Document:

exhibit_10-2.htm

    SUPPLY
AND DISTRUBUTION AGREEMENT

    

    BETWEEN

    

    NATURAL
GLACIAL WATERS INC.

    

    AND

    

    AQUABLUE
SPRING WATER INTERNATIONAL INC.

    LES
EAUX DE SOURCE AQUABLUE INTERNATIONAL INC.

    

    

    SUPPLY
AND DISTRIBUTION AGREEMENT

    

    THIS
AGREEMENT IS DATED THE 22 DAY OF AUGUST, 2008 FOR REFERENCE
BETWEEN:

    NATURAL
GLACIAL WATERS INC.

    

    8430
Berray Road, Fanny Bay, BC V0R 1W0

    (the
“Manufacturer”)

    

    AND:

    AQUABLUE
SPRING WATER INTERNATIONAL, INCL./LES EAUX DE SOURCE

    AQUABLUE
INTERNATIONAL INC.

    

    507,
Places d’Armes, Bureau 1529, Montreal, Quebec, H2Y 2W8

    (the
“Distributor”)

    (The
manufacturer and the Distributor shall collectively be referred to as the
Parties in this Agreement.)

    

    RECITALS:

    

    WHEREAS:

    

    
      	
              A.  

            	
              The
      Manufacturer is a corporation duly incorporated pursuant to the British
      Columbia Business Corporations Act, and is represented by Alan Lai, its
      Chief Executive Officer, who is duly authorized for the purposes of this
      Agreement.

            

    

    

    
      	
              B.  

            	
              The
      Distributor is a corporation duly incorporated pursuant to the Canada
      Business Corporations Act, and is represented by Anna Szostak, its
      President, who is duly authorized for the purposes of this
      Agreement.

            

    

     

    
 

    
      
        
        

      

      
        Page
- 1

        
          

        

      

      
        
        

      

    

    
      	
              C.  

            	
              The
      Manufacturer is in the business of bottling, selling and supplying premium
      natural glacial spring water to third party distributors of natural spring
      water.

            

    

    

    
      	
              D.  

            	
              The
      Manufacturer is also in the business of selling, and distributing premium
      natural glacial spring water in Asia (including and not limited to Taiwan,
      the People’s Republic of China, Korea, and Japan), Canada (including and
      not limited to Vancouver Island, British Columbia, the City of Vancouver,
      British Columbia, the Lower Mainland of British Columbia, and Edmonton,
      Alberta), and the United States (including and not limited to State of
      California) under its own brand of NÉVÉ and CANADA
    ICEFIELD.

            

    

    

    
      	
              E.  

            	
              The
      Distributor is an independent intermediary specializing in the
      distribution of premium natural spring
water.

            

    

    

    
      	
              F.  

            	
              The
      Distributor wishes to exclusively distribute and market bottled natural
      glacial spring water under the Distributors brand name of “AQUABLUE” (the
      “Brand”).

            

    

    

    
      	
              G.  

            	
              The
      Manufacturer wishes to supply the Distributor with bottled natural glacial
      spring water (the “Product”) under the Distributor’s brand name of
      “AQUABLUE” and to grant the Distributor the exclusive right to distribute
      the Brand in any territory the Distributor may
  develop.

            

    

    

    
      	
              H.  

            	
              The
      Parties agree that this Agreement shall in no way whatsoever restrict of
      limit the Manufacturer’s business of bottling, selling, and distributing
      natural glacial spring water under its own brand of NÉVÉ and CANADA
      ICEFIELD in any current or future territory developed by the Manufacturer,
      shall in no way whatsoever restrict or limit the Manufacturer from
      developing and marketing future brands, and shall in no way whatsoever
      restrict or limit the Manufacturer’s business of bottling, selling and
      supplying natural spring water to other third party distributor(s), other
      than distributor’s current, in any current or future territory developed
      by the Manufacturer.

            

    

    

    
      	
              I.  

            	
              It
      is the intention of the Parties to establish a complimentary commercial
      relationship between them and they wish, to that effect, to establish
      between them an atmosphere of cooperation and constant consultation so as
      to enable the development of policies for the production, the marketing
      and the distribution in order to ensure maximum penetration of the
      “AQUABLUE” Products.

            

    

    

    
      	
              J.  

            	
              The
      Manufacturer agrees no to directly contact distributor’s customer. A
      written consent from the distributor is needed prior the manufacturer
      enter into a formal business relationship with the distributors
      customer’s. A customer list, however needs to be supplied to the
      manufacturer on monthly basis. Manufacturer’s current customer is exempt
      from this restriction.

            

    

    

    NOW THEREFORE the Manufacturer
and the Distributor agree that:

    

    SUPPLY
OF WATER

    

    
      	
              1.  

            	
              The
      Manufacturer shall supply the Distributor with natural glacial spring
      water from its sources (the “natural spring water”). All natural
      spring  water supplied by the Manufacturer shall at all times
      meet or exceed the standards and regulations established by NSF
      International (the “NSF”) and the International Bottled Water
      Association.

            

    

    

    

    

    
      
        
        

      

      
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- 2

        
          

        

      

      
        
        

      

    

    

    SUPPLY
AND DISTRIBUTION

    

    
      	
              2.  

            	
              The
      manufacturer hereby agrees to grant the distributor the right to purchase
      from the Manufacturer natural spring water for the purpose of distributing
      and marketing the Product under that distributor’s Brand for the term of
      this Agreement.

            

    

    

    
      	
              3.  

            	
              The
      Distributor shall have the exclusive right to distribute and to sell the
      Products under the brand AQUABLUE on the Territory for the term of this
      Agreement, or any renewal thereof.

            

    

    

    PRODUCT
PACKING SPECIFICATIONS

    

    
      	
              4.  

