TRANSLATION FOR CONVENIENCE ONLY - NOT LEGALLY BINDING
EXHIBIT
10.17
TRANSLATION
FOR CONVENIENCE ONLY - NOT LEGALLY BINDING
[TRANSLATION]
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AGREEMENT
FOR THE MANUFACTURE OF
SECURED SPRING WATER ICE CUBES AND BOTTLED
WATER
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BETWEEN:
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WATER
BANK OF AMERICA INC.,
a
corporation legally incorporated pursuant to the Canada
Business Corporations Act,
with its registered office at 0 Xxxxx Xxxxx-Xxxxx, Xxxxxxxx, Xxxxxx
X0X 0X0, duly represented for the purposes hereof by Xx. Xxxx
Xxxx Xxxxxxxxx, authorized to act for the purposes hereof as declared
by
him;
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hereinafter
referred to as “WBOA”
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AND:
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4287762
CANADA INC.,
a
corporation legally incorporated pursuant to the Canada
Business Corporations Act,
with its registered office at 12,271 Xxxxx 00, Xxxxxxx Xxxxxxxxx,
Xxx Xxxxxxxxx, Xxxxxx X0X 0X0, duly represented by
Xx. Xxxxx St-Onge, authorized to act for the purposes hereof as
declared by him;
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hereinafter
referred to as “CANADA INC.”
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AND:
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ANTIROUILLE
MÉTROPOLITAIN CANADA LTÉE,
a
corporation legally incorporated pursuant to the Canada
Business Corporations Act,
with its registered office at 0000 Xxxxxxx Xxxx., Xxxxx-Xxxxxxxx, Xxxxxx,
duly represented by Xx. Xxxxx St-Onge, authorized to act for the
purposes hereof as declared by him;
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hereinafter
referred to as as the “INTERVENER”
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WHEREAS
a
promise to sell was executed on January 26, 2006, between WBOA and
Bruno St-Onge, the latter having designated the INTERVENER as the
purchaser;
WHEREAS
said
promise to sell stipulates that the sale of the shares of 4287762 CANADA INC.,
which exploits a spring located in New Brunswick (hereinafter referred to
as the “Spring”), is conditional upon the parties having agreed to an agreement
for the supply and manufacture of secured spring water ice cubes;
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WHEREAS
the
Spring has an annual catchment capacity of approximately ONE BILLION SIX HUNDRED
FORTY MILLION (1,640,000,000) litres of water;
WHEREAS
the
parties hereby wish to enter into a private agreement whereby CANADA INC. will
grant to WBOA water rights and will undertake to manufacture secured spring
water ice cubes exclusively for WBOA, as well as to supply non-exclusively,
bottled water in various formats (hereinafter collectively referred to as the
“Products”);
THE
PARTIES AGREE AS FOLLOWS:
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1.
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PREAMBLE
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1.1
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The
preamble is an integral part hereof.
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2.1
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Production
Unit
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Upon
the
execution hereof, CANADA INC. undertakes to purchase a production unit for
the
manufacturing of secured spring water ice cubes, the whole in accordance with
the specifications provided by WBOA (hereinafter referred to as the “Unit”).
With respect thereto, CANADA INC. undertakes to pay a maximum amount of SIX
HUNDRED THOUSAND DOLLARS CANADIAN ($600,000.00 CDN) for the purpose of
purchasing the Unit and installating same in its premises within approximately
seven (7) months following the execution of this agreement, the whole subject
to
the suppliers. It is understood that said amount of SIX HUNDRED THOUSAND DOLLARS
CANADIAN ($600,000.00 CDN) includes the costs of purchase, transport,
installation, training and start of production.
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2.2
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Maintenance
and Operation of the Unit
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It
is
understood that CANADA INC. shall be fully responsible for any and all costs
relating to the maintenance and operation of the Unit. Without limiting the
generality of the preceding, CANADA INC. shall bear and assume all costs
relating to the ongoing maintenance of the Unit, the supplying of any power
sources required for the operation of the Unit (electricity, compressed air,
etc.), the purchase of any parts and products for maintenance, as well as oil,
grease and detergent, all deemed edible, as well as any spare parts required
for
the ongoing operation of the Unit.
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2.3
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Exclusivity
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CANADA
INC. undertakes to hand over, on an exclusive basis, all production capacity
generated by the Unit and undertakes to maintain the Unit in proper working
order so as to respect the projected production planning as determined by the
parties.
