 

 
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information that may not be known generally or publicly (collectively,
“Confidential Information”).  The parties acknowledge that such Confidential
Information is generally not known in the trade and is of considerable
importance to the parties and their affiliates. Each party expressly agrees that
during the Term of this Participant Joinder Agreement and thereafter it will
hold in confidence and not disclose and not make use of any such Confidential
Information, except (a) as required pursuant to this Participant Joinder
Agreement and the Master Agreement, (b) for disclosure to its directors,
officers, employees, attorneys, advisors or agents who need to review the
Confidential Information in connection with the conduct of its business (it
being understood that such directors, officers, employees, advisors and agents
will be informed of the confidential nature of such information), (c) as
required in the course of any litigation or court proceeding involving
Distributor and a Participant and/or UFPC concerning this Participant Joinder
Agreement or the Master Agreement, (d) the Participants may discuss such
information with each other, Yum!, duly licensed Yum! System franchisees, or
group or association of Yum! System franchisees who have agreed to
confidentiality obligations with respect to McLane’s Confidential Information at
least as restrictive as those set forth in this Section and Distributor has
approved such disclosure, and (e) for disclosure of information that (i) was or
becomes generally available to the public other than as a result of a disclosure
by its directors, officers, employees, advisors or agents in breach of this
provision, (ii) was available to it on a non-confidential basis prior to
disclosure to it pursuant hereto, (iii) is obtained by it on a non-confidential
basis from a source other than such persons or their agents, which source is not
prohibited from transmitting the information by a confidentiality agreement or
other legal or fiduciary obligation, or (iv) has been authorized by the other
party to be disseminated to persons on a non-confidential basis.

7.           UFPC.  Distributor and the Participants hereby acknowledge and
agree that the Distribution Services contemplated in this Participant Joinder
Agreement and the Master Agreement will be provided directly to the applicable
Participant by Distributor and, except as otherwise contemplated by the Master
Agreement, UFPC shall have no financial or other liability whatsoever under this
Participant Joinder Agreement or the Master Agreement for the provision of, or
failure to provide, Distribution Services or otherwise.  Without limiting the
generality of the foregoing, in no event shall UFPC be liable to any party
including the Participants and Distributor for any loss, claim of any kind,
demand, suit, damage, failure to perform, failure to pay, breach or other
liability arising out of, in connection with, or resulting from, this
Participant Joinder Agreement, the Master Agreement or for the performance or
breach hereof or thereof.

8.           Retail Outlet List.  Attached hereto as Attachment 2 is an initial
Retail Outlet list that details the Retail Outlets in which the Distribution
Services are being ordered by the Participants and that will be covered by the
Master Agreement and this Participant Joinder Agreement (the “Retail Outlet
List”).  The Retail Outlet List shall be updated and otherwise revised from time
to time as Retail Outlets are acquired or divested by the Participants.  Any
Retail Outlet eligible to be added to the Retail Outlet List during the term of
this Participant Joinder Agreement shall be provided Distribution Services by
Distributor at the then prevailing distribution rates and/or mark-ups pursuant
to the Master Distribution Agreement.  If the opt-in is selected on Attachment
2, all of the Participant’s Retail Outlets in the Yum! System shall receive
Distribution Services by Distributor pursuant to this Participant Joinder
Agreement and the Master Agreement.

9.           Retail Outlets Bound.  By signing this Participant Joinder
Agreement, the Participants bind, to the terms and conditions of this
Participant Joinder Agreement and the applicable provisions of the Master
Agreement, the Retail Outlets set forth on the Retail Outlet List (or, if the
opt-in is selected on Attachment 2, all of the Participant’s Retail Outlets in
the Yum! System).  Each Participant represents and warrants that it is empowered
to enter into this Participant Joinder Agreement on behalf of the Retail Outlets
set forth on the Retail Outlet List and to bind such Retail Outlets to the terms
and conditions of this Participant Joinder Agreement.

 

 
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10.           Critical Vendor.  The Participants shall take all reasonable steps
necessary or required (including, without limitation, including Distributor in
first day notice and motions) to have Distributor designated as a “critical
vendor” entitled to payment in full for all prepetition deliveries of Products
in any bankruptcy proceedings in which Participant or any of its affiliates is
the debtor.

11.           Compliance with Law.  During the term of this Participant Joinder
Agreement, Distributor and the Participants shall comply with all federal, state
and local laws, statutes, regulations, and ordinances affecting or relating to
its respective activities under this Participant Joinder Agreement and the
Master Agreement.

12.           Change in Control.  The Participants shall provide to Distributor
notice in writing at Distributor’s address listed in Section 30 of the Master
Agreement of any change in control of a Participant.  A change in control means
one or more transactions or events in which, or after which, 50% or more of the
ownership or ability to control a Participant has changed from one person or
entity or group of persons or entities acting in concert to another person or
entity or group of persons or entities acting in concert.

13.           Assignment.  This Participant Joinder Agreement and any rights or
obligations granted herein shall not be assigned, sublicensed, delegated or
otherwise transferred by either party, by operation of law or otherwise, without
the prior written consent of the other party, and any such assignment without
consent shall be null and void.  No party shall be under any obligation to
consent to any proposed assignment.  Notwithstanding the foregoing, if a
Participant sells or transfers some or all of its Retail Outlets to a new
Participant which is financially stable and satisfies Distributor’s generally
applicable credit policies, such Participant may assign this Participant Joinder
Agreement and any rights or obligations granted herein with respect to the sold
or transferred Retail Outlets to such new Participant.

14.           Entire Agreement.  This Participant Joinder Agreement, the Master
Agreement and the Exhibits and Attachments attached hereto and thereto
constitute the entire understanding and agreement between Distributor and the
Participants and supersede all prior and contemporaneous understandings and
agreements, whether oral or written, respecting this Participant Joinder
Agreement’s subject matter.

15.           Relationship of the Parties.  Distributor is an independent
contractor with respect to its performance of its obligations
hereunder.  Nothing contained herein shall be deemed to create the relationship
of partner, principal and agent or joint venture between the parties.  No party
has any right or authority to incur obligations of any kind in the name or the
account of the other party nor to commit or bind such party to any contract or
other obligation.

16.           Non-Waiver.  No failure to exercise, delay in exercising, or
course of dealing by or between Distributor or the Participants of any right,
power, or privilege granted hereunder, shall operate as a waiver of such right,
power, or privilege for future occurrences.  The rights and remedies provided in
this Participant Joinder Agreement and the Master Agreement are cumulative and
not exclusive of any rights or remedies provided by law.

17.           Benefit.  This Participant Joinder Agreement shall inure to the
benefit of and shall be binding upon each Participant and its respective
successors and permitted assigns and Distributor and its successors and
permitted assigns.

18.           Governing Law.  This Participant Joinder Agreement shall be
governed by and construed in accordance with the laws of the Commonwealth of
Kentucky, without regard to its conflict of law principles, and the laws of the
United States applicable hereto.

19.           Master Agreement Controls.  In the event there is any
inconsistency, conflict or ambiguity between this Participant Joinder Agreement
and the Master Agreement, the Master Agreement shall control.

 

 
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20.           Alternative Dispute Resolution.

(a)           Mediation and Arbitration.  The parties shall attempt in good
faith to resolve by mediation any claim, dispute or controversy arising out of
or relating to this Participant Joinder Agreement.  Any party may institute a
mediation proceeding by a request in writing to the other applicable
party.  Thereupon, both of such parties will be obligated to engage in
mediation.  The proceeding will be conducted in Louisville, Kentucky in
accordance with the then current Center of Public Resources Model Procedure for
Mediation of Business Disputes.  In the event that the parties are unsuccessful
in resolving the dispute via mediation, the parties agree promptly to resolve
any such claims, disputes and/or controversies through binding confidential
arbitration conducted in Louisville, Kentucky in accordance with the then
current Commercial Arbitration Rules of the American Arbitration Association
(the “AAA”); provided, one neutral arbitrator shall be chosen in accordance with
such rules to arbitrate the dispute.  The parties irrevocably consent to such
jurisdiction for purposes of said arbitration, and judgment may be entered
thereon in any state or federal court in the same manner as if the parties were
residents of the state or federal district in which said judgment is sought to
be entered.  All applicable statutes of limitations and defenses based upon the
passage of time shall be tolled while the requirements of this Section are being
followed.  The mediation and arbitration provisions contained in this section
shall be limited to disputes between Distributor and the Participants hereunder
and shall not alter the provisions of Section 29 of the Distribution Services
and Approval Agreement.

(b)           Injunctive Relief.  Nothing contained in Section 20(a) shall bar
the right of any of the parties to seek and obtain temporary injunctive relief
from a court of competent jurisdiction in accordance with applicable law against
threatened conduct that will cause loss or damage, pending initiation and/or
completion of the arbitration.

21.           Counterparts.  This Participant Joinder Agreement may be executed
in counterparts.  Each of such counterparts shall be deemed an original, but all
of such counterparts shall together constitute one and the same instrument.

22.           Captions.  The captions used herein are inserted only as a matter
of convenience and for reference and in no way define, limit, or describe the
scope or the intent of nay section hereof.

23.           Further Assurances.  From time to time at Participant’s request
and without further consideration, Distributor shall execute and deliver such
further instruments and documents and take such other action as the Participants
may reasonably request, in order to carry out more effectively the transactions
contemplated in the Master Agreement and this Participant Joinder Agreement.

24.           Open Window Discount.  Distributor offers an on-invoice discount
as indicated on the applicable Brand Exhibit(s) for scheduled delivery access
(that could include Key Drop Deliveries) to all of the Participants’ Retail
Outlets serviced by Distributor, excluding Black-Out Periods (“Open Window
Discount”).  Specific Retail Outlets may be excluded from the Open Window
Discount, with the mutual consent of the Participants and Distributor, for
reasons of safety or applicable local law.  Please indicate whether or not you
would like to take advantage of the Open Window Discount below:

 

 
-9-

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A&W RESTAURANTS, INC.

 
 

Yes, I would like to take advantage of the Open Window Discount and I understand
that it could potentially include Key Drop Deliveries.

 

 

No, I would not like to take advantage of the Open Window Discount.

 
 

 
KFC CORPORATION

 
 

Yes, I would like to take advantage of the Open Window Discount and I understand
that it could potentially include Key Drop Deliveries.

 

 

No, I would not like to take advantage of the Open Window Discount.

 
LONG JOHN SILVER’S, INC.

 
 

Yes, I would like to take advantage of the Open Window Discount and I understand
that it could potentially include Key Drop Deliveries.

 

 

No, I would not like to take advantage of the Open Window Discount.

 
PIZZA HUT, INC.

 
 

Yes, I would like to take advantage of the Open Window Discount and I understand
that it could potentially include Key Drop Deliveries.

 

 

No, I would not like to take advantage of the Open Window Discount.

 
TACO BELL CORP.

 
 

Yes, I would like to take advantage of the Open Window Discount and I understand
that it could potentially include Key Drop Deliveries.

 

 

No, I would not like to take advantage of the Open Window Discount.

 

 
-10-

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IN WITNESS WHEREOF, the parties have executed this Participant Joinder Agreement
through their duly authorized signatories as of the date first set forth above,
but actually on the dates set forth below.

PARTICIPANTS:
 
DISTRIBUTOR:
         
A&W RESTAURANTS, INC.
 
MCLANE FOODSERVICE, INC.
         
By /s/ Donald R. Becker
 
By /s/Susan Adzick
         
Name:  Donald R. Becker
 
Name:  Susan Adzick
         
Title:  Division Counsel
 
Title:  VP Sales & Marketing
         
Date:  8/17/10
 
Date:  8/24/10
 

     
KFC CORPORATION
   
By /s/ Lawrence L. Vornholt III
   
Name:  Lawrence L. Vornholt III
   
Title:  CFO
   
Date:  8/13/10
         
LONG JOHN SILVER’S, INC.
   
By/s/ Donald R. Becker
   
Name: Donald R. Becker
   
Title: Division Counsel
   
Date: 8/17/10
         
PIZZA HUT, INC.
   
By /s/ Robert W. Millen
   
Name:  Robert W. Millen
   
Title:  SVP & General Counsel
   
Date:  8/13/10
   

 
 

 

 
-11-

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TACO BELL CORP.
   
By /s/ Melissa Lora
   
Name:  Melissa Lora
   
Title:  CFO
   
Date:  8/13/10
   

 
 
 
 
 
 
 
 
 
 
 

 

 
-12-

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ATTACHMENT 1

MASTER DISTRIBUTION AGREEMENT

Attachment 1 – Page 1
 
 

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MASTER DISTRIBUTION AGREEMENT

This is the Master Distribution Agreement (this “Agreement”), effective as of
January 1, 2011 (the “Effective Date”) by and between Unified Foodservice
Purchasing Co-op, LLC, a Kentucky limited liability company (“UFPC”), for and on
behalf of itself as well as the Participants (as defined below) and McLane
Foodservice, Inc., a Texas corporation (“Distributor”).

RECITALS

WHEREAS, Yum! Brands, Inc. (“Yum!”) and its wholly owned subsidiaries, A&W
Restaurants, Inc., KFC Corporation, Long John Silver’s Inc., Pizza Hut, Inc.
(including WingStreet) and Taco Bell Corp. (collectively, the “Brands”) have
appointed UFPC as the exclusive domestic purchasing agent for the system of
restaurants and other outlets operated under the A&W, KFC, Long John Silver’s,
Pizza Hut and Taco Bell concepts, and such other Yum! concepts as may be
designated from time to time (the “Yum! System”);
 
        WHEREAS, UFPC administers purchasing programs and other projects for the
A&W National Purchasing Co-op, Inc., the KFC National Purchasing Cooperative,
Inc., the Long John Silver’s National Purchasing Co-op, Inc., the Pizza Hut
National Purchasing Coop, Inc., and the Taco Bell National Purchasing Coop, Inc.
(collectively, the “Concept Co-ops”);

                WHEREAS, Distributor is in the business of purchasing food and
other products from Suppliers (as defined below) for resale and distribution to
retail outlets (“Distribution Services”) in Distributor’s distribution area,
which is described in Exhibit A attached to this Agreement (the “Distribution
Area”);

WHEREAS, Distributor is a Yum! approved distributor of all proprietary and
non-proprietary food, produce, supplies, packaging, smallwares, beverages,
promotional items, and other items used or sold in the Yum! System
(collectively, the “Products”);

WHEREAS, UFPC has been authorized to secure for itself, Yum!, the members of the
Concept Co-ops and the other franchisees of the Yum! System (collectively, the
“Operators”) continuously available Products in adequate quantities at the best
sustainable service and at the lowest possible sustainable delivered prices;

        WHEREAS, manufacturers and suppliers to the Yum! System are collectively
referred to herein as “Suppliers;”

WHEREAS, UFPC both (a) negotiates agreements with Suppliers providing for the
price and other terms pursuant to which Suppliers will sell Products to
Operators and their designated distributors (for resale to Operators) for use in
retail outlets (“Contract Transactions”), and (b) makes limited volume purchases
of Products from Suppliers for sale to Operators and their designated
distributors for use in Retail Outlets (“Title Transactions”);
 
        WHEREAS, UFPC desires, on behalf of certain Operators, to engage
Distributor to provide the Distribution Services to A&W, KFC, LJS, Pizza Hut
and/or Taco Bell retail outlets operated by such Operators in the Distribution
Area and Distributor desires to provide the Distribution Services to those
retail outlets on the terms and conditions set forth in this Agreement and any
Participant Distribution Joinder Agreement signed by Operators, in the form
attached hereto as Exhibit B (the “Participant Joinder Agreement”);

        WHEREAS, Operators who execute Participant Joinder Agreements for the
provision of Distribution Services from Distributor are referred to herein as
“Participants;”

 
1

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WHEREAS, the A&W, KFC, LJS, Pizza Hut and Taco Bell retail outlets operated by
Participants in the Distribution Area, shall be listed on an annex to the
applicable Participant Joinder Agreements (or if the opt-in box is selected on
Attachment 2 of the applicable Participant Joinder Agreement, all of
Participant’s retail outlets), which annexes may be amended from time to time
during the term of the underlying Participant Joinder Agreements by a writing
signed by the applicable Participant and Distributor to add or remove outlets
operated by such Participant;

WHEREAS, the Concept Co-ops are authorized by their bylaws to pay dividends and
distributions, either directly or through distributors, to Operators based on an
Operator’s patronage with UFPC and the applicable Concept Co-op(s) (the
“Patronage Dividend Program”) and UFPC desires that Distributor perform certain
record keeping and reporting functions to allow for the proper administration by
UFPC of the Patronage Dividend Program; and

WHEREAS, UFPC desires certain information from Distributor to enable UFPC to
monitor the Distributor’s performance and better serve the Operators.

           NOW, THEREFORE, in consideration of the foregoing and the covenants
and other agreements contained herein, UFPC and Distributor agree as follows:

        1.           Purchase and Sale of Products.
 
        (a)   Retail Outlets.  All retail outlets now or hereafter listed on the
annexes to the Participant Joinder Agreements (or if the opt-in box is selected
on Attachment 2 of the applicable Participant Joinder Agreement, all of
Participant’s retail outlets) are hereinafter referred to as the “Retail
Outlets.”  Retail Outlets may be added at any time during the term of the
applicable Participant Joinder Agreement at the prevailing rates.
 
        (b)   Purchases.  During the term of a Participant Joinder Agreement,
the applicable Participant shall purchase from Distributor, and Distributor
shall purchase from Suppliers and resell and distribute to the Participant,
substantially all of the Products used or sold in Participant’s Retail Outlets,
in accordance with and subject to the terms and conditions set forth in this
Agreement and the Participant Joinder Agreement.  However, a Participant may:
(i) make incidental purchases of any Product from alternate sources; and (ii)
purchase any Product from alternative sources during emergency situations or
periods to the extent Distributor is unable to supply Products in accordance
with the terms and conditions of this Agreement to any one or more of the Retail
Outlets.  Participant shall purchase Products from Distributor on a regular,
on-going basis during the Term (as defined below) pursuant to specific orders
placed by the Participant or its Retail Outlets.  If the terms of such orders or
order documentation (including the terms of any purchase orders or order
acknowledgements) conflict with this Agreement and/or the Participant Joinder
Agreement, the terms of this Agreement and the Participant Joinder Agreement
shall control.
 
        (c)   Specific Brand Terms and Conditions.  Certain terms and conditions
applicable to the Distribution Services and specific to the Brands including,
but not limited to, excluded Products, mark-ups and payment discounts are
attached hereto and incorporated herein as follows: A&W specific terms and
conditions are set forth in Exhibit C; KFC specific terms and conditions are set
forth in Exhibit D; Long John Silver’s specific terms and conditions are set
forth in Exhibit E; Pizza Hut specific terms and conditions are set forth in
Exhibit F; and Taco Bell specific terms and conditions are set forth in Exhibit
G (all exhibits that relate to A&W, KFC, Long John Silver’s, Pizza Hut and Taco
Bell, respectively, are collectively referred to herein as the “Brand
Exhibits”).  If the terms of the applicable Brand Exhibit conflict with this
Agreement, the terms of the applicable Brand Exhibit shall
control.  Participants shall only receive copies of the applicable Brand
Exhibits that correspond to the Brand(s) owned and operated by such
Participants.

 
2

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          (d)   Proprietary Products.  Distributor shall resell and/or deliver
Products proprietary to the Yum! System only to Yum! System retail outlets and
not to any non-Yum! System retail food service facility or any other person or
entity.
 
          (e)   Documentation.  All Title Transactions with Distributor shall be
effected through and governed by the terms of UFPC’s standard forms of purchase
orders, order acknowledgments, invoices, agreements and other similar documents
and procedures as the case may be unless otherwise expressly agreed to in
writing by UFPC.  All Contract Transactions involving Distributor shall be
effected with Suppliers through and governed by the terms of UFPC’s standard
form of Supplier Business Relationship Agreement (“SBRA”) and related
documentation including applicable SBRA Addenda.  UFPC’s negotiated standard
payment or credit terms available to Distributor under the SBRA are subject to
Suppliers’ standard credit underwriting procedures and administration.
 
          (f)   Exclusive Purchasing.  Distributor shall exclusively purchase
all Products for resale to Operators under Title Transactions or Contract
Transactions, except: (i) in emergency supply situations designated in writing
as such by UFPC; or (ii) as specifically permitted or required in writing by
UFPC pursuant to this Agreement.  Distributor will provide UFPC with prompt
detailed notice of any such non-UFPC purchases on behalf of Operators.
 
          (g)   Operators. Distributor shall electronically provide to UFPC the
Distributor’s order guides, price list and other information concerning
Distribution Services to Operators within the Distribution Area as reasonably
requested by UFPC pursuant to Section 12 of this Agreement.  This information
shall be accurate in all material respects and shall be used by UFPC to assist
the Operators in monitoring the Distributor’s margins, prices and performance
under this Agreement, the Participant Joinder Agreements or any other Yum!
System distribution agreements between Distributor and Operators, as
applicable.  Distributor has provided to UFPC a complete list of the
Participants and the addresses of each Retail Outlet to which Distributor
provides Distribution Services as of the Effective Date.  Distributor shall
promptly notify UFPC of any changes in or additions to the list.  When Operators
cease using the Distribution Services of Distributor, UFPC will take
commercially reasonable steps to cooperate with Distributor to facilitate the
transfer of Products from Distributor to the facilities of the Operator’s new
Yum! approved distributor in a manner consistent with the terms of this
Agreement and the Yum! Distribution Services and Approval Agreement.
 
          (h)   Cooperation.  For reasons of a natural disaster, elimination of
a Product by Yum!, change in the specification of a Product, incorrect forecast
estimate by UFPC or Yum! for a Product or other extraordinary situation, at
UFPC’s request, Distributor will take all reasonable steps to cooperate with
other Yum! approved distributors, within and outside the Distribution Area, to
maintain standard inventory levels throughout the entire Yum! System; provided
that Distributor is paid its Landed Cost for any Products sold or otherwise
moved to a facility or other distribution center not operated by
Distributor.  If Distributor is required to sell or otherwise move Products to a
facility or other distribution center not operated by Distributor and such
measures are required due to no fault of Distributor as reasonably determined by
UFPC on a case by case basis, Distributor shall be entitled to recover from the
applicable Yum! approved distributor the UFPC approved handling costs associated
with the Products.
 
 
3

--------------------------------------------------------------------------------

 

 
 
       (i)   Payments to Suppliers.  Distributor shall promptly pay Suppliers
for Products pursuant to the payment terms set forth in the applicable SBRA as
communicated to Distributor by UFPC or such other prompt payment term expressly
agreed upon by Distributor and the Supplier.  Distributor will be entitled to
retain prompt pay discounts earned on commercially customary and reasonable
prompt payment terms (“Prompt Pay Terms”).  During the Term of this Agreement,
UFPC shall use its commercially reasonable efforts to work with Suppliers to
maintain Supplier’s Prompt Pay Terms with Distributor in effect as of the
Effective Date.  *.  Distributor shall also pay the applicable Supplier invoice
in full without any unauthorized deduction or set off.
 
