NCC Dealer Distribution and Services Agreement

THIS AGREEMENT is between NATURAL CHOICE CORPORATION, an Illinois

Corporation with its principal place of business at 5677 Sockness Drive, Rockford, IL 61109 (hereinafter referred to as “Manufacturer”) and other non-related companies that are selected and appointed as “NCC Factory Authorized Dealer” (hereafter referred to as “Dealer”).

BACKGROUND

WHEREAS, the Manufacturer is engaged in the development, manufacturing, and marketing of drinking water equipment, primarily water coolers and water filters, which are collectively referred to as the “Products” (defined below), including brand names such as “Natural Choice”, “ION”, “EZChange”, and others, both present and future. 

WHEREAS, the Manufacturer has made significant investments in development of proprietary products and designs, and is seeking qualified dealers to resell and/or lease such Products in various markets including, but not limited to, the area in which the Dealer intends to provide services as stated herein (defined as “Territory” below).

WHEREAS, the Manufacturer is seeking Dealers who will be good stewards of the proprietary nature of these Products and who will not disclose the Manufacturer’s Confidential Information, designs and plans to any third party.

WHEREAS, the Dealer is currently in the business of selling similar drinking water and/or office coffee products to customers and has requested approval to purchase and lease and/or resell Manufacturer’s Products.

IN CONSIDERATION of the mutual covenants of the parties, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, andintending to be legally bound, Manufacturer and Dealer hereby agree as follows:

1. Definitions
The following words shall have the following meanings when used in this Agreement:

1.1 “Prices” shall mean Manufacturer’s current prices for Products as may be provided by Manufacturer to Dealer and its customers, and as initially set forth in Schedule A, "Price List" attached hereto. Manufacturer reserves the right to change Prices at its sole discretion.

1.2 "Confidential Information” shall mean all technical and sales literature, drawings, ideas and concepts relating to the Products, including plans, implementation and design, as well as other information including, without limitation, patents, trade secrets, business and marketing plans, specifications, copyrights, service marks, trademarks, and software which Dealer receives directly or indirectly from Manufacturer or that is known to Dealer as a consequence of or through its relationship with Manufacturer. "Confidential Information" does not include:

(a) information which at the time of its disclosure is in the public domain;

(b) information that, after disclosure by Manufacturer to Dealer, becomes part of the public domain by publication or otherwise through no fault of the Dealer (but only after it is published or otherwise becomes part of the public domain);

(c) information which Dealer can show was in its possession at the time of disclosure pursuant to this Agreement and was not acquired:

i) directly or indirectly from Manufacturer; or

ii) from a third party who required Manufacturer to maintain the 

(d) information which is received by Dealer, after disclosure by Manufacturer to Dealer, from a third party who had a lawful right to disclose it to Dealer and Dealer was not required by the third party to hold the information in confidence; andinformation in confidence;

1.3 “Purchase Order” shall mean any document received by the Manufacturer from Dealer contracting, or promising to purchase Products in accordance with the terms of this Agreement and specifically excluding any terms set forth in a Purchase Order that conflicts with any terms of this Agreement.

1.4 “Services” shall mean any services provided by Manufacturer or Dealer to customers under this Agreement including, without limitation, installation and support services as well as maintenance services.

1.5 “Products” shall mean any drinking water equipment & accessories sold by the Manufacturer and generally described in Manufacturer’s Price List.

1.6 “Terms and Conditions” shall mean Manufacturer’s terms and conditions of sale for the Products attached hereto as Schedule B.

1.7 “Territory” shall mean: the geographic area defined by the ability of the Dealer to sell and service the Products through a direct employee of the Dealer (not a contracted or part-time representative, service rep, or agent). Where the Dealer is not able to send a direct employee for immediate after-sales service, the Dealer is not approved for selling and/or leasing the Productsin that location and is subject to immediate cancellation, forfeiting all privileges including price discounts.

1.8 “Trademarks” shall mean the trademarks, service marks, and trade names“NATURAL CHOICE”, “ION”, “EZCHANGE”, “INSTACHILL”, “CARBONPLUS”, or any other brand name in use by Manufacturer at the time of this Agreement and continuing in the future as Manufacturer develops additional Products and brand names. Dealer hereby acknowledges all such “Trademarks” are the sole property of Manufacturer and are allowed for use only with written authorization by the Manufacturer and limited by the duration of this Agreement.

