Agreement Regarding Offset of Uncollectible Receivables Against Intercompany Liabilities Between John A. Catsimatidis and Gristede's Foods, Inc.

Summary

This agreement is between John A. Catsimatidis and Gristede's Foods, Inc. It addresses how any uncollectible vendor receivables, up to $600,000, from a previous acquisition will be offset against certain intercompany liabilities owed by Gristede's to Mr. Catsimatidis or his entities. Mr. Catsimatidis agrees not to reduce these liabilities below $600,000 until the company's next audited financial statements are issued. The agreement replaces a prior letter from 1999.

EX-10.11 3 0003.txt AGREEMENT Exhibit 10.11 JOHN A. CATSIMATIDIS 823 Eleventh Avenue New York, N. Y. 10019 ================================================================================ Gristede's Foods, Inc. 823 Eleventh Avenue New York, N.Y. 10019-3535 March 10, 2000 Ref: Audit of Gristede's Foods, Inc. Financial Statements for the Fiscal Year Ended November 28, 1999 Gentlemen: On November 10, 1997, Gristede's Foods, Inc. ("GRI") acquired 29 supermarkets and City Produce Distributors, Inc. (collectively, the "Food Group") from entities wholly owned directly or indirectly by myself (the "Acquisition"). The total consideration for the Acquisition was $40 million -- and was paid by GRI issuing $36 million in common stock and assuming $4 million in liabilities owed by the Food Group to myself or entities wholly owned by myself (the "Intercompany Liabilities") In connection with the Acquisition, GRI acquired (i) the inventories located at the Food Group stores, (ii) various Food Group vendor trade receivables, and (iii) certain other Food Group assets. In turn, GRI assumed an equivalent amount of Food Group trade vendor payables and certain other Food Group liabilities. In your audit examination of GRI's financial statements for FYE 11/28/99, you have indicated that as of such date, GRI had approximately $600,000 remaining of the approximately $3.3 million in vendor trade receivables that were acquired from the Food Group pursuant to the Acquisition (the "Remaining Vendor Receivables"). Should any portion of the Remaining Vendor Receivables be deemed by yourselves to be uncollectible at GRI's next fiscal year end date of December 3, 2000 (the "Net Uncollectible Receivables"), I agree to have such Net Uncollectible Receivables offset, dollar for dollar, against the Intercompany Liabilities, provided, however, that the aggregate amount of such offsets do not exceed $600,000. Subsequent recoveries against the Net Uncollectible Receivables shall be available to pay Intercompany Liabilities. I agree not to permit the level of Intercompany Liabilities on GRI's books to fall below $600,000 prior to the issuance of GRI's audited FYE 12/03/00 financial statements, to cover any contingent liability herein. This letter supercedes and nullifies the prior February 27, 1999 letter, "Ref.: Audit of Gristede's Sloan's, Inc. Financial Statements for the Fiscal Year Ended 11/29/98" previously executed by myself. Sincerely, /s/ John Catsimatidis - --------------------- John Catsimatidis 2