BUYING AGENCY AGREEMENT
BETWEEN
NISSHO IWAI AMERICAN CORPORATION
AND
COLUMBIA SPORTSWEAR COMPANY
JANUARY 1, 1992
BUYING AGENCY AGREEMENT
DATED: JANUARY 1, 1992
BETWEEN: NISSHO IWAI AMERICAN CORPORATION "NIAC"
▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
AND: COLUMBIA SPORTS COMPANY "COLUMBIA"
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▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
NIAC and COLUMBIA entered into the Buying Agency Agreement dated as of
January 1, 1989, pursuant to which COLUMBIA appointed NIAC as its buying agent
with respect to all clothing goods, materials and products which COLUMBIA would
purchase outside of the United States for resale by COLUMBIA in the United
States (collectively the "Goods"); and NIAC and COLUMBIA desire to terminate
said prior agreement as of December 31, 1991 and to create a new agreement
governing their relationship commencing on January 1, 1992.
THEREFORE, the parties agree as follows:
ARTICLE I
AGREEMENT TO PURCHASE
During each year of this Agreement, COLUMBIA agrees that it shall purchase
through NIAC, as its buying agent, at least eighty percent (80%) of the Goods
which COLUMBIA purchases outside of the United States for resale by COLUMBIA in
the United States.
ARTICLE II
AGREEMENT TO PROCURE GOODS FOR RESALE
During the term of this Agreement, NIAC will purchase as COLUMBIA's agent,
on F.O.B. vessel loading port of country of origin (hereinafter referred to as
"F.O.B. price"), all Goods requested by COLUMBIA, and deliver such Goods or
arrange for their delivery to a port specified by COLUMBIA within the United
States. COLUMBIA shall be responsible for locating the source of Goods and
negotiating the purchase, the price, and delivery schedules for such Goods with
the suppliers.
On behalf of COLUMBIA, NIAC shall advance the costs for acquisition of the
Goods and other costs incurred in bringing the Goods, cleared through customs,
to the point of delivery. Reimbursable Costs will include, without limitation,
the amount paid by NIAC to the supplier for Goods purchased, transportation
costs, costs of loading and unloading, costs of insurance, any costs incurred in
protecting the Goods, custom duties, and fees of custom brokers for air
shipment. Reimbursable Costs will not include bank service charges, fees of
custom brokers (except for air shipment), and salaries paid to NIAC's own
employees or NIAC's overhead costs. COLUMBIA shall reimburse NIAC for all such
Reimbursable Costs together with a commission for its services as COLUMBIA's
buying agent in the amount of two percent (2%) of the F.O.B. price of the Goods
purchased, country of origin.
ARTICLE III
REIMBURSEMENT TERMS
3.1 NIAC shall invoice COLUMBIA after delivery of the Goods for all
Reimbursable Costs for the Goods and for NIAC's commission. Any unanticipated
Reimbursable Costs incurred thereafter shall be billed by NIAC as soon as
possible after such costs are incurred.
3.2 The Reimbursement Starting Date shall be each disbursement date of the
letter of credit opened by NIAC for the supplier. COLUMBIA shall pay NIAC for
all Reimbursable Costs and the applicable commission for Goods in United States
currency within Ninety (90) days from the Reimbursement Starting Date (the "Due
Date").
3.3 COLUMBIA shall pay interest to NIAC on all Reimbursable Costs and
NIAC's commission at a rate equal to one and one quarter percent (1.25%) over
the three month LIBOR printed in the Wall Street Journal in effect on the first
day of each month. Interest shall accrue from the Reimbursement Starting Date to
the date of payment by COLUMBIA for such invoice.
3.4 Overdue interest shall be payable on all amounts due NIAC from the Due
Date of said amount to the date NIAC actually receives payments thereof. The
applicable overdue interest rate shall be the Prime Rate announced by Citibank
N.A., New York plus five percent (5%) or the maximum rate allowed by law,
whichever is lower as set forth on each invoice issued by NIAC.