                      (j)            UFPC.  Distributor hereby acknowledges and
agrees that the Distribution Services contemplated in this Agreement and the
Participant Joinder Agreement will be provided directly to the Participant by
Distributor and, except as otherwise contemplated herein, UFPC shall have no
financial or other liability whatsoever under this Agreement or the Participant
Joinder Agreement for the provision of, or failure to provide, Distribution
Services or otherwise.  Without limiting the generality of the foregoing, in no
event shall UFPC be liable to any party, including any Participant or
Distributor, for any loss, claim of any kind, demand, suit, damage, failure to
perform, failure to pay, breach or other liability arising out of, in connection
with, or resulting from, this Agreement, the Participant Joinder Agreement or
for the performance or breach hereof or thereof.

              2.         Prices and Terms.

                       (a)           Distributor Mark-up.  The price paid by
Operators for all Products sold and delivered under this Agreement and the
Participant Joinder Agreement shall equal Distributor’s Landed Cost as
determined under Section 2(e) of this Agreement, plus the Brand specific
mark-up(s) set forth on the applicable Brand Exhibit(s) attached to this
Agreement, less discounts and other surcharges such as credit terms, drop size
discounts, outbound fuel etc. included in applicable Brand
Exhibit(s).  Designation of Products within a markup category will be based upon
the level two categories as assigned and communicated via UFPC’s Global Pricing
System (“GPS”).

*
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION

 
4

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        (b)           Multibrand Retail Outlet Mark-ups.  With respect to any of
the Retail Outlets that are multibrand units (if any), all of the terms in the
Brand Exhibit applicable to the Retail Outlet’s Host Brand shall apply (drop
size discounts, prompt pay discounts, etc.) to all of such multibrand units,
except that mark-ups applicable to the Host Brand’s Primary Products (as defined
below) will not apply to the non-Host Brand’s Primary Products.  For purposes of
this Agreement, the “Host Brand” of a particular Operator’s multibrand unit will
be the Brand with respect to which such Operator operates the most
single-branded Retail Outlets.  For example, if the Operator owns six KFC Retail
Outlets, two A&W Retail Outlets and two KFC/A&W multibrand Retail Outlets, KFC
would be the Host Brand for the multibrand Retail Outlets.  Each Brand’s agreed
upon mark-ups will apply to the Primary Products for such Brand and each Brand
within the multibrand unit (if Brand mark-ups are different).  The Host Brand’s
mark-up will apply to all other Products that are not Primary Products for the
non-Host Brand within the multibrand unit.  “Primary Products” are Products
designated in GPS as predominately associated with one Brand over the other.
 
        (c)           Landed Cost.  The term “Landed Cost” for each Product
means the applicable Supplier’s F.O.B. dock price for such Product plus (i)
freight to Distributor’s applicable distribution center, inclusive of Supplier
ancillary charges such as pallet and inbound fuel surcharges, less (ii) all
weight and quantity discounts, promotional allowances, rebates and special
discounts applicable to such Product.  The Landed Cost used in the calculations
of the price sold to the Operators is determined under Section 2(e) Inventory
Pricing Policies.
 
        (d)           Freight Management.  UFPC will provide lane rates through
GPS to allow Distributor to calculate the freight per case to be charged to the
Operator.  Based on the lane rates provided, Distributor may elect to manage the
freight and use the lane rates published by UFPC in GPS as the asis for
calculating the freight per case.  In the event Distributor declines to manage
the freight, Distributor shall pay the applicable Supplier the GPS published
lane rate for the delivery of Products.  In either event, Distributor shall
abide by the Freight Management Guidelines attached hereto as Exhibit H and
incorporated herein by this reference.  UFPC retains the right to adjust the
aforementioned freight management process at any time during the Term of this
Agreement upon at least thirty (30) days prior written notice to Distributor as
long as such change does not materially adversely affect Distributor.
 
        (e)           Inventory Pricing Policies.  The price that Distributor
shall charge Operators for Products shall be determined in accordance with the
pricing policies set forth in this Section 2(e) (the “Inventory Pricing
Policies”). Distributor agrees to sell Products to Operator at the price
determined in accordance with the Inventory Pricing Policies whether that value
is higher or lower than actual inventory value for the applicable Product.
 
             (i)   Period Priced Products.  Products priced on a period basis
which correspond to one of the thirteen four week periods as defined in the Yum!
fiscal calendar (each such period an “Applicable Period”) shall be priced in
accordance with this Section 2(e)(i) (“Period Priced Products”).  The Landed
Cost for Period Priced Products is determined on the Wednesday immediately
before the beginning of the Applicable Period during which such price will
apply.  The Landed Cost shall be equal to the amount set forth on the latest
purchase order for the Period Priced Product that: (A) is expected to be
received prior to the tenth day of the Applicable Period; (B) is for a volume of
such Period Priced Product that is reasonably representative of the typical
order volume for the Period Priced Product; and (C) such purchase order for the
Period Priced Product was received in sequential order of the date ordered,
except in cases of extraordinary circumstances such as quality assurance
considerations, promotional activity, etc. which are documented and reported to
UFPC.  For example, if the Landed Cost for a Period Priced Product on the latest
purchase order expected to be received prior to the tenth day of the Applicable
Period is $22.00 per case, the Landed Cost for all of the Applicable Period
shall be $22.00 per case, regardless of current inventory value.  All Products
that are not otherwise

 
5

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Weekly Priced Products, Matrix Priced Products or Weighted Average Products
pursuant to the Inventory Pricing Policies shall be Period Priced
Products.  UFPC shall use its commercially reasonable efforts to provide
Distributor 14 days advance notice of changes to Product price, freight rates
and primary Supplier for all Period Priced Products.
 
             (ii)   Weekly Priced Products.  Products whose input costs
including, but not limited to, Product price and applicable lanes, change more
than 10 times per calendar year, and other Products where the purchasing method
precludes the ability to provide for 14 days notice, shall be priced in
accordance with this Section 2(e)(ii) (“Weekly Priced Products”), on a weekly
basis, with weeks corresponding to one of the fifty two weeks (Sunday through
Saturday) as defined in the Yum! fiscal calendar (each an “Applicable Week”).  A
list of Weekly Priced Products shall be agreed upon by both UFPC and Distributor
on a semi-annual basis.  The Landed Cost for Weekly Priced Products is
determined on the Wednesday immediately prior to the beginning of the Applicable
Week during which such price will apply.  The Landed Cost shall be equal to the
amount set forth on the latest purchase order for the Weekly Priced Product
that: (A) is expected to be received prior to the last day (Saturday) of the
Applicable Week; (B) is for a volume of Weekly Priced Products that is
reasonably representative of the typical order volume for the Weekly Priced
Product; and (C) the purchase order for such Weekly Priced Product was received
in sequential order of the date ordered, except in cases of extraordinary
circumstances such as quality assurance considerations, promotional activity,
etc. which are documented and reported to UFPC.  For example, if on the
Wednesday of the current week the Landed Cost for a Weekly Priced Product on the
latest purchase order expected to be received prior to the last day of the
Applicable Week is $22.00 per case, the Landed Cost for all of the Applicable
Week will be $22.00 per case, regardless of current inventory value.  UFPC shall
use its commercially reasonable efforts to provide Distributor 72 hours advance
notice of changes to Product Price, freight rates and primary Supplier changes
for all Weekly Priced Products
 
             (iii)   Matrix Priced Products.  Products such as produce, primary
Taco Bell beef products, and A&W beef patties priced on a weekly (Sunday through
Saturday) basis shall be priced in accordance with this Section 2(e)(iii)
(“Matrix Priced Products”).  The applicable price for Matrix Priced Products
shall be the Distributor’s Landed Cost for such Matrix Priced Products as
determined by GPS on the Friday immediately prior to the next Applicable
Week.  UFPC shall use its commercially reasonable efforts to provide Distributor
all cost changes including Supplier changes by 12:00 noon (Eastern) on the
Friday immediately prior to the next Applicable Week; provided, however, if
there is no cost change update provided on Friday, the price for Matrix Priced
Products shall remain the same as the price determined by GPS during the
previous Applicable Week.
 
             (iv)   Weighted Average Priced Products.  Products that regularly
require purchases from multiple Suppliers and any other Products designated by
UFPC and the Distributor in writing shall be priced in accordance with this
Section 2(e)(iv) (“Weighted Average Priced Products”).  The applicable price for
Weighted Average Priced Products (the “Weighted Average Price”) is determined on
the Wednesday immediately prior to the next Applicable Week.  The Weighted
Average Price shall be the weighted average of all purchase orders expected to
be received during the Applicable Week (Sunday – Saturday) by Distributor and
will set the Weighted Average Price for the Applicable WeeK.
 
             (v)   Exceptions to the Inventory Pricing Policies.  In the event:
(A) UFPC does not provide Distributor with the required notice of cost changes
for Period Priced Products (14 days) or Weekly Priced Products (72 hours) as set
forth in this Section; or (B) if Period Priced Products or Weekly Priced
Products must be purchased from a secondary Supplier, then the Landed Cost for
Period Priced Products or Weekly Priced Products, as applicable, shall be the
greater of: (1) the Landed Cost from the primary Supplier or secondary Supplier
or (2) the Landed Cost prior to or after the price change for Period Priced
Products or Weekly Priced Products, as applicable; provided, however, after one
Applicable Period or Applicable Week, the Landed Cost shall once again be
determined in accordance with the Inventory Pricing Policies of this Section

 
6

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(i.e. cannot hold a price up for multiple Applicable Periods or Weeks).  Except
for emergency situations, Distributor will only use primary Suppliers unless
otherwise directed by UFPC to utilize the secondary Suppliers.  If a secondary
approved Supplier is utilized for emergency situations without UFPC’s specific
direction, Distributor must notify UFPC as quickly as reasonably possible but in
any event not more than 72 hours from utilizing a secondary Supplier and
disclose the cause of the emergency situation.

                      (f)            Deviated Pricing.  Distributor will
administer “Deviated Pricing” when required by UFPC and a Supplier.  Deviated
Pricing includes, but is not limited to, national branded Products (Example:
Heinz Ketchup and JHS Toppings) where the sell price to the Retail Outlets is
reduced compared to the Supplier price charged to Distributor.  The applicable
Supplier will reimburse Distributor the difference between the price paid to
Distributor by the Operator for the applicable Product and the price paid by
Distributor to the Supplier for such Product after Distributor provides proof of
sale to Retail Outlets to the applicable Supplier in accordance with the
agreement between Distributor and Supplier.

                              (g)       National Priced Products.  Distributor
will administer national pricing for Products when required by UFPC and the
Supplier.  “National Priced Products” are Products where the sell price to the
Retail Outlets is set by the Supplier and the handling fee for distributing
these Products is paid by the Supplier directly to Distributor.  (Example: Pepsi
BNB products, Coca Cola BNB products and Ecolab Chemicals). The handling fee for
distributing National Priced Products paid by Suppliers will not be less than
the applicable Brand mark-up.  No additional distribution mark-up, handling or
other fees are to be added to national priced Products.
 
       (h)           Pallets.  Distributor may recapture the actual documented
cost it incurred for inbound pallets, but Distributor shall subtract the
residual value for, and any other amounts recovered in connection with, inbound
pallets from Distributor’s pallet expense used to calculate Landed
Cost.  Notwithstanding the foregoing, Distributor agrees to provide UFPC with a
quarterly report of any pallet charges passed through to Operators.  Any change
to the aforementioned pallet handling process shall be mutually agreed upon by
UFPC and Distributor.
 
       (i)        Inbound Fuel Surcharge. Distributor may apply a fuel surcharge
on inbound freight to Distributor’s distribution centers in accordance with the
terms and conditions of the fuel surcharge schedule currently agreed upon (or as
may be hereafter agreed upon) by UFPC and Distributor.  Such inbound fuel
surcharge will be based on the current industry standard fuel surcharge
schedules used by carriers to assess a fuel surcharge.
 
       (j)   Outbound Fuel Surcharge and Fuel Pricing Program.
 
             (i)   Outbound Fuel Surcharge.  Distributor may apply a fuel
surcharge on outbound freight from Distributor’s distribution centers in
accordance with the terms and conditions of the Outbound Fuel Surcharge Matrix
attached hereto as Exhibit I as the matrix may be amended from time to time by
the mutual agreement of UFPC and Distributor (the “Outbound Fuel Surcharge”)
 
             (ii)   Fuel Pricing Program.  Distributor shall participate in
UFPC’s fuel pricing program (the “Pricing Program”), as the Pricing Program may
be established from time to time by UFPC, pursuant to which Distributor will, at
UFPC’s written direction, take certain pricing positions with respect to fuel
used in connection with delivery of the Distribution Services
hereunder.  Distributor will establish one or more accounts in connection with
its participation in the Pricing Program, and take positions on behalf of, and
at the express direction of, UFPC.  Distributor’s participation in the Pricing
Program shall be cost neutral to Distributor.  The benefits and burdens of
Distributor’s Pricing Program transactions will be reflected in
 

 
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increases or decreases, as the case may be, of the Outbound Fuel Surcharge
applicable to Retail Outlets for outbound freight from Distributor’s
distribution centers.  Distributor’s transaction costs arising from its
participation in the Pricing Program will be reflected as an increase to the
outbound fuel surcharge applicable to Retail Outlets for outbound freight from
Distributor’s distribution centers.
 
        (k)           Distributor Price Updates and GPS.  Notwithstanding the
foregoing, if Operator participates in an electronic ordering system,
Distributor shall update prices for Products on the Distributor’s system on the
first day of the applicable period. Distributor shall use its best efforts to
maintain sufficient inventories of Products in each of Distributor’s
distribution centers serving one or more Retail Outlet to satisfy each Retail
Outlet’s reasonably expected requirements for Products consistent with the
Services Level Requirements and Reporting Obligations set forth on Exhibit J
(the “Service Level Requirements”).  Distributor acknowledges that information
concerning Products will be provided through GPS and Distributor will have the
ability to view such Product information through the online access to GPS
information.  Distributor further acknowledges that GPS is the data warehouse of
all pricing and primary sourcing decisions made by UFPC. Distributor agrees to
use GPS as the final authority to determine price and maintain Supplier
information. UFPC shall provide as much notice as reasonably practical to
Distributor of any deletion or other modification of Products and, in the case
of any newly added Products (such as LTO Products, Test Products, Base Business
Products) UFPC will provide all pertinent item and Supplier information which
UFPC and Distributor mutually agree is required to completely establish such
Product(s) in Distributor’s inventory system.  Distributor shall immediately
review all information provided by UFPC to establish newly added Products in
Distributor’s inventory system and in any event provide any feed back within one
(1) business day from the provision of such information.
 
        (l)           Payment Terms.  Distributor’s credit policies and
standards applicable to Participants are set forth on Exhibit K (the “Credit
Policies”).  The Credit Policies shall be applied in a consistent and
non-discriminatory manner among all of Distributor’s customers and any terms of
such policies and standards that purport to alter the prices for Products for
Participants will not be effective or enforceable against the Participants.  For
the avoidance of doubt, an alteration of payment terms pursuant to Section
2(l)(i) of this Agreement or Section 3(a) of the Participant Joinder Agreement
is not an alteration of price pursuant to this Section.  The standard terms for
payment of invoices for Products purchased hereunder by Participants that
qualify under the Credit Policies are set forth in the applicable Brand
Exhibit(s); provided, however, Distributor shall offer and apply the payment
discounts for early payment as set forth in the applicable Brand Exhibit(s) for
all Participants, which are subject to such Brand Exhibit, and that qualify
pursuant to the Credit Policies.  Initial and ongoing payment terms are subject
to Distributor’s credit approval pursuant to the Credit Policies.  Except as
otherwise provided herein, Distributor shall not be required to extend the
payment terms set forth on the applicable Brand Exhibit(s) for any Participant
that does not qualify under the Credit Policies. Distributor has provided UFPC
with a copy of the current Credit Policies and will provide UFPC with an updated
version of the Credit Policies as such Credit Policies are updated or otherwise
revised from time to time.
 
             (i)   Prepaid/COD Participants.  Distributor shall not be required
to extend any discount to prepaid/COD Participants who are placed on prepay/COD
terms by Distributor because of credit concerns.  Distributor may, in accordance
with the Credit Policies, and in any event upon Participant’s failure to pay an
invoice when due, deal on a prepay/C.O.D. basis with a Participant; provided,
however, that regardless of any delinquency in the account of a Participant,
Distributor shall not for any reason refuse to sell Products on a prepay/C.O.D.
basis to a Participant: (i) for a period of 30 days without qualification; (ii)
for a second period of 30 days upon Participant’s payment to Distributor of an
amount equal to at least 10% of the current amount of the delinquency in the
account of Participant; and (iii) for a third period of 30 days upon
Participant’s payment to Distributor of an amount equal to at least 10% of the
current amount of the delinquency in the account of Participant, it being
understood and agreed that at the end of such third thirty (30) day period the
total amount of the unpaid delinquency is due and payable.

 
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             (ii)   Interest and Suspension.  Without limiting the foregoing:
(i) any amounts not paid by a Participant when due shall bear interest until
paid at the lesser of eighteen percent (18%) per annum or the maximum rate
allowed by applicable law; and (ii) in the event any Participant fails to make
payments for any Products delivered by Distributor at such time as payment is
scheduled to be made as prescribed by this Section, Distributor shall have the
immediate right to suspend performance of any or all of its obligations under
this Agreement with respect to such Participant until such time as the
prescribed payment is made.  Distributor shall be entitled to offset any or all
amounts due any Participant against any amounts due and owing Distributor by
such Participant pursuant to this Agreement or the applicable Participant
Joinder Agreement, including any accrued interest thereon.
 
        (m)           Pickups. Participant may refuse Products, which are
shipped incorrectly, not ordered, or shipped outside the applicable Yum!
published shelf life matrix or which are otherwise non-conforming, in each case,
at the time of delivery; provided, however, that Participant may refuse produce
Products consistent with the customary practices in effect as of the Effective
Date.  Distributor shall pick up any such refused Product at the time of
delivery or, in any event, on the next scheduled delivery except that: (i)
produce Products, due to perishability, will not be picked up; and (ii) no
frozen or refrigerated Products will be picked up once such Products have left
Distributor’s possession. Distributor shall promptly issue credit to the
applicable Participant for such returned Products.  For Key Drop Deliveries, as
defined in Section 3(b)(ii) of this Agreement, Participant must notify
Distributor of shorts and damages by 11:00 a.m. the day the Product was
delivered to be eligible for credit.  Nothing in this Agreement precludes or
limits Participant’s right to request credit for or pickup of Products with
defects or which are non-conforming in ways not evident to a superficial visual
inspection of the Products upon their delivery; provided, however, produce
Products, due to perishability, will not be picked up and no frozen or
refrigerated Products will be picked up once such Products have left
Distributor’s possession.  Participant’s requests for credit for Products with
defects or which are non-conforming in ways not evident to a superficial visual
inspection of the Products shall be directed to the Yum! Quality Assurance
Hotline (the “Hotline”).  The Hotline will evaluate the Participant’s request
for credit and the supporting detail and recommend a credit, partial credit or
no credit be provided by the Distributor to the Participant.  The Hotline’s
recommendation concerning the credit is non-binding and issues and other
disputes concerning any credit will be resolved directly between the Distributor
and the Participant.  Products refused by Participants for reasons other than
those stated above, shall be subject to a 15% restocking charge imposed by
Distributor.
 
        (n)           Service Level Requirements.  Distributor shall maintain
sufficient inventories of Products in each of its distribution centers serving
one or more Retail Outlets to satisfy the reasonable expected Product
requirements for each Retail Outlet served consistent with historical demand or
forecasts.  Notwithstanding the foregoing, in addition to the Service Level
Requirement set forth on Exhibit J, Distributor shall also maintain the
performance standards and service level requirements set forth in the applicable
Brand Exhibit(s).
 
        (o)           Distributor Representations.  Distributor represents and
warrants that: (i) Distributor has the right to transfer good and merchantable
title to the Products; and (ii) the Products sold and delivered to Participants
pursuant to this Agreement and the Participant Joinder Agreements shall be sold
and delivered free and clear of any and all claims, liens, charges, security
interests or other encumbrances of any kind whatsoever.

 
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3.           Orders and Deliveries.
 
        (a)           Orders. Participants shall place orders by telephone or by
electronic order systems (“EOS”) in a manner reasonably acceptable to the
Participants and Distributor.   Distributor will proactively and continuously
improve its EOS ability to transmit and receive orders to stay current with
industry standards.  If Distributor is currently providing a system which
satisfies the current requirements of the Participants and UFPC described below,
Distributor shall be entitled to continue to utilize that system; provided,
however, Distributor shall make modifications to such system to accept orders
from another EOS so long as the data feed to Distributor is in substantially the
same format as Distributor currently receives.  If Distributor is not currently
providing a system which satisfies the current requirements of the Participants
and UFPC described below, Distributor shall use, facilitate the use of, and pay
a reasonable EOS development fee and ongoing periodic expenses for any EOS
specified by the Participants, so long as: (i) the EOS has been designated by
either the Participants or UFPC as appropriate for use in the Yum! System; and
(ii) the EOS and order placement process does not increase Distributor’s ongoing
order placement expenses.  The current requirements of an EOS referenced above
are that such system must receive orders from Participants, submit confirmed
orders into Participants’ inventory, and generate and store certain records and
reports required under this Agreement.  UFPC acknowledges that Distributor’s EOS
system utilized as of the Effective Date satisfies the EOS requirements set
forth in this Section.  Participant’s orders must be received by Distributor no
later than the local time at the Distributor’s applicable Distribution Center
from which the Products will be shipped set forth on Exhibit M on the day which
is two (2) days prior to the scheduled shipment date; provided, however, with
regard to orders from Retail Outlets not within a 175 mile radius of
Distributor’s servicing distribution center, Distributor may require that these
orders be made no later than the local time at the Distributor’s applicable
Distribution Center from which the Products will be shipped set forth on Exhibit
M on the day which is three (3) days prior to the scheduled shipment
date.  Participants may place an add-on to any order through noon (local time at
the Distributor’s applicable Distribution Center from which the Products will be
shipped) the day following the order due date at no additional charge provided
that there is space to accommodate the add-on Product(s) on Distributor’s
applicable trailer.  If Distributor does not receive a timely order from the
Participants, the Participants shall accept delivery for such Retail Outlet of
the same order Participant received for the same day of the previous week
(excluding smallwares and cleaning supplies). Distributor will not make these
automatic deliveries to any Participant that elects not to receive them and so
notifies Distributor in writing that automatic deliveries are unwanted.
 
        (b)           Deliveries.
 
