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EXHIBIT 10.3
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80 (B) (4),
200.83 AND 240.24B-2
ASSEMBLY AGREEMENT
THIS ASSEMBLY AGREEMENT ("Agreement") made as of the 1st day of April,
1999 (the "EFFECTIVE DATE") by and between GLOBAL LEAK DETECTION (U.S.A.), INC.,
a Nevada, U.S.A. Corporation with its principal offices at Carson City, Nevada,
U.S.A. (herein called "MANUFACTURER"), and MOTORVAC TECHNOLOGIES, INC., a
Delaware, U.S.A. Corporation with its principal office at Santa Ana, California,
U.S.A. (the "ASSEMBLER").
RECITALS:
WHEREAS
A. Manufacturer and Global Leak Detection Corp., an Alberta, Canada
corporation ("PARENT") have developed proprietary methodology, processes and
machinery for the manufacture of and have the right to manufacture certain
proprietary products for the detection of leaks in automotive, commercial,
industrial, marine or residential applications (the "PRODUCTS"), which Products
include in particular a combined apparatus, casing, and appurtenances for the
detection of leaks in automotive systems (the "AUTOMOTIVE UNIT"), which Product
in particular contains vapour generation capability housed in a sealed canister
(the "AUTOMOTIVE CANISTER").
B. Manufacturer and Parent continue to carry out research and
development programs in respect of the Products and their manufacture;
C. Assembler desires to assemble the Automotive Unit by incorporating
the Automotive Canister. The parties acknowledge that this Agreement is limited
to enabling the assembly of only those Products as may be specified hereunder
from time to time and the terms thereof in respect of each Product from time to
time.
D. Assembler desires to make the Housing (as defined herein) to house
the Automotive Canister, which together with the Automotive Canister shall form
the Automotive Unit, which shall be distributed by Assembler, as Master
Distributor, pursuant to that certain Master Distributor Agreement between the
parties executed concurrently herewith.
F. Whereas the following additional provisions attached as Schedules
hereto shall form part of this Agreement:
Schedule A Trading Area
Schedule B-1 Litigation (Manufacturer)
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Schedule B-2 Litigation (Assembler)
Schedule C Dispute Resolution
Schedule D-1 Confidentiality and Non-Disclosure Agreement (Manufacturer)
Schedule D-2 Confidentiality and Non-Disclosure Agreement (Assembler)
Schedule E Non-Competition Agreement
NOW THEREFORE in consideration of the mutual promises and covenants
herein the parties agree as follows:
1. APPOINTMENT AND GRANT OF LICENSE.
1.1 Manufacturer hereby appoints Assembler as the exclusive assembler of
Automotive Units in the Trading Area, and Assembler hereby accepts such
appointment, upon the terms and conditions of this Agreement. For purposes of
this Agreement, the Trading Area shall consist of the territories included on
SCHEDULE A (which Trading Area is identical to the Trading Area under the Master
Distributor Agreement of even date hereunder, as it may be amended from time to
time (the "Master Distributor Agreement")). Notwithstanding anything herein to
the contrary, in the event Assembler's exclusivity under the Master Distributor
Agreement is terminated in accordance with the terms of such agreement, then
Manufacturer shall have the right to terminate the exclusivity of Assembler's
rights hereunder immediately upon delivery of written notice of such termination
to Assembler.
1.2 Subject to the terms and conditions of this Agreement, Manufacturer
hereby grants to Assembler an exclusive right and license to assemble Automotive
Units, pursuant to the external specifications of the Automotive Canister as
provided by Manufacturer in writing, and permanently incorporate the Automotive
Canister for integrated assembly into a merchantable unit or Product as
described herein. Assembler shall not sub-contract the right to assemble all or
any part of the Automotive Units without the prior written consent of
Manufacturer.
1.3 Manufacturer shall provide the external specifications for the
Automotive Canister to Assembler hereunder, in writing, as and when available
and free of cost. The agreed upon specifications may be changed: (i) upon thirty
(30) days advance written notice to Assembler; and (ii) so long as any such
change does not adversely affect physical or functional interchangeability for
performance of the Automotive Canister as incorporated into the Housing.
2. MANUFACTURER PROVIDES AUTOMOTIVE CANISTERS.
2.1 Manufacturer shall be the exclusive supplier of Automotive Canisters
to Assembler for purposes of Assembler's performance of this Agreement;
provided, however, that Assembler shall have the right to produce Automotive
Canisters for assembly of Automotive Units hereunder if Manufacturer is unable
to satisfy Assembler's projected demand for Automotive Canisters, as set forth
in this Section 2.1 below.
