EXHIBIT B
UNIT LICENSE AGREEMENT
BY AND BETWEEN:
PIZZA DONINI INC.
body politic duly constituted according to Law, having its Head Office
and principal place of business at 4555 des Grandes Prairies Blvd.,
Suite 30, H1R 1A5, in the City of St. Leonard, Province of Quebec,
herein duly represented by Mr. Peter Deros, its representative, duly
authorized for these purposes as he so declares,
HEREINAFTER REFERRED TO AS "DONINI"
AND:
ZELLERS INC.
body politic duly constituted according to Law, having its Head Office
and principal place of business at 8925 Torbram Road, Brampton,
Ontario, L6T 4G1, herein duly represented by Mr. Jeff Collins, its
representative, duly authorized for these purposes as he so declares,
HEREINAFTER CALLED THE "ZELLERS"
WHEREAS ZELLERS wishes to offer Donini pizza and products for sale in
its in-store Zellers restaurants throughout Quebec, under the following terms
and conditions.
1. The preamble to the present Agreement shall form an integral part
hereof as if it were recited at length herein for all legal purposes.
2. ZELLERS hereby agrees to offer for sale in twenty-five (25) mutually
agreeable in-store restaurants within Quebec (the whole from those
listed more fully in Schedule "A" annexed hereto), the Donini Products
enumerated in Schedule "B" annexed hereto (or such other products as
the parties shall agree from time to time) at such prices as shall be
determined by the parties hereto at the time as the exact and sizes of
the Products are determined, i.e. 9", 10", 12". The prices which DONINI
sells the Donini Products to ZELLERS for the agreed locations shall
thereafter remain unchanged during the initial one-year term of this
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Agreement, save and except where there is an increase in the cost of
raw materials to DONINI, which increase may be justified to ZELLERS.
ZELLERS further agrees that it shall offer no other products similar to
those listed in Schedule B at the agreed locations during the term
hereof.
Should the parties be satisfied with the progress of the project within
Quebec under the terms hereof on or before the expiration of the term
of this Agreement, ZELLERS shall grant to DONINI the right to sell the
DONINI Products in its in-store Zellers restaurants throughout Canada,
upon such terms and conditions as are mutually agreeable to the parties
hereto. In any event, either party, in its sole and unfettered
discretion, may decline to continue or expand the sale of Donini
Products on or after the expiration of the term of this Agreement.
3. DONINI shall provide at its sole cost and expense for each in-store
restaurant serving the DONINI Products the use of one (1) conveyor belt
pizza oven currently costing $6,500.00, miscellaneous cutters and
spatulas currently costing $500.00, 2 signs for the interior of the
restaurant, currently costing $2,000.00, and all necessary electrical
connections and installations for all of the above, as well as menus,
table tents, flyers and other point of sale promotional material. The
current cost of the equipment enumerated herein is exclusive of any
sales taxes, including G.S.T and Q.S.T.
4. All equipment, signage and other items enumerated in paragraph 3 shall
remain the property of DONINI and shall be provided to ZELLERS by
DONINI to be used for the preparation and service of the DONINI
Products and shall be returned to DONINI upon the termination of this
Agreement in the condition in which they were delivered to ZELLERS,
save and except reasonable wear and tear.
ZELLERS hereby undertakes to insure the equipment for depreciated
value, at the rate of 10% per year, naming DONINI or its nominee as an
additional named insured, and to maintain and repair same as would a
careful owner.
ZELLERS shall be responsible for all damages to equipment provided
herein to a maximum of $9,000.00 per Zellers store supplied by DONINI
and for loss, theft, breakage, injuries and other claims in respect of
the equipment provided hereunder.
5. DONINI shall install at its sole cost all necessary equipment in the
ZELLERS stores listed in Schedule "A" within six (6) months of the
signature of this Agreement, starting from the stores located in and
around the City of Montreal and the surrounding areas and moving
outward from the said areas.
