Draft STONE HOMES TERRITORY AGENT AGREEMENT

Draft STONE HOMES TERRITORY AGENT AGREEMENT

(Insert Name of Authorised Location)

THIS AGREEMENT is dated 2009

BETWEEN

STONE HOMES PTY LIMITED (ABN 26 115 467 439)of 151 Smeaton Grange Road, Smeaton Grange, NSW 2567 (Stone Homes)

AND

(the Territory Agent)

AND

(the Director)

Recitals

ASTONE HOMES is a corporation supplying to the public throughout Australia:

i)kit homes clad in sandstone and/or roll formed steel (i.e. color steel homes) and/or all other types of kit homes; and

ii)components for dwellings including but not limited to the following:

-sandstone blocks;

-timber windows;

-timber doors;

-pavers.

(collectively referred to in this Agreement as the Product)

BSTONE HOMES has developed and is the owner of the following intellectual property:

i)plans,

ii)engineering drawings,

iii)designs,

iv)computer software (the Software)

for the purposes of promoting and selling the Product and may from time to time develop other intellectual property for use in the design and sale of the Product (collectively referred to in this Agreement as the Intellectual Property).

CSTONE HOMES has licensed the use of the Intellectual Property to duly appointed Territory Agents to act as independent businesses to assist STONE HOMES in the sale of the Product.

DSTONE HOMES is a licensed contractor under the Home Building Act 1989 NSW.

EThe parties have agreed to the appointment of the Territory Agent to assist STONE HOMES in the sale of the Product and to grant the Territory Agent a license to use the Intellectual Property on the terms set out in this Agreement.

IT IS AGREED

1.INTERPRETATION

1.1In this Agreement, unless otherwise indicated by the context:

(a)Business Day means a day that is not a Saturday, Sunday, public holiday or bank holiday in Sydney.

(b)Product has its meaning as defined under the preceding clause A.

(c)Software has its meaning under the preceding clause B(iv).

(d)Result means the sale of the Product as effected by or on behalf of the Territory Agent and as demonstrated in clause 13(a).

(e)Customer means a purchaser of the Product.

(f)Contract means the contract to supply the kit home as between the purchaser and STONE HOMES.

(g)Consideration means any monetary payments made to either party to this Agreement in accordance with the promises and representations made under this Agreement as between the parties.

1.2In this Agreement, unless otherwise indicated by the context:

(a)words importing the singular include the plural and vice versa;

(b)headings are for convenience only and do not affect interpretation of this Agreement;

(c)a reference to a clause, paragraph or schedule is a reference to a clause, paragraph or schedule of this Agreement;

(d)where any word or phrase is given a definite meaning in this Agreement, any part of speech or other grammatical form of that word or phrase has a corresponding meaning;

(e)an expression importing a natural person includes a body corporate, partnership, joint venture, association or other legal entity;

(f)a reference to a statute, statutory provision or regulation includes all amendments, consolidations or replacements thereof;

(g)a reference to a party to a document includes that party’s legal personal representatives, successors and permitted assigns;

(h)a covenant or agreement on the part of or for the benefit of two or more persons binds or benefits them jointly and severally; and

(i)a reference to a body, whether statutory or not;

(i)which ceases to exist; or

(ii)whose powers or functions are transferred to another body;

is a reference to the body which replaces it or which substantially succeeds to its powers or functions.

Product

2.STONE HOMES may alter or add to the Product from time to time in its absolute discretion. The Product is defined as:

i)kit homes clad in sandstone and/or roll formed steel (i.e. color steel homes) and/or all other types of kit homes; and

ii)components for dwellings including but not limited to the following:

-sandstone blocks;

-timber windows;

-timber doors;

-pavers.

Appointment Fee

1. In consideration of the payment to STONE HOMES by the Territory Agent of the Appointment Fee as set out in the Schedule to this Agreement (the Schedule) the Territory Agent is appointed sole Territory Agent for the sale of the Product in the Authorised Territory as set out in the Schedule to this Agreement and must operate an office/ display centre at the Authorised Location as set out in the Schedule to this Agreement.
2. The Appointment Fee shall be paid as follows:

(a)10% on the Territory Agent signing this Agreement (this amount is non-refundable); and

(b)the balance no later than 30 days from the date of this Agreement.

1. In the event the balance of the Appointment Fee is not paid when due under this Agreement (time being of the essence), Stone Homes may elect to terminate this Agreement.

Commencement

1. The Territory Agent may commence to operate the Territory Agency at its discretion on payment in full of the Appointment Fee.
2. This Agreement shall have a term of 99 years from the date of this Agreement unless otherwise lawfully terminated.

Independent Business

1. The Territory Agent acknowledges it will be conducting an independent business in the performance of this Agreement and not acting as an employee or partner/joint venturer of Stone Homes nor under any contract of service.

