DISTRIBUTORSHIP AGREEMENT
THIS DISTRIBUTORSHIP AGREEMENT is entered into on May 10, 2000, by and
between AMERICAN SOIL TECHNOLOGIES, INC. (a Nevada Corporation), having a
business address at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
("Manufacturer"), and SUNPRIDE, INC. (a California Corporation and a subsidiary
of Gerber California, Inc. a California Corporation, each corporation being a
part of the GERBER GOLDSHCMIDT GROUP), having a business address at ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ("Distributor") with respect to the
following:
WHEREAS, Manufacturer is engaged in the business of manufacturing and
selling "Agriblend" and other soils materials as described and as may be amended
on EXHIBIT "A" attached hereto which is incorporated herein for all purposes as
if set forth verbatim (the "Product"); and
WHEREAS, DISTRIBUTOR DESIRES TO SELL THE PRODUCT ON THE BASIS PROVIDED FOR
IN THIS AGREEMENT.
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein set forth Manufacturer and Distributor have agreed as follows:
I. DESIGNATION AS DISTRIBUTOR
1.1 Upon and subject to the terms and conditions contained in this
Agreement, Manufacturer hereby designates the Distributor as the exclusive
authorized distributor of the Product (Agriblend a.k.a., Agriblend Plus, for
agriculture applications) within the territory described in EXHIBIT "B" attached
hereto which is incorporated herein for all purposes as if set forth verbatim
(the "Territory"). Manufacturer will place no other distributor or dealer in the
Territory.
II. PURCHASE AND RESALE OF PRODUCT
2.1 Manufacturer hereby grants to Distributor the right, subject to the
terms and conditions of this Agreement, to sell the Product. In consideration of
Distributor's agreement herein, Distributor is granted the exclusive right to
purchase and resell the Product in the Territory.
2.2 Distributor shall submit orders for the Product to Manufacturer.
Manufacturer shall deliver to Distributor such Product as the Distributor may
order with estimated delivery time being approximately 30 days or as may be
agreed between parties. No order submitted to Manufacturer by the Distributor
shall become effective unless and until it is formally accepted in writing by
Manufacturer. Manufacturer shall fulfill such orders and ship the goods to
Distributor pursuant to written instructions from Distributor. Distributor shall
pay for all costs incurred in the shipment of the Product, pursuant to paragraph
4.2.
III. PRICES, DISCOUNTS AND TERMS
3.1 All purchases will be at prices set forth in EXHIBIT "A". Distributor
will pay Manufacturer for the Product upon such terms that are acceptable to
Manufacturer and Distributor at the time of placing the order with Manufacturer.
Manufacturer's acceptance of the terms of payment shall be a condition of
Manufacturer's acceptance of Distributors' order. Distributor understands that
the prices set forth in EXHIBIT "A" are subject to change upon FORTY FIVE (45)
days prior written notice by Manufacturer. Any pre-sold inventory will be
delivered at the price in effect on the date ordered by Distributor.
IV. DELIVERY; RISK OF LOSS
4.1 Manufacturer shall ship the Product ordered by Distributor hereunder in
the manner and under the terms specified in EXHIBIT "C".
4.2 Upon acceptance of orders received by Manufacturer from Distributor,
Manufacturer shall deliver to Distributor FOB Manufacturer's blending facility
located in ▇▇▇▇▇▇, Arizona or at such other location that Manufacturer may
designate. If any delivery location other than Arizona is designated by
Manufacturer, Manufacturer agrees to pay any increase in shipping cost to Mexico
that results from the change.
1
4.3 Manufacturer agrees to package the product adequately to ensure that
the product maintains its quality, integrity and form until delivery to end
buyer. Provided, however, Manufacturer shall not be responsible for said
packaging if the packaging is opened after FOB delivery to Distributor or if the
product is not stored or transported in accordance with Manufacturer's
recommendations (see exhibit "D"). It is presently understood that the packaging
procedure is three paper lined bags with a poly inner liner which Manufacturer
has determined is adequate to maintain said integrity while being transported or
stored.
