DISTRIBUTOR AGREEMENT
PREAMBLE
THIS DISTRIBUTION AGREEMENT ("Agreement") entered into as of MARCH 20, 2006
Creative Enterprises, (hereinafter "Supplier") and Exclusive Beverage
Distributors with its principle place of business at 000-00 Xxxxxxx Xxx.
Xxxxxxxxxxx, XX, 00000 (hereinafter "Distributor").
RECITAL
WHEREAS, Supplier is in the business of developing, marketing, selling and
promoting certain beverage products, including the Product (as hereinafter
defined):
WHEREAS, Distributor is in the business of distributing beverages to customers
and assures the Supplier that it has the financial resources, facilities,
personnel, and expertise necessary to successfully market the Product in the
territory (as hereinafter defined); and
WHEREAS, Distributor wishes to obtain, and Supplier is willing to grant
Distributor an exclusive right to distribute the Product to retail customers for
purpose of resale in the Territory.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
representations and agreements set forth herein, and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged.
Supplier and Distributor, intending to be legally bound, hereby agree as
follows:
1. DEFINITIONS - For purpose of this Agreement the following terms shall
have the respective meanings indicated below:
1.1 PRODUCT - Xxxx Water, Xxxx Flavored Water, and Skinny Water.
1.2 SALES QUOTA - Specified minimum case quantities of the
Product as set forth in EXHIBIT A consisting of a Minimum
Annual Purchase Commitment.
1.3 TERRITORY - As set forth in EXHIBIT B).
1.4 PRICING - As set forth in EXHIBIT C).
1.5 CASE 24 pack 16 oz. Water, Flavored Water, and Skinny Water,
12 Pack 1 Liter and 1.5 Liter water.
* Certain portions of this Exhibit has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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2. GRANT OF DISTRIBUTION RIGHT
2.1 EXCLUSIVE - Subject to the terms and conditions of this
agreement, Supplier hereby grants to Distributor, and
Distributor hereby accepts from Supplier, a nontransferable,
exclusive right to distribute the Product to customers
located in a Territory.
2.2 Supplier agrees to compensate Distributor for all cases
delivered in the Territory through alternative distribution
subject to the exceptions herein Section 2 of this
agreement. This invasion fee will be paid on a quarterly
basis, at the rate of *** per case.
2.3 Supplier expressly reserves unto itself and/or its agents
the right to sell products within the territory to all
accounts that will not accept store delivery inclusive of
catalogue accounts, internet fulfillment services and
electronic media accounts.
2.4 Supplier shall be free to sell or distribute products in the
Territory to or in any of the following which Distributor
fails to effectively service within 90 days hereof, or at
any time that such service ceases or is interrupted for any
period of 30 or more days.
a) Any class or channel of trade that is mutually
agreed upon;
b) Any significant, definable, geographical segment of
the territory;
c) Any accounts the Distributor is unwilling to
service;
2.5 Distributor may appoint sub-distributors in furtherance of
its obligations under this Agreement to service the
Territory encompassed by this Agreement. Distributor shall
be responsible for the conduct of all its sub-distributors.
In the event this Agreement is terminated, any and
all sub-distributor Agreements shall automatically be
terminated. The Distributor agrees to indemnify and hold
harmless Supplier against any and all damages and costs,
including attorney's fees and all other expenses incidental
thereto, incurred as a result of any claim(s) asserted by
any of the Distributors' sub-distributors, Supplier may
notify Distributor of such dissatisfication and it shall be
the obligation of the Distributor to terminate the
sub-distributor within sixty (60) days of said notification
by Supplier, without any disruption of service to the retail
accounts being serviced by said sub-distributor.
2.6 Chain accounts, from time to time Supplier or it's
affiliates may agree to uniform pricing with certain Chain
accounts customers. Distributor shall have a right of first
refusal to match the agreed to uniform pricing for these
accounts within the Territory. All discounts will be split
between supplier and distributor.
3. MARKETING OBLIGATIONS OF DISTRIBUTOR
3.1 DISTRIBUTION TO CUSTOMERS - Subject to the exclusions
contained in paragraph 2.4 hereof, Distributor shall directly
distribute the Product to customers within the Territory.
* Certain portions of this Exhibit has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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3.2 SALES QUOTAS - As set forth in EXHIBIT A. In each annual
period. Distributor shall equal or exceed the retail sales
quota set forth in EXHIBIT A.
3.3 PROMOTIONAL EFFORTS - Distributor shall use its best
efforts to aggressively sell and promote the product to
customers in the Territory.
