Exhibit 10.14
DISTRIBUTORSHIP AGREEMENT
This Distributorship Agreement entered into this 15th day of August 2002 by
and between American Soil Technologies, Inc. a Nevada public corporation with
its principal place of business in Pasadena California (ASTI) and Gigot Agra
Services with its principal place of business located in Garden City, Kansas
(GAS) hereinafter collectively referred to as the Parties.
RECITALS
A. ASTI is engaged in the business of manufacturing and selling -numerous
Soil Amendments and Polymer Products used in the Agricultural and Turf
Industries (Products).
X. XXXX and GAS are entering into a distributorship agreement of even date
(the "Distributorship Agreement") pursuant to which ASTI is selling to GAS and
GAS is purchasing from ASTI for distribution, certain ASTI products relating to
the Agricultural and Turf Industries on the terms and subject to the conditions
set forth herein;
AGREEMENT
In consideration of the mutual promises contained in this Agreement, the
Parties hereby agree that GAS shall be the distributor of the Products
identified in Schedule A pursuant to the following terms and conditions:
1. APPOINTMENT AND TERRITORY. GAS shall be a non-exclusive distributor of
the Products as set forth in Schedule A. GAS shall be the exclusive distributor
to those customers that are, from time to time, added to and set out in Schedule
B and shall continue as an exclusive customer so long as GAS sells Products to
said customer within one year of identification. While a distribution agreement
remains in effect, ASTI will not, directly or indirectly, sell the Products to
GAS's customers and will not permit anyone, either directly or indirectly, to
sell Products to GAS's customers without GAS's express permission. The territory
assigned to GAS shall be set out in Schedule C.
2. ACCEPTANCE OF APPOINTMENT. GAS hereby accepts said appointment as a
distributor as described in Section "1" above and agrees to exercise its best
efforts to promote, sell and service the Products in the territory and further
agrees that it shall be primarily responsible for the promotion, sale and
non-technical servicing of Products to its commercial accounts.
3. PRODUCTS. The products to be distributed pursuant to this Agreement are
Agriblend (TM), Nutrimoist (TM)L, Nutrimoist (TM)Turf, Extend(TM) (a liquid
XXX), STOCKOSORB(R) S, STOCKOSORB(R) C, STOCKOSORB(R) M, STOCKOSORB(R) F
STOCKOPAM(R) and Bio-Nutrients. Said products are the exclusive property of ASTI
and are used in the Agricultural and Turf industries and are specifically listed
in Schedule A. Any additional new or improved polymer based products will also
be added to this agreement.
4. MINIMUM ORDERS AND PRICING. ASTI will sell to GAS and GAS will purchase
from ASTI Products in such minimum quantities and at such prices as are mutually
agreed. ASTI will sell Products to GAS to the best of ASTI's ability; provided,
however, that all or some Products may not always be available to fill all
orders and ASTI shall allocate to GAS such proportion of the available supplies
of Products which is not less than the GAS's pro-rata share of the gross sale of
the Products throughout the United States. The price ASTI sells the Products to
GAS will not be more than the price at which ASTI sells the same volume of
products to any other distributor.
Prices set forth shall be for a period of two (2) years except that ASTI,
upon thirty (30) days written notice to GAS, may change the price solely to
reflect price changes brought about by taxation or by any order, regulation or
law of any governmental body or upon extenuating circumstances beyond the
control of the parties as reasonably determined by ASTI and GAS, to include, but
not be limited to, an increase of ASTI's cost of obtaining raw materials or
labor. No price change shall be effective without said notice. After the initial
two-year period, ASTI and GAS shall in good faith negotiate a new price for the
Products. Price increases shall closely be tied to inflation as measured by
well-recognized indices of manufactured products in the Territory.
5. INSTALLATION OF PRODUCT. ASTI shall advise GAS as to the method and
installation of the Products, which shall be mandatory.