V. WARRANTIES AND REPRESENTATIONS
5.1 Manufacturer warrants that the Product manufactured and sold to
Distributor will be free from defects in material and workmanship at the time of
shipment.
5.1.2 Manufacturer warrants that product is patented in the United States
(patent number 5649495 filed July 22, 1995 and patent number 5868087 filed
February 9, 1997) and Manufacturer agrees to register the product in Mexico to
protect the product from competition to the extent that such registration is
effective.
5.2 Distributor will supply a copy of Manufacturer's express written
warranty materials to all buyers of the Product and as supplied by Manufacturer.
5.3 Manufacturer warrants that the crosslinked potassium
polyacrylate/polyacrlamide copolymer ingredient contained in the product blend
is environmentally safe and non-toxic to plants, soil, or groundwater and that
all other ingredients used in the product mix are environmentally safe and
non-toxic to plants, soil, or groundwater, provided the product is used in
accordance with Manufacturer's currently published specifications and procedures
(see exhibit "D").
5.4 Manufacturer agrees to protect and defend Distributor should
Distributor be made a defendant in any products liability, patent, or trade ▇▇▇▇
infringement suit. Distributor shall defend Manufacturer in any suit involving
misrepresentations by Distributor which are clearly contrary to the published
facts about the product, together with any other suit against Manufacturer where
Distributor has exceeded the written authority given Distributor by
Manufacturer.
VI. DISTRIBUTOR OPERATIONS
6.1 Distributor agrees to use its best efforts to develop business in, to
promote the use of, and to sell the Product within the Territory in accordance
with good business practice. Manufacturer agrees to assist Distributor in the
sale of the Product, and that it will provide Distributor with all information,
literature and relevant material regularly available under Manufacturer's
practices for use by its distributors.
6.2 Distributor may display the Product in shows, wherever located, in
which Distributor's participation is permitted by the show rules.
6.3 Distributor may use Manufacturer's trademarks, trade names and symbols
which apply to the Product in advertising signage and other materials designed
to promote and sell the Product under the Agreement. Distributor will not obtain
or attempt to obtain any right, title or interest in or to the trademarks.
6.4 During the term of this Agreement, Distributor shall not distribute,
offer, sell, or purchase any products that compete or may compete with
Manufacturer's Product.
6.5 Distributor agrees that it shall not at any time, either during or
subsequent to the term of this Agreement, unless expressly consented to in
writing by Manufacturer, either directly or indirectly use or disclose to any
person or entity any confidential information of any kind, nature or description
concerning any matters affecting or relating to the business of Manufacturer,
including, but not limited to, information concerning the customers of
Manufacturer, Manufacturer's marketing methods, compensation paid to employees,
independent contractors or suppliers and other terms of their employment or
contractual relationships, financial and business records, know-how, or any
other information concerning the business of Manufacturer, its manner of
operations, or other data of any kind, nature or description. Distributor agrees
that the above information and items are important, material and confidential
trade secrets and these affect the successful conduct of Manufacturer's business
and its goodwill.
2
6.6 Manufacturer Shall:
A. Make payment to Distributor in the amount of $3,000 per month not
later than the tenth day of each month for a maximum period of 12 months
commencing on May 10, 2000, as a contribution to Distributor for the sole and
exclusive purpose of Distributor employing an Agronomist in the Territory. It is
understood that said Agronomist will be a consultant or employee of Distributor
and that Manufacturer shall not be responsible for any costs, including payroll
taxes, insurance of any kind, or expenses other than cost specifically provided
for herein, in connection with such employment.
B. Provide Distributor brochures and other promotional materials and
cooperate with Distributor regarding development of promotional materials in the
Territory. Manufacturer's direct costs in this regard shall not exceed $7,500
for the first year with any increase to be determined annually thereafter.
6.7 Distributor shall be responsible for all approvals, permits, tariffs,
and/or any expenses imposed or required by federal, state or local governments
within the Territory in connection with marketing or selling the product within
the Territory.
