Exhibit 10.1
PRODUCT DEVELOPMENT AGREEMENT
This Agreement is dated as of May 5, 2014,
BETWEEN:
TRIDENT BRANDS INCORPORATED, a company incorporated under the
laws of Nevada, having its principal offices located at ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, Bahamas
("TDNT")
AND:
CONTINENTAL INGREDIENTS CANADA INC., a company incorporated under
the laws of Ontario, having its principal offices located at ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
("CIC")
WHEREAS TDNT intends to commercialize nutritional supplements and functional
food and beverage products under its Everlast Sports Nutrition(R) trademark
(collectively the "PRODUCTS") for direct response sales in the North American
market;
AND WHEREAS TDNT wishes to engage CIC on an exclusive basis to provide services
with respect to the development, manufacture and supply of the Products,
pursuant to the terms and conditions of this Agreement;
THEREFORE the parties covenant and agree as follows:
1. SERVICES
1.1 TDNT hereby exclusively retains CIC, and CIC agrees, to furnish to TDNT the
services described generally in Exhibit A to this Agreement, which Exhibit
forms an integral part of this Agreement (the "Services"). The parties
recognize that Exhibit A is not intended to describe the Services in
complete detail, but rather, to define the general scope and nature of the
Services.
1.2 CIC will, from time to time, submit to TDNT, for its approval, proposals
for the production of one or more of the Products, setting forth
objectives, proposed actions and schedules for the Services. Once such
proposals are approved by TDNT, and CIC has agreed to any specifications
for the Products provided by TDNT, the parties shall enter into a separate
production agreement with respect to the Product (a "Production
Agreement"), which Production Agreement will, amongst other matters,
contain terms for manufacturing, pricing and distribution of the Products.
1.3 CIC covenants and agrees that it shall perform all Services in a diligent
and professional manner, in accordance with the provisions of this
Agreement and any applicable Production Agreements.
1.4 TDNT covenants and agrees that during the term of this Agreement it shall
not engage another party other than CIC or its Associates, to provide the
Services with respect to the Products. Subject to section 5 (TDNT's
Intellectual Property Rights), nothing in this Agreement shall be construed
to limit the rights of CIC to provide services similar to the Services to
any other party.
1.5 This Agreement shall not be construed to limit either party's right to deal
with any other vendors, suppliers, sellers or customers in respect of
matters other than the manufacture, supply, distribution or purchase of the
Products.
2. TERM AND TERMINATION
2.1 The initial term of this Agreement shall be five (5) years, commencing May
5, 2014, 2014 and ending May 5, 2019. The term of this Agreement will
automatically renew for further consecutive twelve (12) month periods on an
ongoing basis, unless terminated earlier in accordance with the provisions
of this Agreement, upon the same terms and conditions as set out herein,
unless either party delivers to the other a termination notice in writing
at least six (6) months prior to the expiration of the initial term or any
renewal period.
2.2 Either party may terminate this Agreement in the event the other party
breaches or violates any provision of this Agreement and does not cure such
breach or violation within thirty (30) business days after receipt of
written notice from the other party describing the breach or violation.
2.3 Without restricting any right or remedy otherwise available to the parties,
this Agreement may be terminated on notice to the other party if the other
party ceases to do business, becomes bankrupt, takes any steps or
proceeding available to it for the benefit of insolvent debtors, becomes
insolvent or takes any step or proceeding for its dissolution or winding up
including the appointment of a receiver.
3. PRODUCTION AGREEMENT
3.1 Each Production Agreement shall provide details regarding the pricing of
the Product(s) and the parties acknowledge that it is intended that the
pricing of the Products will result in a gross margin to CIC of between 20
to 30 percent. The Production Agreements shall also set forth provisions
for the establishment of appropriate accounting systems for cash
management, sales reconciliations and inventory sales guarantees by TDNT to
CIC as well as deal with such matters as are set forth in Exhibit A hereto.
3.2 A Production Agreement will provide that delivery, including delivery later
than the date or dates provided in a Production Agreement, shall not
constitute a breach of the Production Agreement and shall not entitle TDNT
2
to terminate the Production Agreement or to any other remedy, unless CIC
has guaranteed the date of delivery in a warranty set out in the Production
Agreement. The Production Agreement shall also contain provisions relating
to force majeur events.
