DISTRIBUTION AGREEMENT
This Agreement ("Agreement") is made effective September 1, 1997, by and
between NORPAC FOODS, INC., an Oregon cooperative corporation, Xxxxxx
Xxxxxxx Sales Agent, Inc., dba NORPAC Food Sales, an Oregon corporation
(both collectively referred to as ("NORPAC"), and INTERNATIONAL YOGURT
COMPANY, an Oregon corporation ("IYC").
R E C I T A L S
A. NORPAC and IYC have been parties to a Marketing Agreement dated
September 8, 1987, which expires September 8, 1997, and which provided for
the distribution, marketing and sales of IYC's frozen dessert and snack
products ("Products").
B. It is the purpose of this Agreement to provide for the invoicing,
pooling and distribution of IYC's Products of the type and with the
characteristics of the products which are currently handled through the
NORPAC system as requested from time to time by IYC; and to serve as a
transition period as the parties cooperate during the term of this
Agreement to promote and encourage the establishment of direct
relationships between IYC and the brokers in the Brokerage Marketing Areas
described in Exhibit A and the establishment of its own marketing and
distribution and invoicing systems.
T E R M S
NOW, THEREFORE, in consideration of the terms and conditions hereinafter
set forth, the parties hereby agree as follows:
I. SERVICES PROVIDED BY NORPAC. During the term of this Agreement, IYC
may utilize NORPAC's system for the invoicing, pooling, selling and
delivery of its Products in the Brokerage Marketing Areas listed on Exhibit
A and in such other areas as are currently and serviced by the NORPAC
marketing and distribution system, and in any other NORPAC system areas as
are mutually agreeable.
II. IYC'S RESPONSIBILITIES. IYC shall assume and fulfill the following
responsibilities:
A. Guaranty and Indemnity. IYC will execute NORPAC's form of
Guaranty and Indemnity, its assurance of compliance with California
Proposition 65, and will provide to NORPAC a certificate of insurance
certifying that NORPAC is an additional insured under IYC's commercial
general liability and umbrella excess liability policies. IYC agrees
that said guaranty, assurance and certificate shall remain in full
force and effect for the benefit of NORPAC under and during the term
of this Agreement.
B. IYC shall continue to stock Products as necessary in its and
NORPAC's system storage facilities, which are used for customer pick
up and NORPAC pool truck deliveries. Consistent with current
practice, IYC agrees to report periodically to NORPAC in writing, at
such times and in such forms as NORPAC may reasonably request, as to
the quantity of products in the storage facilities.
III. ACCOUNTING AND PAYMENT PROVISIONS. When requested by IYC, NORPAC
agrees to provide, the following accounting activities for all services and
product sales under this Agreement:
A. Accurate and timely invoicing of Product sales; customer charge
backs or disputed items shall be for IYC's account, unless due to the
act of NORPAC;
B. Accurate and timely invoicing for transportation charges incurred
by IYC;
C. Freight payments on behalf of IYC to be billed back to IYC;
D. Claims filing and collection for Product distributed through the
NORPAC system which is damaged or destroyed by freight suppliers.
E. Its reasonable best efforts to assist IYC with IYC's reasonable
accounting requirements as reasonably requested from time to time by
IYC.
IYC agrees to timely remit payment in response to NORPAC's invoices.
During the first six (6) months of this Agreement said payment shall be
remitted by IYC on or before sixty (60) days after receipt of NORPAC's
invoice. For the ensuing five (5) month period, said payment shall be
remitted within forty-five (45) days of receipt of NORPAC's invoice.
Thereafter IYC's payment shall be remitted within thirty (30) days of
receipt of NORPAC's invoice. IYC agrees to advise NORPAC in writing by the
applicable due date of the receipt of invoice if it disputes any invoiced
item. The parties agree to cooperate to resolve any disputes. Absent this
written notice the invoice shall be payable in full in accordance with
applicable terms. NORPAC may deduct any undisputed charges which are past
due from IYC from any amounts otherwise due IYC. In the event that related
to this Agreement it becomes necessary by mutual agreement for IYC to
invoice NORPAC for services rendered by IYC to NORPAC, IYC may deduct any
undisputed charges which are past due from NORPAC from any amounts
otherwise due NORPAC. The payment remittance and disputed item notice
provisions in this paragraph which apply to IYC shall apply as well to
NORPAC.
