Exhibit 99.1
DISTRIBUTORSHIP AGREEMENT
This Agreement made this 3 day of March 1993.
BETWEEN: ADELAIDE HOLDINGS, INC.
(hereinafter referred to as "Adelaide")
located at 00000 Xxxxxxxx Xxxxxxxxx,
Xxxxx 000,
Xxxxx, Xxxxxxx 00000.
- and -
XXXX XXXXXXXX
000 XXXXXXX XXXX
XXXXXXX XXXXX, XXX XXXX 00000
(hereinafter referred to as "Distributor"):
WITNESSETH:
WHEREAS, ADELAIDE owns the rights to manufacture,
distribute and sell a fully automated french fry vending machine;
WHEREAS, ADELAIDE is the owner of a distinctive type of
marketing, preparation and vending machine sale of Adelaide french fry food
products; and;
WHEREAS, ADELAIDE has developed and adopted for its own
use and for the use of its Distributors a unique system of Adelaide product
preparation and vending machine sale, consisting in part of the unique french
fry vending machines, distinctive advertising, signs, food presentation and
formula secret recipes (collectively the "Products"); and
WHEREAS, in addition to valuable goodwill, Adelaide owns
the valuable trade name and design of Adelaide in addition to various patents,
trademarks, service marks, copyrights, tradenames, slogans, designs, insignia,
emblems, symbols, package designs, logos and other proprietary identifying
characteristics (collectively, the "Adelaide Marks") used in relation to and in
connection with the Products, and
WHEREAS, DISTRIBUTOR wishes, upon the terms and
conditions hereinafter set forth, to enter into the business of distributing
Adelaide Products on an exclusive basis in the Territories of STATES OF NEW
YORK, MASSACHUSETTS, NEW HAMPSHIRE, VERMONT, CONNECTICUT, RHODE ISLAND, MAINE
and to benefit from the expertise and experience of Adelaide in its field; and
WHEREAS, ADELAIDE is willing to permit Distributor to
use Adelaide marks as aforesaid, together with the retail sale of Adelaide
French Fry Vending Machine and its products upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, the parties hereto, in consideration of
the mutual covenants herein contained and promises herein expressed for other
good and valuable consideration, receipt whereof is hereby acknowledged, do
hereby agree as follows:
ARTICLE I
DISTRIBUTORSHIP AGREEMENT
A. Subject to the provisions of this Agreement and the performance of its
covenants and obligations, Adelaide hereby grants Distributor an exclusive right
and license to distribute all Adelaide Products and to use the Adelaide Marks in
the retail sale thereof within the territorial boundaries set forth and more
particularly described in Schedule "A" attached hereto and forming part of this
Agreement (the "Territory") for a term of ten (10) years commencing the 5 day of
March 1993.
The parties specifically acknowledge and agree that the restriction of
operation to the Territory identified herein is an essential and indispensable
term of this Agreement.
DISTRIBUTORS'S SPECIFIC TERRITORIAL RIGHTS
1. The Distributor shall have the exclusive right in his Territory
to sell the Adelaide French Fry Vending Machine and Adelaide's attendant
Products to all users in the Territory.
2. In the event that Adelaide machines are sold by the parent
company for use in the Distributor's Territory, the Distributor shall earn its
full Distributors's profit. This provision is contingent upon his consent to
supply and service these machines.
3. The Distributor shall receive its full profit if machinery is
sold to clients in his Territory for installation in areas outside of his
Territory. Except that in the event the machinery is sold into another
Distributor's Territory, the Distributor profit shall be seventy (70%) percent
to the originating Distributor and thirty (30%) percent to the Territorial
Distributor.
4. The Distributor in his exclusive Territory will receive thirty
(30%) percent of the full Distributor's profit in such event that there are
installed in his Territory Adelaide machines resulting from national accounts
having locations in various Territories throughout the country.
A national account is defined for the purposes of clarity, a national
theater chain, a national retail chain or any entity that has locations in more
than four states. The Distributor in order to earn the national account
Distributor's profit is obligated to supply and service these locations.
ARTICLE II
OBLIGATIONS OF ADELAIDE
Adelaide agrees to assist Distributor in distributing Products by way of retail
sale in the following manner:
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A. Adelaide will conduct, at no charge, certain sales and maintenance
training programs in its headquarters training school which Distributor and one
key employee may attend. All costs and expenses incurred by Distributor in
traveling to or attending the training program shall be borne by Distributor.
