Exhibit 10.1
DISTRIBUTOR AGREEMENT: Supplier and Distributor
THIS AGREEMENT is made the 24h day of February 2000
BETWEEN:
SPECTRUM INTERNATIONAL INC., a company duly Incorporated pursuant to
the laws of the State of Delaware in the United States of America,
under number 9748501, having its registered and records offices
located at #1 Xxxxxx Square, 00xx Xxxxx, 00xx & Xxxxx Xxxxxx,
Xxxxxxxxxx Xxxxxx of Newcastle, 19801
(herein the "Supplier") OF THE FIRST PART
AND:
CANAFRA MANAGEMENT & CONSULTING SERVICES, a Corporation duly
incorporated pursuant to the laws of Canada, having its registered
and records office located at 2100 - 0000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxxx, X0X 0X0
(herein the "Distributor"). OF THE SECOND PART
WHEREAS THE PARTIES AGREED as follows:
1. Interpretation
(1) In this agreement unless the context otherwise requires, the singular
shall include the plural and vice versa and the following expressions
shall have the following meanings:
(a) "Approved Dealers" means Entities appointed by the Distributor with
the approval of the Supplier pursuant to paragraphs 4(2) and 4(3)
hereof
(b) "Commencing Date" means the 24~' day of February 2000;
(c) "Entity" means any person or body of persons whether corporate or
unincorporated (including a partnership);
(d) "Associate Company" means any Entity in which the Supplier owns or
controls, whether directly or indirectly, 50% or more of the voting
rights whereby control over the direction and management of such
Entity is exercised;
(e) "Official Distributor" means an Entity authorized by the Supplier or
an Associate Company to undertake the wholesale or retail
distribution or both of Products;
(f) "Product" or "Products" means tire sealant supplied by a Supplying
Company to the Distributor;
(g) "Supply" means the fact or action of disposal by way of sale;
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(h) "Supplying Company" means the Supplier or an Associate Company;
(i) "Term" shall be a period of five (5) years from the Commencing Date
as referred to in paragraph 13(2):
(j) "Territory" means the Territory or territories described in Schedule
"B" hereto, together with such other territories as may from time to
time be included within-the meaning of that expression by agreement
in writing between the Supplier and Distributor.
(2) The headings in this agreement are for convenience only and shall not
affect its construction.
2. Appointment and Grant of Rights
(1) Subject to the provisions herein and for the duration of the Term this
agreement and any extensions thereof.
(a) the Supplier appoints the Distributor as its Official Distributor
for the Territory and the Distributor accepts such appointment;
(b) the Supplier grants to the Distributor the exclusive right to Supply
the Products by direct sales and to Approved Dealers and to other
Entities within the Territory.
(2) The Parties hereto agree that, except with the prior written consent of
the Supplier:
(a) the Distributor will not Supply any of the Products outside the
Territory;
(b) the Distributor may supply the Products to any Entity within the
Territory for use outside the Territory.
3. Exclusivity
(1) The Supplier agrees and undertakes to procure that for the duration of
this agreement neither it nor any Associate Company will appoint another
Official Distributor for the Territory.
(2) The Distributor agrees that for the duration of this agreement
(a) it will purchase the Products only from the Supplier; and
(b) it will not and will ensure that its Approved Dealers will not
without the prior written consent of the Supplier:
(i) Supply or be directly or Indirectly engaged or interested in
Supplying any competing items; or
(ii) hold any competing items in stock; or
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(iii) solicit or be directly engaged or interested in soliciting
orders for any competing items.
(3) The Supplier agrees not to sell or permit any Associate Company to sell
the Products to anyone other than the Distributor in the Territory except
as follows:
(a) to any Entity in the Territory for resale outside the Territory;
(b) to any Entity is, requiring the Products for use in connection with
its operation in the Territory where that Entity is in the opinion
of the Supplier, part of a multinational group whose main purchasing
office for the Products is outside the Territory.