NORPAC will charge IYC and IYC will pay NORPAC the actual charges for
freight, and related services. For NORPAC's invoicing services and costs
that NORPAC incurs in making its distribution system available to IYC, IYC
agrees to pay NORPAC one and one-half percent (12%) of the Brokerage Base
Price of IYC's Product invoiced through the NORPAC system. In addition,
IYC agrees to pay NORPAC an additional one and one-half percent (12%) of
the Brokerage Base Price of IYC's Product for all orders placed and
generated through the NORPAC Food Sales customer service system (which may
be necessary where IYC is not able to establish a broker-direct
relationship). For the purposes of this Agreement, Brokerage Base Price is
defined as paid invoice price, less off-invoice discounts, less cash
discounts, less freight charges (in the case of delivered pricing), and
less marketing development plan charges of $1.90 per case, any change in
which shall be subject to the mutual agreement of the parties.
NORPAC agrees to pay the sum of $25,000 to IYC as follows (1) if IYC has
paid NORPAC on a current basis each month all amounts due NORPAC under the
terms of this Agreement, then NORPAC agrees effective October 31, 1998,
that the $25,000 amount shall be paid as a credit against amounts due
NORPAC through October 31, 1998 and the balance, if any, paid by check to
IYC on such date; or (2) if IYC has not paid NORPAC on a current basis each
month all amounts due NORPAC under the terms of this Agreement then NORPAC
agrees effective December 31, 1998, that the $25,000 amount shall be paid
as a credit against amounts due NORPAC through December 31, 1998 and the
balance, if any, paid by check to IYC on such date; or (3) if IYC waives
all rights under this Agreement to utilize the services being provided by
NORPAC, NORPAC agrees, effective the day the waiver is effective, that the
$25,000 shall be credited against amounts then due NORPAC and the balance,
if any, shall be paid by check to IYC on such date.
IV. TERM. Subject to the Termination provisions hereinafter set forth,
this Agreement commences September 1, 1997, and terminates December 31,
1998, unless sooner terminated according to the terms hereof or extended by
mutual agreement of the parties.
V. TERMINATION. Material breach of this Agreement by any party and
failure promptly to remedy that breach after written notice from any other
party of such breach shall be cause for immediate termination of this
Agreement by any other party. Insolvency of any party or petition for or
adjudication of bankruptcy, or the appointment of a receiver, or a
composition with or assignment for the benefit of creditors, by or as to
any party, shall be cause for immediate termination of this Agreement by
the other parties upon written notice to all parties.
VI. ASSIGNMENT. This agreement may not be assigned or transferred by
either IYC or NORPAC without the prior written consent of the other party.
VII. ATTORNEYS FEES. In the event of litigation arising under this
Agreement, the prevailing party or parties shall be entitled to recover
their reasonable attorneys fees and costs as set by the court at trial or
on appeal.
VIII. BINDING EFFECT. This agreement is binding on the parties, their
successors and assigns.
IX. APPLICABLE LAW. This Agreement shall be construed pursuant to the
laws of the State of Oregon. Jurisdiction and venue for resolution of any
disputes arising hereunder shall be in the Circuit Court for Multnomah
County, Oregon.
X. ENTIRE AGREEMENT. This and the Agreement between the parties
executed on the effective date herewith is the entire agreement of the
parties. It supersedes any prior agreements among the parties.
EXECUTED September 11, 1997, in duplicate original effective the date
first above-written.
INTERNATIONAL YOGURT COMPANY NORPAC FOODS, INC.
By By
Title Title
XXXXXX XXXXXXX SALES AGENT, INC., DBA NORPAC
FOOD SALES
By
Title