B. Adelaide agrees to provide to Distributor, as it is available from time
to time, exchange of information relating to the Products and additional types
of products as may be authorized by Adelaide from time to time for sale pursuant
to this Agreement, and which, when authorized, will also constitute "Products"
for all purposes herein, at such times and in such detail as Adelaide shall deem
appropriate.
ARTICLE III
CONFIDENTIAL INFORMATION
A. The parties hereto covenant and agree that any Confidential Information
disclosed to the Distributor relating directly or indirectly to the vending
machines and their component parts of the ingredients, preparation or sale of
any of the Products will remain the property of Adelaide at all times and will,
if disclosed in any tangible format, be returned to Adelaide upon demand and, in
any event, UPON TERMINATION OF THIS AGREEMENT.
B. It is expressly understood and agreed by Distributor that the
confidential Information described above constitutes highly confidential trade
secrets and Distributor agrees that neither he nor any of his employees will
reveal any of such Confidential Information being revealed or reproduced.
ARTICLE IV
STANDARDS OF OPERATION AND SUPERVISION BY ADELAIDE
A. Distributor agrees to conduct its business in a manner consistent with
the standards set forth in this Agreement. It is expressly understood that these
standards may change from time to time, and are in addition to and not in
substitution for any standards set forth in this Agreement.
B. In order to preserve the value and goodwill of Adelaide and related
goodwill of other Adelaide Distributors and to promote the purpose of this
Agreement, the parties hereto agree as follows:
1. Distributor will use and distribute the Products as herein
contemplated strictly in accordance with the terms of this Agreement.
2. Unless approved in writing by Adelaide, Distributor will not
develop, produce, sell, advertise for sale or give away any product which might
reasonably compete with the Products and all food Products will be prepared in
accordance with the specific formulas or utilizing the ingredients purchased
from or specified by Adelaide. It is expressly understood that the conditions
and restrictions expressed herein are for the purposes of ensuring quality
control, health and safety standards and uniformity of Products sold in
conjunction with the Adelaide Marks.
3. Adelaide may from time to time offer guidance to Distributor
relative to retail prices for Products offered for retail sale that in
Adelaide's judgment constitute good business practice.
4. Distributor will use its best efforts to see to it that its
customers maintain suitable signs (which signs shall be approved by Adelaide)
at, on or near the front of any premises within which its french fry vending
machines are located, describing the premises having Products available for
retail sale.
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Any translation from the English language or deviation from
Adelaide approved designs contained in such sign shall require the prior
written approval of Adelaide.
5. It is the Distributor's responsibility to ensure that all food
products sold by Distributor hereunder will be of the highest and safest
quality, and the service relating to any such sale hereunder will comply with
the instructions and standards provided by Adelaide in preparing the food
Products, or with any other further written requirements of Adelaide as they are
communicated to Distributor from time to time.
6. It is the Distributor's responsibility to ensure that it will
maintain all french fry vending machines by which its business is conducted in
conformity with the high quality, style and cleanliness required of similar
french fry vending machines now operated in connection with Adelaide Marks and
will be responsible that the operation of such machines by its customers be
conducted in a clean, orderly, legal and respectable standard of business
including, without limitation, cleaning and sanitation of the french fry vending
machines, disposal of stale, spoiled or unmerchantable food Products,
replacement of cooking oil at specified intervals, replacement or repair of
display merchandise, replacement of outdated or obsolete machines (including its
component parts), equipment and signs. Distributor shall see that its customers
comply with all applicable ordinances, health and safety regulations, laws and
statutes governing the operation of such premises and the sale of products,
including all criminal and quasi-criminal laws and regulations.
C. Adelaide or Adelaide's supervisory personnel shall have the right to
enter upon any premises in which Distributor conducts its business at any
reasonable time for the purposes of examining, conferring with Distributor's
employees, inspecting and checking perishable and non-perishable food supplies,
vending machines, and other equipment and in determining whether the
distribution of Product is being conducted in accordance with the aforesaid
standards and within the terms of this Agreement. In the event any such
inspection indicates a deficiency or unsatisfactory condition or conditions,
Distributor shall, within forty-eight (48) hours and, if not capable of being
corrected or repaired within such time, shall within such period of time
commence such correction or repair and thereafter diligently pursue the same to
completion. In the event of failure of Distributor to comply with the foregoing
obligations to correct and repair, Adelaide, in addition to any other remedies
conferred in this Agreement, shall have the right to forthwith make or cause to
be made, such corrections or repairs, the expenses thereof, including board,
lodging, wages and transportation of Adelaide personnel, attorneys' fees and
other living expenses, shall be paid by the Distributor immediately upon billing
by Adelaide. Nothing in this paragraph shall in any way limit Adelaide's other
rights hereunder.
