EXHIBIT 10(ii)
DISTRIBUTOR AGREEMENT
---------------------
THIS AGREEMENT made this 28 day of July, 1995, between GOLDCAPS, INC., a
subsidiary of IVAX Corporation, a Florida corporation, with its principal place
of business at 00 X.X., 000xx Xxxxxx, Xxxxxxxx 000, Xxxxx, Xxxxxxx 00000,
(hereinafter known as the "Company") and DAISY MANUFACTURING COMPANY, INC., a
Delaware corporation, with its principal place of business at Xxx 000, Xxxxxx,
Xxxxxxxx 00000-0000 (hereinafter known as the "Distributor");
WHEREAS, the Company is engaged in the manufacture, production and sale of
softgel paintball capsules (the "Product") having the specifications set forth
in Schedule A hereto (the "Specifications"); and
WHEREAS, the Distributor plans to establish and maintain a marketing
organization and market the Product in the areas/ countries listed on Schedule
"B" hereto (the "Sales Territory"); and
WHEREAS, the Company and the Distributor wish to cooperate for the purpose of
making the Product available to purchasers in the Sales Territory.
NOW, THEREFORE, it is agreed as follows:
1. Appointment. The Company hereby appoints the Distributor as Exclusive
-----------
Distributor for sales of the Product in the Sales Territory. The Sales
Territory may be expanded, in the sole discretion of the Company, upon the
request of Distributor and the presentation of a satisfactory business plan
in connection therewith and execution of a written amendment hereto adding
such expanded Sales Territory to Schedule B. The Distributor accepts this
appointment and agrees to act as distributor and not to sell any products
within or outside the Sales Territory which compete with the Product during
the entire term of this Agreement nor to sell the Product, directly or
indirectly or as an associate,
partner, manager, agent, owner, investor in any cooperation, partnership or
other entity, operator or otherwise, or by means of any corporate or other
devise, outside the Sales Territory. Notwithstanding the foregoing, from
time to time the Company may permit the Distributor to sell Product to
customer outside the Sales Territory, provided that such permission is
obtained in advance of any such sale, which permission will not be
unreasonably withheld, and such sale is conducted upon the terms and
conditions agreed upon in writing between the parties.
2. Duties. The Distributor shall carry continuously and have readily
------
available sufficient quantities of the Product to enable it to meet
promptly the demands of customers in the Sales Territory, provided the
Company has sufficient quantity in supply, and to make every reasonable
effort to use proper means to develop, promote and continue as far as
practicable sales of the Product, Distributor further agrees to provide
warehousing as needed to service customers in its Sales Territory.
Distributor will engage at its sole discretion, sales personnel to serve
the customers in the Sales Territory as part of its operation. Distributor
shall provide the Company, no less often then semi-annually, written
reports itemizing the unit sales volume for the Sales Territory.
Distributor shall promote the Product from time to time via trade journal
advertisements, printed brochures, direct mail or other means. The Company
reserves the right to pre-approve any advertisement in which the Company or
any of its trademarks are referred to, but will not unreasonably withhold
approval. The Company and Distributor will contribute to a promotion fund
each contributing an agreed upon amount. Distributor will include, at a
minimum, the warnings issued by the Company in all packaging used
-2-
in connection with the sale of Product and shall use its best efforts to
ensure that all packaging containing Product sold to the end user shall
contain such warnings.
3. Purchases and Delivery. Unless otherwise agreed by the parties, all
----------------------
shipments shall be F.O.B. the Company's plant or their designated plant for
shipment directly to a location as agreed with the Distributor within the
Sales Territory. Source of shipments shall be in the sole discretion of
the Company. In addition to the terms and conditions set forth in this
Agreement, the terms and conditions of the Daisy Purchase Order shall be
incorporated herein as being fully set forth in Schedule C.
4. Payment and Credit Terms. Terms on all purchases shall be net 30.
------------------------
5. Prices. A list of current prices of the Product for various quantities is
------
listed on Schedule D, attached hereto and made a part hereof. The price of
the Product may be changed by the Company on an annual basis with 30 days
written notice to the Distributor. Any such modified prices will not be
unreasonable given the then current market and competitive conditions.
Prices for new products, if any, will be established by the Company at the
time of the initial commercial launch of such new products.