4. Distributor Organization
(1) The Distributor agrees to establish and maintain a level of representation
for the Products In the Territory satisfactory to the Supplier and for
this purpose to provide without expense to the Supplier or Associate
Companies or Supplying Companies such reasonable numbers of persons who
have been adequately trained in the marketing of the Products as shall in
the Supplier's opinion be adequate for the Territory.
(2) For the purpose of enabling the Distributor to discharge its obligations
under this agreement the Distributor shall be entitled to appoint, by
agreements in writing, Approved Dealers within the Territory to ensure
full and proper representation throughout the Territory for the supply and
servicing of the Products.
(3) Such appointments by the Distributor of Approved Dealers within the
Territory shall be subject to the prior written approval of the Supplier
and shall be made on such terms as in the opinion of the Supplier properly
protect the goodwill attaching to the Suppliers Product.
5. Marketing Responsibilities
(1) The Distributor agrees to promote in every reasonable manner at its own
expense the sale of the Products throughout the Territory.
(2) The Distributor and the supplier will upon each anniversary of the
agreement set sales target for the following year based upon the size of
the market, past performance satisfactory levels of product representation
and reasonable anticipated penetration rates into the market as is being
defined above.
(3) The first years sales target will be set at one 40' container.
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6. Inspections and Reports
(1) The Distributor agrees:
(a) to provide the Supplier with such forms, reports, estimates and
other information regarding stocks, sales, future requirements,
financial results and other matters relating to the Products as the
Supplier may request from time to time.
(2) The Distributor further agrees to report to the Supplier in writing:
(a) any actual or anticipated change in its or any of its Approved
Dealers' constitution or management or control; and
(b) any handling of competing items by any of Its Approved Dealers or
by any Entity under the same ultimate direction, management or
control of the Distributor or any of its Approved Dealers.
7. Ordering Procedures
(1) All orders for Products required by the Distributor shall be dispatched by
the Distributor to the Supplier or such other Associate Company as the
Supplier may from time to time designate for the purpose. All
correspondence in connection with such orders is to be conducted with that
company.
(2) Each order addressed to a Supplying Company may be accepted or rejected
for reasonable cause by that or any other Supplying Company. No order
placed will be deemed accepted until a formal acceptance has been
dispatched to the Distributor or the Supplying Company, which is accepting
the order. Neither the Supplier nor any Supplying Company is under any
obligation to accept all or any orders tendered by the Distributor.
8. Conditions of Sale and Prices
(1) Each order placed by the Distributor for the purchase of the Products and
accepted by a Supplying Company will (whether or not expressly stated in
the order or acceptance) be deemed to have been so accepted upon and
subject to the terms and conditions of this agreement as well as the
standard terms and conditions of sale (including warranty) of the
Supplying Company for purchases by Official Distributors current at the
time of acceptance of such order as the same are from time to time
notified to the Distributor. As at the Commencing Date the terms and
conditions of sale (including warranty) applying to purchases by Official
Distributors from Supplying Companies are as set out in the attached
Schedule "A".
(2) Payment by the Distributor or its Approved Dealers shall include all
fiscal charges and costs involved in transferring the full amounts due
and, unless otherwise agreed, shall be effected by irrevocable letters of
credit drawn in terms approved by the Supplying Company prior to the date
of shipment and confirmed in the country of residence of that Supplying
Company.
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(3) The Distributor undertakes that it will make all payments to Supplying
Companies and Associate Companies as and when such payments are due and
duly perform all its other legal obligations to such companies.
(4) Wherever reasonably possible, the Distributor shall sell or dispose of the
Products In the Territory at such prices as the Supplier may reasonably
suggest from time to time; provided it is hereby agreed that
notwithstanding the foregoing, the Distributor is under no obligation to
accept such suggested resale price and the Distributor may sell the
Products, at any reasonable price it chooses, having regard to its concern
to develop and continually increase sales and to make a profit. If the
Distributor does not sell or dispose of the Products at the prices
suggested by the Supplier, the Distributor will not suffer in any way in
its business relations with the Supplier or any other person over whom the
Supplier can otherwise influence or control.