ARTICLE V
COMMENCEMENT OF BUSINESS
A. Distributor agrees to obtain, prior to commencement of its distribution
business, pursuant to this Agreement, all licenses, approvals, inspections,
permits or any other certification which may be required by any competent public
authority for the lawful operation of its business and to keep the same in good
standing during the term hereof.
ARTICLE VI
USE OF ADELAIDE NAME, MARKS AND ADVERTISING
A. During the term of this Agreement, and any renewals hereof, Distributor
shall advertise sale of the Products under the trade name of "Adelaide's Hot
French Fries" and will diligently promote and
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make every reasonable effort to steadily increase sales of the Products by
proper use of all advertising media.
B. No design, advertisement, sign or form of publicity, including form,
color, number, location and size, shall be used by Distributor in connection
with sale of the Products unless the same shall have been first submitted to
Adelaide and approved in writing. Upon notification from Adelaide, Distributor
will cause to be removed any objectionable advertising material and, if
required, cause to be published any retraction in a form and manner consistent
with that of the objectionable advertising materials. In the event said
materials are not removed within seven (7) days after notice, Adelaide or its
authorized agents, may at any time, enter upon Distributor's premises, or
elsewhere and remove any objectionable advertising material and may keep or
destroy such materials without paying therefore and without being guilty of
trespass or other civil or criminal wrong.
C. All printed materials, including, but not limited to, product
carrying bags, product wrapping, cups, napkins, posters or other printed
material used in connection with the distribution by retail sale of the
Products shall bear Adelaide Marks as suggested by Adelaide, and such use
will indicate that Adelaide Marks are registered Marks.
D. Distributor shall act prudently and in conformity with all laws,
regulations, ordinances, or other requirements which may affect the utilization
of the Adelaide Marks to ensure that the Marks are not jeopardized, diminished
or damaged in any manner and Distributor agrees to indemnify and save harmless
Adelaide for any damage or expense occasioned directly or indirectly by
Distributor's improper use of said Marks.
E. Any contractual arrangement of any kind for advertising under the trade
name "Adelaide's Hot French Fries" or utilizing the Adelaide Marks, entered into
by Distributor shall expressly provide for termination with no greater than then
(10) days written notice.
ARTICLE VII
ADELAIDE MARKS
A. Adelaide hereby grants to Distributor for the term of this Agreement the
exclusive right and license to use the Adelaide Marks within the Territory but
only in connection with the distribution of Adelaide Products which Distributor
is permitted to sell hereunder and the extent and manner of use of the Adelaide
Marks shall be subject to Adelaide approval.
B. Distributor shall not be entitled to assign or sublicense his rights to
use the Adelaide Marks without the consent and approval of Adelaide.
C. Upon execution of this Agreement, Distributor shall cooperate with
Adelaide and shall do all things reasonably required in making whatever
application, if any, as required by law to register Distributor as a "Registered
User" of the Adelaide Marks and Distributor shall sign any document necessary
for the purpose. The cost of such application (and of any application to cancel
such registration at the end of the term of this Agreement) shall be borne by
Distributor.
D. Distributor shall notify Adelaide forthwith in writing of any
counterfeiting or infringement of the Adelaide Marks which may come to
Distributor's attention. Should any such infringement or alleged infringement
occur:
1. The commencement, defense, and conduct of any such proceedings
shall be initiated by Distributor. If requested by Adelaide,
Distributor will
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furnish all reasonable assistance to Adelaide in such
proceedings and agrees to share equally with Adelaide in the
costs of any such proceedings.
E. Distributor agrees not to use the words "Adelaide" or any other work,
design or device forming or forming any part of any of the Adelaide Marks:
1. During the term of this Agreement, otherwise than as herein
authorized; or
2. After termination of this Agreement, in any manner.
ARTICLE VIII
UNIFORMITY OF PRODUCTS
A. The reputation and goodwill of Adelaide products is based upon, and can
be maintained and enhanced, only by the sale of consistently high quality
Products to the satisfaction of customers who rely upon the uniformly high
quality of such products. Distributor therefore agrees that all food Products
offered for sale in the vending machines and paper goods, supplies and other
materials utilized in connection with the food products shall be purchased
directly from Adelaide.
