Exhibit 4.5
SALES REPRESENTATIVE AGREEMENT
THIS AGREEMENT made as of the 1st day of February, 1992, by and between
AQUAPENN SPRING WATER COMPANY, INC., a Pennsylvania corporation, having its
principal office at 0000 Xxxxxxxx Xxxxx, Xxxxx Xxxxxxx, Xxxxxxxxxxxx (the
"Company") and XXXXXXX X. XXXXX, an individual, having a principal office at
0000 Xxxx Xxxxxx, Xxxxxxxx Xxxx, Xxxxxxxx, (the "Broker").
RECITALS:
A. The Company is engaged in the wholesale production and sale of a
family of high-quality spring water products.
B. The Company and the Broker desire to enter into a relationship
whereby the Broker will act as a sales representative of the Company on the
terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual promises herein set
forth, the parties hereto, with the intent to be legally bound hereby, agree as
follows:
1. Sales Representative. The Company hereby grants to the Broker, and
the Broker hereby accepts, during the term of this agreement, the right to act
as the Company's sales representative with the exclusive right to sell,
distribute and handle all products sold or distributed directly or indirectly by
the Company from time to time (the "products") to persons and entities located
in the Territory as defined in Section 3 below.
Notwithstanding the above, the Broker will not have the exclusive right
to sell Products on behalf of the Company to a person or entity (i) located in
the Territory if the Broker refuses or fails to service such account
("Unserviced Account"); or (ii) which is an account with its purchasing
headquarters located outside the Territory (an "Outside Account") and the sale
within the Territory is due solely to an order or approval at such headquarters.
The Broker is not entitled to commission for Unserviced Accounts or Outside
Accounts. The Broker may elect to not service accounts without being in breach
hereof.
2. Term. The term of this Agreement shall commence effective as of the
date hereof and continue until January 31, 1999, unless otherwise terminated
pursuant to the terms hereof.
3. Territory. The initial territory shall be the States of Illinois,
Indiana, Wisconsin, Missouri and Iowa. The Broker may, at any time upon notice
to the Company, elect to have the
State of Texas included in the Territory; provided, however, that if the Company
indicates that it intends to assign Texas to another sales representative, the
Broker will have a fifteen (15) day period in which to elect to include such
State in the Territory hereunder, but if the Broker does not so exercise to
include Texas in the Territory, the Broker shall cease to have any right to
subsequently elect to include Texas in the Territory.
4. Compensation.
4.1 Commission. Unless otherwise agreed in writing by both parties
hereto, the Company will pay to Broker on or before the last day of each month,
as commission, an amount equal to five percent (5%) of the previous months
receipts of Gross Sales Price for sales of Products, to (i) any person or entity
located in the Territory other than an Outside Account or Unserviced Account,
and (ii) any account, wherever located, where the purchasing headquarters of the
account is located in the Territory and the account has approved the purchase of
Products due to the Broker's efforts. "Gross Sales Price" shall mean the net
purchase price paid by a purchaser as shown on invoices rendered, less all
deductions for any (i) sales, use or excise taxes; (ii) freight and other
transportation-related charges; (iii) adjustments, refunds, returns, settlement
of claims, collection costs and other allowances made for price-offs related to
sales of Products for which a commission has been paid or is payable to the
Broker.
4.2 Stock Options. As additional compensation, the Broker shall have
the option to purchase and the Company shall sell to the Broker common stock of
the Company with the number of shares subject to the Broker's option hereunder
based on the aggregate gross sales for which the Broker is entitled to a
commission hereunder in accordance with the following scale:
(i) Four percent (4%) of the first two
million dollars ($2,000,000) of
gross sales for which the Broker is
entitled to a commission hereunder
("Gross Sales"), or 80,000 shares;
(ii) Three percent (3%) of the next two
million dollars ($2,000,000) of
Gross Sales, or 60,000 shares; and
(iii) Two percent (2%) of the next sixteen
million dollars ($16,000,000) of
Gross Sales, or 320,000 shares.
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Except as otherwise provided below, the maximum number of shares which
may be purchased by the Broker hereunder is 460,000 shares and the purchase
price is $1.50 per share. The Broker shall be entitled to exercise his option to
purchase some or all of the shares to which he is entitled hereunder for a sixty
(60) day period following February 1 of each year (the "Anniversary Date")
provided that the Broker shall be entitled to purchase shares to which he is
entitled hereunder any time during a six (6) month period following termination
or expiration of this Agreement. If the Broker becomes entitled to purchase
shares following the termination or expiration of this Agreement, the Broker
shall have a sixty (60) day period from being notified by the Company of his
right to purchase shares hereunder to exercise his option. The Company shall
inform the Broker each month of the number of shares which are subject to the
options set forth hereunder. Notwithstanding anything to the contrary herein,
the Broker shall not be entitled to exercise his option hereunder until the
Gross Sales is equal to or exceeds $500,000. The failure by the Broker to
exercise his option at any Anniversary Date shall not affect the Broker's right
to subsequently exercise his options. In the event of a stock split or a reverse
stock split, the Broker will be eligible to an equitable adjustment in the class
and number of shares and the purchase price to take into consideration such
additional issuance. In addition, if the Company is a party to a merger and is
not the survivor, the Company shall provide that the Broker shall be eligible to
purchase such number and types of shares as may be equitable under the
circumstances.
