EXCLUSIVE DISTRIBUTOR AGREEMENT
This Agreement is made on July 5, 2000, between United-Guardian,
Inc., a corporation organized under the laws of Delaware with offices at
000 Xxxxxx Xxxx., Xxxxxxxxx, Xxx Xxxx, 00000 ("UGI") and ISP Technologies
Inc., a corporation organized under the laws of Delaware with offices at
State Highway 146 & Industrial Road, Texas City, Texas 77590 ("ISP").
WHEREAS, UGI is a manufacturer of specialty chemical products;
and
WHEREAS, ISP and its affiliated companies have substantial
experience and expertise in marketing specialty chemical products to
various markets; and
WHEREAS, UGI desires ISP to act as its (i) exclusive distributor
in certain markets and territories and (ii) non-exclusive distributor for
certain other markets and territories, for certain of its specialty
chemical products in accordance with the terms and conditions of this
Agreement;
NOW THEREFORE, UGI and ISP hereby agree as follows:
I. APPOINTMENT; PRODUCTS
1.1 UGI hereby appoints and authorizes ISP as the exclusive
distributor of certain of its specialty chemical products listed on
Schedule A, which is attached hereto and incorporated herein (the
"PRODUCT(S)"), which may be modified from time to time upon mutual
written agreement of the parties as new PRODUCTS are added to this
Agreement and older PRODUCTS discontinued. ISP shall have (i) the
exclusive right to market and sell the PRODUCTS into the personal care
market (the "PC MARKET") in the EXCLUSIVE TERRITORY and the non-exclusive
right to market and sell the PRODUCTS into the PC MARKET in the
NON-EXCLUSIVE TERRITORY, and (ii) the non-exclusive right to sell the
PRODUCTS into the industrial and medical markets (the "I&M MARKET") in
the TERRITORY. The geographical areas comprising the "EXCLUSIVE
TERRITORY" (which is defined as the geographic areas where ISP has
exclusive marketing and sales rights hereunder with respect to the PC
MARKET) and the "NON-EXCLUSIVE TERRITORY" (which is defined as the
geographic areas where ISP has non-exclusive marketing and sales rights
hereunder), are set forth on Schedule B, attached hereto and incorporated
herein. References herein to "TERRITORY" mean both the "EXCLUSIVE
TERRITORY" and "NON-EXCLUSIVE TERRITORY".
1.2 ISP accepts the appointment and agrees to use its
commercially reasonable best efforts to maintain, promote, develop and
increase sales of the PRODUCTS. ISP may delegate the performance of any
or all of its obligations hereunder to an affiliate.
1.3 It is understood that the authority granted to ISP hereunder
is the authority to market the PRODUCTS and does not constitute ISP as
the agent or legal representative of UGI for any purpose whatsoever, and
ISP is not authorized to assume or create any obligation or
responsibility, express or implied, on behalf of or in the name of UGI,
or to bind UGI in any manner whatsoever, except as provided pursuant to
the terms and conditions of this Agreement or as may be authorized by UGI
from time to time.
1.4 UGI shall have the right to continue to sell PRODUCTS to
certain pre-existing customers. Prior to, or concurrently with, the
execution of this Agreement the parties shall agree, in writing, on the
list of such pre-existing customers. UGI shall also have the exclusive
right to market and sell Lubrajel and Hydrajel-based products for use as
vaginal moisturizers, sexual lubricants or for other internal
applications, such as mouth or nose moisturizers and ISP shall not
receive any compensation for those sales or for sales to any of UGI's
aforementioned pre-existing customers.
1.5 ISP has the right of first refusal to market and sell in the
TERRITORY any new products for the PC MARKET that UGI develops without
the assistance of third parties, except for "FINISHED FORMULATIONS" as
defined in Section 2.3 of this Agreement. UGI shall notify ISP, in
writing, of any such new product and ISP shall have sixty (60) days from
the date of its receipt of such notice to exercise the aforementioned
right of first refusal. If ISP exercises said right, such new product
shall then be deemed a "PRODUCT" hereunder.
II. EXCLUSIVITY
2.1 From the execution date of this Agreement set forth in the
preamble hereof and during the entire term of this Agreement, UGI shall
not appoint any other distributor of the PRODUCTS for the PC MARKET in
the EXCLUSIVE TERRITORY. UGI represents that it has no existing
distributor arrangements of any nature whatsoever with any third party
regarding direct or indirect sale and/or marketing of the PRODUCTS for
the PC MARKET in the EXCLUSIVE TERRITORY. UGI shall have the right to
appoint additional distributors in the TERRITORY for the I&M MARKET, and
shall give ISP written notice of such appointment at least thirty (30)
days prior to the effective date of any such appointment. UGI shall also
have the right to terminate ISP's non-exclusive right to market and sell
PRODUCTS in a country or countries in the NON-EXCLUSIVE TERRITORY at any
time upon sixty (60) days prior written notice in order to appoint an
exclusive distributor for that country or countries; provided, however,
ISP shall have the right to continue to market and sell PRODUCTS
hereunder to any customer(s) that have purchased any PRODUCT from ISP
within the (i) one year period prior to the date of ISP's receipt of such
notice, or (ii) six (6) month period after such receipt.