B. In order to establish uniformity of taste and quality of the Products,
Adelaide has developed and will continue to develop recipes and formulas of
ingredients, which ingredients will be made available to Distributor. Such
products will be purchased by Distributor at the prevailing prices from time to
time, FOB Miami, Florida, and will be utilized by Distributor exclusively as
specified by Adelaide unless products not supplied by Adelaide but must be
approved by Adelaide and compensated for its loss of profit on product.
C. Distributor agrees that he will not offer any food product or utilize
any paper goods, supplies or other materials, or any equipment, signage, display
cases or other items which may compete with the Products and which are not
purchased from Adelaide or any supplier that is not currently approved by
Adelaide.
ARTICLE IX
FEES AND FINANCIAL OBLIGATIONS
A. In consideration of the right to distribute Products granted herein,
Distributor agrees upon execution of this Agreement, to pay to Adelaide, the sum
of ONE MILLION TWO HUNDRED FIFTY THOUSAND ($1,250,000.00) DOLLARS, as
consideration solely for the right to distribute Products and which right shall
be acquired, in full, upon execution of this Agreement by Adelaide whereupon
such fee shall be fully earned and non-refundable under any circumstance
whatsoever and subject to fee payment Schedule "B".
B. It is expressly agreed between the parties that as consideration for the
grant of distribution rights hereunder by Adelaide to Distributor and as an
express condition of such grant, that Distributor purchase from Adelaide a
minimum number of french fry vending machines upon the terms and conditions set
forth on Schedule "B" attached hereto and forming a part of this Agreement.
C. Unless otherwise specified herein, all amounts stated herein or
payments to be made to
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Adelaide under this Agreement shall be in U.S. Dollars. Such payments shall be
made in such manner as is specified from time to time by Adelaide but may
include, but without limiting the generality of the foregoing, bank wire
transfer, or certified check delivered to Adelaide accounts at such place as
Adelaide may from time to time designate.
ARTICLE X
DISTRIBUTOR
A. Distributor acknowledges that the Adelaide Products are unique and
distinctive and have been developed by Adelaide at great effort, time and
expense; that Distributor has regular and continuing access to valuable and
confidential information, training and trade secrets regarding the Products; and
that Distributor recognizes his obligation to fully develop his territory for
sales of the Products and accordingly agrees as follows:
1. During the term of this Agreement and any renewal thereof,
Distributor shall not, in any capacity whatsoever, either
directly or indirectly, individually or as a member of any
business organization, except with the prior written consent of
Adelaide, engage in the sale of any french fries vending machine
or supplies therefore, other than Adelaide's.
2. During the term of this Agreement, or upon expiration or
termination of this Agreement, divulge any aspect of the
Products whether expressly stated to be confidential or
otherwise to any person.
ARTICLE XI
TRANSFER OF INTEREST
A. This Agreement shall enure to the benefit of the successors and assigns
of Adelaide and may be so assigned at any time.
B. Adelaide shall not unreasonably withhold its consent to any transfer or
assignment which is subject to the restrictions of this Article, provided,
however, that Adelaide shall not be required to give its consent unless, in
addition to the requirements of Article IV hereof, the following conditions are
met prior to the effective date of the assignment:
1. For all proposed transfers or assignments:
(a) Distributor shall not be in default under any provision
of the terms of this Agreement or any other agreement
ancillary to this Agreement, and shall have continuously
distributed products for a period of not less than
twelve (12) months;
(b) Distributor has executed a general release in a form
prescribed by Adelaide of any and all claims against
Adelaide;
(c) The proposed assignee executes such other documents as
Adelaide may require in order to assume all of the
obligations of this Agreement, to the same extent, and
with the same effect, as previously assumed by
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distributor;
(d) The proposed assignee executes such other documents as
Adelaide may require in order to assume all of the
obligations of this Agreement, to the same extent, and
with the same effect, as previously assumed by
distributor;
(e) A transfer fee has been paid to Adelaide in an amount
equal to five per cent (5%) of the aggregate cash or
cash valued consideration paid by the assignee to
assignor for the distribution rights, to defray its
reasonable costs and expenses in connection with the
transfer, including without limitation, the cost of
legal and accounting fees, credit and investigation
charges, evaluations, retraining and additional
supervision. It is agreed that the original cost of the
territory will be deducted.
C. Upon the death or permanent incapacity of a Distributor the following
shall apply:
1. Adelaide shall have the right, within thirty (30) days of the
date upon which Adelaide is notified of such death or incapacity (if consistent
with applicable local laws) to purchase the interest or any part thereof for
cash at the appraised value, such purchase to be completed within sixty (60)
days.
