EXHIBIT 10.23
*CONFIDENTIAL PORTIONS OF THIS AGREEMENT HAVE BEEN
OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT.
INTERNATIONAL EXCLUSIVE
DISTRIBUTORSHIP AGREEMENT
THIS INTERNATIONAL EXCLUSIVE DISTRIBUTORSHIP AGREEMENT (this
"Agreement") is made as of January 16, 2005 by and between Smart Energy
Solutions, Inc., a corporation organized and existing under the laws of the
State of Nevada, United States, having its principal place of business at 000
Xxxxxx Xxxxxx, Xxxxxxx, XX 00000(xxx "Manufacturer") and ELCART DISTRIBUTION
S.P.A., a corporation organized and existing under the laws of Italy, having its
principal place of business in via Xxxxxxxxxxxx Xxxxxxxxxx 00, Xxxxxxx Xxxxxxx,
Xxxxx, Xxxxx (the "Distributor").
RECITALS
WHEREAS, Manufacturer is the exclusive owner and has all right, title
and interest to a group of related proprietary products known as the "Battery
Brain Products", which are described in Exhibit A (the "Products"); and
WHEREAS, Distributor desires to be appointed as the exclusive
distributor of the Products in the territory set forth in Exhibit B (the
"Territory"), and Manufacturer has agreed to appoint Distributor as its
exclusive distributor on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and other good and valuable consideration, the adequacy,
sufficiency and receipt of which are hereby acknowledged, the parties hereto
agree as follows:
1. Appointment of Distributor.
1.1 Grant of Exclusive Rights.
(a) Pursuant to the terms and conditions contained in this
Agreement, Manufacturer hereby grants, and Distributor hereby accepts, the
exclusive right to promote and sell the Products in the Territory to any person
other than (i) a person engaged in the business of manufacturing motor vehicles
and (ii) national governmental bodies and persons that have as their primary
purpose to enter into contracts with national governmental bodies (a "Reserved
Customer"). For purposes of clarification, the Distributor is permitted to
promote and sell the Products in the Territory to state, county, city, town,
borough, village, district or other entities exercising, or entitled or
purporting to exercise, any governmental powers and a person that (A) has as its
primary purpose to enter into contracts with such governmental bodies, or to
engage primarily in activities carried out pursuant to an agreement or
agreements with such governmental bodies, or (B) is owned by or is subject to
the direction of such bodies, provided that such governmental bodies are not the
national governmental bodies of such jurisdiction..
1.2 Manufacturer's Distribution Rights. Manufacturer reserves for
itself the rights to directly or indirectly sell the Products in the Territory
to Reserved Customers.
1.3 Outside the Territory. Distributor shall not, directly or
indirectly, market or sell any Products to any person (a) located outside the
Territory or (b) whom the Distributor knows or has reason to know will export
the Products outside the Territory or will market or sell the Products outside
the Territory. Distributor shall promptly refer to the Manufacturer all
inquiries or orders for the Products from any of the foregoing persons.
1.4 Alterations to Product. Manufacturer, at its option, subject to
giving ninety (90) days' notice, may discontinue the manufacture and/or sale of
any of the Products, and may modify or alter the Products as Manufacturer, in
its sole discretion, deems appropriate.
2. Resales and Marketing by Distributor.
2.1 Resales by Distributor
(a) Generally. Distributor shall be entitled to sell for its
own account the Products in the Territory. Distributor shall have the right
during the Term to describe itself as Manufacturer's "Authorized Distributor"
for the Products in the Territory, but shall not hold itself out as
Manufacturer's agent or as being entitled to bind Manufacturer in any way.
(b) Best Efforts. Distributor shall use its best efforts to
sell the Products and to fully develop the market for the Products within the
Territory. Distributor shall use its best efforts to promote the sale of the
Products in the Territory in accordance with the Distributor's Business Plan
(hereafter defined) and Manufacturer's policy and shall protect Manufacturer's
interests. Distributor agrees that all its sales efforts shall be directed only
to customers in the Territory.
(c) Resale Prices. Distributor shall be entitled to charge its
customers the resale prices of the Products as it determines, provided that its
objectives set forth in the Distributor's Business Plan (hereafter defined) are
achieved. Distributor shall avoid such pricing policies as would clearly
adversely affect the image of the Products.
