EXHIBIT 10.11
DISTRIBUTION AGREEMENT
This Distribution
Agreement is made and entered into this 15 day of
February, 2005, by and between SEALIFE MARINE PRODUCTS, INC., a California
corporation ("Company"),
having principal
offices at 5601 Slauson Avenue, Suite
283, Culver City, California 90230, and SURFACE PROTECTION INDUSTRIES
INTERNATIONAL, a California corporation ("Distributor") having its principal
offices at 3660 East Pico
Boulevard, Los Angeles, California 90023.
RECITALS
A.
Company is
engaged in the manufacture and sale of marine
paints sold under the name of
Sealife Marine Products.
B.
Distributor desires to act as the exclusive distributor in
the
territory hereafter described
for the products manufactured by Company.
C.
Distributor represents
that it possesses the ability and
wherewithal to promote the
sale and use of products manufactured by Company
for
the types of accounts
approved in Exhibit "A" and is desirous of developing
demand for and selling such
products on an exclusive basis in the territory
set
forth in Exhibit "A" (the
"Territory).
D.
Company is desirous of having Distributor develop demand for
and sell its products in the Territory on the terms and
conditions
set forth
herein.
E.
Distributor and
Company desire to set forth the terms and
conditions of their
relationship and their respective rights and
obligations.
NOW, THEREFORE, the parties do hereby agree as follows:
1.
INCORPORATION OF RECITALS.
Each of the above Recitals are incorporated in this Agreement as
though
set forth in full
hereat.
2.
APPOINTMENT.
2.01
TERRITORY. Company
hereby appoints Distributor upon the terms
and conditions hereafter set forth, as its exclusive distributor in the
Territory to sell the marine
paints manufactured by
Company. The marine
paints
are hereafter referred to as
the "Products". See Exhibit "B" for product listing
an distributor
pricing.
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2.02
ACCEPTANCE.
Distributor accepts
the appointment
to develop
demand for and to sell
Company Products
within the Territory
and will make all
sales hereunder in accordance
with this Agreement.
Distributor shall make every
effort to adhere to Company
pricing schedules
relative to wholesale
prices and
volume
discounting.
3.
TERRITORY.
Distributor agrees that it will not sell any of the Products
outside of
the Territory, and Company agrees that it will
not appoint other
distributors,
representatives or agents for
the sale of the Products in the Territory nor will
any of its employees sell any
of the Products in the Territory. Company further
agrees that it shall not
assist distributors or
representatives of the Products
in other territories to sell Products in
the Territory by shipping Products to
or for them, into the
Territory.
4.
TERM.
The term of this
Agreement shall be for
a period of three (3)
years,
commencing from the date of this Agreement. This Agreement shall be
automatically renewed on the
same terms and conditions for successive periods of
twelve (12) months
each unless one party
gives to the other
written notice
of
its intention to terminate at least
one hundred twenty
(120) days prior to the
expiration of the initial term or the expiration of any renewal term.
Notwithstanding the foregoing, either party shall have the right
to terminate
this Agreement on thirty (30)
days written notice to the other for cause, if the
reason for the cause has not
been cured within the time hereafter set forth.
5.
DISTRIBUTOR'S DUTIES.
5.01
ACCEPTANCE OF APPOINTMENT. Distributor accepts its
appointment
and agrees to use its best
efforts to diligently promote and develop the
goodwill and sale of the
Products in the Territory and in connection therewith
to make the Products an
integral part of its marketing and sales programs.
5.02
SALES STAFF.
Distributor agrees to maintain an adequate sales
staff and facilities in the
Territory and in this regard, may appoint dealers,
salesmen and/or
representatives to sell the Products in the Territory.
5.03
COMPLIANCE WITH LAWS.
Distributor agrees to fully comply with
all applicable laws,
statutes, rules and
regulations in respect to the sale and
distribution of the
Products.
6.
OPERATIONS.
6.01
ACCEPTANCE OF ORDERS; FILLING.