2. If Adelaide declines to elect to purchase the interest, within
thirty (30) days of the date upon which Adelaide is notified of such death or
incapacity, the interest may be transferred within a further sixty (60) days by
sale to a third party meeting Adelaide's then current criteria for new
distributors, provided that the requirements of paragraph D of this Article are
met. If a transfer to an approved transferee cannot be effected within a further
one hundred and twenty (120) days, this Agreement shall terminate and
automatically.
3. No sale or transfer of the interest shall be approved by
Adelaide unless the incapacitated Distributor or personal representative has
agreed to reimburse Adelaide for the reasonable costs and expenses it has
incurred or may incur in providing (at Adelaide's option) one or more interim
Distributors to manage the business until a transfer of the interest is
effected, if Adelaide determines, in its discretion, that such supervision is
necessary or desirable.
D. Adelaide's consent to a transfer of any interest subject to the
restrictions of this Article shall not constitute a waiver by Adelaide of the
right to distribute products granted herein, nor shall it be deemed a waiver of
Adelaide's right to demand exact compliance with any of the terms of this
Agreement by the assignee. The document effecting the transfer or assignment of
any interest subject to the restrictions of this Article shall specifically
provide that Distributor's obligations hereunder shall continue in full force
and effect notwithstanding any such disposition.
E. If Distributor has received and desires to accept any bona fide offer to
purchase his or its distribution rights hereunder, Distributor or such person
shall notify Adelaide in writing of the purchase price and terms of such offer,
and Adelaide shall have the right and option (subject to any limitations of
applicable local laws exercisable within thirty (30) days after receipt of such
written notification), to send written notice to Distributor or such persons
that Adelaide or its designee intends to purchase Distributor's interest on the
same terms and conditions offered by the third party. Any material change in the
terms of an offer prior to closing shall result in a new notification as in the
case of the initial offer. Adelaide's failure to exercise the option afforded by
this paragraph G of this Article shall not constitute a waiver of any other
provision of this Agreement, including any of the requirements of this Article
with respect to the proposed transfer.
ARTICLE XII
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DEFAULT
A. In addition to those events herein before stated to be events of
default, it is agreed that the rights granted to Distributor pursuant to this
Agreement may be terminated forthwith with notice upon the happening of any one
or more of the following events, except that Adelaide must be in compliance with
the terms and conditions of this distribution agreement:
1. If the Distributor fails to comply with any of the terms and
conditions of this Distributorship Agreement and such failure to comply
continues for a period of thirty (30) days after written notice thereof has been
given to the Distributor.
2. If the Distributor fails to comply with any of the terms and
conditions of any other agreements entered into pursuant to or collateral to
this Agreement.
3. If the Distributor shall be adjudicated a bankrupt or become
insolvent, or if a receiver or other person with like powers shall be appointed
(whether temporary or permanent) to take charge of all or substantially all of
the Distributor's assets, or if the Distributor shall make a general assignment
for the benefit of creditors or a proposal under the Bankruptcy Act (or any
similar or successor Act), or commence any proceedings to wind-up, liquidate,
or dissolve the distributor's business.
4. If any judgement or judgments in excess of ONE THOUSAND
DOLLARS ($ 1,000.00) or any legal tax lien against the Distributor remains
unsatisfied or unbonded of record in excess of thirty (30) days, or if the
Distributor shall commit or suffer any default under any security instrument.
5. Other than amounts to be paid to Adelaide wherein the provisions
of subsections (a) and (b) above respecting default shall apply, if the
Distributor does not pay any other indebtedness incurred in connection with the
operation of the business through which the products are maintained and sold and
such indebtedness is not paid within seven (7) days of notice from Adelaide.
6. If the Distributor fails to continuously and actively operate
its distributorship throughout the Territory.
7. If the Distributor falsifies any statement or report furnished
to Adelaide or otherwise deliberately provides false information to Adelaide; or
if the Distributor is convicted of a felony or other crime or impairs the
goodwill associated with Adelaide's Marks.
8. If the Distributor commits acts of default for which notices of
default have been served more than four times in any one calendar year during
the term, notwithstanding that such defaults may have been cured.
9. If the Distributor does not order and complete the purchase of
the french fry vending machines it is required to purchase pursuant to the terms
of this Agreement in the manner and at the times therein specified.
10. If the Distributor does not complete the training course to be
taken by the Distributor prior to distributing food product to the public to the
satisfaction of Adelaide.