6. TERMS OF PURCHASE AND SALE. All prices are FOB ASTI Plant or ASTI
warehouse. GAS shall be granted 30 day terms subject to credit worthiness. GAS
may either (i) deduct from any payment that portion of the purchase price paid
for any unit which is damaged or defective or which is not delivered, or (ii)
require ASTI to refund that portion of the purchase price paid for any such
unit, or to replace the unit at ASTI's expense. GAS will return to ASTI, at
ASTI's expense, any damaged or defective Product or packaging, and GAS will
furnish ASTI with an affidavit by one of the GAS's executive officers as to any
units that are not delivered. The amount and terms of any additional credit
extended by ASTI to GAS shall be as agreed to between the parties in accordance
with applicable laws. Any payments not received on or before the thirty-fifth
day following proper invoicing thereof shall be considered late and shall be
subject to a late penalty of one percent 1 1/2% and will be charged a like
amount each month or a portion thereof thereafter until the invoice is paid.
Date of invoice shall be the shipment date.
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7. GAS'S OBLIGATIONS WITH RESPECT TO SALE OF PRODUCTS. GAS agrees to:
(a) spend a mutually agreed upon amount on advertising, including the
time and efforts of its employees, sales promotion dollars and effort on
Products.
(b) cause its sales and merchandising personnel personally to call upon
potential customers at customary intervals and to attempt to sell the Products;
(c) (i) maintain a well-trained sales force, adequate to service all of
GAS's customers, to promote the sale of Products, (ii) keep said sales force
fully informed as to ASTI's policies, and (iii) adequately train said sales
force to promote the sale of the Products in a manner which shall reflect credit
on GAS and on ASTI;
(d) cooperate with ASTI in effectuating ASTI's promotions and
merchandising programs, provided such promotions and merchandising programs do
not impose undue hardship or burden on GAS and provided such promotions and
merchandising programs are consistent with the image and propriety of GAS;
(e) afford representative of ASTI adequate opportunity to meet with and
help train GAS's sales and merchandising personnel as well as its customers as
needed;
(f) maintain inventories of Products (of all types and sizes covered by
this Agreement) adequate to meet the demand therefore subject to ASTI's ability
to supply GAS with adequate quantities of Products;
(g) promote the sale of the Products listed on Schedule B to customers
in an aggressive and diligent manner
(h) maintain prompt delivery service compatible with good business
practice, the nature of Products, and the requirements of its customers;
(i) supply a copy of ASTI's express written warranty materials to all
buyers of Products.
(j) maintain sufficient insurance to adequately protect GAS from
suffering a diminution of capital in the event of fire, theft or casualty
losses.
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(k) not to distribute, offer, sell or purchase any polymer products
that compete or may compete with ASTI's Products during the term of this
agreement. Specifically excluded are diatomaceous earth and zeolite, both
moisture absorbing minerals that GAS is currently marketing for other producers.
8. ASTI'S OBLIGATIONS WITH RESPECT TO SALE OF ITS PRODUCTS.
(a) ASTI warrants to GAS that (i) the Product and the packaging are and
will be safe, the units of the Product purchased under this Agreement will be
properly, adequately and safely packaged and labeled, and the Products comply
and will comply with all applicable laws, rules and regulations, and (ii) the
Products and packaging of the Products do not and will not violate any patent,
copyright, trademark, service xxxx or other right and do not and will not
contain any item, part or material which ASTI is not authorized to use.
(b) All Products sold and distributed hereunder shall be merchantable
and shall meet all standards of quality imposed by Federal law and by the laws
of the State or country, as long as such country's requirements do not exceed
the standards of quality imposed by the laws of the United States, wherein
Product is to be distributed. ASTI will furnish on a timely basis all Material
Data Safety Sheets and material handling requirements and recommendations.
(c) ASTI shall maintain all required federal, state and local licenses
in good standing and shall further act in conformance with state laws as a
supplier of the Products to GAS as are required in the United States.
(d) ASTI will indemnify GAS against any liability and will hold GAS
harmless from and pay any loss, damage, cost and expense (including, without
limitation, legal fees and disbursements, court costs and the cost of appellate
proceedings) which GAS incurs arising out of or in connection with the use of
Products or from the use of brand names or labels of Products and shall hold
harmless and indemnify GAS against any liability, damage or expense incurred in
connection with any such suit and cooperate in the defense thereof to the extent
reasonably required by ASTI and further provided that such suit, liability,
damage or expense not arise out of GAS's gross negligence or failure to comply
with any terms of this Agreement;
(e) maintain sufficient insurance to adequately protect ASTI from
suffering a diminution of capital in the event of fire, theft or casualty
losses;
(f) spend a reasonable amount on advertising to include the time and
efforts of its employees and sales promotion dollars.
