First Amendment to Distributor Service Agreement

Contract Categories: Business Operations - Services Agreements
EX-10.17 15 dex1017.htm FIRST AMENDMENT TO DISTRIBUTOR SERVICE AGREEMENT First Amendment to Distributor Service Agreement

Exhibit 10.17

First Amendment to Distributor Service Agreement

This First Amendment to Distributor Service Agreement (the “Amendment”), is made and entered into effective as of and retroactive to January 1, 2005, by and between McLane Company, Inc., a Texas corporation (“McLane”), and SSP Partners, a Texas general partnership (“SSP”).

Whereas, SSP and McLane entered into that certain Distributor Service Agreement dated August 21, 1997, as extended pursuant to those certain extensions dated May 13, 2002, October 10, 2002, and January 24, 2003. The Distributor Service Agreement, along with all amendments, exhibits and extensions, is hereby incorporated herein by reference for all purposes and is referred to herein as the “Agreement”; and

Whereas, SSP and McLane desire to amend the Agreement to in order to, among other things, extend the Agreement and modify the billing plan and the cigarette pricing;

Now, therefore, in consideration of the premises described below, McLane and SPP agree to amend the Agreement as follows:

1. The term of the Agreement (the “Term”) shall be for three (3) years, commencing January 1, 2005, and terminating on December 31, 2007.

2. Article 5.3 of the Agreement is modified to provide that the notices to E. V. Bonner, Jr., shall be sent to P.O. Box 9036, Corpus Christi, Texas 78469, telephone: 361 ###-###-####, telecopier: 361 ###-###-####.

3. The attached Exhibit A entitled “Cigarette Pricing”, and Exhibit B entitled “UIN Department Markup Schedule” (referred to collectively as the “Replacement Exhibits”), do hereby replace and supercede all prior Exhibits in the Agreement relating to the above-mentioned subjects.

4. All incentives and mark-up reductions contained in the Replacement Exhibits shall be retroactive to and effective as of January 1, 2005.

5. McLane shall provide to SSP, [***] of shelf tags for all stores for all products.

6. Telxon ordering units shall be provided by McLane to SSP at [***] to SSP. If McLane replaces the Telxon units with another electronic ordering device during the term of this Agreement, any fees will be subject to mutual agreement.

7. McLane shall provide to SSP [***] of live image planograms [***].

8. McLane reserves the right to implement a Diesel Fuel Surcharge (as described below) if the EIA Report on Highway Diesel Price – Gulf Coast (the “EIA Price”), exceeds [***] per gallon for [***] successive months. The Diesel Fuel Surcharge shall be calculated on a “per

 

* CONFIDENTIAL TREATMENT REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND IS NOTED WITH “[***].” AN UNREDACTED VERSION OF THIS DOCUMENT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


stop” basis as follows: For each incremental [***] cent [***] increase above [***] per gallon, McLane may charge an additional [***] cents [***] per stop. By way of explanation, if the EIA Price increases to [***] per gallon (an increase of [***] cents), then the Diesel Fuel Surcharge shall be [***] cents ([***] cents x 2 [***]-cent increases) per stop. Provided, however, that the Diesel Fuel Surcharge shall be eliminated once the EIA Price goes below [***] per gallon.

9. McLane shall pay to SSP a one-time transition allowance of [***] (the “Transition Allowance”), within [***] days after the last party signs this Amendment, as indicated below. This Amendment is contingent on the payment of the Transition Allowance, and the failure of McLane to timely deliver the Transition Allowance to SSP shall render this Amendment null and void and of no further force and effect. If the Agreement is terminated at any time during the Term due to an uncured default on the part of SSP or a Change in Control (as defined in Article 5.2), then SSP shall reimburse to McLane the total Transition Allowance paid to SSP by McLane under this Amendment, less one-thirty-sixth (1/36) of the Transition Allowance for each month elapsed during the Term.