5. Trade Secrets. Broker, during the term of this Agreement, will have
access to and become acquainted with various trade secrets, consisting of
formulas, patterns, devices, secret inventions, processes, compilations of
information, records, specifications, and customer lists which are owned by
Company and which are regularly used in the operation of the business of the
Company. The Broker shall not disclose any of the aforesaid trade secrets,
directly or indirectly, or use them in any way, either during the term of this
Agreement or at any time thereafter, except (i) as required in the course of his
services under this Agreement, (ii) disclosure is in connection with a judicial
or arbitration proceeding, (iii) such information is or becomes of general
knowledge in the industry other than due to the wrongful acts of the Broker,
(iv) the Company discloses such information to a third party without restriction
in disclosure or use or (v) disclosure or use is in connection with the Broker's
subsequent employment or business endeavors in good faith and without the
specific intent or unreasonably depriving the Company of the value and benefit
of such information and a period of two (2) years has expired following the
termination or expiration of this agreement. All original files, records,
documents, drawings, specifications, equipment, and other items relating to
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the business of the Company, whether prepared by Broker or otherwise coming into
his possession, shall remain the exclusive property of the Company and shall be
delivered to the Company upon termination or expiration of this Agreement;
provided that the Broker may retain copies of such information subject to the
confidentiality provision contained herein.
6. Noncompetition. During the term of this Agreement, the Broker shall
not, directly or indirectly, either as an employee, employer, consultant, agent,
principal, partner, stockholder, corporate officer, director, or in any other
individual or representative capacity, own, operate, control, assist, or
participate in any business that is in competition in any manner whatsoever with
the business of the Company. The foregoing prohibitions shall not apply to
ownership by Broker of less than five percent (5%) of the issued or outstanding
stock of any company whose shares are listed for trading over any public
exchange or the over-the-counter market provided that Broker does not control
any such company.
7. Duties.
7.1 Brokers Duties. During the term of this Agreement the Broker
will: (i) use reasonable efforts to promote the Products in the Territory it
being understood that this is not the Broker's sole business activity; (ii)
maintain a perpetual customer list which states Products being sold and agreed
upon compensation; and (iii) perform his duties hereunder in strict compliance
with all applicable laws, rules and regulations of duly constituted governmental
authorities and shall obtain all licenses, registrations or other approvals
required by law in connection with the services to be rendered hereunder.
7.2 Company's Duties. During the term of this Agreement, the Company
will: (i) provide the Broker with the then current price lists for the Products;
(ii) provide the Broker with the then current promotional materials and samples
of the Products; (iii) provide the Broker with information of all promotional
programs, if any, available from time to time during the terms of this Agreement
in connection with the Products; (iv) provide copies of any invoices for which
commissions are payable hereunder upon the Broker's request; (v) use reasonable
efforts to promptly ship Products regarding orders accepted by the Company and
promptly invoice and collect all amounts due as a result thereof; (vi) perform
its duties hereunder in direct compliance with all applicable laws, rules and
regulations.
8. Independent Contractor. The Broker's relationship to the Company
will, for all purposes, be that of an independent contractor. The Broker will
not be responsible for shipment or delivery of the Products or any credit
decisions. All expenses
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and disbursements, including, but not limited to, those for travel and
entertainment, office, clerical, and general selling expenses, that may be
incurred by the Broker in connection with the services which he renders pursuant
to this Agreement shall be borne wholly and completely by the Broker, and the
Company shall not be in any way responsible or liable therefore unless otherwise
agreed in writing by the Company. The Broker does not have, nor shall he hold
himself out as having, any right, power or authority to create any contract or
obligation, either express or implied on behalf, in the name of, or binding upon
the Company, or to pledge the Company's credit, or to extend credit in the
Company's name unless otherwise agreed in writing by the Company. The Broker
shall not have the right to appoint or otherwise designate suitable and
desirable salesmen, employees, agents, and representatives (hereinafter
collectively referred to as "Broker's Representatives") without approval of
Company. If approval is granted the Broker shall be solely responsible for the
Broker's Representatives and their acts. The Broker's Representatives shall be
at the Broker's own risk, expense, and supervision, and the Broker's
Representatives shall not have any claim against the Company for salaries,
commissions, items of cost, or other form of compensation or reimbursement; and
the Broker represents, warrants, and covenants that the Broker's Representatives
shall be subordinate to the Broker and subject to each and all of the terms,
provisions, and conditions applying to the Broker hereunder.