3.3 The Production Agreement will also provide that CIC shall:
(a) properly ▇▇▇▇, ▇▇▇▇ and ship the Products in accordance with all of
TDNT's requirements;
(b) provide, with each shipment, packing slips with TDNT's order number
marked thereon; and
3.4 The Production Agreement will provide that all risk of loss or damage in
the Products shall pass to TDNT when the Products are delivered to TDNT and
the parties expressly agree that until CIC has been paid in full (in cash
or cleared funds) for the Products, the following provisions shall apply:
(a) legal and beneficial ownership of the Products shall remain with CIC;
(b) TDNT shall hold any of the Products that come in to its possession as
bailee for CIC and that a fiduciary relationship exists between the
parties;
(c) TDNT shall keep the Products separate and in good condition as a
fiduciary of CIC, clearly showing CIC's ownership of the Products;
(d) CIC shall be entitled to inspect the Products and may recover all or
any part thereof at any time from TDNT of any Products that are in
TDNT's possession and for that purpose CIC, its servants and agents
may enter upon any land or building upon or in which the Products are
situated;
(e) TDNT shall have the right to dispose of the Products (as between it
and its customers only), upon payment for same to CIC, as principal in
the ordinary course of its business provided that where TDNT is paid
by its customers TDNT holds the proceeds of sale to the extent of the
amount owing by TDNT to CIC at the time of receipt of such proceeds in
trust for CIC and does not mix those proceeds with any other monies.
(f) under no circumstances shall CIC be liable to TDNT for any expenses or
any damage that TDNT may incur or suffer while acting as the bailee of
CIC.
3.5 The Production Agreement shall further provide that:
(a) TDNT's designated employees or agents shall have the right to enter
CIC's production facility at reasonable times on prior notice to CIC
to be present for an inspection, supervised and conducted by CIC
personnel, of the facility, the Products, the materials and any
3
property of CIC utilized to perform its obligations under the
Production Agreement.
(b) Unless otherwise specified in a Production Agreement, TDNT shall
inspect or test all goods upon receipt. TDNT shall be deemed to have
accepted the goods and that the goods comply with the Production
Agreement unless, in the case of a defect in the quality or state of
the Products otherwise not complying with a Production Agreement, TDNT
gives CIC a notice specifying such defect or noncompliance within 14
days after receiving the Products.
4. WARRANTY
4.1 CIC warrants that at the date of delivery the title to the Products sold
shall be free of any encumbrances and that the Products will conform to the
specifications, samples or descriptions furnished to or by TDNT or
specified in the Production Agreement.
4.2 Unless the parties have expressly agreed in a Production Agreement to
modify this section 4.2 then, notwithstanding the provisions of section 4.1
above or any other provision of this Agreement, any condition, warranty,
statement or undertaking as to the Products' merchantability or fitness or
suitability for any particular purpose however or whenever expressed or
which may be implied by statute, custom or usage of trade or otherwise is
hereby expressly excluded, except and only to the extent that any such
exclusion is specifically prevented by law.
5. TDNT'S INTELLECTUAL PROPERTY RIGHTS.
5.1 CIC acknowledges and agrees that TDNT is the sole owner or licensee of all
trade-marks, trade names, patents, copyrights and any other intellectual
property rights associated with the Products (the "Intellectual Property
Rights"), and all associated goodwill. CIC shall not challenge TDNT's
ownership or use, or the validity, of any and all Intellectual Property
Rights of TDNT;
5.2 CIC agrees to cooperate with TDNT and/or its Associates and take all
reasonable actions required to assist TDNT and/or its Associates to secure,
protect and maintain the Intellectual Property Rights in Canada, the United
States of America or any foreign country, including but not limited to
giving prompt notice to TDNT of any known or potential infringement of such
Intellectual Property Rights of which CIC becomes aware, and cooperating in
the preparation, execution and/or recordation of any documents necessary to
register or otherwise protect such Intellectual Property Rights, and
maintaining or terminating, as applicable, such documents or recordation.