Obligations of Stone Homes

1. Technical Advice and Other Services

(a)Stone Homes shall during normal business hours (i.e. 9am – 5pm) in New South Wales provide technical assistance to the Territory Agent in the use of the Intellectual Property and in relation to the promotion and sale of the Product. The Territory Agent may elect to attend a 2-day training course to be conducted at the STONE HOMES head office within 3 months after the signing of this Agreement.

(b)Such assistance will not include business advice or any other directions by STONE HOMES as to the conduct of the Territory Agent’s business other than as expressly set out in this agreement.

10.Advertising

(a)STONE HOMES warrants that it will spend 5% of its cash receipts (excluding GST) of annual sales of kit homes (excluding components for dwellings comprising the Product and any other product STONE HOMES may at any time choose to retail, distribute or in any other way supply) on advertising nationally.

(b)Although uniform advertising across Australia is the aim, STONE HOMES gives no guarantee in relation to absolute uniformity in advertising.

(c)The strategy, mode and medium of all such advertising will be entirely at the discretion of STONE HOMES.

(d)STONE HOMES does not guarantee that all of the advertising funds will be spent in any given Territory Agent’s area.

(e)STONE HOMES will comply with all reasonable requests of the Territory Agent to supply advertising materials for the Product which are supplied to other Territory Agents at a price equal to STONE HOMES' cost of purchase plus handling and freight.

(f)The Territory Agent shall not use such advertising materials to the detriment of STONE HOMES image, name and reputation or for any other purpose other than the promotion of STONE HOMES Product.

(g)All advertisements of the Product done by the Territory Agent independently of STONE HOMES must be approved by STONE HOMES in writing prior to publication.

11.Intellectual Property

11.1 STONE HOMES has developed and is the owner of the following intellectual property:

i)plans,

ii)engineering drawings,

iii)designs,

iv)computer software (the Software)

for the purposes of promoting and selling the Product and may from time to time develop other intellectual property for use in the design and sale of the Product (collectively referred to in this Agreement as the Intellectual Property).

11.2 License to use the Intellectual Property

(a)STONE HOMES hereby grants for the term of this agreement (or earlier termination thereof) a non-exclusive license to the Territory Agent to use the Intellectual Property in relation to the performance of the Territory Agent’s obligations under this Agreement.

(b)The Territory Agent has no sublicensing rights or right to assign the benefit of the license other than as provided in Clause 28 hereof (Assignment of Territory Agency).

(c)The Software is a computer package that will serve the purposes of pricing the Product and producing brochures to promote the Product.

11.3 Operation of the Intellectual Property

(a)The Territory Agent may use all plans as produced by the Software in accordance with the license noted previously. Such plans so produced by the Software are for the customer’s reference only and not for the purposes of submission to Council or any other relevant authority. Plans for such purposes are supplied by the Stone Homes Head Office.

(b)STONE HOMES grants no warranty or guarantee in respect of the Software, and will only be held liable to the extent of replacing any defective Software, and not to any consequential and/or indirect losses suffered by the Territory Agent due to the use of the Software.

12.Extent of STONE HOMES’ Liability

To the extent permitted by Australian legislation:

(a)STONE HOMES’ liability to the Territory Agent in the event the Product or the Software is found to be defective is limited to a sum equivalent to the commission payable to the Territory Agent in relation to the relevant sale.

(b)STONE HOMES will not be liable for any consequential losses claimed by or from the Territory Agent as a result of the quality of the Product or the Intellectual Property being deficient in any way.

Rights of the Territory Agent

13.Commissions on sales

(a)STONE HOMES shall pay to the Territory Agent Commission being a sum equal to 10% of the moneys received by STONE HOMES (excluding refund of GST payable by STONE HOMES on any supply) in relation to the sale of the Product effected by or on behalf of the Territory Agent (the Result)

(b)The Territory Agent may deliver a tax invoice to STONE HOMES on the last working day of the week for commissions payable for the total Results achieved by that Territory Agent in that week. The tax invoice shall be accompanied by such documents as may be reasonably required by STONE HOMES to support the total commission invoiced.

(c)STONE HOMES must pay commission on or before the following Friday, or last working day of the week, into the Territory Agent’s bank account via electronic banking.

(d)If the customer validly terminates the contract to supply the Product with STONE HOMES after the commission has been paid to the Territory Agent, the Territory Agent must refund the commission paid within 14 days of demand by notice in writing to the Territory Agent by STONE HOMES.

14Right to solely operate in the Authorised Territory

(a)Subject to clause 14(g), the Territory Agent will have sole operating rights within the Authorised Territory subject to this Agreement. This includes having sole access to the phone numbers advertised for calls originating from within the Territory, advertising and other privileges prescribed in this Agreement.

(b)All sales must be effected from the Authorised Location. The Territory Agent acknowledges that other territory agents may sell the Product within the Territory.