            	
              The
      Parties agree that all raw material specifications, packing
      specifications, prices and volume discounts agreed upon by the Parties are
      detailed in Schedule B to this
Agreement.

            

    

    

    
      	
              5.  

            	
              in
      the event that the Distributor wishes the Manufacturer to supply Product
      to the Distributor in bottle and formats other than those agreed upon and
      detailed in Schedule B to this Agreement, the Manufacturer and Distributor
      will provide the Distributor with new raw material specifications, packing
      specifications and prices, and the raw material specifications, packaging
      specifications, prices and volume discounts stated in Schedule to this
      Agreement shall not be applicable.

            

    

    

    LABEL
AND COSTS FOR LABELS

    

    
      	
              6.  

            	
              The
      Distributor shall supply the artwork to be printed on the labels applied
      to the Product.

            

    

    

    
      	
              7.  

            	
              The
      Distributor shall supply the artwork to be printed on the cardboard cases
      that will be used to package the
Product.

            

    

    

    
      	
              8.  

            	
              There
      will be a one time set-up cost for creating a printing plate and cutting
      die for the labels to be applied to the Product. The cost for creating a
      printing plate and cutting die for the labels shall be paid by the
      Distributor. Payment for the printing plate and cutting die shall be paid
      by the Distributor to the Manufacturer at the time of the Distributor’s
      first order.

            

    

    

    
      	
              9.  

            	
              There
      will be a one time set-up cost for creating a printing plate and cutting
      die for the artwork to be printed on the cardboard cases. The cost for
      creating a printing plate and cutting die for the cardboard cases shall be
      paid by the Distributor. Payment for the printing plate and cutting die
      shall be paid by the Distributor to the Manufacturer at the time of the
      Distributor’s first order.

            

    

    

    RAW
MATERIAL AND MATERIAL SPECIFICATIONS

    

    
      	
              10.  

            	
              The
      Manufacturer shall purchase all the raw material(s) required to bottle and
      package the Product.

            

    

    

    
      	
              11.  

            	
              The
      Manufacturer shall supply the raw materials for each plastic bottle as
      described in Schedule B to this
Agreement.

            

    

    

    
      	
              12.  

            	
              The
      Manufacturer shall give the Distributor 45 days written notice prior to
      implementing any change in the raw material(s) supplied under this
      Agreement. In the event that the Manufacturer makes a change to the raw
      material(s) supplied under this Agreement, the raw material(s) that is
      substituted in place of the original shall meet or exceed the quality of
      the original raw material(s)
supplied.

            

    

    

    
      
        
        

      

      
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- 3

        
          

        

      

      
        
        

      

    

    BOTTLE
DESIGN

    

    
      	
              13.  

            	
              The
      Parties agree that the Manufacturer’s “Traditional” bottle design as shown
      on Schedule “A” to this Agreement shall be used to bottle the
      Product.

            

    

    

    CHANGE
IN BOTTLE DESIGN

    

    
      	
              14.  

            	
              In
      the event that the Distributor wishes the Manufacturer to utilize a bottle
      of a design other than the manufacturer’s “Traditional” bottle design, the
      Distributor shall pay for all cost and expense necessarily required to
      retool the production line (the “retooling cost”). Payment for retooling
      the production line shall be delivered by the Distributor to the
      Manufacturer prior to the commencement of any work required for the
      retooling.

            

    

    

    
      	
              15.  

            	
              The
      Manufacturer agrees to reimburse the retooling cost to the Distributor if
      and when the Distributor’s purchase of Product in the new bottle design
      exceeds 1,000,000 cases.

            

    

    

    Packaging
and Shipping Specifications

    

    
      	
              16.  

            	
              The
      Manufacturer shall package the Product in cardboard cases, the whole as
      described in Schedule B to this
Agreement.

            

    

    

    
      	
              17.  

            	
              The
      Manufacturer shall ship Product to the Distributor only when there is
      sufficient quantity of Product to completely fill a 40 foot shipping
      container.

            

    

    

    Price
and Volume Discounts

    

    
      	
              18.  

            	
              The
      unit price and volume discounts for each format of the Product are
      described in Schedule B to this
Agreement.

            

    

    

    19.                 All
monetary amounts in this Agreement are stated in and shall be paid in Canadian
currency. In addition, unless otherwise indicated, the amounts of money stated
in this Agreement shall not be interpreted to include the amounts stipulated in
the Goods and Services Tax, the Quebec Sales Tax, and any other tax on such
payment during the term hereof.

    

    Price
Change by the Manufacturer

    

    
      	
              20.  

            	
              The
      Manufacturer shall be permitted to change the price stated  in
      Schedule B of this Agreement upon giving the Distributor 60 days written
      notice of any change  to the price. (the “price
      change”).

            

    

    

    
      	
              21.  

            	
              In
      the event of a price change, the Manufacturer shall apply the price in
      effect prior to the price change to any order placed by the Distributor
      before the price change takes effect. The Manufacturer shall not withhold
      any order placed by the Distributor before the price change, and the
      Manufacturer shall supply the Distributor with all orders placed prior to
      the coming into force of the price
change.

            

    

    

    
      	
              22.  

            	
              The
      Parties agree that the price and the volume discounts stated in Schedule B
      of this Agreement shall be reviewed on each anniversary date of the
      signing of this Agreement.

            

    

    

    
      
        
        

      

      
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- 4

        
          

        

      

      
        
        

      

    

    
      	
              23.  

            	
              The
      Parties agree that a price change made on the anniversary review of this
      Agreement, if any, shall come into effect sixty (60) days following the
      anniversary date.

            

    

    

    PRODUCTION
SCHEDULE

    

    
      	
              24.  

            	
              For
      the first six months, the distributor should provide a monthly sale
      forecast to the manufacturer. After this time period, the Distributor
      shall provide the Manufacturer with its sales forecast 120 days before the
      date the Distributor intends to place an order (the “preset sales
      forecast”).

