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Sole Distribution Agreement

Distribution Agreement

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T.O.D. TASTE ON DEMAND INC | Cap Designs Inc

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Date: 2/12/2009

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T.O.D. Taste on Demand Inc.

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 ").






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.




Art. 2


Manufacture, Distribution and Sale



The Distributor shall fund, at its own expense, the manufacturing of a prototype of the Products (the " Prototype ") and of the Products themselves.




The Distributor shall sell the Products within the Territory under its own name and behalf and at its exclusive risk, hazard and liability.




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.



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.






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.




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.




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.


Art. 3


Obligation to Minimum Sales



The Distributor undertakes to sell the following quantities of the Products (each, a " Minimum Quantity "):




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.






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.






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 ").






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.



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.





Art. 4




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 ").




The Consideration shall be paid by the Distributor to TOD on a monthly basis.




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.


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 Products in channels outside the Territory; provided, that Inbev undertakes to purchase minimum quantities for such territories in volume acceptable to TOD.


If TOD has negotiated a distribution or license agreement with respect to territories outside the Territory with third parties (the " Other Channel "), it shall have the right to notify the Distributor of such agreement with the Other Channel and the Distributor shall have 15 days to elect whether it wishes to match the quantities for such territories for the same periods through Inbev.  If the Distributor elects to so match the quantities for the relevant periods within such 15-day period, then it shall provide TOD with written evidence of Inbev's willingness to accept terms similar to the terms agreed on with the Other Channel, and TOD shall not enter into the

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