Common use of PROCEEDS AND RECORDS OF SALE Clause in Contracts

PROCEEDS AND RECORDS OF SALE. (a) Except as provided in subparagraph (b), Consigned Products shall be consigned to Consignee at Bulletin Prices, less the percentage specified in Schedule B, for sale and delivery to retail stores at such prices as Consignee may determine. The percentage set forth in Schedule B shall not be reduced for the duration of this Agreement. Except in the case of temporary promotions or programs, Bakery will provide two weeks’ notice to Consignee of across-the-board Bulletin Price changes. (b) Bakery may bill directly any [chains]Chains and military commissaries that have requested such direct billing or that request it in the future. Such directly billed stores in the Territory will be direct customers of Bakery, and Consignee will solicit sales from them and receive product for delivery to them on Bakery’s behalf at Bulletin Prices. Bakery assumes all credit risks with respect to [chains]Chains and military commissaries which receive such direct billing. The funds owed by such [chains]Chains and military commissaries as a result of the Consigned Products delivered are accounts receivable of, and debts payable to, Bakery and are not the property of Consignee. Consignee shall have the exclusive right to perform the service of delivery of Consigned Products to such customers of Bakery and Bakery shall not effect such delivery except through Consignee, subject to the provisions of Paragraphs [1,6,7]1, 6, 7, and 9. For the performance of his/her/its services of solicitation and delivery under this subparagraph (b), Consignee, if he/she/it shall have made prompt and timely delivery of all charge tickets as required by subparagraph (d) (2), shall be paid a percentage of net proceeds payable to Bakery by the direct billing customers, such percentage to be calculated at the rate specified in Schedule B. (c) Bakery may from time to time extend credit to Consignee for Consigned Products to be sold to retail stores on credit extended by Consignee; provided Bakery has approved in advance the stores to receive such credit and the amount and terms thereof. Notwithstanding the foregoing, any credit extended by Consignee shall be at Consignee’s risk. (1) [(1) ]Consignee shall pay promptly each week on the day specified by Bakery for all Consigned Products sold and delivered by Consignee during the preceding week, (a) less any deductions authorized in Paragraph 24 and (b) less any amounts which would be otherwise due on such sales as to which Bakery shall have extended credit to Consignee under ([c]b) above, plus any amounts becoming due during such week under the terms of credit extended during any previous week. (2) Consignee shall promptly deliver to Bakery on such days as Bakery may specify all charge tickets for all deliveries of Consigned Products to direct customers of Bakery for direct billing by Bakery. (e) For any store in Consignee’s Territory that uses scan-based trading (SBT), under which a sale to the store does not occur and commissions are not earned until items are scanned at the consumer point of purchase, Bakery will provide Consignee with an annual “shrink” allowance of 1% (one percent). Shrink refers to unaccounted for Consigned Products delivered to an SBT store, calculated as a percentage of total inventory. Total inventory equals beginning inventory plus net deliveries to the store (i.e., deliveries less returns). Shrink equals: total inventory, less scan-based sales, less ending inventory (after a physical inventory, if necessary). Bakery shall have the right to charge back Consignee for the wholesale cost of any shrink in excess of the 1% (one percent) allowance, less the percentage specified in Schedule B. If shrink at a store that uses SBT exceeds 3% (three percent) in any year, or exceeds 1% (one percent) in two of any three consecutive years, Bakery shall, upon Consignee’s written request, undertake an investigation of the causes of such shrink, and to the extent it is in Bakery’s opinion caused by the store’s failure to take reasonable measures to prevent shrink, Bakery shall use reasonable efforts to work with the Consignee to request that the store take such measures. (f) Upon Consignee’s compliance with Bakery’s stale policy, Bakery will provide Consignee with an annual stale allowance as determined under the policy but in any event no less than 3% of the total amount of Consigned Products delivered by Consignee; provided, however, that Bakery shall have the right to reduce or eliminate the stale allowance if, in Bakery’s commercially reasonable judgment such adjustment is warranted by a material change in business conditions or if Pepperidge Farm determines that Consignee has materially misused the stale allowance in a manner inconsistent with the purposes of the Stale Policy. Bakery shall have the right to charge back Consignee for the wholesale cost of any stale