            

    

    

    
      	
              25.  

            	
              The
      Parties shall each use its best efforts to cooperate to establish a
      production schedule for each quarter of the year based upon the
      Distributor’s present sales
forecast.

            

    

    

    
      	
              26.  

            	
              The
      Manufacturer will try its best to work with Distributor’s present sales
      forecast. The Manufacturer will inform the Distributor if preset sale
      forecast is over its current production capacity and will not be liable
      for any order amount that exceeds manufacturer’
  capacity.

            

    

    

    TERMS
OF PAYMENT

    

    
      	
              27.  

            	
              Payment
      terms for all Product purchased by the Distributor from the Manufacturer
      shall consist of a 30% down payment paid at the time of order, and with
      the remainder 70% of the purchase price to be paid by an irrevocable
      letter of credit opened by the Distributor in favour of the Manufacturer
      at the time of the order. The irrevocable letter of credit shall be in a
      format specified by the Manufacturer, and the same format shall be used
      for each order.

            

    

    

    SHIPMENT

    

    
      	
              28.  

            	
              Unless
      otherwise agreed in writing, the Manufacturer shall ship all Product FOB
      Vancouver Port.

            

    

    

    
      	
              29.  

            	
              The
      Manufacturer shall not be subject to penalties of any kind whatsoever for
      any delay in the shipment date beyond the ship date formally
      acknowledged  by the Manufacturer unless otherwise agreed to in
      writing by the Manufacturer.

            

    

    

    MANUFACTURER
REPRESENTATIONS AND WARRANTIES

    

    The
Manufacturer represents and warrants to the Distributor as follows:

    

    Status
and Capacity to contract

    

    
      	
              30.  

            	
              The
      Manufacturer is a corporation duly incorporated, validly existing and in
      good standing under the British Columbia Business Corporations Act with
      respect to the filing of annual reports, and has the power and capacity to
      enter into this Agreement and carry out its terms to the full
      extent.

            

    

    

    

    
      
        
        

      

      
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- 5

        
          

        

      

      
        
        

      

    

    

    Authority
to contract

    

    
      	
              31.  

            	
              The
      execution and delivery of this Agreement and the completion of the
      transaction contemplated by this Agreement have been duly and validly
      authorized by all necessary corporate action on the part of the
      Manufacturer, and this Agreement constitutes a legal, valid and binding
      obligation.

            

    

    

    Water
Quality

    

    
      	
              32.  

            	
              The
      natural spring water supplied by the Manufacturer is tested, and the
      quality of the natural spring  water supplied by the
      Manufacturer meets or exceeds the standards and regulations established by
      the NSF and the IBWA.

            

    

    

    Ability
to Supply Product

    

    
      	
              33.  

            	
              The
      Manufacturer has the necessary resources and production capacity to ensure
      the production and supply of no less than 200,000 cases of Product per
      month for the Year 2008 so as to meet the Distributor’s
      requirements.

            

    

    

    DISTRIBUTOR
REPRESENTATION AND WARRANTIES

    

    The
Distributor represents and warrants to the Manufacturer as follows:

    

    Capacity
to contract

    

    
      	
              34.  

            	
              The
      Distributor is a corporation duly incorporated,
      validly  existing and in good standing under the Canada Business
      Corporations Act with respect to the filing of annual reports, and have
      the power and capacity to enter into this Agreement and carry out its
      terms to the full extent.

            

    

    

    Authority
to contract

    

    
      	
              35.  

            	
              The
      execution and delivery of this Agreement and the completion of the
      transaction contemplated by this Agreement have been duly and validly
      authorized by all necessary corporate action on the part of the
      Distributor, and this Agreement constitutes a legal, valid and binding
      obligation.

            

    

    

    Resources

    

    
      	
              36.  

            	
              The
      Distributor represents to the Manufacturer that it has a distribution
      network of a size that is adequate to ensure the complete distribution of
      the Product marketed under the Distributor’s
  Brand.

            

    

    

    Contacts

    

    
      	
              37.  

            	
              The
      Distributor represents to the Manufacturer that it has the necessary
      business contacts to enable it to have easy access to the markets targeted
      for the sale and distribution of the Product marketed under the
      Distributor’s Brand.

            

    

    

    
      
        
        

      

      
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- 6

        
          

        

      

      
        
        

      

    

    Disclosure

    

    
      	
              38.  

            	
              The
      Distributor does not have to disclose information on its distribution
      operations to the Manufacturer.

            

    

    

    OBLIGATIONS
OF THE MANUFACTURER

    

    Production
Quantity

    

    
      	
              39.  

            	
              The
      Manufacturer shall ensure that it has the resources and the capacity to
      produce an supply the Product in sufficient quantity in order to maintain
      an inventory capable of meeting the volume of orders from the
      Distributor.

            

    

    

    Production
Quality

    

    
      	
              40.  

            	
              The
      Manufacturer shall ensure that the quality of the Product shall at all
      times meet or exceed the standards and regulations established by the NSF
      and the IBWA.

            

    

    

    Production
and Quality Assurance Procedures

    

    
      	
              41.  

            	
              The
      Manufacturer shall disclose its production and quality assurance
      procedures to the Distributor, and shall inform the Distributor of any
      changes the Manufacturer may implement to its production and quality
      assurance procedures.

            

    

    

    
      	
              42.  

            	
              The
      Manufacturer’s production and quality assurance procedures shall at all
      time meet or exceed the standards and regulations established by the NSF
      and IBWA.

            

    

    

    
      	
              43.  

            	
              The
      manufacturer shall notify the Distributor of any governmental
      announcements, investigations or actions affecting Product
      quality.

            

    

    

    
      	
              44.  

            	
              The
      Manufacturer shall maintain all production records and
    logs.

            

    

    

    
      	
              45.  

