SALES FORCE AGREEMENT

 

EX-10.1

 

                          SALES FORCE AGREEMENT

 

 

        This Sales Force Agreement is made and entered into as of this 21st day

        of January, 2004, by and between SEALIFE MARINE PRODUCTS, INC., a

        California corporation ("SeaLife") and BROKERS UNLIMITED, INC., a

        California corporation ("BUI") with reference to the following:

 

                                    RECITALS

 

        A.      SeaLife Marine Products, Inc. is a California corporation, which

        has rights to manufacture and sell marine paints including SeaLife 1000,

        a solvent base, anti-fouling coating for underwater use; SeaLife 2000, a

        water base anti-fouling coating for submerged marine use; and SeaLife

        3000, a water base coating with an advance anti-rust additive for above

        water applications.   SeaLife has rights to manufacture and sell these

        products, which are part of EPA Registration Number 70214-1, from its

        parent, SeaLife Corporation, a Delaware corporation (which including

        improvements and new marine paint products constitute the "Products").

 

        B.       BUI is a California corporation, incorporated on October 22,

        2003.

 

        C.       SeaLife has salespersons and sales accounts, as set forth on

        Exhibit "1" and has prospective distributors as set forth on Exhibit

        "2."   These sales accounts and prospective distributors are reserved by

        SeaLife.

 

        D.       BUI has the expertise and wherewithal to develop distributors

        and to promote SeaLife's products.   BUI represents and possesses the

        ability and wherewithal to promote the sale and use of the Products

        manufactured by SeaLife, and is desirous of developing demand for,

        obtaining distributors, and selling the Products on an exclusive basis

        worldwide, excepting only those sales accounts and prospective

        distributors reserved to SeaLife.

 

        F.       SeaLife is agreeable to appointing BUI as its sales force and

         BUI is agreeable to accepting such appointment on the terms and

        conditions set forth herein.

 

        WHEREFORE, it is mutually agreed as follows:

 

                                   ARTICLE 1

 

                                  APPOINTMENT

 

         1.1      Exclusive Appointment; Territory.

 

                (a)      SeaLife appoints BUI as the sole and exclusive sales

                force for the sale of its Products worldwide, excepting (i)

                Scandinavia (Sweden, Norway, Denmark, Finland, Iceland,

                Lithuania, Latvia and Estonia) which territory is to be handled

                by Marika Borofsky as a House Account, (ii) Japan and Korea,

                which territory is to be handled on a non-exclusive basis with

                 Bob Lee, who shall handle enumerated Housed Accounts, as set

                forth in Exhibit "1," and (iii) other House Accounts.   The

                worldwide territory, with the exceptions noted above,

                constitutes the Territory.

 

                (b)      BUI shall continue to be such sole and exclusive

                 sales force after June 30, 2004, conditioned upon BUI

                 meeting or exceeding the sales goals set forth in

                 Article 6.   Exclusivity and the right to continue sales of

                 the Products may be reduced or lost as set forth in Section

                 6.2, if BUI does not obtain minimum sales set forth therein.

 

                (c)      During the term of this Agreement, SeaLife shall not

                appoint any other or different person, firm, business entity, or

                corporation to sell the same Products, excepting only House

                Accounts.

 

        1.2      House Accounts.   SeaLife reserves the right to sell directly to

        House Accounts.   For purposes of this Agreement, House Accounts are

        defined as the Sales Accounts and representatives set forth on Exhibit

        "1" and the Prospective Distributors set forth in Exhibit "2."

 

        1.3      Acceptance.   BUI accepts the appointment to develop demand for

        and to sell the Products, to establish distributors to sell the

        Products, to assist distributors or House Accounts in promoting and

        selling the Products, and to make all sales hereunder in accordance with

        this Agreement.

 

        1.4      Term.   Unless terminated as hereinafter provided, this Agreement

        and the appointment of the BUI hereunder shall continue in force through

        March 31, 2008, and shall automatically be extended thereafter for one

        year periods, unless either party shall give the other party ninety days

        written notice prior to such anniversaries of its election to terminate

        this Agreement, or this Agreement is terminated pursuant to Article 7.

 

                                   ARTICLE 2

 

                                   BUI DUTIES

 

        2.1      Establishment of Distributors.   BUI shall obtain one or more USA

        West Coast distributors to promote and sell the Products on or before

        January 31, 2004.   Any prospective distributorship arrangement shall be

        in writing and shall be presented to SeaLife for its execution and

        approval, which will not be unreasonably withheld or delayed.   Failure

        of BUI to have obtained a West Coast distributor reasonably acceptable

        to SeaLife on or before January 31, 2004, shall permit SeaLife to

        terminate the contract on ten day's written notice.