(a) On one or more occasions, Assembler shall be entitled to
request, in writing, of Manufacturer the grant of a temporary license to produce
the Automotive Canisters provided all of the following conditions have been
fulfilled:
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(i) that Assembler in its capacity as Master Distributor
pursuant to the Master Distributor Agreement has provided Manufacturer not fewer
than three consecutive monthly 90-day rolling projections, each of which
demonstrate the forecast requirement for Automotive Canisters in respect of
which Assembler alleges a shortfall or insufficiency in the supply of Automotive
Canisters;
(ii) Assembler has issued purchase orders in respect of
each of those periods and for the number of units not less than the number of
units forecast; and
(iii) that Assembler has not failed to cure any material
default within the requisite period following receipt of a notice to cure under
the Master Distribution Agreement,
(iv) that Assembler has not failed to cure any material
default within the requisite period following receipt of a notice to cure under
the Assembly Agreement.
(b) If all such conditions under subsection (a) above are
satisfied, then upon thirty (30) days prior notice in writing by Assembler to
Manufacturer requesting a temporary license pursuant hereto, the following shall
apply;
(i) Manufacturer shall grant to Assembler a temporary
non-exclusive license for the manufacture of a fixed number of Automotive
Canisters having regard to the shortfall or projected shortfall in supply of
Automotive Canisters, but in any event not exceeding [...***...] units, provided
that for purposes of this section, any purchase order in excess of [...***...]
units shall be deemed to be divided into separate orders each for [...***...]
units (or any lesser remainder amount);
(ii) Manufacturer shall provide Assembler with the plans
and specifications for the internal components of the Automotive Canister;
(iii) Assembler shall manufacture the Automotive Canister
only in accordance with Manufacturer's then prevailing specifications for the
Automotive Canister and shall xxxx each canister with a unique identifier
approved by Manufacturer for the purpose of indicating that the unit was
manufactured by Assembler; and
(iv) Notwithstanding any other provision of this Agreement
and the Master Distributor Agreement, Assembler shall, and hereby does, accept
all liability whatever, for warranty claims, service and repair, in respect of
the Automotive Canister units which it produces hereunder, and Manufacturer's
liability to Assembler or end-users shall accordingly be eliminated to that
extent for purposes of this Agreement and the Master Distributor Agreement;
provided, however, that Assembler's liability hereunder shall not extend to, and
Manufacturer's liability will continue with respect to, any such claims that are
related to the design, specifications or other aspects of the Automotive
Canister over which Assembler has no control or authority.
* CONFIDENTIAL TREATMENT REQUESTED
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2.2 Assembler shall purchase Automotive Canisters from Manufacturer upon
purchase order, at a per unit base price of [...***...] plus applicable freight,
insurance, duties, charges and other shipping charges. The initial order for
Automotive Canisters shall be for at least [...***...] units, effective
immediately upon execution by all parties of this Agreement and the Master
Distributor Agreement between Manufacturer and Assembler. All subsequent orders
for Automotive Canisters shall be for a minimum of [...***...] units per order.
The terms for purchase of Automotive Canisters shall be the same as those terms
(as modified to reflect the correct purchasing and selling parties) set forth in
Sections 5.4 through 5.7 below.
* CONFIDENTIAL TREATMENT REQUESTED
2.3 Assembler shall provide Manufacturer a rolling, non-binding, 90-day
forecast of its projected demand for Automotive Canisters to assist Manufacturer
with its planning needs.
2.4 Manufacturer shall provide a one-year warranty for all Automotive
Canisters, substantially equivalent to the warranty provided by the Manufacturer
to the Master Distributor Agreement.
3. ASSEMBLER PROVIDES HOUSING. The Assembler shall, at its sole cost, design and
manufacture a housing, case and appurtenances in accordance with the criteria
and specifications provided in writing to Assembler (which shall be provided to
Assembler as soon as practicable following execution of this Agreement), (the
"HOUSING") for the purpose of accommodating and incorporating the Automotive
Canister in accordance with the agreed upon specifications.
4. ASSEMBLER ASSEMBLES AUTOMOTIVE UNIT. Assembler shall at its own cost assemble
the Automotive Canister into the Housing to form the integrated and fully
functional Automotive Unit.
5. PURCHASE OF HOUSING UNITS BY MANUFACTURER.
5.1 ASSEMBLER PROVIDES HOUSING UNIT. Assembler hereby agrees to sell to
Manufacturer the completed Housing units capable of accommodating the Automotive
Canister so as to make the Automotive Unit.
