LUTCAM Inc. DRAFT DISTRIBUTION AGREEMENT
Exhibit
10.5
This
Distribution Agreement (“Agreement”) is made as of this ____
day of
_________, 200___
between Lutcam, Inc., a company incorporated under the laws of the State of
Nevada (the "Company") and _________________________
(the
"Distributor") .
WHEREAS
the Company is a Master Distributor throughout the Territory (as hereinafter
defined) of the interlocking deck products bearing the "ThruFlow Interlocking"
trademark and any other products, all as shown on Schedule “A” hereto, as may be
amended from time to time at the sole discretion of the Company by written
notice thirty (30) days in advance of the effective date of such amendment
(the
"Products");
AND
WHEREAS the Distributor, being familiar with the Products, wishes to enter
into
an Agreement with the Company whereby the Distributor will undertake
responsibility for the distribution and sale of the Products on a nonexclusive
basis throughout the Territory (as hereinafter defined) on the terms and
conditions contained herein;
NOW
THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the mutual
covenants contained in this Agreement, the parties agree as
follows:
1. DEFINITIONS
AND SCHEDULES
Definitions
|
(1.1)
|
As
used in this Agreement, the following words and phrases shall have
the
following meanings:
|
"Term"
means
the term of this Agreement as provided in subsection 3(1) including any renewal
provided thereunder;
"Territory"
means
in the States of Michigan, Ohio, Pennsylvania, New York Indiana, Illinois,
Iowa,
Wisconsin and the country of Canada. The Territory may be modified at the sole
discretion of the Company with thirty (30) days written notice.
"Trademark"
means
the unregistered trademark "ThruFlow Interlocking". Additional trademarks may
be
added at the sole discretion of the Company.
Schedules
(1.2) The
attached schedule forms part of this Agreement and is hereby incorporated
as though set forth in full herein.
2. APPOINTMENT
AND TERRITORY
Appointment
|
(2.1)
|
Subject
to the terms and conditions of this Agreement, the Company hereby
grants
to the Distributor the right to distribute and
sell the Products within the Territory and hereby appoints the Distributor
as its distributor for this purpose
.
|
Sub
-Distributors
|
(2.2)
|
In
connection with the performance of its obligations hereunder, the
Distributor shall have the right, subject to prior written approval
of the
Company, to appoint sub-distributors, provided that, as a condition
of
such appointment, such sub-distributors shall agree in writing to
distribute the Products only within the Territory and to be subject
to the
terms of this Agreement.
|
Restriction
on Sale of Products
|
(2.3)
|
The
Distributor shall not, directly or indirectly, distribute or sell
Products
for delivery to any location outside of the Territory. The Distributor
agrees that it will not solicit orders for Products, advertise the
Products, maintain any branch for marketing the Products or keep
any stock
of the Products outside the Territory. The Company will not deliver
Products at the request of the Distributor to any address outside
of the
Territory.
|
2
3. TERM
AND RENEWAL
Term
|
(3.1)
|
This
Agreement shall become effective upon its execution by both parties
hereto
and, unless terminated earlier in accordance with the provisions
of this
Agreement, shall remain in effect for a period
of Two (2) years from the date of such
execution (the "Initial Term").
|
Renewal
|
(3.2)
|
Upon
the expiry of the Initial Term and provided that the Distributor
is not
otherwise in default hereunder, the Company may, in its sole discretion,
by notice in writing to the Distributor, renew this Agreement upon
the
terms and conditions herein contained for an additional ______ (__)
year
term (the "Renewal Term").
|
4. OBLIGATIONS
OF THE DISTRIBUTOR
The
parties agree that during the term of this Agreement the Distributor
shall:
(4.1) advertise
and promote the sale of the Products in the Territory and to
make
regular and sufficient contact with the present and potential customers
of the Distributor;
(4.2) anticipate
requirements and order promptly when required for the purpose of
facilitating shipments from Company at minimum transportation
costs;
(4.3) maintain
adequate sales and warehouse facilities and sufficient stock of the
Products to ensure prompt service to customers of the Distributor;
(4.4) promptly
comply with the terms of sale for any of the Products as herein provided
or as provided in any invoice provided by the Company;
(4.5) promptly
pay the sale price as herein provided;
(4.6) honor
any
warranty offered by the Company on the Products;
(4.7) provide
an annual marketing plan covering the Distributor’s Territory prior
to
the beginning of each new calendar year;
(4.8) maintain
minimum levels of sales on an annualized basis as agreed;
(4.9) maintain
an annual sales growth after year one of at least 15% annually;
(4.10) provide
at the company’s request sales data containing end customer names
and
locations in addition to annual sales levels by customer along with
average selling prices of the Product and any other detailed sales information
the Company may request; and
(4.11) refrain
from selling competitive products.