2.2 Except as specified in Section 2.3 below, UGI shall not,
directly or indirectly, sell or market the PRODUCTS in the EXCLUSIVE
TERRITORY for the PC MARKET, other than to ISP or as otherwise mutually
agreed upon in writing.
2.3 UGI shall retain the exclusive right to market and sell
"FINISHED FORMULATIONS," as hereinafter defined. ISP shall not receive
any compensation for sales of FINISHED FORMULATIONS, and ISP may sell
FINISHED FORMULATIONS only upon the prior written consent of UGI which
consent shall not unreasonably be withheld or delayed. For purposes of
this Agreement, "FINISHED FORMULATION(S)" shall mean all PRODUCTS which
are formulated with other ingredients and/or a formulation of two or more
products manufactured by UGI which is intended to be used, as is, without
further processing as an end-use product. Prior to, or concurrently with,
the execution of this Agreement, the parties shall agree, in writing, on
a list of the then current FINISHED FORMULATIONS. UGI shall notify ISP,
in writing, of any new FINISHED FORMULATION UGI intends to add to said
list at least thirty (30) days prior to the marketing of such new
FINISHED FORMULATION, during which period the parties shall discuss the
effect of such new FINISHED FORMULATION on the marketing and sale of
PRODUCTS hereunder.
2.4 UGI may develop and/or solicit customers for the PRODUCTS in
the TERRITORY for the PC MARKET, either directly or through third
parties; provided, however, UGI shall refer, and shall cause all such
third parties to refer, any such customers for the PC MARKET to ISP.
III. PERIOD OF AGREEMENT; PERFORMANCE CRITERIA
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3.1 Unless earlier terminated or extended as provided herein,
the term of this Agreement shall be deemed to have commenced as of
January 1, 2000 and shall continue through and including December 31,
2002.
3.2 If ISP's purchases of PRODUCTS (in pounds) from UGI during
the second contract year (calendar year 2001) are at least 125% of the
amount of PRODUCTS (in pounds) it purchased from UGI during calendar year
1999 ("BASE YEAR"), the initial three year term will be extended for a
fourth year. Regardless of whether ISP meets the aforementioned purchase
target for the second contract year, if ISP's purchases of PRODUCTS from
UGI during the third contract year (calendar year 2002) are at least 140%
of such BASE YEAR purchases of PRODUCTS, the initial three year term will
be extended for a fourth and fifth year.
3.3 Prior to, or concurrently with, the execution of this
Agreement the parties shall agree, in writing, upon the BASE YEAR figure
to be used for purposes of Section 3.2 above.
3.4 (a) If UGI enters into a transaction in which (i) UGI
transfers or sells all or substantially all of (x) its business related
to the PC MARKET or (y) its assets, (ii) UGI consolidates with or merges
with or into any other entity and is not the surviving corporation, or
(iii) all or substantially all of its outstanding voting securities are
sold or otherwise transferred to a third party, (in clauses (i), (ii) or
(iii) other than with respect to an affiliate), then UGI shall have the
right to terminate this Agreement. Notwithstanding the foregoing, UGI
shall have the right to transfer or sell a Product line that does not
meet the criteria set forth in clause (i), above; provided, however, UGI
shall not have the foregoing right to terminate this Agreement and the
purchase targets set forth in Section 3.2, above, shall be reduced by the
parties to reflect such transfer or sale; provided further, however, the
first sentence of Section 3.4(d), below, shall apply to any such transfer
or sale.
(b) If ISP enters into a transaction in which (i) ISP
transfers or sells all or substantially all of (x) its business related
to the PC MARKET or (y) its assets, (ii) ISP consolidates with or merges
with or into any other entity and is not the surviving corporation, or
(iii) all or substantially all of its outstanding voting securities are
sold or otherwise transferred to a third party, (in clauses (i), (ii) or
(iii) other than with respect to an affiliate), then ISP shall have the
right to terminate this Agreement.
(c) If the transferee, purchaser or surviving entity of
a transaction referred to in (i), (ii) or (iii) of subparagraphs (a) or
(b) above, is a direct competitor of the other party to this Agreement
not effecting such transaction, that party shall also have the right to
terminate this Agreement.
(d) The party effecting such a transaction shall
provide written notice specifying the date of the transaction to the
other party within thirty (30) days of such date. The termination rights
set forth in Sections 3.4(a), 3.4(b) or 3.4(c) hereof must be exercised
in the aforementioned notice or, in writing, within sixty (60) days of
the date of receipt of said notice or such right shall be deemed waived
notwithstanding Section 20.2 hereof. Such termination shall be effective
ninety (90) days after the date of receipt of the actual notice of
termination.
