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EXHIBIT 99.A
EXCLUSIVE DISTRIBUTION AGREEMENT
AGREEMENT made this 22nd day of September, 2000, by and between UNITED
ENERGY CORPORATION ("UNRG"), a Nevada corporation, with a principal place of
business located at 600 Meadowlands Parkway, #20, Secaucus, New Jersey 07094,
and LUNSFORD, LTD., doing business as ALAMEDA COMPANY ("ALAMEDA"), a California
corporation, having a principal place of business at 1260 N. Lakeview Avenue,
Anaheim, CA 92807.
R E C I T A L S
WHEREAS, UNRG is in the business of manufacturing and distributing
various products ("products") as more fully set forth on Exhibit "A" (in
particular UNIPROOF(R) Blue Line proofing paper); and
WHEREAS, UNRG seeks to establish distribution of the products in the
United States, Canada, Puerto Rico, Mexico, Central America, South America and
the Caribbean; and
WHEREAS, ALAMEDA has agreed to distribute the products for UNRG and
UNRG agrees subject to the terms of this Agreement to appoint ALAMEDA as its
exclusive distributor for the regions set out above, subject to the conditions
set forth herein;
NOW, THEREFORE, upon the mutual covenants contained herein, it is
agreed as follows:
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ARTICLE I
UNRG'S REPRESENTATIONS AND OBLIGATIONS
1.1 UNRG will manufacture the products described on Exhibit "A".
1.2 UNRG will keep in full force and effect its existing licenses,
patents, trademarks, service marks, etc., that each product currently enjoys and
will obtain such intellectual property rights on any new products UNRG
manufactures and/or distributes, in UNRG's sole discretion.
1.3 UNRG will hold ALAMEDA harmless and indemnify ALAMEDA (including
reasonable legal fees) from any third party claim relating to:
(i) intellectual property right infringements which shall
include reimbursement for any Products purchased by ALAMEDA from UNRG which
ALAMEDA is prevented from selling by reason of such claimed infringement;
(ii) product liability or negligence claims concerning the
manufacture of the Products;
(iii) breach of any term of this Agreement by UNRG;
1.4 UNRG will produce Product consistent with present performance and
reliability.
ARTICLE II
DISTRIBUTORSHIP
2.1 UNRG appoints ALAMEDA as its exclusive distributor for the Products
described on Exhibit "A" for the United States, Canada, Puerto Rico, Mexico,
South America, Central America and the Caribbean, for the term of this Agreement
subject to the conditions set
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forth herein. The territory so described and as may be subsequently enlarged,
reduced or otherwise changed with the mutual consent of the parties is
hereinafter referred to as the "Territory".
2.2 UNRG grants ALAMEDA the right to purchase the Products described in
Exhibit "A" at prices mutually agreed to between the parties from time to time.
Notwithstanding the foregoing, ALAMEDA shall have the right to purchase the
Products described in Exhibit "A" at the prices set out in Exhibit "A". Prices
are guaranteed through December 31, 2002.
2.3 All of such prices may be adjusted by UNRG to reflect documented
raw material or manufacturing price increases or decreases on a dollar-
for-dollar basis. Such adjustments shall become effective only upon the
expiration of thirty (30) days after written notice of the adjustment shall have
been given by UNRG to ALAMEDA, accompanied by a copy of a vendor invoice or
other document reflecting the particular increase in cost of materials or
manufacturing incurred by UNRG.
2.4 All prices are F.O.B. UNRG's manufacturing facilities. Risk of loss
shall pass at the time of shipment from such facility. 2.5 UNRG will supply
ALAMEDA such quantities of Products necessary for ALAMEDA to satisfy purchase
orders obtained by ALAMEDA.
2.6 UNRG will permit ALAMEDA to advertise, sell and distribute the
Products under the ALAMEDA label or such other label selected by ALAMEDA
(including UNRG's labels and trademarks), with the approval of UNRG, which
approval shall not be unreasonably withheld.
2.7 UNRG will invoice ALAMEDA for Products shipped (cost of shipping
and freight to be paid by ALAMEDA) on the day of shipping of the
product to ALAMEDA's specified United States location.
