SALES AGENCY AGREEMENT
Agreement dated September 21, 1999, by and between The Old Fashioned Syrup
Company, a United States corporation, wholly owned subsidiary of Meridian
Holdings, Inc., having its principle office at 0000 X.X. Xxxx Xxxxx, Xxxx., Xxxx
Xxxxx, Xxxxxxx XXX (hereinafter called "TOFS") and NAFPRO CANADA INC., a
corporation incorporated under the laws of Canada, with its principle office at
0000 Xxxxxx xxxxxx, Xxxxxxxxxxx, Xxxxxxx, X0X 0X0 (hereinafter called
"Distributor").
WHEREAS, TOFSC is engaged in the business of selling and marketing certain
brand name products and/or private label goods co- packed for other companies;
and
WHEREAS, Distributor is desirous of acting as the exclusive Distributor for
certain of such brand name products in Canada as listed in Schedule 1 attached
hereto (collectively "PRODUCTS") and any private label contract obtained;
NOW, THEREFORE, consideration of the mutual premises hereinafter set forth,
the parties agree:
Section 1. Selected Distributor. TOFSC hereby appoints Distributor and
Distributor hereby agrees to act, as TOFSC's exclusive Distributor to sell and
market the Products in the territory, hereinafter defined, pursuant to the terms
and conditions of this Agreement. Distributor shall be the sole authorized
Distributor for the Products in the Territory and TOFSC shall not appoint other
distributors in the Territory or otherwise sell the Products in the Territory,
except through Distributor.
Section 2. Territory. The term "Territory" as used herein, shall mean all
areas and customers as outlined in Schedule 2 attached hereto (collectively the
"TERRITORY");
Section 3. Products, Assembling, Marketing and Reports
(A) TOFSC reserves the right to discontinue the manufacture of, or to make
such changes in the design, production, testing, packaging or formula of the
Product as it shall, in its absolute discretion decide, provided it gives
Distributor one hundred and twenty (120) days prior written notice of any
discontinuance or change.
(B) To insure the success of this Agreement to the mutual benefit of TOFSC
and Distributor, during the Term, as hereinafter defined, TOFSC will not sell
any of the Products or any competing products/brands in the same categories (i)
to any other person, firm or company in the Territory, or (ii) to any person,
firm or company outside the Territory who it knows or has reason to believe
intends to resell the Products for use in the Territory. TOFSC agrees to refer
all parties to Distributor who makes inquiries relating to the purchase of the
Products in the Territory.
(C) Distributor agrees to sell the products to all classes of trade in the
Territory and to (i) promote the sales of the Products through the Territory to
potential purchasers thereof; and (ii) study and keep under review market
conditions to ascertain the most likely areas where or classes of customers to
whom sales may be made. Distributor agrees to advise TOFSC of any sale inquiries
it may receive for the purchase of the Products outside the Territory and to
report such information to TOFSC
(D) Except for advertising expenses and approved coop advertising which
shall be the sole obligation of TOFSC pursuant to Section II hereof, Distributor
shall provide all customer marketing and selling services for the Products
throughout the Territory, including, but not limited to, all selling,
warehousing, order processing, handling, shipping, collection, customer service
and freight out services. Distributor shall implement such marketing programs
based on pricing, promotion and payment terms approved by TOFSC in consultation
with Distributor but the sole discretion regarding pricing and promotion shall
remain with TOFSC. TOFSC shall have the opportunity by prior notice to
participate in any sales meetings or other marketing discussions of Distributor
as they relate to Products. Notwithstanding the foregoing, TOFSC and Distributor
agree that expenses related to advertising the Products in nationally
distributed magazines and periodicals in the Territory shall be shared equally
by the parties in advance of production and placement.
(E) TOFSC shall, provide product liability insurance coverage for their
product(s). A current copy shall be delivered to the Distributor annually thirty
(30) days prior to each renewal date. Each such policy shall provide that it may
not be amended, canceled, or otherwise modified without thirty (30) days prior
notice to the Distributor.
(F) Distributor shall have no authority to bind or commit TOFSC to any
agreements of any kind (except as expressly agreed herein) nor shall Distributor
have any authorization to incur any debt, obligation, or liability or enter into
any contract or commitment on TOFSC's behalf. Distributor shall be considered an
independent contractor.
Section 4. Pricing, Payment, Title and Risk of Loss.
(A) Pricing. The Products to be sold by Distributor in accordance with this
Agreement shall be sold by Distributor at the prices listed in Schedule 1 in
United States funds as agreed upon by TOFSC and Distributor. TOFSC shall have
the right at any time from time to time to adjust the sales prices for Products
by giving Distributor written notice to that effect not less than ninety (90)
days prior to the date upon which the adjusted price or xxxxx are to become
effective.
(B)(i) Payment Terms and Title. All payments shall be made in United States
Dollars. The terms of payment by Distributor to TOFSC are less 2% of invoice
within ten days or net 30 days (-2%, 10 days, net 30 days.)
(ii) Title to the Products and risk of loss thereof shall pass to
Distributor upon delivery thereof to Distributor F.O.B. Distributor's
principle office, as aforesaid. Upon termination of this Agreement,
Distributor shall have the right to return any unsold Products to TOFSC.