3.5 For purposes of this Agreement "affiliate(s)" means any
person or entity that controls, is under common control with, or is
controlled by a party hereto. As used in this definition, "control"
(including, with its correlative meanings, "controlled by" and "under
common control with") means possession, directly or indirectly, of power
to direct or cause the direction of management and policies (whether
through ownership of securities or partnership or other ownership
interests, by contract or otherwise).
IV. PRICES; PAYMENT; DELIVERY; AND TITLE
4.1 PRICES
(a) Prior to, or concurrently with, the execution of
this Agreement the parties shall agree, in writing, upon the initial
prices for the PRODUCTS hereunder. All prices will be FOB Hauppauge, New
York, and prices shall be subject to increase on thirty (30) days prior
written notice to ISP; provided, however, any such increase in prices in
any calendar year shall not exceed five percent (5%) of the
aforementioned initial price for each PRODUCT, and total price increases
shall not exceed 20% of the initial price for each PRODUCT during the
five year term of the Agreement (if the Agreement remains in effect for
five years).
(b) In the event UGI experiences a significant increase
in costs by reason of conditions beyond its control, including but not
limited to, environmental or regulatory requirements, or substantial
increases in the cost of raw material purchased from a third party and
used by UGI to manufacture a PRODUCT (and expressly excluding labor and
overhead), UGI, upon at least thirty (30) days prior written notice to
ISP, and subject to Section 4.1(e), below, shall be entitled to increase
its prices in excess of the 5% a year increase as provided in Section
4.1(a), above, to reflect such a significant increase in costs. In such
event, UGI will supply ISP with information to support such a price
increase, which information shall accompany the aforementioned notice. In
no event, however, shall UGI be required to disclose the name or source
of any of its raw materials.
(c) Any price increase may be instituted only once each
calendar year. Increased prices shall apply with respect to PRODUCT
shipped after the effective date of any such increase.
(d) If ISP believes it must reduce pricing on a
specific order to meet a competitor's prices and/or to respond to unusual
market conditions, ISP may request price reductions from UGI on a
case-by-case basis and/or request UGI to reduce prices in general to
respond to such unusual market conditions and UGI shall negotiate any
such requested price reduction with ISP in good faith.
(e) If ISP advises UGI, in writing, within the thirty
(30) day notice period referred to in Section 4.1(b), above, that it does
not accept UGI's justification for the increase, such increase shall not
be effective. ISP shall have an independent accounting firm, mutually
acceptable to both UGI and ISP (the "Auditors"), at ISP's sole cost and
expense, conduct an audit of such significantly increased costs. If the
Auditors verify in a certified written statement to ISP and UGI that such
costs have actually increased, as justified by UGI, in a calendar year,
then UGI may increase the prices for each affected PRODUCT by the actual
percentage increase in such costs so certified by the Auditors, such
increase to be retroactively effective to the date thirty (30) days
following the date of UGI's original notice of increase provided pursuant
to Section 4.1(b).
4.2 If, at any time during the term of this Agreement, UGI sells
any PRODUCT, either directly or indirectly, to another purchaser,
including, but not limited to, another distributor, at a price (excluding
taxes and freight charges) which is lower than the price to ISP
hereunder, then UGI shall offer such price for such PRODUCT to ISP for
the period of time such price is offered to such other purchaser.
Once in any twelve (12) consecutive calendar month period ISP
shall have the right, exercisable by written notice to UGI, to obtain
verification of the prices charged by UGI to purchasers of the PRODUCTS
other than ISP. Verification shall be performed by an independent outside
auditor selected by ISP. UGI shall afford such auditor access to customer
invoices and such other records necessary to verify PRODUCT prices. Upon
completion of the review, the auditor shall issue to both parties a
written report of the findings, which shall be final and binding upon the
parties and which shall include the amount of any price adjustment. If
the auditor requires a credit to ISP's account of at least $1000, the
cost of the audit shall be borne by UGI otherwise, the cost shall be
borne by ISP. Any credit to ISP's account shall be made within ten (10)
days of UGI's receipt of the auditor's written report.
4.3 UGI shall invoice ISP for all shipments, and payment is due
thirty (30) days from the date of the invoice.
4.4 Title, risk of loss of, and liability for the PRODUCTS shall
remain with UGI until delivery of the PRODUCTS to a common carrier
reasonably acceptable to ISP at UGI's facilities in Hauppauge, New York.
UGI warrants that, at the time of delivery, the PRODUCTS shall be free
and clear of all liens and encumbrances.
4.5 Duplicate shipments or overages may be returned by ISP to
UGI freight collect if such duplicate shipment or overage is the fault of
UGI.