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9. GAS'S ACKNOWLEDGMENT. GAS acknowledges that it desires to purchase from
ASTI and to distribute Products specified in Schedule B and that the sale by
ASTI to GAS of any such item is not conditioned upon the purchase of any other
item by GAS from ASTI. GAS acknowledges that ASTI is the owner or licensee of
all the brands, trademarks and other indicia of manufacturing origin and quality
of all the Products, and all of the goodwill attributable to such brands,
trademarks and indicia of origin and quality, and GAS acknowledges that nothing
in this Agreement gives GAS any right, title or interest in or to such brands,
trademarks and indicia or origin and quality, other than as a distributor of the
Products pursuant to this Agreement. GAS will make no contrary representations,
nor will GAS adulterate any Product.
10. DISPOSAL OF DAMAGED PRODUCTS. In the event of damage to any Products
rendering the contents unfit for consumption or the containers of less than
merchantable quality, GAS shall not distribute or transfer same or permit same
to become the property of any insurer or carrier, or otherwise dispose thereof
except in accordance with the prior written instructions of ASTI.
11. TERM AND TERMINATION
This Agreement may be terminated: (1) at any time by the mutual consent of
the parties in writing, effective as provided therein; (2) upon thirty (30) days
written notice by Distributor to Manufacturer without cause; or (3) with cause
by either party at any time by giving the other party thirty (30) days notice,
in writing, by registered or certified mail, of such termination. The
Manufacturer shall fill all orders for Products placed for Distributor's
specific customers prior to termination of this Agreement.
(a) This Agreement shall expire five (5) years from the date of execution.
This Agreement shall automatically renew under the same terms and conditions in
additional five (5) year increments unless either party is in default of any
material term of this Agreement. If a material default exists hereunder, the
non-defaulting party shall give the defaulting party thirty (30) days written
notice to cure the default or, if the default may not be cured in such time, a
reasonable amount of time to cure the default. If the defaulting party is unable
to cure the within the time frame specified, this Agreement shall be voidable by
the non-defaulting party.
(b) ASTI warrants that it shall conduct the renewal of this Agreement in
good faith. If, after the expiration of the five-year renewal period specified
in 11(a) above without renewal, ASTI elects to appoint a new distributor for an
exclusive customer of GAS, ASTI shall provide a copy of such agreement to GAS.
GAS shall have thirty (30) days to match the terms of such agreement. If GAS
agrees to the terms of such agreement, ASTI shall renew GAS as the exclusive
distributor for that customer.
(c) The Parties acknowledge that upon the expiration of this Agreement,
ASTI shall have no right to require GAS to continue to act as a distributor of
Products, or of any of them, and GAS shall have no right to require ASTI to
continue to supply Products, or any of them, to GAS. In the event of expiration
or termination of this Agreement ASTI shall execute delivery on all orders
placed with and accepted by it and GAS shall accept shipment and make payment
for any such orders, all in accordance with the provisions of this Agreement
even though termination or expiration has been effected.
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This Agreement may be canceled by the non-offending party prior to the
expiration of the contract term on any of the following grounds:
(1) A trustee, receiver, or other similar custodian is appointed for all or
any substantial part of the other party's property:
(2) When the aggregate of one party's property, exclusive of any property
which it may have conveyed, transferred, concealed, removed or permitted to be
concealed or removed, with intent to defraud, hinder, or delay its creditors,
shall not at a fair valuation be sufficient in amount to pay its debts, or the
party is unable, by its available assets or the honest use of credit, to pay its
debts as they become due;
(3) The other party files a petition, or an answer not denying
jurisdiction, in bankruptcy or under Chapter 7 or 11 of the Federal Bankruptcy
Code or any similar law, state or Federal, whether now or hereafter existing, or
such a petition is filed against the other party and not vacated or stayed
within fifteen (15) days;
(4) The other party makes an assignment for the benefit of creditors;
(5) An attachment, or any like process, is levied or filed against any
substantial part of the other party's property, and is not discharged within
fifteen (15) days;
(6) A judgment is rendered against the other party and remains unsatisfied,
unstayed or otherwise unsuperseded for sixty days (60) and is substantial in
relation to other party's assets;
(7) The other party ceases to have in effect a valid Federal, state or
local license required for the carrying out of the provisions of this Agreement,
whether through revocation, failure or renew, or suspension for more than thirty
(30) days;
(8) A law is enacted making the sale of Products unlawful;
(9) The other party engages in any act with respect to the Products which
is in violation of any Federal or state law, regardless of whether such
violation is prosecuted by any administrative of judicial body which violation
results in a loss of the licenses necessary to distribute or supply the
Products;
(10) The other party does not comply with credit terms as agreed to between
the parties.