in excess of the stale allowance, less the percentage specified in Schedule B. Bakery shall make available to Consignee reasonable detail supporting any stale charges for which Consignee is responsible. (g) In the event that a Chain account requires double bagged Consigned Products, Bakery shall double bag such Consigned Products at no cost to Consignee through [one year from date of Final Order]. If Bakery in its sole discretion discontinues providing double bagging after [one year from date of Final Order], Bakery shall pay Consignee an additional 2.5% of the Bulletin Price of such Consigned Product double bagged and distributed by Consignee to a retail store (net of returns). In the event Bakery, in its sole discretion, discontinues double bagging Consigned Products and Consignee, in his/her/its sole discretion, opts to discontinue distributing double-bagged Consigned Product to a retail store, Bakery shall have the exclusive right to distribute such double-bagged Consigned Product to such retail store and Consignee shall be entitled to only 5% of the Bulletin Price of such double bagged Consigned Product (net of returns). In the event that a Chain account no longer requires double bagged Consigned Products, Bakery’s obligations under this subparagraph shall cease and Consignee’s obligations under this Agreement will resume. For the avoidance of doubt, any retail store to which Consignee discontinues distributing double-bagged Consigned Product shall remain included in the Territory upon sale of the Territory by Consignee, as set forth in Paragraph 8, below, with the parties’ rights with respect thereto governed by the terms of this Agreement.

PROCEEDS AND RECORDS OF SALE. (a) Except as provided in subparagraph (b), Consigned Products shall be consigned to Consignee at Bulletin Prices, less the percentage specified in Schedule B, for sale and delivery to retail stores at such prices as Consignee may determine. The percentage set forth in Schedule B shall not be reduced for the duration of this Agreement. Except in the case of temporary promotions or programs, Bakery will provide two weeks’ notice to Consignee of across-the-board Bulletin Price changes. (b) Bakery may bill directly any [chains]Chains Chains and military commissaries that have requested such direct billing or that request it in the future. Such directly billed stores in the Territory will be direct customers of Bakery, and Consignee will solicit sales from them and receive product for delivery to them on Bakery’s behalf at Bulletin Prices. Bakery assumes all credit risks with respect to [chains]Chains Chains and military commissaries which receive such direct billing. The funds owed by such [chains]Chains and military commissaries as a result of the Consigned Products delivered are accounts receivable of, and debts payable to, Bakery and are not the property of Consignee. Consignee shall have the exclusive right to perform the service of delivery of Consigned Products to such customers of Bakery and Bakery shall not effect such delivery except through Consignee, subject to the provisions of Paragraphs [1,6,7]11, 6, 7, and 9. For the performance of his/her/its services of solicitation and delivery under this subparagraph (b), Consignee, if he/she/it shall have made prompt and timely delivery of all charge tickets as required by subparagraph (d) (2), shall be paid a percentage of net proceeds payable to Bakery by the direct billing customers, such percentage to be calculated at the rate specified in Schedule B. (c) Bakery may from time to time extend credit to Consignee for Consigned Products to be sold to retail stores on credit extended by Consignee; provided Bakery has approved in advance the stores to receive such credit and the amount and terms thereof. Notwithstanding the foregoing, any credit extended by Consignee shall be at Consignee’s risk. (1) [(1) ][ ]Consignee shall pay promptly each week on the day specified by Bakery for all Consigned Products sold and delivered by Consignee during the preceding week, (a) less any deductions authorized in Paragraph 24 and (b) less any amounts which would be otherwise due on such sales as to which Bakery shall have extended credit to Consignee under ([c]b) above, plus any amounts becoming due during such week under the terms of credit extended during any previous week. (2) Consignee shall promptly deliver to Bakery on such days as Bakery may specify all charge tickets for all deliveries of Consigned Products to direct customers of Bakery for direct billing by Bakery. (e) For any store in Consignee’s Territory that uses scan-based trading (SBT), under which a sale to the store does not occur and commissions are not earned until items are scanned at the consumer point of purchase, Bakery will provide Consignee with an annual “shrink” allowance of 1% (one percent). Shrink refers to unaccounted for Consigned Products delivered to an SBT store, calculated as