V. SPECIFICATIONS
5.1 UGI warrants that the PRODUCTS shall meet UGI's published
PRODUCT specifications, which specifications may be modified by UGI from
time to time upon sixty (60) days prior written notice to ISP. Prior to,
or concurrently with, the execution of this Agreement, the parties shall
agree, in writing, upon such specifications. ISP shall have the right at
all times to reject PRODUCTS not meeting the published specifications,
which PRODUCTS will then be returned and replaced, and replacement
PRODUCTS shipped as requested by ISP at UGI's sole cost and expense, and
UGI shall reimburse ISP for any and all costs and expenses incurred by
ISP as a result of such rejection. ISP does not waive any rights,
including, but not limited to, the foregoing, by unloading, selling
and/or using PRODUCT that does not meet such specifications unless it
knew at the time of such unloading, selling, or use that the PRODUCT did
not meet the specifications. UGI shall bear all risks of any nature
whatsoever with respect to such PRODUCTS that have been so rejected by
ISP and shall indemnify ISP as set forth in Section 9.1 with respect to
such PRODUCTS.
5.2 UGI shall provide ISP with certificates of analysis for each
individual lot and Material Safety Data Sheets and any updates thereto.
VI. SUPPORT AND SALES
6.1 All orders for PRODUCTS shall be made by ISP's standard
purchase order. Neither such standard purchase order nor any document
used by UGI shall amend or modify any provisions of this Agreement.
6.2 ISP shall market and sell the PRODUCTS under UGI's
tradenames or trademarks. UGI hereby grants to ISP an exclusive license
to use the UGI tradenames or trademarks associated with the PRODUCTS in
the TERRITORY as long as UGI itself has the right to use such xxxx in a
particular country in the TERRITORY. With the exception of the
Registration of the "Lubrajel" trademark in Japan by Showa Denko and/or
Kose, UGI represents and warrants that, to the best knowledge of its
officers and directors, no third parties have registered UGI's tradenames
or trademarks. Upon termination of this Agreement and after sale or
disposal of all PRODUCT in ISP's inventory, ISP shall cease using UGI's
tradenames and trademarks. In any part of the TERRITORY in which UGI has
not registered its trademarks, ISP shall have the right, but not the
obligation, to do so at its own expense under UGI's name, and shall be
entitled to an exclusive royalty-free license to use the same as long as
this Agreement remains in effect and thereafter as provided in the
preceding sentence. UGI shall cooperate fully with ISP in the event ISP
decides to pursue any such registration, and will furnish to ISP any
documentation it may reasonably request to accomplish such registration.
In such cases in which ISP does so register UGI's trademark, it shall be
ISP's sole right, but not its obligation, at its expense to initiate or
defend any trademark infringement actions connected with the use of said
xxxx in those areas on behalf, and in the name, of UGI as owner of said
xxxx.
UGI shall provide ISP with such information and technical
assistance as is reasonably necessary for ISP to service all customers
for the PRODUCTS. The extent of such information and technical assistance
shall be determined solely by UGI in the exercise of its reasonable
business judgment.
6.3 UGI shall designate a UGI employee to be the PRODUCT
representative for ISP. Such employee shall assist ISP in resolving
technical PRODUCT and specification matters and shall provide such other
assistance as may be reasonably requested by ISP for ISP to successfully
market the PRODUCTS and provide a high standard of service in the
promotion and sale of the PRODUCTS. ISP shall designate an ISP employee
to be its technical contact to interface with UGI's PRODUCT
representative regarding technical PRODUCT and specification matters.
6.4 Notwithstanding expiration or earlier termination of this
Agreement for any reason whatsoever, ISP shall have the right to continue
to sell or otherwise dispose of any and all PRODUCTS in ISP's inventory
at such prices as ISP may elect unless UGI agrees to buy back such
inventory at the price paid to UGI by ISP for such PRODUCTS, including
ISP's shipping expenses and related costs. Shipping expenses back to UGI
will also be the responsibility of UGI.
6.5 UGI shall have the right to terminate this Agreement upon
thirty (30) days prior written notice, if during the term of this
Agreement ISP purchases or manufactures, or causes a third party to
purchase or manufacture on its behalf, for sale in the TERRITORY for the
PC MARKET or I&M MARKET, any products which have substantially the same
specifications as the PRODUCTS (as published by UGI prior to such
purchase or manufacture) and are substantially chemically equivalent to,
or intended to be used as direct substitutes for, the PRODUCTS.
6.6 Within sixty (60) days after the end of the first six (6)
months of each calendar year and within sixty (60) days after the end of
each calendar year, ISP shall submit to UGI a report on its marketing
efforts for the PRODUCTS in the EXCLUSIVE TERRITORY during that six (6)
month period of that calendar year, and, with respect to the second
report, its plans for the following calendar year. Such reports shall
include a breakdown of sales by country if it is reasonably practical for
ISP to do so. Any data regarding the PRODUCTS that is generated by ISP in
connection with its efforts to market the PRODUCTS or to obtain
regulatory approval, as provided in Section 10.2 hereof, shall be
provided to UGI as obtained by ISP. Such reports shall include
information on sales, customer needs and requests, and problems
encountered and shall be deemed CONFIDENTIAL INFORMATION, as defined in
Section 14.1 hereof, whether or not so marked.