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(11) An assignment pledge or any other security interest is created in all,
or a substantial part of the other party's assets without the prior written
consent of the non-assigning party;
(12) A breach of any provision of this Agreement, other than those set
forth in subparagraphs (1) through (11) above, if said breach remains
uncorrected for thirty (30) days after written notice thereof.
(13) Failure by the Distributor to meet the minimum sales required, if any.
A cancellation pursuant to paragraphs 11 (1) through 11 (11) above shall
take effect commencing with the thirtieth day after written notice is given to
the party whose rights are to be canceled and a cancellation pursuant to
paragraph 11 (12) above shall take effect on the thirtieth day after the notice
provided for in said paragraph 11 (12).
12. SURVIVING RIGHTS AND OBLIGATIONS UPON EXPIRATION OR CANCELLATION.
(a) During the period provided for in paragraphs 10 and 11 of this
Agreement, GAS shall be entitled to purchase sufficient quantities of the
Products to meet the reasonable market demand therefore in the Territory for the
period of said notice, taking into account (i) the inventory of the Products
which GAS has in its possession as of the date of said notice; (ii) GAS's
previous sales performance for comparable periods of time; and (iii) GAS's
contractual obligations to third parties.
(b) Upon expiration or cancellation of this Agreement for any reason,
GAS shall have the right to (i) offer to sell the Products back to ASTI at the
price at which GAS purchased the Products from ASTI plus all costs, expenses,
non-refundable taxes, storage, shipping and freight charges incurred by GAS in
obtaining and returning the Products or, (ii) sell any remaining Products in its
possession to another buyer as determined by GAS if ASTI refuses to repurchase
the products from GAS.
(c) Upon expiration or cancellation of this Agreement for any reason,
at ASTI's option, GAS shall deliver to ASTI, F.O.B. GAS's warehouse and in
accordance with ASTI's written instructions, all display, point-of-sale,
advertising and promotional materials then in GAS's possession bearing the
brands trademarks, or other indicia of origin or quality, or Products. To the
extent that GAS has purchased said materials from ASTI, within 30 days of
receipt of said materials, ASTI shall pay to GAS the cost for such materials,
less wear and tear to such materials as received by ASTI. GAS shall within
ninety days following the cancellation of this Agreement, remove all signs,
advertising, and similar materials bearing the brands, trademarks, and other
indicia of origin or quality of Products, on GAS's trucks, buildings, stationery
and other property.
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13. ASSIGNMENT. Neither party may transfer or assign any of its rights or
obligations under this Agreement without the written consent of the other, which
consent shall not be unreasonably withheld.
14. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties pertaining to the subject matter hereof and supersedes all
prior and contemporaneous agreements and understandings of the parties in
connection therewith. No agent or officer of either party is authorized to make
any representation, promise or warranty not contained in the Agreement. No
interpretation, change, waiver or termination of any of the provisions hereof
shall be binding upon either party, unless in writing and signed by an officer
thereunto authorized. No modification, waiver, termination, discharge or
cancellation of this Agreement shall affect the right of either party to enforce
against the other any claim, whether or not liquidated, which accrued prior to
the date of such modification, waiver, termination, discharge or cancellation,
and no waiver of any of the provisions of, or default under, this Agreement
shall affect the right of either party to enforce said provisions or to exercise
any right or remedy in the event of any other fault whether or not similar.
15. NOTICES. All notices and other communications pursuant to or relating
to any of the subject matter of this Agreement shall be in writing, shall be
effective upon mailing, and be sent by certified or registered mail addressed to
the other party at the following address:
If to ASTI, to:
American Soil Technologies, Inc.