2.8 Payment terms are as set forth on Exhibit "A".
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2.9 For purposes of this Agreement, Products are defined as those
described in Exhibit "A", which may include from time to time any additional
products derived from the UNIPROOF(R) technology.
2.10 UNRG represents that to the best of its knowledge, the Products do
not infringe upon any patents and/or any other intellectual property right to
which any other party in the United States or abroad has patent rights.
2.11 UNRG will not cause, sell, distribute or give away any samples of
the Products within the Territory.
2.12 During the term of this Agreement, UNRG shall turn over all past,
future and existing accounts for the Products within the Territory (including
private label) to ALAMEDA and shall not appoint any other or different person,
firm, or corporation to sell the Products in the Territory. UNRG will not sell
to any account outside the Territory where it can be shown that said account
shipped the Products back into the Territory.
2.13 During the term of this Agreement, UNRG shall not produce any of
the Products or any product similar to the Products under a private label or any
other name for any person, company or entity within the Territory. UNRG shall
not produce any of the Products similar to the Products for sale on the Internet
or any website within the Territory.
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ARTICLE III
TERMINATION
3.1 In the event of a breach of this Agreement by a party, as a
condition to the exercise of any remedy on account thereof by the non-breaching
party, the non-breaching party shall give written notice to the breaching party
of the event or occurrence constituting breach hereunder and stating what
conduct is needed to cure the same. The party receiving such a notice shall
have, in all cases, thirty (30) days from the date such notice is given in which
to cure the same. If no cure is effected within such time frame, then the
non-breaching party may exercise any or all remedies available to it at law or
in equity on account thereof, and in addition to and cumulative of all such
remedies, the non-breaching party shall have the right to terminate this
Agreement by delivering notice of termination to the breaching party. No
termination of this Agreement shall relieve a party of obligations incurred
prior to the date of such termination.
3.2 In the event of termination, this Agreement shall remain applicable
to any orders for Products which ALAMEDA has previously placed and to any other
orders which may be placed within sixty (60) days subsequent to the effective
date of termination.
3.3 In the event of termination of this Agreement for failure of
ALAMEDA to maintain minimum purchase requirements, UNRG will permit ALAMEDA to
become a non-exclusive distributor.
ARTICLE IV
ALAMEDA'S REPRESENTATIONS AND OBLIGATIONS
4.1 ALAMEDA will purchase, sell and distribute the Products
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in the Territory using its best efforts to achieve maximum sales of the
Products. In order to maintain exclusivity in the Territory, ALAMEDA must
purchase from UNRG the following product minimums:
In calendar year 2001, ALAMEDA must purchase a minimum of 13,394,641 sq. ft. of
UNIPROOF(R) Blue Line proofing paper in mill rolls only and in calendar year
2002 must purchase a minimum of 16,073,569 sq.ft. of such product.
4.2 ALAMEDA will pay UNRG the amount invoiced for the Products in
accordance with the pricing and payment terms set forth above and on Exhibit
"A".
4.3 ALAMEDA shall pay all advertising and promotional costs it incurs
and all such costs UNRG incurs at ALAMEDA's request.
4.4 During the term of this Agreement, ALAMEDA agrees not to sell or
distribute any product used for the same purpose as the Products that is exposed
through a light source for proofing purposes.
ARTICLE V
LIMITED WARRANTY OF THE PRODUCTS
5.1 UNRG expressly warrants, for a period of ninety (90) days from the
date of shipment to ALAMEDA, or to a place designated by ALAMEDA, that products
sold hereunder shall be free from defects in workmanship or materials that
render the product(s) unusable for its ordinary purpose, and during that period
agrees to, without cost to ALAMEDA, repair or replace products that prove to be
defective in workmanship or materials, provided written notice of the defect is
given to UNRG within ninety (90) days of delivery to ALAMEDA and the defective
products are returned to the UNRG. This
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warranty shall not cover damage to the products occurring during or after
shipment. Except for the foregoing express warranty, UNRG MAKES NO OTHER
WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, CONCERNING THE PRODUCTS AND
HEREBY DISCLAIMS ANY AND ALL OTHER EXPRESS OR IMPLIED WARRANTIES, INCLUDING
WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
ARTICLE VI
TERM
6.1 The term of this Agreement shall be effective from the date
executed by both parties through December 31, 2002, provided ALAMEDA meets the
minimum purchase requirements herein. Thereafter, the Agreement will
automatically renew for successive one-year terms provided ALAMEDA has purchased
the minimum amounts of products per year agreed to herein and to be agreed upon
for each year following 2002.