ARTICLE IV
LINE OF CREDIT
4.1 Prior to November 10 of each year, COLUMBIA shall submit to NIAC its
annual preliminary financial plan for COLUMBIA's forthcoming fiscal year. Such
plan will consist of monthly income statements, balance sheets, and statements
of cash flows and
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will be in substantially the same format as the 1991 plan. By November 10 of
each year, COLUMBIA also shall submit its financial statements for the current
fiscal year through September and its preliminary income statement for October.
Such statements shall be prepared in accordance with generally accepted
accounting principles, and such statements shall be certified by the chief
financial officer of COLUMBIA as being accurate and having been prepared in this
manner. Following a reasonable review of said annual financial plan and the
financial statements, and provided NIAC is reasonably satisfied with the
financial plan and the financial statements, NIAC shall specify the amount of
the credit line which it is willing to establish for COLUMBIA for the purchase
of Goods under Articles II and III above for the forthcoming COLUMBIA fiscal
year. The amount of credit which shall be applied against the credit line shall
be equal to the amount of outstanding invoices from NIAC to COLUMBIA which have
not been paid.
4.2 Notwithstanding the above, however, NIAC shall have no obligation to
place orders for Goods requested by COLUMBIA or extend credit under the credit
line if at any time:
1. COLUMBIA has operated at a loss during any three consecutive fiscal
quarters or COLUMBIA has accumulated a loss in the current fiscal
year, the total amount of which exceeds 50 percent of the amount of
retained earnings at the end of the preceding fiscal year;
2. There are outstanding invoices which have not yet been paid by
COLUMBIA and existing purchase orders which have not yet been invoiced
to COLUMBIA for payment both of which total more than 100 percent of
the approved credit line; or
3. There is any default by COLUMBIA under this Agreement.
ARTICLE V
WARRANTY LIMITATIONS AND INDEMNIFICATION
5.1 NIAC shall purchase the Goods ordered by COLUMBIA from those Suppliers
chosen by COLUMBIA. NIAC shall assign to COLUMBIA any warranties regarding the
Goods which are provided by the suppliers, but shall not provide any warranties
itself. NIAC EXPRESSLY DISCLAIMS ALL WARRANTIES, INCLUDING WITHOUT LIMITATION
WARRANTIES OF MERCHANTABILITY OR FITNESS. NIAC shall not be obligated to pay or
give any purchase discount or allowance to COLUMBIA for defective or B Grade
goods. NIAC shall, however, give COLUMBIA any discounts or allowance given to
NIAC by the supplier for Goods.
5.2 COLUMBIA hereby releases and shall indemnify and hold harmless NIAC
from any claim, loss, or liability arising from any claim by any third party
against NIAC arising out of this Agreement, any actions or omissions of NIAC
pursuant to this Agreement,
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or the Goods purchased hereunder unless and to the extent such claim, loss or
liability arises from the sole negligence of NIAC.
5.3 COLUMBIA shall maintain with a reasonably acceptable insurance company
product liability insurance in an amount per occurrence of not less than
$1,000,000 covering any claim of product liability with respect to the Goods
delivered by NIAC to COLUMBIA under this Agreement, naming NIAC as an additional
named insured, and providing for not less than ten (10) days' advance notice to
NIAC of cancellation. COLUMBIA shall submit to NIAC promptly upon issuance of
such policy of insurance and upon each anniversary thereof a certificate issued
by the insurance company evidencing such insurance.
5.4 NIAC, at COLUMBIA's expense, shall have the obligation of maintaining
appropriate insurance on the Goods until delivered to the point of delivery.
ARTICLE VI
REPORTS AND RECORDS
For so long as COLUMBIA is indebted to NIAC, COLUMBIA shall prepare and
submit to NIAC the following reports and documents:
6.1 Within forty-five (45) days following the end of each calendar month,
COLUMBIA shall submit the following:
1. A balance sheet (a consolidated balance sheet if COLUMBIA has any
subsidiaries in the future) as of the close of the month just ended.
