1
Exhibit 10(i)(a)(1)
SALES AGREEMENT
THIS AGREEMENT made the 5th day of May, 0000
X X X X X X X:
IN-FLO LIQUID DISPENSING CORPORATION, a
corporation organized and existing under the laws of Canada,
(hereinafter referred to as the "Vendor")
OF THE FIRST PART;
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DIVERSE PRODUCTS INCORPORATED, a corporation
organized and existing under the laws of the State of Ohio,
(hereinafter referred to as the "Master Marketer")
OF THE SECOND PART.
WHEREAS:
(1) The Vendor has developed a liquid product dispensing and packaging system,
consisting of certain components hereinafter described, which system has been
designed to facilitate the retail point of sale preparation and packaging of
liquid products, the aforesaid system hereinafter referred to as the "In-Flo
System";
(2) The components of the In-Flo System consist of three (3) separate and
distinct systems, each of which has been developed by In-Flo and in respect of
which In-Flo holds or owns certain exclusive intellectual property rights;
(3) The three (3) components referenced above include (i) a soft collapsible
plastic bottle having the characteristics identified in Schedule A to this
Agreement, hereinafter the "Bottles"; (ii) a retail robotic packaging shelf,
identified by the Vendor as the "Smart Shelf' by which the Bottles are
robotically filled at the point of sale with liquid, sealed with a cap mechanism
and presented for sale in a retail display shelf unit and (iii) a bottle
processing/packaging unit by which the Bottles are collapsed and specially
packaged for installation in the Smart Shelf;
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(4) The Master Marketer has devised a plan which will require a source of
supply of soft collapsible plastic bottles for use in conjunction with a water
filtration/purification process for the retail/consumer sale of water and other
water based beverages which will employ a system by which bottles are filled by
hand and employ a manually operated flexible spigot type tip filling head,
filling through a flip top cap and a plan for mechanical filling of bottles
with powdered instant drink premix to which consumers will add water;
(5) The Master Marketer has identified certain characteristics of the Bottle
which are proprietary to the Vendor and access to these rights would be
advantageous to the Master Marketer for use in the Master Marketer's system for
the retail/consumer sale of water and other water based beverages; and
pre-package instant drink pre-mixes;
(6) The Master Marketer wishes to obtain from the Vendor the exclusive right to
purchase Bottles from the Vendor for use and subsequent re-sale by the Master
Marketer to its customers in conjunction with its manual filling procedure to
sell water and water based beverage products;and pre-packed instant drink
pre-mixes;
(7) The Vendor is willing to sell the Bottles to the Master Marketer upon and
subject to the terms and conditions hereinafter set forth;
NOW THEREFORE THIS AGREEMENT WITNESSES that for good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged by
each of the parties hereto) the parties make the agreements and acknowledgments
hereinafter set forth:
ARTICLE I
INTERPRETATION
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1.1 DEFINITIONS - Whenever used in this Agreement, unless there is something in
the subject matter or context inconsistent therewith, the following words and
terms shall have the respective meanings ascribed to them as follows:
(a) "AGREEMENT" means this Agreement and all instruments supplemental
hereto or in amendment or confirmation hereof; "hereof", "hereto", and
"hereunder" and similar expressions mean and refer to this Agreement
and not to any particular Article or Section; "Article", "Section",
"paragraph" or "clause" means and refers to the specified article,
section, paragraph or clause of this Agreement;
(b) "BUSINESS DAY" means a day other than a Saturday, Sunday or any other
day on which the principal commercial banks located at the City of
Toronto are not open for business during normal banking hours;
(c) "CONTRACT YEAR" means a period during the Term of the Agreement
commencing the first
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(1st) day of February to and including the next following thirty first
(31st) day of January; and for greater certainty, the first such
Contract Year shall commence the first (1st) day of February 1996 and
end on the thirty-first (31st) day of January, 1997; and
(d) "EFFECTIVE DATE" means May 1, 1995.
1.2 HEADINGS - The division of this Agreement into Articles and Sections and
the insertion of headings are for the convenience of reference only and shall
not affect the construction or interpretation of this Agreement.
1.3 NUMBER - In this Agreement and unless the context otherwise requires, words
importing the singular number only shall include the plural and vice versa,
words importing the neuter gender shall include the masculine and feminine
genders and vice versa and words importing persons shall include individuals,
partnerships, associations, trusts, unincorporated organizations and
corporations and vice versa.