            	
              At
      the written request of the Distributor, the Manufacturer shall make
      available, and produce the production records and logs for inspection by
      the Distributor.

            

    

    

    Transportation
and Delivery Costs

    

    
      	
              46.  

            	
              The
      Manufacturer shall be responsible for any and all transportation cost for
      the delivery of the Product from its factory in Fanny Bay, British
      Columbia to the Vancouver port of departure in the Province of British
      Columbia designated by the
Distributor.

            

    

    

    Risk
of Loss – Transportation

    

    
      	
              47.  

            	
              All
      risk of loss during transportation of the Product from the Manufacturer’s
      factory to the Distributor’s port of departure shall be borne solely by
      the Manufacturer.

            

    

    

    
      
        
        

      

      
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- 7

        
          

        

      

      
        
        

      

    

    Indemnification

    

    
      	
              48.  

            	
              The
      Manufacturer shall indemnify and hold harmless the Distributor from any
      claim, demand, suits, actions, including fees of whatever kind,
      disbursements, both legitimate and reasonable, judicial and extrajudicial,
      whether a case is founded or not, any judgment and any award because of an
      act or omission on its part of any default in the execution of its
      obligations under this Agreement.

            

    

    

    Best
Efforts

    

    
      	
              49.  

            	
              The
      Distributor shall use its best efforts to develop and maintain a
      progressive level of purchase of the
Product.

            

    

    

    Transportation
and Delivery Costs

    

    
      	
              50.  

            	
              The
      Distributor shall be solely responsible for any and all transportation
      costs for the delivery of Product from the Distributor’s designated port
      of departure in the Province of British Columbia to the Distributor’s port
      of arrival.

            

    

    

    Risk
of Loss – Transportation

    

    
      	
              51.  

            	
              All
      risk of loss during transportation of the Product from the Distributor’s
      designated port of departure to the Distributor’s port of arrival shall be
      borne solely by the Distributor.

            

    

    

    Indemnification

    

    
      	
              52.  

            	
              The
      Distributor shall indemnify and hold harmless the Manufacturer of any
      claim, demand, suits, actions, including fees of whatever kind,
      disbursements, both legitimate and reasonable, judicial an extrajudicial,
      whether a case is founded or not, any judgment and any award because of an
      act or omission on its part or any default in the execution of its
      obligations under this Agreement.

            

    

    

    DEFECTIVE
PRODUCTS

    

    
      	
              53.  

            	
              In
      the event of a defective product claim by the Distributor, the Parties
      agree that an independent government certified laboratory, as a greed to
      between the parties, shall be hired to test and evaluate the Product
      alleged to be defective for the purpose of determining the source and
      cause of the defect, if any.

            

    

    

    
      	
              54.  

            	
              The
      total cost of the laboratory testing shall be borne by and the sole
      responsibility of the Manufacturer if the laboratory results conclude that
      the fault for the defect lies the Manufacturer, and its production
      procedures.

            

    

    

    
      	
              55.  

            	
              The
      total cost of the laboratory testing shall be borne by, and the sole
      responsibility of the Distributor if the laboratory results conclude that
      the fault for the defect is a result in the Distributor’s storage and
      distribution process.

            

    

    

    
      	
              56.  

            	
              In
      the event that the laboratory result is inconclusive in anyway whatsoever
      as to where the fault for the alleged defect lies, or if the laboratory
      result is inconclusive in anyway whatsoever as to the existence of a
      defect, the total cost of the laboratory testing shall be shared equally
      between the Manufacturer and the
Distributor.

            

    

    

    
      
        
        

      

      
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- 8

        
          

        

      

      
        
        

      

    

    
      	
              57.  

            	
              If
      any Product supplied by the Manufacturer to the Distributor is determined
      to be defective, and if the fault for the defect lies with the
      Manufacturer, the Manufacturer shall be liable to the Distributor only for
      the replacement of Product, FOB point of Distributor’s customer, and then
      only if the Manufacturer is notified in writing of such alleged defect
      within 90 days from the date of delivery to the Distributor’s
      customer.

            

    

    

    DEFAULT
AND TERMINATION

    

    Termination
without notice

    

    
      	
              58.  

            	
              This
      Agreement shall terminate automatically and without notice, whether formal
      or informal, if either one of the following events
  occur:

            

    

    

    
      	
              a.  

            	
              If
      either the Distributor or the Manufacturer becomes insolvent or makes an
      assignment or its assets in favor of its creditors or liquidates its
      assets;

            

    

    
      	
              b.  

            	
              If
      either the Distributor or Manufacturer produces a motion for voluntary
      bankruptcy or if a petition for bankruptcy is initiated against it, or
      that a final judgment is rendered declaring its bankruptcy;
    or

            

    

    
      	
              c.  

            	
              If
      either the Distributor or Manufacturer sells, assigns transfers its rights
      or any portion of its rights under this Agreement without the prior
      written consent of the other party;

            

    

    

    Termination
with Notice

    

    
      	
              59.  

            	
              The
      Parties may at any time terminate this Agreement through written notice
      only to the other party, without prejudice to any of their rights and
      remedies, if any of the Parties fails to comply with any term of this
      Agreement, and then only if such default is not corrected within 90 days
      following the delivery of the written notice describing the
      default.

            

    

    

    
      	
              60.  

            	
              If
      the default is not remediable, then the non-defaulting party may terminate
      this Agreement by written notice to the other
  party.

            

    

    

    TERM
OF AGREEMENT

    

    5
Year Term and Renewal

    

    
      	
              61.  

            	
              This
      Agreement is for a term of 5 years, and shall be automatically renewed for
      a subsequent 5 year term unless written notice to the contrary is
      delivered by either party to the other 60 days prior to the expiration the
      term, or any renewal thereof.

            

    

    

    
      	
              62.  