2. A statement of income and retained earnings (a consolidated
statement if COLUMBIA has any subsidiaries in the future) for the
period ended at the close of the month just ended, for such month and
for the fiscal year to date.
3. The month-end borrowing base certificate, submitted to COLUMBIA's
lead bank, under its revolving credit agreement.
6.2 Within forty-five (45) days following the end of each calendar quarter
COLUMBIA shall submit the following:
1. A report showing the amount owed to COLUMBIA by each major customer
of COLUMBIA as of the close of each calendar quarter just ended, and
the amount owed by COLUMBIA to NIAC at such time.
2. A report in such detail as NIAC reasonably shall require showing
the inventory of COLUMBIA on hand at the close of each calendar
quarter just ended by location and by category and, if possible, the
movement of the inventory during that quarter.
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6.3 By April 30 following the end of fiscal year of COLUMBIA, which fiscal
year will end December 31, COLUMBIA shall furnish to NIAC a report of the
certified public accountants regularly employed by COLUMBIA concerning their
examination of the financial statements of COLUMBIA as of the end of the last
fiscal year of COLUMBIA.
6.4 Miscellaneous:
1. All financial statements to be submitted to COLUMBIA to NIAC shall
be prepared in accordance with generally accepted accounting
principles consistently maintained by COLUMBIA.
2. COLUMBIA shall inform NIAC of the credit limit it has been extended
by its leading bank and of the interest rate it is paying for funds at
its earliest convenience after negotiating its line of credit.
3. COLUMBIA shall prepare and submit to NIAC from time to time such
other information and reports relating to the affairs of COLUMBIA as
NIAC may reasonably request.
4. In the event that COLUMBIA provides NIAC with confidential
information which is marked in writing to be confidential, NIAC shall
use its best efforts to maintain the confidentiality of all such
confidential information in the same manner in which NIAC maintains
its own confidential information. Upon termination of this Agreement,
if requested by COLUMBIA in writing, NIAC, at its option, will deliver
to COLUMBIA or destroy that confidential information of COLUMBIA which
NIAC does not need to retain for its own business purposes in
connection with this Agreement.
ARTICLE VII
ORDERING FORECASTS
7.1 In order to facilitate NIAC's procurement of Goods, COLUMBIA shall
provide NIAC from time to time and as requested by NIAC with forecasts of the
quantity and type of Goods COLUMBIA intends to purchase using NIAC.
7.2 COLUMBIA shall give NIAC any orders for Goods to be purchased under
this Agreement as far in advance as is reasonably practical from the planned
time of production.
7.3 NIAC will place orders with suppliers and if applicable, open its sight
letter of credit, for such orders as soon as reasonably possible after the date
on which NIAC receives an order from COLUMBIA.
7.4 NIAC may delay placing said orders and opening letters of credit if
there is any condition as described in Article IV which would permit NIAC to
refuse to continue its extension of credit to COLUMBIA.
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ARTICLE VIII
TERM
This Agreement shall be in effect as of January 1, 1992 and, unless sooner
terminated pursuant to its provisions, shall remain in full force and effect
until December 31, 1994. This Agreement shall be automatically extended for a
5-year period thereafter unless a party desiring not to renew the Agreement
gives the other party written notice of its election not to renew no later than
June 30, 1994.
ARTICLE IX
TERMINATION AND DEFAULT
9.1 In the event of a change of control of COLUMBIA, then such event shall
be a default under this Agreement and NIAC shall have the right to terminate
this Agreement upon ten (10) days' prior written notice to COLUMBIA. A change of
control shall be deemed to have occurred if ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇ ▇▇▇▇▇ is not
the chief executive officer of COLUMBIA, or if ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇ ▇▇▇▇▇, by
themselves or together, do not own a majority of the shares of common stock of
COLUMBIA.
9.2 If any party shall cease to conduct its business or shall make any
involuntary assignment of either its assets or its business for the benefit of
creditors; if a trustee or receiver is appointed to administer or conduct its
business affairs; if it is adjudged in any legal proceeding to be a debtor in
bankruptcy; or if any insolvency proceedings are commenced against it and not
terminated or dismissed within ninety (90) days, then such event shall be
considered a default of the Agreement and the other party may terminate this
Agreement.
