Exhibit
10.3
Portions
of this Exhibit 10.3 marked by a [__] have been omitted
pursuant to a request for confidential treatment filed separately
with the Commission.
DISTRIBUTORSHIP
AGREEMENT
This
DISTRIBUTORSHIP AGREEMENT (“Agreement”) is made and
entered into as of the 5th day of February 2009 (the
“Effective Date”) by and between WILD Flavors,
Inc. , a Delaware corporation, whose corporate offices are
located at 1261 Pacific Avenue, Erlanger, KY 41018-1260
(“WILD”); Sunwin International Neutraceuticals,
Inc. , a Nevada corporation, whose
corporate offices are located at 6 Shengwang Avenue, Qufu,
Shandong, China 273100 (“SUNWIN”) and Sunwin Stevia
International Corp. , a Florida corporation doing business as
Sunwin USA whose corporate address is P.O. Box 1017, Frisco,
TX 75034-1017 (“Sunwin USA”).
WHEREAS,
SUNWIN has developed and sells certain herbs and herbal extracts
used in traditional Chinese medicines and veterinary products,
including but not limited to a natural sweetener known as
Stevia;
WHEREAS,
SUNWIN wishes to appoint Sunwin USA as a distributor for the
Products, as hereinafter defined, on a world-wide basis (the
“Territory”) on the terms and subject to the conditions
provided for herein; and,
WHEREAS,
Sunwin USA desires to distribute the Products in the Territory with
direction and assistance of WILD; and,
WHEREAS,
WILD, by virtue of its capital investment in SUNWIN and its
agreement to provide the services set forth in Schedule A to this
Agreement (the “Corporate Services”), has been
appointed manager of Sunwin USA and, as such, operates and controls
Sunwin USA, and WILD is willing and able to assist Sunwin USA in
developing uses for and marketing the Products for
use in various applications in the Territory.
NOW,
THEREFORE, in consideration of the mutual covenants and obligations
of the parties contained herein, the parties agree as
follows:
1. Appointment
of Distributor and Services
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A.
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Appointment
of Distributor, Certain Defined Terms
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SUNWIN
hereby: (i) appoints Sunwin USA as its exclusive distributor for
the resale of the RA 80 Products, as hereinafter defined, in the
Territory; (ii) appoints Sunwin USA as its non-exclusive
distributor for the resale of the RA 40 Products, as hereinafter
defined, in the Territory; (iii) appoints Sunwin USA as its
exclusive distributor of the RA 40 Products upon fulfilment of, and
subject to, the terms and conditions set forth in Section 1.B(d)
and (iv) grants Sunwin USA the right to buy all of the Products in
accordance with the terms and conditions of this
agreement. Sunwin USA agrees to act as a distributor of
the Products subject to the terms of this agreement
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The
term “RA 80 Products” as used in this Agreement shall
mean: the branded product known as OnlySweet®, Stevia
graded RA 80 and above, including RA 80 and RA 95, all other forms
of Stevia used as a sweetener under development or developed in the
future that have an equivalent or
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Portions
of this Exhibit 10.3 marked by a [__] have been omitted
pursuant to a request for confidential treatment filed separately
with the Commission.
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better
concentration of sweetness of RA 80 or above and any improvements
to these products.
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The
term “RA 40 Products” as used in this Agreement shall
mean Stevia graded RA 40, RA 50, RA 60 and any other grade
of Stevia up to RA 80, but not including RA 80.
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The
term “Products” as used in this Agreement shall mean
the RA 80 Products and the RA 40 Products.
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SUNWIN
Commitments to Sunwin USA:
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SUNWIN
agrees to deliver to or, as directed by Sunwin USA, for Sunwin USA
to market and sell to all customers in the Territory, and SUNWIN
will not sell the RA 80 Products to any other party in the
Territory.
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SUNWIN
agrees to refer to Sunwin USA all customers who seek to purchase
the RA 80 Products for delivery into the Territory. Sunwin USA
shall purchase the RA 80 Products from SUNWIN for all customers in
the Territory and from no other suppliers except as provided for in
this Agreement.
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SUNWIN
shall provide in its written and / or verbal agreements with its
other business partners that the RA 80 Products produced by or for
SUNWIN may not be sold in the Territory and that only Sunwin USA is
entitled to market and / or sell the RA 80 Products in the
Territory.
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SUNWIN
agrees to sell RA 40 Products to Sunwin USA on a priority basis as
set out in Section 1.B(g) below. At such time as Sunwin
USA’s demand for the RA 40 Products as evidenced by purchase
orders for such amounts meets or exceeds the full production
capacity of SUNWIN for all of the RA 40 Products for a period of 90
consecutive days, SUNWIN will, within 90 days thereafter and the
fulfillment of all pending orders for such products from its other
customers of RA 40 Products, grant to Sunwin USA the exclusive
right to distribute the RA 40 Products in the Territory. Sunwin USA
shall have the exclusive right to distribute the RA 40 Products so
long as Sunwin USA is able to purchase all of SUNWIN’s
production capacity at prices to be agreed upon by SUNWIN and
Sunwin USA.
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SUNWIN
will support Sunwin USA technically with regard to scientific,
product specifications and regulatory aspects and will inform
Sunwin USA of the results of any clinical studies conducted on the
Products.
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SUNWIN
agrees that its manufacturing facility(ies) shall be able to pass a
quality audit by Sunwin USA and / or by WILD at all times during
the term of this Agreement, and Sunwin USA and WILD agree to assist
SUNWIN in correcting any audit deficiencies.