10. McLane shall provide to SSP the [***], on a [***] basis, as defined below, for all SSP stores. If economic conditions warrant a change to the pricing structure by McLane in markets where SSP also operates stores, McLane shall notify SSP of such change and the pricing may be amended by mutual written agreement by SSP and McLane. [***]. McLane agrees to provide to SSP the [***] available from McLane in markets where SSP operates stores.

11. Article 5.2 is amended by adding the following:

“If there is a Change of Control, as herein defined, this Agreement may be terminated by SSP. A “Change in Control” shall be defined as: (a) a transfer of a substantial number of SSP’s Stores, or (b) an event or series of events constituting a change in voting control of SSP or Susser Holdings, LLC. If SSP is unable to cause the acquiring party to so assume and ratify this Agreement, then SSP shall have the option of terminating this Agreement and the parties shall have no further liabilities or obligations hereunder, except for amounts due to McLane prior to such termination, and the unearned Transition Allowance, if any, described in Paragraph 9 above.”

The Agreement, as expressly amended and modified herein, is hereby ratified and confirmed by SSP and McLane and shall continue in full force and effect. In the event of a conflict between the terms of this Amendment and the terms of the Agreement, the terms of this Amendment shall govern and control.

[Signatures on following page]

 

* CONFIDENTIAL TREATMENT REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND IS NOTED WITH “[***].” AN UNREDACTED VERSION OF THIS DOCUMENT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

2


McLane Company, Inc.

By:

  /s/

Print Name: 

    

Print Title: 

    

SSP Partners, a Texas general partnership

By:

  /s/ E.V. Bonner, Jr.

Print Name: 

  E.V. Bonner, Jr.

Print Title: 

  Executive V. P.


EXHIBIT “A”

CIGARETTE PRICING

All cigarettes shall be billed at the then current manufacturer list price plus (a) [***] per carton with respect to all cigarettes manufactured by Philip Morris or any of its respective affiliates, or the Brown & Williamson business unit of Reynolds American, except as provided otherwise in (c) below, (b) [***] per carton on all cigarettes manufactured by Reynolds American or any of its affiliates, except as provided otherwise in (a) above or (c) or (d) below, (c) [***] per carton on Misty, GPC, Viceroy and any other similarly priced cigarettes previously manufactured by Brown & Williamson, or any of its affiliates (including certain Pall Mall cigarettes), (d) [***] per carton on Forsythe cigarettes, (e) [***] per carton on all cigarettes manufactured by Lorillard Tobacco Company or any of its affiliates, or (f) [***] per carton with respect to cigarettes not described in (a), (b), (c), (d) or (e) above, plus, in all cases, all then applicable taxes and fair trade mark-ups. The per carton mark-ups described in (a), (b), (c), (d), (e) or (f) above will be proportionately increased/decreased in the event of any post-June 1, 2004 increases/decreases in the amounts payable to and/or discounts available to McLane from the cigarette manufacturers related to the purchase of cigarettes from such manufacturers by McLane. The per carton rebates described below will be paid within ten (10) business days after the end of each McLane fiscal accounting period.

Cigarette incentive schedule

 

State

   Premium   Generic   Sub-Generic

Texas

   [***]   [***]   [***]

Oklahoma

   [***]   [***]   [***]

[***] will be paid on purchases by SSP of cigarettes manufactured by the fallowing manufacturers or any other manufacturers that do not offer satisfactory rebate/promotional programs to McLane.

Imperial Tobacco

KingMaker

Kretek

Nat Sherman

Premier

State Fe Natural

Tobacco Exports

S&M Brands, Inc.

 

* CONFIDENTIAL TREATMENT REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND IS NOTED WITH “[***].” AN UNREDACTED VERSION OF THIS DOCUMENT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


Subject to the terms and conditions of Section 6.16 of this Agreement, McLane shall provide SSP with [***] of the price protection provided to McLane by the manufacturer on future price increases on cigarettes.