2.2 Preliminary Marketing Plan; Business Plan. Prior to or
simultaneously herewith, Distributor has submitted to Manufacturer a preliminary
marketing plan, briefly summarizing its plan for the promotion, marketing and
distribution of the Products within the Term. Within one hundred twenty (120)
days of the date hereof, Distributor shall submit to Manufacturer a detailed
business plan (the "Distributor's Business Plan") of its promotion, marketing
and distribution of the Products within the Term, including without limitation,
sales targets for each quarter in the Term that are at least equal to or greater
than the Guaranteed Minimum Target (defined in Section 2.6 below). Manufacturer
and Distributor shall have the duty to negotiate in good faith the sales targets
and other milestones set forth in the Distributor's Business Plan.
Nothwithstanding anything contained herein to the contrary, if the Guaranteed
Minimum Target amounts are not purchased by the Distributor as provided in
Section 2.6 below, the Distributor shall lose the exclusivity to promote and
sell the Product in the Territory. In such case, the Manufacturer shall have the
right to contract with another party to promote and sell the Product in the
Territory.
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2.3 Marketing Materials. At Distributor's expense: (a) All marketing
catalogues, sales brochures, manuals, packaging labels, warranties, disclaimers,
technical materials, and all other information and material relating to the
Products (the "Marketing Materials") provided by Manufacturer to Distributor
shall be printed, published, and otherwise used by Distributor, as instructed by
Manufacturer; and (b) Distributor shall cause any Marketing Materials provided
by Manufacturer to be translated into the principal language or languages of the
Territory within thirty (30) days after the date of receipt of such Marketing
Materials. Manufacturer shall have the right to review Distributor's Marketing
Materials, and upon Manufacturer's request, Distributor at its expense shall
promptly provide to Manufacturer copies of the Marketing Materials and shall
revise the Marketing Materials as may be requested by Manufacturer.
2.4 Certain Marketing Obligations. In connection with the marketing and
sale of the Products, Distributor shall:
(a) make clear, in all dealings with customers and prospective
customers, that it is acting as distributor of the Products and not as agent of
Manufacturer; and
(b) comply with all legal requirements from time to time in
force relating to the importation, storage, marketing, distribution, and sale of
the Products and all other laws applicable to the Products and Distributor's
activities hereunder.
(c) The Manufacturer confirms that the products comply with
the CE and all relevant European directives as well as RoHs directive valid at
the date of signed Contract. The Manufacturer will provide the Distributor with
the copies of named documents.
2.5 Sales Targets.
(a) Preparation Period. For the twelve (12) month period
following the date of this Agreement (the "Preparation Period"), Distributor
shall not be required to purchase any Products. If Distributor purchases an
initial order of 5,000 unit or more by January 2006 the manufacturer will
guarantee the sale with a buy back assurance on the initial order. The
Manufacture will also guarantee the price for the first 12 month period.
(b) Guaranteed Minimum Targets. During each of the periods set
forth in the table below, Distributor shall purchase a quantity of units of the
Products equal to at least the guaranteed minimum target (the "Guaranteed
Minimum Target") for the applicable period set forth below. Distributor shall
not be in violation of this Section 2.6(b) if, from the date of this Agreement
until the last day of any of the applicable periods below, Distributor has
purchased a quantity of units of the Products equal to at least the Aggregate
Minimum Target set forth above.
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Period Guaranteed Minimum Aggregate Minimum
Target Target
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1 year commencing on the date of this Agreement 0 units 0 ,units
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1 year period commencing on the 13th month following the date _______units ________units
of this Agreement
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1 year period commencing on the 24th month following the date ________units ________units
of this Agreement
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(c) Good Faith Negotiations. Prior to the 13th month following
the date of this Agreement, Manufacturer and Distributor shall negotiate in good
faith Guaranteed Minimum Targets for the following twelve (12) month period.
Prior to the commencement of each successive twelve (12) month period of the
Term thereafter, Manufacturer and Distributor shall negotiate in good faith
Guaranteed Minimum Targets for such twelve (12) month period. If the parties
fail to agree to Guaranteed Minimum Targets for any such period, then the
parties shall be deemed to have agreed that the Guaranteed Minimum Target for
such period shall be equal One Hundred and Twenty Five Percent (125%) of the
Guaranteed Minimum Target set for the immediately preceding twelve (12) month
period.
(d) Consequences of Non-Attainment of Minimum Targets. If at
the end of the applicable year, the Guaranteed Minimum Target has not been
attained, Manufacturer shall be entitled, at its option, subject to giving ten
(10) days notice, to (1) terminate this Agreement, or (2) cancel Distributor's
exclusivity, or (3) reduce the extent of the Territory, or (4) increase the
prices of the Products. This right shall, however, be exercised in writing not
later than three (3) months after the end of the year in which the Guaranteed
Minimum Target has not been attained.
(e) Minimum Inventory. During the Term, Distributor shall
maintain an inventory of units of the Products sufficient to fulfill the
forecasted demand for the Product in the Territory.