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6. DONINI shall provide training at its sole cost in its test kitchen at
4555 des Grandes Prairies Blvd., Suite 30, St. Leonard, Quebec, to
management personnel designated by ZELLERS in respect of the use of the
equipment and the storage, preparation and service of the DONINI
Products. The management personnel so trained shall thereafter train
all restaurant personnel.
7. ZELLERS and/or its designated distributor, affiliates or subsidiaries
shall order all purchases of DONINI Products listed in Schedule "B"
exclusively from DONINI and/or its designated broker, subsidiaries or
affiliates (as may be designated by DONINI from time to time) and all
orders shall be paid at the price established pursuant to paragraph 2
hereof on mutually agreeable terms and conditions. The Products ordered
shall be delivered to ZELLERS or its designated distributor, affiliates
or subsidiaries at a mutually agreeable central warehouse or
distribution center in Quebec for distribution to the various
individual outlets.
8. DONINI shall provide at its cost and expense, all advertising, press
releases and other material promoting the DONINI Products in ZELLERS
in-store restaurant, ("Advertising"). No Advertising shall be
distributed or published without the prior written approval of ZELLERS.
ZELLERS grants to DONINI a limited, non-exclusive, non-transferable,
non-assignable license to use the ZELLERS name and logo set out in "C"
(the "Trade-marks") for the purposes of the Advertising only and
pursuant to the terms set out in Schedule "D" herein.
9. The term of this Agreement shall be a period of one (1) year following
the completion of the installation of the equipment as provided in
paragraph 5 hereof. Either party may terminate this Agreement prior to
the expiry of the one (1) term provided above upon forwarding to the
other party a written notice of termination at least ninety (90) days
prior to the date of termination stipulated by the said party. Where
ZELLERS shall approve of the sale of the DONINI Products throughout
Canada, based on the results of the sales of the Products during the
one-year term of this agreement as provided in paragraph 2 hereof, and
conditional upon the acceptance of DONINI, the term of an agreement for
sale of the Products throughout Canada shall be no less than three (3)
years. In the event that DONINI shall not be granted the option to sell
the DONINI Products throughout Canada, DONINI shall be entitled to
remove all of the equipment installed pursuant to paragraph 5 of this
Agreement, unless the parties shall otherwise agree, the whole at the
option of DONINI.
10. DONINI shall permit the sale of DONINI Products to be eligible for
participation in the existing ZELLERS Club-Z points promotional and/or
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any other promotional program that may be adopted by ZELLERS. ZELLERS
shall use its best efforts to promote or advertise the eligibility of
the purchase of DONINI Products in any such programs.
11. The parties shall execute such further agreements, instruments or
documents as may be necessary in order to give full force and effect to
the foregoing.
12. ZELLERS shall not assign this Agreement, in whole or in part, without
the prior written consent of DONINI, which consent shall not be
unreasonable withheld.
13. This Agreement shall be interpreted in accordance with the laws of
Quebec and any and all disputes shall be submitted to the appropriate
courts in and for the district of Montreal.
14. This Agreement was drafted in English at the request of the parties
hereto. La presente convention a ete redigee en anglais a la demande
des parties aux presentes
AND AFTER DUE READING HEREOF, THE PARTIES HAVE SIGNED THESE PRESENTS AT THE
PLACES AND ON THE DATES INDICATED HEREINBELOW.
SIGNED AT MONTREAL, QUEBEC, THIS 2ND DAY OF FEBRUARY 2001.
PIZZA DONINI INC.
/s/ PETER DEROS
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PER: MR. PETER DEROS WITNESS
DULY AUTHORIZED FOR THESE PURPOSES
SIGNED AT BRAMPTON, ONTARIO, THIS 15TH DAY OF FEBRUARY 2001.
ZELLERS INC.
/s/ JEFF COLLINS
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PER: MR. JEFF COLLINS WITNESS
DULY AUTHORIZED FOR THESE PURPOSES
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