1.4 SCHEDULES - The following are the Schedules annexed hereto and incorporated
by reference and deemed to be part hereof:
Schedule A Bottle Specifications
Schedule B Minimum Purchase Requirements
Schedule C Pricing Specifications
1.5 REFERENCE TO STATUTES - All references contained in this Agreement to a
statute shall be deemed to be made to such statute as now enacted or as the same
may from time to time be amended, re-enacted or replaced, and in the case of any
such amendment, re-enactment or replacement, such reference herein to a
provision of such statute shall be read as a reference to such amended,
re-enacted or replaced provision.
ARTICLE 2
CONSIDERATION FOR GRANT OF EXCLUSIVE PURCHASE RIGHTS
----------------------------------------------------
2.1 INTERIM PAYMENT - Concurrently with the execution hereof the Master
Marketer shall deliver to the Vendor a non-refundable payment in the amount of
U.S.$10,000.00 Dollars ($10,000.00) in the form of a certified cheque or bank
draft made payable to the order of the Vendor, such payment being an inducement
by the Master Marketer to the Vendor to execute this Agreement and representing
an advance against the exclusivity fee of U.S.$110,000.00 provided in paragraph
2.2 below.
2.2 EXCLUSIVITY FEE - To secure performance of the exclusivity covenant
provided in paragraph 7.1 hereof, the Master Marketer agrees to pay to the
Vendor the non-refundable aggregate sum of U.S. $110,000.00. (the "Exclusivity
Fee"). Upon payment of the interim payment provided in paragraph 2.1 above, the
Exclusivity Fee shall be credited with the payment of U.S.$10,000.00.
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Within 190 calendar days of the Effective Date, the Master Marketer shall pay to
the Vendor the remaining portion of the Exclusivity Fee, being the sum of
U.S.$100,000.00. In the event of non-payment of this sum by the Master Marketer
within 190 calendar days of the Effective Date, unless such period is extended
by the Vendor, this Agreement shall thereupon terminate without notice to the
Master Marketer, it being expressly agreed by the Vendor that notwithstanding
any provision in this Agreement to the Contrary, upon such termination the
Master Marketer shall be excused from the performance of all obligations
hereunder, with the exception of paragraph 7.3 which shall survive such
termination and without limiting the generality of the foregoing, upon such
termination, the Master Marketer shall be excused from the payment of the
liquidated damages set forth in paragraph 8.6 hereof. The Exclusivity Fee, once
paid by the Master Marketer, shall be non-refundable and shall be retained by
the Vendor as liquidated damages and not as a penalty in the event of the
termination of this Agreement caused by Master Marketer's failure to perform any
obligation or comply with any term or provision contemplated herein.
ARTICLE 3
PURCHASE AND SALE OF BOTTLES AND PURCHASE PRICE
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3.1 PURCHASED AND SALE OF BOTTLES - Subject to the terms and conditions hereof,
the Vendor agrees to sell Bottles to the Master Marketer and the Master
Marketer agrees to buy or market Bottles from the Vendor in such quantities as
the Master Marketer may direct in accordance with the provisions contained in
Schedule B attached hereto.
3.2 MINIMUM PURCHASE COMMITMENTS - The Master Marketer covenants and agrees to
purchase, or market, during the first three contract years of the Term of this
Agreement, an aggregate minimum of 125 million Bottles as specified in Schedule
B. The Master Marketer further acknowledges and agrees that the Agreement may
be terminated at the option of the Vendor upon notice to the Master Marketer
upon the completion of the fourth Contract Year in the event that the sum of
Bottles ordered by purchase orders received during the fourth Contract Year
does not exceed 200 million Bottles. The Master Marketer further acknowledges
and agrees that the Agreement may be terminated at the option of the Vendor
upon notice to the Master Marketer upon the completion of the sixth (6th) month
of the fifth (5th) Contract Year in the event that the sum of Bottles ordered
by purchase orders received during the first six (6) month period of the fifth
Contract Year does not exceed 200 million Bottles.
