Exhibit 10.4
SALES REPRESENTATIVE
AGREEMENT
THIS AGREEMENT (Agreement) is entered into this 7th day of July 2005, by
and between Reclamation Consulting and Applications Inc., a company organized
under the laws of Colorado with its principal place of business at 23832
Rockfield Blvd., Suite 273, Lake Forest, California 92630, USA
and
Mr. Jimmy Watts, an individual having his principal place of business at
375 Red Eagle Circle, Ridgeland, MS 39157 (`Representative').
RECITALS
RCAI manufactures and distributes certain asphalt and cement product
release agents, lubricants and cleaners, which are used in the construction,
paving and similar industries and which are sold under the RCAI trademarks
`Alderox(R)', ASA-12(R), KR7(R), DCR(R), Paver Blend and TSR(R).
RCAI desires to appoint Representative to promote, market, sell and service
RCAI's products and Representative desires to promote, market, sell and provide
customer service for RCAI products in the territory, defined herein below.
In consideration of the mutual representations, agreements and conditions
contained in this Agreement, RCAI and Representative hereby agree as follows:
SECTION 1: DEFINITIONS
1.1 `Products' means asphalt, cement and related product release agents,
lubricants and cleaners, specifically Alderox(R) ASA-12(R) Asphalt Release
Agent, Alderox(R) KR7(R) Concrete Release Agent & Form Oil and Alderox(R) DCR(R)
Drag Chain and Drag Slat Release Agent and Lubricant, Alderox(R) Paver Blend
paving equipment release agent and cleaner and Alderox(R) TSR(R) oil sands and
mining release agent in liquid form that RCAI formulates and manufactures. RCAI
authorizes Representative to promote, market, sell and provide customer service
of and for these Products under the RCAI Trademarks. RCAI may, at its sole
discretion and in writing, add additional Products to this Agreement as they
become available.
1.2 `Territory' means the entire geographic area of Mississippi.
1.3 `Effective Date' means the date first written above which will be
concurrent with the date when an authorized representative of the last party
hereto executes this Agreement.
1.4 `Agreement Year' means any partial or whole calendar year, commencing
with the Effective Date hereof, or any such subsequent period during the
continuance of this Agreement.
1.5 `Trademarks' means all trademarks, trade names, designs, logos or other
protected or protectable commercial symbols used by RCAI to identify RCAI as the
source of the Products to which RCAI grants Representative the right of
distribution hereunder and as set forth in Schedule A hereto.
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1.6 `Documentation' means any promotional, advertising, technical or
training materials developed and furnished by RCAI to Representative hereunder,
specifically intended for the public, including customers and potential
customers and concerning the promotion, application or handling of the Products.
1.7 `Representative' means Mr. Jimmy Watts, and any sub-subcontractor,
agent, representative, successor or assign to whom any of the rights or
obligations of Representative herein are assigned or delegated upon the prior
written consent of RCAI.
SECTION 2: GRANT OF REPRESENTATIVE RIGHTS & RESPONSIBILITIES
2.1 As of the Effective Date of this Agreement and for the term hereof,
RCAI hereby appoints Representative and Representative hereby accepts the
appointment to promote, sell, market and provide customer service for the
Products in the Territory under the terms and conditions of this Agreement.
2.2 The rights granted herein will apply provided Representative achieves
the Minimum Sales Objectives in the Territory for each Agreement Year during the
term hereof as further described below.
2.3 During the term hereof, Representative will refrain from directly
promoting, selling or servicing the Products outside the Territory by soliciting
orders, establishing or operating any branch or facilities for said purposes
outside the Territory, or taking any other direct action to obtain customer
orders outside of the Territory without prior written consent from RCAI.
2.4 During the term RCAI shall appoint no other sales agents to sell the
Products within the Territory, provided minimum sales objectives are achieved as
set out below. RCAI will use reasonable efforts to refer to Representative any
customer inquiry or order originating from Representative's Territory.
2.5 The rights of Representative to promote, sell or provide customer
service for the Products include the right of subcontract, but only upon the
prior written consent of RCAI. All other rights not expressly granted in this
Agreement to Representative are reserved to RCAI.
