Merchandise Distribution Agreement

DISTRIBUTION AGREEMENT

Effective Date: ________

This Distribution Agreement, hereinafter referred to as the "Agreement", is entered into and takes effect on ________ (the "Effective Date") by and between the following parties:

________ (the "Supplier")
having a principal address at:

________

AND

________
a Corporation incorporated under the laws of Canada
and having its principal place of business at the following address:

________

Parties may be referred to individually as a "Party" and collectively as "Parties".

PREAMBLE

WHEREAS the Parties wish to enter into an agreement whereby the Supplier provides certain products (as defined below) to the Distributor for distribution;

AND WHEREAS the Parties wish to establish between them a written document covering the terms and conditions of their agreement;

NOW THEREFORE, in consideration of the promises and covenants contained herein, as well as other valuable consideration (the receipt and sufficiency of which is hereby acknowledged), the Parties agree as follows:

ARTICLE I - PRODUCTS

The Supplier agrees to supply and the Distributor agrees to distribute the following products (the "Products"):

________.

ARTICLE II - TERRITORY

The Products will be distributed exclusively in the following geographic territory (the "Territory"):

________.

ARTICLE III - TERMS OF DISTRIBUTION

The Distributor hereby undertakes to do its best to obtain and promote the sale of the Products in the Territory. The Distributor will maintain adequate personnel at all times, including, but not limited to, adequate sales personnel. The Distributor further agrees to comply with each of the Supplier's policies, procedures or other rules regarding the purchase and sale of the Products. The Distributor agrees to conduct its business in a manner favorable and promotional to the Supplier and the Products and not to denigrate, tarnish or imply bad favor for the name, reputation or goodwill of the Supplier.

No sale, resale, promotion, delivery, payment, service or other distribution of the Products by the Distributor will be permitted outside the Territory. If the Distributor makes a significant change to its distribution network, it agrees to notify the Supplier as soon as possible.

The Distributor hereby acknowledges and agrees that its only rights with respect to the Product are the rights specifically described in this Agreement and that all other rights with respect to the Product are specifically reserved to the Supplier.

The Supplier will use its best efforts to fulfill the Distributor's orders for the Products.

ARTICLE IV - EXCLUSIVE

The Supplier agrees not to sell or ship the Products in the Territory to anyone except the Distributor. The Supplier further agrees not to sell or ship similar products or products bearing an identical or similar trademark or other commercial identification on the product or packaging to anyone in the Territory, except to the Distributor. Any inquiries received by the Supplier regarding products in the Territory shall be directed to the Distributor.

ARTICLE V - PRICE AND PAYMENT INFORMATION

The purchase price of the Products shall be clearly indicated on the invoice sent to the Distributor for each shipment of Products and shall be negotiated by the Parties prior to the first shipment to the Distributor. The purchase price is payable in Canadian dollars and may be established as follows:

________.

The purchase price may include shipping charges, product insurance or other handling charges, which the Distributor hereby agrees to pay.

The payment schedule for the purchase price is as follows:

________.

Any significant prospective or proposed or otherwise expected increase in the purchase price must be communicated by Supplier to the Distributor with as much advance notice as possible, but in no event more than 15 days prior to the next shipment of Products to the Distributor. The Distributor may elect to continue this Agreement at the increased purchase price or may elect to terminate this Agreement on 10 days written notice. In the event that the Distributor elects to terminate this Agreement, the Distributor has the right, but not the obligation, to purchase a one-month supply of Products at the Initial Purchase Price.

The risk of loss of the Products passes when the Supplier completes delivery to the Distributor, if the Products are delivered in person, or when the Supplier places the Products with the carrier.

ARTICLE VI - SECURITY INTERESTS

Ownership of the Products will pass to the Distributor when the Products have been delivered. However, the Supplier shall retain a security interest in the delivered Products until payment for the Products has been fully received.

The Supplier shall have all the rights of a secured Party.

If the Distributor fails to pay, the Supplier may enter the property of the Distributor and recover the Products. The Supplier may also exercise any remedy under this Agreement or any remedy available at law or in equity.

ARTICLE VII - 28828558882 285585825

552 55228825 252 2528852 25222282258 252258588 22 252 88825885225 2522 2822 22 2822 22 588882 252 88825885225 82 8288822 252 25255828. 552 88825885225 252 582 8585 252258588, 852 582228825228 525 525228 2552 252 55228825 5225828 282258582 22 588 25225822552 582528, 828855822 822288282558 25222522 582528, 82 8585 252258588.