VII. TERM AND TERMINATION
7.1 This Agreement shall become effective upon its execution by both
parties hereto by their authorized representatives. Upon execution, this
Agreement shall remain in effect for an initial term of one (1) year ("Initial
Term"). This Agreement shall automatically renew for successive one (1) year
terms unless either party notifies the other in writing at least thirty (30)
days prior to the end of any one (1) year term that they wish to terminate the
Agreement for cause as set forth in paragraph 7.2 herein.
7.2 This Agreement may be terminated: (1) at any time by the mutual consent
of the parties in writing, effective as provided therein; (2) upon thirty (30)
days written notice by Distributor to Manufacturer without cause; or (3) with
cause by either party at any time by giving the other party thirty (30) days
notice, in writing, by registered or certified international mail, of such
termination. Good cause for termination by either party shall include:
(a) Either party's failure to fulfill its commitments and obligations
under this Agreement;
(b) Distributor's failure to meet the minimum purchase and/or
inventory requirements specified in Exhibit A shall be cause for
termination by Manufacturer. "Purchases", as the term is used in
this paragraph, shall include confirmed purchase orders upon
which delivery shall be made within 60 days from date of
confirmed purchase order. If for any reason Manufacturer is
unable to deliver product within 60 days the purchase will still
be applied to the minimum purchase requirement.
(c) Excessive, meaning repeated and serious, customer complaints
received by either party regarding sales practices of
Distributor, or the quality of the Product.
(d) Either party's violation of any law that impairs its ability to
conduct business or otherwise properly perform the commitments
and obligations under this Agreement.
Distributor shall have 30 days from receipt of notice by Manufacturer to take
reasonable steps to cure the cause of termination. However, this right to cure
the cause of termination does not apply to Distributor's failure to meet the
minimum purchases and/or inventory requirements specified in Exhibit A.
7.3 Termination by either party in accordance with the provisions herein
shall not constitute a breach of this Agreement. Neither Manufacturer nor
Distributor shall by reason of the exercise of the rights of termination, be
liable to the other for compensation, reimbursement or damages either on account
of present or prospective profits on sales or anticipated sales, or on account
of expenditures, investments or commitments made in connection therewith or in
connection with the establishment, development or maintenance of the business or
good will of Manufacturer or Distributor, or on account of any cause or thing
whatsoever; provided, however, that termination of this Agreement shall in no
way affect Manufacturer's obligation with respect to product previously ordered
hereunder.
3
7.4 In the event of termination of this Agreement, Manufacturer shall make
delivery on retail orders placed with and accepted by it and Distributor shall
accept shipment and make payment for any such orders, all in accordance with the
provisions of this Agreement even though termination has been effected.
VIII. GENERAL PROVISIONS
8.1 Neither Distributor nor Manufacturer is an employee, agent or
representative of the other and nothing herein or performed hereunder shall be
represented or construed as constituting either party as an agent or
representative of the other. Each party shall conduct its entire business under
this Agreement at its own cost and expense and shall have no authority to make
any representation, guarantee or warranty (except as provided in Article V
hereof), commitment or agreement on behalf of the other or to assume or incur
any liability or indebtedness on the other's behalf, or to bind the other under
any obligation whatsoever. Neither party shall be liable for any act or failure
to act by the other, their agents or employees. Each party agrees to indemnify
and hold the other harmless from any and all claims resulting from violation of
this paragraph or resulting from any activity of the other party, its agents or
employees, hereunder.
8.2 Neither this Agreement nor any rights hereunder shall be assigned or
transferred by Distributor without the written consent of Manufacturer. However,
Distributor is permitted within the scope of this Agreement to: 1) select
retailers or sub-distributors in the Territory for the Product; and 2) Sunpride
shall be entitled to assign the agreement to any associate company within the
Gerber ▇▇▇▇▇▇▇▇▇▇▇ Group, provided such associate company is controlled by
shareholding or voting by Gerber ▇▇▇▇▇▇▇▇▇▇▇ USA Inc. Distributor shall provide
Manufacturer full and complete details in writing regarding any assignment or
transfer of this agreement or of assignment or transfer of any of the rights
provided herein. Manufacturer reserves the right to terminate this Agreement in
part or in its entirety, in the event that an assignment of this agreement is
made and such assignment does not conform to the requirements of this paragraph.