ARTICLE VII
PURCHASE OF EXISTING INVENTORY
7.1 ALAMEDA will purchase all of UNRG's existing inventory of finished
goods of UNIPROOF(R) Blue Line proofing paper at 37% off low net price plus
2%-net 10 days ("Existing Inventory"). Low net prices are as follows:
Low net on two-sided sheets $0.49 per square foot
Low net on one-sided sheets $0.35 per square foot
Low net on two-sided rolls $0.43 per square foot
Low net on one-sided rolls $0.30 per square foot
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7.2 ALAMEDA will also purchase all mill rolls (unconverted goods) at
$0.25 per square foot for two-sided rolls and at $0.175 per square foot for
one-sided rolls.
7.3 All shipments will be F.O.B. UNRG manufacturing facilities.
7.4 UNRG's finished inventory will be held at UNRG facilities per
request of ALAMEDA and shipped at ALAMEDA's direction.
7.5 Payment for Existing Inventory to UNRG by ALAMEDA will be in five
(5) equal payments with the first payment to UNRG due upon the first receipt of
any Existing Inventory from UNRG ("First Payment"). The next four (4) equal
payments will commence sixty (60) days from the date the first payment is due in
thirty (30) day intervals.
ARTICLE VIII
MISCELLANEOUS
8.1 Notices. All notices permitted or required under this Agreement
shall be in writing and shall be either (a) delivered by personal service, (b)
delivered by courier service, or (c) sent by certified or registered mail,
postage prepaid, return receipt requested, to the parties hereto at their
addresses set forth below or at such other addresses which may be designated in
writing by the parties:
If to UNRG: 600 Meadowlands Parkway #20
Secaucus, New Jersey 07094
Attn: Ronald Wilen, President
If to ALAMEDA: 1260 N. Lakeview Avenue
Anaheim, CA 92807
Attn: Robin Lunsford, President
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8.2 Entire Agreement. This Agreement (including Exhibits hereto)
supersedes all prior agreements and understandings, oral and written, among the
parties with respect to the subject matter hereof, and this Agreement
constitutes the entire agreement of the parties.
8.3 No Third Party Beneficiaries. Nothing in this Agreement, express or
implied, is intended to confer any rights or obligations on any person other
than the parties of their respective heirs, successors and assigns.
8.4 Assignment. No party shall assign its rights or obligations under
this Agreement without the prior written consent of the other party.
8.5 Successors and Assigns. The covenants, agreements and conditions
contained or granted shall be binding upon and shall inure to the benefit of the
parties and their respective heirs, successors and permitted assigns.
8.6 No Joint Venture. The parties, by entering into this Agreement and
consummating the transaction contemplated in this Agreement, shall not be, and
shall not be considered, a partner or joint venturer of one another.
8.7 Headings. The article, section and other headings contained in this
Agreement are for reference purposes only and shall not be deemed to be part of
this Agreement or to affect the meaning or interpretation of this Agreement.
8.8 Counterparts. This Agreement may be executed in any number of
counterparts, including facsimile counterparts, each of which, when executed,
shall be deemed to be an original, and all
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of which together shall be deemed to be one and the same instrument.
8.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey, without giving effect to
any choice of law principles.
8.10 Severability. If any term, covenant, condition, or provision of
this Agreement of the application thereof to any circumstances shall be invalid
or unenforceable to any extent, the remaining terms, covenants, conditions and
provisions of this Agreement shall not be affected and each remaining term,
covenant, condition, and provision of this Agreement shall be valid and shall be
enforceable to the fullest extent permitted by law. If any provision of this
Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only as broad as it is enforceable.
