Exhibit 10.1

 

NOTE: A request for confidential treatment has been made with respect to the
portions of the following document that are marked with [*CONFIDENTIAL*]. The
redacted portions have been filed separately with the SEC.

 

AGREEMENT FOR DISTRIBUTION OF PRODUCTS

 

This Agreement for Distribution of Products is entered into to be effective as
of January 1, 2005 (the “Effective Date”), by and between Whole Foods Market
Distribution, Inc., a Delaware corporation having an address at 550 Bowie
Street, Austin, Texas 78703 (“WFM”) and United Natural Foods, Inc. and its
subsidiaries and affiliates having an address at 260 Lake Road, Dayville,
Connecticut 06241 (collectively “UNFI”).

 

RECITALS

 

A. WFM and its affiliates (the “WFM Affiliates”) operate certain retail
supermarket stores, bakeries and other facilities in the United States which are
primarily engaged in the sale of natural and organic products (the “WFM
Stores”).

 

B. The parties desire to enter into an agreement pursuant to which UNFI shall
sell and distribute to WFM facilities, including WFM Stores, WFM bakeries, WFM
distribution centers and other WFM facilities (together the “WFM Facilities”)
the goods and services specified below on the terms set forth below.

 

NOW THEREFORE, the parties agree as follows:

 

1. Term. Subject to earlier termination as set forth herein, this Agreement
shall commence on January 1, 2005 (the “Effective Date”) and expire on December
31, 2007.

 

2. Distribution

 

(a) UNFI shall be the Primary Distributor to WFM for the following types of
products (the “Product Categories”): (i) natural foods/grocery items, (ii)
organic packaged grocery products, (iii) frozen products (including certain
grocery and meats), (iv) branded bulk products, (v) vitamins, supplements, body
care and other health and beauty aid products, (vi) dairy products and (vii)
selected specialty items (but excluding produce, mercantile and other categories
not specifically identified above). The foregoing products, along with any other
products provided hereunder, are hereinafter defined individually as a “Product”
and collectively as the “Products”). Produce, non-branded bulk items and
alcoholic beverages are not included in the Products for purposes of this
Agreement.

 

(b) For purposes of this Agreement, “Primary” shall mean that: (i) WFM
Facilities in all regions other than in [*CONFIDENTIAL*], shall purchase a
majority of the products they purchase in the Product Categories from UNFI, and
(ii) WFM shall purchase a minimum of $[*CONFIDENTIAL*] million in Products
(inclusive of orders for Products that are out of stock, hereinafter
occasionally defined as “OOS Products”) during each 12-month period of the Term,
commencing as of the Effective Date.

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NOTE: A request for confidential treatment has been made with respect to the
portions of the following document that are marked with [*CONFIDENTIAL*]. The
redacted portions have been filed separately with the SEC.

 

3. Pricing, Adjustments, Minimum Orders, Fuel Adjustments

 

(a) During the Term, UNFI Base Pricing not including freight charges from UNFI
distribution centers to WFM Facilities (the “Freight Up Charge”) for Products
(other than produce, wine, non-branded bulk products and products purchased
through Select Nutrition Distributors, Inc.) will be priced based upon UNFI’s
“Cost” plus a percentage as set forth as follows: [*CONFIDENTIAL*]. Pricing
shall be set based on [*CONFIDENTIAL*].

 

(b) If WFM maintains a higher Cost plus percentage than is applicable, UNFI
agrees to rebate the difference based on the actual amount charged and the
actual earned by WFM based on its volume in a manner consistent with the
parties’ past pricing adjustments.

 

(c) For purposes of this Agreement, “Cost” shall be defined as [*CONFIDENTIAL*].

 

(d) UNFI will look to put on-line new facilities in both [*CONFIDENTIAL*] and in
[*CONFIDENTIAL*] during the next 18 months depending on site and economic
viability. In addition, UNFI will look at the feasibility of [*CONFIDENTIAL*].
These initiatives will be done in conjunction with WFM.

 

(e) [*CONFIDENTIAL*] Products on promotion will be priced at [*CONFIDENTIAL*].
WFM will work with UNFI and vendors to improve the pre-order process. In
addition, [*CONFIDENTIAL*]. These Products will be priced at [*CONFIDENTIAL*].

 

(f) Drop Charge for Less than Minimum Orders. WFM and UNFI anticipate that the
average minimum dollar amount per order taking into account all WFM Facilities
shall be approximately $[*CONFIDENTIAL*]. If any WFM Facility places an order
for Products and the total aggregate dollar amount of all Products included in
the delivery is less than $[*CONFIDENTIAL*], UNFI shall charge an additional
$[*CONFIDENTIAL*] drop charge for the order. This drop charge for orders that
are less than $[*CONFIDENTIAL*] shall not apply to any orders placed by any new
WFM Facility within the first [*CONFIDENTIAL*] days of such WFM Facility’s
opening date. For WFM Facilities that frequently fall below the
$[*CONFIDENTIAL*] level, UNFI shall notify WFM of the issue and propose a
reduction in the number of regularly scheduled deliveries to such WFM
Facilities. After receipt of the UNFI’s notice and proposal, WFM will reduce the
number of deliveries to such WFM Facilities, unless the cause for such orders
being below the $[*CONFIDENTIAL*] level is due to size of the WFM Facility or
backroom issues. Nothing in the two preceding sentences shall affect UNFI’s
right to charge and WFM’s obligation to pay the above-referenced drop charge.