6.7 After termination of this Agreement for any reason, ISP
shall provide to UGI a list of all ISP customers that have purchased
PRODUCTS within the twelve (12) month period prior to the effective date
of such termination. Such list shall include the customer name, PRODUCTS
purchased by that customer, and the quantities of PRODUCTS purchased
during said twelve (12) month period. With respect to customers located
in the United States, such list shall be provided to UGI within fifteen
(15) days of the effective date of such termination, and within such
period of time as is reasonably possible after the effective date of such
termination with respect to customers located in the remainder of the
TERRITORY.
VII. PACKAGING AND SHIPPING
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7.1 UGI shall package the PRODUCTS in accordance with the
methods that it uses to package PRODUCTS for its other distributors, and
will do so in accordance with all pertinent provisions of any applicable
federal, state, municipal, provincial or other local law or regulation of
which it is aware or is made aware; provided, however, ISP may repackage
PRODUCT, in which event ISP will use only repackaging containers and
other packing materials and labels that comply with all pertinent
provisions of any applicable federal, state, provincial, municipal or
other local law or regulation.
VIII. SAMPLES AND RETAINED BATCHES
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8.1 UGI, at no cost to ISP, shall provide ISP with reasonable
quantities of samples for those PRODUCTS that ISP does not stock, to be
shipped to ISP in accordance with ISP's instructions and at ISP's
expense. For PRODUCTS that ISP does stock, it will be ISP's
responsibility to use its own stock to provide samples.
8.2 UGI shall retain a reasonable amount of PRODUCT as a sample
to allow for testing of each finished batch lot. Such sample shall be
labeled with the PRODUCT name, code, batch/lot number, and date of sample
and shall be retained by UGI for a period of three (3) years from the
date of manufacture of such batch lot. At any time, ISP shall have the
right to request UGI to deliver, and UGI shall thereupon forthwith
deliver, a portion of such sample to ISP or its designee.
IX. INDEMNIFICATION
9.1 Neither party hereto shall be liable for any indirect,
incidental, or consequential damages or lost profits caused by or arising
out of its performance or failure to perform hereunder. However, UGI will
defend, indemnify and hold ISP, its affiliates, assigns, and their
respective agents, representatives, officers, directors and employees
harmless from and against all claims, demands, settlements, judgments,
losses, liabilities and any and all related costs and expenses (including
reasonable and necessary attorneys' fees) arising out of or related, in
any manner whatsoever, to (i) the PRODUCTS (including but not limited to
the manufacture, transportation, sale, use and/or disposal of the
PRODUCTS) except to the extent solely and directly caused by ISP's
negligence or willful misconduct in handling, storing, repackaging, or
transporting the PRODUCTS, (ii) any breach of any representation,
warranty or agreement made by UGI herein; (iii) any failure to comply
with applicable laws and regulations; and/or (iv) any act or omission of
UGI in any way related to this Agreement.
ISP will defend, indemnify and hold UGI and its affiliates,
assigns and their respective agents, representatives, officers, directors
and employees harmless from and against all claims, demands, settlements,
judgments, losses, liabilities and any and all related costs and expenses
(including reasonable and necessary attorneys' fees) arising out of or
related to (i) ISP's handling, storing, repackaging, transportation,
marketing, advertising, sale, use, disposal, or label content of the
PRODUCTS (except if such sale, handling, storing, repackaging,
transportation, marketing, advertising, use, disposal or label content is
based on erroneous information provided by UGI) or (ii) ISP's failure to
comply in all material respects with applicable laws and regulations, and
with respect to both (i) and (ii), only to the extent the same are solely
and directly caused by ISP.
9.2 Notwithstanding any other provision set forth herein, the
indemnity provisions set forth in Section 9.1 and elsewhere in this
Agreement shall survive termination or expiration of this Agreement.
X. REGULATORY, HEALTH AND SAFETY MATTERS
10.1 UGI, at its sole cost and expense, shall perform such
health and safety tests related to the PRODUCTS and take any other action
which may be required by any governmental authority having jurisdiction
of the same, which are or may become necessary to ensure the continued
manufacture of the PRODUCTS. UGI represents and warrants that, to the
best knowledge of its officers and directors, it is not aware of any
regulations prohibiting the sale of PRODUCTS in the TERRITORY for the PC
MARKET and/or the I&M MARKET. UGI does not warrant that it will be able
to comply with the health and safety regulations in all parts of the
TERRITORY, but shall use commercially reasonable efforts to comply when
so requested by ISP. UGI shall share with ISP the results of any such
health and safety tests and all other health, safety and/or regulatory
information now or hereafter in its possession relating to the PRODUCTS
and their uses.
10.2 ISP may, in its sole discretion and at its own expense,
choose to obtain governmental approvals that may be required to market
the PRODUCTS in the TERRITORY. UGI will, at ISP's request and expense,
execute and deliver whatever documents are necessary in order to enable
ISP to obtain such approvals; however, all such documents or information
which UGI deems confidential will, at UGI's option, be provided directly
to the regulatory agencies involved, with appropriate procedures
satisfactory to UGI (in its reasonable business judgment) being followed
to maintain the confidentiality of the information.