            	
              In
      addition, all parties agree that all clauses contained in this Agreement
      shall automatically terminate upon the expiry of this Agreement, save and
      except for those clauses listed under the heading
    “Survival”.

            

    

    

    

    Coming
into Force

    

    
      	
              63.  

            	
              This
      Agreement shall come into force from the date on which it is
      signed.

            

    

    

    
      
        
        

      

      
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- 9

        
          

        

      

      
        
        

      

    

    RELATIONSHIP

    

    
      	
              64.  

            	
              It
      is the intention of the Parties to create a strategic partnership in order
      to enhance their respective
businesses.

            

    

    

    
      	
              65.  

            	
              Neither
      party shall have any authority, right, or power whatsoever to enter into a
      contract or commitment on behalf of the other or to obligate or bind the
      other in any way whatsoever, nor shall either party hold itself out as
      having any power, right, or authority to do
so.

            

    

    

    
      	
              66.  

            	
              The
      Distributor has not received any tacit or explicit authority to create
      binding obligations on behalf of the Manufacturer in any manner
      whatsoever. For greater clarity, the authority of the Distributor is
      strictly limited to that of an independent contractor, and the Distributor
      shall not be deemed to be an employee or agent of the
      Manufacturer.

            

    

    

    
      	
              67.  

            	
              Each
      party shall have the exclusive right to select, engage, fix the
      compensation of, discharge and otherwise to supervise and control the
      persons hired by it and shall, with respect to all such persons, perform
      all obligations and discharge all liabilities imposed upon employers under
      labour, wage hours, workmen’s compensation, unemployment compensation or
      insurance, social security and other federal, provincial and municipal
      laws and regulations.

            

    

    

    INTELLECTUAL
PROPERY

    

    
      	
              68.  

            	
              The
      Parties agree and acknowledge that neither party shall acquire any right
      to any patent, trademark or other intellectual property owned, created or
      developed by the other party prior to the coming into force of this
      Agreement, during the term of this Agreement, or any renewal thereof, or
      after the termination of this
Agreement.

            

    

    

    CONFIDENTIALITY

    

    Confidential
Information

    

    
      	
              69.  

            	
              The
      Manufacturer and the Distributor shall fully protect all Confidential
      Information and shall not release to any other third party any
      confidential business matters. The Manufacturer and the Distributor shall
      not use any Confidential Information disclosed or obtained from each other
      through this Agreement for any purpose other than for the purposes of this
      Agreement. The Manufacturer and the Distributor shall take all possible
      measures to ensure that their respective employees, servants, agents,
      affiliates, or related companies of whatsoever nature shall not at any
      time directly or indirectly furnish to any person any information about
      the other party’s Confidential Information during the term of this
      Agreement, any renewal of this Agreement, or when this Agreement
      terminates.

            

    

    

    
      	
              70.  

            	
              The
      term “Confidential Information” in relation to information disclosed by
      the Manufacturer to the Distributor shall mean information relating to
      Manufacturer’s business, including and not limited to all oral and written
      information concerning the business of the Manufacturer, and without
      limiting the generality of the following the bottling processes, water
      purification techniques, production and quality assurance procedures,
      production records and logs, services, products, names of customers and
      customer lists, pricing data, production costs, and product costs of the
      Manufacturer.

            

    

    

    
      	
              71.  

            	
              The
      term “Confidential Information” in relation to the information disclosed
      by the Distributor to the Manufacturer shall mean information relating to
      the Distributor’s business, including and not limited to all oral and
      written information concerning the business of the Distributor, and
      without limiting the generality of the following the names of customers,
      and customer lists, information on the Distributor’s distribution network,
      pricing data, production costs, and product(s) costs of the
      Distributor.

            

    

    

    
      
        
        

      

      
        Page
- 10

        
          

        

      

      
        
        

      

    

    Return
of Confidential Information

    

    
      	
              72.  

            	
              Upon
      termination of this Agreement, all parties to this Agreement shall return
      all Confidential Information to the originating party from which such
      Confidential Information was originally
  received.

            

    

    

    ASSIGNMENT

    

    
      	
              73.  

            	
              This
      Agreement may not be assigned by any party without the prior written
      consent of the other party, which consent may be arbitrarily
      withheld.

            

    

    

    

    NON-WAIVER

    

    
      	
              74.  

            	
              No
      failure or delay by either party in exercising any right, power or
      privilege under this Agreement will operate as a waiver thereof, nor will
      any single or partial exercise thereof preclude any other or further
      exercise thereof or the exercise of  any right, power or
      privilege under this Agreement.

            

    

    

    SURVIVAL

    

    

    
      	
              75.  

            	
              Provisions
      of the following paragraphs of this Agreement shall survive the
      termination of this Agreement:

            

    

    

    
      	
              a.  

            	
              Paragraph
      69 – “Confidentiality”;

            

    

    
      	
              b.  

            	
              Paragraph
      77 – “Dispute Resolution”;

            

    

    
      	
              c.  

            	
              Paragraph
      79 – “Governing Law”;

            

    

    
      	
              d.  

            	
              Paragraph
      68 – “Intellectual Property”;

            

    

    
      	
              e.  

            	
              Paragraph
      73 – “Assignment”

            

    

    

    FORCE
MAJEURE

    

    
      	
              76.  

            	
              No
      Party to this Agreement shall be liable for any failure to perform its
      obligations under this Agreement if such performance is rendered
      impossible as a result of acts of God, acts of one or both of the parties,
      acts of war (whether declared or undeclared), acts of civil or military
      authority, fires, strikes, partial or complete work stoppages, lockouts,
      riots, compliance to any regulations or orders of any governmental
      authorities or any other cause of whatsoever kind which is beyond the
      control of the party prevented from performing, and whether such cases is
      like or unlike the specific causes listed in this
    paragraph.

