SALES AGENCY AGREEMENT
Agreement dated September 21, 1999, by and between The Old
Fashioned Syrup Company, a United States corporation, wholly owned
subsidiary of Meridian Holdings, Inc., having its principle office at ▇▇▇▇
▇.▇. ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇., ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ (hereinafter called
"TOFS") and NAFPRO CANADA INC., a corporation incorporated
under the laws of Canada, with its principle office at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇ (hereinafter called "Distributor").
WHEREAS, TOFSC is engaged in the business of selling and
marketing certain brand name products and/or private label goods co-
packed for other companies; and
WHEREAS, Distributor is desirous of acting as the exclusive
Distributor for certain of such brand name products in Canada as listed in
Schedule 1 attached hereto (collectively "PRODUCTS") and any private
label contract obtained;
NOW, THEREFORE, consideration of the mutual premises
hereinafter set forth, the parties agree:
Section 1. Selected Distributor. TOFSC hereby appoints
Distributor and Distributor hereby agrees to act, as TOFSC's exclusive
Distributor to sell and market the Products in the territory, hereinafter
defined, pursuant to the terms and conditions of this Agreement.
Distributor shall be the sole authorized Distributor for the Products in the
Territory and TOFSC shall not appoint other distributors in the Territory
or otherwise sell the Products in the Territory, except through Distributor.
Section 2. Territory. The term "Territory" as used herein,
shall mean all areas and customers as outlined in Schedule 2 attached
hereto (collectively the "TERRITORY");
Section 3. Products, Assembling, Marketing and Reports
(A) TOFSC reserves the right to discontinue the
manufacture of, or to make such changes in the design, production,
testing, packaging or formula of the Product as it shall, in its absolute
discretion decide, provided it gives Distributor one hundred and twenty
(120) days prior written notice of any discontinuance or change.
(B) To insure the success of this Agreement to the
mutual benefit of TOFSC and Distributor, during the Term, as hereinafter
defined, TOFSC will not sell any of the Products or any competing
products/brands in the same categories (i) to any other person, firm or
company in the Territory, or (ii) to any person, firm or company outside
the Territory who it knows or has reason to believe intends to resell the
Products for use in the Territory. TOFSC agrees to refer all parties to
Distributor who makes inquiries relating to the purchase of the Products
in the Territory.
(C) Distributor agrees to sell the products to all classes
of trade in the Territory and to (i) promote the sales of the Products
through the Territory to potential purchasers thereof; and (ii) study and
keep under review market conditions to ascertain the most likely areas
where or classes of customers to whom sales may be made. Distributor
agrees to advise TOFSC of any sale inquiries it may receive for the
purchase of the Products outside the Territory and to report such
information to TOFSC
(D) Except for advertising expenses and approved coop
advertising which shall be the sole obligation of TOFSC pursuant to
Section II hereof, Distributor shall provide all customer marketing and
selling services for the Products throughout the Territory, including, but
not limited to, all selling, warehousing, order processing, handling,
shipping, collection, customer service and freight out services.
Distributor shall implement such marketing programs based on pricing,
promotion and payment terms approved by TOFSC in consultation with
Distributor but the sole discretion regarding pricing and promotion shall
remain with TOFSC. TOFSC shall have the opportunity by prior notice
to participate in any sales meetings or other marketing discussions of
Distributor as they relate to Products. Notwithstanding the foregoing,
TOFSC and Distributor agree that expenses related to advertising the
Products in nationally distributed magazines and periodicals in the
Territory shall be shared equally by the parties in advance of production
and placement.
(E) TOFSC shall, provide product liability insurance
coverage for their product(s). A current copy shall be delivered to the
Distributor annually thirty (30) days prior to each renewal date. Each
such policy shall provide that it may not be amended, canceled, or
otherwise modified without thirty (30) days prior notice to the
Distributor.
(F) Distributor shall have no authority to bind or
commit TOFSC to any agreements of any kind (except as expressly
agreed herein) nor shall Distributor have any authorization to incur any
debt, obligation, or liability or enter into any contract or commitment on
TOFSC's behalf. Distributor shall be considered an independent
contractor.
Section 4. Pricing, Payment, Title and Risk of Loss.
(A) Pricing. The Products to be sold by Distributor in
accordance with this Agreement shall be sold by Distributor at the prices
listed in Schedule 1 in United States funds as agreed upon by TOFSC and
Distributor. TOFSC shall have the right at any time from time to time to
adjust the sales prices for Products by giving Distributor written notice to
that effect not less than ninety (90) days prior to the date upon which the
adjusted price or ▇▇▇▇▇ are to become effective.
(B)(i) Payment Terms and Title. All payments shall be
made in United States Dollars. The terms of payment by Distributor to
TOFSC are less 2% of invoice within ten days or net 30 days (-2%, 10
days, net 30 days.)
(ii) Title to the Products and risk of loss thereof shall
pass to Distributor upon delivery thereof to Distributor F.O.B.
Distributor's principle office, as aforesaid. Upon termination of this
Agreement, Distributor shall have the right to return any unsold Products
to TOFSC.
