Jamba Juice 2007 Annual Report Download - page 171

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(g) Disposition of Inventory upon Termination of Agreement . Upon termination of this Agreement, JJC shall be financially responsible to purchase
all Inventory brought in and stocked at Distributor to fulfill JJC needs, not to exceed the financial exposure outlined below. JJC, at its election, will utilize one
or a combination of the following options to resolve all Inventory issues upon termination of this Agreement: (1) JJC will purchase all Inventory in stock at
Distributor’s Landed Cost, plus [****] (Landed Cost multiplied by [****]); (2) JJC will pay Distributor’s Landed Cost plus [****] (Landed Cost
multiplied by [****]) for Inventory in stock and pay Distributor for any reasonable costs incurred to dispose of the Products; assuming that all acceptable
inventory control standards have been maintained (3) JJC or a party designated by JJC will pick up the Products in stock at Distributor’s warehouse(s), and
will pay Distributor’s Landed Cost plus [****] (Landed Cost multiplied by [****]). One or more of the above options must be executed within thirty
(30) days of the termination of this Agreement. Payment terms for the options are net fifteen (15) days upon credit approval, unless different arrangements are
agreed upon in writing. JJC’s total financial exposure for each Product stocked shall be limited to the greater of (i) Inventory balances not exceeding thirty
(30) days of the trailing six months’ average usage, (ii) the total amount of promotional Inventory purchased according to written authorization from JJC
Purchasing or (iii) [****] of the minimum Order, but not to exceed the Landed Cost of Product on-hand and on-order. This Section shall survive termination
of this Agreement.
11. DAMAGE LIABILITY
Distributor will be responsible for the reasonable cost of repair or replacement to JJC buildings or equipment if the damage occurred as a direct result of
an accident caused by, or negligence of Distributor’s employee. JJC agrees to notify Distributor immediately via telephone followed by written notice within five
(5) days in the event of any damage occurrence.
12. SPOILAGE
The Distributor guarantees that all merchandise is fresh and saleable upon delivery. If at the time of delivery the Product does not meet industry standards, JJC
may return the Product with Distributor’s driver for credit. Claims for items being returned from prior deliveries must be made within twenty-four (24) hours
from the date of delivery. These items must be clean and free of all markings, and in their original containers. The Distributor shall credit JJC with the
delivered cost of any such returned Products and such credit shall be reflected on a credit memo to be mailed within five (5) business days posted to the
account of claim.
Approval from the Distributor Customer Service Department must be received to return any items, which do not meet the specifications stated above. If
spoilage occurs before the expiration date of the Product, the Distributor will not be responsible for crediting JJC Stores for any Product that does not hold until
its code date, or have manufacturer defects. The Distributor will assist in handling these spoilage issues with the appropriate vendors for JJC but will not be
financially responsible.
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