5.2 PRICE OF HOUSING. The price of each Housing is hereby fixed at the
amount of Cost plus a gross profit margin of [...***...], where "Cost" means all
of the direct costs of manufacturing the Housing in respect of the components
and materials only, including all direct labor, but excluding amortized capital
or equipment costs and excluding allocated general and administrative expense.
* CONFIDENTIAL TREATMENT REQUESTED
5.3 MANUFACTURER'S RESTRICTIONS ON SALE. Manufacturer acknowledges that
so long as Assembler's rights as Master Distributor are exclusive under the
Master Distributor Agreement, Manufacturer cannot sell or offer to sell any
Automotive Canisters or Automotive Units: (i) in the Trading Area (as defined in
the Master Distributor Agreement); or (ii) to Snap-On Canada Ltd. or any
affiliate thereof.
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5.4 PURCHASE ORDER. All purchase orders must reference this Agreement.
Housing units, if and when ordered by Manufacturer, shall be ordered by
Manufacturer through the issuance of purchase orders, which shall be subject to
and governed by this Agreement. Manufacturer may submit written purchase orders
to Assembler from time to time during the Term of this Agreement. Except with
respect to quantity and delivery terms on any purchase order of Manufacturer,
the terms and conditions of this Agreement will supersede and take precedence
over any additional or different terms on the face or reverse side of any such
purchase order. Any such additional or different terms are deemed to be material
alterations to the terms and conditions of this Agreement and will not be
binding even if there is a signed acknowledgment or confirmation by Assembler of
such purchase order unless such acknowledgment or confirmation is by an
executive officer of Assembler.
5.5 QUANTITY, DELIVERY DATE. Each such purchase order of Manufacturer
will specify the quantity of Housing units being ordered, delivery terms, and
the requested delivery date.
5.6 SHIPPING. Prices and fees to Manufacturer are C.I.F. Manufacturer's
warehouse. The Assembler will prepay and add applicable freight, insurance,
duties, rates, charges and other shipping charges to the invoice. All Products
shall be packed for shipment and storage in accordance with standard commercial
practices. All risk of loss or damage will pass to Manufacturer upon delivery to
the Manufacturer's warehouse. Assembler will deliver the Products according to
the delivery dates specified in Manufacturer's purchase orders. Assembler will
notify Manufacturer immediately and in writing of any anticipated failure of
Assembler to be able to deliver Products according to such delivery dates, and
in such event Assembler shall have the right to: (I) reschedule such delivery
dates to mutually-agreed dates in the future; or (II) cancel, in whole or in
part, the purchase orders applicable to such Products, without further liability
to Manufacturer.
5.7 PAYMENT. Assembler will invoice Manufacturer at the time of shipment
for each Housing units order. Each such invoice will include the aggregate price
for the Housing units shipment plus freight, taxes, duties and other costs
prepaid by Assembler. All payments shall be made in U.S. dollars. Full payment
of the amounts invoiced for each shipment will be paid within forty five (45)
days of the date of Manufacturer's receipt of such invoice (which shall be no
sooner than the date of delivery of such Housing units). Any Housing units not
properly rejected within fifteen (15) business days of receipt of such Housing
units by Manufacturer will be deemed accepted. Any invoice not paid when due, as
provided in this section will be subject to a monthly charge of one percent
(1.0%) of the unpaid portion thereof from the date of delivery.
5.8 SITUS OF SALE. For purposes of taxation determination, the situs of
the sale of the Housings to Manufacturer shall be Carson City, Nevada.
6. TERM. Unless earlier terminated in accordance with this Agreement, this
Agreement shall be in effect for an initial term of five (5) years from the
Effective Date ("TERM"), and provided that Assembler has not failed to cure any
material default under this Agreement following Manufacturer's notice to cure as
required under Section 9.1, such Term shall automatically renew for a renewal
term of an additional five (5) years.
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7. REPRESENTATIONS AND WARRANTIES OF THE MANUFACTURER.
7.1 CORPORATE POWER. Manufacturer hereby represents and warrants that it
is duly organized and validly existing under the laws of the jurisdiction of its
incorporation and has full corporate power and authority to enter into this
Agreement and to carry out the provisions hereof.
7.2 DUE AUTHORIZATION. Manufacturer hereby represents and warrants that
it is duly authorized to execute and deliver this Agreement and to perform its
obligations hereunder.
7.3 BINDING OBLIGATION. Manufacturer hereby represents and warrants that
this Agreement is a legal and valid obligation binding upon it and is
enforceable in accordance with its terms. The execution, delivery and
performance of this Agreement by Manufacturer does not conflict with any
agreement, instrument or understanding, oral or written, to which it is a party
or by which it may be bound, nor violate any law or regulation of any court,
governmental body or administrative or other agency having authority over it nor
result in the creation or imposition of any encumbrance upon any of the
Products.