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(a) All orders
Company receives for the Products from
Distributor are subject to acceptance by
Company. Company
agrees that it
will
not unreasonably refuse to
accept an order and Company shall accept or reject an
order within five (5) days after receipt and, if rejected, shall advise
Distributor as to the
reason.
(b) Company
will use its best efforts to fill the
accepted orders as promptly
as practicable,
subject, however, to
delays caused
by transportation conditions, labor or material shortages, strikes, riots,
fires, or any other cause
beyond Company's control. In all cases, Company will
use its best efforts to
advise Distributor
in advance of any
inability to make
full and timely delivery of any Products, which Distributor has previously
ordered.
6.02
ORDERS-PRICES-PAYMENT
(a) The
Initial Minimum Order of the Products by
Distributor shall be 200 gallons. Payment for this for this order
will require
50% deposit and remaining 50%
due upon shipment of 200 gallons.
(b) Going
forward payment for
Products shall be made net
thirty (30) days from receipt of Product. Products ordered will be f.o.b.
factory in Los Angeles,
California.
(c) The
initial schedule of prices for the Products is as
set forth in Exhibit
"B" hereto.
Company may change the
schedule of prices
at
any time to become
effective within sixty (60) days notice to Distributor.
Company will honor all orders received prior to the price change becoming
effective, although delivery is not made until after
the effective date of the
price change. However, if the manufacturer incurs raw material increases and
passes those increases on to
the company, the
company in turn will increase its
price accordingly.
6.03
COMMON CARRIERS AGENTS OF DISTRIBUTOR. Whenever Company shall
deliver or cause to be delivered to a common carrier any goods ordered by
Distributor, whether the particular
carrier shall have
been designated in
the
shipping or routing
instructions
of Distributor
or not, Company shall not be
responsible for any delays or damages in
shipment and the
common carrier,
to
which Company shall deliver
goods shipped to
Distributor
or its customer,
is
declared to be the agent of
Distributor.
6.04
CONFLICTS OF
INTEREST; NON-HIRE PROVISION. Distributor
represents it is free to enter into this
Agreement,
and that this
engagement
does not violate the terms of
any agreement between
Distributor
and any
third
party. Further, Distributor, in rendering its duties shall not utilize any
invention, discovery,
development,
improvement,
innovation, or trade secret in
which it does not have a proprietary interest. During the term of this
Agreement, Distributor shall devote as much of its
productive time, energy and
abilities as Distributor, in
its sole discretion,
shall determine to accomplish
the sales of the Products. Distributor is expressly free to perform
non-competing sales or services for other
parties while performing services for
Company.
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For a period of one year following the termination of this Agreement,
Distributor shall not, directly or indirectly,
hire, solicit or encourage to
leave the Company's employment, any employee of Company or hire any such
employee who has left
Company's employment.
6.05
EXPENSES. Except
as specifically herein provided to the
contrary, Distributor shall bear the full cost and
expense of
providing all
services required to be
provided, including expenses relating to salaries of its
employees, office, travel, correspondence,
business
communications,
demonstration time and any and all taxes which
may be imposed upon
Distributor
in connection with its
selling and operating activities.
6.06
RIGHT TO USE NAME.
(a) Subject to
the provisions of
Subsection (b) of
this
Section 6.06, Distributor must use the name SeaLife as
applied to the Products
in any sign or advertising
during the continuance of this Agreement.
(b) In case of
termination
of this Agreement, or upon
request of Company,
Distributor
shall discontinue use
of such name in any sign
or advertising and thereafter
shall not use the name, directly or indirectly, in
connection with its business nor use any other name,
title or expression so
nearly resembling it as would be likely
to lead to confusion or uncertainty or
to deceive the public.
Distributor shall, however, have the right to continue
to
sell any of its remaining
inventory of the Products under the name SeaLife.
6.07
INSURANCE.
(a)
Distributor will
carry liability insurance in an
amount not less than
$2,000,000
relative to any
service that it
performs
for
Company, will name Company as an
additional
insured and will
provide
Company
with a Certificate of
Insurance.
(b) Company
will carry liability
insurance in an
amount
not less than $2,000,000,
which shall include
damage to third parties caused by
pollution due to use of the