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On
the
other hand, WBOA undertakes not to sign any contracts for the manufacture of
secured spring water ice cubes in North America, with the exception of the
events provided for in Section 2.5 hereunder.
Notwithstanding
the above paragraph, it is expressly understood that WBOA shall be allowed
to
obtain its supply from any other source if one or any of the following
conditions should arise:
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(i)
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if
the spring water supplied by CANADA INC. does not meet regulatory
and
legislative norms in Canada and the United States, and CANADA INC.
has not
remedied such situation within sixty (60) days following the delivery
of a
written notice to this effect;
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(ii)
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if,
as a result of transportation and customs costs, the price(s) charged
by
CANADA INC. for secured spring water ice cubes and/or bottles of
water is
(are) more than 20% higher than the price(s) offered by a competitive
supplier and if CANADA INC. refuses to lower its costs accordingly
so that
the offered price(s), including transportation and customs costs,
is (are)
identical to the one (those) offered by the competitive
supplier;
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(iii)
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if
CANADA INC. cannot fulfill the orders as provided by WBOA for a Period,
as
defined in Section 2.4 hereunder, for any reasons
whatsoever;
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Moreover,
the parties acknowledge and represent that none of the provisions in this
paragraph shall be interpreted as preventing WBOA from purchasing and/or
manufacturing secured spring water ice cubes made with treated water in the
United States. With respect to Canada, CANADA INC. shall have a right of first
refusal with respect to the manufacturing of secured spring water ice cubes
made
from treated water.
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2.4
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Industrial
Planning and Orders
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The
parties will work together to establish a projected production plan for the
Products based on a three (3) month time frame (hereinafter referred to as
as
the “Period”). Throughout the execution of the present agreement, such projected
planning, which is adjustable, will be updated every month during the term
of
this agreement.
Subject
to delivery estimates and manufacturing delays, WBOA will place an order with
CANADA INC. stipulating a schedule for delivery and, as the case may be, any
overbilling with respect to handling will be agreed upon between the parties.
With
respect to all orders of Products, WBOA will pay in cash or will provide CANADA
INC. with a bank or payment guarantee.
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2.5
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Stocks
and Finished Products
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CANADA
INC. will be responsible for providing a sufficient inventory of consumables
required for the processing of secured spring water ice cubes (superior and
inferior grade PET film, cardboard, pallets, self-adhesive stickers, printer
ink, etc.). CANADA INC. will also provide the water necessary for the production
of the Products, the whole as stipulated in the Agreement for Supply of Spring
Water entered into on this day between the parties.
CANADA
INC. warrants to WBOA that the packaging and consumables, to the knowledge
of
CANADA INC., meet the security and food hygiene norms in effect in Canada and
the United States and undertakes, with respect thereto, to take all necessary
measures in the event of any amendment thereto in order to modify the production
of the Products accordingly.
CANADA
INC. will assume all handling costs associated with the production of the
Products, from the loading of the consumables to the supplying of the Unit
and
up to the loading of the Products, the whole in accordance with accepted
industry practices.
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2.6
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Inspection
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Provided
that it has given CANADA INC. sufficient advance notice, WBOA may proceed with
an inspection of the Unit; such inspections shall not disturb CANADA INC.’s
operations.
Moreover,
CANADA INC. may, at its discretion, ask WBOA to approve samples of the Products
prior to delivery.
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2.7
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Contract
Guarantee
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CANADA
INC. guarantees WBOA that any Products found to be defective will be replaced
as
soon as possible after such Products are returned and the results of the
analysis are obtained by the plant’s internal house laboratory.
With
the
exclusion of any serial defects, this guarantee covers manufacturing defects
and
defects in the materials.
In
the
event that identical defects appear in series, the parties, by common accord,
will take all necessary measures (as an example of necessary measures:
correction of settings, design modifications, etc.) to remedy the situation.
If
this situation is entirely attributable to CANADA INC., the latter will replace
any defective Products at its expense.
This
guarantee does not cover defects resulting from normal wear and tear, a faulty
installation or a modification of the Products not formally accepted by CANADA
INC.
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This
guarantee will expire when and where the transporter’s responsibility begins,
except if services of the latter have been retained by CANADA INC.