3
5. PRICES
AND PAYMENT
Sale
Price
|
(5.1)
|
The
Company shall, from time to time, provide the Distributor with its
price-list, the current form of which is attached hereto as Schedule
"A",
with respect to the Products, which may be amended at the sole discretion
of the Company with thirty (30) days written notice. All prices are
quoted
FOB the manufacturer's plant.
|
Payment
|
(5.2)
|
The
Company will invoice the Distributor for all Products sold to it
hereunder. Payment terms will require the Distributor to pay for
all
orders of Products in full within thirty (30) days of the date that
the
Products are delivered to the Distributor's designated
location.
|
Price-List
|
(5.3)
|
The
Company may provide to the Distributor, from time to time, lists
setting
out Distributor’s suggested selling prices with respect to the Products.
The Distributor shall have the right to establish its own selling
prices
for the Products within the Territory. The responsibility of the
Distributor is to continue to demonstrate an ability sell to previously
agreed-to minimum levels as well as to grow sales annually at least
fifteen persenct (15%) year over year. It is recognized that the
Distributor’s developed pricing has a direct connection to the
Distributor’s obligation to sell minimum quantities of Product and grow
sales annually.
|
Sales
and Marketing
|
(5.4)
|
Subject
to the provisions of this Agreement, the determination of sales and
marketing strategies and selling prices for the Products within the
Territory during the Term shall be the sole responsibility of the
Distributor, subject to any printed and published Product advertising
the
Company may elect.
|
Consultation,
etc.
|
(5.5)
|
The
Distributor agrees to consult with the Company from time to time
in
connection with sales and marketing strategies for the Products.
In
addition, the Distributor agrees to report regularly, at least once
per
calendar quarter, to the Company upon marketing conditions affecting
the
sale of Products within the Territory, as well as providing at the
request
of the Company any and all customer information relating to the sale
of
the Product.
|
4
6. RESPONSIBILITIES
OF THE COMPANY
|
(6.1)
|
The
parties agree that during the term of this Agreement the Company
shall:
|
|
(a)
|
provide
the Distributor with such information as the Company considers appropriate
in order to assist the Distributor in the preparation of sales promotion
material and shall provide the Distributor with its sales promotional
material relating to the Products in order to facilitate advertising
of
the Products, together with such information as the Company deems
appropriate in connection with any warranties relating to the
Products;
|
|
(b)
|
replace,
at its own cost, any and all Products which are delivered by the
Company
to the Distributor in a defective state, limited to the published
warranties and written performance specifications of the Product
provided
to the Distributor by the Company;
|
|
(c)
|
arrange
for the manufacture and delivery to the Distributor of all orders
of
Products placed by the Distributor, in minimum truckload quantities
with
preference to maximizing freight and packaging cost savings, at its
designated warehouses in a prompt and timely manner, in minimum truckload
quantities only;
|
|
(d)
|
bear
all liability in respect of the Products for any and all matters
arising
out of the manufacture of the Products, limited to the Company’s published
Product warranties, written performance specifications and applications
of
use recommended in writing; and
|
|
(e)
|
permit
the Distributor to hold itself out as an authorized distributor of
the
Products.