5.3 TDNT and/or its Associates may or may not, at its own discretion, commence,
prosecute or defend any action or claim concerning any Intellectual
Property Rights and shall have the right to control any such action, and
CIC shall fully cooperate with TDNT and/or its Associates in any such
action, including the satisfaction of procedural requirements necessary to
bring such action in a particular jurisdiction. CIC shall not commence any
4
action regarding the Products or any Intellectual Property Rights of TDNT
without TDNT's prior written consent, which TDNT may withhold.
5.4 The provisions of sections 5.1, 5.2 and 5.3 above shall survive the expiry
or other termination of this agreement, however caused.
6. COMPLIANCE WITH LAWS
6.1 CIC agrees that any and all work performed in compliance with this
Agreement, any Production Agreement and the Products shall be subject in
all respects to, and in compliance with all municipal, provincial and
federal laws, rules and regulations of Canada and its respective agencies
governing the manufacture, sale and delivery of the Product.
7. CONFIDENTIALITY
7.1 The parties acknowledge and agree that they may become privy to certain
proprietary and confidential information relating to the other party's
business including, without limitation, trade secrets, lists, product
formulations, methods and recipes, supplier and customer lists, and all
technical, cost, pricing and marketing information (the "Confidential
Information"). Each party shall maintain the absolute confidentiality of
the other party's Confidential Information and shall not disclose the same
for any reason whatsoever, except disclosing such information to its
directors, officers, employees and professional advisors only to the extent
necessary for the performance of its obligations under this Agreement. Each
party further agrees not to use, disclose or provide access to any such
Confidential Information of the other party, directly or indirectly, in any
manner except as expressly permitted herein, or for the purposes of
carrying out its obligations under this Agreement. Without limiting the
generality of the foregoing, "use, disclose or provide access to" includes
sale, copying, dissemination, publishing, broadcasting or reproduction by
any means whatsoever. Notwithstanding the foregoing, neither party shall
have any obligation of confidentiality with respect to information which:
(a) is publicly available after such receipt other than by breach of this
Agreement;
(b) the receiving party can show was lawfully in its possession prior to
the receipt thereof (as evidenced by written or other tangible records
or practices);
(c) was received in good faith by the receiving party from an independent
third party who, at the time of such receipt, was lawfully in
possession of such information and under no obligation of secrecy or
confidentiality;
(d) is independently and lawfully developed by a party completely without
reference to the Confidential Information (as evidenced by written or
other tangible records and practices); or
(e) is released from the provisions of this Agreement by the written
authorization of the other party.
5
7.2 Neither party shall be in breach of this Agreement as a result of the
disclosure of any Confidential Information required by law or judicial or
administrative process, provided that the disclosing party provides the
other party with as much notice as is reasonably possible in the
circumstances prior to making any such disclosure of Confidential
Information and cooperates with the other party in any application,
proceedings or other action undertaken by the other party. to obtain a
protective order or other means of protecting the .confidentiality of the
Confidential Information required to be disclosed.
8. GENERAL
8.1 All references to amounts of money refer to the lawful currency of Canada
unless otherwise specified.
8.2 The recitals to this Agreement are incorporated into this Agreement by
reference and form an integral part of this Agreement.
8.3 The headings in this Agreement have been inserted for convenience of
reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
8.4 This Agreement contains the entire agreement among the parties relating to
the subject matter hereof, and it supersedes, terminates and cancels any
and all prior expectations, understandings, communications, representations
and agreements, whether written or oral, among the parties relating to the
subject matter of this Agreement.
8.5 This Agreement may not be altered or modified except by agreement in
writing signed by the parties.
8.6 Each of the parties shall, from time to time, execute and deliver all such
other documents and instruments and do all acts and things as the other
party may reasonably require to effectively carry out, perfect, or better
evidence the full intent of this Agreement and there are no other terms and
conditions except as set forth herein respecting the purchase and sale of
the Products hereunder.
8.7 No waiver by a party of any breach of a provision of this Agreement by the
other party shall be deemed to be a waiver of any other breach of this
Agreement.
8.8 If any covenant, obligation or term of this Agreement is held to be invalid
or unenforceable, then the remainder of this Agreement shall not be
affected by the invalid or unenforceable portion and this Agreement shall
be construed as though it were executed without reference to the invalid or
unenforceable portion of this Agreement.
