EXHIBIT 6.19
BUSINESS DEVELOPMENT AGREEMENT
This AGREEMENT is entered into as of May 25, 2001, by and between
Americas Favorite Food Corp., a California corporation ("AFFC"), and US Foods
International, LLC, a California limited liability company (collectively with
its affiliates, "USFI").
RECITALS
WHEREAS, AFFC is party to that certain Stock Purchase and Share
Exchange Agreement (the "Exchange Agreement"), of even date herewith, by and
among Dippy Foods, Inc., a Nevada corporation ("Dippy"), AFFC and the AFFC
Shareholders named therein, pursuant to which Dippy is to purchase all of the
issued and outstanding shares of capital stock of AFFC from the AFFC
Shareholders, such that AFFC will become a wholly-owned subsidiary of Dippy, in
exchange for the issuance of shares of Dippy common stock to the AFFC
Shareholders;
WHEREAS, certain shareholders of USFI are also shareholders of AFFC who
will receive shares of Dippy common stock pursuant to the Exchange Agreement;
WHEREAS, USFI is in the business of, among other things, reselling,
marketing and distributing branded food products;
WHEREAS, USFI is party to (i) that certain Joint Venture Agreement,
dated May 9, 2001 (the "Aseen Contract"), by and between USFI and Aseen Corp., a
corporation organized and existing under the laws of South Korea ("Aseen"),
attached hereto as Exhibit A, pursuant to which Aseen has an exclusive right to
resell and distribute throughout South Korea branded food products of USFI and
other manufacturers for whom USFI serves as a reseller and/or distributor, and
(ii) that certain Export Agreement South Korea, dated May 3, 2001 (the "Hain
Contract"), between USFI and The Hain Celestial Group, Inc. ("Hain"), attached
hereto as Exhibit B, pursuant to which Hain has appointed USFI as its exclusive,
independent sales representative and distributor to South Korea for the Hain
brands identified in Exhibit A to the Hain Contract (the Aseen Contract and Hain
Contract are sometimes referred to herein collectively as the "Contracts");
WHEREAS, Dippy and/or its affiliates are in the business of, among
other things, producing and selling prepackaged, single-serving meals to schools
and other institutional food servers;
WHEREAS, as a material inducement for Dippy to enter into the Exchange
Agreement, AFFC and USFI have determined that it is in their and their
shareholders' best interests to enter into this Agreement in order that the
benefits AFFC will receive from this Agreement may be considered a definitive
asset of AFFC at the Closing (as defined in the Exchange Agreement), and in
order that USFI and Dippy may form a formal business relationship;
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AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Assignment of Profits. All of USFI's rights and interests in and to,
including without limitation, all profits derived by USFI from, each of
the Contracts, are hereby assigned to AFFC (the "Assignment").
Notwithstanding the foregoing Assignment, USFI shall retain all of its
obligations under the Contracts, and such Assignment shall not be
deemed a delegation to AFFC of any of USFI's obligations under such
Contracts. USFI and AFFC shall use their best efforts to obtain the
acknowledgment and agreement of Aseen and Hain with respect to the
Assignment, but such Assignment shall be effective whether or not such
acknowledgment and agreement of Aseen and Hain are obtained.
2. Lines of Credit. USFI shall provide AFFC and/or Dippy, as the case may
require, with lines of credit sufficient to enable AFFC and/or Dippy to
fulfill, independent of or in participation with USFI, as the case may
require, (a) purchase orders and other opportunities derived by USFI
from the Contracts, and (b) any other purchase orders or opportunities
procured by USFI for AFFC and/or Dippy pursuant to the terms of this
Agreement.
3. Minimum Purchase Orders. USFI shall use its best efforts to obtain for
AFFC and/or Dippy at least
4. $4,000,000 per year in purchase orders for AFFC's and/or Dippy's
products. Business Opportunities in Korea and with U.S. Armed Services.
To the extent permitted by U.S. law and regulations, USFI will use its
resources, including without limitation its business relationships and
contacts, to provide AFFC and/or Dippy with business opportunities in
South Korea and with the United States armed services, and will
cooperate closely with AFFC and/or Dippy to identify and procure such
business opportunities for AFFC and/or Dippy.
5. AFFC/Dippy Products. To the extent permitted by U.S. law and
regulations, USFI will use its resources, including without limitation
its relationships with distributors, to procure opportunities for the
sale, marketing and distribution of all of AFFC's and/or Dippy's
products internationally and throughout the United States and its
territories.
6. Dippy Debt/Equity Financing. USFI will cooperate closely with and use
its best efforts on behalf of Dippy to secure, as soon after the date
of this Agreement as is reasonably practicable, at least $1,000,000 in
debt or equity financing for Dippy.
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7. Intended Third Party Beneficiary. Dippy is an intended third party
beneficiary of this Agreement.