3.3 MINIMUM ORDER QUANTITIES - The Master Marketer acknowledges and agrees that
the cost of manufacture of the Bottles depends in part upon economies of scale
arising through uninterrupted production in significant volumes, and the base
price per Bottle quoted in Schedule C is based upon the Master Marketer
purchasing no fewer than 5 million Bottles with each individual purchase order
issued during the of the Term of this Agreement.
3.4 PLACING ORDERS - The Master Marketer acknowledges and agrees that from time
to time during the Term of this Agreement, it shall deliver purchase orders to
the Vendor specifying a
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number of Bottles to be produced and delivered to the Master Marketer. Each
purchase order shall comply with the provisions of paragraph 3.3 above. In
addition, the aggregate sum of Bottles ordered through purchase orders issued by
the Master Marketer in any Contract Year shall not be less than the minimum
purchase commitments identified in Schedule B. The Vendor shall use its
reasonable best efforts to arrange for the manufacture and shipment of the
specified number of Bottles within thirty (30) days following receipt of a
purchase order. The Master Marketer acknowledges and agrees that the Vendor's
manufacturing and delivery capacity during the first Contract Year is not
expected to exceed 800,000 Bottles in any thirty-day period, with the result
that completion of shipment of a minimum order quantity of 5 million Bottles may
take, from the date of receipt of the purchase order by the Vendor, up to seven
(7) calendar months to complete. The Vendor covenants and agrees that during the
term of this Agreement it shall co-operate with the Master Marketer and use its
reasonable best efforts to ensure that Bottles are manufactured and delivered
within the times required by the Master Marketer.
3.5 PURCHASE PRICE - The purchase price payable to the Vendor for the Bottles
shall be in accordance with the provisions of Schedule C attached hereto. The
Master Marketer expressly acknowledges and agrees that the purchase price
consists of a manufacturing component and a margin component. The manufacturing
component includes costs which are subject to change from time to time upon the
advice of the manufacturer of the Bottles selected by the Vendor. These
manufacturing cost components include resin, labour, cap, label and carton
costs. In the event that the price of any of these or other components are
increased or decreased, the Vendor will immediately notify the Master Marketer
of such increase or decrease in accordance with the notice provisions contained
in paragraph 9.4 hereof. All Bottle purchase orders placed by the Master
Marketer following the Vendor's receipt of a notice of increase or decrease, as
the case may be, shall be subject to such price increase or decrease. The
Master Marketer shall accept the Bottle manufacturer's notice of price increase
or decrease addressed to the Vendor and the Vendor shall be under no duty or
obligation to the Master Marketer to otherwise account for such price increase
or decrease, provided that the notice received from the Bottle manufacturer
specifies with some particularity the source and basis of such increase or
decrease. In addition, the Vendor's costs are incurred in Canadian dollars, and
as a result. the price of Bottles will be subject to adjustment from time to
time as a consequence of fluctuations in the value of the Canadian dollar
against the United States dollar. Subject to any cost driven price adjustments
as aforesaid, the purchase price payable for Bottles shall be the U.S. dollar
equivalent of the Canadian dollar purchase price specified in Schedule C then
in effect on the date of the purchase order determined by reference to the noon
buying rate of Canadian dollars in terms of United States dollars as reported
by the Federal Reserve Bank of New York or such other source as mutually agreed
by the Vendor and the Master Marketer.
3.6 TAXES - The Master Marketer or ultimate purchaser shall be liable for and
shall pay all sales and transfer taxes, and all other taxes, duties or other
like charges payable upon and in connection with the conveyance and transfer of
Bottles by the Vendor to the Master Marketer or ultimate purchaser, if
applicable.