11. Distributor will pay all attorney's fees as between an attorney
and his own client, accounting fees and court costs incurred by Adelaide in the
event of a violation by Distributor of this agreement.
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12. In case of a breach or a threatened breach of the terms of this
Agreement by Distributor, Adelaide shall, in addition to any other remedy it may
have, and notwithstanding any other provision hereof, be entitled to an
injunction restraining Distributor from committing or continuing to commit any
breach of this Agreement, without showing or proving any actual damage sustained
by Adelaide, which damage is hereby conclusively acknowledged.
ARTICLE XIII
RIGHTS AND OBLIGATIONS OF PARTIES
ON TERMINATION OF EXPIRATION
A. Upon termination or expiration of this Agreement for any reason
whatsoever, Distributor will immediately discontinue use of all trade names,
trademarks, signs, forms of advertising, printed material and all other indicia
of operation as an Adelaide Distributor from its operations. In addition,
Distributor will discontinue use of the Adelaide color scheme. If the
Distributor shall fail or omit to make or cause to be made such discontinuance
within seven (7) days after termination or expiration of this Agreement, then
Adelaide, in addition to any other remedy it may have, shall have the right to
enter upon premises and to make or cause to be made such removal of signs,
trademarks, trade names and other indicia of operation subject to removal and
such removal shall be conducted at the sole expense of Distributor (without
being deemed guilty of trespass or any civil wrong) which expense the
Distributor agrees to pay on demand.
B. Adelaide may retain all fees paid pursuant hereto.
C. Any and all obligations of Adelaide to Distributor under this Agreement
shall immediately cease and terminate.
D. In no event shall termination or expiration of this Agreement for any
reason whatsoever affect Distributor's obligation to take or abstain from taking
action in accordance with this Agreement.
E. It is understood by Distributor that rights in and to Adelaide's Marks
and any part thereof or addition thereto and the use thereof shall be and remain
the property of Adelaide and Distributor shall confirm same in writing and shall
further assign, transfer and convey to Adelaide by such instrument in writing as
may be requested, all additional rights which may be acquired, if any, by reason
of the use of said name of Distributor.
F. Adelaide shall have the option to purchase, at Distributor's cost less
twenty-five (25) percent, all or any portion of inventory of any kind bearing
the Adelaide's Marks, including, but not limited to, french fry vending
machines, equipment, vehicles, and any other items Distributor may have in stock
at the time of such termination or expiration.
G. Distributor shall cause immediate discontinuance of all advertising or
other public display or publication of the word "Adelaide" and, in the event
that such action is not taken by Distributor, Distributor hereby constitutes
irrevocably Adelaide as Distributor's attorney to carry out such acts at
Distributor's sole expense.
H. Distributor will immediately pay any and all amounts owing to Adelaide
and its subsidiaries and affiliates.
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I. Distributor shall not, in any capacity whatsoever, either directly or
indirectly, individually or as a member of any business organization, engage in
the preparation or sale of any Adelaide or other approved Adelaide product, or
have any employment or interest in a firm engaged in the preparation or sale of
such products within the Territory or within thirty (30) miles of any other
Distributor's exclusive or non-exclusive territory for a period of three (3)
years following such termination. Distributor acknowledges and agrees that this
restriction upon subsequent activities is necessary in view of the Confidential
Information and expertise Distributor will acquire pursuant to the terms of the
Agreement and will cause Adelaide irreparable and substantial damage in the
event of breach of these provisions. The Distributor has the option to cancel
this Agreement by giving notice of six (6) months without refund of payments for
Distributorship already paid.
ARTICLE XIV
INSURANCE
A. Distributor agrees to place and keep in effect during the life of this
Agreement, with an insurance company approved by Adelaide, public liability in
amounts no less than ONE MILLION DOLLARS ($1,000,000.00), in case of damage or
injury to one person, no less than ONE MILLION DOLLARS ($1,000,000.00), in
case of damage or injury to more than one person, property damage insurance of
ONE MILLION DOLLARS ($1,000,000.00) in case of damage or injury to one person
(Proof of insurance coverage should be furnished to Adelaide prior to the
delivery of the first machine).
B. It is specifically agreed that insurance coverage required to be kept in
effect by the terms of this paragraph shall be subject to review by Adelaide in
order to ensure adequate insurance protection throughout the term of this
Agreement. Adelaide may, from time to time, and in its sole discretion, require
Distributor upon thirty (30) days written notice to obtain additional insurance
beyond the aforementioned requirements of this paragraph.