|
7. TERMINATION
|
(7.1)
|
The
Distributor and the Company each shall have the right to terminate
this
Agreement (except for those provisions which by their nature survive
termination), upon the occurrence of any of the following events,
such
termination to be effective immediately upon the receipt or deemed
receipt
by the other party of notice to that
effect:
|
|
(a)
|
if
a party is in default of any of the provisions, terms or conditions
herein
contained and has failed to remedy such default within thirty days
of
written notice thereof from the other
party;
|
|
(b)
|
the
other party becomes bankrupt or insolvent, makes an assignment for
the
benefit of its creditors or attempts to avail itself of any applicable
statute relating to insolvent
debtors;
|
5
|
(c)
|
if
the other party winds-up, dissolves, liquidates or takes steps to
do so or
otherwise ceases to function as a going concern or is prevented from
reasonably performing its duties hereunder;
or
|
|
(d)
|
if
a receiver or other custodian (interim or permanent) of any of the
assets
of the other party is appointed by private instrument or by court
order or
if any execution or other similar process of any court becomes enforceable
against the other party or its assets or if distress is made against
the
other party's assets or any part
thereof.
|
|
(7.2)
|
Upon
termination of this Agreement for any reason whatsoever, the following
shall apply:
|
|
(a)
|
each
party shall recover its own and release to the other party all of
its
rights and privileges granted by this
Agreement;
|
|
(b)
|
the
Distributor shall return to the Company all advertising, informational
or
technical material given to the Distributor by the
Company;
|
|
(c)
|
the
Distributor shall cease using the Company's trade names and trademarks
and
thereafter refrain from holding itself out as an authorized distributor
of
the Company;
|
|
(d)
|
if
requested by the Company, the Distributor shall sell to the Company,
at
the original net price paid by the Distributor plus actual freight
charges
for delivery to the Company, all of the Products sold by the Company
to
the Distributor in the possession or the control of the Distributor
at the
time of termination of this Agreement and deliver same to the Company
forthwith upon request, provided however, that the Company may reject
any
of the Products so delivered, which are not in the same condition
a
delivered to the Distributor; and
|
|
(e)
|
the
Distributor shall immediately pay all amounts owed to the
Company.
|
(7.3) This
section, number 7, shall survive the termination of this Agreement.
6
8. TRADE-XXXX
Use
of Trade-Xxxx
|
(8.1)
|
The
Company hereby grants the Distributor a license to use the Trademark
only
in connection with the sale of the Products as
follows:
|
|
(a)
|
the
Distributor shall notify the Company promptly of any suspected
infringement or passing off or any pending or threatened litigation
or
other proceeding concerning the Trademark which may come to its
attention;
|
|
(b)
|
the
Company shall use its best efforts to prosecute, defend and conduct
at its
own expense all suits involving the Trademark including, without
limitation, actions involving infringement or passing off and will
undertake any actions or litigate any proceeding reasonably necessary
for
the protection of the Trademark and the Distributor shall provide
every
assistance to the Company in such defense at the cost of the Company;
and
|
|
(c)
|
nothing
in this Agreement shall be deemed in any way to constitute any transfer
or
assignment by the Company of the Trademark to the Distributor or
give the
Distributor any right, title or interest in or to the Trademark and
the
Distributor acknowledges that all trade-marks, copyrights and all
other
proprietary marks and/or rights to them are and shall remain the
exclusive
property of the Company.
|
9. ASSIGNMENT
Non-Assignability
The
parties covenant and agree that neither party shall, without the prior written
consent of the other, transfer the whole or any part of this Agreement or any
of
its interest, rights or obligations hereunder.
|
10.
|
INDEPENDENT
CONTRACTOR
|
This
Agreement does not and shall not be construed to create any partnership or
agency whatsoever as between the Company and the Distributor and the Distributor
shall not, by reason of any provision herein contained, be deemed to be the
partner, agent or legal representative of the Company nor to have the ability,
right or authority to assume or create, in writing or otherwise, any obligation
of any kind, express or implied, in the name of or on behalf of the
Company.
7
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11.
|
GENERAL
CONTRACT PROVISIONS
|
Entire
Agreement
|
(11.1)
|
This
Agreement constitutes the entire agreement between the parties with
respect to all matters herein contained, and its execution has not
been
induced by, nor do any of the parties hereto rely upon or regard
as
material, any representations or writings whatsoever not incorporated
herein and made a part hereof. This Agreement shall not be amended,
altered or qualified except by an instrument in writing, signed by
all the
parties hereto and any amendments, alterations or qualifications
hereof
shall not be binding upon or affect the rights of any party who has
not
given its consent in writing.