3.7 PAYMENT OF PURCHASE Price - Unless otherwise agreed by the Vendor, payment
of the selling price for all Bottles shall be secured by irrevocable letter of
credit payable by release as delivery of
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Bottles is completed. Each purchase order placed shall be accompanied by an
irrevocable letter of credit denominated in U.S. dollars representing the entire
purchase price due and payable in respect of such order, in form and substance
acceptable to the Vendor or its nominee bank. Notwithstanding receipt of any
purchase order from the Master Marketer, the Vendor shall be under no obligation
to arrange for the production of Bottles pursuant to such purchase order unless
and until such irrevocable letter of credit is delivered to the Vendor. Because
production of Bottles in accordance with specific purchase orders will be spread
over a period of weeks or months, the parties do not anticipate that shipment of
entire purchase order quantities of Bottles, and delivery of any particular
purchase order may be spread over several shipments. The Master Marketer agrees
that the irrevocable letter of credit will permit the Vendor to draw thereupon
on a shipment by shipment basis to ensure payment for Bottles is made concurrent
with delivery. In addition, each letter of credit shall provide that payment for
Bottles which have been manufactured and available for delivery shall be made
notwithstanding that no delivery has been made in the event that the Master
Marketer has not made arrangements to accept delivery of such Bottles within
thirty (30) days of receipt of notice from the Vendor that such Bottles are
available for delivery. In the event the Purchaser is Xxxxxx Associates, Inc.,
Slush Puppie Corp. or other purchaser satisfactory to the Vendor the terms will
be 30 days of receipt of notice from Vendor that such Bottles are available for
delivery.
ARTICLE 4
DELIVERY
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4.1 The place of delivery of the Bottles sold under this Agreement shall be
F.O.B. the place of manufacture in Canada or other warehouse as provided in
paragraph 4.2 below, as no allowance has been made in the determination of the
purchase price for delivery and insurance costs which would otherwise be borne
by the Vendor in arranging for delivery F.O.B. the Master Marketer's specified
destination.
4.2 The Vendor agrees that as Bottles are ready to be shipped pursuant to a
particular purchase order, the Vendor shall notify the Master Marketer or
ultimate purchaser of the fact and at the same time, advise the Master Marketer
or ultimate purchaser of available dates and times of delivery. In the event
that the manufacturer of the Bottles does not have the capacity to warehouse
all or any part of a purchase order prior to its delivery to the Master
Marketer or ultimate purchaser, the Master Marketer or ultimate purchaser must,
within a reasonable period of time and in any event, within the time prescribed
by paragraph 3.7 above, accept delivery of all such Bottles, pay the purchase
price payable in respect of such Bottles and make its own arrangements for
storage or shipment as may be necessary.
4.3 The Master Marketer or the Master Marketer's agent shall have the right to
inspect all Bottles tendered for delivery. The inspection shall take place at
the place for delivery (place of manufacture). The expense of inspection shall
be borne by the Master Marketer or ultimate purchaser except in the instance in
which goods have been rejected which determination may be based strictly upon
the failure of the Bottles to conform to the specifications for the Bottles
provided
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in Schedule A. In addition, any rejection of Bottles for nonconformity with the
specifications provided in Schedule A must be made by the Master Marketer or
ultimate purchaser by sending written notification to the Vendor of the
rejection within thirty (30) days of delivery. The notification must state the
particulars of the alleged nonconformity. After transmitting the notification of
rejection, the Master Marketer or ultimate purchaser will return any rejected
Bottles to the Vendor. The Master Marketer or ultimate purchaser will not be
charged for Bottles properly rejected as nonconforming with the specifications
of Schedule A. The Vendor shall as soon as practical deliver Bottles to the
Master Marketer or ultimate purchaser to replace rejected Bottles and complete
the purchase order. Except for the Vendor's warranty that the Bottles will
conform with the specifications contained in Schedule A, the Master Marketer
acknowledges and confirms that the Vendor makes no warranty, whether express or
implied that the Bottles will be fit for the Master Marketer's specific
purposes.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE VENDOR
--------------------------------------------
5.1 The Vendor hereby covenants, represents and warrants to the Master
Marketer that:
(a) DUE AUTHORIZATION, ETC. - The Vendor has all necessary corporate power,
authority and capacity to enter into this Agreement and the agreements
and other instruments contemplated herein and to perform its
obligations hereunder and thereunder. The execution and delivery of
this Agreement and the agreements and other instruments contemplated
herein and the consummation of the transactions contemplated hereunder
have been duly authorized by all necessary corporate action on the part
of the Vendor.