 

        2.2      Duties of BUI.   BUI shall obtain, create, supervise and assist

        distributors to sell the Products.   BUI shall provide such support,

        prospective customers, leads, and sales assistance to accomplish the

        minimum sales set forth in Section 6.1.   BUI shall select distributors

        for SeaLife's approval, which will not be unreasonably withheld or

        delayed, and help them with their strategic plans and sales, including

        but not limited to monitoring relationships; inspecting sales

         performance of the distributor; creating and utilizing

        computer/telephone technology to process, track and manage all orders

        obtained through the distributors, and, if applicable, the House

        Accounts; set up and operate a toll-free telephony services and web

        portals; providing content and information provided by SeaLife as to

        distributors and the Products to enable retail and wholesale customers

        to obtain the Products and determine the viability of the Products for

        their uses.   The cost of creating and maintaining the web portals and

        telephony services shall be solely that of BUI, and no content shall be

        included without the prior approval of SeaLife.

 

        2.3      Levels of Service.   BUI shall provide three levels of service,

        namely:

 

         (a)      Low Level, by providing remote sales support including

         conference calls and providing information to assist the House Account

         representative to close the sale, strategy and order processing support

         to the House Account distributors and their customers, and to the House

         Accounts, with commissions payable pursuant to Section 3.3(b).

 

        (b)      Middle Level support, providing the Low Level support plus

        onsite sales support, including but not limited to, providing staff to

        work with the distributors or House Account to promote the Products, to

        develop solid leads, and to assist in accomplishing sales of the

        Products, with commissions payable pursuant to Sections 3.3(c) or

        3.3(d).

 

        (c)      Full Support, providing the Middle Level support plus signing up

        distributors, assisting with the strategic plans to accomplish greater

        sales, and assisting sales to the ultimate end users along with the

        distributor, including attendance and participation in face-to-face

        meetings, all with the approval of SeaLife, with commissions payable

        pursuant to Section 3.3(a).

 

        2.4      Marketing Plans/Content.   BUI agrees to work with and assist

        SeaLife in developing marketing plans and web portal promotions and

        information, in conjunction with their marketing assistance to

        distributors, all to be approved by SeaLife prior to incorporation

        and/or dissemination.

 

        2.5      Bi-Monthly Conferences.   SeaLife and BUI shall have bi-monthly

        meetings, at times and places mutually agreed upon, to discuss and plan

        goals and programs to further the marketing distribution and sale of the

        Products.   These conferences shall include, but not be limited to,

        commitment of resources by SeaLife and BUI; training plans and

        determinations to be executed by SeaLife and BUI; action plans to be

        executed by BUI; targeting distributors and potential customers;

        providing maintenance schedules for existing distributors and customers;

        and developing marketing plans for improvements and enhancements of the

         Products and/or new products.

 

        2.6      Monthly Reports.   BUI shall provide SeaLife monthly reports

        setting forth its distributors, their marketing efforts, contacts made,

        the sales accomplished, the leads being pursued, and marketing plans for

        the next two quarters.

 

        2.7      Customer Follow-Up.   BUI shall create, design, operate and

        maintain customer follow-ups and customer satisfaction programs, all

        with the approval of SeaLife, which will not be unreasonably withheld or

        delayed.

 

        2.8      Staff.   BUI represents and warrants that it will provide

        sufficient staffing to obtain distributors; assist the marketing and

        sales of the Products; maintain the toll-free telephony services;

        maintain and update the web portals (with content to be provided by

        SeaLife); develop an enhanced marketing plans for the distributors and

        their clients; and assist and work with SeaLife to grow the business and

        increase sales to the mutual benefit and satisfaction of both parties.

 

        2.9      Compliance With Laws.   SeaLife and BUI agree to fully comply

        with all applicable state, federal and international laws, statute,

        rules and regulations with respect to marketing of the Products.

 

        2.10     Expenses.   BUI shall bear the full cost and expense of

        providing all of its services including, but not limited to, salaries

        of its employees, office and administrative expenses, travel,

        correspondence, business communications,advertising programs and

        market plans, presentations, creation of the web portals and toll-free

        telephony services, supporting such items, and other related costs

        and all taxes imposed on BUI, subject to BUI having the right to

        dispute any taxes imposed.