3.4 DISTRIBUTOR ASSISTANCE - Supplier shall assist Distributor
with the marketing of product within the Territory and will
honor all reasonable requests for promotional support.
3.5 DISTRIBUTOR SERVICE - Distributor shall use its best
efforts to properly service all customers within the
Territory.
3.6 REPORTS - Distributor shall deliver to Supplier no later
than 10 days after the end of each month during the term of
this agreement a written report showing for the preceding
month by ship-to location.
a. Monthly Depletions of product by case for each item
b. Year to Date Sales of Product in cases for each item
c. Number of Active Accounts for the Product
d. Sales to chain Accounts of twenty (20) stores or more
(whether all such stores are within or outside the
Territory) by cases for item, upon request.
4. ORDER PROCEDURE
4.1 ORDERS - All orders for Product requested by Distributor
shall be in writing and received by Supplier at least 5 days
prior to requested shipping date.
4.2 SUPPLIER ACCEPTANCE - All orders for Product by
Distributor shall be subject to acceptance by Supplier and
shall not be binding upon Supplier until the earlier of
written confirmation or shipment, and in the case of
acceptance by shipment, only as to the portion of the order
actually shipped.
4.3 CONTROLLING TERMS - The terms and conditions of this
agreement and of the applicable Supplier hereunder. Any
terms or conditions appearing on the face or reverse side of
any purchase order, acknowledgement or confirmation that are
different from or in addition to those required hereunder
shall not be binding on the parties, even if signed and
returned.
5. PRICES, DISCOUNTS AND PAYMENT
5.1 PRICES TO DISTRIBUTOR - The price payable by Distributor
for the Product shall be established by Supplier for
purposes of this agreement and may be changed, at the
Supplier's sole discretion, within thirty (30) days written
notice to Distributor.
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5.2 PAYMENT - Distributor shall pay for Product within (45)
days from the date product is received on such terms as may
be otherwise specified on Supplier's invoice. At Supplier's
option, shipments may be made on credit terms in effect at
the time an order is accepted. Supplier reserves the right,
upon written notice to Distributor of any of its obligations
to Supplier, including the failure of Distributor to comply
with credit terms and limitations.
5.3 DISTRIBUTOR FINANCIAL CONDITION - Distributor represents
and warrants that it is and at all times during the term of
this Agreement shall remain in good financial condition,
solvent and able to pay invoices for product when due.
6. WARRANTY - Subject to the terms and conditions of this Agreement, Supplier
warrants that the Product, when and is delivered to Distributor, confirms to its
specifications in all material respects, and to the best of its knowledge is
free from defects in contents and workmanship.
7. CONFIDENTIAL INFORMATION - During the course of performance of this
Agreement. Supplier may disclose certain Confidential Information to the
Distributor solely to permit Distributor to perform its obligations under this
Agreement. Distributor shall use its best efforts to maintain the secrecy of all
such Confidential Information. Distributor shall refrain from using, disclosing,
or otherwise exploiting any Confidential Information for any purpose not
specifically authorized by Supplier in this agreement. All files, lists,
records, documents, drawings marketing and xx xxxxxxxxx, that incorporate or
refer to any Confidential Information shall be returned or destroyed promptly
upon termination of this Agreement. Confidential Information will only be
disclosed to those employees of the Distributor that need such information to
effectively perform their obligation to distribute the product & vice versa.
8. TRANSHIPMENT - Distributor shall not directly sell or distribute the product
outside the Territory described in Exhibit B without prior written permission of
an officer of Supplier. The Distributor acknowledges that such action will cause
irreparable and incalculable harm to Supplier. Supplier may terminate this
Agreement for cause if Distributor directly sells or Distributes Charity
Beverage Products outside the Territory, and Supplier shall be free thereafter
to appoint another Distributor in the Territory. In addition to all other
remedies available to the Supplier for such breach. Distributor shall pay $5.00
for each case sold of the product found to have been so sold or distributed by
Distributor outside of the territory. Only if the supplier Chooses not to
terminate.
9. INSURANCE - Distributor shall maintain general and public liability and
product liability insurance in sum not less than that $1,000,000 underlying
coverage.
10. TRADEMARKS - All trademarks, tradedress copyright and goodwill as they
relate to the Product, packaging, image, merchandising and advertising materials
remain the sole and exclusive property of the Supplier. The Supplier grants the
Distributor the right, during the term of this Agreement, to use its trademark,
tradedress and Product image to promote the goodwill and sales of the products
in the Territory. Any use of such must be to promote the products in the best
possible manner and is at the sole discretion of the supplier. All proposed
marketing materials are subject to Supplier approval.
