================================================================================
SALES AND DISTRIBUTION AGREEMENT
================================
THIS AGREEMENT made this 22nd day of October, 2007
BETWEEN:
OOO "Neonovi Gorod" having its principal office at 160 Ul.Dobrolubova,
Novosibirsk, Russia ("Neon City" or "Distributor")
And
INNOCENT, INC. at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇
("Innocent", or the "Company")
WHEREAS, Neon City is an agency specializing in product distribution, marketing,
and advertising in Russia and former CIS countries.
WHEREAS, Innocent resells new food products produced or developed by North
American companies ("Products") to foreign markets.
WHEREAS, the Parties mutually desire to establish a preferred relationship with
each other for the purpose of resale of the Products in Russia and former CIS
countries.
THIS AGREEMENT WITNESSETH THAT in consideration of the mutual covenants and
agreements set forth below, the parties covenant and agree as follows:
ARTICLE 1
APPOINTMENT OF DISTRIBUTOR
1. Distribution Right. The Company hereby appoints and grants
--------------------
Distributor the non-exclusive and non-assignable right to re-sell the products
supplied by Innocent. The distribution right shall be limited to customers who
have places of business in, and will initially sell the products supplied by
Distributor in the geographic area ("Target Territory") set forth in Exhibit "A"
attached hereto. The Distributor accepts the right to re-sell the products
supplied by Innocent in consideration of $500 (five hundred dollars) payable
upon signing of this Agreement.
2. Prices. All prices stated are FOB the Company's offices in Petaluma,
-------
California, USA, or where the products will be shipped directly from
manufacturer or distributor in North America, offices and distribution centers
of these manufacturers and distributors. Prices do not include transportation
costs which shall be borne by Neon City. Prices do not include federal, state or
local taxes applicable to the products sold under this Agreement. An amount
equal to the appropriate taxes will be added to the invoice by the Company where
the Company has the legal obligation to collect such taxes. Distributor shall
pay such amount to the Company unless Distributor provides Company with a valid
tax exemption certificate authorized by the appropriate taxing authority. Neon
City agrees to pay to the Company up to 40% markup on the Products purchase
price, excluding shipping costs if the Products were shipped directly to Neon
City, paid by the Company to its suppliers in North America.
3. Terms. Terms are net cash upon delivery, except where satisfactory
-----
credit is established in which case terms are net thirty (30) days from date of
delivery. The Company reserves the right to revoke any credit extended at the
Company's sole discretion. Distributor agrees to pay such invoices when due
regardless of other scheduled deliveries. Invoices not paid within thirty (30)
days of the invoice date will have one percent (1 %) per month finance charge
assessed against the unpaid balance from the date of invoice until the date of
payment.
-1-
4. Continuation of Business. This Agreement shall not prevent
-------------------------
or restrict Neon City from continuing its business as usual in the Target
Territory.
ARTICLE II
MARKETING AND ADVERTISING
1. Sales. Distributor shall use its best efforts to promote the sale
-----
and distribution of the products and to provide adequate support, which
efforts shall include the following:
(a) Establishing and maintaining appropriate, attractive and
accessible premises and facilities for the display and demonstration of the
Products;
(b) Provide an adequate, trained sales and technical staff to
promote the sale and marketing of the Products;
(c) Undertake promotional campaigns and canvas prospective
buyers to stimulate the sales of Products;
(d) Provide the Company with forecasts every month of its
probability requirements for the next six months for Products, such forecasts
to be in such manner and on forms to be specified by Company and agreed to by
Distributor.
2. Advertising. The Company shall, upon request, provide necessary
-----------
product information to the Distributor to assist with product promotion on the
territory.
ARTICLE III
DELIVERY
1. Purchase Orders. Distributor shall order Products by written
----------------
notice to Company. Each order shall specify the quantity of Products to be
shipped, and the desired method of shipment. Company shall indicate its
acceptance of such release by returning a signed copy to Distributor. Company
agrees to ship Products to Distributor as close as possible to the delivery
schedule set forth in each order as accepted by Company, unless Company
otherwise indicates in writing. Company shall not be required to honor any
release which: (a) specifies a shipping date earlier than Company's then current
delivery schedule for the date such release is received by Company and/or (b)
specifies a quantity to be delivered in any one month within the current
delivery schedule which is greater than one hundred percent (100%) of the total
quantity shipped in the preceding thirty (30) day period.