ARTICLE VIII - 585522585582 28825858

552 88825885225 525282 582228825228 525 525228 2552 252 55228825 5225828 588 582528 82 252 55228825'8 822288282558 25222522, 828855822 588 2522228, 2555225528, 8258882 25528, 25552 8285228, 8222582528 25 22525 822288282558 25222522 ("55228825 52"). 552 88825885225 252, 5282825, 82 2552225 5 8828225 8882282 85882 2588 825222222 88 82 222282 525 5228828 22 252 55228825'8 52 22 582 522 25222282258 252258588 25 2555225528 25 8258882 25528 22 252 25255828 822882885882 58 8582225 82 252 55228825. 552 88825885225 252 222 555 522 22 252 55228825'8 822288282558 25222522 582528 22 522 2525582 25 22525 252258588.

ARTICLE IX - COMPLIANCE

The Distributor hereby agrees to comply with all federal, provincial, local and foreign laws and regulations, including all applicable export control laws and regulations.

ARTICLE X - CONFIDENTIALITY

Each Party hereby acknowledges and agrees that it and the other Party each possess certain non-public "Confidential Information" (as defined below) and may also possess trade secret information (as defined below) (collectively "Proprietary Information") relating to their business operations and development. The Parties agree that Proprietary Information is secret and valuable to each of their respective businesses and the Parties have entered into a commercial relationship whereby each Party will have access to the other Party's Proprietary Information. Each of the Parties wishes to maintain the secret and private nature of any given Proprietary Information. The "Receiving Party" means the Party receiving the Proprietary Information and the "Disclosing Party" means the Party disclosing the Proprietary Information.

"Confidential Information" means all information that is confidential and has commercial value to either Party. Confidential Information may be in the form of documents, techniques, methods, practices, tools, specifications, inventions, patents, trademarks, copyrights, equipment, algorithms, models, samples, software, drawings, sketches, plans, programs or other knowledge and/or secrets, whether oral or written, and may relate to, but is not limited to, research and development, forecasting, marketing, personnel, customers, suppliers, intellectual property and/or finance or any other information that is confidential and of commercial value to either Party.

Confidential Information may or may not be disclosed as such, through labelling, but shall be treated as information that is to be treated as confidential in the circumstances in which it was disclosed.

"Confidential information" means any information which, depending on the circumstances, must be treated as confidential:

A) is known or available to the public at the time of its disclosure or has become known or available after its disclosure through no fault of the Receiving Party;

B) is already known, by lawful means, to the Receiving Party;

C) is given by the Disclosing Party to third parties, other than the Receiving Party, without any restriction;

D) is given to the Receiving Party by a third party who lawfully possessed the Confidential Information and the right to disclose it; or

E) is independently developed by the Receiving Party and the Receiving Party can demonstrate such independent development.

"Trade secret information" is specifically defined as any formula, process, method, model, design or other information that is not known or reasonably ascertainable by the public, consumers or competitors and from which, and by reason of which, an economic or commercial advantage may be derived.

Both Parties hereby agree:

A) Not to disclose Proprietary Information by unauthorized means to third parties during the entire duration of this Agreement and the relationship between the Parties;

B) Not to disclose Confidential Information by unauthorized means to third parties for a period of 3 (three) years after the termination of this Agreement;

C) Not to disclose the Trade Secret Information at any time and forever, or as long as such information remains a trade secret under applicable law, whichever occurs first, to any third party;

D) Not to use the Confidential Information or Trade Secret Information for any purpose other than as set forth in this Agreement or as expressly authorized by the Disclosing Party.

ARTICLE XI - WARRANTIES

The following specific warranties are applicable to the Products:

________.

Except as set forth herein, the Supplier makes no other warranties, express or implied, or promises or obligations with respect to the Products. The Supplier disclaims all other warranties, including warranties of fitness for a particular purpose.

ARTICLE XII - TERMINATION

This Agreement shall be effective on the date of execution and shall continue for a period of ________ (________) years.

The Agreement will be automatically renewed and will remain in full force and effect until either Party submits a written notice of termination to the other Party.

Either Party may terminate this Agreement for any reason or without cause prior to the natural expiration of the term, upon the following notice:

________.

In the event that termination has not been properly notified, either Party may still terminate this Agreement, but shall pay a financial penalty for such termination. The financial penalty for early termination shall be as follows: ________ ($________).

The Parties may also terminate this Agreement in the event of default. If either Party breaches this Agreement, the other Party may terminate this Agreement upon 60 days written notice. Such notice shall contain all information relating to the breach and shall give the breaching Party an opportunity to cure the breach within 60 days. If the breach has not been cured within this period, the Agreement will be terminated. If the breach has been cured, this Agreement shall remain in full force and effect.