7.4 OWNERSHIP OF PRODUCTS. Manufacturer hereby represents and warrants
that (a) it is the duly authorized and exclusive licensee and beneficial owner
of all such rights under such licenses with respect to the Products, (b) it has
not granted any license under the Products in the Trading Area to any third
party and is under no obligation to grant any such license, except to Assembler,
and (c) there are no outstanding liens, encumbrances, agreements or
understandings of any kind, either written, oral or implied, regarding the
Products which are inconsistent or in conflict with this Agreement.
7.5 INFRINGEMENT; MISAPPROPRIATION. Manufacturer hereby represents and
warrants that the Products provided to Assembler under this Agreement do not to
its knowledge (a) infringe any patent, copyright, trademark, trade dress, trade
secret or other proprietary right of any third party, or (b) misappropriate any
trade secret of any third party.
7.6 DISCLAIMER OF WARRANTIES. Except as expressly set forth in this
Agreement, Manufacturer does not make any representation or warranty to the
Assembler of any kind, express or implied, including, without limitation, any
warranty of merchantability or fitness for a particular purpose.
7.7 INTELLECTUAL PROPERTY. The Products, including without limitation
the Automotive Canister, and including any registered and unregistered
trademarks, trade names, copyrights, registered or unregistered user rights,
patents, patent applications pending, inventions and know-how, are validly and
beneficially licensed by the Manufacturer from Parent (and licensed by Parent
from Graminia Developments Ltd. ("Graminia")) with full right to use and
sub-license the same and are in good standing and, where appropriate, duly
registered in all appropriate offices in the State of Nevada or elsewhere in the
U.S.A. or Canada where so required to preserve the rights thereof and thereto.
Such marks, names, copyrights, registered user rights, patents and inventions do
not misappropriate or infringe upon the trademarks, trade names, copyrights,
registered user rights, patents and inventions, or other proprietary right,
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domestic or foreign, of any other person or third party or misappropriate any
trade secret of any third party.
7.8 LICENSES. The licenses and rights from Graminia to Parent and from
Parent to Manufacturer for the Products are in full force and effect and the
parties are not in breach thereunder, under no threat of cancellation by any of
the parties thereto and to the extent set out in this Agreement is assignable or
capable of sub-license to the Assembler. The foregoing license is exclusive and
transferable by the Manufacturer with the consent of Parent and Graminia, which
consent shall have been obtained and provided to Assembler in writing prior to
the execution and effectiveness of this Agreement.
7.9 LITIGATION. Except as disclosed in SCHEDULE B-1, there are no
actions, suits, grievances or proceedings (whether or not purportedly on behalf
of the Manufacturer) pending or threatened against Manufacturer, Graminia or
Parent, before or by any federal, state, municipal or other governmental court,
department, commission, board or agency or instrumentality, domestic or foreign
which materially adversely affect or which could materially adversely affect the
Products, the Patents or the rights granted to Assembler hereunder.
8. REPRESENTATIONS AND WARRANTIES OF THE ASSEMBLER.
8.1 CORPORATE POWER. Assembler hereby represents and warrants that it is
duly organized and validly existing under the laws of the jurisdiction of its
incorporation and has full corporate power and authority to enter into this
Agreement and to carry out the provisions hereof.
8.2 DUE AUTHORIZATION. Assembler hereby represents and warrants that it
is duly authorized to execute and deliver this Agreement and to perform its
obligations hereunder.
8.3 BINDING OBLIGATION. Assembler hereby represents and warrants that
this Agreement is a legal and valid obligation binding upon it and is
enforceable in accordance with its terms. The execution, delivery and
performance of this Agreement by Assembler does not conflict with any agreement,
instrument or understanding, oral or written, to which it is a party or by which
it may be bound, nor violate any law or regulation of any court, governmental
body or administrative or other agency having authority over it, except that
Assembler has entered into a non-competition agreement with EmiTech as
previously disclosed to Manufacturer.
8.4 DISCLAIMER OF WARRANTIES. Except as expressly set forth in this
Agreement, Assembler does not make any representation or warranty to the
Manufacturer of any kind, express or implied, including, without limitation, any
warranty of non-infringement, merchantability or fitness for a particular
purpose.
8.5 INTELLECTUAL PROPERTY. Assembler acknowledges that, except as to
rights identified as belonging to Assembler under Section 12 below and except
for the license and other rights granted in this Agreement, it has no right to
ownership in any of the intellectual property rights relating to Products,
including any registered and unregistered trademarks, trade names, copyrights,
registered or unregistered user rights, patents, patent applications pending,
inventions and know-how relating primarily to the Products, including without
limitation the Automotive Unit and the Automotive Canister.