2. Appointment
Subject to the terms herein, Manufacturer hereby grants Dealer the non-exclusive right to market and sell the Products in the Territory. To induce Manufacturer to enter into this Agreement, Dealer represents and warrants to Manufacturer that Dealer has:

a) Qualified sales and service personnel to market, sell, and service the Products;

b) Sufficient knowledge of the industry and the Products; and,

c) Sufficient capital to fund the purchase and payment for Products, maintain appropriate inventory, advertising and marketing programs, and required personnel to operate the business.

3. Acceptance of Appointment
Dealer hereby accepts appointment as an authorized dealer of the Products on the terms andconditions provided for in this Agreement.

4. Duties of Dealer
In satisfaction of its duties under this Agreement, Dealer shall undertake the following duties in a professional manner to the satisfaction of Manufacturer:

4.1 Provide professional installation and support services through their direct employees (not contracted and/or part-time labor) for Manufacturer’s Products.

4.2 Comply with all applicable international, territorial, federal, provincial, and local laws, ordinances, and regulations in connection with Dealer's sale or lease of the Products and providing services in accordance with its performance of this Agreement.

4.4 Limit all sales (including rentals and leases) and service calls to the Territory (no contracted labor or part-time representatives or service companies).

4.5 Obtain all licenses, permits, government approvals, customs duties, and any other licenses pertaining to the shipment of Products to, and services provided in the Territory at Dealer's expense.

No license, right or interest in any Manufacturer trademark, trade name or service marks is granted herein. Except as provided in Section 18, neither Dealer nor any of Dealer’s customers may use any Manufacturer trademark, trade name or service mark without Manufacturer's prior written consent.

5. Prices
Dealer shall pay Manufacturer the prices for the Products purchased under this Agreement asset forth in the Manufacturer’s Price List with any discounts to be applied solely as specified by the Manufacturer. All prices are F.O.B Factory and may be amended by Manufacturer in its sole discretion from time to time. All such changes shall become effective thirty (30) days after Dealer has received written notice from Manufacturer. 

6. Purchase Orders
Dealer purchases the Products by submitting a Purchase Order by phone, fax, email, or Manufacturer’s internet website. All Purchase Orders must be accepted in writing by Manufacturer and are not valid or effective until accepted by Manufacturer ("Acceptance"). Manufacturer reserves the right to reject any Purchase Order for any reason at its sole discretion.

In the event any Purchase Order contains terms which are in addition to or in conflict with the terms of this Agreement or the Terms or Conditions, this Agreement and the Terms and Conditions shall control.

After acceptance of a Purchase Order, Manufacturer shall deliver to a common carrier F.O.B.Manufacturer’s facilities or by other means as noted in the Purchaser Order as accepted by Manufacturer. Dealer assumes all risks of loss or damage at time of transfer to freight carrier and is responsible for arrangements and confirmation of their own insurance coverage. Manufacturer is not responsible for any damage/shortage that occurs once the shipment has been accepted by dealer. 

7. Payment Terms
Unless credit terms have been granted to Dealer, payment to Manufacturer from Dealer shall be made prior to Manufacturer's shipment of the Products. Manufacturer retains the right to grant, modify, and revoke payment and credit terms as needed based on business conditions.

8. Delivery or Order
The Manufacturer will use reasonable efforts to fulfill any Purchase Orders received from Dealer within 60 calendar days from the date Manufacturer issues its Acceptance. Manufacturer shall have no duty or obligation to deliver any Products if Dealer is in breach or default of thisAgreement or any past due amount is owed by Dealer to Manufacturer.

9. Marketing
Complete information regarding policies for Marketing are contained in Appendix A.

Promotional material, advertisements including, but not limited to the entire content of internet sites, or any material to be released to the public, including photographs, that utilize any trademarks of the Manufacturer or depict any of the Products must be approved by an authorized executive officer of the Manufacturer in writing prior to Dealer or anyone on Dealer's behalf being authorized to release said materials to the public. 

Internet sales by Dealer are strictly prohibited. All sales must be generated through person-to-
person contact with the Dealer’s direct employees. Internet sites containing pricing information are strictly forbidden to be disclosed anywhere on the website. The entire content of the website pertaining to the Products, including all written words and all images, is subject to the review and approval of the Manufacturer.

10. National and House Accounts
Manufacturer reserves the right to handle certain ‘National’ and/or ‘House’ accounts exclusively and without interference from Dealers. In the interest of providing superior service, support, pricing, and in the interest of maintaining the integrity of Products across a large customer with multiple locations, the Manufacturer can negotiate Buy/Sell arrangements directly with these customers.