a percentage of total inventory. Total inventory equals beginning inventory plus net deliveries to the store (i.e., deliveries less returns). Shrink equals: total inventory, less scan-based sales, less ending inventory (after a physical inventory, if necessary). Bakery shall have the right to charge back Consignee for the wholesale cost of any shrink in excess of the 1% (one percent) allowance, less the percentage specified in Schedule B. If shrink at a store that uses SBT exceeds 3% (three percent) in any year, or exceeds 1% (one percent) in two of any three consecutive years, Bakery shall, upon Consignee’s written request, undertake an investigation of the causes of such shrink, and to the extent it is in Bakery’s opinion caused by the store’s failure to take reasonable measures to prevent shrink, Bakery shall use reasonable efforts to work with the Consignee to request that the store take such measures. (f) Upon Consignee’s compliance with Bakery’s stale policy, Bakery will provide Consignee with an annual stale allowance as determined under the policy but in any event no less than 3% of the total amount of Consigned Products delivered by Consignee; provided, however, that Bakery shall have the right to reduce or eliminate the stale allowance if, in Bakery’s commercially reasonable judgment such adjustment is warranted by a material change in business conditions or if Pepperidge Farm determines that Consignee has materially misused the stale allowance in a manner inconsistent with the purposes of the Stale Policy. Bakery shall have the right to charge back Consignee for the wholesale cost of any stale in excess of the stale allowance, less the percentage specified in Schedule B. Bakery shall make available to Consignee reasonable detail supporting any stale charges for which Consignee is responsible. (g) In the event that a Chain account requires double bagged Consigned Products, Bakery shall double bag such Consigned Products at no cost to Consignee through [one year from date of Final Order]. If Bakery in its sole discretion discontinues providing double bagging after [one year from date of Final Order], Bakery shall pay Consignee an additional 2.5% of the Bulletin Price of such Consigned Product double bagged and distributed by Consignee to a retail store (net of returns). In the event Bakery, in its sole discretion, discontinues double bagging Consigned Products and Consignee, in his/her/its sole discretion, opts to discontinue distributing double-bagged Consigned Product to a retail store, Bakery shall have the exclusive right to distribute such double-bagged Consigned Product to such retail store and Consignee shall be entitled to only 5% of the Bulletin Price of such double bagged Consigned Product (net of returns). In the event that a Chain account no longer requires double bagged Consigned Products, Bakery’s obligations under this subparagraph shall cease and Consignee’s obligations under this Agreement will resume. For the avoidance of doubt, any retail store to which Consignee discontinues distributing double-bagged Consigned Product shall remain included in the Territory upon sale of the Territory by Consignee, as set forth in Paragraph 8, below, with the parties’ rights with respect thereto governed by the terms of this Agreement.

PROCEEDS AND RECORDS OF SALE. (a) Except as provided in subparagraph (b), Consigned Products shall be consigned to Consignee at Bulletin Prices, less the percentage specified in Schedule B, for sale and delivery to retail stores at such prices as Consignee may determine. The percentage set forth in Schedule B shall not be reduced for the duration of this Agreement. Except in the case of temporary promotions or programs, Bakery will provide two weeks’ notice to Consignee of across-the-board Bulletin Price changes. (b) Bakery may bill directly any [chains]Chains Chains and military commissaries that have requested such direct billing or that request it in the future. Such directly billed stores in the Territory will be direct customers of Bakery, and Consignee will solicit sales from them and receive order product for delivery to them on Bakery’s behalf at Bulletin Prices. Bakery assumes all credit risks with respect to [chains]Chains Chains and military commissaries which receive such direct billing. The funds owed by such [chains]Chains Xxxxxxx and military commissaries as a result of the Consigned Products delivered are accounts receivable of, and debts payable to, Bakery and are not the property of ConsigneeConsignee . Consignee shall have the exclusive right to perform the service of delivery of Consigned Products to such customers of Bakery and Bakery shall not effect such delivery except through Consignee, subject to the provisions of Paragraphs [1,6,7]11, 6, 7, and 9. For the performance of his/her/its services of solicitation and delivery under this subparagraph (b), Consignee, if he/she/it shall have made prompt and