             (i)    Distributor shall deliver ordered Products to the applicable
Retail Outlets in accordance with the applicable Brand Exhibit(s) or as
otherwise mutually agreed in writing by Distributor and the applicable
Participant.  Distributor shall use its best efforts to provide an additional
weekly delivery to new Retail Outlets during the first four (4) weeks after the
opening of such new Retail Outlet to allow the new Retail Outlet to manage
increased sales demands and to determine actual sales volumes.  Distributor
shall establish and make known to the Participants a schedule for such
deliveries. Distributor may deliver the ordered Products to the Retail Outlets
at any time during which the applicable Retail Outlet is open for business other
than black-out periods as listed in each Brand Exhibit or such other black-out
periods which are agreed upon in writing by Distributor and Participants
(collectively, the “Black-Out Periods”).  Distributor must complete a delivery
prior to the beginning of the Black-Out Periods in order for the delivery to be
an “On-Time Delivery” as determined in accordance with the Service Level
Requirements.  Distributor shall start each delivery within one hour (before or
after) of the scheduled delivery time.  For example: (i) if the scheduled
delivery time is 9:00 a.m. and Distributor’s driver starts the delivery between
8:00 a.m. and 10:00 a.m., the delivery will be an On-Time Delivery if such
delivery is completed by the beginning of the Black-Out Period; but (ii) if the
scheduled delivery time is 11:00 a.m. and Distributor’s driver starts the
delivery at 11:00 a.m. but does not complete the delivery by the beginning of
the Black-Out Period, the delivery will not be an On-Time Delivery. Distributor

 
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shall establish with each Participant a delivery window or will notify
Participant of the scheduled delivery time at each Retail Outlet no later than
one day preceding the date of delivery.  Distributor will also communicate
holiday schedules and route revisions to the Participants at least fourteen (14)
days in advance. If any delivery cannot be started within the two hour period
described above (one hour before and one hour after the scheduled delivery
time), Distributor will notify the applicable Participant in advance; provided,
however, Distributor shall complete the delivery on the same day.  Distributor
may make deliveries to Participants from any of Distributor’s Yum! approved
distribution centers; provided, however, that prior to changing a distribution
center from which deliveries are made to Participant (whether at the beginning
of the applicable Participant Joinder Agreement(s) or otherwise), Distributor
shall obtain UFPC’s prior written consent to such change, which consent shall
not be unreasonably withheld. Distributor acknowledges that it is reasonable for
UFPC to withhold its consent to a change in a distribution center from which
deliveries are made to Participants if the change would adversely affect such
Participant’s price or service.  Distributor acknowledges that realignment of
distribution centers by Distributor will provide the adversely affected
Participant(s) the option to terminate the applicable Participant Joinder
Agreement(s) pursuant to Section 16(b)(xiii).
 
             (ii)   Key Drop Deliveries.  Distributor may, upon the prior
written approval of an officer of the Participant (or other appropriate level
employee of the Retail Outlet) which approval shall not be unreasonably
withheld, or as provided on the applicable Brand Exhibit(s), deliver Products:
(A) when the Retail Outlet is closed; or (B) at such additional times that the
applicable Participant designates in writing for a key drop delivery (each a
“Key Drop Delivery”).  If Distributor’s driver sets off an alarm at a Key Drop
Delivery (other than because Participant did not provide the correct alarm code
or due to an alarm malfunction) and there are charges incurred by the
Participant as a result of such alarm, Distributor shall reimburse the
applicable Participant for such charges.  If a Participant changes the key to
the delivery door and/or alarm code, the Participant must provide the new key
and/or alarm code prior to the Participant’s next order leaving the distribution
center.  If Distributor is unable to access a Retail Outlet because Distributor
was not provided the new key and/or alarm code prior to the Participant’s next
order leaving the distribution center, Distributor may omit delivery of that
order and promptly work directly with the Participant to redeliver that order as
soon as reasonably possible at the redelivery rate mutually agreed upon by
Distributor and the Participant.  Key Drop Deliveries must be completed before
the Retail Outlet opens for business to be considered a “Key Drop Delivery” and
shorts and damages must be called into Distributor by 11:00 a.m. the next
business day following such Key Drop Delivery to qualify for credit from
Distributor.  Products shall be deemed delivered when actually placed in the
appropriate storage areas of the Retail Outlet by drivers, as reasonably
directed by the Participant.
 
             (iii)   Coordination for Delivery.  Distributor shall cooperate
with Participants to schedule delivery days and times to minimize interruption
of the operation of the Retail Outlet to the extent reasonably practical under
the circumstances, considering certain Retail Outlets may have special
considerations and Distributor needs to maintain its operating efficiencies,
comply with local ordinances and driver hours of service
regulations.  Distributor shall make all deliveries to such location on each
Retail Outlet premises as Participants shall reasonably direct and Products
shall be deemed delivered when actually placed in the appropriate storage areas
of the Retail Outlet by drivers, as reasonably directed by the Participant;
provided, however, that drivers shall not be required to rotate Products or
place Products in specific shelving.  Participants shall ensure that access to
the Retail Outlet and storage locations are easily accessible (e.g. sidewalk
shoveled of snow if applicable and keep sidewalks and aisles clear of
debris).  In addition, Participants shall ensure that an employee of such Retail
Outlet is available so that Distributor can complete its deliveries in an
efficient and timely manner.

 
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             (iv)   Hot Shot Deliveries.  If ordered Products are not delivered
by Distributor on the scheduled delivery date (including Key Drop Deliveries),
or ordered Products are delivered damaged or not meeting the required
specifications or standards, Distributor will make a special delivery to
redeliver the Products as quickly as possible at no additional charge (each a
“Hot Shot Delivery”).  In addition, Distributor shall take back all Products
that are damaged or out of specification (except produce or refrigerated or
frozen Products): (i) at the time of delivery; or (ii) for Key Drop Deliveries,
at the time of the Hot Shot Delivery, if the Hot Shot Delivery is performed by
Distributor, and if not, Distributor shall take back such damaged or out of
specification Products during the next regularly scheduled delivery and in
either event credit the applicable Participant for the amount charged by
Distributor for such damaged or out of specification Product.  Hot Shot
Deliveries of Products to the Retail Outlets shall not be made by any person
other than a Distributor-owned or controlled carriage unless expressly
authorized by UFPC in writing.  Distributor shall use its best efforts to
promptly satisfy any emergency needs of a Participant for Products.  If the
emergency results from Distributor’s non-delivery of critical Products,
Distributor will arrange a Hot Shot Delivery or other special delivery as
quickly as possible and at no charge to Participant.  Distributor shall not
impose any minimum dollar order amount per delivery for regularly scheduled
deliveries.  If a Hot Shot Delivery is necessitated by the action or inaction of
a Supplier, UFPC shall use its commercially reasonable efforts to work with
Distributor and the applicable Supplier to encourage Supplier to reimburse
Distributor for its actually incurred costs for the Hot Shot Delivery.
 
             (v)   Delivery Doors.  Distributor and Participant will work
together to develop a mutually agreed upon solution to reduce the time that the
delivery door at a Retail Outlet is open (“Door Solution”) (e.g.: Distributor’s
driver will close the Retail Outlet’s delivery door each trip from trailer to
Retail Outlet as long as the Participant has provided a method of keeping the
door unlocked and an exterior door handle).  In the event that Distributor is
requested by a Participant to implement a Door Solution that materially
increases the cost of providing the Distribution Services, Distributor may
assess an additional fee to such Participant provided that the additional fee
is: (i) reviewed by UFPC and determined, in good faith, to not exceed the
incremental cost incurred by Distributor in implementing the Door Solution; and
(ii) agreed to in advance by the applicable Participant prior to
implementation.  In the event that the Door Solution is required by Yum!, any
Brand or by applicable law that materially increases the cost of providing the
Distribution Services, UFPC and Distributor shall mutually agree to an
additional fee.
 
        (c)           Bar Coding. Yum! is a leader in the QSR industry on bar
coding (case and pallet) in efforts to improve Distribution Services to the
Retail Outlets and the ability to track products.  Yum! is requiring its
approved distributors to proactively improve their bar coding technology to
utilize bar coding in areas such as receiving, order picking, and Retail Outlet
deliveries.  Distributor shall use its commercially reasonable efforts to work
with UFPC and Yum! to proactively improve its bar coding technology and work
with UFPC and Yum! to complete bar coding projects reasonably designated by UFPC
and Yum! within such reasonable time frames set by UFPC and Yum! taking into
consideration Distributor’s financial and personnel requirements of such bar
coding project(s).  Notwithstanding the foregoing, Distributor shall perform
such bar coding improvements or other projects required by applicable law,
ordinance, regulation or other governmental mandate.
 
   4.           Inventory of Base Business Products.  Base Business Products are
Products that are used by Operators on a regular, on-going basis in Retail
Outlets.  Distributor shall promptly and proactively manage its inventories of
all Base Business Products in the most cost efficient case/freight bracket
available that coincides with the current sales volumes, Suppliers’ lead-times,
and adequate safety stock to meet or exceed the applicable Service Level
Requirements.  Distributor will increase inventory levels of Base Business
Products to meet promotional timelines as required when included as part of
Limited Time Offers or otherwise as reasonably requested by UFPC and will
deplete any possible extra inventory through normal daily purchases. Base

 
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Business Products do not include LTO Products or Test Products, but do include
food and/or non-food consumable Products of various themes and design (e.g.,
kids’ meals, crayons, balloons, birthday kits, kids’ table covers, glass mugs
and suckers) that are commonly used by Operators on an on-going basis in Retail
Outlets.
 
    5.           LTO, Test and Promotional Products.
 
        (a)           LTO Products.
 
             (i)   Promotions and Promotion Notice.  Distributor shall make
available special Products that are used or sold by Operators for a limited time
only or other short duration (“LTO Products”), as required by UFPC, Yum! or
Operator marketing promotions, limited time offers or Brand tests (each a
“Promotion” and collectively, “Promotions”).  Distributor hereby acknowledges
the dynamics of change inherent in Promotions and agrees that the lead-times
provided to Distributor for LTO Products may be short in some
circumstances.  UFPC shall use its commercially reasonable efforts to give
Distributor as much lead time or notice as reasonably practical of the start of
a Promotion (each a “Promotion Notice”).  Distributor shall use its commercially
reasonable efforts to provide such short notification Products to the Retail
Outlets within the time frames requested. In the event Distributor incurs
extraordinary freight expenses due to expedited shipments of LTO Products not
due to the action or inaction of Distributor, UFPC will review and evaluate such
extraordinary freight expenses on a case by case basis and use its commercially
reasonable efforts to work with the parties involved in an effort to find an
equitable allocation of such extraordinary freight expenses.  A Promotion Notice
shall include the start date of the Promotion, the length of time the Promotion
will run, the LTO Products that will be required in connection with such
Promotion, the estimated volume of LTO Products required during the Promotion,
when available, UFPC may provide the estimated volume of LTO Products by
distribution center and in some cases UFPC may provide the initial recommended
inventory levels of the applicable LTO Products.  Distributor shall work with
UFPC after a receipt of a Promotion Notice to ensure: (i) adequate supply of LTO
Products by the start date and throughout the Promotion; and (ii) appropriate
inventory levels of LTO Products are in Distributor’s distribution centers at
the UFPC requested times.  UFPC understands Distributor’s desire that the sale
of LTO Products by Distributor to Operators be final and as such, UFPC will not
tell Operators to return or otherwise request that Operators return LTO Products
to Distributor unless the LTO Product is defective or otherwise non-conforming
or Distributor shipped more LTO Products than the applicable Operator ordered.
 
             (ii)   Projections and Inventory Levels.  UFPC shall provide, in
the program document, weekly volume projections of all LTO Products to be used
or sold in a particular Promotion and all Base Business Products affected or
potentially affected by such Promotion.  Volume estimates for Base Business
Products involved in Promotions may be provided as percentage increases or
decreases in normal, non-promotional volume.  UFPC may also provide Distributor
with information regarding Brand and Operator Promotions and may provide
Distributor with UFPC’s standard communications related to such
Promotions.  Distributor shall make available LTO Products designated in the
Promotion Notice and maintain inventory of LTO Products in accordance with the
weekly volume projections.  Prior to the start of any Promotion, Distributor
shall build inventory to the levels set forth in the applicable Promotion
Notice, as such volumes may be amended from time to time by UFPC pursuant to the
weekly volume projections.  Distributor shall, working with UFPC, promptly and
proactively manage inventory of LTO Products to correct differences between
actual sales of LTO Products during the Promotion and the applicable weekly
volume projections.  Distributor and UFPC shall cooperate to minimize any
adverse financial impact to UFPC, Operators and Distributor due to inventory
shortage or inventory obsolescence during or after a Promotion.  Notwithstanding
anything else herein, Distributor is responsible for handling all LTO Products
using distribution practices standard in the industry and in any event no less
than reasonable care.  Distributor shall not be responsible for costs or other
expenses for damage (i.e. glass breakage) of LTO Products that require unique
handling, storage or any other

 
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practice that is not within Distributor’s standard distribution practices
previously communicated to, and agreed upon by, UFPC unless such damage is
caused by Distributor’s negligence or willful misconduct.  It is the
Distributor’s responsibility to manage and adjust Product inventories based on
demand.  However, it is understood that certain short shelf life, perishable
Base Business Products involved in a Promotion may require Distributor to order
in advance and have on hand and in transit inventory that is in excess of normal
Base Business Product requirements.  In the event that actual sales for such
short shelf life, perishable Base Business Products involved in a Promotion do
not meet published forecasts, UFPC will evaluate Distributor’s reasonable
expenses associated therewith on a case by case basis and work with the
applicable parties involved in an effort to find an equitable allocation of such
expenses.
 
             (iii)   Balance of Inventory.  From time to time, UFPC and/or
Distributor may become aware of the need to balance the inventory of LTO
Products between Yum! approved distributors or between Distributor’s
distribution centers in order to reduce any excess LTO Product inventory in any
distribution centers and/or replenish low levels of LTO Product inventory in any
distribution center.  Distributor shall work proactively with UFPC and the other
distributors in the transfers of LTO Products; provided that Distributor is paid
its Landed Cost for any LTO Products sold or otherwise moved to a facility or
other distribution center not operated by Distributor.  In cases where LTO
Products are transferred between Yum! approved distributors, UFPC will
facilitate the transfer of the LTO Products and UFPC will work to obtain payment
of Distributor’s Landed Cost within a reasonable amount of time after such
transfer.
 
             (iv)   Disposition of Inventory.  At the end of a Promotion, UFPC
and Distributor shall work cooperatively with Operators to deliver to the
applicable Operators as designated by UFPC or dispose of any remaining LTO
Products as promptly and expeditiously as possible.  The balance of the
inventory of LTO Products not purchased within ninety (90) days following the
end of the applicable Promotion will be delivered to the applicable Operators as
designated by UFPC or otherwise disposed of and billed to UFPC, Yum!, and/or the
applicable Operators as designated by UFPC within fifteen (15) days following
the end of such ninety (90) day period.
 
             (v)   Storage of Inventory.  In the event that at the end of a
Promotion UFPC directs Distributor to retain the remaining inventory of LTO
Products for future use, Distributor shall retain such inventory.  Distributor
may charge the applicable Operators as designated by UFPC a monthly storage and
handling fee equal to 1% of the Landed Cost of the LTO Products determined in
accordance with the Inventory Pricing Policies, with the such Landed Cost
re-calculated at the end of each month, beginning ninety (90) days after the end
of the applicable Promotion and ending when UFPC, Yum! and/or the applicable
Operators, as designated by UFPC, purchase, all inventory of such LTO Product or
such LTO Products are distributed in the normal course.
 
        (b)           Test Products.  Distributor shall make available Products
that are used or sold by Operators in connection with any tests to be conducted
by an Operator at any Retail Outlet (“Test Products”).
 
             (i)   Test Notice.  Distributor hereby acknowledges the dynamics of
change inherent in tests and agrees that lead-times provided to Distributor for
Test Products may be short in some circumstances.  UFPC shall use its
commercially reasonable efforts to give Distributor as much lead time or notice
as reasonably practical of the start of a test (each a “Test Notice”).  In the
event Distributor incurs extraordinary freight expenses due to expedited
shipments of Test Products not due to the action or inaction of Distributor,
UFPC will review and evaluate such extraordinary freight expenses on a case by
case basis and use its commercially reasonable efforts to work with the parties
involved in an effort to find an equitable allocation of such extraordinary
freight expenses. A Test Notice shall include the start date of the test, the
length of time the test will run; the Test Products that will be required in
connection with such test, the estimated volume of Test Products required during
the test, when available, UFPC may provide the estimated volume of Test Products
by

 
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distribution center and in some cases UFPC may provide the initial recommended
inventory levels of the applicable Test Products.  Distributor shall work with
UFPC after a receipt of a Test Notice to ensure: (i) adequate supply of Test
Products by the start date and throughout the test; and (ii) appropriate
inventory levels of Test Products are in Distributor’s distribution centers at
the UFPC requested times.  UFPC understands Distributor’s desire that the sale
of Test Products by Distributor to Operators be final and as such, UFPC will not
tell or otherwise request that Operators return Test Products to Distributor
unless the Test Product is defective or otherwise non-conforming or Distributor
shipped more Test Products than the applicable Operator ordered.
 
             (ii)   Inventory Levels and Breakage.  Distributor shall hold
inventory of Test Products in quantities consistent with the Test
Notice.  Notwithstanding anything else herein, Distributor is responsible for
handling all Test Products using distribution practices standard in the industry
and in any event no less than reasonable care.  Distributor shall not be
responsible for costs or other expenses for damage (i.e. glass breakage) of Test
Products that require handling, storage or any other practice that is not within
Distributor’s standard distribution practices previously communicated to, and
agreed upon by, UFPC unless such damages is caused by Distributor’s negligence
or willful misconduct.
 
             (iii)   Disposition and Storage of Inventory.  At the end of a
test, UFPC and Distributor shall work cooperatively with Operators to deliver to
the applicable Operators as designated by UFPC or dispose of any remaining Test
Products as promptly and expeditiously as possible.  In the event that at the
end of a Test, UFPC directs Distributor to retain the remaining inventory of
Test Products for future use, Distributor shall retain such
inventory.  Distributor may charge the applicable Operators as designated by
UFPC a monthly storage and handling fee equal to 1% of the Landed Cost of the
Test Products determined in accordance with the Inventory Pricing Policies, with
such Landed Cost re-calculated at the end of each month, beginning ninety (90)
days after the end of the applicable test and ending when UFPC, Yum! and/or the
applicable Operators, as designated by UFPC, purchase, all inventory of such
Test Products or such Test Products are distributed in the normal course.
 
     (c)           Distributor Commitment Agreement Products.  Distributor shall
make available Products that are used or sold by Operators in connection with
any Promotion (whether for a limited time only, or ongoing) where UFPC decides
distribution commitment agreements are required by Operators to be completed,
approved and sent directly to Distributor (“DCA Products”).
 
             (i)   Distribution Commitment Agreement.  Distribution commitment
agreements are agreements between Distributor and Operator in connection with
the purchase and distribution of DCA Products and include the resolution of any
related DCA Product issues including, but not limited to, the depletion of DCA
Product inventories (“Distribution Commitment Agreement”). Distributor hereby
acknowledges that it has received a copy of all standard Distributor Commitment
Agreements currently used by each Brand.  UFPC agrees to review with Distributor
any future changes to a Brand’s standard Distribution Commitment Agreement.
 
             (ii)   Distribution Commitment Agreement Notice.  Distributor
hereby acknowledges the dynamics of change inherent in Promotions and agrees
that lead-times provided to Distributor for DCA Products may be short in some
circumstances.  UFPC shall use its commercially reasonable efforts to give
Distributor as much lead time or notice as reasonably practical of the start of
a Promotion involving DCA Products (each a “DCA Notice”).  A DCA Notice shall
include the start date of the Promotion; the length of time the Promotion will
run; the DCA Products that will be required in connection with such Promotion;
the timing when the Distribution Commitment Agreements are due by the applicable
Brand(s) and/or Operators directly to Distributor; and the timing when
Distributor shall provide directly to UFPC the following information: the total
estimated volume of DCA Products required during the Promotion (listed by
Distribution

 
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Center and by Operator) and in some cases, when available, the initial
recommended inventory levels of the applicable DCA Products.  Distributor shall
work with UFPC after receipt of a DCA Notice to ensure:  (i) adequate supply of
DCA Products by the start date and throughout the Promotion; and (ii)
appropriate inventory levels of DCA Products are in Distributor’s distribution
centers at the UFPC requested times.  UFPC understands Distributor’s desire that
the sale of DCA Products by Distributor to Operators be final and as such, UFPC
will not tell or otherwise request that Operators return DCA Products to
Distributor unless the DCA Product is defective or otherwise non-conforming or
Distributor shipped more DCA Products than the applicable Operator ordered.
 
    6.           Product or Other Changes.
 
          (a)           Pack Size Changes.  Any material change (as defined
below) on an individual SKU basis to pack size, case weight or case cube for
Products (the “Standards”) may have a favorable or an adverse affect on the
economics of this Agreement.  As such, UFPC shall use its commercially
reasonable efforts to provide advance written notice of any material change in
the Standards. If there is any material change to the Standards, Distributor may
make a reasonable, appropriate, and equitable increase or decrease in the case
mark-ups described in the applicable Brand Exhibit(s) as may be directly
necessitated by such a change to the Standards upon obtaining the prior written
consent of UFPC.  Distributor’s modification to the case mark-up must correctly
account for the change to the Standards. New/Test Products are expressly
excluded from this provision.  Increased or decreased mark-ups as a result of
this provision will revert back to the normal mark-up at the start of the next
contract term.  Disputes between Distributor and UFPC that arise in connection
with a material change in the Standards shall be mediated pursuant to the
provisions of Section 36 of this Agreement.  For purposes of this Section, a
“material change” means a modification or difference of 10% or more from the
then current Standards of a Product other than a Test Product.
 
          (b)           Change in Storage or Delivery Requirements.  If UFPC
and/or Yum! add or modify Products in a manner that fundamentally alters the
storage or delivery requirements from those in effect as of the Effective Date,
Distributor may propose to UFPC alternative storage and/or delivery methods on
terms, prices and rates that Distributor considers reasonable and competitive
under the circumstances and are acceptable to Distributor.  If UFPC or the
applicable Participant(s) do not accept Distributor’s proposal to provide
alternative storage and/or delivery methods, which approvals shall not be
unreasonably withheld, conditioned or delayed, UFPC or the applicable
Participant(s) may, after requesting written bid(s) for storage and delivery
methods that meet their respective requirements, enter into an agreement for the
distribution of the applicable Product with any person(s) providing such bid(s),
so long as the terms and conditions of such bid are more favorable, taken as a
whole, than Distributor’s proposal, as determined by UFPC.
 
          (c)           Efficiency Gains.  In the event that technology,
productivity or other supply chain efficiency gains result in the industry or
from the collaboration between the parties and/or Yum! after the Effective Date
(collectively, “Efficiency Gains”), UFPC and Distributor hereby agree to review
and discuss such Efficiency Gains and determine a reasonable and equitable
division of the benefits associated therewith taking into consideration the
time, financial and other contributions of Yum!, UFPC, the Participants and
Distributor.  If the parties are unable to agree on an equitable division of the
benefits associated with Efficiency Gains within sixty (60) days of the date the
Efficiency Gains are disclosed to the other party, upon the request of either
party, such issue shall be resolved pursuant to the Alternative Dispute
Resolution provision of Section 36 hereof.