ARTICLE XV
INDEMNIFICATION OF COMPANY
Distributor agrees to protect, indemnify, and save Adelaide, its
affiliates, subsidiaries, partners, stockholders, directors, officers and
employees of its partners harmless from any and all loss, damage, liability,
expenses, attorney's fees and costs incurred by any of them because of any
action, matter, thing, or conduct relating to Distributor and Distributor's
business or its agents, servants, employees, customers and guest in, on, or
connected with the preparation, cooking and sale of products.
ARTICLE XVI
APPEARANCE OF MACHINES
Distributor shall see to it that all machines in the Distributor's
Territory are in good repair, and shall refurbish, tidy, and maintain each
Adelaide french fry vending machine as necessary or as required by Adelaide in
order to ensure that at all times a first class, safe and reputable Product is
provided to the public.
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ARTICLE XVII
RENEWAL OF AGREEMENT
Unless terminated as herein otherwise provided, Distributor shall have
the option, pursuant to such procedures as may be required by Adelaide at the
expiration of the initial term of this Agreement, to renew the license granted
hereunder at each ten (10) year expiration date as long as all contractual
conditions are met hereof by executing Adelaide's then-current form of
Distributorship Agreement provided that:
1. Distributor gives Adelaide written notice of its election to
renew not less than three (3) months nor more than nine (9) months prior to the
expiration of the then current term and, Distributor executes a general release
under seal, in a form prescribed by Adelaide, of any and all claims against
Adelaide, its affiliates, stockholders, directors, officers and employees, and
2. Distributor at the time of notice of election to renew and at
the end of the then-current term is not in default of any of the terms or
conditions of this Agreement or any other Agreement between Distributor and
Adelaide or its affiliates, and has substantially complied with the terms and
conditions of all such agreements during the term of this Agreement, and
3. All of Distributor's accrued monetary obligations to Adelaide
and its subsidiaries and affiliates have been satisfied prior to renewal, and
timely met throughout the term of this Agreement.
Upon renewal of this Agreement, no additional distributorship fee will
be due. However, it is specifically agreed that Distributor will, upon renewal,
be charged by Adelaide a sum which shall be equal to Adelaide's estimated costs
incurred in connection with such renewal plus an administrative fee equal to
fifteen (15%) percent of such costs. Furthermore, Distributor acknowledges the
terms of the Adelaide then current form of Distributorship Agreement.
XVIII
RELATIONSHIP OF PARTIES
A. Adelaide and Distributor are not and shall not be considered as joint
venturers, partners, or agents of each other, or anything other than
Manufacturer and Distributor and neither shall have the power to bind or
obligate the other as set forth in this Agreement.
B. The parties further agree that their relationship created by this
Agreement is not a Fiduciary relationship.
ARTICLE XIX
DISTRIBUTOR'S RESPONSIBILITY
A. Distributor acknowledges that his success in the distribution of
products contemplated to be undertaken by Distributor pursuant to this Agreement
is speculative and depends primarily upon the
12
ability of Distributor as an independent business organization. Distributor
acknowledges that neither Adelaide nor any other person has guaranteed or
warranted that Distributor will succeed in the operation of this business
venture.
B. Distributor further acknowledges that there have been no
representations, promises or guarantees of warranties of any kind made by
Adelaide or its agents or representatives to induce Distributor to execute this
Agreement, except as specifically set forth in this Agreement and further that
Distributor has received all information which he has requested concerning the
business operation of Adelaide which, in the opinion of Distributor, is
necessary to decide whether to enter into this Agreement.
ARTICLE XX
NOTICES
A. All notices to Adelaide required by the terms of this Agreement shall be
sent by registered mail, addressed to Adelaide at its office at:
00000 Xxxxxxxx Xxxxxxxxx
Xxxxx #000
Xxxxx, Xxxxxxx 00000
(or such other address as Adelaide shall designate in writing) or by telefax,
telecopy or other electronic means of communication to such address.
B. All notices to Distributor required by the terms of this Agreement shall
be personally delivered to or sent by registered mail, addressed to the
Distributor at:
XXXX XXXXXXXX, 000 XXXXXXX XXXX, XXXXXXX XXX XXXX 00000 (or such other address
as Distributor shall designate in writing) or by telefax, telecopy or other
electronic means of communication to such address.
C. All notices to either party required by the terms of the Agreement shall
be deemed to have been received:
(i) in the case of hand delivery or telefax, telecopy or other
electronic communication, upon actual receipt thereof (and not the date of
receipt of confirming mail); and
(ii) in the case of notice sent by registered mail, ten
(10) business days after the date of mailing.