timely delivery of all charge tickets as required by subparagraph (d) (2), shall be paid a percentage of net proceeds payable to Bakery by the direct billing customers, such percentage to be calculated at the rate specified in Schedule B. (c) Bakery may from time to time extend credit to Consignee for Consigned Products to be sold to retail stores on credit extended by Consignee; provided Bakery has approved in advance the stores to receive such credit and the amount and terms thereof. Notwithstanding the foregoing, any credit extended by Consignee shall be at Consignee’s risk. (1d) [(1) ]Consignee shall pay promptly each week on the day specified by Bakery for all Consigned Products sold and delivered by Consignee during the preceding week, (a) less any deductions authorized in Paragraph 24 and (b) less any amounts which would be otherwise due on such sales as to which Bakery shall have extended credit to Consignee under ([c]bc) above, plus any amounts becoming due during such week under the terms of credit extended during any previous week. (2) Consignee shall promptly deliver to Bakery on such days as Bakery may specify all charge tickets for all deliveries of Consigned Products to direct customers of Bakery for direct billing by Bakery. (e) For any store in Consignee’s Territory that uses scan-based trading (SBT), under which a sale to the store does not occur and commissions are not earned until items are scanned at the consumer point of purchase, Bakery will provide Consignee with an annual “shrink” allowance of 1% (one percent). Shrink refers to unaccounted for Consigned Products delivered to an SBT store, calculated as a percentage of total inventory. Total inventory equals beginning inventory plus net deliveries to the store (i.e., deliveries less returns). Shrink equals: total inventory, less scan-based sales, less ending inventory (after a physical inventory, if necessary). Bakery shall have the right to charge back Consignee for the wholesale cost of any shrink in excess of the 1% (one percent) allowance, less the percentage specified in Schedule B. If shrink at a store that uses SBT exceeds 3% (three percent) in any year, or exceeds 1% (one percent) in two of any three consecutive years, Bakery shall, upon Consignee’s written request, undertake an investigation of the causes of such shrink, and to the extent it is in Bakery’s opinion caused by the store’s failure to take reasonable measures to prevent shrink, Bakery shall use reasonable efforts to work with the Consignee to request that the store take such measures. (f) Upon Consignee’s compliance with Bakery’s stale policy, Bakery will provide Consignee with an annual stale allowance as determined under the policy but in any event no less than 3% of the total amount of Consigned Products delivered by Consignee; provided, however, that Bakery shall have the right to reduce or eliminate the stale allowance if, in Bakery’s commercially reasonable judgment such adjustment is warranted by a material change in business conditions or if Pepperidge Farm determines that Consignee has materially misused the stale allowance in a manner inconsistent with the purposes of the Stale Policy. Bakery shall have the right to charge back Consignee for the wholesale cost of any stale in excess of the stale allowance, less the percentage specified in Schedule B. Bakery shall make available to Consignee reasonable detail supporting any stale charges for which Consignee is responsible. (g) In the event that a Chain account requires double bagged Consigned Products, Bakery shall double bag such Consigned Products at no cost to Consignee through [one year from date of Final Order]. If Bakery in its sole discretion discontinues providing double bagging after [one year from date of Final Order], Bakery shall pay Consignee an additional 2.5% of the Bulletin Price of such Consigned Product double bagged and distributed by Consignee to a retail store (net of returns). In the event Bakery, in its sole discretion, discontinues double bagging Consigned Products and Consignee, in his/her/its sole discretion, opts to discontinue distributing double-bagged Consigned Product to a retail store, Bakery shall have the exclusive right to distribute such double-bagged Consigned Product to such retail store and Consignee shall be entitled to only 5% of the Bulletin Price of such double bagged Consigned Product (net of returns). In the event that a Chain account no longer requires double bagged Consigned Products, Bakery’s obligations under this subparagraph shall cease and Consignee’s obligations under this Agreement will resume. For the avoidance of doubt, any retail store to which Consignee discontinues distributing double-bagged Consigned Product shall remain included in the Territory upon sale of the Territory by Consignee, as set forth in Paragraph 8, below, with the parties’ rights with respect thereto governed by the terms of this Agreement.