3. Purchase and Delivery of Products.
3.1 Purchase.
(a) Submission of Purchase Order. Distributor shall order the
Products from Manufacturer by submitting to Manufacturer a purchase order (the
"Purchase Order") in the form approved by Manufacturer. Each Purchase Order
shall be for a number of units of the Products equal to or greater than ten
percent (10%) of the Guaranteed Minimum Target for the year in which the
Purchase Order is placed. Distributor agrees to submit a Purchase Order no less
than every three months during the Term, with the first Purchase Order
__________to be submitted on or before the anniversary from the date hereof.
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(b) Acceptance of Purchase Order. Promptly upon Manufacturer's
receipt of a Purchase Order, Manufacturer shall either accept or decline the
Purchase Order provided, however, that Manufacturer shall not unreasonably
reject Purchase Orders. Nothing in this Agreement shall entitle Distributor to
any priority of supply in relation to the Products as against Manufacturer's
other distributors or customers.
(c) Cancellation of Purchase Order. Distributor may cancel a
Purchase Order by delivering to Manufacturer written notice of intent to do so
no later than fifteen (15) days after delivery of the Purchase Order .in that
case the Distributor will pay 33% of the total order.
(d) Precedence of Terms. Sales of the Products pursuant to the
Purchase Orders shall be governed by this Agreement and the Manufacturer's
Standard Terms of Sale (the "Standard Terms") as they may be in effect from time
to time, which may be changed by Manufacturer in its sole discretion.
Manufacturer shall give to Distributor notice in writing of any material change
in such Standard Terms prior to such change taking effect. To the extent that
there is a conflict or inconsistency between the terms of this Agreement and the
Standard Terms, the terms of this Agreement shall take precedence.
(e) Additional duties of Distributor. With respect to each
Purchase Order, Distributor shall be responsible at Distributor's cost and
expense for: (1) ensuring the accuracy of the Purchase Order; (2) providing
Manufacturer with any information necessary to enable Manufacturer to process
the order; (3) complying with applicable legal requirements in the Territory,
including, without limitation, labeling and marketing legal requirements; and
(4) obtaining any necessary governmental permits, licenses, certificates of
origin, approvals, and other requisite documents in respect of the importation
of the Products into the Territory and their resale in the Territory.
3.2 Delivery.
(a) Estimated Delivery Date. As soon as practicable after
Manufacturer's acceptance of a Purchase Order, Manufacturer shall notify
Distributor of the estimated delivery date (the "Estimated Delivery Date") for
the Products purchased. Manufacturer shall use its best efforts to schedule the
Estimated Delivery Date no later than sixty (60) days after Manufacturer's
acceptance of a Purchase Order and to deliver by the Estimated Delivery Date the
full quantity of Products ordered; however, time of delivery shall not be of the
essence and accordingly Manufacturer shall have no liability to Distributor if,
notwithstanding such efforts, there is any delay in delivery.
(b) Method of Delivery. Manufacturer shall deliver the
purchased Products at Distributor's expense in accordance with the method
specified in the Purchase Order.
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3.3 Title; Risk of Loss. The title to any of the Products shall not
pass to Distributor until Manufacturer has received payment in full of Purchase
Order; provided, nevertheless, that the risk of loss of or damage to any of the
Products shall pass to Distributor from the time Manufacturer notifies
Distributor that the Products are available for collection or from the time of
delivery to the carrier at Manufacturer's premises, whichever is earlier.
3.4 Time Limit for Rejection or Revocation of Acceptance of the Goods.
Rejection or revocation of acceptance by Distributor of the Products must be
made within seven (7) days after delivery of the Products to Distributor. No
defective Products may be returned to Manufacturer unless first authorized in
writing by Manufacturer.
4. Payment for Products.
4.1 Prices. The prices for the Products shall be set forth in Exhibit
E, except as such prices may be adjusted pursuant to the terms of this
Agreement. Such prices may be adjusted by Manufacturer once for each calendar
year of the Term upon written notice delivered to Distributor no later than
October 1 of the preceding calendar year.
4.2 Transportation Costs. Distributor shall, in addition to the price,
be liable for arranging and paying all costs of transportation and insurance. If
Manufacturer, at its option, agrees at the request of Distributor to arrange for
transportation and insurance as agent for Distributor, Distributor shall
reimburse Manufacturer the full shipping, handling, and other expenses thereof
and all the applicable provisions of this Agreement shall apply with respect to
the payment of such costs as they apply to payment of the price of the Products.