9.3 In addition to the special rights of termination provided in the
sections above, if any party fails to perform any of its obligations in this
Agreement, such failure shall constitute a default of this Agreement. If such
non-performance is not cured within thirty (30) days after notice of such
failure is sent, then the party giving the notice of non-performance may elect
to terminate this Agreement. If written election to terminate is give, this
Agreement shall terminate ten (10) days following delivery of this notice.
9.4 Upon any default the non-defaulting party shall have all rights
permitted to it under law including, without limitation, the rights arising from
default specified in this Agreement.
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ARTICLE X
LIMITATION OF LIABILITY
Without limiting NIAC's right and COLUMBIA's obligation under Article V of
this Agreement, in the event there is any dispute or claim arising from this
Agreement or the Goods purchased hereunder, NIAC shall not be liable for any
amount in excess of the purchase price of the Goods giving rise to the claim or
the dispute, and in no event shall NIAC be liable for any incidental or
consequential damages, including without limitation, lost profits. These
limitations shall apply to any and all claims or disputes, whether arising from
contract, warranty, tort (including negligence) or strict liability.
ARTICLE XI
SECURITY
COLUMBIA shall not grant (or suffer the existence of) any liens, security
interests or encumbrances on any of COLUMBIA's assets to any vendor other than
NIAC without (A at least thirty (30) days in advance of such intended grant,
giving NIAC written notice thereof and (B) granting NIAC a superior security
interest in such assets, provided that this article shall not limit COLUMBIA's
ability to grant any liens, security interests or encumbrances to COLUMBIA's
banks or other institutional lenders.
ARTICLE XII
"S" CORPORATION
At all times during the term of this Agreement, COLUMBIA will not make any
distribution of cash or other assets to its shareholder in excess of:
1. Those amount that are required by such shareholders to pay any and
all federal and state income tax obligations on the net income of
COLUMBIA that passes through to the shareholders under subchapter S of
the Internal Revenue Code, including required estimate payments;
2. 50% of income after provision for state and federal income taxes
for such period; and
3. 100% of the proceeds of any primary common stock offering.
Within ten (10) days after making any distribution permitted hereunder, COLUMBIA
shall deliver to NIAC a statement showing the amount of the distribution and how
it was calculated for each shareholder.
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ARTICLE XIII
GOVERNING LAW
This Agreement is made in the State of Oregon and its effectiveness,
interpretation and enforcement shall be governed by the law of such state.
ARTICLE XIV
WAIVER
The waiver of non-performance of an obligation of a party under this
Agreement in one case shall not be deemed to be waiver of non-performance of the
same obligation m any other case.
ARTICLE XV
FORCE MAJEURE
No party shall be liable for the failure to carry out its obligations
hereunder in the event that it is prevented from doing so by any act beyond its
control, including without limitation, war or warlike condition, unavailability
of shipping vessels, insurrection, labor disturbances, casualty, governmental
tariffs or quotas, or U.S. Government credit restrictions. This Article shall
not apply to COLUMBIA's obligation to make any payment as provided in this
Agreement.
ARTICLE XVI
NOTICES
All communications and notices provided for hereunder shall be effective
when delivered to the parties at their addresses specified above or to such
other parties or places as a party shall designate by written notice to the
other. Notices sent by mail shall be effective when delivered.
ARTICLE XVII
This instrument constitutes the entire agreement and understanding of the
parties hereto with respect to the subject matter of this Agreement, and
supersedes all prior discussions, agreements and understandings between the
parties with respect to the said matter. No amendment, modification or
assignment of this Agreement shall be binding on the parties unless made in
writing expressly referring to this Agreement and signed by authorized officers
or representatives of the parties hereto.