PROCEEDS AND RECORDS OF SALE. (a) Except as provided in subparagraph (b), Consigned Products shall be consigned to Consignee at Bulletin Prices, less the percentage specified in Schedule B, for sale and delivery to retail stores at such prices as Consignee may determine. The percentage set forth in Schedule B shall not be reduced for the duration of this Agreement. Except in the case of temporary promotions or programs, Bakery will provide two weeks’ notice to Consignee of across-the-board Bulletin Price changes. (b) Bakery may [will]may bill directly any [chains]Chains all chains]any Chains and military commissaries that have requested such direct billing or that request it in the future. Such directly billed stores in the Territory will be direct customers of Bakery, and Consignee will solicit sales from them and receive product for delivery to them on Bakery’s behalf at Bulletin Prices. Bakery assumes all credit risks with respect to [chains]Chains and military commissaries which receive [have requested]receive such direct billing. The funds owed by such [chains]Chains and military commissaries as a result of the Consigned Products delivered are accounts receivable of, and debts payable to, Bakery and are not the property of Consignee. Consignee shall have the exclusive right to perform the service of delivery of Consigned Products to such customers of Bakery and Bakery shall not effect such delivery except through Consignee, Consignee,[-] subject to the provisions of Paragraphs [1,6,7]11, 6, 7, and 9. For the performance of his/her/its services of solicitation and delivery under this subparagraph (b), Consignee, if he/she/it shall have made prompt and timely delivery of all charge tickets as required by subparagraph (d) (2), shall be paid a percentage of net proceeds payable to Bakery by the direct billing customers, such percentage to be calculated at the rate specified in Schedule B. (c) Bakery may [will]may from time to time extend credit to Consignee for Consigned Products to be sold to retail stores on credit extended by Consignee; provided Bakery has approved in advance the stores to receive such credit and the amount and terms thereof. Notwithstanding the foregoing, any credit extended by Consignee shall be at Consignee’s risk. (1) [(1) ][ ]Consignee shall pay promptly each week on the day specified by Bakery for all Consigned Products sold and delivered by Consignee during the preceding week, (a) less any deductions authorized in Paragraph 24 and (b) less any amounts which would be otherwise due on such sales as to which Bakery shall have extended credit to Consignee under ([c]b) above, plus any amounts becoming due during such week under the terms of credit extended during any previous week. (2) Consignee shall promptly deliver to Bakery on such days as Bakery may specify all charge tickets for all deliveries of Consigned Products to direct customers of Bakery for direct billing by Bakery. (e) For any store in Consignee’s Territory that uses scan-based trading (SBT), under which a sale to the store does not occur and commissions are not earned until items are scanned at the consumer point of purchase, Bakery will provide Consignee with an annual “shrink” allowance of 1% (one percent). Shrink refers to unaccounted for Consigned Products delivered to an SBT store, calculated as a percentage of total inventory. Total inventory equals beginning inventory plus net deliveries to the store (i.e., deliveries less returns). Shrink equals: total inventory, less scan-based sales, less ending inventory (after a physical inventory, if necessary). Bakery shall have the right to charge back Consignee for the wholesale cost of any shrink in excess of the 1% (one percent) allowance, less the percentage specified in Schedule B. If shrink at a store that uses SBT exceeds 3% (three percent) in any year, or exceeds 1% (one percent) in two of any three consecutive years, Bakery shall, upon Consignee’s written request, undertake an investigation of the causes of such shrink, and to the extent it is in Bakery’s opinion caused by the store’s failure to take reasonable measures to prevent shrink, Bakery shall use reasonable efforts to work with the Consignee to request that the store take such measures. (f) Upon Consignee’s compliance with Bakery’s stale policy, Bakery will provide Consignee with an annual stale allowance as determined under the policy but in any event no less than 3% of the total amount of Consigned Products delivered by Consignee; provided, however, that Bakery shall have the right to reduce or eliminate the stale allowance if, in Bakery’s commercially reasonable judgment such adjustment is warranted by a material change in business conditions or if Pepperidge Farm determines that Consignee has materially misused the stale allowance in a manner inconsistent with the purposes of the Stale Policy. Bakery shall have the right to charge back Consignee for the