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NOTE: A request for confidential treatment has been made with respect to the
portions of the following document that are marked with [*CONFIDENTIAL*]. The
redacted portions have been filed separately with the SEC.

 

(g) In the event diesel fuel cost weekly average is in excess of
$[*CONFIDENTIAL*] per gallon during any three month period during the Term (the
“Base Fuel Price”), UNFI shall be entitled to charge WFM an energy surcharge as
defined below for Products delivered during the following three month period.
The energy surcharge shall be calculated by taking [*CONFIDENTIAL*]. In the
event that the weekly average price for diesel fuel exceeds $[*CONFIDENTIAL*]
per gallon, the parties agree to negotiate in good faith the allocation of cost
between them in excess of the $[*CONFIDENTIAL*] threshold. UNFI and WFM shall
develop billing procedures to implement this provision. If the parties cannot
agree on an adjustment, [*CONFIDENTIAL*]. Should the price fall below
$[*CONFIDENTIAL*] per gallon, UNFI will provide a fuel adjustment credit to WFM
calculated the same as above.

 

(h) Cross-Dock Billing. UNFI will, from time to time, and based on UNFI space
availability, ship pallets and shipper displays on a cross-dock basis (as
opposed to “bill to, ship to”) for WFM at a rate of $[*CONFIDENTIAL*] per
pallet.

 

(i) Payment Terms. WFM shall send a wire transfer every [*CONFIDENTIAL*] as
payment for all acceptable invoices received by WFM the preceding
[*CONFIDENTIAL*]. A finance charge of [*CONFIDENTIAL*] per month shall be
assessed on any delinquent balance.

 

4. Placement of Personnel and Transfer of Pricing Information

 

(a) UNFI shall provide, at its cost, a [*CONFIDENTIAL*] at WFM Headquarters in
Austin, Texas. In addition, UNFI will provide [*CONFIDENTIAL*].

 

(b) WFM agrees to assume responsibility for disseminating product pricing
information to the regions, stores and departments based on a mutually agreed
upon transition schedule. This is presently work being done by UNFI but now that
UNFI is electronically transmitting the 889 and 879 files, WFM has all the
information necessary to disseminate this information.

 

(c) In addition, UNFI agrees that it will accept electronic files from WFM on
its National and Regional Promotions in a file lay-out acceptable to both
parties based on a mutually agreed upon transition schedule. The goal is to
streamline and have consistent formats for mutually agreed data related to
promotions.

 

5. Promotional and Marketing Funds. UNFI will provide assistance to WFM in the
solicitation of vendor funding for new, remodeled stores and acquired stores at
levels requested by WFM.

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NOTE: A request for confidential treatment has been made with respect to the
portions of the following document that are marked with [*CONFIDENTIAL*]. The
redacted portions have been filed separately with the SEC.

 

6. Out of Stock Performance Criteria

 

(a) UNFI and WFM will work together to create an approved product list (“APL”)
beginning with the Northeast Region of WFM. An evaluation of this program will
be made with the parties Joint OOS Committee.

 

(b) UNFI agrees, on a local regional DC by DC basis, to maintain minimum fill
rates of [*CONFIDENTIAL*]% for WFM Facility orders which means that the UNFI
portion of OOS Product’s should not exceed [*CONFIDENTIAL*]%. In the event that
UNFI OOS Product’s exceed [*CONFIDENTIAL*]% for more than [*CONFIDENTIAL*]
consecutive weeks, UNFI shall pay WFM a credit (the “OOS Credit”) equal to
[*CONFIDENTIAL*]. UNFI shall pay the affected WFM Region(s) the OOS Product
Credit every week until such time as UNFI fill rates for the applicable DC equal
or exceed [*CONFIDENTIAL*]% for a week. UNFI shall issue a weekly check to each
affected WFM Region for its prorated share of such OOS Product Credit.

 

7. Audits WFM and its designated agents shall have the right to perform the
following audits of UNFI’s compliance with the terms of the Agreement.
[*CONFIDENTIAL*]. The parties anticipate that this will involve the review of
[*CONFIDENTIAL*].

 

(a) Financial – WFM sales, cost, promotions, performance metrics and discounts;

 

(b) Freight - freight costs, rates, transportation costs;

 

(c) Vendors – invoices from vendors to UNFI.