Predatory pricing and interference by dealers in these accounts – for any Product or Replacement Part – does not serve the mutual best of interests of the Dealer or Manufacturer, and are therefore, not allowed. Dealers will be terminated immediately for interfering in National and House Accounts. 

11. Training, Installation and Support Services
Dealer shall be responsible for all Product installation and maintenance. 

11.1 Manufacturer will provide training material, technical documentation and support as deemed appropriate by the Manufacturer to familiarize Dealer with the installation of the systems;

11.2 Manufacturer will provide training, subject to availability of Manufacturer resources, to Dealer direct employee personnel either by telephone and internet, or at one of Manufacturer's facilities when reasonably requested by the Dealer. 

11.3 After Dealer's direct employee(s) have completed the training identified herein, the Dealer will respond in a timely and effective manner to all inquiries concerning Product raised by customers concerning the operation of any Products. Manufacturer agrees to provide a reasonable level of technical phone support for Dealer’s customers on any technical or operational issues.

12. Documentation
12.1 Manufacturer agrees to provide relevant Manuals for each Product, where necessary. Amended documentation will be provided to Dealer, as is necessary and appropriate for the installation and maintenance of Products. To the extent that such other information (including price, data/documentation and marketing information) furnished to Dealer is Confidential Information, the Dealer agrees to keep it in strictest confidence and not to disclose to any party.

12.2 Dealer shall not make any change to any documents or manuals provided by Manufacturer to Dealer unless instructed to do so by Manufacturer in writing.

13. Use of Confidential Information by Dealer

13.1 Dealer, its employees and agents shall retain all Confidential Information, as defined in Article 1 and prevent disclosure of such Confidential Information, except as expressly provided for in this Section 13.1. Manufacturer hereby states that the Product designs constitute a valuable asset of Manufacturer, and are to be considered proprietary information included in the definition of Confidential Information set forth herein. Access by Dealer to Confidential Information shall be restricted to Dealer’s employees with a need to have access to such Confidential Information, each of whom shall have signed a confidentiality agreement containing protections benefiting the Manufacturer and no less restrictive than the provisions of this Section 13. Dealer acknowledges that by virtue of this Agreement, Dealer acquires only the right to use the Confidential Information under the terms and conditions of this Agreement for so long as it is in effect, and does not acquire any rights of ownership, title, or disclosure of the Confidential Information.

13.2 Dealer shall not use, make, have made, distribute or disclose any copies of the Confidential Information, in whole or in part, without the prior written authorization of Manufacturer except as defined herein.

13.3 Dealer shall inform its employees having access to the Confidential Information of Dealer’s limitations, duties and obligations regarding nondisclosure and copying of the Confidential Information. Dealer agrees to protect and secure the Confidential Information with the same or higher degree of care and confidentiality that it employs to protect its own proprietary and/or confidential information.

14. Warranties
14.1 Unless otherwise specified by the Manufacturer, each product carries warranty information describing the terms and conditions of warranted products and performance attached hereto as Schedule C.

14.2 Dealer shall in no way imply or state to its customers that any warranties not expressly given by the Manufacturer or applicable third parties are in effect with respect to the Products.

14.3 Products and parts thereof suspected to be deficient may be returned to Manufacturer, which will, as its sole obligation hereunder and at its option, replace or repair Products that theManufacturer finds to be defective, excluding any Products damaged as a result of misuse during the installation process or otherwise. Manufacturer is not liable for shipping cost on Warranty parts, but may credit the cost of the shipping, in its sole discretion. An RMA # is required on allreturns.

15. Limitation of Liability
15.1 MANUFACTURER DOES NOT MAKE ANY EXPRESS OR IMPLIED WARRANTIES OTHER THAN PROVIDED IN THE ABOVE WARRANTY.

15.2 IN NO EVENT WILL MANUFACTURER BE LIABLE FOR ANY LOST REVENUES OR PROFITS, OR OTHER SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES, EVEN IF MANUFACTURER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

15.3 NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, MANUFACTURER’S MAXIMUM LIABILITY FOR DAMAGES SHALL BE LIMITED TO THE PAYMENTS MADE BY DEALER TO MANUFACTURER UNDER THIS AGREEMENT FOR THE SPECIFIC PRODUCT THAT CAUSED THE ALLEGED DAMAGES.

16. Limitation of Intellectual Property Liability
16.1 The Manufacturer shall have no liability for any claim of copyright, trade secret or patent infringement based on the use of the Products or the use or combination of the Products and equipment, services or other materials not provided by Manufacturer.