 

* CONFIDENTIAL TREATMENT REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND IS NOTED WITH “[***].” AN UNREDACTED VERSION OF THIS DOCUMENT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


UIN DEPARTMENT MARKUP SCHEDULE

EXHIBIT B

 

UIN DEPT

  

DEPARTMENT DESCRIPTION

   MARK
UP

CIGARETTES

     

GROCERY

   DEFAULT   

20601

   GROCERY    [***]

20602

   SOFT/SPORTS DRINKS    [***]

20603

   FOUNTAIN SYRUPS FIGAL/BIB    [***]

20604

   JUICES    [***]

20605

   DRINK POWDER/LIQ FOUNTAIN    [***]

20606

   COOKIES/CRACKERS    [***]

20608

   NUTS/SNACKS    [***]

20610

   AUTOMOTIVE/MOTOR OIL    [***]

20611

   NACHO CHIPS    [***]

20612

   COFFEE VEND    [***]

20614

   BULK POPCORN/SUPPLIES    [***]

20618

   GROCERY (NORMAL GMP)    [***]

20620

   DISPOSABLE LIGHTERS    [***]

20721

   CUPS & LIDS    [***]

20722

   STORE SUPPLIES/RACKS    [***]

20723

   BAGS/PAPER/PLASTIC    [***]

20925

   CANDY/FULL CASE, VEND    [***]

20926

   CANDY/BAG    [***]

21030

   CANDY/COUNT GOOD    [***]

21235

   TOBACCO SMOKELESS    [***]

21338

   TOBACCO CHEWING/SMOKING    [***]

21339

   CIGARETTE PAPERS/SMOKING ACCSS    [***]

21442

   TOBACCO CIGARS    [***]

21545

   FROZEN FOOD RETAIL    [***]

21546

   FROZEN FOOD BULK/P.PACK    [***]

21547

   DELI MEAT/BULK/PPK FROZEN    [***]

21548

   BAKERY FROZEN    [***]

21649

   FROZEN F.FD MISC/DESSERTS    [***]

21650

   FROZEN SANDWICHES    [***]

21651

   FROZEN F.FD PIZZA/BURRITO    [***]

21652

   ICE CREAM TAKE HOME    [***]

21653

   FROZEN NOVELTIES RETAIL    [***]

 

* CONFIDENTIAL TREATMENT REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND IS NOTED WITH “[***].” AN UNREDACTED VERSION OF THIS DOCUMENT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


UIN DEPARTMENT MARKUP

SCHEDULE

EXHIBIT B

 

UIN DEPT

  

DEPARTMENT DESCRIPTION

   MARK
UP

GROCERY

     

21757

   REFRIGERATED    [***]

21758

   REFRIGERATED JUICE/SHAKES    [***]

21759

   CHEESE PACKAGED    [***]

21760

   BAKERY COOLER    [***]

21761

   EGGS    [***]

21762

   PRODUCE    [***]

21865

   FROZEN BEEF    [***]

21866

   PROCESSED MEATS    [***]

21867

   WAFER MEATS    [***]

21868

   FRESH BOX BEEF    [***]

21869

   FRESH POULTRY    [***]

21870

   FRESH SEAFOOD    [***]

21871

   DELI MEAT/BULK/PPK/COOLER    [***]

21872

   DELI CHEESE BULK/P.PACK    [***]

21873

   DELI SALADS BULK/P.PACK    [***]

21874

   FROZEN POTATOES    [***]

21875

   FROZEN POULTRY    [***]

21876

   FROZEN PORK    [***]

21877

   FRESH SALADS    [***]

21878

   FRESH BULK VEGETABLES    [***]

21879

   FRESH BULK FRUITS    [***]

21880

   PRODUCE PREPACKAGED    [***]

21881

   FROZEN SEAFOOD    [***]
   CATCHWEIGHT    [***]
   HALF-CASE    [***]
   SINGLE-SELL    [***]

 

* CONFIDENTIAL TREATMENT REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND IS NOTED WITH “[***].” AN UNREDACTED VERSION OF THIS DOCUMENT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.