 

8. Private Label. UNFI will purchase and carry Private Label Products requested
by WFM subject to space and slot availability pursuant to the terms set forth on
Exhibit B. “Private Label Products” shall mean those products that WFM offers
from time to time in WFM Facilities under WFM proprietary labels.

 

9. Termination

 

(a) WFM may terminate this Agreement immediately upon written notice to UNFI
(unless otherwise provided below) for cause if:

 

(i) UNFI fails to make any payment, credit, rebate or other remittance of
monetary consideration provided for herein on the date due, other than as to
payments regarding which UNFI has given WFM notice of good faith dispute, and
fails to remedy any delinquent payment, credit, rebate or other remittance
within fifteen business days after notice thereof from WFM;

 

(ii) UNFI breaches any non-monetary obligations under the Agreement not
specifically referenced above in this Section, and fails to cure such breach
after 30 days’ prior written notice of breach;

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NOTE: A request for confidential treatment has been made with respect to the
portions of the following document that are marked with [*CONFIDENTIAL*]. The
redacted portions have been filed separately with the SEC.

 

(iii) Regulatory violations by UNFI where the violations or the corrective
action required materially and adversely affect the continued ability of UNFI to
perform all or any material portion of the Agreement; or

 

(iv) [*CONFIDENTIAL*].

 

(b) UNFI may terminate the Agreement immediately for cause upon written notice
to WFM if:

 

(i) WFM fails to make any payment, credit, rebate or other remittance of
monetary consideration provided for herein on the date due, other than payments
regarding which WFM has given UNFI notice of a good faith dispute, and fails to
remedy any delinquent payment within five business days after notice thereof
from UNFI (which failure to cure shall be an event of default), or if such
breach occurs more than twice in any given calendar year;

 

(ii) WFM fails to purchase $[*CONFIDENTIAL*] of Products in any calendar year
during the Term other than where such failure is caused by a Force Majeure event
or WFM’s failure is due to UNFI or manufacturer OOS Products; or

 

(iii) WFM materially breaches any non-monetary obligations under the Agreement
not specifically referenced above in this Section, and fails to cure such breach
after 30 days’ prior written notice of breach.

 

10. Facilities; Delivery Standards.

 

(a) Standards for Facilities. UNFI represents, warrants and covenants that all
UNFI distribution centers will be maintained and operated in all material
respects in accordance with all applicable laws, in compliance with industry
standards and with UNFI warehousing and delivery standards, which will be
available for review upon request by WFM. WFM may inspect the physical plant and
inventory of any distribution center during normal business hours upon
reasonable advance notice to the designated UNFI personnel, but shall not impair
or impede the business operations of the center. UNFI shall give at least 60
days notice of its intent to move service for any WFM Store from one facility to
another facility. The proposed move shall not result in any increase in cost to
WFM, and the parties will have had the opportunity to prepare and implement a
plan for a transition to any new distribution facility.

 

(b) Departure Windows. Unless otherwise provided in this Agreement, UNFI agrees
to maintain the existing departure windows for scheduled departures from
distribution centers for delivery to WFM Facilities. If changes are required by
municipal, residential or property owners on delivery hours, parking of trucks,
delivery routes, curfews, noise ordinances, lease covenants, neighborhood
covenants and/or operating hours, then WFM and UNFI will work together to make
the scheduling changes necessary to comply with such restrictions.

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NOTE: A request for confidential treatment has been made with respect to the
portions of the following document that are marked with [*CONFIDENTIAL*]. The
redacted portions have been filed separately with the SEC.

 

(c) Code Date Policy; Inventory Management. Products shall be distributed to WFM
Facilities in compliance with the Code Date Policy attached as Exhibit D related
to the minimum number of days prior to expiration of the final code date, for
perishable Products, under which such Products will be accepted upon delivery to
WFM Facilities. Product delivered with less than the minimum code date shall be
deemed out-of-stock for purposes of this Agreement. UNFI agrees to deliver all
Products on a “first-in, first-out” inventory management basis, to ensure proper
inventory turns and maximize available Product Code Dates.

 

(d) Quality Standards. Products will be delivered palletized and shrink-wrapped
and meet WFM’s quality standards and be free from damage including but not
limited to temperature damage and be free from evidence of rodents or insects.
The parties will develop a mutually agreeable pallet and tote exchange program.
In the event that any product is recalled or withdrawn (the “Recalled Product”),
UNFI or its designee will pick up the Recalled Product in order to remove any
Recalled Product from WFM Facilities and shall dispose of or return any Recalled
Products as required. In addition to the foregoing responsibilities, UNFI shall
use its best reasonable efforts to cooperate with WFM in removing the Recalled
Product and replenishing WFM Facilities with replacement products.