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SUNWIN
shall supply all of Sunwin USA’s needs for the RA 80 Products
before selling and / or shipping Products to any other
person. SUNWIN shall supply all of Sunwin USA’s
needs for the RA 40 Products before selling and / or shipping
Products to any other person on any order received after
written
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Portions
of this Exhibit 10.3 marked by a [__] have been omitted
pursuant to a request for confidential treatment filed separately
with the Commission.
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acceptance
by SUNWIN of Sunwin USA’s purchase order for the RA 40
Products. If, for any reason, SUNWIN cannot supply
sufficient volumes of the Products to meet Sunwin USA’s
priority rights to volume, then Sunwin USA shall be free to
purchase the Products elsewhere to satisfy its volume needs until
such time as SUNWIN is able to fulfill Sunwin USA’s orders
for the Products.
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Sunwin
USA Commitments to SUNWIN:
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Sunwin
USA, at the direction and with the assistance of WILD, agrees to
market and / or distribute the Products in the Territory and to
provide the Corporate Services.
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Sunwin
USA, at the direction and with the assistance of WILD, agrees to
develop prototype products containing the Products and exhibit
these prototypes in appropriate trade shows and / or to appropriate
customers.
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Sunwin
USA, at the direction and with the assistance of WILD, agrees to
provide prototype products containing Stevia to SUNWIN for
its evaluation, when requested by SUNWIN.
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Sunwin
USA agrees to achieve a minimum distribution volume of [
___] Metric Tons of the Stevia grade [
_______________ ] which are included in the Products in
the Territory during [ _________________________ ]
and each calendar year thereafter (the “Minimum Distribution
Requirement”). In the event Sunwin USA does not
achieve and maintain the Minimum Distribution Requirement, then the
parties agree to discuss how best to increase volume sales of the
Products. If after 60 days after the end of each
calendar year [ __________ ] the Parties have not
reached an agreement to be negotiated in good faith on ways to
increase sales of the Products to meet or exceed the Minimum
Distribution Requirement, then SUNWIN shall be permitted to appoint
additional distributors, after providing written notice to Sunwin
USA of its decision to appoint such additional distributors, to
sell the Products in the Territory, and sell any grade of
Stevia or any other product manufactured or distributed by
SUNWIN in the Territory; provided, however, that if Sunwin USA
achieves the Minimum Distribution Requirement in a subsequent
calendar year, then SUNWIN and Sunwin USA will negotiate in good
faith the terms and conditions of reinstatement of the exclusivity
rights provided for in this Agreement.
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Sunwin
USA has the right of first refusal to market and distribute
anywhere in the Territory any new forms of Stevia used as a
sweetener that are not included in the definition of the Products
which are developed by SUNWIN (the “New Products”) on
the following terms. If at any time SUNWIN seeks to sell
the New Products in the Territory, then SUNWIN must first offer
Sunwin USA the exclusive right to distribute the New Products in
the Territory on terms and conditions to be negotiated by the
parties in good faith. Should Sunwin USA and SUNWIN be
unable to reach mutually agreeable terms for such distribution
within 30 days from receipt of written notice from SUNWIN, then
SUNWIN may sell the New Products on a non-exclusive basis to other
parties in or for distribution into the
Territory. However, this right of first
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Portions
of this Exhibit 10.3 marked by a [__] have been omitted
pursuant to a request for confidential treatment filed separately
with the Commission.
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refusal
does not obligate Sunwin USA to market and / or distribute any
other new items developed and produced by SUNWIN.
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2.
Prices and Payment :
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SUNWIN
agrees to sell the Products to Sunwin USA at prices establish by
the following formula (the “Purchase Price
Formula”):
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[__________________________________________________________________________]
=Sale
Price to Sunwin USA
The
term “Cost of Goods Sold” shall be computed in
accordance with Generally Accepted Accounting Principles in the
United States (“GAAP”).
The
term “Value Added or Other Tax” shall mean the value
added tax, duties or levies in effect at the time of shipment of
any products under this Agreement.
The
term “Operating Expenses” shall mean the operating
expenses related to the production, transportation and insurance,
if any, related to the production of the Products.
The
Purchase Price Formula yields the following prices which shall be
the prices to Sunwin USA from [______] :
Description
Price per metric ton (in US $)
SUNWIN
and Sunwin USA agree to review the above listed prices for the
Products quarterly. If, at any time during the term of
this Agreement, Sunwin USA or WILD discovers that some other
producer(s) is / are selling the Products of equivalent quality to
any other person(s) at lower prices than SUNWIN charges Sunwin USA,
then SUNWIN agrees to reduce its markup and sell the Products to
Sunwin USA at or below the other producer(s) market
prices. Sunwin USA shall provide SUNWIN with any
reasonably requested documentation to support Sunwin USA’s
claim that other Stevia producers are selling equivalent
grades of stevia at prices below SUNWIN’s
prices. Thereafter, SUNWIN shall have up to 30 calendar
days in which to adjust the Products’ prices to
Sunwin USA to meet the lower priced Products for
future orders of the Products. If SUNWIN does not meet
the lower price(s), then Sunwin USA shall be free to purchase the
Products from any other producer, in its sole discretion and
without penalty from SUNWIN, until SUNWIN can match the competitive
price.
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Sunwin
USA and SUNWIN shall have the right to conduct a third party audit
to verify these margin calculations and pricing claims at any
time. Any new prices shall become effective on the
15 th
day of
the month following the quarterly review and shall be applied to
new purchase orders submitted after such date.
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Portions
of this Exhibit 10.21 marked by a [__] have been omitted
pursuant to a request for confidential treatment filed separately
with the Commission.
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C.
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Sunwin
USA agrees to pay all amounts
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