6. Returns. The Company will replace, free of charge, any products which does
-------
not conform to the Specifications set forth in Schedule A. The Company may
remove, reinspect or otherwise recover any such product and sell it again
to the Distributor, provided such recovered Product meets the
Specifications therefor. Advance authorization must be obtained from the
Company prior to any return or issuance of credit.
-3-
7. Interruption of Deliveries. The Company shall make every effort to fill
--------------------------
all orders with reasonable promptness, except that in case of fire, riots,
strikes or other labor disputes, any other causes beyond the Company's
control, the Company, at its option, may cancel the delivery, or partially
cancel as the case may be, by giving written notice to the Distributor.
If, as a result of any such non-delivery of product by the Company,
Distributor fails to maintain sufficient quantities of Product as required
under paragraph 2 hereof, Distributor shall not be deemed thereby to be in
breach of this Agreement.
8. Distributor's Performance Criteria. Distributor will exercise its best
----------------------------------
efforts to sell the Product set forth in Schedule C in the Sales Territory.
Distributor agrees that it will attempt to sell 100 million capsules in
various colors during the two year period of this contract. During this
Agreement, the Company may at its option upon reasonable notice require a
conference between representatives of the Company and Distributor to
discuss the performance of Distributor in terms of the Distributor meeting
sales targets for product.
9. Termination. This Agreement will commence on the date of the first
-----------
shipment of paintballs to Distributor and shall be for a period of two
years. Unless terminated by either party in writing, as hereinafter set
forth, the contract will renew for an additional two years under the same
terms and conditions or modifications agreed to by the parties. Either the
Company or the Distributor may terminate this Agreement on the two year
anniversary, without cause, with one year written notice to the other
party. During the term of the Agreement, either the Company or Distributor
may terminate this Agreement for breach of its terms if, after 60 days
written notice, such breach or default has not
-4-
been cured. Notwithstanding the foregoing, the Company or Distributor, at
any time, may terminate this Agreement immediately if either party is
declared bankrupt or insolvent, or makes an assignment for the benefit of
creditors, or if a receiver is appointed or any proceedings are commenced,
voluntary or involuntary, by or against Distributor under any bankruptcy or
similar law. Termination notices shall be sent as provided herein.
10. Obligation to Pay on Termination. Even though this Agreement is
--------------------------------
terminated, the Distributor's obligation to pay in full for product meeting
the Specifications delivered hereunder to the Distributor shall not be
affected and the Company's obligation to ship Product to Distributor for
which Distributor has in place with the Company confirmed open orders shall
not be affected.
11. Limitation of Liability. The Distributor shall maintain its own place of
-----------------------
business, facilities and the equipment in accordance with Distributor's own
discretion and resell Company's products. Both the Company and Distributor
will name as additional insureds each other on their respective general
liability policies. Neither the Company nor the Distributor shall by reason
of the termination or non-renewal of this Agreement, be liable to the other
for compensation, reimbursement, or damages on account of the loss of
perspective profits or anticipated sales on account of expenditures,
investments, leases, property improvements or commitments in connection
with business or goodwill of the Company or the Distributor.
12. Notices. All notices and other communications hereunder shall be in
-------
writing and shall be deemed to have been given when delivered in person or
when sent by facsimile
-5-
transmission confirmed by certified or registered mail, or two business
days after being sent by an internationally recognized "overnight" courier
service, to the last known address of the other party.
13. Relationship of Parties. The relationship between the Company and the
-----------------------
Distributor is that the buyer and seller. Distributor, including its
agents and employees, shall be regarded as an independent contractor. This
Agreement does not authorize the Distributor to be the agent or the legal
representative of the Company for any purpose. The Distributor is not
granted any right or authority to assume or to create any obligation or
responsibility, express or implied, on behalf of or in the name of the
Company or to bind the Company in any manner.
14. Confidential Information. Unless otherwise agreed to in writing, each
------------------------
party agrees to retain in strict confidence and, except as otherwise
expressly provided herein, not to issue or disclose to others any and all
information received from the other, including, but not limited to, know-
how, compilations, processes, plans, blueprints, technical information, new
product information, test procedures, product samples, specifications as
well as commercial and other information data considered confidential in
nature, whether communicated in writing or orally (the "Confidential
Information"); provided, however, that Confidential Information shall not
be deemed to include:
(a) such information which at the time of disclosure, is in the public
domain or thereafter becomes part of the public domain by publication or
otherwise through no act of the party receiving it;
-6-
(b) such information which a party can conclusively establish was in its
possession prior to the time of disclosure to it and was not acquired
directly or indirectly from the disclosing party or any of its employees or
affiliates; or
(c) such information which is independently made available as a matter of
right by a third party who has not violated a confidential relationship
with the party seeking to maintain the confidentiality of such information.
