Contractors' acceptance of any assigned P.O. shall be
deemed conditional and subject to revocation at any time.
4.APPOINTMENT OF DISTRIBUTOR FOR CERTAIN ITEMS.
(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.),
Contractors hereby appoint the Distributor as Contractors' exclusive source for
acceptance of Products at the Premises, performance of all processes,
warehousing, warehousing requirements and delivery to the Customers, with
respect to the Products (unless the Products are being delivered directly to the
Customer by the Manufacturer) and the Distributor hereby accepts such
appointment. Distributor agrees to perform all such requirements using its best
efforts and in a businesslike manner and to utilize quality control procedures
consistent with applicable industry standards.
8
(b) So long as any Products are located at the Distributor's Premises or are
scheduled for delivery to the Distributor's Premises, Distributor agrees to
warehouse all Products and, with respect to such warehousing obligations, agrees
to perform such warehousing obligations in accordance with all of the
Distributor's Specifications.
(c) Distributor further agrees that with respect to all Products covered by an
Accepted P.O. or that Contractors otherwise paid all or part of the
Manufacturer's Price for, or made any advances with regard to any such Accepted
P.O., which are not (or cannot be) used in connection with the applicable
Accepted P.O., the Contractors' shall have the option of taking (and/or
requiring the Distributor to take), the following actions, in the Contractors'
sole discretion, by written notice to the Distributor:
(i)Distributor shall purchase such Products from Contractors within three (3)
business days following Contractors' notice for an aggregate purchase price
equal to Contractors' aggregate costs and expenses (including advances and
payment of the Manufacturer's Price paid by the Contractors) paid and/or it is
bound or obligated to pay, relating to the Products;
(ii)The Contractors can sell the Products and the proceeds thereof applied first
to Contractors' Manufacturing Price payments, other advances made in connection
with such Products and all costs and expenses relating thereto including all
costs and expenses in connection with the sale of such Products including, but
not limited to, legal fees and expenses, publishing costs, filing fees and then
any remaining funds shall be applied as provided in Section 7, and the balance,
if any, to Distributor; provided, however, if the Contractors elect to have the
Distributor purchase all or any portion of the Products as provided in Section
4(c)(i) above, but the Distributor fails to do so in full and/or in the time
frame provided in such Section 4(c)(i), the Contactors can, by written notice to
the Distributor, cancel its election to have some or all of the applicable
Products purchased by the Distributor and sell such amount of Product or the
remaining unsold amount of Products that the Contractors have not required (or
cancelled the requirement for), the Distributor to purchase from the
Contractors; or
(iii)The Contractors can require the Distributor to sell the Products and