8.3 The failure by either party to enforce or take advantage of any of the
provisions of this Agreement shall not constitute nor be construed as a waiver
of such provisions or of the right subsequently to enforce or take advantage of
each and every such provision. No waiver, deletion, alteration, modification, or
amendment of this Agreement or the rights arising hereunder, shall be valid and
binding unless in writing signed by a duly authorized representative of each
party.
8.4 Any notice required or contemplated by this Agreement shall be in
writing, delivered by registered or certified mail, addressed to the parties at
their addresses hereinabove set forth, or at such other addresses as may from
time to time be substituted therefor by notice in writing sent by the party
changing its address.
8.5 If a dispute or claim shall arise with respect to any of the terms or
provisions of this Agreement, or with respect to the performance by either of
the Parties under this Agreement, other than a dispute with respect to Section 3
of this Agreement, then either party may, with notice as herein provided,
require that the dispute be submitted under the Commercial Arbitration Rules of
the American Arbitration Association ("AAA"). Each party shall bear one-half
(1/2) of the cost of appointing the arbitrator and of paying such arbitrator's
fees. The written decision of the arbitrator(s) ultimately appointed by or for
both Parties shall be binding and conclusive on the Parties. Judgment may be
entered on such written decision of the single arbitrator in any court having
jurisdiction and the Parties consent to the jurisdiction of the Municipal and
Superior Court of San Diego County, California for this purpose. Any arbitration
undertaken pursuant to the terms of this section shall occur in San Diego
County, California.
8.6 If any provision of this Agreement shall in any way be or become
violative of or prohibited by or under the valid applicable laws, judgments,
decrees or public policy of any state or jurisdiction, including any state or
jurisdiction within the Territory, said provision or part thereof shall be, as
to said jurisdiction, ineffective and void to the extent of such violation or
prohibition without invalidating any of the remaining provisions of this
Agreement.
8.7 This Agreement and all Exhibits and Addenda attached hereto set forth
the entire understanding between the parties as to the subject matter hereof and
incorporates herein and supersedes all prior and collateral representations and
agreements by or between the parties. Any and all prior franchise, dealership,
distributorship, or representation agreements, commitments or understandings
which may have been entered into by the parties are hereby terminated and
superseded hereby and any and all claims for violations or breach thereunder are
hereby disavowed and released.
4
8.8. Each Party (the Indemnifying Party) agrees to indemnify, defend, and
hold harmless the other Party (the Indemnified party) from and against any and
all liability for injury to persons or damage to or loss of property to the
extent caused by the negligent act or omission of the Indemnifying Party, its
subcontractors, agents, or employees, including any and all expense and costs,
legal or otherwise, incurred by the Indemnified Party in the investigation and
defense of any claim, demand, or action arising out of the work performed under
this Agreement. Provided, however, that the Indemnifying party shall not be
liable for injury to persons or damage to or loss of property caused by the sole
negligence of the Indemnified Party, its subcontractors, agents, or employees.
However, under no circumstances shall Manufacturer be held liable or have the
duty of indemnification for damages due to improper installation of the Product
as specified in "Exhibit D". This provision shall not absolve the Manufacturer
from liability to defend the Distributor as specified in paragraph 5 of this
Agreement.
The Indemnified Party shall notify promptly the Indemnifying Party of the
existence of any claim, demand, or other matter to which the Indemnifying
Party's indemnification obligations would apply, and shall give them a
reasonable opportunity to settle or defend the same at their own expense and
with counsel of their own selection, provided that the Indemnified Party shall
at all times also have the right to fully participate in the defense. If the
Indemnifying Party, within a reasonable time after this notice, fails to take
appropriate steps to settle or defend the claim, demand, or the matter, the
Indemnified Party shall, upon written notice, have the right, but not the
obligation, to undertake such settlement or defense and to compromise or settle
the claim, demand, or other matter on behalf, for the account, and at the risk,
of the Indemnifying Party.