4.3 Taxes; Duties. All prices for the Products are exclusive of any
applicable taxes, including sales tax or any other value-added tax, for which
Distributor shall be additionally liable. Distributor shall pay costs and
expenses of obtaining any necessary governmental permits, licenses, approvals,
and other requisite documents in connection with the import or export of the
Products and any applicable duties, customs, tariffs, or other charges thereon.
4.4 Payment Method. Full payment in an amount equal to the purchase
price of the Products ordered and all other payments for which Distributor is
responsible pursuant to this Agreement shall be made in United States Dollars as
follows:
(a) Once confirmation by Smart Energy Solutions of a Purchase
Order the Distributor shall deliver to Manufacturer an irrevocable letter of
credit in favor of Manufacturer, issued or confirmed by a bank approved by
Manufacturer (the "Letter of Credit"). The Letter of Credit shall be in an
amount to cover the value of the Purchase Order plus freight and insurance on
said order; and
(b) If the Distributor wishes to pay for the Purchase Order by
wire transfer and use the Letter of Credit to support recurring orders then the
Distributor " shall deliver to Manufacturer a Wire Transfer equal to the amount
due in connection with such Purchase Order no later than the delivery of
purchase.
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4.5 Failure to Pay. If Distributor fails to pay the price and other
amounts due for any Products prior to or on the date such payment is due,
Manufacturer shall be entitled (without prejudice to any other right or remedy
it may have) to:
(a) cancel or suspend any further delivery to Distributor;
(b) sell or otherwise dispose of any Products which are the
subject of any order by Distributor, whether or not appropriated thereto, and
apply the proceeds of sale to the overdue payment; and
(c) charge Distributor interest on the price at the rate of
the lesser of one and one-half (1.5%) per cent per month from the date the
payment became due until actual payment is made.
5. After Sales Service Support. Distributor shall have the sole responsibility
to provide its customers with timely, professional, and adequate after sales
technical support for the Products and any part thereof, in accordance with
professional standards. Notwithstanding the foregoing, Distributor may refer to
Manufacturer any of its customers who present any extraordinarily unusual
problems that the Distributor is not capable of resolving, and the Manufacturer
shall use its best efforts to provide such after sales technical support to
Distributor's customers.
6. Manufacturer's Trademarks and Other Intellectual Property.
6.1 Ownership by Manufacturer. Distributor understands and acknowledges
that all intellectual property rights relating to the Products shall be owned
solely by Manufacturer, and, except as expressly provided herein, Distributor
has no, and shall not acquire any, intellectual property rights relating to the
Products.
6.2 Use of Trademarks.
(a) Manufacturer hereby authorizes Distributor to use
Manufacturer's trademarks and trade names (collectively, the "Trademarks") in
the Territory solely on or in relation to the Products for the purposes only of
exercising its rights and performing its obligations under this Agreement. Such
authorization shall cease immediately upon the expiration or termination, for
any reason, of this Agreement; provided, however, that Distributor shall have
the limited right to sell the Products in stock at the date of expiration of
this Agreement which bear the Trademarks.
(b) Distributor shall ensure that each reference to and use of
any of the Trademarks by Distributor is in a manner from time to time approved
by Manufacturer and accompanied by an acknowledgment, in a form approved by
Manufacturer, that the same is a trademark (or registered trademark) of
Manufacturer.
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6.3 Prohibited Conduct. Distributor shall not:
(a) Make any modifications to the Products;
(b) Alter, remove or tamper with any Trademarks, numbers, or
other means of identification used on or in relation to the Products;
(c) Use any of the Trademarks in any way which might prejudice
their distinctiveness or validity or the goodwill of Manufacturer therein or in
any manner not previously approved by Manufacturer;
(d) Use in relation to the Products any trademarks other than
the Trademarks without obtaining the prior written consent of Manufacturer; or
(e) Use in the Territory any trademarks so resembling any
Trademark as to be likely to cause confusion or deception.
6.4 Rights in Trademarks. Except as provided in this Section 6,
Distributor shall have no rights in respect of any Trademarks used by
Manufacturer in relation to the Products or of the goodwill associated
therewith, and Distributor hereby acknowledges that, except as expressly
provided in this Agreement, it shall not acquire any rights in respect thereof
and that all such rights and goodwill are, and shall remain, vested in
Manufacturer. Distributor shall not register any Trademarks (or which are
confusingly similar to the Trademarks) in the Territory or elsewhere.
6.5 Enforceability of Intellectual Property Rights. Manufacturer shall
use its best efforts to secure adequate patent protection under the laws
applicable in the Territory for any new Products launched during the 2006
calendar year. Distributor shall take all such steps as Manufacturer may
reasonably require to assist Manufacturer in maintaining the validity and
enforceability of the intellectual property rights of Manufacturer in the
Territory provided that Manufacturer shall reimburse Distributor for all costs
or other liabilities arising from or in connection with such steps which have
previously been approved by Distributor in writing.
