Sample Business Contracts

Distribution Service Agreement - Morgan & Sampson Inc. and Ultrafem Inc.

Sponsored Links

                            DISTRIBUTION SERVICE AGREEMENT

    This Distribution Service Agreement (hereinafter called "Agreement") is
made this 1st day of June by and between MORGAN & SAMPSON, INC., a California
Corporation (hereinafter called "Warehouseman"), and ULTRAFEM, INC. (hereinafter
called "Manufacturer").

    WHEREAS Warehouseman and Manufacturer are each desirous of entering into a
Distribution Service to be performed by Warehouseman on behalf of Manufacturer.

    NOW, THEREFORE, the parties hereto in consideration of the premises and the
mutual promises herein contained, do hereby covenant, promise and agrees as

    1.   DEFINITIONS.  For purposes of the Agreement, the following terms shall
have these meanings:

1.1 "Products" shall mean the products manufactured by the Manufacturer or
otherwise offered by it for sale to its customers and which are to be stored and
shipped by Warehouseman in accordance with this Agreement.

1.2 "Basic Service" shall mean the services rendered by the Warehouseman in the
Handling, Warehousing and Distribution of the Products of the Manufacturer as
further defined in this Agreement.

1.3 "Warehouse" shall mean the building owned or used by the Warehouseman for
storage of Products in the ordinary course of its business at 1651 South Carlos
Avenue, Ontario, California 91761, and/or such other buildings as the parties
shall agree upon.



    2.   TERM OF AGREEMENT.  The term of agreement shall be for a period of one
(1) year, and the Contract shall continue in effect thereafter until terminated
by either party by giving ninety (90) days written notice to the other of its
desire not to continue this agreement in force.

    3.   DUTIES OF WAREHOUSEMAN.  During the term of this Agreement,
Warehouseman shall render to Manufacturer the Basic Services as more
particularly described hereinafter in this paragraph.

3.1 Handling shall consist exclusively of the rendering of the following
    services by Warehouseman during its regular business hours with respect to
    Products duly tendered for delivery pursuant to this Agreement:

    (a)  Receipt of Products at the warehouse loading dock during normal
         working hours of Warehouse;

    (b)  Loading Products into the Warehouse;

    (c)  Rendering memoranda of the receipt of Products from Manufacturer,
         indicating the quantity of the Products received and the condition of
         the Products (as is readily apparent from the condition of the
         containers in which such were delivered or upon Warehouseman's
         unpacking of such containers).  Such memoranda are to be sent to
         Manufacturer within three (3) days following receipt of any shipment
         of Products.  Manufacturer shall furnish Warehouseman with a schedule
         explaining its markings with respect to name of product, quantity and
         size.  Each container shall be marked consistently with such schedule
         to provide Warehouseman with such information.



    (d)  Keeping inventory records of Products delivered and shipped hereunder
         and rendering no less than monthly summaries of the transactions made
         with respect to such Products and no less than quarterly counts of the
         Products physically on hand.

3.2 Warehousing shall consist of the storage of the Products of Manufacturer in
    the Warehouse from the time of loading until the time of shipment in
    accordance with the terms of this Agreement.  It is understood that
    Warehouseman has allocated 5,000 (est.) square feet of warehouse space for
    the Products of the Manufacturer.  Upon reasonable notice from Manufacturer
    that it requires additional space and provided such additional space is
    available in the Warehouse, Warehouseman will allocate additional space to

3.3 Distribution shall consist exclusively of the following services to be
    rendered by the Warehouseman with respect to the Products:

    (a)  Acceptance of orders by telephone, fax, EDI, in writing, or computer
         data link for products from the Manufacturer.  A Master Customer list
         will be supplied by Manufacturer.  It is understood that all such
         orders submitted to the Warehouseman for shipment shall be checked
         against the Customer Master list for credit approval prior to

    (b)  Shipping such orders on forms to be supplied by the Warehouseman to the
         Manufacturer's customers by UPS/RPS or by delivery to such common
         carriers as Warehouseman in its discretion shall determine, within a
         reasonable time following its receipt of an order.



    (c)  Warehouseman shall not be liable for any delay in packing or shipping
         of Products as required hereunder if such delay is due to acts of God,
         War, public enemies, seizure under legal process, strikes, lockouts,
         riots and civil commotion's prolonged unavailability of carriers, or
         any other occurance of similar magnitude.  Products remaining in
         storage as a result of such delay will continue to be subject to
         regular storage charges.

    (d)  A copy of the pick list and the bill of lading covering each shipment
         shall be sent by courier program to Manufacturer promptly following
         their rendering to Manufacturer's customers.

    (e)  Customer service shall consist exclusively of the following services
         to be rendered by the Warehouseman with respect to the products:

         (1)  Preparing customer orders for shipment following a credit
              approval check against the Customer Master list.

         (2)  Updating customer orders after shipment via the inventory product
              status report and confirming shipment to Manufacturer via Fax or

         (3)  Tracing customer orders and obtaining P.O.D.'s upon request.