 
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7.           Sourcing Fees.

(a)           Collection of Sourcing Fees.  Distributor shall collect on behalf
of UFPC a sourcing fee (the “Sourcing Fee”) from each Operator that receives
Distribution Services from Distributor.  The Sourcing Fee shall be based on such
percent of sales or purchases or amount per case or other unit, as UFPC may from
time to time designate, based on sales to Operators or purchasers for sales to
Operators of all or certain Products specified by UFPC, or by such other method
as UFPC may from time to time designate.  Distributor shall collect the Sourcing
Fee without mark up pro rata from such Operators.

(b)           Authorization of Collection.  UFPC represents and warrants that
the collection by UFPC of Sourcing Fees is specifically authorized by the Bylaws
of each of the Concept Co-ops.

(c)           Property of UFPC.  The Sourcing Fees will at all times be and
remain the property of UFPC and Distributor shall serve only as a bailee and
agent of UFPC for billing and trustee for UFPC in collecting and holding the
Sourcing Fees for UFPC’s benefit, and remitting the Sourcing Fees to UFPC.  The
Sourcing Fees billed but uncollected from the Operators and all Sourcing Fees
collected from the Operators shall be held in trust for the benefit of UFPC.

(d)           Segregation of Sourcing Fees.  All collections and other proceeds
of Sourcing Fees shall be segregated from all Distributor funds (and if
requested by UFPC, deposited in a separate bank account pending remittance to
UFPC).

(e)           Sourcing Fee Report and Collection.  After receiving Supplier or
Operator account information, including any account information which UFPC may
request from Distributor reflecting the business between Distributor and
Suppliers or Operators under Title Transactions or Contract Transactions, UFPC
shall send to Distributor a Sourcing Fee report that calculates the aggregate
Sourcing Fees due from the Operators for each weekly or other accounting period
specified by UFPC. Distributor will remit all collected Sourcing Fees to UFPC by
wire transfer to UFPC’s designated account within thirty (30) days after the
close of the specified accounting period. UFPC and Distributor shall each have
the right to require the other to provide reasonably acceptable evidence which
supports UFPC’s calculation of its Sourcing Fee.

8.           Yum! Specifications and Standards.

(a)           Specifications and Standards.  Distributor acknowledges that Yum!
has established standards and specifications for Products to be supplied by
Distributor to Operators under this Agreement, which standards and
specifications may be modified by Yum! from time to time during the Term of this
Agreement.  Distributor shall not sell or deliver any Products under this
Agreement unless the Products meet applicable Yum! standards and specifications
and the Products have been supplied by a Yum!-approved Supplier. Yum!
specifications and standards for Products as modified from time to time, are
published by Yum! on the Yum! Distribution Management Website (“DMW”), or such
other source as determined by Yum!.  Distributor agrees to: (i) maintain
Products within the Yum!-approved product temperature requirements while such
Products are in the possession of Distributor; (ii) to supply Products to the
Retail Outlets free of any damage; and (iii) to deliver Products within the
Yum!-approved shelf life matrix.

(b)           Non-Conforming Produce Products.  If UFPC or Participant(s)
determine, in its reasonable discretion, that Distributor is repeatedly
supplying Produce Products that do not meet Yum! specifications and such
nonconforming Produce Products are the result of any act or omission of
Distributor, as determined by UFPC, Participant may, at its option, purchase
Produce Products from another Yum!-approved distributor or Yum!-approved
Supplier. If a Participant exercises the option above: (i) Distributor shall not
be required to sell or deliver Produce Products to such Participant’s Retail
Outlet(s) until such time as the

 
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Participant and Distributor shall mutually agree; and (ii) so long as
Distributor has used its best efforts to resolve out-of-specification Produce
Products issues, and despite these efforts the number of remaining Yum! Retail
Outlets of the same Brand purchasing Produce Products from Distributor’s
distribution center is less than 25, then the applicable distribution center may
elect to discontinue selling and delivering Produce Products.  If the applicable
distribution center elects to discontinue selling and delivering Produce
Products, Distributor agrees to work in good faith with UFPC to help facilitate
a smooth transition to another Yum!-approved Produce Product
distributor.  Notwithstanding the foregoing, UFPC shall use its commercially
reasonable efforts to work with Distributor to resolve any issues or other
problems Distributor may have with a Yum!-approved Supplier routinely supplying
Produce Products that do not comply with Yum! specifications and standards for
Produce Products.

9.           Credit Standards and Policies.  In accordance with UFPC’s policies
concerning credit and financial stability, Distributor has delivered to UFPC a
completed credit application and has satisfied all requirements therein.
Distributor understands and shall at all times satisfy and comply with UFPC’s
credit standards and policies as in effect from time to time.  If a Supplier
charges Distributor a premium because of the Supplier’s view of the
Distributor’s credit worthiness or financial instability, Distributor will not
pass any such premium on to Operators.  Distributor should promptly notify UFPC
of any such premium charged or proposed by a Supplier.  UFPC’s policies
concerning credit and financial stability are applied in a consistent and
non-discriminatory manner among all Yum! approved distributors.

10.   Financial Statements; Business Review Meeting.

(a)           Financial Statements. Distributor will provide UFPC audited
financial statements of Distributor’s ultimate parent company, Berkshire
Hathaway, Inc. (“Berkshire”) for its most recently ended fiscal year.  During
the Term of this Agreement, Distributor shall provide to UFPC (a) within 95 days
of the end of each fiscal year, complete audited financial statements of
Berkshire, and (b) within 45 days of the end of each fiscal quarter, Berkshire’s
Form 10K for such quarter.  All financial statements provided by Distributor
shall be prepared in accordance with generally accepted accounting principles
and shall fairly present the financial condition and results of operations of
Berkshire at their date and for their indicated period.  Distributor will also
provide UFPC unaudited financial statements of Distributor for its most recently
ended fiscal year and interim financial statements of Distributor for its most
recently completed fiscal quarter.  During the Term of this Agreement,
Distributor shall provide to UFPC (a) within 95 days of the end of each fiscal
year, unaudited financial statements of Distributor for such year, and (b)
within 45 days of the end of each fiscal quarter, unaudited financial statements
of Distributor for such quarter.  All Distributor financial statements provided
by Distributor shall: (a) be prepared primarily for internal use and for
consolidation with the financial statements of Berkshire and not necessarily in
accordance with generally accepted accounting principles; and (b) fairly present
the financial condition and results of operations of Distributor at their date
and for their indicated period.

(b)           Business Review Meeting.  At least once each calendar year during
the term of this Agreement, or more or less often as agreed to by the parties,
Distributor and UFPC shall meet to review the status and financial performance
of Distribution Services for the Yum! System conducted pursuant to this
Agreement and the Participant Joinder Agreements.

11.           Sheltered Income.

(a)           Prohibition on Sheltered Income.  Distributor shall not, directly
or indirectly, receive or benefit from any “Sheltered Income” in connection with
Products purchased pursuant to Title Transactions or Contract Transactions for
use in Retail Outlets except for:

 
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            (i)    Marketing or promotional allowances which are distributed or
administered for the benefit of Operators pro rata based on the volume of the
Operators’ purchases;
 
             (ii)    Discounts, rebates or allowances which directly lower
Retail Outlet delivered prices pro rata among Operators based on the volume of
the Operators’ purchases;
 
             (iii)    Prompt pay discounts earned on commercially customary,
reasonable prompt payment terms; and
 
             (iv)           Sheltered Income received by Distributor with
respect to Non-Core Products, which Distributor shall disclose to UFPC upon
specific request by UFPC.  As used in this Agreement, “Non-Core Products” means
goods other than those designated by UFPC as “Core” Products, in its sole
discretion, and purchased under UFPC negotiated purchasing agreements.
 
        (b)           Definition of Sheltered Income.  As used in this
Agreement, “Sheltered Income” means so called earned income, rebates, kickbacks,
volume discounts, tier pricing, purchase commitment discounts, sales and service
allowances, marketing allowances, advertising allowances, promotional
allowances, label allowances, back-door income, various fees, etc., and
includes, among other items, (i) payments and allowances to distributors from
Suppliers based on distributor volume which are not reflected as a reduction in
distributor cost or prices, (ii) special or atypical payment terms, (iii) higher
prices permitted distributors to amortize the cost of excess inventory, (iv)
special favors, gifts and entertainment, and (v) amounts paid to sponsor Yum! or
UFPC meetings and events.
 
        (c)           Title/Contract Transactions.  As a point of clarification,
the provisions of this Section with respect to Sheltered Income do not apply to
Products which are not purchased or acquired by Distributor pursuant to Title
Transactions or Contract Transactions.  However, Distributor shall disclose to
UFPC, upon specific request by UFPC, the amount and source of any Sheltered
Income earned or received on Products which are purchased or acquired by
Distributor for resale or distribution to Operators of the Yum! System.
 
     12.  Provision of Information.
 
        (a)           Distributor Data Interchange Protocol.  Distributor shall
provide reports and/or data requirements to UFPC or its third party information
processor (including distribution center inventory reports regarding Products)
in the form, time and manner set forth in Distributor Data Interchange Protocol
which may be revised from time to time, a copy of which, as of the Effective
Date, is attached hereto as Exhibit L (the “Protocol”).
 
        (b)           Additional Information.  Distributor further agrees to
provide to UFPC such additional information reasonably requested by UFPC
regarding the Products and Distribution Services via electronic data exchange or
otherwise within 30 days of a written request.  This provision may pertain to
orders, acknowledgements, sales reports, Sourcing Fees, price lists, order
guides, receipts from Suppliers, inventory positions, shipments to Retail
Outlets, Retail Outlet delivered pricing components or any other regularly
reported information to allow UFPC to monitor, with reasonable ease and
accuracy, Distributor’s compliance with the price and other terms of this
Agreement and any Participant Joinder Agreements.  Distributor shall report
On-Time Delivery, Perfect Order, Sales Compliance and Delivery Compliance
performance to UFPC on a period/monthly basis.  It is understood and agreed that
Distributor shall not be required to furnish any complete information or report
more than once.
 
        (c)           Preservation of Records.  Distributor shall keep and
preserve adequate records to support all information provided by Distributor to
UFPC pursuant to this Agreement for a commercially reasonable period of time (at
least three years) after the applicable information has been provided to UFPC.

 
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        (d)           Costs.  Any other provision of this Section
notwithstanding, information provided by Distributor to UFPC pursuant to this
Agreement will be provided by Distributor to UFPC (i) at no charge, if such
information or reports can be prepared by Distributor in its ordinary course of
business, or (ii) for a reasonable fee, agreed to in advance by UFPC and
Distributor, which fee will be paid by UFPC to Distributor for the preparation
of any information or reports which UFPC requests from Distributor that (1)
require significant alteration to Distributor’s ordinary record keeping and
reporting capacities, (2) is not readily available to Distributor using its
current data processing or information systems, or (3) is not typically
available from distributors in the distribution industry.
 
        (e)   Sharing Information.  UFPC and Distributor shall each provide the
other from time to time with information reasonably available to each of them
regarding new Products and other developments relating to the Products and their
distribution, all in a format mutually agreed upon by UFPC and Distributor.
 
     13.   Inspections and Record Retention.  Distributor shall afford UFPC
reasonable access during normal business hours upon reasonable prior notice to
all premises utilized in Distributor’s activity hereunder.  UFPC shall have the
right to take reasonable samples of Products, and shall reimburse Distributor
for such samples in an amount equal to Distributor’s Landed Cost plus the
applicable mark-up. Distributor shall keep accurate records covering all
transactions under this Agreement and UFPC shall have the right during normal
business hours to examine any records or other documents and materials in
Distributor’s possession or under its control regarding the subject matter and
terms of this Agreement.  Notwithstanding any other provision of this Agreement,
Distributor shall not be required to disclose or otherwise make available any
information related to Distributor’s customers who are unrelated to the Yum!
System.
 
     14.  Audit Procedures. Distributor shall permit and facilitate price audits
of Distributor’s performance under this Agreement as may be arranged by UFPC
including, without limitation, an audit of the Products purchased on
UFPC-negotiated terms and conditions from Distributor.  Distributor agrees to
make available sales records of Products sold at each cost level, providing
evidence of Distributor’s Retail Outlet Landed Cost for Products sold to
Operators.  If an audit conducted by UFPC presents evidence indicating that
Distributor overcharged an Operator as a result of Distributor’s failure to
reasonably follow pricing through GPS as set forth in the Inventory Pricing
Policies and all other fees as defined in this Agreement or otherwise, then
Distributor shall promptly, and in any event not less than thirty (30) days from
UFPC’s notice to Distributor, reimburse such Operator for any overcharges.  All
audit requests must be responded to within 30 days.
 
     15.  Patronage Dividend Program.
 
        (a)           General.  Distributor acknowledges and agrees that the
Concept Co-ops, and their members and Participants, are the patrons and
customers of UFPC with respect to all Products purchased under Title
Transactions and Contract Transactions.  Distributor further acknowledges and
agrees that, as between the Operators and Distributor, the Operators are
exclusively entitled to any payments by UFPC made pursuant to the Patronage
Dividend Program with respect to such Product sales.  Distributor hereby assigns
all its rights, title and interest, if any, in any payments under the Patronage
Dividend Program to the Concept Co-ops and Operators, as may be designated by
UFPC.  Distributor will provide UFPC with the records, reports and information
in the format prescribed by UFPC necessary for UFPC to efficiently administer
its Patronage Dividend Program.
 
        (b)           Distribution Redistribution and Payment.  If UFPC decides
to administer the Patronage Dividend Program by making payments under the
Patronage Dividend Program to Distributor for redistribution and payment to the
Operators that receive Distribution Services from Distributor, Distributor shall
assist UFPC as reasonably requested in such distribution and payment.

 
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      16.           Term and Termination.

          (a)   Term.  The term of this Agreement shall commence on the
Effective Date and shall continue until December 31, 2016 (the “Initial Term”)
unless earlier terminated pursuant to the terms of this Agreement. Thereafter,
this Agreement shall automatically renew for successive one year terms (each a
“Renewal Term”) unless either party provides the other party written notice of
non-renewal of this Agreement at least 90 days prior to the termination of the
Initial Term or the then current Renewal Term.  The Initial Term and any Renewal
Terms are collectively referred to herein as the “Term.”

          (b)   Termination by UFPC.  UFPC may terminate all or any part of this
Agreement (i.e. with respect to particular distribution center(s),
Participant(s) and/or Retail Outlet(s) as indicated below) upon written notice
of the termination to Distributor within 120 days of the occurrence of any one
of the following:
 
             (i)    except as qualified by Subsection (ii) below, Distributor
fails to cure any material breach of this Agreement or any other agreement
entered into between UFPC and Distributor within 30 days after receipt by
Distributor of written notice of the breach from UFPC, UFPC may terminate this
Agreement in its entirety or with respect to the applicable distribution
center(s);
 
             (ii)   upon receiving notice from Distributor or otherwise that any
of the material representations and warranties of Distributor set forth in this
Agreement are not true, UFPC may terminate this Agreement in its entirety;
 
             (iii)  any of Distributor’s property, or any part thereof, shall be
attached or Distributor shall suffer the filing of any like process against it,
in either event which is not discharged within 30 days and which is substantial
in relation to Distributor’s assets, UFPC may terminate this Agreement in its
entirety or with respect to applicable distribution center(s);
 
             (iv)     Distributor shall have filed, or had filed against it, a
petition of bankruptcy or a similar petition under any bankruptcy law or under
any other law for the relief of debtors, UFPC may terminate this Agreement in
its entirety;
 
             (v)   Distributor suspends the performance of any material
obligation under this Agreement pursuant to Section 17 hereof for a period in
excess of thirty (30) days, UFPC may terminate this Agreement in its entirety or
with respect to applicable distribution center(s), Participant(s) and/or Retail
Outlet(s);
 
             (vi)     Distributor ceases to be approved by Yum! to sell Products
to Participants or the Distribution Services and Approval Agreement between
Distributor and Yum! is terminated pursuant to its terms, UFPC may immediately
terminate this Agreement in its entirety;
 
             (vii)    UFPC receives notice of a change in control of Distributor
as described in Section 27 of this Agreement and notifies Distributor of its
election to terminate this Agreement in its entirety within ninety (90) days
after receipt of such notice;
 
             (viii)   Distributor falls below the reasonable financial
thresholds as defined by Yum! required for compliance with the terms of the
Distribution Services and Approval Agreement between Distributor and Yum!, UFPC
may terminate this Agreement in its entirety.;

 
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             (ix)   Distributor suffers any damage, destruction or loss, whether
or not covered by insurance, materially adversely affecting, or which can
reasonably be expected to materially adversely affect its financial condition,
business or assets used in connection with the provision of Distribution
Services, other than a Force Majeure Event, UFPC may terminate this Agreement in
its entirety or with respect to applicable distribution center(s);
 
             (x)    Distributor has filed against it a lawsuit or proceeding,
materially affecting or which can reasonably be expected to materially adversely
affect, its financial condition, business or assets used in connection with the
provision of Distribution Services, UFPC may terminate this Agreement in its
entirety or with respect to applicable distribution center(s);
 
             (xi)   if Distributor shall at any time not satisfy or not be in
compliance with the credit standards and policies established by UFPC, UFPC may
terminate this Agreement in its entirety;
 
             (xii)    if one or more Retail Outlets are closed, UFPC may
terminate this Agreement with respect to such Retail Outlets; or
 
             (xiii)   if the agreed upon realignment of distribution centers by
Distributor adversely affects a Participant’s price or Distribution Services,
UFPC may terminate this Agreement with respect to the applicable Retail Outlets;
or
 
             (xiv)    if a Participant is no longer a Yum! System franchisee,
UFPC may immediately terminate this Agreement with respect to such Participant.

Unless otherwise provided in this Agreement, Distributor will not increase the
price paid by Participants for Products sold and delivered under this Agreement
and any applicable Participant Joinder Agreement in connection with a
termination of all or any part of this Agreement under this Section or in
connection with the application of the provisions of this Agreement that results
in any Participants’ failure to satisfy any loyalty, exclusivity, volume, or
other similar factors considered by Distributor or the applicable Supplier in
determining the price paid by Participant for Products.
 
          (c)   Termination by Distributor.  Distributor may terminate this
Agreement, or any part hereof (including with respect to one or more Distributor
distribution centers) upon written notice of the termination to UFPC within 120
days of the occurrence of any one of the following:
 
             (i)    UFPC fails to cure any material breach of this Agreement
within 90 days after receipt by UFPC of written notice of the breach from
Distributor, Distributor may terminate this Agreement in its entirety or with
respect to the applicable distribution center(s);

    (ii)    upon receiving notice from UFPC that any of the material
representations and warranties of UFPC set forth in this Agreement are not true,
Distributor may terminate this Agreement in its entirety;

    (iii)    If Distributor or any distribution center ceases to be approved by
Yum! to sell Products to Participants or the Distribution Services and Approval
Agreement between Distributor and Yum! is terminated pursuant to its terms,
Distributor may immediately terminate this Agreement in its entirety or with
respect to the applicable distribution center(s);

 
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(iv)           UFPC shall have filed or had filed against it, a petition of
bankruptcy or a similar petition under any bankruptcy law or under any other law
for the relief of debtors, Distributor may terminate this Agreement in its
entirety; or

(v)           if a Participant is no longer a Yum! System franchisee,
Distributor may immediately terminate this Agreement with respect to such
Participant.

Notwithstanding the foregoing, a Participant’s default under any Participant
Joinder Agreement shall not constitute a default under this Agreement.
 
          (d)   Fresh Poultry Only Termination.  UFPC may terminate this
Agreement with respect to fresh poultry Distribution Services only, if
applicable, upon written notice of termination to Distributor: (i) for any
reason set forth in Section 16(b) of this Agreement; (ii) if Distributor is
selling or delivering fresh poultry Products that do not meet Yum!
specifications or that are being supplied from a non-approved Supplier; (iii)
Distributor is not providing fresh poultry Products within code date or
sufficient shelf life specifications; or (iv) if a Yum! Quality Assurance
investigation provides evidence that Distributor failed to consistently follow
all handling specifications and procedures including, but not limited to, those
applicable to the handling, transportation and receiving of fresh poultry
Products.
 
          (e)   Effect of Termination.  Upon termination of this Agreement or
any part hereof (including with respect to one or more Distributor distribution
centers) for any reason, Distributor shall fulfill and deliver any Products
under any order placed by a Participant prior to the effectiveness of a
termination of this Agreement, and the applicable Participants shall pay
Distributor for all Products delivered, unless otherwise mutually agreed in a
writing signed by both parties.  Termination of this Agreement in part for any
reason shall result in the automatic termination of the applicable Participant
Joinder Agreement(s).  Termination of this Agreement in its entirety for any
reason shall result in the automatic termination of all Participant Joinder
Agreement(s).  Upon a termination or expiration, Distributor shall use its
reasonable efforts to facilitate the transition of the Distribution Services
provided under this Agreement to a successor distributor of the Products,
provided such successor distributor purchases from Distributor at the
Distributor’s Landed Cost, all proprietary Products, LTO Products, Test
Products, and all promotional, specialty and other exclusive Products of the
Brand or the applicable Participant(s) that, for each type of Product (i) at the
time of termination meet applicable Yum! standards and specifications for such
Products, including shelf-life standards, and (ii) were previously purchased by
Distributor specifically for Participants or at UFPC’s written request.  No
termination of this Agreement shall relieve Distributor of Distributor’s
obligations created by this Agreement or any Participant Joinder Agreement for
the period prior to termination.
 
          (f)   Survival After Termination.  No termination of this Agreement
shall limit any party’s rights to remedies for breaches of this Agreement
(whether known or unknown, contingent or otherwise) as of the effective date of
termination.  Additionally, Sections 1(d), 1(g), 1(h), 1(i), 1(j), 2(l)(ii),
5(a)(i) (with respect to sales of LTO Products being final), 5(a)(ii) (only the
seventh sentence), 5(b)(i) (with respect to sales of Test Products being final),
5(b)(ii) (only the last sentence), 5(c)(ii) (with respect to sales of DCA
Products being final), 7(c), 7(d), 7(e), 12(c), 16(e), 16(f), 18, 22, 34 and 36
(only with respect to arbitration) shall survive any termination or expiration
of this Agreement.  Notwithstanding anything else in this Agreement, the
provisions of this Agreement shall survive any termination or expiration of this
Agreement for as long as Distributor provides Distribution Services to an
Operator under this Agreement, a Participant Joinder Agreement or any other
agreement between Distributor and an Operator.  Additionally, to the extent a
provision of this Agreement relates to UFPC’s distributor monitoring or other
duties on behalf of the Operators, such provision shall survive termination or
expiration of this Agreement for as long as Distributor provides Distribution
Services to an Operator under this Agreement, a Participant Joinder Agreement or
any other agreement between Distributor and an Operator.