9. Assignment By/Sale Of Company. The company, without being released
thereby, shall have the right to assign this Agreement and all of its rights and
privileges and obligations to any other person or entity which purchases the
operations of the Company or, to the extent applicable, any label or line of the
Company. However if the Company is liquidated or if the sale of the operations
of the Company or any label or line of the Company is contingent upon the
termination of this agreement to the extent it would otherwise apply to such
sale, then Broker shall accept a reasonable buyout price for the remaining term
of this Contract for such liquidation or as it applies to that portion of the
Company's operations being sold. Also, in the event of any such sale or
liquidation, Broker may then exercise any unexercised stock options granted
under Section 4.2, whether or not the Gross Sales requirements of that section
have then been met.
10. Assignment By Broker. This Agreement is a personal one, being
entered into in reliance upon and in consideration of the singular personal
skill, qualifications, and representations of said trust and confidence in
Broker. Therefore, neither Broker's interest in this Agreement nor any of his
rights or privileges shall be assigned, transferred, shared or divided,
voluntarily or involuntarily, by operation of law or otherwise,
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in any manner. The Broker may assign his interest hereunder to a corporation in
which the Broker owns or controls at least a majority of issued and outstanding
stock. Any such assignment shall not release the Broker from any of his
obligations hereunder, and the Company is obligated only to the Broker.
11. Termination.
11.1 Termination by the Company. The Company may terminate
this Agreement, prior to its expiration, upon occurrence of any of the
following:
(i) For a ninety (90) day period following
each Anniversary Date (the "Current
Anniversary Date") commencing on the
second Anniversary Date, the Company may
elect to terminate this Agreement if (a)
the Gross Sales during the prior twelve
(12) month period (the "Current Period")
do not exceed the Gross Sales during the
twelve (12) month period ending on the
immediately preceding Anniversary Date
by ten percent (10%) and (b) the Gross
Sales during the Current Period do not
exceed by ten percent (10%) the average
annual Gross Sales during each twelve
(12) month period ending on the prior
two Anniversary Dated prior to the
Current Anniversary Date. If the
Company does not deliver a termination
notice within such ninety (90) day
period, this Agreement shall remain in
full force and effect; and
(ii) The material failure of the Broker to
materially comply with any of his
obligations hereunder for a period of
thirty (30) days after written notice of
such failure shall be given by the
Company to the Broker; provided,
however, that if the nature of such
failure shall be such that it cannot be
cured within said thirty (30) day period
and the Broker shall immediately
commence to cure such failure.
11.2 Termination by the Broker. The broker may terminate this
Agreement, prior to its expiration, upon the occurrence of any of the following:
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(i) Upon non-payment of any amounts owing to
the Broker hereunder;
(ii) The material failure of the Company to
materially comply with any of its
obligations hereunder for a period of
thirty (30) days after written notice of
such failure shall be given by the
Broker to the Company; provided,
however, that if the nature of such
failure shall be such that it cannot be
cured within said thirty (30) day period
and the Company shall immediately
commence to cure such failure, the
Company shall have such additional
reasonable period of time as may be
necessary to cure such failure; or
(iii) If any proceeding in bankruptcy,
insolvency or other law for the relief
of debtors, including the appointment of
any receiver or trustee or assignment of
any receiver or trustee or assignment
for the benefit of creditors, shall be
instituted by or against the Company.
12. Effect of Termination or Expiration. The following shall apply upon
termination or expiration of this Agreement:
12.1 Orders. The Broker will be entitled to commissions in
accordance with and subject to the terms of this Agreement for any order for
which the Broker ordinarily would be entitled a commission hereunder and which
the Company received prior to the expiration or the effective date of the
termination of this Agreement.
12.2 Survival. Upon the termination or expiration of this
Agreement, the parties shall be relieved of their respective obligations
hereunder, except as expressly provided in this Agreement and except that:
(i) All amounts owed by one party to
another shall be paid as they become
due, including, without limitation,
amounts due under Sections 4 and 9
herein;
(ii) All claims for breach of contract
with respect to actions occurring
prior to termination or expiration
shall remain applicable and survive
such termination or expiration;
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(iii) All representations and warranties
shall remain applicable and shall
survive such termination or
expiration;
(iv) The respective rights and
obligations of the parties pursuant
to Sections 5, 9, 13 and 14 herein
remain applicable and survive such
termination or expiration; and
(v) The general subsections of Section
15 shall remain applicable and
survive such termination.