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8.6 OWNERSHIP OF THE HOUSING. Assembler hereby represents and warrants
that it will be the beneficial owner or licensee of all right, title and
interest in the Housing.
8.7 INFRINGEMENT; MISAPPROPRIATION. Assembler hereby represents and
warrants that the Housing will be an original work of Assembler (without any
unauthorized third party contribution or contents) and will not to its knowledge
(a) infringe any patent, copyright, trademark, trade dress, trade secret or
other proprietary right of any third party, or (b) misappropriate any trade
secret of any third party.
8.8 SECURITY INTEREST. Assembler acknowledges that Manufacturer has a
continuing beneficial security interest in all Automotive Canisters, continuing
even after the canisters are assembled in the Housing and integrated in the
Automotive Unit, and the Assembler, as Assembler or Master Distributor, shall
hold all canisters and all proceeds derived from the sale of the Automotive
Units in trust for the sole use and benefit of Manufacturer until all liability
to Manufacturer in respect of the purchase of the Automotive Canisters is
satisfied in full. Manufacturer's security interest shall extend to other
property acquired with the proceeds from such sales and to proceeds of such
sales.
8.9 LITIGATION. Except as disclosed on SCHEDULE B-2, there are no
actions, suits, grievances or proceedings (whether or not purportedly an behalf
of the Assembler) pending or threatened against Assembler which have a material
adverse effect upon or which may reasonably be expected to have a material
adverse effect upon, Assembler's performance or Manufacturer's rights under this
Agreement, or any products assembled hereunder, before or by any federal, state,
municipal or other governmental court, department, commission, board or agency
or instrumentality, domestic or foreign, whether or not insured, and which might
involve the possibility of any lien, charge, encumbrance or other right of
another against any Products or Assembler intellectual property used by
Assembler hereunder.
9. TERMINATION.
9.1 TERMINATION FOR CAUSE. Either party may terminate this Agreement for
the material breach of this Agreement or any purchase order by the other party
which material breach has remained uncured for a period of thirty (30) days from
the date of delivery of written notice thereof to such breaching party, which
notice shall specify the curative or remedial action to be taken by the other
party. In such case, termination shall become effective after the end of the
thirtieth day from such notice. For purposes of this Agreement, material breach
shall include, without limitation, the occurrence of any of the following: (i)
any proceedings in bankruptcy, insolvency, receivership or liquidation are taken
or instituted against a party; or (ii) a party makes an assignment for the
benefit of creditors or commits an act of bankruptcy or insolvency.
9.2 AUTOMATIC TERMINATION. This Agreement shall automatically terminate,
without more and without notice, if either party attempts to assign, sell or
encumber this Agreement in any manner whatever without the prior written consent
of the other party in violation of Section 16.
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9.3 EFFECT OF TERMINATION. Either party's obligations under this
Agreement which by their nature would continue beyond termination, expiration or
cancellation of this Agreement shall survive termination, expiration or
cancellation of this Agreement.
10. NEW PRODUCTS. Unless otherwise specified by Assembler, Manufacturer shall
supply the specifications for the newest version or enhancement of (and, except
as otherwise required pursuant to Section 2.1, limited to the external
specifications of) the Automotive Canister, to Assembler. Manufacturer reserves
the right at any time to make changes in specifications, construction or design
of the Products; provided, however, that any changes shall meet the requirements
and conform to the specifications of Assembler in respect of the Housing as set
forth pursuant to this Agreement. Manufacturer shall present not less than 90
days prior written notification of any proposed changes. Any Products so changed
shall be accepted by Assembler as standard Products conforming to existing
orders so long as they do not adversely affect physical or functional
interchangeability for performance of the Automotive Canister, the Housing or
the Automotive Unit.
11. STANDARD OF CONDUCT OF THE PARTIES. The parties hereby agree to deal with
each other in good faith and provide their commercially reasonable efforts in
the supply, manufacture, assembly and support of the Automotive Canister,
Housing and Automotive Unit. The parties agree to keep each other reasonably and
currently informed with respect to the Products and any improvements or
enhancements to them or derivatives therefrom.
12. CERTAIN TECHNOLOGY RIGHTS. Manufacturer hereby acknowledges that all
intellectual property, including know-how and proprietary rights and the rights
to obtain patents, copyrights, trade marks and other rights relating to the
Housing shall belong to the Assembler. The provisions of Section 21 of the
Master Distributor Agreement are incorporated herein by reference.