 
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           17.           Force Majeure.  If Distributor, UFPC and/or a
Participant is prevented from performing its obligations hereunder by an
occurrence beyond its reasonable control, such as, but not limited to, acts of
God, fire, flood, war, terrorism, insurrection, riot, plant breakdown,
accidents, embargo, explosions, product shortages, governmental action, or order
of decree (each, a “Force Majeure Event”), then that party shall be excused from
performance under this Agreement or the applicable  Participant Joinder
Agreement  for so long as such occurrences continue, to the extent that such
party’s ability to perform its obligations hereunder is thereby impaired;
Provided, however, under no circumstances will an increase in Distributor’s fuel
costs be deemed a Force Majeure Event. In such event, the party who intends to
suspend its obligations pursuant to this Section shall notify the other party
and shall keep the other party fully informed as to the status of and the
expected duration of the suspension. In the event Distributor is unable to
perform its obligations under this Agreement, Distributor shall cooperate fully
with UFPC and Participants in allowing Participants to arrange for shipments of
Products through another distributor designated by UFPC.

           18.           Indemnity; Liability and Supplier Business Relationship
Agreement.

(a)           No Punitive or Exemplary Damages.  DISTRIBUTOR SHALL NOT BE LIABLE
TO UFPC OR ANY PARTICIPANT FOR EXEMPLARY OR PUNITIVE DAMAGES IN CONNECTION WITH
ANY UNRESTRICTED OR RESTRICTED CLAIMS.

(b)           Product Recalls.

(i)           As between Yum! and Distributor, liability for expenses incurred
as a result of government, Yum!, or supplier initiated Product recalls,
destructions, withdrawals, or removals stemming from issues concerning product
safety, product quality, consumer protection, or other related matters (each a,
“Product Recall”) are not dealt with in this Agreement but rather are governed
by the relevant terms of any Distribution Services and Approval Agreement or
other agreements entered into between Yum! and Distributor.

(ii)           In the event of a Product Recall, Distributor shall not be liable
for Products that Operators or their affiliates have in their possession or
otherwise in their care, custody or control unless such Product Recall was due
to Distributor’s negligent acts or omissions, or wrongful
conduct.  Notwithstanding the foregoing, in the event of any Product Recall,
Distributor shall take all reasonable steps to cooperate with UFPC and the
Operators and otherwise facilitate the applicable, appropriate credit,
reimbursement or other refund from the responsible Supplier(s) to the Operators.

(c)           “Unrestricted Claims.”  The following limitations on liability do
not apply to claims against Distributor by UFPC and/or Participants (i) where
Distributor’s liability is based on Distributor’s negligent acts or omissions,
wrongful conduct and/or breach of any representations, express warranties or
agreements made by Distributor in or through this Agreement; (ii) for breach of
implied warranties, if any (including, without limitation, any implied warranty
of merchantability and any implied warranty of fitness for a particular purpose)
where the breach resulted from Distributor’s negligent acts or omissions or
wrongful conduct; or (iii) which seek to recover – by way of indemnity,
contribution, or otherwise – for amounts paid or obligated to be paid by UFPC
and/or Participants to third parties (“Unrestricted Claims”).

(i)           Limited Waiver of Implied Warranties.  With respect to claims
other than Unrestricted Claims (“Restricted Claims”), any and all implied
warranties, if any (including, without limitation, any implied warranty of
merchantability and any implied Warranty of fitness for a particular purpose)
shall be deemed to have been waived.  This limited waiver shall not be construed
as a waiver or disclaimer of such warranties for any other purpose and shall not
restrict the rights of UFPC and/or Participants to assert Unrestricted Claims
against Distributor for breach of any implied warranties.

 
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(ii)           No Indirect or Consequential Damages.  With respect to Restricted
Claims only, Distributor shall not be liable to UFPC or any Participant for any
indirect, special, incidental, or consequential damages, or for lost revenues,
lost profits, lost business value or goodwill, even if Distributor has been
advised of the possibility of those damages.

(iii)           Insurance.  The foregoing limitations and restrictions shall not
apply to any Unrestricted Claims asserted against Distributor by any subrogated
insurer of UFPC or the Participants.

(iv)           Assignments.  Distributor will provide Operators, upon reasonable
request, with an appropriate mutually agreeable assignment of claims against
Suppliers to facilitate claims, made with or without McLane direct
participation, by Operators against Suppliers.

(v)           Non-SBRA Products.  Sections 18(c)(i) and 18(c)(ii) of this
Agreement shall not apply to claims against Distributor by UFPC and/or
Participants with regard to Products purchased by Distributor from any Supplier
which does not have a current SBRA (as defined below) with UFPC (“Non-SBRA
Products”); provided that Distributor’s liability to UFPC and/or Participants
for Restricted Claims with regard to Non-SBRA Products shall be limited to
amounts actually recovered by Distributor from the Supplier with regard to such
Non-SBRA Products.  Distributor shall either: (a) diligently pursue all claims
that Distributor may have against any Supplier with regard to such Non-SBRA
Products; or (b) assign such claims to Operators as provided in Section
18(c)(iv).

(d)           Distributor Indemnity.  Distributor shall indemnify and hold
harmless UFPC and the Participants, their successors and assigns, and their
officers, directors, and employees (collectively, the “Indemnified Parties”)
from and against any and all suits, actions, claims, losses, damages,
liabilities, obligations, judgments, costs or expenses (including, without
limitation, reasonable attorneys’ fees and expenses) that any of the Indemnified
Parties may suffer or incur as a result of any claim by any third party, but
only to the extent attributable to Distributor’s negligent acts or omissions,
wrongful conduct and/or breach of any representations, express or implied
warranties or agreements made by Distributor in or through this
Agreement.  Notwithstanding the foregoing and for the avoidance of doubt,
Distributor does not agree to indemnify or hold harmless a particular
Indemnified Party for any suits, actions, claims, losses, damages, liabilities,
obligations, judgments, costs or expenses arising from the negligence or willful
misconduct of the Indemnified Party.

(e)           Supplier Business Relationship Agreement.

(i)           SBRA Provisions.  It is UFPC’s express policy to require all Yum!
approved Suppliers to enter into and maintain a Supplier Business Relationship
Agreement (“SBRA”) with UFPC.  UFPC shall use its commercially reasonable
efforts to enter into and maintain a SBRA with all Yum! approved Suppliers.  The
SBRA provides, among other things, that: (i) Distributor is an express third
party beneficiary of the Supplier’s obligations and restrictions under the SBRA
and is entitled to enforce such obligations and restrictions directly against
the applicable Supplier; (ii) Distributor is an additional insured on Supplier’s
commercial general liability policy required to be maintained by the SBRA; and
(iii) Supplier has the obligation to transfer good and merchantable title to the
Products, free and clear of all security interests and other liens and
encumbrances (collectively, the “SBRA Provisions”).  The aforementioned SBRA
Provisions shall not be revised or otherwise amended in any way that materially
adversely affects Distributor.  Distributor shall not enter into any agreement
with Suppliers that contains provisions more onerous on Suppliers than the SBRA
Provisions or UFPC’s standard form of SBRA as approved by the UFPC Board of
Directors from time to time.
 
 
 
 
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(ii)           *.
 
19.    Approved Distributor Status.

(a)           Approved Distributor.  Distributor represents that it has been
approved by Yum! to sell Products to Operators.  Distributor shall maintain its
approved status at all times during the Term of this Agreement pursuant to the
terms of any Distribution Services and Approval Agreement or other agreements
entered into between Yum! and Distributor.

(b)           Compliance with Agreements and other Requirements.  Distributor
shall enter into, abide by and remain in compliance with the terms of the
Distribution Services and Approval Agreement between Distributor and
Yum!.  Distributor shall at all times comply with Yum!’s quality assurance and
financial reporting policies and standards.  Distributor acknowledges that it is
UFPC’s policy to enter into Contract Transactions and/or “Title Transactions”
and Distributor acknowledges that it must comply with the applicable credit
standards defined by Yum! and UFPC.

(c)           Financial Criteria.  Yum! has the authority to disqualify a
Distributor that is unable to remain in good financial condition.  Good
financial condition will be determined by Yum! through reference to external
credit rating agencies, Dunn & Bradstreet reporting, and financial ratios
analysis performed by Yum! or its designee using Distributor’s financial
statements.  Yum! will notify UFPC of Distributor’s financial condition as
determined by Yum!.  If Distributor fails to meet the good financial criteria,
as defined by Yum!, UFPC will place Distributor on pending status and
Distributor may be required to: (i) submit a one year irrevocable letter of
credit in favor of UFPC equal to the highest thirteen consecutive weeks in the
past 52 week period of UFPC Sourcing Fees; or (ii) within three (3) business
days of such notice deposit all then collected Sourcing Fees that have not yet
been remitted to UFPC into a separate segregated bank account along with any
future collected Sourcing Fees until they are remitted to UFPC in accordance
with this Agreement.  In addition, to the extent Distributor purchases Products
directly from UFPC under its “Title Transaction” program, UFPC may require
Distributor to post an additional irrevocable one year letter of credit equal to
the highest thirteen consecutive weeks of purchases from UFPC in the past 52
week period times the current purchase price of such Products.  These letters of
credit will be required to be maintained until such time as Distributor
qualifies and is approved under Yum!’s financial criteria.  If required, all
letters of credit must be renewed for an additional one year period at least
sixty (60) calendar days prior to the then expiration date.

*
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION

 
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          (d)           UFPC may consider adopting other methods of guaranteeing
the collectability of UFPC’s Distributor receivable.

20.   Insurance. During the entire Term of this Agreement and any Participant
Joinder Agreement, Distributor shall maintain commercial general liability
insurance, including, but not limited to, public liability, completed operations
and product liability coverage, in amounts not less than those reasonably
required from time to time by Yum! and UFPC.  The insurance coverage required
herein shall be provided by an insurance company or companies with an A. M.
Best’s rating of A- or better. The insurance coverage shall be primary to any
coverage UFPC, the Participants and/or YUM! may have whether pursuant to or
independent of this Agreement or any Participant Joinder Agreement.  Distributor
agrees to furnish, together with its execution of this Agreement and thereafter
in advance of any annual renewal of or any relevant and material change in
Distributor’s insurance coverage, or upon the reasonable request of Yum!, UFPC
or any Participant, a fully complying current certificate of insurance for
Yum!’s and UFPC’s approval, which certificate shall list UFPC and its members
and affiliates; Yum! and its affiliates, all franchisees, licensees and the
current and former employees and agents of each of the foregoing companies as
additional insureds on Distributor’s commercial general liability policy
only.  Notwithstanding the foregoing, neither Yum!’s nor UFPC’s review or
approval of such certificate shall relieve Distributor to any degree of its
obligation to maintain the required coverage hereunder.  Distributor shall
notify YUM! and UFPC at least thirty (30) days in advance of any relevant and
material changes in Distributor’s insurance coverage.  Each certificate shall
indicate that the coverage represented thereby shall not be canceled, or
modified (to UFPC, Yum! or the Participants’ detriment), until at least thirty
(30) days prior written notice has been given to YUM! and UFPC.  The insurance
requirements set forth herein are minimum coverage requirements and are not to
be construed in any way as a limitation on Distributor’s liability under this
Agreement.

21.    Representations and Warranties.  Distributor represents and warrants to
UFPC, and UFPC represents and warrants to Distributor, that (a) each has full
power and authority to enter into this Agreement, and to observe and perform all
of such party’s obligations hereunder, (b) with respect to each party, the
execution, delivery and performance of this Agreement does not and will not
violate any provisions of law, or any provision of such party’s articles of
incorporation or bylaws, or any agreement by which such party is bound; and (c)
this Agreement is the legal, valid and binding obligation of each party
enforceable against such party in accordance with its terms.  The
representations and warranties contained herein shall survive the execution and
any termination of this Agreement. Distributor further represents and warrants
to UFPC that (a) Distributor has all required approvals of Yum! and (b)
Distributor is financially stable and is in compliance with UFPC’s credit
standards and policies.

22.   Confidentiality.  UFPC and Distributor acknowledge that as a result of the
matters provided for in this Agreement, trade secrets and information of a
proprietary or confidential nature relating to the business of the parties and
their affiliates may be disclosed to and/or developed by the parties including,
without limitation, information about trade secrets, agreements, Products,
services, goods and equipment, licenses, costs, sales and pricing information,
and any other information that may not be known generally or publicly
(collectively, “Confidential Information”).  The parties acknowledge that such
Confidential Information is generally not known in the trade and is of
considerable importance to the parties and their affiliates.  Each party
expressly agrees that during the Term of this Agreement and thereafter it will
hold in confidence and not disclose and not make use of any such Confidential
Information, except (a) as required pursuant to this Agreement, (b) for
disclosure to its directors, officers, employees, attorneys, advisors or agents
who need to review the Confidential Information in connection with the conduct
of its business (it being understood that such directors, officers, employees,
advisors and agents will be informed of the confidential nature of such
information), (c) as required in the course of any litigation or court
proceeding involving Distributor and UFPC and/or Participant concerning this
Agreement, (d) with the prior consent of the Distributor, UFPC and Participants
may discuss such

 
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information with another duly licensed Yum! System franchisee, or group or
association of Yum! System franchisees who have agreed to confidentiality
obligations with respect to Distributor’s Confidential Information at least as
restrictive as those set forth in this Section, and (e) for disclosure of
information that (i) was or becomes generally available to the public other than
as a result of a disclosure by its directors, officers, employees, advisors or
agents in breach of this provision, (ii) was available to it on a
non-confidential basis prior to disclosure to it pursuant hereto, (iii) is
obtained by it on a non-confidential basis from a source other than such persons
or their agents, which source is not prohibited from transmitting the
information by a confidentiality agreement or other legal or fiduciary
obligation, or (iv) has been authorized by the other party to be disseminated to
persons on a non-confidential basis.

23.   Account Managers.
 
        (a)           Distributor Account Manager.  During the Term, Distributor
shall make available to UFPC a dedicated account manager (“Distributor Account
Manager”) to assist in coordination, problem resolution and program management,
and to have day-to-day responsibility for making decisions
hereunder.  Distributor Account Manager will be reasonably accessible to UFPC
and Participants to discuss the course of dealing between Distributor and the
Participants under this Agreement and the Participant Joinder Agreements,
respectively.

        (b)           UFPC Account Manager.  During the Term, UFPC shall make
available to Distributor an account manager (“UFPC Account Manager”) to assist
in coordination, problem resolution and program management, and to have
day-to-day responsibility for making decisions hereunder.  The UFPC Account
Manager will be reasonably accessible to Distributor to discuss the course of
dealing between Distributor and the Participants under this Agreement and the
Participant Joinder Agreements, respectively.

        (c)           Cooperation.  The appropriate departments or personnel of
UFPC and Distributor shall work together to handle the day-to-day activities
with regard to the provision of Distribution Services and otherwise assist in
the facilitation of the parties’ respective responsibilities and obligation
under this Agreement and the Participant Joinder Agreements.  If there is an
issue or other problem that does not get resolved in the normal course,
Distributor Account Manager and the UFPC Account Manager shall communicate and
otherwise work together too effectively and efficiently share information,
address and resolve such issues or other problems associated with the provision
of Distribution Services.

24.   Notice of Material Adverse Change or Event.  Distributor shall provide to
UFPC prompt notice in writing of all material adverse changes or events. A
material adverse change or event shall include (a) any adverse or potentially
adverse material change in the financial condition, business or assets of
Distributor; (b) any happening or event that has materially adversely affected,
or can reasonably be expected to materially adversely affect, Distributor’s
financial condition, business or assets or cause its business to be carried on
materially less profitably than prior to the happening or event; (c) any damage,
destruction or loss suffered by Distributor, whether or not covered by
insurance, materially adversely affecting, or which can reasonably be expected
to materially adversely affect its financial condition, business or assets; (d)
any filing by Distributor of a petition of bankruptcy or similar petition under
any federal bankruptcy law or under any other law for the relief of debtors,
admission in writing of an inability to pay debts generally as they become due,
any insolvency in that Distributor’s total assets are in the aggregate worth
less than all of its liabilities or it is unable to pay its debts generally as
they become due, or any making of a general assignment for the benefit of
creditors, (e) any filing of a lawsuit or proceeding, materially adversely
affecting, or which can reasonably be expected to materially adversely affect,
its financial condition, business, or assets; and (f) any default or asserted or
imminent default under any written agreement between Distributor and UFPC or any
Operator.

 
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    25.   Compliance with Law.  During the Term of this Agreement, Distributor
shall comply with all federal, state and local laws, statutes, regulations, and
ordinances affecting or relating to its activities under this Agreement.

    26.   Assignability.  This Agreement and any rights or obligations granted
herein shall not be assigned, sublicensed, delegated or otherwise transferred by
either party, by operation of law or otherwise, without the prior written
consent of the other party.  Neither party shall be under any obligation to
consent to any proposed assignment.  Notwithstanding the foregoing, if a
Participant sells or transfers some or all of its Retail Outlets to a new
Operator which is financially stable and is able to satisfy the Credit Policies,
Participant may assign its Participant Joinder Agreement and any rights or
obligations granted therein to such new Operator with written notice to
Distributor.

    27.   Change in Control.  Distributor shall provide to UFPC prompt notice in
writing of any change in control of Distributor. A change in control means one
or more transactions or events in which, or after which, 25% or more of the
ownership or ability to control Distributor has changed from one person or
entity or group of persons or entities acting in concert to another person or
entity or group of persons or entities acting in concert that (i) does not have
a senior debt rating of at least A3 by Moody’s or A- by Standard and Poor’s or
(ii) controls, or is under common control with, a person or entity or group of
persons or entities that, directly or indirectly, compete with Yum! or any
concepts operated or franchised by Yum! in the quick service restaurant
industry.
 
    28.   Entire Agreement/Severability.  This Agreement, all of the Participant
Joinder Agreements and the Exhibits attached hereto and thereto, respectively
constitute the entire understanding and agreement between Distributor and UFPC
and supersede all prior and contemporaneous understandings and agreements,
whether oral or written, respecting this Agreement’s subject matter. This
Agreement may not be amended, modified or supplemented except by a writing
signed by both parties to this Agreement.   If any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid, illegal,
or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision hereof, and this Agreement
shall be construed as if such invalid, illegal, or unenforceable provision had
never been contained herein.

    29.   Relationship of the Parties.  Distributor is an independent contractor
with respect to its performance of its obligations hereunder.  Except as
provided in Section 7, nothing contained herein shall be deemed to create the
relationship of partner, principal and agent, or joint venture, between the
parties. Distributor has no right or authority to incur obligations of any kind
in the name of or for the account of, neither UFPC and/or the Participants nor
to commit or bind UFPC and/or the Participants to any contract or other
obligation.

    30.   Notice.  Unless specifically provided otherwise in this Agreement, all
notices and other communications required under this Agreement must be in
writing and shall be sufficiently given if delivered in person, by electronic
mail, by telecopy, by facsimile transmission or by certified or other receipted
mail as follows, and shall be deemed given upon receipt:

 
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If to Distributor:
President
       
McLane Foodservice, Inc.
       
2085 Midway Road
       
Carrollton, Texas 75006
               
In each case
       
with a copy to:
General Counsel
       
McLane Company, Inc.
       
4747 McLane Parkway
       
Temple, Texas 76504
               
If to UFPC:
Vice President of Distribution
       
Unified Foodservice Purchasing Co-op, LLC
       
950 Breckenridge Lane
       
Louisville, Kentucky 40207
               
In each case
       
with a copy to:
R. James Straus
       
Frost Brown Todd LLC
       
400 West Market Street, Suite 3200
       
Louisville, Kentucky 40202
   

 
Either party may by notice to the other change the addressee and address for
notices.
 
    31.   Non-Waiver.  No waiver of any provision of this Agreement will be
effective unless in writing and signed by an authorized representative of the
party intended to be bound.  No failure to exercise, delay in exercising, or
course of dealing, by or between Distributor or UFPC of any right, power, or
privilege granted hereunder, shall operate as a waiver of such right, power, or
privilege for future occurrences. The rights and remedies herein provided are
cumulative and not exclusive of any rights or remedies provided by law.
 
    32.   Benefit.  This Agreement shall inure to the benefit of and shall be
binding upon: UFPC its successors and assigns; Distributor, its successors and
assigns; and any person, firm, organization or corporation claiming through or
under UFPC or Distributor.  The Concept Co-ops and Participants are intended
third party beneficiaries of this Agreement.
 
    33.   Counterpart.  This Agreement may be executed in counterparts. Each of
such counterparts shall be deemed an original, but all such counterparts shall
together constitute one and the same instrument.
 
    34.   Governing Law.  This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Kentucky, without regard to its
conflict of law principles, and the laws of the United States applicable hereto.

    35.   Interpretation.  The captions used herein are inserted only as a
matter of convenience and for reference and in no way define, limit, or describe
the scope or the intent of any section or paragraph hereof.  Unless the context
otherwise requires, as used in this Agreement, all terms used in the singular
will be deemed to refer to the plural as well, and vice versa.  The words
“hereof,” “herein” and “hereunder” and words of similar import referring to this
Agreement refer to this Agreement as a whole and not to any particular provision
of this Agreement.  Whenever the words “include,” “includes” or “including” are
used in this Agreement, they will be deemed to be followed by the words “without
limitation.”  All Exhibits attached to this Agreement are hereby incorporated
herein by this reference.  Any reference to days herein means calendar days,
unless otherwise specified.

 
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    36.   Alternative Dispute Resolution.
 
        (a)           Mediation and Arbitration.  The parties shall attempt in
good faith to resolve by mediation any claim, dispute or controversy arising out
of or relating to this Agreement.  Either party may institute a mediation
proceeding by a request in writing to the other party.  Thereupon, both parties
will be obligated to engage in mediation.  The proceeding will be conducted in
Louisville, Kentucky in accordance with the then current Center of Public
Resources Model Procedure for Mediation of Business Disputes.  In the event that
the parties are unsuccessful in resolving the dispute via mediation, the parties
agree promptly to resolve any such claims, disputes and/or controversies through
binding confidential arbitration conducted in Louisville, Kentucky in accordance
with the then current Commercial Arbitration Rules of the American Arbitration
Association (the “AAA”); provided, one neutral arbitrator shall be chosen in
accordance with such rules to arbitrate the dispute. The parties irrevocably
consent to such jurisdiction for purposes of said arbitration, and judgment may
be entered thereon in any state or federal court in the same manner as if the
parties were residents of the state or federal district in which said judgment
is sought to be entered.  All applicable statutes of limitations and defenses
based upon the passage of time shall be tolled while the requirements of this
Section are being followed.  The mediation and arbitration provisions contained
in this section shall be limited to disputes between Distributor and UFPC and/or
Yum!.
 
        (b)           Injunctive Relief.  Nothing contained in Section 36(a)
shall bar the right of any of the parties to seek and obtain temporary
injunctive relief from a court of competent jurisdiction in accordance with
applicable law against threatened conduct that will cause loss or damage,
pending initiation and/or completion of the arbitration.
 
