SALES AGREEMENT
Between
CONSOLIDATED COATINGS CORPORATION
0000 Xxxxxxx Xxx
Xxxxx, XX, X0X 0X0, Xxxxxx
Hereinafter referred to as "CCC"
And
Serefex Corporation
0000 Xxxxxxxx Xxxxxx, Xxxxx X
Xxxxxx, Xxxxxxx 00000, XXX
Hereinafter referred to as "SEREFEX"
Where CCC manufactures a product known as MagnaPaint and is desirous of selling
the product in volume in the United States and where Serefex has certain
contacts, personnel, marketing ability, and has developed complementary products
to assist in the sales of MagnaPaint.
1. Agreement:
1.1 Serefex agrees to purchase MagnaPaint at the price and terms as set out in
schedule "A"
1.2 Serefex Agrees to purchase MagnaPaint in the quantities as set out in
Schedule "B"
1.3 Serefex agrees to spend advertising dollars as set out in schedule "C"
1.4 CCC agrees to allow Serefex the exclusive territory of selling MagnaPaint
in the USA as set out in Schedule "D".
2. Termination
2.1 This agreement will be terminated if any of the following conditions are
present.
2.1a The expenditure on Advertising is less than the amount set out in schedule
"C"
2.1b The purchases of MagnaPaint are less than the amount as set out in schedule
"B"
3.0 Termination compensation:
In the event this agreement is Terminated by CCC for any reason listed in
Section 2 above, then Serefex shall be entitled to, for a period of one month
for each month the customer is purchasing MagnaPaint under this agreement, but
in no event not to exceed 1 year from the date of termination, the 12% sales
commission and sales management fee identified in schedule A attached to this
agreement, for any customers covered under Schedule D attached to this agreement
in which Serefex generates sales of MagnaPaint from either by or through its
advertising and promotion campaign expenditures required under section C
attached to this agreement.
4.0 TERM. The term of this agreement shall commence on the date hereof and
shall continue for a period of one (1) year from the date hereof (the initial
term), with automatic renewal for one-year periods in the absence of written
notice of termination given by either party to the other not less that thirty
(30) days prior to the end of the initial term and any anniversary date thereof
subject to the termination clause.
5.0 NOTICES. All notices and other communications hereunder shall be deemed to
have been duly given if they are in writing and have been delivered personally
or have been deposited in the mail for delivery by certified mail, return
receipt requested, or by regular first class mail, postage prepaid. Notice to
Serefex shall be sent to 0000 Xxxxxxxx Xxxxxx, Xxxxx X, Xxxxxx, Xxxxxxx 00000,
XXX. Notice to Consolidated Coatings shall be sent to 0000 Xxxxxxx Xxx, Xxxxx,
XX, X0X 0X0, Xxxxxx. Either party may change the address to which notices to
such party are to be sent by giving written notice of such change to the other
party in accordance with the provisions of this section.
Agreed upon and to become effective on this _______ day of January 2004.
Consolidated Coatings Corporation Serefex Corporation
/s/ per Xxx Xxxxxxxxx /s/ Xxxxx Xxxx
--------------------- --------------
per Xxx Xxxxxxxxx Xxxxx Xxxx
President President
SCHEDULE A
PRICE AND TERMS
Price: $ 9.70 per Gallon,
$16.99 per Gallon
$29.15 per Gallon
$68.03 per 2.5 Gallon Pal
Discount: 12% for sales commissions and sales Management
Net Price: $ 8.54 / gal
$14.95 / gal
$25.65 / gal
$59.87 / 2 gal pail
Terms: Cash or approved Credit
Funds: US$
Price Protection: Price will be held until September 1, 2004 if the Canadian
Dollar ranges between (0.745 - 0.765). If the Canadian Dollar rises and sustains
itself over the set amount the price will be increased by the percentage
increase of the new rate and 0.75. For the purpose of this paragraph, sustains
shall mean the average closing price of the Canadian dollar to the United States
Dollars for 30 consecutive trading days.
Price Reduction: Price will be reduced to $9.00 Gross and $7.92 Net if the
Canadian Dollar falls and sustains itself below 0.745. For the purpose of this
paragraph, sustains shall mean the average closing price of the Canadian dollar
to the United States Dollars for 30 consecutive trading days.
Volume Rebate: A volume Rebate will be credited to the account of Serefex
after Purchases of:
$850,000 - $999,999 = 2%
more than $1,000,000 = 3%
Non-cumulative
Preexisting Agreements:
CCC agrees to honor it's pricing quoted to Menards for the
following:
1/4 Gallon, $8.99 less the 12% discount for sales commissions and sales
management, therefore a net price of $7.92 to Serefex
1/2 Gallon, $16.99 less the 12% discount for sales commissions and sales
management, therefore a net price of $14.95 to Serefex. Serefex is to purchase
product from CCC to satisfy Menards orders until the next truckload arrives at
Serefex (April 04). At that time Serefex will deliver orders from it's stock.
SCHEDULE B
PURCHASES
Serefex agrees to purchase the following amounts:
2004 Q1 Waived (Zero Required)
2004 Q2 $115,000 (Including 1 full truckload in April 2004)
2004 Q3 $300,000
2004 Q4 $450,000
If a greater amount is purchased in any quarter it may be deducted from the
subsequent quarters as long as the total purchased is a minimum of $865,000 for
the year 2004 and the minimums in Q1 and Q2 are met
2005 CCC and Serefex to negotiate purchases with a goal of more than a 10%
increase on an annual basis.
SCHEDULE "C"
ADVERTISING AND PROMOTION
Serefex agrees to use its best efforts to promote MagnaPaint and agrees to use
its proprietary ideas, web site and cash to advertise and promote.
The following is the minimum cash amount to be used to promote MagnaPaint. These
expenses must be submitted to CCC in the way of paid receipts.
2004 Q1 $ 10,000
2004 Q2 $ 40,000
2004 Q3 $ 50,000
2004 Q4 $ 50,000
Total $150,000
If a greater amount is spent in any quarter it may be deducted from the
subsequent quarters as long as the total spent is a minimum of $150,000 for the
year 2004 and the minimums in Q1 and Q2 are met.
Marketing commitments for 2005 will be negotiated with the goal of a spending
increase of more than 10%.
SCHEDULE D
EXCLUSIVE TERRITORITIES
Per section 1.4 of this agreement, Serefex shall be entitled to exclusivity for
all Sales of MagnaPaint to the following Accounts, Customers and/or territories:
1. Entire State of Florida
2. QVC and HSN
3. Colleges in which $10,000 of MagnaPaint sales occurs.
4 CCC agrees to allow Serefex the exclusive territory of selling MagnaPaint
in the USA to stores defined as "Big Boxes" further defined as chain stores
whose average size is over 40,000 Sq. Ft. and number over 100 stores per
chain.