(c)Where the STONE HOMES Head Office supplies kit homes and/or sandstone blocks, timber windows, timber doors, pavers to a customer, who intending to erect a dwelling within the Territory with the products so purchased, does not deal with the Territory Agent but deals solely with STONE HOMES, STONE HOMES shall notify the Territory Agent of its sale to the customer within seven (7) days of such sale and the Territory Agent shall be entitled to invoice STONE HOMES for a sum being 7% of the moneys received from that customer (ex GST) and such invoice shall be payable (and refundable as the case may be) as provided in clause 13 of this Agreement.

(d) Only the sale of the products so listed in subclause 14(c), comprising the Product, will be subject to any payment of commission by STONE HOMES to the Territory Agent whether the customer deals directly with the Territory Agent, the Referral Agent or the STONE HOMES Head Office.

(e)The Territory Agent acknowledges that STONE HOMES will be selling sandstone blocks, pavers, timber windows and timber doors direct to the public. STONE HOMES will be required to pay 7% of the moneys received through the sale of such items as a commission to the Territory Agent where the aforementioned components sold are of the highest quality and the items are used by the purchaser for construction of a dwelling (or part thereof) within the Territory. However no such entitlements in commission is payable by STONE HOMES to the Territory Agent where the components so supplied are otherwise not of the highest quality (i.e. seconds). It is also acknowledged by the Territory Agent that STONE HOMES may elect to add further products for sale, and such products whether components or otherwise will not in any way entitle the Territory Agent to any payments of commission from STONE HOMES, unless with prior written mutual agreement between the parties.

(f)The Territory Agent shall meet the minimum turnover requirements as set out in the Schedule hereto unless such failure is due to force majeure events such as drought, economic recession, wars, civil disturbances and natural disasters.

(g)Appointment of Referral agents within the Territory

STONE HOMES may appoint referral agents to operate within the Territory to sell kit homes. If a referral agent introduces the sale of a kit home or Product to the STONE HOMES Head Office for the erection of a dwelling within the Authorised Territory, STONE HOMES shall notify the Territory Agent of the sale within seven (7) days of such sale and the Territory Agent shall be entitled to invoice STONE HOMES for a commission representing 7% OF moneys received (excluding refund of GST payable by STONE HOMES on any supply) by STONE HOMES in relation to such sale

15.Deliveries:

The Territory Agent shall not make any representations, promises or guarantees regarding delivery dates for the Product.

16.The Conduct of the Territory Agency:

(a)The Territory Agent acknowledges that it is intended that the Territory Agent shall perform this Agreement as an independent contractor. The Territory Agent is an independent business entity, to be constituted exclusively as a corporation.

(b)The Territory Agent acknowledges that any degree of oversight exercised by STONE HOMES over the Territory Agent’s performance of this Agreement is no more than necessary to protect STONE HOMES goodwill and interests under this Agreement.

(c)STONE HOMES acknowledges that the Territory Agent will delegate aspects of the performance of this Agreement to its employees.

(d)The Territory Agent shall carry out his own independent business in performance of this Agreement, with all necessary legal formalities including but not limited to registration of a business name and payment of all relevant and required taxation liabilities.

(e)The Territory Agent shall operate only within the Territory from premises commensurate with the style of the Product at the Authorised Location. STONE HOMES is not required to make any form of contribution (financial or otherwise) to the Territory Agent’s business.

(f)STONE HOMES will not be responsible or be required to participate in any supervisory or auxiliary role in the Territory Agent’s business in any respect, including but not limited to the daily administration of the Territory Agency, the employment, training, direction and supervision of staff and the scheduling of the Territory Agent’s business activities or be involved in the Territory Agency in any organizational way.

(g)The Territory Agent must provide his own equipment for the efficient running of his business apart from providing the office/display centre, including but not limited to a desktop computer (minimum: a Pentium 4 system), facsimile machine, a telephone answering machine and an air-conditioning system for the office/display centre.

(h)STONE HOMES acknowledges that Territory Agent may agree to erect the Product on behalf of a customer, acting independently. If however the Territory Agent elects to recommend the builder of the kit home sold to the customer, the recommended builder must be a builder with a current and appropriately authorised license to build the kit home in accordance with the requirements of the Home Building Act and Regulations, and any other relevant Australian statutes and regulations.

17.Purchase monies from customers

The Territory Agent shall not deposit any purchase monies for the Product into any bank account other than as authorized by STONE HOMES in writing.

18.Exclusively deal with STONE HOMES’ Products

(a)The Territory Agent will not sell or distribute any products similar to the Product, for the term of this agreement including any other product which STONE HOMES may supply at any given time.

(b)For the avoidance of doubt, the Territory Agent may engage in any business, professional or commercial activities except where it would compete with the STONE HOMES’ business in any way.