    4.   DUTIES AND AGREEMENTS OF MANUFACTURER.  In consideration of the
undertaking of the Warehouseman to perform the Basic Services with respect to
the Products, the Manufacturer undertakes, agrees and represents as follows:

4.1 Title to the Products shall at all times remain in the Manufacturer's
    possession and any taxes assessed directly on such Products shall be for
    the account of and paid by the Manufacturer.  The Manufacturer will have
    good title to all of the Products to be delivered to Warehouseman hereunder
    and has the legal right and authority to take all such acts with respect to
    such Products as it may take pursuant to the provisions of this Agreement.



4.2 The Products to be delivered hereunder will be in good condition and of
    merchantable quality at the time of their delivery to Warehouseman and of
    the type and in the quantities indicated by the documents rendered by
    Manufacturer at the time of delivery.  Manufacturer further represents that
    no storage of shipment procedures are required for proper care of the
    Products other than those which are rendered by Warehouseman in the
    ordinary course of its business.  Manufacturer understands that
    Warehouseman relies upon the representations set forth herein in
    determining the performance of its duties hereunder and the fulfillment of
    the its standard of care reference to in Paragraph 7 hereof.

4.3 Manufacturer shall be solely responsible for the design, development,
    supply, safety, and performance of the Products hereunder.  Warehouseman
    agrees to immediately notify Manufacturer of any and all claims, demand of
    actions asserted or commenced against Warehouseman arising out of or
    connected with this Agreement or the Products.  If any liability, action,
    claims or demands are attributable to the Products or Manufacturer,
    Manufacturer shall at its own cost and expense defend the same and will
    indemnify, save harmless and defend the Warehouseman of any and all claims,
    losses, or liabilities, including reasonable attorney's fees, in any way
    arising out of or alleged to have arisen out of the use of Manufacturer's
    Products.  So long as this Agreement remains in force, Manufacturer will:

    (a)  Maintain adequate bodily injury and property damage insurance with
         respect to Products warehoused or distributed pursuant to this



    (b)  Designate Warehouseman as a named insured with respect to such
         insurance; and

    (c)  Provide Warehouseman with Certificates of Insurance to evidence
         compliance with this Paragraph 4.3.

4.4 With respect to the shipment of Products to the Warehouseman:

    (a)  All Products will be shipped prepaid to the loading dock of the
         Warehouseman packed in Manufacturer's regular shipping cartons for
         storage and marked as to quantity and description of Products.

    (b)  Manufacturer shall give Warehouseman notice within two (2) business
         days after the shipment of Products to Warehouse of all shipments to
         be made hereunder, the name of the carrier and the contents of the
         shipment.  Manufacturer agrees that Warehouseman shall not be liable
         for demurrage or delays in unloading inbound trucks, unless
         Warehouseman has failed to exercise reasonable care and diligence
         under the circumstances, which include the receiving of the notice
         provided herein.

4.5 With respect to the shipment of Products by Warehouseman, Manufacturer
    agrees to make all claims against carriers carrying Products to
    manufacturer's customers.  Warehouseman agrees to assist Manufacturer in
    developing information reasonably available to Warehouseman and necessary
    for such claims.




5.1 The fees for Basic Services to be computed separately each calendar month
    shall be as outlined in Exhibit 'A'.  Should the Manufacturer give notice
    pursuant to Paragraph 2 hereof, the fee for preparation and transfer of
    Manufacturer's Products shall be herein specified as though such Products
    had been shipped to the Manufacturer's customers.

5.2 In addition to the payment of fees for Basic Services, and in addition to
    the payment for Extra Services as hereinafter provided in Paragraph 6
    hereof, Manufacturer agrees to reimburse Warehouseman for all properly
    documented expenses incurred or paid for the account of the Manufacturer
    including freight, postage or other payments paid or incurred by
    Warehouseman or any taxes levied or assessed against the Products.
    Manufacturer will also reimburse Warehouseman for telephone toll charges
    and fax expenses incurred on behalf of Manufacturer subject to
    Manufacturer's policies with respect to such charges as are communicated to
    Warehouseman in writing.

5.3 With the exception of freight and storage charges, monthly bills will be
    rendered for the services performed and expenses incurred pursuant to
    Paragraphs 5.1 and 5.2 hereof and such bills are payable within thirty (30)
    days of their receipt.  Freight charges, both UPS/RPS and common carriers
    will be debited against the Freight Advance Account as such expenses are
    incurred.  An accounting of all charges debited to the freight advance
    account along with copies of UPS/RPS charges and common carrier freight
    bills will maintain a freight advance account with the Warehouseman at a
    initial level described in Exhibit 'A' and replenished from time to time
    upon reaching a minimum level described in Exhibit 'A'.



    6.   EXTRA SERVICES.  Extra Services and charges for purposes of this
    Agreement are as follows:

6.1 For packing and repackaging Products for shipment in packages or containers
    other than in those which such Products were delivered to Warehouseman in
    accordance with Sub-Paragraph 4.4(a) above, Manufacturer shall be charged
    as outlined in Exhibit 'A'.