            

    

    

    DISPUTE
RESOLUTION

    

    
      	
              77.  

            	
              Disputes
      arising under this Agreement shall be resolved through friendly
      discussions and negotiations among the Parties. In the event that any
      dispute is not resolved within 30 working days following the date on which
      the disputed matter is first raised by written notice from one party to
      this Agreement to the other, any party to the Agreement has the right to
      submit the dispute to arbitration by a single arbitrator appointed by the
      British Columbia International Commercial Arbitration Center (“BCICAC”)
      under the Rules established  by the BCICAC. The decision of the
      single arbitrator shall be final and binding upon all
    parties.

            

    

    

    
      	
              78.  

            	
              During
      the period in which any disputed term of this Agreement is being
      arbitrated, the Agreement shall remain in full force and effect and the
      parties shall continue to observe and implement all other terms of the
      Agreement.

            

    

    

    
      
        
        

      

      
        Page
- 11

        
          

        

      

      
        
        

      

    

    GOVERNING
LAW

    

    
      	
              79.  

            	
              This
      Agreement shall be governed by and construed in accordance with the law of
      British Columbia, and the law of Canada applicable herein and all disputes
      and claims, whether for damages, specific performance, injunction,
      declaration or otherwise, both at law and equity, arising out of, or in
      any way connected with, this Agreement shall be referred to the courts of
      British Columbia and each of the parties hereby attorns to the exclusive
      jurisdiction of the courts of British
Columbia.

            

    

    

    SEVERABILITY

    

    
      	
              80.  

            	
              If
      a court or other tribunal of competent jurisdiction determines that any
      one or more of the provisions contained in this Agreement is invalid,
      illegal or unenforceable in any respect in any jurisdiction, the validity,
      legality and enforceability of such provision or provisions shall not in
      any way be affected or impaired thereby in any other jurisdiction and the
      validity, legality and enforceability of the remaining provisions
      contained herein shall not in any way be affected or impaired thereby,
      unless in either case as a result of such determination this Agreement
      would fail in its essential
purpose.

            

    

    

    NOTICES

    

    
      	
              81.  

            	
              Any
      notices required any this Agreement shall be sufficient if given in
      writing and delivered in person or by facsimile transmissions as
      follows:

            

    

    

    If to the
Manufacturer: Delivery address: 8430 Berray Road, Fanny Bay, BC V0R
1W0

    

    Mailing
address: S-21, C-9, Fanny Bay, BC V0R 1W0

    Fax:
(250) 335-9120

    Attention:
Alan Lai

    

    With a
copy to: Ansley & Co.

    Barristers
& Solicitors

    Unit 306
– 576 England Avenue, Courtenay, BC V9N 3P6

    Fax:
(250) 338-0902

    

    If to the
Distributor: 507, Places d’Armes, Bureau 1529

    Montreal
(Quebec) B2Y 2Y8

    Fax:
(514) 845-5546

    Attention:
Anna Szostak

    With a
copy to:

    Guy
Baillareon, Esq.

    Barristors
& Solicitors

    85
Notre-Dame West Suite 1550

    Montreal
(Quebec) B2Y 1S5

    Fax:
(514) 395-9177

    

    Any such
notice shall be deemed to have been duly given upon delivery if delivered in
person, and on the day following transmission if given by
facsimile.

    

    
      
        
        

      

      
        Page
- 12

        
          

        

      

      
        
        

      

    

    EXPENSES

    

    
      	
              82.  

            	
              Each
      party to this Agreement is liable for the expenses it incurs or agrees to
      incur under this Agreement. No party to this Agreement may commit any
      other party to pay any expenses except with the express written agreement
      of that other party.

            

    

    

    HEADINGS

    

    
      	
              83.  

            	
              The
      headings appearing in this Agreement are inserted for convenience of
      reference only and will not affect the interpretation of this
      Agreement.

            

    

    

    

    NO
CONTRA PREFERENTUM

    

    
      	
              84.  

            	
              The
      language in all parts of this Agreement shall in all cases be construed as
      a whole and neither strictly for nor strictly against any of the parties
      to this Agreement.

            

    

    

    GENDER

    

    
      	
              85.  

            	
              In
      this Agreement, unless the context otherwise requires, words importing the
      singular include the plural and vice versa, words importing gender include
      all genders.

            

    

    

    

    ENTIRE
AGREEMENT

    

    
      	
              86.  

            	
              This
      Agreement constitutes the entire and only agreement and understanding
      between the parties and supersedes all prior agreement or understandings
      whether written or oral. There are no representations, promises or
      warranties made by any of the parties to this Agreement, expect for those
      which have been specifically set out in this Agreement. No term of this
      Agreement shall be modified, replaced, changed, or altered in any manner
      whatsoever expect by the express written agreement of the
      parties.

            

    

    

    AMENDMENT

    

    
      	
              87.  

            	
              This
      Agreement may be modified or changed in whole or in part by mutual
      agreement between the Parties. Any changes or any modification, if any,
      shall become effective on the day it is recorded in writing and signed by
      the Parties and attached to a copy of this Agreement as a schedule. No
      amendment of this Agreement will be binding unless made in writing by all
      the parties to this Agreement.

            

    

    

    

    

    
      
        
        

      

      
        Page
- 13

        
          

        

      

      
        
        

      

    

    

    

    COUNTERPARTS

    

    
      	
              88.  

            	
              This
      Agreement may be signed in as many counterparts as may be necessary each
      of which so signed shall be deemed to be an original, and such
      counterparts together shall constitute one and the same instrument, and
      notwithstanding the date of execution, shall be deemed to be effective as
      of the date indicated below. Each executed copy may be returned to either
      party by facsimile, and each facsimile copy shall be deemed to be an
      original.

            

    

    

    

    

    IN WITNESS WHEREOF, the
Parties have signed this Agreement as of the 22 day of August,
2008.