6.6 Protection of Intellectual Property. Distributor shall not do or
authorize any third party to do any act which would or might invalidate or be
inconsistent with any intellectual property rights of Manufacturer.
6.7 Notification of Infringement. Distributor shall promptly and fully
notify Manufacturer of any actual, threatened or suspected infringement in the
Territory of any intellectual property rights of Manufacturer which comes to
Distributor's attention, and of any claim by any third party so coming to its
attention that the importation of the Products into the Territory, or their sale
therein, infringes any rights of any other person, and Distributor shall at the
request and expense of Manufacturer do all such things as may be requested to
assist Manufacturer in taking or resisting any proceedings in relation to any
such infringement or claim.
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6.8 Confidential Information.
(a) "Confidential Information" means all items, materials and
information which belong to Manufacturer and are not generally known to the
public that have been or may hereafter be disclosed to Distributor by
Manufacturer or by the directors, officers, employees, agents, consultants,
advisors or other representatives, including legal counsel, accountants and
financial advisors ("Representatives") of Manufacturer, irrespective of the form
of the disclosure. Confidential Information is intended to be interpreted
broadly and includes trade secrets and other proprietary or confidential
information concerning the business and affairs of Manufacturer, product
specifications, data, know-how, formulae, compositions, processes, designs,
sketches, photographs, graphs, drawings, samples, inventions and ideas, past,
current, and planned research and development, current and planned manufacturing
or distribution methods and processes, customer lists, current and anticipated
customer requirements, price lists, supplier lists, market studies, business
plans, computer software and programs (including object code and source code),
computer software and database technologies, systems, structures and
architectures (and related processes, formulae, composition, improvements,
devices, know-how, inventions, discoveries, concepts, ideas, designs, methods
and information); financial statements, financial projections and budgets,
historical and projected sales, capital spending budgets and plans, the names
and backgrounds of key personnel, and personnel training techniques and
materials. Confidential Information also includes all notes, analyses,
compilations, studies, summaries and other material prepared by Distributor
containing or based, in whole or in part, upon any Confidential Information,
including, without limitation, the Activity Reports.
(b) Distributor agrees that the Confidential Information (1)
shall be kept in the strictest of confidence by Distributor; (2) shall be used
only in the performance of its obligations hereunder and shall not at any time
be used by Distributor, directly or indirectly, in any other fashion, either for
its own account or the account of a third party; and (3) without limiting the
foregoing, shall not be disclosed by Distributor, directly or indirectly, to any
person, except with the specific prior written consent of the principal
executive officer of Manufacturer.
(c) Upon termination, expiration, or cancellation of this
Agreement for any reason, Distributor (i) shall promptly deliver to Manufacturer
all documents or other materials disclosed by Manufacturer or any of
Manufacturer's Representatives to Distributor constituting Confidential
Information, together with all copies and summaries thereof in the possession or
under the control of Distributor and (ii) shall destroy materials generated by
Distributor that include or refer to any part of the Confidential Information,
without retaining a copy of any such material.
7. Term and Termination.
7.1 Term. The initial term of this Agreement shall be one (1) year ,
commencing as of the date hereof, unless cancelled or terminated earlier as
provided in Sections 2.6 or 7.2 hereof or elsewhere in this Agreement (the
"Initial Term"). Following the Initial Term, this Agreement shall be
automatically renewed for successive one (1) year periods (each a "Renewal
Term," and together with the Initial Term, the "Term") unless either party
hereto delivers to the other party written notice of its intent not to renew no
later than sixty (60) days prior to the expiration of the immediately preceding
period.
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7.2 Earlier Termination.
(a) Manufacturer shall be entitled to terminate this Agreement
by giving not less than twenty (20) days' written notice to Distributor if there
is any change in the management, ownership or control of Distributor.
Distributor agrees to provide notice to Manufacturer no earlier than thirty (30)
business days prior to the consummation of any change in the management,
ownership or control of Distributor.