The rights and obligations of the Parties under this section shall be
binding upon and inure to the benefit of any successors, assigns, and heirs of
the Parties.
8.9 The individuals signing on behalf of Manufacturer and Distributor have
authority to bind the respective parties. Execution and delivery of this
Agreement by Manufacturer and Distributor to the other constitutes a valid and
binding agreement.
IN WITNESS WHEREOF, this Agreement is signed in two or more counterparts as
of the day and year first above written.
"MANUFACTURER" "DISTRIBUTOR"
AMERICAN SOIL TECHNOLOGIES, INC. SUNPRIDE, INC.
AGRIBLEND DIVISION
/s/ ▇▇▇▇ ▇. Kitchen /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------- ------------------------------------
By: ▇▇▇▇ ▇. Kitchen By: ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------- --------------------------------
Its: President/ceo Its: President
----------------------------- --------------------------------
5
EXHIBIT "A"
To Distributorship Agreement between American Soil Technologies, Inc., a Nevada
Corporation ("Manufacturer"), and Sunpride, Inc., a subsidiary of Gerber
California, Inc. ("Distributor"), dated May 10, 2000.
PRODUCT(S), PRICE, AND MINIMUM PURCHASES AND INVENTORY REQUIREMENTS
The Product to which the above-mentioned Agreement relates is the following
and is sold for the price indicated below (subject to change upon 45 (FORTY FIVE
DAYS) prior written notice by Manufacturer to Distributor):
PRODUCT PRICE
------- -----
AGRIBLEND or AGRIBLEND PLUS, $2.00 PER POUND (NOT INCLUDING SHIPPING OR
FOR AGRICULTURE APPLICABLE TAXES OR DUTY, FOB ▇▇▇▇▇▇, ARIZONA)
Said price shall be reduced to $1.85 per pound upon Distributor achieving an
annual volume of one million pounds. Said price shall be reduced retrospectively
in respect of the specific calendar year in which the one million pounds is
achieved and for which the charge shall be in respect of the entire distributor
purchases from Manufacturer for the calendar year and for which the appropriate
credit shall be passed.
MINIMUM PURCHASE REQUIREMENTS (IN THE TERRITORY) NECESSARY TO MAINTAIN
EXCLUSIVITY IN THE TERRITORY AND DISTRIBUTOR PRICE:
PERIOD
MINIMUM PURCHASE REQUIREMENT
Year One (First 12 months from date of this Agreement) 250,000 POUNDS
Year Two (13th month through 24th month) 600,000 POUNDS
Year Three (25th month through 36th month) 1,200,000 POUNDS
Year Four (37th month through 48th month) 3,000,000 POUNDS
Year Five (49th month through 60th month) 4,000,000 POUNDS
MINIMUM INVENTORY REQUIREMENT
Distributor shall at all times maintain an inventory at Distributors choice of
location in the Territory of the Product in the minimum amount of 1,000 kg.
EXHIBIT "B"
To Distributorship Agreement between American Soil Technologies, Inc., a Nevada
Corporation ("Manufacturer"), and Sunpride, Inc., a subsidiary of Gerber
California, Inc. ("Distributor"), dated May 10, 2000.
TERRITORY AND BUSINESS APPLICATIONS
The Territory to which the above-mentioned Agreement relates as follows:
Mexico, excluding therefrom, Baja California (provided, however, Distributor
shall have the right to sell the product in Baja California on a non-exclusive
basis). Distributor acknowledges that a third party is currently
selling/distributing the product in the territory of Baja California and may
continue to do so indefinitely. Manufacturer agrees not increase the number of
distributors in the Territory of Baja California beyond the "third party"
referenced above in this paragraph.