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2.8
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Price
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In
addition to the price of water, which is provided for in the Agreement for
Supply of Spring Water entered into between the parties on this day, the parties
agree that for the first five (5) years, the base price for the production
of
secured spring water ice cubes will be determined based on the method used
according to the document annexed hereto as Schedule “A”. For all
subsequent years, the parties will agree in good faith on a price for each
Period. With respect to other Products, the parties will agree in good faith
on
a production price at the beginning of each Period.
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2.9
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“ICE
ROCKS” Trademark
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WBOA
undertakes to never associate the “ICE ROCKS” trademark with products containing
treated water (namely bottled treated water and secured ice cubes made with
treated water).
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3.
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TERM
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This
agreement will have a term of twenty (20) years starting as of the date of
execution.
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4.
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DEFAULT
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4.1
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Termination
by WBOA
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The
following events are deemed to be events of default and will entitle WBOA to
terminate this agreement upon giving CANADA INC. a sixty (60) day written notice
to this effect if:
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(i)
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CANADA
INC. fails to honour one or several clauses of the agreement or of
any
other agreement in effect between the
parties;
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(ii)
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CANADA
INC. is declared bankrupt or insolvent by a competent court, makes
an
assignment of its business or of all or a substantial portion of
its
assets for the benefit of its creditors in
general;
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(iii)
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other
than pursuant to an internal reorganisation, a merger or an acquisition,
CANADA INC. proceeds with the liquidation of its business or of all
or a
substantial portion of its assets, or with the dissolution of its
corporate entity;
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(iv)
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CANADA
INC. avails itself of a law relating to the protection of insolvents
or a
law relating to restructuring, arrangements, liquidation or any other
similar law relating to the rights of creditors in
general;
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(v)
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CANADA
INC. files a proposal pursuant to the Bankruptcy
and Insolvency Act
(Canada) or does not contest the filing by a third party of a petition
in
bankruptcy pursuant to such act;
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(vi)
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CANADA
INC. requests the appointment of a liquidator or a receiver to manage
or
liquidate its business or all or a substantial portion of its assets
or
does not contest the filing by a third party of a petition regarding
such
appointment;
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(vii)
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the
business of CANADA INC. or all or a substantial portion of its assets
are
subject to seizure by a creditor or are put in receivership or a
liquidator is appointed with respect thereto to manage or liquidate
its
business or all or a substantial portion of its assets, unless such
seizure, receivership or appointment of a liquidator is cancelled
within
fifteen (15) days;
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(viii)
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after
having negotiated in good faith, the parties cannot agree upon a
price
according to Section 2.8 of this
agreement;
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(ix)
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without
limiting the preceding, CANADA INC. is in breach of one or any of
its
obligations pursuant to this
agreement.
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4.2
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Termination
by CANADA INC.
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The
following events are deemed to be events of default and will entitle CANADA
INC.
to terminate this agreement upon giving WBOA a sixty (60) day written notice
to
this effect if:
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(i)
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WBOA
fails to honour one or several clauses of the agreement or of any
other
agreement in effect between the
parties;
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(ii)
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WBOA
is declared bankrupt or insolvent by a competent court, makes an
assignment of its business or of all or a substantial portion of
its
assets for the benefit of its creditors in
general;
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(iii)
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other
than pursuant to an internal reorganisation, a merger or an acquisition,
WBOA proceeds with the liquidation of its business or of all or a
substantial portion of its assets or with the dissolution of its
corporate
entity;
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(iv)
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WBOA
avails itself of a law relating to the protection of insolvents or
a law
relating to restructuring, arrangements and liquidation, or any other
similar law relating to the rights of creditors in
general;
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(v)
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WBOA
files a proposal pursuant to the Bankruptcy
and Insolvency Act
(Canada) or does not contest the filing by a third party of a petition
in
bankruptcy pursuant to such act;
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(vi)
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WBOA
requests the appointment of a liquidator or a receiver to manage
or
liquidate its business or all or a substantial portion of its assets
or
does not contest the filing by a third party of a petition regarding
such
appointment;
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(vii)
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the
business of WBOA or all or a substantial portion of its assets are
subject
to seizure by a creditor or are put in receivership or a liquidator
is
appointed with respect thereto to manage or liquidate its business
or all
or a substantial portion of its assets, unless such seizure, receivership