13. Indemnification. The Company agrees to indemnify, defend and hold
the Broker and his permitted employees and agents and their respective
successors and assigns harmless from and against any and all fines, losses,
damages, claims, costs and expenses (collectively, "Losses") which the Broker or
any such person or entity may incur or be subject to as a result of or on
account of, with regard to the Products, any Losses relating to product
liability.
14. Insurance. During the term of this Agreement and for a period of
three (3) years thereafter, the Company shall add Broker and his permitted
employees and agents as additional named insureds and their respective
successors and assigns on any and all product liability and similar insurance
policies it maintains such insurance coverages (both in type and amount). The
Company shall deliver to the Broker, upon request, insurance certificates
verifying compliance with this section.
15. Miscellaneous.
15.1 Governing Laws. This Agreement shall be deemed to have
been made in the State of Pennsylvania and shall be construed according to the
laws of that state.
15.2 Entire Agreement. This Agreement contains all of the
terms and conditions agreed upon by the parties hereto with reference to the
subject matter hereof. No other agreements, oral or otherwise, shall be deemed
to exist or to bind any of the parties hereto, and all prior agreements and
understandings are superseded hereby. No officer or employee or agent of the
Company has any authority to make any representation or promise not contained in
this Agreement, and Broker agrees that he has executed this Agreement without
reliance upon any such representation or promise. This Agreement cannot be
modified or changed except by written instrument signed by all of the parties
hereto.
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15.3 Severability. In the event any one or more of the
provisions contained in this Agreement shall for any reason be held invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision thereof and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
15.4 Waiver. A waiver of one of the provisions of this
Agreement shall not affect any of the other provisions of this Agreement, such
that the remaining provisions will remain in full force and effect. The failure
of either party to enforce any of the provisions of this Agreement shall not be
deemed a waiver thereof. A waiver in writing at any time of any of the terms and
conditions of this Agreement shall not be considered a modification,
cancellation or waiver of such terms or conditions as to subsequent events
unless otherwise expressly provided.
15.5 Notices. Each notice, consent, request or other
communication required or permitted by this Agreement shall be in writing and
shall be deemed "given" to a party (i) when delivered by hand to such party, or
(ii) on the third day after deposit in the U.S. mail, postage prepaid and
certified (return receipt requested), addressed to the party to which it is to
be given at the address set forth below, or (iii) on the date sent, if sent by
facsimile transmission to the number indicated below or (iv) on the first
service day after proper and timely deposit, freight prepaid, with a nationally
recognized next-day delivery service providing next-day service to the location
of the recipient, to such party at the address set forth below:
If to Broker: Xx. Xxxxxxx X. Xxxxx
0000 Xxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
Fax No. 000-000-0000
If to the Company: AquaPenn Spring Water Company, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxxxx, XX 00000
Fax No. 000-000-0000
Any party at any time may change the address or the facsimile telephone number
at which it or he is to be given notice by giving notice to its or his new
address or new facsimile telephone number to the other party in the foregoing
manner.
15.6 Enforcement. Should any legal proceedings be commenced to
secure or enforce any right under this Agreement, the prevailing party, if
litigation, or the party designated by the arbitrators, if arbitration, shall be
entitled to recover from the other party its reasonable attorneys, fees and
costs, in
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addition to all other relief to which said party may be entitled. The term
"prevailing party" shall mean that party whose position is substantially upheld
in a final judgment rendered in such litigation or, if the final judgment is
appealed, that party whose position is substantially upheld by the decision of
the final appellate body to consider the appeal.
15.7 Arbitration. Any dispute between the parties regarding
any matter or issue arising under this Agreement shall, upon the written demand
of any affected party, be submitted to arbitration in State College,
Pennsylvania in accordance with the commercial arbitration rules of the American
Arbitration Association. The award of the arbitrators in any such arbitration
proceeding shall be final and binding upon the parties, and judgment thereon may
be entered in any court. Notwithstanding this section, either party may seek
injunctive or other relief from any court of competent jurisdiction to prevent a
breach or further breach of this Agreement pending the outcome of arbitration.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement with the intent to be legally bound thereby on the day and year first
above-written.
ATTEST: AQUAPENN SPRING WATER
COMPANY, INC.
By:/s/ X.X. Xxxxxx, Xx. By:/s/ Xxxxxx X. Xxxxx (seal)
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Secretary President
I HAVE READ THE FOREGOING AGREEMENT AND I HEREBY ACCEPT AND AGREE TO
EACH AND ALL OF THE PROVISIONS, COVENANTS AND CONDITIONS THEREOF. I HEREBY
ACKNOWLEDGE RECEIPT OF A COPY OF THIS AGREEMENT.
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
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