9. Changes In Specification
(1) The Supplier may make modifications or make improvements to the Products
at any time but shall be under no obligation to apply the same to any
Products previously purchased by the Distributor.
(2) The Distributor agrees that, except as approved in writing by the
Supplier, it will not and will ensure that its Approved Dealers will not
make any modifications to, or in any way vary, the specification of
Products supplied to it by Supplying Companies.
10. Inventions
(1) The Distributor shall promptly disclose to the Supplier all particulars of
any Improvement or further Invention applicable to any of the Products
which is made or discovered by the Distributor or any of its employees or
which comes to the Distributor's knowledge (whether or not the same be
patented or patentable).
(2) If the Supplier so desires, the Distributor shall use its best efforts to
procure that the Supplier or any Associate Company designated by it, is
enabled to acquire exclusive rights to the improvement or further
invention upon terms to be mutually agreed between the owner thereof and
the Supplier.
11. Relationship Between Parties
(1) The Distributor agrees that it is not and shall not represent itself to be
an agent of the Supplier or any Associate Company or Supplying Company for
any purpose and shall not incur assume or create any obligations nor make
any promise or representation on behalf of the same, and further agrees to
ensure that its Approved Dealers do not incur any such obligations or make
any such promises or representations.
(2) This agreement does not in any way create an employer/employee
relationship between the Supplier or any Associate Company or Supplying
Company and the Distributor or the Distributors employees or both.
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(3) The Distributor shall be solely responsible for the discharge of its
obligations and liabilities to third parties and shall have no right to
indemnity or contribution from the Supplier or any Associate Company or
Supplying Company in respect thereof except in so far as expressly
provided in the relevant Supplying Company's warranty as from time to time
current
12. Assignment
(1) Subject to paragraph 15(1) hereof, this agreement shall be binding upon
and enure to the benefit of the respective parties hereto, their heirs or
legal representatives, successors and permitted assignees, but it is
personal to the Distributor who may not assign the whole or any part of it
without the Supplier's prior written consent.
(2) The Supplier shall be entitled without restriction to assign the whole or
any part of this agreement to any Associate Company.
13. Period of Agreement
(1) This agreement shall be deemed to have come into effect on the Commencing
Date.
(2) Unless sooner terminated under the provisions of paragraph 15 hereof, this
agreement shall remain in force for an initial period of five (5) years
from the Commencing Date.
(3) Upon the Distributor giving to the Supplier notice of its intention to do
so no later than six (6) months prior to the expiration of the Term, and
provided that the Distributor has complied with all of the terms of this
Agreement and is in compliance herewith at the expiration of the Term, the
Distributor shall have the option to extend the Term of this Agreement for
a further period of five (5) years commencing upon the expiration of the
Term (the "Option Term") subject to the Supplier and Distributor coming to
an agreement prior to the expiration of the Term on the minimum purchase
orders and sales objectives to be made and obtained by the Distributor
during the period of the Option Term.
14. Termination
(1) This agreement shall immediately and automatically terminate without
notice or other act
(a) upon the attempted assignment by the Distributor of this agreement
or any of its rights or obligations hereunder without the previous
written consent of the Supplier being given other than that
accounted for in (12)(2);
(b) upon the commencement or happening of any occurrence connected with
insolvency, bankruptcy, dissolution or liquidation of either party
to this agreement;
(c) appointment of a receiver or trustee for a party, or
(d) execution of an assignment for the benefit of creditors by a party,
provided that the petition, appointment or assignment is not vacated
or nullified within fifteen (15) days of that event.
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(e) upon the death of the Distributor if an individual.
(2) This agreement may be terminated immediately by notice in writing given by
one party to the other upon the violation by that other party of any
provision of this agreement.