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NISSHO IWAI AMERICAN CORP. COLUMBIA SPORTSWEAR COMPANY
By: By:
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, General Manager & ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Senior Vice President Chairman of the Board
COLUMBIA SPORTSWEAR COMPANY
By:
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▇▇▇ ▇▇▇▇▇, President
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Amendment No. 1 to Buying Agency Agreement
between
Nissho Iwai American Corporation
and
Columbia Sportswear Company
October 1, 1993
AMENDMENT NO. 1 TO BUYING AGENCY AGREEMENT
THIS AMENDMENT made and entered into October 1, 1993 by and between NISSHO
IWAI AMERICAN CORPORATION, ▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇ ("NIAC") and COLUMBIA SPORTSWEAR COMPANY, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ ("COLUMBIA").
WITNESSETH:
WHEREAS, NIAC and COLUMBIA entered into the Buying Agency Agreement
("AGREEMENT") dated as of January 1, 1992, pursuant to which COLUMBIA appointed
NIAC as its buying agent with respect to all clothing goods, materials and
products which COLUMBIA would purchase outside of the United States for resale
by COLUMBIA in the United States (collectively the "Goods");
WHEREAS, COLUMBIA desires to reduce the following:
i) interest on all reimbursable cost which NIAC invoices to
COLUMBIA;
ii) the NIAC commission.
Rate
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Existing Rate New Rate
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i) 1.25% above three 0.5% above three
month LIBOR rate month LIBOR rate
ii) 2% 1.5%
WHEREAS, NIAC desires to increase the share of sales through NIAC to
COLUMBIA in exchange of acceptance by NIAC for reduction of both an interest and
commission rate said above;
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WHEREAS, NIAC and COLUMBIA desire to extend the term of AGREEMENT until
September 30, 1998.
NOW, THEREFORE, the parties agree as follows:
ARTICLE 1. AGREEMENT TO PURCHASE
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The Article I of AGREEMENT shall be read as follows:
During each year of this Agreement, COLUMBIA agrees that it shall purchase
through NIAC, as it buying agent, at least ninety-five (95%) of the Goods which
COLUMBIA purchases outside of the United States for resale by COLUMBIA in the
United States.
ARTICLE 2. AGREEMENT TO PROCURE GOODS FOR RESALE
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The last sentence of Article II of AGREEMENT shall be read as follows:
COLUMBIA shall reimburse NIAC for all such Reimbursable Costs together with
a commission for its services as COLUMBIA's buying agent in the amount of one
and a half percent (1.5%) of the F.O.B. price of the Goods purchased, country of
origin.
ARTICLE 3. REIMBURSEMENT TERMS
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A. The first sentence of paragraph 3.2 of Article IV of AGREEMENT shall be
read as follows:
3.2 The Reimbursement Starting Date shall be the date of each payment made
by NIAC for the supplier.
B. The first sentence of paragraph 3.3 of Article IV of AGREEMENT shall be
read as follows:
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3.3 COLUMBIA shall pay interest to NIAC on all Reimbursable Costs and
NIAC's commission at a rate equal to half percent (0.5%) over the three month
LIBOR printed in the Wall Street Journal in effect on the first day of each
month.
ARTICLE 4. TERM
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The Article VIII of AGREEMENT shall be read as follows:
This Agreement shall be in effect as of January 1, 1992 and, unless sooner
terminated pursuant to its provisions, shall remain in full force and effect
until September 30, 1998. This Agreement shall be automatically extended for a
5-year period thereafter unless a party desiring not to renew the Agreement
gives the other party written notice of its election not to renew no later than
March 31, 1998.
ARTICLE 5. OTHER TERMS AND CONDITIONS
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Other terms and conditions than those described herein shall remain
unchanged and in full force.
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IN WITNESS WHEREOF, the parties hereto have caused this AMENDMENT to be
executed as of the date first set forth above.
NISSHO IWAI AMERICAN CORP.
By:
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
General Manager &
Senior Vice President
COLUMBIA SPORTSWEAR COMPANY
By:
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▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Chairman of the Board
COLUMBIA SPORTSWEAR COMPANY
By:
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▇▇▇ ▇▇▇▇▇
President
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