    

    By its
authorized representative:

    

    

    
      
        
        

      

      
        Page
- 14

        
          

        

      

      
        
        

      

    

     

    

     

     

     

     

    
      
        
        

      

      
        Page
- 15

        
          

        

      

      
        
        

      

    

     

     

     

    SCHEDULE
B

    

    

    
      	
              1.  

            	
              Pricing
      for 240 ml and packaging
specification

            

    

    
      	
              a.  

            	
              240
      ml – CAD $6.5 (F.O.B Vancouver
Port)

            

    

    
      	
              i.  

            	
              21
      g perform (28 mm PCO design)

            

    

    
      	
              ii.  

            	
              Blue
      Cap (28 mm PCO design)

            

    

    
      	
              iii.  

            	
              Printed
      label

            

    

    
      	
              iv.  

            	
              Cardboard
      boxes

            

    

    

    
      	
              b.  

            	
              48
      bottles per case, 80 cases per pallets and 1680 cases per 40 feet
      containers (20 pallets)

            

    

    

    
      	
              2.  

            	
              Pricing
      for 500 ml and packing
specification

            

    

    
      	
              a.  

            	
              500
      ml – CAD $4.6 (F.O.B. Vancouver
Port)

            

    

    
      	
              i.  

            	
              21
      g perform (28 mm PCO design)

            

    

    
      	
              ii.  

            	
              Blue
      Cap (28 mm PCO design)

            

    

    
      	
              iii.  

            	
              Label

            

    

    
      	
              iv.  

            	
              Cardboard
      Boxes

            

    

    

    
      	
              b.  

            	
              24
      bottle per case. 84 cases per pallets and 1765 cases per 40 feet
      containers (21 pallets)

            

    

    

    
      	
              3.  

            	
              Pricing
      for 1.5 L and packaging
specification

            

    

    

    
      	
              a.  

            	
              1.5
      L – CAD $4.6 (F.O.B. Vancouver
Port)

            

    

    
      	
              i.  

            	
              46
      g perform (28 mm PCO design)

            

    

    
      	
              ii.  

            	
              Blue
      Cap (28 mm PCO design)

            

    

    
      	
              iii.  

            	
              Printed
      Label

            

    

    
      	
              iv.  

            	
              Cardboard
      Boxes

            

    

    

    
      	
              b.  

            	
              12
      bottle per case 55 cases per pallets and 1155 cases per 40 feet container
      (21 pallets)

            

    

    

    The
volume discount per month is as follows:

    

    120,000
cases for CAD $0.10 discount

    200,000
cases for CAD $0.30 discount

     

     

    
      
        
        

      

      
        Page
- 16

        
          

        

      

      
        
        

      

    

     

    

     

    

     

    
      
         

      

      
        Page
- 17exhibit_10-3.htm

     

     

     

    EXCLUSIVE
AGREEMENT ON THE PURCHASE, DISTRIBUTION AND MARKETING OF BOTTLED SPRING WATER IN
HONG KONG, MACAO AND PROVINCES OF CHINA TO BE NAMED LATER

    

    BETWEEN

    

    AQUABLUE SPRING WATER INTERNATIONAL,
INC. a Canadian corporation having its head office at 507 Place d’Armes,
Suite 1550 Montreal (Quebec) CANADA H2Y 2W8

    

    AND

    

    CHINA ASIA GROP HOLDING
LIMITED, Rm07, 16th Floor,
BlocA2, International Trading Center, Kequiao Shaoxing Zhejiang,
CHINA

    Other
address I. Flat-RM813, 8-F Hollywood Plaza, 610 Nathan Road, Hong
Kong

    
      (Hereinafter
referred to as “Distributor”)

    

    
      
        

      

    WHEREAS
the VENDOR authorizes the DISTRIBUTOR to sell and distribute Aquablue Spring
Water and any other brands sold by Aquablue Spring Water International, Inc. in
mainland China, Hong Kong SAR and Macao SAR (Hereinafter referred to as “the
said regions”);

    

    WHEREAS
the DISTRIBUTOR wishes to buy the water exclusively from Aquablue Spring Water
International Inc. and to have the rights to sell and distribute those products,
mentioned above, in the said regions and that the parties here to wish to sign a
distribution contract that will be valid for period of eight (8)
years;

    

    For good
and valuable consideration, the receipt of which is hereby acknowledged, the
VENDOR and the DISTRIBUTOR agree as follow:

    

    ARTICLE
1                                
Rights
and Obligations of the parties

    

    
      	
              1.1  

            	
              The
      VENDOR shall be responsible for shipping the bottled water towards the
      DISTRIBUTOR  as per written request or purchase order by the
      DISTRIBUTOR as soon as possible upon receipt of foresaid documentation and
      proper payment as outlined below.

            

    

    
      	
              1.2  

            	
              The
      VENDOR shall make an effort to provide all reasonable assistance for the
      client in the distribution and marketing of the bottled water in the said
      regions if necessary.

            

    

    
      	
              1.3  

            	
              The
      DISTRIBUTOR shall be responsible for all import permits and for compliance
      with all the rules and regulations of the country and/or region of
      import.

            

    

    
      	
              1.4  

            	
              The
      DISTRIBUTOR shall make all possible efforts to respect the minimum quota
      of a million cases per year per region after 2 years and to promote the
      sales accordingly.

            

    

    

    ARTICLE
2                                Price and method of
payment:

    

    
      	
               
      

            	
              2.1

            	
              The
      VENDOR

            	
              shall
      supply containers of 2000 cases of spring water at a price of 7.7 CDN$ per
      case of 24 bottles of 500 ml FOB Montreal port. The price shall be
      increased or decreased by the VENDOR subject to increases or decreases
      from time to time of raw materials and/or shipping price. Price changes
      may occur no more often that every sixty days. The increase or decrease
      will reflect 50% of the actual change in the cost of the VENDOR. Pertinent
      information shall be supplied by the VENDOR to support such price
      changes.