11. TERM - This Agreement shall commence on the date signed by both parties and
shall remain In force until December 31, 2009 and shall automatically renew from
year to year as long as Distributor come within 80% of projected sales quotas.
12. TERMINATION - This Agreement may be terminated as follows:
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12.1 For cause or breach of a material provision of this
Agreement, by either party with at least 30 days advance
written notice.
12.2 By the Supplier in the event of;
A) the liquidation or dissolution or notice thereof
of the Distributor's usual business;
B) an assignment by the Distributor for the benefit
of creditors; or
C) the filing of a voluntary or involuntary
petition under the provisions of the United
Stated Bankruptcy Code or the appointment of a
receiver for the property of the Distributor,
the filing of which remains uncontested and
undischarged by the Distributor at the end of
thirty (30) days after such filing.
12.3 Supplier may terminate this agreement without cause at
anytime upon 60 days advanced written notice to Distributor.
If the Distributor is terminated by the Supplier, or its
successor, for any reason other than cause, the terminating
party will pay to the distributor an amount equal to the
pre-tax gross profit times the number of cases of Product
purchased by distributor during either: a) the twelve (12)
months immediately preceding notice of termination or; b)
such shorter period time prior to termination that
Distributor has been selling the product. Payments hereunder
shall be due within 90 days of such termination and shall be
calculated as the base amount plus any outstanding monies
due to the Distributor for promotional programs, co-op or
otherwise, and any returns or allowances; minus any
outstanding monies due the Supplier including, but not
limited to, invoices due for product or P.O.S., repurchased
product, promotional activities (Slotting, incentives, etc.)
and any other adjustments outstanding.
12.4 CONSEQUENCES OF SURVIVAL - Upon termination of this
Agreement, Supplier shall have the right to repurchase all
saleable product inventory and P.O.S. materials held by the
Distributor at landed net invoice prices. In further
consideration of the compensation payable in connection
herewith, the Distributor will guarantee to Supplier that
concurrently with the termination and payment, it will
furnish to Supplier:
13. MODIFICATIONS, AMENDMENTS, AND WAIVERS - This Agreement may not be modified
or amended, including by custom, usage of trade, or course of dealing, except by
an instrument in writing signed by a duly authorized officers of both of the
parties hereto. Performance of any obligation required of a party hereunder may
be waved only by a written waiver signed by a duly authorized officer of the
other party, which waiver shall be effective only with respect to the specific
obligation described therein. The waiver by either party hereto of a breach of
any obligation of the other shall not operate or be construed as a waiver or
other subsequent breach of the same provision or any other provision of this
Agreement.
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14.1 ASSIGNMENT - Supplier's grant of distribution rights
hereunder is based upon its trust and confidence in the
Distributor and the current owners of the Distributor. The
Distributor's rights and/or obligations under this Agreement
may not be transferred or assigned in any matter, voluntary
or involuntary, to any other person or entity, without
written consent of the Supplier. For purposes of this
provision, a transfer or assignment shall include, but not
be limited to the following: (a) gift; (b) merger of
Distributor with any other entity; and (c) sale, gift,
transfer or issuance of more than 25% of the equity
ownership or stock of the Distributor to any person, persons
or entities other than the current owners or their direct
family. Supplier will not unreasonably withhold such consent
if Distributor timely provides Supplier with all information
it reasonably requires and determines that such transfer or
assignment will not significantly impair Supplier rights or
opportunities hereunder nor put Supplier at risk in any of
its other business dealings. Upon any such transfer or
assignment without Supplier consent, this Agreement shall
immediately terminate, without notice and without
opportunity to cure.
14.2 FORCE MAJCURE - Supplier or distributor shall not be
responsible for any failure to perform due to unforeseen
circumstances or to cause beyond Supplier's reasonable
control, including but not limited to acts of God, war,
riot, embargos, acts of civil or military authorities, fire,
floods, accidents, strikes, or shortages of transportation,
facilities, fuel, energy, labor, or materials. In the event
of any such delay. Supplier may defer the delivery date for
a period equal to the time of such, delay.
14.3 NOTICES - Unless other wise specifically provided, all
notices required permitted by this Agreement shall be in
writing and may be delivered personally, or may be sent by
facsimile or certified mail, return receipt requested, to
the following addresses, unless the parties are subsequently
notified of any change of address in accordance with this
section 14.3
IF TO SUPPLIER:
CREATIVE ENTERPRISES
000 Xxxx Xxx. Xxxxx
Xxx Xxxx, XX
Attn:
Facsmile: 000-000-0000
IF TO DISTRIBUTOR:
EXCLUSIVE BEVERAGE DISTRIBUTORS
000-00 XXXXXXX XXX
Xxxxxxxxxxx, XX.00000
Attn: Xxxxx Xxxxx
Facsmile: 631-293-2064
Any notice shall be deemed to have been received as follows: (1) by
personal delivery, upon receipt; (2) by facsimile. 24 hours after
transmission or dispatch; (3) by certified mail, 5 business days
after delivery to the U.S. postal authorities by the party serving
notice. If notice is sent by facsimile, a confirming copy of the
same shall be sent by mail to the same address.
