Affiliated Foods, Inc. - Page 5

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               Only P&G and Colgate had written promotional account                   
          agreements with petitioner.  The remaining vendors had oral                 
          agreements with respect to the promotional accounts.                        
               P&G and Colgate had the following written promotional                  
          account agreements with petitioner:  Flexible Marketing Agreement           
          between petitioner and P&G; Cooperative Merchandising Agreement             
          between petitioner and P&G; Category Marketing Agreement between            
          petitioner and P&G; Ajax Line Special Event Merchandising                   
          Contract between petitioner and Colgate; and Special Event                  
          Merchandising Contract between petitioner and Colgate.  The funds           
          that were the subject of these written promotional account                  
          agreements were maintained by petitioner.4                                  
               Under the Flexible Marketing Agreement (FMA) with P&G, P&G             
          created a promotional account for each category of brand-name               
          products listed in the FMA; e.g., coffee/tea products, chilled              
          beverages, and baking mixes.  The amount paid into the                      
          promotional account for each quarter was determined by                      
          multiplying a specified rate by the number of cases of the                  
          specified brands shipped to petitioner during the "base period".            
          The base period was the same quarter in the previous year.  The             


          4    The written agreements are inconsistent on whether                     
          petitioner or the manufacturer would maintain possession of the             
          promotional funds.  However, the parties have stipulated that               
          petitioner maintained possession of the promotional funds, and              
          the testimony at trial supports the stipulation.                            





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Last modified: May 25, 2011