10.3 In the event UGI cannot, or chooses not to, and ISP chooses
not to comply with any government regulations affecting the sale of
PRODUCTS in the TERRITORY, the parties shall, in good faith, renegotiate
the purchase targets set forth in Section 3.2, above, to account for
diminished sales potential.
XI. INSURANCE
11.1 UGI shall maintain, at its sole cost and expense, the
following kinds of insurance with minimum limits as set forth below and
naming ISP as additional insured (and such insurance shall be primary
without regard to any other insurance ISP shall maintain or otherwise
have in force):
Kinds of Insurance Limits of Liability
Comprehensive General Minimum $1,000,000
Liability (including products per occurrence
liability) and a broad form
vendors endorsement naming ISP
Excess (umbrella) $4,000,000
liability (including products
liability) and a broad form
vendors endorsement naming ISP
The insurance coverages set forth in this Article XI shall be
provided by insurers reasonably acceptable to ISP. UGI shall provide ISP
with a certificate of insurance evidencing that all such insurance
coverages are in effect prior to commencement of the INITIAL TERM, and
that none of such policies of insurance shall be terminated, canceled or
modified by the insurers unless ISP is provided with at least thirty (30)
days prior written notice of the same.
11.2 Notwithstanding any other provision set forth herein, the
insurance provisions set forth in Section 11.1 shall survive expiration
or earlier termination of this Agreement.
XII. DEFAULT
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12.1 In the event that either party hereto shall default in any
material respect in the performance of any obligation specified herein,
the non-defaulting party shall have the right, in addition to any other
rights or remedies it may have hereunder or at law or in equity, to so
notify the other party thereof in writing specifying the nature of such
default and, if such default is not remedied within thirty (30) days from
the date of such notice, then the non-defaulting party shall have the
right, in addition to any other rights or remedies it may have hereunder
or at law or in equity, to terminate this Agreement immediately.
12.2 In the event either party shall initiate any bankruptcy,
insolvency, receivership or similar proceedings, or such proceedings are
initiated against either party, and such party fails to have such
proceedings dismissed within forty-five (45) days after such proceedings
are initiated, the other party may terminate this Agreement immediately.
XIII. ASSIGNMENT
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13.1 Neither party shall assign this Agreement, in whole or in
part, whether by operation of law or otherwise, without the other party's
prior written consent, which consent shall not be unreasonably withheld
or delayed, except that either party may assign this Agreement without
such consent to (i) an affiliate, or (ii) any entity that purchases all
or substantially all of the assets of that party or of the business to
which this Agreement relates, or (iii) an entity with which that party
may merge or consolidate.
XIV. CONFIDENTIAL INFORMATION; PATENTS
---------------------------------
14.1 Each party hereto shall keep confidential and shall not
disclose in any manner to any third party nor use for any purposes other
than those contemplated by this Agreement, during the term hereof and for
a period of ten (10) years from the expiration or earlier termination of
this Agreement, any proprietary technical or business information marked
as "CONFIDENTIAL" and acquired from the other party hereto in connection
with or in the course of performance of this Agreement ("CONFIDENTIAL
INFORMATION").
14.2 CONFIDENTIAL INFORMATION shall not include any information
which: (a) was in the possession of the receiving party prior to the
disclosing party's disclosure to the receiving party and which was not
previously obtained either directly or indirectly from the disclosing
party; (b) was at the time of the disclosing party's disclosure to the
receiving party or thereafter becomes, through no fault of the receiving
party, part of the public domain by publication or otherwise; or (c) was
furnished to the receiving party by any third party not subject to
restrictions on disclosure.
14.3 Notwithstanding Section 14.1, any invention, discovery or
improvements which either party hereto or its employees, agents or
advisors solely develops or makes as a result of information received
under this Agreement or the performance of its obligations hereunder,
shall become the property of such party as long as such invention,
discovery, or improvement is not the result of use of the proprietary
CONFIDENTIAL INFORMATION of the other party. Both parties agree to
perform, and agree to use best efforts to have their employees, agents
and advisors perform, all lawful acts requested by the party owning such
property, at such owning party's expense, to:
(a) perfect title therein in such owning party or its
nominee; and
(b) enable such owning party or its nominee to obtain
and maintain patent or other legal protection therefor anywhere in the
world.
14.4 ISP and UGI shall have joint ownership of any invention,
discovery or improvements made as a result of the parties' joint efforts,
or the joint efforts of their employees, agents or advisors, pursuant to
a written agreement entered into by UGI and ISP which shall include, but
not be limited to, the description and purpose of the joint effort and
the terms and conditions governing the exploitation of any patent(s)
resulting from the same, such agreement to be entered into prior to the
initiation of any joint efforts. ISP and UGI shall file joint
applications for all patents arising from such efforts in all countries
the parties deem necessary. The costs of obtaining such patents shall be
borne equally by the parties, however, if one party seeks to file a
patent in a jurisdiction where the other party does not wish to file,
that party may make such a filing and all such costs shall be borne by
the filing party.