(b) VALID AND BINDING OBLIGATION - This Agreement constitutes and the
agreements and other instruments contemplated herein when executed will
constitute valid and binding obligations of the Vendor enforceable
against the Vendor in accordance with the terms hereof and thereof
subject, however, to limitations with respect to enforcement imposed by
law in connection with bankruptcy or similar proceedings affecting the
rights of creditors generally and to the extent that equitable remedies
such as specific performance and injunction are in the discretion of
the court from which they are sought.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE MASTER MARKETER
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6.1 The Master Marketer hereby covenants, represents and warrants to the
Vendor that:
(a) DUE AUTHORIZATION, Etc. - The Master Marketer has all necessary
corporate power, authority and capacity to enter into this Agreement
and the agreements and other instruments contemplated herein and to
perform its obligations hereunder and thereunder. The execution and
delivery of this Agreement and the agreements and other instruments
contemplated
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herein and the performance of the transactions contemplated hereunder
and thereunder have been duly authorized by all necessary corporate
action on the part of the Master Marketer.
(b) VALID AND BINDING OBLIGATION - This Agreement constitutes and the
agreements and other instruments contemplated herein when executed will
constitute valid and binding obligations of the Master Marketer
enforceable against the Master Marketer in accordance with the terms
hereof and thereof subject to limitation with respect to enforcement
imposed by law in connection with bankruptcy or similar proceedings
affecting the rights of credits generally and to the extent that
equitable remedies such as specific performance and injunction are in
the discretion of the court from which they are sought.
ARTICLE 7
COVENANTS OF THE VENDOR AND THE MASTER MARKETER
-----------------------------------------------
7.1 VENDOR - GRANT OF EXCLUSIVITY TO MASTER MARKETER FOR PARTICULAR USE OF
BOTTLES - The Vendor covenants and agrees that during the term of this
Agreement, the Master Marketer shall be the Vendor's exclusive world-wide
purchaser of Bottles only for the retail/consumer sale of water and other water
based beverages employing a system by which Bottles are filled by hand using a
manually operated flexible spigot type tip filling head, filling through a flip
top cap and a plan for mechanical filling of bottles with powdered instant
drink pre-mix to which consumers will add water. The Master Marketer also
expressly acknowledges and agrees that the grant of the exclusive purchase
rights granted hereunder are subject to the provisions of paragraph 2.2 of this
Agreement.
7.2 MASTER MARKETER - LIMITATIONS ON USE OF BOTTLES - The Master Marketer
covenants and agrees that during the term of this Agreement, the Master
Marketer shall purchase the Bottles only for the retail/consumer sale of water
and other water based beverages employing a system by which Bottles are filled
by hand using a manually operated flexible spigot type tip filling head,
filling through a flip top cap and a plan for mechnical filling of bottles with
powdered instant drink pre-mix to which consumers will add water. The Master
Marketer covenants and agrees that it will not, during the term of this
Agreement, adopt, use or sell any system by which Bottles are filled using a
robotic or automatic style of filling system, which rights are expressly
reserved by the Vendor.
7.3 MASTER MARKETER - CONFIDENTIALITY - In the event of the termination of this
Agreement without consummation of the transactions contemplated hereby, the
Master Marketer will keep confidential any information concerning the Bottles
or the business of the Vendor (unless in the public domain) obtained from the
Vendor. If this Agreement is so terminated, promptly after such termination,
all documents, working papers and other written material obtained from one
party in connection with this Agreement and not therefore made public
(including all copies thereof), shall be returned to the party which provided
such material.
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ARTICLE 8
TERMINATION
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8.1 RIGHT OF TERMINATION ON NOTICE
(i) VENDOR Notwithstanding anything herein to the contrary, the Vendor
shall have the right to terminate this Agreement at any time in accordance with
the following:
(a) by giving the Master Marketer at least thirty (30)
days notice of such termination in the case of a
default by the Master Marketer of any term or
provision of this Agreement; provided however that,
if the Master Marketer within such thirty (30) day
period, shall remedy the default upon which such
notice shall have been based, or, within such thirty
(30) day period, shall commence to remedy such
default and thereafter diligently prosecute the
same, then such notice shall not become effective
and this Agreement shall continue and remain in full
force and effect; or
(b) by giving the Master Marketer notice of such
termination (such termination to be effective
forthwith upon the giving of such notice), upon any
action being taken to dissolve the Master Marketer,
or upon any attempt by the Master Marketer to grant a
sublicence hereunder or to assign, pledge, or
otherwise encumber or dispose of this Agreement,
whether voluntarily, by operation of law, or
otherwise except as otherwise expressly provided for
herein.