|
Headings
|
(11.2)
|
The
division of this Agreement into articles and sections is for convenience
of reference only and shall not affect the interpretation or construction
of this Agreement.
|
Severability
|
(11.3)
|
In
the event that any of the covenants herein contained shall be held
unenforceable or declared invalid for any reason whatsoever, such
unenforceability or invalidity shall not affect the enforceability
or
validity of the remaining provisions of this Agreement and such
unenforceable or invalid portion shall be severable from the remainder
of
this Agreement.
|
Governing
Law
|
(11.4)
|
This
Agreement shall be governed by and construed in accordance with the
laws
of the State of Nevada without regard to its conflicts of laws
provisions.
|
Notices
|
(11.5)
|
All
notices, requests, demands or communications made pursuant to the
terms
hereof or required or permitted to be given by one party to another
shall
be given in writing by personal delivery or by registered mail, postage
prepaid, addressed to such other party or delivered to such other
party as
follows:
|
to
the
Company at:
0000
Xxxxxxxxx Xxxx
Xxxxxx,
Xxxxxxx X0X0X0
8
to
the
Distributor at:
or
at
such other address as may be given by any of them to the other from time to
time
and such notices, requests, demands or other communications shall be deemed
to
have been received when delivered, or, if mailed, three (3) business days
following the date of mailing thereof, provided that if any such notice,
request, demand or other communication shall have been mailed and regular mail
service shall be interrupted by strikes or other irregularities, such notices,
requests, demands or other communications shall be deemed to have been received
three (3) business days after the day following the resumption of normal mail
service.
Time
of the Essence
|
(11.6)
|
Time
shall be of the essence.
|
Further
Assurances
|
(11.7)
|
The
parties agree to sign such other instruments, cause such meetings
to be
held, resolutions passed and by-laws enacted, exercise their vote
and
influence, do and perform and cause to be done and performed such
further
and other acts and things as may be necessary or desirable in order
to
give full effect to this Agreement.
|
Successors
and Assigns
|
(11.8)
|
This
Agreement shall enure to the benefit of and be binding upon the parties
hereto and their respective successors and
assigns.
|
Non-Waiver
|
(11.9)
|
No
waiver by any party of any breach by any other party of any of its
covenants, obligations and agreements hereunder shall be a waiver
of any
subsequent breach of any other covenant, obligation or agreement,
nor
shall any forbearance to seek a remedy for any breach be a waiver
of any
rights and remedies with respect to such or any subsequent
breach.
|
9
Force
Majeure
(11.10)In
the event of an inability or failure by the Company to manufacture, supply
or
ship any of the Products herein by reason of any fire, explosion, war, riot,
strike, walk out, labor controversy, flood, shortage of water, power, labor,
transportation facilities or necessary materials or supplies, default or failure
of carriers, breakdown in or the loss of production or anticipated production
from plant or equipment, act of God or public enemy, any law, act or order
of
any court, board, government or other authority of competent jurisdiction,
or
any other direct cause (whether or not of the same character as the foregoing)
beyond the reasonable control of the Company, then the Company shall not be
liable to the Distributor during the period and to the extent of such inability
or failure. Deliveries omitted in whole or in part while such inability remains
in effect shall be canceled.
IN
WITNESS WHEREOF this agreement has been executed by the parties hereto as of
the
date first above written.
SIGNED,
SEALED & DELIVERED )
) LutCam
Inc.
)
)
)
) Name: Xxxxx
Xxxxx
) Title: President
)
)_______________________________________
)
)
)
) Name:
) Title:
10
SCHEDULE
A
Current
Product Pricing
|
United
States Funds
|
Canadian
Funds
|
||||
|
Order
Quantity
|
Four
(4) Foot Product Price (per piece)
|
Three
(3) Foot Product Price (per piece)
|
Order
Quantity
|
Four
(4) Foot Product Price (per piece)
|
Three
(3) Foot Product Price (per piece)
|
|
4000
+
|
4000
+
|
||||
|
2000-
3999
|
2000-
3999
|
||||
|
400-
0000
|
000-
0000
|
||||
|
200-
000
|
000-
000
|
||||
|
150-199
|
150-199
|
||||
|
100-149
|
100-149
|
||||
|
00-00
|
00-00
|
||||