13. INDEPENDENT CONTRACTOR STATUS.
13.1 This Agreement does not constitute Assembler as a legal
representative, joint venturer, partner, employee, servant or agent of
Manufacturer for any purpose whatever. Assembler is an independent contractor
assembling the Automotive Canister (and in the event it invokes a temporary
license to do so, manufacturing the Automotive Canister), Housing and Automotive
Units and carrying on business solely on its own behalf and is in no way
authorized to make any contract, agreement, warranty or representation on behalf
of Manufacturer, or to create any obligation, express or implied, on behalf of
Manufacturer, other than as expressly set out herein, in the Master Distributor
Agreement or in the Manufacturer's written limited warranty.
13.2 Assembler shall not be held responsible for any act, omission,
opinion or other obligation of the Manufacturer.
14. CONSEQUENTIAL DAMAGES WAIVER/ LIMITATION OF LIABILITY. NO PARTY SHALL BE
LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE OR
EXEMPLARY DAMAGES INCLUDING WITHOUT LIMITATION, LOST PROFITS, SAVINGS, OR
INCOME, REGARDLESS OF THE FORM OF ACTION, WHETHER IN
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CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT PRODUCT LIABILITY OR OTHERWISE,
EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
15. INDEMNIFICATION.
15.1 MANUFACTURER INDEMNIFICATION. Manufacturer will fully defend,
indemnify, and hold Assembler and its officers, directors and employees, to the
extent of their lawful acts, harmless from any claim, suit, threat or legal
proceeding and all damages, costs, expenses, and other liabilities arising from
any of the foregoing (including attorneys' fees) resulting from the inaccuracy
of any representations or warranties of Manufacturer or Manufacturer's breach of
any of its warranty obligations hereunder.
15.2 ASSEMBLER INDEMNIFICATION. Assembler will fully defend, indemnify,
and hold Manufacturer and its officers, directors and employees, to the extent
of their lawful acts, harmless from any claim, suit, threat or legal proceeding
and all damages, costs, expenses, and other liabilities arising from any of the
foregoing (including attorney's fees) resulting from the inaccuracy of any
representations or warranties of Assembler or Assembler's breach of its warranty
obligations hereunder.
15.3 NOTIFICATION. Each party seeking indemnification under this
Agreement agrees to notify the other party promptly in writing of each claim,
suit, threat or legal proceeding, and to give such other party sole control over
and information and reasonable cooperation (at such other party's expense) for
the defense thereof.
16. NO ASSIGNMENT. This Agreement may not be assigned, sold or encumbered by
either party without the prior written consent of the other party, which consent
may be arbitrarily withheld.
17. NO BROKER. Each of the parties to this Agreement represents and warrants to
the other that all negotiations relating to this Agreement and the transactions
contemplated by this Agreement have been carried on between them directly,
without the intervention of any other party in such manner as to give rise to
any valid claim against any of the parties for a brokerage commission, finder's
fee or other like payment.
18. NON-WAIVER. No investigations made by or on behalf of the one party at any
time shall have the effect of waiving or diminishing the scope of or otherwise
affecting any representation, warranty or indemnity made by or imposed upon the
other party in or pursuant to this Agreement. No waiver by a party of any
condition, in whole or in part, shall operate as a waiver of any other
condition.
19. DISPUTE RESOLUTION. The parties agree to resolve disputes without litigation
and in accordance with the dispute resolution and arbitration provisions set out
in SCHEDULE C hereto which are hereby incorporated herein as part of this
Agreement.
20. FURTHER NEGOTIATION. The parties shall cooperate and negotiate in good faith
as to the following: (i) by November 15, 1999, the parties shall have made a
determination as to Assembler's participation in the assembly and/or
distribution, sale and marketing of the Global
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Leak Heavy Duty Truck Machine; and (ii) Manufacturer shall provide Assembler an
equal opportunity to bid on the exclusive assembly rights of other Products,
including without limitation, the Marine Model and the Instrumentation Machine,
and the exclusive assembly rights and marketing, distribution and sale rights
for the Heat Exchanger Machine.
21. RIGHT OF FIRST REFUSAL. Except as otherwise may be agreed by the parties,
Manufacturer, Parent or any affiliate of either of them (collectively, "GLDI")
shall not sell or in any manner, except in a non-arm's length transaction with
an affiliate of Manufacturer as part of a reorganization or restructuring of
Manufacturer and its affiliates, transfer ("TRANSFER") any of the shares of or
other equity interest in Manufacturer, or any other right or interest therein
(any of such shares or other equity interest, or any other right or interest
therein, ("SHARES"), or any patents or other proprietary rights in connection
with the Products and which are the subject of this other Agreement or the
Master Distributor Agreement ("PATENTS"), whether voluntarily, by operation of
law or upon a change in control, for consideration or by gift or otherwise,
except by a Transfer which meets the requirements hereinafter set forth in this
section and except for a transfer of Shares to an entity affiliated with GLDI
pursuant to a reorganization of GLDI as described above.