(ii) MASTER MARKETER Notwithstanding anything herein to the contrary,
the Master Marketer shall have the right to terminate this Agreement at any
time in accordance with the following:
(a) by giving the Vendor at least thirty (30) days
notice of such termination in the case of a default
by the Vendor of any term or provision of this
Agreement; provided however, if the Vendor within
such thirty (30) day period, shall remedy the
default upon which such notice shall have been
based, or, within such thirty (30) day period, shall
commence to remedy such default and thereafter
diligently prosecute the same, then such notice
shall not become effective and this Agreement shall
continue and remain in full force and effect; or
(b) by giving the Vendor notice of such termination (such
termination to be effective forthwith upon the giving
of such notice), upon any action being taken to
dissolve the Vendor, or to assign, pledge, or
otherwise encumber or dispose of this Agreement,
whether voluntarily, by operation of law, or
otherwise except as otherwise expressly provided for
herein.
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8.2 RIGHT OF TERMINATION WITHOUT NOTICE
(i) VENDOR Notwithstanding anything herein to the contrary, this Agreement
shall terminate, without notice required by the Vendor, upon
(a) the bankruptcy or insolvency of the Master Marketer,
(b) the making by the Master Marketer of an assignment for the
benefit of creditors, or
(c) the appointment of a receiver of the Master Marketer or of any
of its assets which appointment shall not be vacated within
thirty (30) days thereafter.
(ii) MASTER MARKETER Notwithstanding anything herein to the contrary, this
Agreement shall terminate, without notice required by the Master Marketer, upon
(a) the bankruptcy or insolvency of the Vendor,
(b) the making by the Vendor of an assignment for the benefit of
creditors, or
(c) the appointment of a receiver of the Vendor or of any of its
assets which appointment shall not be vacated within thirty
(30) days thereafter.
8.3 Except as otherwise provided in this Article 8, neither party shall be
liable to the other, by virtue of the termination of this Agreement in
accordance with this Article 8, for any compensation, reimbursement,
expenditure, or statutory or other indemnities, or for any investments, leases
or other commitments, or for any damages on account of the loss of prospective
profits or anticipated sales, or for any other loss, damage, expense or matter
growing out of such termination.
8.4 No termination of this Agreement for any reason shall relieve a party of or
release such party from those of its obligations hereunder which subsist or are
to be performed after such termination.
8.5 LIQUIDATED DAMAGES - In the event of the termination of this Agreement by
the Vendor in accordance with the provisions of paragraphs 8.1(i) or 8.2(ii)
prior to January 31st, 1999, being the end of the third Contract Year, the
Master Marketer shall pay to the Vendor the following amounts as liquidated
damages and not as a penalty:
(a) if the Agreement is terminated during the third Contract Year, the sum of
CDN.$2,475,000.00 less the product obtained by multiplying the total number of
Bottles included in purchase orders issued by the Master Marketer or ultimate
purchaser between February 1, 1998 to and including January 31, 1999 by
Cdn$0.0225;
(b) if the Agreement is terminated during the second Contract Year, the sum of
CDN.$2,975,000.00 less the lesser of (i) the product obtained by multiplying
the total number of Bottles included in purchase orders issued by the Master
Marketer between February 1, 1997 to and
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including January 31, 1998 by Cdn$0.025 and (ii) CDN$500,000; or
(c) if the Agreement is terminated during the first Contract Year, the sum of
CDN.$3,225,000.00 less the lesser of (i) the product obtained by multiplying
the total number of Bottles included in purchase orders issued by the Master
Marketer between February 1, 1996 to and including January 31, 1997 by
Cdn$0.05 and CDN$2,975,000.
ARTICLE 9
GENERAL
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9.1 TERM - The term of this Agreement shall commence with upon the Effective
Date and continue for an initial term of five years until the completion of
the fifth Contract Year, on the thirty first (31st) day of January, 2001 (the
"Initial Term"). Thereafter, this Agreement shall automatically continue for
successive one (1) year terms (any such one (1) year term being a "Renewal
Term") so long as Master Marketer is not in default and has fulfilled all
purchase requirements of this Sales Agreement.
