FIRST AMENDMENT AGREEMENT
First Amendment Agreement effective as of the Closing Date (as defined below) by and between AmeriServe Food Distribution, Inc., a Delaware corporation ("AmeriServe"), TRICON Global Restaurants, Inc., a North Carolina corporation, Pizza Hut, Inc., a Delaware corporation, Taco Bell Corp., a California corporation, Kentucky Fried Chicken Corporation, a Delaware corporation, and Kentucky Fried Chicken of Southern California, Inc., a Delaware corporation (as successor to Kentucky Fried Chicken of California, Inc.) (collectively, the "Tricon Parties").
WHEREAS, the parties hereto are parties to the Amended and Restated Sales and Distribution Agreement dated as of November 1, 1998, a copy of which is attached hereto as Exhibit A (the "Distribution Agreement"), pursuant to which AmeriServe has been appointed as the exclusive distributor of certain restaurant products sold to company-owned Pizza Hut, Taco Bell and KFC restaurants in the continental United States; and
WHEREAS, on or about January 31, 2000, AmeriServe and its affiliates that are debtors and debtors-in-possession in the Bankruptcy Cases (defined below) filed voluntary petitions under chapter 11 of title 11 of the United States Code, 11 U.S.C. §§101-1330 in the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"), styled In re AmeriServe Food Distribution, Inc., et al.,Case No. 00-358 (PJW) (the "Bankruptcy Cases"); and
WHEREAS, solely to facilitate the sale of certain of the assets of AmeriServe comprising its U.S. distribution business to McLane Company, Inc. (the "Sale Transaction"), the Tricon Parties have agreed to certain modifications of the Distribution Agreement as set forth herein, which modifications the Tricon Parties are not obligated to make and would not have agreed to in the absence of the Sale Transaction; and
WHEREAS, the Tricon Parties acknowledge that they will have received good and valuable consideration in exchange for the modifications set forth herein.
NOW, THEREFORE, the parties hereto hereby agree as follows:
- Section 4(a) of the Distribution Agreement is hereby amended by substituting the phrase "15 calendar days" for the phrase "30 calendar days" where such phase appears in the first sentence thereof, effective as of the Closing Date.
- Section 5(b) of the Distribution Agreement is hereby amended by adding the following at the end thereof, effective as of the Closing Date:
"Notwithstanding the foregoing, Buyer will use its reasonable best efforts to provide flexibility to Seller with respect to 24 hour/day and 7 day/week delivery options, subject to the black out periods described in Exhibit H attached hereto or such other black out periods which are previously agreed to in writing by Seller and the regional managers of the Exclusive Restaurants and the minimum service levels set forth in Section 6 of this Agreement."
- Section 9 of the Distribution Agreement is hereby deleted in its entirety and is replaced by the following, effective as of the Closing Date:
This Agreement is for a term beginning on the Effective Date and ending on January 11, 2005 (the 'Initial Term'), and shall automatically be extended thereafter, subject to the terms and conditions set forth herein, through October 10, 2010 (the 'Extension Term')."
- Section 17 of the Distribution Agreement is hereby deleted in its entirety and is replaced by the following, effective as of the Closing Date:
"Seller acknowledges that the KFC National Purchasing Cooperative, Inc., organizations representing KFC, Taco Bell and Pizza Hut franchisees, and Buyer have established the Unified Foodservice Purchasing Co-op, LLC (the 'Unified Coop') to purchase goods and equipment, including Restaurant Products and Exclusive Restaurant Products, for Buyer-owned and operated and franchisee-owned and operated restaurants, including Exclusive Restaurants. Seller also acknowledges that Buyer has designated the Unified Coop as an SCM Party and Buyer has appointed and designated the Unified Coop, on an exclusive basis, to administer purchasing programs on behalf of restaurant operators for all restaurants located in the United States, including Exclusive Restaurants.
Seller has entered into a Distributor Participation Agreement with the Unified Coop in form and substance satisfactory to the Unified Coop. Consistent with the provisions of Paragraph 13(b) of this Agreement, Buyer and Seller each consent to the disclosure of the terms of this Agreement and any information provided for in this Agreement to the Unified Coop. Buyer and Seller each agree that the designation of the Unified Coop as an SCM Party is not in violation of the assignment provisions contained in Paragraph 16(d) of this Agreement. 'The Service Fee,' as defined in Paragraph 4 of the Distributor Participation Agreement will replace "the costs of SCM allocated to the Exclusive Restaurant Products" referred to in clause (y) in Section 3(a) of this Agreement."