15. Other Agreements. It is declared by both parties that there are no oral or
----------------
other agreements or understandings between them affecting this Agreement,
or related to the selling or servicing of said products in the Sales
Territory. This Agreement, together with the Schedules attached hereto,
supersedes all previous agreements between the parties relating to the
subject matter hereof.
16. Modification. This Agreement may be changed, waived, or amended only by an
------------
instrument in writing signed by both parties.
17. Severability. If any term of this Agreement thereof shall be invalid,
------------
breached or unenforceable, the remainder of this Agreement shall remain in
full force and effect. No representation or warranty is made by either
party with respect to the subject matter hereof other than as expressly set
forth herein of in the Schedules attached hereto.
18. No Implied Waivers. The failure of either party at any time to require
------------------
performance by the other party of any provision hereof shall in no way
affect the full right to require such performance at any time thereafter,
nor shall the waiver by either party of a breach of any provision hereof be
taken or held to be a waiver of any succeeding breach of such provision, or
as a wavier of the provision itself.
-7-
19. Governing Law. This Agreement is to be governed by and construed according
-------------
to the domestic laws of the U.S.A. without regard to its conflicts of laws
provisions or Uniform United Nations Conventions. However, any provision
herein which in any way contravenes the laws of any country or jurisdiction
shall be deemed not to be a part of this Agreement. All actions concerning
any dispute arising or related hereto or the transactions contemplated
herein shall be filed and maintained only in a court sitting in Florida.
20. Packaging, Trademarks. It is agreed that the Company and Distributor will
---------------------
decide how the product is to be packaged. It is agreed that if the name
Goldcaps or any other past, present or future Company Trademark or logo,
will not be used by the Distributor upon the expiration or termination of
this Agreement or in any other manner except as provided herein. The
Distributor further agrees to make no claim thereto or against the use
thereof by the Company or other distributor's of the Company's products.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed on the date above written.
WITNESS GOLDCAPS, INC.
(The Company)
/s/ /s/
----------------------------- ------------------------------
WITNESS Its: President
DAISY MANUFACTURING COMPANY, INC.
(The Distributor)
/s/ Xx Xxxxxxx Xxxxxxx /s/ Xxxxxx X. Xxxxxxx, Xx.
----------------------------- ------------------------------
Xxxxxx X. Xxxxxxx, Xx.
Its: President
-8-
Schedule A
----------
Product Specifications [upon receipt by Distributor]
----------------------------------------------------
Pole Range: Min .665
Max .705
Equator Range: Min .665
Max .695
Bounce Test: 10 capsule drop at 6 feet
Maximum breakage - 2 capsules
Shoot Test: 20 capsules shot
Maximum breakage in barrel - 2 capsules
Color: Matched to clients request
-9-
Schedule B
----------
The Sales Territory shall consist of the following:
Exclusive worldwide distribution to all retail and wholesale outlets,
excluding Paintball Field Operators.
-10-
Schedule C
----------
PURCHASE ORDER TERMS
1. Buyer shall not be charged for any costs of packing, crating, drayage or
storage without its prior written consent.
2. Buyer shall not be liable for the payment of any federal, state or local
taxes which may be applicable to the materials, goods or services covered
by this order unless the same shall have been separately itemized and set
forth in Seller's quotation.
3. Seller warrants and represents that the prices for the goods and materials
set forth herein does not exceed the net price now charged by Seller to any
other customer purchasing the same items in like or similar quantities, and
agrees that if at any time during the pendency of this order, lower net
prices are quoted to any other person for similar goods and materials, such
lower net prices shall be from that time substituted for the prices
contained herein.
4. (a) Seller warrants and represents that the goods furnished hereunder
shall be of the quantity, quality, description and specifications set
forth herein and free of defects in design, workmanship and materials.
(b) All such goods and materials shall be received subject to Buyer's
inspection and approval. Payment for the goods and materials shall
not constitute acceptance thereof.
