12. COMMITMENTS AND CONTINGENCIES Purchase Commitments On November 12, 2009, Tops Markets entered into a supply contract with C&amp;S Wholesale Grocers, Inc. ( C&amp;S ) whereby C&amp;S provides warehousing, logistics, procurement and purchasing services in support of the majority of the Company s supply chain. The agreement expires on September 24, 2016. The agreement provides that the actual costs of performing these services shall be reimbursed to C&amp;S on an  open-book  or  cost-plus  basis, whereby the parties will negotiate annual budgets that will be reconciled against actual costs on a periodic basis. The parties will also annually negotiate services specifications and performance standards that will govern warehouse operations. The agreement defines the parties  respective responsibilities for the procurement and purchase of merchandise intended for use or resale at the Company s stores, as well as the parties  respective remuneration for warehousing and procurement/purchasing activities. In consideration for the services it provides under the agreement, C&amp;S will be paid an annual fee and will have incentive income opportunities based upon the Company s cost savings and increases in retail sales volume. On September 24, 2012, Tops Markets entered into a separate supply agreement with C&amp;S to provide similar services in support of the 21 supermarkets acquired in the GU Acquisition from GU Markets LLC, an affiliate of C&amp;S, in October 2012. This agreement expires on September 23, 2022. Effective May 1, 2013, Tops Markets entered into a member participation agreement with Topco Associates LLC, a procurement cooperative for food retailers and wholesalers, for the supply of substantially all of the Company s prescription drugs and other health and beauty care products requirements. There is no minimum purchase requirement, and this agreement expires February 28, 2017. The Company s previous supply agreement for these products with McKesson Corporation was terminated without penalty. Effective July