ARTICLE XXI
INTERPRETATION AND EXECUTION OF AGREEMENT
A. This Agreement shall be construed and interpreted in accordance with the
laws of the State of Florida.
B. This instrument contains the entire Agreement of the parties and no
representations, inducements, promises, or agreements, oral or otherwise, not
embodied herein, were made by Adelaide and none shall be of any force or effect.
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C. Nothing in this Agreement shall bar or restrict Adelaide's right to
obtain injunctive relief under applicable law.
ARTICLE XXII
SEVERABILITY AND CONSTRUCTION
Each section, part, term and provision of this Agreement, and any
portion thereof shall be considered severable, and if, for any reason, any
portion of this Agreement is determined to be invalid, contrary to or in
conflict with any applicable present or future law, rule, or regulation in a
final unappealable ruling issued by any court, agency, or tribunal with valid
jurisdiction in a proceeding to which Adelaide is a party, that ruling shall not
impair the operation of, or have any other effect upon, such other portions of
this Agreement as may remain otherwise intelligible (all of which shall remain
binding on the parties and continue to be given full force and agreement as of
the date upon which the ruling becomes final).
ARTICLE XXIII
WRITTEN APPROVALS AND WAIVERS
A. Adelaide shall not be deemed to have waived or impaired any right,
power or option reserved by this Agreement (including, without limitation, its
right to demand Distributor's exact compliance with every term, condition, and
covenant herein, or to declare any breach thereof a default and to terminate
this license prior to the expiration of its term), by virtue of any custom or
practice of the parties at variance with the terms hereof, any failure by
Adelaide to demand strict compliance with this Agreement, any forbearance,
delay, failure or omission by Adelaide to exercise any right, power or option,
whether of the same, similar or different nature, against Distributor or other
Distributorships, or the acceptance by Adelaide of any payments due from
Distributor after any breach of this Agreement.
AS WITNESS the hands and seals of the duly authorized representatives of
the parties hereto as of the day and year first above written.
ADELAIDE HOLDINGS, INC.:
Xxxx X. Xxxx [ILLEGIBLE]
----------------------------------- -----------------------------------
Witness
DISTRIBUTOR:
Xxxx Xxxxxxxx [ILLEGIBLE]
----------------------------------- -----------------------------------
Witness
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SCHEDULE B
Territory: Connecticut, Maine, Massachusetts, New Hampshire, New
York, Rhode Island, Vermont
Price: $ 1,250,000.00
Down Payment: $ 50,000.00
5 March 93 $ 30,000.00
30 April 93 $ 20,000.00
Balance Due: $1,200,000.00
Yearly Minimum Year One $100,000.00
Payment: Year Two $100,000.00
Year Three $150,000.00
Year Four $250,000.00
Year Five $250,000.00
Year Six $250,000.00
Year Seven $100,000.00
Terms:
(A) Xxxx Xxxxxxxx will remit an additioanl Five
Hundred ($500.00) Dollars over the Distributor
price to Adelaide Holdings, Inc. for each
machine sold into the territory. This additional
payment will be applied to the yearly minimum
payment for the territory.
(B) To maintain distributor rights, Xxxx Xxxxxxxx
must sell a minimum of one hundred (100)
machines per year into the territory until the
balance of One Million Two Hundred Thousand
($1,200,000.00) Dollars is paid. If Xxxx
Xxxxxxxx does meet the yearly minimum
requirement by paying the additional Five
Hundred (500.00) with each machine sale during
any one any one year period, they will pay the
difference to equal the yearly minimum amount
required.
EXAMPLE: If during year one Xxxx Xxxxxxxx sells
one hundred and ninety (190) machines, the
additional payment for machine sales payable to
Adelaide Holdings, Inc. would have been Ninety
Five Thousand ($95,000.00). Xxxx Xxxxxxxx will
need to make an additional payment of Five
Thousand ($5,000.00) in order to meet the
$100,000.00 minimum payment for that year. If
Xxxx Xxxxxxxx sells 500 machines in year one,
the total additional payment to Adelaide
Holdings, Inc. will be $250,000.00. The minimum
number of machines to be sold in
Schedule B:
cont.
the territory will still remain at One Hundred
per year.
(C) Payment for the territory will not exceed seven
(7) years, from the date of the delivery of the
first machine shipped to Xxxx Xxxxxxxx. The only
exception to this payment schedule is if
Adelaide Holdings, Inc. is not able to ship the
minimum requirement of machines per year.