16.2 THE MANUFACTURER SHALL HAVE NO LIABILITY WITH RESPECT TO ANY ALLEGED OR PROVEN INFRINGEMENT OF PATENTS, TRADE SECRETS AND COPYRIGHTS WITH RESPECT TO THE PRODUCTS OR ANY PARTS THEREOF.

17. Disclaimer of Partnership or Agency
The relationship between Manufacturer and Dealer under this Agreement is solely that of independent contractors. Each of the parties is in no way the legal representative or agent of the other party for any purpose, shall not in any way hold themselves out as such, and shall have no power to assume or create, in writing or otherwise, any obligation or responsibility of any kind, expressed or implied, in the name of or on behalf of the other party.

18. Indemnification
Dealer will indemnify, defend and hold Manufacturer harmless from any and all liabilities, losses, obligations, expenses including without limitation, reasonable attorney’s fees and costs, incurred in connection with any lawsuit, proceedings, or other action (i) arising out of the operation of Dealer's business or (ii) related to any claim by a third party based, in whole or in part, on Dealer's distribution, use, or installation of Products. The activities of any of Dealer’s employees, agents or representatives will be considered activities of the Dealer for purposes of this Section. Manufacturer will have the right, but not the obligation, to assume the defense of any such lawsuit, proceeding, or action. Manufacturer and Dealer will each give the other prompt notice of any such claim, lawsuit, proceeding or action.

19. Use of Manufacturer Trademarks and Service Marks
19.1 During the term of this Agreement, Dealer shall have a limited license to use theTrademarks in connection with Dealer’s promotion of the Products, but only in strict compliance with such license and the policies, instructions and guidelines of Manufacturer. This compliance shall include proper display of trademark notices and warnings with each use of trademark and any use of such Trademarks shall be subject to prior approval of the Manufacturer.

19.2 Dealer acknowledges the exclusive right, title and interest of the Manufacturer in and to the Trademarks;

19.3 Nothing contained in this Agreement shall be construed as conveying to Dealer any right, title of interest in or to any of the Trademarks other than an express right to a permissive use thereof in connection with the promotion of the Products;

19.4 Dealer shall cooperate to the fullest extent possible with Manufacturer or its nominee to take such actions as Manufacturer in its sole discretion may consider necessary to protect any of the Trademarks;

19.5 Dealer shall fully cooperate with Manufacturer in maintaining and defending the ownership and validity of each of the Trademarks against infringement and claims of infringement, Dealer will promptly notify Manufacturer of (i) any infringement or unauthorized use of any Trademark by any third party, or (ii) any assertion by any third party that Dealer’s use of any Trademark constitutes infringement. Manufacturer shall not be obligated to initiate or defend legal action with respect to any Trademark, and Dealer shall not initiate or defend any such action itself without Manufacturer’s prior written consent; and

19.6 Dealer hereby agrees and warrants that Dealer will not incorporate all or any portion of the Trademarks into Dealer’s corporate name or trade names.

20. Force Majeure
20.1 If the performance of Manufacturer is made impossible by reason of any circumstances beyond Manufacturer's reasonable control, including without limitation vendor delay, fire, explosion, power failure, acts of God, war, revolution, civil commotion, or acts of public enemies, any law, order, regulation, ordinance, or requirement of any government or legal body or any representative of any such government or legal body, labor unrest, including without limitation, strikes, slowdowns, picketing or boycotts, then Manufacturer shall be excused from such performance on a day-to-day basis to the extent of such interference continues, provided thatManufacturer shall use reasonable efforts to remove such causes of nonperformance. Under no circumstances shall economic considerations, economic impracticability or inefficiencies delay or excuse Dealer’s performance or be considered an event of "Force Majeure”.

21. Terms of Agreement
The term of this agreement will commence on Effective Date and continue for one (1) Year (unless terminated in accordance with terms hereof). This agreement will be automatically renewed for successive one (1) Year periods; provided, that either party may cancel this License as of the end of either the initial term or any renewal term by giving not less than sixty (60) days written notice prior to the end of such term (the initial and any renewal terms shall be referred to as the “Term”). 

22. Termination
22.1 Either Dealer or Manufacturer may at its option forthwith terminate this Agreement by giving a thirty (30) days advance written notification to the other party, signed by the same person who originally signed the agreement (or that person's authorized representative). If no reply is received, termination shall occur within thirty (30) days of the date of said notice. 