SECTION 3: AUTHORIZED USE OF TRADEMARKS
3.1 As of the Effective Date of this Agreement and for the term hereof,
RCAI hereby grants Representative the nonexclusive, nontransferable right to use
the Trademarks set forth in Schedule A attached hereto in connection with the
promotion, distribution and servicing of the Products in the Territory. RCAI may
amend Schedule A from time to time.
3.2 Representative will comply with all RCAI requirements for affixing or
using the Trademarks on or in connection with the Products.
3.3 During the term hereof, Representative will represent to customers and
other third parties that Representative is an authorized independent
representative of RCAI and the Products for the Territory. Representative will
refrain from using any trademarks or other identifying symbols that may be
considered by customers or other third parties to be misleading as to the
identity of Representative, the relationship of RCAI and Representative, or the
origin or nature of the Products.
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SECTION 4: MINIMUM SALES
4.1 The minimum volume of sales of the Products that Representative commits
to use its best efforts to achieve in the Territory on an annual basis in the
first Agreement Year is 30,000 gallons (avg. 2,500 gallons per month). RCAI will
review the annual volumes of sales of the Products prior to the beginning of any
successive term during which this Agreement may continue and RCAI may change and
adjust such minimums as it, in its sole judgment, sees fit.
4.2 Representative will use its best efforts to achieve the Minimum Sales
in any given Agreement Year. In particular, Representative will:
a) actively promote, sell and service the Products in the
Territories;
b) diligently pursue sales leads provided by RCAI;
c) initiate sales programs, campaigns, surveys, promotions and
advertising programs;
d) comply with all provisions of Sections 8 and 9 hereof on
training and advertising;
e) respond promptly and fully to any of RCAI's requests for
information on customers or market conditions in
Representative's Territory.
4.3 In the event that Representative fails to achieve the Minimum Sales in
any Agreement Year, RCAI may, in its sole discretion, revise the Minimum Sales
for the Territory, and/or revoke the exclusive appointment granted herein in the
Territory with immediate effect and appoint other Representative(s) in the
Territory, and/or terminate this Agreement in full immediately upon 90 days
written notice to Representative.
SECTION 5: TERMS OF DELIVERY
5.1 Unless otherwise agreed, all Products for which RCAI accepts purchase
order are FOB RCAI's facility. Transportation and delivery fees are to be paid
by customer.
SECTION 6: TERMS OF PAYMENT
6.1 Purchase Orders from Customers will be sent directly to RCAI with copy
to Representative.
6.2 RCAI's Suggested Retail Price for all Alderox(R) products, excluding
cleaning products, is $9.00 per gallon. Should Representative sell any
Alderox(R) product at a price in excess of the Suggested Retail Price, the
`overage' will be split 60% (Representative)/40% (RCAI).
6.3 Invoices will be sent directly from RCAI to Customer with copy to
Representative.
6.4 Representative will be paid a sales commission of $1.50 per gallon of
product purchased by customers within the Territory.
6.5 Representative will be paid a sales commission of $10% of the purchase
price for equipment purchased by customers within the Territory
6.6 Sales commission payments will be made to Representative by RCAI
immediately upon receipt of payment from the customer.
6.7 Upon execution of the Sales Representative Agreement, RCAI will provide
Representative with one (1) spray applicator system suitable for demonstration
projects, 300 gallons of Alderox(R) product, all required sales, marketing and
promotional materials, and a minimum of three (3) days product and sales
training.
SECTION 7: QUALITY CONTROL & SAFETY STANDARDS
7.1 Representative will:
a) employ and maintain sufficient personnel to perform the
obligations of Representative as defined herein and ensure their
adequate training in accordance with this Agreement;
b) provide customers with adequate information and training on the
safe and effective handling of the Product(s) and their
applications;
b) furnish all market development information reasonably requested
by RCAI concerning the customers of Products sold by
Representative; and
c) notify RCAI by phone, confirming in writing or confirming by
e-mail, as promptly as practicable after it comes to
Representative's attention, of any customer complaints regarding
the Products.
d) Advertise and publicize the Products in the Territory in
accordance with any RCAI advertising and promotional guidelines
set forth in any Documentation or other materials, or as
provided during any sales training or market development
assistance by RCAI. All advertising and/or promotional material
related to the Alderox(R) products must be approved in writing
by RCAI prior to use.
