Exhibit 99.3
DISTRIBUTORSHIP AGREEMENT
THIS AGREEMENT SUPERSEDES ALL PRIOR AGREEMENTS
This Agreement made this 19TH day of JANUARY, 1993.
BETWEEN: ADELAIDE ROBOTIC TECHNOLOGIES, INC.
(hereinafter referred to as "Adelaide")
located at 00000 Xxxxxxxx Xxxxxxxxx,
Xxxxx 000,
Xxxxx, Xxxxxxx 00000.
A division of Adelaide Holdings, Inc.
- and -
AMERICAN FRY CORPORATION
000 Xxxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxx Xxxx, XX 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 Territory of STATE OF PENNSYLVANIA 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 19th day of January, 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.
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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 11
OBLIGATIONS OF ADELAIDE
Adelaide agrees to assist Distributor in distributing Products
by way of retail sale in the following manner:
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.
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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.
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
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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 make every reasonable effort to steadily
increase sales of the Products by proper use of all advertising media.
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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.
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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 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.
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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 SEVEN HUNDRED-FIFTY THOUSAND DOLLARS ($750,000.00), 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 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.
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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
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.
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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
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.
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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. Adelaide may all paid pursuant hereto.
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.
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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.
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 coverge 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.
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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.
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
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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.
ARTICLE 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 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.
15
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:
AMERICAN FRY CORPORATION, 000 XXXXX XXXXXXX XXXXX, XXXXX 000, XXXXXX XXXX, XX
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.
C. Nothing in this Agreement shall bar or restrict Adelaide's right to obtain
injunctive relief under applicable law.
16
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 ROBOTIC TECHNOLOGIES, INC.:
/s/ Xxxx X. Xxxx /s/ Illigible
----------------------------------- ----------------------------
Witness
DISTRIBUTOR:
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxxxxx X. Wulfling
----------------------------------- ----------------------------
Witness
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SCHEDULE B
TERRITORY: Pennsylvania
PRICE: $750,000.00
TERMS:
(A) Payment Schedule to secure rights for the above mentioned
territory.
Amount Due: $750,000.00
November 30, 1993 $25,000.00
February 28, 1994 $25,000.00
May 31, 1994 $25,000.00
August 31, 1994 $25,000.00
First Year Payment Totals $100,000.00
-----------
BALANCE $650,000.00
For each machine delivered, an additional Five Hundred
Dollars ($500.00) will be paid to Adelaide which will be
credited towards the Twenty-Five Thousand Dollars
($25,000.00) payment due on November 30, 1993.
Example: 30 machines delivered will amount to an
additional Fifteen Thousand Dollars ($15,000.00) which
would be credited to the August 31, 1993. The balance
due on that date to Adelaide would be Ten Thousand Dollars
($10,000.00). The payment of the Five Hundred Dollars
($500.00) additional for each machine ordered will apply
only to the November 30, 1993 payment.
The existing payment schedule will apply from thereon.
(B) The balance of payments due in the amount of Six Hundred
Fifty Thousand Dollars ($650,000.00) are to paid over five
(5) years beginning April 1994. Annual payments of One
Hundred Thirty Thousand Dollars ($130,000.00) to be paid
on a quarterly basis.
(C) As the delivery of the machines commence, the territorial
requirement is two hundred machines sold annually.
