1
EXHIBIT 10(h)
SUPPLY AND DISTRIBUTION AGREEMENT WITH
BOWLINE FAMILY PRODUCTS, INC.
2
[INNO LOGO]
SUPPLY AND DISTRIBUTION AGREEMENT
THIS SUPPLY AND DISTRIBUTION AGREEMENT ("Agreement") is entered into by and
between Bowline Family Products, Inc., having its principle place of business at
0000 Xxxxxx, Xxxxxx, XX 00000 ("Bowline") and Innova Pure Water, Inc., a Florida
corporation having its principle place of business at 00000 00xx Xxxxx, Xxxxx
000, Xxxxxxxxxx, Xxxxxxx 00000 ("Innova")
WHEREAS, Innova has a proprietary line of existing water filtration products;
and WHEREAS. Bowline desires to utilize Innova's products;
NOW THEREFORE, in consideration of the premises and the mutual covenants and
agreements herein contained, the parties, intending to be legally bound hereto,
agree as follows:
1) Innova will supply to Bowline an a non-exclusive basis Innova's Model "A"
filter for sale only with Bowline's 1/2 litre, I litre arid 1 1/2 litre
28mm bottles in combination with tote bags, and provide a non-exclusive
license for the use of Innova's Model "A" filter only with Bowline's 1/2
litre, I litre and 1 1/2 litre 28mm bottles in combination with tote bags
This license is specifically for Bowline to offer the Innova filters with
Bowline's bottles in conjunction with bottle totes and not for sale in
bottles without visible offers for totes attached to bottle as seen in
Exhibits A & B except that Innova will provide Bowline with Model A filters
as replacement filters for Bowline Bottles which are offered for sale with
totes as seen in Exhibits A & B. Each product containing an Innova filter
is to be identified as a filter supplied by Innova Pure Water, Inc. Patent
#5,609,759.
This agreement excludes bottles incorporating 2 or 3 dimension figural
designs or bottle tops with figural designs.
Innova will supply their current Model "A" filter under the terms of this
agreement until such time as modified "A" filter is available. Bowline
shall pay for tool modifications for modified "A" filter.
2) The Model A filter has been tested to NSF International Standard 42, Class
II for treatment of 40 gallons of municipally supplied water.
3) Ninety days (90) days from signing of this agreement Bowline will supply
Innova with a rolling six month forecast updated on the first day of each
succeeding month and providing a specific 120 day, 90 day, and 30 day
forecast. Bowline shall place confirmed purchase orders based upon their
120 day forecast for shipment against 30 day release schedules approved by
Innova.
4) This agreement is for a term of three (3) years based upon Bowline
purchasing a minimum of 250,000 units in the first year, 500,000 units in
the second year, and 760,000 units in the third year. If purchase volume
minimums are reached per this agreement will automatically extend on a
yearly basis provided all other terms are met.
2
3
Either party may cancel this agreement by providing the other party notice
within 120 days of the anniversary date.
5) This agreement is non-exclusive to allow Bowline to sell to retail
channels. Any other accounts or categories will require prior approval by
Innova in writing Bowline will not offer any of Bowline1s products which
utilize Innova filters to existing Innova customers unless agreed to in
writing by Innova. Should Bowline offer Innova products beyond the scope of
this agreement or introduce competitive products which interfere with the
sales of Innova supplied products. Innova reserves the right to cancel the
agreement in its entirety.
6) Bowline will represent the performance of Innova products only as approved
in writing by Innova. Bowline further agrees to hold Innova harmless and
indemnify Innova for any liability or damage suffered by Innova as a result
of misrepresentation or false information by Bowline or their sales
representatives. Bowline will add Innova to its product liability insurance
policy In the amount of $2,OOO.O0O and Innova will add Bowline to its
product liability insurance policy.
7) Bowline will include the Innova xxxxx, xxxx, patent number and
identification with their retail package as may be reasonably directed by
Innova. Innova will have the right to review package copy and withhold its
identification or murk as it may solely choose. Bowline does not have
rights to any Innova trademark under this agreement, except the right to
use selected Innova marks with Innova's written permission, as set forth in
above. Upon termination of this agreement for any reason Bowline will
immediately cease use of all Innova marks.
8) Bowline will bring to Innova's attention any patent infringement of which
they become aware. Innova agrees to defend Bowline against any domestic
patent infringement claim that might arise through the incorporation of an
Innova supplied filtration product. However, Innova reserves the right to
determine the action to be taken.
9) The license under this agreement does not transfer any patent or
manufacturing rights other than to market the specified Innova products as
herein identified and sold in the manner described.
10) Nothing in this agreement shall be construed as creating a partnership or
joint venture between the parties, and neither can legally make commitments
to bind the other, nor is either responsible for the negligent or
intentional acts of the other.
11) Termination of this agreement for cause may occur as a result of default
and the failure to remedy the default within thirty days of notice sent to
the defaulting party. Just cause will be for:
a) Deviation from the terms set forth.
b) Failure to make payments in a timely manner.
e) Failure to meet annual sales commitments excepting force majeure.
d) Should Bowline fail to control the distribution of the licensed
product to the agreed specified trade and/or retail
establishments, and;
e) Should uncomplimentary information be transmitted from any
Bowline employee or sales representative, or should such
person(s) transmit any Innova proprietary Information to a third
party which may include information regarding Innova's pricing,
margins, products under development personnel Information, or
information relating to Innova customers, manufacturers, or
strategic alliance partners.
2
4
12) Should this agreement and license be terminated for any reason, 120 days
will be provided for Bowline to liquidate existing inventory. Period may be
extended for additional 60 days provided Bowline still has existing
inventory and Bowline is liquidating through approved channels of
distribution at agreed upon price and terms. Such liquidation would be
limited to channels of distribution pursuant to this agreement unless
separately agreed to in writing by Innova. Innova will be provided the
opportunity to purchase such inventory on the same terms Bowline offers to
any third party which are accepted by said third party. In the event that
this agreement is terminated Innova will provide filters to fulfill any
existing outstanding orders that Bowline is committed to deliver.
13) Should Bowline fail to meet its minimum purchase obligations, there will be
no financial liability. except for trade accounts outstanding or materials
on order to satisfy Bowline's 120 day forecast that remains unabsorbed
within the following 120 day period.
14) This agreement will be interpreted under the laws of the state of Florida.
15) Any disagreements that may arise which cannot be resolved by the principles
will be submitted to binding arbitration by and under the rules of the
American Arbitration Association, the findings of which the parties to this
agreement agree to accept and abide by.
16) The following pricing is subject to change upon 120 days written notice.
However, Innova will honor all existing Bowline agreements/contracts and
all existing customer proposals that do not allow Bowline to increase their
price within the 120 day period/notice of Innova's price increase.
Model "A" Filter packed, F.O.B. Innova, Price
Modified "A" to be determined
Filter Payment Terms: Net 30
$1.40 bulk
For Innova Pure Water, Inc.
Xxxx Xxxxx, President & CEO
Date:
For Bowline Family Products, Inc.
Date: 9/26/97
------------------
3