8.11 Amendments. This Agreement may not be modified or changed except
by a written instrument signed by both parties.
8.12 Construction of Agreement. This Agreement was negotiated at arm's
length by the parties and their respective counsel. The rule that an agreement
is to be construed against the party drafting the agreement is hereby waived,
and shall have no applicability in construing this Agreement or any provision
thereof.
8.13 Independent Counsel. The parties hereby acknowledge that each of
them has received the advice of independent counsel in connection with the
transactions contemplated herein.
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8.14 Arbitration. Any controversy or claim arising out of or related to
this Agreement shall be commenced, prosecuted and resolved in the State of New
Jersey by arbitration in accordance with the rules of the American Arbitration
Association, and judgment upon any award rendered by the arbitration(s) may be
entered in any court having jurisdiction thereof. Cost of arbitration hearing
shall be the responsibility of the losing party.
8.15 Force Majeure. Neither party to this Agreement will be held liable
for a delay or failure in performance due to the occurrence of a contingency,
the non-occurrence of which was a basic assumption of this Agreement, including,
but not limited to UNRG's failure to deliver because of resource or raw
materials shortages, strikes, or other matters beyond its control.
8.16 ALAMEDA Not Agent or Legal Representative. This Agreement does not
constitute ALAMEDA, as the agent or legal representative of UNRG for any purpose
whatsoever. ALAMEDA is not granted any right or authority to assume or to accrue
any obligation or responsibility, express or implied, in behalf of or in the
name of UNRG or to bind UNRG in any manner.
8.17 Completeness of Instrument. This instrument, including Exhibit
"A", contains all of the agreements, understandings, representations,
conditions, warranties, and covenants made between the parties hereto. Unless
set forth herein, neither party shall be liable for any representation made, and
all modifications and amendments hereto must be in writing.
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8.18 No Implied Waivers. The failure of either party at any time to
require performance by the other party of any provision hereof shall not affect
in any way the full right to require such performance at any time hereafter. Nor
shall the waiver by either party of a breach of any provision hereof be taken or
held to be a waiver of the provision itself.
8.18 Attorney Fees. If an action is brought to enforce any of the terms
or provisions of this Agreement, the prevailing party shall be entitled to
reasonable attorney's fees.
IN WITNESS WHEREOF, the undersigned have executed this Distribution
Agreement as of the date first above written.
"UNRG"
UNITED ENERGY CORPORATION
Dated: September 25, 2000 By: \s\ Ronald Wilen
RON WILEN, President
"ALAMEDA"
LUNSFORD, LTD.
Dated: September 22, 2000 By: \s\ Robin Lunsford
ROBIN LUNSFORD,
President/CEO
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EXHIBIT "A"
ALAMEDA will purchase all new finished master rolls of UNIPROOF(R) Blue
Line proofing paper at $0.25 per square foot for 2-sided master rolls and at
$0.175 per square foot for all 1-sided master rolls, based on linear feet
shipped.
Prices are guaranteed to December 31, 2002, with an understanding and
agreement to pass along increases and decreases in manufacturing and materials
cost, which must be documented. Should competing or existing products decrease
in price, UNRG will attempt to decrease prices to ALAMEDA by the same
percentage.
Terms of payment will be net 20 days from date of invoice. Invoices
will be faxed to ALAMEDA immediately upon shipment of Product(s). All shipments
will be F.O.B. UNRG manufacturing facilities. Purchase order requirements are
as follows for new materials:
(a) Minimum order must be for 26 master rolls (at least 20,000 linear
feet per roll) per quarter, placed ninety (90) days prior to delivery.
(b) After December 31, 2000, if ALAMEDA fails to meet minimum quarterly
purchase orders of at least 26 master rolls for two (2) consecutive quarters,
then ALAMEDA will lose exclusivity but will remain a dealer. Further, all UNRG
customers will revert back to UNRG and the termination provisions of this
Agreement will apply.
LUNSFORD, LTD. UNITED ENERGY CORPORATION
By: \s\ Robin Lunsford By: \s\ Ronald Wilen
ROBIN LUNSFORD, RONALD WILEN, President
President/CEO\
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