21.1 If GLDI desires to Transfer any Shares or Patents, GLDI shall first
give written notice thereof to Assembler. Such notice shall indicate the
relevant terms and conditions of the proposed Transfer, name the proposed
transferee, and state the number of Shares (or the extent and nature of the
interest) or the Patents proposed to be Transferred, the proposed consideration
including timing and form thereof, and all other material terms and conditions
of the proposed Transfer.
21.2 For thirty (30) days following receipt of such notice, Assembler
shall have the exclusive option to purchase all of the Shares or Patents
described in the notice at the price and upon the terms set forth in such
notice. In the event Assembler elects to purchase all of the Shares or Patents
described in the notice, it shall give written notice to Manufacturer of its
election to purchase.
21.3 Notwithstanding anything contained herein to the contrary,
Assembler may assign its rights under this section upon the prior written
consent of Manufacturer, which consent may be arbitrarily withheld; provided
that no consent shall be required for an assignment in a non-arm's length
transaction with an affiliate of Assembler as part of a reorganization or
restructuring of Assembler and its affiliates.
21.4 Assembler shall have the option to elect to pay for said Shares or
Patents on substantially the same terms and conditions set forth in the notice
from GLDI regarding the proposed Transfer of such Shares or Patents.
21.5 In the event Assembler does not elect to acquire all of such Shares
or Patents, GLDI may, within the sixty-day period following the expiration of
the option rights granted to Assembler herein, Transfer the Shares or Patents as
specified in the notice, provided such Transfer is on the terms set forth in the
notice to Assembler.
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21.6 The foregoing exclusive right of first refusal shall terminate as
of the date one (1) year following the expiration or termination of the later to
expire of this Agreement or the Master Distributor Agreement.
22. CONFIDENTIALITY, NON-DISCLOSURE AND NON-COMPETITION COVENANTS. The
Confidentiality and Non-Disclosure Agreements attached hereto as SCHEDULE D-1
and SCHEDULE D-2 hereto, and the Non-Competition Agreement attached hereto as
SCHEDULE E hereto, are hereby incorporated herein as part of this Agreement.
23. MISCELLANEOUS.
23.1 INTERPRETATION. Wherever the singular or masculine is used in this
Agreement the same shall be interpreted as including the plural, feminine or
neuter wherever the context so requires. The captions and headings are inserted
for convenience of reference only, form no part of this Agreement and in no way
define, describe or limit the scope or intent of this Agreement or any provision
hereof.
23.2 FURTHER ACTS. In order to fulfill the intent of the parties hereto,
they shall execute from time to time all reasonable documents and do all such
things as may be necessary or desirable to more completely and effectively carry
out the terms and intentions of this Agreement, to implement it in all respects
or to fulfill consequential aspects thereof, which any other party may request
from time to time at the expense, if any, of the party so requesting.
23.3 SEVERABILITY. If a Court or duly constituted arbitrator would
declare that all or any portion of the provisions of this Agreement are void or
unenforceable in the circumstances, this Agreement shall, automatically and
without further act on the part of the parties hereto, be reduced in scope to
such an extent as to be valid and enforceable in the circumstances. The
invalidity of any provision of this Agreement or any covenant contained herein
on the part of any party shall not affect the validity of any other provision or
covenant herein, which shall remain in fun force and effect
23.4 GOVERNING LAW. Subject to the procedures set out in the Dispute
Resolution provisions set out in SCHEDULE C hereto, this Agreement shall be
governed by and construed pursuant to and in accordance with, including the
enforcement thereof, the laws of the State of California and the laws of United
States of America applicable therein without reference to conflict of laws
principles and excluding the United Nations Convention on Contracts for the
International Sale of Goods. Any disputes under this Agreement shall be subject
to the exclusive jurisdiction and venue of the California state courts and the
Federal courts located in Orange County, California, and the parties hereby
consent to the personal and exclusive jurisdiction and venue of these courts.