(C) Third Party Obligations. Distributor acknowledges and agrees that it
may use ASSOCATED NATIONAL BROKERAGE INC. or other third party to provide
certain administrative services in the territory. Distributor agrees that it
shall be solely responsible for all payments, charges and costs that are
incurred under such service agreements and shall indemnify and hold TOFSC and
its Representatives (as hereinafter defined) harmless from any and all costs or
liabilities on account of such service agreements. Distributor agrees that it
shall not amend any such service agreement as it relates to the Products without
the prior written consent of TOFSC.
(D) Defective Products. TOFSC warrants that each Product delivered
thereunder shall be free from defects in material and workmanship and fit and
sufficient for the purpose intended and shall comply with all applicable
governmental laws and regulations. TOFSC will promptly cause to be replaced at
TOFSC's expense Products which prove to be defective whether by reason of
defects in material, workmanship, design, specifications, fitness for purpose or
compliance with applicable laws and regulations. TOFSC will pay all
transportation charges for shipment of replaced Products to Distributor. All
replaced Products shall be shipped to Distributor F.O.B. Distributor's principle
office. Notwithstanding the foregoing, Distributor acknowledges and agrees that
it has examined the label for the Products utilized by TOFSC in the U.S. and
that such label satisfies the labeling requirements for the Territory.
Section 5. Force Majeure. If, because of force majeure, Distributor or
TOFSC shall be unable to deliver or market the Products then the obligations of
Distributor or TOFSC, as the case may be, under this agreement shall be
suspended to the extent made necessary by such force majeure. If Distributor or
TOFSC is affected by force majeure it shall give notice to the other as promptly
as practicable of the nature and probably duration of force majeure. The term
"force majeure" shall mean, acts of God or governmental authority, fires,
explosions, floods, or other causes beyond the reasonable control of Distributor
or TOFSC.
Section 6. Indemnification's. TOFSC hereby indemnifies Distributor and its
officers, directors, distributors and shareholders ("Representatives") against
and agrees to hold them harmless from any and all damages, loss, liability,
expense (including, without limitation, reasonable out-of-pocket expense of
investigation involving Distributor) and cost incurred or suffered by them on
account of any actual or alleged injury to person, including trademark
infringement claims and product liability claims, arising out of the manufacture
and sale of the Product, unless such damage due to an unauthorized
representation or the negligence of Distributor, in which case there shall be no
obligation of TOFSC to indemnify hereunder. Distributor hereby indemnifies TOFSC
and its officers, directors, distributors and shareholders ("Representatives")
against and agrees to hold them harmless from any and all damage, loss,
liability, expense (including, without limitation, reasonable out-of-pocket
expense of investigation and attorneys' fees and expense in connection with any
action, suit or proceeding brought by, against or involving TOFSC and cost
incurred or suffered by them on account of any actual or alleged damage to
person arising out of the negligence or intentional misconduct of Distributor in
selling or marketing of t he Product unless such damage is also due to the
negligence of TOFSC in which case there shall be no obligation of Distributor to
indemnify hereunder. The provisions of this Section 6 shall survive termination
of this Agreement.
Section 7. Confidentiality.
(A) Confidential Information. Distributor agrees to treat as confidential
all data and information concerning the Product, including the formulas,
manufacturing procedures and other confidential information ("Confidential
Information") of TOFSC. Distributor further agrees not to reveal, divulge or
make known to any person, nor use such Confidential Information, either in its
own behalf or on behalf of any third party, for any purpose whatsoever, during
or after any relationship with TOFSC. Distributor will take the steps necessary
to protect information, data or other tangible or intangible property of its own
that it regards as proprietary or confidential, to insure that such Confidential
Information is not disclosed. Such confidentiality obligation shall not apply
with respect to any Confidential Information (i) which is or hereafter becomes
publicly available otherwise than by breach of Distributor's obligations
hereunder or (ii) which is or comes into possession of Distributor from a third
person under no obligation of confidentiality to TOFSC or (iii) which
Distributor is required by law to disclose. Distributor agrees that, without
TOFSC's written prior consent, it shall not release to the press, other
communication or media, subcontrators, or consultants, or any other persons,
information, new items, general publicity or advertising pertaining to this
Agreement or the Products hereunder. Any breach by Distributor of such
confidentiality provision shall be deemed a material breach of a material term
of this Agreement pursuant to Section 11(A)(i). The provisions of this Section 8
shall survive the termination of this Agreement.
Section 8. Term. The term of this agreement ("Term") shall commence on
September 27, 1999 ("Effective Date") and, unless terminated earlier as provided
in Section 12 hereof, shall be for an initial period of two (2) years, and
automatically renewable for additional successive five (5) year periods,
provided that either party can terminate at any time by one hundred and ninety
(90) days prior written notice.