wholesale cost of any stale in excess of the stale allowance, less the percentage specified in Schedule B. Bakery shall make available to Consignee reasonable detail supporting any stale charges for which Consignee is responsible. (g) In the event that a Chain account requires double bagged Consigned Products, Bakery shall double bag such Consigned Products at no cost to Consignee through [one year from date of Final Order]. If Bakery in its sole discretion discontinues providing double bagging after [one year from date of Final Order], Bakery shall pay Consignee an additional 2.5% of the Bulletin Price of such Consigned Product double bagged and distributed by Consignee to a retail store (net of returns). In the event Bakery, in its sole discretion, discontinues double bagging Consigned Products and Consignee, in his/her/its sole discretion, opts to discontinue distributing double-bagged Consigned Product to a retail store, Bakery shall have the exclusive right to distribute such double-bagged Consigned Product to such retail store and Consignee shall be entitled to only 5% of the Bulletin Price of such double bagged Consigned Product (net of returns). In the event that a Chain account no longer requires double bagged Consigned Products, Bakery’s obligations under this subparagraph shall cease and Consignee’s obligations under this Agreement will resume. For the avoidance of doubt, any retail store to which Consignee discontinues distributing double-bagged Consigned Product shall remain included in the Territory upon sale of the Territory by Consignee, as set forth in Paragraph 8, below, with the parties’ rights with respect thereto governed by the terms of this Agreement.

PROCEEDS AND RECORDS OF SALE. (a) Except as provided in subparagraph (b), Consigned Products shall be consigned to Consignee at Bulletin Prices, less the percentage specified in Schedule B, for sale and delivery to retail stores at such prices as Consignee may determine. The percentage set forth in Schedule B shall not be reduced for the duration of this Agreement. Except in the case of temporary promotions or programs, Bakery will provide two weeks’ notice to Consignee of across-the-board Bulletin Price changes. (b) Bakery may bill directly any [chains]Chains and military commissaries that have requested such direct billing or that request it in the future. Such directly billed stores in the Territory will be direct customers of Bakery, and Consignee will solicit sales from them and receive product for delivery to them on Bakery[']’s behalf at Bulletin Prices. Bakery assumes all credit risks with respect to [chains]Chains and military commissaries which receive such direct billing. The funds owed by such [chains]Chains and military commissaries as a result of the Consigned Products delivered are accounts receivable of, and debts payable to, Bakery and are not the property of Consignee. Consignee shall have the exclusive right to perform the service of delivery of Consigned Products to such customers of Bakery and Bakery shall not effect such delivery except through Consignee, subject to the provisions of Paragraphs [1,6,7]11, 6, 7, and 9. For the performance of his/her/its services of solicitation and delivery under this subparagraph (b), Consignee, if he/she/it shall have made prompt and timely delivery of all charge tickets as required by subparagraph (d) (2), shall be paid a percentage of net proceeds payable to Bakery by the direct billing customers, such percentage to be calculated at the rate specified in Schedule B. (c) Bakery may from time to time extend credit to Consignee for Consigned Products to be sold to retail stores on credit extended by Consignee; provided Bakery has approved in advance the stores to receive such credit and the amount and terms thereof. Notwithstanding the foregoing, any credit extended by Consignee shall be at Consignee[']’s risk. (1) [(1) ]Consignee shall pay promptly each week on the day specified by Bakery for all Consigned Products sold and delivered by Consignee during the preceding week, (a) less any deductions authorized in Paragraph 24 and (b) less any amounts which would be otherwise due on such sales as to which Bakery shall have extended credit to Consignee under ([c]b) above, plus any amounts becoming due during such week under the terms of credit extended during any previous week. (2) Consignee shall promptly deliver to Bakery on such days as Bakery may specify all charge tickets for all deliveries of Consigned Products to direct customers of Bakery for direct billing by Bakery. (e) For any store in Consignee’s Territory that uses scan-based trading (SBT), under which a sale to the store does not occur and commissions are not earned until items are scanned at the consumer point of purchase, Bakery will provide Consignee with an annual “shrink” allowance of 1% (one percent). Shrink refers to unaccounted for Consigned Products delivered to an SBT