or appointment of a liquidator is cancelled within fifteen (15)
days;
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(viii)
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after
having negotiated in good faith, the parties cannot agree upon a
price
according to Section 2.8 of this
agreement;
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(ix)
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without
limiting the preceding, WBOA is in breach of one or any of its obligations
pursuant to this agreement;
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(x)
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in
the event that, according to Section 5.2 (ix) of the Agreement for
Supply
of Spring Water, WBOA does not purchase from CANADA
INC.:
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·
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for
the first year, an amount of water totaling FIVE HUNDRED THOUSAND
DOLLARS
CANADIAN ($500,000.00 CDN) following the purchase and the installation
of
the Unit as defined in Section 2.1 of the Agreement for the
Manufacture of Secured Spring Water Ice Cubes and Bottled
Water;
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for
the second year, an amount of water totaling ONE MILLION DOLLARS
CANADIAN
($1,000,000.00 CDN);
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·
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for
the third year, an amount of water totaling TWO MILLION DOLLARS CANADIAN
($2,000,000.00 CDN);
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·
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for
the fourth year, an amount of water totaling FOUR MILLION DOLLARS
CANADIAN
($4,000,000.00 CDN);
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·
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for
the remainder of the term of the agreement, an amount of water totaling
EIGHT MILLION DOLLARS CANADIAN ($8,000,000.00 CDN) per
year;
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The
parties acknowledge and represent, however, that any quantity of water purchased
by a purchaser with whom CANADA INC. is presently negotiating with through
the
agency of Xx. Xxxxxxx Xxxxxxxx Xx., shall, for the purposes of this section
(namely the minimum quantity to be purchased by WBOA) be considered as having
been purchased by WBOA.
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(xi)
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WBOA
was not listed on a recognized stock exchange on or before
February 11, 2008.
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5.
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BUY-BACK
OF THE UNIT
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5.1
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In
the event that either of the parties were to terminate the present
agreement for any reason whatsoever, the whole according to
Sections 4.1 and 4.2, WBOA will buy the Unit back from CANADA INC. at
the following price, in addition to the cost of any inventory or
consumable raw materials in stock:
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·
during
the first five years:
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100%
of the purchase price;
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·
during the sixth to the tenth year:
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80%
of the purchase price;
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·
during
the eleventh to the fifteenth year:
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60%
of the purchase price;
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·
during
the sixteenth to the twentieth year:
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40%
of the purchase price;
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Notwithstanding
the preceding, WBOA will pay CANADA INC. an additional amount of FIVE HUNDRED
THOUSAND DOLLARS ($500,000.00) in the event that the present agreement is
terminated for the reasons provided for in Sections 4.2 (i), (ix) and (x).
The
payment of the Unit, and as the case may be of the additional amount, will
be
completed no later than three (3) months after the termination of the agreement,
failing which the rights of WBOA to purchase the Unit pursuant hereto will
be
extinguished for all legal purposes. In such event, Section 6.1 will be
non-applicable.
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6.
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NON-COMPETITION
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6.1
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During
the entire term of this agreement and for a period of five (5) years
from
its expiry for any reason whatsoever, CANADA INC. undertakes to not
manufacture, distribute or sell, directly or indirectly, secured
spring
water ice cubes similar or identical to those offered by WBOA.
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6.2
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Notwithstanding
Section 6.1 hereinabove, CANADA INC. may manufacture, distribute or
sell, directly or indirectly, secured spring water ice cubes similar
or
identical to those offered by WBOA in the following
cases:
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(i)
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if,
following the termination of this agreement, on the grounds provided
for
herein, WBOA does not pay CANADA INC. for the Unit within the time
limit
provided for in Section 5.1 hereinabove.
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7.
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CONFIDENTIALITY
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7.1
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During
the entire term of this agreement and for a period of five (5) years
following its expiry for any reason whatsoever, the parties undertake
to
take all necessary measures to ensure the confidentiality of any
information of this nature that are communicated to them on a confidential
basis by the other party.
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8.
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GENERAL
PROVISIONS
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8.1
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Severability
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Except
for an express provision hereof to the contrary effect, each section, term
and
provision of this agreement, in whole or in part, is deemed to be independent
and if such provision of this agreement is, for any reason whatsoever, deemed
invalid, or contrary to or in conflict with an existing or eventual law or
regulation as a result of a final decision not subject to recourse rendered
by a
court, an agency or an arbitration tribunal in a jurisdiction having authority
regarding proceedings to which WBOA and CANADA INC. are a party, said decision
or judgment will not be prejudicial to the other portions of this agreement
which will remain moreover intelligible and will continue to be in full force
and effect and will bind the parties to this agreement and will not have any
effect on the application thereof.