8. Indemnification. USFI will indemnify and hold AFFC and Dippy, and their
respective affiliates, officers, directors, employees and agents,
harmless from any and all obligations, costs, fees, losses,
liabilities, claims, penalties, judgments, actions, damages and
expenses incurred or sustained by AFFC and/or Dippy as the result of
any actions or inactions of USFI in connection with the performance of
the Aseen Contract and/or the Hain Contract. In addition, the indemnity
provided herein includes, without limitation, any costs or expenses for
reasonable attorneys fees, expert witness fees, costs of reports and
analyses, costs of travel and accommodation expenses, deposition and
trial transcripts, and costs of arbitration incurred at any time by
AFFC and/or Dippy in seeking to enforce the terms of this Agreement or
for damages for its breach. Any such costs, fees or expenses described
above shall be paid to AFFC and/or Dippy, as the case may be, at the
same time the same are incurred, and no final disposition of any matter
shall be required before such costs, fees or expenses are paid.
9. Governing Law. This Agreement shall be governed according to the laws
of the State of California.
10. Recitals. The Recitals above are hereby incorporated into and made a
part of this Agreement.
11. Entire Agreement. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto with
respect to the subject matter hereof and contains all of the covenants
and agreements between the parties with respect to such subject matter.
Each party to this agreement acknowledges that no representations,
inducements, promises, or agreements, oral or otherwise, have been made
by any party, or anyone acting on behalf of any party, which are not
embodied herein, and that no other agreement, statement, or promise not
contained in this Agreement shall be valid or binding on either party.
12. Arbitration. The parties hereby agree that all controversies, claims
and matters of difference shall be resolved by binding arbitration
before the American Arbitration Association (the "AAA") located in Los
Angeles County, California according to the rules and practices of the
AAA from time-to-time in force; provided however that the parties
hereto reserve their rights to seek and obtain injunctive or other
equitable relief from a court of competent jurisdiction, without
waiving the right to compel such arbitration pursuant to this section.
The arbitrator shall apply California law in rendering a decision.
13. Severability. If any term or provision of this Agreement or the
application thereof to any person or circumstance shall, to any extent,
be determined to be invalid, illegal or unenforceable under present or
future laws effective during the term of this Agreement, then and, in
that event: (A) the performance of the offending term or provision (but
only to the extent its application is invalid, illegal or
unenforceable)
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shall be excused as if it had never been incorporated into this
Agreement, and, in lieu of such excused provision, there shall be added
a provision as similar in terms and amount to such excused provision as
may be possible and be legal, valid and enforceable, and (B) the
remaining part of this Agreement (including the application of the
offending term or provision to persons or circumstances other than
those as to which it is held invalid, illegal or unenforceable) shall
not be affected thereby and shall continue in full force and effect to
the fullest extent provided by law.
14. Preparation of Agreement. It is acknowledged by each party that such
party either had separate and independent advice of counsel or the
opportunity to avail itself of the same in connection with this
Agreement. In light of these facts it is acknowledged that no party
shall be construed to be solely responsible for the drafting hereof,
and therefore any ambiguity shall not be construed against any party as
the alleged draftsman of this Agreement.
15. No Assignment of Rights or Delegation of Obligations by USFI; AFFC's
Right to Assign. USFI may not assign, whether by operation of law or
otherwise, its rights or obligations under this Agreement without
AFFC's prior written consent. AFFC may assign its rights and delegate
its obligations under this Agreement to any other person or entity.
16. Amendments. This agreement may be amended only by a written instrument
duly executed by the parties or their respective permitted successors
or assigns; provided, however, that no amendment which alters or
diminishes the rights and/or benefits of AFFC hereunder shall be
effective without the approval of Dippy, AFFC's sole shareholder;
provided, further, however, that Dippy's approval of any such amendment
shall have been obtained by the unanimous approval of the board of
directors of Dippy.
17. Counterparts. This Agreement may be executed manually or by facsimile
signature in any number of counterparts, each of which shall be deemed
an original, and all of which together shall constitute one and the
same instrument, binding on all parties hereto.
18. Headings. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
19. Attorneys Fees. If any legal action, arbitration or other proceeding is
brought for the enforcement of this Agreement or because of any
dispute, breach, default or claim hereunder, the successful or
prevailing party shall be entitled to recover reasonable attorneys fees
and other costs it incurs in such action, arbitration or proceeding, in
addition to any other relief to which it may be entitled.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first written
above.
US FOODS INTERNATIONAL, LLC,
a California limited liability company
By: /s/ Xxxx Place
--------------------
Name: Gary Place
Its: Managing Member
AMERICAS FAVORITE FOOD CORPORATION,
a California corporation
By: /s/ Xxxx Place
--------------------
Name: Xxxx Place
Its: Chief Executive Officer
By: /s/ Xxxxx Xxx
-------------------
Name: Xxxxx Xxx
Its: Secretary
ACKNOWLEDGED AND AGREED:
DIPPY FOODS, INC.,
a Nevada corporation
By: /s/ Xxx Xxxxxxxxx
------------------------
Name: Xxx Xxxxxxxxx
Its: President
ASEEN CORP.,
a South Korea corporation
By: /s/ Hong Xxx Xxx
------------------------
Name: Hong Xxx Xxx
------------------------
Title: President & CEO
------------------------
THE HAIN CELESTIAL GROUP, INC.
By: /s/ Xxx Xxxx
------------------------
Name: Xxx Xxxx
------------------------
Title: Vice-President
------------------------
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