000 Xxxxx Xxxxxxx Xxx.
Xxxxx 000
Xxxxxxxx, XX 00000
With a copy thereof to be sent to:
Xxxx X. Xxxxx
0000 Xxxx Xxxxxxxx Xx.
Xxxxxxx, XX. 00000
If to GAS , to:
Gigot Agra Services
0000 X Xxx 00
Xxxxxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxx
or to such other address as may be specified in a notice given in the foregoing
manner
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16. MUTUAL RELEASE. The parties acknowledge that, at the date thereof,
neither of them has any claim for damages, reimbursement of expenses, breach of
contract, nor any claim of any other nature against the other party and in
consideration of the other entering into this Agreement, any and all such claims
of each party except those stated are hereby fully and forever discharged and
released. This clause shall be ineffective as to subsequent renewals of this
Agreement absent an express written agreement to the contrary.
17. GOVERNING LAW. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of California, without regard to the
conflicts of law principles thereof.
18. INDEPENDENT CONTRACTORS. It is the intention of ASTI and GAS that ASTI
and GAS are, and shall be deemed to be, independent contractors with respect to
the subject matter of this Agreement, and nothing contained in this Agreement
shall be deemed or construed in any manner whatsoever as creating any
partnership, joint venture, employment, fiduciary or other similar relationship
between ASTI and GAS.
19. SEVERABILITY. If any part of this Agreement shall be or become illegal,
ineffective or unenforceable, the remainder of this Agreement shall not be
affected thereby, and the parties shall be bound by the remainder of this
Agreement as if the illegal, ineffective or unenforceable part had never been
inserted in this Agreement.
20. AMENDMENT AND WAIVER. No amendment to, or waiver of, any provision of
this Agreement shall be effective unless in writing and signed by both parties.
The waiver by any party of any breach or default shall not constitute a waiver
of any different or subsequent breach or default.
21. FORCE MAJEURE. Neither party shall be liable for failure to perform or
delay in performing any obligation under this Agreement if such failure or delay
is due to fire, flood, earthquake, strike, war (declared or undeclared),
embargo, blockade, legal prohibition, governmental action, riot, insurrection,
damage, destruction or any other similar cause beyond the control of such party.
22. CAPTIONS. The captions of this Agreement are for convenience and
reference only and in no way define, limit or describe the scope or intent of
this Agreement nor affect it in any way.
23. COUNTERPARTS. This Agreement may be executed in counterparts which,
when taken together, shall constitute one document. Facsimile signatures shall
be deemed as originals and have full legal effect. The officers of ASTI and GAS
each specifically warrant that they have the authority to execute this
Agreement.
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SIGNATURES
This Agreement has been executed by the duly authorized representatives of
the parties, effective as of the date first above written.
Gigot Agra Services American Soil Technologies, Inc.
By/s/ Xxxxxx X. Xxxxx By /s/ Xxxx X. Xxxxx
-------------------------- -----------------------------
Xxxxxx X. Xxxxx Xxxx X. Xxxxx, Its: President
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SCHEDULE A
PRODUCTS
The products to be distributed pursuant to this Agreement are Agriblend (TM), ,
Nutrimoist (TM)L, Nutrimoist (TM)Turf, Extend(TM) (a liquid XXX), STOCKOSORB(R)
F, STOCKOSORB(R) C, STOCKOSORB(R) M, STOCKOSORB(R) S, STOCKOPAM(R) and
Bio-Nutrients.
Distributor
Gigot Agra Services American Soil Technologies, Inc.
By/s/ Xxxxxx X. Xxxxx By /s/ Xxxx X. Xxxxx
-------------------------- -----------------------------
Xxxxxx X. Xxxxx Xxxx X. Xxxxx, Its: President
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SCHEDULE B
EXCLUSIVE CUSTOMERS
Distributor
Gigot Agra Services American Soil Technologies, Inc.
By/s/ Xxxxxx X. Xxxxx By /s/ Xxxx X. Xxxxx
-------------------------- -----------------------------
Xxxxxx X. Xxxxx Xxxx X. Xxxxx, Its: President
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SCHEDULE C
TERRITORY
The territory shall consist of an area within a three hundred mile radius of
Garden City, Kansas.
Distributor
Gigot Agra Services American Soil Technologies, Inc.
By/s/ Xxxxxx X. Xxxxx By /s/ Xxxx X. Xxxxx
-------------------------- -----------------------------
Xxxxxx X. Xxxxx Xxxx X. Xxxxx, Its: President
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