2. Shipment. All shipments of Products shall be made FOB Company's
---------
offices in Petaluma, California, USA, or where the products will be shipped
directly from manufacturer or distributor in North America, offices and
distribution centers of these manufacturers and distributors, and liability for
loss or damage in transit, or thereafter, shall pass to Distributor upon
Company's delivery of Products to a common carrier for shipment. Shipping dates
are approximate and are based, to a great extent, on prompt receipt by Company
of all necessary ordering information from Distributor. Distributor shall bear
all costs of transportation and insurance and will promptly reimburse Company if
Company prepays or otherwise pays for such expenses. Company shall not be in
default by reason of any failure in its performance under this Agreement if such
failure results from, whether directly or indirectly, fire, explosion, strike,
freight embargo, Act of God or of the public enemy, war, civil disturbance, act
of any government, de jure or de facto, or agency or official thereof, material
or labor shortage, transportation contingencies, unusually severe weather,
default of any other manufacturer or a supplier or subcontractor, quarantine,
-2-
restriction, epidemic, or catastrophe, lack of timely instructions or essential
information from Distributor, or otherwise arisen out of causes beyond the
control of the Company. Nor shall the Company at any time be liable for any
incidental, special or consequential damages.
3. Cancellation. All sales to Distributor are final, after receipt of
------------
written purchase order.
ARTICLE IV
TERM OF AGREEMENT
1. Term. This agreement shall be effective on the date first
----
set forth above and shall continue in effect until the second anniversary of the
date hereof, unless earlier terminated in accordance with the provisions of
Section 10 hereof.
2. Renewal. This Agreement will be renewed automatically for the
-------
period of one year unless terminated by the parties.
ARTICLE V
TRADEMARKS
1. Trademarks of the Parties to this Agreement. Each party shall
--------------------------------------------
have the right to exercise quality control over the use of its Trademarks by the
other party to the degree necessary, in the sole opinion of the owner of such
Trademarks, to maintain the validity and enforceability of such Trademarks and
to protect the goodwill associated therewith. Each party shall, in its use of
the other's Trademarks, adhere to a level of quality at least as high as that
used by such party in connection with its use of its own Trademarks. If the
owner of a Trademark, in its reasonable opinion, finds that use of the Trademark
by the other party of such Trademark threatens the goodwill of the Trademark,
the user of such Trademark shall, upon notice from such owner, immediately, and
no later than ten (10) days after receipt of such owner's notice, take all
measures reasonably necessary to correct the deviations or misrepresentation in,
or misuse of, the respective items.
2. Other's Trademarks. Each party shall use the other's
--------------------
Trademarks in accordance with sound trademark and trade name usage principles
and in compliance with all applicable laws and regulations of the United States
(including without limitation all laws and regulations relating to the
maintenance of the validity and enforceability of such Trademarks) and shall not
use the Trademarks in any manner that might tarnish, disparage, or reflect
adversely on the Trademarks or the owner of such Trademarks. Each party shall
use, in connection with the other's Trademarks, all legends, notices and
markings required by law. No party may alter the appearance of another's
Trademarks in any advertising, marketing, distribution, or sales materials, or
any other publicly distributed materials without the prior written consent of
the other party.
ARTICLE VI
CONFIDENTIAL INFORMATION
1. Innocent shall not utilize or disclose any confidential
information, knowledge, or data concerning inventories, improvements, business,
production methods, and/or trade secrets of Neon city (the "Confidential
Information"), except as Neon City may otherwise consent to in writing or unless
the same information has become public knowledge through no fault by Innocent.
-3-
2. Neon City shall not utilize or disclose any confidential
information, knowledge, or data concerning business, marketing and production
methods, customer information and/or data and/or trade secrets of Innocent,
except as Innocent may otherwise consent to in writing or unless the same
information has become public knowledge through no fault by Neon City.