    37.           No Drafting Penalty.  The parties each acknowledge that the
terms and conditions of this Agreement have been the subject of active and
complete negotiations, and that such terms and conditions should not be
construed in favor of or against any party by reason of the extent to which any
party or its professional advisors participated in the preparation of this
Agreement.  Neither party to this Agreement shall be deemed to be the drafter of
any of the provisions of this Agreement.  No party hereto shall thus take any
position in any dispute resolution proceeding or otherwise that any vague or
ambiguous provisions of this Agreement should be construed against another party
hereto simply because such other party may have actually drafted such
provision.  No implication shall be drawn from the drafting history of this
Agreement and such drafting history shall not be admissible as evidence of the
intended meaning of any provision of this Agreement or construed against any
party.

[Signature Page to Follow]

 
31

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have signed this Agreement on the date first set
forth above but actually on the dates indicated below.
 

 
UNIFIED FOODSERVICE PURCHASING CO-OP, LLC
         
By  /s/ Daniel E. Woodside
         
Name:  Daniel E. Woodside
         
Title:  President and CEO
         
Date:  5/26/10
               
MCLANE FOODSERVICE, INC.
         
By  /s/ Susan Adzick
         
Name:  Susan Adzick
         
Title:  Vice President, Sales and Marketing
         
Date:  5/25/10
 

 
 
                                                    

[Signature Page to Master Distribution Agreement]

 
32

--------------------------------------------------------------------------------

 

EXHIBIT A

DISTRIBUTION AREA

DC
Address
City
State
Zip
McLane - Albany #160
Northeast Industrial Park, #22
Guilderland Center
NY
12085
McLane - Arlington #135
3901 Scientific Drive
Arlington
TX
76014
McLane - Atlanta #166
3500 South Corporate Parkway
Forest Park
GA
30297
McLane - Burlington #159
600 Commerce Road
Burlington Township
NJ
08016
McLane - Charlotte #164
55 O’Dell School Road
Concord
NC
28025
McLane - Cincinnati #153
1985 International Way
Hebron
KY
41048
McLane - Denver #121
19500 East 34th Drive
Aurora
CO
80011
McLane - Houston #129
330 Greens Landing
Houston
TX
77038
McLane - Kansas City #132
8200 Monticello
Shawnee
KS
66227
McLane - Manassas #162
7501 Century Park Drive
Manassas
VA
20109
McLane - Memphis #142
6415 Shelby View Drive
Memphis
TN
38134
McLane - Milwaukee #141
1906 Grandview Parkway
Sturtevant
WI
53177
McLane - Orlando #170
2444 Tradeport
Orlando
FL
32824
McLane - Phoenix #112
1825 South 43rd Ave, Suite #C
Phoenix
AZ
85009
McLane - Plymouth #149
14835 Pilot Drive
Plymouth
MI
48170
McLane - Portland #101
7319 SW Kable Ln, Suite 500
Portland
OR
97224
McLane - Riverside #103
14813 Meridian Parkway
Riverside
CA
92518
McLane - Tracy #102
800 East Pescadero Drive
Tracy
CA
95304

EXHIBIT A – PAGE 1
 
 

--------------------------------------------------------------------------------

 

EXHIBIT C

A&W SPECIFIC TERMS AND CONDITIONS

Markup Schedule-National:
 
The following markups shall be added to the respective Landed Costs for the
applicable Products sold and delivered under this Agreement, and shall be
applicable for all of Distributor’s distribution centers (each, a “DC”) which
provide Distribution Services to A&W Brand Retail Outlets as of 8/1/2010.
 
2011:
General Full Case Markup
*
 
BNB Beverages
*
 
Break Case Markup
*
     

Break Case is any item for which Distributor is required to break the exterior
case (i.e., disposable gloves).
 
Excluded Products:
 
Products which Participant is not required to purchase from Distributor under
this Agreement – * (“Excluded Products”).
 
Annual Markup Adjustments:
 
On January 1 of each year of the Initial Term, beginning on January 1, 2012,
each flat case markup shall be adjusted according to the following schedule
(“Annual Markup”):
 
Annual Markup Adjustment
Effective Period
   
*
January 1, 2012-December 31, 2012
*
January 1, 2013-December 31, 2013
*
January 1, 2014-December 31, 2014
*
January 1, 2015-December 31, 2015
*
January 1, 2016-December 31, 2016

Any subsequent Renewal Terms will carry an adjustment of * for each Renewal
Term.
 
Additionally, in the event of an increase in the Consumer Price Index (“CPI
Increase”) that exceeds * during any Measurement Period, an additional * will be
added to such Annual Markup adjustment for each * increase in the Consumer Price
Index (“CPI”) that is more than a * increase.  “CPI” will be determined based
upon “United States Department of Labor Statistics (BLS), Consumer Price Index –
All Urban Consumers (www.bls.gov).”  The measurement period for a CPI Increase
shall be from November to November.
 
By way of example only, if the actual change in CPI from November to the
subsequent November is *, an additional * would be added to the applicable
Annual Markup for the subsequent year, beginning on January 1st.  If the actual
change in CPI from November to the subsequent November is *, an additional *
would be added to the applicable Annual Markup for the subsequent year,
beginning on January 1st.
 

 
*
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION

 

EXHIBIT C – PAGE 1
 
 

--------------------------------------------------------------------------------

 

 
Drop Size Discount/Surcharge:
 
Participant shall receive an on-invoice Drop Size Discount/Surcharge, based upon
the total number of cases delivered, during each regularly scheduled delivery.
 
< 65 cases
*
> 95 cases
*

Payment Terms:
 
Net * days (subject to terms and conditions in Section 2(l) and Exhibit K of
this Agreement).
 
Prompt Pay Discount:
 
Distributor shall make prompt pay discounts available to Participant and its
affiliates for * days payment, according to a progressive scale over the
Term.  Participant will be eligible to begin receiving a prompt pay discount
January 1, 2013 at a rate of * of the then calculated rate, increasing to * in
2014, * in 2015, and * in 2016.
 
*
*
*
*

To receive a prompt pay discount at * days Participant and all its affiliates
must make payments via electronic funds transfer.  Prompt pay discounts will not
be made available to Participant or any of its affiliates if any past due
balance exists.  The prompt pay discount available for a calendar quarter shall
be calculated on the first business day of such calendar quarter using (x) a
discount rate which is the greater of (i) * or (ii) * (provided however that
such discount rate shall not exceed *), multiplied by (y) *.
 
Non-Exclusive Fee:  If Participant or any affiliate of Participant fails to
purchase from Distributor substantially all of the Products used or sold in the
Retail Outlets, but excluding Excluded Products and any Products provided by a
distribution company or companies other than Distributor under and in accordance
with Section 6(b) of the Agreement (such excluded Products, the “Non-Exclusive
Products”), Distributor may assess Participant a fee of * for Products purchased
from Distributor, other than Non-Exclusive Products; provided, however, that the
foregoing fee shall not apply if Participant makes incidental purchases of any
Product in emergency situations or if Participant purchases any Product from
alternative Suppliers during periods when Distributor is unable to supply any
one or more of the Retail Outlets.
 
Restocking Fee:  For any Products returned by Participant for any reason other
than Distributor delivery error, Distributor may impose and Participant shall
pay a restocking fee of *.
 
Deliveries:  Not less than two times per week, unless by mutual consent.
 
Black-Out Periods:  The Black-Out Periods are as follows:  * and * Distributor
must complete a delivery by *, unless the delivery is a Key Drop Delivery.
 
Open Windows Discount:  Distributor agrees to an on-invoice discount of * for
scheduled delivery access to all Participant’s Retail Outlets serviced by
Distributor, excluding the previously discussed Black-Out Periods (includes
potential key deliveries) (“Open Windows Discount”).  This Open Windows Discount
enables Distributor to develop more cost efficient delivery routes, and to pass
on these efficiencies  to the Participants that agree to the process.  Specific
Retail Outlets may be excluded for reasons of safety, or certain local
restrictions, but only with the mutual consent of Participant and the
Distributor General Manager.
 
*
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION

 

EXHIBIT C – PAGE 2
 
 

--------------------------------------------------------------------------------

 

 
*.
 

 
Service Level Requirements:
 

 
2011
2012
2013
2014
2015
2016
             
On Time Delivery
*
*
*
*
*
*
Delivery Compliance
*
*
*
*
*
*
Perfect Orders
*
*
*
*
*
*
Sales Compliance
*
*
*
*
*
*

*
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION

EXHIBIT C – PAGE 3
 
 

--------------------------------------------------------------------------------

 

EXHIBIT D

KFC SPECIFIC TERMS AND CONDITIONS

KFC CORPORATION

Markup Schedule-National:
 
The following markups shall be added to the respective Landed Costs paid for the
application Products sold and delivered under this Agreement, and shall be
applicable for all of Distributor’s distribution centers (each, a “DC”) which
provide Distribution Services to KFC Brand Retail Outlets.
 
2011:
General Full Case Markup
*
 
BNB Beverages
*
 
Break Case Markup
*

 
Fresh Poultry markup *, but, will be subject to change on a DC-by-DC basis with
* days notice, to reflect market related changes.
 
Break Case is any item for which Distributor is required to break the exterior
case (i.e., disposable gloves).
 
Excluded Products:
 
Products which Participant is not required to purchase from Distributor under
this Agreement — * (“Excluded Products”).
 
Market Share Discount:
 
Distributor agrees to a reduction in the then-current per case markup, based
upon the following net gains in new KFC Brand Retail Outlets that execute a
Participant Joinder Agreement and become subject to this Agreement during the
Term:
 
Net Retail Outlets
Gained                                                                           Markup
Reduction
(Thresholds)
 
*                                                                *
 
*                                                                *
 
*                                                                *
 
The markup reduction would become effective at the beginning of the pricing
period following the attainment of the applicable threshold of Retail Outlets.
 
Annual Markup Adjustments:
 
On January 1 of each year of the Initial Term beginning on January 1, 2012, each
flat case markup shall be adjusted according to the following schedule (“Annual
Markup”):

*
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION

EXHIBIT D – PAGE 1
 
 

--------------------------------------------------------------------------------

 

Annual Markup Adjustment
Effective Period
   
*
January 1, 2012-December 31, 2012
*
January 1, 2013-December 31, 2013
*
January 1, 2014-December 31, 2014
*
January 1, 2015-December 31, 2015
*
January 1, 2016-December 31, 2016

Any subsequent Renewal Terms will carry an adjustment of * per case for each
Renewal Term.
 
Additionally, in the event of an increase in the Consumer Price Index (“CPI
Increase”) that exceeds * during any Measurement Period, an additional * will be
added to such Annual Markup adjustment for each * increase in the Consumer Price
Index (“CPI”) that is more than a * increase.  “CPI” will be determined based
upon “United States Department of Labor statistics (BLS), Consumer Price Index –
All Urban Consumers (www.bls.gov).”  The measurement period for a CPI Increase
shall be from November to November.
 
By way of example only, if the actual change in CPI from November to the
subsequent November is *, an additional * would be added to the applicable
Annual Markup for the subsequent year, beginning on January 1st.  If the actual
change in CPI from November to the subsequent November is *, an additional *
would be added to the applicable Annual Markup for the subsequent year,
beginning on January 1st.
 
Loyalty Discount:
 
If Participant and all of its affiliates utilize Distributor to service all of
their respective Retail Outlets to which Distributor offers Distribution
Service, Participant shall receive an on-invoice loyalty discount of $0.04/case
for Products sold and delivered under this Agreement; *.  “affiliate”, for
purpose of this paragraph, and with respect to an entity or individual, means
any other entity (including a corporation, partnership, joint venture, trust,
limited liability company, limited liability partnership, association or other
organization or entity) or individual that directly or indirectly holds any
ownership interest, or has any control, or is controlled by, or under common
control with such entity or individual.  “control” (and its derivatives)
means:  (a) the legal, beneficial, or equitable ownership, directly or
indirectly, of (i) of any of the voting equity interests in an entity or (ii)
equity interests having the right to any of the profits of an entity or, in the
event of dissolution, to any of the assets of such entity; or (b) the right to
appoint, directly or indirectly, any member of the board of directors; or (c)
the right to direct, directly or indirectly, the management or direction of the
entity by contract or corporate governance document; or (d) in the case of a
partnership, the holding by an entity (or one of its affiliates) of the position
of a general partner.
 
Payment Terms:
 
Net * days (subject to terms and conditions in Section 2(l) and Exhibit K of
this Agreement).
 

 

 

 

 
*
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION

 

EXHIBIT D – PAGE 2
 
 

--------------------------------------------------------------------------------

 

 
Prompt Pay Discount:
 
Distributor shall make prompt pay discounts available to Participant and its
affiliates for * days payment, according to a progressive scale over the
Term.  Participant will be eligible to begin receiving a prompt pay discount
January 1, 2013 at a rate of * of the then calculated rate, increasing to * in
2014, * in 2015, and * in 2016.  To receive a prompt pay discount at * days
Participant and all its affiliates must make payments via electronic funds
transfer.  Prompt pay discounts will not be made available to Participant or any
of its affiliates if any past due balance exists.  The prompt pay discount
available for a calendar quarter shall be calculated on the first business day
of such calendar quarter using a discount rate which is the greater of (i) * or
(ii) *.
 
Non-Exclusive Fee:  If Participant or any affiliate of Participant fails to
purchase from Distributor substantially all of the Products used or sold in
Participant’s and its affiliates’ Retail Outlets, but excluding the Excluded
Products and any Products provided by a distribution company or companies other
than Distributor under and in accordance with Section 6(b) of the Agreement
(collectively, the “Non-Exclusive Products”), Distributor may assess Participant
a fee of * for Products purchased from Distributor, other than the Non-Exclusive
Products; provided, however, that the foregoing fee shall not apply if
Participant makes incidental purchases of any Product in emergency situations or
if Participant purchases any Product from alternative Suppliers during periods
when Distributor is unable to supply any one or more of the Retail Outlets.
 
Restocking Fee:  For any Products returned by Participant for any reason other
than Distributor delivery error, Distributor may impose and Participant shall
pay a restocking fee of *.
 
Deliveries:  Not less than two times per week, unless by mutual consent.
 
Black- Out Periods:
 
* and * each day.
 
Open Windows Discount:  Distributor agrees to an on-invoice discount of * for
scheduled delivery access to all of Participant’s Retail Outlets serviced by
Distributor, excluding the previously discussed Black-Out Periods (includes
potential Key Drop Deliveries) (“Open Windows Discount”).  This Open Windows
Discount enables Distributor to develop more cost efficient delivery routes, and
to pass on these efficiencies to the Participants that agree to the
process.  Specific Retail Outlets may be excluded for reasons of safety, or
certain local restrictions, but only with the mutual consent of Participant and
the Distributor General Manager.
 
Home Office Tools:  Distributor has developed and uses a proprietary chain
restaurant management software product called “Home Office Tools” (“HOT
Software”) which interfaces with the “Merit” software used at many KFC Retail
Outlets.  It also has developed operating instructions and manuals as well as
Web Site access with end-user documentation (collectively, the
“Documentation”).  Distributor grants to Participant a royalty-free, limited,
non-exclusive license to access and use, only in connection with Participant’s
and its affiliates’ respective internal business purposes and direct benefit and
not for the internal purposes of any third party, the HOT Software and
Documentation.  Distributor also will make available to Participant the
technical support services offered generally by Distributor to its customers
from time-to-time and which may include:
 
 
Reasonable amount of telephone, facsimile or electronic mail consultation
regarding the HOT Software installation and on-going operation during normal
business hours.

 
 
Software updates as provided generally by Distributor to its customers.

 
*
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION

 

EXHIBIT D – PAGE 3
 
 

--------------------------------------------------------------------------------

 

 
 
Any Documentation updates as made generally available by Distributor to its
customers from time-to-time.

 
Participant acknowledges, on behalf of itself and its affiliates, that (i) all
HOT Software and Documentation is licensed and not sold and that Participant
does not acquire any express or implied rights in the HOT Software or
Documentation other than those specified in this Agreement.  Distributor shall
retain all rights, title, interest, including intellectual property rights, in
the HOT Software and Documentation.
 
The HOT Software and the Documentation are Confidential Information of
Distributor, and are subject to the confidentiality obligations of Participant
under the Participant Joinder Agreement.  Upon the expiration or termination of
the Participant Joinder Agreement, Participant shall, and cause its affiliates
to, stop use of the HOT Software, return to Distributor within ten (10) business
days of expiration or termination all copies of any Documentation and give
Distributor written certification that Participant and its affiliates have
complied with all of their obligations under this paragraph.
 
DISTRIBUTOR MAKES NO REPRESENTATIONS OR WARRANTIES REGARDING THE HOT SOFTWARE OR
THE DOCUMENTATION.  TO THE EXTENT ALLOWED BY LAW, DISTRIBUTOR DISCLAIMS AND
EXCLUDES ALL EXPRESSED, IMPLIED AND STATUTORY WARRANTIES OR CONDITIONS,
INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NON-INFRINGEMENT, AND SKILL AND CARE.  DISTRIBUTOR DOES NOT WARRANT
THAT THE HOT SOFTWARE OR THE DOCUMENTATION, OR THE SUPPORT SERVICES WILL BE
WITHOUT DEFECT OR ERROR, SATISFY PARTICIPANT’S REQUIREMENTS, OR PROVIDE
UNINTERRUPTED USE OF THE HOT SOFTWARE.  DISTRIBUTOR DOES NOT WARRANT THAT THE
HOT SOFTWARE SHALL OPERATE WITH ANY HARDWARE OR SOFTWARE OTHER THAN AS SPECIFIED
IN THE DOCUMENTATION.
 
*.
 

 

 

 

 
Service Level Requirements:
 

 
2011
2012
2013
2014
2015
2016
On Time Delivery
*
*
*
*
*
*
Delivery Compliance
*
*
*
*
*
*
Perfect Orders
*
*
*
*
*
*
Sales Compliance
*
*
*
*
*
*

 
*
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION

 

EXHIBIT D – PAGE 4
 
 

--------------------------------------------------------------------------------

 

 
UFPC will use its commercially reasonable efforts to align UFPC designated fresh
poultry Supplier ship points with Distributor’s respective distribution centers
in such a manner that the Landed Costs for Products provided from Distributor’s
distribution centers, respectively, are competitive to the Landed Costs for
similar products (food and paper or poultry only) provided by other
distributor(s) providing distribution services from distribution centers in the
same general geographic area; providing that this does not restrict UFPC’s
capability to maintain proper supply of fresh poultry within any distribution
center.
 

EXHIBIT D – PAGE 5
 
 

--------------------------------------------------------------------------------

 

EXHIBIT E

LJS SPECIFIC TERMS AND CONDITIONS

Markup Schedule-National:
 
The following markups shall be added to the respective Landed Costs for the
applicable Products sold and delivered under this Agreement, and shall be
applicable for all of Distributor’s distribution centers (each, a “DC”) which
provide Distribution Services to LJS Retail Outlets.
 
2011:
General Full Case Markup
*
 
BNB Beverages
*
 
Break Case Markup
*
     

 
Break Case is any item for which Distributor is required to break the exterior
case (i.e., disposable gloves).
 
Excluded Products:
 
Products which Participant is not required to purchase from Distributor under
this Agreement – * (“Excluded Products”).
 
Annual Markup Adjustments:
 
On January 1 of each year of the Initial Term, beginning on January 1, 2012,
each flat case markup shall be adjusted according to the following schedule
(“Annual Markup”):
 
Annual Markup Adjustment
Effective Period
*
January 1, 2012-December 31, 2012
*
January 1, 2013-December 31, 2013
*
January 1, 2014-December 31, 2014
*
January 1, 2015-December 31, 2015
*
January 1, 2016-December 31, 2016
   

Any subsequent Renewal Terms would carry an adjustment of * for each Renewal
Term.

 
Additionally, in the event of an increase in the Consumer Price Index (“CPI
Increase”) that exceeds * during any Measurement Period, an additional * will be
added to such Annual Markup adjustment for each * increase in the Consumer Price
Index (“CPI”) that is more than a * increase.  “CPI” will be determined based
upon “United States Department of Labor Statistics (BLS), Consumer Price Index –
All Urban Consumers (www.bls.gov).”  The measurement period for a CPI Increase
shall be from November to November.
 
By way of example only, if the actual change in CPI from November to the
subsequent November is *, an additional * would be added to the applicable
Annual Markup for the subsequent year, beginning on January 1st.  If the actual
change in CPI from November to the subsequent November is *, an additional *
would be added to the applicable Annual Markup for the subsequent year,
beginning on January 1st.
 

 
*
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION

 

EXHIBIT E – PAGE 1
 
 

--------------------------------------------------------------------------------

 

 
Loyalty Discount:
 
If Participant and all of its affiliates utilize Distributor to service all of
their respective Retail Outlets to which Distributor offers Distribution
Service, Participant shall receive an on-invoice loyalty discount of $0.04/case
for Products sold and delivered under this Agreement; *.  “affiliate”, for
purpose of this paragraph, and with respect to an entity or individual, means
any other entity (including a corporation, partnership, joint venture, trust,
limited liability company, limited liability partnership, association or other
organization or entity) or individual that directly or indirectly holds any
ownership interest, or has any control, or is controlled by, or under common
control with such entity or individual.  “control” (and its derivatives)
means:  (a) the legal, beneficial, or equitable ownership, directly or
indirectly, of (i) of any of the voting equity interests in an entity or (ii)
equity interests having the right to any of the profits of an entity or, in the
event of dissolution, to any of the assets of such entity; or (b) the right to
appoint, directly or indirectly, any member of the board of directors; or (c)
the right to direct, directly or indirectly, the management or direction of the
entity by contract or corporate governance document; or (d) in the case of a
partnership, the holding by an entity (or one of its affiliates) of the position
of a general partner.
 
Drop Size Discount/Surcharge:
 
Participant shall receive an on-invoice Drop Size Discount/Surcharge, based upon
the total number of cases delivered, during each regularly scheduled delivery.
 
< * cases                                *
 
> * cases                                *
 
Payment Terms:
 
Net * days (subject to terms and conditions in Section 2(l) and Exhibit K of
this Agreement).
 
Prompt Pay Discount:
 
Distributor shall make prompt pay discounts available to Participant and its
affiliates for * days payment, according to a progressive scale over the
Term.  Participant will be eligible to begin receiving a prompt pay discount
January 1, 2013 at a rate of * of the then calculated rate, increasing to * in
2014, twenty percent (20%) in 2015, and * in 2016. To receive a prompt pay
discount at * days Participant and all its affiliates must make payments via
electronic funds transfer.  Prompt pay discounts will not be made available to
Participant or any of its affiliates if any past due balance exists.  The prompt
pay discount available for a calendar quarter shall be calculated on the first
business day of such calendar quarter using (x) a discount rate which is the
greater of (i) * or (ii) * (provided however that such discount rate shall not
exceed *), multiplied by (y) *.
 