(b) Without prejudice to any other provision in this
Agreement, Manufacturer shall be entitled to terminate this Agreement by giving
not less than five (5) days' written notice to Distributor upon the occurrence
of any of the following:
(i) Distributor fails to perform its obligations
under the Distributor's Business
Plan and such non-performance continues for thirty (30) days after written
notice giving full particulars of such non-performance and requiring it to be
remedied;
(ii) Distributor commits any breach of any of the
provisions of this Agreement and,
in the case of a breach of a payment obligation, fails to remedy the same within
five (5) days after written notice of such failure to pay, and in the case of a
breach of any other obligation, fails to remedy the same within thirty (30) days
after receipt of a written notice giving full particulars of the breach and
requiring it to be remedied;
(iii) Distributor goes into bankruptcy, moratorium,
receivership, liquidation, or
anything analogous to any of the foregoing under the law of any jurisdiction; or
(iv) Distributor ceases to carry on business or
Manufacturer reasonably believes
that Distributor will be ceasing to carry on business or otherwise be unable to
perform its obligations to Manufacturer.
(c) Distributor shall have no claim against Manufacturer for
compensation for loss of distribution rights, loss of goodwill or any similar
loss.
7.3 Right to Buy Upon Termination. At any time after the Term,
Manufacturer, at its option, shall be entitled (but not obliged) to buy from
Distributor all or any part of the inventory of the Products then held by
Distributor at the price originally paid by Distributor.
8. Covenant Not to Compete; Non-Solicitation.
8.1 Covenant Not to Compete.
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(a) Distributor hereby covenants and agrees that, during the
Term and for a period of one (1) year thereafter, neither Distributor nor its
Affiliates (hereinafter defined) shall, directly or indirectly:
(1) engage in the research or development of any
products which are in direct competition with the Products (the "Competing
Products");
(2) represent, manufacture, market, or sell Competing
Products in the Territory;
(3) engage, invest, participate, or be interested in
any business which at any time currently or in the future competes with
Manufacturer (the "Restricted Business"), anywhere in the Territory; or
(4) have any interest in, own, manage, operate,
control, be connected with as a stockholder (other than as a stockholder of less
than one percent (1%) of the issued and outstanding stock of a publicly held
corporation), joint venturer, officer, director, agent, lender, representative,
partner, employee or consultant, or otherwise engage or invest or participate in
any Restricted Business;
(b) During the Term, Manufacturer shall not (1) take any
action which may jeopardize Distributor's exclusive right and license hereunder
or Distributor's appointment as its exclusive Distributor in the Territory, and,
(2) except with respect to Reserved Customers, make any solicitation in the
Territory without Distributor's prior written approval and coordination or make
any sale of Products (or cause the sale of its Products) to customers in the
Territory without complying with the terms of this Agreement.
8.2 Non-solicitation. Distributor hereby covenants and agrees that,
during the Term, and continuing until the one (1) year anniversary of the
expiration of the Term, neither Distributor nor its Affiliates (hereinafter
defined) shall, directly or indirectly:
(a) solicit or recruit, or attempt to solicit or recruit, for
employment or for independent contract in connection with any Restricted
Business operating in the Territory, any employee or independent contractor who
is or was employed or under contract with Manufacturer during the Term; or
(b) solicit the business of any customer or prospective
customer of Manufacturer's (i) whose needs became known to Distributor during
the term of this Agreement, or (ii) with whom Distributor has had dealings as a
result of this Agreement, wherein such solicitation involves any service or
product that is similar to or in competition with any service or product of
Manufacturer either existing or in the process of being developed at the time of
the termination of this Agreement;
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8.3 Modification. If any provision of this Agreement is held by any
court of competent jurisdiction to be unenforceable because of the scope,
duration or area of its applicability, a court of competent jurisdiction shall
have the right to modify such scope, duration or area or all of them so as to
render them enforceable, and such provision shall then be applicable in such
modified form.
8.4 Injunctive Relief. Distributor acknowledges that Manufacturer will
have no adequate remedy at law if Distributor or any of its Affiliates breaches
any covenant contained in Section 6 or Section 8. In the event of any such
breach or threatened breach, Manufacturer shall have the right, in addition to
any other remedy that it may have, to obtain in any court of competent
jurisdiction, injunctive relief to restrain any breach or threatened breach of
or otherwise to specifically enforce any of the covenants contained in Section 6
and/or Section 8, as the case may be.
8.5 Affiliate. The term "Affiliate", as used herein, shall be deemed to
mean, with respect to any individual, any individual directly related to such
individual, whether through blood or marriage, and any Entity directly or
indirectly controlled by such individual, through the ownership of all or any
part of such Entity; and, with respect to any Entity, any individual or Entity
directly or indirectly controlling, controlled by or under direct or indirect
common control with such Entity, through employment or ownership, in whole or in
part. The term "Entity", as used herein, shall be deemed to mean a corporation,
partnership, association, trust, estate or other entity or organization.
9. Limited Product Warranty; Indemnification.
9.1 Limited Product Warranty.
(a) Limited Product Warranty. For purposes of this Agreement,
"Covered Person" means the ultimate end-user that originally purchases the
Products from Distributor or Distributor's agents or sub-distributors.