ARTICLE VII
RESTRICTIONS ON AUTHORITY
1. Neon City has no authority, under any circumstances, either
expressed or implied, to incur any liability or obligations on behalf of
Innocent, including, but not limited to:
2. Making any quotations on any Products or services,
modifications to the agreements signed by Innocent without a written approval
from Innocent;
3. Binding Innocent to any contract of employment. Neon City
is solely responsible for its own employees, sales persons and its
representatives, and for their actions. Neon City has no authority to endorse
checks or commercial papers, or to carry any accounts in the name of Innocent;
4. Making any warranties or representations to third parties with
regard to the Products or services without Innocent's prior written approval.
5. Innocent has no authority, under any circumstances, either
expressed or implied, to incur any liability or obligations on behalf of Neon
City, including, but not limited to:
6. Making any quotations on any Products or services,
modifications to the agreements signed by Neon City with its clients, agents,
vendors, etc., which are not related to this Agreement.
7. Binding Neon City to any contract of employment. Innocent
is solely responsible for its own employees, sales persons and its
representatives, and for their actions. Innocent has no authority to endorse
checks or commercial papers, or to carry any accounts in the name of Neon City;
8. Making any warranties or representations to third parties with
regard to the Products or services provided by Neon City without Neon City's
prior written approval.
ARTICLE VIII
INDEMNIFICATION BY PARTIES
1. Innocent agrees, during and after the term of this Agreement,
to indemnify and to hold Neon City harmless from and against any and all loss,
damage, liability and costs and expenses (including reasonable attorney's fees
and expenses) in connection therewith incurred by Neon City as a result of any
breach of this Agreement by, or any act of omission or commission on the part
of, Innocent or any of its agents, servants or employees, from all claims,
damages, suits or rights of any persons, firms or corporations arising from the
operation of the business of Innocent.
2. Neon City agrees, during and after the term of this Agreement,
to indemnify and to hold Innocent harmless from and against any and all loss,
damage, liability and costs and expenses (including reasonable attorneys' fees
and expenses) in connection therewith incurred by Innocent as a result of any
-4-
breach of this Agreement by, or any act of omission or commission on the part
of, Neon City or any of its agents, servants or employees, from all claims,
damages, suits or right of any persons, firms or corporations arising from the
operation of the business of Neon City.
ARTICLE IX
FORCE MAJEURE
Innocent and Neon City shall not be liable for delays or failure to fulfill the
terms of this Agreement due to causes beyond their reasonable control. Such
causes may include, but are not restricted to Acts of God, fires, floods,
strikes, accidents, riot, war, government interference, rationing allocations
and embargoes. In the event of a delay, the date or dates for performance of
this Agreement shall be extended for a period equal to the time lost by reason
of delay, provided that either party who is not affected by any of such causes
may terminate the Agreement immediately upon written notice to the other party
should any of such causes last over 45 days.
ARTICLE X
TERMINATION OR CANCELLATION
The term of this agreement shall be for an initial period of two (2) years from
its Effective Date as the date appears on the first page, and in the event that
Innocent and Neon City faithfully perform its entire obligation required hereby.
At any time during the initial term or any extended term of this Agreement
either party shall have termination right except for the reason as stated in
Section X.1
1. Termination by Innocent. Innocent may, upon ten (10) days
------------------------
prior written notice to Neon City, terminate this Agreement if:
1.1 Neon City fails to perform any material provision of
this Agreement for thirty (30) days after written
notice of such failure has been provided by Innocent to Neon City and fails to
cure such failure within such thirty (30) day period; or
1.2 Any receiver of any property of Neon City shall have
been appointed; Neon City shall have made an
assignment for the benefit of creditors; Neon City shall have made any
assignment or have had a receiving order made against it under the applicable
bankruptcy laws; Neon City shall have become bankrupt or insolvent; Neon City
shall have made application for relief under the provisions of any statute now
or hereafter in force concerning bankrupt or insolvent debtors; or any action
whatever, legislative or otherwise, shall have been taken with a view to the
winding up, dissolution or liquidation of Neon City.
