Appointment of Distributor.
(a)
Subject to the other provisions of this Agreement, with respect to
all Accepted P.O.'s (and only so long as such P.O. remains an Accepted P.O.)
Contractor hereby appoints the Distributor as Contractor's exclusive source for
performing or causing to be performed in accordance with the Distributor's
Specifications all processing, warehousing, and shipping requirements with
respect to the Products, and the Distributor hereby accepts such
appointment.
Distributor agrees to perform all of its obligations pursuant to
this ¶4 in a good and workmanlike manner, to utilize quality control procedures
consistent with the standards of Distributor and the industry, and to otherwise
comply with each of the Distributor's Specifications.
(b)
So long as any Products are located at the Warehouse or are
scheduled for delivery to the Warehouse, Distributor agrees to perform in
accordance with all of the Distributor's Specifications.
If any Products are
located at any facility of the Distributor or at an independent warehouse which
is not acceptable to the Contractor, the Distributor shall furnish the
Contractor with a surety bond issued by a company and having terms acceptable to
the Contractor.
(c)
Distributor further agrees that with respect to Products purchased
by Contractor pursuant to (and in accordance with) a Certificate which are not
(or cannot be) used in connection with the applicable Accepted P.O., upon
Contractor's written notice:
5
(i)
Distributor shall purchase such Products from Contractor within
three (3) days following Contractor's notice for a purchase price equal to
Contractor's costs for the Products; or
(ii)
If Distributor fails to make such purchase of Products, such
Products shall be sold by Contractor and the proceeds thereof applied first to
Contractor's costs for the Products, and the balance, if any, to Distributor.
5.
Payment and Re-Assignment.
(a)
Upon delivery of Products to the Customer pursuant to an Accepted
P.O., Distributor shall issue a P.O. Invoice (and deliver any other related
documents required by the applicable P.O. for issuance of an invoice on account
of such P.O.) to the Customer for the full P.O. Price.
Upon Contractor's
direction, the P.O. Invoice so issued shall be in the name of the Contractor and
shall direct the Customer to make payment to the Contractor (or the Lock Box, if
applicable).
Distributor shall immediately pay to the Contractor any sums from
time to time received by the Distributor from the Customer or any other party
other than the Contractor on account of a P.O. Invoice.
Upon Contractor's
demand, each P.O. Invoice shall be prepared on such invoice form as Contractor
may designate.
(b)
At such time as Contractor has received payment in full on account
of a P.O. Invoice or such other amount as is designated by Contractor on Exhibit
"C" hereto, the Contractor shall re-assign the applicable Accepted P.O. and all
rights with respect thereto to the Distributor and the Distributor shall accept
such re-assignment.
The re-assignment shall be evidenced by a Re-Assignment and
Release of Purchase Order in the form of Exhibit "C" attached hereto.