Non-Exclusive Fee:  If Participant or any affiliate of Participant fails to
purchase from Distributor substantially all of the Products used or sold in
Participant’s and its affiliates’ Retail Outlets, but excluding Excluded
Products and any Products provided by a distribution company or companies other
than Distributor under and in accordance with Section 6(b) of the Agreement
(collectively, the “Non-Exclusive Products”), Distributor may assess Participant
a fee of * for Products purchased from Distributor, other than Non-Exclusive
Products; provided, however, that the foregoing fee shall not apply if
Participant makes incidental purchases of any Product in emergency situations of
if Participant purchases any Product from alternative Suppliers during periods
when Distributor is unable to supply any one or more of the Retail Outlets.
 

 
*
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION

 

EXHIBIT E – PAGE 2
 
 

--------------------------------------------------------------------------------

 

 
Restocking Fee:  For any Products returned by Participant for any reason other
than Distributor delivery error, Distributor may impose and Participant shall
pay a restocking fee of *.
 
Deliveries:  Not less than two times per week, unless by mutual consent.
 
Black-Out Periods:
 
* and * each day and completed by * unless a key drop delivery.
 
Open Windows Discount:  Distributor agrees to an on-invoice discount of * for
scheduled delivery access to all Participant’s Retail Outlets serviced by
Distributor, excluding the previously discussed Black-Out Periods (includes
potential key deliveries) (“Open Windows Discount”).  This Open Windows Discount
enables Distributor to develop more cost efficient delivery routes, and to pass
on these efficiencies  to the Participants that agree to the process.  Specific
Retail Outlets may be excluded for reasons of safety, or certain local
restrictions, but only with the mutual consent of Participant and the
Distributor General Manager.
 
*.
 

 
Service Level Requirements:
 

 
2011
2012
2013
2014
2015
2016
On Time Delivery
*
*
*
*
*
*
Delivery Compliance
*
*
*
*
*
*
Perfect Orders
*
*
*
*
*
*
Sales Compliance
*
*
*
*
*
*

 

*
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION

EXHIBIT E – PAGE 3
 
 

--------------------------------------------------------------------------------

 

EXHIBIT F

PIZZA HUT SPECIFIC TERMS AND CONDITIONS

PIZZA HUT, INC.

Markup Schedule-National:
The following markups shall be added to the respective Landed Costs for the
applicable Products sold and delivered under this Agreement, and shall be
applicable for all of Distributor’s distribution centers (each, a “DC”) which
provide Distribution Services to Pizza Hut - Corporate Retail Outlets.

General Full Case Markup *
Cheese *
BNB Beverages National price
Break Case Markup  *

Break Case is any item for which Distributor is required to break the exterior
case (i.e., disposable gloves).

Excluded Products:

Products which Participant is not required to purchase from Distributor under
this Agreement — * (“Excluded Products”).

Annual Markup Adjustments:
On January 1 of each year of the Initial Term, beginning on January 1, 2012,
each flat case markup shall be adjusted according to the following schedule
(“Annual Markup”):

Annual Markup Adjustment
Effective Period
   
*
January 1, 2012-December 31, 2012
*
January 1, 2013-December 31, 2013
*
January 1, 2014-December 31, 2014
*
January 1, 2015-December 31, 2015
*
January 1, 2016-December 31, 2016

Any subsequent Renewal Terms will carry an adjustment of * for each Renewal
Term.

Additionally, in the event of an increase in the Consumer Price Index (“CPI
Increase”) that exceeds * during any Measurement Period, an additional * will be
added to such Annual Markup adjustment for each * increase in the Consumer Price
Index (“CPI”) that is more than a * increase.  “CPI” will be determined based
upon “United States Department of Labor Statistics (BLS), Consumer Price Index –
All Urban Consumers (www.bls.gov).”  The measurement period for a CPI Increase
shall be from November to November.

By way of example only, if the actual change in CPI from November to the
subsequent November is *, an additional * would be added to the applicable
Annual Markup for the subsequent year, beginning on January 1st.  If the actual
change in CPI from November to the subsequent November is *, an additional *
would be added to the applicable Annual Markup for the subsequent year,
beginning on January 1st.
 

 
*
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION

 

EXHIBIT F – PAGE 1
 
 

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Loyalty Discount:
 
If Participant and all of its affiliates utilize Distributor to service all of
their respective Retail Outlets to which Distributor offers Distribution
Service, Participant shall receive an on-invoice loyalty discount of $0.04/case
for Products sold and delivered under this Agreement; *.  “affiliate”, for
purpose of this paragraph, and with respect to an entity or individual, means
any other entity (including a corporation, partnership, joint venture, trust,
limited liability company, limited liability partnership, association or other
organization or entity) or individual that directly or indirectly holds any
ownership interest, or has any control, or is controlled by, or under common
control with such entity or individual.  “control” (and its derivatives)
means:  (a) the legal, beneficial, or equitable ownership, directly or
indirectly, of (i) of any of the voting equity interests in an entity or (ii)
equity interests having the right to any of the profits of an entity or, in the
event of dissolution, to any of the assets of such entity; or (b) the right to
appoint, directly or indirectly, any member of the board of directors; or (c)
the right to direct, directly or indirectly, the management or direction of the
entity by contract or corporate governance document; or (d) in the case of a
partnership, the holding by an entity (or one of its affiliates) of the position
of a general partner.
 
Payment Terms:
 
Net * days (subject to the terms and conditions in Section 2(l) and Exhibit K of
this Agreement).
 
Prompt Pay Discount:
 
Distributor shall make prompt pay discounts available to Participant and its
affiliates for * days payment, according to a progressive scale over the
Term.  Participant will be eligible to begin receiving a prompt pay discount
January 1, 2013 at a rate of *of the then calculated rate, increasing to * in
2014, * in 2015, and * in 2016.  To receive a prompt pay discount at * days,
Participant and all its affiliates must make payments via electronic funds
transfer.  Prompt pay discounts will not be made available to Participant or any
of its affiliates if any past due balance exists.  The prompt pay discount
available for a calendar quarter shall be calculated on the first business day
of such calendar quarter using a discount rate which is the greater of (i) * or
(ii) *.
 
Non-Exclusive Fee:  If Participant or any affiliate of Participant fails to
purchase from Distributor substantially all of the Products used or sold in the
Retail Outlets, but excluding the Excluded Products and any Products provided by
a distribution company or companies other than Distributor under and in
accordance with Section 6(b) of the Agreement (collectively, the “Non-Exclusive
Products”), Distributor may assess Participant a fee of * for Products purchased
from Distributor, other than Non-Exclusive Products; provided, however, that the
foregoing fee shall not apply if Participant makes incidental purchases of any
Product in emergency situations or if Participant purchases any Product from
alternative Suppliers during periods when Distributor is unable to supply any
one or more of the Retail Outlets.
 

 

 

 

 

 

 
*
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION

 

EXHIBIT F – PAGE 2
 
 

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Restocking Fee:  For any Products returned by Participant for any reason other
than Distributor delivery error, Distributor may impose and Participant shall
pay a restocking fee of *.
 
Deliveries:  Not less than two times per week, unless by mutual consent.
 
Black-Out Periods:
 
* and *.
 
Open Windows Discount:
 
Distributor agrees to an on-invoice discount of * for scheduled delivery access
to all Participant’s Retail Outlets serviced by Distributor, excluding the
previously discussed Black-Out Periods (includes potential Key Drop Deliveries)
(“Open Windows Discount”).  This Open Windows Discount enables Distributor to
develop more cost efficient delivery routes, and to pass on these efficiencies
to the Participants that agree to the process.  Specific Retail Outlets may be
excluded for reasons of safety, or certain local restrictions, but only with the
mutual consent of Participant and the Distributor General Manager.
 
*.
 

 
Service Level Requirements:

 
2011
2012
2013
2014
2015
2016
On Time Delivery
*
*
*
*
*
*
Delivery Compliance
*
*
*
*
*
*
Perfect Orders
*
*
*
*
*
*
Sales Compliance
*
*
*
*
*
*

*
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION

EXHIBIT F – PAGE 3
 
 

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EXHIBIT G

TACO BELL SPECIFIC TERMS AND CONDITIONS
 
TACO BELL CORP.
 

Markup Schedule-National:
 
The following markups shall be added to the respective Landed Costs for the
applicable Products sold and delivered under this Agreement, and shall be
applicable for all of Distributor’s distribution centers (each, a “DC”) which
provide Distribution Services to Taco Bell Corp. Retail Outlets.
 
General Full Case Markup
*
BNB Beverages
*
Break Case Markup
*

 
Break Case is any item for which Distributor is required to break the exterior
case (i.e., disposable gloves).
 
Excluded Products:
 
Products which Participant is not required to purchase from Distributor under
this Agreement — * (“Excluded Products”).
 
Annual Markup Adjustments:
 
On January 1 of each year of the Initial Term, beginning on January 1, 2012,
each flat case markup shall be adjusted according to the following schedule
(“Annual Markup”):
 
Annual Markup Adjustment
Effective Period
*
 
January 1, 2012-December 31, 2012
*
 
January 1, 2013-December 31, 2013
*
 
January 1, 2014-December 31, 2014
*
 
January 1, 2015-December 31, 2015
*
 
January 1, 2016-December 31, 2016
     

Any subsequent Renewal Terms will carry an adjustment of * per case for each
Renewal Term.
 
Additionally, in the event of an increase in the Consumer Price Index (“CPI
Increase”) that exceeds * during any Measurement Period, an additional * will be
added to such Annual Markup adjustment for each * increase in the Consumer Price
Index (“CPI”) that is more than a * increase.  “CPI” will be determined based
upon “United States Department of Labor Statistics (BLS), Consumer Price Index –
All Urban Consumers (www.bls.gov).”  The measurement period for a CPI Increase
shall be from November to November.
 
By way of example only, if the actual change in CPI from November to the
subsequent November is *, an additional * would be added to the applicable
Annual Markup for the subsequent year, beginning on January 1st.  If the actual
change in CPI from November to the subsequent November is *, an additional *
would be added to the applicable Annual Markup for the subsequent year,
beginning on January 1st.
 

 
*
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION

 

EXHIBIT G – PAGE 1
 
 

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Loyalty Discount:
 
If Participant and all of its affiliates utilize Distributor to service all of
their respective Retail Outlets to which Distributor offers Distribution
Service, Participant shall receive an on-invoice loyalty discount of $0.04/case
for Products sold and delivered under this Agreement; *, “affiliate”, for
purpose of this paragraph, and with respect to an entity or individual, means
any other entity (including a corporation, partnership, joint venture, trust,
limited liability company, limited liability partnership, association or other
organization or entity) or individual that directly or indirectly holds any
ownership interest, or has any control, or is controlled by, or under common
control with such entity or individual.  “control” (and its derivatives)
means:  (a) the legal, beneficial, or equitable ownership, directly or
indirectly, of (i) of any of the voting equity interests in an entity or (ii)
equity interests having the right to any of the profits of an entity or, in the
event of dissolution, to any of the assets of such entity; or (b) the right to
appoint, directly or indirectly, any member of the board of directors; or (c)
the right to direct, directly or indirectly, the management or direction of the
entity by contract or corporate governance document; or (d) in the case of a
partnership, the holding by an entity (or one of its affiliates) of the position
of a general partner.
 
Payment Terms:
 
Net * days (subject to the terms and conditions in Section 2(l) and Exhibit K of
this Agreement).
 
Prompt Pay Discount:
 
Distributor shall make prompt pay discounts available to Participant and its
affiliates for * days payment, according to a progressive scale over the
Term.  Participant will be eligible to begin receiving a prompt pay discount
January 1, 2013 at a rate of * of the then calculated rate, increasing to * in
2014, * in 2015, and * in 2016.  To receive a prompt pay discount at * days
Participant and all its affiliates must make payments via electronic funds
transfer.  Prompt pay discounts will not be made available to Participant or any
of its affiliates if any past due balance exists.  The prompt pay discount
available for a calendar quarter shall be calculated on the first business day
of such calendar quarter using a discount rate which is the greater of (i) * or
(ii) *.
 
Non-Exclusive Fee:  If Participant or any affiliate of Participant fails to
purchase from Distributor substantially all of the Products used or sold in the
Retail Outlets, but excluding the Excluded Products and any Products provided by
a distribution company or companies other than Distributor under and in
accordance with Section 6(b) of the Agreement (collectively, the “Non-Exclusive
Products”), Distributor may assess Participant a fee of * for Products purchased
from Distributor, other than Non-Exclusive Products; provided, however, that the
foregoing fee shall not apply if Participant makes incidental purchases of any
Product in emergency situations or if Participant purchases any Product from
alternative Suppliers during periods when Distributor is unable to supply any
one or more of the Retail Outlets.
 

 

 

 

 

 

 
*
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION

 

EXHIBIT G – PAGE 2
 
 

--------------------------------------------------------------------------------

 

 
Restocking Fee:  For any Products returned by Participant for any reason other
than Distributor delivery error, Distributor may impose and Participant shall
pay a restocking fee of *.
 
Deliveries:  Not less than two times per week, unless by mutual consent.
 
Black-Out Periods:
 
* and *.
 
Open Windows Discount:  Distributor agrees to an on-invoice discount of * for
scheduled delivery access to all Participant’s Retail Outlets serviced by
Distributor, excluding the previously discussed Black-Out Periods (includes
potential key deliveries) (“Open Windows Discount”).  This Open Windows
Discount  enables Distributor to develop more cost efficient delivery routes,
and to pass on these efficiencies  to the Participants that agree to the
process.  Specific Retail Outlets may be excluded for reasons of safety, or
certain local restrictions, but only with the mutual consent of Participant and
the Distributor General Manager.
 
Home Office Tools:  Distributor has developed and uses a chain restaurant
management software product called Home Office Tools” (“HOT Software”) which
interfaces with the “TACO” software used at many Taco Bell Retail Outlets.  It
also has developed operating instructions and manuals as well as Web Site access
with end-user documentation (collectively, the “Documentation”).  Distributor
grants to Participant a royalty-free, limited, non-exclusive license to access
and use, only in connection with Participant’s and its affiliates’ respective
internal business purposes and direct benefit and not for the internal purposes
of any third party, the HOT Software and Documentation.  Distributor also will
make available to Participant the technical support services offered generally
by Distributor to its customers from time to time and which may include:
 
 
·
Reasonable amount of telephone, facsimile or electronic mail consultation
regarding the HOT Software installation and on-going operation during normal
business hours.

 
 
·
Software updates as provided generally by Distributor to its customers.

 
 
·
Any Documentation updates as made generally available by Distributor to its
customers from time-to-time.

  
Participant acknowledges, on behalf of itself and its affiliates, that (i) all
HOT Software and Documentation is licensed and not sold and that Participant
does not acquire any express or implied rights in the HOT Software or
Documentation other than those specified in this Agreement.  Distributor shall
retain all rights, title, interest, including intellectual property rights, in
the HOT Software and Documentation.
 
The HOT Software and the Documentation are Confidential Information of
Distributor, and are subject to the confidentiality obligations of Participant
under the Participant Joinder Agreement.  Upon the expiration or termination of
the Participant Joinder Agreement, Participant shall, and cause its affiliates
to, stop use of the HOT Software, return to Distributor within ten (10) business
days of expiration or termination all copies of any Documentation and give
Distributor written certification that Participant and its affiliates have
complied with all of their obligations under this paragraph.
 
 

 
*
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION

 

EXHIBIT G – PAGE 3
 
 

--------------------------------------------------------------------------------

 

 
DISTRIBUTOR MAKES NO REPRESENTATIONS OR WARRANTIES REGARDING THE HOT SOFTWARE OR
THE DOCUMENTATION.  TO THE EXTENT ALLOWED BY LAW, DISTRIBUTOR DISCLAIMS AND
EXCLUDES ALL EXPRESSED, IMPLIED AND STATUTORY WARRANTIES OR CONDITIONS,
INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NON-INFRINGEMENT, AND SKILL AND CARE.  DISTRIBUTOR DOES NOT WARRANT
THAT THE HOT SOFTWARE OR THE DOCUMENTATION, OR THE SUPPORT SERVICES WILL BE
WITHOUT DEFECT OR ERROR, SATISFY PARTICIPANT’S REQUIREMENTS, OR PROVIDE
UNINTERRUPTED USE OF THE HOT SOFTWARE.  DISTRIBUTOR DOES NOT WARRANT THAT THE
HOT SOFTWARE SHALL OPERATE WITH ANY HARDWARE OR SOFTWARE OTHER THAN AS SPECIFIED
IN THE DOCUMENTATION.
 
*.
 
Service Level Requirements:
 

 
2011
2012
2013
2014
2015
2016
             
On Time Delivery
*
*
*
*
*
*
Delivery Compliance
*
*
*
*
*
*
Perfect Orders
*
*
*
*
*
*
Sales Compliance
*
*
*
*
*
*

*
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION

EXHIBIT G – PAGE 4
 
 

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EXHIBIT H

FREIGHT MANAGEMENT GUIDELINES

The following are freight management guidelines (“Guidelines”) which shall be
used to govern the management of freight inbound to the Distributor’s
distribution centers and the calculation of the per case freight to be applied
to the Products for sale to Retail Outlets.  UFPC will use GPS to communicate
all Product information required by these guidelines to determine the freight
price for each Product at the case level.

1.           Inbound Freight Bid Process

90 days prior to the first day of each calendar year during the Term, UFPC shall
solicit and obtain freight lane rates from each Supplier for the shipment of
Products to each distribution center during such calendar year.  In order to
transition to this calendar year implementation of new lane rates, UFPC and
Distributor will mutually agree to timing and a process to effect such
transition.  Following the receipt of such quoted freight lane rates, UFPC shall
communicate them to Distributor; and Distributor, within 30 days of receiving
them, may elect to assume the freight management of certain (or all) of the
Lanes (as defined below) at the quoted lane rates by notifying UFPC of such
election.  With respect to any Lanes for which Distributor so exercises its
election, Distributor shall manage all inbound freight shipments in that Lane
for the ensuing calendar year and the freight rate quoted by the applicable
Supplier for such Lane shall apply to all shipments during such calendar
year.  With respect to any Lanes for which Distributor does not exercise its
election, UFPC (or its designee) shall manage all shipments in that Lane for the
ensuing calendar year.

2.           Purchase Order Size.

The following are parameters for determining the purchase order quantity of
Products:

(a)           For the purpose of calculating freight per case to be charged to
each Retail Outlet, Distributor shall base its standard purchase order quantity
on:

(i)           Full Truckload.  A “Full Truckload” quantity is defined as the
maximum amount of Product based on weight or cubes that may be shipped in a 53’
single trailer (unless Products are being backhauled, in which case Distributors
then current equipment may be utilized).  In the event that a 53’ trailer is not
available, Distributor shall utilize the generally available trailer that
results in the lowest freight expenses to the Operator.  The maximum amount of
Product shall be determined by the standard palletization defined in GPS for the
Products that move on a particular Lane and shall be limited by the YUM! Quality
Assurance shelf life guidelines; or

(ii)           21-Day Average Sales.  The “21-Day Average Sales” quantity is
defined as the maximum amount of Product purchased in a particular Lane that is
sold during a 21 day period.  This average order quantity will be the basis for
determining the applicable freight rate for those Products on that Lane as
published through GPS.

(b)           As used in this Exhibit:

(i)           Lane.  A “Lane” is all Products that move from a Supplier’s plant
location to a Distributor’s distribution center.

(ii)           Product Mix on a Lane.  GPS will determine the Product weight
measure (gross weight, net weight or cube) to be used on a Lane.  On Lanes that
ship both weight and cube based Products, GPS will determine one Product weight
measure to be used for that Lane which measure shall become the basis to be used
on all Products on that Lane.

EXHIBIT H – PAGE 1
 
 

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3.           Application of Freight to the Case

The following are guidelines which shall be used in conjunction with GPS to
determine the freight per case to be applied to the Products.

1.           Product Weight. Each Supplier shall specify the weight of a
Product, which shall be communicated via GPS.  All Product weights applicable to
freight within GPS are gross weights, unless otherwise noted to be net
weight.  Distributor shall accept Supplier’s freight weight specification which
shall be consistent with industry standards.

(a)           Gross Weight.  Gross weight is the net weight of a Product plus
the Product packaging and the case packaging, but does not include the weight of
the pallet, wrap, foil, banding or other material not part of the individual
case.

(b)           Net Weight.  Net weight of a Product is the weight of the Product
exclusive of any packaging material.

(c)           Cube.  Cube of a Product is the length of the Product times its
width times its height, including the case packaging material.  Cube does not
include the dimensions of the pallet, wrap, foil, banding or other material not
part of the individual case.

(d)           Distributor Recourse for Weight Discrepancies.  Supplier is
responsible for weight and cube discrepancies.  Distributor shall notify UFPC of
any discrepancies, and UFPC will cooperate in resolving the discrepancy between
the Supplier and Distributor.

2.           Freight per case Pricing.  The methodology to determine the
applicable Product freight shall be either the “Actual Purchase Order Size” or
the “Average Usage” each as described below:

(a)           Actual Purchase Order Size Method.

(i)           If the purchase order quantity of the actual purchase order used
to set the applicable price for Products in accordance with the Inventory
Pricing Policies is equal to or greater than a Full Truckload quantity, then the
Full Truckload lane rate, determined by GPS, shall be the basis for the Product
freight price per case.

(ii)           If the purchase order quantity on the actual purchase order used
to set the price is less than a Full Truckload quantity, then the appropriate
“LTL” Lane rate or “ASTL” Lane rate, as determined through GPS, shall be the
basis for the Product freight per case.  In no event will a LTL lane rate
greater than the Full Truckload Lane rate be used to calculate the freight per
case to the applicable Retail Outlet.

(b)           Average Usage Method.  Where an average purchase order size is
used to calculate the Product freight per case, the Average Usage will be
calculated on a basis consistent with the Inventory Pricing Policies that govern
the items on that purchase order – i.e. period or weekly.  For the purpose of
calculating the Average Usage, Distributor will use the average of purchase
order sizes received during the 28 day period immediately prior to the date
pricing is determined.  The Average Usage should be representative of the
typical volume moving inbound to the distribution center on a Lane and will
exclude outlier purchase orders from the calculation of the Average Usage. The
methodology for excluding outlier purchased orders will be mutually agreed to
between UFPC and Distributor. In the event there are no receipts in those 28
days either due to no activity or introduction of new item or Lane on which an
Average Usage can be calculated, freight pricing will

EXHIBIT H – PAGE 2
 
 

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be based upon the Actual Purchase Order Size until such time an Average Usage
can be calculated.  The Average Usage shall be the basis for determining the
applicable freight bracket as communicated via GPS and used in the calculation
for determining the freight per case for all Products.  Any changes to the
Average Usage method must be agreed to in writing by UFPC and Distributor.

(c)           Exceptions to Freight per Case Pricing.  Exceptions to the freight
per case pricing are allowed under the following circumstances:

(i)           Embedded Items.   If Distributor is managing a Lane with “Embedded
Items” (as defined below) Distributor’s Landed Cost including freight shall not
exceed the Supplier’s delivered cost of the Products.  An “Embedded Item” is any
Product for which the freight charges are included in the FOB cost of the
Product, rather than assessed as an add-on, line item charge.