9.2 PUBLIC NOTICES - The parties hereto hereby agree that with respect to all
notices to third parties and all other publicity concerning the transactions
contemplated by this Agreement, no party shall act unilaterally in this regard
without the prior approval of the other, such approval not to be unreasonably
withheld. unless such disclosure shall be required to meet timely disclosure
obligations of any party under applicable securities laws and stock exchange
rules in circumstances where prior consultation with the other party is not
practicable.
9.3 TIME - Time shall be of the essence of this Agreement and of every part
hereof and no extension or variation of this Agreement shall operate as a
waiver of this provision.
9.4 NOTICES - All payments and communications which may be or are required to
be given by either party to the other herein, shall (in the absence of any
specific provision to the contrary) be in writing and delivered or sent by
prepaid overnight courier or telecopier to the parties at their following
respective addresses:
For the Vendor: 000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx
XXX 0X0
Fax: 000-000-0000
For the Master Marketer: 0000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxx
00000
Fax: 000-000-0000
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and if any such payment or communication is sent by prepaid overnight courier,
it shall be conclusively deemed to have been received on the second Business Day
following the transmittal thereof and, if delivered or telecopied, it shall be
conclusively deemed to have been received at the time of delivery or
transmission. Either party may from time to time change its address hereinbefore
set forth by notice to the other of them in accordance with this section.
9.5 GOVERNING LAW - This Agreement and the rights and obligations and
relations of the parties hereto shall be governed by and construed in
accordance with the laws of the Province of Ontario and the federal laws of
Canada applicable therein (but without giving effect to any conflict of law
rules). The parties hereto agree that the Courts of Ontario shall have
jurisdiction to entertain any action or other legal proceedings commenced by
the Vendor based on any provisions of this Agreement and in such case, the
Master Marketer hereby attorns to the jurisdiction of the Courts of the
Province of Ontario. The parties hereto also agree that the Courts of Ohio
shall have jurisdiction to entertain any action or other legal proceedings
commenced by the Master Marketer based on any provisions of this Agreement and
in such case, the Vendor hereby attorns to the jurisdiction of the Courts of
the Province of Ontario.
9.6 HEADINGS - The index to and headings in this Agreement and in the
Schedules hereto are inserted solely for convenience of reference and do not
affect the interpretation thereof or define, limit or construe the contents of
any provision of this Agreement.
9.7 ASSIGNMENT - Neither this Agreement nor any rights or obligations
hereunder shall be assignable by any party hereto without the prior written
consent of each of the other parties. Subject thereto, this Agreement shall
enure to the benefit of and be binding upon the parties hereto and their
respective successors (including any successor by reason of amalgamation of
any party hereto) and permitted assigns. Notwithstanding the above, the
parties hereto agree that the Master Marketer may assign and delegate its
rights and duties of performance hereunder to a corporation affiliated with
the Master Marketer formed for the purpose of completing the plan of sale
developed by the Master Marketer as herein recited.
9.8 ENTIRE AGREEMENT - With respect to the subject matter of this Agreement,
this Agreement (a) sets forth the entire agreement between the parties hereto
and any persons who have in the past or who are now representing either of the
parties hereto, (b) supersedes all prior understandings and communications
between the parties hereto or any of them, oral or written, and (c)
constitutes the entire agreement between the parties hereto. Each party hereto
acknowledges and represents that this Agreement is entered into after full
investigation and that no party is relying upon any statement or
representation made by any other which is not embodied in this Agreement Each
party hereto acknowledges that he or it shall have no right to rely upon any
amendment. promise, modification, statement or representation made or
occurring subsequent to the execution of this Agreement unless the same is in
writing and executed by each of the parties hereto.
9.9 FURTHER ASSURANCES - The parties hereto shall with reasonable diligence do
all such things and provide all such reasonable assurances as may be required
to consummate the transactions contemplated hereby, and each party hereto
shall provide such all documents or instruments required
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13
by the other party as may be reasonably necessary or desirable to effect the
purpose of this Agreement and carry out its provisions whether before, at or
after the Closing Time.
9.10 COUNTERPARTS - This Agreement may be executed in any number of
counterparts and all such counterparts shall for all purposes constitute one
agreement, binding on the parties hereto, provided each party hereto has
executed at least one counterpart, and each shall be deemed to be an original,
notwithstanding that all parties are not signatory to the same counterpart.