Manufacturer shall provide to Covered Persons a limited product warranty (the
"Limited Warranty") that the Products shall be free from defects in material and
workmanship for a period of twenty four (24) months from the date of purchase
(the "Warranty Period"), subject to the conditions and limitations set forth
herein. The Limited Warranty shall be provided only to the Covered Person and no
other person. The sole and exclusive remedy for defects in Products covered by
this Limited Warranty shall be limited to the correction of the defect by repair
or replacement, at Manufacturer's option. The Limited Warranty shall not apply
to Products that have been subjected to mishandling, misuse, neglect, improper
or inadequate storage, improper testing, improper installation, repair,
alteration, damage, assembly, or processing that alters physical or electrical
properties. This Limited Warranty shall terminate upon expiration of the
Warranty Period.
(b) Limited Warranty Claim Procedure. If a Product is
defective, the Covered Person shall, during the Warranty Period, return the
product to Distributor, who shall inspect the returned Product for defects. If
Distributor reasonably believes that the returned Product is defective and is
covered under the Limited Warranty, it shall promptly forward the returned
product to Manufacturer for repair or replacement. Manufacturer shall pay the
shipping charges to return the product to Distributor and bear the risk of loss
during transit, unless Manufacturer determines that the defect is not covered by
the Limited Warranty. In the event that Distributor or Manufacturer determines
that a returned product is not covered by the Limited Warranty, it shall
immediately notify the Covered Person and request instructions regarding
disposition.
-12-
(c) Restocking Fee. Within six (6) months after the date
hereof, Distributor shall establish a division in its organization that is
responsible and able to fulfill Distributor's obligations with respect to the
Limited Warranty, including, without limitation, the testing of returned
Products and their delivery to Manufacturer. The Restocking Fee shall be deemed
waived by Manufacturer for any Product that is received by Manufacturer at any
time prior to six (6) months after the purchase date. In any case Manufacturer
will not pay back the cost of the returned. Returned product that will be found
not operative will be exchanged for new ones
(d) Annual Warranty Claim Report. No later than thirty (30)
days after the end of each 12 (twelve) month period of the Term, Distributor
shall provide to Manufacturer a written report of all warranty claims received
by Distributor during such 12 (twelve) month period.
9.2 Indemnity.
(a) Indemnity by Distributor. Distributor shall indemnify and
hold harmless Manufacturer and its Affiliates, officers, directors,
stockholders, employees, and agents, and the successors and assigns of all of
them (the "Indemnified Parties"), and shall reimburse the Indemnified Parties
for, any loss, liability, claim, damage, expense (including, but not limited to,
costs of investigation and defense and attorneys' fees) directly or indirectly
arising from or in connection with (a) any failure by Distributor or its
sub-distributors or agents to perform or comply with any agreement, covenant or
obligation in this Agreement, (b) any claim made at any time by any governmental
authority with respect to the business of Distributor or its sub-distributors or
agents and the marketing, distribution, or sale of the Product; and (c) any
warranty claim pursuant to Section 9.1 hereof, if the Product that is asserted
to be defective has been subjected by Distributor to mishandling, misuse,
neglect, improper or inadequate storage, improper testing, repair, alteration,
damage, assembly, or processing that alters physical or electrical properties.
This Section 9.2 shall survive the expiration of the Term.
(b) Indemnity by Manufacturer. Manufacturer represents and
warrants that it has sufficient coverage to cover product and applicable
liability claims with respect to the Products to be sold hereunder and
Distributor shall be covered by such Manufacture's liability insurance policy as
an additional insured party. Manufacturer shall indemnify and hold Distributor
harmless from all claims damages, and expenses (including reasonable attorneys'
fees) based on any product and applicable liability claims with respect to the
Products to be sold hereunder.
-13-
10. Miscellaneous.
10.1 Notices. All notices, requests, demands, claims and other
communications hereunder shall be in writing. Any notice, request, demand, claim
or other communication hereunder shall be deemed duly given (a) if by personal
delivery, when so delivered, (b) if mailed, two (2) business days after having
been sent by registered or certified mail, return receipt requested, postage
prepaid and addressed to the intended recipient as set forth on the first page
of this Agreement, (c) if sent through an overnight delivery service in
circumstances to which such service guarantees next day delivery, the day
following being addressed to the intended recipient as set forth on the first
page of this Agreement; or (d) if given by facsimile, once such notice is
transmitted to the facsimile number specified in writing by the intended
recipient for such purpose and the appropriate answer back or telephonic
confirmation is received. Any party may change the address to which notices,
requests, demands, claims and other communications hereunder are to be delivered
by giving the other parties notice in the manner herein set forth.