- Section A of Exhibit D to the Distribution Agreement is hereby deleted in its entirety and is replaced by the following, effective as of January 1, 2001:
"A. The prices for the Exclusive Restaurant Products (including fresh produce but excluding softdrinks and Promotional Items (as defined below)) shall be the Landed Cost plus the SCM costs or service fee, as applicable, described in Sections 3(a) and 17 plus the per case charge indicated below:
Pizza Hut $1.66/case
Taco Bell $1.99/case
- Section B of Exhibit D to the Distribution Agreement is hereby deleted in its entirety and is replaced by the following, effective as of January 1, 2001:
- Section IV of Exhibit E to the Distribution Agreement is hereby amended by substituting the phrase "benchmark" for the phrase "bid" where it appears therein, and by substituting the phrase "benchmarking" for the phrase "bidding" where it appears therein, each effective as of the Closing Date.
- Subsection IV.A.1. of Exhibit E to the Distribution Agreement is hereby amended by adding the following after the last sentence thereof, effective as of the Closing Date:
"In developing the standard freight rates, the SCM Party will continue to use similar practices as demonstrated in 1999 and 2000. After receiving freight rates from the vendors, the SCM Party will contract, at its discretion, with one or two nationally recognized third party logistics firms to provide benchmark freight rates by lane. The SCM Party will use its reasonable best efforts to ensure the process is performed independently and objectively to preclude any financial gain by the third party logistics firms for providing understated benchmark freight rates."
- Section V of Exhibit E to the Distribution Agreement is hereby deleted in its entirely, effective as of the Closing Date.
- In connection with and as part of the Sale Transaction, The Tricon Parties consent to AmeriServe's assumption and assignment to McLane, of the Distribution Agreement as modified by this First Amendment, and agree that: (i) at the Closing Date, the Distribution Agreement as amended by this First Amendment shall be deemed assumed by AmeriServe and assigned to McLane, and (ii) other than McLane's promise to perform in accordance with the terms of the Distribution Agreement as amended by the First Amendment, no adequate assurance as to future performance under the United States Bankruptcy Code shall be required in connection with the Sale Transaction. The Tricon Parties consent to the assumption and assignment of the Distribution Agreement, as amended by this First Amendment, shall not constitute a waiver of any claims and/or legal or equitable remedies as against AmeriServe (including, without limitation, rights of recoupment or setoff) arising out of or related to any prior breach of the Distribution Agreement by AmeriServe, it being understood that such claims and/or remedies are expressly retained by and for the benefit of the Tricon Parties and that, notwithstanding the assumption and assignment of the Distribution Agreement, as modified by this First Amendment, there has been no cure of any pre-existing defaults under the Distribution Agreement, provided, that the assumption and assignment shall not diminish or elevate in any way the status or priority of the Tricon Parties' claims or remedies against AmeriServe that arose prior to AmeriServe's bankruptcy.
- This First Amendment to the Distribution Agreement shall become effective upon both its execution by the parties hereto and the final closing of the Sale Transaction (the "Closing Date"), provided that such Sale Transaction has received all requisite approvals of the Bankruptcy Court.
IN WITNESS WHEREOF, the parties hereto have duly executed this First Amendment Agreement to the Distribution Agreement as of _______________, 2000.
|AMERISERVE FOOD DISTRIBUTION, INC.|
By: /s/ Kevin J. Rogan
Name: Kevin J. Rogan
Title: Senior Vice President
| MCLANE COMPANY, INC.|
By: /s/ James L. Kent
Name: James L. Kent
Title: Senior Vice President
TRICON GLOBAL RESTAURANTS, INC.
KENTUCKY FRIED CHICKEN OF SOUTHERN CALIFORNIA, INC.
KENTUCKY FRIED CHICKEN CORPORATION
PIZZA HUT, INC.
TACO BELL CORP.
By: /s/ Aylwin B. Lewis
In his Capacity as Executive Officer
Pursuant to Section 16(a) of
The Distribution Agreement
Name: Aylwin B. Lewis
Title: Executive Vice President
Source: OneCLE Business Contracts.