 

                                   ARTICLE 3

 

                                   OPERATIONS

 

        3.1      Acceptance of Orders; Filling.

 

                (a)      All orders SeaLife receives for its Products from BUI or

                its distributors are subject to confirmation by SeaLife, which

                will not be unreasonably withheld or delayed.

 

                (b)      SeaLife will use its best efforts to fill the accepted

                orders as promptly as practicable, subject, however, to delays

                caused by Government orders or requirements, transportation

                conditions, labor or material shortages, strikes, riots, fires,

                 or any other cause beyond SeaLife's control.   In all cases,

                SeaLife will use its best efforts to advise BUI in advance of

                any inability to make full and timely delivery of any products

                which the Sales Representative has previously ordered.

 

        3.2      Payment.

 

                (a)      BUI's distributors and/or their customers shall pay

                SeaLife for its Products.

 

                (b)      SeaLife may change the schedule of prices at any time

                with thirty (30) days notice.   Such price increases shall not

                apply to confirmed orders in process.

 

        3.3      Commission to BUI.

 

                (a)      BUI shall be paid a commission of 17% of the Gross Sales

                received by SeaLife for sales accomplished by BUI and/or its

                distributors in the territory, less freight and delivery costs,

                product returns, discounts, and repacking charges.   Discounts

                shall be handled on a pro rata basis, e.g., if the discount

                required is 20%, BUI's commission will be reduced by 20% (such

                pro rata discounts are "Discounts").

 

                (b)      For House Accounts, BUI will assume primary service

                responsibilities after the close of sale, and assist SeaLife's

                representatives and accounts through sale.   The services

                rendered by BUI to assist in accomplishment of House Account

                 sales, BUI shall receive a commission of 7% of the Gross Sales

                received by SeaLife for sales accomplished by the House Account

                representative, less freight and delivery costs, Product

                returns, Discounts, and repacking charges.

 

                (c)      For all new accounts obtained by BUI and/or its

                distributors from SeaLife recommended prospective customer

                leads, BUI shall be paid a commission of 12% of the Gross Sales

                 received by SeaLife for sales accomplished, less freight and

                delivery costs, Product returns, Discounts, and repacking

                charges.

 

                (d)      Such payment to BUI shall be within fifteen (15) days of

                 receipt of payment by SeaLife from BUI's distributors, or its

                customer, or House Account customer.

 

               (e)      SeaLife shall provide BUI written notification of leads

               and prospects with the name and address of the contact person.

               SeaLife representatives shall assist BUI as requested, to

               accomplish the sale of the Products to such leads. BUI and/or

               its distributors shall have primary responsibility of following

               up and attempting to close sales to the lead.   All Gross Sales

               obtained from such lead shall be subject to the 12% commission

               to BUI and Middle Level support. The level of support shall

               determine if a 12% or 17% commission is applicable.

               If BUI and/or its distributors have already contacted the

               prospect, they shall provide written notice to SeaLife of the

               prior contact, the person contacted,and information regarding

               that contact.   To assist both parties in this respect,

               in its monthly reports, BUI shall provide lists of names of

               persons and entities contacted so that there will be fewer

               disputes as to who created the lead which ultimately resulted

               in the sale.   If the parties disagree as to the appropriate

               commission (17% or 12%) to BUI, the decision shall be submitted

               to mediation or arbitration pursuant to Article 9.

 

                (f)      Gross Sales equal all sums actually received by Company

                from the sale of Products.

 

        3.4      BUI's Efforts, Facilities and Personnel.   BUI will use its best

        efforts to promote demand for and sale of SeaLife's Products and will

        maintain adequate facilities and sales and personnel for the purpose.

        BUI shall have the right, subject to SeaLife's prior approval, which

        will not be unreasonably withheld or delayed, to terminate a distributor

        and replace it with a more productive distributor.

 

        3.5      Place of Business; Display.   BUI shall maintain a place of

        business, display materials, website portals, toll-free telephonic

        services and demonstration sites reasonably satisfactory to SeaLife at

        all times, and SeaLife shall have the right at all reasonable times

        during business hours to inspect the place of business and display

        materials for matters connected with the Agreement.

 

        3.6      Appointment of Distributors, Salesmen or Other Representatives.

 

                (a)      BUI shall work and develop the Territory to the

                reasonable satisfaction of SeaLife, and in doing so may appoint

                 distributors, salesmen, or other representatives to sell

                SeaLife's Products.

 

                (b)      SeaLife will execute agreements with the distributors

                obtained by BUI and approved by SeaLife.

