BAILMENT AGREEMENT ALCOHOLIC BEVERAGE CONTROL MISSISSIPPI DEPARTMENT OF REVENUE The Alcoholic Beverage Control Division, hereinafter referred to as the ABC, headquartered at 1286 Gluckstadt Road, Madison, Mississippi 39110, and _____________________________, hereinafter referred to as the Vendor, headquartered at _________________________________________ ______________________________________________entered into this agreement for the purpose of operating a bailment warehouse program. This agreement will be effective ________________, and will remain in effect until cancelled in writing by the ABC or vendor with 30 days notice. A bailment warehouse program is defined as meaning the Vendor will own the stock in the ABC Liquor Distribution Center until it is withdrawn from bailment for shipment to the ABC permittees. The ABC and the Vendor agree to the following: 1. The vendor agrees to place, without charge, approved items of alcoholic beverages into the ABC's distribution center at 1286 Gluckstadt Road, Madison, Mississippi, 39110. The items are to be shipped in accordance with the ABC's shipping instructions and, when shipped, are to be cosigned to the vendor, or his representative or agent, in care of the ABC's distribution center. 2. The ABC agrees to handle and store approved items furnished by the vendor for sale in Mississippi. 3. The vendor agrees that all price quotations for bailment stock will be delivered prices to the ABC's distribution center, including tax and duty on imported items. Chapter 10 Bailment Procedures - Policies and Procedures of Mississippi Alcoholic Beverage Control Bailment Warehouse System 100 Mississippi uses the bailment system for operations of the LDC Warehouse. When bailment is used, there will be a bailment agreement between the Division and the vendor. Under the bailment system, ABC inventory is used first; when the ABC inventory is insufficient, the vendor's inventory will be utilized. All bailment alcoholic beverages received by the Division will be stored at the Liquor Distribution Center Warehouse. The Division will determine the location of all alcoholic beverages stored in the LDC Warehouse. The Division reserves the right to manage warehouse space allocation. (Reserved) Vendors will own and control the stock that enters the LDC Warehouse. The Division will take physical inventory on a continuous cycle counting basis. 1 101 102 200 American LegalNet, Inc. www.FormsWorkFlow.com Any irreconcilable discrepancies will be resolved as follows: 1. The Division will pay the vendor for the product in cases of physical shortage of the vendor's product. 2. The Division will place any surplus into its own inventory in cases of physical overage of the vendor's product. 201 Vendors may conduct their own physical inventory of stock held in bailment by arrangement with the Division at least 48 hours in advance. Vendors or their agents should bring discrepancies to the attention of the Division. The Division will routinely authorize the product into the distribution center for restocking purposes. The Division will require that vendors designate an agent who will be responsible for approving stock withdrawal. A Mississippi Bailment Warehouse Vendor's Authorization Representative Form should be completed for each authorized agent. Vendors must update this document as needed. The Division will notify the vendor's agent during the last week of each month of their intention to purchase specified inventory belonging to the vendor based on anticipated needs for the following month. If the vendor does not respond within two (2) hours after receipt of the notification, the vendor will be deemed to have authorized the anticipated purchase. This report shows the maximum anticipated purchases. Actual purchases may differ due to the availability of the vendor's product on the date the inventory was picked, the availability of new receipts into the LDC Warehouse, and the availability of ABC owned inventory which will be removed first. Vendors shall comply with the inventory management guidelines as set for by the Division. Vendors who do not comply, may, at the discretion of the Division, be stopped from listing new products and/or offering special purchase allowances. The receipt of bailment merchandise is according to the following terms and conditions. 1. Receiving into the bailment-warehousing systems will take place at the LDC Warehouse. 2. Product will not be unloaded if it is not shipped on pallets or slipsheets. Pallets are the preferred method for delivery; therefore, there will be a charge for the use of slip-sheets 3. Vendors are required to supply LDC Warehouse personnel with a Bill of Lading or Packing List at delivery which must include the control 2 202 203 204 205 206 American LegalNet, Inc. www.FormsWorkFlow.com 4. 5. 6. 7. 8. state code, the description and name of the product, and the quantity of the product being delivered to the LDC Warehouse. The vendor will be responsible for obtaining the freight carrier. The carrier is required to call the LDC Warehouse to obtain an unloading appointment time. The carrier must indicate the vendor when scheduling the appointment. The Division will complete a Receiving Report form for each load delivered. The case quantity shown on the form will reflect any overage or shortage compared to the Bill of Lading or Packing List supplied by the carrier. LDC Warehouse personnel will unload all products. Carrier drivers are required to witness the unloading. The driver and Division representative will sign the unloading report form and the Bill of Lading or Packing List. If the Division discovers an error in the receiving process, the Division will complete an Inventory Correction form which will be attached to the original receiving report. 207 Because the Division may purchase damaged goods and subsequently establish a receivable with the vendor, the LDC Warehouse Operations Manager will be responsible for determining whether damaged goods are to be received into the bailment inventory. The Division will always attempt to resolve any problems in this area to the mutual satisfaction of the vendor and the Division. The Division believes that it is advantageous to the vendor and the Division to accept merchandise with small amounts of damage which has occurred during the shipping process. At the discretion of the LDC Warehouse Operations Manager, goods with slight damage will be received into the Division inventory