9.11 WAIVER - The failure of any party to this Agreement to enforce at any
time any of the provisions of this Agreement or any of its rights in respect
thereto or to insist upon strict adherence to any term of this Agreement will
not be considered to be a waiver of such provision, right or term or in any
way to affect the validity of this Agreement or deprive the applicable party
of the right thereafter to insist upon strict adherence to that term or any
other term of this Agreement. The exercise by any party to this Agreement of
any of its rights provided by this Agreement will not preclude or prejudice
such party from exercising any other right it may have by reason of this
Agreement or otherwise, irrespective of any previous action or proceeding
taken by it hereunder. Any waiver by any party hereto of the performance of
any of the provisions of this Agreement will be effective only if in writing
and signed by a duly authorized representative of such party.
IN WITNESS WHEREOF the parties hereto have hereunto duly executed this
Agreement as of the day and year first above written.
IN-FLO LIQUID DISPENSING
CORPORATION
Per: /s/ X. Xxxx
-----------------------------
Title
Per: President
-----------------------------
Title
DIVERSE PRODUCTS INCORPORATED
Per: /s/ Xxxxx X. Xxxxx
-----------------------------
Title
Per: President
-----------------------------
Title
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14
SCHEDULE A
BOTTLE SPECIFICATIONS
---------------------
Bottle - Including In-Flo proprietary neck insert as follows:
Patent Pending Canada #608,021
U.S.A. #07/829,047
E.P.O. Europe #90911521.4
Australia #61421/90
These applications relate to the Bottle neck design under registration as
containment system.
Design Registration Xxxxxx #00000
X.X.X. #D320932
These registrations relate to the shape of the body of the Bottle, without neck
details, and is a joint registration owned by In-Flo and A.B.C. Group Product
Development Ltd.
Specifications
--------------
- Bottle colour - clear or opaque blue
- Bottle - complete with cap, label and shipping carton
- 65 gram weight or 55 gram weight - Width - 170mm, Height - 290mm,
Capacity - 4 Litre or 1 (U.S.) Gallon
- Resin - options - Dowlex L.D.P.E foodgrade material or Quantum
L.G.P.E. NA 345 foodgrade material
- Flip-top - 28mm FFCR snap-on cap. foodgrade material.
Colour - White or Clear
- Label - Primax (white polyolefin) #S246
Width - 3.3750 in., Length - 5.000 in.
Shape - Round corner rectangle
Front - 4 colour varnish U.V.
- Carton - Overall diameter - 40 13/16 x 7 1/8 x 15 1/2 in.
48 Bottles/carton
Note: Cap neck may be changed at In-Flo's discretion to allow screw-on
application.
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15
SCHEDULE B
----------
MINIMUM PURCHASE REQUIREMENTS
-----------------------------
The Master Marketer will be required, on or before February 1, 1996 to issue a
purchase order for a minimum of 5,000,000 bottles with targeted delivery dates.
The Master Marketer must generate orders for the following minimum Bottle
quantities in each Contract Year to maintain exclusively:
Minimum
-------
Contract Year 1 5 Million
2 20 Million
3 100 Million
4 200 Million
5 400 Million
Subsequent years 400 Million
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16
SCHEDULE C
----------
BOTTLE PRICING
--------------
The base price for Bottles as at the date of the Agreement, subject Agreement,
and assuming they are ordered in lots not smaller than 5,000,000 Bottles per
purchase order shall be CDN$0.2746 per Bottle, being the sum of (i) a
manufacturing component of CDN$0.2246, which is based on Dowlex resin made by
DOW(Canada) (the "Manufacturing Component") and (ii) a margin component to the
Vendor of CDN$0.05 per Bottle (the "Margin Component").
Bottle orders in excess of the minimum for each year will be available for
purchase at a price equal to the Manufacturing Component as quoted above, as
adjusted from time to time in accordance with the provisions of the Agreement
plus a Margin Component per Bottle that is variable based upon Bottle volumes as
follows:
Contract Year Volume in Excess of Minimum Margin Component, Per Bottle
1 From 5 million - 20 million @ $0.0250
2 From 20 million - 100 million @ $0.0225
3 From 100 million - 200 million @ $0.0200
4 From 200 million - 400 million @ $0.0175
5 From 400 million and beyond @ $0.0150
Subsequent From Beyond 400 million @ 0.0150
Years
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