 

(e) Store Receiving. All product shipments by UNFI to WFM Facilities shall be
evidenced by an invoice and signed by both parties. Shipments of product shall
be acknowledged as received by execution by store personnel of the delivered
invoice a copy of which shall be left with the WFM Facility.

 

(f) Passage of Title and Risk of Loss. Title and risk of loss shall pass upon
delivery to WFM Facilities when delivered by UNFI fleet or by independent
carrier.

 

11. Indemnification

 

(a) UNFI Indemnity. UNFI shall indemnify, defend and hold harmless WFM and its
parent and affiliates, together with their stockholders, general and limited
partners, members, managers, directors, officers, employees, agents,
representatives, successors and assigns from and against any and all demands,
claims, liabilities, losses, costs, expenses (including but not limited to
reasonable attorney fees), injuries and damages of any kind (together “Claims”)
incurred or suffered by or asserted against any of them, arising out of or
relating to (i) any actual or alleged violation by UNFI of any federal, state or
local law, including any statute, ordinance, administrative order, rule or
regulation; (ii) any negligence or willful misconduct on the part of UNFI or any
of its employees or agents; (iii) any breach of any term of this Agreement;
and/or (iv) the employment, presence or activities of any UNFI applicant,
employee or contractor on any premises of WFM or any WFM Affiliates for any
purpose related to this Agreement, including but not limited to all personal
injury, wage and hour, wrongful termination, harassment, discrimination, workers
compensation or disability claims or demands.

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NOTE: A request for confidential treatment has been made with respect to the
portions of the following document that are marked with [*CONFIDENTIAL*]. The
redacted portions have been filed separately with the SEC.

 

(b) WFM Indemnity. WFM shall indemnify, defend and hold harmless UNFI and its
parent and affiliates, together with their stockholders, general and limited
partners, members, managers, directors, officers, employees, agents,
representatives, successors and assigns from and against any and all Claims
incurred or suffered by or asserted against any of them, arising out of or
relating to (i) any actual or alleged violation by WFM of any federal, state or
local law, including any statute, ordinance, administrative order, rule or
regulation; (ii) any negligence or willful misconduct on the part of WFM or any
of its employees or agents; (iii) any breach of any term of this Agreement;
and/or (iv) the employment, presence or activities of any WFM applicant,
employee or contractor on any premises of UNFI for any purpose related to this
Agreement, including but not limited to all personal injury, wage and hour,
wrongful termination, harassment, discrimination, workers compensation or
disability claims or demands.

 

(c) Third Person Claims. Promptly after a party has received notice of or has
actual knowledge of any Claim against it covered by a third party or the
commencement of any action or proceeding by a third person with respect to any
such Claim, such party (sometimes referred to as the “Indemnitee”) shall give
the other party (sometimes referred to as the “Indemnitor”) written notice of
such claim or commencement of such action or proceeding; provided, however, that
the failure to give such notice will not affect the right to indemnification
hereunder with respect to such Claim, action or proceeding, except to the extent
that the other party has been actually prejudiced as a result of such failure.
If the Indemnitor has notified the Indemnitee within thirty (30) days from the
receipt of the foregoing notice that it wishes to defend against the Claim,
unless there exists a potential conflict of interest between the parties, then
the Indemnitor shall have the right to assume and control the defense of the
Claim by appropriate proceedings with counsel reasonably acceptable to the
Indemnitee. The Indemnitee may participate in the defense, at its sole expense,
of any such Claim for which the Indemnitor shall have assumed the defense
pursuant to the preceding sentence, provided, however, that counsel for the
Indemnitor shall act as lead counsel in all matters pertaining to the defense or
settlement of such Claims, suit or proceeding other than Claims that in the
Indemnitee’s reasonable judgment could have a material and adverse effect on
Indemnitee’s business apart from the payment of money damages. The Indemnitee
shall be entitled to indemnification for the reasonable fees and expenses of its
counsel for any period during which the Indemnitor has not assumed the defense
of any claim. The Indemnitor may not settle any Claim without obtaining a
release for the benefit of the Indemnitee, unless the consent of the Indemnitee
is obtained.

 

(d) Product Liability. UNFI acknowledges that it generally obtains
indemnification agreements from the various manufacturers, vendors or
distributors of products it purchases and sells. UNFI agrees to indemnify and
hold harmless WFM for any liability arising from any product (other than private
label products below) sold to WFM by UNFI, without regard to any negligence by
UNFI related to such product, except where the loss is determined to have arisen
out of the negligence of WFM. UNFI’s obligation to indemnify WFM for any
liability arising from any such products

 

 

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NOTE: A request for confidential treatment has been made with respect to the
portions of the following document that are marked with [*CONFIDENTIAL*]. The
redacted portions have been filed separately with the SEC.

 

sold to WFM shall exist regardless of the existence or nonexistence of any such
indemnification agreements from product manufacturers. Indemnification under
this section does not extend to claims arising out of any WFM private label
products, except where the liability or loss is attributable to the negligence
or intentional acts or omissions of UNFI. Except as otherwise provided
hereinabove, all demands, claims, liabilities, losses, costs, injuries and
damages of any kind related to private label products are the responsibility of
WFM.