10.2 Choice of Law. This Agreement shall be governed, construed and
enforced in accordance with the laws of the State of New Jersey, United States,
without giving effect to principles of conflicts of law.
10.3 Jurisdiction. The parties hereby irrevocably consent to the in
personam jurisdiction of the state or federal courts located in the state of New
Jersey, United States, in connection with any action or proceeding arising out
of or relating to this Agreement or the transactions and the relationships
established thereunder. The parties hereby agree that such courts shall be the
venue and exclusive and proper forum in which to adjudicate such matters and
that they will not contest or challenge the jurisdiction or venue of these
courts.
10.4 WAIVER OF ANY AND ALL RIGHTS TO A TRIAL BY JURY. ALL PARTIES TO
THIS AGREEMENT UNCONDITIONALLY, IRREVOCABLY, AND EXPRESSLY WAIVE ALL RIGHTS TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING, SUIT, COUNTERCLAIM, OR CROSS-CLAIMS
ARISING DIRECTLY OR INDIRECTLY IN ANY MATTER (WHETHER SOUNDING IN TORT,
CONTRACT, OR OTHERWISE) IN ANY WAY ARISING OUT OF OR OTHERWISE RELATING TO THIS
AGREEMENT OR TRANSACTIONS OR THE RELATIONSHIPS ESTABLISHED THEREUNDER. ALL
PARTIES CONFIRM THAT THE FOREGOING WAIVER OF A TRIAL BY JURY IS INFORMED AND
FREELY MADE.
10.5 Entire Agreement. This Agreement and the Annexes attached hereto
set forth the entire agreement and understanding of the parties in respect of
the transactions contemplated hereby and supersedes all prior or contemporaneous
agreements, arrangements and understandings of the parties relating to the
subject matter hereof. No representation, promise, inducement, waiver of rights,
agreement or statement of intention has been made by any of the parties which is
not expressly embodied in this Agreement, such other agreements, notes or
instruments related to this transaction executed simultaneously herewith, or the
written statements, certificates, schedules or other documents delivered
pursuant to this Agreement or in connection with the transactions contemplated
hereby.
-14-
10.6 Assignment. Except as permitted in Section 2.5, Distributor's
rights and obligations under this Agreement shall not be assigned or delegated,
by operation of law or otherwise, without Manufacturer's prior written consent,
and any such assignment or attempted assignment shall be void, of no force or
effect, and shall constitute a material default by such party.
10.7 Amendments. This Agreement may be amended, modified, superseded or
cancelled, and any of the terms, covenants, representations, warranties or
conditions hereof may be waived, only by a written instrument executed by all of
the parties hereto or, in the case of a waiver, by the party waiving compliance.
10.8 Waivers. The failure of any party at any time or times to require
performance of any provision hereof shall in no manner affect the right at a
later time to enforce the same. No waiver by any party of any condition, or the
breach of any term, covenant, representation or warranty contained in this
Agreement, whether by conduct or otherwise, in any one or more instances shall
be deemed to be or construed as a further or continuing waiver of any such
condition or breach or a waiver of any other term, covenant, representation or
warranty of this Agreement.
10.9 Counterparts; Fascimile Signatures. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument. Signatures transmitted by facsimile shall have the same force and
effect as original signatures.
10.10 Survival. All covenants and agreements of the parties contained
herein which are to be performed after the expiration of the Term shall survive
the expiration of the Term.
10.11 Interpretation. The section headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement. Reference to any agreement, document, or
instrument means such agreement, document, or instrument as amended or modified
and in effect from time to time in accordance with the terms thereof.
-15-
IN WITNESS WHEREOF, the parties have duly executed this International
Exclusive Distributorship Agreement as of the date first above written.
DISTRIBUTOR:
ELCART DISTRIBUTION S.P.A.
By: /s/ Xxxxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxxxxx
Title: Legal Representative
MANUFACTURER:
SMART ENERGY SOLUTIONS, INC.
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Chief Financial Officer
-16-
EXHIBIT A
THE PRODUCTS & PRICE
Battery Brain Type I $*
Battery Brain Type II $*
Battery Brain Type III $*
----------
* Omitted pursuant to a request for confidential treatment and filed separately
with the Securities and Exchange Commission.
-00-
XXXXXXX X
XXXXXXXXXXX XX XXXXXXXXX
The Territory is the geographical area within the national borders of each of
the following states:
Italy
-18-
EXHIBIT C
DESCRIPTION OF MARKETING, SALES,
AND CUSTOMER SERVICE ORGANIZATION
-19-