(3) This agreement may be terminated immediately by notice in writing given to
the Distributor by the Supplier:
(a) in the event of the failure by the ultimate holding company or
controlling shareholder of the Distributor to complete a guarantee
agreement; or
(b) In the event of a breach by the ultimate holding company or
controlling shareholder of the Distributor of any of its obligations
contained in any guarantee agreement; or
(c) If in the opinion of the Supplier the Distributor has ceased or
failed to provide full and proper representation of the Products in
the Territory or has failed to discontinue (at the Supplier's
request) any line of goods which the Supplier considers might
interfere with the proper distribution of the Products in the
Territory; or
(d) If any change occurs in the constitution, management, control or the
financial or other circumstances of the Distributor which in the
opinion of the Supplier, is materially detrimental to the interests
of the Supplier, and in particular, but without limiting the
generality of the foregoing if any interest in the Distributor is
acquired by any Entity engaged in any business which, in the opinion
of the Supplier, is deemed to compete with the business of the
Supplier or any Associate Company.
15. Results of Termination
(1) Upon the termination of this agreement (howsoever occasioned):
(a) all unfulfilled orders for the Products from the Distributor
(including those accepted by Supplying Companies) shall
automatically be canceled; and
(b) all rights granted by the Supplier or an Associate Company to the
Distributor shall immediately be relinquished by the Distributor;
and
(c) the Distributor shall itself and shall ensure that its Approved
Dealers discontinue the use of and thereafter refrain from using on
signs and in stationary and advertising any Supplier's trade names,
designations, and slogans owned or used by the Supplier or Associate
Companies and thereafter take no action that would make it appear to
the public that the Distributor or any of its Approved Dealers is/
are still servicing or Supplying the Products; and
(d) the following conditions shall apply regarding any indebtedness of
the Distributor to the Supplier or to any Associate Company or
Supplying Company:
(i) where this agreement has been terminated for any of the
reasons set out in paragraphs 15(l) and 15(2) and paragraphs
15(3)(a), (b) and (d) all such indebtedness shall become due
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and payable as at the effective date of termination of
agreement
(ii) where this agreement has been terminated for any other
reason all such indebtedness shall immediately become due
and payable in the event of the non-payment on the due date
of any sum due by the Distributor to the Supplier or any
Associate Company or Supplying Company; and
(e) the Distributor shall be permitted to complete any transaction that
have been agreed to if not completing the transaction the
Distributor would be subject to a liability; and
(f) the Distributor shall deliver to the Supplier or to a successor
Official Distributor or other Entity designated by the Supplier, all
price lists, bulletins, manuals, catalogues and other literature and
publications relating to sales and Product information.
(2) The termination of this agreement (however occasioned) shall be without
prejudice to any rights or obligations which shall have accrued prior to
such termination and shall not destroy or diminish the binding force or
effect of any of the provisions of this agreement which are expressly or
by implication provided to come into force upon or continue in force after
such termination.
(3) Neither party shall be liable to the other for any compensation, loss or
damage arising from termination of this agreement.
(4) During any period of notice served by or on the Distributor pursuant to
paragraph 14(2):
(a) the Supplier or any Associate Company or both may appoint another
Official Distributor, accept orders for and sell the Products to
anyone other than the Distributor, and take any other action which
it deems necessary to ensure the continuity of distribution of the
Products in the Territory, and the Distributor shall not be entitled
to any compensation or other remuneration in respect of any action
taken by the Supplier or Associate Companies in accordance with this
paragraph;
(b) the Distributor may not handle competing items for a period of one
year after termination.
16. Product
(1) The Product shall be manufactured in Canada by a Supplying Company.
17. Applicable Law and Arbitration
(1) This agreement shall be governed and interpreted in accordance with the
laws of British Columbia, Canada.
(2) Any and every dispute or difference between the parties concerning the
validity, meaning or effect of this agreement shall be finally settled by
a single arbitrator appointed under the Commercial Arbitration Act of
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British Columbia and the place of arbitration shall be in Vancouver,
British Columbia.
(3) Nothing contained in this paragraph 17 shall prevent the Supplier from
applying to an appropriate court in any part of the Territory or elsewhere
for any injunction or other like remedy to restrain the distributor from
committing any breach or any anticipated breach of this agreement and for
consequential relief.