The Business Application (American Soil Technologies, Inc. product to which
this Agreement is applicable) shall be as follows:
"AGRIBLEND" a.k.a., AGRIBLEND PLUS, FOR AGRICULTURE APPLICATIONS.
EXHIBIT "C"
To Distributorship Agreement between American Soil Technologies, Inc., a
Nevada Corporation ("Manufacturer"), and Sunpride, Inc., a subsidiary of Gerber
California, Inc. ("Distributor"), dated May 10, 2000.
PAYMENT AND DELIVERY TERMS
Unless Manufacturer and Distributor otherwise agree in writing to other
terms and conditions of sale, the terms of payment and delivery for Product
purchased under the Agreement referred above shall be as follows:
1. Such credit terms agreed to by the Parties from time to time.
2. Upon acceptance of purchase orders received by Manufacturer from
Distributor, Manufacturer shall deliver to Distributor FOB Manufacturer's
blending located in ▇▇▇▇▇▇, Arizona or at such other location that Manufacturer
may designate. If any delivery location other than Arizona is designated by
Manufacturer, Manufacturer agrees to pay any increase in shipping cost to the
territory that results from the change.
3. Manufacturer agrees to package the product adequately to ensure that the
product maintains its quality, integrity and form until delivery to end buyer.
Provided, however, Manufacturer shall not be responsible for said quality,
integrity, or form if the packaging is opened after FOB delivery to Distributor
or if the product is not stored or transported in accordance with Manufacturer's
recommendations (see Exhibit "D"). It is presently understood that the packaging
procedure is three paper lined bags with a poly inner liner which Manufacturer
has determined is adequate to maintain the quality, integrity, and form of the
product provided reasonable care is taken during transportation or storage.
4. Any pre-sold inventory shall be delivered at the price in effect when
the order was placed by Distributor and accepted by Manufacturer.
5. Manufacturer shall have no liability or indemnification duty for delays
due to causes beyond Manufacturer's control.
EXHIBIT "D"
To Distributorship Agreement between American Soil Technologies, Inc., a
Nevada Corporation ("Manufacturer"), and Sunpride, Inc., a subsidiary of Gerber
California, Inc. ("Distributor"), dated May 10, 2000.
MANUFACTURER'S SPECIFICATIONS
APPLICATION RATE
BROADCAST APPLICATION
▇▇▇▇▇ SOIL: 20 TO 25 POUNDS PER ACRE
CLAY SOIL: 25 TO 30 POUNDS PER ACRE
BANDING APPLICATION
▇▇▇▇▇ SOIL: 8 TO 10 POUNDS PER ACRE
CLAY SOIL: 9 TO 12 POUNDS PER ACRE
APPLICATION METHODOLOGY
BROADCAST APPLICATION
Scatter the dry granules by hand, with a fertilizer spreader, or for best
results, with Valmar equipment, or equal, spreader at the appropriate
application rate specified above. Incorporate into the soil evenly with a rotary
hoe, rotary spreading machine, or other means of tillage that will efficiently
blend the product with the soil. Apply the product before sowing or planting.
Blend to a depth six inches (15 cm).
BANDING APPLICATION
Use insecticide dosing equipment or ▇▇▇▇▇-Box to apply the dry product in the
seed row at the time of planting in a band not less than eight inches in width
to a depth of 3 inches.
PRECAUTIONS
The product exhibits a very low degree of toxicity. Handle as a mild irritant.
Do not inhale. Inhalation may cause irritation of the upper respiratory tract.
Avoid contact with the eyes. Wash thoroughly with soap and water after contact.
Keep out of reach of children. Product is not for human or animal consumption.
SPILL CLEANUP
When spilled and contacted by water, the product will cause surface areas to
become extremely slippery. Accordingly, spills should be collected without the
use of water to avoid potentially hazardous slippery conditions. Thoroughly
collect spilled product. Collect and dispose of product as a non-hazardous
industrial waste.
STORAGE AND HANDLING
The product (Agriblend) is usable for more than two years when stored under 110
degrees Fahrenheit under cool dry conditions.