6.2 For destroying Products, Manufacturer will be charged the cost to
    Warehouseman for such service as outlined in Exhibit 'A'.

6.3 All the services enumerated Paragraph 6 may be performed and charged for
    only when approved by Manufacturer.

6.4 Bills for fees charged to Extra Services will be rendered monthly and
    payable within thirty (30) days of their receipt.


7.1 Warehouseman shall only be liable for damages for loss of or injury to the
    Products caused by its failure to exercise such care in regard to them as a
    reasonably careful man would exercise under like circumstances and shall
    not be liable for damages which could not have been avoided by the exercise
    of such care.  Warehouseman shall not be held responsible for loss of
    Products by leakage or through failure to detect same, for concealed
    damage, or for inventory shrinkage of less than one percent (1%) based on
    average monthly inventory (with inventory overages offsetting inventory
    shortages) to be reviewed after six (6) months.



7.2 Warehouseman's liability for loss or injury to Products under Paragraph 7.1
    above shall be limited to and shall not exceed the lesser of: (a) the cost
    to the manufacturer of producing or otherwise obtaining such Products at
    the time and place of their production or obtaining of the same plus
    freight or the shipping charges incurred in delivering the Products to
    Warehouseman; or (b) the actual market value thereof at the time and place
    at which the injury or loss occurred.

7.3 Warehouseman shall not be obligated to provide any insurance for
    Manufacturer's Products.  Manufacturer shall provide any insurance required
    (including, but not limited to, fire insurance) by it at its sole cost and
    expense to cover its Goods in transit and while in the Warehouse.
    Manufacturer hereby waives and releases any and all rights of recovery,
    liability or responsibility against Warehouseman, its agents or employees
    for loss, injury or damage suffered by Manufacturer because of fire or
    insurable extended coverage perils, however caused, even if such fire or
    other casualty shall have been by the fault of negligence of Warehouseman
    or any one for whom Warehouseman may be responsible.  Manufacturer shall
    give notice to its insurance carrier that the foregoing Waiver of
    Subrogation is contained in this Agreement.  Manufacturer shall supply
    Warehouseman with satisfactory evidence of such insurance and Waiver of
    Subrogation by means of a Certificate of Insurance from its insurer.



7.4 Manufacturer guarantees, warrants and certifies that no product
    constituting or being a part of any shipment made hereunder is misbranded
    within the meaning of the Federal Hazardous Substances Labeling Act or
    within the meaning of any applicable state law in which the definition of
    misbranding is substantially the same as that contained in the Federal Act
    or is an article which may not under the provisions of the Federal Act be
    introduced into Required Commerce.

7.5 Manufacturer guarantees, warrants and certifies that no drug constituting or
    being part of a shipment made hereunder will at the time of shipment or
    delivery, be adulterated or misbranded within the meaning of the Federal
    Food, Drug and Cosmetic Act, as said Act is constituted and effective at
    the time of such shipment or delivery, or will be an article which may not
    under the provisions of said Act be introduced into Interstate Commerce.

    8.   GOVERNING LAW.  The interpretation of this Agreement shall be governed
by the laws of the State of California and the rights of parties hereunder, to
the extent not otherwise provided herein, shall be determined in accordance with
the article of the Uniform Required Code relating to documents of title as
adopted in the State of California.

    9.   NOTICES.  Any notice or other communication required or permitted
hereunder unless otherwise specifically provided, shall be in writing, and shall
be effective upon receipt at the following addresses, unless a change is
specified in writing by a party hereto:



         TO:       MORGAN & SAMPSON, INC.
                   Corporate Office
                   1651 South Carlos Ave.
                   Ontario, CA  91761

         TO:       ULTRAFEM, INC.
                   500 5th Avenue, Suite #3620
                   New York, NY 10110

    10.  MISCELLANEOUS.  This Agreement constitutes the entire Agreement 
between the parties pertaining to the subject matter hereof and supersedes 
all prior and contemporaneous Agreements, understandings, negotiations and 
discussions, whether oral or written, of the parties, and there are not 
warranties, representations or other Agreements between the parties in 
connection with the subject matter hereof except as specifically set forth 
herein.  No supplement, modification, waiver or termination of this Agreement 
shall be binding unless executed in writing by the party to be bound thereby. 
No waiver of any of the provisions of this Agreement shall be deemed or shall 
constitute a waiver of any other  provision hereof (whether or not similar), 
or shall such waiver constitute a continuing waiver unless otherwise 
expressly provided.

    11.  SUCCESSORS AND ASSIGNS.  All of the terms and provisions of this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns.



    IN WITNESS WHEREOF, the parties have caused this Agreement to be signed.

ULTRAFEM, INC.                             MORGAN & SAMPSON, INC.

By: /s/ Audrey Contente                    By: /s/ Daniel B. Morgan, Jr.
   -----------------------------                ----------------------------
   Audrey Contente                              Daniel B. Morgan, Jr.
   Senior Vice President                        Executive Vice President

Dated: 6/3/96                              Dated:  5/31/96
      --------------------------                   -------------------------