18. General Provisions
(1) The following general conditions apply to this agreement:
(a) it shall be invalid until signed by duly authorized signatories of
both the parties;
(b) no erasure of or addition to any portion of this agreement except
filling in blank spaces and lines shall be binding upon the parties
unless in writing signed by duly authorized officers of both
parties;
(c) no departure from or waiver of the terms of this agreement shall be
deemed to authorize any prior or subsequent departure or waiver or
require its continuation;
(d) if any provision of this agreement or the application of such
provision shall be hold illegal or unenforceable under any laws of
any jurisdiction applicable to the agreement the remainder of the
agreement or the application of such provision to other persons or
circumstances shall not be affected thereby;
(e) the copy of this agreement held by the Supplier shall govern in the
case of any variation between it and the duplicate held by the
Distributor.
(2) All previous agreements which the Distributor has entered into with the
Supplier or any Associate Company pertaining to the Supply or servicing or
both of the Products are hereby canceled and entirely superseded by this
agreement but without prejudice to any claims for moneys owing by the
Distributor thereunder.
(3) The Distributor hereby waives all rights which It may have under any law
which is effective within the Territory or elsewhere and which provides
for the payment to the Distributor of any commission or compensation or
remuneration to which the Distributor is not expressly entitled under any
provision of this agreement.
19. Severability
(1) If any term of this Agreement is invalid or unenforceable under any
statute, regulation, ordinance, order or other rule of law, that term
shall be deemed modified or deleted, but only to the extent necessary to
comply with the statute, regulation, ordinance, order or rule, and the
remaining provisions of this Agreement shall remain in full force and
effect.
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20. No Implied Waiver
(1) The failure of either party at any time to require performance by the
other party of any provision of this Agreement shall in no way affect the
right to require performance at any time thereafter, nor shall the waiver
of either party of a breach of any provision of this Agreement constitute
a waiver or any succeeding breach of a same or any other provision.
21. Notices
(1) Any notice required or permitted to be given under this agreement shall be
in writing and may be given by any means reasonably calculated to reach
the other party, including, without limiting the generality of the
foregoing, fax transmission or prepaid mail addressed to such party at its
address as herein contained. Such notice if given by fax transmission
shall be deemed to have been received on the day following dispatch
thereof and notice given as aforesaid by prepaid mail shall be deemed to
have been received not later than five (5) days after the mailing thereof
as follows:
To the Supplier:
Spectrum international Inc.
#000 - 00000 - 00xx Xxxxxx,
Xxxxxx, X.X. X0X 0X0 Facsimile:(000) 000-0000
To the Distributor:
Canafra Management & Consulting Services
000 - 0000 Xxxx 0xx Xxxxxx,
Xxxxxxxxx, X. X. X0X 0X0 Facsimile (000) 000-0000
(2) Either party may by notice in writing given as herein provided change its
address for notice hereunder and such address as so changed shall be
deemed to be the address of such party for the purposes of notice
hereunder.
IN WITNESS WHEREOF the parties have set their hands and seals the day, month and
year as first written above.
SPECTRUM INTERNATIONAL INC.
/s/ signature
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CANFRA MANAGEMENT & CONSULTING SERVICES
/s/ signature
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SCHEDULE "A"
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SCHEDULE "B"
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Pursuant to Section 1 (1)(j) of the agreement "Territory" means the following
countries on the Continent of Africa.
Angola Botswana Burkina Faso
Burundi Cameroon Central African Republic
Chad Democratic Republic Republic of the Congo
of the Congo
Cote d'Ivoire Djibouti Eritrea
Ethiopia Gabon The Gambia
Ghana Guinea Guinea - Bissau
Kenya Lesotho Liberia
Madagascar Malawi Mali
Martinique Mauritania Mauritius
Morocco Mozambique Namibia
Niger Nigeria Rwanda
Senegal Seychelles Sierra Leone
South Africa Sudan Swaziland
Tanzania Togo Tunisia
Uganda Western Sahara Zambia
Zimbabwe