 

(e) Insurance. At all times during the Term and for a one year period after its
termination or expiration, UNFI and WFM agree that all material properties and
risks of such party shall at all times be covered by valid and currently
effective insurance policies or binders of insurance or programs of
self-insurance in such types and amounts as are consistent with customary
practices and standards of the industry, but in no event less than the amounts
set forth on Exhibit C. Each of UNFI’s insurance policies shall, at UNFI’s sole
expense, name “Whole Foods Market Distribution, Inc., a Delaware corporation,
together with its parent and affiliates” as additional insureds to the extent of
the respective parties’ obligations herein. Each of WFM’s insurance policies
shall, at WFM’s sole expense, name United Natural Foods, Inc. together with its
parent, affiliates,” as additional insureds to the extent of the respective
parties’ obligations herein. Certificates of insurance evidencing the renewal of
insurance shall be exchanged by the parties from time to time. The certificates
of insurance shall provide that: (a) such insurance shall not be materially
modified or cancelled unless the other party has been given at least thirty (30)
days’ advance written notice thereof; and (b) such certificates shall be renewed
annually or as policy renewals occur. None of the required coverage amounts
shall be construed as a limitation on a party’s potential liability.

 

12. Compliance with Laws.

 

(a) General. Each party covenants and agrees during the Term it will fully
comply with all applicable laws, ordinances, regulations, licenses and permits
of or issued by any federal, state or local government entity, agency or
instrumentality applicable to its responsibilities hereunder. Each party agrees
that it shall comply with all certification procedures and regulations. Each
party shall promptly notify the other party after it becomes aware of any
material adverse proposed law, regulation or order that, to its knowledge, may
or does conflict with the parties’ obligations under this Agreement. The parties
will then use reasonable efforts to promptly decide whether a change may be made
to the terms of this Agreement to eliminate any such conflict or
impracticability.

 

(b) Organic Documentation. In connection with any organic products, UNFI shall
take all such actions as required by any federally recognized certifying
organization (or as required by law) in order for such products to be certified
as organic, including, without limitation, the maintenance of any required
documentation and the taking of all reasonably necessary precautions to prevent
product compromise. UNFI shall provide all documentation relating to the
foregoing to WFM at WFM’s request. WFM acknowledges that UNFI’s facilities in
Iowa City and Indiana are in the process of obtaining such certifications and
UNFI agrees to use its commercially reasonable efforts to expedite such
certifications.

 

 

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NOTE: A request for confidential treatment has been made with respect to the
portions of the following document that are marked with [*CONFIDENTIAL*]. The
redacted portions have been filed separately with the SEC.

 

13. Representations and Warranties of UNFI. UNFI represents and warrants to WFM
as follows, and such representations and warranties shall survive the Effective
Date:

 

(a) Sufficient Personnel to Perform Obligations. UNFI represents that it has
sufficient personnel with adequate training and expertise to perform its
obligations as contemplated hereunder in the time frames contemplated herein.

 

(b) National Organic Standards. UNFI represents and warrants that it has
adequate processes and systems in place, and has adequately educated its
personnel, and that it will fully comply with all federal, state and local
regulations relating to handling and labeling of organic products, including but
not limited to the National Organic Standards as promulgated by the U.S.
Department of Agriculture and as such applies to UNFI as a handler or processor
of organic foods. UNFI acknowledges that WFM has placed substantial reliance on
UNFI to handle various foods for human consumption so as to not invalidate any
“organic” designation of such foods. UNFI agrees to use its commercially
reasonable efforts to expedite such certifications.

 

(c) Computer Systems. UNFI has proper security safeguards in place to ensure the
confidentiality of all of WFM’s data as contained in UNFI’s computer systems.
All such systems will perform without material defect or error in compliance
with the performance standards set forth in this Agreement. UNFI has a disaster
recovery program in place to ensure that, in the event of a catastrophic
destruction of any portion of UNFI’s computer systems, wherever located, UNFI
will be able to recover all necessary data to continue to perform its
obligations hereunder in substantially the time frames contemplated herein.

 

(d) Facilities’ Condition and Capacity. All of the distribution centers
servicing WFM will be maintained and operated in accordance with UNFI
warehousing and delivery standards. Such facilities have the operational systems
required to support the obligations of UNFI as set forth in this Agreement, and
all such facilities have adequate capacity to order, store and deliver products
in accordance with the terms of this Agreement and in the amounts contemplated
by WFM. All the distribution centers shall have sufficient security measures in
place prior to receipt of products for WFM to ensure that such products are not
tampered with or adulterated in any manner, and that all such products shall be
maintained at temperatures and other storage conditions necessary to preserve
the freshness and integrity of the Products.

