T.O.D. Taste on Demand Inc.
Sole Distribution Agreement
SOLE
DISTRIBUTION AGREEMENT
THIS
SOLE DISTRIBUTION AGREEMENT (the " Agreement ") is entered
into this 7th day of February 2009 by and between
(1)
Taste on Demand Inc. , a company incorporated and validly
existing under the laws of Nevada, whose offices are at 55
Ha'Keshet Street, Reut, Israel (" TOD "), and
(2) Cap
Designs Inc., a company incorporated and validly existing under the
laws of California, whose offices are at 17328 Ventura Blvd.,
Ensino, Califonia 91316, wholly owned by (i) Izhak Dahan ,
whose address is Shunit 4/47, Haifa, Israel and (ii) Mr. Uri
Singer (the " Distributor ").
CHAPTER
I – GRANT OF RIGHTS
Art.
1
Exclusive
Distributorship, Products, Territory
The
Distributor hereby represents and warrants to TOD that it has the
knowledge, skills and ability and sufficient means to carry on its
obligations under this Agreement and that it has extensive
experience in manufacturing, promoting, selling and distributing
products to the beverage manufacturers and bottlers in South
America (including the sale of tens of million of cap container
device in South America).
Based
on the Distributor's representations and in reliance upon their
accuracy, TOD hereby grants to the Distributor the exclusive right
to manufacture, distribute, promote and sell the products listed in
Annex 1 (the " Products "), within the territory of
South America (the " Territory "), subject to the terms and
conditions hereof.
CHAPTER
II – DISTRIBUTOR’S OBLIGATIONS
Art.
2
Manufacture,
Distribution and Sale
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The
Distributor shall fund, at its own expense, the manufacturing of a
prototype of the Products (the " Prototype ") and of the
Products themselves.
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The
Distributor shall sell the Products within the Territory under its
own name and behalf and at its exclusive risk, hazard and
liability.
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The
Distributor undertakes to promote the sale of the Products in the
Territory in the most effective way and in co-operation with
TOD. In this context, the Distributor undertakes to
safeguard all interests of TOD with the ordinary
businessman’s diligence.
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The
Distributor represents and warrants to dispose and undertakes to
maintain the financial means, as well as the adequate organisation
in terms of structures, staff and facilities so as to ensure the
most effective manufacturing, promotion, distribution and sale of
the Products within the Territory.
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The
Distributor shall make available to TOD, free of charge, one
prototype of the Products manufactured by it and copies of all
marketing and promotion materials produced by it in every
language. If the Distributor produces only one prototype
of the Product it shall not be required to make such prototype
available to TOD if such prototype is necessary by it for the
promotion of the Products.
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The
Distributor shall be solely responsible for compliance with all
applicable laws relating to its manufacturing, promotion, marketing
and sales activities pursuant to this Agreement. The
Distributor shall be solely responsible to obtain, at its own risk
and expense, all regulatory licenses, authorizations, permits and
approvals necessary to carry on its activities under this Agreement
and for the Products in the Territory.
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TOD
and the Distributor shall be and always act as independent
contractors. In particular, the Distributor is not
authorised to represent and in general to act in the name of
TOD.
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Art.
3
Obligation
to Minimum Sales
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The
Distributor undertakes to sell the following quantities of the
Products (each, a " Minimum Quantity "):
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Within
the first nine months as of the commencement date of this Agreement
(the " First Period "), the Distributor shall not be
obligated to sell any Products.
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Within
the 12-month period after the First Period (the " Second
Period "), the Distributor shall be obligated to sell 15
million Products (the " Second Period Quantity "). For the
purpose of calculating the Second Period Quantity, any and all
Products that have been sold by the Distributor within the First
Period shall be considered to have been sold within the Second
Period.
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Within
the 12-month period after the Second Period (the " Third
Period "), the Distributor shall be obligated to sell 20
million Products (the " Third Period Quantity ").
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The
Third Period Quantity shall be increased by 15% with respect to
each 12-month period after the Third Period and the Distributor
shall be obligated to sell such quantities accordingly, i.e., the
minimum sales obligations during the first 12-month period after
the Third Period is 23 million Products and during the second
12-month period after the Third Period is 26.45 million
Products.
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In
case of non-fulfilment of the obligations imposed on the
Distributor under Art. 3.1, TOD shall only be entitled to terminate
the Agreement with effect 90 (ninety) days after notice of
termination. The Minimum Quantities are not payment
obligations and if the Distributor fails to attain to such Minimum
Quantities, it shall not be required to make any payments on
account thereof and the only remedy available to TOD for such
failure is its right to terminate this Agreement.
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Art.
4
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In
consideration for the rights detailed in Art. 1, the Distributor
shall pay TOD an amount of US$0.07 per Product for each Product
which has been sold by the Distributor and for which consideration
was actually received by the Distributor (the "
Consideration ").
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The
Consideration shall be paid by the Distributor to TOD on a monthly
basis.
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Until
the 10 th
day of
each calendar month, the Distributor shall provide TOD with a
monthly report setting forth the quantity of the Products sold by
it during the immediately preceding month and the aggregate
quantity sold by it during the relevant period for which it is
obligated to a Minimum Quantity. The Distributor shall
promptly provide all necessary information required by TOD for
verification of the reports, the Consideration to which it is
entitled and the attainment of the Distributor with its Minimum
Quantity obligations. If requested by TOD, the
Distributor shall provide TOD with access to all its books and
records for purposes of ensuring the Distributor's full compliance
with its obligations hereunder.
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Art.
5
Sales
Outside the Territory
Save
as otherwise provided for by mandatory law of the Territory or as
may be agreed in writing by TOD, the Distributor undertakes not to
sell, promote or assist any sale of Products outside the
Territory.
Notwithstanding
the foregoing, the Distributor shall have the right until November
4, 2009 to engage Inbev in distribution of the
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