SECTION 8: LIMITED WARRANTIES FOR PRODUCTS
8.1 RCAI hereby warrants with respect to all Products delivered to
customers will be suitable for the applications intended, provided they are used
as is intended from the date of delivery to Distributor until one (1) year from
the delivery date.
8.2 RCAI's entire liability and Representative's customers' exclusive
remedy is limited to the replacement without charge, of any Products which prove
not to function as intended within the warranty period.
8.3 RCAI will not be liable for the replacement of Products which, in
RCAI's sole opinion, have been subjected to misuse, accident, alteration,
neglect or damage.
8.4 The warranties provided herein are the only warranties made by RCAI and
excludes all other express and implied warranties including those of
merchantability and fitness of the Products for a particular purpose.
8.5 IN NO EVENT WILL RCAI BE LIABLE FOR DAMAGES OF ANY KIND, DIRECT OR
INDIRECT, INCLUDING, WITHOUT LIMITATION, GENERAL AND SPECIAL DAMAGES SUFFERED BY
REPRESENTATIVE OR ANY CUSTOMER OR SUBCONTRACTOR ARISING FROM BREACH OF WARRANTY,
BREACH OF CONTRACT, NEGLIGENCE OR OTHER TORT, EQUITY, OR ANY OTHER LEGAL GROUND
OF ACTION.
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SECTION 9: REPRESENTATIVE'S LIABILITY
9.1 Representative will limit its representations on warranty with regard
to the Products to correspond to the provisions of this Agreement.
SECTION 10: PROPRIETARY RIGHTS
10.1 Representative on behalf of itself, its officers, employees, agents,
representatives, and assigns:
a) acknowledges that RCAI is the owner of all proprietary rights in
the Products and the Trademarks, to which RCAI grants
Representative the rights to sell and use pursuant to the
provisions of this Agreement; and
b) will refrain from any unauthorized or infringing use of the
Products, Trademarks or any Documentation for the term hereof
and thereafter.
10.2 Promptly after learning of any suspected or actual unauthorized third
party use of the Products, Trademarks or Documentation, Representative will
notify RCAI of said unauthorized use or disclosure.
10.3 Should RCAI decide in its sole discretion to take any action to defend
against or terminate said infringing or unauthorized use of its proprietary
rights in Representative's Territory, Representative will, upon RCAI's request,
render any assistance RCAI may require, at RCAI's expense.
SECTION 11: TERM AND TERMINATION
11.1 This Agreement will commence on the Effective Date hereof and will
continue for an initial term of one (1) year (Initial Term). This Agreement may
be renewed at RCAI's sole option for one or more successive terms of 1 year each
(Successive Term) by 90 days prior written notice by RCAI to Representative. At
the time of renewal Representative will:
a) have complied with its best efforts obligation to achieve the
Minimum Sales Objective for the Agreement term concerned; and
b) have complied with all other obligations of this Agreement to
RCAI's satisfaction.
11.2 This Agreement may be terminated without cause by either party hereto
if the party wishing to terminate gives prior written notice to the other party
at least 90 days prior to the end of the Initial Term or any Successive Term.
11.3 RCAI may terminate this Agreement at any time during the Initial Term
or any Successive Term by giving written notice to Representative, notice
effective upon the date given, in the event of any one or more of the following:
a) the failure of Representative to achieve the Minimum Sales,
provided, however, that RCAI may elect in lieu of termination,
to revise the Minimum Sales, appoint other Representative(s) in
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the Territory or take any other measures to ensure that the
market in Representative's Territory is optimally developed;
b) Representative's default in payment when due of any amount
payable to RCAI, provided however, in lieu of or in addition to
termination, RCAI may take any measures to mitigate or reduce
the extent of Representative's default.