8.9 This Agreement shall, in all respects, be subject to and be interpreted,
construed and enforced in accordance with the laws in effect in the
Province of Ontario and the laws of Canada applicable in the Province of
Ontario.
8.10 All notices required or permitted to be given under the terms of this
Agreement will be in writing and may be delivered personally, by courier or
may be forwarded by first class prepaid registered mail to the addresses
6
set forth on page 1 of this Agreement or at such other addresses as may
from time to time be notified in writing by the parties to this Agreement.
Any notice delivered will be deemed to have been given and received at the
time of delivery. Any notice mailed by first class prepaid registered mail
will be deemed to have been given and received on the expiration of 72
hours after it is posted, provided that if there is between the time of
mailing and actual receipt of the notice a mail strike, slowdown or other
labour dispute which might affect the delivery of such notice by the mail,
then such notice will only be effective if actually delivered.
8.11 Nothing in this Agreement shall be deemed or construed as creating the
relationship of principal and agent, partnership or joint venture between
the parties. This Agreement, and no provision in this Agreement or any act
or acts of the parties to this Agreement shall be deemed to create any
relationship other than that of supplier and customer.
8.12 All rights and remedies of either party under this Agreement are cumulative
and are in addition to and shall be deemed not to exclude any other right
or remedy allowed by law and all rights and remedies may be exercised
concurrently.
8.13 This Agreement shall enure to the benefit of and be binding upon the
parties, their respective successors and permitted assigns.
8.14 CIC shall not assign its interests or obligations under this Agreement
without the prior written consent of TDNT, which consent may be withheld at
the sole discretion of TDNT. TDNT shall not assign its interests or
obligations under this Agreement without the prior written consent of CIC,
which consent may be withheld at the sole discretion of CIC.
8.15 This Agreement may be executed in any number of counterparts, each of which
when executed and delivered (by facsimile or otherwise) shall be deemed to
be an original, and all of which together shall constitute one and the same
document.
9. DEFINITIONS
9.1 Unless the context otherwise requires, the following words and phrases have
the meanings set forth below:
(a) "Associate" means, in relation to either party hereto, a company:
(i) which holds or controls, directly or indirectly through another
person, entity or otherwise, more than half of the voting shares
in a party hereto; or
(ii) in which any such company or a party hereto holds or controls,
directly or indirectly through another person, entity or
otherwise, more than half of the voting shares,
and "Associates" means all of them.
7
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the
date first above written.
CONTINENTAL INGREDIENTS CANADA INC.
Per: /s/ ▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Partner
Per: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Partner
I/We have authority to sign on behalf
of the Corporation.
TRIDENT BRANDS INCORPORATED
Per:
-------------------------------------
Name:
Title:
Per: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
I/We have authority to sign on behalf
of the Corporation.
8
EXHIBIT A
Responsibilities of CIC
General
Act as liaison/consolidator between all the ingredient suppliers and TDNT
Manage the complete process from ingredient sourcing, manufacturing,
distribution, inventory management and other various logistics of the products.
Identify and advise TDNT with the latest technology of ingredients suitable for
the design of TDNT's products
Help to design the future portfolio of products
Provide access to the in-house labs of CIC where applicable
Provide a designated portion of finished office space for TDNT
Logistics
All products will be designed (where applicable) through this partnership for a
period of five years with automatic renewals if mutually agreed upon. Design
objectives will be brought to CIC from TDNT and both will work in conjunction to
develop through concept to product delivery.
CIC will deal directly with the ingredient manufacturers and build in a mutually
agreed upon ▇▇▇▇-up/margin on all products.
CIC will source the most suitable manufacturing partner and manage the final
build out of the product including the packaging components.
CIC will arrange to have the product shipped to the designated distribution
facility for the direct response sales.
Scope
This appendix is limited to direct response sales in North America. As the scope
changes in relation to sales outside North America or to the retail sales
channels this appendix will need to modified.
Sample Price Calculation
Cost of goods, freight, applicable duties, and packaging fees equals Base Cost.
For a 25% gross markup calculation take base cost and divide by 0.75.