Westpac Pacific Foods - Page 8




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          the repayment of any portion of the upfront payments received by            
          Save Mart or Westpac, American Greetings calculated Westpac's               
          repayment obligation at $406,243 on a prorated calendar basis.              
          Westpac's internal correspondence reflected a repayment                     
          obligation of $512,500 based on the percentage of the volume                
          purchase commitment it had satisfied.  Accordingly, Westpac                 
          accepted American Greetings’ lower demand and paid American                 
          Greetings $406,243 by check dated September 28, 1995.  The check            
          stub contains a notation that the payment constitutes a                     
          “repayment of contract adv[ance]”.                                          
          McCormick Contract                                                          
               On or about March 4, 1991, Westpac entered into an agreement           
          with McCormick & Co., Inc. (McCormick), dated February 27, 1991,            
          by which Westpac agreed to use McCormick as its “primary                    
          supplier” of spices, extracts, foil seasonings, mixes, gourmet              
          spices, and cake decorations.  In addition, Westpac agreed to               
          purchase $50 million in McCormick products over an indefinite               
          period.                                                                     
               In consideration of Westpac's commitments, McCormick agreed            
          to make a series of cash payments to Westpac and to supply                  
          Westpac with certain amounts of free products.  In particular,              
          McCormick agreed to pay Westpac $5 million4 and to provide                  


               4  McCormick actually paid Westpac $4,801,000 during the               
          1991 taxable year.                                                          





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