23.5 ENTIRE AGREEMENT. This Agreement, including the Schedules attached
hereto, and the Assembly Agreement, constitute the entire agreement between the
parties. reflects all the agreements, understandings, representations,
conditions and warranties by and between the parties, and any prior
understanding or representation of any kind preceding the Effective Date shall
not be binding upon either party unless expressly stated herein in writing or
clearly and expressly incorporated by reference herein in writing. The execution
of this Agreement has not
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been induced by, nor do any of the parties hereto rely upon or regard as
material, any representations or promises whatever except to the extent
expressly granted herein in writing or clearly and expressly incorporated by
reference herein in writing. No party shall be liable for any representation
made or omitted unless it is expressly set forth in this Agreement.
23.6 AMENDMENT OF THIS AGREEMENT. Any amendment or modification of this
Agreement or additional obligation assumed by any party in connection with this
Agreement shall be binding only if evidenced in writing signed by each party or
an authorized representative of each party. Any alteration, amendment or
qualification of this Agreement shall be null and void and shall not bind any
party unless made in writing.
23.7 NOTICE. All notices contemplated or required to be given hereunder
shall be effective if sent by prepaid mail, facsimile transfer or delivered
personally to any of the parties at the address listed below or at such other
address as the party to whom such notice is to be given otherwise directs in
writing. Any notice delivered aforesaid shall be effective on the date of
facsimile transfer or delivery and any notice mailed as aforesaid shall be
effective three (3) business days after the mailing thereof, provided that where
interruption of mail services is likely by reason of any strike or other labor
dispute, notice shall be by personal delivery only to the person or to the
address as aforesaid.
To Manufacturer at: x/x 0000-00 Xxxxxx
Xxxxxxxx, Xxxxxxx Xxxxxx X0X 0X0
Attn: Xxxxxx Xxxxxxx
Fax: (000) 000-0000
With a copy to: Xxxxxxx & Company
#0000, 00000-00 Xxxxxx
Xxxxxxxx, Xxxxxxx Xxxxxx X0X 0X0
Attn: Xxxx X. Xxxxxxx
Fax: (000) 000-0000
To Assembler at:
Xxx Xxxxxx
0000 X. Xxxxxxx Xxx
Xxxxx Xxx, XX 00000
Fax: (000) 000-0000
With a copy to: Xxxxxx X. Xxxxxx, Esq.
Xxxxxx Godward LLP
0000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000
Fax: (000) 000-0000
23.8 TIME OF ESSENCE. Time shall be of the essence of this Agreement.
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23.9 WAIVER. Any waiver of any term, provision or condition of this
Agreement to be effective must be in writing and signed by the party waiving
such term, provision or condition stating with specificity the particular
provision or provisions being waived and for what event or period of time. No
waiver of any one or more provisions shall be deemed to be a further waiver or
continuing waiver of such terms, provisions or conditions or any other term
provisions or conditions unless the waiver specifically so states.
23.10 FORCE MAJEURE. No right of any party hereto shall be prejudiced by
events beyond a party's reasonable control and without negligence of the party
charged with performance hereunder, including without limitation pressures or
delays from outside parties, labor disputes, the exigencies of nature,
governments, regulatory authorities and acts of God, particularly as they may
affect the performance of this Agreement. All times herein provided for shall be
extended by the period necessary to cure any such event and the party affected
shall use all reasonable means to do so promptly.
23.11 WARRANTY OF AUTHORITY. Any such execution of this Agreement is a
representation and warranty to the other party that the party so signing has
full authority in all requisite capacities to do so.
23.12 ENUREMENT. This Agreement shall be binding upon and enure to the
benefit of the Parties and their respective successors and permitted assigns.
23.13 COUNTERPARTS AND FAX COPIES. This Agreement may be executed in
counterpart and may be delivered by fax copies thereof and when the whole is so
executed and delivered it shall constitute a valid and binding agreement among
the parties so executing and delivering the agreement effective as of the
Effective Date. Fax Signatures shall be deemed to be accepted as original.
23.14 ATTORNEYS' FEES. In any proceeding between the parties arising
from or related to the interpretation, construction or enforcement of this
Agreement, subject to the Dispute Resolution provisions of SCHEDULE C, the
prevailing party shall, in addition to recovering all costs of suit, be entitled
to an award of actual attorneys' fees incurred, whether in an original action or
on appeal.
IN WITNESS WHEREOF the parties hereto have duly executed this Agreement
as of the day and year first above written.
GLOBAL LEAK DETECTION (U.S.A.), INC.
s/ Xxxxxx Xxxxxxx
----------------------------------------
Xxxxxx Xxxxxxx, President
MOTORVAC TECHNOLOGIES, INC.
s/ Xxx X. Xxxxxx
----------------------------------------
Xxx X. Melody, President
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SCHEDULES AND EXHIBITS NOT INCLUDED