store, calculated as a percentage of total inventory. Total inventory equals beginning inventory plus net deliveries to the store (i.e., deliveries less returns). Shrink equals: total inventory, less scan-based sales, less ending inventory (after a physical inventory, if necessary). Bakery shall have the right to charge back Consignee for the wholesale cost of any shrink in excess of the 1% (one percent) allowance, less the percentage specified in Schedule B. If shrink at a store that uses SBT exceeds 3% (three percent) in any year, or exceeds 1% (one percent) in two of any three consecutive years, Bakery shall, upon Consignee’s written request, undertake an investigation of the causes of such shrink, and to the extent it is in Bakery’s opinion caused by the store’s failure to take reasonable measures to prevent shrink, Bakery shall use reasonable efforts to work with the Consignee to request that the store take such measures. (f) Upon Consignee’s compliance with Bakery’s stale policy, Bakery will provide Consignee with an annual stale allowance as determined under the policy but in any event no less than 3% of the total amount of Consigned Products delivered by Consignee; provided, however, that Bakery shall have the right to reduce or eliminate the stale allowance if, in Bakery’s commercially reasonable judgment such adjustment is warranted by a material change in business conditions or if Pepperidge Farm determines that Consignee has materially misused the stale allowance in a manner inconsistent with the purposes of the Stale Policy. Bakery shall have the right to charge back Consignee for the wholesale cost of any stale in excess of the stale allowance, less the percentage specified in Schedule B. Bakery shall make available to Consignee reasonable detail supporting any stale charges for which Consignee is responsible. (g) In the event that a Chain account requires double bagged Consigned Products, Bakery shall double bag such Consigned Products at no cost to Consignee through [one year from date of Final Order]. If Bakery in its sole discretion discontinues providing double bagging after [one year from date of Final Order], Bakery shall pay Consignee an additional 2.5% of the Bulletin Price of such Consigned Product double bagged and distributed by Consignee to a retail store (net of returns). In the event Bakery, in its sole discretion, discontinues double bagging Consigned Products and Consignee, in his/her/its sole discretion, opts to discontinue distributing double-bagged Consigned Product to a retail store, Bakery shall have the exclusive right to distribute such double-bagged Consigned Product to such retail store and Consignee shall be entitled to only 5% of the Bulletin Price of such double bagged Consigned Product (net of returns). In the event that a Chain account no longer requires double bagged Consigned Products, Bakery’s obligations under this subparagraph shall cease and Consignee’s obligations under this Agreement will resume. For the avoidance of doubt, any retail store to which Consignee discontinues distributing double-bagged Consigned Product shall remain included in the Territory upon sale of the Territory by Consignee, as set forth in Paragraph 8, below, with the parties’ rights with respect thereto governed by the terms of this Agreement.

PROCEEDS AND RECORDS OF SALE. (a) Except as provided in subparagraph (b), Consigned Products shall be consigned to Consignee at Bulletin Prices, less the percentage specified in Schedule B, for sale and delivery to retail stores at such prices as Consignee may determine. The percentage set forth in Schedule B shall not be reduced for the duration of this Agreement. Except in the case of temporary promotions or programs, Bakery will provide two weeks’ notice to Consignee of across-the-board Bulletin Price changes. (b) Bakery may bill directly any [chains]Chains Chains and military commissaries that have requested such direct billing or that request it in the future. Such directly billed stores in the Territory will be direct customers of Bakery, and Consignee will solicit sales from them and receive product for delivery to them on Bakery’s behalf at Bulletin Prices. Bakery assumes all credit risks with respect to [chains]Chains Chains and military commissaries which receive such direct billing. The funds owed by such [chains]Chains Chains and military commissaries as a result of the Consigned Products delivered are accounts receivable of, and debts payable to, Bakery and are not the property of Consignee. Consignee shall have the exclusive right to perform the service of delivery of Consigned Products to such customers of Bakery and Bakery shall not effect such delivery except through Consignee, subject to the provisions of Paragraphs [1,6,7]11, 6, 7, and 9. For the performance of his/her/its services of solicitation and delivery under this subparagraph (b), Consignee, if he/she/it shall have made prompt and