14.5 The terms and conditions of this Agreement, including, but
not limited to, the information set forth in the document(s) described in
Sections 1.4, 2.3, 3.3 and 4.1(a) hereof, shall be treated as
CONFIDENTIAL INFORMATION hereunder, except to the extent required by
government regulations. ISP acknowledges that UGI may be required to file
this Agreement and/or such document(s) with the Securities and Exchange
Commission ("SEC"), disclose the subject matter hereof or thereof in a
letter to its shareholders, and/or issue a press release regarding such
subject matter. UGI shall advise ISP, in writing, if UGI intends to file
with the SEC, or otherwise disclose, all or any portion of the
information set forth in the document(s) described in Sections 1.4, 2.3,
3.3 and/or 4.1(a), above, such that ISP shall have sufficient time to
prepare a request for confidential treatment with respect to such
information for filing with the SEC and UGI shall timely file such
request with the SEC and shall not file or otherwise disclose such
information pending the SEC's final determination with respect to such
request.
ISP and UGI shall mutually agree to any press release to be
issued with respect to the subject matter hereof.
14.6 Notwithstanding any other provision set forth herein, the
provisions of this Article XIV shall survive expiration or earlier
termination of this Agreement.
XV. INTELLECTUAL PROPERTY RIGHTS
15.1 UGI represents and warrants, to the best knowledge and
belief of its officers and directors, that UGI owns all right, title and
interest in and to the manufacturing process and the patents, trademarks,
copyrights and other intellectual property rights relating to the
PRODUCTS except for patents that may be filed by other companies that
refer to the use of one or more of the PRODUCTS in patent applications
filed by those companies. UGI shall notify ISP, in writing, of any such
patents with respect to which UGI has knowledge.
15.2 Except for Patent Number 3-72042 obtained by Kose in Japan
for the use of Lubrajel in cosmetic uses/applications in Japan, UGI
represents and warrants, to the best knowledge and belief of its officers
and directors, that the manufacture and sale of the PRODUCTS by UGI to
ISP and the distribution, promotion and sale of the PRODUCTS by ISP, does
not and will not infringe any United States or foreign patent, trademark,
copyright or other intellectual property rights of any third party. UGI
warrants that formulations marketed by ISP's customers using any PRODUCT
shall not infringe any UGI patents; provided, however, UGI does not
warrant that such formulations shall not infringe existing or future
patents of third parties.
15.3 UGI shall defend, indemnify and hold ISP, its affiliates,
and their respective agents, representatives, officers, directors,
employees and customers harmless from and against all claims, demands,
settlements, judgments, losses, liabilities, penalties, fines and any and
all related costs and expenses (including reasonable attorney's fees)
arising out of any allegation that any PRODUCT sold by UGI to ISP under
this Agreement infringes any United States or foreign patent, trademark,
copyright or other intellectual property rights of any third party, up to
an amount equal to the total REVENUES earned by ISP with respect to the
infringing PRODUCT(S) in the country where such infringement allegedly
occurred. For purposes of this Section 15.3 "REVENUES" shall exclude (a)
discounts, rebates, returns and allowances, if actually allowed or
granted to customers; and (b) sales, excise, and other taxes,
transportation and insurance charges; if such items are actually included
in the gross sales price to customers. ISP shall notify UGI of the
commencement of any such suit or action promptly after receiving written
notice of the same and provide UGI with reasonable and necessary
cooperation, at UGI's sole cost and expense, in defense or resolution of
any such suit or action.
XVI. NOTICES
-------
16.1 All notices and consents required to be given hereunder
shall be in writing and given: by hand; by certified mail (return receipt
requested); by facsimile confirmed by certified mail (return receipt
requested); or, by recognized overnight courier service, addressed to the
intended recipient as follows:
If to ISP ISP Technologies Inc.
c/o ISP Management Co., Inc.
0000 Xxxx Xxxx
Xxxxx, Xxx Xxxxxx 00000
Attn: General Counsel
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to UGI: United-Guardian, Inc.
000 Xxxxxx Xxxx.
Xxxxxxxxx, Xxx Xxxx 00000
Attn: President
Telephone: (000) 000-0000
Fax:(000) 000-0000
or to such other address as either party may from time to time designate
in writing to the other.
XVII. DISPUTE RESOLUTION
------------------
Any controversy or claim arising from or related to this
Agreement or the breach thereof shall be settled by a single arbitrator
in an arbitration administered by the American Arbitration Association in
New York City in accordance with the Expedited Procedures of its
Commercial Arbitration Rules, and judgment on the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof.
XVIII. GOVERNING LAW
-------------
The validity and interpretation of this Agreement and the legal
relations of the parties shall be governed by the laws of the United
States of America and State of New York without regard to the choice of
law provisions. Each party consents to submit to the exclusive
jurisdiction of the federal or state courts located in the State of New
York for the enforcement of any arbitration award made pursuant to
Article XVII.