However,
the portion deemed invalid will be deemed to no longer be part of this agreement
as of the date of the expiry of the delay for the appeal.
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8.2
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Notice
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Any
notice, consent, approval, declaration, authorization, document or any other
communication required or permitted pursuant to the terms and conditions of
this
agreement shall be made or given in writing and shall be delivered in person
or
by messenger to the parties at their respective addresses as set forth
hereinabove with the exception of CANADA INC. whose address for service shall
be
0000 Xxxxxxx Xxxx., Xxxxx-Xxxxxxxx, Xxxxxx, X0X 0X0, or at any other
address or addresses indicated by the interested party by means of a written
notice to the other party hereto as provided for hereinabove.
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8.3
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Time
is of the Essence
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The
time
limits prescribed herein are an essential part of this agreement. Time limits
shall be calculated in accordance with the provisions of the Code of Civil
Procedure of Quebec.
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8.4
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Headings
and Numbering
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The
headings and numbering of the provisions set forth in this agreement or in
any
schedules hereto are inserted solely for the convenience of the reader and
will
in no way have any effect on the interpretation thereof.
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8.5
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Non-waiver
of Rights
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The
waiver by WBOA or by CANADA INC., as the case may be, to prevail itself of
any
infringement of a term or condition of this agreement shall not be deemed as
a
waiver to invoke any subsequent infringement of such term or condition or any
other term or condition hereof. The acceptance by CANADA INC. thereafter of
an
amount payable, in particular by WBOA, pursuant to this agreement shall not
be
deemed as a waiver to invoke any other prior infringement of any term or
condition hereof, with the exception of the omission to pay the specified amount
as agreed upon, whether or not CANADA INC. had any knowledge of this prior
infringement when it accepted the said amount. Any waiver of any term or
condition of this agreement by WBOA or CANADA INC. shall be made in writing.
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8.6
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Priority
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This
agreement and the documents mentioned therein constitute the entire agreement
entered into between WBOA and CANADA INC. regarding the contents of this
agreement and they cancel and supersede all prior agreements. Each of the
parties acknowledges that no other declarations were made and that it has not
induced the other party to execute this agreement, and that there are no
declarations, incentives, promises or agreements not formulated in this
agreement, verbal or otherwise, between the parties that is otherwise binding,
specifically with respect to this agreement. Only the amendments, corrections
or
variations made to this agreement and validated in writing shall be binding
upon
any of the parties.
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8.7
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Cumulative
Rights and Recourses
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The
rights and recourses of the parties as provided for in this agreement are in
addition to and not in lieu of any of the other rights and recourses pursuant
hereto or with respect to any other agreement between the parties, in right
or
in equity.
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8.8
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Heirs,
Successors and Assigns
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This
agreement enures to the benefit of the parties and is binding upon them and
upon
their heirs, executors, administrators, successors, beneficiaries, trustees
and
receivers as well as all their respective legal representatives and assigns.
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8.9
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Governing
Law
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This
agreement is governed by the laws of Quebec applicable thereto.
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8.10
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Choice
of Domicile
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The
parties hereby agree that any legal proceedings or quasi-legal proceedings
instituted by any of the parties with respect to this agreement shall be brought
before the competent authority in the judicial district chosen by the applicant,
whether in Trois-Rivières or in Montreal, to the exclusion of any other judicial
district.
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IN
WITNESS WHEREOF,
the
parties hereto signed in Trois-Rivières on February 11, 2006.
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WATER
BANK OF AMERICA INC.
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(signed)
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By:
Xxxx Xxxx Xxxxxxxxx
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4287762
CANADA INC.
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Document
annexed to deed no. 13737 of the undersigned notary, after having
been acknowledged as authentic and signed for identification by the
interested parties before the undersigned notary
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[Various
signatures]
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(signed)
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By:
Bruno St-Onge
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ANTIROUILLE
METROPOLITAIN CANADA LTÉE
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(signed)
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By:
Bruno St-Onge
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TRUE
COPY
(signed
by the notary)
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