timely delivery of all charge tickets as required by subparagraph (d) (2), shall be paid a percentage of net proceeds payable to Bakery by the direct billing customers, such percentage to be calculated at the rate specified in Schedule B. (c) Bakery may from time to time extend credit to Consignee for Consigned Products to be sold to retail stores on credit extended by Consignee; provided Bakery has approved in advance the stores to receive such credit and the amount and terms thereof. Notwithstanding the foregoing, any credit extended by Consignee shall be at Consignee’s risk. (1) [(1) ][ ]Consignee shall pay promptly each week on the day specified by Bakery for all Consigned Products sold and delivered by Consignee during the preceding week, (a) less any deductions authorized in Paragraph 24 and (b) less any amounts which would be otherwise due on such sales as to which Bakery shall have extended credit to Consignee under ([c]b) above, plus any amounts becoming due during such week under the terms of credit extended during any previous week. (2) Consignee shall promptly deliver to Bakery on such days as Bakery may specify all charge tickets for all deliveries of Consigned Products to direct customers of Bakery for direct billing by Bakery. (e) For any store in Consignee’s Territory that uses scan-based trading (SBT), under which a sale to the store does not occur and commissions are not earned until items are scanned at the consumer point of purchase, Bakery will provide Consignee with an annual “shrink” allowance of 1% (one percent). Shrink refers to unaccounted for Consigned Products delivered to an SBT store, calculated as a percentage of total inventory. Total inventory equals beginning inventory plus net deliveries to the store (i.e., deliveries less returns). Shrink equals: total inventory, less scan-based sales, less ending inventory (after a physical inventory, if necessary). Bakery shall have the right to charge back Consignee for the wholesale cost of any shrink in excess of the 1% (one percent) allowance, less the percentage specified in Schedule B. If shrink at a store that uses SBT exceeds 3% (three percent) in any year, or exceeds 1% (one percent) in two of any three consecutive years, Bakery shall, upon Consignee’s written request, undertake an investigation of the causes of such shrink, and to the extent it is in Bakery’s opinion caused by the store’s failure to take reasonable measures to prevent shrink, Bakery shall use reasonable efforts to work with the Consignee to request that the store take such measures. (f) Upon Consignee’s compliance with Bakery’s stale policy, Bakery will provide Consignee with an annual stale allowance as determined under the policy but in any event no less than 3% of the total amount of Consigned Products delivered by Consignee; provided, however, that Bakery shall have the right to reduce or eliminate the stale allowance if, in Bakery’s commercially reasonable judgment such adjustment is warranted by a material change in business conditions or if Pepperidge Farm determines that Consignee has materially misused the stale allowance in a manner inconsistent with the purposes of the Stale Policy. Bakery shall have the right to charge back Consignee for the wholesale cost of any stale in excess of the stale allowance, less the percentage specified in Schedule B. Bakery shall make available to Consignee reasonable detail supporting any stale charges for which Consignee is responsible. (g) In the event that a Chain account requires double bagged Consigned Products, Bakery shall double bag such Consigned Products at no cost to Consignee through [one year from date of Final Order]. If Bakery in its sole discretion discontinues providing double bagging after [one year from date of Final Order], Bakery shall pay Consignee an additional 2.5% of the Bulletin Price of such Consigned Product double bagged and distributed by Consignee to a retail store (net of returns). In the event Bakery, in its sole discretion, discontinues double bagging Consigned Products and Consignee, in his/her/its sole discretion, opts to discontinue distributing double-bagged Consigned Product to a retail store, Bakery shall have the exclusive right to distribute such double-bagged Consigned Product to such retail store and Consignee shall be entitled to only 5% of the Bulletin Price of such double bagged Consigned Product (net of returns). In the event that a Chain account no longer requires double bagged Consigned Products, Bakery’s obligations under this subparagraph shall cease and Consignee’s obligations under this Agreement will resume. For the avoidance of doubt, any retail store to which Consignee discontinues distributing double-bagged Consigned Product shall remain included in the Territory upon sale of the Territory by Consignee, as set forth in Paragraph 8, below, with the parties’ rights with respect thereto governed by the terms of this Agreement.