 

(e) Information Provided to Auditors. All information that shall be provided by
UNFI to WFM and/or its designated auditors shall be provided in the format in
which such information is maintained in the normal course of UNFI’s business,
and to UNFI’s knowledge, all such information shall be true and correct in all
material respects, except as otherwise disclosed to WFM and/or its designated
auditors at the time of disclosure.

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NOTE: A request for confidential treatment has been made with respect to the
portions of the following document that are marked with [*CONFIDENTIAL*]. The
redacted portions have been filed separately with the SEC.

 

14. Representations and Warranties of WFM. WFM represents and warrants to UNFI
as follows, and such representations and warranties shall survive the Effective
Date:

 

(a) Sufficient Personnel to Perform Obligations. WFM represents that it has
sufficient personnel with adequate training and expertise to perform its
obligations as contemplated hereunder in the time frames contemplated herein.

 

(b) Computer Systems. WFM has proper security safeguards in place to ensure the
confidentiality of all of UNFI’s data as contained in WFM’s computer systems.
All such systems will perform without material defect or error in compliance
with the performance standards set forth in this Agreement. WFM has a disaster
recovery program in place to ensure that, in the event of a catastrophic
destruction of any portion of WFM’s computer systems, wherever located, WFM will
be able to recover all necessary data to continue to perform its obligations
hereunder in substantially the time frames contemplated herein.

 

15. Miscellaneous

 

(a) Binding Effect. This Agreement is a binding obligation between the parties
hereto for the sale by UNFI and purchase by WFM for the products referenced at
the prices and other terms set out in or referenced herein, and may be enforced
by either party in accordance with its terms. This Agreement supersedes all
previous agreements between the parties.

 

(b) Force Majeure. “Force Majeure” events shall be events beyond the reasonable
control of a party (and not through the fault or negligence of such party) that
make timely performance of an obligation not possible. Force Majeure events are
those that are not reasonably foreseeable with the exercise of reasonable care,
nor avoidable through the payment of nonmaterial additional sums. In addition,
Force Majeure events are not due to the negligence, inattention, misconduct or
inexperience of the party affected. In the event of a Force Majeure, the party
so affected shall give prompt written notice to the other party of the cause and
shall take whatever reasonable steps are necessary to relieve the effect of such
cause as rapidly as possible.

 

(c) Governing Law; Forum and Jurisdiction; Waiver of Punitive and Similar Types
of Damages. The relationship of the parties hereto and all claims arising out of
or related to that relationship, including, but not limited to, the construction
and interpretation of any written agreements, including this Agreement, shall be
governed by the substantive laws of the State of Delaware (without regard to
conflicts of law principles). The parties agree and consent to the jurisdiction
of the state and federal courts located in Chicago, Illinois and acknowledge
that such courts are proper and convenient forums for the resolution of any
actions between the parties with respect to

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NOTE: A request for confidential treatment has been made with respect to the
portions of the following document that are marked with [*CONFIDENTIAL*]. The
redacted portions have been filed separately with the SEC.

 

the subject matter of this Agreement, and agree that, in such case, these courts
shall be the sole and exclusive forums for the resolution of any actions between
the parties with respect to the subject matter hereof. The parties hereby waive
any right and all right to a jury trial under any applicable law. The parties
also waive any and all right to punitive, incidental or consequential damages,
except to the extent such damages are included in any award for which
indemnification is sought pursuant to the terms of this Agreement or an action
is brought for breach of provisions relating to confidential information. Each
party herein shall be responsible for their own attorneys’ fees, costs and
expenses.

 

(d) Confidentiality. The parties to this Agreement shall maintain as
confidential the specific terms hereof (“Confidential Information”), and shall
not disclose such terms to any third party (other than to its own outside legal,
accounting, insurance or financial advisors as necessary) without the other
party’s prior written consent. “Confidential Information” about a party learned
under this Agreement shall not be used during or after the term of this
Agreement except in connection with the party’s obligations hereunder, and
without limiting the foregoing, such information as to WFM may not be used by
UNFI in connection with the marketing, distribution or sale of UNFI’s products
other than to WFM. The term “Confidential Information” shall include computer
software, source code, object code, hardware configurations and all other
information relating to a party, its business and prospects, learned by the
other party or disclosed by such party from time to time to the other party in
any manner, whether orally, visually or in tangible form (including, without
limitation, documents, devices and computer readable media) and all copies,
improvements, derivatives and designs thereof, created by either party whether
owned by or licensed to such party. The term “Confidential Information” shall
also be deemed to include all notes, analyses, compilations, studies,
interpretations or other documents prepared by a party that contain, reflect or
are based upon the information furnished to such party by the other party
pursuant hereto. Confidential Information shall not include any information
that:

 

(i) was in a party’s possession prior to disclosure by the other party
hereunder, provided such information is not known by such party to be subject to
another confidentiality agreement with or secrecy obligation to the other party;

 

(ii) was generally known in the grocery industry at the time of disclosure to a
party hereunder, or becomes so generally known after such disclosure, through no
act of such party;

 

(iii) has come into the possession of a party from a third party who is not
known by such party to be under any obligation to the other party to maintain
the confidentiality of such information; or

 

(iv) was independently developed by a party without the use of any Confidential
Information of the other party, to the extent that such independent development
is reasonably established by such first party to the other party.