14.4 ARBITRATION -- Any controversy or claim between or among
the parties relating to this Agreement shall be determined
by arbitration in accordance with the Commercial
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Arbitration Rules of American Arbitration Association. The
panel shall consist of at least (3) three arbitrators. Any
such arbitration hearing shall be held in New York unless
the parties mutually agree otherwise.
14.5 GOVERNING LAW - The validity and interpretation of this
Agreement shall be governed by and construed and enforced in
accordance with the Laws of the state of New York.
14.6 AUTHORITY - The Distributor has all requisite corporate
power and authority to enter into this Agreement. This
Agreement has been duly and validly executed and delivered
by the Distributor and constitutes a legal, valid and
binding agreement of the Distributor, enforceable in
accordance with its terms.
14.7 ENTIRE AGREEMENT - This Agreement constitutes the entire
understanding and contract between the parties and
supersedes and all prior and contemporaneous, oral or
written representations, communications, understandings, and
agreements between the parties with respect to the subject
matter hereof. The parties acknowledge and agree that
neither of the parties is entering into this Agreement on
the basis of any representations or promises not expressly
contained herein.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their duly authorized representatives as of the date first below
written.
SUPPLIER DISTRIBUTOR
Executed this day 20 of March, 2006 Executed this day 20 of March, 2006
By: Xxxxx Xxxxxx, Pros. CEO By: Xxxxx Xxxxx/Pres.
------------------------------- -------------------------------
(PRINTED NAME/TITLE) (PRINTED NAME/TITLE)
Signature: /s/ Xxxxx Xxxxxx Signature: /s/ Xxxxx Xxxxx
CREATIVE ENTERPRISES Exclusive Beverage Distributors
000 Xxxx Xxx. Xxxxx 000-00 Xxxxxxx Xxx
Xxx Xxxx, XX. 00000 Xxxxxxxxxxx, XX. 00000
Facsmile: 000-000-0000 Facsmile: 631-293-2064
Creative Enterprises Exclusive Beverage Distributors
A NEVADA Corporation A New York Corporation
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EXHIBIT A)
SALES AND MARKETING PLAN
1. SALES QUOTAS:
In addition to the Distributor's obligation to use its best efforts to
actively and aggressively market the Products to all available customers within
the Territory, the Distributor agrees to purchase and pay for the following
minimum volumes of the Products for sale in the territory, which amounts the
parties hereby acknowledge and stipulate are fair and commercially reasonable.
2006 [***] cases
2007 [***] cases
2008 [***] cases
The parties agree to negotiate the Minimum Purchase Volumes for each year after
the periods set forth above, based upon the current market conditions, including
categories growth, population size, per-capita sales volume and comparative
analysis to other territories. In the event that an agreement is reached, shall
be [***] higher than the minimum for the previous year or [***] of the actual
purchase in the previous year, whichever is greater.
3 MARKETING FUNDING & CO-OP'S: Supplier and Distributor each agree to fund
on a 60/40 basis the following:
A. Distributor Sales Incentives
B. Cooler Programs
4 Failure to comply with any of the provisions of this Marketing plan or
failure to achieve any of the purchase or distribution goals set forth
herein shall constitute a material breach of this Agreement and give rise
to termination with cause.
Agreed to: /s/ Xxxxx Xxxxx
-----------------------------
(DISTRIBUTOR)
Accepted By: /s/ Xxxxx Xxxxxx
---------------------------
(SIGNATURE)
*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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EXHIBIT B)
TERRITORY
1. EXCLUSIVE BEVERAGE DISTRIBUTORS shall be the exclusive beverage
Distributor of the Product;
In the state of NEW YORK
In the counties of Richmond, Kings, Queens, Manhattan, The Bronx, Nassau
and Suffolk.
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EXHIBIT C
PRICING
[***]
ALL PRICES ARE SUBJECT TO CHANGE WITHIN 60 DAYS WRITTEN NOTICE TO DISTRIBUTOR.
*** Certain information on this page has been omitted and filed separately with
the commission. Confidential treatment has been requested with respect to the
omitted portions.
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