(C) Third Party Obligations. Distributor acknowledges
and agrees that it may use ASSOCATED NATIONAL BROKERAGE
INC. or other third party to provide certain administrative services in the
territory. Distributor agrees that it shall be solely responsible for all
payments, charges and costs that are incurred under such service
agreements and shall indemnify and hold TOFSC and its Representatives
(as hereinafter defined) harmless from any and all costs or liabilities on
account of such service agreements. Distributor agrees that it shall not
amend any such service agreement as it relates to the Products without
the prior written consent of TOFSC.
(D) Defective Products. TOFSC warrants that each
Product delivered thereunder shall be free from defects in material and
workmanship and fit and sufficient for the purpose intended and shall
comply with all applicable governmental laws and regulations. TOFSC
will promptly cause to be replaced at TOFSC's expense Products which
prove to be defective whether by reason of defects in material,
workmanship, design, specifications, fitness for purpose or compliance
with applicable laws and regulations. TOFSC will pay all transportation
charges for shipment of replaced Products to Distributor. All replaced
Products shall be shipped to Distributor F.O.B. Distributor's principle
office. Notwithstanding the foregoing, Distributor acknowledges and
agrees that it has examined the label for the Products utilized by TOFSC
in the U.S. and that such label satisfies the labeling requirements for the
Territory.
Section 5. Force Majeure. If, because of force majeure,
Distributor or TOFSC shall be unable to deliver or market the Products
then the obligations of Distributor or TOFSC, as the case may be, under
this agreement shall be suspended to the extent made necessary by such
force majeure. If Distributor or TOFSC is affected by force majeure it
shall give notice to the other as promptly as practicable of the nature and
probably duration of force majeure. The term "force majeure" shall
mean, acts of God or governmental authority, fires, explosions, floods, or
other causes beyond the reasonable control of Distributor or TOFSC.
Section 6. Indemnification's. TOFSC hereby indemnifies
Distributor and its officers, directors, distributors and shareholders
("Representatives") against and agrees to hold them harmless from any
and all damages, loss, liability, expense (including, without limitation,
reasonable out-of-pocket expense of investigation involving Distributor)
and cost incurred or suffered by them on account of any actual or alleged
injury to person, including trademark infringement claims and product
liability claims, arising out of the manufacture and sale of the Product,
unless such damage due to an unauthorized representation or the
negligence of Distributor, in which case there shall be no obligation of
TOFSC to indemnify hereunder. Distributor hereby indemnifies TOFSC
and its officers, directors, distributors and shareholders
("Representatives") against and agrees to hold them harmless from any
and all damage, loss, liability, expense (including, without limitation,
reasonable out-of-pocket expense of investigation and attorneys' fees and
expense in connection with any action, suit or proceeding brought by,
against or involving TOFSC and cost incurred or suffered by them on
account of any actual or alleged damage to person arising out of the
negligence or intentional misconduct of Distributor in selling or
marketing of t he Product unless such damage is also due to the
negligence of TOFSC in which case there shall be no obligation of
Distributor to indemnify hereunder. The provisions of this Section 6 shall
survive termination of this Agreement.
Section 7. Confidentiality.
(A) Confidential Information. Distributor agrees to
treat as confidential all data and information concerning the Product,
including the formulas, manufacturing procedures and other confidential
information ("Confidential Information") of TOFSC. Distributor further
agrees not to reveal, divulge or make known to any person, nor use such
Confidential Information, either in its own behalf or on behalf of any
third party, for any purpose whatsoever, during or after any relationship
with TOFSC. Distributor will take the steps necessary to protect
information, data or other tangible or intangible property of its own that it
regards as proprietary or confidential, to insure that such Confidential
Information is not disclosed. Such confidentiality obligation shall not
apply with respect to any Confidential Information (i) which is or
hereafter becomes publicly available otherwise than by breach of
Distributor's obligations hereunder or (ii) which is or comes into
possession of Distributor from a third person under no obligation of
confidentiality to TOFSC or (iii) which Distributor is required by law to
disclose. Distributor agrees that, without TOFSC's written prior consent,
it shall not release to the press, other communication or media,
subcontrators, or consultants, or any other persons, information, new
items, general publicity or advertising pertaining to this Agreement or the
Products hereunder. Any breach by Distributor of such confidentiality
provision shall be deemed a material breach of a material term of this
Agreement pursuant to Section 11(A)(i). The provisions of this Section 8
shall survive the termination of this Agreement.
Section 8. Term. The term of this agreement ("Term") shall
commence on September 27, 1999 ("Effective Date") and, unless
terminated earlier as provided in Section 12 hereof, shall be for an initial
period of two (2) years, and automatically renewable for additional
successive five (5) year periods, provided that either party can terminate
at any time by one hundred and ninety (90) days prior written notice.