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NOTE: A request for confidential treatment has been made with respect to the
portions of the following document that are marked with [*CONFIDENTIAL*]. The
redacted portions have been filed separately with the SEC.

 

Notwithstanding the foregoing, nothing herein shall prevent the filing of a copy
of this Agreement as an exhibit to any filing required by a regulatory agency
having jurisdiction over either party, provided that a party required to file a
copy hereof shall notify the other party of the filing and request and use its
best efforts to obtain confidential treatment of all financial terms of this
Agreement prior to the filing thereof. In addition, either party may disclose
the terms of this Agreement pursuant to a valid subpoena, provided such party
gives the other party reasonable prior notice of the service of any subpoena to
permit the other party to seek a protective order, and seeks confidential
treatment of all financial terms hereof.

 

The parties acknowledge and agree that the non-breaching party’s remedy at law
is inadequate in the event of any breach or threatened breach by the other party
of its agreements set forth in this Section. In the event of such breach or
threatened breach, in addition to any other remedy which may be available to the
non-breaching party, the non-breaching party shall be entitled to seek, without
posting a bond, preliminary or permanent injunctive and/or other equitable
relief restraining the breaching party, or any of its agents or employees, from
breaching or acting in any manner inconsistent with the conduct or performance
required by this Section.

 

(e) Amendment; Assignment. This Agreement may not be amended or modified except
by an instrument in writing signed by an authorized officer of each party. It is
agreed that neither party shall transfer or assign this Agreement or any part
hereof or any right arising hereunder, by operation of law or otherwise, to a
third party without the prior written consent of the other party, which shall
not be unreasonably withheld or delayed. Any purported assignment without
consent shall be void and of no force or effect or, at the other party’s option,
shall terminate this Agreement. Subject to the foregoing, this Agreement shall
be binding on the respective parties and their permitted successors and assigns.
Notwithstanding anything to the contrary stated above, both parties may assign
this Agreement to any direct or indirect affiliate without obtaining the consent
of the other party; provided, however, that the assignor shall continue to be
liable for any failure by the assignee to perform.

 

(f) Entire Agreement; Survival. All exhibits to this Agreement are incorporated
by reference herein. This Agreement (and any documents referred to herein or
therein) represents the entire agreement and understanding of the parties with
respect to the matters set forth herein, and there are no representations,
warranties or conditions or agreements (other than implementing invoices,
purchase orders and the like necessary to implement this Agreement) not
contained herein (or in any documents not referred to herein) that constitute
any part hereof or that are being relied upon by any party hereunder.
Notwithstanding any termination of this Agreement, all claims arising prior to
such termination for any breach of or for any amount due under this Agreement
(excluding any such claims that have been satisfied, waived or released prior to
such termination) under this Agreement, shall survive such termination, and in
addition, the following sections shall survive any such termination: Sections 7
through 15.

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NOTE: A request for confidential treatment has been made with respect to the
portions of the following document that are marked with [*CONFIDENTIAL*]. The
redacted portions have been filed separately with the SEC.

 

(g) Severability. If any provision of this Agreement is held by a court of
competent jurisdiction to be invalid, void, or unenforceable, the remaining
provisions shall nevertheless continue in full force without being impaired or
invalidated in any way.

 

(h) Publicity. Subsection 15(d) notwithstanding, both parties shall agree on a
joint initial press release on the entering into of this Agreement; provided,
however, that either party may issue releases as deemed necessary by their
respective securities counsel under applicable laws governing the release of
information.

 

(i) Notices. Any notices to be given by either party to the other shall be in
writing by personal delivery or by mail, registered or certified, postage
prepaid with return receipt requested, or by facsimile (only with receipt
confirmed). Notices shall be addressed to the parties at the addresses set forth
below or to such other address as shall have been so notified to the other party
in accordance with this Section. Notices to UNFI shall be addressed to: Steven
Townsend, UNFI, 260 Lake Road, Dayville, CT 06241, FAX: 860-779-0746, with a
copy, which shall not constitute notice, to E. Colby Cameron, Esq., Cameron &
Mittleman LLP, 56 Exchange Terrace, Providence, RI 02903, FAX: 401-331-5787.
Notices to WFM shall be addressed to: VP Purchasing, Whole Foods Market
Distribution, Inc., 550 Bowie Street, Austin, Texas 78703 with a copy to WFM’s
General Counsel at the same address.