2. Termination by Neon City. Neon City may, by ten (10) days
-------------------------
prior written Notice to Innocent, terminate this Agreement if Innocent fails to:
2.1 Perform any material provision of this Agreement for
thirty (30) days after written notice of such failure
has been provided by Neon city to Innocent; or
2.2 Any receiver of any property of Innocent shall have
been appointed; Innocent shall have made an assignment
for the benefit of creditors; Innocent shall have made any assignment or have
had a receiving order made against it under the applicable bankruptcy laws;
Innocent shall have become bankrupt or insolvent; Innocent shall have made
application for relief under the provisions of any statute now or hereafter in
force concerning bankrupt or insolvent debtors; or any actions whatever,
legislative or otherwise, shall have been taken with a view to the winding up,
dissolution or liquidation of Innocent.
-5-
3. Continuing Obligations
3.1 In the event of the termination of this Agreement for
any reason, all rights and interest granted to Innocent by Neon City under the
terms of this Agreement shall immediately revert to Neon City.
3.2 In the event of the termination of this Agreement,
all rights and interest granted to Neon City by Innocent under the terms of this
Agreement shall immediately revert to Innocent.
4. Survival of Provisions. The following provisions shall
survive the termination of this Agreement for whatever reasons: Articles 1, 3,
5, 6, 7, 8, 9, 10,11, 12, 13, 14, 15, 16 and 17.
ARTICLE XI
GENERAL CONDITIONS
1. No amendment, change or revision, or discharge of this
agreement shall have any Force or effect unless set forth in writing and signed
by duly authorized representatives of both parties.
2. ILLEGAL PAYMENTS; Both parties certifies, and will certify
each year, that they do not make payments which are illegal in the countries of
the Target Territory or in the country in which such payments are made in
connection with the political contributions which are illegal in the countries
of the Target Territory or in the country in which such contributions are made,
to any Government, Government official, political party, political candidate, or
other political organization.
ARTICLE XII
COMPLETE AGREEMENT
1. This Agreement, including all attachments, constitutes the
entire agreement between the parties with respect to the subject matter hereof,
and supersedes all previous communications, representation, understanding, and
agreements, either oral or written between the parties or any official or
representative thereof. This Agreement shall be modified only by the instrument
in writing and signed by duly authorized representatives of both parties.
ARTICLE XIII
NOTICES
1. All notifications, reports, requests for changes, or
additions to this Agreement shall be in writing and addressed as follows:
Innocent: Innocent, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇
Neon City: OOO "Neonovi Gorod"
160 Ul.Dobrolubova,
Novosibirsk,
Russia
2. Addresses may be modified at any time by written
notification from one party to the other party. Any such notice or other
communication shall be deemed given and effective when delivered personally or
by e-mail or three (3) days after the postmark date if mailed by certified or
registered mail, postage prepaid, return receipt requested, addressed to a
party as stated above.
ARTICLE XIV
SEVERABILITY
If any provision herein shall be held to be invalid or unenforceable for any
reason, such provision shall, to the extent of such invalidity or
unenforceability, be severed, but without in any way affecting the remainder of
such provisions or any other provision contained herein, all of which shall
continue in full force and effect.
ARTICLE XV
GOVERNING LAW
This Agreement and all disputes and suits related thereto shall be governed by
and construed and interpreted in accordance with the laws of the State of
California without regard to any conflicts of law rules.
ARTICLE XVI
NO WAIVER
No delay or failure by either party to exercise or enforce at any time any right
or provision of this Agreement shall be considered a waiver thereof or of such
party's right thereafter to exercise or enforce each and every right and
provision of this Agreement. A waiver to be valid shall be in writing, but need
not be supported by consideration.
ARTICLE XVII
MISCELLANEOUS
1. Unless otherwise specified herein, all payments required to be made
hereunder shall be made in United States funds.
2. Time shall be of the essence of this Agreement and of each and every
part hereof.
-7-
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed
by their duly authorized representatives as of the date first above written.
INNOCENT, INC. OOO "NEONOVI GOROD"
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇ By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------ -----------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇, President ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President
Date: October 22, 2007 Date: October 22, 2007
------------------------------------ -----------------------------------
C/S
EXHIBIT A
DESCRIPTION OF THE TERRITORY
Subject to the provisions of sections I and XI of this Agreement, the following
country or countries shall constitute the Territory:
RUSSIA AND FORMER CIS COUNTRIES