Section 9. Commissions. In consideration for Distributor's services
hereunder, Distributor shall receive a commission ("Commission") during the Term
of this Agreement equal to Five (5%) percent of the aggregate Net Sales for all
TOFSC manufactured PRIVATE LABEL products sold by the Distributor. The term "Net
Sales" as used in this Agreement shall mean the gross sales volume in Canadian
dollars achieved by Distributor for all products for which it acts as a
Distributor hereunder, less discounts, returns and allowances.
Section 10. Marketing. Subject to Section 3(D) hereof, TOFSC shall be
responsible for all trade shows, marketing and advertising expenses for the
Products, including coupon redemption or Co-op allowances and listing fees.
Section 11. Termination
(A) Termination Events. Either party shall have the right at any time
during the continuance of the following events affecting the other party, to
terminate this Agreement by giving one hundred and eighty (180) days written
notice to the other as provided herein, and upon the termination of such one
hundred eighty (180) day period this Agreement shall terminate if such event has
not been cured and still continues:
(i) (a) a receiver, trustees or liquidator of either party is
appointed for any of its properties or assets; (b) a party admits in
writing its inability to pay its debts as they mature; (c) a party makes a
general assignment for the benefit of creditors; (d) a party is adjudicated
as bankrupt or insolvent; (e) a petition for the reorganization of a party
or plan of arrangement with its creditors, or its dissolution or
liquidation is filed under any law or statute and such petition is not
stayed, vacated or dismissed within ninety (90) days; or (f) a party ceases
doing business and commences dissolution or liquidation;
(ii) the other party is unable to perform its duties hereunder for a
period of six (6) months in any one period of twelve (12) calendar months;
or
(iii) as to Distributor only, if Distributor becomes subject to the
control of any firm or company which markets products in the product
categories of the Products.
Notwithstanding the foregoing, TOFSC shall have the right at any time to
terminate this Agreement by giving one hundred and eighty (180) days written
notice to Distributor in the event Distributor is not discharging its
responsibilities hereunder or if Distributor is incapable of so doing, in such
case as determined by TOFSC in its sole discretion, and upon termination of such
one hundred and eighty (180) days period this Agreement shall terminate if such
event has not been cured and still continues.
(B) Surviving Rights. Any termination of this Agreement except as otherwise
herein provided shall (i) be without prejudice to the ten existing rights and
liabilities hereunder of either party including indemnification rights; (ii)
require Distributor to deliver to TOFSC all books, papers, plan, drawings,
literature, documents, samples and other property of TOFSC of any kind
whatsoever which have come into its possession in the course of its duties
hereunder, and (iii) not release Distributor from its undertakings hereunder
regarding confidentiality of information. Distributor on or before the effective
date of termination shall remove any reference either to its appointment
hereunder as Distributor which may exist on its premises, vehicles or stationary
and to arrange for the cancellation of any such references on advertisements or
directories at the next reprinting.
Section 12. Assignment. Distributor shall not have the right to assign this
Agreement without prior written consent of TOFSC.
Section 13. Entire Agreement. This Agreement constitutes the entire
understanding and agreement between the parties hereto and the terms of this
Agreement cannot be waived or modified, except by an express agreement in
writing signed by both parties. Any waiver by TOFSC or Distributor of a breach
of this Agreement shall not be considered a waiver of any subsequent breach of
the same or any other term or condition of this Agreement.
Section 14. Governing Law. This Agreement shall be governed by and
interpreted under the laws of Ontario Canada without giving effect to the
principles of conflict of laws thereof. Each of the parties hereto hereby
irrevocably consents to the service or process in any action or proceeding by
the mailing thereof by registered or certified mail postage prepaid at its
address set forth herein.
Section 15. Notices. All notices, requests, demands or other communications
under this Agreement or in connection therewith shall be in writing and, unless
otherwise specifically provided herein, shall be deemed to have been given when
delivered personally or when sent by certified or registered mail, return
receipt requested, or by overnight mail or fax to the respective parties at the
address of each party herein set forth or to such other address as either party
shall designate by notice given to the other as provided in this paragraph.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above written.
NAFPRO CANADA INC. OLD FASHIONED SYRUP COMPANY
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxx Xxxxxx
Title: V.P. Sales Xxxx Xxxxxx CEO
SCHEDULE 1
September 21, 1999
Sweet 'N Low Sugar Free Chocolate Flavored Syrup
Costs in USA funds, F.O.B. Xxxxxxx, Xxxxxxx
00 x 500g per case "Canadian" label
Cost $20.00
Less - 2.00
Distributor Allowance $18.00
Less 10% -1.82
Truckload Allowance
Total $16.38
Terms: 2% 10 days, net 30 days
Sweet 'N Low Sugar Free Chocolate Flavored Syrup
4 x 1 US gallon per case
Cost in USA funds, F.O.B. Atlanta, Georgia
Cost $32.00
Less - 2.00 Distributor Allowance
$30.00
Less 10% -3.00 Truckload Allowance
Total $27.00
Terms: 2% 10 days, net 30 days
CHEDULE 2
TERRITORY FOR "PRODUCTS"
The territory is described as all of Canada including the Northwest
Territories.
TERRITORY FOR "PRIVATE LABEL" SALES
The territory is described as all of Canada including the Northwest
Territories.