 

(j) No Third Party Beneficiaries. Nothing in this Agreement, whether expressed
or implied, is intended to confer on any person other than the parties to this
Agreement or their respective successors or permitted assigns, any rights,
remedies, obligations or liabilities.

 

(k) Independent Contractors. In all matters relating to this Agreement both
parties shall be acting solely as independent contractors and shall be solely
responsible for the acts of their respective employees, contractors and agents.
Employees, agents or contractors of one party shall not be considered employees,
agents or contractors of the other party. Nothing contained in this Agreement
shall be deemed or construed to create a partnership or joint venture, to create
the relationship of an employer-employee or principal-agent, or to otherwise
create any liability for or obligation of either party whatsoever with respect
to the indebtedness, liabilities, and obligations of the other party. Neither
UNFI nor any employee or representative of UNFI shall at any time wear a “Whole
Foods Market” (Registered Trademark) uniform or in any way hold himself out to
be an employee of WFM or any WFM Affiliate. The parties specifically agrees that
this Agreement shall not be deemed to grant or imply that either party or any
employee of either party is authorized to sign, contract, deal, or otherwise act
in the name of or on behalf of the other party.

 

(l) Titles and Headings; Counterparts; Facsimile Signature. The titles and
headings to Sections herein are inserted for the convenience of reference only
and are not intended to be a part of or to affect the meaning or interpretation
of this Agreement. This Agreement may be executed in one or more counterparts,
all of which will be considered one and the same agreement, and will become a
binding agreement when one or more

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

NOTE: A request for confidential treatment has been made with respect to the
portions of the following document that are marked with [*CONFIDENTIAL*]. The
redacted portions have been filed separately with the SEC.

 

counterparts have been signed by each party and delivered to the other party.
Electronic or facsimile signatures shall be deemed original signatures for
purposes of execution of this document. This Agreement, including its
attachments, supersedes all prior agreements between UNFI and WFM or any WFM
Affiliate and is the only agreement between WFM and UNFI, either oral or in
writing, relating to the matters set forth herein.

 

(m) Negotiation of Agreement, Each party and its counsel have cooperated in the
drafting and preparation of this Agreement and the documents referred to herein,
and any drafts relating thereto shall be deemed the work product of the parties
and may not be construed against any party by reason of its preparation. Any
rule of law or any legal decision that would require interpretation of any
ambiguities in this Agreement against the party that drafted it is of no
application and is hereby expressly waived.

 

 

[Signature Page to Follow]

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NOTE: A request for confidential treatment has been made with respect to the
portions of the following document that are marked with [*CONFIDENTIAL*]. The
redacted portions have been filed separately with the SEC.

 

WHEREAS, the parties hereto have entered into this Agreement as of the Effective
Date.

 

Whole Foods Market Distribution, Inc.,

a Delaware corporation

By:  

 

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

Name Printed:  

 

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

Title:  

 

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

UNITED NATURAL FOODS, INC. By:  

 

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

Name Printed:  

 

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

Title:  

 

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

 

List of Exhibits:

 

1. Exhibit A – UNFI Freight Delivery Charge Schedule

2. Exhibit B – Private Label Points

3. Exhibit C – Minimum Insurance Requirements

4. Exhibit D – Code Date Policy

 

[Signature Page to UNFI/WFMDI Agreement]

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

NOTE: A request for confidential treatment has been made with respect to the
portions of the following document that are marked with [*CONFIDENTIAL*]. The
redacted portions have been filed separately with the SEC.

 

Exhibit A

 

Freight Delivery Charge Schedule

 

[*CONFIDENTIAL*]

 

 

 

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

NOTE: A request for confidential treatment has been made with respect to the
portions of the following document that are marked with [*CONFIDENTIAL*]. The
redacted portions have been filed separately with the SEC.

 

Exhibit B

 

WFM Private Label Points

 

[*CONFIDENTIAL*]

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

NOTE: A request for confidential treatment has been made with respect to the
portions of the following document that are marked with [*CONFIDENTIAL*]. The
redacted portions have been filed separately with the SEC.

 

Exhibit C

 

Minimum Insurance Requirements

 

Policy

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

 

Minimum Amount

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

Comprehensive General Liability and Contractual Liability   $[*CONFIDENTIAL*]
per occurrence/$[*CONFIDENTIAL*] aggregate Product Liability   $[*CONFIDENTIAL*]
per occurrence Automobile (combined bodily injury/property damage  
$[*CONFIDENTIAL*] per occurrence Umbrella (Excess) Insurance   $[*CONFIDENTIAL*]
per occurrence Worker’s Compensation   Statutory

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

NOTE: A request for confidential treatment has been made with respect to the
portions of the following document that are marked with [*CONFIDENTIAL*]. The
redacted portions have been filed separately with the SEC.

 

Exhibit D

 

Code Date Policy

 

[*CONFIDENTIAL*]