c) Representative's breach of any obligation concerning RCAI's
proprietary rights;
d) Representative's breach of any obligation or representation,
other than those of paragraphs a), b) and c) above,
e) Representative's attempted assignment of this Agreement or any
of rights granted hereunder by Representative by agreement or
operation of law, without the prior written consent of RCAI;
f) Representative's unauthorized development of new products
related to the Alderox(R) products and/or unauthorized
development of the Alderox(R) products.
g) any legal or business transaction or event which causes a change
in majority ownership of Representative and effectively results
in an assignment of this Agreement to owners substantially
different from the owners of Representative at the time of
execution of this Agreement without the prior written consent of
RCAI; and
h) any insolvency or inability of Representative to pay debts as
and when due, or the initiation or tendency of any proceeding
involving the insolvency, bankruptcy, reorganization, or
liquidation of Representative.
SECTION 12: EFFECTS OF TERMINATION
12.1 Subject to Section 15.6, upon termination, Representative will
immediately discontinue the promotion, selling and servicing of the Products and
will cease to represent itself as an authorized Representative of RCAI.
12.2 Representative will further discontinue any use of RCAI's Trademarks
and any Documentation. At RCAI's option, Representative will certify destruction
of Documentation.
12.3 Representative will refrain from using any name, mark or logo which
may create a likelihood of confusion with RCAI's Trademarks and will further
refrain from copying in whole or in part any of the Confidential Information or
Documentation.
12.4 Unless termination occurs for cause, Representative may sell any
Products remaining as of the date of termination, provided it does so within 30
days of the date of termination. All other Products remaining thereafter must be
disposed of by Representative and certified to RCAI.
12.5 Nothing herein will relieve or extinguish any of Representative's
payment obligations under any provision of this Agreement. Nevertheless, in the
event of insolvency or refusal to pay for any reason by Representative, RCAI may
take reasonable actions to mitigate its losses by sale of the Products ordered
to other Representatives or customers.
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12.6 Representative will offer to RCAI and RCAI may at its sole option,
elect to assume the rights and obligations of any agreements between
Representative and its customers for the service of the Products, effective as
of the date of termination or expiration.
12.7 If either RCAI terminates this Agreement without cause, there will be
no non-compete period following the termination of the Agreement.
12.8 If RCAI terminates this Agreement with cause, Representative may not
compete with any of RCAI's products or services for a period of two (2) years.
12.9 If Representative terminates this Agreement without cause,
Representative may not compete with any of RCAI's products or services of a
period of five (5) years.
12.10 If Representative terminates this Agreement with cause, there will be
no non-compete period following the termination of the Agreement.
12.11 In no event will termination or expiration with or without cause of
this Agreement entitle Representative to any compensation by RCAI on any grounds
whatsoever.
SECTION 13: GOVERNING LAW, ARBITRATION, ATTORNEY'S FEES
13.1 Governing Law. This Agreement together with the Schedules hereto and
any valid agreement subsequently entered into between the parties regarding the
subject matter hereof will be governed and construed in accordance with the laws
of California.
13.2 Dispute Resolution. In the event of any controversy or claim arising
out of or relating to this Agreement, the parties agree to try in good faith to
settle the claim by mediation administered by the American Arbitration
Association (`AAA') under its International Commercial Mediation Rules before
resorting to arbitration. Any controversy or claim that cannot be resolved by
mediation will be settled by arbitration administered by the AAA in accordance
with its International Arbitration Rules. To the extent these rules require
supplementation and do not contradict the aforesaid Rules, the arbitral tribunal
will apply the California rules on Arbitration and Conciliation of International
Commercial Disputes. Unless otherwise agreed, the place of arbitration will be
Los Angeles, California. Judgment on the award rendered by the arbitrator will
be final and may be entered in any court having jurisdiction thereof.
13.3 In the event of unauthorized use or disclosure of the Products,
Trademarks, or Documentation, Representative acknowledges that RCAI will be
irreparably harmed and, as there is no adequate remedy at law, RCAI may seek and
obtain injunctive relief against Representative for any harm arising from or
relating to said unauthorized use or disclosure. Moreover, should the interim
measures for injunctive relief under the AAA International Arbitration Rules
prove inadequate, RCAI may seek injunctive relief, specific performance or any
other equitable relief from any competent court having jurisdiction.