22.2 Manufacturer shall have the right to immediately terminate this Agreement, without prior notice, if Dealer, its employees, or agents shall materially breach this Agreement.

23. Effect of Termination and/or Expiration
23.1 Upon termination or expiration of this Agreement for whatever reason, Dealer waives the applicability and protection of all laws, regardless of jurisdiction, giving Dealer any rights of indemnity or other compensation in lieu of notice or otherwise arising upon termination of this Agreement or any other relationship between Manufacturer and Dealer. Manufacturer will not be required to indemnify or pay any amount to Dealer, whether as compensation, balancing, relief or otherwise, as a result of the termination of this Agreement.

23.2 Upon the expiration or termination of this Agreement for whatever reason, Dealer shall promptly return to Manufacturer all Confidential Information furnished hereunder together with all copies made therefrom and shall not retain copies of any such Confidential Information.

23.3 Upon the expiration or termination of this Agreement for whatever reason, Dealer has a duty to immediately cease all use of the Trademarks and deliver to, or destroy, as directed by Manufacturer, all materials bearing the Trademarks, including all advertising and promotional materials. Dealer shall also take all actions necessary to transfer and assign to Manufacturer or its nominee any right, title or interest in or to any of the Trademarks which Dealer may have acquired in any manner as a result of its activities under this Agreement.

24. Entire Agreement
This Agreement, the schedules attached hereto and the documents referenced herein supersede any and all prior agreements, discussions and negotiations between the Dealer and Manufacturer. Collectively, they set forth the entire agreement and understandings between the parties as to the subject matter of this Agreement. Neither of the parties shall be bound by any terms, conditions, definitions, waivers, warranties or representations with respect to the subject matter of this Agreement, other than as expressly provided in this Agreement or duly set forth on or subsequent to the date hereof in a writing signed by a proper and duly authorized representative of whichever of the parties is to be bound hereby.

25. Assignment
This Agreement and the Dealer’s obligations hereunder cannot be assigned or transferred by the Dealer to any other party without the prior written consent of an authorized executive officer of Manufacturer. For purposes of this Section 25, any transfer of a controlling interest in Dealer shall be considered an assignment if such transfer is to an unrelated 3rd party.

26. Governing Law
This Agreement shall be construed in accordance with the laws of the State of Illinois, without regard to any conflicts of laws consideration. The parties hereto agree that the sole proper venue for any action related to or arising from this Agreement shall be State and/or Federal courts located in Winnebago County, Illinois, and the parties hereby irrevocably consent to the jurisdiction and venue of such courts and hereby waive any claim of forum non conveniens or other causes for change of venue.

27. Waiver
Any failure of Manufacturer to enforce, at any time or for any period of time, any of the provisions under this Agreement shall not be construed as a waiver of the right of Manufacturer to enforce such provisions unless said waiver is in writing, and signed by an authorized executive officer of Manufacturer.

28. Notices
Any notice or other communications required or permitted to be given under or in connection with this Agreement shall be in writing and shall be deemed to have been duly given or made when personally delivered by registered or certified mail, or air courier with signature showing receipt.

29. Severability of Provisions
Each provision of this Agreement shall be considered severable and if for any reason any provision or provisions herein are determined to be invalid or contrary to any existing or future law, such invalidity shall not impair the operation of this Agreement or affect those portions of this Agreement which are valid.

30. Background, Enumeration, and Headings
The Background, enumeration and headings contained in this Agreement are for convenience of reference only and are not intended to have any substantive significance in interpreting this Agreement.

31. Survival
Dealer recognizes and agrees that its obligations under this Agreement shall survive the termination of the Agreement, and Dealer shall be bound by such obligations after termination hereof.

32. Legal Relief
Dealer agrees that in the event Dealer breaches or threatens to breach any of the covenants expressed herein, the damages to Manufacturer will be great and irreparable and difficult to quantify; therefore, Manufacturer may apply to a court of competent jurisdiction for injunctive or other equitable relief to restrain such breach or threat of breach, in addition to any other relief either at law or in equity that Manufacturer may be entitled to pursue. In the event that any or all of the covenants expressed herein shall be determined by a court of competent jurisdiction to be invalid or unenforceable, by reason of its geographic or temporal restrictions being too great, by reason that the range of activities covered is too great, or for any other reason, these covenants shall be interpreted to only extend to the maximum geographic area, period of time, range of activities or other restrictions to which they may be enforceable.

IN WITNESS WHEREOF, and intending to be legally bound, the parties have executed this Dealer Agreement, effective the date first written above.