(c) Seller agrees to promptly repair or replace any goods and materials
found to be defective in design, workmanship or material or not in
conformity with the specification therefor. Buyer may return any non-
conforming goods or materials at Seller's expense.
(d) Goods delivered in excess of the quantity specified herein may be
refused and returned to Seller at its expense.
(e) Buyer may cancel any portion of this order if shipment is not timely
made as specified.
(f) Seller warrants that the sale or use of the articles or materials
covered by this order, either alone or in combination with any other
articles or materials with which Seller intends or has advised or
advertised that they may be used, will not constitute an infringement
or contributory infringement of any patents or copyrights in any
country, and Seller hereby licenses Daisy Manufacturing Company, Inc.
and its customers under all of Seller's patents or
-11-
trademarks or copyrights to use and sell the articles or materials
covered by this order, alone or in any combination for which the
materials may be used.
5. Seller covenants and agrees to hold harmless, defend, indemnify and keep
indemnified, the Buyer, its affiliated and Subsidiary companies,
successors, and assigns, customers and users of its products of and from
any and all action or actions, loss, claims, demands, expenses, fees and
charges, costs and damages of any person whomsoever, arising out of or
caused by any breach of warranties or violation of the terms and conditions
hereof.
6. The representations and warranties of the Seller and the remedies of the
Buyer for breach thereof set forth herein shall not be construed to limit
or exclude any other warranties or remedies provided by law.
7. The warranties herein shall run to the Buyer, its affiliated and subsidiary
companies, successors, assigns and its customers and the users of the goods
and materials involved.
8. Seller shall bear the sole responsibility for any materials furnished to it
by Buyer in connection with this order.
9. Seller shall not assign any portion of this order without Buyer's written
consent. Buyer's consent shall not release Seller from its obligation and
liabilities hereunder.
10. Any terms herein to the contrary notwithstanding, neither party shall be
liable for delays or defaults due to force majeure, acts of governmental
authority or public enemy, war, strikes and labor troubles, freight
embargoes or any other causes or contingencies beyond its control,
provided, however, that Buyer may cancel any portion of this order if
shipment is not timely made as specified hereunder.
11. This order is subject to and Seller shall comply with all applicable
federal, state and local laws and regulations, including the requirements
of the Fair Labor Standards Act of 1938, as amended and including, for
orders (or contracts) not exempt under Section 204 of Executive Order
11246, as amended by Executive Order 11375, the provisions of paragraphs
(1) through (7) of Section 202 thereof, which provisions are incorporated
herein by reference. Acceptance of this order on the part of the Seller
shall constitute its certification of full compliance with such laws and
regulations.
12. The terms of this order supersede any prior dealings or negotiations of the
parties and contain the entire agreement between them, and no amendment or
modification thereof shall be valid or binding upon the Buyer unless
contained in a written instrument signed by its authorized representative,
provided, however, that where this purchase order form is used in
connection with purchase release under formal written contracts, the
contract provisions shall prevail if inconsistent with the within terms;
and provided, further, that in the event this purchase order involves a
government contract the terms thereof shall
-12-
be superseded by attachment of form entitled "Standard Terms and Conditions
For Fixed Price Purchase Orders," which form upon attachment shall become
part of the purchase order.
13. Daisy Manufacturing Company, Inc. is a Federal Contractor subject to
Section 402 of the Vietnam Era Veterans Readjustment Assistance Act of 1974
and Section 503 of the Rehabilitation Act of 1973 and as such vendors
[ ]are subject to these sections.
-13-
Schedule D
----------
Pricing/Quantities:
--------------------
A. Single Tone:
0 - 50 MM $21.00/M
50 - 100 MM $20.00/M
100+ $19.25/M
(after the Distributor has purchased 50 M paintballs, then
the price for the original 50 M will be calculated at
$20.00/M and credits issued forthwith. After the Distributor
has purchased 100 M paintballs, then the price of the
original 100 M will be calculated at $19.25/M and credits
issued forthwith).
B. Two Tone:
0 - 00 XX x00.00/X
00 - 000 XX $20.50/M
100+ $19.75/M
(after the Distributor has purchased 50 M paintballs, then
the price for the original 50 M will be calculated at
$20.50/M and credits issued forthwith. After the Distributor
has purchased 100 M paintballs, then the price of the
original 100 M will be calculated at $19.75/M and credits
issued forthwith).
NOTE: M = Thousand
-14-