13.4 The award of the arbitrator will be final and binding on the parties,
provided said award does not contradict in whole or in part the state of the
governing law hereof. Judgment upon the award rendered may be entered in any
court having jurisdiction or application may be made to such court for a
judicial acceptance of the award and an order of enforcement.
13.5 Attorney's Fees. In the event an action or arbitral proceeding is
instituted relating to this Agreement, the party which the arbitrator or court
of competent jurisdiction shall deem to have substantially prevailed therein
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shall be entitled to recover all costs, expenses, and attorney's fees adjudged
by such arbitral tribunal or court.
SECTION 14: GENERAL PROVISIONS
14.1 Relationship of the Parties. Representative is an independent sales
representative of RCAI, but in all of its operations hereunder Representative
will operate as an independent contractor and will conduct its business at its
own cost. Representative has no authority to make any representation or warranty
on behalf of RCAI, except as specified in this Agreement. RCAI is not be
responsible for payment of any taxes, income or otherwise, on behalf of
Representative nor is RCAI responsible to provide any benefits whatsoever.
14.2 Force Majeure. In the event that either party is rendered wholly or
partially unable to carry out its obligations under this Agreement due to
reasons beyond its control (including, without limitation, acts of God,
industrial disputes, war or civil disturbances, fire, floods, storms,
earthquakes, landslides, acts of any governmental authority or agency, embargoes
or unavailability of equipment or transport), the failure to so perform will be
excused and not constitute default hereunder during the continuation of the
intervention of such force majeure. The party affected shall give prompt notice
to the other party, shall take all reasonable steps to eliminate the intervening
event and shall resume performance as promptly as is practicable.
14.3 Assignment. This Agreement will be binding upon and inure to the
benefit of RCAI, its successors and assigns. This Agreement will not be
assignable or transferable by Representative unless prior written consent is
obtained from RCAI and provided that the assignee or transferee agrees in
writing to be bound by all the terms, condition and obligations of this
Agreement by which Representative is bound and Representative remains subject to
the obligations on confidentiality and proprietary rights set forth herein. Any
assignment of this Agreement or any rights or obligations arising therefrom
without RCAI's prior written consent shall be deemed void.
14.4 Severability. If any provision of this Agreement is held to be
invalid, illegal, or unenforceable by a court or other tribunal of competent
jurisdiction, this Agreement will be considered divisible as to such provision
and the remaining provisions hereof will remain valid and binding.
14.5 No Waiver. Failure or delay by either party to exercise or enforce any
term, right, power or privilege of this Agreement will not operate as a waiver
thereof nor will any single or partial exercise of any term, right, power or
privilege preclude any other or further exercise thereof.
14.6 Entire Agreement. This Agreement, and all schedules hereto form the
entire agreement of the parties hereto with respect to the subject matter
hereof. No modification, renewal, extension or waiver of this Agreement or any
of its provisions will be binding unless made in writing and signed by each
party's duly authorized representative, except as to the Schedules attached
hereto, which RCAI may amend from time to time during the term hereof.
14.7 Survival. Neither termination nor expiration will affect any right or
obligation of either party hereunder which by its terms continues beyond the
effective date of termination or expiration.
14.8 Notices. Unless otherwise provided herein, any notice or other written
communication required or permitted in connection with this Agreement will be
properly given when made in writing and sent by first-class registered or
certified airmail, return receipt requested, or by courier or other personal
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delivery service, and properly addressed to the appropriate party at the address
set forth above, until changed by written notice. Notice shall be effective when
given.
IN WITNESS WHEREOF, RCAI and Representative have each caused this
Agreement to be executed on its behalf by its duly authorized officer as of the
date first written above.
RCAI REPRESENTATIVE
By: /s/ GORDON DAVIES By: /s/ JIMMY WATTS
----------------- ---------------
Gordon Davies Jimmy Watts
President
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