The Supplier may also terminate this Agreement in case of any of the following:

a) The Distributor declares bankruptcy, requires guardianship or enters into another financial compromise agreement;

b) The Distributor fails to maintain the required federal and provincial licenses;

c) The Distributor fails to maintain the required insurance;

d) The Distributor has a material change in its corporate structure, including a change in ownership;

e) The Distributor does not meet one of the performance criteria described below.

In the event of termination of this Agreement prior to its natural expiration, the Supplier may repurchase existing products in the Distributor's inventory or may require the Distributor to sell the Product to another Distributor at the Supplier's sole and exclusive discretion. The purchase price for resale to the Supplier or another Distributor shall be the cost paid by the Distributor. The sale will only take place if the Distributor has maintained the Products in good and saleable condition as reviewed by the Supplier.

ARTICLE XIII - METHOD OF PERFORMANCE

The Distributor is required to make commercially reasonable efforts to meet the following performance measures (the "Performance Measures"):

________.

ARTICLE XIV - OUTDOOR TERRITORY TRANSACTIONS

The Distributor shall not sell, attempt to sell, promote, advertise or otherwise solicit orders for products outside the Territory. If the Distributor receives inquiries for products outside the Territory, the Distributor must contact the Supplier to determine how the Supplier wishes to proceed.

ARTICLE XV - GENERAL PROVISIONS

A) GOVERNING LAW: This Agreement shall be governed in all respects by the laws of and any applicable federal law. Both Parties consent to the jurisdiction of the provincial and federal courts. The Parties agree that this choice of law, choice of venue and choice of jurisdiction provision is not optional, but rather mandatory.

B) LANGUAGE: All communications or notices made under this Agreement shall be in English.

C) ASSIGNMENT: This Agreement, or any rights hereunder, may not be assigned, sold, leased or otherwise transferred, in whole or in part, by either Party.

D) AMENDMENTS: This Agreement may only be amended in writing and signed by both Parties.

E) NO WAIVER: None of the provisions of this Agreement shall be deemed waived by any act or acquiescence of either Party. Only an additional written agreement may constitute a waiver of any of the terms of this Agreement between the Parties. No waiver of any term or provision of this Agreement shall constitute a waiver of any other term or provision or the same provision at any later date. The failure of either Party to enforce any provision of this Agreement shall not constitute a waiver of such provision or any other provision.

F) VALIDITY: If any provision or term of this Agreement is held to be unenforceable, this Agreement shall be deemed to be amended to the extent necessary to render the provision otherwise unenforceable, and the remainder of the Agreement shall be valid and enforceable. If a court refuses to modify this Agreement in accordance with its terms, the invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of the remaining terms and provisions, which shall be applied as if the offending term or provision had not been included in this Agreement.

G) PUBLIC ANNOUNCEMENT: Neither Party will make any public announcement or disclosure of the existence of this Agreement or any of its provisions without the prior written consent of the other Party.

H) ENTIRE AGREEMENT: This Agreement constitutes the entire agreement between the Parties and supersedes all prior or contemporaneous agreements, whether written or oral.

I) HEADINGS: The headings in this Agreement are for convenience of reference only and shall not be construed to limit or affect in any way the terms of this Agreement.

J) COUNTERPARTS: This Agreement may be executed in counterparts, all of which shall constitute one and the same agreement. If the dates indicated at the end of this document are different, this Agreement shall be deemed to take effect on the date on which both Parties have signed the Agreement, which may be the later date.

K) FORCE MAJEURE: The Supplier shall not be liable for any failure to perform due to causes beyond its reasonable control, including, but not limited to, acts of force majeure, acts of civil authorities, acts of military authorities, riots, embargoes, acts of nature and natural disasters, and other acts that may be due to unforeseen circumstances.

L) AUTHORIZED ELECTRONIC COMMUNICATIONS: Any notice to be given under this Agreement shall be in writing and sent by first class mail, airmail or electronic mail to the address of the Party concerned indicated at the head of this Agreement, or to the relevant electronic address indicated below, or to such other electronic address as that Party may communicate to the other Party in accordance with this clause. The contact details of the Parties are as follows:

Supplier: ________

Distributor: ________

Notices sent as set forth above shall be deemed to have been received 3 business days after the date of mailing (in the case of domestic first class mail), or 7 business days after the date of mailing (in the case of airmail), or the next business day after mailing (in the case of e-mail).

To prove that a notice was sent, it is sufficient to prove that the notice was left, or that the envelope containing the notice was properly addressed and mailed, or that the applicable means of telecommunication was addressed and sent and that the mailing was confirmed and/or acknowledged, as the case may be.

EXECUTION

Name: ________

Signature: _________________________

Date : _____________________________

Business Name: ________

Representative's Name: ________________________

Representative's Title: _________________________

Representative's Signature: _____________________

Date: _____________________________________