Exhibit 10.1










EXHIBIT 10.1

AGREEMENT







THIS
AGREEMENT is made
effective the 10th day of
December 2004 and replaces any and all previous agreements. 




AMONG:

 

     HOUSE OF
BRUSSELS CHOCOLATES INC.,
a Nevada
corporation, with offices at One Riverway, Suite 1700, Houston, TX, 77056
(hereinafter called “HOBC”).

 

OF
THE FIRST PART




AND:

 

SCHOKINAG
CHOCOLATE NORTH AMERICA INC., a
California Corporation, located at 5301 Office Park Drive, Suite 200,
Bakersfield, CA 93309 (hereinafter called “Schokinag”).




OF
THE SECOND PART




(Collectively
known as the “Parties”)

WHEREAS:





	
      A.
	
      HOBC
      wishes to provide manufacturing, co-packing, marketing and distribution
      services with respect to certain chocolate products developed and owned by
      Schokinag, and








	
      B.
	
      Schokinag
      wishes to engage HOBC to provide manufacturing, co-packing, marketing and
      distribution services with respect to certain of its chocolate products,
      and








	
      C.
	
      Both
      HOBC and Schokinag wish to support and encourage the success of their
      joint undertakings.







NOW
THEREFORE, the
Parties hereby agree as follows:





	
      1.
	
      Both
      Schokinag and HOBC agree to provide best efforts with respect to the
      marketing and distribution of those Schokinag chocolate products detailed
      on Exhibit A (the “Schokinag Products”). Within the scope of its efforts,
      HOBC intends to take the lead role in the exclusive introduction and sale
      of the Schokinag Products to national/regional wholesalers, retail chains
      and private label customers throughout North America. Schokinag shall
      continue its efforts and focus on food service and speciality distributors
      with the objective of penetrating the gourmet foods market. Schokinag
      shall forward all sales leads relating to national product sales
      opportunities to HOBC for follow-up. During the term of this agreement,
      HOBC agrees to neither manufacture nor promote products that directly
      compete with the Schokinag Products (for these purposes, directly
      competing products shall be narrowly defined).









	
      2.
	
      Be
      it agreed that Schokinag and HOBC will, in the future, determine a plan to
      utilize Schokinag’s road show unit (hereinafter the “Big Tin”), for
      general marketing purposes. 







Be it
also agreed that Schokinag and HOBC will, in the future, determine a mechanism
by which HOBC will be able to replicate the Big Tin as its own cost, for its own
use in generating sales. 





	
      3.
	
      Effective
      March 1, 2004 (or earlier, if possible), Schokinag agrees to appoint HOBC
      as exclusive manufacturer and co-packer of the Schokinag Products. A
      detail of agreed manufacturing and co-packing fees is included on Exhibit
      A. During the term of this agreement, Schokinag agrees to provide the raw
      materials (including shipping) required in connection with the manufacture
      and packaging of the Schokinag Products at a price determined by summing
      variable contract pricing and typical distributor-level margins. At no
      time during the term of the agreement shall HOBC obtain raw materials for
      the Schokinag Products from any other source.





 


	 	
      Beyond any existing packaging that Schokinag may have in
      inventory, HOBC will replace the source for any or all packaging materials
      used in co-packing the Schokinag Products as it sees fit, but only with
      the prior approval of Schokinag. In the event HOBC makes a replacement of
      same or similar packaging materials, it will invoice Schokinag for such
      materials at the previously detailed cost of such materials, as included
      in the “Schokinag Product Base Cost Analysis”, less 50% of the difference
      between the previously detailed cost and the actual cost paid by HOBC when
      the packaging is actually incorporated into finished
      goods.





 




















   



	
      4.
	
      Both
      Schokinag and HOBC may purchase units of the Schokinag Products for resale
      at a “Base Cost” as calculated in the “Schokinag Product Base Cost
      Analysis”, included as Exhibit C to this Agreement. In general, the Base
      Cost of a Schokinag Product shall equal the total costs of its raw
      material content, packaging materials and co-packing fee. Shipping costs
      for finished goods to Schokinag, or final customers shall be borne by the
      party purchasing the units. 









	
      5.
	
      During
      the term of this agreement, HOBC shall perform inventory counts to verify
      the amount and condition of inventories held in connection with its
      manufacturing and co-packing efforts on behalf of Schokinag. The results
      of such counts shall be forwarded regularly, but not less than on a
      quarterly basis. Normal waste or loss of product by obsolescence or age
      shall be borne by Schokinag to a maximum of 1.5%. The cost of other
      discrepancies or excessive waste or spoilage shall be borne by
      HOBC.