 

                (c)      Upon expiration or prior termination of any such

                agreement for any cause, BUI shall furnish SeaLife with notice

                thereof.

 

        3.7      Report of Sales.   SeaLife shall furnish BUI monthly sales

        reports of all sales of Products.

 

        3.8      Confidentiality.   BUI acknowledges that during the engagement it

        will have access to and become acquainted with various trade secrets,

        inventions, innovations, processes, information, pricing, product

         development, marketing, promotional activities, records and

        specifications owned or licensed by SeaLife and/or used by SeaLife in

        connection with the operation of its business including, without

        limitation, SeaLife's business and product processes, methods, customer

        lists, accounts and procedures ("Confidential Information").   BUI agrees

        that it will not disclose any Confidential Information, directly or

        indirectly, or use any Confidential Information in any manner, either

        during the term of this Agreement or at any time thereafter, except as

        required in the course of this engagement with SeaLife.   All files,

        records, documents, blueprints, specifications, information, letters,

         notes, media lists, original artwork/creative, notebooks, and similar

        items prepared or furnished by SeaLife and containing Confidential

        Information, shall remain the exclusive property of SeaLife.   BUI shall

        not retain any copies of the foregoing without SeaLife's prior written

        permission.   Upon the expiration or earlier termination of this

        Agreement, or whenever requested by SeaLife, BUI shall immediately

        deliver to SeaLife all such files, records, documents, specifications,

        information, and other items in its possession or under its control,

        upon written request from SeaLife.

 

        In furtherance of its confidentiality obligations, BUI, its agents,

        servants and/or employees, undertake:

 

                (a)      To keep all the Confidential Information in confidence;

 

                (b)      To use any Confidential Information only for the

                purposes of selling SeaLife's product;

 

                (c)      Not, without SeaLife's prior written consent, to

                communicate or to disclose or copy any Confidential Information

                to any person other than any of BUI's directors, officers,

                employees, agents or representatives who require access to sell

                SeaLife's Products (each such person an "Authorized Person");

 

                (d)      To ensure that all Authorized Persons are, prior to the

                disclosure of Confidential Information, made aware of its

                 confidential nature and that they hold the Confidential

                Information in accordance with the terms of this Agreement;

 

                (e)      That, if Confidential Information is to be disclosed per

                Court order or is disclosed under a legal requirement, BUI shall

                notify SeaLife immediately.   If an unauthorized disclosure is

                made, BUI shall notify SeaLife immediately and use its best

                efforts to recover the Confidential Information disclosed within

                a two year period; and

 

                (f)      That BUI shall indemnify and hold harmless SeaLife for

                any damages which a Court in a final decision shall have

                accepted to have been caused by the unauthorized disclosure or

                breach of this Agreement, including the cost of any reasonable

                expenses incurred as a result of such disclosure or breach.

 

        3.9      Conflicts of Interest; Non-Hire Provision.

 

              (a)      BUI represents that it is free to enter into this

              Agreement, and that this engagement does not violate the terms

              of any agreement between BUI and any third party.   Further,

              BUI, 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, BUI shall

               devote as much of its productive time, energy and

              abilities, if any, as BUI, in its sole discretion, shall

              determine.   BUI is expressly free to perform non-competing

              sales or services for other parties while performing services

              for SeaLife.   For a period of two years following any

              termination, BUI shall not, directly or indirectly hire,

              solicit, or encourage to leave SeaLife's employment, any

              employee, consultant, or contractor of SeaLife or hire any

              such employee, consultant, or contractor who has left

              SeaLife's employment or contractual engagement within two

              years of such employment or engagement.

 

                 (b)      SeaLife represents that it is free to enter into this

                Agreement, and that this engagement does not violate the terms

                of any agreement between SeaLife and any third party.   Further,

                SeaLife, 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.

                SeaLife is expressly free to perform non-competing sales or

                services for other parties while performing services for

                SeaLife.   For a period of two years following any termination,

                SeaLife shall not, directly or indirectly hire, solicit, or

                 encourage to leave BUI's employment, any employee, consultant,

                or contractor of BUI or hire any such employee, consultant, or

                contractor who has left BUI's employment or contractual

                engagement within two years of such employment or engagement.

 

        3.10     Right to Use Name.

 

                (a)      Subject to the provisions of Subsection (b), BUI may use

                the name SeaLife as applied to SeaLife's Products in any sign or

                advertising during the term of this Agreement.

 

                (b)      In case of termination of this Agreement, BUI shall

                discontinue use of such name in any sign or advertising and

                thereafter sh