            

    

    
      	
               
      

            	
              2.2

            	
              The
      DISTRIBUTOR shall pay the VENDOR, by means of T/T or a wire or a letter of
      credit or any other secure approach as acceptable to the VENDOR, an amount
      covering the price of the order with each purchase order. Once the goods
      are ready for shipment; the said payment to be cashed as the goods leaves
      the bottling plant.

            

    

    
      	
               
      

            	
              2.3

            	
              The
      bottle used for this contract is the regular bottle with a blue plastic
      cap and a transparent label. All these items will have to be approved in a
      separate agreement.

            

    

    

    
      
        
        

      

      
        Page
- 1

        
          

        

      

      
        
        

      

    

    ARTICLE
3                                Term of
agreement

    

    This
agreement shall be valid for eight (8) years and both parties shall have the
rights but no obligation, to extend the agreement on the terms and conditions to
be agreed by both parties then for another eight (8) years by delivering notice
before of to the VENDOR at least three (3) months prior to the termination of
the agreement.

    

    ARTICLE
4                                Modification and
amendments

    

    All
modification and/or amendments to this agreement must be in writing and signed
by authorized representatives of both parties.

    

    ARTICLE
5                                
Liability for breach
of contract

    

    
      	
              5.1  

            	
              Both
      parties herein shall comply with the provisions in this agreement. If one
      party violates any provision of this agreement without the order party’s
      acceptance it would be regarded as a breach of the agreement and entitle
      the orders party to treat this agreement as repudiated, but without
      prejudice to any rights accruing due to the other party at that date.
      Notwithstanding the foregoing neither party shall terminate this agreement
      without first delivering written notice of default to the other party,
      specifying the details of the default and providing the defaulting party
      with 60 days to cure the default.

            

    

    
      	
              5.2  

            	
              After
      the occurrence of an act of breach by one party, if the non-breaching
      party request to continue to perform the agreement, notwithstanding
      whether compensation have been actually paid, the breaching party shall to
      continue to perform this agreement.

            

    

    

    ARTICLE
6                                Relationship of
Parties

    

    The
VENDOR and the DISTRIBUTOR are independent contracting parties and nothing in
this agreement shall make either party the agent or legal representative of the
other for any purpose whatsoever. Notwithstanding this clause, the
DISTRIBUTOR  has all authority to represent the Packer in its capacity
as bottler for China since it is a request by the Chinese Authorities.
Otherwise, a representative from the Packer will have go to China to answer to
the Chinese Government.

    

    ARTICLE
7                                
Governing
Law

    

    This
agreement is to be construed according to the laws of the Province of
Quebec.

    

    ARTICLE
8                                Severability

    

    If any
term of this agreement in invalid or unenforceable under any stature,
regulations, ordinance, other or other rule of law, that term shall be deemed
modified or delete, but only to the extent necessary to comply with the stature,
regulation, ordinance, order or rule, and the remaining provisions of this
agreement shall remain in full force and effect.

    

    ARTICLE
9                                No Implied
Waiver

    

    The
failure of either party at any time to require performance by the other party of
any provision of this agreement shall in no way effect the right to require
performance at any time thereafter, nor shall the waiver of either party of a
breach of any provision of this agreement constitute a waiver of any succeeding
breach of the same or any other provision.

    

    ARTICLE
10                                Notices

    

    Any
notices or other writing required or permitted to be given under this agreement
of for the purposes of it to any party, shall be sufficiently given if delivered
personally, or if sent by prepaid registered mail or if transmitted by telex,
telefax or other from of recorded communication to that party:

    

    
      	
              a)  

            	
              China
      Asia Group Holding limited

            

    

    Tel:           0086
575 84784404

    Fax:           0086
575 84784405

    E-mail:                      daoucofares@gmail.com

    

    
      	
              b)  

            	
              Aquablue
      Spring Water International, Inc.

            

    

    507
Places d’Armes, suite 1550 Montreal (Quebec) CANADA H2Y 2W8

    Tel:           (514)
677-3810

    Fax:           (514)
845-5546

    

    
      
        
        

      

      
        Page
- 2

        
          

        

      

      
        
        

      

    

    Or at any
other address as the party to whom the writing is to be given shall have last
notified the other party. Any notice delivered to the party to whom it is to be
given shall have last notified the other party. Any notice delivered to the
party to whom it is addressed shall be deemed to have been given and received on
the day it is delivered as that address.

    

    Provided
that if that day is not a business day then the notice shall be deemed to have
been given and received on the first business day next following that day. Any
notice mailed shall be deemed to have been given and received on the third
business day next following the date of its mailing. Any notice transmitted by
telex, telefax or other from of recorded communication shall be deemed given and
receive on the first business day after is transmission.

    

    ARTICLE
11                                
Entire
Agreement

    

    This
agreement, together with attachments, documents or schedules specifically
referenced in the agreement, constitutes the entire agreement between the Packer
and the DISTRIBUTOR with respect to the matter contained herein and
supersedes  all prior oral or written  representations and
agreement duly executed by the VENDOR and the DISTRIBUTOR.

    

    ARTICLE
12                                Force
Majeure

    

    Neither
party to this contract shall be held responsible for breach of contract caused
by and act of god, insurrection, civil war, military war operation, or local
emergency. The parties do hereby accept the international provision of “Force
Majeure” as published by the International Chamber of Commerce in Geneva
Switzerland.

    

    AND
THE PARTIES HEREIN HAVE SIGNED IN MONTRAL,

    THIS     DAY
OF APRIL 2008

    

    AQUABLUE
SPRING WATER INTERNATIONAL INC.

     

    

     

    
      
         

      

      
        Page
- 3

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