	
      6.
	
      The
      Initial Term of this agreement shall be for three (3) years. No sales
      targets will be set for years 1 and 2. However, in the event that HOBC
      achieves Minimum Product Sales associated with this agreement in excess of
      $3 million during year 3, then HOBC shall enjoy the unilateral right to
      extend this agreement and its associated privileges for an additional term
      of five (5) years. In the event HOBC fails to achieve Minimum Product
      Sales during its Initial Term, further extensions of this agreement must
      be mutually agreed to by both parties.








	
      7.
	
      All
      current and future recipes associated with the Schokinag Products are
      confidential and proprietary and shall remain the exclusive property of
      Schokinag. In addition, the words “Schokinag”, “European Drinking
      Chocolate”, “Extreme Dark”, and “Drink Your Chocolate” are trademarks
      owned by Schokinag and shall remain their exclusive
    property.







In the
event either HOBC or Schokinag enter into a “Private Label” sale of the
Schokinag Products, product packaging related to the sale must contain a phrase
analogous to “Made with Schokinag Chocolate” in easy to read lettering.






	
      8.
	
      Schokinag
      agrees to provide financing to a maximum of $50,000.00 (fifty thousand
      dollars) to assist in the purchase of specialized equipment to be used in
      the manufacture and packaging of the Schokinag Products. A detail of the
      equipment, together with the amounts to be financed by Schokinag, are
      detailed at Exhibit B. HOBC shall take title to the equipment and provide
      a written promissory note to Schokinag for the amount financed. HOBC
      agrees to reimburse Schokinag for the amounts financed at a rate of eight
      cents ($0.08) per unit packed under its co-packing agreement. Such
      repayment amounts may be calculated on a “co-packing invoice” by invoice
      basis and credited against the amounts then due and payable to HOBC. This
      invoicing should occur monthly. 




 























IN
WITNESS WHEREOF the
parties hereto have executed this Agreement as of the day and year first above
written.




HOUSE
OF BRUSSELS CHOCOLATES
INC.

a Nevada
corporation, by its authorized signatory:







s/s Grant
Peteresen

_____________________________

Signature
of Authorized Signatory




Grant
Petersen

_____________________________

Name of
Authorized Signatory




Chief
Executive Officer

____________________________

Position
of Authorized Signatory

 

SCHOKINAG
CHOCOLATE NORTH AMERICA INC. 

a
corporation based in California, by its authorized signatory :







s/s Brian
Warkentin

_____________________________

Signature
of Authorized Signatory




Brian
Warkentin

_____________________________

Name of
Authorized Signatory




President

_____________________________

Position
of Authorized Signatory

 


























Exhibit
A




Schokinag
Products








	
       Product
      Name
	
      Unit
      Size
	
       
      Schokinag Item Number
	
       HOBC
      Item Number

	
       Bittersweet
      Retail Bar
	
      12x9oz 
      
	
       
      7617209758
	
       76172097

	
       Milk
      Retail Bar
	
      12x9oz 
      
	
       
      7223809758
	
       72238097

	
       White
      Retail Bar
	
      12x9oz 
      
	
       
      7252809758
	
       72528097

	
       Semisweet
      Baking Chunks
	
      12x12oz 
      
	
       
      7615012758
	
       76150127

	
       Milk
      Baking Chunks
	
      12x12oz 
      
	
       
      7223212758
	
       72232127

	
       White
      Baking Chunks
	
      12x12oz 
      
	
       
      7252612758
	
       72526127

	
       22/24
      Retail Cocoa
	
      12x8oz 
      
	
       
      7302008758
	
       73020087

	
       Triple
      Chocolate EDC
	
      12x12oz 
      
	
       
      7654012758
	
       76540127

	
       White
      Chocolate EDC
	
      12x12oz 
      
	
       
      7254012758
	
       72540127

	
       Dulce
      de Leche EDC
	
      12x12oz 
      
	
       
      7224012758
	
       72240127

	
       Chocolate
      Mocha EDC
	
      12x12oz 
      
	
       
      7344012758
	
       73440127

	
       German
      Chocolate Cake EDC
	
      12x12oz 
      
	
       
      7677712758
	
       76777127

	
       Extreme
      Dark EDC
	
      12x12oz 
      
	
       
      7775412758
	
       77754127

	
       No-Sugar-Added
      Triple Chocolate EDC
	
      12x12oz 
      
	
       
      7654312758
	
       76543127







*EDC =
European Drinking Chocolate