Section 9. Commissions. In consideration for Distributor's
services hereunder, Distributor shall receive a commission
("Commission") during the Term of this Agreement equal to Five (5%)
percent of the aggregate Net Sales for all TOFSC manufactured
PRIVATE LABEL products sold by the Distributor. The term "Net
Sales" as used in this Agreement shall mean the gross sales volume in
Canadian dollars achieved by Distributor for all products for which it acts
as a Distributor hereunder, less discounts, returns and allowances.
Section 10. Marketing. Subject to Section 3(D) hereof,
TOFSC shall be responsible for all trade shows, marketing and
advertising expenses for the Products, including coupon redemption or
Co-op allowances and listing fees.
Section 11. Termination
(A) Termination Events. Either party shall have the
right at any time during the continuance of the following events affecting
the other party, to terminate this Agreement by giving one hundred and
eighty (180) days written notice to the other as provided herein, and upon
the termination of such one hundred eighty (180) day period this
Agreement shall terminate if such event has not been cured and still
continues:
(i) (a) a receiver, trustees or liquidator of either party
is appointed for any of its properties or assets; (b) a party admits in
writing its inability to pay its debts as they mature; (c) a party makes a
general assignment for the benefit of creditors; (d) a party is adjudicated
as bankrupt or insolvent; (e) a petition for the reorganization of a party or
plan of arrangement with its creditors, or its dissolution or liquidation is
filed under any law or statute and such petition is not stayed, vacated or
dismissed within ninety (90) days; or (f) a party ceases doing business
and commences dissolution or liquidation;
(ii) the other party is unable to perform its duties
hereunder for a period of six (6) months in any one period of twelve (12)
calendar months; or
(iii) as to Distributor only, if Distributor becomes
subject to the control of any firm or company which markets products in
the product categories of the Products.
Notwithstanding the foregoing, TOFSC shall have the right at any
time to terminate this Agreement by giving one hundred and eighty (180)
days written notice to Distributor in the event Distributor is not
discharging its responsibilities hereunder or if Distributor is incapable of
so doing, in such case as determined by TOFSC in its sole discretion, and
upon termination of such one hundred and eighty (180) days period this
Agreement shall terminate if such event has not been cured and still
continues.
(B) Surviving Rights. Any termination of this
Agreement except as otherwise herein provided shall (i) be without
prejudice to the ten existing rights and liabilities hereunder of either party
including indemnification rights; (ii) require Distributor to deliver to
TOFSC all books, papers, plan, drawings, literature, documents, samples
and other property of TOFSC of any kind whatsoever which have come
into its possession in the course of its duties hereunder, and (iii) not
release Distributor from its undertakings hereunder regarding
confidentiality of information. Distributor on or before the effective date
of termination shall remove any reference either to its appointment
hereunder as Distributor which may exist on its premises, vehicles or
stationary and to arrange for the cancellation of any such references on
advertisements or directories at the next reprinting.
Section 12. Assignment. Distributor shall not have the right to
assign this Agreement without prior written consent of TOFSC.
Section 13. Entire Agreement. This Agreement constitutes the
entire understanding and agreement between the parties hereto and the
terms of this Agreement cannot be waived or modified, except by an
express agreement in writing signed by both parties. Any waiver by
TOFSC or Distributor of a breach of this Agreement shall not be
considered a waiver of any subsequent breach of the same or any other
term or condition of this Agreement.
Section 14. Governing Law. This Agreement shall be
governed by and interpreted under the laws of Ontario Canada without
giving effect to the principles of conflict of laws thereof. Each of the
parties hereto hereby irrevocably consents to the service or process in any
action or proceeding by the mailing thereof by registered or certified mail
postage prepaid at its address set forth herein.
Section 15. Notices. All notices, requests, demands or other
communications under this Agreement or in connection therewith shall be
in writing and, unless otherwise specifically provided herein, shall be
deemed to have been given when delivered personally or when sent by
certified or registered mail, return receipt requested, or by overnight mail
or fax to the respective parties at the address of each party herein set forth
or to such other address as either party shall designate by notice given to
the other as provided in this paragraph.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first above written.
NAFPRO CANADA INC. OLD FASHIONED
SYRUP COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
Title: V.P. Sales ▇▇▇▇ ▇▇▇▇▇▇ CEO
SCHEDULE 1
September
21,
1999
Sweet 'N Low Sugar Free Chocolate Flavored Syrup
Costs in USA funds, F.O.B. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇ x 500g per case "Canadian" label
Cost $20.00
Less - 2.00 Distributor Allowance
$18.00
Less 10% -1.82 Truckload Allowance
Total $16.38
Terms: 2% 10 days, net 30 days
Sweet 'N Low Sugar Free Chocolate Flavored Syrup
4 x 1 US gallon per case
Cost in USA funds, F.O.B. Atlanta, Georgia
Cost $32.00
Less - 2.00 Distributor Allowance
$30.00
Less 10% -3.00 Truckload Allowance
Total $27.00
Terms: 2% 10 days, net 30 days
SCHEDULE 2
TERRITORY FOR "PRODUCTS"
The territory is described as all of Canada including the Northwest
Territories.
TERRITORY FOR "PRIVATE LABEL" SALES
The territory is described as all of Canada including the Northwest
Territories.