(ii)           Promotional Products.  Freight prices for promotional Products
shall be equal to freight prices for non-promotional Products on that Lane as
determined by GPS.  In the event of an extraordinary circumstance that causes a
promotional product to significantly deviate from its normal movement, UFPC will
consider pricing such Promotional Product outside of the freight prices for
non-promotional Products.

(iii)           Primary Supplier Changes.  In the event Products move from one
primary Supplier to another as directed by GPS, the Average Usage for those
Products on that Lane will be recalculated immediately to support the resulting
change in the freight per case for the items in that Lane.

(iv)           Absence of Freight Pricing.  In the event that GPS is missing
freight lane rates for specific Products, and the Products are not Embedded
Items, then the Distributor has the right to price the Products at the
Distributor’s freight cost plus markup until GPS lane rates are communicated.

EXHIBIT H – PAGE 3
 
 

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EXHIBIT I

OUTBOUND FUEL SURCHARGE MATRIX

The following shall apply to all Retail Outlets:

1.
Adjustments to Per-Case Markups. In order to account for changes in fuel costs
that may occur during the term of this Agreement, Distributor shall be entitled
to adjust the applicable per-case markups by an amount calculated in accordance
with this exhibit.

2.
Definitions.

 
(a)
“Adjustment Determination Date” means the Monday immediately preceding the
commencement of each Yum!’s accounting period.

 
(b)
“EIA Average” means, with respect to each Adjustment Determination Date, the
weekly national average retail diesel fuel rates as set forth in the EIA Report
for the four then-most recent weeks, as of that date, for which such data is
available. The parties acknowledge and agree that the base EIA Average is $2.16
per gallon.

 
(c)
“EIA Report” means the Report of Weekly Retail On-Highway Diesel Prices
published by Energy Information Administration of the United States Department
of Energy on the EIA website (www.eia.doe.gov) or otherwise, or another
comparable report if the EIA Report is no longer published.

 
(d)
“Period” means each Yum!’s accounting period of four weeks.

3.
Determination and Notice.  As of each Adjustment Determination Date, Distributor
shall determine the applicable adjustment in accordance with the following
table. Distributor shall send written notice of such adjustment to Operators and
the UFPC within two business days thereafter.

EIA Average
Per Case Adjustment
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*

4.
Implementation and Applicability. The rate as adjusted will apply to all sales
or deliveries commencing on the first day of the Period following each
Adjustment Determination Date, and will remain effective for that entire Period.

*
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION

EXHIBIT I – PAGE 1
 
 

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5.
Fuel-Surcharge Risk Management. To mitigate the price volatility for in-bound
and out-bound fuel surcharges, Distributor agrees to work with UFPC to price the
fuel surcharge using risk management tools in a mutually agreeable manner. Risk
management tools shall include, but not be limited to, fixed price contracts,
futures, options on futures, over-the-counter swaps, and over-the counter swap
options.

 
(a)
The basis for any fuel surcharge will be the Department of Energy (DOE), Energy
Information Administration (EIA) U.S. average on-highway price for all types as
set forth in the Fuel Surcharge section of this agreement. The pricing component
for any risk management tool will be the DOE, EIA U.S. average on-highway price
or any other price index that highly correlates to the DOE, EIA U.S. average
on-highway price in accordance with FAS 133 accounting principles.

 
(b)
Distributor agrees to accept input from UFPC authorized personnel as to risk
management positions to take on the designated pricing component based on the
UFPC selected risk management tool. Positions will be initiated based on market
conditions as perceived by UFPC. Positions are held in Distributor’s name. Gains
or losses associated with this risk management position will be adjusted into
the fuel surcharge price that is charged to the store in future periods as
agreed to between UFPC and Distributor.

EXHIBIT I – PAGE 2
 
 

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EXHIBIT J

SERVICE LEVEL REQUIREMENTS AND REPORTING

Sales Compliance / Order Fill Rate

The Order Fill Rate shall be provided in a format substantially similar to
either of the examples attached to this Exhibit J. Order Fill Rate shall be
computed with respect to each Yum! System concept in which Operator operates
Retail Outlets and serviced by each of Distributor’s distribution centers
delivering Products to Operator.

Order Fill Rate equals Total Orders Correctly Filled for a period divided by
Total Cases Ordered for the same period.

Total Orders Correctly Filled equals Total Cases Ordered for the period less
Operations Errors less Purchasing Errors.

Operations Errors includes

-Warehouse Outs (Distributor could not find Product in slot)
-Damages (Products arriving at Retail Outlet in damaged state)
-Mispicks (e.g. ordered apples, received oranges with apples sticker)
-Short on Truck (Products on invoice but driver could not locate)
-Overlooked (Products found in truck after delivery with sticker for the
account)

Purchasing Errors includes

-Gross Out of Stocks (Products where sufficient quantity did not exist in
Distribution Center to fulfill order)
 
-Substitutions (not to include Products which were ordered but discontinued)
 

Distributor may choose to show errors attributable to Operator as shown in the
example of this Exhibit I. Distributor agrees that each of its distribution
centers delivering Products to Operator will maintain a period Order Fill Rate
for each Yum! System concept in which Operator operates Retail Outlets (taking
into account all retail outlets in such concept serviced by such distribution
center) equal to or greater than the Service Level Requirements listed in the
applicable Brand Exhibit.

On-Time Deliveries

An On-Time Delivery is a delivery which occurs +/- one (1) hour from the
scheduled delivery time. Distributor agrees that each of its distribution
centers delivering Products to Operator will maintain a period On-Time Delivery
rate for each Yum! System concept in which Operator operates Retail Outlets
(taking into account all retail outlets in such concept serviced by such
distribution center) equal to or greater than the Service Level Requirements
listed in the applicable Brand Exhibit.  All Key Drop Deliveries will be
included as On-Time Deliveries in calculating the On-Time Delivery rate;
provided, however, that the Key Drop Delivery must be completed during the hours
in which the Retail Outlet is closed or during the hours designated in writing
by Operator for a Key Drop Delivery.

EXHIBIT J – PAGE 1
 
 

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Perfect Order

A Perfect Order is defined as an order under which a Retail Outlet received 100%
of the Products it ordered undamaged and within specifications. Distributor
agrees that each of its distribution centers delivering Products to Operator
will maintain a period Perfect Order rate for each Yum! System concept in which
Operator operates Retail Outlets (taking into account all retail outlets in such
concept serviced by such distribution center) equal to or greater than the
Service Level Requirements listed in the applicable Brand Exhibit.  Any order
which fails to be a “Perfect Order” because (i) a vendor was not able to supply
a Product which is part of the order, or (ii) a Product which is part of the
order is not shipped to Distributor in a timely manner and the Operator or its
representative is responsible for arranging or directing the manner of delivery
of such Products to Distributor, shall be disregarded for purposes of the
calculation of Perfect Orders and Order Fill Rate.

Delivery Compliance Percent

Delivery Compliance is a measurement of the deliveries that are completed
outside of the Black-Out Period.  Non-complaint deliveries are deliveries that
are not completed or are started during the scheduled Black-Out Period
timeframe.  Operators reserve the right to allow the Distributor to complete the
delivery during a Black-Out Period.  Deliveries completed during a Black-Out
Period will not be counted as a non-compliant delivery if the Distributor
obtains the Operator’s signature on the Distributor’s invoice stating the
Operator agreed to allow the delivery during the Black-Out Period.

Delivery Compliance Percentage equals Total deliveries completed outside the
Black-Out Period for a period divided by Total number of deliveries completed
for the same period.

Example:

Total non-Black-Out
Period deliveries                                           Total
Deliveries                                Delivery Compliance %
135,347                      ÷                      136,000                      =               99.51%

EXHIBIT J – PAGE 2
 
 

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EXAMPLE

Operations:
Total Cases
50,000
                       
Warehouse
   
Short On
Driver
Total
 
Outs
Damages
Mispicks
Truck
Returns
Operations
Cases
6
18
28
31
13
96
 
0.012%
0.036%
0.056%
0.062%
0.026%
0.192%
             

Purchasing:
                         
Less Supplier
Total
 
Out of Stocks
Shortages
Purchasing
Cases
27
(5)
22
 
0.060%
0.010%
0.071%
       
Overall Fill Rate
 
   
Total Cases
50,000 case
   
Operations
96
   
Purchasing
22
   
Grand Total
118
     
0.236%
           
Overall Fill Rate:
99.764%
                                                                               
   

EXHIBIT J – PAGE 3
 
 

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EXAMPLE
ABC Foodservice

   
Yum Brands!
A&W
KFC
LJS
PH
TB
       
OT%
DC%
PO%
SC%
OT%
DC%
PO%
SC%
OT%
DC%
PO%
SC%
OT%
DC%
PO%
SC%
OT%
DC%
PO%
SC%
OT%
DC%
PO%
SC%
     
P01 2010
                                                     
P02 2010
                                                     
P03 2010
                                                     
P04 2010
                                                     
P05 2010
                                                     
P06 2010
                                                     
P07 2010
                                                     
P08 2010
                                                     
P09 2010
                                                     
P10 2010
                                                     
P11 2010
                                                     
P12 2010
                                                     
P13 2010
                                                   

 

     
PERIOD 06, 2010:  05/24/10 - 06/23/10
 
Yum Brands!
A&W
KFC
LJS
PH
TB
 
OT%
DC%
PO%
SC%
OT%
DC%
PO%
SC%
OT%
DC%
PO%
SC%
OT%
DC%
PO%
SC%
OT%
DC%
PO%
SC%
OT%
DC%
PO%
SC%
DC #1
                                               
DC #2
                                               
DC #3
                                               
DC #4
                                               
DC #5
                                               
DC #6
                                               
DC #7
                                               
DC #8
                                               
DC #9
                                               
DC #10
                                               
DC #11
                                               
DC #12
                                               
DC # 13
                                               
DC# 14
                                               
DC # 15
                                               
DC #16
                                               
DC #17
                                               
DC #18
                                               
Total
                                               

 
EXHIBIT J – PAGE 4
 
 

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EXHIBIT K

CREDIT POLICIES

McLane Foodservice, Inc. – Credit Policy

PURPOSE
 
To provide an overview of McLane Foodservice’s uniform policies and procedures
in regard to granting/declining trade credit to all customers (both new and
existing) and in regard to the continued evaluation of the credit worthiness of
our customers throughout the contract term.
 
OVERVIEW
 
The credit worthiness of a potential or existing customer is determined by a
number of factors.  It is imperative that McLane Foodservice performs a thorough
investigation, analysis, and risk assessment of the customer’s credit
information – both initially and throughout the contract term.  These review
procedures will result in the amount of credit McLane Foodservice will be able
to provide to the customer.
 
A customer’s credit worthiness is based on the four “C’s” of credit:
 
·
Character relates to the customer’s intent or willingness to pay;

 
·
Capacity relates to the financial viability of the customer and/or the ability
to generate cash flows necessary to meet all debt service requirements;

 
·
Capital relates to the resources on which the customer can draw should income or
cash flow prove inadequate;

 
·
Conditions relate to the economic climate in which the business (as well as
McLane Foodservice) operates throughout the contractual term

 
CREDIT INVESTIGATION
 
The credit investigation process for both new customers and existing customers
will include but not be limited to the following:
 
·
For new customers, a Credit Application must be completed by the customer, *.

 
·
Review of Dun & Bradstreet (and other credit reporting agencies) reports
relating to the customer.

 
·
Review of the customer’s *.

 
·
For existing customers, review of the customer’s *.

 
Please NOTE:  McLane Foodservice intends to review the customer’s *.  McLane
Foodservice may adjust the customer’s credit terms at any time based on such
information.
 
 
MITIGATION OF CREDIT RISK
 
*
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION
 

 

EXHIBIT K – PAGE 1
 
 

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In addition to the review of the customer’s * described above, any and/or all of
the following may be required of the customer to help mitigate McLane
Foodservice’s credit risk:
 
·
*

 
·
*

 
·
*

 
·
*

 

*
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION
 

EXHIBIT K – PAGE 2
 
 

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EXHIBIT L

DISTRIBUTOR DATA INTERCHANGE PROTOCOL

In consideration of UFPC’s provision of purchasing services, Distributor agrees
to provide UFPC, or its designated third party, with the following information
on the terms and in the manner set forth in this Distributor Data Interchange
Protocol (this “Protocol”).  Unless otherwise defined herein, all capitalized
terms have the definition assigned to them in the Master Distribution Agreement
dated as of January 1, 2011 by and between UFPC, for and on behalf of itself and
the Participants and Distributor (the “MDA”).  Pursuant to Section 12(a) of the
MDA, UFPC reserves the right to amend this Protocol from time to time with
written notice to Distributor (delivered reasonably in advance of the effective
date of such change) in order to appropriately monitor the distribution programs
in the Yum! System.

The components of this Protocol include:

Section 1 – General Startup and Operations Considerations
Section 2 – Global Pricing System (GPS)
Section 3 – Distributor Receipts from Suppliers
Section 4 – Distributor Shipment to Store Information
Section 5 – Distributor Inventory and Open PO Information
Section 6 – Ad-hoc Requests

Definitions

·
Embedded Items – Products in which the Supplier delivered price to the
Distributor includes the cost of the applicable Product and the required freight
required to deliver the Product to Distributor.

·
Supplier – The manufacturer or supplier from whom Distributor purchases Products
for distribution to Operators in the Yum! System.

·
Store – The Yum! System restaurant outlet to which the Distributor delivers
Products.

·
Transportation Lane – The identification of the point of origin and point of
delivery for a shipment, usually through a supplier shipping location (“Plant”)
and distributor receiving location (“DC”).

1.           General Startup & Control Considerations

Communications Protocol

 
·
All electronic transfers of information under this Protocol shall be
communicated and transmitted by Distributor to UFPC at UFPC’s FTP server at
205.198.144.145, or to a UFPC designated third party address, as requested by
UFPC.

           General Data Considerations

 
·
Distributor shall define and provide a layout and field definition for each data
feed.

 
·
Unless otherwise noted above, all information provided under this Protocol shall
be transmitted under the following schedule:

 
·
Receipts from Suppliers – No less than weekly, preference is daily

 
·
Distributor Shipments to Store – Daily

 
·
Distributor Inventory and Open Purchase Order Information – Daily

EXHIBIT L – PAGE 1
 
 

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·
Several data element requests are common throughout each request.  These have
been documented fully in their first reference, and other references will use
that common definition.

Startup Considerations

 
·
The key date in all startup considerations (the “Startup Date”) shall be: (a)
the date of the first order placed with a Supplier utilizing Contract
Transactions, or (b) the date that the MDA is signed by both parties, whichever
is later.

 
·
Initial discussions must be held within 30 days of the Startup Date to address
the implementation of the information requirements.

 
·
Regular information delivery must commence within 90 days of the Startup Date.

 
·
Information from the Startup Date through the first regular information delivery
must be delivered to UFPC within 120 days of the Startup Date.

Support Considerations

 
·
In the event of any failure to transmit complete or accurate information,
Distributor shall work collaboratively with UFPC in the resolution of such
failure and replace any lost information due to such failure in a timely manner.

2.           Global Pricing System (GPS)

UFPC will provide to Distributor electronic notifications for all Products
purchased pursuant to Contract Transactions established by UFPC on behalf of
A&W, KFC, Long John Silver’s, Pizza Hut, or Taco Bell Stores.

This information is provided to Distributor to enable the complete
identification of information required in order to transact purchases of
Products.

The notifications include, but are not limited to:

 
·
Supplier information

 
·
Item information

 
·
Transportation Lane rate notification

 
·
Price change notification

 
·
Embedded Item price change notification

 
Distributor is required to process these notifications and will receive a
contact at UFPC to whom questions may be directed.

GPS is also available to Distributor as an on-line Internet application to
provide real time review of item information and notifications.  Distributor is
required to obtain an access ID from UFPC prior to accessing GPS.

3.           Distributor Receipts from Suppliers

Distributor shall provide UFPC or its designated third party with receipt
information (“Receipt Information”) from all Suppliers for all Products
purchased pursuant to Contract Transactions established by UFPC on behalf of
A&W, KFC, Long John Silver’s, Pizza Hut, or Taco Bell Stores.

EXHIBIT L – PAGE 2
 
 

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Supplier Receipt Information is required to validate contract pricing and
volumes, for linkage to Distributor shipment information (“Shipment
Information”) and for UFPC’s analysis of how its contracts have been and are
being executed.

Unless otherwise agreed to by UFPC and Distributor, Receipt Information shall be
transmitted no less frequently than weekly with a preference for daily.

If there are adjustments, credits, or other changes on transactions previously
transmitted, these changes should be provided in the next transaction set.  It
is the expectation that all transactions sent to UFPC are cumulative unless
specifically coordinated independent of the normal process.

More specifically, Supplier receipts shall include sufficient information
related to each purchase order as to determine the following:
 

 
·
Timing of Order - Date order, requested delivery date, actual receipt date

 
·
Shipping Lane - DC, Supplier, Plant, Transportation Method

 
·
Distributor Product Information – SKU, SKU Description

 
·
Quantity of Order - Quantity of Product, Total weight/cube of Products under the
applicable Purchase Order

 
·
Pricing Information – FOB (as defined below), Freight, Embedded Price, Pallet
Cost, Other inbound cost that make up Distributor’s Landed Cost.

 
There is an expectation that all pricing to Stores is dependent upon one of the
dates on a purchase order.  This date must be supplied in the Supplier receipts
feed.

Note that base Supplier cost and inbound transportation cost may not be
available separately when Embedded Items are purchased.  For Embedded Items, the
complete cost should be supplied as the base Supplier cost (“FOB”).

In addition to the Supplier receipts transaction feeds, additional reference
information shall also be provided.  The reference files are as follows:
 
DC location file:

 
1.
Distributor identification of receiving location

 
2.
Physical address

Distributor Product file:

 
1.
Distributor Product identification (SKU)

 
2.
Yum! Brands Global Item Number (GIN)

 
3.
Distributor Product description

 
4.
Pack size

 
5.
Unit size

 
6.
Supplier identification (usually a code)

 
7.
Supplier Product number

EXHIBIT L – PAGE 3
 
 

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Reference information for each Supplier and Plant location:

 
1.
Supplier identification (usually a code)

 
2.
Supplier name

 
3.
Physical address

4.           Distributor Shipments to Stores

Distributor shall provide UFPC or its third party designee, as determined by
UFPC, with Shipment Information on ALL Product sales by Distributor to A&W, KFC,
Long John Silver’s, Pizza Hut, or Taco Bell Stores.

Shipment Information is required to manage UFPC’s total volumes for end of
period patronage calculations, for monitoring of Distributor-Operator contracts
and to provide visibility as to where Product volume has moved within UFPC’s
supply chain.

Unless otherwise agreed to by UFPC and Distributor, Shipment Information shall
be provided to UFPC no less frequently than daily.

If there are adjustments, credits, or other changes on transactions previously
transmitted, these changes should be provided in the next transaction set.  It
is the expectation that all transactions sent to UFPC are cumulative unless
specifically coordinated independent of the normal process and communicated as
such to UFPC.

More specifically, Shipment Information shall include sufficient information
related to each invoice as to determine the following:
 

 
·
Invoice Information – invoice number, invoice date, ship date, any other date
used to determine pricing to a Store, adjustment reason codes

 
·
Shipping Lane – DC, Store information (ship-to, bill-to), Store concept

 
·
Distributor Product Information – SKU, SKU Description

 
·
Quantity Shipped – Quantity for each Product, UOM, Cube, Weight

 
·
Pricing Information – Total sales dollars, pricing components (FOB, Freight,
Mark-up, Sourcing Fees, Pallet Fees, Other Fees) and any other fee that makes up
the Price of the Product to the applicable Store(s).

 
In addition to the Distributor Shipment Information feed, a Distributor account
file shall also be provided as reference information.  The Distributor account
reference files should contain the following:
 
 
·
Distributor ship-to code

 
·
Distributor ship-to address

 
·
Distributor bill-to location code

 
·
Bill-to name and address

 
·
Store Concept identification  (e.g. to KFC, Taco Bell, A&W, LJS or Pizza Hut)

 
·
The Yum! store number for that location

 
·
Store type (e.g. 2n1, 3n1, traditional KFC, Taco Bell, Pizza Hut, etc.)

 
 
EXHIBIT L – PAGE 4
 
 

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In addition, the Distributor Shipment Information transaction file above should
be reflected in the reference files as described in Section 3 of this Protocol
(Distributor Receipts from Suppliers):
 

 
·
Distributor Product information

 
·
Supplier information

 
·
Distributor shipping location

 
5.           Distributor Inventory of Product

Information regarding Product inventory and the movement of Product inventory
(“Inventory Information”) is required to allow UFPC to identify the inventory
and inventory movement of, among other things, Products on order or in stock.

Distributor shall transmit daily Inventory Information to UFPC.  Inventory
Information will be supplied for all Products.

More specifically, Inventory Information shall include:

 
1.
DC location  (the DC in control of the inventory)

 
2.
Distributor Product code (Identification of the specific Product)

 
3.
Quantity on order (open purchase orders) from all Suppliers for the specific DC
location

 
a.
Order Date

 
b.
PO Number

 
c.
Quantity

 
d.
Vendor

 
e.
Due Date

 
f.
Appointment Date

 
4.
Quantity on hand at the DC location

 
5.
Quantity required for orders already placed by Stores

 
6.
Quantity unit of measure (e.g. case, etc.)

 
7.
Weight (may be identified through Product master)

 
8.
Cube (may be identified through Product master)

 
9.
Date (of inventory status)

In addition, the data above should be reflected in the reference files as
described in Section 3 of this Protocol (Distributor Receipts from Suppliers):

 
·
Distributor Product information

 
·
Supplier Information

 
·
Distributor Shipping Location

 
6.           Ad-hoc Requests

Distributor shall provide such other information not otherwise contemplated in
this Protocol as UFPC may reasonably request.

EXHIBIT L – PAGE 5
 
 

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EXHIBIT M

McLANE DISTRIBUTION CENTER ORDER PLACEMENT CUT-OFF TIMES

Distribution Center
Local Time*
Albany - 160
4:30 Eastern
Arlington - 135
5:00 Central
Atlanta - 166
5:00 Eastern
Burlington - 159
4:30 Eastern
Charlotte - 164
5:00 Eastern
Cincinnati - 153
3:30 Eastern
Denver - 121
3:30 Mountain
Houston - 129
4:30 Central
Manassas - 162
4:00 Eastern
Memphis - 142
4:30 Central
Milwaukee - 141
4:00 Central
Orlando - 170
4:15 Eastern
   
Phoenix - 112
3:00 Pacific
Plymouth - 149
4:00 Eastern
Portland - 101
3:30 Pacific
Riverside - 103
3:30 Pacific
Shawnee - 132
4:30 Central
Tracy - 102
3:30 Pacific

*Subject to change with reasonable notice.

 
LOULibrary 0008126.0113712 951514v1

EXHIBIT M – PAGE 1

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