XIX. FORCE MAJEURE
-------------
Neither party shall be liable for delay or failure to perform in
whole or in part any provision of this Agreement by reason of
contingencies beyond its control, including but not limited to: acts of
God; fires; floods; earthquake; lightning; storms; explosions; mechanical
breakdowns; military operations; civil commotions; failure of public
services; wars; sabotage; accidents; labor disputes or shortages;
governmental laws, ordinances, rules, regulations, whether valid or
invalid; inability to obtain material, equipment or transportation; and
any other similar occurrences. The party so affected shall promptly give
written notice to the other party whenever such contingency or other act
becomes reasonably foreseeable, and the affected party shall use its best
efforts to overcome the effects of the contingency as promptly as
possible, and shall promptly give written notice to the other party of
the cessation of such contingency. Neither party, however, shall be
required to resolve a strike, lockout or other labor problem in a manner
which it, in its sole discretion, does not deem proper and advisable. In
the event of a force majeure circumstance which prevents UGI from
supplying and/or ISP from purchasing and/or selling PRODUCTS, the
purchase targets set forth in Section 3.2 hereof shall be reduced prorata
based upon the length of time the force majeure circumstance is in
effect.
XX. ENTIRE AGREEMENT AND AMENDMENTS; WAIVER; CAPTIONS
20.1 This Agreement, the Schedules (which are attached hereto
and incorporated herein), and the information described in Sections 1.4,
2.3, 3.3, 4.1(a), 5.1 and 14.4 hereof constitute the entire agreement and
understanding between the parties with respect to its subject matter and
supersede all prior agreements, written or oral, between the parties
concerning such subject matter and specifically the Exclusive Distributor
Agreements between the parties dated (i) December 9, 1994 (as amended
September 20, 1996) and (ii) September 20, 1996. This Agreement and the
Schedules hereto may not be changed or modified except in writing signed
by a duly authorized representative of each party. The parties may use
purchase orders, acknowledgments or other documentation but the same are
intended for convenience and record purposes only and any provisions
which may be contained therein are not intended to (nor shall they serve
to) add to or otherwise amend or modify any provisions of this Agreement.
20.2 No failure of either party to enforce any provisions hereof
shall constitute a waiver by that party of its right subsequently to
enforce the same or any other provision hereof.
No waiver of any provision of this Agreement shall be effective
unless in writing signed by the party claimed to have waived such
provision.
20.3 The captions used herein are for reference only, and shall
not in any way affect the meaning or interpretation of this Agreement.
XXI. SEVERABILITY
------------
If any provision of this Agreement shall hereafter be held to be
invalid or unenforceable for any reason in a particular jurisdiction,
such provision shall be reformed to the maximum extent permitted to
preserve the parties' original intent, failing which, such provision
shall be severed from this Agreement and the remainder of this Agreement
shall continue in full force and effect. Such occurrence shall not have
the effect of rendering the provision in question invalid in any other
jurisdiction or in any other case or circumstance, or of rendering
invalid any other provision contained herein, to the extent that such
other provision is not actually in conflict with any applicable law.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
ISP TECHNOLOGIES INC. UNITED-GUARDIAN, INC.
By:/s/ Xxxxx Xxxxx By:/s/ Xxx Xxxxxx
----------------- -----------------
Title: President Title: President
Schedule A
PRODUCTS
Lubrajel MS, CG, NP, DV, TW, PF, Oil, and LC
Oil of Orchids (water soluble) Oil of Orchids (oil soluble) Lubrasil and
Lubrasil DS Aquathik Thixotrate B122 Lubraslide Klensoft Super Ti Powder
Ultra Ti Powder Unitwix Confetti Confetti II
Any improvements to, or variations of, the above-listed PRODUCTS will
also be deemed PRODUCTS for purposes of this Agreement with the exception
of (a) the FINISHED FORMULATIONS specified herein and (b) any
improvements to, or variations of, Lubrajel and Hydrajel-based products
for use as vaginal moisturizers, sexual lubricants or for other internal
applications, such as mouth or nose moisturizers.
Schedule B
TERRITORY
A) EXCLUSIVE TERRITORY:
-------------------
North America: All (including, but not limited to, Mexico and
Puerto Rico)
Central & South America: Brazil, Argentina, Columbia, Venezuela,
Chile, Guatemala, Peru, Dominican Republic
Asia/Pacific: People's Republic of China, India, Hong Kong,
Japan, Singapore, Malaysia, Thailand, Australia, New Zealand, Taiwan,
Philippines, Indonesia
Central Europe: Russia, Hungary, Czech Republic, Poland,
Romania, Bulgaria,
Western Europe: Germany, Austria, Spain, Portugal, Netherlands,
Belgium, Greece
Scandinavia: Denmark, Sweden, Finland, Norway
Middle East: Israel, Turkey
Africa: South Africa
B) NON-EXCLUSIVE TERRITORY:
------------------------
All other countries not specified above, excluding the United
Kingdom, France, Switzerland, Italy, and Korea
